Directs the New York state comptroller, in coordination with the departments of economic development and taxation and finance to conduct an audit of all state economic development programs.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5890
SPONSOR: Barclay (MS) TITLE OF BILL: An act directing the New York state comptroller, in
coordination with the departments of economic development and taxation
and finance to conduct an audit of all state economic development
programs
PURPOSE OR GENERAL IDEA OF BILL:
Direct the New York State Comptroller in coordination with the commis-
sioners of the department of economic development and taxation and
finance shall conduct an audit of all state economic development
programs and study the feasibility of reducing the number of economic
development programs currently offered by the State and its subsidiaries
and replacing these programs with one centralized competitive program.
SUMMARY OF PROVISIONS:
Section 1 - Legislative Findings.
Section 2 - The New York State Comptroller in coordination with the
commissioners of the department of economic development and taxation and
finance shall conduct an audit of all state economic development
programs. This audit shall include but not be limited to:
a) identifying all programs by type and funding source;
b) identifying the types of businesses that have received financial
assistance;
c) reviewing information available on job creation or other data on
economic expansion;
d) analyzing the geographic distribution of financial assistance
throughout the State;
e) reviewing a sample of loans and grants to determine if statutory
requirements for the programs were followed; and
f) reviewing information available on economic development programs in
other states.
Section 3 - The commissioner of the department of economic development
in consultation with the commissioner of taxation and finance shall
study the feasibility of reducing the number of economic development
programs currently offered by the State and its subsidiaries and replac-
ing these programs with one centralized competitive program.
Section 4 - Effective date.
JUSTIFICATION:
The scale and scope of economic development programs in New York State
continuesto be expanded significantly. These programs provide billions
in tax payer funds to support thousands of projects around the State
with little to no oversight in certain cases.
In May 2015, the NYS Comptroller issued a report that called for
increased scrutiny and transparency in the State's economic development
investiment portfolio. According to the Comptroller, "ESD has no parame-
ters in place to guide how much it should spend on marketing to achieve
any specific outcome. Most importantly, ESD is unable to assess whether
the State has received an appropriate return on its investment".
In a State with a poor business and tax climate, it is extremely prob-
lematic that such significant use of taxpayer funds is utilized without
stringent accountability and transparent benchmarks measuring success.
This bill would direct the NYS Comptroller to conduct an audit of all
State economic development programs to evaluate their return on invest-
ment to the State. The Comptroller would determine if the programs meet
their intended goals and recommend necessary changes to increase trans-
parency and stimulate job growth.
PRIOR LEGISLATIVE HISTORY:
A6199 of 2017-18 Held for consideration in Government Operations
A10254 of 2015-16 Held for consideration in Governmental Operations
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
5890
2019-2020 Regular Sessions
IN ASSEMBLY
February 20, 2019
___________
Introduced by M. of A. BARCLAY, GIGLIO, NORRIS, TAGUE, BRABENEC, MORI-
NELLO, MANKTELOW, RA, HAWLEY -- Multi-Sponsored by -- M. of A.
M. L. MILLER, SALKA -- read once and referred to the Committee on
Governmental Operations
AN ACT directing the New York state comptroller, in coordination with
the departments of economic development and taxation and finance to
conduct an audit of all state economic development programs
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative findings. The legislature finds that the state
2 and local governments of New York play an important role in facilitating
3 economic development, reducing regulations and the creation of jobs.
4 State funding for economic development should be transparent, stream-
5 lined, and encourage job creation in all regions of the state. Empire
6 state development manages statewide economic development programs
7 through several subsidiaries, each with its own board and staff. In
8 addition, there are approximately twenty state agencies performing
9 economic development functions. At the local level, there are one
10 hundred fourteen industrial development agencies, over five hundred
11 local development corporations, eighty-two empire zone boards, one
12 hundred fourteen business improvement districts, forty-nine urban
13 renewal and community development agencies, and ten regional economic
14 development councils, all engaging in economic development activity.
15 Most of the state's economic development programs, especially those
16 providing direct financial assistance, are operated by the department of
17 economic development and the empire state development corporation. The
18 majority of this business support is in the form of grants and loans to
19 businesses and to local units of government to fund economic development
20 activities. This legislation is intended to improve these important
21 tools for economic development by streamlining applications and report-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08933-01-9
A. 5890 2
1 ing, strengthening accountability mechanisms, and encouraging quality
2 job creation for all New Yorkers.
3 § 2. The New York state comptroller in coordination with the commis-
4 sioners of the departments of economic development and taxation and
5 finance shall conduct an audit of all state economic development
6 programs. Such audit shall include but not be limited to:
7 (a) identifying all programs by type and funding source;
8 (b) identifying the types of businesses that have received financial
9 assistance;
10 (c) reviewing information available on job creation or other data on
11 economic expansion;
12 (d) analyzing the geographic distribution of financial assistance
13 throughout the state;
14 (e) reviewing a sample of loans and grants to determine if statutory
15 requirements for the programs were followed; and
16 (f) reviewing information available on economic development programs
17 in other states.
18 The New York state comptroller in coordination with the commissioners
19 of the departments of economic development and taxation and finance
20 shall develop all necessary rules and regulations to conduct an audit of
21 New York state economic development programs as outlined in this
22 section. Following the review and audit of such economic development
23 programs the agencies shall recommend all necessary changes to make such
24 economic development programs more transparent, streamlined, and ensure
25 that such programs are meeting the goals of the laws that established
26 them and providing for a return on investment to the state. The results
27 of this audit must be made available for public review online by Janu-
28 ary 1, 2020.
29 § 3. After the conclusion of the audit, the commissioner of the
30 department of economic development in consultation with the commissioner
31 of taxation and finance shall study the feasibility of reducing the
32 number of economic development programs currently offered by the state
33 and its subsidiaries and replacing these programs with one centralized
34 competitive program. A report of the study, outlining the impact of each
35 of the above steps, shall be filed with the governor, the temporary
36 president of the senate, the minority leader of the senate, the speaker
37 of the assembly and the minority leader of the assembly on or before
38 December 31, 2020.
39 § 4. This act shall take effect immediately.
