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A10294 Summary:

BILL NOA10294A
 
SAME ASSAME AS S08181-A
 
SPONSORStirpe
 
COSPNSROtis, Buttenschon, Jacobson, DenDekker, McDonald, Ortiz, Colton, Blake, Thiele, Lupardo, Zebrowski, Woerner, Epstein, Griffin, Jones, Abinanti, Bronson
 
MLTSPNSR
 
Amd 858, add 859-c, Gen Muni L
 
Establishes a state disaster emergency loan program to be administered by industrial development agencies for small businesses and small not-for-profit corporations.
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A10294 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A10294a
 
SPONSOR: Stirpe
  TITLE OF BILL: An act to amend the general municipal law, in relation to establishing a state disaster emergency loan program; and providing for the repeal of such provisions upon the expiration thereof   PURPOSE: To provide industrial development agencies (IDAs) with the flexibility to support small businesses and non-profits during public health emer- gencies.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the bill provides for grants and in-kind donations from Industrial Development Agencies (IDAs) to small businesses or not-for- profits for the purposes of purchasing personal protective equipment (PPE) and other fixtures needed to help prevent the spread of COVID-19. Section 2 establishes the State disaster emergency loan program to allow IDAs to make loans to small businesses and not-for-profit organizations up to $25,000 with certain considerations. IDAs who choose to administer a State disaster emergency loan program will have to maintain records related to the program, and report to the Governor, Speaker of the Assembly and Temporary President of the Senate one year following the end of the State disaster emergency declaration. Section 3 establishes the effective date, and the expiration of the legislation on December 31; 2021.   JUSTIFICATION: The current public health crisis is forcing small businesses and not- for-profit organizations across New York to slow down or shut down oper- ations. This represents a significant threat to the viability of these businesses, who are significant employers and important pieces of their communities. Current restrictions limit the ability of local IDAs to provide loans to such small businesses and not-for-profit organizations to help ensure their short-term viability, especially until the Small Business Administration's funding in response to the crisis comes online. Granting IDAs a short-term authority to extend such moderate loans will help ensure New York's small businesses and not-for-profit organizations remain viable after this public health crisis and have more options in any future crises. Also, providing grants for Personal Protective Equipment (PPE) and installation of safety fixtures for these small businesses and not-for-profit organizations will allow safety for workers during the COVID-19 pandemic.   PRIOR LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS: To be determined.   EFFECTIVE DATE: Immediately.
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A10294 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                        10294--A
 
                   IN ASSEMBLY
 
                                     April 15, 2020
                                       ___________
 
        Introduced  by  M.  of  A. STIRPE, OTIS -- read once and referred to the
          Committee on Corporations, Authorities and  Commissions  --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee
 
        AN ACT to amend the general municipal law, in relation to establishing a
          state disaster emergency loan program; and providing for the repeal of
          such provisions upon the expiration thereof
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivisions 16 and 17 of section 858 of the general munic-
     2  ipal law, as added by chapter 1030 of the laws of 1969 and as renumbered
     3  by chapter 356 of the laws of 1993, are amended to read as follows:
     4    (16) To establish and re-establish its fiscal year; [and]
     5    (17) To provide loans to small  businesses  or  not-for-profit  corpo-
     6  rations  as  authorized  in  section  eight hundred fifty-nine-c of this
     7  title; and
     8    (18) To provide grants to small businesses and  not-for-profit  corpo-
     9  rations, as defined in section eight hundred fifty-nine-c of this title,
    10  for the purpose of acquiring personal protective equipment or installing
    11  fixtures necessary to prevent the spread of novel coronavirus, COVID-19,
    12  during  the period in which executive order two hundred two of two thou-
    13  sand twenty, as amended, is in effect. In order to  be  eligible  for  a
    14  grant  pursuant  to this subdivision, a small business or not-for-profit
    15  corporation must meet the requirements of  paragraph  a  of  subdivision
    16  three  of  section  eight hundred fifty-nine-c of this title.  No indus-
    17  trial development agency may provide a small business or  not-for-profit
    18  corporation  with more than ten thousand dollars pursuant to this subdi-
    19  vision; and
    20    (19) To do all  things  necessary  or  convenient  to  carry  out  its
    21  purposes and exercise the powers expressly given in this title.
    22    §  2.  The  general  municipal  law is amended by adding a new section
    23  859-c to read as follows:
    24    § 859-c. State disaster emergency loan program.   1. For  purposes  of
    25  this section:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16066-10-0

        A. 10294--A                         2
 
     1    a.  "grace  period"  means the sixty-day period after a state disaster
     2  emergency ends;
     3    b.  "eligible entity" means both a small business and a small not-for-
     4  profit corporation that:
     5    (i) is physically located in the state; and
     6    (ii) was operational prior to the state disaster emergency.
     7    c. "small business" means a business with not more than fifty  employ-
     8  ees;
     9    d.  "small  not-for-profit  corporation" means a not-for-profit corpo-
    10  ration, formed pursuant to the not-for-profit corporation law  with  not
    11  more than fifty employees; and
    12    e.  "state  disaster  emergency"  means  the period in which executive
    13  order two hundred two of two thousand twenty, as amended, is  in  effect
    14  to address the outbreak of novel coronavirus, COVID-19.
    15    2.  Any  industrial  development  agency  (IDA) may administer a state
    16  disaster emergency loan program to provide loans from available  revenue
    17  to  eligible entities pursuant to this section, provided that no IDA may
    18  create more than one state disaster emergency loan program.
    19    3. a. An IDA may make a loan to an eligible  entity  upon  application
    20  from  such  entity  through  the  state disaster emergency loan program,
    21  provided the IDA has determined that the applicant:
    22    (i) was a financially viable entity prior to the state disaster  emer-
    23  gency;
    24    (ii) conducts business in the area served by the IDA; and
    25    (iii) has been negatively affected by the state disaster emergency.
    26    b.  An IDA shall consider the following, before approving the applica-
    27  tion of an eligible entity for a loan under the state disaster emergency
    28  loan program:
    29    (i) creditworthiness of the applicant  prior  to  the  state  disaster
    30  emergency;
    31    (ii)  the  level of negative impact of the state disaster emergency on
    32  the operations and finances of the applicant;
    33    (iii) applicant's proposed plan to use the funds received through this
    34  program;
    35    (iv) applicant's ties to their community and the impact of their  work
    36  in the area served by the IDA;
    37    (v)  applicant's  assurance  that  efforts will be made to retain jobs
    38  during the state disaster emergency; and
    39    (vi) other potential sources of funding available to the applicant.
    40    c. An IDA shall give priority under the state disaster emergency  loan
    41  program  to applications from applicants serving highly distressed areas
    42  as defined pursuant to subdivision eighteen  of  section  eight  hundred
    43  fifty-four of this title.
    44    d. No applicant shall be permitted to receive loans from more than one
    45  IDA.
    46    e. Any IDAs that serve within the same municipalities shall coordinate
    47  the distribution of loans in the state disaster emergency loan program.
    48    4.  Prior to administering a state disaster emergency loan program, an
    49  IDA shall develop, and adopt by resolution, the terms and conditions  of
    50  such loans, provided that:
    51    a.  The amount of any loan provided pursuant to this section shall not
    52  exceed twenty-five thousand dollars, provided that the total  amount  of
    53  all  loans  received  by an eligible entity shall not exceed twenty-five
    54  thousand dollars;
    55    b. The loan agreement shall not (i) require repayment during the grace
    56  period, or (ii) charge interest on the principal amount;

        A. 10294--A                         3
 
     1    c. The loan agreement shall require that the eligible entity repay the
     2  loan in full not later than one year after the end of the grace  period;
     3  and
     4    d.  The  loan  agreement  shall  not  contain a fee or penalty for the
     5  prepayment or early payment of the loan.
     6    5. The IDA shall offer credit counseling services  or  refer  eligible
     7  entities to not-for-profit credit counselors.
     8    6.  a.  Each  IDA shall maintain records related to the state disaster
     9  emergency loan program, including  a  record  of  loans  issued  and  of
    10  payments  received,  and  include  such information in the annual report
    11  required by section twenty-eight hundred of the public authorities law.
    12    b. An IDA that establishes a state  disaster  emergency  loan  program
    13  pursuant  to this section shall submit a report on the program including
    14  but not limited to the number and aggregate amount of loans given, loans
    15  fully repaid, any outstanding loans, defaults  and  bad  debts,  to  the
    16  governor,  the  speaker  of the assembly, and the temporary president of
    17  the senate one year after the state disaster emergency ends.
    18    7. Any interest deferred or not  charged  related  to  a  loan  issued
    19  pursuant  to  this section shall be exempt from all state taxes that may
    20  be applicable to such interest amounts as they  relate  to  an  eligible
    21  entity.  IDAs  shall disclose to eligible entity borrowers in loan docu-
    22  ments that there may be federal tax consequences to the program loans.
    23    8. No new loan applications pursuant to this section shall be accepted
    24  after the state disaster emergency ends.
    25    § 3. This act shall take effect immediately and shall  expire  and  be
    26  deemed repealed December 31, 2021.
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