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A01920 Summary:

COSPNSRForrest, Zaccaro
Rpld & add §104-a, Ec Dev L; amd §§1836-a, 1836-b, 1836-c, 1836-d & 1836-e, Pub Auth L; amd §612, Tax L
Relates to the establishment of a state university-based center for employee ownership that provides education and outreach to business owners regarding employee ownership.
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A01920 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Zinerman
  TITLE OF BILL: An act to amend the economic development law, the public authorities law and the tax law, in relation to the establishment of a state universi- ty-based center for employee ownership; and to repeal certain provisions of the economic development law relating thereto   PURPOSE OR GENERAL IDEA OF BILL: This bill provides several updates and revisions to current law to support the expansion of employee-owned enterprises or worker cooper- ative businesses.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends the Economic Development Law and creates the Center for Employee Ownership, housed within the State University of New York, out of a defunct economic development program to support education and outreach on employee ownership succession plans. Sections 2-6 amends the Public Authorities Law and revitalizes a defunct lending program that supports loans and loan guarantees to finance employee-owned businesses, especially in the case of succession and purchase of a pre-existing business by employees. The authority shall have authorization to lend up to $100 million to such businesses, and all loans shall be repaid to the authority with proceeds used for addi- tional lending. Section 7 amends the Tax Law to provide complete capital gains tax exemption for sale of stock to an employee-owned enterprise. Section 8 is the effective date.   JUSTIFICATION: Employee-owned businesses and worker cooperatives are a vital business sector that employs 13.5 million workers across the country at over 7,000 companies. New York provides a modicum of support for such busi- nesses, but several programs have become defunct and require new author- ization and revision to properly support this growing segment of the state's economy. This legislation will help support the creation of new employee-owned businesses by focusing on support for succession plan- ning, so that a business can continue when the owner retires or moves on by spinning the business off to a cooperative employee-owned enterprise.   PRIOR LEGISLATIVE HISTORY:.: 2017-18: S.5685/A.8368(Gjonaj)- Referred. Commerce, Economic Development and Small Business   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Minimal. All funding authorized under this bill would be comprised of pre-existing appropriations or through loans or loan guarantees that will be repaid by the affected entities.   EFFECTIVE DATE: Immediately, except that section one of the bill shall take effect 180 days after the bill shall have become a law.
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