S06085 Summary:

Add §54, UDC Act
Establishes the New York state taxi medallion guaranty program act to assist taxi medallion owners who are otherwise unable to obtain financing, refinancing, or restructuring of an existing loan.
Go to top    

S06085 Actions:

Go to top

S06085 Committee Votes:

Go to top

S06085 Memo:

Memo not available
Go to top

S06085 Text:

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                    IN SENATE
                                      May 16, 2019
        Introduced  by  Sen.  RAMOS  -- read twice and ordered printed, and when
          printed to be committed to the Committee on Corporations,  Authorities
          and Commissions
        AN  ACT  to  amend the urban development corporation act, in relation to
          establishing the New York state taxi medallion guaranty program act

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Short  title. This act shall be known and may be cited as
     2  the "New York state taxi medallion guaranty program act".
     3    § 2. Section 1 of chapter 174 of the laws of  1968,  constituting  the
     4  New York state urban development corporation act, is amended by adding a
     5  new section 54 to read as follows:
     6    §  54.  New  York  state  taxi  medallion guaranty program. 1. For the
     7  purposes of this section:
     8    (a) "Financial  institution"  shall  mean  any  bank,  trust  company,
     9  savings  bank,  savings  and loan association, or cooperative bank char-
    10  tered by the state or any national banking association, federal  savings
    11  and  loan association or federal savings bank, any community development
    12  financial institution or community-based lending  organization,  or  any
    13  state  or  federally  chartered  credit  union,  or any other federal or
    14  state-chartered entity whose  principal  business  is  the  originating,
    15  purchasing,  or  servicing  of  commercial  financial  obligations of or
    16  relating to medallions.
    17    (b) "Participating financial institution"  shall  mean  any  financial
    18  institution  participating in the New York state taxi medallion guaranty
    19  program.
    20    (c) "Medallion" shall have the same  meaning  as  defined  by  section
    21  twelve hundred eighty of the tax law.
    22    2. (a) The corporation, or its agent, shall establish a taxi medallion
    23  guaranty  program  to  provide  a  loan loss reserve to assist medallion
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 6085                             2
     1  owners that otherwise find it difficult to obtain regular  bank  financ-
     2  ing, refinancing, or restructuring of any existing loan.
     3    (b)(i)  Assistance  under the taxi medallion guaranty program shall be
     4  provided by the corporation or its agent, who  shall  be  authorized  to
     5  assist small businesses and individuals that otherwise find it difficult
     6  to  obtain  regular or sufficient bank financing or restructuring of any
     7  existing loan.
     8    (ii) Any financial institution  desiring  to  become  a  participating
     9  financial  institution  shall  execute  an agreement in such form as the
    10  corporation or its agent shall prescribe. Such agreement  shall  contain
    11  the  terms and provisions set forth in paragraph (c) of this subdivision
    12  and such other terms and provisions as  the  corporation  or  its  agent
    13  shall deem necessary or appropriate.
    14    (c) A participating financial institution refinancing or restructuring
    15  a loan to a small business pursuant to this section shall:
    16    (i)  upon  refinancing  or restructuring of any loan, forgive at least
    17  one hundred seventy-five thousand dollars of debt on such original loan;
    18    (ii) certify to the corporation or its agent in such fashion and  with
    19  such  supporting  information  as  the  corporation  or  its agent shall
    20  prescribe, in addition to any medallion loans that it has  restructured;
    21  and
    22    (iii)  upon  refinancing or restructuring of any loan, extend the date
    23  of maturity on the original loan by at least four years.
    24    (d) The corporation or its agent shall, after  such  certification  as
    25  provided  by  subparagraph  (ii)  of  paragraph (c) of this subdivision,
    26  transfer to the participating financial institution an amount  equal  to
    27  the  total contributions of such participating financial institution and
    28  the medallion owner or such additional amount up to one  hundred  seven-
    29  ty-five  thousand  dollars  of  such  contributions as determined by the
    30  corporation or its agent, provided however that prior to  such  transfer
    31  such  participating  financial  institution must first exhaust all other
    32  options for recovering the outstanding loan amount from the  loan  docu-
    33  ments  including, but not limited to those options available under arti-
    34  cle nine of the uniform commercial code.
    35    (e) Once a  participating  financial  institution  has  exhausted  its
    36  recovery  efforts under a medallion loan and security agreement, if such
    37  recoveries  amount  to  less  than  one  hundred  seventy-five  thousand
    38  dollars,  such  participating  financial  institution  may draw upon the
    39  funds in the loan loss reserve established by this section to repay such
    40  loan in the amount equal to the difference between one hundred  seventy-
    41  five thousand dollars and the amount otherwise recovered.
    42    3.  Administration  of  the  taxi  medallion guaranty program. (a) The
    43  corporation is hereby authorized to:
    44    (i) enter into contracts  with  third  party  financial  institutions,
    45  including  but  not  limited to the New York business development corpo-
    46  ration established under article five-A of the banking law,  to  act  as
    47  agent  of  the  corporation  with  respect  to the administration of the
    48  program, provided that the selection of a third party other than the New
    49  York business development  corporation  shall  be  made  pursuant  to  a
    50  competitive process;
    51    (ii)  conduct  an  annual  review and assessment of the performance of
    52  such third party in its capacity as agent for the corporation, to deter-
    53  mine whether the contract referenced in subparagraph (i) of  this  para-
    54  graph  should  be renewed for an additional two year period. Such review
    55  shall be based on whether such third party agent has satisfactorily  met
    56  the terms and conditions of such contract;

        S. 6085                             3
     1    (iii)  allow such third party agent the opportunity to take corrective
     2  action where an initial determination has found that  such  third  party
     3  agent's performance is unsatisfactory;
     4    (iv) submit to the speaker of the assembly and the temporary president
     5  of  the  senate  its  recommendation to terminate the contract with such
     6  third party agent and transfer such contract to another  agent  where  a
     7  final  review  of  the  third  party  agent's  performance  continues to
     8  conclude that such third party agent's  performance  is  unsatisfactory;
     9  and
    10    (v)  promulgate  rules and regulations with respect to the implementa-
    11  tion of the taxi medallion guaranty program  and  any  other  rules  and
    12  regulations  necessary  to  fulfill  the purposes of this section, which
    13  shall be consistent with the program plan required by subdivision  nine-
    14  teen of section one hundred of the economic development law.
    15    (b)  Any  contract  entered into pursuant to subparagraph (i) of para-
    16  graph (a) of this subdivision shall:
    17    (i) be for a period of two years and shall be  renewed  for  an  addi-
    18  tional  two year period subject to the requirements of subparagraph (ii)
    19  of paragraph (a) of this subdivision; and
    20    (ii) provide for compensation of expenses incurred by the third  party
    21  agent  in  connection  with  its  services  as  agent and for such other
    22  services as the corporation may  deem  appropriate  including,  but  not
    23  limited to, the use of the premises, personnel, and personal property of
    24  such third party agent.
    25    § 3. This act shall take effect on the one hundred eightieth day after
    26  it  shall have become a law. Effective immediately, the addition, amend-
    27  ment and/or repeal of any rule or regulation necessary for the implemen-
    28  tation of this act on its effective date are authorized to be  made  and
    29  completed on or before such effective date.
Go to top