senate Bill S1252

Authorizes the NYSUDC to form a limited liability company for the purpose of certification as a community development entity under the New Markets tax credit program

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 09 / Jan / 2013
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 08 / Jan / 2014
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS

Summary

Authorizes the NYS urban development corporation to form a limited liability company for the purpose of certification as a community development entity under the New Markets tax credit program.

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Bill Details

Versions:
S1252
Legislative Cycle:
2013-2014
Current Committee:
Senate Corporations, Authorities And Commissions
Law Section:
New York State Urban Development Corporation Act
Laws Affected:
Amd §12, UDC Act
Versions Introduced in Previous Legislative Cycles:
2011-2012: S2416
2009-2010: S7462A

Sponsor Memo

BILL NUMBER:S1252

TITLE OF BILL:
An act
to amend
the New York state
urban development corporation act, in relation to authorizing the
corporation to form a limited liability company for a specific purpose
and providing for the repeal of such provisions upon expiration
thereof

PURPOSE:

This bill would, allow New York State to participate in the federal
New Markets Tax Credit (NMTC) Program by creating the necessary
authority for the Empire State Development Corporation (ESDC) to form
limited liability companies.

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend the opening paragraph of § 12 of § 1
of Chapter 174 of the Laws of 1968 constituting the New York State
Urban Development Corporation (UDC) Act, to authorize ESDC to form
LLCs pursuant to Limited Liability Company (LLC) Law § 203 for the
sole purpose of the participation in the federal NMTC Program. This
section would also provide that all projects awarded New Markets Tax
Credits by ESDC or its subsidiary shall be submitted to the Public
Authorities Control Board for approval, in accordance with the
'provisions of Public Authorities Law § 51. Finally, this section
would provide that ESDC report annually on the NMTC Program.

Section 2 of the bill would provide for an immediate effective date,
as well as a five year sunset provision.

EXISTING LAW:

Current law does not permit ESDC to form LLCs.

PRIOR LEGISLATIVE HISTORY:

2011: Referred to Corporations, Authorities & Commissions
2010: Referred to Corporations, Authorities & Commissions
Reported to Finance
Passed Senate - Aye: 61 Nay: 0

STATEMENT IN SUPPORT:

In May of 2009, ESDC was awarded a $30 million allocation of federal
NMTCs under the American Recovery and Reinvestment Act (ARRA) in
order to facilitate and increase private sector investment in
economic and community
development in low income communities. This amendment to the UDC Act
would permit credits to flow to investors and foster economic
development in distressed communities throughout the State.


Enabling ESDC to form LLCs for the purpose in question will enable the
State to take advantage of a benefit under the federal stimulus
package. This benefit comes at no cost to the State. Currently, New
York is at a disadvantage relative to other states that take part in
the NMTC program. Other states can form LLCs and LLCs are the only
type of entity that can effectively utilize the NMTC benefit.
Accordingly, necessary private investors have no incentive to invest
in New York projects using the NMTC allocation awarded to ESDC in 2009.

Since the award in May of $30 million from the ARRA, ESDC has
identified several eligible projects with funding gaps that could be
filled with an NMTC investment. Additionally, the federal government
is expected to announce another round of NMTC awards in 2010, but New
York will not be able to compete for an additional allocation of
NMTCs until the proposed amendment has been adopted and the current
allocation is awarded.

BUDGET IMPLICATIONS:

None to the State. Allocation of this funding will create a
significant economic benefit to underserved communities in the State.
Since its creation in 2000, the NMTC Program has resulted in the
investment of over $14 billion of private sector capital in low
income communities around the country.

EFFECTIVE DATE:

This bill would take effect immediately and expire five years later.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1252

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen. PERKINS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Corporations,  Authorities
  and Commissions

AN ACT to amend the New York state urban development corporation act, in
  relation  to  authorizing  the corporation to form a limited liability
  company for a specific purpose and providing for the  repeal  of  such
  provisions upon expiration thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 1 of section 12 of section 1 of chapter 174  of
the  laws  of  1968  constituting  the  New York state urban development
corporation act, is amended by adding three undesignated  paragraphs  to
read as follows:
  THE CORPORATION, BY RESOLUTION, MAY DIRECT ANY OF ITS DIRECTORS, OFFI-
CERS,  OR  EMPLOYEES  TO  FORM  A  LIMITED LIABILITY COMPANY PURSUANT TO
SECTION 203 OF THE LIMITED LIABILITY COMPANY LAW FOR THE SOLE PURPOSE OF
CERTIFYING AND PERFORMING AS A COMMUNITY DEVELOPMENT ENTITY  THAT  WOULD
BE  ELIGIBLE  TO  RECEIVE  AN  ALLOCATION  OF  TAX CREDITS UNDER THE NEW
MARKETS TAX CREDIT PROGRAM. SUCH A LIMITED LIABILITY COMPANY  SHALL  ACT
SOLELY IN RELATION TO PROJECTS SELECTED BY THE CORPORATION, OR A SUBSID-
IARY  OF  THE  CORPORATION,  TO RECEIVE TAX CREDITS FROM A FEDERAL ALLO-
CATION TO THE CORPORATION, OR A SUBSIDIARY OF THE CORPORATION, UNDER THE
NEW MARKETS TAX CREDIT PROGRAM AND TO DO ANY OTHER ACT  OR  THING  INCI-
DENTAL  TO  OR  CONNECTED  WITH  THE FORGOING PURPOSES OR IN ADVANCEMENT
THEREOF, PROVIDED THAT THE CORPORATION, OR A SUBSIDIARY  OF  THE  CORPO-
RATION,  SHALL  BE THE MANAGING MEMBER OF EACH LIMITED LIABILITY COMPANY
CREATED BY THE CORPORATION.
  ALL PROJECTS AWARDED NEW MARKETS TAX CREDITS BY THE CORPORATION  OR  A
SUBSIDIARY  THEREOF SHALL BE SUBMITTED TO THE PUBLIC AUTHORITIES CONTROL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03582-01-3

S. 1252                             2

BOARD FOR APPROVAL, IN ACCORDANCE WITH THE PROVISIONS OF SECTION  51  OF
THE PUBLIC AUTHORITIES LAW.
  THE  CORPORATION  SHALL  INCLUDE  IN  THE  INFORMATION  REQUIRED TO BE
SUBMITTED ANNUALLY IN ACCORDANCE WITH THE PROVISIONS OF SUBDIVISION 1 OF
SECTION 2800 OF THE PUBLIC AUTHORITIES LAW INFORMATION REGARDING ASSIST-
ANCE PROVIDED BY IT OR ITS SUBSIDIARY UNDER THE NEW MARKETS  TAX  CREDIT
PROGRAM,  AND  SHALL  PROVIDE  FINANCIAL INFORMATION WITH RESPECT TO ANY
SUBSIDIARY ADMINISTERING THE  PROGRAM  IN  THE  CORPORATION'S  FINANCIAL
REPORTS, INCLUDING ITS CERTIFIED AUDITED FINANCIAL STATEMENTS.
  S  2.  This  act shall take effect immediately and shall expire and be
deemed repealed five years after such date.

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