BILL NUMBER:S5625

TITLE OF BILL:

An act to authorize the Gloversville Public Library to enter into
contracts in aid of the financing of historic rehabilitation of the
library; and to authorize participation in the retirement system by
employees of a free association library chartered to serve the
Enlarged City School District of the city of Gloversville

PURPOSE:

To enable the historic Gloversville Public Library, built in 1904, to
obtain private investments and make much needed renovations to its
buildings at no expense to local residents.

SUMMARY OF PROVISIONS:

Section 1 of the bill sets forth the policy and purposes of this act.
It finds that enabling the use of historic rehabilitation tax credits,
new markets tax credits, and other tax incentives to assist in
financing the rehabilitation of the Gloversville Public Library is for
a public and governmental purpose and is in the public interest.

Section 2 of the bill allows the restructuring of the Gloversville
Public Library in order to ensure that it may participate in the
              

historic rehabilitation tax credit program and the New Markets Tax
Credit program.

Paragraph (a) of Section 2: In order to accomplish the use of the tax
credits, the Library will need to transfer ownership of its property
to two new education corporations. First, the Library must transfer
its building to an education corporation, chartered or incorporated by
the Regents, that can both incur debt (which the Library cannot, as a
public library) and create the taxable subsidiary business
corporations needed to make use of the historic tax credits. Thus, the
proposed legislation authorizes the transfer of ownership of the
Gloversville Public Library's building to an education corporation
created for the purpose of preserving this historic property and
facilitating the expansion of free library services in Gloversville.

Paragraph (b) of Section 2: To comply with IRS guidance and
regulations, the Library will need to transfer its collection and
furnishings to a new free association library created to serve
Gloversville during the tax credit period. The proposed legislation
authorizes the transfer of the Library's collection and furnishings to
a free association library to be chartered and registered by the Board
of Regents to provide free library services to the residents of
Gloversville.

Paragraph (c) of Section 2: The current library is structured as a
school district public library, and Gloversville voters have approved
taxes for library purposes that are currently levied and collected by
the Enlarged City School District of Gloversville and paid over to the
Gloversville Public Library to support its provision of library
services to Gloversville residents. During the period in which those
library services will be provided by the new free association library,


the tax levy should support the free association library's operations
rather than the operations of the Gloversville Public Library, to
ensure against double taxation. Section 2(c) of the proposed
legislation authorizes the voters of Gloversville to direct that the
taxes raised for library purposes be paid over to the free association
library, rather than to the Gloversville Public Library, during the
period in which the free association library is providing the library
services.

Section 3 of the bill declares that all of the purposes referred to
herein are in the public interest and for the benefit of the residents
of the Enlarged City School District of the City of Gloversville and
are hereby declared to be public purposes for which monies and other
assets of the Gloversville Public Library may be used or expended.

Section 4 of the bill provides that employees of the free association
library which is being created shall retain their existing membership
in the state and local employees retirement system. This provision is
consistent with existing law, which permits the State Comptroller to
allow employees of association libraries to participate in the
Retirement System. Employees of multiple other free association
libraries currently participate in the Retirement System.

JUSTIFICATION:

The Gloversville Public Library is seeking to adaptively re-use and
transform its 16,000 square foot Carnegie Library into a modern,
19,000 square foot 21st Century Learning Center. Built in 1904 and on
the National Register since 1976, the building is both iconic and
structurally sound: it is suitable for continuing its vital programs
and services to the nearly 20,000 residents of the Enlarged City
School District of Gloversville. It is, however, badly in need of a
thorough renovation Among other limitations, the building lacks
accessibility and has an antiquated heating system (the boiler dates
from 1904), as well as antiquated cooling, electrical and water
systems.

By renovating and rehabilitating its historic building, the Library
will be able to improve accessibility, expand services and programs,
and better serve patrons of the Library It will be able to provide
both traditional services such as children's and family reading
programs, a circulating and reference collection, and a place to read
and study, as well as new information services by functioning as the
community's technology and remote learning hub, workforce and small
business development center The Library will be a place for all
residents of this low-income community to come together and learn
about the issues that are important to them. As such, the
transformation of the Library is a critical component of the
revitalization of the community as a whole, particularly
Gloversville's downtown core.

The Library is hoping to use historic tax credits to leverage
significant private investment in the project. This would avoid
placing an additional tax burden on taxpayers of the Enlarged City
School District of Gloversville, who support the Library's operating
budget through their taxes. As the owner of the historic property, the
Library can qualify for historic tax credits in an amount equal to 40%


of the amount expended in historic rehabilitation of the property The
Library would then assign the tax credits for use by an investor, in
return for an investment that would be used as additional funding for
the project. The Library has the potential for raising nearly $2
million in private investment using state and federal historic tax
credits as an incentive for such investment.

New Markets Tax Credits and historic rehabilitation tax credits have
been used frequently in new York by both private and nonprofit
entities. These projects have played a crucial role in encouraging
development and redeveloping communities,.This bill would enable the
Gloversville Public Library to participate in these programs,
undertake needed improvements, and help revitalize the downtown area.

Finally, the bill ensures that employees of the Gloversville Public
Library will not be negatively affected by providing that these
employees will be able to continue their participation in the New York
State Employee Retirement System notwithstanding their change of
employer during the tax credit period.

LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

None to the State.

EFFECTIVE DATE:

Immediately.