Assembly Bill A10086

                                BILL NUMBER:A10086

TITLE  OF BILL:   An act to repeal section 2975-a of the public authori-
ties law relating to the assessment and reimbursement of state  expendi-
tures by an industrial development agency or authority

PURPOSE  OR GENERAL IDEA OF BILL: To repeal section 2975-a of the Public
Authorities Law relating to governmental costs from industrial  develop-
ment agencies

SUMMARY OF SPECIFIC PROVISIONS: section 2975-a of the Public Authorities
law  that authorized the director of the Division of Budget to determine
the amount owed by industrial development agencies in New York State for
the recovery of State governmental costs would be repealed  upon  enact-
ment of this legislation.

JUSTIFICATION:    The  2009-2010  State  Budget  added Section 2975-a to
Public Authorities Law authorizing the recovery  of  State  governmental
costs  from.  IDAs  in an aggregate amount not to exceed five million in
any given state fiscal year. The Division  of  Budget  implemented  this
cost recovery by assessing a 4.727% flat fee on IDA revenues of all IDAs
in  the  State  that had over 55,000 in revenue and that submitted their
2008  data  to  the  Public  Authorities  Reporting  Information  System
(PARIS).  When  calculating the recovery billings the Division of Budget
considered each IDAs revenues to include their total Payment in Lieu  of
Taxes  (PILOTs). It is unreasonable to assess the cost recovery based on
              

total PILOTs because the bulk of the monies  received  from  PILOTs  are
passed  through  to  the IDA's respective municipality and should not be
considered as revenue.

Public Authorities Law section 2975-a states "on November first of  each
year,  the  director of the budget shall determine the amount owed under
this section by each industrial development  agency  or  authority"  and
goes  on  to  say  "the  state  treasurer  shall impose and collect such
assessments, which shall  be  paid  no  later  than  March  thirty-first
following the imposition of the assessments." IDAs however only received
their cost recovery bills in February 2010, leaving insufficient time to
review the bills and determine how they will be paid.

Public  Authorities  Law  section  2976  already authorizes the State to
collect a bond issuance charge from IDAs as  a  cost  recovery  measure.
The  cost recovery authorized in Public Authorities Law 2975-a is exces-
sive and duplicative. IDAs were created  by  the  State  Legislature  to
promote  the economic welfare and prosperity of the State's inhabitants.
It was intended that IDAs would actively attract, encourage and  develop
economically  sound  commerce and industry for the purpose of preventing
unemployment and economic deterioration.   The effect of  the  new  cost
recovery  assessment  depletes IDA cash reserves and severely limits the
ability of IDAs to continue in their economic development efforts. It is
for these and other reasons stated by several local government officials
and IDA's throughout the state that this section of  public  authorities
law should be repealed with this legislation.

PRIOR LEGISLATIVE HISTORY: none

FISCAL  IMPLICATIONS:  Approximately 55 Million that was billed to IDA's
statewide would not be recovered by the State.

EFFECTIVE DATE: immediately