NY State Senate Bill 2009-S363

Archive: Last Bill Status - In Senate Committee Commerce, Economic Development And Small Business Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to commerce, economic development and small business
Jan 07, 2009	referred to commerce, economic development and small business

2009-S363 (ACTIVE) - Details

See Assembly Version of this Bill:: A4881
Current Committee:: Senate Commerce, Economic Development And Small Business
Law Section:: Economic Development Law
Laws Affected:: Amd §100, Ec Dev L; amd §1801, add §1835-bb, Pub Auth L
Versions Introduced in 2011-2012 Legislative Session:: S354

2009-S363 (ACTIVE) - Summary

Authorizes the job development authority to create and administer the bank export incentive program for the investment and lending of monies which may be borrowed by certain eligible New York firms for business projects; directs the commissioner of the department of economic development to assist in the promotion of such program; defines terms.

2009-S363 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S363

 TITLE OF BILL :
An act to amend the economic development law and the public
authorities law, in relation to authorizing the job development
authority to create and administer the bank export incentive program
with the technical assistance of the department of economic
development


 PURPOSE :
To encourage banking organizations to provide medium term loans at
competitive interest rates for relatively small amounts of money
borrowed for short periods of time.

 SUMMARY OF PROVISIONS :
This legislation permits the Job Development Authority (JDA) to create
a program in which monies will be placed with cooperating banking
organizations. Such corporations will be permitted to invest these
monies on the condition that they lend an amount equal to two times
the amount of money provided them to eligible applicants for eligible
projects. Eligible applicants is defined as New York State firms with
less than 500 workers. Eligible projects means a product manufactured
or service delivered by an eligible applicant to a customer residing
in or representing a nation other than the United States or its
territories. The bill permits JDA to authorize such loans to be

between $25,000 and $500,000 and to be at a competitive interest rate
under the terms negotiated by the authority with the banking
organization involved. The authority is permitted to terminate such
agreement 30 days after that banking organization involved has been
notified that they have not lived up to the terms of the agreement.
Once each fiscal year the authority shall report to the Governor and
the fiscal committees of the Legislature as to the number of loans
made to eligible projects, the amount of each loan and its repayment
terms include interest charged and duration of the loan, the principal
product or services involved in the eligible project, the nation in
which the product or services was sold, and the number of banking
organizations participating in the program.

 JUSTIFICATION :
Small and medium-sized corporations seeking to export products find it
virtually impossible to secure financing when the sale of a product
involved is to a foreign customer. The primary reasons that such funds
have been unavailable is that the processing of such a loan involved
high overhead cost because of the need to evaluate the foreign
customer and estimate the fluctuations of foreign currencies and other
variables involved in an export sale. These high transaction costs
cannot be recovered because the interest rate that must be offered in
order for the seller to remain competitive must be relatively low and
the terms of the loan are relatively short in duration (one to five
years) and the principal amount is also low due to the size of the
transaction.  Thus, the banking organization finds it impossible to
make money offering these "export credits" to small and medium-sized
businesses seeking to sell overseas.

This legislation is designed to provide a pool of money which the
banking organization can invest as it chooses and use the income from
such investment organization to subsidize the cost of small loans to
medium and small-sized exporters. The legislation requires that at
least two times the amount of money placed with the bank shall be lent
out to these small and medium sized firms. While medium-term financing
represents only roughly 10% of the export financing needs of
corporations in our country, it is the portion of export financing
which is being met least well by the banking community. It is the
intent of this legislation to use the expertise that resides within
the banking community to evaluate the quality of the loans and make
the financial judgments about each loan. Such expertise does not,
reside within the public sector and would therefore be done in a less
efficient manner by a public sector organization. While the end result
of this legislation will be to make New York exporters more
competitive to the world market, it is necessary to provide such
competition through the intermediary of the banking community because
of their ability to evaluate the risk.

 LEGISLATIVE HISTORY :
2007-2008:  S.2027 Referred to Commerce, Economic Development and
Small Business
2003-2004: S.1201 Referred to Commerce, Economic Development and Small
Business
2001-2002:  S.519 Referred to Commerce, Economic Development and Small
Business

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
On the one hundred twentieth day after it shall have become a law.

2009-S363 (ACTIVE) - Bill Text download pdf

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

                                   363

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by  Sen.  ROBACH -- read twice and ordered printed, and when
  printed to be committed to the Committee on Commerce, Economic  Devel-
  opment and Small Business

AN  ACT to amend the economic development law and the public authorities
  law, in relation to  authorizing  the  job  development  authority  to
  create and administer the bank export incentive program with the tech-
  nical assistance of the department of economic development

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

  Section 1.  Legislative  intent.  The  legislature  hereby  finds  and
declares  that the economy of the state of New York can be bolstered and
enhanced through the sale of additional products and services  from  New
York  state  to  customers in foreign countries. The legislature further
finds that one of the impediments to an increase in  export  sales  from
New  York state is the unavailability of loans at a competitive interest
rate for relatively small amounts of money  borrowed  for  time  periods
between  one  and  five years from the commercial banks of our state and
nation. It is further found that one of  the  major  reasons  that  such
monies  are  unavailable  is  the  high cost of processing such loans by
banking organizations because of the complexities of international tran-
sactions. The legislature, therefore, finds and declares that it  is  in
the  interest of a stronger and more viable economy for the state of New
York to encourage the banking industry of our state to  provide  medium-
term  financing  for  low  dollar volume export transactions through the
creation of a bank export incentive program.
  S 2.  Subdivision 47 of section 100 of the economic  development  law,
as renumbered by chapter 427 of the laws of 2008, is renumbered subdivi-
sion 48 and a new subdivision 47 is added to read as follows:
  47.  THE  COMMISSIONER  SHALL, THROUGH THE USE OF SEMINARS, WORKSHOPS,
ADVERTISING OR OTHER APPROPRIATE METHODS, MAKE POTENTIAL ELIGIBLE APPLI-

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

                                                           LBD03499-01-9

S. 363                              2

CANTS AWARE OF THE EXPORT FINANCE FUND AND OF ITS POTENTIAL USE TO  SUCH
APPLICANTS.  FURTHER,  THE COMMISSIONER SHALL MAKE BANKING ORGANIZATIONS
PARTICIPATING IN THE USE OF THE EXPORT FINANCE FUND AWARE  OF  POTENTIAL
ELIGIBLE  APPLICANTS  AND SHALL ASSIST BOTH SUCH ELIGIBLE APPLICANTS AND
BANKING ORGANIZATIONS AS MAY BE REQUIRED IN  ORDER  TO  HELP  FACILITATE
FURTHERANCE  OF  THE SALES OF MANUFACTURED PRODUCTS TO THE INTERNATIONAL
MARKETPLACE.
  S 3. Section 1801 of the public authorities law is amended  by  adding
six new subdivisions 20, 21, 22, 23, 24 and 25 to read as follows:
  20.  "COMPETITIVE  INTEREST  RATE" SHALL MEAN A RATE OF INTEREST WHICH
MUST BE APPLIED TO A LOAN MADE TO AN ELIGIBLE APPLICANT FOR AN  ELIGIBLE
PROJECT,  AT  A LEVEL OF INTEREST DESIGNED TO INDUCE ELIGIBLE APPLICANTS
TO RETAIN A COMPETITIVE POSITION IN THE WORLD MARKETPLACE.
  21. "BANKING ORGANIZATION" SHALL MEAN (A) ANY ORGANIZATION DEFINED  BY
SUBDIVISION  ELEVEN OF SECTION TWO OF THE BANKING LAW, (B) ANY AGENCY OR
BRANCH OF A FOREIGN BANKING CORPORATION LICENSED BY THE BANKING  DEPART-
MENT  UNDER  ARTICLE  FIVE  OF  THE  BANKING LAW, (C) ANY NATIONAL BANK,
FEDERAL SAVINGS AND LOAN ASSOCIATION AND FEDERAL CREDIT UNION,  (D)  ANY
AUTHORIZED INSURER DEFINED BY PARAGRAPH TEN OF SUBSECTION (A) OF SECTION
ONE  HUNDRED  SEVEN  OF THE INSURANCE LAW, AND (E) ANY OTHER INSTITUTION
WITHIN THE STATE AUTHORIZED TO ORIGINATE AND  SERVICE  LOANS  INCLUDING,
BUT NOT LIMITED TO, CREDIT UNIONS AND MORTGAGE LOAN COMPANIES.
  22.  "ELIGIBLE  APPLICANT"  SHALL  MEAN A FIRM WHICH EMPLOYS LESS THAN
FIVE HUNDRED WORKERS AND WHOSE PRINCIPAL PLACE OF BUSINESS IS WITHIN THE
BORDERS OF NEW YORK STATE OR AN EXPORT TRADING COMPANY AS DEFINED IN THE
EXPORT TRADING COMPANY ACT (P.L. 97-290) PRESENTING AN ELIGIBLE  PROJECT
ON BEHALF OF SUCH FIRM.
  23.  "ELIGIBLE PROJECT" SHALL MEAN A SALE OF A PRODUCT MANUFACTURED OR
SERVICE DELIVERED BY AN ELIGIBLE APPLICANT TO A CUSTOMER RESIDING IN AND
REPRESENTING A BUSINESS, NATURAL PERSON, OR  GOVERNMENTAL  ENTITY  OF  A
NATION  OTHER THAN THE UNITED STATES OR ITS TERRITORIES, WHICH (A) IS TO
BE FINANCED FOR A PERIOD NOT LESS THAN ONE YEAR NOR MORE THAN FIVE YEARS
FROM THE POINT OF SALE, (B) IS INSURED BY THE FCIA OR THE  EXPORT-IMPORT
BANK OF THE UNITED STATES.
  24. "PROJECT LOAN" SHALL MEAN MONIES LENT TO AN ELIGIBLE APPLICANT FOR
AN  ELIGIBLE  PROJECT  AT A COMPETITIVE INTEREST RATE FROM A COOPERATING
BANKING ORGANIZATION.
  25. "EXPORT FINANCE FUND" OR "FUND" SHALL MEAN MONIES PROVIDED BY  THE
AUTHORITY  TO  A  COOPERATING  BANKING  ORGANIZATION OR ORGANIZATIONS IN
ORDER THAT SUCH ORGANIZATION OR ORGANIZATIONS  SHALL  BE  ABLE  TO  MAKE
LOANS TO ELIGIBLE APPLICANTS FOR ELIGIBLE PROJECTS AT COMPETITIVE INTER-
EST  RATES  BY INVESTING SUCH FUND IN INTEREST-BEARING INVESTMENTS WHICH
THE AUTHORITY MAY AUTHORIZE.
  S 4. The public authorities law is amended by  adding  a  new  section
1835-bb to read as follows:
  S 1835-BB. ADDITIONAL POWERS OF THE AUTHORITY. THE AUTHORITY IS HEREBY
DIRECTED  TO ESTABLISH THE NEW YORK STATE BANK EXPORT INCENTIVE PROGRAM.
1. IN ORDER TO IMPLEMENT THE PROGRAM, THE AUTHORITY MAY ENTER INTO COOP-
ERATIVE AGREEMENTS WITH ONE OR MORE  BANKING  ORGANIZATIONS  WITHIN  THE
STATE  TO  PROVIDE  THEM  WITH AN EXPORT FINANCE FUND IN ORDER THAT SUCH
COOPERATING BANKING ORGANIZATIONS MAY LEND THEIR OWN ASSETS TO  ELIGIBLE
APPLICANTS FOR ELIGIBLE PROJECTS AT COMPETITIVE INTEREST RATES.
  2.  SUCH  AGREEMENT  WITH  A  COOPERATING  BANKING  ORGANIZATION SHALL
INCLUDE BUT NOT BE LIMITED TO:
  (A) A REQUIREMENT THAT AN AMOUNT EQUAL TO NOT LESS THAN TWO TIMES  THE
AMOUNT  OF  MONIES ON DEPOSIT WITH SUCH COOPERATING BANKING ORGANIZATION

S. 363                              3

MUST BE LENT TO ELIGIBLE APPLICANTS FOR  ELIGIBLE  PROJECTS  WITHIN  THE
AGREED  UPON TIME PERIOD FOLLOWING DEPOSIT OF SAID MONIES WITH THE BANK-
ING CORPORATION.
  (B)  THE  CRITERIA  AND  STANDARDS WITHIN WHICH THE TERMS AND INTEREST
RATES OFFERED TO  ELIGIBLE  APPLICANTS  FOR  ELIGIBLE  PROJECTS  MAY  BE
CONSIDERED TO BE COMPETITIVE.
  (C)  A  REQUIREMENT  THAT LOANS TO ELIGIBLE APPLICANTS BE MADE FOR NOT
LESS THAN TWENTY-FIVE THOUSAND DOLLARS NOR MORE THAN FIVE HUNDRED  THOU-
SAND DOLLARS.
  3.  IN  ORDER  TO  MAKE  SUCH  FINANCING POSSIBLE, THE AUTHORITY SHALL
ESTABLISH CRITERIA FOR THE SELECTION OF  COOPERATING  BANKING  ORGANIZA-
TIONS  AND  FOR  THE AMOUNTS AND TERMS UNDER WHICH THE INVESTMENT OF THE
FUND MAY BE MADE IN SUCH BANKING ORGANIZATIONS.
  4. A PROVISION STATING THAT IF THE AUTHORITY  IN  ITS  JUDGMENT  FINDS
THAT  SUCH BANKING ORGANIZATION HAS NOT MET THE CONDITIONS OF THE AGREE-
MENT ENTERED INTO BETWEEN THE AUTHORITY AND SAID  BANKING  ORGANIZATION,
THE  AUTHORITY SHALL NOTIFY THE BANKING ORGANIZATION OF THOSE ASPECTS OF
THE AGREEMENT THAT THE AUTHORITY DETERMINES ARE NOT BEING  MET;  AND  IF
AFTER  THIRTY  DAYS SUBSEQUENT TO SUCH NOTIFICATION THE AUTHORITY DETER-
MINES THAT THE BANKING ORGANIZATION HAS NOT MET THE  CONDITIONS  OF  THE
AGREEMENT, THE AUTHORITY MAY REMOVE ANY MONIES DEPOSITED WITH SUCH BANK-
ING ORGANIZATION AND MAY TERMINATE THE AGREEMENT.
  5.  THE  AUTHORITY  SHALL  ALLOCATE  THE  MONIES  APPROPRIATED FOR THE
PURPOSES OF THIS PROGRAM FOR DEPOSIT IN ONE OR MORE COOPERATING  BANKING
ORGANIZATIONS LOCATED WITHIN THE STATE OF NEW YORK.
  6. AT THE END OF EACH FISCAL YEAR FOLLOWING THE EFFECTIVE DATE OF THIS
SECTION,  THE  AUTHORITY  SHALL  REPORT  TO  THE GOVERNOR AND THE FISCAL
COMMITTEES OF THE LEGISLATURE AS TO: (A) THE NUMBER  OF  LOANS  MADE  TO
ELIGIBLE  PROJECTS;  (B) THE AMOUNT OF EACH LOAN AND ITS REPAYMENT TERMS
TO INCLUDE INTEREST CHARGED AND DURATION OF THE LOAN; (C) THE  PRINCIPAL
PRODUCT  OR SERVICES INVOLVED IN THE ELIGIBLE PROJECT; (D) THE NATION IN
WHICH THE PRODUCT OR SERVICE WAS SOLD; AND (E)  THE  NUMBER  OF  BANKING
ORGANIZATIONS PARTICIPATING IN THE PROGRAM.
  S 5. This act shall take effect on the one hundred twentieth day after
it  shall have become a law. Effective immediately, the addition, amend-
ment and/or repeal of any rule or regulation necessary for the implemen-
tation of the foregoing sections of this act on their effective date  is
authorized  and  directed  to  be  made  and completed on or before such
effective date.

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Senate Bill S363

Sponsored By

Archive: Last Bill Status - In Senate Committee Commerce, Economic Development And Small Business Committee

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2009-S363 (ACTIVE) - Details

2009-S363 (ACTIVE) - Summary

2009-S363 (ACTIVE) - Sponsor Memo

2009-S363 (ACTIVE) - Bill Text download pdf

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Senate Bill S363

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Sponsored By

Joseph E. Robach

Archive: Last Bill Status - In Senate Committee Commerce, Economic Development And Small Business Committee

Actions

2009-S363 (ACTIVE) - Details

2009-S363 (ACTIVE) - Summary

2009-S363 (ACTIVE) - Sponsor Memo

2009-S363 (ACTIVE) - Bill Text download pdf

Comments