S T A T E O F N E W Y O R K
________________________________________________________________________
4377
2011-2012 Regular Sessions
I N A S S E M B L Y
February 3, 2011
___________
Introduced by M. of A. P. RIVERA, TOWNS, SCHROEDER -- Multi-Sponsored by
-- M. of A. AUBRY, BRENNAN, CAHILL, CANESTRARI, CLARK, ENGLEBRIGHT,
HEASTIE, JOHNS, MAGEE, McENENY, MILLMAN, MORELLE, PHEFFER, J. RIVERA
-- read once and referred to the Committee on Small Business
AN ACT to amend the state finance law, in relation to authorizing
excelsior linked deposits and loans to be made to a series of eligible
businesses
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 15 and 17 of section 213 of the state finance
law, as amended by chapter 291 of the laws of 2004, are amended to read
as follows:
15. "Linked deposit" means a deposit, or for farm credit system insti-
tutions and the New York business development corporation an investment
eligible to be held by such institution or corporation placed with a
lender by the comptroller or the commissioner of taxation and finance
for a period of four years at the linked deposit interest rate, provided
the lender agrees to:
(a) lend the equivalent value of such deposit EITHER to (I) an eligi-
ble business at the interest rate provided in section two hundred eigh-
teen of this article, OR (II) A SERIES OF ELIGIBLE BUSINESSES IN INDI-
VIDUAL LOAN PRINCIPAL AMOUNTS NOT TO EXCEED FIFTY THOUSAND DOLLARS, ALL
OF WHICH BEAR INTEREST AT THE RATE PROVIDED IN SECTION TWO HUNDRED EIGH-
TEEN OF THIS ARTICLE; and
(b) permit the deposit to be comprised of a series of ninety day
deposits each bearing an interest rate equal to the linked deposit
interest rate fixed at the time the original deposit is placed.
This article and the related statutes that refer to this article do
not grant thrifts, farm credit system institutions or the New York busi-
ness development corporation eligibility to accept public funds or
public moneys from public entities for investment purposes. For farm
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00019-01-1
A. 4377 2
credit system institutions, the linked deposit program is available for
loans with an agricultural purpose as defined by the farm credit act of
nineteen hundred seventy-one, as amended and regulations promulgated
thereunder. A linked deposit is intended to enable a lender to make a
linked loan to an eligible business and such deposit earns a yield lower
than posted rates in order to accomplish the goals of this article.
NOTWITHSTANDING THE PROVISIONS OF THE OPENING PARAGRAPH OF THIS SUBDI-
VISION, LINKED DEPOSITS MADE PURSUANT TO SUBPARAGRAPH (II) OF PARAGRAPH
(A) OF THIS SUBDIVISION MAY BE PLACED WITH A LENDER FOR A PERIOD OF FIVE
YEARS.
17. "Linked loan" means EITHER (A) a loan for purposes of an eligible
project, in an amount equal to a linked deposit and bearing interest for
the first four years at the interest rate provided in section two
hundred eighteen of this article; OR (B) A SERIES OF LOANS, NONE OF
WHICH EXCEEDS FIFTY THOUSAND DOLLARS IN PRINCIPAL AMOUNT, EACH OF WHICH
IS FOR THE PURPOSE OF AN ELIGIBLE PROJECT OR, FOR LOANS MADE IN
DISTRESSED COMMUNITIES (WITH MEDIAN HOUSEHOLD INCOME LEVELS WHICH ARE
LESS THAN EIGHTY PERCENT OF THE STATE MEDIAN HOUSEHOLD INCOME), IS FOR
THE PURPOSE OF FINANCING OR REFINANCING A SMALL BUSINESS, AND THE AGGRE-
GATE VALUE OF ALL SUCH LOANS IS EQUIVALENT TO A SINGLE LINKED DEPOSIT
BEARING INTEREST FOR THE FIRST TWO YEARS AT THE RATE PROVIDED IN SECTION
TWO HUNDRED EIGHTEEN OF THIS ARTICLE.
S 2. The opening paragraph of subdivision 1 of section 219 of the
state finance law, as added by chapter 705 of the laws of 1993, is
amended to read as follows:
The commissioner of economic development shall establish procedures
and other requirements for participation in the program, and shall
provide a simplified application form to the participating lenders for
linked deposits. Such form shall reflect the qualifying information
required by this article for eligible businesses and shall contain a
statement by the applicant that inability to obtain the reduced interest
rate provided by the program would impede the ability of the applicant
to undertake the eligible project. FOR A SERIES OF LINKED LOANS, AS
AUTHORIZED BY PARAGRAPH (B) OF SUBDIVISION SEVENTEEN OF SECTION TWO
HUNDRED THIRTEEN OF THIS ARTICLE, SUCH FORM SHALL INCLUDE A STATEMENT BY
THE LENDER THAT NO LOAN SHALL BE MADE THAT DOES NOT COMPLY WITH THE
REQUIREMENTS OF THIS ARTICLE. Upon completion of any application for a
linked deposit, the lender shall send the application, together with the
interest rate certification required pursuant to section two hundred
eighteen of this article, to the commissioner of economic development
who shall either approve or reject the application within twenty-eight
days. The commissioner of economic development shall evaluate each
application based upon the following criteria:
S 3. This act shall take effect immediately.