senate Bill S7627

2013-2014 Legislative Session

Relates to requirements for economic development grants

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Archive: Last Bill Status - In Committee


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

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
May 21, 2014 referred to commerce, economic development and small business

S7627 - Bill Details

See Assembly Version of this Bill:
A9863
Current Committee:
Law Section:
Economic Development Law
Laws Affected:
Amd §100, Ec Dev L; add §11-a, St Fin L

S7627 - Bill Texts

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Establishes requirements for economic development grant recipients and specifies the steps that must be taken by the commissioner of economic development in terms of repayment.

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BILL NUMBER:S7627

TITLE OF BILL: An act to amend the economic development law and the
state finance law, in relation to economic development grant
recipients

PURPOSE OR GENERAL IDEA OF BILL: The intent of this legislation is to
provide a mechanism by which the state can recover certain economic
development grant funds from any person or business organization that
reduces the number of New York State employees up to five years after
having received financial assistance from the state.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 adds a new paragraph to subdivision 19 of section 100 of
economic development law to adopt regulations to establish terms and
conditions of repayment of state grants.

Section 2 adds section 11-a to state finance law to establish
regulations for economic development grant recipients and conditions
under which the grants must be repaid to the state.

Section 3 sets the effective date.

JUSTIFICATION: Clawback provisions are common and necessary for a
majority of business transactions. Each year, New York State offers
tens of millions of dollars in grant funding to foster economic growth
and attract new businesses. However, in cases when these same
businesses decide to leave New York State or reduce their New York
State employee base, taxpayers may still be left paying the bills.
This legislation would provide that grantees shall not reduce the
number of New York State employees upon receiving financial assistance
from the State or up to five years after receiving such assistance,
unless the full amount of the grant and a penalty is repaid to the
State. This clawback mechanism is designed to protect taxpayers from
continuing to fund businesses that have moved their workforce out of
New York State.

PRIOR LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.

EFFECTIVE DATE: This act shall take effect immediately.

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

                                  7627

                            I N  S E N A T E

                              May 21, 2014
                               ___________

Introduced  by  Sen. O'BRIEN -- 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 state finance law,
  in relation to economic development grant recipients

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

  Section  1.  Subdivision 19 of section 100 of the economic development
law is amended by adding a new paragraph (c) to read as follows:
  (C) TO ADOPT REGULATIONS IN ACCORDANCE WITH SECTION  ELEVEN-A  OF  THE
STATE  FINANCE  LAW, TO ESTABLISH THE TERMS AND CONDITIONS OF REPAYMENT,
INCLUDING  SPECIFYING  THE  CONDITIONS  UNDER  WHICH  REPAYMENT  MAY  BE
DEFERRED,  FOLLOWING  A  DETERMINATION BY THE COMMISSION OF A LEGITIMATE
HARDSHIP.
  S 2. The state finance law is amended by adding a new section 11-a  to
read as follows:
  S  11-A.  REQUIREMENTS FOR ECONOMIC DEVELOPMENT GRANT RECIPIENTS.  ANY
PERSON OR BUSINESS ORGANIZATION WHO RECEIVES AN AWARD OR  GRANT  THROUGH
AN ECONOMIC DEVELOPMENT PROGRAM, WHERE SUCH AWARD OR GRANT ALSO REQUIRES
THE  CREATION OF JOBS, SHALL NOT REDUCE THE NUMBER OF EMPLOYEES WHO WERE
EMPLOYED WITHIN THE STATE AT THE TIME SUCH PERSON OR BUSINESS  ORGANIZA-
TION  ACCEPTED  THE  FINANCIAL ASSISTANCE FOR FIVE YEARS AFTER RECEIVING
SUCH ASSISTANCE OR DURING THE TERM OF THE AWARD OR GRANT,  WHICHEVER  IS
LONGER,  UNLESS THE FULL AMOUNT OF ASSISTANCE IS REPAID TO THE STATE AND
A PENALTY EQUAL TO FIVE PERCENT OF THE TOTAL ASSISTANCE RECEIVED IS PAID
TO THE STATE. AS USED IN THIS SECTION, THE TERM "BUSINESS" SHALL INCLUDE
ANY DIVISION OF A BUSINESS OR SUBSIDIARY INSTITUTION CONTROLLED, DIRECT-
LY OR INDIRECTLY, BY ANOTHER INSTITUTION.
  S 3. This act shall take effect immediately.


 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14726-02-4

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