Senate Bill S6981

                                 BILL NUMBER:  S6981

 TITLE OF BILL :  An act in relation to authorizing the North Country
Alliance Local Development Corporation to utilize interest derived
from the North Country Alliance trust fund to cover administrative
costs

 PURPOSE :

To authorize the North Country Alliance Local Development Corporation
to utilize interest derived from the North Country Alliance trust fund
to finance its administrative costs

 SUMMARY OF PROVISIONS :

Section 1 provides the regional corporation, North Country Alliance,
is authorized to pay administrative costs using interest derived from
the trust fund. For this purpose, "administrative costs," "regional
corporation," and "trust fund," shall have the same meaning as defined
in the 1989 agreement between the North Country Alliance Local
Development Corporation and the New York State Urban Development
Corporation.

Section 2 provides the effective date.

 EXISTING LAW :
              

Under Section 6 of the Omnibus Economic Development Act of 1987, North
Country Alliance entered into what is known as the Regional Revolving
Loan Trust Fund Agreement with the New York State Urban Development
Corporation in 1989.

 JUSTIFICATION :

In March 1989, North Country Alliance (NCA) entered into what is known
as the Regional Revolving Loan Trust Fund Agreement with the New York
State Urban Development Corporation (UDC). The Agreement established
NCA's Regional Revolving Loan Fund to provide low interest loans for
working capital to small businesses. The Agreement initially provided
for administrative funds to be paid from the Trust Fund Account
proceeds. This fund is comprised of the original grant funds from the
UDC, as well as repayments on loans. However, the administrative funds
NCA received were always paid from a General and Administrative
Account held by the UDC, which was capitalized with dividends and
interest earned on the investments of the Trust Fund Account.

Since 2010, the UDC has capitalized the General and Administrative
Account. Therefore, NCA has not been able to receive its eligible
allotment of administrative funds pursuant to the original Agreement.
This is providing a serious burden on the NCA and will likely result
in the corporation having to increase fees to borrower in order to
recover costs associated with overseeing the program. Because NCA
promotes small business growth and job creation, increasing borrower
fees is antithetical to the mission of the organization.

This legislation alleviates the need for NCA to increase its borrower
fees by authorizing NCA to use interest derived from the Trust Fund
Account to pay certain administrative costs as outlined by the
Agreement. Providing such statutory authorization does not have any
negative fiscal impact on the State, as this is not a new
appropriation, but the authorization for the use of existing funds.

 LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

None. This measure will not require a new appropriate and is simply
authorizing the use of existing funds.

 EFFECTIVE DATE :
This act shall take effect immediately.