Senate Bill S4675

                                
 
BILL NUMBER: S4675

SPONSOR: SKOUFIS
 
TITLE OF BILL:  An act to amend the general municipal law, in relation
to requiring the return of all or a part of the financial assistance
provided for a project where the project has material shortfalls or
material violations

 
PURPOSE OR GENERAL IDEA OF BILL:

Local industrial development agencies (IDAs) are already required to
develop policies for the return of payments or incentives given to
projects that fail to deliver on their job or other commitments, and are
required to annually evaluate whether projects are meeting their commit-
ments. However, IDAs are not-required to use the results of their analy-
sis to seek the return of incentives from under-performing projects.
This bill would require that local IDAs seek the return of incentives or
financial assistance.

 
SUMMARY OF PROVISIONS:

              

Section 1: Amends subdivision 11 of section 874 of the general municipal
law to require that local industrial development agencies implement
their policies for return of financial assistance or tax incentives
provided to a project whenever the agency's annual assessment shows
material shortfalls in job creation and retention projections or materi-
al violations of the terms and conditions of the project agreement.

Section 2: Effective Date.

 
JUSTIFICATION:

Each year, local industrial development agencies grant millions of
dollars of financial assistance in the form of tax incentives, payment
in lieu of taxes (PILOT) agreements, and others, to projects seeking
assistance. These projects generally promise to create or retain jobs
and deliver other economic benefits to the community.  Agencies are
required to annually evaluate the success of each project at meeting the
job and economic benefit metrics agreed to as a condition of assistance
and are also required to develop policies for the return of all or part
of the financial assistance provided for the project in the event that a
project has material shortfalls in job creation and retention or materi-
al violations of the terms and conditions of the project agreements.
However, the implementation of these policies to compel the return of
taxpayer financial assistance given to projects is purely at the
discretion of the IDA board. Too often, IDAs fail to implement their
policies to demand the return of taxpayer assistance from projects that
have completely failed to live up to their promises to create jobs or
benefit the local economy. This bill addresses that loophole by requir-
ing IDA boards to seek the return of taxpayer-funded incentives given to
underperforming businesses.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS:


None to the state. The return of financial assistance granted by indus-
trial development agencies to underperforming projects will benefit
local taxpayers.

 
EFFECTIVE DATE:
This act shall take effect immediately.