The New York State Senate

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

                                  2868

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                            January 30, 2019
                               ___________

Introduced  by  Sen.  KAPLAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Finance

AN ACT to amend the executive law, in  relation  to  the  recoupment  of
  economic incentives to businesses

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

  Section 1. The executive law is amended by adding a new section  163-b
to read as follows:
  §  163-B.  RECOUPMENT  OF  ECONOMIC INCENTIVES. 1. NOTWITHSTANDING ANY
INCONSISTENT PROVISION OF LAW, EACH CONTRACT, AGREEMENT OR UNDERSTANDING
BY WHICH A PERSON, FIRM, PARTNERSHIP,  COMPANY,  ASSOCIATION  OR  CORPO-
RATION  RECEIVES  AN AWARD, GRANT, LOAN, TAX ABATEMENT OR OTHER BUSINESS
INCENTIVE FROM THE STATE, ANY OF  ITS  POLITICAL  SUBDIVISIONS,  OR  ANY
DEPARTMENT, BUREAU, BOARD, COMMISSION, AUTHORITY, OR ANY OTHER AGENCY OR
INSTRUMENTALITY  OF  THE  STATE  OR  ITS  POLITICAL SUBDIVISIONS, OR ANY
PUBLIC BENEFIT CORPORATION AS DEFINED IN  SUBDIVISION  FOUR  OF  SECTION
SIXTY-SIX  OF THE GENERAL CONSTRUCTION LAW, OR ANY MUNICIPAL CORPORATION
AS DEFINED IN SUBDIVISION THREE OF SECTION THREE-A OF THE GENERAL MUNIC-
IPAL LAW FOR THE PURPOSES OF JOB TRAINING, JOB CREATION OR RETENTION, OR
THE DEVELOPMENT OF ITS OPERATION WITHIN THE  STATE,  SHALL  CONTAIN  THE
FOLLOWING PROVISIONS:
  (A)  A  STATED  PERIOD OF TIME WITHIN WHICH THE TERMS OF THE CONTRACT,
AGREEMENT OR UNDERSTANDING ARE TO BE FULLY EXECUTED AND COMPLETED;
  (B) A STATED PURPOSE AND THE AMOUNT OF THE AWARD, GRANT OR OTHER BUSI-
NESS INCENTIVE;
  (C) WHERE APPLICABLE, THE NUMBER OF PERSONS TO BE TRAINED PURSUANT  TO
THE TERMS OF THE CONTRACT, AGREEMENT OR UNDERSTANDING;
  (D)  WHERE  APPLICABLE,  THE  NUMBER OF JOBS TO BE CREATED OR RETAINED
PURSUANT TO THE TERMS OF THE CONTRACT, AGREEMENT OR UNDERSTANDING;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09002-01-9

S. 2868                             2

  (E) WHERE APPLICABLE, THE EXTENT OF THE OPERATIONS OR FACILITIES TO BE
DEVELOPED PURSUANT TO THE TERMS OF THE  CONTRACT,  AGREEMENT  OR  UNDER-
STANDING; AND
  (F)  NOTICE  TO  THE RECIPIENT THAT THE AWARD, GRANT OR OTHER BUSINESS
INCENTIVE SHALL BE SUBJECT TO RECOUPMENT PURSUANT TO THIS SECTION.
  2. EXCEPT AS PROVIDED IN SUBDIVISION  THREE  OF  THIS  SECTION,  EVERY
AWARD,  GRANT OR OTHER BUSINESS INCENTIVE AWARDED PURSUANT TO THIS CHAP-
TER SHALL BE SUBJECT TO REPAYMENT WITH INTEREST, BY THE RECIPIENT UPON A
FINDING BY THE AWARDING  ENTITY  THAT  THE  PERSON,  FIRM,  PARTNERSHIP,
COMPANY,   ASSOCIATION,  OR  CORPORATION  HAS  NOT  FULLY  EXECUTED  AND
COMPLETED THE STATED PURPOSES OR OBJECTIVES OF THE AWARD, GRANT OR OTHER
BUSINESS INCENTIVE WITHIN THE STATED PERIOD OF TIME AS SET FORTH IN  THE
CONTRACT, AGREEMENT OR UNDERSTANDING.
  3.  IF  THE  AWARDING  ENTITY  DETERMINES  THAT  THE RECIPIENT WHO HAS
RECEIVED AN AWARD, GRANT OR OTHER BUSINESS INCENTIVE UNDER THIS  CHAPTER
IS  NOT  COMPLYING WITH THE CONTRACT, AGREEMENT OR UNDERSTANDING ENTERED
INTO WITH THE AWARDING ENTITY, IT SHALL NOTIFY  THE  RECIPIENT  OF  SUCH
NONCOMPLIANCE.    SUCH NOTICE SHALL STATE THAT THE RECIPIENT IS ENTITLED
TO A HEARING AND AN OPPORTUNITY TO EXPLAIN  THE  NONCOMPLIANCE.  IF  THE
ENTITY  FINDS  THAT  THE  RECIPIENT  HAS NOT COMPLIED WITH THE CONTRACT,
AGREEMENT OR UNDERSTANDING, THE RECIPIENT SHALL BE  REQUIRED  TO  REFUND
THE FULL AMOUNT OF THE INCENTIVE PROVIDED, HOWEVER, THAT:
  (A)  UPON A FINDING THAT THE RECIPIENT HAS CREATED OR RETAINED SOME OF
THE JOBS PROMISED UNDER THE CONTRACT, AGREEMENT, OR  UNDERSTANDING,  THE
RECIPIENT  SHALL  ONLY BE REQUIRED TO REFUND THE AMOUNT WHICH REPRESENTS
THE JOBS WHICH IT FAILED TO CREATE OR RETAIN, OR
  (B) UPON A FINDING THAT THE RECIPIENT HAS FAILED  TO  DEVELOP  CERTAIN
FACILITIES  OR  OPERATIONS AS PROMISED UNDER THE CONTRACT, AGREEMENT, OR
UNDERSTANDING, THE RECIPIENT SHALL REFUND THE AMOUNT OF THE AWARD, GRANT
OR BUSINESS INCENTIVE AS FOLLOWS:
  (I) WHERE THE RECIPIENT HAS DEVELOPED ONE-THIRD OR LESS OF THE FACILI-
TIES OR OPERATIONS, THE RECIPIENT SHALL REFUND AT  LEAST  TWO-THIRDS  OF
THE AWARD, GRANT OR BUSINESS INCENTIVE;
  (II)  WHERE  THE  RECIPIENT  HAS  DEVELOPED  TWO-THIRDS OR LESS OF THE
FACILITIES OR OPERATIONS, THE RECIPIENT SHALL REFUND AT LEAST  ONE-THIRD
OF THE AWARD, GRANT OR BUSINESS INCENTIVE;
  (III)  WHERE THE RECIPIENT HAS DEVELOPED MORE THAN TWO-THIRDS BUT LESS
THAN ALL OF THE FACILITIES OR OPERATIONS AS PROMISED UNDER THE CONTRACT,
AGREEMENT OR UNDERSTANDING, THE RECIPIENT SHALL REFUND AN  AMOUNT  WHICH
THE  ENTITY DETERMINES TO BE A REASONABLE PROPORTION OF THE AWARD, GRANT
OR BUSINESS INCENTIVE NOT FULFILLED.
  4. UPON A FINDING THAT THE RECIPIENT OF THE  AWARD,  GRANT,  OR  OTHER
BUSINESS  INCENTIVE HAS NOT FULLY EXECUTED AND COMPLETED THE PURPOSES OR
OBJECTIVES OF THE AWARD, GRANT OR BUSINESS INCENTIVE, THE AWARDING ENTI-
TY MAY WAIVE REPAYMENT OF SUCH AWARD, GRANT  OR  BUSINESS  INCENTIVE  AS
REQUIRED  PURSUANT  TO THIS SECTION, UPON A FINDING THAT THE FAILURE WAS
CAUSED BY UNFORESEEN CIRCUMSTANCES BEYOND THE DIRECT OR INDIRECT CONTROL
OF THE RECIPIENT PERSON,  FIRM,  PARTNERSHIP,  COMPANY,  ASSOCIATION  OR
CORPORATION,  AND WAS NOT ATTRIBUTABLE TO BAD FAITH OR FRAUD. UNFORESEEN
CIRCUMSTANCES SHALL INCLUDE, BUT NOT BE LIMITED  TO,  MARKET  CONDITIONS
WHICH  ADVERSELY IMPACT UPON A RECIPIENT AND WHICH ARE OF SUCH MAGNITUDE
THAT A WAIVER OF REPAYMENT IS ABSOLUTELY NECESSARY TO ENSURE THE CONTIN-
UED OPERATIONS OF THE RECIPIENT AT THE LOCATION FOR WHICH THE  INCENTIVE
WAS  GRANTED  OR TO ENSURE CONTINUED EMPLOYMENT OF ITS EMPLOYEES AT SUCH
LOCATION. NO WAIVER OF FULL REPAYMENT MAY BE PROVIDED, HOWEVER, UPON THE
RELOCATION OUTSIDE OF NEW YORK STATE, OR FROM THE LOCATION SUCH  RECIPI-

S. 2868                             3

ENT  OCCUPIED  AT  THE  TIME  THE RECIPIENT RECEIVED THE AWARD, GRANT OR
BUSINESS INCENTIVE TO ANOTHER LOCATION IN THE STATE. UPON  THE  DETERMI-
NATION  OF  UNFORESEEN  CIRCUMSTANCES APPROPRIATE TO GRANT A WAIVER, THE
REPAYMENT  OF  THE  OUTSTANDING  BALANCE OF ANY AWARD, GRANT OR BUSINESS
INCENTIVE, OR OF ANY TAX CREDITS, INCLUDING  INTEREST  THEREON,  MAY  BE
DEFERRED  FOR  A  PERIOD  NOT TO EXCEED FIVE YEARS FROM THE DATE OF SUCH
WAIVER, PROVIDED THAT IF AT THE END OF FIVE  YEARS  THE  CONDITIONS  FOR
WHICH  THE WAIVER WAS GRANTED CONTINUE, THE AWARDING ENTITY MAY GRANT AN
ADDITIONAL WAIVER.
  5. EACH ENTITY OF THE STATE WHICH ENTERS INTO AGREEMENTS  PURSUANT  TO
THIS  CHAPTER  SHALL  ESTABLISH  RULES  AND  REGULATIONS RELATING TO THE
CONDUCT OF A HEARING AND THE TERMS AND CONDITIONS OF REPAYMENT.
  6. ANY RECIPIENT AGGRIEVED BY A DETERMINATION OF THE  AWARDING  ENTITY
MAY  SEEK REVIEW OF SUCH DETERMINATION PURSUANT TO ARTICLE SEVENTY-EIGHT
OF THE CIVIL PRACTICE LAW AND RULES.
  7. UNLESS THE AGREEMENT BETWEEN THE ENTITY AND THE RECIPIENT OTHERWISE
PROVIDES FOR A PENALTY OF INTEREST IN THE EVENT OF  NON-COMPLIANCE,  FOR
PURPOSES OF THIS SECTION, INTEREST CHARGED IN THE REPAYMENT OF AN AWARD,
GRANT  OR  BUSINESS INCENTIVE SHALL BE CALCULATED AT A RATE EQUAL TO THE
UNDERPAYMENT RATE SET BY THE COMMISSIONER OF TAXATION AND FINANCE PURSU-
ANT TO THE PROVISIONS OF SUBSECTION (E) OF SECTION ONE THOUSAND  NINETY-
SIX  OF  THE TAX LAW; AND SHALL BE CALCULATED FROM THE DATE OF DISBURSE-
MENT OF SUCH AWARD, GRANT OR BUSINESS INCENTIVE.
  8. THE PROVISIONS OF THIS SECTION SHALL NOT  BE  DEEMED  TO  ALTER  OR
ABRIDGE  ANY  RIGHT OR REMEDY EXISTING AT LAW OR EQUITY OTHERWISE AVAIL-
ABLE TO THE AWARDING ENTITY.
  9. ON OR BEFORE SEPTEMBER FIRST, TWO THOUSAND NINETEEN,  AND  ANNUALLY
THEREAFTER, THE STATE, ANY OF ITS POLITICAL SUBDIVISIONS, OR ANY DEPART-
MENT,  BUREAU,  BOARD,  COMMISSION,  AUTHORITY,  OR  ANY OTHER AGENCY OR
INSTRUMENTALITY OF THE STATE  OR  ITS  POLITICAL  SUBDIVISIONS,  OR  ANY
PUBLIC  BENEFIT  CORPORATION  AS  DEFINED IN SUBDIVISION FOUR OF SECTION
SIXTY-SIX OF THE GENERAL CONSTRUCTION LAW, OR ANY MUNICIPAL  CORPORATION
AS DEFINED IN SUBDIVISION THREE OF SECTION THREE-A OF THE GENERAL MUNIC-
IPAL LAW FOR THE PURPOSES OF JOB TRAINING, JOB CREATION OR RETENTION, OR
THE DEVELOPMENT OF ITS OPERATION WITHIN THE STATE, SHALL SUBMIT A REPORT
TO  THE  GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE, THE SPEAKER OF
THE ASSEMBLY, THE SENATE MINORITY LEADER, THE ASSEMBLY  MINORITY  LEADER
AND  THE  STATE  COMPTROLLER  ON  THE RECOUPMENT OF FINANCIAL INCENTIVES
PURSUANT TO THIS SECTION. SUCH REPORT SHALL INCLUDE: A LISTING OF RECIP-
IENTS OF AN AWARD, GRANT  OR  BUSINESS  INCENTIVE  WHO  HAVE  FAILED  TO
EXECUTE  AND  COMPLETE THE TERMS OF A CONTRACT, AGREEMENT OR UNDERSTAND-
ING; THE AMOUNT AND TYPE OF AWARD,  GRANT  OR  BUSINESS  INCENTIVE;  THE
DETERMINATION  OF  THE  AWARDING  ENTITY  WITH  RESPECT TO SUCH FAILURE,
INCLUDING THE REASONS THEREFOR; THE STATUS OF REPAYMENT  OF  THE  AWARD,
GRANT  OR  BUSINESS  INCENTIVE BY THE RECIPIENT; ANY WAIVER PROVIDED FOR
THE REPAYMENT OF AN AWARD, GRANT OR BUSINESS INCENTIVE AND  THE  REASONS
THEREFOR;  AND  ANY  RECOMMENDATIONS  OF  THE ENTITY WITH RESPECT TO THE
RECOUPMENT OF FINANCIAL INCENTIVES PURSUANT TO THIS SECTION.
  § 2. This act shall take effect immediately and shall  apply  only  to
contracts,  agreements  and understandings entered into on or after such
date.