Senate Bill S177

                                 
BILL NUMBER: S177

SPONSOR: RYAN S
 
TITLE OF BILL:

An act to amend the general municipal law, in relation to financial
assistance from an industrial development agency; and to repeal certain
provisions of such law relating thereto

 
PURPOSE OR GENERAL IDEA OF BILL:  This bill would prevent retail
establishments from utilizing the "highly distressed area" exemption to
the retail ban for industrial development agencies.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 repeals subdivision 18 of section 854 of the general municipal
law.

Section 2 removes references to "highly distressed areas" from paragraph
(b) of subdivision 2 of section 862 of the general municipal law.
Section 3 is the effective date.

              

 
JUSTIFICATION:

Industrial development agencies, or IDAs, are public benefit corpo-
rations created under the general municipal law and the public authori-
ties law. Since their creation in 1969, they have offered billions of
dollars of incentives to large multi-national corporations. The only
data the state receives regarding job creation and economic benefits as
a result of IDA activity is self-reported, and IDAs' exact effectiveness
in this area is unknown.

In the 2013-2014 budget, language was added to the general municipal law
to prohibit IDAs from providing incentives to projects where the facili-
ties or property would be primarily used for retail sales of goods or
services. Exceptions to this retail ban were carved out as well. Per the
budget briefing book, the goal of these changes was to "make IDAs more
accountable by limiting the industries to which IDAs can offer State
sales and other use benefits to...key sectors."

Despite this ban, many IDAs continue to offer incentives to retail and
food service establishments. According to the U.S. Bureau of Labor
Statistics, the median wage for a food service worker nationwide in 2021
was $28,780 per year. The reason for the "highly distressed area"
exemption to the retail ban is ostensibly to improve the conditions in
the area by creating more jobs that will lift residents out of poverty.
$28,780 per year is not enough to lift an individual out of poverty,
never mind a family. Providing incentives to retail and food service
entities does not benefit highly distressed communities. We need to
prioritize high-wage jobs that have a proven record of lifting people
out of poverty.

 
LEGISLATIVE HISTORY:

2023-2024: S4868/A6391

 
FISCAL IMPLICATIONS:

None.
 
EFFECTIVE DATE:
This act shall take effect immediately.