1. The Laws of New York
  2. Unconsolidated Laws
  3. Urban Development Corporation Act 174/68


Section 16-L Rural revitalization program

Urban Development Corporation Act 174/68 (UDA)

1. Statement of legislative intent. The legislature finds that vast areas of rural New York state show signs of severe economic distress and lag behind the rest of the state in employment growth and income, with the gap widening with passing years. Poverty in many rural areas is pervasive, with the poor often outnumbering the affluent.

  The legislature further finds that rural communities in New York state need immediate assistance to develop the capacity to plan and organize for economic development, to undertake new economic development initiatives, to overcome obstacles to economic development and to fully utilize indigenous resources to provide rural residents with economic opportunities.

  The legislature further finds that, to begin to address these needs, a catalyst is needed to stimulate and encourage innovative economic development alternatives to declining employment in the agricultural and manufacturing sectors.

  The legislature further finds that, while agriculture is considered to be a major New York industry, state economic development financing programs do not treat agriculture as an industrial sector, and financing is not available to provide farmers with assistance to become more competitive in national and international markets.

  Therefore, the legislature declares that the revitalization of the state's rural economy is essential to New York's economic health and that state assistance in this regard is necessary and proper for achieving this public purpose.

  2. Rural revitalization assistance grants. (a) The corporation is authorized, within available appropriations in the empire state economic development fund established pursuant to section 16-i of this act, to award grants or enter into contracts for services, on a competitive basis in response to requests for proposals, to eligible entities and organizations as set forth in this subdivision to support community economic development programs and activities which increase or retain employment opportunities in rural New York state and otherwise contribute to the revitalization of local rural areas which are economically distressed through innovative activities designed to generate economic alternatives and opportunities in rural areas.

  (b) Grants and contracts made by the corporation pursuant to this subdivision shall be subject to the following limitations:

  (i) no such grant shall exceed one hundred thousand dollars per year, except that for the purpose of paragraph (f) of this subdivision, no such grant shall exceed fifty thousand dollars.

  (ii) the corporation shall enter into no more than one grant per year per application under this subdivision.

  (c) Preference shall be given to programs which meet highly distressed area criteria or which support empire zones established pursuant to article 18-B of the general municipal law; provide a local match; meet a substantial local or regional need; complement local programs or provide services not readily available from units of local government or the private sector.

  (d) For the purposes of this subdivision, "rural area" shall mean a rural area as defined in subdivision 7 of section 481 of the executive law.

  (e) Not-for-profit corporations, agricultural cooperative corporations, public benefit corporations and educational institutions serving rural areas, shall be eligible to apply for support under this subdivision for the following activities, provided, however, that the sum total of grants received by any one eligible entity does not exceed two hundred fifty thousand dollars in any one year:

  (i) innovative activities and programs designed to encourage value-added small business development and growth in rural areas, including cottage and crafts industries; group marketing of local products; women-owned industries; natural resources development; and tourism. Such activities and programs shall also include projects pertaining to agriculture and agribusiness development to stimulate the development and implementation of new and alternative production, processing, storage, distribution and marketing technologies and improvements for New York food, agricultural and forest products. Projects promoting strengthened farm management practices shall also be eligible for assistance;

  (ii) in-depth analysis within rural areas to support local efforts to identify new business opportunities, and to organize industry-wide collaborative efforts designed to create jobs and to develop growth strategies;

  (iii) support for the operation of programs designed to generate and leverage equity-type or working capital financing for new and small business enterprises in rural areas, or to meet other critical financing needs of existing rural businesses;

  (iv) support for multi-county activities designed to provide small business development and financial packaging assistance to new and small rural business enterprises to assure the continuation and growth of such enterprises; and

  (v) provide, or cause to be provided, technical assistance to small businesses to help such businesses comply with applicable federal, state and local rules and regulations, including, but not limited to, assistance to applicants for permits required by such rules and regulations.

  (f) Any vocational education agency offering technical assistance services to small business, any small business development center located at a post-secondary educational institution, any county cooperative extension service, any agricultural cooperative corporation offering technical assistance services to farmers and non-farm agricultural businesses or any not-for-profit corporation offering technical assistance, shall be eligible to apply under this paragraph to establish rural enterprise extension services designed to provide technical assistance and services to entrepreneurs who are seeking to establish or who are operating small business ventures in rural areas where, for reasons of distance, population dispersal, or scale of business venture, conventional business incubation and assistance programs are not feasible, such extension services to sponsor, employ and support technical assistance specialists as circuit riders to serve the rural area served by the sponsoring entity.

  (i) Such specialists shall be the outreach arm of the technical assistance program and shall:

  (A) provide technical and management assistance to entrepreneurs seeking to establish a new small business, including but not limited to, agribusinesses, part-time businesses, crafts-related businesses, tourism-related businesses, and other new businesses that are started in areas distant from other existing programs and sources of technical assistance;

  (B) regularly visit outlying areas of the region or areas served by the entity sponsoring the rural enterprise extension service program to provide both short-term and ongoing technical assistance and services to clients;

  (C) arrange, when needed, for supplemental assistance to be provided by the sponsoring entity;

  (D) conduct, with assistance from both local sources of expertise and the sponsoring entity local seminars in outlying regions on various aspects of entrepreneurship and new enterprise development; and

  (E) provide information on other sources and programs of assistance, services and support, including financial sources, to entrepreneurs and small business operators.

  (ii) Applications for support under this paragraph shall be required to demonstrate a need for a rural enterprise extension service program in the area to be served; the ability and willingness of the applicant to support technical assistance specialists employed as circuit riders with additional resources to provide intensive, long-term technical assistance or specialized technical assistance to client entrepreneurs and small business operators when necessary; and the ability to assist entrepreneurs and small business operators in locating appropriate sources of financial assistance.

  (iii) For the purposes of this subdivision "vocational education agency" shall mean a community college or board of cooperative educational services operating within the state.

  3. Agricultural job training assistance. The corporation is authorized, within available appropriations in the empire state economic development fund established pursuant to section 16-i of this act, to contract with the commissioner of agriculture and markets, in consultation with the commissioner of labor, to administer a program of job training for workers engaged in or to be engaged in the production, harvesting and processing of farm or aquatic products.

  4. Farmers' market grant program. (a) The corporation is authorized, within available appropriations in the empire state economic development fund established pursuant to section 16-i of this act, to award grants, on a competitive basis in response to requests for proposals, to municipal corporations, local development corporations, business improvement districts, not-for-profit corporations, regional marketing authorities and agricultural cooperatives organized pursuant to the cooperative corporations law, for the construction, reconstruction, improvement, expansion or rehabilitation of farmers' markets. The corporation is further authorized to contract with the commissioner of agriculture and markets, and such commissioner is authorized to contract with the corporation, to prepare and issue requests for proposals, accept grant applications, recommend those applications which best meet established criteria and to administer grants awarded under this subdivision.

  (b) Grants made by the corporation pursuant to this subdivision shall:

  (i) not exceed fifty thousand dollars per year; and

  (ii) be limited to fifty percent of the total proposed farmers' market start-up or expansion costs, not including any capital expenditures except as set forth in paragraph (a) of this subdivision.

  (c) The corporation shall enter into no more than one grant per year per application under this subdivision.

  (d) The corporation shall consult with the department of agriculture and markets in order to establish such criteria governing the award of grants as authorized herein, as the corporation and such department deem necessary. Such criteria shall include, but not be limited to:

  (i) the relative impact of the proposed farmers' market project on the economy of the area to be served;

  (ii) the anticipated level of municipal support and local participation in the project by farmers and others;

  (iii) the extent to which New York farmers would benefit, through the direct sale of farm and food products;

  (iv) the equitable distribution of monies awarded for state assistance for farmers' markets among urban and rural areas; and

  (v) the anticipated quantity of non-farm jobs which would be created and retained due to the proposed project.

  (e) Preference shall be given to: applicants located in highly distressed areas and providing services not readily available from units of local government or the private sector and to applicants who are proposing to start a new farmers' market.

  5. Rural single-tenant entrepreneurship and incubator facilities. The corporation is authorized, within available appropriations in the empire state economic development fund established pursuant to section 16-i of this act, to award grants, loans and loan guarantees to vocational education agencies for the development of single tenant entrepreneurship and incubator facilities in rural areas as provided in this subdivision. (a) For the purposes of this subdivision:

  (i) "rural area" shall mean a rural area as defined in subdivision 7 of section 481 of the executive law;

  (ii) "vocational education agency" shall mean a community college or board of cooperative educational services operating within the state; and

  (iii) "entrepreneurship and incubator facility" shall mean a single-tenant facility providing low-cost space, technical assistance and support services, to new business enterprises.

  (b) In sparsely populated rural areas where multi-tenant incubator facilities are not feasible, assistance from the rural revitalization program may be provided to vocational education agencies that have an existing technical assistance capability that can be applied to the incubation of new firms for the purpose of constructing a single-tenant entrepreneurship and incubator facility or rehabilitating an existing space for use as a single-tenant entrepreneurship and incubator facility.

  (c) Funds from the rural revitalization program pursuant to this subdivision shall only be provided for construction or rehabilitation of a facility. A vocational education agency receiving such assistance shall be required to provide any machinery and equipment necessary for a tenant to operate a start-up enterprise and shall be responsible for operating the facility, such operation to include classroom training in business principles and practices to the prospective owners of such enterprises prior to entering into any tenancy agreement with such prospective owners, and the provision of technical assistance and services to a tenant.

  6. Agricultural industry competitiveness assistance. (a) For the purposes of this subdivision, "project" shall mean an agricultural project as set forth in paragraphs (b) and (b-1) of this subdivision.

  (b) The corporation is authorized, within available appropriations in the empire state economic development fund established pursuant to section 16-m of this act, to provide financial assistance in the form of loans, loan guarantees, and interest subsidy grants to subsidize loans from federally chartered instrumentalities and state and private lending institutions, including agricultural cooperative corporations, provided that such assistance to state lending institutions shall not exceed one-third of the total project cost or four hundred thousand dollars, whichever is less, to agricultural enterprises seeking to implement the following agricultural projects:

  (i) making the transition from dairy farming to crop or livestock farming or specialty wood productions, or using former dairy farms for crop, livestock or specialty wood production, in order to keep farmland in production by producing products in local, national or international demand;

  (ii) start-ups of new agribusinesses or expansions or upgrades of the facilities, technologies and operations of existing agribusinesses.

  (b-1) The corporation is authorized, within available appropriations in the empire state economic development fund established pursuant to section 16-m of this act, to provide financial assistance in the form of loans, loan guarantees, working capital loans, and interest subsidy grants to subsidize loans from federally chartered instrumentalities and state and private lending institutions, including agricultural cooperative corporations, provided that such assistance to state lending institutions shall not exceed one-third of the total project cost or four hundred thousand dollars, whichever is less, to agricultural enterprises seeking to implement the projects listed in this paragraph. Funds for such loans, grants, subsidies, or any other assistance specified pursuant to this act may come from funds derived from the financial assistance for small and medium-sized business assistance projects established pursuant to section 9-a of this act, the regional revolving loan trust fund established pursuant to section 16-a of this act, the regional economic development partnership program established pursuant to section 16-e of this act, the empire state economic development fund established pursuant to section 16-m of this act, or from any other funds, programs, or projects administered by the corporation or by other state appropriations.

  (i) the establishment or replanting of existing vineyards with other varieties that are in greater demand in the national and international marketplace and which will increase the national and international competitiveness of New York state grape growers;

  (ii) the establishment or replanting of fruit orchards or small fruit acreages that have reached the end of their natural life cycles, with preference to plantings in the more popular varieties which have national and international markets;

  (iii) the establishment, construction, retention, or expansion of facilities, buildings, machinery, equipment, and other productive assets used in the production, manufacture, processing, warehousing, research, or distribution or sale of fresh fruits or the processing of such fruits into juices, wines, or other food products. Such project costs may include, but not be limited to, buildings, machinery, equipment, New York raw fruits, New York unprocessed or partially processed fruits, or other necessary working capital or operational funds or assistance needed to ensure the success of such project.

  (c) The corporation shall determine the terms and interest rates of such loans; provided, however, in the case of financial assistance for vineyards, orchards, small fruit acreages, wineries, or processing plants, the corporation may defer repayment of principal and interest on loans for up to five years.

  (d) Funds may be used to undertake feasibility studies to determine the projected local, national, and/or international demand for the proposed crop or product to be financed and the suitability of the land and climate for such production. In the case of a proposal to establish or replant a vineyard, the corporation shall consult with the New York state wine and grape foundation and the agricultural extension service of Cornell University to determine the appropriateness and feasibility of the proposed project.

  (e) The provisions of section 10 and subdivision 2 of section 16 of this act shall not apply to assistance provided under this subdivision.

  7. Micro business revolving loan assistance grants. (a) The corporation is authorized, within available appropriations in the empire state economic development fund, to provide financial assistance in the form of grants for the purpose of developing a statewide infrastructure that delivers financing and technical assistance to micro businesses across the state to stimulate new and existing micro business development relating to the use of agricultural products, forest products, cottage and crafts industries, tourism, and other businesses as provided for in subparagraph (i) of paragraph (e) of subdivision 2 of this section; provided such business employs five or fewer full-time persons and is based on the production, processing, and/or marketing of products grown or produced in this state. Assistance provided under this subdivision shall be awarded through a competitive process initiated by the corporation, in response to a request for proposals.

  (b) Not-for-profit corporations and public benefit corporations located in the state shall be eligible to apply to the corporation, in response to a request for proposals, for a grant, not to exceed two hundred thousand dollars in any one calendar year, to create a micro business revolving loan fund to be administered by the entity applying for such grant, hereafter referred to in this subdivision as "micro loan administrators", who shall be selected by the corporation from among eligible applicants. The corporation shall show preference in its awarding of grants to micro loan administrators whose service area meets the provisions of paragraph (c) of subdivision 2 of this section. All grant funds shall be dedicated to being re-lent to individual micro business borrowers, except that ten percent of such funds as are awarded may be used by micro loan administrators to provide training and technical assistance for such borrowers. Micro business loans shall be limited to twenty-five thousand dollars per borrower. Borrowers shall provide ten percent equity for loans up to ten thousand dollars. Loans above ten thousand dollars shall be matched on a one to one basis by including other loans, equity capital and in some circumstances, leveraged capital. The interest rate and the terms on such loans shall be determined by the micro loan administrators. The term of any loan shall not exceed five years. All loans shall be secured by lien positions on collateral at the highest level of priority that can accommodate the borrower's ability to raise sufficient debt and equity capital for the project. Any interest earned on micro business loans shall be retained in a special account for the purpose of paying expenses of the loan administrator associated with administering the micro loan program.

  (c) An eligible micro loan administrator applicant shall:

  (i) serve one or more rural counties;

  (ii) have established a loan committee comprised of five or more persons experienced in commercial lending in rural areas or in the operation of a for-profit small business and a staff person of the regional office of the department of economic development. Such loan committee shall review every application for micro loan assistance pursuant to this subdivision, shall determine the feasibility of the transaction proposed in the application and shall recommend to the board of directors or other governing body of the micro loan administrator such action as the committee deems appropriate;

  (iii) have available to its staff sufficient expertise to analyze applications for micro loan assistance, provide technical assistance to borrowers and to regularly monitor micro loan assistance to clients; and

  (iv) have an acceptable plan to market its services to potential borrowers through such entities as chambers of commerce, industry trade associations, banks, local development corporations, community based organizations and industrial development agencies.

  (d) Applications to the corporation for certification or recertification as a micro loan administrator shall:

  (i) describe the organization, membership, loan committee, staff and sources of other funds, if any;

  (ii) identify the geographic area to be served;

  (iii) explain the method and criteria to be used in determining businesses eligible for micro loan assistance;

  (iv) describe the means for coordination of micro loan assistance with other funding sources within the geographic area to be served for the purposes of leveraging project financing;

  (v) include a proposal to reconfigure the geographic area served by the micro loan administrator, if applicable; and

  (vi) contain such other information as the corporation deems appropriate.

  (e) The corporation shall, every five years, recertify that each micro loan administrator has complied with the terms and conditions of this subdivision. In the event a micro loan administrator is not recertified, or its certification is withdrawn, then the corporation shall give written notice to such micro loan administrator which shall thereafter neither make new loans under this subdivision nor undertake new obligations except upon written approval of the corporation. The corporation may thereafter certify another micro loan administrator in the manner provided in this subdivision for the selection of micro loan administrators. Upon the certification of a successor micro loan administrator, all remaining micro business loan funds, records and accounts of the micro loan administrator not recertified shall be transferred to the corporation, and the micro loan administrator not recertified shall cease to function pursuant to this subdivision. The corporation shall transfer returned funds to a successor micro loan administrator, or in the event no successor micro loan administrator is certified, equally to other existing micro loan administrators.

  8. Cluster based industry and agribusiness development grants. (a) The corporation is authorized, within available appropriations in the empire state economic development fund, pursuant to section sixteen-m of this act, to award matching grants, on a competitive basis in response to requests for proposals, to eligible entities and organizations as set forth in this subdivision to support cluster based industry and agribusiness development activities which increase or retain employment opportunities and otherwise contribute to the growth or revitalization of rural areas.

  (b) Cluster based industry and agribusiness development grants shall provide financial assistance for the purpose of establishing a program to support cluster based economic development efforts in rural areas. Such grants shall be used to:

  (i) Assess industry and agribusiness needs and develop methods of identifying industry and agribusiness clusters in a region; and

  (ii) Promote cluster based industry and agribusiness development initiatives targeted at businesses that would benefit from joint activities, marketing, and problem solving.

  (c) Grant assistance provided under this subdivision shall be awarded through a competitive process initiated by the corporation, in consultation with the commissioner of agriculture and markets and local development agencies, in response to a request for proposals. To be eligible for a grant award, recipients shall provide matching funds in the form of cash, in-kind services or other resources as defined by the corporation.

  (d) Not-for-profit corporations and public benefit corporations located in the state shall be eligible to apply to the corporation, in response to a request for proposals, for a matching grant, not to exceed 25,000 dollars in any one calendar year.