|SAME AS||SAME AS UNI. S02999-A|
|Amd §137, Ec Dev L; add §1285-v, Pub Auth L; amd §16-m, UDC Act|
|Relates to financial assistance to small businesses for the purpose of pollution prevention, control and compliance.|
|01/18/2017||referred to small business|
|06/07/2017||reported referred to ways and means|
|06/08/2017||amend and recommit to ways and means|
|06/08/2017||print number 2348a|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2348A SPONSOR: Thiele
TITLE OF BILL: An act to amend the economic development law, the public authorities law and the New York state urban development corpo- ration act, in relation to financial assistance to small businesses for the purpose of pollution prevention, control and compliance   PURPOSE OR GENERAL IDEA OF BILL: To amend the economic development law, the public authorities law and the New York State Urban Development Corporation Act, in relation to financial assistance to small businesses for the purpose of pollution prevention, control and compliance.   SUMMARY OF SPECIFIC PROVISIONS: Section 1. Amends Paragraphs 1 and m of subdivision 2 of section 137 of the economic development law are amended and a new paragraph n is added Section 2. The Public Authorities Law is amended by adding a new Section 1285-v relating to the Small Business Environmental Fund Section 3. The New York State Urban Development Act is amended by adding a new paragraph (o) relating to assistance to capitalize the Small Busi- ness Environmental Fund Section 4. Effective Date   JUSTIFICATION: Amendments to federal and state environmental laws, including the feder- al Clean Air Act of 1990 and State Clean Air Compliance Act of 1993, have imposed considerable new burdens on many small businesses across New York State. As a result of these new regulatory activities, many small firms must now invest in changes in production methods or equip- ment at a time when access to capital for small businesses is generally difficult. Both private and public sources of financing have historically avoided small business lending because of the relatively higher risks and admin- istrative costs of those loans. This bill would build upon existing relationships between the small business and the financial institution and involve the expenditure of State funds only in the event of default on the loan. The fund would not only assist small businesses and New York State in achieving compliance with environmental law, but would also assist many businesses in developing better credit relationships with private lenders. This bill explicitly fosters investment in pollution prevention activ- ities, since such activities are the most effective way to achieve compliance and enhance environmental performance. Often, pollution prevention projects undertaken in an effort to comply with environmental laws take a company beyond compliance, reducing or eliminating the discharge of pollutants into the environment and saving the company beyond compliance, reducing or eliminating the discharge of pollutants into the environment and saving the company considerable money through increased efficiency and productivity, and reduced waste treatment, storage, transportation, disposal and liability costs. For these reasons, the bill would enhance access to capital for small businesses seeking to pursue pollution prevention, even when compliance is not an immediate issue.   PRIOR LEGISLATIVE HISTORY: 2015-16: A.7518/S.5495 2014: A.5578   FISCAL IMPLICATIONS: To be determined   EFFECTIVE DATE: This act shall take effect on the 180th day after it shall have become a law; provided, however, that effective immediately, the addition, amend- ment and/or repeal of any rules or regulations necessary for the imple- mentation of this act on its effective date are authorized and directed to be made and completed on or before such date and provided further that the amendments to section 16-m of section 1 of chapter 174 of the laws of 1968, constituting the New York State Urban Development Corpo- ration Act, made by section three of this act, shall not affect the expiration of such section and shall be deemed to expire therewith.
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STATE OF NEW YORK ________________________________________________________________________ S. 2999--A A. 2348--A 2017-2018 Regular Sessions SENATE - ASSEMBLY January 18, 2017 ___________ IN SENATE -- Introduced by Sens. LAVALLE, KENNEDY -- read twice and ordered printed, and when printed to be committed to the Committee on Commerce, Economic Development and Small Business -- reported favora- bly from said committee and committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once and referred to the Committee on Small Business -- reported and referred to the Committee on Ways and Means -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the economic development law, the public authorities law and the New York state urban development corporation act, in relation to financial assistance to small businesses for the purpose of pollution prevention, control and compliance The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraphs l and m of subdivision 2 of section 137 of the 2 economic development law, paragraph l as amended and paragraph m as 3 added by chapter 594 of the laws of 1994, are amended and a new para- 4 graph n is added to read as follows: 5 l. providing information to small business stationary sources on 6 state-sponsored programs offering financial and technical assistance, 7 and in locating sources of funding for compliance with the requirements 8 of article nineteen of the environmental conservation law and the Act; 9 [ and] 10 m. establishing procedures for assuring the confidentiality of infor- 11 mation received from small business stationary sources[ .]; and 12 n. marketing the small business environmental fund established pursu- 13 ant to section twelve hundred eighty-five-v of the public authorities 14 law to small business stationary sources, assisting the New York state EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04119-02-7S. 2999--A 2 A. 2348--A 1 urban development corporation in the projection of demand for financial 2 assistance pursuant to section sixteen-m of the New York state urban 3 development corporation act. 4 § 2. The public authorities law is amended by adding a new section 5 1285-v to read as follows: 6 § 1285-v. Small business environmental fund. 1. The corporation shall 7 undertake and provide assistance in support of a program to assist small 8 businesses in leveraging capital from financial institutions to achieve 9 pollution prevention and/or compliance with federal or state environ- 10 mental laws. 11 2. There is hereby established in the custody of the corporation a 12 special fund to be known as the small business environmental fund. 13 Moneys in such fund shall be segregated from all other funds of or in 14 the custody of the corporation subject to any rights of holders of 15 corporation bonds or notes issued for the purposes of this section. 16 Moneys in such fund shall only be used in accordance with the provisions 17 of this section. The moneys in such fund shall be applied to or paid out 18 for authorized purposes of such fund on the direction of the chairman of 19 the corporation in accordance with subdivision four of this section, or 20 such other person as the corporation shall authorize to make such direc- 21 tion. 22 3. Such fund shall consist of all of the following: (a) moneys appro- 23 priated by the state legislature for the purpose of such fund or other- 24 wise transferred by the state for deposit therein by the comptroller as 25 required by law; (b) payments of the loan origination fee authorized 26 pursuant to subdivision six of this section; (c) investment earnings on 27 amounts in such fund; (d) the proceeds of bonds or notes issued by the 28 corporation for purposes of leveraging capital on behalf of small busi- 29 nesses seeking to achieve pollution prevention and/or comply with feder- 30 al or state environmental laws; and (e) any other payments received from 31 the federal government or other sources for the purposes of the fund. 32 4. (a) Moneys in such fund shall be applied by the corporation as a 33 loan loss reserve fund, to provide credit enhancement to encourage 34 financial institutions to make pollution prevention or compliance loans 35 including such loans as may be necessary to purchase, lease, install or 36 acquire pollution control equipment to small businesses. 37 (b) The corporation is hereby authorized to provide assistance in the 38 form of a loan loss reserve fund for loans by financial institutions to 39 small businesses that otherwise find it difficult to obtain bank financ- 40 ing for pollution prevention or compliance activities control. The 41 corporation may use moneys in the fund to guarantee up to ninety percent 42 of the outstanding principal of each loan to be made by a financial 43 institution to a small business for pollution prevention or compliance 44 activities, provided, however, that no loan by a financial institution 45 pursuant to this section shall exceed five hundred thousand dollars. 46 5. (a) The corporation shall enter into agreements with financial 47 institutions governing participation in the fund which shall include, 48 but not be limited to, the terms of the payment of claims pursuant to 49 subdivision seven of this section. Such agreements shall set forth any 50 loan application fee to be charged by the financial institution to the 51 applicant and the loan origination fee to be paid to the corporation for 52 loans pursuant to this section. In entering into agreements with finan- 53 cial institutions, the corporation shall give priority to the execution 54 of agreements which provide for the participation of a consortium of 55 financial institutions serving an entire economic development region as 56 defined in section two hundred thirty of the economic development law.S. 2999--A 3 A. 2348--A 1 (b) The corporation shall also establish procedures and other require- 2 ments for small business participation. Such procedures shall include a 3 simplified application form for small businesses seeking assistance. 4 Such application shall require a demonstration by the applicant that 5 difficulty in obtaining conventional bank financing for pollution 6 prevention or compliance activities in the purchase, lease, installation 7 or acquisition of pollution control equipment impedes the ability of the 8 applicant to achieve pollution prevention or comply with federal or 9 state environmental laws. Such application shall also include such 10 specific information as the corporation may require, with regard to the 11 pollution prevention or compliance activities proposed, and the esti- 12 mated cost of financing such activities. 13 (c) Within twenty-eight days of receipt of an application pursuant to 14 this section, the corporation shall either approve or reject such appli- 15 cation. The corporation shall approve an application pursuant to para- 16 graph (b) of this subdivision based upon a determination that: 17 (1) the proposed pollution prevention or compliance activities will 18 assist the small business in achieving pollution prevention and/or full 19 compliance with federal or state environmental laws; 20 (2) a loan is required to finance the pollution prevention or compli- 21 ance activities or to finance the purchase, lease, installment or acqui- 22 sition of pollution control equipment; 23 (3) approval is not sought for an outstanding loan previously made by 24 a financial institution to the small business; and 25 (4) no concurrent loan has been made to the small business pursuant to 26 this section. 27 (d) In the approval of applications, the corporation shall give pref- 28 erence to those small businesses which are: 29 (1) seeking to comply with new requirements imposed pursuant to the 30 federal Clean Air Act (42 U.S.C. 7401 et seq. as amended by P.L. 101- 31 549), the New York state clean air compliance act as, established pursu- 32 ant to chapter six hundred eight of the laws of nineteen hundred nine- 33 ty-three, the provisions of article seventeen of the environmental 34 conservation law relating to water pollution control, and the provisions 35 of title nine of article twenty-seven of the environmental conservation 36 law, relating to industrial hazardous waste management, or any rules and 37 regulations promulgated thereunder; and are 38 (2) seeking to comply with new requirements imposed pursuant to feder- 39 al or state environmental laws; and are 40 (3) in highly distressed areas or minority-owned business enterprises 41 or women-owned business enterprises. 42 (e) Upon approval or denial of an application, the corporation shall 43 notify the applicant of such action by regular mail. The corporation may 44 also notify any financial institution of the approval or denial of an 45 application. 46 6. (a) Decisions to execute a loan pursuant to this section shall be 47 made solely by the financial institution and may provide for such inter- 48 est rate, fees and other terms and conditions as the financial institu- 49 tion and borrower may agree, provided, however, that: 50 (1) unless approved by the corporation, the term of the loan shall not 51 exceed seven years or the estimated useful life of any financed changes 52 in pollution prevention or control methods or equipment, whichever is 53 less; and 54 (2) if the amount of the loan is determined by a commitment agreement 55 that establishes a line of credit, the amount of the actual loan is the 56 maximum amount available to the borrower under the agreement.S. 2999--A 4 A. 2348--A 1 (b) A small business, in receipt of a loan pursuant to this section, 2 shall pay an origination fee to the corporation upon distribution of 3 loan proceeds. Moneys from such a fee shall be deposited in the fund; 4 provided, however, that the corporation, in consultation with the direc- 5 tor of the division of the budget, may use a portion of such moneys for 6 the administration of the fund. Nothing contained in this section shall 7 prohibit the financing of the origination fee in the terms of the loan. 8 7. (a) Upon the default of a loan made pursuant to this section, a 9 financial institution may file contemporaneously with a notice of 10 default to the small business, a claim with the corporation to recover 11 the outstanding principal plus accrued interest and one-half of the 12 documented out-of-pocket expenses incurred in pursuing loan collection 13 efforts, including preservation of collateral. The amount of principal 14 and accrued interest included in the claim may not exceed the principal 15 amount agreed upon at the time of closing, plus accrued interest attrib- 16 utable to such agreed upon amounts, consistent with the requirements of 17 this section. 18 (b) For loans made pursuant to this section, the financial institution 19 shall determine a loan to be in default in a manner consistent with 20 methods employed by the financial institution for similar loans not made 21 pursuant to this section. 22 (c) The corporation is authorized and directed to adopt rules and 23 regulations governing the payment of claims from the fund. Such rules 24 and regulations shall provide that upon receipt of a claim filed by a 25 financial institution, the corporation shall, within ten business days, 26 pay from the fund the amount of the claim as submitted, unless informa- 27 tion provided by the financial institution is found by the corporation 28 to be incomplete or was known by the financial institution to be false 29 at the closing of the loan. The terms of the payment of claims from the 30 fund shall be included in the agreement entered into by the corporation 31 and the financial institution pursuant to subdivision five of this 32 section. 33 (d) Upon payment of a claim, the corporation shall report the claim to 34 the office of the attorney general, who then shall exercise the rights 35 of subrogation. The financial institution thereafter shall assign to the 36 attorney general any right, title, or interest to any collateral, secu- 37 rity, or other right of recovery in connection with the loan. Any money 38 received by the attorney general as a result of enforcement actions 39 taken with respect to any collateral, security or other rights of recov- 40 ery shall be promptly deposited by the attorney general through the 41 corporation in the fund, less any out-of-pocket expenses incurred by the 42 attorney general in taking such enforcement actions. 43 8. Pursuant to rules and regulations of the corporation, the corpo- 44 ration may terminate the participation of a financial institution in the 45 fund upon a determination that such institution is not in substantial 46 compliance with the requirements of this section or the provisions of an 47 agreement executed pursuant to subdivision five of this section. The 48 corporation shall provide notice to a financial institution at least 49 ninety days in advance of such termination. 50 9. The corporation shall monitor the activities of participating 51 financial institutions and small businesses and may require such period- 52 ic reports or other information as deemed necessary from such insti- 53 tutions and businesses on the status of loans made pursuant to this 54 section. On or before the first day of March following the effective 55 date of this section, and on such date annually thereafter, the corpo- 56 ration shall submit to the governor, the temporary president of theS. 2999--A 5 A. 2348--A 1 senate and the speaker of the assembly a report on the fund. Such report 2 shall include, but not be limited to: 3 (a) the total number and amount of loans and the average amount of 4 loans leveraged by the fund from financial institutions in each economic 5 development region of the state as defined in section two hundred thirty 6 of the economic development law; 7 (b) the total number and amount of loans and the average amount of 8 loans leveraged by the fund from financial institutions pursuant to 9 paragraph (d) of subdivision five of this section in each such region; 10 and 11 (c) the total number and amount of claims submitted by financial 12 institutions for recovery of moneys through the fund, the total number 13 and amount of claims paid from the fund and a summary of the circum- 14 stances associated with claims on the fund. 15 10. (a) On or before the first day of September following the effec- 16 tive date of this section, and on such date every two years thereafter, 17 the corporation shall submit to the director of the budget, the chair of 18 the senate finance committee and the chair of the assembly ways and 19 means committee an evaluation of the effectiveness of the fund in real- 20 izing pollution prevention by small businesses and securing the compli- 21 ance of such businesses with federal and state environmental laws. Such 22 evaluation shall be prepared by an entity independent of the corporation 23 selected through a request for proposal process and shall include recom- 24 mendations for improvements to the implementation of the fund to enhance 25 small business pollution prevention, control and compliance. 26 (b) On or before the first day of September following the effective 27 date of this section, and on such date every two years thereafter, the 28 corporation shall submit to the director of the budget, the chair of the 29 senate finance committee and the chair of the assembly ways and means 30 committee an evaluation of the effectiveness of the fund in securing the 31 compliance of small businesses with the requirements of the federal 32 Clean Air Act (42 U.S.C. §7401 et seq. as amended by P.L. 101-549), the 33 New York state clean air compliance act, as established pursuant to 34 chapter six hundred eight of the laws of nineteen hundred ninety-three, 35 the provisions of article seventeen of the environmental conservation 36 law relating to water pollution control, and the provisions of title 37 nine of article twenty-seven of the environmental conservation law, 38 relating to industrial hazardous waste management, or any rules and 39 regulations promulgated thereunder. Such evaluation shall be prepared 40 by an entity independent of the corporation selected through a request 41 for proposal process and shall include recommendations for improvements 42 to the implementation of the fund to enhance small business pollution 43 prevention, control and compliance. 44 11. The corporation shall market the fund program to small businesses 45 in cooperation with financial institutions, statewide trade associations 46 representing financial institutions and small businesses, local and 47 regional economic development agencies, and the small business station- 48 ary source ombudsman program, established pursuant to section one 49 hundred thirty-seven of the economic development law. The corporation 50 shall develop a program to promote awareness of the program in all 51 geographic regions of the state, to ensure maximum participation by 52 small businesses and financial institutions and the fiscal integrity of 53 the fund. Agreements entered into by the corporation pursuant to subdi- 54 vision five of this section shall require a plan by each financial 55 institution for marketing the fund in highly distressed areas, empire 56 zones and to minority-owned business enterprises and women-owned busi-S. 2999--A 6 A. 2348--A 1 ness enterprises, with appropriate lending objectives identified by each 2 financial institution for such areas and businesses. 3 12. The corporation is authorized and directed to adopt rules and 4 regulations for the establishment and administration of the fund, in 5 accordance with the state administrative procedure act. No funds shall 6 be disbursed from this program until such rules and regulations have 7 been promulgated by the corporation. 8 13. For the purposes of this section, the following words or terms 9 shall mean: 10 (a) "financial institution" shall mean a banking organization, as 11 defined pursuant to section two of the banking law, a New York small 12 business investment company and a New York specialized small business 13 investment company, as defined pursuant to section two hundred twenty- 14 eight-a of the banking law, a local development corporation, as defined 15 in subdivision eight of section eighteen hundred one of this chapter, 16 and the New York business development corporation established pursuant 17 to section two hundred ten of the banking law. 18 (b) "fund" shall mean the small business environmental fund estab- 19 lished pursuant to this section. 20 (c) "highly distressed area" shall mean an area meeting the criteria 21 as set forth under subdivision (a) of section nine hundred fifty-eight 22 of the general municipal law. 23 (d) "minority-owned business enterprise" shall have the same meaning 24 as defined in subdivision seven of section three hundred ten of the 25 executive law. 26 (e) "pollution control equipment" shall mean any equipment approved by 27 the corporation as necessary for compliance with new requirements of the 28 federal Clean Air Act (42 U.S.C. § 7401 et seq. as amended by P.L. 101- 29 549), the New York state clean air compliance act, as established pursu- 30 ant to chapter six hundred eight of the laws of nineteen hundred nine- 31 ty-three, the provisions of article seventeen of the environmental 32 conservation law relating to water pollution control, and the provisions 33 of title nine of article twenty-seven of the environmental conservation 34 law, relating to industrial hazardous waste management, or any rules and 35 regulations promulgated thereunder. 36 (f) "pollutant" shall mean any substance, contaminant, waste or emis- 37 sion which contributes to pollution as defined in article one of the 38 environmental conservation law. 39 (g) "pollution prevention" shall mean changes in production methods or 40 raw materials that reduce, avoid, or eliminate the use of toxic or 41 hazardous substances or the generation of such substances or pollutants 42 per unit of product, so as to reduce risks to the health of workers, 43 consumers, or the environment, without shifting risks between workers, 44 consumers, or environmental media. Pollution prevention includes the 45 redesign, modification, upgrade or replacement of production processes, 46 equipment or technology; reformulation or redesign of products; substi- 47 tution of inputs or raw materials; improvements in housekeeping, mainte- 48 nance, training, or inventory control; and extended use or reuse of 49 materials through methods integral to the production process, such as 50 in-process, closed-loop recycling. It does not include incineration, 51 transfer from one medium of release or discharge to another media, off- 52 site or out-of-production recycling, end-of-pipe treatment or pollution 53 control. 54 (h) "toxic or hazardous substance" shall mean any substance listed as 55 a substance hazardous to public health, safety or the environment inS. 2999--A 7 A. 2348--A 1 regulations promulgated pursuant to article thirty-seven of the environ- 2 mental conservation law. 3 (i) "small business" shall have the same meaning as defined in section 4 one hundred thirty-one of the economic development law. 5 (j) "women-owned business enterprise" shall have the same meaning as 6 subdivision fifteen of section three hundred ten of the executive law. 7 § 3. Subdivision 1 of section 16-m of section 1 of chapter 174 of the 8 laws of 1968, constituting the New York state urban development corpo- 9 ration act, is amended by adding a new paragraph (o) to read as follows: 10 (o) Assistance to capitalize the small business environmental fund, 11 established pursuant to section twelve hundred eighty-five-v of the 12 public authorities law. 13 § 4. This act shall take effect on the one hundred eightieth day after 14 it shall have become a law; provided, however, that effective immediate- 15 ly, the addition, amendment and/or repeal of any rules or regulations 16 necessary for the implementation of this act on its effective date are 17 authorized and directed to be made and completed on or before such date 18 and provided further that the amendments to section 16-m of section 1 of 19 chapter 174 of the laws of 1968, constituting the New York state urban 20 development corporation act, made by section three of this act, shall 21 not affect the expiration of such section and shall be deemed to expire 22 therewith.