A08513 Summary:

BILL NO    A08513A

SAME AS    No same as 

SPONSOR    Scarborough

COSPNSR    Clark, Cook, Perry, Robinson

MLTSPNSR   Crespo, Markey, Rivera

Add S16-x, UDC Act

Enacts the HIRE NY act to provide zero interest loans through the urban
development corporation for hiring by micro-businesses; appropriates
$20,000,000 therefor.
Go to top

A08513 Memo:

BILL NUMBER:A8513A

TITLE  OF BILL:   An act to amend the New York state urban development
corporation act, in relation to enacting the HIRE NY act;  and  making
an appropriation therefor

PURPOSE:   To provide zero interest loans to businesses with less than
5 employees to hire New York residents. To grow small  businesses  and
get New Yorkers hired.

SUMMARY OF PROVISIONS:  Economy New York. Act." Or the "HIRE NY Act"

Section  2 of this hill amends section 1 of chapter 174 of the laws of
1968, constituting the New York State  urban  development  corporation
act  by  adding a new section 16-w. Subpart 1 sets out the legislative
intent. Subpart 2 set out definitions. Subpart 3 establishes the  hire
New  York  fund and outlines its purposes. Subpart 4 sets for the loan
application  process.  Subpart  5  establishes  an  application   fee.
Subpart  sets  forth  the  loan  terms.  Subpart  9  sets forth that a
micro-business may utilize funds only  for  salary  of  micro-business
qualifying new hire. Subpart 10 gives the corporation authorization to
establish an advisory committee. Subpart 11 outlines the corporation's
reporting  requirements.  Subpart  12  authorizes  the  corporation to
promulgate rules and regulations required to fulfill the  purposes  of
this act.

Section  3  appropriates  twenty  million dollars ($20,000.000) to the
urban development corporation out of the monies in  the  general  fund
for the hire New York fund.

Section 4 sets out that it shall take effect immediately.

JUSTIFICATION:  There are far too many unemployed New Yorkers and as a
result New York's economy is suffering. Getting unemployed New Yorkers
back  to work is the key to New York's future economic development. AL
the same time, start-ups and businesses with  less  than  5  employees
lack   the   access   to  capital  required  to  hire  new  employees.
Unfortunately, New York's current economic incentives fail  to  target
these  businesses  because  most  of  them lack taxable income to Lake
advantage of the available tax credits, which make  up  a  substantial
portion of the state's economic development incentives.

So while micro-businesses are the backbones of our communities and the
engines  of tomorrow's economy we are failing to provide them with the
appropriate support so that they can  spur  significant  job  creation
across  the  state.  To  get  people  back  to  work, we need to offer
economic incentives that provide capital to micro-businesses for their
use in hiring new employees, instead of relying almost entirely on tax
credits that amount to feel good measures and cannot actually be  used
by the businesses we are intending to help.

LEGISLATIVE HISTORY:  This is a new bill.

FISCAL  IMPLICATIONS:  This bill would transfer twenty million dollars
($20,000,000.00) from  the  general  fund  to  the  urban  development
corporation  to  establish  the  hire  New  York fund. Loan funds that
create jobs would result  in  increased  state  revenues  from  income


taxes.  In  addition,  revenue  growth  experienced  by  participating
businesses would translate into increased state revenue.

EFFECTIVE DATE:  This act shall take effect immediately
Go to top

A08513 Text:

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

                                        8513--A

                                 I N  A S S E M B L Y

                                   January 21, 2014
                                      ___________

       Introduced  by  M.  of  A.  SCARBOROUGH, CLARK, COOK, PERRY, ROBINSON --
         Multi-Sponsored by -- M. of A. CRESPO, MARKEY, RIVERA -- 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  commit-
         tee

       AN ACT to amend the New York state urban development corporation act, in
         relation  to  enacting  the  HIRE  NY act; and making an appropriation
         therefor

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

    1    Section 1. This act shall be known and may be cited as the "hire indi-
    2  viduals in the real economy New York (HIRE NY) act".
    3    S  2.  Section  1 of chapter 174 of the laws of 1968, constituting the
    4  New York state urban development corporation act, is amended by adding a
    5  new section 16-x to read as follows:
    6    S 16-X. THE HIRE NEW YORK PROGRAM. 1. LEGISLATIVE INTENT. THE LEGISLA-
    7  TURE HEREBY FINDS THAT MICRO-BUSINESSES ARE THE ENGINES OF  OUR  ECONOMY
    8  AND  ARE  VITAL  TO  THE REVITALIZATION OF COMMUNITIES AND NEIGHBORHOODS
    9  THROUGHOUT THE STATE. THE LEGISLATURE FURTHER  FINDS  THAT  CURRENT  LAW
   10  FAILS  TO MOTIVATE PEOPLE TO START OR EXPAND BUSINESSES. THE LEGISLATURE
   11  FINDS THAT IT IS IMPORTANT TO SPUR START-UP MICRO-BUSINESSES  THAT  HAVE
   12  THE  POTENTIAL  TO  BECOME  THE  JOB ENGINES FOR TOMORROW'S ECONOMY. THE
   13  LEGISLATURE FURTHER FINDS INVESTMENTS IN ECONOMIC  DEVELOPMENT  FAIL  TO
   14  PROVIDE  ANY  FUNDING TO MICRO-BUSINESSES. THE LEGISLATURE FURTHER FINDS
   15  THAT SMALL MICRO-BUSINESSES WITH THE PROPER  INCENTIVES  ARE  POISED  TO
   16  PROVIDE SIGNIFICANT LOCAL JOB CREATION ACROSS THE STATE. THE LEGISLATURE
   17  FURTHER  FINDS THAT TAX CREDITS ARE NOT AN EFFECTIVE JOB CREATION INCEN-
   18  TIVE FOR MICRO-BUSINESSES BECAUSE MANY  OF  THESE  BUSINESSES  LACK  THE
   19  INCOME THAT MAKES A TAX CREDIT MEANINGFUL. THE LEGISLATURE FURTHER FINDS
   20  THAT  CREATION OF A STATEWIDE HIRE NEW YORK FUND WILL PROVIDE THE NEEDED
   21  CAPITAL FOR THE BUSINESSES OF TOMORROW TO GROW AND EMPLOY MORE NEW YORK-
   22  ERS.

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD13164-06-4
       A. 8513--A                          2

    1    2. DEFINITIONS. AS USED IN THIS SECTION,  THE  FOLLOWING  TERMS  SHALL
    2  HAVE THE MEANINGS INDICATED:
    3    (A)  "FUND" MEANS THE HIRE NEW YORK FUND AS ESTABLISHED BY SUBDIVISION
    4  THREE OF THIS SECTION.
    5    (B) "LOCAL JOB" MEANS A JOB FILLED BY AN EMPLOYEE THAT RESIDES  WITHIN
    6  THE  SAME  OR  AN  ADJACENT COUNTY AS THE APPLICANT'S PLACE OF BUSINESS.
    7  FOR THE PURPOSES OF THIS PARAGRAPH, FOR THE CITY OF NEW YORK, THE  ADJA-
    8  CENT  COUNTIES SHALL BE DEEMED TO BE NASSAU, SUFFOLK, ROCKLAND AND WEST-
    9  CHESTER.
   10    (C) "MICRO-BUSINESS" MEANS A BUSINESS WITH FEWER THAN FIVE  EMPLOYEES.
   11  A BUSINESS THAT IS OWNED IN ANY PORTION BY ANOTHER BUSINESS ENTITY SHALL
   12  NOT QUALIFY AS A "MICRO-BUSINESS."
   13    (D)  "MICRO-BUSINESS QUALIFYING NEW HIRE" MEANS EITHER A NEW FULL-TIME
   14  WAGE-PAYING JOB OR THE EQUIVALENT OF A FULL-TIME WAGE-PAYING JOB REQUIR-
   15  ING AT LEAST THIRTY-FIVE HOURS PER WEEK AND IS FILLED FOR  ONE  YEAR.  A
   16  MICRO-BUSINESS QUALIFYING NEW HIRE SHALL NOT BE:
   17    (I)  AN EMPLOYEE WHO HAS BEEN TRANSFERRED FROM EMPLOYMENT WITH ANOTHER
   18  BUSINESS LOCATED IN THIS STATE, THROUGH AN ACQUISITION, MERGER,  CONSOL-
   19  IDATION  OR  OTHER  REORGANIZATION  OF  BUSINESSES OR THE ACQUISITION OF
   20  ASSETS OF ANOTHER BUSINESS, OR
   21    (II) AN EMPLOYEE WHO HAS  BEEN  TRANSFERRED  FROM  EMPLOYMENT  WITH  A
   22  RELATED PERSON OR BUSINESS ENTITY, OR
   23    (III)  AN  EMPLOYEE WHO IS HIRED TO FILL A CURRENTLY EXISTING POSITION
   24  THAT RESULTS FROM A TERMINATION OR DEPARTURE OF A PREVIOUS EMPLOYEE, OR
   25    (IV) A TEMPORARY OR PART-TIME EMPLOYEE.
   26    3. ESTABLISHMENT AND PURPOSES. THE CORPORATION SHALL ESTABLISH A  FUND
   27  TO BE KNOWN AS THE "HIRE NEW YORK FUND" AND SHALL PAY INTO SUCH FUND ANY
   28  MONIES  MADE AVAILABLE TO THE CORPORATION FOR SUCH FUND FROM ANY SOURCE.
   29  THE FUND SHALL CONSIST OF SUCH  AMOUNTS  AS  MAY  BE  APPROPRIATED,  ANY
   30  REPAYMENT  OF  THE  PRINCIPAL AMOUNT OF ANY LOAN MADE FROM THE FUND, AND
   31  ANY INTEREST EARNED BY THE CORPORATION FROM THE INVESTMENT OF MONEYS  OF
   32  THE  FUND.  THE  CORPORATION  IS  AUTHORIZED  TO ACCEPT, AS AGENT OF THE
   33  STATE, ANY GIFT, GRANT, DEVISE OR BEQUEST, WHETHER CONDITIONAL OR UNCON-
   34  DITIONAL, INCLUDING BUT NOT LIMITED TO FEDERAL GRANTS, AND TO USE MONIES
   35  MADE AVAILABLE FOR THE PROGRAM FROM ANY PUBLIC OR  PRIVATE  SOURCE,  FOR
   36  THE  PURPOSE OF IMPLEMENTING THE PROGRAM. THE CORPORATION SHALL BE ENTI-
   37  TLED TO RECOVER FROM THE MONIES MADE AVAILABLE FOR THE PROGRAM  ITS  OWN
   38  NECESSARY AND DOCUMENTED COSTS INCURRED IN ADMINISTERING THE PROGRAM AND
   39  EVALUATING  THE EFFECTIVENESS OF THE PROGRAM; PROVIDED, HOWEVER, THE SUM
   40  THAT MAY BE RECOVERED FOR THE CORPORATION'S ADMINISTRATIVE  COSTS  SHALL
   41  NOT  EXCEED  FIVE  PERCENT OF THE MONIES MADE AVAILABLE FOR THE PROGRAM,
   42  AND THE SUM THAT MAY BE RECOVERED FOR THE CORPORATION'S EVALUATION COSTS
   43  SHALL NOT EXCEED THREE PERCENT OF THE  MONIES  MADE  AVAILABLE  FOR  THE
   44  PROGRAM.    THE MONIES HELD IN OR CREDITED TO THE FUND SHALL BE EXPENDED
   45  SOLELY FOR THE PURPOSES SET FORTH IN THIS SECTION. THE CORPORATION SHALL
   46  NOT COMMINGLE THE MONIES OF SUCH FUND  WITH  ANY  OTHER  MONIES  OF  THE
   47  CORPORATION  OR  ANY MONIES HELD IN TRUST BY THE CORPORATION. THE CORPO-
   48  RATION IS AUTHORIZED, WITHIN AVAILABLE APPROPRIATIONS  AND  LOAN  REPAY-
   49  MENTS  TO  PROVIDE  ZERO  INTEREST LOANS TO MICRO-BUSINESSES TO HIRE NEW
   50  EMPLOYEES.
   51    4. APPLICATIONS FOR LOAN. AN APPLICATION FOR A LOAN SHALL BE SUBMITTED
   52  IN SUCH FORM AND IN ACCORDANCE WITH SUCH PROCEDURES AS  THE  CORPORATION
   53  SHALL  ESTABLISH.  APPLICATIONS  SUBMITTED  TO  THE FUND MAY INCLUDE BUT
   54  SHALL NOT BE LIMITED TO:
   55    (A) A BUSINESS PLAN;
   56    (B) A JOB DESCRIPTION AND REQUIRED EMPLOYEE QUALIFICATIONS;
       A. 8513--A                          3

    1    (C) A GUARANTOR;
    2    (D)  THE GUARANTOR'S NAME AND ADDRESS, AUDITED FINANCIAL STATEMENTS OR
    3  TAX RECORDS FOR THE PREVIOUS THREE YEARS, AND OTHER FINANCIAL DOCUMENTA-
    4  TION THE CORPORATION SHALL DEEM APPROPRIATE;
    5    (E) A DESCRIPTION OF HOW THE APPLICANT ANTICIPATES THE  BUSINESS  WILL
    6  GROW AS A RESULT OF THE ADDITIONAL WORKFORCE;
    7    (F) A LIST OF CURRENT EMPLOYEES AND JOB DESCRIPTION FOR EACH EMPLOYEE;
    8  AND
    9    (G) ANY ADDITIONAL INFORMATION THAT THE CORPORATION SHALL REQUIRE.
   10    ALL INFORMATION COLLECTED BY THE CORPORATION SHALL BE CONFIDENTIAL AND
   11  SHALL BE USED EXCLUSIVELY FOR PURPOSES OF THIS SECTION.
   12    5.  APPLICATION FEE. EACH APPLICATION MUST BE ACCOMPANIED BY A MINIMUM
   13  ONE HUNDRED-DOLLAR APPLICATION  FEE.  THIS  APPLICATION  FEE  IS  TO  BE
   14  APPLIED  TO  THE CORPORATION'S ADMINISTRATIVE EXPENSES. APPLICATION FEES
   15  ARE TO BE REFUNDED TO ALL SUCCESSFUL APPLICANTS WITHIN  THIRTY  DAYS  OF
   16  RECEIPT  OF THE FINAL PAYMENT OF PRINCIPAL. THE PURPOSE OF THIS APPLICA-
   17  TION FEE IS TO ENSURE THAT APPLICATIONS ARE MADE IN GOOD  FAITH  AND  TO
   18  AVOID WASTED ADMINISTRATIVE FEES THAT OCCUR FROM BAD FAITH APPLICATIONS.
   19  THE  CORPORATION MAY REFUND ALL APPLICATION FEES, EVEN IF APPLICATION IS
   20  DENIED WHEN IT BELIEVED THAT THE APPLICANT IN GOOD FAITH BELIEVED IT WAS
   21  ENTITLED TO RECEIVE A LOAN UNDER THIS SECTION.
   22    6. LOAN TERMS. (A) THE CORPORATION SHALL PROVIDE FUNDS FOR EACH OF THE
   23  FIRST THREE YEARS OF THE MICRO-BUSINESS QUALIFYING  NEW  HIRE'S  EMPLOY-
   24  MENT.
   25    (B)  IN  EACH OF THOSE YEARS THE CORPORATION WILL PROVIDE NO MORE THAN
   26  TWENTY PERCENT OF THE MICRO-BUSINESS QUALIFYING NEW HIRE'S ANNUAL  SALA-
   27  RY.
   28    (C)  IN  EACH  YEAR  THE  CORPORATION WILL PROVIDE NO MORE THAN TWENTY
   29  THOUSAND DOLLARS PER MICRO-BUSINESS QUALIFYING NEW HIRE.
   30    (D) LOAN PAYMENTS TO THE CORPORATION FROM THE  BUSINESS  ARE  DEFERRED
   31  UNTIL THREE YEARS FROM MICRO-BUSINESS QUALIFYING NEW HIRE'S START DATE.
   32    (E)  PRINCIPAL  IS  TO  BE PAID TO THE CORPORATION IN MONTHLY INSTALL-
   33  MENTS.
   34    (F) NO INTEREST SHALL BE CHARGED ON ANY LOAN PROVIDED PURSUANT TO THIS
   35  SECTION.
   36    (G) THE LOAN WILL BE PAID BY THE CORPORATION IN THREE INSTALLMENTS  AS
   37  FOLLOWS:
   38    (I) THE FIRST INSTALLMENT WILL BE PROVIDED BY THE CORPORATION NO LATER
   39  THAN  TEN DAYS AFTER RECEIPT OF THE MICRO-BUSINESS QUALIFYING NEW HIRE'S
   40  W-2 AND PROOF OF RESIDENCE; AND
   41    (II) THE PAYMENTS FOR EACH ADDITIONAL INSTALLMENT SHALL BE MADE WITHIN
   42  TEN DAYS OF THE DATE OF THE MICRO-BUSINESS QUALIFYING NEW  HIRE'S  ANNI-
   43  VERSARY OF EMPLOYMENT.
   44    (H)  NO FEES OR PENALTIES SHALL BE CHARGED OR COLLECTED FOR PREPAYMENT
   45  OF ANY SUCH LOAN.
   46    7. LOAN APPROVAL. IN AWARDING THE LOAN, THE CORPORATION  SHALL  SELECT
   47  FROM ELIGIBLE BUSINESS APPLICANTS BASED ON THE FOLLOWING CRITERIA:
   48    (A) THE LIKELIHOOD OF SUCCESS OF THE APPLICANT IN MEETING THE GOALS OF
   49  ITS STRATEGIC PLAN;
   50    (B)  THE  EXTENT OF NEED FOR LOANS AND DEVELOPMENT SERVICES WITHIN THE
   51  INVESTMENT AREAS OR TARGETED POPULATIONS;
   52    (C) THE CREDIT SCORE OF THE APPLICANT;
   53    (D) THE CREDIT SCORE OF THE GUARANTOR;
   54    (E) GOOD STANDING ON OTHER LOAN OBLIGATIONS; AND
   55    (F) OTHER FACTORS DEEMED TO BE APPROPRIATE BY THE CORPORATION.
       A. 8513--A                          4

    1    8. APPLICATION CRITERIA. THE CORPORATION SHALL DEVELOP AND USE A STAN-
    2  DARD APPLICATION FORM. IN ADDITION TO SUCH OTHER CRITERIA AS THE  CORPO-
    3  RATION  MAY  ADOPT  IN  RULES  AND  REGULATIONS FOR THE CONSIDERATION OF
    4  APPLICATIONS FOR LOANS OR LOAN GUARANTEES PURSUANT TO THIS SECTION,  THE
    5  CORPORATION SHALL:
    6    (A)  DETERMINE THAT THE COMPANY IS UNABLE TO OBTAIN SUFFICIENT FUNDING
    7  ON REASONABLE TERMS FROM OTHER PUBLIC OR PRIVATE SOURCES TO  PERMIT  THE
    8  COMPANY'S PLANNED HIRING;
    9    (B)  CONSIDER  WHETHER  THE  LOAN  OR  LOAN GUARANTEE WILL RESULT IN A
   10  REASONABLE LIKELIHOOD OF SUCCESS IN MEETING THE PURPOSES  FOR  WHICH  IT
   11  WAS SOUGHT BY THE APPLICANT COMPANY; AND
   12    (C) ASSESS THE DEMONSTRATED NEED FOR SUCH ASSISTANCE, ESTABLISHED BY A
   13  SHOWING  OF  A SHORT-TERM LACK OF LIQUIDITY OF AN EXISTING SOLVENT BUSI-
   14  NESS.
   15    9. USE OF LOAN. A MICRO-BUSINESS MAY UTILIZE FUNDS ONLY FOR SALARY  OF
   16  A MICRO-BUSINESS QUALIFYING NEW HIRE.
   17    10. ADVISORY COMMITTEE. THE CORPORATION MAY CREATE AN ADVISORY COMMIT-
   18  TEE,  CONSISTING  OF AT LEAST FIVE MEMBERS, TO ADVISE THE CORPORATION IN
   19  THE PROMOTION, IMPLEMENTATION AND ADMINISTRATION OF THE  HIRE  NEW  YORK
   20  PROGRAM.
   21    11.  REPORTING  REQUIREMENTS. THE CORPORATION SHALL SUBMIT A REPORT TO
   22  THE GOVERNOR, THE SPEAKER OF THE ASSEMBLY AND THE TEMPORARY PRESIDENT OF
   23  THE SENATE ON OR BEFORE THE FIRST OF OCTOBER, AND  ANNUALLY  THEREAFTER,
   24  DESCRIBING  THE  FINANCIAL AND TECHNICAL ASSISTANCE PROVIDED PURSUANT TO
   25  THIS SECTION, INCLUDING: THE  NUMBER  OF  LOAN  APPLICATIONS  FILED  AND
   26  ACCEPTED;  THE  AMOUNT AND TYPE OF ASSISTANCE PROVIDED; A DESCRIPTION OF
   27  BUSINESSES ASSISTED BY FUND MONIES; THE NUMBER OF JOBS  CREATED  THROUGH
   28  THE  LOANS OF FUND MONIES; AND SUCH OTHER INFORMATION AS THE CORPORATION
   29  MAY DEEM APPROPRIATE.
   30    12. RULES AND REGULATIONS. THE CORPORATION  IS  HEREBY  AUTHORIZED  TO
   31  PROMULGATE  RULES  AND REGULATIONS IN ACCORDANCE WITH THE STATE ADMINIS-
   32  TRATIVE PROCEDURE ACT THAT ARE NECESSARY TO FULFILL THE PURPOSES OF THIS
   33  SECTION. SUCH RULES AND REGULATIONS MUST BE COMPLETED WITHIN ONE HUNDRED
   34  EIGHTY DAYS AFTER THE EFFECTIVE DATE OF THIS SECTION.
   35    S 3. The sum of twenty million dollars ($20,000,000), is hereby appro-
   36  priated to the urban development corporation out of the  moneys  in  the
   37  state  treasury  in the general fund to the credit of hire New York fund
   38  established pursuant to section 16-x of the New York state urban  devel-
   39  opment corporation act.
   40    S 4. This act shall take effect immediately.
Go to top
Page display time = 0.1027 sec