A08513 Summary:

BILL NO    A08513 

SAME AS    SAME AS S05997-A

SPONSOR    Scarborough

COSPNSR    Clark, Cook, Perry, Robinson

MLTSPNSR   Crespo, Markey, Rivera

Add S16-w, 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.
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A08513 Memo:

BILL NUMBER:A8513

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 bill 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 I 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 aualifying 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. At 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 take 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
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A08513 Text:

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

                                         8513

                                 I N  A S S E M B L Y

                                   January 21, 2014
                                      ___________

       Introduced  by  M.  of  A.  SCARBOROUGH -- read once and referred to the
         Committee on Small Business

       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-w to read as follows:
    6    S 16-W. 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.
   23    2.  DEFINITIONS.  AS  USED  IN THIS SECTION, THE FOLLOWING TERMS SHALL
   24  HAVE THE MEANINGS INDICATED:
   25    (A) "FUND" MEANS THE HIRE NEW YORK FUND AS ESTABLISHED BY  SUBDIVISION
   26  THREE OF THIS SECTION.

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD13164-03-4
       A. 8513                             2

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

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

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