Establishes the incentive evaluation act; creates the incentive evaluation commission to at least once every four years evaluate each incentive provided by the state and report to the governor and the legislature on their effectiveness and provide recommendations relating thereto.
STATE OF NEW YORK
________________________________________________________________________
4896
2025-2026 Regular Sessions
IN SENATE
February 14, 2025
___________
Introduced by Sen. SKOUFIS -- read twice and ordered printed, and when
printed to be committed to the Committee on Commerce, Economic Devel-
opment and Small Business
AN ACT to amend the economic development law, in relation to establish-
ing the incentive evaluation act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The economic development law is amended by adding a new
2 article 28 to read as follows:
3 ARTICLE 28
4 INCENTIVE EVALUATION ACT
5 Section 500. Short title.
6 501. Definitions.
7 502. Incentive evaluation commission.
8 503. Periodic evaluations.
9 504. Evaluation process.
10 § 500. Short title. This article shall be known and may be cited as
11 the "incentive evaluation act".
12 § 501. Definitions. As used in this article, the following terms shall
13 have the following meanings:
14 1. "business entity" shall mean any person, corporation, partnership,
15 sole proprietor, limited partnership, association or any other business
16 entity.
17 2. "commission" shall mean the incentive evaluation commission estab-
18 lished under this article.
19 3. "incentive" shall mean a tax credit, tax exemption, tax deduction,
20 tax expenditure, rebate, grant, or loan that is intended to encourage
21 businesses to locate, expand, invest, or remain in New York, or to hire
22 or retain employees in New York.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09441-02-5
S. 4896 2
1 4. "substantial interest" shall mean the ownership, directly or indi-
2 rectly, of more than fifty percent of the equity interest with voting
3 rights of a business entity.
4 § 502. Incentive evaluation commission. 1. There is hereby established
5 the incentive evaluation commission consisting of:
6 (a) A certified public accountant appointed by the state comptroller;
7 (b) A chartered financial analyst appointed by the speaker of the
8 assembly;
9 (c) An auditor who is employed as an internal auditor by a company or
10 who is employed by a private auditing firm appointed by the state comp-
11 troller;
12 (d) An economist from a New York college or university appointed by
13 the temporary president of the senate;
14 (e) A lay person who is not an elected official appointed by the
15 governor;
16 (f) The commissioner of the department of taxation and finance or
17 their designee who is also a member of the department of taxation and
18 finance, which shall be an ex officio and nonvoting position;
19 (g) The director of the authorities budget office or their designee
20 who is an employee of the authorities budget office which shall be an ex
21 officio and nonvoting position; and
22 (h) The commissioner or their designee who is an employee of empire
23 state development which shall be an ex officio and nonvoting position.
24 2. Initial appointments to the commission of voting members shall
25 occur within ninety days of the effective date of this article and such
26 members shall have their term expire on the thirty-first of December
27 next succeeding the ninetieth day after the effective date of this arti-
28 cle. Thereafter, such members shall be appointed for terms of four years
29 beginning on January first. Any vacancy shall be filled by the appoint-
30 ing authority for the remainder of the unexpired term.
31 3. No person shall serve on the commission or be appointed to the
32 commission who is employed by a business entity that receives any incen-
33 tive or who holds a substantial interest in ownership in a business
34 entity that receives any incentive.
35 4. No person shall be appointed to the commission who at the time of
36 their appointment is an elected official. Any person who is appointed to
37 the commission who subsequently becomes an elected official during their
38 term on the commission shall be required to vacate their position on the
39 commission.
40 5. The office of general services shall provide staff and administra-
41 tive support to the commission. The department and the department of
42 taxation and finance shall assist the office of general services as
43 needed in providing staff and administrative support to the commission.
44 § 503. Periodic evaluations. 1. (a) On or before the thirty-first of
45 December next succeeding the ninetieth day after the effective date of
46 this article and every four years thereafter, the commission shall
47 develop a four-year schedule for evaluating incentives. The development
48 of the schedule for evaluating the incentives shall take into consider-
49 ation fiscal impacts to revenues of this state, including but not limit-
50 ed to the general fund, the opportunity to group incentives with similar
51 goals and objectives for evaluation, and the ability to obtain suffi-
52 cient data related to the incentives for evaluation. Each schedule shall
53 include a list of all incentives in the state, including any it exempts
54 from evaluation. In determining whether a program is an incentive, the
55 commission may consider legislative intent and may also consider whether
56 the program is promoted as an incentive by any state agency. For each
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1 incentive listed in the schedule, the commission shall attempt to iden-
2 tify the goal or goals of the incentive.
3 (b) Upon approval of the schedule, the commission shall provide the
4 schedule to the governor, temporary president of the senate, and speaker
5 of the assembly.
6 2. For the four calendar years following the approval of a schedule
7 under subdivision one of this section, the commission shall ensure that
8 each incentive in such schedule is evaluated within the four-year evalu-
9 ation period unless the commission determines that the incentive is
10 exempt from evaluation. The commission may exempt from evaluation any
11 incentive that it concludes has a minimal fiscal impact. The commission
12 shall determine a specific threshold amount which shall be considered as
13 a minimal fiscal impact for the current evaluation cycle. The commission
14 may also conduct an expedited evaluation for any incentive that has been
15 evaluated at least twice within the previous eight years and has not had
16 a material change to the program since its prior evaluation. The expe-
17 dited evaluation will update the prior evaluation's financial and
18 economic impacts, findings, and recommendations.
19 § 504. Evaluation process. 1. The commission may contract with a
20 private company, nonprofit, or academic institution for professional
21 services to assist with evaluation of each incentive. The commission
22 shall develop requirements for such professional services necessary to
23 complete incentive evaluations pursuant to this article. Such require-
24 ments shall include, but not be limited to, the contractor provide at
25 least one draft report for each incentive prior to the issuance of the
26 final report; provided, the contractor may determine the timing and
27 frequency of draft reports based on the availability of information and
28 the potential for draft reports to assist the commission in making a
29 final recommendation. The cost of such contract shall be paid by the
30 department. No recipient or potential recipient of an incentive or
31 representative of a recipient or potential recipient shall contact the
32 entity or individual with whom the commission contracts pursuant to this
33 subdivision unless the entity or individual specifically requests infor-
34 mation or documentation for purposes of the incentive evaluation proc-
35 ess; provided, this shall not be construed to prevent participation in a
36 public hearing conducted pursuant to subdivision two of this section.
37 2. For each year in which incentives have been scheduled to be evalu-
38 ated under this article:
39 (a) By October first of each such year, the commission or the commis-
40 sion's chosen contractor shall have evaluated each incentive scheduled
41 for review that year. The commission or the commission's chosen contrac-
42 tor shall conduct each incentive evaluation in consultation with the
43 department using criteria developed pursuant to subdivision four of this
44 section.
45 (b) Between October first and November thirtieth of each such year,
46 the commission shall hold at least one public meeting to review, allow
47 for public comment, and vote to approve, disapprove, or modify each
48 incentive evaluation conducted that year.
49 (c) By December fifteenth of each such year, the commission shall
50 issue an annual written report which shall provide: (i) the results of
51 each incentive evaluation; (ii) a review of prior incentive evaluation
52 recommendations by the commission and changes to statute or incentive
53 administration related to such recommendations; and (iii) if the commis-
54 sion votes to modify an incentive evaluation as provided in this subdi-
55 vision, such modification and the original evaluation shall be docu-
56 mented. The report shall be made publicly available on the department's
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1 website and the commission's website and shall be submitted to the
2 governor, temporary president of the senate, and the speaker of the
3 assembly.
4 3. Each evaluation shall include the following:
5 (a) An estimate of the economic and fiscal impact of the incentive.
6 This estimate shall include, but not be limited to:
7 (i) the extent to which the incentive changes business behavior.
8 (ii) the results of the incentive for the economy of New York as a
9 whole. This consideration includes both positive direct and indirect
10 impacts and any negative effects on other New York businesses.
11 (iii) a comparison to the results of other incentives or other econom-
12 ic development strategies with similar goals.
13 (b) An assessment of whether adequate protections are in place to
14 ensure the fiscal impact of the incentive does not increase substantial-
15 ly beyond the state's expectations in future years.
16 (c) An assessment of whether the incentive is being administered
17 effectively.
18 (d) An assessment of whether the incentive is achieving its goals.
19 (e) Recommendations for how the state can most effectively achieve the
20 incentive's goals, including recommendations on whether the incentive
21 should be retained, reconfigured, or repealed.
22 (f) Recommendations for any changes to state policy, rules, or stat-
23 utes that would allow the incentive to be more easily or conclusively
24 evaluated in the future. These recommendations may include changes to
25 collection, reporting, and sharing of data, and revisions or clarifica-
26 tions to the goal of the incentive.
27 4. Evaluation criteria shall be developed for each incentive evaluated
28 by the commission. Each incentive shall be evaluated using criteria
29 specific to the individual incentive.
30 5. The commission and any of its contractors, unless prohibited by
31 state or federal law, may request and shall receive in a timely manner
32 from any department, division, board, bureau, commission, agency or
33 other political subdivision of the state, such information and assist-
34 ance as shall enable it to properly carry out its powers and duties
35 pursuant to this article.
36 § 2. This act shall take effect immediately.
