Authorizes the comptroller and the commissioner of taxation and finance to make linked deposits with lenders to a series of eligible businesses, so long as no individual loan exceeds $50,000; authorizes excelsior linked deposit loans to be made to a series of eligible businesses, with no individual loan exceeding $50,000, and such loans may be used for financing or refinancing a small business in distressed communities.
STATE OF NEW YORK
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4377
2011-2012 Regular Sessions
IN ASSEMBLY
February 3, 2011
___________
Introduced by M. of A. P. RIVERA, TOWNS, SCHROEDER -- Multi-Sponsored by
-- M. of A. AUBRY, BRENNAN, CAHILL, CANESTRARI, CLARK, ENGLEBRIGHT,
HEASTIE, JOHNS, MAGEE, McENENY, MILLMAN, MORELLE, PHEFFER, J. RIVERA
-- read once and referred to the Committee on Small Business
AN ACT to amend the state finance law, in relation to authorizing
excelsior linked deposits and loans to be made to a series of eligible
businesses
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivisions 15 and 17 of section 213 of the state finance
2 law, as amended by chapter 291 of the laws of 2004, are amended to read
3 as follows:
4 15. "Linked deposit" means a deposit, or for farm credit system insti-
5 tutions and the New York business development corporation an investment
6 eligible to be held by such institution or corporation placed with a
7 lender by the comptroller or the commissioner of taxation and finance
8 for a period of four years at the linked deposit interest rate, provided
9 the lender agrees to:
10 (a) lend the equivalent value of such deposit either to (i) an eligi-
11 ble business at the interest rate provided in section two hundred eigh-
12 teen of this article, or (ii) a series of eligible businesses in indi-
13 vidual loan principal amounts not to exceed fifty thousand dollars, all
14 of which bear interest at the rate provided in section two hundred eigh-
15 teen of this article; and
16 (b) permit the deposit to be comprised of a series of ninety day
17 deposits each bearing an interest rate equal to the linked deposit
18 interest rate fixed at the time the original deposit is placed.
19 This article and the related statutes that refer to this article do
20 not grant thrifts, farm credit system institutions or the New York busi-
21 ness development corporation eligibility to accept public funds or
22 public moneys from public entities for investment purposes. For farm
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00019-01-1
A. 4377 2
1 credit system institutions, the linked deposit program is available for
2 loans with an agricultural purpose as defined by the farm credit act of
3 nineteen hundred seventy-one, as amended and regulations promulgated
4 thereunder. A linked deposit is intended to enable a lender to make a
5 linked loan to an eligible business and such deposit earns a yield lower
6 than posted rates in order to accomplish the goals of this article.
7 Notwithstanding the provisions of the opening paragraph of this subdi-
8 vision, linked deposits made pursuant to subparagraph (ii) of paragraph
9 (a) of this subdivision may be placed with a lender for a period of five
10 years.
11 17. "Linked loan" means either (a) a loan for purposes of an eligible
12 project, in an amount equal to a linked deposit and bearing interest for
13 the first four years at the interest rate provided in section two
14 hundred eighteen of this article; or (b) a series of loans, none of
15 which exceeds fifty thousand dollars in principal amount, each of which
16 is for the purpose of an eligible project or, for loans made in
17 distressed communities (with median household income levels which are
18 less than eighty percent of the state median household income), is for
19 the purpose of financing or refinancing a small business, and the aggre-
20 gate value of all such loans is equivalent to a single linked deposit
21 bearing interest for the first two years at the rate provided in section
22 two hundred eighteen of this article.
23 § 2. The opening paragraph of subdivision 1 of section 219 of the
24 state finance law, as added by chapter 705 of the laws of 1993, is
25 amended to read as follows:
26 The commissioner of economic development shall establish procedures
27 and other requirements for participation in the program, and shall
28 provide a simplified application form to the participating lenders for
29 linked deposits. Such form shall reflect the qualifying information
30 required by this article for eligible businesses and shall contain a
31 statement by the applicant that inability to obtain the reduced interest
32 rate provided by the program would impede the ability of the applicant
33 to undertake the eligible project. For a series of linked loans, as
34 authorized by paragraph (b) of subdivision seventeen of section two
35 hundred thirteen of this article, such form shall include a statement by
36 the lender that no loan shall be made that does not comply with the
37 requirements of this article. Upon completion of any application for a
38 linked deposit, the lender shall send the application, together with the
39 interest rate certification required pursuant to section two hundred
40 eighteen of this article, to the commissioner of economic development
41 who shall either approve or reject the application within twenty-eight
42 days. The commissioner of economic development shall evaluate each
43 application based upon the following criteria:
44 § 3. This act shall take effect immediately.
