Establishes the self-sufficiency program within the New York state urban development corporation act to promote economic development; defines terms; authorizes the urban development corporation to expedite the design, planning and construction of eligible projects; makes related provisions.
STATE OF NEW YORK
________________________________________________________________________
5219
2009-2010 Regular Sessions
IN ASSEMBLY
February 11, 2009
___________
Introduced by M. of A. MAGNARELLI -- read once and referred to the
Committee on Economic Development, Job Creation, Commerce and Industry
AN ACT to amend the New York state urban development corporation act, in
relation to establishing the self-sufficiency program and to authorize
the urban development corporation to issue bonds or notes to provide
for such program; and providing for the repeal of certain provisions
of such act upon expiration thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 1 of chapter 174 of the laws of 1968, constituting
2 the New York state urban development corporation act, is amended by
3 adding a new section 16-u to read as follows:
4 § 16-u. Self-sufficiency program. 1. It is hereby declared that it is
5 a vital policy and public purpose of New York state to promote signif-
6 icant economic development in New York. The history of New York is
7 marked by large-scale economic endeavors which harnessed the creativity,
8 skill and vision of the residents of New York. The transforming power of
9 these accomplishments is best embodied in the Erie Canal, which created
10 in its wake a surge of economic and population growth in New York. In
11 contrast, the legislature hereby finds that the current economic climate
12 of New York as a whole is marked by persistent disinvestment, blight and
13 aging infrastructure, loss of open space, and emigration of employment
14 opportunities and investment dollars, and that recreating the environ-
15 ment of energy and risk-taking that drove the Erie Canal is essential to
16 New York's future well-being. The legislature finds that in order to
17 reverse the trends of decline, it is necessary and appropriate to estab-
18 lish a public/private financing model to promote economic development in
19 New York while maximizing leverage needed to assist in financing such
20 projects and do so in an expedited manner. It is the overriding public
21 policy of this state to create a new vehicle for financing and approving
22 projects in New York to ensure the health, welfare and prosperity of all
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07176-01-9
A. 5219 2
1 citizens of the state, while ensuring that state finances are not
2 depleted but in fact enriched over the long term.
3 2. As used in this section, the following terms shall have the mean-
4 ings indicated:
5 (a) "Applicant" shall mean that individual or entity, or such individ-
6 ual's or entity's agent, successor in interest, assignee or designee,
7 which files an application with the corporation for consideration of an
8 eligible project.
9 (b) "Base payment" shall mean that portion of a PILOT payment paid
10 pursuant to a PILOT agreement as follows: in the first year, such amount
11 shall be equal to the real property taxes paid to the taxing entities in
12 the immediately preceding year and in the second year and in each year
13 thereafter, the amount required to be paid in each subsequent year shall
14 be one hundred four percent of the immediately preceding year's payment.
15 (c) "Brownfield site" shall have the meaning set forth in section
16 27-1405 of the environmental conservation law.
17 (d) "Eligible project" shall mean any new equipment, improvement or
18 structure, including new construction, alteration or improvement to
19 existing structures, and all real and personal property deemed necessary
20 therewith, which is projected to (i) cost a minimum of twenty million
21 dollars, (ii) result in the creation, in one or more phases, of at least
22 three hundred new full time equivalent jobs at the project site; and
23 (iii) one or more of the following: (A) will be designed and constructed
24 to achieve "gold" status or higher pursuant to the leadership in energy
25 and environmental design ("LEED") green building rating system criteria
26 developed by the United States Green Building Council or (B) will be
27 designed and constructed to "3 Globes" or higher pursuant to the green
28 globes rating system developed by the Green Building Initiative; or (C)
29 will utilize technology-enabled design, construction and operation
30 including, but not limited to, generally accepted universal design prin-
31 ciples that enhance the full cycle use buildings without regard to the
32 physical abilities or disabilities of occupants or guests in order to
33 accommodate a wide range of individual preferences and functional abili-
34 ties. If a phase of the eligible project is under construction as of the
35 date of the application, then any jobs created as of such date shall be
36 considered jobs created for purposes of this definition.
37 The corporation shall give preference to those eligible projects which
38 meet either or both of the following criteria: (i) the site is located
39 in an area of a municipality or region characterized by high unemploy-
40 ment, a high poverty rate and/or a high commercial vacancy rate; or (ii)
41 the applicant's proposed eligible project will be located, in whole or
42 in part, on a brownfield site as defined in this section.
43 (e) "Host community benefit" shall be an amount equal to three percent
44 of the project costs, payable at the closing of the financing of the
45 eligible project, to the municipalities in which the eligible project is
46 to be sited, provided that if an eligible project is undertaken in one
47 or more phases, such amount shall be proportional to the percentage of
48 project costs of eligible projects being undertaken. The host community
49 benefit shall be allocated to the municipality or municipalities in
50 which the eligible project is to be sited in the same proportion as the
51 amount of real property taxes on the eligible project would have been
52 distributed to such municipalities if not for the tax-exempt status of
53 the eligible project.
54 (f) "Marketing development fee" shall be an amount equal to three
55 percent of the project costs, if an eligible project is to be undertaken
56 in one or more phases, such amount shall be proportional to the percent-
A. 5219 3
1 age of the project costs of the particular phase to the project costs of
2 the eligible project being undertaken, for the purpose of marketing this
3 program by the corporation.
4 (g) "Municipality" shall mean any county, city, village or town in the
5 state.
6 (h) "PILOT agreement" shall mean an agreement between the sponsor and
7 the corporation to make PILOT payments for an eligible project.
8 (i) "PILOT payment" shall mean that sum agreed to pursuant to subdivi-
9 sion five of this section.
10 (j) "Project costs" shall mean and include all costs paid or incurred
11 in connection with an eligible project including, without limitation,
12 the costs of land and other interests, buildings, fixtures, furniture,
13 equipment or machinery, research and development, permitting, planning,
14 engineering, financing, the provision of working capital, inventory,
15 marketing, expenditures associated with the opening of the eligible
16 project, and/or other amounts, including reserves and interest, the host
17 community benefit, the school district contribution and the marketing
18 development fee required to be paid in connection with financing of the
19 eligible project. The term financing shall include refinancing.
20 (k) "Project payment" shall mean that portion of a PILOT payment paid
21 annually pursuant to a PILOT agreement equal to the amount established
22 by the applicant.
23 (l) "School district contribution" shall mean that amount to be paid,
24 if at all, in an amount equal to three percent of the project costs,
25 payable at the closing of the financing of the eligible project, to the
26 school district in which the eligible project is sited, provided that,
27 if an eligible project is to be undertaken in one or more phases, such
28 amount shall be proportional to the percentage of the project costs of
29 the particular phase to the project costs of the eligible project being
30 undertaken.
31 (m) "Sponsor" shall mean the individual or entity or such individual's
32 or entity's agent, assignee, designee or successor in interest whose
33 application for treatment as an eligible project has been approved by
34 the corporation.
35 (n) "Taxing entities" shall mean each municipality and school
36 district, in which an eligible project is located, that has the power to
37 impose but which will fail to receive real property tax payments which
38 would otherwise be due, except for the tax exempt status of the corpo-
39 ration.
40 (o) "Undertaking" shall mean, without limitation, the acquisition,
41 financing, construction, installation, equipping and completion of an
42 eligible project in one or more phases.
43 3. Notwithstanding any provision of law to the contrary, the corpo-
44 ration is hereby authorized to undertake an eligible project pursuant to
45 this section, and the corporation shall not be required to pay taxes
46 upon any of the property acquired by it or under its jurisdiction,
47 control or supervision pursuant to this section or upon its activities
48 pursuant to this section.
49 4. (a) The corporation is authorized to accept applications for
50 approval of an eligible project, and the application shall be approved
51 as an eligible project and a project as defined in this section by the
52 corporation if such application demonstrates that the project meets the
53 definition of an eligible project and will advance the economic well-be-
54 ing of the state. The applicant shall pay to the corporation a non-re-
55 fundable application fee of one thousand dollars. The corporation shall
56 approve or disapprove of such eligible project no later than thirty days
A. 5219 4
1 from the date of receipt of the application or at the next board meeting
2 occurring within sixty days of the receipt of the application if such
3 meeting is scheduled for a date later than thirty days from the date of
4 receipt of such application. Such approval shall not be subject to arti-
5 cle 8 of the environmental conservation law. In connection with the
6 undertaking of an eligible project by the corporation or a phase there-
7 of, the sponsor shall pay to the corporation, at the closing of the
8 financing by the corporation or its designee of an eligible project, a
9 closing fee of up to one percent of the amount financed. In calculating
10 such fee, the sponsor shall be entitled to a credit against such fee for
11 amounts paid to the corporation or other authorities or public benefit
12 corporations as fees paid pursuant to other programs in connection with
13 or related to the eligible project, as well as any fees paid to the
14 state pursuant to title 10 of article 9 of the public authorities law.
15 The corporation shall promulgate regulations within thirty days of the
16 effective date of this section, or at the next regularly scheduled board
17 meeting occurring within sixty days of the effective date of this
18 section, if such meeting is scheduled for a date greater than thirty
19 days from the effective date of this section, to establish procedures
20 for the approval of eligible projects. In considering the application,
21 the corporation shall consider factors affecting the creditworthiness of
22 the applicant including, but not limited to, the applicant's business
23 plan, business experience and management information, credit history and
24 financial statements, sufficiency of collateral to secure repayment of
25 the loan, other personal and corporate guarantees on the project, and
26 cash flow projections. To the extent permitted by law, all information
27 regarding the financial condition, marketing plans, manufacturing proc-
28 esses, production costs, customer lists, or other trade secrets or
29 proprietary information deemed as such by the applicant in connection
30 with the application submitted pursuant to this subdivision, shall be
31 confidential and exempt from public disclosure.
32 (b) In connection with the undertaking of an eligible project by the
33 corporation, a sponsor shall pay the marketing development fee to the
34 corporation or its designee. Such fee can be paid by the sponsor at any
35 time, but in any event no later than the closing of the financing by the
36 corporation or its designee of an eligible project or a phase thereof.
37 Such marketing development fee shall be used by the corporation and/or
38 the department of economic development to promote business development
39 in the state including, without limitation, the ombudsman program
40 described in subdivision nine of this section.
41 5. Notwithstanding any other provision of law to the contrary, in
42 conjunction with the acquisition of title or other interest sufficient
43 to confer jurisdiction, control or supervision of the corporation over
44 an eligible project, the corporation shall enter into a PILOT agreement
45 with the sponsor or its designee for a period of forty years or such
46 shorter term as determined by the sponsor. Subject to the approval of
47 the taxing entities, the PILOT payment shall be used to pay project
48 costs. However, if the sponsor agrees that the corporation shall
49 distribute the base payment, host community benefit and school district
50 contribution to the respective taxing entities, then the PILOT agreement
51 containing such provision shall be deemed approved by the taxing enti-
52 ties and the corporation shall notify the taxing entities accordingly.
53 Project payments shall be paid to the corporation and shall be used as
54 directed by the sponsor to pay or to provide for the payment of any
55 project costs. To the extent all or a portion of the project payments
56 are used to pay debt service on bonds or notes issued pursuant to this
A. 5219 5
1 section, such project payments shall be in amounts sufficient to pay
2 such debt service.
3 6. Notwithstanding the provisions of section 18 of this act, the
4 corporation is hereby authorized, to issue bonds or notes which are
5 payable from and secured by project payments, allocated and paid pursu-
6 ant to the provisions of subdivision five of this section, in order to
7 finance project costs. Provided, however, such bonds or notes shall not
8 be a debt of the corporation, nor shall such bonds and notes be a debt
9 of the state within the meaning of any constitutional or statutory
10 provision. The pledge of project payments allocated and paid shall
11 constitute a first lien on the eligible project and the revenues derived
12 therefrom, and shall be secured by the eligible project.
13 7. (a) Within five business days of the approval of an application,
14 the corporation shall provide a written notice and recommendation to the
15 chief executive officer of the municipality in which the eligible
16 project is to be sited which regulates land use pursuant to the zoning
17 power. Such notice shall contain a summary of the eligible project
18 including but not limited to a description of the financial benefits of
19 the eligible project to the municipality, school district, and region,
20 and if the eligible project is a permissible use under the applicable
21 zoning law.
22 (b) The chief executive officer of the municipality in which the
23 eligible project is to be sited which regulates land use pursuant to the
24 zoning power in conjunction with the legislative body of such munici-
25 pality shall conduct a public hearing in relation thereto, at which the
26 public shall have an opportunity to be heard. Notice of the hearing
27 shall be posted in at least four prominent places and shall be published
28 not less than once a week for three successive weeks prior to the hear-
29 ing in a newspaper of general circulation in such municipality. The
30 notice of hearing shall include such notice as provided by the corpo-
31 ration to the chief executive officer of the municipality in which the
32 eligible project is to be sited which regulates land use pursuant to the
33 zoning power. A copy of the notice shall be mailed to the last known
34 owner of each parcel of land adjoining the eligible project. A copy of
35 the notice shall also be mailed to the legislative body of each of the
36 taxing entities.
37 (c) Any and all persons may appear before the legislative body at such
38 public hearing and show cause why the eligible project should or should
39 not be adopted. At any time not later than the hour set for hearing
40 objections to the proposed eligible project, any person may file in
41 writing with the clerk of the legislative body a statement of such
42 person's objections to the eligible project.
43 (d) Within thirty days of the date of the notice provided in paragraph
44 (a) of this subdivision, the local school district shall issue a state-
45 ment to the legislative body recommending approval or disapproval of
46 such eligible project. The local school district shall only recommend
47 disapproval of a project which, considered in its entirety, it reason-
48 ably demonstrates will materially adversely impact the fiscal integrity
49 of the school district. Such statement shall be transmitted to the
50 legislative body of such municipality and shall be posted for public
51 viewing. Such statement shall not be subject to article 8 of the envi-
52 ronmental conservation law.
53 (e) Within forty-five days of the date of the notice provided in para-
54 graph (a) of this subdivision, the legislative body of such municipality
55 may approve or disapprove of the eligible project. If, within such peri-
56 od, the legislative body of such municipality approves or fails to
A. 5219 6
1 disapprove such project, then, notwithstanding any provision of law to
2 the contrary, such eligible project shall be deemed a permissible use
3 under the applicable zoning law, subject only to the sponsor obtaining
4 site plan approval from the body of said municipality authorized to
5 grant such approval, except that if the local zoning law does not
6 require site plan approval for such use, then no site plan approval
7 shall be required. In the event such legislative body disapproves of the
8 proposed use, the sponsor may, within ten days of its receipt of such
9 disapproval (i) notify the corporation of its intent to amend its appli-
10 cation to change the situs of the eligible project to another city, town
11 or village of the state and promptly file notice with said city, town or
12 village pursuant to this section; or (ii) withdraw the eligible project
13 from further action by the corporation without penalty. Such approval
14 shall not be subject to article 8 of the environmental conservation law.
15 8. Notwithstanding any provision of law to the contrary, for each
16 eligible project, upon written request of the sponsor, the corporation
17 shall be the lead agency (as that term is defined in section 8-0111 of
18 the environmental conservation law) for purposes of compliance under
19 article 8 of the environmental conservation law.
20 9. The corporation shall exercise the full extent of its corporate
21 powers subject to applicable law to expedite the design, planning and
22 construction of eligible projects, and shall use its best efforts in
23 securing those approvals necessary to complete an eligible project. As
24 part of this exercise, the corporation shall appoint an ombudsman to
25 facilitate the implementation and marketing of the self-sufficiency
26 program described in this section and the empire revolving bridge loan
27 fund described in section 16-t of this act, as added by a chapter of the
28 laws of 2009.
29 10. An entity independent of the corporation shall conduct and submit
30 to the governor and the legislature by no later than December 31, 2013,
31 a comprehensive evaluation of the performance of the eligible projects
32 approved pursuant to this program. The criteria by which the program is
33 to be evaluated shall include, but not be limited to, the following: (a)
34 whether quantifiable benefits attributable to the program justify its
35 direct costs to the state and participating localities; (b) whether the
36 program has contributed to the economic revitalization of the state by
37 stimulating (i) the creation and retention of permanent, full-time,
38 quality private sector jobs; and (ii) the creation, location and expan-
39 sion of businesses in the state; (c) whether the program has created
40 employment and business development opportunities for residents of the
41 state; and (d) whether the program is being managed and evaluated effec-
42 tively by the corporation.
43 § 2. This act shall take effect on the same date and in the same
44 manner as a chapter of the laws of 2009, entitled "AN ACT to amend the
45 New York state urban development corporation act, in relation to estab-
46 lishing the empire revolving bridge loan fund, and authorizing the New
47 York state urban development corporation to issue bonds or notes to
48 provide monies for such fund; and to amend chapter 393 of the laws of
49 1994, amending the New York state urban development corporation act
50 relating to the powers of the New York state urban development corpo-
51 ration to make loans, in relation to the effectiveness thereof", takes
52 effect, provided, that paragraph (a) of subdivision 4 of section 16-u of
53 the New York state urban development corporation act, as added by
54 section one of this act, shall expire and be deemed repealed November
55 26, 2019.
