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A08117 Summary:

A08117 Actions:

A08117 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A8117
 
SPONSOR: Schimminger

 
TITLE OF BILL:  An act to amend the state finance law, in relation to
the Excelsior Linked Deposit Program
 
 
PURPOSE:
 
This bill would increase the lifetime cap on the total amount of money a
company may borrow from the Excelsior Linked Deposit program from $2
million to $5 million.
 
 
SUMMARY OF PROVISIONS:
 
Section one of the bill would amend State Finance Law § 217 to increase
the lifetime cap on the total amount of money a company may borrow in
the program from $2 million to $5 million. It would remove the current
$2 million limit on the maximum loan amount a company may receive under
the.program.
 
Section 2 of the bill would make it effective immediately.
 
 
JUSTIFICATION:
 
The Excelsior Linked Deposit program caps the total amount of loan
assistance a company may receive under the program at $2 million. It
also caps the maximum loan amount to a given company at $2 million.
 
Over the past eight years, the Empire State Development Corporation
(ESD) has noticed a decrease in activity in the Excelsior Linked Deposit
program due to lower than expected interest rates. Under the Program,
borrowers realize an interest rate subsidy of up to 3 percent based on
the lender's four year CD rate. Currently, the average CD rate is quite
low (.95 percent) and, as a result, borrowers are neither realizing the
full benefit of the program nor applying for as many loans as in the
past. Increasing the lifetime allowance and removing the individual loan
amount limit would allow for an increase in program activity.
 
Since the last increase from $1 million to $2 million in 2011, fifty
five (55) borrowers have reached their lifetime maximum for Linked
Deposit assistance. A majority of these businesses have added employees.
In addition, ESD has heard from borrowers wishing to have the cap raised
so they could continue to participating in the program and from lenders
stating it would be beneficial to their business if the lifetime allow-
ance were to be increased.
 
With respect to removing the maximum individual loan amount, this change
would allow ESD to better use its administrative discretion as program
funding and economic conditions fluctuate. If the limit on the maximum
loan amounts is removed in statute, ESD would have the authority to
subsidize greater individual loans when ample funding is available while
retaining the authority to subsidize lesser individual loans if funding
becomes limited.
 
 
LEGISLATIVE HISTORY:
 
This is a new bill.
 
 
FISCAL IMPLICATIONS:
None.
 
 
EFFECTIVE DATE:
This act shall take effect immediately.

A08117 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8117
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 30, 2017
                                       ___________
 
        Introduced  by  M.  of A. SCHIMMINGER -- (at request of the Empire State
          Development) -- read once and referred to the  Committee  on  Economic
          Development
 
        AN  ACT  to  amend  the  state finance law, in relation to the Excelsior
          Linked Deposit Program
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 217 of the state finance law, as amended by section
     2  1  of  part  H  of chapter 60 of the laws of 2011, is amended to read as
     3  follows:
     4    § 217. Linked loans. Linked loans shall be made by lenders pursuant to
     5  the program only to eligible  businesses  in  connection  with  eligible
     6  projects.  [A  linked  loan  shall be limited to a maximum amount of two
     7  million dollars.] An eligible business may receive more than one  linked
     8  loan.  During  the  life of the linked loan program, the total amount of
     9  money that a business can borrow from the linked program is  [two]  five
    10  million  dollars.  The credit decision for making a linked loan shall be
    11  made solely by the lender. Notwithstanding the length of the term  of  a
    12  linked loan, the linked deposit relating to the linked loan shall be for
    13  a period of not more than four years.
    14    § 2. This act shall take effect immediately.
 
 
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09962-01-7