Amd §16-c, UDC Act (as proposed in S.571 & A.6420)
Restricts the use of funds received from the minority and women-owned business development and lending program for the purpose of refinancing existing commercial or business related debt.
STATE OF NEW YORK
________________________________________________________________________
1356
2023-2024 Regular Sessions
IN SENATE
January 11, 2023
___________
Introduced by Sen. SANDERS -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the urban development corporation act, in relation to
allowing businesses to use funds received from the minority and
women-owned business development and lending program for the purpose
of refinancing existing debt
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraph (vii) of paragraph (c) of subdivision 1 of
2 section 16-c of section 1 of chapter 174 of the laws of 1968, constitut-
3 ing the urban development corporation act, as amended by a chapter of
4 the laws of 2022 amending the urban development corporation act relating
5 to allowing businesses to use funds received from the minority
6 and women-owned business development and lending program for the
7 purpose of refinancing existing debt, as proposed in legislative bills
8 numbers S.571 and A. 6420, is amended to read as follows:
9 (vii) refinancing of commercial or business related debt or equity
10 invested in [an] a commercial or business related enterprise or commer-
11 cial or business related project, unless [the chairperson of] the corpo-
12 ration finds the terms of the original debt to be unreasonable as
13 provided in subparagraph (ix) of paragraph (d) of this subdivision.
14 § 2. Subparagraph (ix) of paragraph (d) of subdivision 1 of section
15 16-c of section 1 of chapter 174 of the laws of 1968, constituting the
16 urban development corporation act, as added by a chapter of the laws of
17 2022 amending the urban development corporation act relating to allow-
18 ing businesses to use funds received from the minority and women-
19 owned business development and lending program for the purpose of
20 refinancing existing debt, as proposed in legislative bills numbers
21 S.571 and A. 6420, is amended to read as follows:
22 (ix) provide for the refinancing of commercial or business related
23 debt or equity invested in an enterprise or project, provided that [the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04148-01-3
S. 1356 2
1 chairperson of] the corporation determines the terms of the original
2 debt to be unreasonable. The applicant must submit a written justifica-
3 tion to [the chairperson of] the corporation for each loan explaining
4 why the current loan is not on reasonable terms. Unreasonable terms of
5 debt may include but are not limited to:
6 (1) a demand or balloon maturity feature in the existing note;
7 (2) the current maturity is not appropriate for the original purpose
8 of the loan;
9 (3) the existing debt being refinanced is on a revolving line or a
10 credit card;
11 (4) the interest rate is deemed unreasonable by the corporation; or
12 (5) the loan is over-collateralized.
13 § 3. This act shall take effect on the same date and in the same
14 manner as a chapter of the laws of 2022 amending the urban development
15 corporation act relating to allowing businesses to use funds
16 received from the minority and women-owned business development and
17 lending program for the purpose of refinancing existing debt, as
18 proposed in legislative bills numbers S.571 and A. 6420, takes effect.
