Bill Text: NY S04966 | 2019-2020 | General Assembly | Introduced

Bill Title: Enacts the HIRE NY act to provide zero interest loans through the urban development corporation for hiring by micro-businesses.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced) 2019-04-02 - REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS [S04966 Detail]

Download: New_York-2019-S04966-Introduced.html

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                    IN SENATE
                                      April 2, 2019
        Introduced  by Sens. PARKER, COMRIE, SEPULVEDA -- read twice and ordered
          printed, and when printed to be committed to the Committee  on  Corpo-
          rations, Authorities and Commissions
        AN ACT to amend the New York state urban development corporation act, in
          relation to enacting the HIRE NY act
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. This act shall be known and may be cited as the "hire indi-
     2  viduals in the real economy New York (HIRE NY) act".
     3    § 2. Section 1 of chapter 174 of the laws of  1968,  constituting  the
     4  New York state urban development corporation act, is amended by adding a
     5  new section 16-bb to read as follows:
     6    §  16-bb. The HIRE New York program. 1. Legislative intent. The legis-
     7  lature hereby finds that micro-businesses are the engines of our economy
     8  and are vital to the revitalization  of  communities  and  neighborhoods
     9  throughout  the  state.  The  legislature further finds that current law
    10  fails to motivate people to start or expand businesses. The  legislature
    11  finds  that  it is important to spur start-up micro-businesses that have
    12  the potential to become the job  engines  for  tomorrow's  economy.  The
    13  legislature  further  finds  investments in economic development fail to
    14  provide any funding to micro-businesses. The legislature  further  finds
    15  that  small  micro-businesses  with  the proper incentives are poised to
    16  provide significant local job creation across the state. The legislature
    17  further finds that tax credits are not an effective job creation  incen-
    18  tive  for  micro-businesses  because  many  of these businesses lack the
    19  income that makes a tax credit meaningful. The legislature further finds
    20  that creation of a statewide hire New York fund will provide the  needed
    21  capital for the businesses of tomorrow to grow and employ more New York-
    22  ers.
    23    2.  Definitions.  As  used  in this section, the following terms shall
    24  have the meanings indicated:
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 4966                             2
     1    (a) "Fund" means the hire New York fund as established by  subdivision
     2  three of this section.
     3    (b)  "Local job" means a job filled by an employee that resides within
     4  the same or an adjacent county as the  applicant's  place  of  business.
     5  For  the purposes of this paragraph, for the city of New York, the adja-
     6  cent counties shall be deemed to be Nassau, Suffolk, Rockland and  West-
     7  chester.
     8    (c)  "Micro-business" means a business with fewer than five employees.
     9  A business that is owned in any portion by another business entity shall
    10  not qualify as a "micro-business."
    11    (d) "Micro-business qualifying new hire" means either a new  full-time
    12  wage-paying local job or the equivalent of a full-time wage-paying local
    13  job  requiring at least thirty-five hours per week and is filled for one
    14  year. A micro-business qualifying new hire shall not be:
    15    (i) an employee who has been transferred from employment with  another
    16  business  located in this state, through an acquisition, merger, consol-
    17  idation or other reorganization of  businesses  or  the  acquisition  of
    18  assets of another business, or
    19    (ii)  an  employee  who  has  been  transferred from employment with a
    20  related person or business entity, or
    21    (iii) an employee who is hired to fill a currently  existing  position
    22  that results from a termination or departure of a previous employee, or
    23    (iv) a temporary or part-time employee.
    24    3.  Establishment and purposes. The corporation shall establish a fund
    25  to be known as the "hire New York fund" and shall pay into such fund any
    26  monies made available to the corporation for such fund from any  source.
    27  The  fund  shall  consist  of  such  amounts as may be appropriated, any
    28  repayment of the principal amount of any loan made from  the  fund,  and
    29  any  interest earned by the corporation from the investment of moneys of
    30  the fund. The corporation is authorized  to  accept,  as  agent  of  the
    31  state, any gift, grant, devise or bequest, whether conditional or uncon-
    32  ditional, including but not limited to federal grants, and to use monies
    33  made  available  for  the program from any public or private source, for
    34  the purpose of implementing the program. The corporation shall be  enti-
    35  tled  to  recover from the monies made available for the program its own
    36  necessary and documented costs incurred in administering the program and
    37  evaluating the effectiveness of the program; provided, however, the  sum
    38  that  may  be recovered for the corporation's administrative costs shall
    39  not exceed five percent of the monies made available  for  the  program,
    40  and the sum that may be recovered for the corporation's evaluation costs
    41  shall  not  exceed  three  percent  of the monies made available for the
    42  program.  The monies held in or credited to the fund shall  be  expended
    43  solely for the purposes set forth in this section. The corporation shall
    44  not  commingle  the  monies  of  such  fund with any other monies of the
    45  corporation or any monies held in trust by the corporation.  The  corpo-
    46  ration  is  authorized,  within available appropriations and loan repay-
    47  ments to provide zero interest loans to  micro-businesses  to  hire  new
    48  employees.
    49    4. Applications for loan. An application for a loan shall be submitted
    50  in  such  form and in accordance with such procedures as the corporation
    51  shall establish. Applications submitted to  the  fund  may  include  but
    52  shall not be limited to:
    53    (a) a business plan;
    54    (b) a job description and required employee qualifications;
    55    (c) a guarantor;

        S. 4966                             3
     1    (d)  the guarantor's name and address, audited financial statements or
     2  tax records for the previous three years, and other financial documenta-
     3  tion the corporation shall deem appropriate;
     4    (e)  a  description of how the applicant anticipates the business will
     5  grow as a result of the additional workforce;
     6    (f) a list of current employees and job description for each employee;
     7  and
     8    (g) any additional information that the corporation shall require.
     9    All information collected by the corporation shall be confidential and
    10  shall be used exclusively for purposes of this section.
    11    5. Application fee. Each application must be accompanied by a  minimum
    12  one  hundred-dollar  application  fee.  This  application  fee  is to be
    13  applied to the corporation's administrative expenses.  Application  fees
    14  are  to  be  refunded to all successful applicants within thirty days of
    15  receipt of the final payment of principal. The purpose of this  applica-
    16  tion  fee  is  to ensure that applications are made in good faith and to
    17  avoid wasted administrative fees that occur from bad faith applications.
    18  The corporation may refund all application fees, even if application  is
    19  denied when it believed that the applicant in good faith believed it was
    20  entitled to receive a loan under this section.
    21    6. Loan terms. (a) The corporation shall provide funds for each of the
    22  first  three  years  of the micro-business qualifying new hire's employ-
    23  ment.
    24    (b) In each of those years the corporation will provide no  more  than
    25  twenty  percent of the micro-business qualifying new hire's annual sala-
    26  ry.
    27    (c) In each year the corporation will  provide  no  more  than  twenty
    28  thousand dollars per micro-business qualifying new hire.
    29    (d)  Loan  payments  to the corporation from the business are deferred
    30  until three years from micro-business qualifying new hire's start date.
    31    (e) Principal is to be paid to the  corporation  in  monthly  install-
    32  ments.
    33    (f) No interest shall be charged on any loan provided pursuant to this
    34  section.
    35    (g)  The loan will be paid by the corporation in three installments as
    36  follows:
    37    (i) The first installment will be provided by the corporation no later
    38  than ten days after receipt of the micro-business qualifying new  hire's
    39  W-2 and proof of residence; and
    40    (ii) The payments for each additional installment shall be made within
    41  ten  days  of the date of the micro-business qualifying new hire's anni-
    42  versary of employment.
    43    (h) No fees or penalties shall be charged or collected for  prepayment
    44  of any such loan.
    45    7.  Loan  approval. In awarding the loan, the corporation shall select
    46  from eligible business applicants based on the following criteria:
    47    (a) The likelihood of success of the applicant in meeting the goals of
    48  its strategic plan;
    49    (b) The extent of need for loans and development services  within  the
    50  investment areas or targeted populations;
    51    (c) The credit score of the applicant;
    52    (d) The credit score of the guarantor;
    53    (e) Good standing on other loan obligations; and
    54    (f) Other factors deemed to be appropriate by the corporation.
    55    8. Application criteria. The corporation shall develop and use a stan-
    56  dard  application form. In addition to such other criteria as the corpo-

        S. 4966                             4
     1  ration may adopt in rules  and  regulations  for  the  consideration  of
     2  applications  for loans or loan guarantees pursuant to this section, the
     3  corporation shall:
     4    (a)  determine that the company is unable to obtain sufficient funding
     5  on reasonable terms from other public or private sources to  permit  the
     6  company's planned hiring;
     7    (b)  consider  whether  the  loan  or  loan guarantee will result in a
     8  reasonable likelihood of success in meeting the purposes  for  which  it
     9  was sought by the applicant company; and
    10    (c) assess the demonstrated need for such assistance, established by a
    11  showing  of  a short-term lack of liquidity of an existing solvent busi-
    12  ness.
    13    9. Use of loan. A micro-business may utilize funds only for salary  of
    14  a micro-business qualifying new hire.
    15    10. Advisory committee. The corporation may create an advisory commit-
    16  tee,  consisting  of at least five members, to advise the corporation in
    17  the promotion, implementation and administration of the  hire  New  York
    18  program.
    19    11.  Reporting  requirements. The corporation shall submit a report to
    20  the governor, the speaker of the assembly and the temporary president of
    21  the senate on or before the first of October, and  annually  thereafter,
    22  describing  the  financial and technical assistance provided pursuant to
    23  this section, including: the  number  of  loan  applications  filed  and
    24  accepted;  the  amount and type of assistance provided; a description of
    25  businesses assisted by fund monies; the number  of  local  jobs  created
    26  through  the  loans  of  fund  monies; and such other information as the
    27  corporation may deem appropriate.
    28    12. Rules and regulations. The corporation  is  hereby  authorized  to
    29  promulgate  rules  and regulations in accordance with the state adminis-
    30  trative procedure act that are necessary to fulfill the purposes of this
    31  section. Such rules and regulations must be completed within one hundred
    32  eighty days after the effective date of this section.
    33    § 3. The provisions of this act shall be eligible to  be  funded  from
    34  any  state  agency,  public authority, public benefit corporation or any
    35  other entity for which this act is consistent with the  mission  of  the
    36  state  agency, public authority, public benefit corporation or any other
    37  entity.
    38    § 4. This act shall take effect immediately.