Bill Text: NY S07291 | 2023-2024 | General Assembly | Introduced


Bill Title: Authorizes recoupment by the state or any political subdivision of financial incentives such as awards, loans, grants or tax abatements, awarded businesses for purposes of job training, job creation or retention, or the development of business operations, upon recipient's failure to complete the terms of the incentive.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-01-03 - REFERRED TO FINANCE [S07291 Detail]

Download: New_York-2023-S07291-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          7291

                               2023-2024 Regular Sessions

                    IN SENATE

                                      May 19, 2023
                                       ___________

        Introduced  by  Sen.  RYAN  --  read twice and ordered printed, and when
          printed to be committed to the Committee on Finance

        AN ACT to amend the executive law, in  relation  to  the  recoupment  of
          economic incentives to businesses

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The executive law is amended by adding a new section  163-b
     2  to read as follows:
     3    §  163-b.  Recoupment  of  economic incentives. 1. Notwithstanding any
     4  inconsistent provision of law, each contract, agreement or understanding
     5  by which a person, firm, partnership,  company,  association  or  corpo-
     6  ration  receives  an award, grant, loan, tax abatement or other business
     7  incentive from the state, any of  its  political  subdivisions,  or  any
     8  department, bureau, board, commission, authority, or any other agency or
     9  instrumentality  of  the  state  or  its  political subdivisions, or any
    10  public benefit corporation as defined in  subdivision  four  of  section
    11  sixty-six  of the general construction law, or any municipal corporation
    12  as defined in subdivision three of section three-a of the general munic-
    13  ipal law for the purposes of job training, job creation or retention, or
    14  the development of its operation within the  state,  shall  contain  the
    15  following provisions:
    16    (a)  a  stated  period of time within which the terms of the contract,
    17  agreement or understanding are to be fully executed and completed;
    18    (b) a stated purpose and the amount of the award, grant or other busi-
    19  ness incentive;
    20    (c) where applicable, the number of persons to be trained pursuant  to
    21  the terms of the contract, agreement or understanding;
    22    (d)  where  applicable,  the  number of jobs to be created or retained
    23  pursuant to the terms of the contract, agreement or understanding;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00303-01-3

        S. 7291                             2

     1    (e) where applicable, the extent of the operations or facilities to be
     2  developed pursuant to the terms of the  contract,  agreement  or  under-
     3  standing; and
     4    (f)  notice  to  the recipient that the award, grant or other business
     5  incentive shall be subject to recoupment pursuant to this section.
     6    2. Except as provided in subdivision  three  of  this  section,  every
     7  award,  grant or other business incentive awarded pursuant to this chap-
     8  ter shall be subject to repayment with interest, by the recipient upon a
     9  finding by the awarding  entity  that  the  person,  firm,  partnership,
    10  company,   association,  or  corporation  has  not  fully  executed  and
    11  completed the stated purposes or objectives of the award, grant or other
    12  business incentive within the stated period of time as set forth in  the
    13  contract, agreement or understanding.
    14    3.  If  the  awarding  entity  determines  that  the recipient who has
    15  received an award, grant or other business incentive under this  chapter
    16  is  not  complying with the contract, agreement or understanding entered
    17  into with the awarding entity, it shall notify  the  recipient  of  such
    18  noncompliance.    Such notice shall state that the recipient is entitled
    19  to a hearing and an opportunity to explain  the  noncompliance.  If  the
    20  entity  finds  that  the  recipient  has not complied with the contract,
    21  agreement or understanding, the recipient shall be  required  to  refund
    22  the full amount of the incentive provided, however, that:
    23    (a)  upon a finding that the recipient has created or retained some of
    24  the jobs promised under the contract, agreement, or  understanding,  the
    25  recipient  shall  only be required to refund the amount which represents
    26  the jobs which it failed to create or retain, or
    27    (b) upon a finding that the recipient has failed  to  develop  certain
    28  facilities  or  operations as promised under the contract, agreement, or
    29  understanding, the recipient shall refund the amount of the award, grant
    30  or business incentive as follows:
    31    (i) where the recipient has developed one-third or less of the facili-
    32  ties or operations, the recipient shall refund at  least  two-thirds  of
    33  the award, grant or business incentive;
    34    (ii)  where  the  recipient  has  developed  two-thirds or less of the
    35  facilities or operations, the recipient shall refund at least  one-third
    36  of the award, grant or business incentive;
    37    (iii)  where the recipient has developed more than two-thirds but less
    38  than all of the facilities or operations as promised under the contract,
    39  agreement or understanding, the recipient shall refund an  amount  which
    40  the  entity determines to be a reasonable proportion of the award, grant
    41  or business incentive not fulfilled.
    42    4. Upon a finding that the recipient of the  award,  grant,  or  other
    43  business  incentive has not fully executed and completed the purposes or
    44  objectives of the award, grant or business incentive, the awarding enti-
    45  ty may waive repayment of such award, grant  or  business  incentive  as
    46  required  pursuant  to this section, upon a finding that the failure was
    47  caused by unforeseen circumstances beyond the direct or indirect control
    48  of the recipient person,  firm,  partnership,  company,  association  or
    49  corporation,  and was not attributable to bad faith or fraud. Unforeseen
    50  circumstances shall include, but not be limited  to,  market  conditions
    51  which  adversely impact upon a recipient and which are of such magnitude
    52  that a waiver of repayment is absolutely necessary to ensure the contin-
    53  ued operations of the recipient at the location for which the  incentive
    54  was  granted  or to ensure continued employment of its employees at such
    55  location. No waiver of full repayment may be provided, however, upon the
    56  relocation outside of New York state, or from the location such  recipi-

        S. 7291                             3

     1  ent  occupied  at  the  time  the recipient received the award, grant or
     2  business incentive to another location in the state. Upon  the  determi-
     3  nation  of  unforeseen  circumstances appropriate to grant a waiver, the
     4  repayment  of  the  outstanding  balance of any award, grant or business
     5  incentive, or of any tax credits, including  interest  thereon,  may  be
     6  deferred  for  a  period  not to exceed five years from the date of such
     7  waiver, provided that if at the end of five  years  the  conditions  for
     8  which  the waiver was granted continue, the awarding entity may grant an
     9  additional waiver.
    10    5. Each entity of the state which enters into agreements  pursuant  to
    11  this  chapter  shall  establish  rules  and  regulations relating to the
    12  conduct of a hearing and the terms and conditions of repayment.
    13    6. Any recipient aggrieved by a determination of the  awarding  entity
    14  may  seek review of such determination pursuant to article seventy-eight
    15  of the civil practice law and rules.
    16    7. Unless the agreement between the entity and the recipient otherwise
    17  provides for a penalty of interest in the event of  non-compliance,  for
    18  purposes of this section, interest charged in the repayment of an award,
    19  grant  or  business incentive shall be calculated at a rate equal to the
    20  underpayment rate set by the commissioner of taxation and finance pursu-
    21  ant to the provisions of subsection (e) of section one thousand  ninety-
    22  six  of  the tax law; and shall be calculated from the date of disburse-
    23  ment of such award, grant or business incentive.
    24    8. The provisions of this section shall not  be  deemed  to  alter  or
    25  abridge  any  right or remedy existing at law or equity otherwise avail-
    26  able to the awarding entity.
    27    9. On or before September first, two thousand twenty-three, and  annu-
    28  ally  thereafter,  the  state, any of its political subdivisions, or any
    29  department, bureau, board, commission, authority, or any other agency or
    30  instrumentality of the state  or  its  political  subdivisions,  or  any
    31  public  benefit  corporation  as  defined in subdivision four of section
    32  sixty-six of the general construction law, or any municipal  corporation
    33  as defined in subdivision three of section three-a of the general munic-
    34  ipal law for the purposes of job training, job creation or retention, or
    35  the development of its operation within the state, shall submit a report
    36  to  the  governor, the temporary president of the senate, the speaker of
    37  the assembly, the senate minority leader, the assembly  minority  leader
    38  and  the  state  comptroller  on  the recoupment of financial incentives
    39  pursuant to this section. Such report shall include: a listing of recip-
    40  ients of an award, grant  or  business  incentive  who  have  failed  to
    41  execute  and  complete the terms of a contract, agreement or understand-
    42  ing; the amount and type of award,  grant  or  business  incentive;  the
    43  determination  of  the  awarding  entity  with  respect to such failure,
    44  including the reasons therefor; the status of repayment  of  the  award,
    45  grant  or  business  incentive by the recipient; any waiver provided for
    46  the repayment of an award, grant or business incentive and  the  reasons
    47  therefor;  and  any  recommendations  of  the entity with respect to the
    48  recoupment of financial incentives pursuant to this section.
    49    § 2. This act shall take effect immediately and shall  apply  only  to
    50  contracts,  agreements  and understandings entered into on or after such
    51  date.
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