Authorizes the NYS urban development corporation to form a limited liability company for the purpose of certification as a community development entity under the New Markets tax credit program.
TITLE OF BILL: An act to amend the New York state urban development corporation act, in relation to authorizing the corporation to form a limited liability company for a specific purpose and providing for the repeal of such provisions upon expiration thereof
This bill would, allow New York State to participate in the federal New Markets Tax Credit (NMTC) Program by creating the necessary authority for the Empire State Development Corporation (ESDC) to form limited liability companies.
SUMMARY OF PROVISIONS:
Section 1 of the bill would amend the opening paragraph of § 12 of § 1 of Chapter 174 of the Laws of 1968 constituting the New York State Urban Development Corporation (UDC) Act, to authorize ESDC to form LLCs pursuant to Limited Liability Company (LLC) Law § 203 for the sole purpose of the participation in the federal NMTC Program. This section would also provide that all projects awarded New Markets Tax Credits by ESDC or its subsidiary shall be submitted to the Public Authorities Control Board for approval, in accordance with the 'provisions of Public Authorities Law § 51. Finally, this section would provide that ESDC report annually on the NMTC Program.
Section 2 of the bill would provide for an immediate effective date, as well as a five year sunset provision.
Current law does not permit ESDC to form LLCs.
PRIOR LEGISLATIVE HISTORY:
2011: Referred to Corporations, Authorities & Commissions 2010: Referred to Corporations, Authorities & Commissions Reported to Finance Passed Senate - Aye: 61 Nay: 0
STATEMENT IN SUPPORT:
In May of 2009, ESDC was awarded a $30 million allocation of federal NMTCs under the American Recovery and Reinvestment Act (ARRA) in order to facilitate and increase private sector investment in economic and community development in low income communities. This amendment to the UDC Act would permit credits to flow to investors and foster economic development in distressed communities throughout the State.
Enabling ESDC to form LLCs for the purpose in question will enable the State to take advantage of a benefit under the federal stimulus package. This benefit comes at no cost to the State. Currently, New York is at a disadvantage relative to other states that take part in the NMTC program. Other states can form LLCs and LLCs are the only type of entity that can effectively utilize the NMTC benefit. Accordingly, necessary private investors have no incentive to invest in New York projects using the NMTC allocation awarded to ESDC in 2009.
Since the award in May of $30 million from the ARRA, ESDC has identified several eligible projects with funding gaps that could be filled with an NMTC investment. Additionally, the federal government is expected to announce another round of NMTC awards in 2010, but New York will not be able to compete for an additional allocation of NMTCs until the proposed amendment has been adopted and the current allocation is awarded.
None to the State. Allocation of this funding will create a significant economic benefit to underserved communities in the State. Since its creation in 2000, the NMTC Program has resulted in the investment of over $14 billion of private sector capital in low income communities around the country.
This bill would take effect immediately and expire five years later.
STATE OF NEW YORK ________________________________________________________________________ 1252 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. PERKINS -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions AN ACT to amend the New York state urban development corporation act, in relation to authorizing the corporation to form a limited liability company for a specific purpose and providing for the repeal of such provisions upon expiration thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 1 of section 12 of section 1 of chapter 174 of the laws of 1968 constituting the New York state urban development corporation act, is amended by adding three undesignated paragraphs to read as follows: THE CORPORATION, BY RESOLUTION, MAY DIRECT ANY OF ITS DIRECTORS, OFFI- CERS, OR EMPLOYEES TO FORM A LIMITED LIABILITY COMPANY PURSUANT TO SECTION 203 OF THE LIMITED LIABILITY COMPANY LAW FOR THE SOLE PURPOSE OF CERTIFYING AND PERFORMING AS A COMMUNITY DEVELOPMENT ENTITY THAT WOULD BE ELIGIBLE TO RECEIVE AN ALLOCATION OF TAX CREDITS UNDER THE NEW MARKETS TAX CREDIT PROGRAM. SUCH A LIMITED LIABILITY COMPANY SHALL ACT SOLELY IN RELATION TO PROJECTS SELECTED BY THE CORPORATION, OR A SUBSID- IARY OF THE CORPORATION, TO RECEIVE TAX CREDITS FROM A FEDERAL ALLO- CATION TO THE CORPORATION, OR A SUBSIDIARY OF THE CORPORATION, UNDER THE NEW MARKETS TAX CREDIT PROGRAM AND TO DO ANY OTHER ACT OR THING INCI- DENTAL TO OR CONNECTED WITH THE FORGOING PURPOSES OR IN ADVANCEMENT THEREOF, PROVIDED THAT THE CORPORATION, OR A SUBSIDIARY OF THE CORPO- RATION, SHALL BE THE MANAGING MEMBER OF EACH LIMITED LIABILITY COMPANY CREATED BY THE CORPORATION. ALL PROJECTS AWARDED NEW MARKETS TAX CREDITS BY THE CORPORATION OR A SUBSIDIARY THEREOF SHALL BE SUBMITTED TO THE PUBLIC AUTHORITIES CONTROLEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03582-01-3 S. 1252 2
BOARD FOR APPROVAL, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 51 OF THE PUBLIC AUTHORITIES LAW. THE CORPORATION SHALL INCLUDE IN THE INFORMATION REQUIRED TO BE SUBMITTED ANNUALLY IN ACCORDANCE WITH THE PROVISIONS OF SUBDIVISION 1 OF SECTION 2800 OF THE PUBLIC AUTHORITIES LAW INFORMATION REGARDING ASSIST- ANCE PROVIDED BY IT OR ITS SUBSIDIARY UNDER THE NEW MARKETS TAX CREDIT PROGRAM, AND SHALL PROVIDE FINANCIAL INFORMATION WITH RESPECT TO ANY SUBSIDIARY ADMINISTERING THE PROGRAM IN THE CORPORATION'S FINANCIAL REPORTS, INCLUDING ITS CERTIFIED AUDITED FINANCIAL STATEMENTS. S 2. This act shall take effect immediately and shall expire and be deemed repealed five years after such date.