Provides that microbusinesses in New York are eligible for small business revolving loans and the linked deposit interest rate reductions.
TITLE OF BILL: An act to amend the economic development law, the state finance law and the New York state urban development corporation act, in relation to making small business loans available to microbusinesses
PURPOSE: To provide that microbusinesses in New York are eligible for small business revolving loans and the linked deposit interest rate reductions.
SUMMARY OF PROVISIONS: Section 1 adds a new section 131-a to the economic development law to include the definition of a microbusiness as one that is resident in New York state, independently owned and operated, not dominant in its field, and employs under five persons.
Section 2 amends paragraph f subdivision 11 of section 213 of the state finance law, as added by chapter 705 of the laws of 1993, by adding a new paragraph g stating that a microbusiness (that has been in operation for 5 years and that is located in an empire zone, empowerment zone, a highly distressed area of renewal community) is an eligible business for the purpose of the excelsior linked deposit program.
Section 3 amends section 16-t of section 1 of chapter 174 of the laws of 1968 by adding a new subdivision 16 to provide that $5 million in program funds be available for micro-loans to microbusinesses, which will be eligible to apply in the same manner as other small businesses.
JUSTIFICATION: Microbusinesses have been estimated to constitute around 90% of all businesses within New York State by the Association for Enterprise Opportunity. A microbusiness is a business that has 5 or fewer employees. Given their nature, it is often difficult for microbusiness owners to access capital through lending institutions. A microbusiness can consist of a wide variety of businesses that run from 'mom and pop' shops to start-up tech companies. These businesses are both the backbone and the future of our economy.
Given their prevalence and importance, this bill adds the definition of microbusinesses to the law in order to allow for their inclusion in successful state programs, including the linked deposit program and small business revolving loan fund.
PRIOR LEGISLATIVE HISTORY: 2012: S.7556 Referred to Commerce, Economic Development, and Small Business
FISCAL IMPLICATIONS: No additional cost to the state is estimated.
This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 546 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. KENNEDY -- read twice and ordered printed, and when printed to be committed to the Committee on Commerce, Economic Devel- opment and Small Business AN ACT to amend the economic development law, the state finance law and the New York state urban development corporation act, in relation to making small business loans available to microbusinesses THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The economic development law is amended by adding a new section 131-a to read as follows: S 131-A. DEFINITION OF A MICROBUSINESS. FOR THE PURPOSES OF THIS CHAP- TER, A MICROBUSINESS SHALL BE DEEMED TO BE A BUSINESS THAT IS RESIDENT IN THIS STATE, INDEPENDENTLY OWNED AND OPERATED, NOT DOMINANT IN ITS FIELD AND EMPLOYS UNDER FIVE PERSONS. S 2. Paragraph (f) of subdivision 11 of section 213 of the state finance law, as added by chapter 705 of the laws of 1993, is amended and a new paragraph (g) is added to read as follows: (f) any service business that is independently owned and operated, is not dominant in its field, employs one hundred or fewer persons on a full-time basis within the state, and is seeking financing through the program for a project that will result in the retention or creation of permanent private sector jobs within the state, other than a business that sells a service rendered at a facility personally by an individual for another individual, directly, without the intervention of a third party, or a professional service business such as health, legal, accounting, engineering, or architectural services
[.]; OR (G) A MICROBUSINESS, AS DEFINED BY SECTION ONE HUNDRED THIRTY-ONE-A OF THE ECONOMIC DEVELOPMENT LAW, THAT HAS BEEN IN OPERATION FOR FIVE YEARS AND THAT IS LOCATED IN AN EMPIRE ZONE, EMPOWERMENT ZONE, A HIGHLY DISTRESSED AREA OR RENEWAL COMMUNITY.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04073-01-3 S. 546 2
S 3. Section 16-t of section 1 of chapter 174 of the laws of 1968, constituting the urban development corporation act is amended by adding a new subdivision 16 to read as follows: 16. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION, THE CORPORATION SHALL PROVIDE AT LEAST FIVE MILLION DOLLARS IN PROGRAM FUNDS PURSUANT TO THIS SECTION TO LENDING ORGANIZATIONS FOR THE PURPOSE OF MAKING MICRO-LOANS TO MICROBUSINESSES, AS DEFINED BY SECTION ONE HUNDRED THIRTY-ONE-A OF THE ECONOMIC DEVELOPMENT LAW. MICROBUSINESSES SHALL BE ELIGIBLE TO APPLY FOR FUNDING IN THE SAME MANNER AS OTHER SMALL BUSI- NESSES PURSUANT TO SUBDIVISION THREE OF THIS SECTION. S 4. This act shall take effect immediately.