Bill Text: NY S01356 | 2023-2024 | General Assembly | Introduced

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Bill Title: 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.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2023-01-30 - SUBSTITUTED BY A968 [S01356 Detail]

Download: New_York-2023-S01356-Introduced.html

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                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.