BILL NUMBER: S220
SPONSOR: RYAN S
 
TITLE OF BILL:
An act to amend the executive law, in relation to the recoupment of
economic incentives to businesses
 
SUMMARY OF PROVISIONS:
Provides that where the State, a public benefit corporation including an
industrial development authority, or a municipality provides an economic
incentive to a company for the purpose of job training, job creation or
retention, or expansion of operations, such agreement shall be in writ-
ing and state the terms and conditions of the incentive. Where the
company's promise is not fulfilled, the agency shall be authorized to
recoup the incentive in an amount proportionate to the unfulfilled part
of the agreement. The recipient shall be entitled to a hearing with an
opportunity to explain any non-compliance. Recoupment may be waived
where the failure was not attributable to bad faith or fraud and was due
to unforeseen circumstances beyond the recipient's control. Unforeseen
circumstances are defined to include market conditions which are of such
magnitude that a waiver of payment is necessary to ensure continued
operations or employment of the company at its locations. State agencies
are required to establish rules regarding the conduct of the hearing and
conditions of repayment. Requires a report to the Governor and Legisla-
ture concerning incentives provided and agency action regarding noncom-
pliance.
 
EXISTING LAW:
Currently there are no state laws requiring recoupment of an economic
incentive from a company that defaults on the agreement for which the
incentive was provided.
 
JUSTIFICATION: Providing incentives to attract or convince companies
to remain in New York state has become a common practice. Competition by
surrounding states which provide similar incentives has made this prac-
tice a regularly used economic development tool. It is necessary, howev-
er, that public money is invested wisely with companies which try in
good faith to deliver on their promise to create jobs or expand oper-
ations. This bill requires nothing more than that which is already
required of companies in the private business world - to enter into a
contract and perform as promised in consideration of payment. Yet,
because a company acting in good faith may be unable to carry out its
agreement, the bill authorizes a waiver of repayment upon a showing that
market conditions prevented compliance. A company's failure to create or
retain jobs, moreover, affects the lives of the workers at the affected
facility. Job security is shaken and subsequent employment may be diffi-
cult to come by. This bill attempts to provide some assurance that
employment disruption will only occur if due to market conditions,
beyond the control of the company.
 
LEGISLATIVE HISTORY:
2001-02: S.1587 No action
2003-04: S.1291 No action
2005-06: S.1994 Referred to Finance
2007-08: S.2805 Referred to Finance
2015-16: Referred to Finance
2017-2018: S. 2177 Referred to Finance
2019-2020: A.7259 Referred to Governmental Operations
2021-2022: A.1349 Referred to Governmental Operations
2023-2024: S.7291 Referred to Finance
 
FISCAL IMPLICATIONS:
An increase in tax revenues from employed workers and expanded oper-
ations.
 
EFFECTIVE DATE:
Immediately, applicable to all contracts entered into on and after the
date of enactment.