N.Y. Urban Development Corporation Act 174/68 § 16-l: Rural revitalization program

§ 16-l. Rural revitalization program. 1. Statement of legislative

intent. The legislature finds that vast areas of rural New York state

show signs of severe economic distress and lag behind the rest of the

state in employment growth and income, with the gap widening with

passing years. Poverty in many rural areas is pervasive, with the poor

often outnumbering the affluent.

The legislature further finds that rural communities in New York state

need immediate assistance to develop the capacity to plan and organize

for economic development, to undertake new economic development

initiatives, to overcome obstacles to economic development and to fully

utilize indigenous resources to provide rural residents with economic

opportunities.

The legislature further finds that, to begin to address these needs, a

catalyst is needed to stimulate and encourage innovative economic

development alternatives to declining employment in the agricultural and

manufacturing sectors.

The legislature further finds that, while agriculture is considered to

be a major New York industry, state economic development financing

programs do not treat agriculture as an industrial sector, and financing

is not available to provide farmers with assistance to become more

competitive in national and international markets.

Therefore, the legislature declares that the revitalization of the

state's rural economy is essential to New York's economic health and

that state assistance in this regard is necessary and proper for

achieving this public purpose.

2. Rural revitalization assistance grants. (a) The corporation is

authorized, within available appropriations in the empire state economic

development fund established pursuant to section 16-i of this act, to

award grants or enter into contracts for services, on a competitive

basis in response to requests for proposals, to eligible entities and

organizations as set forth in this subdivision to support community

economic development programs and activities which increase or retain

employment opportunities in rural New York state and otherwise

contribute to the revitalization of local rural areas which are

economically distressed through innovative activities designed to

generate economic alternatives and opportunities in rural areas.

(b) Grants and contracts made by the corporation pursuant to this

subdivision shall be subject to the following limitations:

(i) no such grant shall exceed one hundred thousand dollars per year,

except that for the purpose of paragraph (f) of this subdivision, no

such grant shall exceed fifty thousand dollars.

(ii) the corporation shall enter into no more than one grant per year

per application under this subdivision.

(c) Preference shall be given to programs which meet highly distressed

area criteria or which support empire zones established pursuant to

article 18-B of the general municipal law; provide a local match; meet a

substantial local or regional need; complement local programs or provide

services not readily available from units of local government or the

private sector.

(d) For the purposes of this subdivision, "rural area" shall mean a

rural area as defined in subdivision 7 of section 481 of the executive

law.

(e) Not-for-profit corporations, agricultural cooperative

corporations, public benefit corporations and educational institutions

serving rural areas, shall be eligible to apply for support under this

subdivision for the following activities, provided, however, that the

sum total of grants received by any one eligible entity does not exceed

two hundred fifty thousand dollars in any one year:

(i) innovative activities and programs designed to encourage

value-added small business development and growth in rural areas,

including cottage and crafts industries; group marketing of local

products; women-owned industries; natural resources development; and

tourism. Such activities and programs shall also include projects

pertaining to agriculture and agribusiness development to stimulate the

development and implementation of new and alternative production,

processing, storage, distribution and marketing technologies and

improvements for New York food, agricultural and forest products.

Projects promoting strengthened farm management practices shall also be

eligible for assistance;

(ii) in-depth analysis within rural areas to support local efforts to

identify new business opportunities, and to organize industry-wide

collaborative efforts designed to create jobs and to develop growth

strategies;

(iii) support for the operation of programs designed to generate and

leverage equity-type or working capital financing for new and small

business enterprises in rural areas, or to meet other critical financing

needs of existing rural businesses;

(iv) support for multi-county activities designed to provide small

business development and financial packaging assistance to new and small

rural business enterprises to assure the continuation and growth of such

enterprises; and

(v) provide, or cause to be provided, technical assistance to small

businesses to help such businesses comply with applicable federal, state

and local rules and regulations, including, but not limited to,

assistance to applicants for permits required by such rules and

regulations.

(f) Any vocational education agency offering technical assistance

services to small business, any small business development center

located at a post-secondary educational institution, any county

cooperative extension service, any agricultural cooperative corporation

offering technical assistance services to farmers and non-farm

agricultural businesses or any not-for-profit corporation offering

technical assistance, shall be eligible to apply under this paragraph to

establish rural enterprise extension services designed to provide

technical assistance and services to entrepreneurs who are seeking to

establish or who are operating small business ventures in rural areas

where, for reasons of distance, population dispersal, or scale of

business venture, conventional business incubation and assistance

programs are not feasible, such extension services to sponsor, employ

and support technical assistance specialists as circuit riders to serve

the rural area served by the sponsoring entity.

(i) Such specialists shall be the outreach arm of the technical

assistance program and shall:

(A) provide technical and management assistance to entrepreneurs

seeking to establish a new small business, including but not limited to,

agribusinesses, part-time businesses, crafts-related businesses,

tourism-related businesses, and other new businesses that are started in

areas distant from other existing programs and sources of technical

assistance;

(B) regularly visit outlying areas of the region or areas served by

the entity sponsoring the rural enterprise extension service program to

provide both short-term and ongoing technical assistance and services to

clients;

(C) arrange, when needed, for supplemental assistance to be provided

by the sponsoring entity;

(D) conduct, with assistance from both local sources of expertise and

the sponsoring entity local seminars in outlying regions on various

aspects of entrepreneurship and new enterprise development; and

(E) provide information on other sources and programs of assistance,

services and support, including financial sources, to entrepreneurs and

small business operators.

(ii) Applications for support under this paragraph shall be required

to demonstrate a need for a rural enterprise extension service program

in the area to be served; the ability and willingness of the applicant

to support technical assistance specialists employed as circuit riders

with additional resources to provide intensive, long-term technical

assistance or specialized technical assistance to client entrepreneurs

and small business operators when necessary; and the ability to assist

entrepreneurs and small business operators in locating appropriate

sources of financial assistance.

(iii) For the purposes of this subdivision "vocational education

agency" shall mean a community college or board of cooperative

educational services operating within the state.

3. Agricultural job training assistance. The corporation is

authorized, within available appropriations in the empire state economic

development fund established pursuant to section 16-i of this act, to

contract with the commissioner of agriculture and markets, in

consultation with the commissioner of labor, to administer a program of

job training for workers engaged in or to be engaged in the production,

harvesting and processing of farm or aquatic products.

4. Farmers' market grant program. (a) The corporation is authorized,

within available appropriations in the empire state economic development

fund established pursuant to section 16-i of this act, to award grants,

on a competitive basis in response to requests for proposals, to

municipal corporations, local development corporations, business

improvement districts, not-for-profit corporations, regional marketing

authorities and agricultural cooperatives organized pursuant to the

cooperative corporations law, for the construction, reconstruction,

improvement, expansion or rehabilitation of farmers' markets. The

corporation is further authorized to contract with the commissioner of

agriculture and markets, and such commissioner is authorized to contract

with the corporation, to prepare and issue requests for proposals,

accept grant applications, recommend those applications which best meet

established criteria and to administer grants awarded under this

subdivision.

(b) Grants made by the corporation pursuant to this subdivision shall:

(i) not exceed fifty thousand dollars per year; and

(ii) be limited to fifty percent of the total proposed farmers' market

start-up or expansion costs, not including any capital expenditures

except as set forth in paragraph (a) of this subdivision.

(c) The corporation shall enter into no more than one grant per year

per application under this subdivision.

(d) The corporation shall consult with the department of agriculture

and markets in order to establish such criteria governing the award of

grants as authorized herein, as the corporation and such department deem

necessary. Such criteria shall include, but not be limited to:

(i) the relative impact of the proposed farmers' market project on the

economy of the area to be served;

(ii) the anticipated level of municipal support and local

participation in the project by farmers and others;

(iii) the extent to which New York farmers would benefit, through the

direct sale of farm and food products;

(iv) the equitable distribution of monies awarded for state assistance

for farmers' markets among urban and rural areas; and

(v) the anticipated quantity of non-farm jobs which would be created

and retained due to the proposed project.

(e) Preference shall be given to: applicants located in highly

distressed areas and providing services not readily available from units

of local government or the private sector and to applicants who are

proposing to start a new farmers' market.

5. Rural single-tenant entrepreneurship and incubator facilities. The

corporation is authorized, within available appropriations in the empire

state economic development fund established pursuant to section 16-i of

this act, to award grants, loans and loan guarantees to vocational

education agencies for the development of single tenant entrepreneurship

and incubator facilities in rural areas as provided in this subdivision.

(a) For the purposes of this subdivision:

(i) "rural area" shall mean a rural area as defined in subdivision 7

of section 481 of the executive law;

(ii) "vocational education agency" shall mean a community college or

board of cooperative educational services operating within the state;

and

(iii) "entrepreneurship and incubator facility" shall mean a

single-tenant facility providing low-cost space, technical assistance

and support services, to new business enterprises.

(b) In sparsely populated rural areas where multi-tenant incubator

facilities are not feasible, assistance from the rural revitalization

program may be provided to vocational education agencies that have an

existing technical assistance capability that can be applied to the

incubation of new firms for the purpose of constructing a single-tenant

entrepreneurship and incubator facility or rehabilitating an existing

space for use as a single-tenant entrepreneurship and incubator

facility.

(c) Funds from the rural revitalization program pursuant to this

subdivision shall only be provided for construction or rehabilitation of

a facility. A vocational education agency receiving such assistance

shall be required to provide any machinery and equipment necessary for a

tenant to operate a start-up enterprise and shall be responsible for

operating the facility, such operation to include classroom training in

business principles and practices to the prospective owners of such

enterprises prior to entering into any tenancy agreement with such

prospective owners, and the provision of technical assistance and

services to a tenant.

6. Agricultural industry competitiveness assistance. (a) For the

purposes of this subdivision, "project" shall mean an agricultural

project as set forth in paragraphs (b) and (b-1) of this subdivision.

(b) The corporation is authorized, within available appropriations in

the empire state economic development fund established pursuant to

section 16-m of this act, to provide financial assistance in the form of

loans, loan guarantees, and interest subsidy grants to subsidize loans

from federally chartered instrumentalities and state and private lending

institutions, including agricultural cooperative corporations, provided

that such assistance to state lending institutions shall not exceed

one-third of the total project cost or four hundred thousand dollars,

whichever is less, to agricultural enterprises seeking to implement the

following agricultural projects:

(i) making the transition from dairy farming to crop or livestock

farming or specialty wood productions, or using former dairy farms for

crop, livestock or specialty wood production, in order to keep farmland

in production by producing products in local, national or international

demand;

(ii) start-ups of new agribusinesses or expansions or upgrades of the

facilities, technologies and operations of existing agribusinesses.

(b-1) The corporation is authorized, within available appropriations

in the empire state economic development fund established pursuant to

section 16-m of this act, to provide financial assistance in the form of

loans, loan guarantees, working capital loans, and interest subsidy

grants to subsidize loans from federally chartered instrumentalities and

state and private lending institutions, including agricultural

cooperative corporations, provided that such assistance to state lending

institutions shall not exceed one-third of the total project cost or

four hundred thousand dollars, whichever is less, to agricultural

enterprises seeking to implement the projects listed in this paragraph.

Funds for such loans, grants, subsidies, or any other assistance

specified pursuant to this act may come from funds derived from the

financial assistance for small and medium-sized business assistance

projects established pursuant to section 9-a of this act, the regional

revolving loan trust fund established pursuant to section 16-a of this

act, the regional economic development partnership program established

pursuant to section 16-e of this act, the empire state economic

development fund established pursuant to section 16-m of this act, or

from any other funds, programs, or projects administered by the

corporation or by other state appropriations.

(i) the establishment or replanting of existing vineyards with other

varieties that are in greater demand in the national and international

marketplace and which will increase the national and international

competitiveness of New York state grape growers;

(ii) the establishment or replanting of fruit orchards or small fruit

acreages that have reached the end of their natural life cycles, with

preference to plantings in the more popular varieties which have

national and international markets;

(iii) the establishment, construction, retention, or expansion of

facilities, buildings, machinery, equipment, and other productive assets

used in the production, manufacture, processing, warehousing, research,

or distribution or sale of fresh fruits or the processing of such fruits

into juices, wines, or other food products. Such project costs may

include, but not be limited to, buildings, machinery, equipment, New

York raw fruits, New York unprocessed or partially processed fruits, or

other necessary working capital or operational funds or assistance

needed to ensure the success of such project.

(c) The corporation shall determine the terms and interest rates of

such loans; provided, however, in the case of financial assistance for

vineyards, orchards, small fruit acreages, wineries, or processing

plants, the corporation may defer repayment of principal and interest on

loans for up to five years.

(d) Funds may be used to undertake feasibility studies to determine

the projected local, national, and/or international demand for the

proposed crop or product to be financed and the suitability of the land

and climate for such production. In the case of a proposal to establish

or replant a vineyard, the corporation shall consult with the New York

state wine and grape foundation and the agricultural extension service

of Cornell University to determine the appropriateness and feasibility

of the proposed project.

(e) The provisions of section 10 and subdivision 2 of section 16 of

this act shall not apply to assistance provided under this subdivision.

7. Micro business revolving loan assistance grants. (a) The

corporation is authorized, within available appropriations in the empire

state economic development fund, to provide financial assistance in the

form of grants for the purpose of developing a statewide infrastructure

that delivers financing and technical assistance to micro businesses

across the state to stimulate new and existing micro business

development relating to the use of agricultural products, forest

products, cottage and crafts industries, tourism, and other businesses

as provided for in subparagraph (i) of paragraph (e) of subdivision 2 of

this section; provided such business employs five or fewer full-time

persons and is based on the production, processing, and/or marketing of

products grown or produced in this state. Assistance provided under this

subdivision shall be awarded through a competitive process initiated by

the corporation, in response to a request for proposals.

(b) Not-for-profit corporations and public benefit corporations

located in the state shall be eligible to apply to the corporation, in

response to a request for proposals, for a grant, not to exceed two

hundred thousand dollars in any one calendar year, to create a micro

business revolving loan fund to be administered by the entity applying

for such grant, hereafter referred to in this subdivision as "micro loan

administrators", who shall be selected by the corporation from among

eligible applicants. The corporation shall show preference in its

awarding of grants to micro loan administrators whose service area meets

the provisions of paragraph (c) of subdivision 2 of this section. All

grant funds shall be dedicated to being re-lent to individual micro

business borrowers, except that ten percent of such funds as are awarded

may be used by micro loan administrators to provide training and

technical assistance for such borrowers. Micro business loans shall be

limited to twenty-five thousand dollars per borrower. Borrowers shall

provide ten percent equity for loans up to ten thousand dollars. Loans

above ten thousand dollars shall be matched on a one to one basis by

including other loans, equity capital and in some circumstances,

leveraged capital. The interest rate and the terms on such loans shall

be determined by the micro loan administrators. The term of any loan

shall not exceed five years. All loans shall be secured by lien

positions on collateral at the highest level of priority that can

accommodate the borrower's ability to raise sufficient debt and equity

capital for the project. Any interest earned on micro business loans

shall be retained in a special account for the purpose of paying

expenses of the loan administrator associated with administering the

micro loan program.

(c) An eligible micro loan administrator applicant shall:

(i) serve one or more rural counties;

(ii) have established a loan committee comprised of five or more

persons experienced in commercial lending in rural areas or in the

operation of a for-profit small business and a staff person of the

regional office of the department of economic development. Such loan

committee shall review every application for micro loan assistance

pursuant to this subdivision, shall determine the feasibility of the

transaction proposed in the application and shall recommend to the board

of directors or other governing body of the micro loan administrator

such action as the committee deems appropriate;

(iii) have available to its staff sufficient expertise to analyze

applications for micro loan assistance, provide technical assistance to

borrowers and to regularly monitor micro loan assistance to clients; and

(iv) have an acceptable plan to market its services to potential

borrowers through such entities as chambers of commerce, industry trade

associations, banks, local development corporations, community based

organizations and industrial development agencies.

(d) Applications to the corporation for certification or

recertification as a micro loan administrator shall:

(i) describe the organization, membership, loan committee, staff and

sources of other funds, if any;

(ii) identify the geographic area to be served;

(iii) explain the method and criteria to be used in determining

businesses eligible for micro loan assistance;

(iv) describe the means for coordination of micro loan assistance with

other funding sources within the geographic area to be served for the

purposes of leveraging project financing;

(v) include a proposal to reconfigure the geographic area served by

the micro loan administrator, if applicable; and

(vi) contain such other information as the corporation deems

appropriate.

(e) The corporation shall, every five years, recertify that each micro

loan administrator has complied with the terms and conditions of this

subdivision. In the event a micro loan administrator is not recertified,

or its certification is withdrawn, then the corporation shall give

written notice to such micro loan administrator which shall thereafter

neither make new loans under this subdivision nor undertake new

obligations except upon written approval of the corporation. The

corporation may thereafter certify another micro loan administrator in

the manner provided in this subdivision for the selection of micro loan

administrators. Upon the certification of a successor micro loan

administrator, all remaining micro business loan funds, records and

accounts of the micro loan administrator not recertified shall be

transferred to the corporation, and the micro loan administrator not

recertified shall cease to function pursuant to this subdivision. The

corporation shall transfer returned funds to a successor micro loan

administrator, or in the event no successor micro loan administrator is

certified, equally to other existing micro loan administrators.

8. Cluster based industry and agribusiness development grants. (a) The

corporation is authorized, within available appropriations in the empire

state economic development fund, pursuant to section sixteen-m of this

act, to award matching grants, on a competitive basis in response to

requests for proposals, to eligible entities and organizations as set

forth in this subdivision to support cluster based industry and

agribusiness development activities which increase or retain employment

opportunities and otherwise contribute to the growth or revitalization

of rural areas.

(b) Cluster based industry and agribusiness development grants shall

provide financial assistance for the purpose of establishing a program

to support cluster based economic development efforts in rural areas.

Such grants shall be used to:

(i) Assess industry and agribusiness needs and develop methods of

identifying industry and agribusiness clusters in a region; and

(ii) Promote cluster based industry and agribusiness development

initiatives targeted at businesses that would benefit from joint

activities, marketing, and problem solving.

(c) Grant assistance provided under this subdivision shall be awarded

through a competitive process initiated by the corporation, in

consultation with the commissioner of agriculture and markets and local

development agencies, in response to a request for proposals. To be

eligible for a grant award, recipients shall provide matching funds in

the form of cash, in-kind services or other resources as defined by the

corporation.

(d) Not-for-profit corporations and public benefit corporations

located in the state shall be eligible to apply to the corporation, in

response to a request for proposals, for a matching grant, not to exceed

25,000 dollars in any one calendar year.