S 4896: Establishes the incentive evaluation act; creates the incentive evaluation commission to at least once every four years evaluate each incentive provided by the state and report to the governor and the legislature on their effectiveness and provide recommendations relating thereto.

  
  STATE OF NEW YORK ________________________________________________________________________ 4896 2025-2026 Regular Sessions  IN SENATE February 14, 2025 ___________ Introduced by Sen. SKOUFIS -- 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, in relation to establish- ing the incentive evaluation act The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The economic development law is amended by adding a new 2 article 28 to read as follows: 3 ARTICLE 28 4 INCENTIVE EVALUATION ACT 5 Section 500. Short title. 6 501. Definitions. 7 502. Incentive evaluation commission. 8 503. Periodic evaluations. 9 504. Evaluation process. 10 § 500. Short title. This article shall be known and may be cited as 11 the "incentive evaluation act". 12 § 501. Definitions. As used in this article, the following terms shall 13 have the following meanings: 14 1. "business entity" shall mean any person, corporation, partnership, 15 sole proprietor, limited partnership, association or any other business 16 entity. 17 2. "commission" shall mean the incentive evaluation commission estab- 18 lished under this article. 19 3. "incentive" shall mean a tax credit, tax exemption, tax deduction, 20 tax expenditure, rebate, grant, or loan that is intended to encourage 21 businesses to locate, expand, invest, or remain in New York, or to hire 22 or retain employees in New York. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09441-02-5 
 S. 4896 2 1 4. "substantial interest" shall mean the ownership, directly or indi- 2 rectly, of more than fifty percent of the equity interest with voting 3 rights of a business entity. 4 § 502. Incentive evaluation commission. 1. There is hereby established 5 the incentive evaluation commission consisting of: 6 (a) A certified public accountant appointed by the state comptroller; 7 (b) A chartered financial analyst appointed by the speaker of the 8 assembly; 9 (c) An auditor who is employed as an internal auditor by a company or 10 who is employed by a private auditing firm appointed by the state comp- 11 troller; 12 (d) An economist from a New York college or university appointed by 13 the temporary president of the senate; 14 (e) A lay person who is not an elected official appointed by the 15 governor; 16 (f) The commissioner of the department of taxation and finance or 17 their designee who is also a member of the department of taxation and 18 finance, which shall be an ex officio and nonvoting position; 19 (g) The director of the authorities budget office or their designee 20 who is an employee of the authorities budget office which shall be an ex 21 officio and nonvoting position; and 22 (h) The commissioner or their designee who is an employee of empire 23 state development which shall be an ex officio and nonvoting position. 24 2. Initial appointments to the commission of voting members shall 25 occur within ninety days of the effective date of this article and such 26 members shall have their term expire on the thirty-first of December 27 next succeeding the ninetieth day after the effective date of this arti- 28 cle. Thereafter, such members shall be appointed for terms of four years 29 beginning on January first. Any vacancy shall be filled by the appoint- 30 ing authority for the remainder of the unexpired term. 31 3. No person shall serve on the commission or be appointed to the 32 commission who is employed by a business entity that receives any incen- 33 tive or who holds a substantial interest in ownership in a business 34 entity that receives any incentive. 35 4. No person shall be appointed to the commission who at the time of 36 their appointment is an elected official. Any person who is appointed to 37 the commission who subsequently becomes an elected official during their 38 term on the commission shall be required to vacate their position on the 39 commission. 40 5. The office of general services shall provide staff and administra- 41 tive support to the commission. The department and the department of 42 taxation and finance shall assist the office of general services as 43 needed in providing staff and administrative support to the commission. 44 § 503. Periodic evaluations. 1. (a) On or before the thirty-first of 45 December next succeeding the ninetieth day after the effective date of 46 this article and every four years thereafter, the commission shall 47 develop a four-year schedule for evaluating incentives. The development 48 of the schedule for evaluating the incentives shall take into consider- 49 ation fiscal impacts to revenues of this state, including but not limit- 50 ed to the general fund, the opportunity to group incentives with similar 51 goals and objectives for evaluation, and the ability to obtain suffi- 52 cient data related to the incentives for evaluation. Each schedule shall 53 include a list of all incentives in the state, including any it exempts 54 from evaluation. In determining whether a program is an incentive, the 55 commission may consider legislative intent and may also consider whether 56 the program is promoted as an incentive by any state agency. For each 
 S. 4896 3 1 incentive listed in the schedule, the commission shall attempt to iden- 2 tify the goal or goals of the incentive. 3 (b) Upon approval of the schedule, the commission shall provide the 4 schedule to the governor, temporary president of the senate, and speaker 5 of the assembly. 6 2. For the four calendar years following the approval of a schedule 7 under subdivision one of this section, the commission shall ensure that 8 each incentive in such schedule is evaluated within the four-year evalu- 9 ation period unless the commission determines that the incentive is 10 exempt from evaluation. The commission may exempt from evaluation any 11 incentive that it concludes has a minimal fiscal impact. The commission 12 shall determine a specific threshold amount which shall be considered as 13 a minimal fiscal impact for the current evaluation cycle. The commission 14 may also conduct an expedited evaluation for any incentive that has been 15 evaluated at least twice within the previous eight years and has not had 16 a material change to the program since its prior evaluation. The expe- 17 dited evaluation will update the prior evaluation's financial and 18 economic impacts, findings, and recommendations. 19 § 504. Evaluation process. 1. The commission may contract with a 20 private company, nonprofit, or academic institution for professional 21 services to assist with evaluation of each incentive. The commission 22 shall develop requirements for such professional services necessary to 23 complete incentive evaluations pursuant to this article. Such require- 24 ments shall include, but not be limited to, the contractor provide at 25 least one draft report for each incentive prior to the issuance of the 26 final report; provided, the contractor may determine the timing and 27 frequency of draft reports based on the availability of information and 28 the potential for draft reports to assist the commission in making a 29 final recommendation. The cost of such contract shall be paid by the 30 department. No recipient or potential recipient of an incentive or 31 representative of a recipient or potential recipient shall contact the 32 entity or individual with whom the commission contracts pursuant to this 33 subdivision unless the entity or individual specifically requests infor- 34 mation or documentation for purposes of the incentive evaluation proc- 35 ess; provided, this shall not be construed to prevent participation in a 36 public hearing conducted pursuant to subdivision two of this section. 37 2. For each year in which incentives have been scheduled to be evalu- 38 ated under this article: 39 (a) By October first of each such year, the commission or the commis- 40 sion's chosen contractor shall have evaluated each incentive scheduled 41 for review that year. The commission or the commission's chosen contrac- 42 tor shall conduct each incentive evaluation in consultation with the 43 department using criteria developed pursuant to subdivision four of this 44 section. 45 (b) Between October first and November thirtieth of each such year, 46 the commission shall hold at least one public meeting to review, allow 47 for public comment, and vote to approve, disapprove, or modify each 48 incentive evaluation conducted that year. 49 (c) By December fifteenth of each such year, the commission shall 50 issue an annual written report which shall provide: (i) the results of 51 each incentive evaluation; (ii) a review of prior incentive evaluation 52 recommendations by the commission and changes to statute or incentive 53 administration related to such recommendations; and (iii) if the commis- 54 sion votes to modify an incentive evaluation as provided in this subdi- 55 vision, such modification and the original evaluation shall be docu- 56 mented. The report shall be made publicly available on the department's 
 S. 4896 4 1 website and the commission's website and shall be submitted to the 2 governor, temporary president of the senate, and the speaker of the 3 assembly. 4 3. Each evaluation shall include the following: 5 (a) An estimate of the economic and fiscal impact of the incentive. 6 This estimate shall include, but not be limited to: 7 (i) the extent to which the incentive changes business behavior. 8 (ii) the results of the incentive for the economy of New York as a 9 whole. This consideration includes both positive direct and indirect 10 impacts and any negative effects on other New York businesses. 11 (iii) a comparison to the results of other incentives or other econom- 12 ic development strategies with similar goals. 13 (b) An assessment of whether adequate protections are in place to 14 ensure the fiscal impact of the incentive does not increase substantial- 15 ly beyond the state's expectations in future years. 16 (c) An assessment of whether the incentive is being administered 17 effectively. 18 (d) An assessment of whether the incentive is achieving its goals. 19 (e) Recommendations for how the state can most effectively achieve the 20 incentive's goals, including recommendations on whether the incentive 21 should be retained, reconfigured, or repealed. 22 (f) Recommendations for any changes to state policy, rules, or stat- 23 utes that would allow the incentive to be more easily or conclusively 24 evaluated in the future. These recommendations may include changes to 25 collection, reporting, and sharing of data, and revisions or clarifica- 26 tions to the goal of the incentive. 27 4. Evaluation criteria shall be developed for each incentive evaluated 28 by the commission. Each incentive shall be evaluated using criteria 29 specific to the individual incentive. 30 5. The commission and any of its contractors, unless prohibited by 31 state or federal law, may request and shall receive in a timely manner 32 from any department, division, board, bureau, commission, agency or 33 other political subdivision of the state, such information and assist- 34 ance as shall enable it to properly carry out its powers and duties 35 pursuant to this article. 36 § 2. This act shall take effect immediately.