S 6447: Establishes a temporary state assistance fund to provide legal counsel for bankruptcy proceedings under chapter eleven of the federal bankruptcy code; provides for the administration thereof.

  
  STATE OF NEW YORK ________________________________________________________________________ 6447 2025-2026 Regular Sessions  IN SENATE March 14, 2025 ___________ Introduced by Sen. CLEARE -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the executive law, in relation to establishing a tempo- rary state assistance fund to provide legal counsel in certain bank- ruptcy proceedings and providing for the administration thereof The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "save merchants and retail tenants (SMART) act". 3 § 2. The executive law is amended by adding a new section 94-e to read 4 as follows: 5 § 94-e. Temporary state assistance to fund legal services in certain 6 bankruptcy proceedings. 1. Definitions. As used in this section: 7 (a) "Administrator" means the New York office of court administration. 8 (b) "Covered business" means any small business, not-for-profit corpo- 9 ration, limited partnership, limited liability company, limited liabil- 10 ity partnership, as well as other miscellaneous businesses, which 11 conducts a majority of its business in the state and was adversely 12 affected by COVID-19 or public health restrictions enforced by the state 13 during the COVID-19 pandemic, which are eligible for relief under the 14 federal Small Business Reorganization Act, as amended by the Coronavirus 15 Aid, Relief, and Economic Security (CARES) Act of 2020, and files for 16 bankruptcy protection under such act prior to March twenty-seventh, two 17 thousand twenty-six. 18 (c) "Bankruptcy court" means the United States bankruptcy court for 19 the northern, southern, eastern or western district of the state. 20 (d) "Legal services" means individualized legal assistance in a single 21 consultation and/or ongoing legal representation, provided by a legal 22 services provider to a covered business, and all legal advice, advocacy, 23 and assistance associated with such service. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00171-01-5 
 S. 6447 2 1 (e) "Legal services provider" means an individual, organization, or 2 association that has the authority to provide legal services and is 3 designated by the administrator to provide such services. 4 2. Temporary access to legal services for small businesses in certain 5 bankruptcy proceedings. All covered businesses shall have access to 6 legal services as provided in this subdivision and made available in a 7 fund maintained by the administrator pursuant to subdivision four of 8 this section. 9 (a) Covered businesses affected by COVID-19 or public health 10 restrictions enforced by the state during the COVID-19 pandemic, which 11 file for relief under the federal Small Business Reorganization Act, as 12 amended by the Coronavirus Aid, Relief, and Economic Security (CARES) 13 Act, prior to March twenty-seventh, two thousand twenty-six, shall have 14 access to legal services in connection with the filing and prosecution 15 under chapter eleven of the federal bankruptcy code. 16 (b) In all cases, access to legal services established in paragraph 17 (a) of this subdivision shall terminate: 18 (i) upon the termination or dismissal of the bankruptcy proceeding; 19 (ii) at the recommendation of the United States trustee; or 20 (iii) at the recommendation of the assigned United States bankruptcy 21 judge. 22 (c) In all cases, the right to counsel established in paragraph (a) of 23 this subdivision shall not extend to appeals. 24 3. Powers and duties of the administrator. The administrator is 25 charged with implementing the requirements of this section no later than 26 October first, two thousand twenty-five, and may promulgate such rules, 27 policies, and procedures as may be necessary and appropriate to accom- 28 plish such implementation. The administrator shall have the power and 29 responsibility to: 30 (a) ensure independent, competent, and zealous representation of 31 covered businesses receiving legal services provided pursuant to this 32 section; 33 (b) examine, evaluate, and monitor legal services provided pursuant to 34 this section; 35 (c) establish measures of performance to monitor the quality of legal 36 services and the overall effectiveness of such legal services; 37 (d) target grants in support of innovative and cost-effective 38 solutions that enhance the provision of legal services; and 39 (e) investigate and monitor any other matters relevant to the 40 provision of legal services which the administrator deems important. 41 4. Funding. (a) The state shall establish a dedicated fund and shall 42 appropriate sufficient sums into such fund to fully carry out the 43 requirements of this section. Funds necessary to fully carry out the 44 requirements of this section shall be determined by the administrator, 45 in consultation with the director of the division of the budget. 46 (b) The administrator shall be charged with ensuring that appropriated 47 funds are timely distributed to legal services providers for the 48 provision of legal services. 49 § 3. This act shall take effect immediately.