New York Senate Bill S06447

New York 2025-2026 Regular Session

• Introduced: 3/14/25
• Refer: 3/14/25
• Refer: 1/7/26

Caption

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.

Summary

Bill S06447, known as the 'Save Merchants and Retail Tenants (SMART) Act', aims to establish a temporary state assistance fund to provide legal counsel for small businesses undergoing bankruptcy proceedings, specifically those affected by the COVID-19 pandemic. The bill defines 'covered businesses' as small businesses and not-for-profit corporations that were adversely impacted by public health restrictions and are eligible for relief under the federal Small Business Reorganization Act. The fund will be administered by the New York Office of Court Administration, which will ensure that these businesses have access to legal services during their bankruptcy proceedings until March 27, 2026. The bill outlines the responsibilities of the administrator, including ensuring competent representation for businesses receiving legal services, monitoring the quality of these services, and establishing performance measures. It also mandates the creation of a dedicated fund to support the provision of these legal services, with the administrator tasked with determining the necessary funding in consultation with the division of the budget. The right to counsel provided under this act does not extend to appeals, and access to legal services will terminate under specific conditions, such as the dismissal of the bankruptcy proceeding. Overall, the bill seeks to alleviate the financial and legal burdens faced by small businesses during a challenging economic period, thereby promoting their recovery and sustainability. The establishment of this fund is seen as a critical step in supporting the local economy and ensuring that small businesses have the necessary legal support to navigate bankruptcy proceedings effectively.

Impact

If enacted, Bill S06447 will create a new legal framework within New York State law that provides temporary assistance for legal services to small businesses facing bankruptcy due to COVID-19 impacts. This will amend the executive law by adding a new section that specifically addresses the needs of these businesses, ensuring they have access to legal counsel during bankruptcy proceedings. The establishment of a dedicated fund for this purpose will also require the state to allocate resources to support these legal services, potentially influencing budgetary allocations and priorities in the future.

Sentiment

The sentiment surrounding Bill S06447 appears to be generally positive, particularly among advocates for small businesses and legal aid organizations. Discussions indicate a recognition of the challenges faced by small businesses during the pandemic, and the bill is viewed as a necessary measure to provide support and facilitate their recovery. However, there may be concerns regarding the adequacy of funding and the effectiveness of the legal services provided, which could influence public opinion and legislative support as the bill progresses.

Contention

Notable points of contention may arise regarding the scope of the bill, particularly in defining 'covered businesses' and the eligibility criteria for legal assistance. Some stakeholders may argue that the criteria are too restrictive, potentially leaving out certain businesses that also require support. Additionally, there may be debates over the allocation of state funds and whether the proposed budget for the legal services is sufficient to meet the needs of all eligible businesses. These discussions could involve differing opinions from lawmakers, business associations, and legal advocacy groups.