S. 4078 2
The legislature further finds that it has been conclusively demon-
strated that firms originating and graduating from a New York state
incubator program have a markedly better chance of remaining in and
expanding employment opportunities in New York state compared to firms
that begin outside an incubator environment, that entrepreneurial coun-
seling and mentoring has a significant positive effect on firm growth,
development, and sustainability, and that research has shown that the
success of business incubation programs and the resulting intensifica-
tion of the entrepreneurial ethos in an area can often rise above
regional economic conditions, so long as high level in-incubator factors
are maintained, such as qualified staff, program comprehensiveness and
integration, adherence to best practices, the extent of participation by
client entrepreneurs in the program, and the vitality and composition of
the advisory board.
The legislature further finds that these important programs are
supported by a mixed variety of local sponsorships, public and private
foundation grants, rental and program fee revenues, and other sources of
funds, many of them short-term and unstable, and that such instability
can act as a barrier that stifles the ability of the business incubation
program to meet its goals and achieve maximum effectiveness in job
creation and economic impact.
The legislature further declares that any incubator support program to
be successful shall require metrics of incubators that requires that in
order to retain designation, such incubators must provide evidence for
evaluation of the relative success of their programs, allow for compar-
ison of program effectiveness to other programs similarly composed,
targeted, and situated, provide evidence of program and service quality,
demonstrate the value provided to clients, demonstrate continued imple-
mentation of best practices, and assure that the program continues to
meet the requirements for designation.
The legislature therefore declares that it is in every respect appro-
priate public policy to provide support for incubators in New York, as a
means of increasing economic opportunity and choice to the citizens of
this state, maintaining high standards for incubation programs, and
building and expanding the economy of this state.
S 2. Section 1 of chapter 174 of the laws of 1968, constituting the
New York state urban development corporation act, is amended by adding a
new section 16-v to read as follows:
S 16-V. NEW YORK STATE BUSINESS INCUBATOR SUPPORT ACT. 1. NEW YORK
STATE INCUBATORS. THE CORPORATION SHALL DESIGNATE PROGRAMS WHICH ON
APPLICATION MEET THE REQUIREMENTS OF SUBDIVISION TWO OF THIS SECTION AS
NEW YORK STATE INCUBATORS, AND SHALL PROVIDE SUPPORT AND SERVICES
DESCRIBED IN THIS SECTION OR WHICH AS MAY OTHERWISE BE AVAILABLE BY AND
THROUGH THE CORPORATION OR, ASSISTED BY THE COMMISSIONER OF ECONOMIC
DEVELOPMENT AND IN CONSULTATION WITH THE DEPARTMENT OF ECONOMIC DEVELOP-
MENT, BY AND THROUGH THE DEPARTMENT OF ECONOMIC DEVELOPMENT. "NEW YORK
STATE INCUBATOR" SHALL MEAN A BUSINESS INCUBATION PROGRAM WHICH ALSO
PROVIDES PHYSICAL SPACE OR WHICH IS A VIRTUAL INCUBATION PROGRAM THAT
HAS BEEN DESIGNATED UPON APPLICATION BY THE CORPORATION AS A NEW YORK
STATE INCUBATOR PURSUANT TO THIS SECTION AND WHICH THEREBY BECOMES
ELIGIBLE FOR BENEFITS, SUPPORT, SERVICES, AND PROGRAMS AVAILABLE PURSU-
ANT TO SUCH DESIGNATION.
2. REQUIREMENTS FOR DESIGNATION. A PROGRAM WISHING TO BE DESIGNATED AS
A NEW YORK STATE INCUBATOR PURSUANT TO THIS SECTION SHALL HAVE BEEN IN
EXISTENCE AS A PROGRAM WITH, IN, OR AS THE CURRENT ORGANIZATION FOR, A
PERIOD OF AT LEAST THREE FISCAL YEARS PRIOR TO THE CURRENT FISCAL YEAR,
S. 4078 3
OR DEMONSTRATE CONTINUITY OF STAFFING, PROGRAM, AND PURPOSE SHOWING A
CONTINUATION OF THE PROGRAM THROUGH ANOTHER AUSPICE OR GOVERNING ENTITY,
AND SHALL PROVIDE THE FOLLOWING IN A MANNER PRESCRIBED BY THE CORPO-
RATION:
(A) UNLESS OTHERWISE STATED, FOR THE CURRENT AND TWO PREVIOUS FISCAL
YEARS THE PROGRAM PROVIDES, POSSESSES, OR HAS DEVELOPED AT LEAST TWELVE
OF THE FOLLOWING PROGRAMS, SERVICES, AND ATTRIBUTES, INCLUDING SUBPARA-
GRAPH (XIII) OF THIS PARAGRAPH REGARDING STABILITY AND SUPPORT AND
SUBPARAGRAPH (XVIII) OF THIS PARAGRAPH REGARDING THE STRATEGIC PLAN:
(I) AN INTEGRATED ARRAY OF SERVICES WHICH INCLUDES MANAGEMENT GUID-
ANCE, TECHNICAL ASSISTANCE, CONSULTING, MENTORING, BUSINESS PLAN DEVEL-
OPMENT, AID IN CREATION OF THE BUSINESS ENTITY, AND ONGOING COUNSELING;
(II) ENTREPRENEURIAL EDUCATION OF AT LEAST THIRTY HOURS OF CLASSROOM
INSTRUCTION AND TEN HOURS OF TECHNICAL ASSISTANCE, OR THE EQUIVALENT IN
INDIVIDUALIZED COUNSELING AND MENTORING SERVICES FOR CLIENTS;
(III) OPPORTUNITIES FOR CLIENTS TO NETWORK, COLLABORATE WITH OTHER
BUSINESS PROGRAMS, AND GAIN ACCESS TO SERVICES, INCLUDING THROUGH SUCH
PROGRAMS AS THE SMALL BUSINESS DEVELOPMENT CENTER, THE LOCAL OR AREA
CHAMBER OF COMMERCE OR OTHER BUSINESS ASSOCIATION, PROGRAMS OF THE SMALL
BUSINESS ADMINISTRATION, AND/OR OTHER SIMILAR BUSINESS ORGANIZATIONS,
ASSOCIATIONS, AND PROGRAMS;
(IV) ACCESS TO CAPITAL VIA REFERRAL OR OTHER ARRANGEMENTS WITH FINAN-
CIAL INSTITUTIONS, VENTURE CAPITALISTS, ANGEL INVESTORS, INVESTMENT
FUNDS MANAGED OR FINANCED BY STATE OR LOCAL ECONOMIC DEVELOPMENT ORGAN-
IZATIONS, OR OTHER SIMILAR OR EQUIVALENT CAPITAL SOURCES, EVIDENCED BY
WRITTEN AGREEMENTS, MEMORANDUMS OF UNDERSTANDING, LETTERS OF INTENT, OR
OTHER ENDORSEMENTS ACCEPTABLE TO THE CORPORATION, AND INCLUDING READYING
CLIENTS FOR THE FINANCIAL MEETINGS AND INTERVIEWS;
(V) AID IN ACCESSING MARKETS, VIA BID ASSISTANCE OR ACCESS PROGRAMS
THAT MAY INCLUDE BUT ARE NOT LIMITED TO LITERATURE REVIEW, ESTABLISHMENT
OF A RESOURCE DOCUMENTS ROOM (PHYSICAL OR VIRTUAL), OPPORTUNITY NOTIFI-
CATION OF LOCAL, STATE, AND FEDERAL GOVERNMENTAL AND PRIVATE OPPORTU-
NITIES, AND IDENTIFICATION OF AND INTRODUCTIONS TO POTENTIAL FIRST
CUSTOMERS;
(VI) PHYSICAL OFFICE SPACE AND/OR LABORATORY SPACE AND/OR MANUFACTUR-
ING SPACE UNDER A WRITTEN AGREEMENT FOR A PERIOD NOT TO EXCEED FIVE
YEARS FOR ANY INDIVIDUAL INCUBATOR CLIENT, PROVIDED THAT THE AVERAGE
PERIOD DURING WHICH SPACE IS PROVIDED FOR ALL SUCH CLIENTS ACCESSING
SPACE SHALL NOT EXCEED THREE YEARS;
(VII) POLICIES REQUIRING PARTICIPATION BY CLIENTS IN THE INCUBATOR
PROGRAM, INCLUDING DISQUALIFICATION OR SUSPENSION FROM THE PROGRAM FOR
FAILURE TO PARTICIPATE;
(VIII) CRITERIA FOR GRADUATION FROM THE PROGRAM OR PHYSICAL SPACE, AND
TERMS AND CONDITIONS FOR ONGOING RELATIONSHIPS, IF ANY, BETWEEN THE
INCUBATOR AND THE CLIENT;
(IX) AT LEAST FIFTY PERCENT OF THE TOTAL INCUBATOR BUDGET PROVIDED
FROM SOURCES OTHER THAN TENANT RENTS AND FEES AND IN-KIND SUPPORT FROM
THE SPONSORING ENTITY, MUST BE FROM SOURCES OTHER THAN NEW YORK STATE
GOVERNMENT AGENCIES;
(X) AN INDEPENDENT COMMUNITY-BASED BOARD OR ADVISORY BOARD THAT
INCLUDES ONE OR MORE EXECUTIVE OFFICERS OF FIRMS THAT HAVE GRADUATED
FROM THE INCUBATOR, AND ONE OR MORE PROFESSIONALS IN ONE OF THE FOLLOW-
ING AREAS: ACCOUNTING, INTELLECTUAL PROPERTY, LAW (BUSINESS OR CORPO-
RATE), OR ECONOMIC DEVELOPMENT;
(XI) AN INDEPENDENT ADVISORY COUNCIL OR RELATED NETWORK THAT INCLUDES
ONE OR MORE EXECUTIVE OFFICERS OF FIRMS THAT HAVE GRADUATED FROM THE
S. 4078 4
INCUBATOR, AND INDIVIDUALS WITH EXPERTISE IN AREAS APPROPRIATE TO THE
SECTOR OR CONCENTRATION OF CLIENTS, AND THE MISSION AND GOAL OF THE
INCUBATOR;
(XII) A PROFESSIONAL MANAGEMENT AND SERVICE DELIVERY TEAM WITH EXPERI-
ENCE, EXPERTISE, OR CREDENTIALS IN MANAGEMENT, ENTREPRENEURSHIP, BUSI-
NESS DEVELOPMENT, OR OTHER EQUIVALENT AREAS;
(XIII) INSTITUTIONAL STABILITY AND LONG TERM VIABILITY, INDICATED BY:
THE SPONSOR'S COMMITMENT TO FINANCIALLY AND PROGRAMMATICALLY MAINTAIN
THE INCUBATOR FOR AT LEAST TWO YEARS IN ADDITION TO THE CURRENT FISCAL
YEAR; RECEIPT OF AT LEAST TWO NON-STATE PUBLIC AND PRIVATE GRANT AND/OR
OTHER REVENUE SOURCES INCLUDING PROPERTY RENTALS AND PROGRAM FEES THAT
ARE OR HAVE PROVEN TO BE PREDICTABLE AND RELIABLE; AND MANAGEABLE DEBT
SERVICE NOT EXCEEDING AN AVERAGE OF TWENTY-FIVE PERCENT OF TOTAL BUDGET
(EXCLUSIVE OF ANY IN-YEAR CASH ADVANCES AGAINST PROGRAM OR GRANT REVEN-
UES);
(XIV) A LIMITATION TO TWENTY PERCENT OR LESS OF THE TOTAL INCUBATOR
BUDGET FOR ADMINISTRATIVE COSTS, WHICH INCLUDES ONLY THAT PORTION OF THE
SALARIES AND BENEFITS OF THE CHIEF EXECUTIVE OFFICER, ANY DEPUTY OR
ASSISTANT TO THE CHIEF EXECUTIVE OFFICER, AND THE CHIEF FINANCIAL OFFI-
CER OR CONTROLLER, WHICH CANNOT BE ATTRIBUTED TO PROGRAMS OR SERVICES
FUNDED FROM NON-STATE REVENUES OR NOT OTHERWISE PAID BY THE INCUBATOR
SPONSOR FROM ITS OWN SOURCES;
(XV) ACCESS BY CLIENTS TO MENTORING, ADVISORY, OR EDUCATIONAL
SERVICES, INCLUDING CLASSROOM TEACHING, FROM INDIVIDUALS WHO ARE
LAWYERS, PROFESSIONAL ACCOUNTANTS, OR INDIVIDUALS WHO HAVE BEEN IN BUSI-
NESS AT AN EXECUTIVE LEVEL FOR AT LEAST FIVE YEARS;
(XVI) A WRITTEN OR OTHERWISE DEMONSTRABLE CONNECTION TO REGIONAL
SOURCES OF INNOVATION AND EXPERTISE OR SOURCES OF HUMAN RESOURCES,
INCLUDING BUT NOT LIMITED TO A COLLEGE OR UNIVERSITY, AN INDEPENDENT
RESEARCH INSTITUTION, A BUSINESS ASSOCIATION, OR TO EMPLOYEES, MEMBERS,
OR GRADUATES FROM ANY OF SUCH SOURCES, AND THE PROGRAMS OR ACTIVITIES BY
WHICH SUCH SOURCES CAN AND HAVE PROCURED OR PROVIDED SERVICES AND EXPER-
TISE TO ADVANCE CLIENT DEVELOPMENT;
(XVII) EVIDENCE THAT THE INCUBATOR IS A CENTER OF ENTREPRENEURIAL
ACTIVITIES OF A CITY, REGION, OR DISTRESSED PORTION THEREOF, AS DOCU-
MENTED BY PROGRAMS AND ACTIVITIES COORDINATED WITH COUNTY OR LOCAL
ECONOMIC DEVELOPMENT ORGANIZATIONS, INVESTOR AND FINANCIAL CLUBS OR
INSTITUTIONS, OR STUDENT OR YOUTH-ORIENTED ENTREPRENEURIAL ACTIVITIES.
FOR PURPOSES OF THIS PARAGRAPH, DISTRESS MAY BE DEMONSTRATED BY LOCATION
OF THE PROGRAM OR ITS CLIENTS IN A FEDERAL HISTORICALLY UNDERUTILIZED
BUSINESS ZONE (HUB ZONE) OR EMPOWERMENT ZONE, AN AREA THAT IS OR WAS A
NEW YORK STATE EMPIRE ZONE, OR CENSUS DATA DEMONSTRATING LOWER MEDIAN
INCOME AND EMPLOYMENT, AND HIGHER POVERTY THAN IN THE SURROUNDING COMMU-
NITIES WITHIN THE COUNTY OR CITY, PLUS LOWER ACCESS TO CAPITAL, BUSINESS
FORMATION STATISTICS, AND OTHER SIMILAR FACTORS; AND
(XVIII) A STRATEGIC PLAN THAT DESCRIBES THE IMPACT ON THE REGIONAL
ENTREPRENEURIAL ECOSYSTEM THAT THE INCUBATOR IS INTENDED TO HAVE AND
COMMITS THE INCUBATOR TO BEST INCUBATION PRACTICES AND DESCRIBES A
DEFINED PROCESS THAT ACCELERATES COMMERCIALIZATION AND DEVELOPMENT FOR A
CLIENT COMPANY OR ENTITY THROUGH PROVISION OF TECHNICAL ASSISTANCE,
DIRECT MENTORSHIP, ENTREPRENEURIAL EDUCATION, AND BUSINESS DEVELOPMENT
SERVICES, INCLUDING DEVELOPMENT OF A BUSINESS PLAN AND MARKETS, DEVELOP-
MENT OF THE MANAGEMENT TEAM AND AID IN DEVELOPMENT OF PRODUCT, CUSTOM-
ERS, AND LOCAL OR REGIONAL SUPPLY CHAIN PARTNERS, ACCESS TO INVESTMENT,
AND LAUNCHING OF A SUCCESSFUL BUSINESS WHICH WILL EMPLOY NEW YORKERS;
S. 4078 5
(B) ANNUALLY DEMONSTRATE THAT IT MEETS THE GOALS OF CREATING JOBS AND
INCUBATING BUSINESSES WITH SURVIVAL RATES IN EXCESS OF AVERAGE STARTUPS,
AND THAT THE PROGRAM HAS A STRATEGIC PLAN TO CONTINUE TO MEET SUCH GOALS
FOR THE THREE YEARS SUCCEEDING DESIGNATION AND THAT COMMITS THE PROGRAM
TO IMPLEMENTING BEST PRACTICES. SUCH DEMONSTRATION SHALL INCLUDE A
COMMITMENT BY THE SPONSOR TO CONTINUE TO MAINTAIN THE PROGRAM FOR AT
LEAST THREE YEARS AFTER SUCH DESIGNATION. PROGRAMS SHALL PROVIDE THE
FOLLOWING DATA FOR: (I) THE PROGRAM YEAR JUST COMPLETED, (II) THE ACCU-
MULATED DATA FOR THE THREE YEARS THAT INCLUDES THE PROGRAM YEAR JUST
COMPLETED AND THE PRECEDING TWO YEARS, THE FIRST YEAR OF WHICH SHALL BE
CONSIDERED THE BASE YEAR, AND (III) USING THE FIRST YEAR OF DATA AS THE
BASE YEAR, THE INCREASE OR DECREASE IN EACH FACTOR APPLICABLE FROM THE
INITIAL OR BASE YEAR:
(1) NUMBER OF CLIENTS SERVED IN THE INCUBATOR;
(2) TOTAL NUMBER OF GRADUATES;
(3) NUMBER OF GRADUATE FIRMS THAT ARE STILL IN BUSINESS OR HAVE BEEN
MERGED OR ACQUIRED;
(4) THE FOLLOWING DATA FOR FIRMS IN THE INCUBATION PROGRAM, REPORTED
AS AGGREGATE DATA:
I. THE NUMBER OF INDIVIDUALS EMPLOYED FULL TIME OR FULL TIME EQUIV-
ALENTS, INCLUDING COMPANY PRINCIPALS, WHO ARE WORKING OR ARE INTENDED TO
WORK FULL WEEKS FOR A YEAR;
II. COMPENSATION PAID;
III. GROSS REVENUES OF FIRMS;
IV. FIRM DEBT FINANCING FROM ALL SOURCES, INCLUDING BANK, FAMILY,
FRIENDS, AND OTHER LOAN SOURCES;
V. EQUITY CAPITAL FINANCING FROM ALL SOURCES;
VI. GRANT FUNDS FROM ALL SOURCES;
VII. WHERE APPLICABLE AND AVAILABLE, THE NUMBER OF FULL TIME EQUIV-
ALENT JOBS, CONTRACT VALUATION, AND/OR OTHER ECONOMIC VALUATION,
PROVIDED BY NEW YORK STATE SUPPLIERS TO FIRMS THAT ARE INCUBATOR
CLIENTS;
(5) NUMBERS OF BUSINESSES THAT ON GRADUATION FROM THE INCUBATOR MOVED
TO THE SURROUNDING COMMUNITY, OR WITHIN A REGIONAL DISTRESSED AREA, OR
WITHIN NEW YORK STATE;
(6) NUMBERS OF INDIVIDUALS COUNSELED, MENTORED, ATTENDED CLASSES,
COMPLETED BUSINESS PLANS;
(7) A DESCRIPTION OF THE ENTREPRENEURIAL AND ECONOMIC IMPACT THAT THE
INCUBATOR HAS HAD ON THE SURROUNDING REGION AND COMMUNITY THAT CAN BE
ATTRIBUTED TO RESOURCES ASSEMBLED BY THE INCUBATOR OR TO PERSONS PARTIC-
IPATING IN ITS PROGRAMS IN ROLES INCLUDING BUT NOT LIMITED TO ADVISORS,
MENTORS, INVESTORS, ENTREPRENEURS-IN-RESIDENCE, PROFESSIONAL-SERVICE
PROVIDERS, STUDENT INTERNS. THE DESCRIPTION SHALL INSOFAR AS POSSIBLE
INCLUDE SUCH QUANTIFIABLE FACTORS AND OUTCOMES AS INCREASED NUMBER OF
STARTUPS, INCREASED BUSINESS OR FINANCINGS (INCLUDING AMONG INDIVIDUALS
AND ENTITIES WHICH ARE NOT CLIENTS), WIDELY-ATTENDED PROGRAMS AND EVENTS
SPONSORED BY THE INCUBATOR OR PRODUCED IN COLLABORATION WITH OTHER
INSTITUTIONS OR BUSINESS ASSOCIATIONS OR PROGRAMS, NEWS STORIES,
OUTREACH AND ATTENDANCE OF ENTREPRENEURIAL EVENTS AND CLASSES INTO NEW
OR NON-TRADITIONAL GROUPS WITHIN THE COMMUNITY, SURVEYS, ENDORSEMENTS BY
PUBLIC OFFICIALS, ECONOMIC-DEVELOPMENT AND BUSINESS-ATTRACTION PROFES-
SIONALS, AND LEADERS OF BUSINESS ASSOCIATIONS, AND OTHER SIMILAR SIGNIF-
ICANT FACTORS.
THE PROGRAM SHALL ALSO PROVIDE TO THE CORPORATION THE TWO MOST RECENT
AUDITED FINANCIAL STATEMENTS OF THE SPONSORING ENTITY WHOSE ENGAGEMENT
SCOPE INCLUDES THE INCUBATOR PROGRAM, OR IF NO SPONSORING ENTITY, THEN
S. 4078 6
OF THE INCUBATOR PROGRAM. SUCH FINAL STATEMENTS SHALL BE PREPARED BY AN
INDEPENDENT AUDITING FIRM WHOSE PRINCIPALS ARE CERTIFIED PUBLIC ACCOUNT-
ANTS LICENSED BY THE STATE EDUCATION DEPARTMENT.
3. DESIGNATION. (A) THE CORPORATION SHALL DESIGNATE APPLICANTS WHICH
MEET THE REQUIREMENTS OF SUBDIVISION TWO OF THIS SECTION AS NEW YORK
STATE INCUBATORS.
(B) AS A CONDITION OF MAINTAINING DESIGNATION, EACH INCUBATOR SHALL
ANNUALLY SUBMIT TO THE CORPORATION IN A MANNER AND ACCORDING TO A SCHED-
ULE ESTABLISHED BY THE CORPORATION:
(I) UPDATED INFORMATION AS REQUIRED IN PARAGRAPH (B) OF SUBDIVISION
TWO OF THIS SECTION, MAINTAINING THE INITIAL BASE YEAR IN ORDER TO MEAS-
URE THE INCREASE OR DECREASE IN EACH FACTOR OR DATA;
(II) ITS STRATEGIC PLAN, AS UPDATED ALONG WITH A BRIEF DESCRIPTION OF
ITS SUCCESS IN MEETING THE GOALS OF ITS STRATEGIC PLAN;
(III) A STATEMENT THAT THE ITEMS LISTED IN PARAGRAPH (A) OF SUBDIVI-
SION TWO OF THIS SECTION ARE STILL APPLICABLE TO THE OPERATIONS OF THE
INCUBATOR, OR ANY CHANGE IN APPLICABILITY; AND
(IV) SUCH ADDITIONAL INFORMATION AS THE COMMISSIONER MAY REQUIRE.
(C) THE CORPORATION SHALL DESIGN SIMPLIFIED FORMS TO AID IN THE
SUBMISSION OF THE DATA REQUIRED IN THIS SUBDIVISION, WHICH MAY BE
SUBMITTED ELECTRONICALLY. SUCH FORMS SHALL STATE THE PURPOSES OF THE
REQUIRED DATA SUBMISSIONS.
(D) THE CORPORATION SHALL EVALUATE THE OPERATIONS OF THE INCUBATOR
USING METHODS INCLUDING BUT NOT LIMITED TO SITE VISITS, REPORTS PURSUANT
TO SPECIFIED INFORMATION, AND REVIEW EVALUATIONS. IF THE CORPORATION IS
UNSATISFIED WITH THE PROGRESS OF AN INCUBATOR, THE CORPORATION SHALL
NOTIFY SUCH INCUBATOR OF THE RESULTS OF ITS EVALUATIONS AND THE FINDINGS
OF DEFICIENCIES IN ITS OPERATIONS AND SHALL ALLOW AND COOPERATE WITH
SUCH INCUBATOR TO REMEDY SUCH FINDINGS IN A TIMELY MANNER. FOR NEW YORK
STATE INCUBATORS WHICH RECEIVE SUSTAINING OPERATING GRANTS PURSUANT TO
PARAGRAPH (A) OF SUBDIVISION FOUR OF THIS SECTION, SUCH EVALUATIONS
SHALL INCLUDE PEER REVIEW AND SHALL TAKE PLACE NO LESS THAN ONCE EVERY
THREE YEARS OR MORE OFTEN FOR ANY INDIVIDUAL INCUBATOR WHICH IS A RECIP-
IENT OF SUCH GRANT AT THE DISCRETION OF THE CORPORATION. SUCH PEER
REVIEW SHALL BE IMPLEMENTED THROUGH CONTRACT WITH A STATE ASSOCIATION,
AS PROVIDED IN SUBDIVISION EIGHT OF THIS SECTION, AND SHALL RESULT IN A
WRITTEN REPORT THAT INCLUDES PROGRAMMATIC AND FISCAL EVALUATION OF THE
INCUBATION PROGRAM AND RECOMMENDATIONS FOR IMPROVEMENT. MEMBERS OF SUCH
PEER REVIEW GROUP SHALL INCLUDE OPERATORS OF OTHER INCUBATOR PROGRAMS, A
SIGNIFICANT PORTION OF WHOM SHALL BE DIRECTORS OR OPERATORS OF INCUBA-
TORS WHICH ARE LOCATED OUTSIDE OF NEW YORK STATE.
4. GRANTS. (A) SUSTAINING OPERATING GRANTS. A PROGRAM DESIGNATED AS A
NEW YORK STATE INCUBATOR SHALL BE ELIGIBLE FOR AN OPERATING GRANT IN AN
AMOUNT NOT TO EXCEED ONE HUNDRED FIFTY THOUSAND DOLLARS FROM FUNDS
AVAILABLE TO THE CORPORATION OR OTHERWISE APPROPRIATED THEREFOR,
PROVIDED HOWEVER THAT:
(I) ANY SUCH GRANT SHALL BE MATCHED ON A TWO-TO-ONE BASIS BY THE
INSTITUTION RECEIVING THE FUNDS AND COLLABORATIVE PARTNERS IN THE FORM
OF CASH OR IN-KIND PERSONNEL, EQUIPMENT, MATERIAL DONATIONS, AND OTHER
FACILITY AND OPERATIONS EXPENDITURES, PROVIDED THAT NO MORE THAN FIFTY
PERCENT OF SUCH MATCH SHALL BE IN-KIND;
(II) A PROGRAM APPLYING FOR A GRANT SHALL DEMONSTRATE FINANCIAL
STABILITY AND LONG TERM VIABILITY, AS PROVIDED IN SUBPARAGRAPH (XIII) OF
PARAGRAPH (A) OF SUBDIVISION TWO OF THIS SECTION;
S. 4078 7
(III) A GRANT RECIPIENT SHALL AGREE TO PROVIDE DATA AS REQUIRED TO THE
DEPARTMENT AND SHALL AGREE TO CONFORM TO BEST PRACTICES AS OUTLINED BY
STATE AND/OR NATIONAL BUSINESS INCUBATOR ASSOCIATIONS; AND
(IV) FAILURE TO ABIDE BY THE REQUIREMENTS OF THIS SUBDIVISION OR TO
CURE A DEFAULT AFTER REVIEW AND AGREEMENT WITH THE CORPORATION SHALL
RESULT IN LOSS OF THE GRANT AND DISQUALIFICATION OF THE DESIGNEE AS A
NEW YORK STATE INCUBATOR.
(B) PLANNING GRANTS. A SPONSOR SEEKING TO DEVELOP AN INCUBATOR PROGRAM
MAY BE ELIGIBLE FOR A PLANNING GRANT IN AN AMOUNT NOT TO EXCEED FIFTEEN
THOUSAND DOLLARS. A SPONSOR SEEKING TO OBTAIN A PLANNING GRANT SHALL
PROVIDE THE FOLLOWING BASIC DATA AND OTHER INFORMATION TO DEMONSTRATE
VIABILITY TO THE SATISFACTION OF THE CORPORATION:
(I) NAME, FINANCIAL STRENGTH, HISTORY, CORPORATE FORM, AND EVIDENCE OF
THE COMMITMENT AND FINANCIAL AND PROGRAMMATIC ABILITY OF THE SPONSOR AND
ITS CONSULTANTS AND COLLABORATORS TO BRING THE PROJECT TO COMPLETION AND
TO SUSTAIN THE PROJECT FOR AT LEAST THREE YEARS AFTER CREATION, INCLUD-
ING RELEVANT SIGNED COPIES OF FEDERAL TAX RETURNS FOR THE PRIOR TWO
YEARS;
(II) A BUSINESS PLAN DETAILING ESTIMATED FINANCING COSTS AND SOURCES,
STAFFING, PROGRAM DESIGN, HOW IT WILL MEET SPACE SIZE AND COSTS REQUIRE-
MENTS FOR AT LEAST FIVE YEARS, INCLUDING EVIDENCE THAT IT HAS OR WILL
SHORTLY HAVE COMPLETE OR CONTINGENT CONTROL OF THE SPACE, AND PROJECT
TIMELINE, OUTCOMES AND DELIVERABLES;
(III) THE KINDS AND NUMBERS OF SHORT AND LONG TERM JOBS ANTICIPATED TO
BE CREATED BY AND THROUGH THE PROJECT, THE TARGET AREAS FOR CLIENT INCU-
BATION, AND HOW THE PROJECT WILL RECRUIT AND SELECT THE COMPANIES IT
WILL ACCEPT FOR INCUBATION;
(IV) THE QUALIFICATIONS THAT MAKE THE PROJECT A UNIQUE AND/OR NECES-
SARY ECONOMIC PRIORITY FOR THE REGION, MUNICIPALITY, OR COMMUNITY, BY
CREATING JOBS AND ECONOMIC INVESTMENT AND DEVELOPMENT, LEADING COMMUNITY
REVITALIZATION, AND OTHER SIMILAR FACTORS;
(V) WHETHER THE PROJECT HAS BEEN ENDORSED BY AREA MUNICIPAL OR OTHER
AREA REPRESENTATIVE PUBLIC OFFICIALS, AND AREA BUSINESS ASSOCIATIONS;
(VI) WHETHER THE PROJECT OR A PHASE OF THE PROJECT HAS BEEN AWARDED
STATE OR OTHER FUNDING, THE AMOUNT OF FUNDING RECEIVED, WHETHER ANY
EXPENDITURE FOR THE PROJECT HAS BEEN MADE PRIOR TO THE DATE OF THE
APPLICATION; AND
(VII) A STATEMENT THAT THE APPLICANT IN THIS OR SOME OTHER FORM HAS
NOT PREVIOUSLY RECEIVED A PLANNING GRANT PURSUANT TO THIS SECTION.
(C) STABILIZATION GRANTS. A PROGRAM WHICH HAS RECEIVED A PLANNING
GRANT, AND WHICH OTHERWISE MEETS THE REQUIREMENTS OF PARAGRAPH (A) OF
SUBDIVISION TWO OF THIS SECTION, INCLUDING SUBPARAGRAPHS (XIII) AND
(XVIII) OF SUCH PARAGRAPH, SHALL BE ELIGIBLE FOR A STABILIZATION GRANT
IN AN ANNUAL AMOUNT NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS FROM
FUNDS AVAILABLE TO THE CORPORATION OR APPROPRIATED THEREFOR. A PROGRAM
MAY NOT RECEIVE MORE THAN THREE SUCH STABILIZATION GRANTS, WHICH SHALL
ONLY BE AVAILABLE ON SUCCESSIVE YEARS, AND ONLY FOR SO LONG AS THE
PROGRAM MEETS THE REQUIREMENTS OF PARAGRAPH (A) OF SUBDIVISION TWO OF
THIS SECTION, INCLUDING SUBPARAGRAPHS (XIII) AND (XVIII) OF SUCH PARA-
GRAPH.
(D) CAPITAL ASSISTANCE. THE CORPORATION SHALL MAKE PROGRAMS DESIGNATED
AS NEW YORK STATE INCUBATORS OR WHICH ARE IN RECEIPT OF OR HAVE APPLIED
FOR PLANNING OR STABILIZATION GRANTS, AWARE OF OPPORTUNITIES FOR CAPITAL
FUNDING OR GRANTS BY OR THROUGH THE CORPORATION OR THE DEPARTMENT OF
ECONOMIC DEVELOPMENT.
S. 4078 8
(E) NO DEDUCTION. IN ADDITION TO THE FOREGOING REQUIREMENTS, AN INCU-
BATOR SPONSOR SHALL AGREE TO DEDICATE ALL FUNDS FROM ANY GRANTS OR
SUPPORT RECEIVED PURSUANT TO THIS SUBDIVISION EXCEPT FOR PARAGRAPH (D)
OF THIS SUBDIVISION WHICH IS SUBJECT TO SEPARATE AGREEMENTS, TO THE
OPERATIONS OF THE INCUBATOR OR THE PLANNING THEREFOR WITHOUT DEDUCTIONS
FOR OVERHEAD, INDIRECT COSTS, OR FACILITIES AND ADMINISTRATION CHARGES
OF SUCH SPONSOR.
5. PROCUREMENT. (A) A CLIENT OF A NEW YORK STATE INCUBATOR DESIGNATED
PURSUANT TO THIS SECTION SHALL BE DEEMED A SMALL BUSINESS CONCERN PURSU-
ANT TO SUBDIVISION 6 OF SECTION 163 OF THE STATE FINANCE LAW, AND TO
PARAGRAPH N OF SUBDIVISION 2 OF SECTION 161 OF SUCH LAW. THE CORPORATION
SHALL COLLABORATE WITH THE COMMISSIONER OF THE OFFICE OF GENERAL
SERVICES AND THE COMMISSIONER OF ECONOMIC DEVELOPMENT WHO SHALL USE HIS
OR HER MEMBERSHIP ON THE STATE PROCUREMENT COUNCIL, TO ADVANCE, TARGET,
AND DEVELOP PROCUREMENT PROGRAMS FOR THE PURCHASE OF SERVICES AND
COMMODITIES, INCLUDING TECHNOLOGIES OR COMMODITIES THAT ARE RECYCLED OR
REMANUFACTURED, TOWARD CLIENTS OF NEW YORK STATE INCUBATORS. THE CORPO-
RATION SHALL ADDITIONALLY, THROUGH MEMBERSHIP ON THE STATE PROCUREMENT
COUNCIL AND COLLABORATION WITH THE COMMISSIONER OF GENERAL SERVICES AND
OTHER STATE AGENCIES, DEVELOP OPPORTUNITIES FOR TEAMING ON CONTRACTS
BETWEEN SMALL BUSINESS CONCERNS WHICH ARE CLIENTS OF NEW YORK STATE
INCUBATORS AND OTHER BUSINESS ENTITIES WHICH MAY PROVIDE RESOURCES OR
CREDIT NECESSARY FOR THE SUCCESSFUL COMPLETION OF CONTRACT REQUIREMENTS
FOR SUCH COMMODITIES, SERVICES, OR TECHNOLOGIES BY SUCH SMALL BUSINESS
CONCERNS.
(B) THE CORPORATION SHALL PROPOSE AND IMPLEMENT AN INCUBATOR RATE FOR
ACCESS BY CLIENTS OF NEW YORK STATE INCUBATORS TO THE PROCUREMENT OPPOR-
TUNITIES NEWSLETTER WEBSITE AND TO ENHANCED ACCESS SERVICES OF THE NEWS-
LETTER. SUCH RATE SHALL IN NO CASE BE MORE THAN THE MARGINAL COST OF
PROVIDING SUCH ACCESS TO CLIENTS OF NEW YORK STATE INCUBATORS. ADDI-
TIONALLY THE CORPORATION SHALL PROVIDE ACCESS TO BIDLINX BY CLIENTS OF
NEW YORK STATE INCUBATORS AT A RATE NO GREATER THAN THE LOWEST RATE PAID
BY ANY USER OF THE SERVICE. IF THE LOWEST RATE PAID BY A USER OF THE
SERVICE IS ZERO, THEN THAT SHALL BE THE RATE FOR ACCESS BY CLIENTS OF
NEW YORK STATE INCUBATORS.
6. INCUBATORS AS EDUCATIONAL ENTITIES. REAL PROPERTY OWNED OR LEASED
BY A NEW YORK STATE INCUBATOR WHICH IS A NONPROFIT ORGANIZATION HAVING
TAX EXEMPT STATUS UNDER SECTION 501(C)(3) OF THE UNITED STATES INTERNAL
REVENUE CODE, OR WHICH IS A NEW YORK STATE INCUBATOR OWNED AND SPONSORED
BY A NONPROFIT ORGANIZATION HAVING SUCH TAX EXEMPT STATUS, OR WHICH IS
AFFILIATED WITH A COLLEGE CHARTERED BY THE REGENTS OF THE STATE OF NEW
YORK OR A COLLEGE INCORPORATED BY SPECIAL ACT OF THE LEGISLATURE, AND
WHICH IS USED FOR THE PURPOSES DESCRIBED IN THIS SECTION OF TRAINING,
EDUCATING, MENTORING, AND DEVELOPING CLIENT ENTREPRENEURS AND BUSINESS
ENTITIES, WHICH ARE THE CRITERIA FOR DESIGNATION OF A PROGRAM AS A NEW
YORK STATE INCUBATOR, SHALL BE DEEMED TO BE PROPERTY OF AN EDUCATIONAL
CORPORATION FOR PURPOSES OF SECTION 420-A OF THE REAL PROPERTY TAX LAW,
INCLUDING ANY CLASSROOMS, CONFERENCE ROOMS, LABORATORY, MEETING SPACE,
ADMINISTRATION AREA, KITCHEN AREA, PARKING, STORAGE, OR OTHER AREA WHICH
IS USED PRIMARILY TO PROVIDE DIRECT AND INDIRECT SERVICES TO RESIDENT
CLIENTS OF SUCH FACILITY, AND INCLUDING SPACE FOR RESIDENT CLIENTS'
OFFICES PURSUANT TO A LICENSE OR LEASE BETWEEN SUCH INCUBATOR AND RESI-
DENT CLIENTS, NOTWITHSTANDING THAT SUCH RESIDENT CLIENTS MAY, OR MAY NOT
BE, NOT-FOR-PROFIT ORGANIZATIONS. THE EXEMPTION PROVIDED FOR IN THE
PRECEDING SENTENCE SHALL ALSO APPLY TO A PROGRAM WHICH MEETS THE
REQUIREMENTS ESTABLISHED THEREIN, BUT WHICH IS A PROGRAM THAT THE CORPO-
S. 4078 9
RATION HAS DETERMINED IS ELIGIBLE TO RECEIVE OR IS RECEIVING STABILIZA-
TION GRANTS PURSUANT TO THIS SECTION. ANY PORTION OF SUCH REAL PROPERTY
WHICH IS LEASED OR LICENSED TO AN INDIVIDUAL OR BUSINESS ENTITY WHICH IS
NOT A RESIDENT CLIENT OF THE NEW YORK STATE INCUBATOR OR THE PROGRAM
DESCRIBED IN THIS SUBDIVISION WHICH IS ELIGIBLE TO RECEIVE OR IS RECEIV-
ING STABILIZATION GRANTS, OR WHICH DOES NOT OTHERWISE MEET THE REQUIRE-
MENTS OF SUBDIVISION 1 OF SUCH SECTION 420-A OF THE REAL PROPERTY TAX
LAW, SHALL BE SUBJECT TO THE PROVISIONS OF SUBDIVISION 2 OF SECTION
420-A OF THE REAL PROPERTY TAX LAW.
7. OTHER ASSISTANCE. THE CORPORATION SHALL MAKE SUCH OTHER AID,
ASSISTANCE, AND RESOURCES AVAILABLE TO NEW YORK STATE INCUBATORS AND
THEIR CLIENTS AS HE OR SHE SHALL DEEM USEFUL AND APPROPRIATE FOR THE
FURTHERANCE OF THE PURPOSES OF THIS ACT, INCLUDING WITHOUT LIMITATION
TECHNICAL ASSISTANCE, AID IN MARKETING, AID IN REACHING AND PROVIDING
ENTREPRENEURSHIP TRAINING OPPORTUNITIES TO SUCH MARGINALIZED GROUPS AS
THOSE COMPOSED OF INDIVIDUALS WHO ARE MINORITY, FEMALE, DISABLED, OR
POOR, AND OTHERS, CURRICULUM DEVELOPMENT, AND OTHER SERVICES AND
RESOURCES. THE CORPORATION SHALL ALSO SEEK ASSISTANCE FROM OTHER STATE
AGENCIES IN THE DEVELOPMENT OF PROCUREMENT AND MARKETING RESOURCES AND
TRAINING OPPORTUNITIES FOR NEW YORK STATE INCUBATORS AND THEIR CLIENTS.
8. SERVICE CONTRACT. THE CORPORATION SHALL CONTRACT WITH A STATEWIDE
ENTITY WHICH IS A MEMBERSHIP ASSOCIATION OF INCUBATORS AND OTHERS AND
WHICH HAS EXPERTISE IN PROVIDING SERVICES TO INCUBATORS FOR THE PURPOSE
OF PROVIDING SERVICES TO ENTITIES DESIGNATED AS NEW YORK STATE INCUBA-
TORS AND TO ENTITIES SEEKING TO APPLY OR APPLYING TO BECOME NEW YORK
STATE INCUBATORS OR WHICH OTHERWISE ARE INCLUDED AS RECIPIENTS OF
SERVICES PURSUANT TO THIS SECTION. SUCH SERVICES SHALL INCLUDE ADVISING
CONCERNING BEST PRACTICES OF INCUBATION AND DEVELOPMENT OF PLANS TO
INCORPORATE AND INTEGRATE SUCH PRACTICES, DEVELOPMENT OF DATA CONCERNING
INCUBATION IN THIS STATE AND RECOMMENDATIONS FOR IMPROVEMENT, AID IN
MARKETING AND EVENT SPONSORSHIP, AND SUCH OTHER SERVICES AS THE CORPO-
RATION SHALL DEEM NECESSARY AND APPROPRIATE TO THE STRENGTHENING OF
BUSINESS INCUBATION IN THIS STATE.
S 3. This act shall take effect immediately.