S T A T E   O F   N E W   Y O R K
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                                  5642

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            February 17, 2009
                               ___________

Introduced  by  M.  of  A.  ESPAILLAT,  TOWNS, PEOPLES, BING, BRADLEY --
  Multi-Sponsored by -- M.  of A. ALFANO,  BARRA,  CARROZZA,  EDDINGTON,
  MAGNARELLI,  RAMOS  --  read  once  and  referred  to the Committee on
  Economic Development, Job Creation, Commerce and Industry

AN ACT to amend the New York state urban development corporation act, in
  relation to creating the metro medical matrix program

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Legislative  findings  and  declarations. The legislature
finds that the biotechnology industry in New York is a vitally important
growth industry and holds great promise for the state's  and  its  citi-
zens' fiscal health.
  The legislature declares that while New York state, especially the New
York  metropolitan  area,  is  home  to many of the world's premier life
sciences research institutions and in spite of what appears to be a very
strong foundation, the state, and particularly the New York metropolitan
area, is lagging behind comparable regions in other states in developing
a "biotech cluster."
  The legislature recognizes that  in  order  to  create  a  world-class
biotech  cluster several factors have to be present including: access to
strong academic research institutions; a  highly  skilled  workforce;  a
successful technology transfer policy; access to early stage capital and
affordable space; and a stable and supportive public policy structure.
  The  legislature further finds that given the metropolitan area's rich
research and development environment, it seems logical that this  indus-
try would flourish in the metropolitan region.
  The  legislature  also recognizes that two of the critical impediments
to building a world-class biotech cluster  are  access  to  early  stage
capital and affordable lab space.
  The  legislature also finds that New York-based biotech companies with
tremendous growth potential for the state's economy often  seek  capital

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07556-01-9
              

A. 5642                             2

and affordable space outside of New York even though the business starts
in a New York metropolitan area.
  The  legislature  declares that in order to assist New York's research
institutions and emerging biotechnology companies, the legislature here-
by creates the "metro medical matrix program".
  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-t to read as follows:
  S 16-T.  THE METRO MEDICAL MATRIX. 1. AUTHORIZATION. THE METRO MEDICAL
MATRIX  PROGRAM (HEREINAFTER REFERRED TO AS "M{3}") IS HEREBY CREATED TO
MAXIMIZE THE ECONOMIC DEVELOPMENT POTENTIAL OF ACADEMIC  AND  COMMERCIAL
BIOSCIENCE  ACTIVITY IN THE NEW YORK CITY METROPOLITAN REGION, INCLUDING
NEW YORK COUNTY, BRONX COUNTY, KINGS  COUNTY,  QUEENS  COUNTY,  RICHMOND
COUNTY,  NASSAU COUNTY, SUFFOLK COUNTY, WESTCHESTER COUNTY, AND ROCKLAND
COUNTY, TO BUILD UPON WORLD-RENOWNED RESEARCH AND DEVELOPMENT ACTIVITIES
IN BIOTECHNOLOGY, BIOMEDICINE, NANOMEDICINE, SPECIALTY  PHARMACEUTICALS,
MEDICAL  DEVICES,  AND  RELATED SCIENCES. M{3} SHALL INCLUDE, BUT NOT BE
LIMITED TO: THE  BIOSCIENCE  FACILITIES  DEVELOPMENT  PROGRAM,  AND  THE
MEDICAL  STRATEGICALLY  TARGETED  ACADEMIC RESEARCH PROGRAM (HEREINAFTER
REFERRED TO AS "MEDSTAR").
  2.  M{3}  CORPORATION.  A  NOT-FOR-PROFIT   CORPORATION   (HEREINAFTER
REFERRED  TO  AS  THE  M{3}  CORPORATION) SHALL BE ELIGIBLE TO RECEIVE A
GRANT FROM THE CORPORATION TO CREATE A BIOSCIENCE FACILITIES DEVELOPMENT
REVOLVING LOAN FUND.  THE  M{3}  CORPORATION  SHALL  BE  GOVERNED  BY  A
NINE-MEMBER BOARD OF DIRECTORS. THE GOVERNOR, THE TEMPORARY PRESIDENT OF
THE SENATE, AND THE SPEAKER OF THE ASSEMBLY SHALL EACH HAVE TWO APPOINT-
MENTS  TO  SUCH  BOARD, AND THE TECHNOLOGY DEVELOPMENT ORGANIZATIONS, AS
DEFINED IN SECTION 3102-D OF THE PUBLIC  AUTHORITIES  LAW,  REPRESENTING
THE  REGIONS  OF  NEW  YORK  CITY, LONG ISLAND, AND THE MID-HUDSON, EACH
SHALL HAVE ONE APPOINTMENT TO SUCH BOARD. APPOINTMENTS MADE BY THE TECH-
NOLOGY DEVELOPMENT ORGANIZATIONS SHALL BE REPRESENTATIVE OF  EITHER  THE
INDUSTRIAL  TECHNOLOGY  RESEARCH  AND  DEVELOPMENT  SECTOR, OR THE SMALL
BUSINESS HIGH TECHNOLOGY SECTOR, OR  THE  FINANCIAL  COMMUNITY.  OF  THE
APPOINTMENTS  MADE  BY  THE  GOVERNOR,  THE  TEMPORARY  PRESIDENT OF THE
SENATE, AND THE SPEAKER OF THE ASSEMBLY, EACH APPOINTEE MUST BE A REPRE-
SENTATIVE OF EITHER THE INDUSTRIAL TECHNOLOGY RESEARCH  AND  DEVELOPMENT
SECTOR,  OR  A  REPRESENTATIVE  OF  THE  SMALL  BUSINESS HIGH TECHNOLOGY
SECTOR, OR A REPRESENTATIVE OF THE FINANCIAL COMMUNITY.
  3. BIOSCIENCE FACILITIES  DEVELOPMENT  PROGRAM.  (A)  THE  CORPORATION
SHALL,  FROM FUNDS MADE AVAILABLE FOR THIS PURPOSE, PROVIDE A GRANT TO A
NOT-FOR-PROFIT CORPORATION ESTABLISHED IN  ACCORDANCE  WITH  SUBDIVISION
TWO OF THIS SECTION FOR THE PURPOSE OF CREATING A REVOLVING LOAN FUND TO
PROVIDE  LOANS  TO BIOSCIENCE FACILITIES TO ASSIST INDIVIDUAL COMMERCIAL
BIOSCIENCE COMPANIES TO REMAIN IN NEW YORK STATE.
  (B) ELIGIBLE BORROWERS UNDER THIS  PROGRAM  SHALL  INCLUDE  EARLY  AND
MIDDLE  STAGE BIOSCIENCE COMPANIES IN SUCH AREAS AS BIOTECHNOLOGY, BIOM-
EDICINE, NANOMEDICINE, SPECIALTY PHARMACEUTICALS, AND  MEDICAL  DEVICES,
WITH  FEWER  THAN  TWO HUNDRED EMPLOYEES AND WHICH HAVE RECEIVED FUNDING
FROM AN INSTITUTIONAL VENTURE CAPITAL FIRM  IN  THE  TWENTY-FOUR  MONTHS
PRIOR  TO  MAKING APPLICATION FOR A LOAN UNDER THIS PARAGRAPH, AND SHALL
ALSO INCLUDE BOTH FOR-PROFIT  AND  NOT-FOR-PROFIT  PROPERTY  OWNERS  AND
DEVELOPERS  WHO ARE INTENDING TO DEVELOP AND LEASE SPACE TO SUCH BIOSCI-
ENCE  COMPANIES,  PROVIDED  HOWEVER  THAT  THE  USE  OF  SUCH  FUNDS  IS
RESTRICTED  TO THE CONSTRUCTION OF LABORATORY AND RELATED SPACE AND THAT
THE MAXIMUM SIZE OF SUCH LOAN SHALL BE NO MORE THAN FIFTY PERCENT OF THE
COST OF SUCH LABORATORY OR RELATED SPACE CONSTRUCTION. SUCH LOANS  UNDER

A. 5642                             3

THIS  PARAGRAPH  SHALL  BE  MADE FOR A PERIOD OF SEVEN TO TEN YEARS AT A
RATE OF SEVEN TO EIGHT PERCENT, EXCEPT THAT DURING SUCH PERIOD THAT  THE
LOAN  SHALL  REMAIN  OUTSTANDING, IF A BIOSCIENCE COMPANY RECEIVING SUCH
LOAN  SHALL  RELOCATE A SIGNIFICANT PORTION OF ITS OPERATIONS, AS DETER-
MINED IN A LOAN AGREEMENT WITH THE M{3} CORPORATION,  OUTSIDE  NEW  YORK
STATE,  SUCH  INTEREST RATE SHALL RISE TO EIGHTEEN PERCENT ON A RETROAC-
TIVE BASIS. IF, AFTER A PERIOD OF FIVE YEARS FROM THE INCEPTION  OF  THE
LOAN,  A  COMPANY SHALL REMAIN IN NEW YORK STATE, TWENTY-FIVE PERCENT OF
THE PRINCIPAL AMOUNT OF SUCH LOAN SHALL BE  FORGIVEN;  AND  IF  AFTER  A
PERIOD  OF  TEN  YEARS  FROM  THE INCEPTION OF THE LOAN, A COMPANY SHALL
REMAIN IN NEW YORK STATE, FIFTY PERCENT OF THE PRINCIPAL AMOUNT OF  SUCH
LOAN  SHALL  BE  FORGIVEN,  FURTHER  PROVIDED  THAT  IF THE AMOUNT STILL
OUTSTANDING ON THE LOAN SHALL BE LESS  THAN  THE  AMOUNT  FORGIVEN,  THE
DIFFERENCE  SHALL  BE  REIMBURSED  TO THE COMPANY. ANY COMPANY RECEIVING
SUCH A LOAN SHALL BE INDEPENDENTLY OWNED AND OPERATED. FOR  PURPOSES  OF
THIS  PARAGRAPH,  THE  TERM  "INDEPENDENTLY OWNED AND OPERATED BUSINESS"
MEANS (I) IN THE CASE OF A CORPORATION, A CORPORATION WHERE NO MORE THAN
FIFTY PERCENT OF THE  VOTING  STOCK  OF  THE  CORPORATION  IS  OWNED  OR
CONTROLLED,  DIRECTLY  OR  INDIRECTLY, BY A SINGLE CORPORATION, A SINGLE
PARTNERSHIP OR A SINGLE LIMITED LIABILITY COMPANY, AND (II) IN THE  CASE
OF  A  PARTNERSHIP, ASSOCIATION, OR OTHER ENTITY, A PARTNERSHIP, ASSOCI-
ATION OR OTHER ENTITY WHERE NO MORE THAN FIFTY PERCENT OF  THE  CAPITAL,
PROFITS OR OTHER BENEFICIAL INTEREST IN SUCH PARTNERSHIP, ASSOCIATION OR
OTHER ENTITY IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY A SINGLE
CORPORATION, A SINGLE PARTNERSHIP OR A SINGLE LIMITED LIABILITY COMPANY.
  (C)  THE M{3} CORPORATION RECEIVING A GRANT FROM THE CORPORATION UNDER
THIS SUBDIVISION SHALL BE PERMITTED TO RECEIVE FUNDS FROM  OTHER  PUBLIC
AND  PRIVATE  ENTITIES, AND THE DONORS OF SUCH OTHER FUNDS MAY DESIGNATE
THAT SUCH FUNDS BE USED ONLY FOR LOANS MADE IN SPECIFIC LOCALITIES.
  (D) GRANTS RECEIVED FROM THE  CORPORATION  BY  THE  M{3}  CORPORATION,
EARNINGS  ON  SUCH MONIES, AND ANY PRINCIPAL REPAYMENTS AND ANY INTEREST
EARNED ON LOANS SHALL BE DEPOSITED IN A LOAN FUND ACCOUNT.
  (E) THE DECISION TO APPROVE OR REJECT  AN  APPLICATION  FOR  FINANCIAL
ASSISTANCE  PURSUANT TO THE PROVISIONS OF THIS SUBDIVISION SHALL BE MADE
BY A MAJORITY OF THE DIRECTORS OF THE M{3} CORPORATION, AND  SUCH  DECI-
SION  SHALL  BE FINAL. NO MEMBER OF THE BOARD OR OTHER GOVERNING BODY OF
THE M{3} CORPORATION SHALL PARTICIPATE IN A DECISION ON A PROJECT APPLI-
CATION WHEN SUCH MEMBER IS A PARTY TO OR HAS  A  FINANCIAL  INTEREST  IN
SUCH  PROJECT.  ANY  MEMBER  WHO  CANNOT  PARTICIPATE IN A DECISION ON A
PROJECT APPLICATION FOR SUCH REASON SHALL NOT BE COUNTED AS A MEMBER  OF
THE BOARD OR OTHER GOVERNING BODY FOR PURPOSES OF DETERMINING THE NUMBER
OF MEMBERS REQUIRED FOR A MAJORITY VOTE ON SUCH APPLICATION. NO EMPLOYEE
OR  OFFICER  OF  ANY  SUCH  CORPORATION  SHALL BE A PARTY TO OR HAVE ANY
FINANCIAL INTEREST IN ANY PROJECT  THAT  RECEIVES  FINANCIAL  ASSISTANCE
PURSUANT TO THIS SECTION.
  (F) THE CORPORATION MAY WITHDRAW ANY AMOUNT REMAINING FROM AN ORIGINAL
GRANT  AND  ANY EARNINGS ON SUCH GRANT, AND ANY PRINCIPAL REPAYMENTS AND
ANY INTEREST EARNED ON LOANS MADE FROM SUCH GRANT WHEN  A  MEMBER  OF  A
BOARD  OF  DIRECTORS, AN OFFICER OR AN EMPLOYEE OF SAID M{3} CORPORATION
IS PARTY TO OR HAS FINANCIAL INTERESTS IN LOAN PROJECTS; WHEN SUCH  M{3}
CORPORATION  FAILS  TO  COMPLY  WITH  THE REQUIREMENTS FOR PROJECT LOANS
PURSUANT TO THIS SECTION; OR WHEN SUCH M{3} CORPORATION MAKES  NO  LOANS
WITHIN THE PREVIOUS FISCAL YEAR. OUTSTANDING LOANS AND OTHER OBLIGATIONS
PAYABLE  TO  SUCH  M{3} CORPORATION SHALL BE ASSIGNED TO THE CORPORATION
UPON SUCH TERMS AND CONDITIONS AS THE CORPORATION SHALL DETERMINE.

A. 5642                             4

  (G) THE M{3} CORPORATION RECEIVING SUCH GRANT SHALL SUBMIT  AN  ANNUAL
REPORT  FOR  THE  PREVIOUS FISCAL YEAR TO THE CORPORATION DESCRIBING THE
FINANCIAL ASSISTANCE PROVIDED PURSUANT TO THIS SECTION, INCLUDING:
  (I) THE NUMBER OF PROJECTS ASSISTED;
  (II) THE AMOUNT AND TYPE OF ASSISTANCE PROVIDED;
  (III) A DESCRIPTION OF THE PROJECTS;
  (IV) THE NUMBER OF JOBS CREATED OR RETAINED;
  (V)  THE STATUS OF OUTSTANDING LOANS, GUARANTEES, EARNINGS AND ACCOUNT
BALANCES; AND
  (VI) SUCH OTHER INFORMATION AS THE CORPORATION MAY REQUIRE.
  (H) THE CORPORATION SHALL ANNUALLY CONDUCT AN AUDIT OF THE M{3} CORPO-
RATION RECEIVING A GRANT TO ENSURE CONFORMITY OF ALL ASPECTS OF  PROGRAM
ADMINISTRATION   AND  OF  FINANCIAL  ASSISTANCE  TRANSACTIONS  WITH  THE
SUBSTANTIVE AND PROCEDURAL PROVISIONS OF THIS SECTION. IN THE EVENT THAT
THE CORPORATION FINDS INSTANCES OF SUBSTANTIVE NONCOMPLIANCE BY SUCH  AN
M{3} CORPORATION WITH ANY OF THE PROVISIONS OF THIS SUBDIVISION AND SUCH
INSTANCES  WERE,  OR SHOULD HAVE BEEN, KNOWN TO BE IN NONCOMPLIANCE, THE
M{3} CORPORATION SHALL RETURN, WITHIN THIRTY DAYS, UPON  DEMAND  BY  THE
CORPORATION, ALL UNCOMMITTED GRANT FUNDS ON HAND AND PROVIDE AN ACCOUNT-
ING OF THE LOANS CURRENTLY OUTSTANDING.
  (I)  THE  CORPORATION  SHALL, ON OR BEFORE OCTOBER FIRST, TWO THOUSAND
NINE, AND ON OR BEFORE EACH OCTOBER FIRST THEREAFTER, SUBMIT A REPORT TO
THE GOVERNOR AND THE LEGISLATURE ON THE OPERATIONS  AND  ACCOMPLISHMENTS
OF  THE  BIOSCIENCES  FACILITY  DEVELOPMENT  PROGRAM.  SUCH REPORT SHALL
INCLUDE A SUMMARY OF THE INFORMATION CONTAINED IN THE REPORTS  SUBMITTED
PURSUANT  TO PARAGRAPH (G) OF THIS SUBDIVISION AND OF THE RESULTS OF THE
AUDITS PERFORMED BY THE CORPORATION PURSUANT TO PARAGRAPH  (H)  OF  THIS
SUBDIVISION,  AND  SHALL SET FORTH THE STATUS OF THE BIOSCIENCES FACILI-
TIES DEVELOPMENT PROGRAM REVOLVING LOAN PROGRAM FOR THE PREVIOUS  FISCAL
YEAR.
  4.  THE  MEDICAL STRATEGICALLY TARGETED ACADEMIC RESEARCH PROGRAM. (A)
THE CORPORATION SHALL, FROM  FUNDS  MADE  AVAILABLE  FOR  THIS  PURPOSE,
ESTABLISH  A  MEDICAL  STRATEGICALLY  TARGETED ACADEMIC RESEARCH PROGRAM
(HEREINAFTER REFERRED TO AS "MEDSTAR"), A CAPITAL FACILITIES PROGRAM, TO
PROVIDE FINANCING FOR  THE  DESIGN,  ACQUISITION,  CONSTRUCTION,  RECON-
STRUCTION,  REHABILITATION  OR  IMPROVEMENT  OF RESEARCH AND DEVELOPMENT
FACILITIES AND EQUIPMENT TO CONDUCT RESEARCH AND DEVELOPMENT  ACTIVITIES
IN  BIOTECHNOLOGY, BIOMEDICINE, NANOMEDICINE, SPECIALTY PHARMACEUTICALS,
MEDICAL DEVICES, AND RELATED SCIENCES. SUCH  MEDSTAR  PROGRAM  SHALL  BE
LOCATED AT ELIGIBLE COLLEGES AND UNIVERSITIES IN THE STATE. FUNDS APPRO-
PRIATED OR REAPPROPRIATED FOR THIS CAPITAL FACILITY PROGRAM BY A CHAPTER
OF  THE  LAWS  OF  TWO  THOUSAND NINE SHALL BE AWARDED TO A PRIMARY HOST
INSTITUTION LOCATED IN THE AREA OF THE METRO  MEDICAL  MATRIX  M{3},  AS
DEFINED  IN  SUBDIVISION ONE OF THIS SECTION, UPON THE RECOMMENDATION OF
THE M{3} CORPORATION ESTABLISHED PURSUANT TO  SUBDIVISION  TWO  OF  THIS
SECTION.
  (B)  CRITERIA FOR RECOMMENDATIONS MADE BY THE M{3} CORPORATION AND FOR
ISSUANCE OF AWARDS SHALL INCLUDE,  BUT  NEED  NOT  BE  LIMITED  TO,  THE
FOLLOWING:
  (I)  THE  POTENTIAL  FUTURE GROWTH AND ECONOMIC IMPACT WITHIN NEW YORK
STATE OF THE PROPOSED RESEARCH TO  BE  UNDERTAKEN  AT  SUCH  FACILITIES,
AVAILABLE  EXPERTISE AT SUCH COLLEGES AND UNIVERSITIES IN THE SCIENTIFIC
DISCIPLINE RELATED TO SUCH FACILITIES;
  (II) AN EVALUATION OF THE ABILITY  OF  THE  PROPOSED  RESEARCH  TO  BE
UNDERTAKEN AT SUCH FACILITIES TO AID EXISTING BUSINESS AND TO CREATE NEW
BUSINESS IN NEW YORK STATE; AND

A. 5642                             5

  (III)  THE  ABILITY  OF  THE  PROPOSAL TO LEVERAGE AND ATTRACT FEDERAL
FUNDS, VENTURE CAPITAL AND PRIVATE INDUSTRY FUNDS.
  (C)  ONLY  AN INSTITUTION LOCATED WITHIN THE AREA OF THE M{3} SHALL BE
ELIGIBLE TO ACT AS A PRIMARY HOST INSTITUTION FOR A  CAPITAL  FACILITIES
AWARD AS DESCRIBED IN PARAGRAPHS (A) AND (B) OF THIS SUBDIVISION.
  (D)  THE  CORPORATION  AND  THE  CITY UNIVERSITY CONSTRUCTION FUND MAY
CONTRACT  WITH  THE  STATE  UNIVERSITY  CONSTRUCTION  FUND  TO   DESIGN,
CONSTRUCT,  ACQUIRE,  RECONSTRUCT, REHABILITATE AND IMPROVE RESEARCH AND
DEVELOPMENT FACILITIES FOR THOSE PRIMARY  HOST  INSTITUTIONS  WHICH  ARE
SENIOR COLLEGES OF THE CITY UNIVERSITY OF NEW YORK.
  (E)  THE  CORPORATION  SHALL, ON OR BEFORE OCTOBER FIRST, TWO THOUSAND
TEN, AND ON OR BEFORE EACH OCTOBER FIRST THEREAFTER, SUBMIT A REPORT  TO
THE  GOVERNOR  AND THE LEGISLATURE ON THE OPERATIONS AND ACCOMPLISHMENTS
OF THE MEDSTAR GRANTS PROGRAM.
  S 3. This act shall take effect immediately.