NY State Senate Bill 2009-S6887

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 22, 2010	referred to corporations, authorities and commissions

2009-S6887 (ACTIVE) - Details

See Assembly Version of this Bill:: A9406
Current Committee:: Senate Corporations, Authorities And Commissions
Law Section:: New York State Urban Development Corporation Act
Laws Affected:: Add §44, UDC Act; add §3154-a, Pub Auth L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S1864, A3464
2013-2014: S1750

2009-S6887 (ACTIVE) - Summary

Creates the Seed-NY investment fund; authorizes the transfer of all assets and liabilities of the small business technology investment fund for the Seed-NY investment fund.

2009-S6887 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6887

 TITLE OF BILL :
An act to amend the New York state urban development corporation act
and the public authorities law, in relation to creating the seed-NY
investment fund


 PURPOSE OR GENERAL IDEA OF BILL :
Authorizes the urban development corporation/empire state development
(ESD) to invest in regional equity funds to help finance the
commercialization of new technologies.

 SUMMARY OF SPECIFIC PROVISIONS :
A new investment fund is created within the urban development
corporation/empire state that will make awards in regional equity
funds providing seed capital for early stage commercialization of
technologies. Criteria and procedures for the awards are established
Funds will be competitively awarded to entities with a demonstrated
record for making syndicated equity-based seed-stage investments.
Individual investments would not exceed five hundred thousand dollars,
or seven hundred fifty thousand dollars in the case of a biotechnology
company, at anyone time and be matched by at least a one-to-one basis
with funds other than state monies. Allocations to these companies
would be in return for equity or debt securities or royalties. Due to
the high risk involved and the economic development component

attributed to these funds, the expected return on investment would be
less than that which would be expected for a traditional venture
capital fund in the private sector.

The corporation would require regional funds to file annual reports on
the use of funds and is required to summarize and evaluate these
reports for the legislature and the governor.

The assets of the the small business technology investment fund would
be liquidated to help finance the new fund.

 EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER :
Chapter 174 of the laws of 1968 is amended by adding a new section 44
and the public authorities law is amended by adding a new section
3154-a.

 JUSTIFICATION :
There is a need for commercialization assistance in New York and
regional entities, aware of the strengths and potentials in their own
economies, are well-suited to determine how to optimize the
effectiveness of these awards. State-sponsored research has supported
the invention of numerous ideas and products that could greatly
benefit society, but many of these inventions are never commercialized
because New York universities, entrepreneurs at or associated with
these universities, and many small business owners in New York State
often do not have the resources or experience to develop their
scientific discoveries.

Such assistance is frequently not available from market sources, such
as venture capitalists and banks, at such an early stage of product
development. A program of state assistance is needed to enable the
successful commercialization of promising inventions and technologies.

This bill introduces the concept of "investing in investors" by
enabling the corporation to decentralize its investment program. The
State has many successful regional investment funds that can provide
such assistance, which increases the chances of success of new
ventures.

 PRIOR LEGISLATIVE HISTORY :
None.

 FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS :
None.

 EFFECTIVE DATE :
Immediately.

2009-S6887 (ACTIVE) - Bill Text download pdf

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

                                  6887

                            I N  S E N A T E

                            February 22, 2010
                               ___________

Introduced  by  Sen.  STACHOWSKI  -- read twice and ordered printed, and
  when printed to be committed to the Committee on Corporations, Author-
  ities and Commissions

AN ACT to amend the New York state urban development corporation act and
  the public authorities  law,  in  relation  to  creating  the  seed-NY
  investment fund

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

  Section 1. 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 44 to read as follows:
  S 44.  THE SEED-NY INVESTMENT FUND. 1. DEFINITIONS. FOR  THE  PURPOSES
OF  THIS SECTION, THE FOLLOWING WORDS AND TERMS SHALL HAVE THE FOLLOWING
MEANINGS UNLESS THE CONTEXT SHALL INDICATE ANOTHER OR DIFFERENT  MEANING
OR INTENT:
  (A)  "REGIONAL  INVESTMENT  FUND"  SHALL  MEAN  A LIMITED PARTNERSHIP,
LIMITED  LIABILITY  PARTNERSHIP,  A  LIMITED  LIABILITY  COMPANY  OR   A
NOT-FOR-PROFIT  FUND  UNDER  EXPERIENCED PROFESSIONAL MANAGEMENT THAT IS
FAMILIAR WITH SEED CAPITAL INVESTMENT,  APPROPRIATE  BUSINESS  PRACTICES
AND  TECHNOLOGY-ORIENTED  PRODUCTS  AND  SERVICES,  AND  FORMED  FOR THE
PURPOSE OF PROVIDING PRIVATE EQUITY  TO  TECHNOLOGY-BASED  COMPANIES  IN
THEIR  FORMATIVE  STAGES, ENCOMPASSES AT LEAST TWO COUNTIES, AND INVESTS
IN QUALIFIED ENTERPRISES LOCATED WITHIN NEW YORK STATE.
  (B) "QUALIFIED ENTERPRISE" SHALL MEAN:
  (I) A COMPANY OR A PROPOSED COMPANY THAT HAS OR WILL LOCATE ITS  PRIN-
CIPAL  PLACE  OF BUSINESS IN NEW YORK STATE, THAT IS, OR PROPOSES TO BE,
ENGAGED IN THIS STATE IN RESEARCH AND  DEVELOPMENT  OR  HIGH  TECHNOLOGY
MANUFACTURING,  AND  THAT  DEMONSTRATES  THE  POTENTIAL  FOR SUBSTANTIAL
GROWTH AND JOB DEVELOPMENT IN AN EMERGING TECHNOLOGY FIELD AS DEFINED IN
SECTION 3102-E OF THE PUBLIC AUTHORITIES LAW OR AS ADOPTED BY THE BOARD;
AND
  (II) IS FORMULATING, HAS FORMULATED, OR IS EXECUTING A DETAILED  BUSI-
NESS PLAN FOR PROOF-OF-CONCEPT OR INITIAL PRODUCT COMMERCIALIZATION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15193-04-0

S. 6887                             2

  (C)  "SEED  CAPITAL"  SHALL  MEAN  FINANCIAL ASSISTANCE TO A QUALIFIED
ENTERPRISE, IN RETURN FOR EQUITY OR DEBT SECURITIES OR ROYALTIES.
  2. INVESTMENTS IN REGIONAL INVESTMENT FUNDS. (A) THE CORPORATION SHALL
MAKE  INVESTMENTS  TO ENCOURAGE AND FACILITATE THE CREATION OR EXPANSION
OF REGIONAL INVESTMENT FUNDS THAT SERVE THE PURPOSES  OF  THIS  SECTION.
THE  BOARD  OF  DIRECTORS  SHALL ADOPT CRITERIA AND GUIDELINES GOVERNING
SUCH INVESTMENTS, WHICH SHALL REQUIRE THAT:
  (I) THERE EXISTS A NEED FOR SEED CAPITAL IN THE REGION SERVED OR TO BE
SERVED BY A REGIONAL INVESTMENT FUND;
  (II) SUPPORT FOR A REGIONAL INVESTMENT FUND EXISTS FROM LOCAL  GOVERN-
MENTS,  ECONOMIC  DEVELOPMENT  AGENCIES, AND BUSINESS COMMUNITIES WITHIN
THE REGION OR AREA TO BE SERVICED BY SUCH FUND;
  (III) THE REGIONAL INVESTMENT FUND HAS THE  CAPACITY  TO  PERFORM  DUE
DILIGENCE  IN  MAKING  INVESTMENT  DECISIONS,  AND TO PROVIDE MANAGEMENT
EXPERTISE AND OTHER VALUE-ADDED  SERVICES  TO  ITS  PORTFOLIO  COMPANIES
WHICH  SERVICES MAY INCLUDE ACCESS TO CAPITAL, BUSINESS EXPERTISE, TECH-
NOLOGY COMMERCIALIZATION SERVICES AND A NETWORK OF RESOURCES IN ORDER TO
ADVANCE THE DEVELOPMENT OF NEW TECHNOLOGIES;
  (IV) THE REGIONAL  INVESTMENT  FUND  ESTABLISHES  CONFLICT-OF-INTEREST
PROVISIONS ACCEPTABLE TO THE CORPORATION;
  (V)  TO THE MAXIMUM EXTENT FEASIBLE, THE REGIONAL INVESTMENT FUND WILL
INVEST IN FIRMS WHICH HAVE THE GREATEST POTENTIAL FOR JOB CREATION;
  (VI) INVESTMENTS MADE BY THE CORPORATION IN A REGIONAL INVESTMENT FUND
SHALL NOT EXCEED FIVE MILLION DOLLARS  AND,  SHALL  BE  MATCHED  BY  THE
REGIONAL  FUND  ON  AT  LEAST A ONE-TO-ONE BASIS WITH MONIES, OTHER THAN
STATE MONIES, UNLESS THE BOARD FINDS THAT A REDUCED MATCHING REQUIREMENT
WILL FURTHER THE PURPOSES OF THIS SECTION; AND
  (VII) INVESTMENTS MADE BY A  REGIONAL  INVESTMENT  FUND  THAT  INCLUDE
FUNDS RECEIVED FROM THE CORPORATION SHALL BE MADE ONLY FOR THE FINANCING
AUTHORIZED BY SUBDIVISION 3 OF THIS SECTION.
  (B)  (I)  THE CORPORATION SHALL MAKE INVESTMENTS IN QUALIFIED REGIONAL
INVESTMENT FUNDS VIA THE ISSUANCE OF A REQUEST FOR PROPOSALS TO REGIONAL
AND LOCAL ECONOMIC  DEVELOPMENT  ORGANIZATIONS,  TECHNOLOGY  DEVELOPMENT
ORGANIZATIONS,  RESEARCH UNIVERSITIES, AND INVESTMENT FUNDS THAT PROVIDE
SMALL-SCALE INVESTMENTS IN HIGH-TECHNOLOGY COMPANIES IN NEW YORK STATE.
  (II) IN AWARDING FUNDS PURSUANT TO THIS SUBDIVISION,  THE  CORPORATION
SHALL ASSURE ADEQUATE GEOGRAPHIC DISTRIBUTION TO THE EXTENT FEASIBLE.
  3.  REGIONAL INVESTMENT FUNDS. (A) REGIONAL INVESTMENT FUNDS RECEIVING
INVESTMENTS FROM THE CORPORATION UNDER THIS ACT SHALL USE SUCH FUNDS AND
THE REQUIRED MATCHING  FUNDS  TO  PROVIDE  SEED  CAPITAL  AND  FOLLOW-ON
FINANCING  TO  QUALIFIED ENTERPRISES, PROVIDED THAT THE REGIONAL INVEST-
MENT FUND SHALL NOT:
  (I) INVEST AN AMOUNT IN ANY SINGLE QUALIFIED ENTERPRISE  THAT  EXCEEDS
FIFTY PERCENT OF THE TOTAL INVESTMENT FROM ALL OTHER SOURCES IN ANY SUCH
ENTERPRISE; OR
  (II)  INVEST OVER FIVE HUNDRED THOUSAND DOLLARS IN ANY ONE COMPANY, OR
SEVEN HUNDRED FIFTY THOUSAND DOLLARS IN  THE  CASE  OF  A  BIOTECHNOLOGY
COMPANY, AT ANY ONE TIME.
  (B)  A  REGIONAL INVESTMENT FUND, BEFORE APPROVING ANY APPLICATION FOR
FINANCIAL ASSISTANCE UNDER THIS SECTION, SHALL FIND THAT:
  (I) THE QUALIFIED ENTERPRISE AND ITS PRODUCT OR PROCESS HAVE A REASON-
ABLE CHANCE OF BEING COMMERCIALLY SUCCESSFUL;
  (II) THE EMPLOYMENT CREATED OR MAINTAINED AS A RESULT  OF  THE  FUND'S
INVESTMENT WILL BE IN NEW YORK STATE; AND
  (III)  PROVISIONS  ARE  IN PLACE FOR THE REPAYMENT OF THE FUNDS IF THE
COMPANY RECEIVING ASSISTANCE LEAVES THE STATE.

S. 6887                             3

  4. REGIONAL INVESTMENT FUND REPORTING. THE CORPORATION  SHALL  REQUIRE
ANY REGIONAL INVESTMENT FUND RECEIVING INVESTMENTS UNDER THIS SECTION TO
FILE  A  REPORT  WITH  THE  CORPORATION BY DECEMBER 1, 2011 AND ANNUALLY
THEREAFTER.  SUCH REPORT SHALL INCLUDE:
  (A)  THE  TOTAL  AMOUNT  OF FUNDS COMMITTED TO THE REGIONAL INVESTMENT
FUND AND THE AMOUNT THAT HAS BEEN INVESTED;
  (B) THE NET ASSET VALUE OF THE FUND;
  (C) THE AMOUNT INVESTED IN EACH PORTFOLIO COMPANY FROM  THE  FUND  AND
FROM OTHER SOURCES;
  (D)  THE TYPE OF PRODUCT OR TECHNOLOGY BEING DEVELOPED BY EACH PORTFO-
LIO COMPANY;
  (E) THE LOCATION OF EACH PORTFOLIO COMPANY;
  (F) THE NUMBER OF JOBS PROJECTED TO BE CREATED AND RETAINED; AND
  (G) SUCH OTHER INFORMATION AS THE CORPORATION DEEMS NECESSARY.
  5. REPORT OF THE CORPORATION. THE  CORPORATION  SHALL  SUBMIT  TO  THE
GOVERNOR  AND  THE  LEGISLATURE  A SUMMARY AND EVALUATION OF THE REPORTS
SUBMITTED TO THE CORPORATION PURSUANT TO SUBDIVISION 4 OF  THIS  SECTION
AND AN EVALUATION OF THE PERFORMANCE OF THE REGIONAL INVESTMENT FUNDS ON
OR BEFORE FEBRUARY 1, 2012 AND ANNUALLY THEREAFTER.
  S  2.  The  public  authorities law is amended by adding a new section
3154-a to read as follows:
  S 3154-A. SMALL BUSINESS INVESTMENT FUND ASSETS AND LIABILITIES.    1.
ALL  OF  THE  ASSETS  AND  LIABILITIES  OF THE SMALL BUSINESS TECHNOLOGY
INVESTMENT FUND ESTABLISHED PURSUANT TO APPROPRIATIONS MADE  BY  VARIOUS
CHAPTERS OF THE LAW INCLUDING, BUT NOT LIMITED TO CHAPTER FIFTY-THREE OF
THE LAWS OF NINETEEN HUNDRED EIGHTY-ONE, CHAPTER FIFTY-THREE OF THE LAWS
OF  NINETEEN  HUNDRED  EIGHTY-FIVE,  CHAPTER  FIFTY-THREE OF THE LAWS OF
NINETEEN HUNDRED EIGHTY-SIX, CHAPTER FIFTY-THREE OF THE LAWS OF NINETEEN
HUNDRED EIGHTY-SEVEN,  CHAPTER  FIFTY-THREE  OF  THE  LAWS  OF  NINETEEN
HUNDRED  EIGHTY-EIGHT,  CHAPTER  FIFTY-THREE  OF  THE  LAWS  OF NINETEEN
HUNDRED EIGHTY-NINE, CHAPTER FIFTY-THREE OF THE LAWS OF NINETEEN HUNDRED
NINETY, CHAPTER FIFTY-THREE OF THE LAWS OF NINETEEN HUNDRED  NINETY-ONE,
CHAPTER  FIFTY-THREE OF THE LAWS OF NINETEEN HUNDRED NINETY-TWO, CHAPTER
FIFTY-THREE OF  THE  LAWS  OF  NINETEEN  HUNDRED  NINETY-THREE,  CHAPTER
FIFTY-THREE  OF  THE  LAWS  OF NINETEEN HUNDRED NINETY-FOUR, AND CHAPTER
FIFTY-THREE OF THE LAWS OF NINETEEN HUNDRED NINETY-FIVE, SHALL  BE  MADE
AVAILABLE  FOR  THE  SEED-NY  INVESTMENT  FUND  ESTABLISHED  PURSUANT TO
SECTION FORTY-FOUR OF SECTION ONE OF THE NEW YORK STATE  URBAN  DEVELOP-
MENT CORPORATION ACT.
  2.  THE  BOARD  SHALL PREPARE A PLAN, WITHIN NINETY DAYS FOLLOWING THE
EFFECTIVE DATE OF THIS SECTION, TO  LIQUIDATE  ALL  CURRENT  ASSETS  AND
LIABILITIES OF THE SMALL BUSINESS TECHNOLOGY INVESTMENT FUND.
  3.  THE  PUBLICLY-TRADED  ASSETS AND ANY WORKING CAPITAL SHALL BE MADE
FULLY AVAILABLE TO THE SEED-NY INVESTMENT FUND ESTABLISHED  PURSUANT  TO
SECTION  FORTY-FOUR  OF SECTION ONE OF THE NEW YORK STATE URBAN DEVELOP-
MENT CORPORATION ACT FOR ALLOCATION TO REGIONAL INVESTMENT FUNDS AS SOON
AS PRACTICABLE.
  4. THE BOARD SHALL ALSO TAKE WHATEVER ACTIONS ARE NECESSARY TO  LIQUI-
DATE  THE  REMAINING  ASSETS OF THE SMALL BUSINESS TECHNOLOGY INVESTMENT
FUND AS SOON AS PRACTICABLE, BUT NOT MORE THAN TWO YEARS  FOLLOWING  THE
EFFECTIVE DATE OF THIS SECTION.
  S 3. This act shall take effect immediately.

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Senate Bill S6887

Sponsored By

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

2009-S6887 (ACTIVE) - Details

2009-S6887 (ACTIVE) - Summary

2009-S6887 (ACTIVE) - Sponsor Memo

2009-S6887 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S6887

Share this bill

Sponsored By

William T. Stachowski

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

2009-S6887 (ACTIVE) - Details

2009-S6887 (ACTIVE) - Summary

2009-S6887 (ACTIVE) - Sponsor Memo

2009-S6887 (ACTIVE) - Bill Text download pdf

Comments