S T A T E O F N E W Y O R K
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7228--A
I N S E N A T E
March 24, 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 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the New York state urban development corporation act, in
relation to creating the bioscience facilities development 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 New York state has many assets that are critical to the
growth of the biotechnology industry.
The legislature also finds that New York state has an extensive
academic research base, a highly skilled labor pool and access to finan-
cial institutions oriented toward biotech development.
The legislature further finds that even with many of the critical
elements for growing a biotechnology cluster, New York for all intents
and purposes has been eclipsed by a number of other regions in the coun-
try.
Further, the legislature finds that while start-up companies are
established in New York, companies that are poised for rapid expansion
have left New York for regions that have developed vigorous biotech and
policies that deliberately invite, nurture and facilitate the expansion
of the industry and proactively addressing the biotech companies' need
for affordable laboratory space.
The legislature declares that biotechnology is an important economic
development industry for the state and that the critical impediment to
the successful growth of a biotech cluster in New York state is access
to affordable laboratory space. Therefore, the legislature hereby
declares the creation of the "bioscience facilities development
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:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07555-03-0
S. 7228--A 2
S 16-T. THE BIOSCIENCE FACILITIES DEVELOPMENT PROGRAM. 1. THE BIOSCI-
ENCE FACILITIES DEVELOPMENT PROGRAM IS HEREBY CREATED TO MAXIMIZE THE
ECONOMIC DEVELOPMENT POTENTIAL OF ACADEMIC AND COMMERCIAL BIOSCIENCE
ACTIVITY IN THE STATE, INCLUDING BUT NOT LIMITED TO BIOTECHNOLOGY, BIOM-
EDICINE, NANOMEDICINE, SPECIALTY PHARMACEUTICALS, MEDICAL DEVICES, AND
RELATED SCIENCES, IN ORDER TO BUILD UPON WORLD-RENOWNED RESEARCH AND
DEVELOPMENT ACTIVITIES IN THE BIOSCIENCES.
2. (A) THE CORPORATION SHALL, FROM FUNDS MADE AVAILABLE FOR THIS
PURPOSE, PROVIDE GRANTS TO LOCAL ECONOMIC DEVELOPMENT CORPORATIONS WHICH
SERVE A REGION MEETING THE CRITERIA SET FORTH IN SUBDIVISION THREE OF
THIS SECTION AND WHICH SHALL APPLY FOR SUCH GRANT IN A FORM AND MANNER
DETERMINED BY THE CORPORATION 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) NO MORE THAN ONE LOCAL ECONOMIC DEVELOPMENT CORPORATION SHALL BE
SELECTED FROM EACH ECONOMIC REGION OF THE STATE, AS DESIGNATED PURSUANT
TO SECTION 230 OF THE ECONOMIC DEVELOPMENT LAW, BY THE CORPORATION TO
RECEIVE A GRANT PURSUANT TO THIS SECTION.
3. A LOCAL ECONOMIC DEVELOPMENT CORPORATION APPLYING FOR A GRANT UNDER
THIS SECTION SHALL:
(A) HAVE FIRM COMMITMENTS FROM PRIVATE AND MUNICIPAL SOURCES TO
PROVIDE FUNDS TO THE LOCAL ECONOMIC DEVELOPMENT CORPORATION IN AN AMOUNT
AT LEAST EQUAL TO THE AMOUNT OF THE GRANT; AND
(B) SERVE AN ECONOMIC DEVELOPMENT REGION OF THE STATE AS DESIGNATED
PURSUANT TO SECTION 230 OF THE ECONOMIC DEVELOPMENT LAW, WHICH REGION
SHALL HAVE LOCATED WITHIN IT COLLEGES, UNIVERSITIES, HOSPITALS, LABORA-
TORIES, AND OTHER RESEARCH INSTITUTIONS.
4. ELIGIBLE BORROWERS FROM THE FUND ESTABLISHED BY THE LOCAL ECONOMIC
DEVELOPMENT CORPORATION RECEIVING A GRANT UNDER THIS PROGRAM SHALL
INCLUDE EARLY AND MIDDLE STAGE BIOSCIENCE COMPANIES IN SUCH AREAS AS
BIOTECHNOLOGY, BIOMEDICINE, 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 TWEN-
TY-FOUR MONTHS PRIOR TO MAKING APPLICATION FOR A LOAN UNDER THIS SUBDI-
VISION, AND SHALL ALSO INCLUDE BOTH FOR-PROFIT AND NOT-FOR-PROFIT PROP-
ERTY OWNERS AND DEVELOPERS WHO ARE INTENDING TO DEVELOP AND LEASE SPACE
TO SUCH BIOSCIENCE 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 THIS SUBDIVISION 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 OPER-
ATIONS, AS DETERMINED IN A LOAN AGREEMENT WITH THE LOCAL ECONOMIC DEVEL-
OPMENT CORPORATION, OUTSIDE NEW YORK STATE, SUCH INTEREST RATE SHALL
RISE TO EIGHTEEN PERCENT ON A RETROACTIVE 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 SUBDIVISION, THE TERM "INDEPENDENTLY OWNED AND
S. 7228--A 3
OPERATED BUSINESS" SHALL MEAN (A) IN THE CASE OF A CORPORATION, ONE
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 (B) IN
THE CASE OF A PARTNERSHIP, ASSOCIATION, 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.
5. GRANTS RECEIVED FROM THE CORPORATION BY A LOCAL ECONOMIC DEVELOP-
MENT CORPORATION, EARNINGS ON SUCH MONIES, AND ANY PRINCIPAL REPAYMENTS
AND ANY INTEREST EARNED ON LOANS SHALL BE DEPOSITED IN A LOAN FUND
ACCOUNT.
6. THE DECISION TO APPROVE OR REJECT AN APPLICATION FOR FINANCIAL
ASSISTANCE PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL BE MADE BY A
MAJORITY OF THE DIRECTORS OF THE LOCAL ECONOMIC DEVELOPMENT CORPORATION,
AND SUCH DECISION SHALL BE FINAL. NO MEMBER OF THE BOARD OR OTHER
GOVERNING BODY OF THE LOCAL ECONOMIC DEVELOPMENT CORPORATION SHALL
PARTICIPATE IN A DECISION ON A PROJECT APPLICATION 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.
7. 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 CORPORATION IS
PARTY TO OR HAS FINANCIAL INTERESTS IN LOAN PROJECTS; WHEN SAID LOCAL
ECONOMIC DEVELOPMENT CORPORATION FAILS TO COMPLY WITH THE REQUIREMENTS
FOR PROJECT LOANS PURSUANT TO THIS SECTION; OR WHEN SAID CORPORATION
MAKES NO LOANS WITHIN THE PREVIOUS FISCAL YEAR. OUTSTANDING LOANS AND
OTHER OBLIGATIONS PAYABLE TO SUCH LOCAL ECONOMIC DEVELOPMENT CORPORATION
SHALL BE ASSIGNED TO THE CORPORATION UPON SUCH TERMS AND CONDITIONS AS
THE CORPORATION SHALL DETERMINE.
8. THE LOCAL ECONOMIC DEVELOPMENT CORPORATION RECEIVING A GRANT PURSU-
ANT TO THIS SECTION SHALL SUBMIT ANNUAL REPORTS FOR THE PREVIOUS FISCAL
YEAR TO THE CORPORATION DESCRIBING THE FINANCIAL ASSISTANCE PROVIDED
PURSUANT TO THIS SECTION, INCLUDING: THE NUMBER OF PROJECTS ASSISTED;
THE AMOUNT AND TYPE OF ASSISTANCE PROVIDED; A DESCRIPTION OF THE
PROJECTS; THE NUMBER OF JOBS CREATED OR RETAINED; THE STATUS OF
OUTSTANDING LOANS, GUARANTEES, EARNINGS AND ACCOUNT BALANCES; AND SUCH
OTHER INFORMATION AS THE CORPORATION MAY REQUIRE.
9. THE CORPORATION SHALL ANNUALLY CONDUCT AN AUDIT OF EACH LOCAL
ECONOMIC DEVELOPMENT CORPORATION 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 SUBSTAN-
TIVE NONCOMPLIANCE BY AN ECONOMIC DEVELOPMENT CORPORATION WITH ANY OF
THE PROVISIONS OF THIS SECTION AND SUCH INSTANCES WERE, OR SHOULD HAVE
BEEN, KNOWN TO BE IN NONCOMPLIANCE, THE ECONOMIC DEVELOPMENT CORPORATION
SHALL RETURN, WITHIN THIRTY DAYS, UPON DEMAND BY THE CORPORATION, ALL
UNCOMMITTED GRANT FUNDS ON HAND AND PROVIDE AN ACCOUNT OF THE LOANS
CURRENTLY OUTSTANDING.
S. 7228--A 4
10. THE CORPORATION SHALL, ON OR BEFORE OCTOBER FIRST OF THE YEAR NEXT
SUCCEEDING THE EFFECTIVE DATE OF THIS SECTION, AND ON OR BEFORE EACH
OCTOBER FIRST THEREAFTER, SUBMIT A REPORT TO THE GOVERNOR AND THE LEGIS-
LATURE ON THE OPERATIONS AND ACCOMPLISHMENTS OF THE BIOSCIENCE FACILI-
TIES DEVELOPMENT PROGRAM. SUCH REPORT SHALL INCLUDE A SUMMARY OF THE
INFORMATION CONTAINED IN THE REPORTS SUBMITTED PURSUANT TO SUBDIVISION
EIGHT OF THIS SECTION AND OF THE RESULTS OF THE AUDITS PERFORMED BY THE
CORPORATION PURSUANT TO SUBDIVISION NINE OF THIS SECTION, AND SHALL SET
FORTH THE STATUS OF THE BIOSCIENCE FACILITIES DEVELOPMENT PROGRAM
REVOLVING LOAN PROGRAM FOR THE PREVIOUS FISCAL YEAR.
S 3. This act shall take effect immediately.
