senate Bill S4483A

2011-2012 Legislative Session

Creates the seed-NY investment fund

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 10, 2012 print number 4483a
amend and recommit to corporations, authorities and commissions
Jan 04, 2012 referred to corporations, authorities and commissions
May 18, 2011 reported and committed to finance
Apr 06, 2011 referred to corporations, authorities and commissions

Bill Amendments

Original
A (Active)
Original
A (Active)

S4483 - Bill Details

See Assembly Version of this Bill:
A6167B
Current Committee:
Senate Corporations, Authorities And Commissions
Law Section:
New York State Urban Development Corporation Act
Laws Affected:
Add §46,UDC Act
Versions Introduced in 2011-2012 Legislative Session:
A6167A

S4483 - Bill Texts

view summary

Creates the seed-NY investment fund to encourage and facilitate the creation or expansion of regional investment funds for research colleges, high-technology development and local development organizations.

view sponsor memo
BILL NUMBER:S4483

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

PURPOSE OF THE BILL:
Authorizes the New York State Urban Development
Corporation (d.b.a Empire State Development Corporation - ESDC) 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 ESDC 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 ease 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 new fund will replace the small business technology investment
fund (SBTIF) and its assets would be liquidated to help finance the
new fund.

The Governor is required to set aside an allocation of twenty-five
million dollars from funding made available from the federal small
business jobs act of 2010, P.L. 11-24, to provide assistance to
established regional investment funds.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
A new section 45
is added to Chapter 174 of the laws of 1968 (the New York State Urban
Development Corporation Act).

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.

The purposes of the SBTIF are not outlined in law, and this new
program would clarify the state's role in supporting new companies.

This bill introduces the concept of "investing in investors" by
enabling the foundation 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:
Similar to A. 9406-A of 2010.

FISCAL IMPLICATIONS:
Federal funds will support the new program.

EFFECTIVE DATE:
Immediately.

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

                                  4483

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              April 6, 2011
                               ___________

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

AN ACT to amend the New York state urban development corporation act, 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. Chapter 174 of the laws of 1968 constituting the  New  York
state  urban  development  corporation  act,  is amended by adding a new
section 45 to read as follows:
  S 45.  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, AND 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  THIRTY-ONE  HUNDRED  TWO-E  OF THE PUBLIC AUTHORITIES LAW OR AS
ADOPTED BY THE CORPORATION; AND

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09996-05-1

S. 4483                             2

  (II) IS FORMULATING, HAS FORMULATED, OR IS EXECUTING A DETAILED  BUSI-
NESS PLAN FOR PROOF-OF-CONCEPT OR INITIAL PRODUCT COMMERCIALIZATION.
  (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 CORPORATION SHALL  ADOPT  CRITERIA  AND  GUIDELINES  GOVERNING  SUCH
INVESTMENTS, WHICH SHALL:
  (I)  DEMONSTRATE  THE NEED FOR SEED CAPITAL IN THE REGION SERVED OR TO
BE SERVED BY A REGIONAL INVESTMENT FUND;
  (II) DEMONSTRATE THAT SUPPORT FOR A REGIONAL  INVESTMENT  FUND  EXISTS
FROM  LOCAL  GOVERNMENTS,  ECONOMIC  DEVELOPMENT  AGENCIES, AND BUSINESS
COMMUNITIES WITHIN THE REGION OR AREA TO BE SERVICED BY SUCH FUND;
  (III) REQUIRE THAT 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 EXPER-
TISE, TECHNOLOGY COMMERCIALIZATION SERVICES AND A NETWORK  OF  RESOURCES
IN ORDER TO ADVANCE THE DEVELOPMENT OF NEW TECHNOLOGIES;
  (IV)   REQUIRE   THAT   THE   REGIONAL   INVESTMENT  FUND  ESTABLISHES
CONFLICT-OF-INTEREST PROVISIONS ACCEPTABLE TO THE CORPORATION;
  (V) TO THE MAXIMUM EXTENT FEASIBLE, REQUIRE  THE  REGIONAL  INVESTMENT
FUND  WILL  INVEST  IN  FIRMS  WHICH HAVE THE GREATEST POTENTIAL FOR JOB
CREATION;
  (VI) REQUIRE THAT INVESTMENTS MADE BY THE  FOUNDATION  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 CORPORATION  FINDS  THAT  A  REDUCED
MATCHING REQUIREMENT WILL FURTHER THE PURPOSES OF THIS SECTION; AND
  (VII) REQUIRE THAT INVESTMENTS MADE BY A REGIONAL INVESTMENT FUND THAT
INCLUDE  FUNDS  RECEIVED FROM THE CORPORATION SHALL BE MADE ONLY FOR THE
FINANCING AUTHORIZED BY SUBDIVISION THREE 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) WHEN 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 SECTION 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 INDIVIDUAL
COMPANY, OR SEVEN HUNDRED FIFTY THOUSAND DOLLARS  IN  THE  CASE  OF  ANY
INDIVIDUAL 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;

S. 4483                             3

  (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.
  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 FIRST, TWO THOUSAND
TWELVE 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  FOUR OF THIS
SECTION AND AN EVALUATION OF THE PERFORMANCE OF THE REGIONAL  INVESTMENT
FUNDS  ON  OR  BEFORE FEBRUARY FIRST, TWO THOUSAND THIRTEEN AND ANNUALLY
THEREAFTER.
  6. SMALL BUSINESS INVESTMENT FUND ASSETS AND LIABILITIES.  (A) 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 NINE-
TEEN HUNDRED NINETY-FOUR, AND CHAPTER FIFTY-THREE OF THE LAWS  OF  NINE-
TEEN  HUNDRED  NINETY-FIVE,  SHALL  BE  MADE  AVAILABLE  FOR THE SEED-NY
INVESTMENT FUND ESTABLISHED PURSUANT TO THIS SECTION.
  (B) THE CORPORATION 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.
  (C)  THE  PUBLICLY-TRADED ASSETS AND ANY WORKING CAPITAL SHALL BE MADE
FULLY AVAILABLE TO THE SEED-NY INVESTMENT FUND ESTABLISHED  PURSUANT  TO
THIS SECTION.
  (D)  THE CORPORATION SHALL ALSO TAKE WHATEVER ACTIONS ARE NECESSARY TO
LIQUIDATE THE REMAINING ASSETS OF THE SMALL BUSINESS TECHNOLOGY  INVEST-
MENT  FUND AS SOON AS PRACTICABLE, BUT NOT MORE THAN TWO YEARS FOLLOWING
THE EFFECTIVE DATE OF THIS SECTION.
  S 2.  The governor, on or before June 27, 2011  and  as  part  of  the
state's application that will be submitted to the United States treasury
department  to  receive funding from the Federal Small Business Jobs Act
of 2010 (P.L. 11-240), shall allocate not less than $25,000,000  of  New
York's portion of such federal moneys to the seed-NY investment fund for
the  purpose  of providing assistance to established regional investment

S. 4483                             4

funds. Upon receipt of the federal moneys, the governor and the legisla-
ture shall immediately appropriate the amount allocated to  the  seed-NY
investment  fund  in the state's application to the New York state urban
development  corporation  for the purpose of carrying out the provisions
of section 45 of the New York state urban development corporation act as
added by section one of this act.
  S 3. This act shall take effect immediately.

Co-Sponsors

S4483A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A6167B
Current Committee:
Senate Corporations, Authorities And Commissions
Law Section:
New York State Urban Development Corporation Act
Laws Affected:
Add §46,UDC Act
Versions Introduced in 2011-2012 Legislative Session:
A6167A

S4483A (ACTIVE) - Bill Texts

view summary

Creates the seed-NY investment fund to encourage and facilitate the creation or expansion of regional investment funds for research colleges, high-technology development and local development organizations.

view sponsor memo
BILL NUMBER:S4483A

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

PURPOSE OF THE BILL:
Authorizes the New York State Urban Development Corporation (d.b.a
Empire State Development corporation - ESDC) 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 ESDC 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 ease 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 new fund will replace the small business technology investment
fund (SBTIF) and its assets would be liquidated to help finance the
new fund.

The Governor is required to set aside an allocation of twenty-five
million dollars from funding made available from the federal small
business jobs act of 2010, P.L. 11-24, to provide assistance to
established regional investment funds.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
A new section 45 is added to Chapter 174 of the laws of 1968 (the New
York State Urban Development Corporation Act).

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.

The purposes of the SBTIF are not outlined in law, and this new
program would clarify the state's role in supporting new companies.

This bill introduces the concept of "investing in investors" by
enabling the foundation 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:
Similar to A.9406-A of 2010.

FISCAL IMPLICATIONS:
Federal funds will support the new program.

EFFECTIVE DATE:
Immediately.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4483--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              April 6, 2011
                               ___________

Introduced  by  Sen.  ALESI  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Corporations,  Authorities
  and  Commissions  --  recommitted  to  the  Committee on Corporations,
  Authorities and Commissions in accordance with Senate Rule 6,  sec.  8
  --  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 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 46 to read as follows:
  S  46.   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, AND 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09996-09-2

S. 4483--A                          2

SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC  AUTHORITIES  LAW  OR  AS
ADOPTED BY THE CORPORATION; AND
  (II)  IS FORMULATING, HAS FORMULATED, OR IS EXECUTING A DETAILED BUSI-
NESS PLAN FOR PROOF-OF-CONCEPT OR INITIAL PRODUCT COMMERCIALIZATION.
  (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  CORPORATION  SHALL  ADOPT  CRITERIA  AND  GUIDELINES GOVERNING SUCH
INVESTMENTS, WHICH SHALL:
  (I) DEMONSTRATE THE NEED FOR SEED CAPITAL IN THE REGION SERVED  OR  TO
BE SERVED BY A REGIONAL INVESTMENT FUND;
  (II)  DEMONSTRATE  THAT  SUPPORT FOR A REGIONAL INVESTMENT FUND EXISTS
FROM LOCAL GOVERNMENTS,  ECONOMIC  DEVELOPMENT  AGENCIES,  AND  BUSINESS
COMMUNITIES WITHIN THE REGION OR AREA TO BE SERVICED BY SUCH FUND;
  (III)  REQUIRE  THAT  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  EXPER-
TISE,  TECHNOLOGY  COMMERCIALIZATION SERVICES AND A NETWORK OF RESOURCES
IN ORDER TO ADVANCE THE DEVELOPMENT OF NEW TECHNOLOGIES;
  (IV)  REQUIRE  THAT   THE   REGIONAL   INVESTMENT   FUND   ESTABLISHES
CONFLICT-OF-INTEREST PROVISIONS ACCEPTABLE TO THE CORPORATION;
  (V)  TO  THE  MAXIMUM EXTENT FEASIBLE, REQUIRE THE REGIONAL INVESTMENT
FUND WILL INVEST IN FIRMS WHICH HAVE  THE  GREATEST  POTENTIAL  FOR  JOB
CREATION;
  (VI)  REQUIRE  THAT  INVESTMENTS  MADE BY THE FOUNDATION 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 CORPORATION FINDS THAT A REDUCED
MATCHING REQUIREMENT WILL FURTHER THE PURPOSES OF THIS SECTION; AND
  (VII) REQUIRE THAT INVESTMENTS MADE BY A REGIONAL INVESTMENT FUND THAT
INCLUDE FUNDS RECEIVED FROM THE CORPORATION SHALL BE MADE ONLY  FOR  THE
FINANCING AUTHORIZED BY SUBDIVISION THREE 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) WHEN 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 SECTION 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  INDIVIDUAL
COMPANY,  OR  SEVEN  HUNDRED  FIFTY  THOUSAND DOLLARS IN THE CASE OF ANY
INDIVIDUAL BIOTECHNOLOGY COMPANY, AT ANY ONE TIME.
  (B) A REGIONAL INVESTMENT FUND, BEFORE APPROVING ANY  APPLICATION  FOR
FINANCIAL ASSISTANCE UNDER THIS SECTION, SHALL FIND THAT:

S. 4483--A                          3

  (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.
  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 FIRST, TWO THOUSAND THIR-
TEEN 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  FOUR OF THIS
SECTION AND AN EVALUATION OF THE PERFORMANCE OF THE REGIONAL  INVESTMENT
FUNDS  ON  OR  BEFORE FEBRUARY FIRST, TWO THOUSAND FOURTEEN AND ANNUALLY
THEREAFTER.
  6. SMALL BUSINESS INVESTMENT FUND ASSETS AND LIABILITIES.  (A) 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 NINE-
TEEN HUNDRED NINETY-FOUR, AND CHAPTER FIFTY-THREE OF THE LAWS  OF  NINE-
TEEN  HUNDRED  NINETY-FIVE,  SHALL  BE  MADE  AVAILABLE  FOR THE SEED-NY
INVESTMENT FUND ESTABLISHED PURSUANT TO THIS SECTION.
  (B) THE CORPORATION 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.
  (C)  THE  PUBLICLY-TRADED ASSETS AND ANY WORKING CAPITAL SHALL BE MADE
FULLY AVAILABLE TO THE SEED-NY INVESTMENT FUND ESTABLISHED  PURSUANT  TO
THIS SECTION.
  (D)  THE CORPORATION SHALL ALSO TAKE WHATEVER ACTIONS ARE NECESSARY TO
LIQUIDATE THE REMAINING ASSETS OF THE SMALL BUSINESS TECHNOLOGY  INVEST-
MENT  FUND AS SOON AS PRACTICABLE, BUT NOT MORE THAN TWO YEARS FOLLOWING
THE EFFECTIVE DATE OF THIS SECTION.
  S 2.  The governor, on or before June 27, 2012  and  as  part  of  the
state's application that will be submitted to the United States treasury
department  to  receive funding from the Federal Small Business Jobs Act
of 2010 (P.L. 11-240), shall allocate not less than $25,000,000  of  New

S. 4483--A                          4

York's portion of such federal moneys to the seed-NY investment fund for
the  purpose  of providing assistance to established regional investment
funds. Upon receipt of the federal moneys, the governor and the legisla-
ture  shall  immediately appropriate the amount allocated to the seed-NY
investment fund in the state's application to the New York  state  urban
development  corporation  for the purpose of carrying out the provisions
of section 46 of the New York state urban development corporation act as
added by section one of this act.
  S 3. This act shall take effect immediately.

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