S T A T E O F N E W Y O R K
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10019
I N A S S E M B L Y
May 1, 2012
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Introduced by M. of A. SCHIMMINGER, SCARBOROUGH, LUPARDO, GABRYSZAK --
read once and referred to the Committee on Economic Development
AN ACT to amend the economic development law, in relation to establish-
ing the New York incubator network
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. The legislature hereby recognizes that
supporting a statewide network of university or college affiliated busi-
ness incubators, selected on a competitive basis that maintain not only
physical facilities, but also most current industry best practice busi-
ness development services is a cost effective approach to supporting
start-up and early stage companies and helping the state's creative
entrepreneurs successfully transition technological breakthroughs with
commercial potential from the laboratory to the marketplace. This
investment in university affiliated business incubators will support
regional development and local economic diversification, job creation,
and the retention of the state's vast resources of intellectual capital.
S 2. The economic development law is amended by adding a new section
361 to read as follows:
S 361. NEW YORK INCUBATOR NETWORK. THE COMMISSIONER, IN COOPERATION
WITH THE DIVISION OF SCIENCE, TECHNOLOGY AND INNOVATION IS AUTHORIZED TO
ACCEPT APPLICATIONS AND DESIGNATE INCUBATORS AS PART OF THE NEW YORK
ACADEMIC INCUBATOR NETWORK. SUCH DESIGNATIONS SHALL BE MADE IN ACCORD-
ANCE WITH THE STANDARDS AND CRITERIA SET FORTH IN SUBDIVISION TWO OF
THIS SECTION. INCUBATORS SO DESIGNATED SHALL BE ELIGIBLE FOR SUPPORT
FROM THE URBAN DEVELOPMENT CORPORATION, AND FOR SUCH ADDITIONAL SUPPORT
AS MAY OTHERWISE BE PROVIDED BY LAW.
1. AS USED IN THIS SECTION: (A) "INCUBATOR" MEANS AN ACADEMIC INCUBA-
TOR FACILITY AS DEFINED IN SUBPARAGRAPH (VI) OF PARAGRAPH (E) OF SUBDI-
VISION TWELVE-G OF SECTION TWO HUNDRED TEN OF THE TAX LAW;
(B) "APPLICANT" MEANS A COLLEGE OR UNIVERSITY, OR COLLEGE OR UNIVERSI-
TY-AFFILIATED RESEARCH INSTITUTE OR FOUNDATION PROVIDING A BASE FOR AN
INCUBATOR; AND
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11827-03-2
A. 10019 2
(C) "DIVISION" MEANS THE DIVISION OF SCIENCE, TECHNOLOGY AND INNO-
VATION.
2. THE DIVISION SHALL:
(A) IDENTIFY AREAS FOR WHICH INCUBATORS THAT ARE RELATED TO INDUSTRIES
WITH SIGNIFICANT POTENTIAL FOR ECONOMIC GROWTH AND DEVELOPMENT IN NEW
YORK STATE AND TECHNOLOGICAL AREAS THAT ARE RELATED TO THE ENHANCEMENT
OF PRODUCTIVITY IN VARIOUS INDUSTRIES LOCATED THROUGHOUT NEW YORK STATE;
(B) AID IN THE ESTABLISHMENT OF INCUBATORS AT ACCREDITED UNIVERSITIES
AND COLLEGES THROUGHOUT THE STATE TO THE EXTENT POSSIBLE IN AREAS WHERE
THERE IS NOT ALREADY SIGNIFICANT SUPPORT FOR BUSINESS INCUBATION;
(C) PURSUANT TO THE STANDARDS ADHERING TO AN INCUBATOR, ESTABLISH
CONGRUENT CRITERIA THAT APPLICANTS MUST SATISFY FOR DESIGNATION AS AN
INCUBATOR FOR THE PURPOSES OF A DESIGNATION AS A MEMBER OF THE NETWORK,
INCLUDING, BUT NOT LIMITED TO THE FOLLOWING:
(I) AN ESTABLISHED RECORD OF, OR PLAN TO CONFORM TO, BEST PRACTICES
INCLUDING CLEAR POLICIES FOR BUSINESS ENTRY AND GRADUATION;
(II) A COMPREHENSIVE SUITE OF ENTREPRENEURIAL MENTORING PRACTICES
INCLUDING ADVISING, COACHING, PLANNING AND CONNECTING TO FUNDING SOURC-
ES;
(III) THE CAPACITY TO SECURE SUBSTANTIAL PRIVATE AND OTHER NON-STATE
GOVERNMENTAL FUNDING FOR THE PROPOSED INCUBATOR, NOT INCLUDING DIRECT
SUPPORT FROM THE SPONSORING ACADEMIC INSTITUTION OR RELATED FOUNDATION,
IN AMOUNTS AT LEAST EQUAL TO THE TOTAL OF SUPPORT SOUGHT FROM THE STATE
OR ITS DIVISIONS;
(IV) THE ABILITY AND WILLINGNESS TO COOPERATE WITH OTHER LOCAL,
REGIONAL AND STATEWIDE ECONOMIC DEVELOPMENT ORGANIZATIONS, STATEWIDE
BUSINESS INCUBATOR ASSOCIATIONS, BUSINESS SUPPORT NETWORKS, VENTURE AND
ANGEL CAPITAL FUNDING SOURCES, AND WORKFORCE DEVELOPMENT ADVOCATES; AND
(V) THE CAPACITY TO COLLABORATE WITH BUSINESS AND INDUSTRY INDIVIDUAL-
LY AND AS PART OF A STATEWIDE INCUBATOR ASSOCIATION;
(D) ESTABLISH SUCH REQUIREMENTS AS IT DEEMS APPROPRIATE FOR THE
FORMAT, CONTENT AND FILING OF APPLICATIONS FOR DESIGNATION AS INCUBA-
TORS;
(E) ESTABLISH SUCH PROCEDURES AS IT DEEMS APPROPRIATE FOR THE EVALU-
ATION OF APPLICATIONS FOR DESIGNATION AS INCUBATORS, INCLUDING THE
ESTABLISHMENT OF A REVIEW PANEL COMPOSED OF STATEWIDE RECOGNIZED EXPERTS
IN BUSINESS INCUBATION;
(F) UPON THE APPROVAL OF AN APPLICATION BY THE COMMISSIONER, CONFER AN
INCUBATOR DESIGNATION UPON A SUCCESSFUL APPLICANT UNLESS OTHERWISE
REVOKED BY THE COMMISSIONER IN CONSULTATION WITH THE DIVISION; AND
(G) THE COMMISSIONER SHALL APPROVE AND PROMULGATE RULES AND REGU-
LATIONS FOR SELECTION OF INCUBATORS AND SHALL MAKE FINAL DESIGNATIONS
REGARDING ALL MATTERS RELATING TO THE STATUS OF AN APPLICANT OR INCUBA-
TOR.
3. (A) (I) FROM SUCH FUNDS AS MAY BE APPROPRIATED OR OTHERWISE AUTHOR-
IZED FOR THIS PURPOSE BY THE LEGISLATURE, THE URBAN DEVELOPMENT CORPO-
RATION SHALL PROVIDE FINANCIAL SUPPORT, THROUGH CONTRACTS OR OTHER
MEANS, TO ENHANCE AND ACCELERATE THE DEVELOPMENT OF SUCH INCUBATORS.
FUNDS RECEIVED PURSUANT TO THIS SUBDIVISION MAY BE USED FOR PURCHASE OF
EQUIPMENT AND FIXTURES, EMPLOYMENT OF DIRECT SERVICE STAFF AND PROVISION
OF INTERNSHIPS SERVING THE INCUBATOR, BUT NOT PRIMARILY SERVING AS
EMPLOYEES OF MEMBER FIRMS LEASING SPACE IN AN INCUBATOR, AND OTHER
PURPOSES APPROVED BY THE DIVISION, BUT MAY NOT BE USED FOR CAPITAL
CONSTRUCTION OF REAL PROPERTY.
(II) BEGINNING IN THE FOURTH ACADEMIC YEAR FOLLOWING THE ACADEMIC YEAR
IN WHICH AN INCUBATOR IS FIRST DESIGNATED, THE INCUBATOR SHALL PRESENT
A. 10019 3
TO THE COMMISSIONER A REPORT CATALOGING ITS REVENUE AND EXPENSES, THE
NUMBER OF PRIVATE SECTOR FIRMS THAT HAVE LEASED SPACE IN THE INCUBATOR,
THE NUMBER OF COMPANIES THAT HAVE GRADUATED FROM AN INCUBATOR, WHETHER
SUCH GRADUATING COMPANIES HAVE REMAINED IN NEW YORK STATE, AND BEST
ESTIMATES AS TO THE NUMBER OF FULL TIME EQUIVALENT POSITIONS CREATED BY
INCUBATOR MEMBER COMPANIES AND THEIR SUCCESSORS FOR A PERIOD OF FIVE
YEARS UPON GRADUATION. THE DIVISION SHALL EVALUATE SUCH INCUBATOR'S
PERFORMANCE ACCORDING TO THE ABOVE LISTED CRITERIA, AND SHALL PRESENT
ITS FINDINGS TO THE COMMISSIONER WHO SHALL MAKE A BINDING RECOMMENDATION
WHETHER SUCH INCUBATOR SHALL RETAIN ITS STATUS AS A MEMBER OF THE
NETWORK.
(III) THE DIVISION CAN RECOMMEND, SUBJECT TO THE APPROVAL OF THE
COMMISSIONER, ADDITIONAL MEMBERS TO THE NETWORK ACCORDING TO THE CRITE-
RIA ESTABLISHED IN SUBDIVISION TWO OF THIS SECTION.
(B) ADDITIONAL FUNDING OF THE OPERATIONS OF EACH INCUBATOR RECIPIENT
IN THE NETWORK SHALL BE BASED UPON A SHOWING THAT: THE INCUBATOR CONTIN-
UES TO COMPLY WITH THE CRITERIA ESTABLISHED BY THE COMMISSIONER IN
CONSULTATION WITH THE DIVISION PURSUANT TO PARAGRAPH (B) OF SUBDIVISION
TWO OF THIS SECTION; A DEMONSTRATION OF ASSISTANCE TO EMERGING BUSI-
NESSES IN NEW YORK STATE; COMPLIANCE WITH THE RULES, REGULATIONS AND
GUIDELINES OF THE URBAN DEVELOPMENT CORPORATION, IN PARTICULAR, AND THE
DIVISION; AND COMPLIANCE WITH ANY CONTRACTS BETWEEN THE URBAN DEVELOP-
MENT CORPORATION AND THE DESIGNATED INCUBATOR.
(C) EACH INCUBATOR SHALL REPORT ON AN ANNUAL BASIS ON ITS ACTIVITIES
TO THE COMMISSIONER IN A MANNER AND ACCORDING TO THE SCHEDULE ESTAB-
LISHED BY THE DIVISION, AND SHALL PROVIDE SUCH ADDITIONAL INFORMATION AS
THE COMMISSIONER MAY REQUIRE. THE DIVISION SHALL EVALUATE INCUBATOR
OPERATIONS USING METHODS SUCH AS SITE VISITS, REPORTING OF SPECIFIED
INFORMATION AND REVIEW EVALUATIONS USING EXPERTS IN ENTREPRENEURIAL
DEVELOPMENT. IF THE DIVISION IS UNSATISFIED WITH THE PROGRESS OF AN
INCUBATOR MEMBER IT SHALL NOTIFY SUCH INCUBATOR OF THE RESULTS OF ITS
EVALUATIONS AND FINDINGS OF DEFICIENCIES IN THE OPERATION OF SUCH INCU-
BATOR AND SHALL ALLOW AND COOPERATE WITH SUCH INCUBATORS TO REMEDY SUCH
FINDINGS IN A TIMELY MANNER. IF SUCH FACTORS ARE NOT REMEDIED, THE
COMMISSIONER MAY WITHDRAW THE STATE FUNDING SUPPORT, IN PART UNTIL SUCH
DEFICIENCIES ARE REMEDIED, OR IN WHOLE IMMEDIATELY FOLLOWING THE WITH-
DRAWAL OF AN INCUBATOR NETWORK DESIGNATION.
4. BEGINNING NO LATER THAN THE END OF THE FOURTH YEAR OF THE FORMATION
OF THE NETWORK, THE COMMISSIONER SHALL MAKE A BIANNUAL REPORT OF THE
INCUBATOR NETWORK PROGRAM TO THE GOVERNOR AND THE SPEAKER OF THE ASSEM-
BLY, THE TEMPORARY PRESIDENT OF THE SENATE, THE LEGISLATIVE COMMITTEES
ON ECONOMIC DEVELOPMENT AND TO THE FISCAL COMMITTEES NOT LATER THAN
DECEMBER THIRTY-FIRST OF EACH ENUMERATED YEAR. SUCH REPORT SHALL
INCLUDE, BUT NOT BE LIMITED TO, A LIST OF IMMEDIATE PAST AND ACTIVE
TENANTS OF THE INCUBATORS IN THE NETWORK, THE RESULTS OF THE DIVISION'S
EVALUATION OF EACH INCUBATOR, A DESCRIPTION OF THE ACHIEVEMENTS OF EACH
INCUBATOR, ANY DEFICIENCIES IN THE OPERATION OF EACH INCUBATOR, REMEDIAL
ACTIONS RECOMMENDED BY THE DIVISION, REMEDIAL ACTIONS TAKEN BY THE INCU-
BATOR, A DESCRIPTION OF BUSINESS ASSISTANCE PROVIDED BY EACH INCUBATOR,
A DESCRIPTION OF ANY EXTERNAL FUNDING ATTRACTED BY THE INCUBATOR, PART-
NERSHIPS ENTERED INTO BY THE INCUBATOR, THE AMOUNT OF FINANCIAL ASSIST-
ANCE PROVIDED BY THE STATE, INCLUDING THE URBAN DEVELOPMENT CORPORATION,
AND THE LEVEL OF MATCHING FUNDS PROVIDED EACH INCUBATOR, AND A
DESCRIPTION OF THE USE OF SUCH MONIES TO THE EXTENT THAT SUCH DISCLOSURE
DOES NOT COMPROMISE GENERALLY ACCEPTED BUSINESS CONFIDENTIALITY STAND-
ARDS.
A. 10019 4
S 3. During state fiscal year 2012-2013, the urban development corpo-
ration is authorized to commit a total of two hundred fifty thousand
dollars in unrestricted assets previously appropriated or otherwise
conferred upon the New York state foundation for science, technology and
innovation pursuant to subdivisions 11 and 12 of section 360 of the
economic development law to implement the creation and establishment of
the New York incubator network.
S 4. This act shall take effect immediately.