Bill Text: NY S05469 | 2011-2012 | General Assembly | Introduced
Bill Title: Creates the small business technology investment fund; requires reporting by regional investment funds receiving investments and requires the foundation to report to the governor and legislature a summary of the program and an evaluation of reports submitted by the funds.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2012-01-04 - REFERRED TO COMMERCE, ECONOMIC DEVELOPMENT AND SMALL BUSINESS [S05469 Detail]
Download: New_York-2011-S05469-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
5469
2011-2012 Regular Sessions
I N S E N A T E
May 25, 2011
___________
Introduced by Sen. PARKER -- read twice and ordered printed, and when
printed to be committed to the Committee on Commerce, Economic Devel-
opment and Small Business
AN ACT to amend the public authorities law, in relation to creating the
small business technology investment fund
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. The public authorities law is amended by adding a new
2 section 3154-a to read as follows:
3 S 3154-A. THE SMALL BUSINESS TECHNOLOGY INVESTMENT FUND. 1. DEFI-
4 NITIONS. FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING WORDS AND TERMS
5 SHALL HAVE THE FOLLOWING MEANINGS UNLESS THE CONTEXT SHALL INDICATE
6 ANOTHER OR DIFFERENT MEANING OR INTENT:
7 (A) "REGIONAL INVESTMENT FUND" SHALL MEAN A LIMITED PARTNERSHIP, A
8 LIMITED LIABILITY PARTNERSHIP, A LIMITED LIABILITY COMPANY OR A
9 NOT-FOR-PROFIT FUND THAT IS PROFESSIONALLY MANAGED BY AN EXPERIENCED
10 FUND MANAGER, IS FORMED FOR THE PURPOSE OF PROVIDING PRIVATE EQUITY TO
11 TECHNOLOGY-BASED COMPANIES IN THEIR FORMATIVE STAGES, ENCOMPASSES AT
12 LEAST TWO COUNTIES, AND INVESTS IN QUALIFIED ENTERPRISES LOCATED WITHIN
13 NEW YORK STATE.
14 (B) "QUALIFIED ENTERPRISE" SHALL MEAN A COMPANY OR A PROPOSED COMPANY
15 THAT HAS OR WILL LOCATE ITS PRINCIPAL PLACE OF BUSINESS IN NEW YORK
16 STATE, THAT IS, OR PROPOSES TO BE, ENGAGED IN THIS STATE IN RESEARCH AND
17 DEVELOPMENT OR MANUFACTURING, AND THAT DEMONSTRATES THE POTENTIAL FOR
18 SUBSTANTIAL GROWTH AND JOB DEVELOPMENT IN AN EMERGING TECHNOLOGY FIELD
19 AS DEFINED IN SECTION THIRTY-ONE HUNDRED TWO-E OF THIS ARTICLE OR AS
20 ADOPTED BY THE BOARD.
21 (C) "SEED CAPITAL" SHALL MEAN FINANCIAL ASSISTANCE TO A QUALIFIED
22 ENTERPRISE, WHICH HAS FORMULATED A DETAILED BUSINESS PLAN, FOR
23 PROOF-OF-CONCEPT OR INITIAL PRODUCT COMMERCIALIZATION.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08350-01-1
S. 5469 2
1 2. INVESTMENTS IN REGIONAL INVESTMENT FUNDS. (A) THE FOUNDATION IS
2 AUTHORIZED TO MAKE INVESTMENTS TO ENCOURAGE AND FACILITATE THE CREATION
3 OR EXPANSION OF REGIONAL INVESTMENT FUNDS THAT SERVE THE PURPOSES OF
4 THIS SECTION. THE FOUNDATION'S BOARD OF DIRECTORS SHALL ADOPT CRITERIA
5 AND GUIDELINES GOVERNING SUCH INVESTMENTS, WHICH SHALL REQUIRE THAT:
6 (I) THERE EXISTS A NEED FOR SEED CAPITAL IN THE REGION SERVED OR TO BE
7 SERVED BY A REGIONAL INVESTMENT FUND;
8 (II) SUPPORT FOR A REGIONAL INVESTMENT FUND EXISTS FROM LOCAL GOVERN-
9 MENTS, ECONOMIC DEVELOPMENT AGENCIES, AND BUSINESS COMMUNITIES WITHIN
10 THE REGION OR AREA TO BE SERVED BY SUCH FUND;
11 (III) THE REGIONAL INVESTMENT FUND HAS THE CAPACITY TO PROVIDE MANAGE-
12 MENT EXPERTISE AND OTHER VALUE-ADDED SERVICES TO ITS PORTFOLIO COMPA-
13 NIES;
14 (IV) THE REGIONAL INVESTMENT FUND ESTABLISHES CONFLICT-OF-INTEREST
15 PROVISIONS ACCEPTABLE TO THE FOUNDATION;
16 (V) TO THE MAXIMUM EXTENT FEASIBLE, THE REGIONAL INVESTMENT FUND WILL
17 INVEST IN FIRMS WHICH HAVE THE GREATEST POTENTIAL FOR JOB CREATION;
18 (VI) INVESTMENTS MADE BY THE FOUNDATION IN A REGIONAL INVESTMENT FUND
19 SHALL NOT EXCEED TWO MILLION DOLLARS AND SHALL BE MATCHED BY THE
20 REGIONAL FUND ON AT LEAST A ONE-TO-ONE BASIS WITH MONIES, OTHER THAN
21 STATE MONIES; AND
22 (VII) INVESTMENTS MADE BY A REGIONAL INVESTMENT FUND THAT INCLUDE
23 FUNDS RECEIVED FROM THE FOUNDATION SHALL BE MADE ONLY FOR THE FINANCING
24 AUTHORIZED BY SUBDIVISION THREE OF THIS SECTION.
25 (B) THE FOUNDATION SHALL MAKE INVESTMENTS IN QUALIFIED REGIONAL
26 INVESTMENT FUNDS VIA THE ISSUANCE OF A REQUEST FOR PROPOSALS TO REGIONAL
27 AND LOCAL ECONOMIC DEVELOPMENT ORGANIZATIONS, TECHNOLOGY DEVELOPMENT
28 ORGANIZATIONS, RESEARCH UNIVERSITIES, AND INVESTMENT FUNDS THAT PROVIDE
29 SMALL-SCALE INVESTMENTS IN HIGH-TECHNOLOGY COMPANIES IN NEW YORK STATE.
30 3. REGIONAL INVESTMENT FUNDS. (A) REGIONAL INVESTMENT FUNDS RECEIVING
31 INVESTMENTS FROM THE FOUNDATION UNDER THIS SECTION SHALL USE SUCH FUNDS
32 AND THE REQUIRED MATCHING FUNDS TO PROVIDE SEED CAPITAL AND FOLLOW-ON
33 FINANCING TO QUALIFIED ENTERPRISES, PROVIDED THAT THE REGIONAL INVEST-
34 MENT FUND SHALL NOT: (I) INVEST AN AMOUNT IN ANY SINGLE QUALIFIED ENTER-
35 PRISE THAT EXCEEDS FIFTY PERCENT OF THE TOTAL INVESTMENT FROM ALL OTHER
36 SOURCES IN ANY SUCH ENTERPRISE; OR (II) INVEST OVER FIVE HUNDRED THOU-
37 SAND DOLLARS IN ANY ONE COMPANY.
38 (B) A REGIONAL INVESTMENT FUND, BEFORE APPROVING ANY APPLICATION FOR
39 FINANCIAL ASSISTANCE UNDER THIS SECTION SHALL FIND THAT: (I) THE QUALI-
40 FIED ENTERPRISE AND ITS PRODUCT OR PROCESS HAVE A REASONABLE CHANCE OF
41 BEING COMMERCIALLY SUCCESSFUL; AND (II) THE EMPLOYMENT CREATED OR MAIN-
42 TAINED AS A RESULT OF THE FUND'S INVESTMENT WILL BE IN NEW YORK STATE.
43 THE REGIONAL INVESTMENT FUND SHALL FURTHER ENSURE THAT PROVISIONS ARE IN
44 PLACE FOR THE REPAYMENT OF THE FUNDS IF THE COMPANY RECEIVING ASSISTANCE
45 LEAVES THE STATE.
46 4. REGIONAL INVESTMENT FUND REPORTING. THE FOUNDATION SHALL REQUIRE
47 ANY REGIONAL INVESTMENT FUND RECEIVING INVESTMENTS UNDER THIS SECTION TO
48 FILE A REPORT WITH THE FOUNDATION BY DECEMBER FIRST, TWO THOUSAND THIR-
49 TEEN AND ANNUALLY THEREAFTER UNTIL DECEMBER FIRST, TWO THOUSAND EIGH-
50 TEEN. SUCH REPORT SHALL INCLUDE:
51 (A) THE TOTAL AMOUNT OF FUNDS COMMITTED TO THE REGIONAL INVESTMENT
52 FUND AND THE AMOUNT THAT HAS BEEN INVESTED;
53 (B) THE NET ASSET VALUE OF THE FUND;
54 (C) THE AMOUNT INVESTED IN EACH PORTFOLIO COMPANY FROM THE FUND AND
55 FROM OTHER SOURCES;
S. 5469 3
1 (D) THE TYPE OF PRODUCT OR TECHNOLOGY BEING DEVELOPED BY EACH PORTFO-
2 LIO COMPANY;
3 (E) THE LOCATION OF EACH PORTFOLIO COMPANY;
4 (F) THE NUMBER OF JOBS PROJECTED TO BE CREATED AND RETAINED; AND
5 (G) SUCH OTHER INFORMATION AS THE FOUNDATION DEEMS NECESSARY.
6 5. ASSETS AND LIABILITIES. ALL OF THE ASSETS AND LIABILITIES OF THE
7 SMALL BUSINESS TECHNOLOGY INVESTMENT FUND SHALL BE MADE AVAILABLE FOR
8 THE PURPOSES OF THIS SECTION. THE BOARD SHALL PREPARE A PLAN WITHIN
9 NINETY DAYS FOLLOWING THE EFFECTIVE DATE OF THIS SECTION TO LIQUIDATE
10 ALL CURRENT ASSETS AND LIABILITIES OF THE FUND. THE PUBLICLY-TRADED
11 ASSETS AND ANY WORKING CAPITAL SHALL BE MADE FULLY AVAILABLE FOR ALLO-
12 CATION TO REGIONAL INVESTMENT FUNDS AS SOON AS PRACTICABLE. THE BOARD
13 SHALL ALSO TAKE WHATEVER ACTIONS ARE NECESSARY TO LIQUIDATE THE REMAIN-
14 ING ASSETS OF THE SMALL BUSINESS TECHNOLOGY INVESTMENT FUND AS SOON AS
15 PRACTICABLE, BUT NOT MORE THAN TWO YEARS FOLLOWING THE EFFECTIVE DATE OF
16 THIS SECTION.
17 6. REPORT OF THE FOUNDATION. THE FOUNDATION SHALL SUBMIT TO THE GOVER-
18 NOR AND THE LEGISLATURE A SUMMARY AND EVALUATION OF THE REPORTS SUBMIT-
19 TED TO THE FOUNDATION PURSUANT TO SUBDIVISION FOUR OF THIS SECTION AND
20 AN EVALUATION OF THE PERFORMANCE OF THE REGIONAL INVESTMENT FUNDS ON OR
21 BEFORE FEBRUARY FIRST, TWO THOUSAND FOURTEEN AND ANNUALLY THEREAFTER
22 UNTIL FEBRUARY FIRST, TWO THOUSAND NINETEEN.
23 S 2. The opening paragraph of section 3150 of the public authorities
24 law, as amended by section 4 of part C of chapter 63 of the laws of
25 2005, is amended to read as follows:
26 As used in this [section] TITLE:
27 S 3. This act shall take effect immediately.
