|SAME AS||No Same As|
|MLTSPNSR||Barclay, Corwin, Crouch, Curran, Duprey, Finch, Fitzpatrick, Giglio, Hawley, McDonough, McKevitt, Montesano, Oaks, Raia, Saladino|
|Amd SS213 & 214, St Fin L|
|Relates to the definition of a business startup and funds reserved for business startups.|
|02/23/2015||referred to economic development|
|01/06/2016||referred to economic development|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5424 SPONSOR: Kolb (MS)
TITLE OF BILL: An act to amend the state finance law, in relation to the definition of a business startup and funds reserved for business startups   PURPOSE OR GENERAL IDEA OF BILL: To increase the maximum allowed to be invested for the Linked Deposit Program (LDP) to $1 billion and designate $200 million to be solely available for business start-ups.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends subdivision 4 of section 213 of the State Finance Law to define business startup as a newly created business in its early research and development stage, as designated by the department of economic development. Section 2 amends section 214 of the State Finance Law to increase the maximum amount the State Comptroller is authorized to deposit for the LDP from $460 million to $900 million and reserves $200 million of those funds for business startups. Section 3 contains the effective date.   JUSTIFICATION: Empire State Development (ESD) is responsible for managing the LDP, which was created to assist New York State manufacturers and small busi- nesses to undertake investments that improve their performance and competitiveness. This revolving loan fund provides businesses with affordable capital based on interest rates subsidized by state deposits. Under LDP, eligible businesses can obtain loans from commercial banks, savings banks, savings and loan associations, farm credit institutions, and the New York Business Development Corporation at an interest rate that is 2 or 3 percentage points lower than the interest rate on tradi- tional loans, thereby making borrowing less expensive. Lenders are compensated by deposits of state funds at comparably reduced rates. The maximum amount allowed to be deposited under current law is $560 million, including $460 million from the State Comptroller and $100 million from the Commissioner of Taxation and Finance. Increasing the maximum to $1 billion will promote additional private sector investment. It has become difficult to raise venture capital in some regions of the state. Many brilliant young people graduate from New York's renowned research institutions, yet they take their innovations elsewhere due to both real and perceived lack of opportunity in this state. Success for small, technologically innovative companies is vital for economic growth. Making available LDP funds for business startups will encourage innovators to stay in the state and will bridge the so-called "Valley of Death", i.e. the period between initial research and marketability for a new product.   PRIOR LEGISLATIVE HISTORY: A.1563 (2013-14), Held in Economic Development; A.4802 (2011-12), Held in Economic Development; A.11280 (2010), Referred to Economic Development.   FISCAL IMPLICATIONS: To be determined.   EFFECTIVE DATE: This act shall take effect immediately.
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STATE OF NEW YORK ________________________________________________________________________ 5424 2015-2016 Regular Sessions IN ASSEMBLY February 23, 2015 ___________ Introduced by M. of A. KOLB, BUTLER, McLAUGHLIN -- Multi-Sponsored by -- M. of A. BARCLAY, CORWIN, CROUCH, CURRAN, DUPREY, FINCH, FITZPATRICK, GIGLIO, HAWLEY, McDONOUGH, McKEVITT, MONTESANO, OAKS, RAIA, SALADINO -- read once and referred to the Committee on Economic Development AN ACT to amend the state finance law, in relation to the definition of a business startup and funds reserved for business startups The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 4 of section 213 of the state finance law, as 2 added by chapter 705 of the laws of 1993 and as further amended by 3 section 15 of part GG of chapter 63 of the laws of 2000, is amended to 4 read as follows: 5 4. (a) "Certified business" means a business located in an empire zone 6 created pursuant to article eighteen-B of the general municipal law and 7 certified pursuant to such article as eligible for the benefits referred 8 to in section nine hundred sixty-six of such article, or a business 9 startup as defined in this subdivision. 10 (b) "Business startup" means a newly created business in its early 11 research and development stage, as designated by the department of 12 economic development. 13 § 2. Section 214 of the state finance law, as amended by section 1 of 14 part P of chapter 59 of the laws of 2007, is amended to read as follows: 15 § 214. Establishment and purpose; linked deposit program authori- 16 zation. The excelsior linked deposit program is hereby created. The 17 purpose of the program is to encourage and assist eligible businesses 18 within the state to undertake eligible projects that will materially 19 contribute to improving their performance and competitiveness. The comp- 20 troller is hereby authorized to use any moneys of the state the comp- 21 troller is authorized to invest pursuant to section ninety-eight-a of 22 this chapter as linked deposits for the program. Not more than [ four] 23 nine hundred [ sixty] million dollars of such moneys shall be on deposit EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02662-01-5A. 5424 2 1 pursuant to the program at any given time, provided that two hundred 2 million dollars of such funds shall be reserved for business startups as 3 defined by subdivision four of section two hundred thirteen of this 4 article. The commissioner of taxation and finance is hereby authorized 5 to use funds in the linked deposit program fund established pursuant to 6 section ninety-two-v of this chapter as linked deposits for the program. 7 Not more than one hundred million dollars from the linked deposit 8 program fund shall be on deposit pursuant to the program at any given 9 time. 10 § 3. This act shall take effect immediately.