A05424 Summary:

BILL NO    A05424 

SAME AS    No same as 

SPONSOR    Kolb (MS)

COSPNSR    Butler, McLaughlin

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.
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A05424 Actions:

BILL NO    A05424 

02/23/2015 referred to economic development
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A05424 Votes:

There are no votes for this bill in this legislative session.
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A05424 Memo:

BILL NUMBER:A5424

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
businesses 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 traditional 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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A05424 Text:

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

                                         5424

                              2015-2016 Regular Sessions

                                 I N  A S S E M B L Y

                                   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    S 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    S  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.
                                                                  LBD02662-01-5
       A. 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    S 3. This act shall take effect immediately.
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