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
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
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.
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
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.
To be determined.
This act shall take effect immediately.