BILL NO A05424
SAME AS No Same as
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
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
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 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
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.