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A05255 Summary:

A05255 Actions:

A05255 Floor Votes:

A05255 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         5255--A
                                                                Cal. No. 368
 
                               2009-2010 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 11, 2009
                                       ___________
 
        Introduced  by  M.  of  A. ESPAILLAT, PEOPLES-STOKES, TOWNS, JOHN, BING,
          MAGNARELLI, MORELLE, DESTITO, SCHROEDER -- Multi-Sponsored by -- M. of
          A. ALFANO, BARRA, BOYLAND, CARROZZA, CUSICK, FARRELL,  GUNTHER,  KOON,
          LIFTON, MAGEE, RAMOS, SWEENEY -- read once and referred to the Commit-

          tee  on  Economic  Development, Job Creation, Commerce and Industry --
          passed by Assembly and delivered to  the  Senate,  recalled  from  the
          Senate,  vote reconsidered, bill amended, ordered reprinted, retaining
          its place on the order of third reading
 
        AN ACT to amend the New York state urban development corporation act, in
          relation to creating the bioscience facilities development program
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Legislative  findings  and  declarations. The legislature
     2  finds that New York state has many  assets  that  are  critical  to  the
     3  growth of the biotechnology industry.
     4    The  legislature  also  finds  that  New  York  state has an extensive
     5  academic research base, a highly skilled labor pool and access to finan-

     6  cial institutions oriented toward biotech development.
     7    The legislature further finds that even  with  many  of  the  critical
     8  elements  for  growing a biotechnology cluster, New York for all intents
     9  and purposes has been eclipsed by a number of other regions in the coun-
    10  try.
    11    Further, the legislature  finds  that  while  start-up  companies  are
    12  established  in  New York, companies that are poised for rapid expansion
    13  have left New York for regions that have developed vigorous biotech  and
    14  policies  that deliberately invite, nurture and facilitate the expansion
    15  of the industry and proactively addressing the biotech  companies'  need
    16  for affordable laboratory space.
    17    The  legislature  declares that biotechnology is an important economic
    18  development industry for the state and that the critical  impediment  to

    19  the  successful  growth of a biotech cluster in New York state is access
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07555-05-0
        A. 5255--A                          2
 
     1  to  affordable  laboratory  space.  Therefore,  the  legislature  hereby
     2  declares   the   creation  of  the  "bioscience  facilities  development
     3  program".
     4    § 2. Section 1 of chapter 174 of the laws of 1968 constituting the New
     5  York  state urban development corporation act is amended by adding a new
     6  section 16-t to read as follows:
     7    § 16-t. The bioscience facilities development program. 1. The  biosci-

     8  ence  facilities  development  program is hereby created to maximize the
     9  economic development potential of  academic  and  commercial  bioscience
    10  activity in the state, including but not limited to biotechnology, biom-
    11  edicine,  nanomedicine,  specialty pharmaceuticals, medical devices, and
    12  related sciences, in order to build  upon  world-renowned  research  and
    13  development activities in the biosciences.
    14    2.  (a)  The  corporation  shall,  from  funds made available for this
    15  purpose, provide grants to local economic development corporations which
    16  serve a region meeting the criteria set forth in  subdivision  three  of
    17  this  section  and which shall apply for such grant in a form and manner

    18  determined by the corporation for the purpose of  creating  a  revolving
    19  loan fund to provide loans to bioscience facilities to assist individual
    20  commercial bioscience companies to remain in New York state.
    21    (b)  No  more than one local economic development corporation shall be
    22  selected from each economic region of the state, as designated  pursuant
    23  to  section  230  of the economic development law, by the corporation to
    24  receive a grant pursuant to this section.
    25    3. A local economic development corporation applying for a grant under
    26  this section shall:
    27    (a) have firm  commitments  from  private  and  municipal  sources  to
    28  provide funds to the local economic development corporation in an amount

    29  at least equal to the amount of the grant; and
    30    (b)  serve  an  economic development region of the state as designated
    31  pursuant to section 230 of the economic development  law,  which  region
    32  shall  have located within it colleges, universities, hospitals, labora-
    33  tories, and other research institutions.
    34    4. Eligible borrowers from the fund established by the local  economic
    35  development  corporation  receiving  a  grant  under  this program shall
    36  include early and middle stage bioscience companies  in  such  areas  as
    37  biotechnology, biomedicine, nanomedicine, specialty pharmaceuticals, and
    38  medical  devices,  with  fewer than two hundred employees and which have
    39  received funding from an institutional venture capital firm in the twen-

    40  ty-four months prior to making application for a loan under this  subdi-
    41  vision,  and shall also include both for-profit and not-for-profit prop-
    42  erty owners and developers who are intending to develop and lease  space
    43  to  such  bioscience  companies, provided, however, that the use of such
    44  funds is restricted to the construction of laboratory and related  space
    45  and  that  the  maximum  size  of  such loan shall be no more than fifty
    46  percent of the cost of such laboratory or  related  space  construction.
    47  Such loans under this subdivision shall be made for a period of seven to
    48  ten  years  at a rate of seven to eight percent, except that during such
    49  period that the loan shall remain outstanding, if a  bioscience  company

    50  receiving  such  loan  shall relocate a significant portion of its oper-
    51  ations, as determined in a loan agreement with the local economic devel-
    52  opment corporation, outside New York state,  such  interest  rate  shall
    53  rise  to  eighteen percent on a retroactive basis. If, after a period of
    54  five years from the inception of the loan, a company shall remain in New
    55  York state, twenty-five percent of the principal  amount  of  such  loan
    56  shall be forgiven; and if after a period of ten years from the inception
        A. 5255--A                          3
 
     1  of  the loan, a company shall remain in New York state, fifty percent of
     2  the principal amount of such loan shall be  forgiven,  further  provided

     3  that  if the amount still outstanding on the loan shall be less than the
     4  amount  forgiven, the difference shall be reimbursed to the company. Any
     5  company receiving such a loan shall be independently owned and operated.
     6  For purposes of this subdivision,  the  term  "independently  owned  and
     7  operated  business"  shall  mean  (a)  in the case of a corporation, one
     8  where no more than fifty percent of the voting stock of the  corporation
     9  is owned or controlled, directly or indirectly, by a single corporation,
    10  a  single  partnership or a single limited liability company, and (b) in
    11  the case of a partnership, association, or other entity, where  no  more
    12  than  fifty percent of the capital, profits or other beneficial interest

    13  in such partnership, association or other entity is owned or controlled,
    14  directly or indirectly, by a single corporation, a single partnership or
    15  a single limited liability company.
    16    5. Grants received from the corporation by a local  economic  develop-
    17  ment  corporation, earnings on such monies, and any principal repayments
    18  and any interest earned on loans shall  be  deposited  in  a  loan  fund
    19  account.
    20    6.  The  decision  to  approve  or reject an application for financial
    21  assistance pursuant to the provisions of this section shall be made by a
    22  majority of the directors of the local economic development corporation,
    23  and such decision shall be final.  No  member  of  the  board  or  other

    24  governing  body  of  the  local  economic  development corporation shall
    25  participate in a decision on a project application when such member is a
    26  party to or has a financial interest in such  project.  Any  member  who
    27  cannot  participate  in  a  decision  on  a project application for such
    28  reason shall not be counted as a member of the board or other  governing
    29  body  for  purposes  of determining the number of members required for a
    30  majority vote on such application. No employee or officer  of  any  such
    31  corporation  shall  be  a party to or have any financial interest in any
    32  project that receives financial assistance pursuant to this section.
    33    7. The corporation may withdraw any amount remaining from an  original

    34  grant  and  any earnings on such grant, and any principal repayments and
    35  any interest earned on loans made from such grant when  a  member  of  a
    36  board  of  directors,  an  officer or an employee of said corporation is
    37  party to or has financial interests in loan projects;  when  said  local
    38  economic  development  corporation fails to comply with the requirements
    39  for project loans pursuant to this section;  or  when  said  corporation
    40  makes  no  loans  within the previous fiscal year. Outstanding loans and
    41  other obligations payable to such local economic development corporation
    42  shall be assigned to the corporation upon such terms and  conditions  as
    43  the corporation shall determine.

    44    8. The local economic development corporation receiving a grant pursu-
    45  ant  to this section shall submit annual reports for the previous fiscal
    46  year to the corporation describing  the  financial  assistance  provided
    47  pursuant  to  this  section, including: the number of projects assisted;
    48  the amount and  type  of  assistance  provided;  a  description  of  the
    49  projects;  the  number  of  jobs  created  or  retained;  the  status of
    50  outstanding loans, guarantees, earnings and account balances;  and  such
    51  other information as the corporation may require.
    52    9.  The  corporation  shall  annually  conduct  an audit of each local
    53  economic development corporation receiving a grant to ensure  conformity

    54  of  all  aspects  of  program administration and of financial assistance
    55  transactions with the substantive  and  procedural  provisions  of  this
    56  section.  In  the event that the corporation finds instances of substan-
        A. 5255--A                          4
 
     1  tive noncompliance by an economic development corporation  with  any  of
     2  the  provisions  of this section and such instances were, or should have
     3  been, known to be in noncompliance, the economic development corporation
     4  shall  return,  within  thirty days, upon demand by the corporation, all
     5  uncommitted grant funds on hand and provide  an  account  of  the  loans
     6  currently outstanding.
     7    10. The corporation shall, on or before October first of the year next

     8  succeeding  the  effective  date  of this section, and on or before each
     9  October first thereafter, submit a report to the governor and the legis-
    10  lature on the operations and accomplishments of the  bioscience  facili-
    11  ties  development  program.  Such  report shall include a summary of the
    12  information contained in the reports submitted pursuant  to  subdivision
    13  eight  of this section and of the results of the audits performed by the
    14  corporation pursuant to subdivision nine of this section, and shall  set
    15  forth  the  status  of  the  bioscience  facilities  development program
    16  revolving loan program for the previous fiscal year.
    17    § 3. This act shall take effect immediately.