Establishes a statewide network of university affiliated business incubators to be known as the New York incubator network.
TITLE OF BILL: An act to amend the economic development law, in relation to establishing the New York incubator network
PURPOSE: Creates the New York academic incubator network, allowing the Division of Science, Technology and Innovation (d.b.a. NYSTAR) to provide financial support to Department of Commerce designated business incubators affiliated with a New York State sited university or college.
SUMMARY OF PROVISIONS: Section 1: Legislative intent.
Section 2: Creates a new section 361 of the Economic Development Law by creating the New York Incubator Network, allowing NYSTAR to designate a college or university, college or university-affiliated research institute or a consortium of such institutions as a certified academic incubator and allows the Division to provide financial assistance for operating purposes.
Section 3: Fiscal Statement.
Section 4: Effective Date.
JUSTIFICATION: Business incubators can play an integral role in New York State's innovation economy by providing start-up and early-stage companies with the resources and technical know-how to become viable, independent companies. Incubators provide peer-to-peer learning and facilitate collaborative business development through leveraging of resources, client networking and implementing industry best practices.
While many New York State incubators receive start-up funding through federal grants, local community assistance and other State programs, there are currently no programs that provide operating support that incubators can depend on from year to year to develop operational capability as well as provide necessary continuity in terms of business development services for companies that are tenants of the incubator.
NYSTAR will establish eligibility criteria for admission to the New York Incubator Network based on an incubator's ability to conform to industry best practices, leverage private and other non-state government funding, and collaborate with other local, regional and statewide economic development partners. Designated incubators
would receive matching grants from NYSTAR for qualifying operational expenses.
LEGISLATIVE HISTORY: This is a new bill.
FISCAL IMPLICATIONS: The bill authorizes ESDC to expand up to $250,000 in support of the network.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 6860 IN SENATE March 30, 2012 ___________Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Commerce, Economic Devel- opment and Small Business AN ACT to amend the economic development law, in relation to establish- ing the New York incubator network THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Legislative intent. The legislature hereby recognizes that supporting a statewide network of university or college affiliated busi- ness incubators, selected on a competitive basis that maintain not only physical facilities, but also most current industry best practice busi- ness development services is a cost effective approach to supporting start-up and early stage companies and helping the state's creative entrepreneurs successfully transition technological breakthroughs with commercial potential from the laboratory to the marketplace. This investment in university affiliated business incubators will support regional development and local economic diversification, job creation, and the retention of the state's vast resources of intellectual capital. S 2. The economic development law is amended by adding a new section 361 to read as follows: S 361. NEW YORK INCUBATOR NETWORK. THE COMMISSIONER, IN COOPERATION WITH THE DIVISION OF SCIENCE, TECHNOLOGY AND INNOVATION IS AUTHORIZED TO ACCEPT APPLICATIONS AND DESIGNATE INCUBATORS AS PART OF THE NEW YORK ACADEMIC INCUBATOR NETWORK. SUCH DESIGNATIONS SHALL BE MADE IN ACCORD- ANCE WITH THE STANDARDS AND CRITERIA SET FORTH IN SUBDIVISION TWO OF THIS SECTION. INCUBATORS SO DESIGNATED SHALL BE ELIGIBLE FOR SUPPORT FROM THE URBAN DEVELOPMENT CORPORATION, AND FOR SUCH ADDITIONAL SUPPORT AS MAY OTHERWISE BE PROVIDED BY LAW. 1. AS USED IN THIS SECTION: (A) "INCUBATOR" MEANS AN ACADEMIC INCUBA- TOR FACILITY AS DEFINED IN SUBPARAGRAPH (VI) OF PARAGRAPH (E) OF SUBDI- VISION TWELVE-G OF SECTION TWO HUNDRED TEN OF THE TAX LAW; (B) "APPLICANT" MEANS A COLLEGE OR UNIVERSITY, OR COLLEGE OR UNIVERSI- TY-AFFILIATED RESEARCH INSTITUTE OR FOUNDATION PROVIDING A BASE FOR AN INCUBATOR; ANDEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11827-03-2 S. 6860 2
(C) "DIVISION" MEANS THE DIVISION OF SCIENCE, TECHNOLOGY AND INNO- VATION. 2. THE DIVISION SHALL: (A) IDENTIFY AREAS FOR WHICH INCUBATORS THAT ARE RELATED TO INDUSTRIES WITH SIGNIFICANT POTENTIAL FOR ECONOMIC GROWTH AND DEVELOPMENT IN NEW YORK STATE AND TECHNOLOGICAL AREAS THAT ARE RELATED TO THE ENHANCEMENT OF PRODUCTIVITY IN VARIOUS INDUSTRIES LOCATED THROUGHOUT NEW YORK STATE; (B) AID IN THE ESTABLISHMENT OF INCUBATORS AT ACCREDITED UNIVERSITIES AND COLLEGES THROUGHOUT THE STATE TO THE EXTENT POSSIBLE IN AREAS WHERE THERE IS NOT ALREADY SIGNIFICANT SUPPORT FOR BUSINESS INCUBATION; (C) PURSUANT TO THE STANDARDS ADHERING TO AN INCUBATOR, ESTABLISH CONGRUENT CRITERIA THAT APPLICANTS MUST SATISFY FOR DESIGNATION AS AN INCUBATOR FOR THE PURPOSES OF A DESIGNATION AS A MEMBER OF THE NETWORK, INCLUDING, BUT NOT LIMITED TO THE FOLLOWING: (I) AN ESTABLISHED RECORD OF, OR PLAN TO CONFORM TO, BEST PRACTICES INCLUDING CLEAR POLICIES FOR BUSINESS ENTRY AND GRADUATION; (II) A COMPREHENSIVE SUITE OF ENTREPRENEURIAL MENTORING PRACTICES INCLUDING ADVISING, COACHING, PLANNING AND CONNECTING TO FUNDING SOURC- ES; (III) THE CAPACITY TO SECURE SUBSTANTIAL PRIVATE AND OTHER NON-STATE GOVERNMENTAL FUNDING FOR THE PROPOSED INCUBATOR, NOT INCLUDING DIRECT SUPPORT FROM THE SPONSORING ACADEMIC INSTITUTION OR RELATED FOUNDATION, IN AMOUNTS AT LEAST EQUAL TO THE TOTAL OF SUPPORT SOUGHT FROM THE STATE OR ITS DIVISIONS; (IV) THE ABILITY AND WILLINGNESS TO COOPERATE WITH OTHER LOCAL, REGIONAL AND STATEWIDE ECONOMIC DEVELOPMENT ORGANIZATIONS, STATEWIDE BUSINESS INCUBATOR ASSOCIATIONS, BUSINESS SUPPORT NETWORKS, VENTURE AND ANGEL CAPITAL FUNDING SOURCES, AND WORKFORCE DEVELOPMENT ADVOCATES; AND (V) THE CAPACITY TO COLLABORATE WITH BUSINESS AND INDUSTRY INDIVIDUAL- LY AND AS PART OF A STATEWIDE INCUBATOR ASSOCIATION; (D) ESTABLISH SUCH REQUIREMENTS AS IT DEEMS APPROPRIATE FOR THE FORMAT, CONTENT AND FILING OF APPLICATIONS FOR DESIGNATION AS INCUBA- TORS; (E) ESTABLISH SUCH PROCEDURES AS IT DEEMS APPROPRIATE FOR THE EVALU- ATION OF APPLICATIONS FOR DESIGNATION AS INCUBATORS, INCLUDING THE ESTABLISHMENT OF A REVIEW PANEL COMPOSED OF STATEWIDE RECOGNIZED EXPERTS IN BUSINESS INCUBATION; (F) UPON THE APPROVAL OF AN APPLICATION BY THE COMMISSIONER, CONFER AN INCUBATOR DESIGNATION UPON A SUCCESSFUL APPLICANT UNLESS OTHERWISE REVOKED BY THE COMMISSIONER IN CONSULTATION WITH THE DIVISION; AND (G) THE COMMISSIONER SHALL APPROVE AND PROMULGATE RULES AND REGU- LATIONS FOR SELECTION OF INCUBATORS AND SHALL MAKE FINAL DESIGNATIONS REGARDING ALL MATTERS RELATING TO THE STATUS OF AN APPLICANT OR INCUBA- TOR. 3. (A) (I) FROM SUCH FUNDS AS MAY BE APPROPRIATED OR OTHERWISE AUTHOR- IZED FOR THIS PURPOSE BY THE LEGISLATURE, THE URBAN DEVELOPMENT CORPO- RATION SHALL PROVIDE FINANCIAL SUPPORT, THROUGH CONTRACTS OR OTHER MEANS, TO ENHANCE AND ACCELERATE THE DEVELOPMENT OF SUCH INCUBATORS. FUNDS RECEIVED PURSUANT TO THIS SUBDIVISION MAY BE USED FOR PURCHASE OF EQUIPMENT AND FIXTURES, EMPLOYMENT OF DIRECT SERVICE STAFF AND PROVISION OF INTERNSHIPS SERVING THE INCUBATOR, BUT NOT PRIMARILY SERVING AS EMPLOYEES OF MEMBER FIRMS LEASING SPACE IN AN INCUBATOR, AND OTHER PURPOSES APPROVED BY THE DIVISION, BUT MAY NOT BE USED FOR CAPITAL CONSTRUCTION OF REAL PROPERTY. (II) BEGINNING IN THE FOURTH ACADEMIC YEAR FOLLOWING THE ACADEMIC YEAR IN WHICH AN INCUBATOR IS FIRST DESIGNATED, THE INCUBATOR SHALL PRESENTS. 6860 3
TO THE COMMISSIONER A REPORT CATALOGING ITS REVENUE AND EXPENSES, THE NUMBER OF PRIVATE SECTOR FIRMS THAT HAVE LEASED SPACE IN THE INCUBATOR, THE NUMBER OF COMPANIES THAT HAVE GRADUATED FROM AN INCUBATOR, WHETHER SUCH GRADUATING COMPANIES HAVE REMAINED IN NEW YORK STATE, AND BEST ESTIMATES AS TO THE NUMBER OF FULL TIME EQUIVALENT POSITIONS CREATED BY INCUBATOR MEMBER COMPANIES AND THEIR SUCCESSORS FOR A PERIOD OF FIVE YEARS UPON GRADUATION. THE DIVISION SHALL EVALUATE SUCH INCUBATOR'S PERFORMANCE ACCORDING TO THE ABOVE LISTED CRITERIA, AND SHALL PRESENT ITS FINDINGS TO THE COMMISSIONER WHO SHALL MAKE A BINDING RECOMMENDATION WHETHER SUCH INCUBATOR SHALL RETAIN ITS STATUS AS A MEMBER OF THE NETWORK. (III) THE DIVISION CAN RECOMMEND, SUBJECT TO THE APPROVAL OF THE COMMISSIONER, ADDITIONAL MEMBERS TO THE NETWORK ACCORDING TO THE CRITE- RIA ESTABLISHED IN SUBDIVISION TWO OF THIS SECTION. (B) ADDITIONAL FUNDING OF THE OPERATIONS OF EACH INCUBATOR RECIPIENT IN THE NETWORK SHALL BE BASED UPON A SHOWING THAT: THE INCUBATOR CONTIN- UES TO COMPLY WITH THE CRITERIA ESTABLISHED BY THE COMMISSIONER IN CONSULTATION WITH THE DIVISION PURSUANT TO PARAGRAPH (B) OF SUBDIVISION TWO OF THIS SECTION; A DEMONSTRATION OF ASSISTANCE TO EMERGING BUSI- NESSES IN NEW YORK STATE; COMPLIANCE WITH THE RULES, REGULATIONS AND GUIDELINES OF THE URBAN DEVELOPMENT CORPORATION, IN PARTICULAR, AND THE DIVISION; AND COMPLIANCE WITH ANY CONTRACTS BETWEEN THE URBAN DEVELOP- MENT CORPORATION AND THE DESIGNATED INCUBATOR. (C) EACH INCUBATOR SHALL REPORT ON AN ANNUAL BASIS ON ITS ACTIVITIES TO THE COMMISSIONER IN A MANNER AND ACCORDING TO THE SCHEDULE ESTAB- LISHED BY THE DIVISION, AND SHALL PROVIDE SUCH ADDITIONAL INFORMATION AS THE COMMISSIONER MAY REQUIRE. THE DIVISION SHALL EVALUATE INCUBATOR OPERATIONS USING METHODS SUCH AS SITE VISITS, REPORTING OF SPECIFIED INFORMATION AND REVIEW EVALUATIONS USING EXPERTS IN ENTREPRENEURIAL DEVELOPMENT. IF THE DIVISION IS UNSATISFIED WITH THE PROGRESS OF AN INCUBATOR MEMBER IT SHALL NOTIFY SUCH INCUBATOR OF THE RESULTS OF ITS EVALUATIONS AND FINDINGS OF DEFICIENCIES IN THE OPERATION OF SUCH INCU- BATOR AND SHALL ALLOW AND COOPERATE WITH SUCH INCUBATORS TO REMEDY SUCH FINDINGS IN A TIMELY MANNER. IF SUCH FACTORS ARE NOT REMEDIED, THE COMMISSIONER MAY WITHDRAW THE STATE FUNDING SUPPORT, IN PART UNTIL SUCH DEFICIENCIES ARE REMEDIED, OR IN WHOLE IMMEDIATELY FOLLOWING THE WITH- DRAWAL OF AN INCUBATOR NETWORK DESIGNATION. 4. BEGINNING NO LATER THAN THE END OF THE FOURTH YEAR OF THE FORMATION OF THE NETWORK, THE COMMISSIONER SHALL MAKE A BIANNUAL REPORT OF THE INCUBATOR NETWORK PROGRAM TO THE GOVERNOR AND THE SPEAKER OF THE ASSEM- BLY, THE TEMPORARY PRESIDENT OF THE SENATE, THE LEGISLATIVE COMMITTEES ON ECONOMIC DEVELOPMENT AND TO THE FISCAL COMMITTEES NOT LATER THAN DECEMBER THIRTY-FIRST OF EACH ENUMERATED YEAR. SUCH REPORT SHALL INCLUDE, BUT NOT BE LIMITED TO, A LIST OF IMMEDIATE PAST AND ACTIVE TENANTS OF THE INCUBATORS IN THE NETWORK, THE RESULTS OF THE DIVISION'S EVALUATION OF EACH INCUBATOR, A DESCRIPTION OF THE ACHIEVEMENTS OF EACH INCUBATOR, ANY DEFICIENCIES IN THE OPERATION OF EACH INCUBATOR, REMEDIAL ACTIONS RECOMMENDED BY THE DIVISION, REMEDIAL ACTIONS TAKEN BY THE INCU- BATOR, A DESCRIPTION OF BUSINESS ASSISTANCE PROVIDED BY EACH INCUBATOR, A DESCRIPTION OF ANY EXTERNAL FUNDING ATTRACTED BY THE INCUBATOR, PART- NERSHIPS ENTERED INTO BY THE INCUBATOR, THE AMOUNT OF FINANCIAL ASSIST- ANCE PROVIDED BY THE STATE, INCLUDING THE URBAN DEVELOPMENT CORPORATION, AND THE LEVEL OF MATCHING FUNDS PROVIDED EACH INCUBATOR, AND A DESCRIPTION OF THE USE OF SUCH MONIES TO THE EXTENT THAT SUCH DISCLOSURE DOES NOT COMPROMISE GENERALLY ACCEPTED BUSINESS CONFIDENTIALITY STAND- ARDS.S. 6860 4
S 3. During state fiscal year 2012-2013, the urban development corpo- ration is authorized to commit a total of two hundred fifty thousand dollars in unrestricted assets previously appropriated or otherwise conferred upon the New York state foundation for science, technology and innovation pursuant to subdivisions 11 and 12 of section 360 of the economic development law to implement the creation and establishment of the New York incubator network. S 4. This act shall take effect immediately.