What's happening
This bill increases the number of designated state business incubator hot spots, adjusts funding rules, and expands eligibility for tax benefits.
Why it matters
Doubling the number of designated “hot spots”. could significantly expand geographic access to state-supported business incubator resources, especially benefiting entrepreneurs and startups outside existing innovation hubs.
Tightening rules on funding use. (mandating at least 85% of grant/support funds go directly to incubator operations) aims to ensure more public dollars reach startups and small businesses rather than being absorbed by administrative or indirect costs.
Expanding eligibility for tax benefits. to certain businesses in state-designated incubators (if they partner with or receive services from a recognized “hot spot”) can make more early-stage companies eligible for valuable state tax incentives—potentially spurring job creation and innovation.
Changing “shall” to “may”. regarding the state’s obligation to provide additional aid and services gives the state more flexibility (or discretion) in resource allocation, which could affect the consistency or predictability of support for incubators and their clients.
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Who cares
Headline styles
Expand Startup Incubator Support
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 61
2 Co-sponsors
History
- Substituted by A10105
- Advanced to third reading
- 2nd report cal.
- 1st report cal.1253
- Referred to corporations, authorities and commissions
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Expand Business Incubator Support
Signed by Governor · Sponsor Robin Schimminger
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7961
IN SENATE
March 13, 2018
Introduced by Sen. RANZENHOFER -- (at request of the Empire State Development) -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the urban development corporation act, in relation to the New York state business incubator and innovation hot spot support act
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph (c) of subdivision 2 of section 16-v of section 1 of chapter 174 of the laws of 1968, constituting the urban development corporation act, as added by section 1 of part C of chapter 59 of the laws of 2013, is amended to read as follows:
(c) The corporation, subject to appropriations provided for this purpose, may approve and designate [five] ten New York state incubator hot spots [in fiscal year two thousand thirteen-two thousand fourteen and five additional New York state innovation hot spots in fiscal year two thousand fourteen-two thousand fifteen]. Such designees will be required to demonstrate an affiliation with and the application support of at least one college, university or independent research institution, and that its programs and purposes are consistent with regional economic development strategies.
§ 2. Paragraph (c) of subdivision 5 of section 16-v of section 1 of chapter 174 of the laws of 1968, constituting the urban development corporation act, as added by section 1 of part C of chapter 59 of the laws of 2013, is amended to read as follows:
(c) No deduction. In addition to the foregoing requirements, an incubator sponsor shall agree to dedicate all funds from any grants or support received pursuant to this subdivision to the operations of the incubator without deductions for [overhead,] indirect costs[, or facilities and administration charges] of such sponsor. In no case shall an incubator sponsor agree to provide less than eighty-five percent of all funds received pursuant to this subdivision to the operations of the incubator without exception.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14327-01-8
S. 7961 2
§ 3. Subdivision 6 of section 16-v of section 1 of chapter 174 of the laws of 1968, constituting the urban development corporation act, as added by section 1 of part C of chapter 59 of the laws of 2013, is amended to read as follows:
6. Other assistance. The corporation [shall] may make such other aid, assistance, and resources available to New York state innovation hot spots and New York state incubators and their clients as it shall deem useful and appropriate for the furtherance of the purposes of this act, including without limitation technical assistance, aid in marketing, aid in reaching and providing entrepreneurship training opportunities to such marginalized groups as those composed of individuals who are minority, female, disabled, or poor, and others, curriculum development, and other services and resources. The corporation shall also seek assistance from other state agencies in the development of procurement and marketing resources and training opportunities for New York state innovation hot spots and New York state incubators and their clients.
§ 4. Subdivision 8 of section 16-v of section 1 of chapter 174 of the laws of 1968, constituting the urban development corporation act, as added by section 1 of part C of chapter 59 of the laws of 2013, is amended to read as follows:
8. New York state innovation hot spots may certify clients which meet the requirements of subdivision nine of this section as qualified entities eligible for New York state innovation hot spot program tax benefits pursuant to section thirty-eight of the tax law. [Under no circumstance may business enterprises of incubators designated as New York state incubators under paragraph (b) of subdivision one of this section be eligible for tax benefits under section thirty-eight of the tax law.] Business enterprises of incubators designated as New York state incubators under paragraph (a) of subdivision one of this section may be certified by the New York state innovation hot spot if the incubator has entered into a memorandum of understanding with such hot spot establishing a process and threshold for the provision of innovation hot spot benefits to qualified enterprises or the hot spot is providing demonstrable services or assistance to the business enterprise in addition to those provided by the incubator.
§ 5. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the urban development corporation act, in relation to the New York state business incubator and innovation hot spot support act
Purpose of bill
The proposed legislation amends the Incubator and Innovation Hot Spot program to clarify language in the statute as it is written and provide an environment that strengthens the program and fosters collaboration amongst the Hot Spots and Incubators. Summary of Provisions:
Section one of the proposed legislation amends paragraph (c) of subsection 2 of section 16-v of the Urban Development Corporation Act to clarify the designation of ten Hot Spots is not limited to a certain timeframe.
Section two of this legislation amends paragraph (c) of subsection 5 of section 16-v of the Urban Development Corporation Act to only exclude indirect costs from acceptable expenses and require that at least eighty five percent of all funds go towards operations for sponsored incuba- tors.
Section three of the proposed legislation amends subsection 6 of section 16-v of the Urban Development Corporation Act to clarify that ESD making other assistance available as appropriate to designees is discretionary and not a mandatory requirement of the law.
Section four of the proposed legislation amends the Urban Development Corporation Act to allow Hot Spots to enter into a memorandum of under- standing with Incubators to provide tax benefits or provide services or assistance to clients in addition to what is provided by the Incubator without risk of the companies losing the tax benefits.
Section five of the proposed legislation provides that the proposed legislation is to take effect immediately upon the effective date of the bill.
Justification
This proposed legislative change would strengthen the NYS Certified Business Incubator and Innovation Hot Spot networks and leverage state funding to expand services to a greater number of entrepreneurs and startup companies. The statute, as it stands, creates competition among the Innovation Hot Spots and NYS Certified Incubators instead of foster- ing collaboration. Because current law can be interpreted to provide that any company that works with both an incubator and a Hot Spot is not eligible for the tax benefit, it is important to clarify that an early stage company working with both an incubator and Hot Spot can still realize the tax benefit through the Hot Spot if an MOU is in place between both entities.
ESD is confident that the proposed changes would not only be beneficial for the business entities but for the overall entrepreneurial ecosystem of the State of New York.
Prior legislative history
This is a new bill.
Fiscal implications
None.
Effective date
This bill would take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.