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Regional High-Tech Incubators, $50M VC Fund Win Support from NY Lawmakers

April 03, 2013

With a continued push toward regionalism to better support the state's high-tech platform, lawmakers approved in the FY14 budget startup funding for a new statewide incubator program that provides grants for the incubators and tax incentives for client companies. The initiative is part of Gov. Andrew Cuomo's planned expansion for the state's 10 regional councils. Other innovation-focused initiatives approved in the recently enacted budget include a $50 million innovation venture capital fund, a third round of funding for the SUNY 2020 program, and $55 million to launch the CUNY 2020 challenge.

The budget signed into law this week includes $1.25 million in initial funding to launch the Innovation Hot Spots program that will create or designate 10 high-tech innovation incubators at locations affiliated with higher education institutes. Created with broad industry support, the new program is a combination of Gov. Cuomo's "hot spots" proposal (see the Jan. 9, 2013 issue of the Digest) and legislation introduced by Sen. Martin Golden (R, C, I-Brooklyn).

Under the program, entities that meet best practice criteria are designated as New York state incubators, and become eligible for ongoing operating grants and assistance. This year, five academically affiliated programs can also receive hot spot designations wherein incubator clients can receive aid in procurement contracting with the state and help from the state's entrepreneurship programs. Clients of incubator hotspots also will receive preferred tax treatment, with taxes reduced to the state's fixed dollar minimum for five years and a five-year sales tax refund. To gain designation, a program must be in existence for three years with connections to regional sources of innovation and expertise, demonstrate job creation, and incubate businesses with survival rates in excess of average startups.

To complement the incubator program, a $50 million innovation venture capital fund will be established to provide seed and early stage funding for new company formation and to help commercialize new technologies and products. The funding is sourced from the New York Power Authority.

Regional councils will receive a third round of funding in the upcoming year. The budget includes $150 million in new funding and $70 million in tax credits. The councils were established in 2011 to serve as a one-stop-shop for all state-supported economic development and business assistance programs in each of the 10 regions (see the April 9, 2011 issue of the Digest).

The budget also includes $55 million for a third round of funding in support of SUNY 2020, which allows four university centers to apply for challenge grants to expand facilities and enhance research-focused programs. Lawmakers included another $55 million to create a similar program for the City University of New York (CUNY) called CUNY 2020.

A new workforce initiative, the Next Generation Job Linkage Program, will work with employers to identify jobs, define skills and provide training. The budget provides $5 million in FY14 toward the effort.

Within the Division of Science, Technology and Innovation (NYSTAR), $32 million (the same as last year) was approved for High Technology funding. This includes $13.8 million for the state's 15 Centers for Advanced Technology, $5.2 million for eight Centers of Excellence, $4.6 million for the Matching Grant program and various university specific programs supported by federal funds requiring a state match, and $2.3 million for 10 Regional Technology Development Centers.

Budget documents are available at: http://publications.budget.ny.gov/budgetFP/enacted1314.html.

New York, Washingtonincubators, state budget, tax credits, workforce, state tbed