Section 16-u - Innovate NY fund1.The Innovate NY fund is hereby created. The purpose of the Innovate NY fund is to make available state funds to eligible applicants to support emerging business ideas and products that result in the growth of business within the state and the concomitant creation of jobs and tax revenues for the state.2.Eligible applicants for Innovate NY funds may include regional and local economic development organizations, technology development organizations, research universities, and investment funds that provide seed-stage investments in New York state companies.3.Funding from the Innovate NY fund may be made available to the applicant for investment in beneficiary companies. In order to be eligible for an investment that includes Innovate NY investment funds, a beneficiary company must: (a) be, or agree in writing to be, located in New York state; (b) be in the seed-stage of development, as defined by the corporation; (c) demonstrate a potential for substantial growth and job development in an emerging technology field, as defined in section thirty-one hundred two-e of the public authorities law or in regulations as adopted by the corporation; and (d) have the potential to generate additional economic activity in New York state. Investment priority shall be given to beneficiary companies involved in commercialization of research and development or high technology manufacturing.4.The corporation shall establish a competitive process for the evaluation of applicants for the Innovate NY investment fund. Applicants shall be evaluated on criteria including, but not limited to, the applicant's: (a) track record of success in raising investment funds and successfully investing them; (b) capacity to perform due diligence and to provide management expertise and other value-added services to beneficiary companies; (c) financial resources for identifying and investing in seed-stage companies; (d) ability to secure non-state matching program investment funds at a ratio that is equal to or greater than one to one (1:1); (e) ability to evaluate the commercial potential of emerging technologies; (f) ability to secure partnerships with local or regional investors; (g) adoption of conflict of interest provisions acceptable to the corporation; and (h) other criteria that the corporation determines is relevant to making investment decisions consistent with the purposes of the fund as set forth in subdivision one of this section. When awarding funds pursuant to this subdivision, the corporation shall assure that the applicants demonstrate the need for seed capital in the areas served by the applicant and provide for adequate geographic distribution of awards to beneficiary companies throughout the state to the extent feasible. The corporation shall distribute funds promptly pursuant to a disbursement process agreed to between the corporation and applicant to enable the applicant to fulfill commitments to beneficiary companies in a timely manner.5.At the time the applicant has invested fifty percent of the Innovate NY funds committed to such applicant and annually thereafter, aggregate investments of Innovate NY funds by such applicant in beneficiary companies shall be leveraged with private sources of capital excluding investments after the initial funding round at a ratio equal to or greater than two to one (2:1).6.The Innovate NY fund shall not invest an amount in any single beneficiary company that exceeds five hundred thousand dollars, or seven hundred fifty thousand dollars in the case of any individual biotechnology-related beneficiary, at any one time, subject to certain exceptions to be established by rules and regulations of the corporation.7.Notwithstanding any provision of law to the contrary, the corporation may establish a program fund for program use and pay into such fund any eligible funds available to the corporation from any source, including moneys appropriated by the state.8.The corporation shall submit a report annually on December thirty-first to the director of the budget, the temporary president of the senate, the speaker of the assembly, the minority leader of the senate and the minority leader of the assembly detailing (a) the total amount of funds committed to each applicant that receives funds and the amount of such funds that has been invested by each such applicant; (b) the amount of Innovate NY and private funds invested in each beneficiary company; (c) the type of product or technology being developed or produced by each beneficiary company; (d) the location of each beneficiary company; (e) the number of jobs projected to be created or retained; and (f) such other information as the corporation deems necessary.9.The corporation is hereby authorized to promulgate rules and regulations in accordance with the state administrative procedure act as are necessary to fulfill the purposes of this section, including with respect to reasonable management fees, promotes, share of return and other fees and charges of applicants that receive funds, and to provide for the repayment of funds received by the beneficiary company if the beneficiary company leaves New York state within a period of time to be established by the corporation.10.In accordance with the rules and regulations to be promulgated by the corporation, the corporation may impose fees, establish repayment terms and provide for equity participation by the corporation in connection with investments from the11.The provisions of section ten and subdivision two of section sixteen of this act shall not apply to assistance provided under this section.N.Y. Urban Development Corporation Act § 16-u