New York State
Albany, May 18, 1998
GOVERNOR PATAKI: SMALL BUSINESS INVESTMENT PROGRAM OPERATIONAL
Insurance Companies to Invest $100 Million in NYS Businesses & Receive Tax Credits
Governor George E Pataki and Superintendent of Insurance Neil D. Levin today announced that five investment companies have received approval by the Insurance Department to act as Certified Capital Companies under an innovative program designed to encourage insurance companies to invest up to $100 million in small business enterprises in New York State.
The Governor and the Superintendent added that 24 insurance companies have already entered into funding comittments to begin to immediately invest a total of $50 million in three of these Certified Capital Companies.
"New York State continues to be an innovative leader in creating jobs and investments in the states economy," said Governor Pataki. "We are encouraging insurance companies to provide capital to help our small businesses grow and prosper, while at the same time providing insurers with direct tax credits. This is a win for small businesses who traditionally have had difficulty in attracting institutional venture capital."
Under legislation drafted and signed into law by Governor Pataki in 1997, the Certified Capital Company mechanism was authorized to further promote the growth of the states economy while at the same time encouraging the investment of private financial resources into the states venture capital markets. Under the program, up to $100 million in investments and corresponding tax credits is allowed for use beginning in the tax year 1999 and 2000.
"These major institutional investment firms will use this capital to promote the formation and expansion of new and existing small businesses in the state, resulting in the creation of jobs and growth in the states economy," said Superintendent Levin.
The following companies have been certified as investment vehicles and are ready to receive the first $50 million to invest in New York State small business ventures: BOCNY LLC (formed by BancOne), the New York Small Business Venture Fund, LLC (NYC Investment Fund) and Advantage Capital New York Partners I, LP.
Charles A. Gargano, Chairman of the Empire State Development Corporation said, "Once again, Governor Patakis vision for New Yorks economy is paying off. Its paying off for investors, its paying off for small business and its paying off for all New Yorkers as we work together to create jobs and keep New Yorks economic renewal on course."
Major insurance companies such as MetLife, New York Life, Equitable, Northwestern Mutual, Travelers and Reliance are currently participating in this program. The insurance companies will receive a 10-year tax credit beginning in 1999 equal to their investment. An additional $50 million will be committed to the program in June, when the remaining $50 million in tax credits will be allocated for use beginning in the year 2000.
Two other investment companies, Exponential of New York, LLC and Excelsior Partners I, LP, that were also approved as Certified Capital Companies are currently seeking insurance company investors to qualify for the year 2000 tax credits to be allocated in June of this year.