SENATE BILL 247
56th legislature - STATE OF NEW MEXICO - second session, 2024
Martin Hickey and George K. Muñoz
RELATING TO ECONOMIC DEVELOPMENT; AMENDING THE BIOSCIENCE DEVELOPMENT ACT; AUTHORIZING INVESTMENT IN BIOSCIENCE COMPANIES; ESTABLISHING REQUIREMENTS; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 9-15E-2 NMSA 1978 (being Laws 2017, Chapter 134, Section 2) is amended to read:
"9-15E-2. DEFINITIONS.--As used in the Bioscience Development Act:
A. "authority" means the New Mexico bioscience authority;
B. "bioscience" means the scientific areas represented by life sciences and biotechnology that are included in the five industries recognized by the United States department of labor:
(1) drugs and pharmaceuticals;
(2) medical devices and equipment;
(3) research testing and medical laboratories;
(4) bioscience-related distribution; and
(5) agriculture and chemicals related to bioscience;
C. "board of directors" means the board of directors of the authority;
D. "financial assistance" means tax incentives, grants, loans and other financial benefits provided for projects to a qualified entity on terms and conditions approved by the authority;
E. "portfolio business" means a bioscience business in which the authority has made an investment;
[E.] F. "national laboratories" means Los Alamos national laboratory and Sandia national laboratories; [and]
G. "New Mexico business" means, in the case of a corporation or limited liability company, a business with its principal office and a majority of its full-time employees located in New Mexico or, in the case of a limited partnership, a business with its principal place of business and at least eighty percent of its assets located in New Mexico; and
[F.] H. "research institutions" means the university of New Mexico, New Mexico state university and the New Mexico institute of mining and technology."
SECTION 2. A new section of the Bioscience Development Act is enacted to read:
"[NEW MATERIAL] INVESTMENTS--REQUIREMENTS--REIMBURSEMENT OBLIGATIONS.--
A. The authority may invest in a bioscience business that:
(1) is a New Mexico business and that shall maintain a minimum in-state workforce of five employees with a minimum average annual salary of sixty thousand dollars ($60,000) as a condition of the investment; or
(2) pursuant to a contract with the authority, shall relocate to the state and agree to maintain itself as a New Mexico business for a minimum period of five years as a condition of the investment and maintain a minimum in-state workforce of five employees with a minimum average annual salary of sixty thousand dollars ($60,000).
B. The authority shall assess a bioscience business prior to making an investment decision. An assessment shall include the following assessment factors with scoring weights determined by the authority by rule:
(1) the market opportunity presented by the product or service offered by the business;
(2) the current financial stability and status of the business;
(3) the expertise and experience in bioscience and business start-ups of the officers of the business;
(4) the business' business plan and its strategy to capture or create a market for its product or services;
(5) the business' competitive assets, including intellectual and physical properties;
(6) the projected economic benefits of the business for New Mexico over the next five years, including projected sales, revenue and the number of in-state employees; and
(7) the projected social benefits of the business in accordance with procurement preferences provided in state or federal law.
C. Investments made pursuant to this section shall be made with a co-investing organization chosen by the authority in consultation with the university of New Mexico purchasing office through a competitive process; provided that the co-investing organization meets the following requirements:
(1) the officer of the co-investing organization with final decision-making authority for a co-investment with the authority shall have a minimum of five years of experience investing in bioscience companies or a minimum of ten years of experience investing in start-up companies; and
(2) the authority's investment in a bioscience business shall be no more than one-third of the combined investment of the authority and a co-investor organization in that business within a twelve-month period.
D. An investment contract with a portfolio business shall specify that:
(1) if the portfolio business fails to meet its contractual obligations pursuant to this section, it shall either:
(a) fully reimburse the authority for the bioscience development fund's cost basis in the portfolio business; or
(b) document to the satisfaction of the authority that it has provided economic benefits to the state that exceed the authority's cost basis in the business;
(2) in any sale of a majority of the assets or a majority of the voting stock of the business to a single entity or set of affiliated entities, the acquiring entity or set of affiliated entities shall assume the legal obligations of the contract with the authority; and
(3) in a bankruptcy proceeding, liquidation or deemed liquidation event for the portfolio business, a claim by the authority shall be paid first.
E. When a portfolio business must compensate the authority pursuant to this section due to an acquisition by another entity or a relocation outside of the state, upon approval of the state investment council, the authority may accept stock in the acquiring entity or in the relocated business in lieu of a cash payment."
SECTION 3. APPROPRIATION.--Twenty-five million dollars ($25,000,000) is appropriated from the general fund to the New Mexico bioscience authority for expenditure in fiscal year 2025 and subsequent fiscal years for investments pursuant to the Bioscience Development Act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2024.
- 6 -