SB 119 — INVESTMENT IN BIOSCIENCE COMPANIES

g o (5) all earnings on investments made by the t hr g e i k authority;

h r i s [(5)] (6) all of the money received by the h , t, authority from a public or private source;

and e u g e b l e e h [(6)] (7) fees, rents or other charges imposed n d d i = = o h and collected by the authority.

l ] b ,d i a º e C.

Disbursements from the bioscience development r i = r t e w d fund shall be made only upon warrant drawn by the secretary of financem anda administrationn pursuanto tod vouchersm signed: by the secretary of economic development or the secretary's designee pursuant to the Bioscience Development Act." SECTION 4.

b e d s º o t n = .231471.2AIC March 6, 2025 (11:50am) s k m e - 4 - e a n e d r e l u [ A d SFC/SB 119 finance and administration pursuant to vouchers signed by the secretary of economic development or the secretary's designee pursuant to the Bioscience Development Act." SECTION 4.

REPORT TO THE GOVERNOR AND THE LEGISLATURE.-- The authority shall submit a report of its activities for the e t 17 prior fiscal year to the governor and to the appropriate w l n d 18 interim committees of the legislature not later than October 1 = = 19 of each year, and the report shall be posted on the authority's a l i a e r 20 website." a t m m 21 SECTION 5.

A new section of the Bioscience Development d r e 22 Act is enacted to read:

c e s k 23 "[NEW MATERIAL] INVESTMENTS--REQUIREMENTS--REIMBURSEMENT e a n b 24 OBLIGATIONS.-- u [ A.

The authority may invest in a bioscience .231471.2 - 4 - SFC/SB 119 business that:

(1) is a New Mexico business that shall h maintain a minimum in-state workforce of five employees with a g o t hr minimum median annual salary of sixty thousand dollars g e i k ($60,000) as a condition of the investment;

or h r i s (2) pursuant to a contract with the authority, h , t, shall relocate to New Mexico and agree to maintain the e u g e b l e e h bioscience business as a New Mexico business for a minimum n d d i = = o h period of five years as a condition of the investment and l ] b ,d i a º e maintain a minimum in-state workforce of five employees with a r i = r t e w d m a n o minimum median annual salary of sixty thousand dollars ($60,000).d m :

b e d s º o t n = .231471.2AIC March 6, 2025 (11:50am) s k m e - 5 - e a n e d r e l u [ A d SFC/SB 119 SFC/SB 119 ($60,000).

e t 17 (1) the market opportunity presented by the w l n d 18 product or service offered by the business;

= = 19 (2) the current financial stability and status a l i a e r 20 of the business;

a t m m 21 (3) the expertise and experience in bioscience d r e 22 and business start-ups of the officers of the business;

c e s k 23 (4) the business's business plan and strategy e a n b 24 to capture or create a market for the business's products or u [ services;

.231471.2 - 5 - SFC/SB 119 (5) the business's competitive assets, including intellectual and physical properties;

h (6) the established business's exit strategy;

g o (7) the projected economic benefits of the New t hr g e i k Mexico business over the next five years, including projected h r i s sales, revenue and the number of in-state employees;

and h , t, (8) the projected social benefits of the e u g e b l e e h business in accordance with procurement preferences provided in n d d i = = o h state or federal law.

l ] b ,d i a º e C.

Investments made pursuant to this section shall r i = r t e w d be made with a co-investing organization chosen by the authoritym ina consultationn witho thed universitym of: New Mexico purchasing office through a competitive process;

b e d s º o t n = .231471.2AIC March 6, 2025 (11:50am) s k m e - 6 - e a n e d r e l u [ A d SFC/SB 119 authority in consultation with the university of New Mexico purchasing office through a competitive process;

(1) the officer of the co-investing organization with final decision-making authority for a co- e t 17 investment with the authority shall have a minimum of five w l n d 18 years of experience investing in bioscience companies or a = = 19 minimum of ten years of experience investing in start-up a l i a e r 20 companies;

and a t m m 21 (2) the authority's investment in a bioscience d r e 22 business shall be no more than one-third of the combined c e s k 23 investment of the authority and a co-investor organization in e a n b 24 that business within a twelve-month period, making the u [ co-investor organization the lead investor and the authority a .231471.2 - 6 - SFC/SB 119 follow-on investor.

(1) if the portfolio business fails to meet h its contractual obligations pursuant to this section, it shall g o either:

t hr g e i k (a) fully reimburse the authority for h r i s the bioscience development fund's cost basis in the portfolio h , t, business;

or e u g e b l e e h (b) document to the satisfaction of the n d d i = = o h authority that the portfolio business has provided economic l ] b ,d i a º e benefits to the state that exceed the authority's cost basis in r i = r t e w d m a n o 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 e t 17 set of affiliated entities shall assume the legal obligations w l n d 18m of: the contract with the authority;

=b e d s º o t n = 19.231471.2AIC (3)March in6, a2025 bankruptcy(11:50am) proceeding,s liquidationk orm ae l- i7 - e a n e d r 20e deemedl liquidationu event[ forA d SFC/SB 119 SFC/SB 119 (2) in any sale of a majority of the portfolioassets business,or a claimmajority byof the voting stock of the business to a tsingle mentity mor 21set of affiliated entities, the authorityacquiring shallentity beor paidset first,of exceptaffiliated asentities otherwiseshall providedassume dthe rlegal eobligations 22of bythe federalcontract orwith statethe law;authority;

and(3) cin ea sbankruptcy kproceeding, 23liquidation (4)or milestonesdeemed shallliquidation beevent metfor quarterly,the semi-portfolio ebusiness, a nclaim bby 24the annuallyauthority orshall annuallybe onpaid afirst, case-by-caseexcept basisas dependentotherwise onprovided theby ufederal [or typestate oflaw; investment to release a disbursement of funds;

providedand .231471.2(4) -milestones 7shall -be SFC/SBmet 119quarterly, thatsemi- milestonesannually mayor include:annually on a case-by-case basis dependent on the type of investment to release a disbursement of funds;

provided that milestones may include:

h (c) signing partnership or collaboration g o agreements;

t hr g e i k (d) being awarded grants and contracts h r i s with agencies, foundations or private industry;

h , t, (e) filing new intellectual property e u g e b l e e h patents and receiving granted patents;

n d d i = = o h (f) sales and sales agreements for l ] b ,d i a º e equipment, goods and services;

r i = r t e w d (g) investigational new drug approval;

(h)m ina vitron oro ind vivom proof: of technology;

(i)b immunogenicitye datad tos supportº eo t 17n investigational= new.231471.2AIC drugMarch filing;6, 2025 (11:50am) s k m e - 8 - e a n e d r e l u [ A d SFC/SB 119 (h) in vitro or in vivo proof of technology;

and(i) wimmunogenicity ldata nto dsupport 18investigational (j)new otherdrug milestonesfiling; deemed appropriate = = 19 for the investment by the authority.

aand l(j) iother amilestones edeemed rappropriate 20for E.the investment by the authority.

WhenE. a portfolio business must compensate the a t m m 21 authority pursuant to this section due to an acquisition by d r e 22 another entity or a relocation outside of the state, the c e s k 23 authority, in collaboration with local investors, may accept e a n b 24 stock in the acquiring entity or in the relocated business in u [ lieu of a cash payment if the value of the stock would be equal .231471.2 - 8 - SFC/SB 119 to or greater than the amount that the business must compensate." SECTION 6.

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, the authority, in collaboration with local investors, may accept stock in the acquiring entity or in the relocated business in lieu of a cash payment if the value of the stock would be equal to or greater than the amount that the business must compensate." SECTION 6.

An entity that has benefited from a contractual h or other activity with the authority, including the receipt of g o t hr co-investment funding, shall:

g e i k (1) have no employee related to a member of h r i s the board of directors;directors Sfl1º or a member of a director's h , t, immediate family»Sfl1 ;

and e u g e b l e e h (2) not hire a member of the board of n d d i = = o h directors norSfl1ºnor»Sfl1 Sfl1º,»Sfl1 an employee of the authorityl within] oneb year,d ofi thea completionº ofe theauthority boardSfl1º member'snor terma member of officea director's or thean employee's servicer withi = r t e w d m a n o immediate family»Sfl1 within one year of the authority.completion of the d m :

b e d s º o t n = .231471.2AIC March 6, 2025 (11:50am) s k m e - 9 - e a n e d r e l u [ A d SFC/SB 119 SFC/SB 119 board member's term of office or the employee's service with the authority.

Any person who knowingly and willfully violates the provisions of Subsection A of this section is guilty of a e t 17 misdemeanor and shall be sentenced pursuant to the provisions w l n d 18 of Subsection B of Section 30-1-6 NMSA 1978.

An alleged = = 19 violation of Subsection A of this section may be reported to a l i a e r 20 the attorney general or district attorney for enforcement." a t m m 21 SECTION 7.

A new section of the Bioscience Development d r e 22 Act is enacted to read:

c e s k 23 "[NEW MATERIAL]MATERIAL ] INVESTMENT REPORTING.--Quarterly reports e a n b 24 for all investments shall be presented to the board of u [ directors by the board of the investment committee during .231471.2 - 9 - SFC/SB 119 regular board meetings, and such reports shall be publicly available pursuant to the Open Meetings Act." SECTION 8.

EFFECTIVE DATE.--The effective date of the h provisions of this act is July 1, 2025.

u » r - 10 - 7t 9h 11g 13e 15l i h r i s h , e h t 17u wg e b l e e , gh n d 18d i = = 19o ah l i] ab e,d ri 20 a tº m m 21 d r e 22r c= t e sw kd 23m e a n bo 24d um [: .231471.2

b r e t º o t n = .231471.2AIC March 6, 2025 (11:50am) s k m e e a n e d r e l u [ A d