In the April 2, 1999 Issue:

Copyright State Science & Technology Institute 2002. Information in this issue of the SSTI Weekly Digest was prepared under a cooperative agreement with the U.S. Department of Commerce, Economic Development Administration. Redistribution to all others interested in tech-based economic development is strongly encouraged — please cite the State Science & Technology Institute whenever portions are reproduced or redirected. Any opinions expressed in the Digest do not necessarily reflect the official position of the U.S. Department of Commerce.

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SSTI Releases USIP Study of State SBIR Programs

A new report by SSTI finds that 48 states have some structured SBIR promotion or assistance effort underway. States spent $8 million in FY 1998 to promote involvement and encourage success in the federal SBIR program. These are among the findings reported in State and Federal Perspectives on the SBIR Program.

The report has three primary purposes: it provides an overview of state services offered; it reports on state and federal program managers views on key issues facing the SBIR program; and, it suggests options for further action to advance state-federal cooperation on SBIR.

The report also includes: a selected bibliography, a list of state SBIR service providers, and a distribution of Phase I awards and proposals by agency and state for FY 93-97.

The report was prepared for United States Innovation Partnership's (USIP) SBIR Task Force, co-chaired by Rich Bendis of the Kansas Technology Enterprise Corporation and Dan Hill of the Small Business Administration. USIP was created in 1997 to establish a new working relationship between the states and federal government designed to promote the development of a national innovation system. SBIR is one of the areas USIP identified as ripe for enhanced state-federal cooperation.

The report was funded by the Department of Defense, the Kansas Technology Enterprise Corporation, the National Institute of Standards and Technology, and the National Science Foundation.

Key findings from the report, include:

Among the options for further action are: expanding the federal program's outreach activities; strengthening state assistance and outreach efforts; communication among state SBIR service providers should increase; communication between state and federal SBIR program managers should increase; state and federal SBIR program managers should consider provisions to be included in the reauthorization of the program; and further research on the SBIR program should be undertaken.

With its examination of state and federal views on issues facing the SBIR program, experienced policymakers will find the report of interest. Those considering starting an SBIR assistance program will find the typology of state programs particularly helpful.

To prepare the report, SSTI interviewed all ten federal agencies participating in the federal SBIR program and 51 state-level officials that manage state SBIR programs in 46 states. Federal program managers were asked a series of 26 open-ended questions while state officials were asked 24 open-ended questions. The interviews averaged one hour in length.

The 100-page report is available for $20 by contacting SSTI at 614/901-1690.

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Changes Proposed for Distance Learning & Telemedicine Program

The U.S. Department of Agriculture (USDA) Rural Utilities Service has issued a direct final rule incorporating a series of changes for the popular Distance Learning & Telemedicine Loan and Grant Program (DLT). The rule will become effective on May 10, 1999 unless the agency receives written adverse comments on or before April 26, 1999.

The DLT program provides financial assistance for schools, libraries and rural medical services to acquire equipment and telecommunications facilities for optimal service delivery.

Since the DLT program was created in 1993, USDA has funded 252 projects in 43 states and two US territories, totaling $62.5 million in grants and $3 million in loans.

The amendments to the DLT program were designed to: clarify the requirements for the different types of financial assistance offered; streamline policies and procedures for obtaining loans; expand the purposes for which loan funds can be used to include land acquisition, facility construction and operating costs; award grants on a competitive basis; and provide additional offices for application submission.

There are three funding mechanisms to the DLT program: a matching grant of up to 70 percent of a project's cost, a repayable loan, and a combination loan/grant. Under the new regulations, each mechanism will have its own separate application process, allowing the USDA to target entities that are appropriate for each type of financing. In the past, the agency found many applicants seeking financial assistance (schools and libraries) were unable to enter into extended term loan agreements, or did not have the means to repay the loan.

Grants now will be awarded to the neediest applicants on a competitive, point-based system, which is outlined in the new rule. Other selection criteria include: need for the service, comparative rurality of the project service area, applicant's ability to leverage funding, innovativeness of the project, project cost effectiveness, and participation in EZ/EC zones and champion communities. Applicants will be able to submit additional indicators addressing the economic disparity of the community to be served by the project. Combin-ation loan/grant awards will be made only to those entities able to enter into a loan agreement. The USDA anticipates awarding $1 of grant funds for every $10 loaned to a project.

The loan and loan/grant combination selection process will be on a first-in, first-out basis, based on the amount of funding available.

A copy of the new regulation can be obtained through the DLT web site at http://www.usda.gov/ rus/dlt/dlml.htm. Interested parties are directed to contact Jonathan Claffey, USDA Rural Utilities Services Deputy Assistant Administrator, at 202/720-9556 for further information.

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Wisconsin explores $100 Million for Venture Capital

Three separate public initiatives are underway in Wisconsin which could result in the availability of more than $100 million for new venture capital financing. The efforts are designed to spur venture capital investment in the state (ranked 45th in the 1998 Pricewaterhouse Coopers survey) and to increase entrepreneurial activity in the Wisconsin biotechnology community.

The fund closest to implementation, is a $50 million pool offered by the Wisconsin Department of Commerce. Scheduled for opening July 1, the program will provide grants to certified Wisconsin-based insurance companies to invest up to $10 million each. The insurance companies would then receive dollar-for-dollar tax credits for the amount of their investments over a 10-year period. The state will certify which emerging businesses are qualified to receive the venture capital. No technologies or industries are specifically targeted by the pool. Legislation has been introduced to expand the pool of eligible venture capital firms to more than insurance companies, such as banks and utility holding companies.

A second $50 million venture capital initiative is being studied by the State of Wisconsin Investment Board (SWIB), which oversees state retirement fund investments. This fund will target biotechnology businesses and technologies developed within the University of Wisconsin-Madison and the Medical College of Wisconsin. The SWIB program would be managed by an existing venture capital firm.

The third proposed state-backed venture capital program is included in the Governor's budget request for the 1999-2001 biennial budget request. The measure would support the creation of a $1 million nonprofit venture capital fund for biotechnology investments by the Wisconsin Housing and Economic Development Authority.

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Position Available
Wheeling Jesuit University invites applications for the position of Chair of the Department of Business and Technology. Among the Chair's responsibilities are recruiting and retaining faculty, overseeing curriculum and budget, developing and maintaining strong ties to the business and governmental community of the Wheeling area, and articulating a vision which leads to widespread recognition of the Depart-ment as offering a premier education program. Applications will be accepted until May 10, 1999. The complete job posting is available on the SSTI website at www.ssti.org

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