In the August 29, 2005 Issue:

Copyright State Science & Technology Institute 2005. 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.

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North Carolina Creates SBIR/STTR Incentive, Matching Program
With the passage of the state's biennial budget, North Carolina's small businesses are now eligible for follow-on support from the state for research projects funded under the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

A provision in the budget creates the One North Carolina Small Business Fund, a special revenue fund of up to $3 million to be used for the North Carolina SBIR/STTR Incentive Program and the North Carolina SBIR/STTR Matching Funds Program. Both programs will be administered by the North Carolina Board of Science and Technology.

The incentive program provides grants to eligible businesses to offset costs associated with submitting proposals for funding under the SBIR/STTR programs. The grants will reimburse an eligible business for up to 50 percent of the costs of preparing and submitting a SBIR/STTR Phase I proposal, up to a maximum of $3,000. An eligible North Carolina business may receive one grant per year.

The Matching Funds Program provides grants to eligible North Carolina businesses to match funds they receive through a SBIR or STTR Phase I award and to encourage these businesses to apply for Phase II awards. The grants will match funds received by an eligible North Carolina business under an SBIR/STTR Phase I proposal up to a maximum of $100,000. Under the program, a business will receive 75 percent of the total grant upon receipt of a Phase I award; upon submission of the Phase II application and acceptance of the Phase I report by the funding agency, a business will receive the remaining 25% of the total grant. An eligible North Carolina business may receive one grant per year, and up to five matching grants over its lifetime.

Robert McMahan, the governor's senior advisor for science and technology and the executive director of the North Carolina Board of Science and Technology, said the programs should significantly increase the growth and competitiveness of North Carolina companies under the SBIR/STTR program. The programs also are expected to help bridge the gap between the state's internationally recognized R&D capacity and the commercialization of products that spring from it. "The downstream effects of a program like this in terms of company and job creation across the state should be significant," McMahan said.

In recent years, North Carolina has ranked above the national average in R&D funding, but at or below the national average in SBIR and STTR funding.

State SBIR proposal assistance and matching award programs are regaining popularity across the country. The NC program is modeled after similar efforts in Indiana and at the Oklahoma Center for the Advancement of Science & Technology. In FY 2004, Michigan also committed $1 million to provide a 15 percent match of SBIR Phase I awards through its Technology Tri-Corridor SBIR Emerging Business Fund.

Text of the legislation authorizing the One North Carolina Small Business Fund is available on page 215 of North Carolina's budget bill: http://www.ncleg.net/Sessions/2005/Budget/S622-PCCS.pdf.

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Initiatives Aim to Close Digital Divide Among Low-Income Households
Two initiatives aimed at closing the digital divide, particularly among low-income Americans, were announced earlier this month.

Maine Free Internet
Angus King, former governor of Maine, provided the leadership to get several innovative programs for the state. As governor, King implemented a $37 million laptop program, the Maine Learning Technology Initiative (MLTI) in 2000, which provides all seventh and eighth-graders with laptops to ensure they had the computer skills required of the global economy. According to an impact evaluation report by the Maine Education Policy Research Institute, teachers and students view the program an overall success (see the April 19 issue of the Digest).

Now, Gov. King is launching a program through the Maine Learning Technology Foundation, in partnership with Great Works Internet, to provide free home Internet access to students who receive free or reduced-cost school lunches. The new initiative applies to all 35,000 middle school students, in addition to some ninth and tenth graders who have laptops issued to them through the school system. Discounts for high-speed Internet service to eighth-grade students and teachers who are part of the state's Laptop Program also will be available through Great Works Internet. Gov. King raised $850,000 through the Maine Learning Technology Foundation to support the program.

While announcing the initiative, Gov. King said, “Over the past three years we have clearly seen the impact that MLTI has had on our students through their increased access to information and research, as well as how it has empowered them to become self-directed learners. However, some of our students have not had the opportunity to continue their learning outside of school because they lacked access to the Internet at home. We’re now working to remedy that situation and to help these students gain that access.”

The press release notes the Internet accounts for students are not intended as a substitute for an existing commercial account and are intended for educational use. Student accounts will be filtered for content and will not include individual e-mail accounts.

Wired Homes for Low Income Families
Robert Rubin, chairman for Local Initiatives Support Corporation (LISC) and former U.S. Treasury Secretary and Sen. Hillary Clinton (D-NY) together announced a $1 billion nationwide effort to build more than 15,000 affordable homes with high-speed digital Internet connectivity. LISC and its subsidiary National Equity Fund (NEF), in partnership with One Economy launched the initiative, access@home. The program expects to connect approximately 100,000 people, offering low-income families personal access to computers and technology services in addition to online connectivity.

Despite an overall increase in the number of U.S. households with computers and Internet access, low-income households remain significantly less likely to be online than middle- or high-income households, according to LISC. Americans earning less than $30,000 per year comprise only 18 percent of Internet users, despite comprising 28 percent of the population, said LISC. Families earning less than 60 percent of the median income for an area are eligible for the program and Internet access will be free for the first five years, Newsday reports. Financing for the program includes both low-income housing tax credit investments from NEF and grants and loans from LISC.

More information about the access@home program is available from LISC at: http://lisc.org/

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Southern Growth Offers Index Tool for Creating Stronger Communities
The bottom line for all regional economic development initiatives should be improving the quality of life for the area's residents. A new report from the Census Bureau — revealing the increased percentage of the U.S. population living in poverty and median household income remaining flat again, after two years of decline — provides a not-too-subtle reminder for the technology-based economic development (TBED) field.

Also released on Tuesday, the Southern Growth Policies Board's new index provides a useful tool for southern communities to track quality of life measures as part of their regional economic development strategies.

Released at the Southern Governor's Association meeting in Greensboro, Georgia, The Southern Community Index is a working plan to track the Southern states' progress in building healthy and vibrant communities as part of an integrated economic development strategy for the region. The Index includes 15 quality of life measures considered to be the building blocks of vibrant communities — from access to healthcare, homeownership rates, crime rates and employment rates to levels of civic engagement and leadership diversity.

Communities play a vital role in building a thriving economy, and the quality of life in the Southern region is largely a product of people's experiences in their local communities. Southern Growth's research has long suggested that building quality communities is the underpinning of long-term economic development. The goal of the Southern Community Index is to bring attention to quality of life issues and to encourage communities to create their own vision and metrics for developing successful and healthy communities.

The Index includes state-by-state data and summaries of community development initiatives in the Southern Growth states — Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Virginia, and West Virginia.

The full report can be viewed in pdf format at
http://www.southern.org/pubs/communityindex/Community%20Index.pdf

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NIH Releases Final Ethics Rules
Ban on Outside Consulting with Industry Remains in Force
Last week, the National Institutes of Health (NIH) announced final regulations regarding reporting of certain financial interests, stock divestiture, outside activities, and awards. The announcement came following a careful review of all comments about the interim ethics regulation submitted by NIH staff, the public, and scientific organizations. The changes, considered sweeping by most media reports and policy analysts, were first proposed in early February (see the Feb. 7, 2005 issue of the Digest.).

Three principles guided the crafting of the rules:

Following those principles will change the way NIH scientists and researchers do business with private companies, however. The major features of the final rules are:

1. The basic prohibition on outside consulting by NIH staff with substantially affected organizations, such as pharmaceutical, biotechnology or medical device manufacturing companies, health care providers or insurers, and supported research institutions remains unchanged.

2. Divestiture of all holdings in substantially affected organizations in excess of $15,000 per company will be required for all senior NIH employees and their spouses and minor children. As defined by the final regulations, these senior employees include the NIH Director and Deputy Director; all direct reports to the NIH Director; all Institute/Center (IC) Directors, Deputy Directors, Scientific Directors, and Clinical Directors in each IC; extramural program officials who report directly to an IC Director; and other employees designated as such because they possess equivalent levels of decision-making responsibility. All other employees may be required to divest if, after review, a potential conflict resulting from their holdings or those of their spouses and minor children would impede their ability to do their government job.

3. The receipt of monetary awards from outside sources will continue to be contingent upon prior approval and be limited to awards that have been determined through a pre-screening process to be bona fide. The final regulations will bar senior employees from receiving the cash component of pre-screened awards offered by donors who have matters pending under their official responsibility.

4. Employees who file either a public (SF 278) or a confidential (OGE 450) financial disclosure report, and those non-filers who serve as clinical investigators identified on an NIH clinical study, are required to report their interests in substantially affected organizations, as well as those of their spouse and minor children, and to indicate the amount held in such investments.

5. To facilitate academic and scientific interactions, the final regulations will allow, subject to prior approval and review by ethics officials, outside activities with professional or scientific organizations, service on data and safety monitoring boards, Grand Rounds lectures, and scientific grant review.

6. The regulations maintain current provisions that permit NIH scientists, to the extent allowed under existing government-wide rules and with prior approval, to engage in compensated academic outside activities such as teaching courses at universities, writing general textbooks, performing scientific journal reviews or editing, and providing general lectures to physicians and scientists as part of a continuing professional education program. NIH scientists also can engage in the practice of medicine and other health professions with prior approval and in accordance with existing rules. Outside activities that involve hobbies, sports, civic organizations or interests unrelated to the NIH mission are permissible, generally without prior approval.

More information is available at: http://www.nih.gov/about/ethics_COI.htm.

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The Scuttlebutt on SSTI's Annual Conferences
Many of the readers are new to the Digest since last year's conference, so we're getting questions about how SSTI's upcoming 9th annual conference, to be held in Atlanta on Oct. 19-21, differs from other events.

The easiest way to answer that is to let the conference speak for itself — through the comments we received from past participants:

"The most relevant conference I’ve attended in the last five years. Great mix of people — connected to others with similar interest that will give me a resource base."

“Outstanding organization and right on target topically. The value you deliver attracts an audience that is such a great balance of academics and practitioners in TBED.”

"I emerged from this session with eagerness to get back to work on linking research to regional economic development!”

“Great networking, great number of options, breakout sessions, great roundtable interaction. Definitely ‘the’ conference for TBED.”

"This was an excellent conference, it’s clear you have a great deal of expertise and insight to share…thanks and will definitely be back.”

“I found the interactive roundtables interesting and valuable, they have facilitated input/discussion from a broad, diversified base.”

"By far superior to other events, good mix and balance."

Here's what we think you can expect at SSTI’s 9th Annual Conference: in-depth examinations of some of the best state and regional approaches to cultivate a bright economic future; unparalleled networking with the right people within the tech-based economic development community; stimulating dialogue and thought-provoking exchange between great thinkers, old friends and new peers from across the country; and renewed energy and personal resolve to address the challenges of strengthening your state or local economy.

Don't expect crowds of 1,000-plus forgettable people. SSTI's audience and program is quality, not quantity. We'll close registration if necessary — we've done it before. We want you to be able to continue conversations with the people you meet during the first breakout session throughout the conference, not wonder if you'll ever see that person again.

SSTI's Annual Conference is not about 20-second elevator pitches. It's for building meaningful professional relationships within the TBED community.

But don't take everyone else's word for it. Join us Oct. 19-21 in Atlanta to find out for yourself.

Remember, the discounted registration period ends Sept. 20. More information is available at: http://www.ssti.org/Conf05/overview.htm

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State Tobacco Settlement Funds & TBED: Where Are They Now?
Following the 1998 Master Tobacco Settlement Agreement, states across the country set out to dedicate significant amounts of funding from their share of the settlement to support research and other TBED programs.

Several states expressed concern in 2003 when a $10 billion judgment against Philip Morris threatened settlement payments for that year. The judgment required a $12 billion bond to appeal the case and the tobacco company considered filing bankruptcy (see the April 4, 2003 issue of the Digest). According to a press release from the New Mexico Attorney General's office, attorneys general from across the country urged the presiding judge to modify the bond order to assure states would receive their annual payment. The court accepted a new order that reduced the bond almost in half the day before the annual payment was due, and Philip Morris subsequently confirmed the $2.6 billion annual payment would be made.

Over the years, the Digest has covered several of these proposals and initiatives. Following is an update to proposals covered previously in the Digest, in addition to new initiatives being considered:

Arkansas
The legislature approved a plan in 2001 to place the first $100 million tobacco settlement funds into the Arkansas Century Trust Fund. All other settlement funds go to the Tobacco Settlement Trust Fund, which includes an annual disbursement of 22.8 percent to biomedical research. Also included in the legislation is a stipulation providing $5 million of each year's payment must be used to pay the debt service for $60 million in capital bonds issued to improve the University of Arkansas Bioscience Center.

In 2004, RAND Corp. issued a draft recommendation that, in order to meet higher priority needs of the state, the Arkansas Tobacco Settlement Commission should reduce its medical research funding by 20 percent (see the Aug. 9, 2004 issue of the Digest). However, after discussions with the Commission regarding the success of the research program, RAND Corp. dropped the recommendation from its final report.

Recent investments include funding two new facilities that will serve the Arkansas Bioscience Institute (ABI) and may include incubation space. The Arkansas Development Finance Authority provided $25 million for an 85,000-square-foot building at the University of Arkansas for Medical Sciences to house ABI research and BioVentures activities and $20 million for an 80,000 square-foot research building at Arkansas State University, including wet labs and greenhouses for agbiotech projects.

Connecticut
In 2000, the legislature created the Biomedical Research Trust Fund to provide grants to eligible institutions for biomedical research in the fields of heart disease, cancer, and other tobacco related diseases (see the June 16, 2000 issue of the Digest). Disbursements from the Tobacco Settlement Fund include $4 million per year to the Biomedical Research Trust Fund. However, facing a large budget deficit in 2002, then Gov. John Rowland transferred most of the tobacco settlement payment for that year from the Tobacco and Health Trust Fund and the Biomedical Research Trust Fund to the general fund. According to the Government Performance Project's Grading the States 2005 Report Card, the state again transferred earmarked money from the Tobacco Settlement Fund to the general fund in both fiscal years 2004 and 2005.

With passage of Senate Bill 934 last spring, the legislature allotted $10 million of the Tobacco Settlement Fund during each of the next 10 years to support Connecticut's new Stem Cell Research Fund (see May 30, 2005 issue of the Digest). These funds are in addition to the $4 million that is apportioned to the Biomedical Research Trust Fund.

Georgia
Georgia placed one-third of its tobacco settlement funds in the OneGeorgia Authority, which was established in 2000 to support economic development initiatives. Approximately $1.6 billion is expected to be available over the 25 years of the settlement. A portion of these funds goes to the EDGE Fund to help communities compete with other states to attract businesses. The Georgia Cancer Coalition (GCC), which coordinates cancer-dedicated expenditures from the state's Tobacco Settlement Trust Fund, focuses on fostering fundamental and translational cancer research. Through FY 2004, more than $178 million has been allocated to GCC from the Tobacco Settlement Trust Fund.

In early 2005, the governing board of the OneGeorgia Authority approved a budget of $10 million to create the Strategic Industries Loan Fund. The fund will provide low-interest loans to stimulate growth in strategic industries. The Authority plans to release a list of industries that will be targeted for the loan program in November.

Michigan
In 1999, former Gov. John Engler signed a bill committing $1 billion over 20 years from the tobacco settlement for life sciences research, development and commercialization (see the Aug. 20, 1999 issue of the Digest).  Budget restraints have slowed the commitment in recent years, although Gov. Jennifer Granholm has stated that she intends to restore the Life Science Corridor's budget to the original investment in the near future. To date, Michigan has invested $220 million into this initiative. The Life Sciences Corridor, now called the Michigan Technology Tri -Corridor, is a grant and loan program dedicated to building research capacity and commercialization success. In 2003, the program was expanded to include homeland security and automotive technology. The program receives $10 million annually from the tobacco settlement.

Voters denied a constitutional amendment in 2002 that would have reallocated 90 percent of the state's tobacco settlement money from life science initiatives and Merit Scholarships to fund health care proposals. Michigan's FY 2005 budget included a commitment of 75 percent of the state's settlement payments to the Merit Scholarship Fund for higher education.

Missouri
Former Gov. Bob Holden signed an executive order committing $21.5 million of the state's tobacco settlement funds to biotech research during FY 2002 (see the July 13, 2001 issue of the Digest). In 2003, the General Assembly enacted legislation allocating 25 percent of the overall tobacco settlement funds for life science research, commercialization and technology transfer activities. The legislation directs the funds, which equal about $36 million per year from 2007 through 2025, into a Life Sciences Trust Fund. Beginning in 2007, public and nonprofit research institutions within the state may submit research grant applications to a seven-member board charged with managing the Trust.

In FY 2004, the legislature passed a settlement carve-out to fund life science business development in the state, and in FY 2005 the annual payment went to the general fund with a portion specifically dedicated to life science research.

North Carolina
Lawmakers created Golden LEAF (Long-term Economic Advancement Foundation) in 1999, which uses half of the state's tobacco settlement for long-term economic development. In 2002, the foundation announced an $85.4 million economic stimulus package including a $42 million investment in bioscience and biotechnology companies (see the Aug. 23, 2002 issue of the Digest). Golden LEAF committed another $64.5 million in 2003 to train workers in the field of biotechnology. Earlier this month, the state broke ground on a Biomanufacturing Training and Education Center on the campus of North Carolina State University in Raleigh, according to the governor's office. The 91,000-square-foot facility is slated to open in 2007 and uses $33.5 million of the state's tobacco settlement money.

The foundation also provides funding to train workers in biotech-related positions through its BioNetwork program. To date, the program has provided nearly $6.8 million through 63 grants to support BioNetwork Centers, curricular development and specialized process technology equipment at Community Colleges to provide hands-on training for the biomanufacturing and pharmaceutical industries.

Legislation introduced earlier this month proposes using $10 million from the state's tobacco settlement proceeds to help fund embryonic stem cell research, according to the News & Record. The measure will remain alive for the legislature to consider during its 2006 session, the article states.

Ohio
Gov. Bob Taft created a task force in 1999 to determine the best use of the tobacco settlement funds. A portion of the funding was put into the state's Biomedical Research and Technology Transfer Partnership Program, which provides grants to support biomedical and biotechnology research leading to technology commercialization. Between 2001 and 2004, approximately $55.5 million from the tobacco settlement has been invested in bioscience R&D. Funding for biomedical projects and biomedical Wright Centers of Innovation was provided this year, as was in the previous two years.

Oklahoma
The State Regents for Higher Education proposed in 1999 spending $500 million in tobacco settlement funds to develop a state-of-the-art cancer research center in Oklahoma City and a satellite clinic in Tulsa. To date, no funds have been used for development of the cancer center. However, last year, a tobacco sales tax increase that is designated specifically for the cancer center was passed. Tobacco settlement funds are governed by a 2000 ballot initiative, which established the Tobacco Settlement Endowment Trust Fund. The Trust's Board has committed the first five years of funding to support only tobacco prevention and cessation programs.

Pennsylvania
In 2001, the state enacted a plan for its share of tobacco settlement money that included $160 million in one-time outlays for research and commercialization of life sciences technologies (see the June 29, 2001 issue of the Digest). Of the total, $100 million was slated for three Life Sciences Greenhouses based at research universities in Philadelphia, Pittsburgh, and Central Pennsylvania. Each Greenhouse receives $33 million in start-up funding over five years, and each has developed a mechanism to support commercialization research or early-stage financing. The program is coordinated with a parallel initiative that invests in three bioscience-oriented venture capital funds in the state. In 2003, Pennsylvania's Tobacco Settlement Board (TSIB) approved a commitment of up to $20 million to Birchmere Ventures III LP to invest in life sciences companies. The commitment will leverage the Tobacco Settlement money three-to-one by raising $30 million from other sources to an initial $10 million made available by the TSIB (see the Dec. 5, 2003 issue of the Digest).

Virginia
Earlier this month, Virginia's Tobacco Commission approved $38 million in grants for various economic development projects. Approximately $23 million is slated for 16 technology-related projects, including installing high-speed fiber-optic networks and telecommunications in several communities. In May, the commission announced it had secured a $389 million endowment to support technology and economic development projects. The commission distributes its funds through several economic-development related initiatives including: small business financing to support entrepreneurship programs in the Southside and Southwest regions of Virginia; an industrial inducement fund called the Tobacco Region Opportunity Fund; and, an economic development fund. The commission anticipates receiving more than $572 million in tobacco settlement funds annually through 2007, then dropping to $152 million each year after that until 2017.

Sources for this story include: State Tobacco Settlement Report available at: http://www.tobaccofreekids.org/reports/settlements/, and Laboratories of Innovation: State Bioscience Initiatives 2004 available at: http://www.bio.org/local/battelle2004/

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EDA Telecast to Discuss SACI Recommendations
On Monday, Sept. 26, 2005, the Economic Development Administration will host a one-hour telecast, to discuss the final report of the Strengthening America’s Communities Advisory Committee.

The telecast will feature members of the Strengthening America’s Communities Advisory Committee to discuss recommendations on the planning and successful implementation of the President’s Strengthening America’s Communities Initiative (SACI) (see the July 25 issue of the Digestfor SSTI review). The report is now public and is available at the SACI website at www.doc.gov/SACI

The report’s overarching premise is that globalization has fundamentally changed the American economy, and that the economic health of the U.S. is now dependent upon the competitiveness of its regions. Despite these economic changes, America continues with policies, organizational structures, and investment strategies from a past era.

Therefore, the SACI committee argues, it is necessary to build a new system of federal economic and community development that invests in the strengthening of regions and their communities.

Guests of the show will include:

Please contact Peggy Tadej at the EDA for more information about the show and viewing instructions at 202-986-1032 x224, or visit the EDA website at http://www.eda.gov/NewsEvents/WebCastsVideos.xml.

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SSTI Job Corner
For more information on the positions below, visit SSTI's online Job Corner at http://www.ssti.org/posting.htm.

Program Research Analyst - Battelle
Battelle, a global science and technology enterprise that develops and commercializes technology and manages laboratories for customers, is seeking a full-time program research analyst for its Cleveland office.Primary job responsibilities will includeconducting and/or participating in assigned technical tasks and activities with minimum supervision and within time and budget constraints; maintaining both formal and informal communications and relationships with clients, including responsibility for reports and presentations; and achieving high technical quality in assigned projects. Applicants should have a relevant master’s degree (e.g. business administration, economics, city/regional planning, geography, or public policy) or a bachelor’s degree with additional experience. The successful candidate will have prior experience in technology-based economic development, cluster analysis, and research & strategy formulation. At least three years of experience is required.

Executive Director - Pennsylvania NanoMaterials Commercialization Center
The Pittsburgh Technology Council, a regional technology trade association, and the Doyle Center for Manufacturing Technology, a consortium that assists small manufacturers in the supply chain of defense industry OEMs, are seeking an experienced professional to serve as executive director of the Pennsylvania NanoMaterials Commercialization Center. This position reports to the CEO and is responsible for developing and implementing an industry-led strategy to grow Pennsylvania’s commercial activities in the field of nanomaterials. To be considered, applicants must provide evidence of 5-10 years of experience in working with and obtaining funding from federal agencies, including the National Science Foundation, the National Institute of Standards and Technology or other research-intensive agencies; a degree in engineering, materials science, chemistry; a strong background in federal R&D programs; established relationships with relevant local, state and federal entities; and a working knowledge of material science and nanotechnology.

Vice President of Workforce Education and Development - Pittsburgh Technology Council; Catalyst Connection
The Pittsburgh Technology Council and Catalyst Connection, a regional economic development organization focused on improving the performance of local manufacturing companies, are seeking an experienced professional to serve as vice president of workforce education and development. This position also reports to the CEO and is responsible for the oversight of academic outreach and relations, manufacturing, technology and life sciences employer engagement in educational projects, and all Council/Catalyst Connection and workforce education development programs and public policy initiatives. The successful candidate will work with regional leaders to integrate workforce development with the region's overall economic development priorities and will represent the Council and Catalyst Connection in education and workforce forums at the regional, state and national levels. To be considered, applicants must provide evidence of 10-15 years of executive level experience in workforce development, education or a related field; experience in managing complex, cross-functional teams and projects, program development and meeting financial targets; and extensive experience in working with industry, economic development, civic, philanthropic and education/training leadership. A master's degree is required.

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