Hawaii
Lawmakers agreed to a scaled-back restructuring plan for the Department of Business, Economic Development and Tourism (DBEDT), separating one division from the department and transferring two attached agencies to other departments.

A proposal introduced earlier in the session called for the removal of several programs from DBEDT, including transferring the state’s lead TBED organization, the High Technology Development Corporation (HTDC), to the Department of Commerce or the higher education system. Although the legislature has indicated they will likely review DBEDT again next year, only the Creative Industries Division, which supports copyright-based industries such as film and digital media and performing and visual arts, would be split up in the coming year, according to an article in the Honolulu Advertiser.

Placing new restrictions on Hawaii’s high-technology investment tax credits, SB 199 establishes a temporary 80 percent tax credit cap and restricts carryover credits on the high-tech business investment tax credit and the technology infrastructure renovation tax credit for investments made between May 1, 2009 and Jan. 1, 2011. Some in tech community voiced concerns that the changes could drive away out-of-state investors, but legislators said it would plug a $150 million hole in the state budget, reports the Pacific Business News. Gov. Linda Lingle’s budget proposal called for tightening the investment tax credits, known as Act 221, to conform to the federal tax code (see the Jan. 7, 2009 issue of the Digest).

Gov. Lingle signed Act 052, establishing an Aerospace Advisory Committee within the Office of Aerospace Development of DBEDT to advise the legislature and state agencies in monitoring, assessing and promoting aerospace development statewide. The committee will track state, national and global trends in aerospace development, identify opportunities to expand and diversify aerospace-related industries in the state, and develop public-private partnerships to support the growth of aerospace development. The 16-member council will be made up of representatives from the aerospace industry, economic development boards, and members of the department of education and university and community college system.

The 2009-11 biennial budget passed by the legislature earlier this month includes $10.8 billion in FY10 and $10.4 billion in FY11 for the state’s operating expenses and reflects approximately $800 million in total-reductions, reports the Honolulu Advertiser.

For HTDC, lawmakers approved $9.8 million in FY10 total funds and $9.7 million in FY11 total funds, including $3.8 million each year in special funds, $1.5 million each year in revolving funds, and the remainder from general funds and federal funds. In the 2007-09 biennium, HTDC received just under $19.6 million in state appropriations. HTDC facilitates the development and growth of Hawaii’s high technology industry.

The total budget amount approved by the legislature for the Hawaii Strategic Development Corporation (HSDC), is $6.9 million for each fiscal year. HSDC works to develop a sustainable venture capital industry in Hawaii.

Gov. Lingle has until July 15 to act on the 2009-11 budget and remaining legislation.

Missouri
A major focus of the Missouri legislative session centered on a jobs bill, HB 191, which expands the state’s Quality Jobs and BUILD incentives programs, providing financial resources to help businesses expand and create jobs, according to the governor’s office.

The passed bill eliminates the $500,000 per-company annual cap on technology business projects within the Quality Jobs tax credits, eliminates the per-company annual cap on high-impact projects within the program, which is currently $750,000 to $1 million, and increases the state’s exposure for the program from $60 million to $80 million. The legislation also increases the total amount of tax credits that can be authorized annually for the BUILD program from $15 million to $25 million. A proposed tax credit to pay for a percentage of company research expenses was left out of the final version of the bill, reports the Associated Press.

Providing supplemental appropriations for FY09 through the state’s share of federal stimulus funds, Gov. Jay Nixon also signed HB15, which includes $30.9 million to the Department of Economic Development for employment and job training programs. A portion of the funding will support the Next Generation Jobs Team, a summer employment program connecting youth with internships and work experiences at high-tech, cutting-edge businesses beginning this month, according to the governor’s office.

In addition, lawmakers passed a $23.1 billion FY10 budget last month, allocating a combination of state and federal funds to support job creation programs throughout the state. The budget for the Department of Economic Development allocates $13.3 million in FY10 from the Life Sciences Research Trust Fund for the Life Sciences Research Board to fund projects related to increasing Missouri’s research capacity. This is about the same amount approved for new grants in FY09. Established in 2003, the fund was created to support life science research, commercialization, and technology transfer using a portion of the state’s tobacco settlement funds.

The General Assembly did not fund the governor’s $60 million Missouri Promise proposal. The plan would have expanded the state’s A+ Program, which provides community college tuition to eligible high school graduates only from designated schools, to include all public high schools, and provide an additional two years’ tuition to students who earned an associate’s degree through the program.

Higher education tuition, however, will remain level in the upcoming school year as a result of an agreement between Gov. Nixon and leaders of the state’s two- and four-year institutions. 

Within the Department of Elementary and Secondary Education budget, lawmakers allocated $1 million from the federal budget stabilization fund – the same as last year – for the eMINTS grant program, a statewide instructional model for teachers in support of the Missouri Mathematics, Engineering, Technology and Science Initiative.

North Dakota
After the conclusion of the 2009 legislative session last month, Gov. John Hoeven signed into law several bills supporting economic growth through targeted investments in agricultural R&D, energy, workforce training, and higher education. 

One of only a handful of states still operating with a surplus, state lawmakers funded several priorities outlined in the governor’s budget proposal designed to diversify the state’s economy (see the Dec. 10, 2008 issue of the Digest). Department of Commerce appropriations include:

• $20 million for Centers of Excellence grants (the same as last biennium), including $10 million for enhancement grants at the University of North Dakota and North Dakota State University (NDSU) that can be used to support research opportunities made possible with military base realignment;
• $2.5 million to support innovation and entrepreneurship, including $1 million for a technology-based entrepreneurship grant program to be developed by the Department of Commerce, $400,000 for Innovate ND, which is a business competition that provides funds for innovative startup ideas, and seed financing to support new business incubators and entrepreneurs; and,
• $1 million for the workforce enhancement fund to assist two-year colleges to respond to business and industry workforce training.

The 2009-11 budget provides $3 million for the Renewable Energy Fund and enacts a law regulating geological storage of carbon dioxide. Lawmakers also approved the governor’s full recommendation of $2 million for installation of blender pumps at motor fuel retailers to promote expanded use of ethanol and biodiesel.

Building on the angel fund investment income tax credit established during the 2007 session, lawmakers passed and Gov. Hoeven signed SB 2269, creating an angel fund investment tax credit. The tax credit provides an incentive for pools of investors, or angel funds, to invest in high-risk economic development projects, including information technology entrepreneurial ventures.

Gov. Hoeven also signed into law SB 2020, the Agriculture Research and Extension bill, providing $17 million for agricultural research infrastructure. The funding includes $11.4 million for Phase II of the NDSU Research Greenhouse and $2.9 million for expansion to the state’s Research Extension Centers.

With a 25 percent increase over last biennium, the $795 million Higher Education appropriation bill includes $1.5 million for science, technology, engineering and mathematics (STEM) grants. Funding allocations are to be used to enhance the use of STEM in existing teacher education program curriculums, according to budget documents.

A STEM measure that failed to pass in the Senate would have encouraged college students to pursue studies in STEM fields, participate in internship programs, and remain in the state after graduation. The legislation would have revised the technology occupations student loan program to include STEM occupations and increase the maximum loan amount to $2,000 per academic year.

The $4.5 billion budget includes $4 million in economic development incentives to be administered through the Vermont Economic Development Authority (VEDA), significantly less than the $11 million proposed by the governor. The Vermont Telecommunications Authority (VTA) will receive only $500,000, which the governor says will effectively shut down the organization by September. VTA has played an integral role in the state's unfinished plan to provide border-to-border cell phone and wireless data access.

Funding has been zeroed-out for the Next Generation program, which provided support for college scholarships and workforce training, including technology-related internships.

Also left out of the final bill is Gov. Douglas' SmartVermont plan to leverage federal stimulus funds, which would have provided $17.2 million for statewide economic development (see the April 1, 2009 issue). The plan would have allocated $4 million for entrepreneurial seed capital, $2.5 million for loans to existing companies, $500,000 for the Vermont Center for Emerging Technologies business incubator and $500,000 for the Vermont Training Program to provide technology education to workers.

Following his promise to veto the legislature's budget in late May, Gov. Douglas released an alternative budget that preserved many of his favored projects while cutting others and raising another $13 million in revenue. His budget would have restored the $2.6 million for the Next Generation program and allocated $11 million for VEDA-administered economic development incentives. The bill also would have introduced a research and development tax credit. Though many of these items were in his January budget request, the May budget proposal included tax increases and alternative cuts to offset costs. 

The new budget proposal, however, was set aside by the legislature in favor of the original bill.

Gov. Douglas also opposed an energy bill that sets more favorable rates for renewable electricity production, but signed the bill after it was approved by a significant majority of legislators. Under the new arrangement, rates for solar, wind, hydro and methane power will be set up to six times higher than the current rate, though the state's Public Service Board will be able to make adjustments if the costs prove unreasonable. Legislators believe that the measure will eventually drive down the cost of renewable sources of electricity and promote the growing renewable energy sector in the state. Gov. Douglas, however, argued that the bill failed to acknowledge the already competitive position of renewable energy producers. The governor signed the bill last week, noting that any veto would be overridden.

Gov. Douglas' explanation of the veto is available at: http://governor.vermont.gov/tools/index.php?topic=GovPressReleases&id=3507&v=Article.

SSTI’s Excellence in TBED Award can help you build recognition for your organization and gain support to continue your critical tech-based economic development efforts.

Every group working toward building a tech-based economy has a story tell, and we want to hear yours. There is still time to apply for the most prestigious recognition in the TBED field. Simply submit a five-page narrative describing your organization’s most successful efforts by the June 16 deadline.

Your application will be evaluated by a committee of distinguished policymakers and practitioners serving as judges. Winners will be recognized during a highly-anticipated ceremony at SSTI’s annual conference Oct. 22-23 in Overland Park, KS.

More information about the awards is available at: www.sstiawards.org.

Download or subscribe to podcasts featuring exclusive interviews with past Excellence in TBED Award Winners: http://www.ssti.org/Awards/podcasts.htm.

The two main components of the Florida Biomedical Research Programs administered by the Florida Department of Health emerge with large funding increases. The James and Esther King Biomedical Research Program will be given $27.2 million from the state biomedical research trust fund in FY09-10, up from $9.9 million in the previous year. Similarly, the Bankhead-Coley Cancer Research Program will receive $25.0 million, an increase from $9.0 million last year.

Enterprise Florida, the state’s main economic development organization, will receive $11.4 million – down from $11.9 million in the previous budget. Space Florida, concentrating on aerospace development, will receive $3.8 million – down from $4.0 million in the previous budget.

Just over $21.1 million will be used for the Qualified Target Industries Tax Refund Incentive, Qualified Defense Contractors Tax Refund Incentive, and the High Impact Performance Incentive programs, collectively a decrease of $500,000 from the previous fiscal year.

The state’s Quick Action Closing Fund, used by the state to arrange capital when competing for high-wage jobs, will receive $13.5 million in the FY09-10 budget, down from $26.5 million in the previous year. Gov. Crist originally requested $45 million for the Closing Fund in this year’s budget request.

The full text of SB2600, similar to the signed budget except for two line-item vetoes (one regarding a pay reduction for state employees and the other regarding the usage of general funds for gun permits), is available at: http://www.flgov.com/budget/sb_2600.pdf.

The results, when compared to findings from a similar survey ACA conducted in November 2008, suggest the angel community is becoming more certain in their outlook on 2009. That might be expected, now that we are five months into the year, but no real trends are appearing other than the number of angels seeing declines is growing at a faster pace than the number expecting growth. In November, only 34.4 percent expected lower deals and yields and only 20.4 percent expected increases.

Irrespective of their own positions, a majority of angel groups (56.2 percent) expect the current economic downturn to continue into 2010. Most, however, expect their own investments to remain stable or increase. Only 42.4 percent reported that the current climate has reduced their appetite for new deals. The other 57.6 percent said that the downturn has either increased their aggressiveness in seeking new deals or not affected it at all.

More telling are the findings that most groups indicated that they plan to make changes in their organizational and funding structure this year, perhaps in response to the changing market for investment capital. While no groups said that they plan to reduce their number of member investors, 29.2 percent said that they plan to seek new investors. Twenty percent said that they plan to establish a sidecar fund for their network and 12.3 percent said that they plan to raise a new fund. A majority (52.8 percent) said that they plan to increase their co-investments with other angel groups and 35.4 percent plan to increase co-investments with other equity investors, including venture funds and individual angels.

The “ACA 2009 Angel Group Confidence Report” is available at: http://www.angelcapitalassociation.org/dir_about/news_detail.aspx?id=196.

Using figures provided by the individual federal agencies, SSTI has prepared a table showing FY08 Phase I SBIR data for all 50 states, Puerto Rico, and the District of Columbia. Statistics include awards, proposals and award-to-proposal conversion rates for 10 of the 12 participating agencies (the Department of Education and the Commerce Department's National Oceanic and Atmospheric Administration declined to provide proposal statistics). The table is available at: http://www.ssti.org/Digest/Tables/060309t.htm.

FY 2007: http://www.ssti.org/Digest/Tables/070908t.htm
FY 2006: http://www.ssti.org/Digest/Tables/120507t.htm
FY 2005: http://www.ssti.org/Digest/Tables/022607t.htm
FY 2004: http://www.ssti.org/Digest/Tables/042505t.htm
FY 2003: http://www.ssti.org/Digest/Tables/062705t.htm
FY 2002: http://www.ssti.org/Digest/Tables/090503t.htm
FY 2001: http://www.ssti.org/Digest/Tables/051002t.htm
FY 2000: http://www.ssti.org/Digest/Tables/030901t.htm (award data only)

Agriculture Secretary Tom Vilsack announced the appointment of Judith Canales as Administrator for Rural Business and Cooperative programs in USDA’s Rural Development agency.

Donald Cardon, who has been serving as director of the Arizona Department of Housing since March, was named director of the Arizona Department of Commerce.

John Chaffee has assumed the post of president and CEO of North Carolina’s Eastern Region Development Commission. His predecessor, Al Delia, left when he was appointed as Gov. Bev Perdue’s policy director.

Howard Gobstein is now the Executive Officer and Vice President of the Association of Public and Land-grant Universities.

Toronto's MaRS Innovation has appointed Dr. Raphael (Rafi) Hofstein as President and CEO, effective June 8.

Jeff Mason, currently senior vice president and chief business development officer for the Michigan Economic Development Corp., has been selected to become the first executive director of Michigan’s University Research Corridor effective July 6.

Southeast BIO has named Jennifer Moore as its new executive director. Moore replaces Stephanie Adams.

The Kansas Technology Enterprise Corporation (KTEC) board of directors announced that Tracy Taylor is stepping down as KTEC’s president and chief executive officer effective June 30.

Kirk White, director of community relations at Indiana University, has been promoted to the newly created position of assistant vice president for university relations and engagement. White, a lieutenant colonel in the Indiana National Guard, has been called to active duty for a second tour in Afghanistan and will be on a leave of absence from IU until the summer of 2010.