SSTI Digest

Gov. Bev Perdue last week announced a number of proposals designed to grow the state's economy and create jobs by focusing on the small business sector. The JobsNOW Small Business Assistance Package involves three areas of assistance, including tax incentives, statewide support for small businesses, and expanding the N.C. business preference to help small businesses compete for state contracts. Proposals include tax credits for investors in innovative startup companies, expanding the cap from $7.5 million to $10 million on the qualified business venture tax credit, and providing a matching state grant to help North Carolina businesses compete for SBIR funding. Gov. Purdue also is expected to recommend adjustments to the biennial budget next week. Read the press release.

Saving the state an estimated $93 million a year, Hawaii House and Senate negotiators agreed to suspend the High-Tech Tax Credit, known as Act 221, for three years, reports the Honolulu Advertiser. Lawmakers also agreed to repeal the tax credits in May rather than at the end of December, the article states. The tax credits, available for equity investments in qualified high-tech companies, were established to provide seed funding for technology and entertainment projects. Controversy over the effectiveness of the tax credits resulted in several revisions aimed at tightening restrictions over the past decade. Just last year, lawmakers passed a bill capping the tax credits for investors at 80 percent. The bill became law without Gov. Linda Lingle's signature (see the Aug. 12, 2009 issue of the Digest).

On March 30, the Small Business Administration (SBA) issued a Notice of Final Amendments to the Small Business Innovation Research Program (SBIR) Policy Directive increasing the SBIR Program award threshold to $150,000 for Phase I, up from $100,000, and $1 million for Phase II, up from $750,000. The current award threshold has not been adjusted since 1992 when Congress reauthorized the program's legislation. SBA received only two public comments, both supporting the proposed amendments, between August and September 2008. The notice is available at: http://edocket.access.gpo.gov/2010/2010-7018.htm.

The U.S. Department of Energy has released $100 million in funding for smart grid workforce training programs to prepare 30,000 new workers in utility and manufacturing industries. DOE expects the 54 projects to leverage an additional $95 million in funding from local sources. The awards will augment the $4 billion in funding for smart grid demonstration and deployment projects present in the 2009 Recovery Act. Read the announcement at: http://www.energy.gov/news/8842.htm.

California Governor Arnold Schwarzenegger has signed an executive order establishing the Governor's Office of Economic Development. The new office will offer assistance to businesses, connect entrepreneurs to state and regional organizations and encourage collaboration among research institutions and the private sector to promote emerging sectors. Read the announcement at: http://gov.ca.gov/press-release/14844/.

The Federal Communications Commission suffered a setback recently when a federal court ruled that the commission lacked the authority to regulate telecommunication companies' interference with customers' communications over the Internet. Without that authority, the FCC will not be able to enforce net neutrality, a concept that was to play a major role in the commission's National Broadband Plan. That plan set the goal of connecting 100 million homes to high-speed broadband by 2010 (see the March 17, 2010 issue). Though the FCC says that the ruling will have little effect on most of the plan, some portions, including those related to rural and low-income connectivity and to improve service for small businesses, could suffer delays.

California Gov. Arnold Schwarzenegger signed an executive order establishing the Governor's Office of Economic Development and appointed Joel Ayala as the director of the new office.

Dennis Lower has been named the new president and chief executive office of the Center of Research, Technology and Entrepreneurial Exchange. Currently, Lower serves as vice president of planning and development and director of InterTech Science Park for the Biomedical Research Foundation of Northwest Louisiana. He will start at CORTEX in May.

Wisconsin Department of Commerce Secretary Dick Leinenkugel has resigned as secretary of the Department to pursue a new opportunity.

Now is the time to highlight your organization's impact and gain high-profile exposure as a recipient of SSTI's national award for excellence in technology-based economic development (TBED).

Recipients of this coveted award are showcased as best practices throughout the TBED community and promoted for their exceptional achievements in approaches to building tech-based economies and demonstration of outstanding results.

SSTI invites applications for the 2010 Excellence in TBED Awards in the following categories:

• Expanding the Research Capacity
• Commercializing Research
• Building Entrepreneurial Capacity
• Increasing Access to Capital
• Enhancing the Science & Technology Workforce
• Improving Competitiveness of Existing Industries

Award Selection Criteria

The initiative must:

Finance reform legislation, bound for the Senate floor in April, could have significant repercussions for investors and entrepreneurs. The bill, introduced by Senator Christopher Dodd (D-CT), would create a new consumer protection watchdog within the Federal Reserve, install new regulations and safety valves to prevent another financial meltdown, and provide greater transparency within the financial industry. Two short provisions, however, have caught the attention of the private equity community and could change the rules for investors. The first would raise the minimum income and wealth level needed for individuals to qualify as accredited investors who may invest without forcing the company to register with the U.S. Securities and Exchange Commission (SEC). The second would allow each state to set its own rules regarding accredited investor security offerings.

The Office of Science and Technology Policy and the National Economic Council have issued a request for information (RFI) on how best to encourage the commercialization of university research and on whether proof of concept centers are an effective tool in early-stage commercialization. The RFI asks for models, strategies and metrics that can help universities contribute to economic development. Responses are due by April 26. The request for information is available at:http://www.gpo.gov/fdsys/pkg/FR-2010-03-25/pdf/2010-6606.pdf

The U.S. lags behind many of its G-20 partners in clean energy finance and investment, according to a new study by the Pew Charitable Trusts. Many factors, including a tight credit market and the lack of a strong national framework for clean energy funding, are cited as contributing to the U.S.'s declining position in the ranks for total investment and investment intensity. As of 2009, China has taken the U.S.'s former top spot in overall clean energy investment, dedicating $34.6 billion to the sector. Spain leads the G-20 nation's in investment intensity, while the U.S. ranks 11th. The report also points out that the U.S. has yet to put into place several national clean energy policies that are becoming standard among G-20 countries.

Five bills in support of Gov. Bob McDonnell's "Jobs and Opportunity Agenda" were signed into law this week, including a measure to exempt the capital gains tax on investments in science-based or biotech startups, designed to provide a significant incentive for investors in technology start-ups.

Under the bill (SB 428/HB 523), qualified investments in a technology, biotechnology, or science-based startup company in the Commonwealth with less than $3 million in annual revenues will be exempt from capital gains tax. Investments must be made between July 1, 2010 and June 30, 2013.