Centers of Excellence, Entrepreneurship Grants Funded in North Dakota Budget

Lawmakers last week passed the 2011-13 biennial budget, providing $12 million for the state's Centers of Research Excellence program. Although it is less than Gov. Jack Dalrymple's request of $20 million to expand the program and provide additional funding for three new centers, the legislature's appropriation will allow for continued investments in infrastructure and research capacity at a time when many states are reducing funding for TBED to help fill budget deficits. The approved budget also includes $1 million for technology-based entrepreneurship grants and establishes a program to provide matching grants for startup technology businesses.

The budget bill for the Department of Commerce allocates $12 million for the Centers of Excellence over the biennium, down from $19.5 million last biennium. Of this amount, $4 million is set aside to advance a limited deployment-cooperative airspace project with the state's research universities, with $2.7 million awarded to the University of North Dakota (UND) and $1.3 million awarded to North Dakota State University (NDSU). Another $4 million each will go to UND and NDSU; however, $3 million of UND's funds must be used to establish and administer a base realignment grant program. The governor's plan to restructure the centers and target additional funding toward three new centers focusing on commercialization, entrepreneurship and workforce was not adopted by the legislature (see the Dec. 15, 2010 issue of the Digest).

The budget bill also establishes a new program providing matching funds for technology-based startup companies. The Small Business Technology Investment Program will receive $1 million over the next two years to provide grants of up to $50,000. The grants require a 2:1 match from a North Dakota angel fund investment. Another $1 million is included for technology-based entrepreneurship grants, the same as last biennium.

Individuals representing government, business and education will convene to conduct an assessment of the state's current assets and resources and identify new opportunities for economic growth and job creation through a new 2020 and Beyond Initiative. The budget provides $50,000 to implement the effort.

Lawmakers passed HB 1057 during the session, a measure that updates the state's pooled angel fund legislation to extend eligibility to all pass-through entities and adds transferability for out-of-state investors or in-state investors who do not have a tax liability. The bill allows for pass-through entities such as Sub-S, LLP, LLC, etc., to earn angel tax credits and pass them through to the owner or member. It also creates an aggregate taxpayer lifetime limit of angel credits to $150,000 and increases from four years to seven years carry forward of unused tax credits. The pooled angel tax credit was established in 2005.

A $1 million appropriation for STEM teacher education enhancement funding is included within the $765 million higher education budget. Following the budget agreement, the Chancellor of the North Dakota University System will recommend tuition limits set forth by the governor to freeze tuition for community colleges and limit increases at four-year institutions to 2.5 percent, reports Inforum.

North Dakota is increasing general fund spending by 20 percent over the next two years with larger projects financed by a fund for oil surplus taxes, reports The Associated Press. The budget approved by the legislature sets aside more than $1 billion in reserves, including $618.6 million for the Legacy Fund approved by voters in November to serve as a savings account for future generations.