Kansas Primes Biotech, Entrepreneurship with Cool Half-Billion

A minimum $500 million 10-year investment to encourage biotech and entrepreneurship may soon become a reality for Kansas. With Gov. Kathleen Sebelius' approval of the Kansas Economic Growth Act, Kansas will set in motion a variety of new programs to encourage research, innovation and technology commercialization.

Much of the state's multimillion-dollar initiative is carried by its biotech element. A newly-created Kansas Bioscience Authority will oversee and administer the investment, with the goal of recruiting 25 eminent and 35 rising star scholars at state universities. The independent public agency also will provide funds for developing lab space and equipment to conduct biosciences research.

Other programs to be run by the Authority include a research incentive program pairing bioscience companies with Kansas universities, a technology transfer program, and a program to identify patents with commercial potential. In addition, the Kansas Economic Growth Act includes several tax proposals to encourage the growth of bioscience firms (see the Jan. 30, 2004, issue of the Digest).

Funding for all biosciences activities would come from the tax income generated from the growth of Kansas bioscience companies and research institutions over the next 12 years. The $593.1 million in revenue expected to result from this growth does not include any revenue resulting from a proposed seed capital fund or the additional capital gains from private investors in Kansas’ new bioscience start-up companies.

Meanwhile, the Kansas Economic Growth Act also creates five major initiatives to foster entrepreneurship across the state:

• The Angel Investment Tax Credit Program will provide a total of $20 million in tax credits for successful business persons to invest in Kansas start-ups and to serve as advisors to those companies. The program allows investors a 50 percent tax credit, or up to $50,000, of qualifying cash investments.
• The Kansas Center for Entrepreneurship will serve as a clearinghouse for entrepreneurs, complete with a toll-free telephone number and website, and provide access to economic development and entrepreneurial assistance organizations.
• The Kansas Community Entrepreneurship Fund will assist in providing seed funding for entrepreneurs, with the State of Kansas making the fund's initial contribution. The fund is expected to be matched by other sources through donations and grants.
• The Kansas Downtown Redevelopment Act is intended to encourage entrepreneurs to locate and invest in local Kansas communities. Cities will apply to be designated a downtown redevelopment area, whereby abatement of real property tax increments will be available for properties that have undergone improvements.
• The Enterprise Facilitation Program supports the expansion of the existing Enterprise Facilitation Boards, which ensure that community boards can provide continued support for local, rural entrepreneurs.

Approximately $3.5 million over 10 years is needed to cover the entrepreneurship center's operating expenses and the entrepreneurship fund's initial investment. Additional funding for the Enterprise Facilitation Program has not not been identified.

Collectively, House Bill 2647 and Senate Bills 393, 480 and 520 comprise the Kansas Economic Growth Act. With Gov. Sebelius' signature on all bills, expected today, the Act will become law. More information is available at: http://www.ktec.com/news/legislator/legislativewatch.htm

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