Legislative Actions & Tech Talkin' Govs 2006, Part II

The second installment to Walkin' the Tech Talkin' Gov Walk (see the April 17 issue of the Digest) covers the outcomes of the 2006 legislative sessions within four states, Connecticut, Florida, Hawaii and Kentucky. Following is a synopsis of bills passed and budget appropriations relevant to tech-based economic development and the priorities outlined in respective gubernatorial addresses at the beginning of 2006.

Connecticut

Gov. Jodi Rell signed into law SB 702, An Act Concerning Jobs for the 21st Century, a major component of her economic development strategy (see the Feb. 20 issue of the Digest). The core legislation exempts all manufacturing machinery and equipment from local property tax after a five-year phase out of the tax. Other provisions include:

• Authorization for new grants to entities operating incubator facilities that house and provide services to small tech-based companies;
• New programs at Connecticut Innovations to provide venture capital to businesses in early stages of product development and to provide matching grants to micro-businesses that receive federal research assistance;
• Two new student loan repayment programs for candidates with engineering degrees or certain doctoral degrees working in Connecticut in eligible career fields;
• A faculty recruitment program and Entrepreneur Center at the University of Connecticut to help support state business and economic development;
• Implementation of three pilot programs designed to stimulate interest of secondary school students in math and science; and
• A new Office of Business Advocate to help small businesses identify and access public and private business assistance.

The original bill, SB 1, proposed funding for the initiatives. However, the final bill dropped all language for funding mechanisms and instead relies on carryover funding from fiscal year 2006. Additionally, the final bill dropped the governor's proposed reorganization of the state's economic development office.

The FY 2006-07 Midterm Budget, HB 5845, includes $6 million over FY 2007-08 for the governor's proposed Job Creation Tax Credit, which establishes a credit for companies that relocate to the state and create new jobs. Also approved is $4.5 million per year beginning in FY 07 for the Displaced Worker Tax Credit, which provides a $1,500 per worker business tax credit to companies that hire workers who were let go by a previous employer as a direct result of business restructuring.

Florida

Nearly all the components of Gov. Jeb Bush's Innovation Agenda were approved by the legislature, although funding to finance the plan was cut almost in half. The governor's FY 2006-07 budget proposal included $630 million for research-focused initiatives, business recruitment funds, and other economic development related programs (see the Feb. 6 issue of the Digest). Following are the initiatives and funding levels approved by the legislature:

• SB 2728 creates the Florida Innovation Incentive Program to provide resources for significant economic development projects and appropriates $250 million ($150 million of which is placed in reserve until released by the Legislative Budget Commission). Additionally, the bill increases the Quick Action Closing Fund from $10 million to $50 million ($10 million of which is placed in reserve).
• HB 1237 creates the 21st Century Technology, Research, and Scholarship Enhancement Act and appropriates $100 million ($100 million less than requested). This includes:
  • $20 million for the 21st Century World Class Scholars Program;
  • $30 million to the Centers of Excellence Program;
  • $36.5 million for research projects at Florida State University and the University of Florida;
  • $8.5 million for construction of science and engineering facilities at the two universities; and,
  • $5 million for a matching grant program for community colleges.
• HB 1489 appropriates $42 million ($13 million less than requested) to expand the aerospace industry in the state and redesignates the Florida Space Authority as "Space Florida."

The Capital Formation Act, HB 1467, died in the Senate. The measure would have provided tax credits for the new Florida Capital Formation Program to create early-stage venture capital for start-up companies.

Hawaii

The legislature approved Gov. Linda Lingle's initiatives for energy self-sufficiency outlined in her State-of-the-State Address (see the Jan. 30 issue of the Digest). HB 2175 increases renewable energy tax credits for photovoltaic systems and removes the credit's 2008 sunset date. It also authorizes bond issuances to install photovoltaic systems at public schools statewide and enables state facilities to meet greenhouse gas and energy consumption goals. The bill requires incorporation of Leadership in Energy and Environmental Design silver standards for certain state-funded facilities and establishes a pilot project to help finance residential solar hot water systems.

A bill that establishes the Innovation Special Fund, SB 2546, to support life sciences, advanced technology, and renewable energy industries was unexpectedly tabled at the session's end last week, the Honolulu Advertiser reports. The measure would have provided $100 million in general fund revenue over the next four years.

Kentucky

The legislature approved several of Gov. Ernie Fletcher's budget recommendations, including $40 million for New Economy Initiatives. The governor announced new investments to spur the growth of companies in niche areas identified by the Life and Biosciences Task Force during his State-of-the-Commonwealth Address (see the Jan. 16 issue of the Digest). Approved funding for New Economy Initiatives includes $20 million for seven new initiatives ($8 million in FY 2006-07 and $12 million in FY 2007-08) and $20 million in bonds for Kentucky's two high-tech investment pools. Newly funded initiatives within the Department of Commercialization include:

• A Small Business Innovation Research (SBIR) Incentive Program to encourage small, high-tech businesses to explore their technological potential and maximize profit from commercialization;
• A statewide science and technology assets database that combines all statewide S&T assets and capabilities for businesses to use for facilitating existing and new opportunities between companies;
• A statewide life sciences and biotechnology assessment to help develop specialized insight into the industry and implement strategies to overcome challenges in this sector;
• Development of a statewide nanoscience analysis and strategic plan and implementation of a fast-start technology commercialization and innovation strategy;
• Expansion of existing biotechnology commercialization efforts under Kentucky's current statewide biotechnology commercialization program; and,
• A strategic analysis of technologies to provide a re-evaluation of the state's top S&T assets and capabilities other than biosciences.

In addition, the legislature approved funding for the governor's educational technology proposals. This includes $4.2 million of the Kentucky High Tech Investment Pool funds to be used for a grant to administer the ConnectKentucky Program; $16.1 million in bond funds for a high-speed education telecommunications network; and $15 million for a web-based online testing program for teachers.