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NC Budget Boosts Funding for Life Sciences, Small Businesses in FY11

August 04, 2010

Several components of Gov. Bev Perdue's JobsNOW small business package related to tech-based economic development efforts in North Carolina were approved in the FY11 budget signed into law on June 30. A program to provide matching funds for Small Business Innovation Research (SBIR) will see its budget more than double in the second year of the biennium and life science programs will receive more than $22 million in recurring appropriations. The enacted budget also extends to Jan. 1, 2013 the Qualified Business Investment Venture credit, which provides a capped incentive for angel investment in cutting-edge industry sectors. The governor had proposed raising the cap from $7.5 million to $10 million, a measure that was not included in the final budget.

In support of the state's life sciences sector, the enacted budget adds more than $22 million to biotech, ag-biotech and biofuels programs in the coming year and allocates recurring funding for some programs that had previously received one-time appropriations, according to NCBIO. This includes $10 million annually for the Institute of Regenerative Medicine and $5 million annually for the Biofuels Center of North Carolina. The North Carolina Biotechnology Center will receive an additional $5 million in FY11, bringing its annual appropriation to $19.5 million. The center works to strengthen the research capabilities of North Carolina's companies and universities.

Increases of $1 million annually also were approved for the North Carolina Research Campus at Kannapolis and for nanobioscience activities at the A&T State/UNC-G Joint School of Nanoscience and Nanoengineering, reports NCBIO.

New appropriations within the Department of Commerce include $1.5 million for the One NC Small Business Fund to provide matching grants to businesses that qualify for federal SBIR/STTR funds. This is up from $700,000 approved for the program last year, but still down from the FY09 appropriation, which awarded $3.5 million for the program (see the July 16, 2008 issue of the Digest). The department also is slated to receive $1 million in FY11 for matching funds for U.S. Department of Energy grants to support energy research and green jobs.

Also part of the small business package, the Department of Commerce will receive $150,000 to develop the In-Source NC Network, a program that provides funding to develop university-based supplier networks within emerging and established industry sectors such as textiles and biotechnology. The networks will be modeled on an existing industry network developed and operated through the North Carolina State University College of Textiles, according to budget documents.

Left out of the package proposed by the governor was a small business startup tax credit that would encourage investment in small business by allowing favorable capital gains treatment of the founding interests in the business.

Lawmakers did pass a bill (SB 308) this session aimed at promoting domestic manufacturing by allowing private foundations to make low-interest loans to qualifying low-profit limited liability (L3C) firms, whether they are startup or existing companies, reports The Dispatch. The bill is expected to help domestic manufacturers cut overhead costs, create more jobs, and better compete in the global marketplace, according to the article.

The Appropriations Act of 2010, which makes adjustments to the 2009-11 biennial budget is available at: http://www.ncga.state.nc.us/Sessions/2009/Bills/Senate/PDF/S897v8.pdf.

North Carolinabio, small business