Washington Gov. Proposes $350M Life Science Fund

Gov. Christine Gregoire announced the first stages of her economic development program last Wednesday, highlighted by a proposal to inject $35 million annually starting in 2008 for the next 10 years into life sciences research at the state's universities. Gov. Gregoire also requested legislation be introduced this week that would facilitate the transfer of technology from research institutions to the private sector.

Gov. Gregoire said the payoff of the proposed Life Sciences Discovery Fund would be twofold, with a strengthening of the state's reputation as a bioscience center and the creation of as many as 20,000 new jobs in the next 10-15 years.

The state legislature and the administration of former Gov. Gary Locke had grappled with increasing the state's biotech investment for the past two years, yet no final funding package ever emerged from the legislature. Gov. Gregoire and the state's private and academic life sciences research community is hopeful the new version of the proposal will be more palatable.

Washington currently is one of the top five states in the nation in drawing research grants, but with deficit pressures on the federal budget likely to reduce the availability of federal research funds at the same time other states are increasing their life science investments, that could change, she noted.

But Gov. Gregoire said creating the Discovery Fund was only the first step in stimulating the growth of this state’s bioscience industries. She said the state needs to target the convergence of life sciences and information technology in the form of competitive grants to build research capacity, support research with clinical and commercial promise, recruit top scientific talent, and encourage collaboration between industry and Washington's research institutions.

Senate Bill 5581 and House Bill 1623, introduced this week at her request, would:

• Create a fund to make grants for promising life-sciences research in Washington;
• Beginning in 2008, provide $35 million in funding per year for 10 years from strategic tobacco settlement funds;
• Make this seed capital investment contingent on attracting at least $10 million in private capital by 2008, with a goal of increasing that to $100 million over time; and,
• Establish a board of trustees that will review applications for grants based on their potential impacts on health care, employment and geographic diversity.

Gov. Gregoire said that over 10 years, she expects the $350 million the state contributes to be matched at least two-to-one by federal and private grants, taking the total potential investment to well over $1 billion.

In the same announcement, the new governor recommended two other economic development proposals designed to help small businesses succeed. The first would double the business and occupation tax credit for small businesses to help these businesses prosper when they are just getting started and may have no profits, yet still owe B&O taxes on their gross revenues. Gov. Gregoire proposed doubling the maximum credit to $70 a month to provide brief or full B&O tax relief to 25,000 small businesses.

The other proposal would double to $100 million the program cap for the Washington Link Deposit Program, which encourages banks to make loans to certified minority and women-owned businesses at below-market rates. She also is proposing eliminating the scheduled sunset of this program in 2008.

The Labor, Commerce, Research & Development Committee of the Washington State Senate is scheduled to hold a public hearing on SB 5581 on Feb. 8. The House Technology, Energy & Communications Committee will hold its first hearing on HB 1623 on Feb. 10.

More information on both bills is available at: http://www.leg.wa.gov/wsladm/billinfo1/bills.cfm