SSTI Digest

Two bold proposals seeking to make big changes to community colleges in Massachusetts and New Jersey research universities recently were approved by lawmakers. In Massachusetts, more funding for the state's 15 community colleges is tied to increased oversight, performance measures and integration of workforce development initiatives. Meanwhile, New Jersey lawmakers passed a bill merging a medical and dentistry school with Rutgers University in hopes of strengthening partnerships for research projects and drawing more federal funding. In both states, the governors say the reforms are crucial for economic and job growth.

As many states near the mid-point of their 2012 legislative sessions, we thought it would be a good time to take a look at some of the bills advancing in statehouses that could impact states' efforts to improve economic conditions. Several states are seeking to advance access to capital initiatives as they continue to struggle with declining revenue and tight credit restrictions. The following overview provides a sampling of TBED bills supporting access to capital, R&D enhancements and higher education standards.

Providing Access to Capital

The Arizona Senate approved last month a bill to empower the state to facilitate $250 million in loans to manufacturers and other businesses by allowing third parties to sell income and insurance premium tax credits to venture capital firms, banks and other lenders, reports The Arizona Capitol Times. Supporters say the program, which has been employed at the federal level over the last decade under the New Markets structure, has been adopted successfully by nine other states. The measure awaits action in the House.

Michigan State University, Rutgers University and the University of Michigan all have announced new initiatives that are intended to fuel innovation and grow regional economies. Michigan State established the University Center for Regional Economic Innovation — a university-based, economic development research center focused on generating businesses and jobs statewide. Rutgers University created a Disruptive Innovation Fund to provide up to $1 million to support the commercialization of innovative products. The University of Michigan's Michigan Investment in New Technology Startups initiative will invest directly into U-M startup businesses.

The New Jersey Economic Development Agency currently is accepting comments from the state's science and technology (S&T) community on the development and implementation of a new "technology accelerator program." The mentor-based program is intended to create a competitive environment for S&T companies and entrepreneurs to showcase their products, ideas and business acumen for an opportunity to receive funding. Over the next three years, Governor Christie's administration intends to commit approximately $450,000 to the program. Read the press release...

Recent legislative actions supporting technology-based economic development include level funding for the Massachusetts Life Sciences Center, funding to support programs of the Minnesota Science and Technology Authority and the expansion of two state programs in support of technology and life sciences companies in New Jersey.

Massachusetts
The Massachusetts Life Sciences Center, a quasi-public agency charged with implementing the state's 10-year, $1 billion Life Sciences Initiative, will receive $10 million in FY12, the same as last year. The appropriation is contingent upon a consolidated net surplus for FY11. The center has so far committed $217 million in state funds, leveraged more than $710 million in additional outside investment, and created a projected 7,000 jobs, according to the agency.

The full budget can be viewed at www.mass.gov/gaa.

New Jersey's Economic Development Authority announced the Edison Innovation Green Growth Fund (EIGGF), a new loan program with a performance grant component to grow the state's energy efficiency and Class 1 renewable energy technology companies. The fund offers five-year fixed term loans of up to $1 million to eligible companies that have begun generating commercial revenues and are seeking matching funds (1:1 by the time of loan closing). If the company achieves certain milestones, up to 50 percent of the loan will convert to a performance grant at the end of year five. The program is supported by funding through the state Board of Public Utilities. Eligible technologies include:

Recognizing the value in supporting companies that innovate to create high-quality jobs, governors in New Jersey and Louisiana recently outlined proposals to enhance tax incentives for R&D, technology commercialization, and transferable tax certificates during the upcoming legislative sessions. In New Jersey, Gov. Chris Christie proposed increasing the R&D tax credit to 100 percent and restoring full funding for the Technology Business Tax Certificate Transfer program as part of his FY12 budget recommendations. Louisiana Gov. Bobby Jindal announced his intentions to work with the legislature to extend and enhance two innovation-related tax incentives — the R&D tax credit and the Technology Commercialization Credit/Jobs Program — when the session convenes in April.
New Jersey

The sixth installment of SSTI's Tech Talkin' Govs series includes excerpts from speeches delivered in Connecticut, Illinois, New Hampshire, New Jersey and North Carolina. The first five installments are available in the Jan. 5, Jan. 12, Jan. 19, Jan. 26 and Feb. 9 issues of the Digest.

Connecticut

Gov. Dan Malloy, Budget Address, Feb. 16, 2011

“We are combining our economic development efforts under one agency so we can have a single powerful voice when it comes to attracting, retaining, and growing jobs in Connecticut...like our new First Five initiative that will offer powerful incentives to the first five companies that bring hundreds of new jobs to Connecticut.

SSTI recently reported on two important bills passed by lawmakers in Michigan late last year and in New Jersey earlier this year that would provide incentives for taxpayers who invest in emerging technology companies. As an update to the Dec. 8, 2010 and Jan. 12, 2011 stories, both former Michigan Gov. Jennifer Granholm and New Jersey Gov. Chris Christie have taken action on the bills with opposing outcomes. Gov. Granholm signed HB 5921 into law on December 14, enacting a measure to provide a 25 percent personal tax credit for individuals who invest at least $20,000 in qualified seed and early stage companies. Gov. Chris Christie on Friday vetoed S.2454, the New Jersey Angel Investor Tax Credit Act, along with 13 other bills approved by lawmakers in January as part of a jobs package.

Maine Governor Paul LePage named Phillip Congdon as the new commissioner of the Department of Economic and Community Development. Cogndon is a licensed professional engineer who spent more than 20 years with Texas Instruments in Dallas. He replaces Acting Commissioner Thaxter Trafton.

Ohio Governor John Kasich announced Mark Kvamme, a partner at Sequoia Capital, will serve as the interim state development director. The Silicon Valley venture capitalist has agreed to do the job for a dollar.

Former NorTech CEO Dorothy Baunach will be Cuyahoga County's interim economic development director.

Ken Bloemer, executive director of the U.S.A. National Innovation Marketplace, will replace Phil Doepker as director of the University of Dayton, Innovation Center.

New Jersey lawmakers last week approved several bills as part of the "Back to Work NJ" economic development and jobs plan proposed by Democratic legislative leaders. Among the measures approved is The New Jersey Angel Investor Tax Credit Act (S.2454) providing incentives to taxpayers who invest in emerging technology companies. Gov. Chris Christie has yet to take action on the package of the bills, which could cost the state up to $805 million in business subsidies and lost corporate tax revenue in the coming fiscal year, reports New Jersey Newsroom.

A new state agency to promote innovation and job creation in New Jersey was established by Gov. Chris Christie earlier this year. Envisioned as a hub for all economic development activity, the New Jersey Partnership for Action consists of three interconnected organizations to promote the state's incentives and resources, develop pro-growth policies, and assist businesses in navigating government programs. The governor's promise of a more effective strategy for economic development activity comes at the same time of severe reductions to the state's technology-based initiatives, however. High-tech business tax credits are reduced by half in the upcoming year, and with no funding allocated for the New Jersey Commission on Science and Technology, the 25-year-old agency will close its doors this month.