New Developments in State S&T Legislation

Arizona

Legislation has been introduced to permit one percent of the permanent state trust funds to be invested in economic development projects as authorized by the Arizona Board of Investment. The concurrent resolution, HCR 2033, was referred to several committees for consideration. Another bill under consideration in the Arizona House, HB 2447, would create the Arizona Capital Access Program, a revolving investment fund secured by state tax credits to encourage technology-focused venture capital investments in the state.

California

Governor Gray Davis has proposed spending up to $300 million over the next four years to create three California Institutes for Science and Innovation on three of the nine campuses of the University of California. According to the Governor's budget request, the funds would be used to create world-class centers for strategic innovation that combine cutting-edge research with training for new scientists and technological leaders. All public funding for the institutes would have to be matched on a 3:1 public:private ratio.

The Governor's budget request also includes: a $13 million increase in basic and applied research in selected programs at the University of California (UC); a $2.2 million increase for the Technology Investment Partnership program; $10 million for biomass conversion assistance; $4.1 million for commercial space technology grants and assistance; $5 million for two Next Generation Internet centers and $8 million in UC research; and a $1.2 million increase for manufacturing technology grants to businesses.

Finally, the Davis Administration also has proposed an increase in the Alternative Incremental Research and Development Credit. The credit was designed to assist firms that had significant research expenses, but could not utilize the traditional research credit because it requires an increase in expenditures over a specific base period. The proposal is designed to increase California's competitiveness in attracting aerospace and other high-tech firms that utilize this credit. It is estimated to result in revenue losses of approximately $4 million in 2000-01.

Indiana

Legislation to make the state's R&D tax credit permanent passed the Indiana House of Representative by a vote of 98-2 and the Senate Committee on Finance by a vote of 12-2. The bill, HB 1214, now moves to the full Senate for its consideration. Last November the General Assembly passed legislation temporarily extending the credit and permitting local governments to grant tax abatements to businesses for new equipment purchases devoted exclusively to R&D activities (Senate Bill 14).

Maine

Submitted to SSTI by Michael Ryan of the Maine Science & Technology Foundation

State Representative Richard Rosen has introduced legislation that would establish an "Applied Research and Development Fund" to be used for applied research and development relevant to the Maine economy. The fund would receive annual general fund appropriations equivalent to one percent of actual general fund revenue for the previous year. Uses of the fund would include, but not be limited to: development of new technology to create high-value jobs and businesses in the state; contribution toward commercialization of new technology and products; promotion of international research and development cooperation; enhancement of worldwide competitiveness of state industries; and leverage and matching grants for available federal funding.

Montana

The Montana Supreme Court recently struck down the state's plans to use $20 million of the $640 million coal tax trust for research and commercialization-based economic development programs — for background see SSTI Weekly Digest article of April 9, 1999 While the case was pending, the state's agriculture and commerce departments developed the infrastructure for an agricultural seed capital account, SBIR Phase 0 grants, a manufacturing extension center, an SBDC network, and several other initiatives. All of these efforts are now on hold for lack of funds.

The state legislature is not scheduled to convene until 2001; however, a special session may be called if an alternative funding scenario can be developed through the interim business, labor and agriculture committee meeting being held this week.