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New State Legislation Gives Green Light to TBED in Kentucky, Oregon

While tight state budgets have slowed the number of tech-based economic development programs being created by states, Kentucky and Oregon have both approved new laws designed to encourage the growth of technology companies.

Kentucky
Kentucky Governor Paul Patton has signed into law House Bill (HB) 525, economic development legislation, designed to attract high-tech, new economy companies to the state that provide high quality, high paying jobs. The legislation is designed to help Kentucky develop a business culture that promotes research and development and an entrepreneurial climate that allows new ideas to flourish.

Specifically, HB 525 does the following:

* Creates a network of Innovation and Commercialization Centers that will provide business-building services geared to the needs peculiar to new economy firms. The Centers will link scientists and entrepreneurs with the innovation-related funding tools created two years ago under the Kentucky Innovation Act so that the new firms are "investment ready." More than 20 Centers will be located across the state.
* Includes changes to the Kentucky Investment Fund Act. Among the changes, a small business will be known to have a value of less than $10 million, rather than $3 million, to encourage more companies to use state tax credits.
* Establishes a Research Facilities Corporate Tax Credit to spur investment in facilities that are used to pursue research. The credit will be 5 percent of costs incurred for facilities that house research and development operations and will be available to all businesses that undertake construction of these facilities.

Oregon
In Oregon, voters passed two measures on May 21 intended to attract investment in biotechnology and higher education.

Ballot Measure 10 amends the Oregon constitution to allow the state’s public universities and colleges "to hold and dispose of stock received in exchange for technology they create." The measure is designed to encourage the commercialization of technology discovered by Oregon’s schools but prevent the schools from using taxpayers’ money to invest in stock.

Another ballot, Measure 11, gives Oregon the opportunity to raise $200 million for the Oregon Health Sciences University (OHSU) by creating an exception to the debt limit for general obligation bonds to finance OHSU and its medical research. The measure enables the state to save $31.5 million in interest costs anticipated for the life of the bonds.

With passage of Measure 10, Oregon becomes the twenty-fourth state to allow public universities to raise nontax revenue by accepting stock from companies wishing to buy, market or license technology.

More information on the legislation approved in Kentucky and Oregon, respectively, is available at <http://www.one-ky.com> and <http://www.sos.state.or.us/>.

Copyright State Science & Technology Institute 2002. Information in this issue of SSTI Weekly Digest was prepared under a cooperative agreement with the U.S. Department of Commerce, Economic Development Administration. Redistribution to all others interested in tech-based economic development is strongly encouraged — please cite the State Science & Technology Institute whenever portions are reproduced or redirected. Any opinions expressed in the Digest do not necessarily reflect the official position of the U.S. Department of Commerce.

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