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State Legislative Best Practices in Support of Bioscience Industry Development

The recent economic downturn has had a significant impact on the bioscience industry.
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Texas: Emerging Technology Fund
The Texas Emerging Technology Fund was created by House Bill 1765 in 2005 and reauthorized in 2007 in an effort to speed up the process of commercialization. The purpose of the fund is to generate new jobs and companies from technologies created by institutions of higher education in Texas. The Fund is dedicated to recruiting research talent, matching grants to help draw down federal dollars, and to help push technology through the commercialization phase. This legislation also creates Regional Centers of Innovation and Commercialization (RCICs). These RCICs are expected to foster collaboration on emerging technologies between public and private entities and institutions of higher education.

Georgia: Eminent Scholars Program
The Georgia Research Alliance Eminent Scholars Program was created in 1990 in hopes of attracting pre-eminent scientists to Georgia's universities. These scientists now lead programs of research and development in areas with the most potential for generating new high-value companies, growing established companies, and creating new high-wage jobs. To date, the Alliance has invested approximately $400 million. This investment has helped to attract more than 50 Eminent Scholars, leverage an additional $2 billion in federal and private funding, create more than 5,000 new technology jobs, generate some 120 new technology companies, and allow established Georgia companies to expand into new markets.

Colorado: Advancement of New Bioscience Discoveries Initiative
Colorado's "Advancement of New Bioscience Discoveries" legislation of 2005 is essentially a state bioscience proof-of-concept (POC) program. This program provides funds to be used on a one-to-one matched basis for development-oriented research to accelerate commercialization by reducing inventions to operational practice and validating their ability to address significant market applications. The State bioscience preclinical research program awards (which include an 8% facilities and administrative cost) are designated at between $50k and $200k. Technologies are competitively selected after several steps to confirm the potential for commercial success.

2.   Specialized Facilities

Bioscience companies have two characteristics that distinguish them from other developing technology industries. First, bioscience companies are subject to a longer and more costly federally mandated oversight process. Second, they are required to conduct research in highly specialized and government inspected facilities. The specialization required in bioscience research facilities makes for some of the most expensive business real estate in the world. To offset this cost for small and emerging bioscience companies, many states are now investing in the development of specialized facilities to serve as incubators.

State governments, in particular, have become increasingly aware of the role specialized facilities play in creating a productive environment for bioscience industry development. States are integrating the need for physical facilities into their overall economic development strategy by setting aside pools of matching physical infrastructure funds to leverage public-private partnerships in commercialization. Examples of some of these programs are listed below:

Texas: Clean-room Construction Tax Exemption
In 2003, the Texas Legislature passed HB 2425, an exemption from the state's sales and use tax on "pharmaceutical biotechnology clean-room" construction and equipment. The exemption applies to all tangible personal property used in connection with manufacturing, processing, or fabrication of a pharmaceutical biotechnology product in a clean-room environment.

University of Massachusetts Life Sciences Facilities Act
In 2005, the Massachusetts Legislature passed SB 2264 to build three new industry-related facilities at the University of Massachusetts. The bill provides funding for the construction, equipment, and operating costs of a new nanotechnology and biomanufacturing facility to be built on the UMass-Lowell campus and for a bioprocessing facility near UMass-Dartmouth. The third facility, the Venture Development Center, to be constructed at UMass-Boston, will be a research and business center offering specialized R&D facilities for collaboration with companies and other research institutions.

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