NYBA-Backed NY Bills Would Double Tax Credit, Match Federal Small Business Grants
A trio of bills introduced in the New York State Senate and Assembly, and championed by the New York Biotechnology Association, would double the state’s tax credits for life sciences startups under the Qualified Emerging Technology Companies program, as well as create new grants intended to match what the businesses receive from federal small-business grants.
State Senate Bill S3430, available by entering the bill number here, would double the maximum credit available under the state’s QETC program from $250,000 to $500,000 a year — and from $1.25 million over five years to $2.5 million over five years; doubling the maximum income of qualified companies from $10 million to $20 million; and doubling the training credit from $50,000 to $100,000 a year.
Assembly Bill A-2400, available here, would also double the QETC program to $2.5 million over five years; create a 20 percent credit over three years for investments in venture capital funds that make equity investments in QETCs; and a 40 percent credit over three years for "seed" equity investments.
The bill would also raise, to 20 percent over three years, a pair of existing tax credits now awarded at 10 percent over five years and 20 percent over 10 years. Half of the new credit could be awarded during the taxable year the investment was made, followed by one quarter of the credit each of the following two years.
Assembly Bill A-10364, available here, would create a Small Business Innovation Matching Grants program, to be overseen by the New York State Foundation for Science, Technology and Innovation, also known as NYSTAR. Small businesses that have received a Phase II federal Small Business Innovation Research Program grant or Phase II federal Small Business Technology Transfer Program grant would be eligible for up to $250,000 from the new state program.
To qualify for the matching grants, small businesses would have to be located in New York, and must conduct bioscience-specific research and development in the state for up to five years after the date of receiving the final matching grant.
The QETC bills were introduced in the state Senate by Dean Skelos (R-Long Island); and in the Assembly by Joseph Morelle (D-Irondequoit), who chairs the chamber’s insurance committee. The matching grant bill was introduced by another key Assembly member, Robin Schimminger (D-Kenmore), the chair of the Assembly’s Committee on Economic Development, Job Creation, Commerce and Industry.
Schimminger told BioRegion News last week he and other sponsors would pursue the bills, now in various committees, even if this year’s tight state budget squeezes out extra funding for QETCs or the matching grants. Lawmakers are scrambling to plug a shortfall of $4.6 billion in the overdue new budget crafted for the fiscal year that started April 1.
“If we fail this year the effort will continue, We certainly want to do everything we can to facilitate and assist those innovative entrepreneurs in New York state who have met the threshold of SBIR, Phase II and STTR Phase II funding,” Schimminger said in an interview.
Both bills were welcomed by NYBA, the state’s life sciences industry group. It had lobbied for such legislation, among other priorities, during NYBA Biotech Advocacy Day, a daylong lobbying trip by association members to the state capital of Albany held Feb. 12.
“They’re not enormous amounts of money, and they really do stimulate growth, development and job creation in the companies that take advantage of them,” Nathan Tinker, NYBA’s executive director, told BRN. “It’s really a pointer toward the state looking at innovation as a job-grower.”
Maryland Senate OKs Repeal of Tech Tax; House of Delegates Vote is Next
Maryland’s state Senate by a 30-17 margin voted to repeal a new 6-percent sales tax on computer services that was set to take effect in July, but which had been opposed by MdBio, the state’s life sciences industry group, and its parent organization the Tech Council of Maryland.
The tech tax had been projected to cost $17,000 a year for the 6,000 Maryland taxpayers affected, representing about 0.2 percent of all the state’s tax filers. More than 40 percent of those filers are in Montgomery County, an anchor of the state’s life sciences and other high-tech sectors. That explains why two of Montgomery County’s eight senators, both of them Democrats — Rona Kramer and Richard Madaleno Jr. — bucked Democratic Gov. Martin O’Malley, a supporter of the tech tax, by joining Republicans in voting for repeal.
O’Malley had argued the tax would generate $200 million a year over its five-year life at a time the state is scrambling to plug a budget shortfall that has resulted in proposed cuts to the state’s stem-cell research funding program [BRN, March 31].
State Senators agreed to offset the lost revenue by imposing a three-year, 6.25 percent surcharge on residents with taxable incomes of more than $1 million, projected to generate $110 million, as well as by cutting $50 million worth of transportation projects and another $50 million in yet-to-be-identified spending by state agencies.
Maryland DBED Awards Akonni $200K Through Challenge Investment Program
Akonni Biosystems, a molecular diagnostics company based in Frederick, Md., has received $200,000 from the Maryland Department of Business and Economic Development through its Challenge Investment Program, designed to assist start-up companies in the life sciences and other high-tech industries.
Founded in 2003, the company last year graduated from the Frederick Innovative Technology Center and moved to a renovated, 11,000-square-foot manufacturing and product development laboratory in downtown Frederick.
Akonni develops, manufactures and markets microarray-based systems for infectious disease and genetic testing.
Two Wisconsin Life Sciences Companies Qualified for Tax Credit Programs
Two Wisconsin life sciences companies have qualified for investor tax credits under the state’s new Angel Investor and Venture Fund Tax Credit programs.
Madison-based FluGen, formed last year, develops and manufactures vaccines and treatments for both seasonal and pandemic influenza strains. FluGen uses technologies based on work in the University of Wisconsin laboratory of Yoshihiro Kawaoka, and licensed from the Wisconsin Alumni Research Foundation.
Sonoplot, based in Middleton, Wis., creates substrates that bind biological molecules and dispense fluid in microscale amounts. The company, formed in 2003, will focus on developing fluid dispensers and an optical-disc-based diagnostic system.
The programs offer Wisconsin income tax credits to angel investors and investors in seed-stage venture capital funds. The credits are available only for investments made in technology businesses qualified by the state’s Department of Commerce. At present 75 businesses have been qualified for the tax credits; the full list is posted on the department’s web site, available here.
New Oklahoma, Nevada Groups Join BIO’s Council of State Bioscience Associations
The Nevada Biotechnology and Biosciences Consortium and the Oklahoma BioScience Association have agreed to join the Council of State Bioscience Associations, an autonomous council operating within the Biotechnology Industry Organization.
The two groups expand CSBA membership to 47 organizations in 42 states. Within the association, the groups can draw on support from their counterparts in other states, toward building support for advancing the industry nationwide.
BIO represents more than 1,200 biotech companies, academic institutions, state biotech centers and related organizations across the US and more than 30 nations.
Enterprise Florida Awards Subsidies Toward Federal Small-Biz Grant Applications
A life sciences company and a company focused on gaining life sciences customers were among three companies that recently received subsidies of up to $3,000 from the “Phase 0” program of Enterprise Florida, the state’s public-private economic development agency, toward crafting proposals for federal small business grants.
Microspherix of Boca Raton, Fla., is applying for a grant with the National Cancer Institute toward development of a cancer treatment using patented bioplastic image-guided anticancer “seeds” to eliver high doses of timed-release chemotherapy to tumors, a treatment intended to spare patients the side effects associated with chemotherapy.
Guided Particle of St. Petersburg, Fla., has developed a printing technology for the biotechnology, printed electronics, and materials development industries. Guided Particle is pursuing a Phase I grant for work to be carried out with the Department of Defense’s Defense Advanced Research Projects Agency. The project involves advanced technology for remote interrogation and control of biological systems.
Guided Particle was referred to the program by the small business development centers at the University of South Florida; Microspherix, by Florida Atlantic University.
Winners can use their subsidies toward preparing applications for federal Small Business Innovation Research and Small Business Technology Transfer Phase I grants. The subsidies can cover expenses that include market research, proposal or grant writing, legal aid for patent filing, and site visits to federal labs.
Three Biotechs Named Among 14 Finalists in Annual Business Plan Competition
Three life sciences companies were among 14 businesses named as finalists in the seventh annual Five Ventures Business Plan Competition & Conference, presented by the Charlotte Research Institute, a portal for business-university partnerships at the University of North Carolina-Charlotte, and set to take place April 10 at the Barnhardt Student Activities Center on the UNC Charlotte campus:
- GOPS Group International, also called AlgaMax, the developer of a system that converts algae matter into either a biodiesel product or as a source to power an energy turbine, producing electricity.
- SpherIngenics, whose technology encapsulates cells in microspheres that are injectable into patients for therapeutic procedures and aesthetic soft tissue augmentation.
- VibeTech, a medical device development and manufacturing company that produces non-invasive, vibration-based medical devices to reduce bone and muscle loss associated with aging, disability, or injury.
Top prize in the competition is more than $100,000 in cash and in-kind professional business services.
Marshall University, Huntington Area Development Corp. Build Biotech Incubator
Marshall University and the Huntington Area Development Corp. have teamed up with the school’s forensic science department to build a biotech incubator, the State Journal of Charleston, WV, reported.
The incubator will open on the second floor of a new four-story addition to the university's Forensic Science Center, in what is now a parking lot at the corner of Charleston Avenue and 14th Street.
The project received partial financing for the project when Gov. Joe Manchin on April 3 signed into law the state’s new “Bucks for Jobs” law, making available $50 million of state surplus money toward the hiring of research professors at Marshall and West Virginia University, provided the schools can match the state money within five years [BRN, March 17]. Under Bucks for Jobs, Marshall will receive $15 million, provided it can raise another $10 million in private funds.
The incubator continues an expansion by Marshall of its biotech programs — from the $48 million Robert C. Byrd Biotechnology Center, which opened last year, to the planned Marshall Institute for Interdisciplinary Research, which would seek to draw to the university researchers who will develop proprietary technology.
John Maher, vice president for research at Marshall, told the State Journal the Cabell County Commission played an important role in bringing the partners to an agreement, as did the university and HADCO, which will maintain any contracts with startup companies.
Funds Linked to Singapore Agency Complete Financing Round for Computing Company Eyeing Life Sciences Market
Investment funds linked to Singapore’s business development agency, the Standards, Productivity and Innovation Board or SPRING Singapore, have participated in a pre-series A financing round of an undisclosed amount, allowing Progeniq Pte Ltd, a developer of high performance computing applications, to expand into the life sciences and CGI animation markets, in part by opening offices in the US and India.
BAF Spectrum Pte Ltd, a seed investment fund partly financed by the financing arm of SPRING Singapore, SPRING SEEDS Capital — SEEDS is short for Startup EnterprisE Development Scheme — took part in the financing round, announced April 4. As part of the deal, Sanjeev Shah, executive director with BAF Spectrum, will take a seat on Progeniq's board of directors. William Klippgen, another BAF Spectrum executive director, and a founder of European Internet mega-portal Kelkoo.com, will join the company's advisory board.