SENATE BILL REPORT

                            SB 6163

  AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 8, 1994

Brief Description:  Allowing businesses in this state to continue participating in the small business innovation research program.

SPONSORS: Senators Sheldon, Bluechel, Skratek, Williams and Oke

SENATE COMMITTEE ON TRADE, TECHNOLOGY & ECONOMIC DEVELOPMENT

Majority Report:  Do pass. 

     Signed by Senators Skratek, Chairman; Sheldon, Vice Chairman; Bluechel, Cantu, Erwin, M. Rasmussen and Williams.

Staff:  Jeff Baird (786‑7444)

Hearing Dates: January 26, 1994; February 1, 1994

SENATE COMMITTEE ON WAYS & MEANS

Majority Report:  That Substitute Senate Bill No. 6163 be substituted therefor, and the substitute bill do pass. 

     Signed by Senators Rinehart, Chairman; Quigley, Vice Chairman; Bauer, Bluechel, Cantu, Gaspard, Hargrove, Hochstatter, Ludwig, McDonald, Moyer, Niemi, Pelz, Roach, L. Smith, Snyder, Spanel, Sutherland, Talmadge, Williams and Wojahn.

Staff:  Martin Chaw (786-7711)

Hearing Dates: February 7, 1994; February 8, 1994

BACKGROUND:

Federal Small Business Innovation Research program grants are awarded by federal agencies with research and development budgets of $100 million or more.  SBIR grants are awarded in phases.  Winning firms are first awarded a phase I contract to perform basic research on an idea or ideas coinciding with a granting agency's mission.  This work is then reviewed for scientific merit and technical feasibility before a granting agency awards a phase II grant for research and development.  During this review period, a firm may be faced with a several month gap in funding that can threaten the firm's viability.

SUMMARY:

The Department of Community, Trade, and Economic Development is directed to establish a competitive grant program to assist SBIR contract winners who have completed their phase I contract and are awaiting a phase II award.  Grants shall not exceed $25,000 and shall be awarded to firms whose technology shows the greatest potential to lead to commercialization and fabrication within the state.

EFFECT OF PROPOSED SUBSTITUTE:

The Department of Community, Trade and Economic Development may award the grants conditioned upon the receipt of a share of any license, patent, copyright, or royalty benefitting the recipient.

A null and void clause is added, making this act contingent upon funding provided in the budget by June 30, 1994.

Appropriation:  none

Revenue:  yes

Fiscal Note:  available

Effective Date:  July 1, 1994 

TESTIMONY FOR (Trade, Technology & Economic Development):

There is a six to nine month wait between phase I and phase II awards.  This long wait can destroy an entrepreneur or small firm that has already risked a great deal of personnel time and capital in winning the phase I grant.

TESTIMONY AGAINST (Trade, Technology & Economic Development):  None

TESTIFIED (Trade, Technology & Economic Development):  PRO:  Clyde Barlow, Barlow Scientific; Phil Spesor, Foresight Science; Mike Anderson, attorney; Gary Smith, Independent Business Association

TESTIMONY FOR (Ways & Means):  None

TESTIMONY AGAINST (Ways & Means):  None

TESTIFIED (Ways & Means):  No one