Senate Committee on Finance (04/20/2006)

Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON FINANCE

Date:	04/20/2006	ATTENDANCE

Time:	11:14 AM to 12:14 PM	Brophy	X
		Shaffer	X
Place:	SCR 354	Taylor	E
		Teck	X
This Meeting was called to order by		Tupa	X
	Senator Sandoval	Veiga	X
		Sandoval	X
This Report was prepared by
	Jason Schrock
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB06-1361 HB06-1360		Referred to Appropriations Amended, Referred to Appropriations

11:15 AM -- House Bill 06-1361

Senator Sandoval, chair, called the meeting to order. Senator Shaffer, prime sponsor, explained the provisions of HB 06-1361 which creates the Colorado Bioscience Research Program to enhance the access of bioscience companies to research infrastructure at research institutions. The bill establishes a process by which a company may request an incentive through the Office of Economic Development (OED) that may not exceed the lessor of the indirect costs associated with the research project, or $20,000 per project. The bill transfers limited gaming tax revenue in FY 2005-06 that would normally go the General Fund for the program. This transfer which would reduce revenue for the Highways Users Tax Fund (HUTF) and Capital Construction Fund (CCF). Senator Shaffer stated that the incentive was needed because research projects are currently being sent out of the state.

The committee discussed using limited gaming funds and its impacts on the HUTF and CCF. Senator Tupa explained that the investment in the bioscience industry would be worth the cost as it would spur economic development and increased business partnerships with the state's research institutions. He distributed a table showing the distribution of limited gaming proceeds under current law (Attachment A).

11:21 AM

Mr. Harry Zeid, Legislative Council Staff, discussed the impacts of HB 06-1360 and HB 06-1361 coupled with HB 06-1201, the tourism funding bill, on General Fund revenue. He indicated that HB 06-1201 would leave about $19 million left for the General Fund from limited gaming revenue. HB 06-1360 and HB 06-1361 would reduce this amount by $3 million for FY 2005-06 only.

The following people testified on the bill:

11:25 AM -- Ms. Denise Brown, Colorado Bioscience Association, spoke in favor of the bill. She discussed the bioscience industry in Colorado which employs about 16,000 workers, paying an average wage of over $63,0000. She indicated that the industry is growing in Colorado. However, she stated that both HB 06-1360 and HB 06-1361 would provide funding resources to fill some key gaps to support the industry. She indicated that the bills would help build relationships between bioscience companies and research institutions. She indicated that bioscience research at research institutions spurs the creation of new companies.

In response to Senator Teck, Ms. Brown explained that HB 06-1360 would address the current lack of investment money that is available after a bioscience research discovery is made to turn the discovery into a commercial product. Senator Shaffer added that the bill would generate good jobs for the state.

11:36 AM -- Ms. Kathi Delahoy, Colorado State University (CSU), spoke in favor of the bill. She stated that the funding provided by HB 06-1361 would help CSU develop core laboratories and acquire more equipment and expertise that is not available in the private sector. She indicated that the bill provides funding to cover the indirect costs, or facilities and administrative costs, associated with a research project. These costs are generally an impediment to the development of relationships between research institutions and companies.

11:43 AM -- Ms. Virginia Love, Colorado Competitive Council (C3), spoke in favor of the bill. She indicated that an objective of C3 was to focus on promoting key industry job clusters and that both HB 06-1360 and HB 1361 help the bioscience industry. The bills would help companies connect with the academic world and get their ideas to the marketplace. She indicated that though the bill would reduce funding to transportation, she thought the benefits to the bioscience industry were worth the cost. She also stated that Colorado ranks low compared to other states in its economic development investment.


BILL:	HB06-1361
TIME:	11:46:48 AM
MOVED:	Shaffer
MOTION:	Motion to refer HB 06-1361 to the Committee on Appropriations with favorable recommendation. The motion passed on a 5 - 1 vote.
SECONDED:
		VOTE
	Brophy	No
	Shaffer	Yes
	Taylor	Excused
	Teck	Yes
	Tupa	Yes
	Veiga	Yes
	Sandoval	Yes
Final YES: 5 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS

11:47 AM -- House Bill 06-1360

Senator Tupa, prime sponsor, explained the provisions of HB 06-1360 which creates the Bioscience Discovery Evaluation Grant Program to improve and expand the evaluation of new bioscience discoveries at research institutions with the intent of accelerating the development of new products and services. Administration of the grant program would be provided by the Office of Economic Development (OED) in the Governor's office in consultation with a Colorado bioscience membership organization. The bill establishes a grant application process for grants of up to $150,000 per bioscience research project. Senator Tupa indicated that a difference between HB 06-1360 and HB 061361 is that HB 06-1360 requires matching money for any grant awarded. He stated that the bill would provide a good return on investment and that the state is lagging behind in bioscience investment compared to other states.

Senator Teck discussed a possible amendment that would require a report showing the return on investment of money spent on the grant program. Senator Tupa believed the amendment was a good suggestion and also pointed out that the bill provides for a reporting requirement to the business affairs committees. He thought that a report showing the return on investment would be able to help future efforts at providing for more state investment in bioscience.

The following people testified on the bill:

11:55 AM -- Mr. David Allen, University of Colorado (CU), spoke in favor of the bill. He distributed a folder of materials on the technology transfer program at CU (Attachment B). He discussed the need for increased resources to enable discoveries to be commercialized. He stated that the grant program provided by the bill would be a competitive process and that CU would use the money to leverage other resources. He indicated that activities generated from the grant program could be quantified and encouraged Senator Teck's amendment to quantify and report the return on investment as a way for the program to be accountable.

Mr. Allen continued by discussing how research institutions are able to own their discoveries and generate revenue from them. However, he stated that the real benefit of the bill to Colorado was an increased amount of jobs created by bioscience companies.

12:07 PM -- Mr. Don Bellgraw, University of Colorado Denver Health Sciences Center and founder of two bioscience companies, spoke in favor of HB 06-1361. He discussed the need for more money for the commercialization of bioscience discoveries after money that led to the discovery runs out. He provided examples of companies in Colorado that have benefitted from grants that allowed for the leverage for money to help with the commercialization of their products.

Senator Tupa closed by asking for support for the bill and stating that the bill provided for a needed public-private partnership to help the bioscience industry grow in the state.


BILL:	HB06-1360
TIME:	12:12:19 PM
MOVED:	Tupa
MOTION:	Motion to adopt L.001 (Attachment C). The motion passed without objection.
SECONDED:
		VOTE
	Brophy
	Shaffer
	Taylor	Excused
	Teck
	Tupa
	Veiga
	Sandoval
Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB06-1360
TIME:	12:13:18 PM
MOVED:	Tupa
MOTION:	Motion to refer HB 06-1360, as amended, to the Committee on Appropriations with favorable recommendation. The motion passed on a 6 - 0 vote.
SECONDED:
		VOTE
	Brophy	Yes
	Shaffer	Yes
	Taylor	Excused
	Teck	Yes
	Tupa	Yes
	Veiga	Yes
	Sandoval	Yes
Final YES: 6 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

12:14 PM

The committee recessed.