|August 21, 2013|
Previously published on June 28, 2013
By Public Act 13-239 (the “Act”), Connecticut’s legislature created a $200 million fund to spur bioscience research and development in the State. The Act will provide financial assistance to start-up companies and people who are making new discoveries in research and development labs. By supplying capital at an early stage, the State hopes to translate research in bioscience into sustainable businesses that will create jobs and foster economic development.
The first Section of the Act sets out definitions. It defines “eligible recipient” to be a duly accredited college or university, a nonprofit corporation, or a for-profit start-up or early stage business. It also defines “early-stage business" to be a business that has been in operation for not more than three years and that is developing or testing a product or service that is (A) not yet available for commercial release, or (B) commercially available in a limited manner, including, but not limited to, market testing of prototypes and clinical trials.” These definitions clearly define the State’s intent to invest in bioscience businesses to incubate and accelerate successful research.
The second and third sections of the Act pertain to the Bioscience Innovation Advisory Committee (“Committee”) and the Connecticut Bioscience Innovation Fund (“Fund”). The Committee will have control over administering the Fund and approving the investments by the Fund. This Committee is composed of a chairperson, who is the chief executive officer of Connecticut Innovations Incorporated (“CI”); the Commissioner of Economic and Community Development; the Commissioner of Public Health; and ten members appointed by the Governor and various legislative leaders. The legislature directed the Committee to distribute the Funds with the goals of developing science disciplines leading to commercializable devices or diagnostics, job growth, and improved quality of efficiency in health care. The Committee will receive administrative assistance from CI. CI has announced plans to hire a new staff member specifically to assist the Committee.
The fourth section of the Act explains how the Fund will be raised through the state bonding process with the available monies increasing over the years. For the first two fiscal years, the bonds issued will equal $10 million and then grow to $15 million for fiscal years 2015 and 2016. In fiscal years 2017 to 2022, the bond amount will hold steady at $25 million. All proceeds from the Fund’s investments will be returned to the Fund for further investments or paying back bonds. The legislature has limited the administrative costs that the Fund can pay to just five percent of the allotted funding for each fiscal year.