---

FEATURE STORY

Legislative Recap:  ED-Specific Bills Do Well Overall

Overall, the outcome of the 2006 legislative session was generally favorable regarding several business and economic development initiatives, most notably the USTAR bill. The following are highlights of important economic development legislation considered by the legislature this session and their outcome.

Business and Economic Development Bills Passed by the Legislature

SB75 - Utah Science, Technology and Research (USTAR) Initiative

Designed to greatly accelerate and enhance what is already occurring at Utah's research universities, USTAR commits $65 million ($50 million one-time and $15 million ongoing), plus $110 million bonding authority, to build state-of-the-art research facilities at Utah State and the University of Utah, recruit top national science teams and create five Innovation Centers throughout the state to support research and business creation.
Michael Sullivan, director of communications and legislative relations for the Governor's Office of Economic Development (GOED), said his office is very pleased that USTAR was approved and expects that within three to five years the state will see a good stream of business spin-offs from Utah's two research universities, the University of Utah and Utah State University.

Utah State University administrators are also confident USTAR will translate into long-term economic benefits for the state. USU President Stan Albrecht said, "The state's investment in university research will result in new discoveries, high-tech companies and high-paying jobs. We are extremely pleased by the passage of USTAR."

SB112 - Centers of Excellence

Authorizes a matching funds exemption for the Centers of Excellence program, designed to give the state's smaller colleges and universities a crack at funding to commercialize their research technologies. The legislation also sets up the State Science Council, which would determine whether or not Centers of Excellence money should be returned if the licensee of the technology takes the company/jobs out of state.

HB131 - Blending of Incentives

Utah's main source of economic development incentives come from the Industrial Assistance Fund (IAF), a job-creation incentive, and the Economic Development Tax Increment Fund (EDTIF) a post-performance incremental tax rebate that returns a portion of state taxes paid back to the company. HB131 will allow GOED's director of recruitment and incentives to blend the EDTIF and IAF incentives according to the needs of the companies applying for them, which will make the state more competitive in its recruiting efforts.

HB50 - Utah Technology Industry Council

Restructures the Utah Technology Council, allowing it to address technology issues on a project-by-project basis. The purpose of the restructuring is to leverage experts from that business community to create short-term task forces to work on specific technology issues.

SB187 - Science and Technology Camp

Appropriates $100,000 in ongoing funds to establish an informal science and technology education program within GOED. The funds will be used to create non-traditional educational settings to encourage kindergarten -12th grade students to pursue math and science fields.

HB71 - Utah Fund of Funds

Reauthorizes the Utah Venture Capital Enhancement Act, more commonly known as the "Utah Fund of Funds," which is an important venue to increase the flow of venture capital into Utah. As a state-sponsored private equity initiative, the Fund of Funds is designed to attract early-stage venture capital investment to Utah companies by encouraging VC firms to establish an active presence in the state.

HB39 - Utah International Trade Commission

Creates the Utah International Trade Commission to address international trade issues as an advisory board to the governor on international trade.

SB29 - Sales and Use Tax Exemption - Telecommunications

Creates a $7 million telecommunications sales and use tax exemption for the telecommunications industry, for the purpose of removing any disincentives for the telecommunications industry to invest in infrastructure improvements within the state.

SB30 - Semiconductor Sales and Use Tax Exemption

Provides a sales tax exemption for semiconductor fabricating, processing, research or development materials.

Initiatives Not Voted Upon

SB244 - Business Resource Centers

Would provide $500,000 for GOED to establish business resource centers in strategic geographical locations throughout the state as one-stop guidance centers to provide business support, education, sources of funding, training, and networking to Utah businesses. We have received confirmation from Governor Huntsman and the legislature that this issue will be resolved in the special session.

Flatter Tax Proposal

Efforts to lower the state's income tax rate stalled in the session, but EDCUTAH and GOED are hopeful a favorable outcome will result from a future special legislative session. The reduced income tax rate is important for two reasons: first, it would make Utah's economic development efforts more competitive with its neighbors, and second, it reduces the burden on taxpayers, which in turn puts more money back into the local economy.

---

EDCUTAH PARTNERS

Current Partners
Why Be a Partner?
Board of Trustees