2012 -- H 7513

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LC00019

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - THE INNOVATE RHODE

ISLAND SMALL BUSINESS PROGRAM

     Introduced By: Representatives Blazejewski, Martin, Jackson, Silva, and Gallison

     Date Introduced: February 09, 2012

     Referred To: House Small Business

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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GOVERNMENT" is hereby amended by adding thereto the following chapter:

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     CHAPTER 64.15

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THE INNOVATE RHODE ISLAND SMALL BUSINESS PROGRAM

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     42-64.15-1. Establishment of incentive program. – (a) There is hereby established the

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Innovate Rhode Island Small Business Incentive Program SBIR/STTR to be administered by the

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economic development corporation (EDC). In order to foster job creation and economic

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development in the state, the EDC may provide grants to eligible businesses to offset costs

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associated with applying to the United States Small Business Administration for Small Business

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Innovative Research (SBIR) grants or Small Business Technology Transfer Research (STTR)

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grants. The grants shall be paid from the Innovate Rhode Island Small Business Account

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established in this chapter.

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     (b) Eligibility. – In order to be eligible for a grant under this section, a business must

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satisfy all of the following conditions:

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     (1) The business must be a for-profit, Rhode Island-based business with twenty-five (25)

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or fewer employees. For the purposes of this section, a Rhode Island-based business is one that

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has its principal place of business in this state.

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     (2) The business must have submitted a qualified SBIR/STTR Phase I proposal to a

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participating federal agency in response to a specific federal solicitation.

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     (3) The business must satisfy all federal SBIR/STTR requirements.

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     (4) The business shall not receive concurrent funding support from other sources that

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duplicates the purpose of this section.

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     (5) The business must certify that at least fifty-one percent (51%) of the research

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described in the federal SBIR/STTR Phase I proposal will be conducted in this state and that the

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business will remain a Rhode Island-based business for the duration of the SBIR/STTR Phase I

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project.

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     (6) The business must demonstrate its ability to conduct research in its SBIR/STTR Phase

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I proposal.

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     (c) Grant. – The EDC may award grants to reimburse an eligible business for up to fifty

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percent (50%) of the costs of preparing and submitting an SBIR/STTR Phase I proposal, up to a

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maximum of three thousand dollars ($3,000). A business may receive only one grant under this

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section per year. A business may receive only one grant under this section with respect to each

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federal proposal submission. Costs that may be reimbursed include costs incurred directly related

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to preparation and submission of the grant such as word processing services, proposal consulting

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fees, project-related supplies, literature searches, rental of space or equipment related to the

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proposal preparation, and salaries of individuals involved with the preparation of the proposals.

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Costs that shall not be reimbursed include travel expenses, large equipment purchases, facility or

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leasehold improvements, and legal fees.

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     (d) Application. – A business shall apply, under oath, to the EDC for a grant under this

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section on a form prescribed by the EDC that includes at least all of the following:

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     (1) The name of the business, the form of business organization under which it is

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operated, and the names and addresses of the principals or management of the business.

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     (2) An acknowledgement of receipt of the Phase I proposal by the relevant federal

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agency.

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     (3) An itemized statement of the costs that may be reimbursed.

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     (4) Any other information necessary for the EDC to evaluate the application.

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     42-64.15-2. Establishment of matching funds program. – (a) There is established the

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Rhode Island SBIR/STTR Matching Funds Program to be administered by the EDC. In order to

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foster job creation and economic development in the state, the EDC may provide grants to

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eligible businesses to match funds received by a business as a SBIR or STTR Phase I award and

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to encourage businesses to apply for Phase II awards.

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     (b) Eligibility. – In order to be eligible for a grant under this section, a business must

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satisfy all of the following conditions:

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     (1) The business must be a for-profit, Rhode Island-based business with twenty-five (25)

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or fewer employees. For the purposes of this section, Rhode Island-based business is one that has

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its principal place of business in this state.

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     (2) The business must have received an SBIR/STTR Phase I award from a participating

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federal agency in response to a specific federal solicitation. To receive the full match, the

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business must also have submitted a final Phase I report, demonstrated that the sponsoring agency

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has interest in the Phase II proposal, and submitted a Phase II proposal to the agency.

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     (3) The business must satisfy all federal SBIR/STTR requirements.

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     (4) The business shall not receive concurrent funding support from other sources that

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duplicates the purpose of this section.

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     (5) The business must certify that at least fifty-one percent (51%) of the research

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described in the federal SBIR/STTR Phase II proposal will be conducted in this state and that the

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business will remain a Rhode Island-based business for the duration of the SBIR/STTR Phase II

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project.

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     (6) The business must demonstrate its ability to conduct research in its SBIR/STTR Phase

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II proposal.

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     (c) Grant. – The EDC may award grants to match the funds received by a business

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through a SBIR/STTR Phase I proposal up to a maximum of one hundred thousand dollars

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($100,000). Seventy-five percent (75%) of the total grant shall be remitted to the business upon

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receipt of the SBIR/STTR Phase I award and application for funds under this section. Twenty-

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five percent (25%) of the total grant shall be remitted to the business upon submission by the

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business of the Phase II application to the funding agency and acceptance of the Phase I report by

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the funding agency. A business may receive only one grant under this section per year. A

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business may receive only one grant under this section with respect to each federal proposal

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submission. Over its lifetime, a business may receive a maximum of five (5) awards under this

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section.

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     (d) Application. – A business shall apply, under oath, to the EDC for a grant under this

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section on a form prescribed by the EDC that includes at least all of the following:

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     (1) The name of the business, the form of business organization under which it is

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operated, and the names and addresses of the principals or management of the business.

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     (2) An acknowledgement of receipt of the Phase I report and Phase II proposal by the

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relevant federal agency.

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     (3) Any other information necessary for the EDC to evaluate the application.

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     42-64.15-3. Program guidelines. – The EDC shall develop guidelines related to the

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administration of the programs established by this chapter. At least twenty (20) days before the

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effective date of any guidelines or nontechnical amendments to guidelines, the EDC must publish

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the proposed guidelines on the EDC website and provide notice to persons who have requested

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notice of proposed guidelines. In addition, the EDC must accept oral and written comments on

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the proposed guidelines during the fifteen (15) business days beginning on the first day that the

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EDC has completed these notifications. For the purpose of this section, a technical amendment is

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either of the following:

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     (1) An amendment that corrects a spelling or grammatical error.

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     (2) An amendment that makes a clarification based on public comment and could have

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been anticipated by the public notice that immediately preceded the public comment.

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     42-64.15-4. Innovate Rhode Island Small Business Account established as a special

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revenue fund. – (a) Establishment. – The Innovate Rhode Island Small Business Account is

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hereby established as a special revenue fund in the EDC.

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     (b) Purpose. – The Innovate Rhode Island Small Business Account ("IRISBA") shall be

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used for the Rhode Island SBIR/STTR Incentive Program and the Rhode Island SBIR/STTR

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Matching Funds Program, as specified in this chapter. Moneys in the IRISBA shall be allocated

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as specified in this chapter in an amount not to exceed one million dollars ($1,000,000).

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     42-64.15-5. Reports. -- The EDC shall publish a report on the use of funds in the

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Innovate Rhode Island Small Business Account ("IRISBA") at the end of each fiscal quarter. The

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report shall contain information on the commitment, disbursement, and use of funds allocated

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under the (IRISBA). The report is due no later than one month after the end of the fiscal quarter,

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and must be submitted to the following:

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     (1) The chairs of the house of representatives and senate finance committees.

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     (2) The fiscal offices of the general assembly.

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     SECTION 2. This act shall take effect upon passage.

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LC00019

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - THE INNOVATE RHODE

ISLAND SMALL BUSINESS PROGRAM

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     This act would establish the Innovate Rhode Island Small Business Account and Program

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within the EDC that would help Rhode Island small businesses apply for federal funds targeting

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research and innovation and would match some or all of the federal funds awarded.

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     This act would take effect upon passage.

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LC00019

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