CHAPTER 351

FORMERLY

SENATE BILL NO. 442

AN ACT TO AMEND DELAWARE CODE TITLE 29, CHAPTER 50, BY CREATING THE DELAWARE TECHNICAL INNOVATION PROGRAM.

WHEREAS, the Small Business Innovation Research (SBIR) Program Is a Federal program begun In 1982 and continuing through September 1993 that requires Federal agencies with nongovernmental research and development budgets In excess of $100 million to allocate 1.25% of their research and development budgets to small business competitors; and

WHEREAS, the SBIR program operates in three phases: Phase I awards up to $50,000 for six months to determine project feasibility, Phase II awards up to $500,000 for two years to fund additional research and development on innovative projects that show positive results during Phase I, Phase III commercialization of the project; and

WHEREAS, In Delaware the SBIR program stimulates technological growth, scientific advancement, and economic competitiveness through supporting industrially-relevant research In technological fields consistent with Delaware strengths and resources; and

WHEREAS, the SBIR program provides small businesses with an excellent opportunity to propose innovative ideas that meet the research and development needs of the Federal government, contributes to Delaware's private sector technology and opens the door to possible future commercialization; and

WHEREAS, the SBIR program is Important to Delaware because It can help create jobs In technically oriented small business firms as well as keeping employing industries current with innovation; and

WHEREAS, the SBIR program provides the kinds of pre-venture capital seed money It Is most difficult for early stage technology businesses to find and provides those dollars In the form of project money rather than either equity or debt; and

WHEREAS, economists have determined the future success of a State will be more technologically determined than ever before, that 40% of Improved manufacturing productivity Is technology-based and If properly used, the SBIR program strengthens the ability of a sate to Improve the productivity of Its Industrial, agricultural or service bustness base; and

WHEREAS, In the 1987 "Report to the States" from the Small Business High Technology Institute, Delaware missed its target of dollar value of total awards by almost $1.2 million; and

WHEREAS, the most reliable forecaster of a state's performance In the SBIR program Is the relationship between actual and targeted numbers of proposals. Delaware missed Its proposed target by 47% and Its Phase I target by 50% over the first four years of the program; and

WHEREAS, the 1988 Operation Plan for the Delaware Development Office "Economic Growth In Delaware" has stated as a specific goal in promoting high technology growth to "Develop an ongoing mechanism to encourage technological innovation and greater technology transfer among Delaware government, academia, and industry".

NOW THEREFORE:

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Chapter 50, Title 29, Delaware Code by adding a new Subchapter II A to

read as follows:

"Subchapter II A. Delaware Technical Innovation Program

§5035. Creation; Definitions.

a) There is hereby created the Delaware Technical Innovation Program to be
administered by the Delaware Development Office.

a) For the purpose of this Subchapter the following definitions shall apply: I) 'Office' means the Delaware Development Office.

2) 'Council' means the Council on Development Finance as defined In §5007 of
this chapter.

3) 'Small business innovation research program' or 'SBIR' means that program,
enacted pursuant to the small business innovation development act of 1982 (P.L. 97-219), which provides funds to small businesses to conduct innovative research having commercial application.

4) 'Small business' means a corporation, partnership, sole proprietorship or
individual, operating a business for profit, with one hundred employees or less, including employees employed In any subsidiary or affiliated corporation which otherwise meets the requirements of the federal small business innovation research program.

§5036. Duties.

In carrying out this program, to promote technology development and utilization within the small business sector, the duties of the Delaware Development Office shall Include but not be limited to:

1) Promote the SBIR program among Delaware small businesses.

1) Seek technical assistance for small businesses to participate more
effectively In the Federal Small Business Innovation Research (SBIR) program.

1) Coordinate efforts with small business, institutions of higher education,
financial institutions, and government to affect timely development and utilization of new development of technology.

1) Administer state matching funds In association with the Delaware Technical
Innovation Program for the Federal SBIR program to provide state matching funds to compensate for the lag between Federal Phase I and Phase IT awards.

1) Coordinate efforts within the business sector to commercialize innovative
products and processes developed by small businesses.

1) Assist small businesses that are engaged in technology development and
utilization In obtaining private sector financing.

1) Develop job training programs to meet specific needs for small business.

1) Review and recommend ways of streamlining relevant state regulations to
expedite the development of innovative products and processes.

§5037. Matching Funds for the Federal Small Business Innovation Research Program.

1/ The State may provide matching funds up to a maximum of the Federal grant for Phase I If:

a) a small business has won a Phase I award In the Federal Small Business
Innovation Research (SBIR) program, and

a) Such small business has submitted a proposal for a Phase II award; and

b) Such small business' principal place of business Is located In this state;
and

c) Such small business certifies that the research to be conducted will
benefit the Delaware economy.

2) The Council shall establish criteria and the Office shall administer the state

matching funds.

§5038 Reporting.

The Delaware Development Office shall report to the Governor and the General Assembly on or before January 15, 1990 and every year thereafter."

Section 2 Tht5 Act shall become effective upon an appropriation by the General Assembly.

Approved July 12. 1988.