Life Science Discovery Fund

February 3, 2005

Thanks everyone for coming today.

As Governor, I am committed to putting Washington back to work and making sure our economic recovery continues.

Today, I want to outline a centerpiece for economic development in our state � the creation of a $1 billion Life Sciences Discovery Fund that can put our state at the leading edge in research to cure debilitating diseases.

The idea behind the Discovery Fund is to leave a real legacy by leveraging the tobacco bonus monies to transform the future of health care.

This is especially important in the highly competitive world of research grants.

Our research institutions have to put up match money to get grants.

With matching money, they can get two, three or even ten times that in grants.

Without the matching money, our higher education institutions cannot maintain their leadership role.

Currently we are one of the top five states in the nation competing for grants.

But we need to commit the match money, and thus make sure the next generation of research occurs here in Washington, and not somewhere else.

The Life Science Discovery Fund legislation will help us do just that.

It would earmark the bonus in tobacco funds to attract matching federal and private grants that altogether could total more than $1 billion over the next 10 to 15 years.

We expect the fund to stimulate the development of new technologies and create as many as 20,000 new jobs in the state in the next 10 to 15 years.

It could keep Washington at the forefront of research to cure diseases like cancer, diabetes, and cardiovascular disease, and improve the quality and yield of agricultural crops.

We can lead the way in transforming health care.

Today�s medicine is reactive.

We wait until people are sick and then treat them.

The medicine of the future will be predictive and preventative.

Washington is well positioned to be a leader because of its high tech and health care industries and fine research institutions.

We�ll be able to build on our legacy of having world-class public and private research institutions by providing the glue that will more seamlessly transform scientific breakthroughs to commercial products.

A Life Sciences Discovery Fund will spawn applications in a range of industries � from agriculture to nutrition, based on their potential to improve the health of Washington�s people, and the health of its economy.

A seven-member board of trustees, appointed by the Governor and confirmed by the Senate, will make research and development grants to Washington universities and research institutions to make our state a leader in life sciences.

This isn�t solely about providing grants to higher education.

We�ll also be making investments in research and research partnerships between the public and private sectors.

Let me give you a recent example of how university research made a huge difference to our wine industry.

In 2000, two WSU professors published research that demonstrated that the geography, soils and climate of the Walla Walla Valley made it highly conducive to growing grapes that yielded fine wines.

Those findings were an incredible boost to the credibility of the region, and were used by the wine industry to promote their wines worldwide and seek additional investment.

The results? In 1998, before they published their research, Walla Walla had 20 or 25 wineries.

Now it has 65.

Their analysis is also benefiting several other areas of Central and Eastern Washington.

Here�s another example. In 2001, the University of Washington launched a major effort in photonics. With the financial assistance of the Legislature, the university was able to expand its facilities to accommodate grants it received to pursue this area of research, and Washington businesses, including Boeing and startup Lumera, are already significantly involved.

I can�t think of a better way to spend tobacco settlement funds than to invest in the future of our health.

The potential payoff is enormous and ongoing.

By making this investment, we could be playing a role in the creation and evolution of entire future industries and health care that nobody now can foresee.

I�m also requesting that legislation be introduced this week that would speed up and make easier the transfer of technology from our research institutions to the private sector.

This will mean that the discoveries of tomorrow will be more easily translated into commercial products that can earn royalties for our institutions and their inventors.

I�ve requested this legislation because we need to capitalize on Washington�s high-tech core to generate more family-wage jobs.

These two strategies � funding for research and encouraging the movement from ideas to products � make sense and should happen now.

The Life Sciences Fund is an anchor for a strategy to more comprehensively approach the potentials for economic development through biosciences.

The idea of the fund is to serve to bring together all parties to collaborate, plan for, and better achieve these potentials.

Last week I announced my vision to make government more effective and more efficient.

I think our economic development strategies should be more efficient and effective too.

We can ill-afford to do nothing while other states and nations aggressively invest in growing their own high technology and life-sciences bases.

I�d now like to introduce University of Washington President Mark Emmert and Washington State University President Lane Rawlins, who will discuss the merits of this proposal.

As I said, the Life Sciences Discovery Fund is only one aspect of my economic development program.

Today, I�m announcing two other proposals to help small businesses succeed.

The first would double the business and occupation tax credit for small businesses to help these businesses prosper when they are just getting started and may have no profits yet still owe B&O taxes on their gross revenues.

My proposal is to double the maximum credit to $70 a month to provide partial or full B&O tax relief to 25,000 small businesses.

The tax-filing threshold is currently $28,000 per year.

We propose to double that to $56,000 in gross income before a business would owe any B&O taxes.

I will outline how to make this revenue neutral in my budget proposal to be released in March.

The last proposal would double to $100 million the program cap for the Washington Link Deposit Program, which encourages banks to make loans to certified minority and women-owned businesses at below-market rates.

I�m also proposing that we eliminate the scheduled sunset of this program in 2008.

This addresses access to capital, the single greatest demand of small businesses, at modest cost to the state.