Oregon introduces unique 60% tax credit to donors supporting commercialization of university research

PORTLAND -- (Oct. 4, 2007) -- A 60 percent income tax credit is now available to Oregon taxpayers who contribute to a new program designed to fast-track commercialization of research discoveries at Oregon’s eight public universities: Oregon Health & Science University, Eastern Oregon University, Oregon Institute of Technology, Oregon State University, Portland State University, Southern Oregon University, University of Oregon, and Western Oregon University.

“This tax credit is one of a kind,” Oregon State Treasurer Randall Edwards told a capacity crowd at a Portland event hosted by the Oregon Innovation Council (Oregon InC) and the Oregon University System (OUS) to publicly launch Oregon’s University Venture Development Fund.

“No other state has a program where donors can receive such a generous tax credit in return for helping move research from lab to market,” Edwards said. “Oregon leads the nation in creating innovative approaches for increasing the return on investment in publicly funded university research. This is an important link in moving innovation to new companies and jobs for Oregon.”

As of this week participating universities are ready to award tax credits for gifts to the fund.
David Chen, chair of the Oregon Innovation Council, applauded Gordon Hoffman and William Newman of Northwest Technology Ventures, for making lead gifts to the fund in the name of four campuses. Another early adopter of the tax credit, Bend Research Inc., also made gifts to more than one university.

Chen said contributions to the fund provide targeted grant support during the difficult early stages of the venture lifecycle, referred to as the “valley of death” because so many promising innovations don’t make it through to commercialization.

“As Oregon’s universities grow their market share of national research dollars and niche this research in growing areas of regional competence, such as nanotech, infectious disease solutions, renewable energy, and green building technologies, the University Venture Development Fund plays a critical role by bridging the gaps from lab R&D to marketable products,” Chen said. “Gap financing is a missing link in the chain of events linking research to job creation.”

Kirby Dyess, vice president of the State Board of Higher Education, said she expects the fund to stimulate entrepreneurship on all levels. “Our aim is to support Oregon’s research, entrepreneurial education, and technology transfer initiatives while providing opportunities for undergraduate and graduate students to gain experience in applying research to commercial activities,” Dyess said. “In the process, this program will provide highly skilled, job-ready graduates while also helping transform today’s research and development activities into tomorrow’s businesses.”

Sen. Frank Morse, R-Albany, who championed legislation (SB 582 and 853) establishing the fund, described the launch as a watershed event. “We want Oregonians to be direct investors in expanding our economy,” he said. “I hope this will spur even more partnerships among the universities, government, business and industry.”

Morse said donations will create an “evergreen” endowment to foster innovation because universities will repay the state for claimed tax credits with income from royalties and licensing fees. The state will issue additional tax credits as the initial ones are repaid allowing a cycle of reinvestment in university-derived innovation.

All of the speakers commented on the “unprecedented” level of cooperation by the universities, business leaders and elected officials in working through the complexities of bringing the University Venture Development Fund to life. “The government-university-industry partnerships embodied in the fund will catalyze the innovation cycle in Oregon,” said Rich Linton, chair of the OUS Research Council and vice president for research and graduate studies at the University of Oregon. “In short, it will help assure the best new ideas make their way from the universities to the marketplace for the benefit of society and the economy”.

Linton said Oregon ranks sixth nationally in federal R&D expenditures per faculty member at public universities. “Our researchers are highly competitive on a per capita basis in securing federal grants that feed the innovation pipeline,” Linton said.

In 2006–7 Oregon’s eight public universities reported a total of $582.6 million in research expenditures, posted 224 invention disclosures and launched six spinout companies. The universities also received a combined total of $6.9 million in licensing income.

The legislature has authorized the universities to receive a total of $14 million in tax credit-eligible gifts, with each institution’s allocation based on its annual income from research grants and contracts.

Tax credits will be awarded on a first come, first served basis. For the FAQ and links to the participating universities, visit www.ous.edu/venturefund. For information specific to the University of Oregon, go to uoventurefund.uoregon.edu.

###

Contact: OUS, Di Saunders, cell, 971-219-6869, office: 503-725-5714; Oregon InC, Courtney Warner, office, 503-229-6063; cell, 503-333-7097