The Following Information Is Provided to Assist Community Members in Writing to Our Elected

Fact Sheet: Governor Ducey’s Plan for $1 Billion in University Research Infrastructure

Thank You for your interest in supporting this vital initiative for our universities, our students, and the people of Arizona.

The following information is provided to assist community members in writing to our elected leaders.

ONCE COMPLETED, please SCAN YOur SIGNED Letter and email it to . AZBio will MAKE THE COPIES & deliver THEM to the capitol FOR YOU. letters will be delivered on Tuesdays and Thursdays during session.

AZBio will deliver copies to:

Leadership:

Senate Majority Leader Kimberly Yee, Senate Minority Leader Katie Hobbs

House Majority Leader John M. Allen, House Minority Leader Rebecca Rios

Members of the Senate Appropriations Committee:

Chairman Debbie Lesko, Vice-Chairman John Kavanagh; Senators: Sylvia Allen, Olivia Cajero Bedford, Steve Farley, Katie Hobbs, Steve Montenegro, Warren Petersen, Martin Quezada

Members of the Senate Finance Committee:

Chairman David C. Farnsworth, Vice-Chairman Karen Fann; Senators: Sonny Borrelli, Sean Bowie, Olivia Cajero Bedford, Steve Farley, Warren Petersen

Members of the House Appropriations Committee:

Chairman Don Shooter, Vice-Chairman David Livingston; Representatives: Lela Alston, Russell Bowers,

Mark A. Cardenas, Heather Carter, Ken Clark, Regina E. Cobb, Charlene R. Fernandez, Randall Friese,

Vince Leach, Jill Norgaard, Tony Rivero, Michelle B. Ugenti-Rita

Members of the House Ways & Means Committee:

Chairman Michelle B. Ugenti-Rita, Vice-Chairman Vince Leach

Representatives: Reginald Bolding, Mark A. Cardenas, Mitzi Epstein, Anthony T. Kern, Jay Lawrence,

Kevin Payne, Jeff Weninger

You are also encouraged to email or fax the Representatives and Senator in the district where you live and/or where your company is located (if different) with a note copying them on the letter and letting them know that as a voter in their district you are sharing the letter with them.

To find your legislators, visit:

Article with cited resources that appeared in AZ Business on 2/1/2017:

What has been proposed by the Governor:

Page 11

RESEARCH AND DEVELOPMENT Developing a higher education system primed to prepare graduates for professional opportunities in an evolving economy requires ongoing investment in university research and development. In response, the Executive provides ongoing support for a $1 billion funding plan for university R&D infrastructure and deferred maintenance projects. The Importance of University R&D. University R&D infrastructure plays a large role in expanding opportunities for students, staff and the Arizona economy. In 2003, the State pledged $34.6 million per year for 23 years (2008–2031) to support university R&D. With this General Fund appropriation, universities have been able to bond and invest in key projects, including science and technology buildings, medical research and biomedical buildings, and laboratory facilities. As an example of how the new R&D infrastructure has significantly impacted the state, in November 2016 the Arizona Board of Regents reported that, since 2008, the number of science, technology, engineering and math (STEM) degrees has increased by 94%, and that, since 2003, university invention disclosures have increased by 154%. Turning Vision into Reality. The Board of Regents’ 2020 Vision addresses several goals of Arizona’s universities, including research excellence “to increase the research capabilities and performance of the Arizona University System to a level of competitive prominence with peer rankings of top American research universities.” Additional bonding capacity and a guaranteed revenue stream for debt repayment will help make this vision a reality for Arizona’s three public universities (the University of Arizona, Arizona State University, and Northern Arizona University). New R&D infrastructure will stimulate research and help attract high-quality faculty to Arizona’s universities. Other benefits include numerous opportunities for student employment and developing new public-private partnerships between Arizona universities and the business sector, likely yielding high economic returns and further aligning education outcomes to workforce needs. In addition to R&D infrastructure, the universities have a large need for deferred maintenance funding. In FY 2016, the universities reported $671 million in deferred maintenance needs and numerous hazardous facility conditions. Funding dedicated to building maintenance will be beneficial for building upkeep and student safety. Funding Plan. The aforementioned $1 billion ongoing investment will be supported by redirecting transaction privilege tax (TPT) revenues paid by the universities, which includes an estimated $30.3 million State component and $6.5 million Stateshared component. The Executive recommends that the $30.3 million state component be used for capital investments, including R&D infrastructure and deferred maintenance projects. This ongoing State component, in addition to a university match, will enable universities to bond for approximately $1 billion over 30 years and make substantial investments in R&D infrastructure and deferred maintenance. TPT growth related to the State component is capped at 2% annually for capital investments. Any TPT revenue growth above 2% annual growth will be provided to universities for general operating expenditures. In addition to the estimated $30.3 million State component, the approximate $6.5 million State-shared component, and all related future TPT revenue growth, will be made available to the universities for general operating expenditures, including resident student costs.

What happened after we invested $500M in 2003:

New facilities:

ASU Biodesign
Economic Impact $1.5 billion in its first decade of operation,per a study by the Seidman Research Institute at ASU’s W. P. Carey School of Business.
NAU Health Sciences Center is home to one of the leading Pathogen Research Labs in the world.
UA BIO5
Economic Impactfor UA’s BIO5, financial ROI is approximately $7 for every dollar invested
UA College of Medicine Phoenix
Economic Impact of biomedical campus in downtown Phoenix in 2013 was nearly $1.3 billion, of which $961 million is attributed to the UA College of Medicine – Phoenix presence. In 2013, the academic medical center accounted for9,355 direct and indirect jobs.

Health Innovations coming from our University Research Complex:

The technology behind ZMapp, a drug credited with saving the lives of two American Health Workers who contracted Ebola. (ASU Biodesign)
Commercializing the ImmunoSignature™ technology for accurate and timely detection, monitoring, and progression of chronic diseases by ASU Spin-out HealthTell
University of Arizona BIO5 Institute researchers are working to identify traits that increase or decrease a person’s susceptibility to asthma. This effort could someday lead to treatments – administered as early as in the womb – to prevent asthma and other diseases from occurring in people who have a tendency to get them.
UA BIO5 have formed 25 spinouts companies in the last eight years.
A recent discovery at the UA College of Medicine – that adult stem cells collected from fat tissue can be converted to cells that will grow cartilage tissue – has focused one Arizona Arthritis Center lab’s research, promising new hope for osteoarthritis sufferers.
The first-ever scorpion antivenom proved effective under controlled clinical trials was co-developed and tested at the University of Arizona’s VIPER Lab.
The Pathogen Genomics Program is a joint program between the Translational Genomics Research Institute (TGen) and the Northern Arizona University (NAU), which results in a unified approach to protecting America against dangerous pathogens, in particular Bacillus anthracis (anthrax).I
Examples of Research into diseases that impact Arizonans and people around the world:

•Alzheimer’s Disease

•Arthritis

•Asthma

•Cancer

•Diabetes

•Ebola

•Heart Disease

•Lyme Disease

•MS

•Valley Fever

•Zika

Educational Opportunities in Research Centers:

Faculty—assisted by undergraduate and graduate students—conduct vital research in university-funded centers and have provided students with exceptional hands-on research experiences that will prepare them for the workforce and future challenges.

Projected Economic Impact:

It is projected that the short-term return over the construction phase in the first three years would yield $2.7 billion in economic impact and a 5:1 return in the first 5 to7 years following construction. Adding it up, that’s $7.7 billion of economic impact the first 10 years. Long term the investment would enable the universities to achieve an increase in extramural research funding (that’s federal and private sector research investment) of an additional one billion dollars each year by 2020.

What is the Economic Multiplier on Biotech Investment in Arizona?

(Source: BIO/TEConomy 2016)

The Direct-Effect Employment Multiplier for Bioscience R&D facilities is 3.1 to 1.

In the cases of companies that can emerge from these facilities, the Direct-Effect Employment Multipliers are:

Drugs and Pharmaceuticals: 12.2 to 1
Medical Devices: 4.7 to 1
Agricultural: 17.1 to 1

What did AZBio’s CEO say in her letter? (following page)

Most letters will likely consist of 1 – 2 pages. This example is a bit longer due to the data provided relative to Arizona’s standing across its population peer group.

February 6, 2017

RE: Support forUniversity Research Infrastructure Investment

Dear Governor Ducey, President Yarbrough, and Speaker Mesnard,

As President & CEO of the Arizona Bioindustry Association and an active supporter of Arizona’s high tech and innovation communities, I am respectfully writing to voice my support for University Research Infrastructure Investment as proposed by Governor Ducey in the Executive Budget.

Arizona’s three state supported research universities play a vital role in the development of our bioscience industry. It is within these walls that new health innovations are developed, new companies are born, and tomorrow’s leaders are trained. University research is also a key factor in attracting new industry relationships that can lead to new commercial collaborations as well as federally sponsored research.

With three public universities and a total of four research universities (including Midwestern University in Glendale), Arizona has the fewest number of research universities across our population peer group of states with 5 – 7 million people. The number of research universities by state across our peer group include: AZ (4), CO (9), IN (12), MD (13), MA (24), MN (11), MO (10), TN (14), WA (12), and WI (12). By expanding our university research infrastructure, and investing to keep our current facilities in top condition, Arizona can continue to expand its innovations within our three highly respected public universities and continue to grow in both stature and global competitiveness.

The quality and capacity of a state’s university infrastructure correlates with the number of researchers it can attract and retain along with the research expenditures these researchers attract to their states. As our research capacity grows, so will the economic impact.

The table on the following page illustrates this research infrastructure impact effect across our state population peer group. Without sufficient places for the research work to be done, we will lack homes for researchers and their research projects and thus restrict our capacity to attract research investments and the expenditures that drive economic impact. The Governor’s Plan addresses this need.

AZ / CO / IN / MD / MA / MN / MO / TN / WA / WI
Pop. (Jul.2015) / 6.8M / 5.5M / 6.6M / 6.0M / 6.8M / 5.5M / 6.1M / 6.M / 7.1M / 5.M
GSP $B (2015) / 298.2 / 318.6 / 331.1 / 365.2 / 478.9 / 334.7 / 290.7 / 310.2 / 449.4 / 300.6
GSP per capita $K / 43.7 / 58.4 / 50.0 / 60.8 / 70.5 / 61.0 / 47.8 / 47.0 / 62.7 / 52.1
Bioscience Academic R&D $K
(2014) / 339.7 / 554.6 / 581.5 / 1,668.3 / 1,515.5 / 620.4 / 844.8 / 750.0 / 972.9 / 887.0
Academic R&D $ Tier / III / II / II / I / I / II / II / II / II / II
Bio Academic R&D $ per capita / 59 / 104 / 88 / 279 / 224 / 90 / 78 / 115 / 123 / 154
Bio R&D Per Capita Tier / V / III / III / I / I / I / II / II / II / II
# Research Universities / 4 / 9 / 12 / 13 / 24 / 11 / 10 / 14 / 12 / 12
# University Researchers / 16,859 / 16,347 / 23,212 / 39,578 / 39,052 / 17,000 / 14,635 / 16,139 / 20,018 / 23,209

In addition to directly impacting our university research infrastructure, the Governor’s plan represents a significant economic stimulus for our state across industry sectors.

In the case of Arizona’s $500 Million investment in 2003, the economic return on that investment has been estimated at a multiplier of 7 to 1.

Arizona’s ability to compete, both nationally and globally, relies on our having a strong foundation of university research to build on. Since 2003, Arizona has taken positive steps to create the place for this research to happen and has been successful in both developing and attracting talented researchers. If we are to continue to grow our business base and create quality jobs, we need to invest in the foundations that support them.

Our universities have set an aggressive goal of growing outside research investment for the current level of $1B per year to $2B per year across all disciplines (including the biosciences) by 2020. We can help them achieve this goal by providing them with the facilities they need to get the job done.

In addition to the economic stimulus that this investment will have in the near term as the facilities are constructed, even greater gains will be reaped in the future as research is commercialized and students who receive their training in these facilities take their place as productive members of Arizona’s workforce.

In today’s knowledge-based economy, real world experience is highly valued. Many of our students gain this real-world experience within our university research facilities working alongside our research faculty on industry or federally supported grants. Industry alone cannot support the needs of our STEM students. We need the opportunities created for student learning within these university research facilities.

If you would like further information on why AZBio strongly supports renewed University Research Infrastructure Investment as has been proposed by Governor Ducey, I would be happy to provide it. The best way to reach me is by phone at (480) 332-9636 or via email at .

Thank you for your leadership and your consideration of this important opportunity for our state both today and in the future

Sincerely,

Joan Koerber-Walker

President & CEO

Arizona Bioindustry Association, Inc. (AZBio)

107 S Southgate Drive

Chandler, Arizona 85226

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