SAN DIEGO and SAN FRANCISCO, Aug. 1 /PRNewswire/ -- A bi-partisancoalition representing California’s life science community is disappointed thenew state budget will not include tax incentives for life science companieslooking to manufacture drugs and products in the state, a benefit to the stateat no cost that could help ensure these jobs and businesses stay inCalifornia.
While California is home to two of the largest clusters of life sciencecompanies in the world, there is increasing competition from regions aroundthe world trying to attract these clean, high paying jobs as the industrymatures. Many cities are offering free land and large tax incentives to takethese jobs from California.
“While we understand the difficult situation the state budget has been in,manufacturing credits will result in good jobs that won’t be moved out ofCalifornia,” said Joe Panetta, president and CEO of BIOCOM, the southernCalifornia life sciences trade group that sponsored the legislation. “Thestate needs to help our research and development-based small businesses beable to manufacture their drugs close to their research headquarters any waythey can.”
The legislation, Assembly Bill 2230 and Senate Bill 1572, provides a taxcredit for expenses associated with building biotech manufacturing facilitieswithin California, helping life science companies at no outright cost to thestate.
“We’re faced with some critical decisions. California can continue tocapitalize on its 30-year investment in R&D and expand into the productionline, or it can opt out of the downstream investments this industry makes andsimply benefit from continued discovery,” said Matt Gardiner, president ofBayBio, which represents the life science community in the Bay Area. “In thenext decade, hundreds of biotechnology products will finish clinical trials,and decisions about where to manufacture them are being made now. As theindustry reaches maturity, we want California to remain the top choice forbiotechnology ventures.”
“Robust as it is now, California’s biomedical industry faces profoundlyserious threats to its continuing prosperity,” said David Gollaher, Ph.D.,president and CEO of the California Healthcare Institute. “State governmentpolicy on incentives for investment will be critical to meeting these seriousnew challenges.”
The bills, which were authored by a bi-partisan group of legislators fromacross the State, take a different approach to manufacturing tax credits byhaving companies enter into contracts with the Franchise Tax Board restrictingthe benefits until a threshold of capital investment and new employment aremet.
The bills were sponsored by BIOCOM, which represents Southern California’slife science community, the California Healthcare Institute, which representsthe state’s biomedical industry, and BayBio, the biotech trade groups for theBay Area, collectively representing more than 230,000 California residentscurrently employed in the life sciences.
The groups plan to continue to pursue this legislation next year.
SOURCE BIOCOM; California Healthcare Institute; BayBio
