Legislation To Provide Tax Credits to Biotechnology Companies Introduced
Assembly member Ellen Corbett (D-San Leandro) on Wednesday introduced a bill (AB 2230) that would provide tax credits to biotechnology firms that locate in California, the San Diego Union-Tribune reports. The bill, drafted by biotechnology industry groups Biocom, the California Healthcare Institute and Bay Bio, would require biotechnology companies to invest between $50 million and $100 million over several years into constructing a manufacturing plant and creating a certain number of long-term, high-paying jobs with health benefits. Companies that meet the criteria would be eligible for a reduction in franchise/corporate tax income; a corporate tax rate reduction over five years; an investment credit; a jobs tax credit based on the number of new employees; and the deferral of property tax until FDA certifies that the new facility could begin construction. Sen. Dede Alpert (D-San Diego) said she plans to introduce a similar version of the bill in the Senate during this legislative session.
With California facing a budget crisis, the state biotechnology industry wanted to craft legislation that "tax-cut-wary Democrats" would have a difficult time "dismissing out of hand," the Union-Tribune reports. "I'm pretty wary of most tax credits," Alpert said, adding, "But (this proposal) is more appealing to me because the state gets something for the taxes it forgoes." Assembly member Christine Kehoe (D-San Diego), an AB 2230 cosponsor, said, "Anything to do with the budget and a tax credit that is going to cost money will be a tough discussion this year." Alpert said that the bill might not reduce tax revenue until after the budget crisis is resolved because "it will take several years of a company making an investment in the state before anyone can get a tax credit" (Somers, San Diego Union-Tribune, 2/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.