Senate Housing Package will enhance biotech innovation.
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Press Release Summary:
As a result of provision included in Housing Bill passed by U.S. Senate, hundreds of biotechnology start-ups will be encouraged to utilize incentive for capital investments. According to Jim Greenwood, BIO president and CEO, biotech companies whose products have not yet made it to market will be in stronger position to carry out clinical trials and product development. New investments will help stimulate economy and accelerate development of life-saving therapies.
Original Press Release:
Accelerated R&D Credit in Senate Housing Package Will Enhance Biotech Innovation and Speed Therapeutic Discovery
WASHINGTON, D.C. (Friday, July 11, 2008) -
Hundreds of biotechnology start-ups will be encouraged to utilize an incentive for capital investments as a result of a provision included in the Housing Bill passed by the U.S. Senate today by a vote of 63-5.
"Many biotech companies whose products have not yet made their way to market will be in a stronger position to carry out clinical trials and product development because of this provision," said Jim Greenwood, president and CEO of the Biotechnology Industry Organization. "Thanks to the leadership of Senators Stabenow and Voinovich, companies will be encouraged to make new investments this year, stimulating the economy and accelerating the development of new life-saving therapies."
"On behalf of the thousands of patients who can benefit from these therapies, we strongly encourage the House to include this provision when it considers the bill next week," continued Greenwood.
Bonus depreciation was enacted into law earlier this year and is designed to encourage companies to make capital investments that will help spur economic growth. Yet many companies that do not expect to pay tax this year, in part due to the economic downturn, would receive no benefit regardless of how much they invest.
The provision passed by the Senate today will provide these companies a limited investment incentive by allowing the companies to utilize accumulated AMT or R&D credits in lieu of the bonus depreciation to which they would otherwise be entitled. Like bonus depreciation, this provision is not a new tax benefit. It simply allows companies to use credits today that they could otherwise use in the future, based on the new capital investments that would have qualified under bonus depreciation.
This provision is supported by a broad range of industries, including: American Airlines, Arena Pharmaceuticals, Inc., the Association for Manufacturing Technology, Arch Coal, BIO, Cleveland Cliffs, CMS Energy, Coal Source, Consol Energy, Ford, Foundation Coal, GM, Goodyear, Jim Walter Resources, Murray Energy, National Mining Association, Northwest Airlines, Owens Illinois, Peabody, and Smurfit Stone.
This bipartisan proposal originally passed as the Voinovich-Stabenow Amendment on the Senate Floor (vote of 76-2) to the Senate Housing Package (cosponsors included: Senators Hatch (R-UT), Rockefeller (D-WV), Smith (R-OR), Cantwell (D-WA), Vitter (D-LA) and Levin (D-MI)).
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BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world's largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world
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