Both the Rhode Island House and the Senate approved bills Tuesday aimed at attracting biotechnology and biomanufacturing firms to Rhode Island and keeping them here when they become profitable.
The Biotechnology Jobs Growth Act of 2006 focuses on the economic incentives that – coupled with physical infrastructure investments and the availability of skilled labor – are viewed as critical to attracting biotech and biomanufacturing investment.
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In the House, a 62-0 vote approved the bill sponsored by House Finance Committee Chairman Steven M. Costantino, D-Providence. The Senate voted 37-0 to approve identical legislation sponsored by Senate Finance Committee Chairman Stephen D. Alves, D-West Warwick.
One area of focus for the act will be making Rhode Island tax policy competitive with that of its New England and Northeast neighbors. The bill extends the existing biotechnology tax credits period from seven to 15 years, making Rhode Island tax policy competitive with that of Connecticut, Massachusetts, New Jersey, New York, and Pennsylvania.
“We’ve talked with leaders in the industry, and they’ve told us that if we want our tax credit program to be effective at attracting and retaining biotech investment, we need to give them more time to cash in their credits. Advancements in biotechnology usually involve years of research and development before they result in profitable products, and under our current program, the tax credits often expire before the company has had the opportunity to use them all,” Costantino said.
In conjunction with extending the tax credit period, the act would establish minimum performance standards that companies must meet to claim the credits. For instance, companies would be required to provide compensation that is at least 25 percent higher than average for full-time employees in Rhode Island, maintain existing jobs, and increase the number of jobs by at least 9.5 percent after four years.
And unlike similar policies in Pennsylvania and New Jersey, the Rhode Island initiative would not permit tax credits to be transferred to a third party or sold back to the state.
“This is not a vast expansion or the addition of any new tax breaks,” said Alves. “This bill is just taking an existing program and fixing some disadvantages that have been identified with it so that it does the job it was meant to do: bringing in and retaining an industry that will bring with it good, high-paying jobs that will help support Rhode Island families.”
