Biotech Tax Bill Suffers Setback in Md

Biotech Tax Bill Suffers Setback in Md.

URL: http://www.washtech.com/news/biotech/8405-1.html

Date accessed: 20 March 2001

Friday, March 16, 2001
By Rob Terry ,
Washington Techway Staff Writer

ANNAPOLIS — A Maryland General Assembly panel has rejected a proposal that would allow state biotechnology companies to sell their net-operating-loss tax credits to profitable companies.

The bill received an unfavorable report from the House Ways and Means Committee yesterday, but its supporters today began lobbying the Senate Budget and Taxation Committee, which is considering a similar bill, in hopes of keeping the issue alive.

The House panel deemed the measure too expensive at a time when lawmakers find themselves preoccupied with spending. Lawmakers have been mired in deliberations over Gov. Parris Glendening’s proposed $21 billion budget.

Concerns about the economy and where it’s headed are being felt in spending reviews. State fiscal analysts this week cut $50 million from next year’s revenue projections. Glendening, a Democrat, followed that by telling General Assembly leaders he would delay $130 million in construction projects — including a University of Maryland Biotechnology Institute building — until determining at the end of this year whether they are affordable.

Because of the biotech net-operating-loss bill’s complexity and the uncertain economic landscape, high-tech advocates had been preparing for the net operating loss measure to be put on hold for a review this summer. New Jersey and Connecticut have passed similar measures, seen as tools to help struggling biotech startups facing long product development cycles and uncertain cash flow. Critics called the measure corporate welfare.

Another bill, exempting from state sales taxes certain equipment used by biotech companies, like supercomputers, was also rejected yesterday by the House Ways and Means Committee.

Proponents expressed hope today, however, that favorable action by the Senate panel could give the effort new life and lead to the bill’s passage by an April 9th adjournment.

“That’s why we file companion bills,” said Tech Council of Maryland lobbyist Jack Sprague.

Category: 16. Economics and Biotechnology