The Golden State Innovation Act Passes First Policy Committee
SACRAMENTO — At a pivotal point in global pandemic response and recovery, the Assembly’s Revenue and Taxation Committee voted unanimously to support AB 593 which will incentivize the innovation of life-saving therapies, like the COVID-19 vaccine. The Golden State Innovation Act, authored by Assemblywoman Cottie Petrie-Norris, restores critical tax incentives that make it possible for life science companies to perform cutting-edge research and development that will ultimately end the pandemic.
“California life sciences companies have been at the forefront of the fight against COVID-19, spending trillions of dollars in developing tests, treatments and vaccines,” said Assemblywoman Cottie Petrie-Norris (D-Laguna Beach) “The R&D tax credit can help us permanently eradicate the pandemic, support innovative life-saving treatments and create high-quality jobs in California to bolster our economy for years to come.”
The Golden State Innovation Act has garnered a broad coalition of support since its introduction on February 11, 2021. Patient-advocacy groups, life sciences companies and 31 California Legislators have joined in support of Assembly Bill 593. This bill will restore the Research and Development (R&D) Tax Credit and Net Operating Loss (NOL) deductions for Life Sciences companies in California at a pivotal point in the state’s pandemic response and recovery.
AB 593 is supported by Advanced Medical Technology Association, American Cancer Society, AMGEN, Bayer, Biocom (Sponsor), Bioscience LA, Biotechnology Innovation Organization, California Access Coalition, California Biomedical Research Association, California Chronic Care Coalition, California Institute for Regenerative Medicine, California Life Sciences Association (Sponsor), CAL RARE, Cedars-Sinai, City of Hope, Dexcom, Edwards Lifesciences, Expanesthetics Inc., Greater Conejo Valley Chamber of Commerce, Horizon Therapeutics, Inari Medical, Masimo Corporation, Objective Capital Partners and Quidel Corporation.
WHAT OTHERS ARE SAYING
“Restoring tax credits to biomedical companies will help them reinvest in cutting edge research and development that will save lives,” said Director of California State Legislation at the American Cancer Society Autumn Ogden-Smith. “The American Cancer Society Cancer Action Network believes that AB 593 (Petrie-Norris) is a positive step in reinvesting in California’s future by helping grow the life sciences industry.”
“We have been challenged by the COVID-19 pandemic and our remarkable responses are a testament to the value of innovative life sciences in treating, preventing, and innovating solutions to global scourges. Cedars-Sinai salutes California’s determination to invest, sustain, and support a sector that holds so much promise in achieving our shared vision for the golden state over the decades to come,” said Dr. Shlomo Melmed, EVP of Academic Affairs, Cedars-Sinai.
“The California Chronic Care Coalition is proud to support AB 593, the Golden State Innovation Act, which would incentivize the development of innovative treatments for rare and chronic diseases. As a result of Covid-19, efforts to address numerous other health problems facing our state and nation have been put on hold. Further, businesses have been crippled by the economic impact of the pandemic, preventing additional investments in innovation. In light of unprecedented state revenues, this investment in California’s life sciences sector is timely, appropriate and sorely needed,” said Liz Helms, President and CEO, CA Chronic Care Coalition.
“City of Hope has a record of innovation. Synthetic human insulin and numerous breakthrough cancer drugs were developed through technology pioneered by City of Hope. We are a part of the bioscience powerhouse that is sprawled across L.A. County,” said President of Strategy and Business Ventures at City of Hope Harlan Levine, M.D. “State incentives that effectively attract R&D investments will indirectly improve City of Hope’s ability to provide more leading-edge therapies and clinical trials for patients who need them today.”
“California-based companies have long been pioneers in research and development in biotechnology, helping the state become one of the largest biopharmaceutical innovation hubs in the world. Today, other states are taking steps to become more competitive and attract the sector’s highly sought-after research and development jobs. California must act to provide tax stability to California-based companies if the state is to maintain its historical leadership status in the sector,” said Jackie Crouse, Vice President of Tax, Amgen.
“Innovation drives California’s economy and keeping that innovation engine running through tax incentives that are so critical for biotechnology start-ups is essential – these firms are making discoveries that lead to medicines that protect and improve the health of the state’s residents. One of the learnings from the pandemic has been the powerful impact that innovators in the life sciences can have in the fight against some of life’s most devastating health conditions. Let’s ensure these firms can thrive through AB 593, with its passage both our economic recovery and human health can be advanced,” said Jens Vogel, SVP/Global Head of Biotech, Bayer.
“If the United States is the heart of life science innovation, then California is the heartbeat. In addition to life-changing and life-saving innovations, in times of crisis and economic downturn the life science industry consistently helps California weather economic emergencies. It also creates quality career pathways for those with two and four year degrees from our community colleges and universities. Reflecting the profile of the industry across the state, Biocom California’s members are overwhelmingly small to mid-sized companies (over 70% have fewer than 100 employees). And it is a race against the clock. For medical device companies it can take many years from concept to FDA clearance, while for biopharmaceutical companies the timeline is closer to a decade from discovery to approval. These companies need tax certainty to make the long-range planning decisions their complex business models require. Assemblywoman Petrie-Norris’ AB 593 will give them that certainty,” said Joe Panetta, President & CEO, Biocom California.
“COVID-19 is the perfect storm of a healthcare crisis, which led to an economic crisis, which has been amplified by social crisis. California has much to gain as it innovates out of these crises, providing new opportunities locally, across the country, and around the world. In order to remain competitive and maximize return on investment, it is critical that we remove financial barriers to innovation,” said David J. Whelan, CEO, Bioscience LA.
“Biopharmaceutical companies are leading the charge in the fight against the coronavirus. These innovators are making life saving discoveries through research and development, including for treatments and vaccines for COVID-19 and future pandemics. California’s research and development tax credit helps incentivize biotechnology companies to invest in these activities and generate increased employment opportunities in science and engineering,” said Patrick J. Plues, Vice President, State Government Affairs, Biotechnology Innovation Organization.
“The California ecosystem is incredibly productive. In 2019, California companies entered more than 1,380 medicines into clinical trials. Many are intended to treat cancer, neurodegenerative conditions, infectious diseases, and numerous other serious conditions where patients have major unmet medical needs. 2020 will of course be marked by the rapid search for, and application of, treatments and cures for COVID-19 related complications. All of this starts with Research and Development activities,” said Dr. Le Ondra Clark Harvey, Executive Director, California Access Coalition.
“Biomedical research requires the input and participation of many individuals from both the life and physical sciences, with many different backgrounds and skills. Such a research team might include medical doctors, veterinarians, computer scientists, engineers, technicians, researchers, and a variety of scientists from the different fields of the life sciences – all with a foundation of Research and Development. These are good jobs for California, and we should protect and nurture them,” said Dr. Amanda Banks, President, California Biomedical Research Association.
“At CIRM we have seen how investing in medical research does more than just advance the field and benefit scientists, it benefits all of us. Our investments have generated more than $11 billion in new sales revenues and taxes for California and helped create more than 56,000 new jobs. Through our support for stem cell research CIRM is attracting scientific talent and additional investments to California, promoting economic growth and creating an environment that supports the development of businesses and commercial enterprises in the state,” said Maria T. Millan, M.D., President and CEO, California Institute for Regenerative Medicine (CIRM).
“The California life sciences ecosystem works like a cycle - academic research develops innovative new ways to tackle disease and other problems while producing well-trained PhDs to carry that work forward. Seeing promise in their research, venture capitalists invest in young companies, and the most successful of these companies grow to become industry leaders in their fields. In 2019, VCs alone invested $6.5 billion into California life sciences businesses, once again leading the nation. With these resources and the additional billions of dollars directly invested by larger companies on R&D in California, the life sciences continue to develop innovative ideas into products: medicines and devices to resolve unmet medical needs, as well as genomic sequencing applications and other diagnostic tests to diagnose health problems and advance personalized medicine,” said Mike Guerra, President and CEO, California Life Sciences Association.
“Dexcom started in San Diego in 1999 and develops and manufactures continuous glucose monitors. Incentives to grow our life sciences workforce and conduct more R&D in California means that Dexcom can reinvest in our local community and economy. California is making an investment into its future by helping grow the life sciences industry and Dexcom applauds the effort,” said Dee Ann Stahly, State Government Affairs Director, Dexcom.
“The success of California’s life sciences ecosystem is built on sound, supportive practices that help medical technology companies like ours grow and thrive. Edwards Lifesciences was founded in 1958, and for more than 60 years, our spirit of innovation focused on helping patients has driven us forward. It is this shared commitment to investing in education, developing thoughtful public policy and supporting research and development that has produced tremendous benefits for California, its life sciences companies and patients. These are the ideals that fuel innovation, and we look forward to continuing them for decades to come,” said Dirksen Lehman, Corporate Vice President, Public Affairs, Edwards Lifesciences.
“Encouraging innovation and investment in California’s innovative capacities through government and industry working together is the best way to grow research jobs in California. As a company spun out of UC Davis, we are now the global leader in inhaled anesthetic innovation with the objective of revolutionizing modern surgery,” said Mark Holman, Chairman, Expanesthetics, Inc.
“Developing transformative medicines for people with rare and rheumatic disease requires diverse, talented and collaborative teams. Actively participating in the biotech community is essential to our ability to make a meaningful difference in patients’ lives and further innovation. California’s tax incentives are a contributing factor to our ability to build, maintain and expand our workforce in South San Francisco and investments in the state,” said Srini Ramanathan Ph.D., Vice President, Development Sciences and Site Head for South San Francisco, Horizon Therapeutics.
“At Inari Medical, we are focused on developing products to treat and transform the lives of patients suffering from venous diseases. The COVID-19 pandemic had a significant impact on our patients, our customers, our employees and their communities. As Inari moves beyond the pandemic, incentives such as the Golden State Innovation Act will support its efforts to create life-saving therapies and quality employment opportunities at its home office in Orange County,” said Mitch Hill, CFO, Inari Medical.
“The COVID-19 pandemic has underscored the value of the life sciences in treating, preventing, and innovating solutions to global challenges. California must continue to invest, sustain, and support this vital business sector,” said Joe Kiani, Founder and CEO, Masimo Corporation.
“We have seen strong spending towards innovative technologies and platforms such as gene and cell therapies pursuing diseases in oncology, CNS, and rare diseases. We have also observed COVID as a contributor to growth, despite some slowdown within parts of the sector, and COVID-19 almost becoming a new disease category in its own right with its own therapeutics and vaccines. Continued investment is the lifeblood of this sector and the foundation for early-stage research,” said David Crean, Managing Director, Objective Capital Partners.
“Highly-skilled research and development teams have produced anti-COVID vaccines with remarkable speed. But this is a persistent virus. We must do all we can to support businesses – especially those located in California – that we are counting on to develop new treatments to combat this deadly virus,” said AB 593 Joint-Author Assemblymember Tom Daly (D-Anaheim). “Without continued research and development, we are only hurting California’s ability to spur new and creative innovations.”
“Reinstating California’s Life Sciences research and development tax credit will be a critical step in bolstering biomedical innovation throughout the state, which is known worldwide as home to the Birthplace of Biotechnology,” said AB 593 Joint-Author Assemblymember Kevin Mullin (D-South San Francisco). “Since we continue to be in the midst of a worldwide pandemic, it is imperative we do everything possible to support Life Sciences research that benefits those suffering from a variety of health conditions, including COVID-19. For these and many other reasons, I am a proud joint-author of AB 593.”
“California’s fiscal outlook looked grim when we were at the height of the pandemic last summer and the Legislature limited R&D tax credits and NOLs, but with a healthy economy and greater than expected revenues we must build upon our successes in critical industries. This is especially true for ones whose breakthroughs will carry us through this and future pandemics,” said AB 593 Joint-Author Assemblymember Jacqui Irwin (D-Thousand Oaks). “The Life Sciences industry provides well-paying jobs to Californians across the state, and the research and development these restored tax credits will spur the goal of saving and improving the lives of everyone in our state and beyond.”
“The Golden State Innovation Act will ensure California remains at the forefront of the BioTech industry, enabling innovation and job creation across the state,” said AB 593 Principal Co-author Assemblymember Jim Cooper (D-Elk Grove). “AB 593 demonstrates to the entire world that California is prepared to invest in saving and improving lives.”
“There are numerous examples of the benefits of biotech research for both health and the economy, most recently demonstrated by the rapid development of COVID vaccines bringing hope of ending a devastating pandemic. California’s biotech researchers bring hope to people both here and around the world,” said AB 593 Principal Co-author Dr. Richard Pan (D-Sacramento). “The Golden State Innovation Act increases investments in biotech research that attracts talent and creates high-wage jobs in California to increase economic opportunities as well as create life-changing therapies.”
“The life sciences industry is saving lives every day and is one of the economic drivers in the Bay Area and specifically on the Peninsula,” said AB 593 Co-author Assemblymember Marc Berman (D-Menlo Park). “This bill would incentivize those companies to continue to conduct research, grow, and thrive in California for the benefit of all residents.”
“Life sciences companies like Genentech in my district are making life saving discoveries through research and development including treatment and vaccines for COVID-19 and future pandemics,” said AB 593 Co-author Senator Bill Dodd (D-Napa). “It is California’s research and development tax credit that incentivizes life science companies to invest in these activities and generate increased employment opportunities in science and engineering in our state.”
“In light of the swelling tax revenue and abundant federal stimulus heading to the State, we must reverse the taxes placed on the very same California businesses that have been critical to developing the vaccines to get us out of this pandemic,” said AB 593 Co-author Assemblymember Chad Mayes (I-Yucca Valley).
“Biotechnology is crucial to the scientific advancement of California, especially during the COVID-19 pandemic,” said AB 593 Co-author Assemblymember Brian Maienschein (D-San Diego). “Incentivizing research and development with tax credits will pave the way for our state to lead in the field of life sciences through job development and innovation.”
"Whether it's COVID or cancer, California’s innovative biotechnology firms are on the verge of finding the cure,” AB 593 Co-author Senator Dave Min (D-Irvine) said. “But these efforts need our support. I’m proud to join this effort that will not only stimulate job growth in our state, and particularly in Orange County, which is home to many of the leading life sciences companies, but will also help people live longer and healthier by supporting the development of groundbreaking therapeutics and technology.”
"As we look to move past the financial crisis created by COVID-19, it is essential that we do everything we can to rebuild our economy. I am proud to co-author AB 593 which restores historic tax credits to Life Science companies that fuel job growth and innovation in California,” said AB 593 Co-author Assemblywoman Luz Rivas (D-Arleta).
AB 593 is joint-authored by Assemblymember Tom Daly (D-Anaheim), Assemblymember Jacqui Irwin (D-Thousand Oaks) and Assemblymember Kevin Mullin (D-South San Francisco); principal co-authored by Assemblymember Jim Cooper (D-Elk Grove) and Senator Dr. Richard Pan (D-Sacramento); and co-authored by Assemblymember Cecilia Aguiar-Curry (D-Winters), Assemblymember Marc Berman (D-Menlo Park), Senator Patricia Bates (R-Laguna Niguel), Assemblymember Rebecca Bauer-Kahan (D-Orinda), Assemblymember Steven Choi (R-Irvine), Assemblymember Jordan Cunningham (R-San Luis Obispo), Assemblywoman Laurie Davies (R-Mission Viejo), Senator Bill Dodd (D-Napa), Assemblymember Jim Frazier (D-Fairfield), Assemblymember Adam Gray (D-Merced), Assemblymember Tim Grayson (D-Concord), Assemblymember Marc Levine (D-Marin County), Assemblymember Evan Low (D-Silicon Valley), Assemblymember Brian Maienschein (D-San Diego), Assemblymember Chad Mayes (I-Yucca Valley), Senator Dave Min (D-Irvine), Assemblymember Jim Patterson (R-Fresno), Assemblywoman Luz Rivas (D-Arleta), Assemblymember Rudy Salas (D-Bakersfield), Assemblymember Kelly Seyarto (R-Murrieta), Assemblywoman Suzette Valladares (R-Santa Clarita), Assemblymember Carlos Villapudua (D-Stockton), Assemblymember Randy Voepel (R-Santee), Assemblymember Marie Waldron (R-Escondido), Assemblymember Chris Ward (D-San Diego), and Senator Scott Wilk (R-Santa Clarita).