Hill leads hearing on ways to keep biotech firms in California

SOUTH SAN FRANCISCO — California should explore tax incentives and other measures to keep biotechnology companies like Genentech from moving parts of their operations to other states or countries, those in the industry and lawmakers said Monday.

“We need to hear practical solutions,” state Sen. Mark Wyland, R-Carlsbad, said during a hearing of the Assembly Select Committee on Biotechnology. “We are in a fiscal crisis, and so-called tax breaks are difficult to achieve, but we have to find ways” to help the state’s biotech companies.

The hearing came as South San Francisco-based Genentech, which launched the biotech industry three decades ago, builds a new manufacturing plant near Portland, Ore. — its first such enterprise outside California.

Genentech cited income-tax disparity as the reason for bringing that plant and its 200 high-quality jobs to Oregon, according to the office of Assemblyman Jerry Hill, D-San Mateo, who chairs the committee.

In a similar move, San Diego-based Amylin Pharmaceuticals Inc., having taking advantage of California’s research-and-development tax credits, established a diabetes-treatment manufacturing plant in Ohio because of an eight-year, 75 percent tax break, Hill’s office said.

“Most companies want to stay here,” Andrea Jackson, director of government affairs for Genentech, said during the hearing, which was held at South San Francisco biotech firm Exelixis Inc. “But oftentimes we

can’t afford it. We want to be partners in how we grow our industry. We want to do it responsibly. We want to do it here in California. But we’re feeling a little lonely, to be honest with you.”

Among the ideas from the hearing to keep biotech firms from going out of state is giving them sales-tax breaks on manufacturing equipment, Hill said.

“That’s already done in enterprise zones, but maybe it can be done individually,” he said.

A model that the state could expand on is a business center in San Jose where the layout is ready-made for biotech firms, he said: “It’s all laid out as a complete lab for them to start out without investing in all the equipment.”

The committee is scheduled to conduct other hearings before a bill is possibly introduced by the end of February to encourage biotech firms to stay and grow in California, said Hill, who serves the 19th Assembly District — home to many such companies.

“We want to craft some legislation that could (give incentives) and help an industry that has brought so much to California and to this district,” he said.

http://www.insidebayarea.com/sanmateocountytimes/localnews/ci_13388522

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