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Urge Congress to Pass the Biotechnology Future Investment and Expansion Act
Because the biotechnology business model is new, some federal laws and regulations unintentionally harm the industry. The U.S. tax code, for example, penalizes companies that undergo a technical change in ownership by severely restricting their access to credits for accumulated net operating losses. This rule, part of the 1986 tax overhaul, was designed to prevent abuses in which companies were acquired solely for the value of their accumulated losses. Unfortunately, biotech companies practicing routine equity financings that result in a change of ownership will forfeit their legitimate net operating loss credits.
The effects on biotech are measurable: Because of tax inequities, biotechnology companies' cost of capital is up to 48.6 percent higher than that of other firms, according to a 2003 BIO-commissioned study.
BIO's supports corrective legislation - the Biotechnology Future Investment Act (H.R. 2968 and S. 1773) - in both the House and Senate.
Fact Sheet
S. 1773, H.R. 2968: The "Biotechnology Future Investment Expansion Act of 2003." (Oct. 30, 2003)
Read the Fact Sheet
Legislative Summary
Summary of S 1773, HR 2968, the Biotechnology Future Investment Act of 2003 (July 3, 2003)
Read the Summary
White Paper
"Taxation and the Incentive to Invest In the Biotech Industry", by Kevin Hassett (Jan. 22, 2003)
Read the White Paper (531 KB PDF)
Text of S. 1773
To permit biomedical research corporations to engage in certain equity financings without incurring limitations on net operating loss carryforwards and certain built-in losses, and for other purposes. (Oct. 22, 2003)
Read the Legislation (PDF)
Text of H. R. 2968
To permit biomedical research corporations to engage in certain equity financings without incurring limitations on net operating loss carryforwards and certain built-in losses, and for other purposes. (July 25, 2003)
Read the Legislation
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