Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - February 19, 2004
Contact: Governor's Communications Office, 360-902-4136
Engrossed Substitute House Bill 2546 extends soon-to-expire tax incentives for research in specific technology areas and construction of research facilities in an effort to create more jobs. The incentives include sales tax deferrals and exemptions for qualified investments in R&D facilities, and a business-and-occupation (B&O) tax credit for qualified R&D expenses.
For the first time, the legislation grants a sales tax deferral to research facilities built by the universities and eliminates the B&O tax on federal research grants to small businesses.
“I am pleased that legislators – Democrats and Republicans – recognized the importance of extending tax incentives for critical research and development in our state,” Locke said. “These incentives will enable our state’s high-tech companies to hire more people to generate the innovations that are the foundation of their success and a key part of our economic future.
“Washington has always been a leader in innovation, and signing this bill will help ensure that we continue to break new ground and create more jobs,” he said.
Industries that qualify for the R&D tax incentives include advanced computing, advanced materials, biotechnology, electronic device technology and environmental technology. The legislation provides accountability tools to measure the long-term effectiveness of the incentives in creating jobs.
The B&O credit for qualified expenses clearly promotes R&D spending in the state. A study by the state Department of Revenue shows 76 percent of Washington’s high-tech companies have expanded their R&D expenditures since 1993, when the incentives were first enacted. The program also helps Washington better compete with other states in such research-intensive fields as biotechnology.
Joining Locke at today’s bill signing were Rep. Jim McIntire, D-Seattle; Rep. Ross Hunter, D-Medina; Rep. Laura Ruderman, D-Kirkland; Sen. Bill Finkbeiner, R-Kirkland; Sen. Mary Margaret Haugen, D-Camano Island; Sen. Luke Esser, R-Bellevue; Sen. Marilyn Rasmussen, D-Eatonville; Sen. Betti Sheldon, D-Bremerton; Sen. Margarita Prentice, D-Renton; Sen. Jim Horn, R-Mercer Island; H. Stewart Parker, president and CEO of Targeted Genetics Corp. and member of the Washington Competitiveness Council; Topaz Conway, CEO of Cytopeia Inc., a Seattle-based bioengineering company; members of the Competitiveness Council; members of the Washington Biotechnology and Biomedical Association; and representatives from the Association of Washington Business.
McIntire sponsored the House bill. “We have clear and convincing evidence that these tax incentives are critical for creating new ideas, new technologies, new products, new markets and new jobs in Washington,” he said. “We are building our future.”
Sen. Joseph Zarelli, R-Ridgefield, sponsored the Senate version of the legislation. “These tax incentives will help produce jobs, stimulate the economy and keep workers here in our state that might otherwise be lured elsewhere,” he said.
Parker said, “Targeted Genetics is developing molecular medicines to treat and prevent diseases for which there is still significant unmet need, such as AIDS and cystic fibrosis. The time and resources involved in innovative product development require significant financial support, and funding is a challenge when our work does not currently derive profit. The legislation will help us as we move through the crucial but costly stages of research and development so that we can achieve success and give back to the patient community.”
Locke today also stressed the direct link between education and successful economic development in the state. He urged the Legislature to pass the education legislation that he has requested this session, particularly his 2004 supplemental budget proposal to increase higher education enrollments in high-demand fields.
“While these tax incentives are important, we also need to increase capacity in our higher education institutions,” Locke said. “How can we consider giving tax breaks to businesses to create more good-paying jobs without also giving our students the opportunity to land those jobs?”
Locke’s 2004 supplemental budget calls for increasing state-funded higher education enrollment by as many as 5,200 full-time students, providing the access that citizens seek, and the well-educated, well-trained graduates that Washington businesses need to remain competitive. Funding is provided for at least 2,727 students in high-demand fields such as health care, computer science, math and special education instruction. The number of state-funded general enrollments also would be expanded by 2,500.
Locke also called on the Legislature to complete action this session on his other requested economic development legislation:
· HB 2689, passed by the House this week, would extend the sales tax exemption on construction of manufacturing and research facilities in rural areas as well as the B&O tax jobs credit. The legislation would also continue the B&O tax credit for help-desk enterprises in rural areas. The Senate version of the legislation, Senate Bill 6240, is still being considered.
· SB 5364/HB 1281, proposed last year, would provide local governments willing to invest in their own infrastructure an opportunity to keep some of the state taxes generated when businesses take advantage of these improvements and locate or expand in local communities. State taxes retained by local governments are used to pay bond debt on infrastructure improvements.
· Locke’s proposed 2004 supplemental budget would maintain funding for the second year of the current biennium for the “From the Heart of Washington” program, which provides advertising and in-store labeling for Washington-produced agriculture products. The legislation would also continue funding for the second year for a state trade representative for China and Southeast Asia, and increase funding for the Small Farm and Direct Marketing program.
# # #
Related links: www.targen.com; www.cytopeia.com; www.governor.wa.gov/wcc/wcc.htm
FOR IMMEDIATE RELEASE - February 19, 2004
Contact: Governor's Communications Office, 360-902-4136
Gov. Gary Locke Signs Key Economic Development Legislation into Law to Create More Jobs
Gov. Gary Locke today signed into law legislation he requested that extends high-tech research and development (R&D) tax incentives to create more jobs across the state. The governor’s first bill signing of the 2004 legislative session took place inside a working laboratory at Targeted Genetics Corp. in Seattle.Engrossed Substitute House Bill 2546 extends soon-to-expire tax incentives for research in specific technology areas and construction of research facilities in an effort to create more jobs. The incentives include sales tax deferrals and exemptions for qualified investments in R&D facilities, and a business-and-occupation (B&O) tax credit for qualified R&D expenses.
For the first time, the legislation grants a sales tax deferral to research facilities built by the universities and eliminates the B&O tax on federal research grants to small businesses.
“I am pleased that legislators – Democrats and Republicans – recognized the importance of extending tax incentives for critical research and development in our state,” Locke said. “These incentives will enable our state’s high-tech companies to hire more people to generate the innovations that are the foundation of their success and a key part of our economic future.
“Washington has always been a leader in innovation, and signing this bill will help ensure that we continue to break new ground and create more jobs,” he said.
Industries that qualify for the R&D tax incentives include advanced computing, advanced materials, biotechnology, electronic device technology and environmental technology. The legislation provides accountability tools to measure the long-term effectiveness of the incentives in creating jobs.
The B&O credit for qualified expenses clearly promotes R&D spending in the state. A study by the state Department of Revenue shows 76 percent of Washington’s high-tech companies have expanded their R&D expenditures since 1993, when the incentives were first enacted. The program also helps Washington better compete with other states in such research-intensive fields as biotechnology.
Joining Locke at today’s bill signing were Rep. Jim McIntire, D-Seattle; Rep. Ross Hunter, D-Medina; Rep. Laura Ruderman, D-Kirkland; Sen. Bill Finkbeiner, R-Kirkland; Sen. Mary Margaret Haugen, D-Camano Island; Sen. Luke Esser, R-Bellevue; Sen. Marilyn Rasmussen, D-Eatonville; Sen. Betti Sheldon, D-Bremerton; Sen. Margarita Prentice, D-Renton; Sen. Jim Horn, R-Mercer Island; H. Stewart Parker, president and CEO of Targeted Genetics Corp. and member of the Washington Competitiveness Council; Topaz Conway, CEO of Cytopeia Inc., a Seattle-based bioengineering company; members of the Competitiveness Council; members of the Washington Biotechnology and Biomedical Association; and representatives from the Association of Washington Business.
McIntire sponsored the House bill. “We have clear and convincing evidence that these tax incentives are critical for creating new ideas, new technologies, new products, new markets and new jobs in Washington,” he said. “We are building our future.”
Sen. Joseph Zarelli, R-Ridgefield, sponsored the Senate version of the legislation. “These tax incentives will help produce jobs, stimulate the economy and keep workers here in our state that might otherwise be lured elsewhere,” he said.
Parker said, “Targeted Genetics is developing molecular medicines to treat and prevent diseases for which there is still significant unmet need, such as AIDS and cystic fibrosis. The time and resources involved in innovative product development require significant financial support, and funding is a challenge when our work does not currently derive profit. The legislation will help us as we move through the crucial but costly stages of research and development so that we can achieve success and give back to the patient community.”
Locke today also stressed the direct link between education and successful economic development in the state. He urged the Legislature to pass the education legislation that he has requested this session, particularly his 2004 supplemental budget proposal to increase higher education enrollments in high-demand fields.
“While these tax incentives are important, we also need to increase capacity in our higher education institutions,” Locke said. “How can we consider giving tax breaks to businesses to create more good-paying jobs without also giving our students the opportunity to land those jobs?”
Locke’s 2004 supplemental budget calls for increasing state-funded higher education enrollment by as many as 5,200 full-time students, providing the access that citizens seek, and the well-educated, well-trained graduates that Washington businesses need to remain competitive. Funding is provided for at least 2,727 students in high-demand fields such as health care, computer science, math and special education instruction. The number of state-funded general enrollments also would be expanded by 2,500.
Locke also called on the Legislature to complete action this session on his other requested economic development legislation:
· HB 2689, passed by the House this week, would extend the sales tax exemption on construction of manufacturing and research facilities in rural areas as well as the B&O tax jobs credit. The legislation would also continue the B&O tax credit for help-desk enterprises in rural areas. The Senate version of the legislation, Senate Bill 6240, is still being considered.
· SB 5364/HB 1281, proposed last year, would provide local governments willing to invest in their own infrastructure an opportunity to keep some of the state taxes generated when businesses take advantage of these improvements and locate or expand in local communities. State taxes retained by local governments are used to pay bond debt on infrastructure improvements.
· Locke’s proposed 2004 supplemental budget would maintain funding for the second year of the current biennium for the “From the Heart of Washington” program, which provides advertising and in-store labeling for Washington-produced agriculture products. The legislation would also continue funding for the second year for a state trade representative for China and Southeast Asia, and increase funding for the Small Farm and Direct Marketing program.
# # #
Related links: www.targen.com; www.cytopeia.com; www.governor.wa.gov/wcc/wcc.htm
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