Session was bonanza for biotech Legislators OK'd funding, tax shifts

April 16, 1993|By Liz Bowie | Liz Bowie,Staff Writer

Biotech companies and researchers walked away from the Maryland General Assembly this week having pocketed $50 million and seen old tax codes rewritten to fit the emerging

industry in Maryland.

The biggest chunk was $40.4 million to renovate a downtown Baltimore warehouse for basic academic research and small companies. But the General Assembly devoted about 15 percent of its 1994 capital budget to promote technology development.

Supporters of the legislation and the budget items said they represented legislators' view that technology, both information and biotech, would form the basis of the economy in the future.

"Our whole legislative agenda -- we got it all," said Walter Plosila, head of the Suburban Maryland Technology Council. "I think the legislature recognizes that [technology] is where the only growth has come during the recession."

The $40.4 million item will transform the old Hutzler Bros. warehouse on Lombard Street and Martin Luther King Boulevard into the new home of the Medical Biotechnology Center. By the spring of 1996, academic researchers and scientists at start-up biotech companies should be working in laboratories there. The companies will be offered space at a reduced rate as a way of giving them a boost.

That item met opposition among some biotech industry executives who believe that too much money is being allotted to academic research in the name of economic development.

The Maryland Biotechnology Institute -- which includes several separate biotech centers, including the medical biotech center -- had come under increasing criticism. It was designed to help develop the state's biotech industry, but some skeptics say the institute's centers have produced little of commercial value since they were founded in the mid-1980s.

Academics also saw the institute as a drain of tax dollars that they thought should be going to the state university system.

The state's commitment to the medical biotech center goes beyond the capital investment. Tax dollars for the center, to pay the salaries of researchers, will have to increase as well.

The center's supporters say it will enhance the academic research already going on at the University of Maryland School of Medicine and will allow closer collaboration between researchers and companies working in the same building.

In addition to the Medical Biotechnology Center, the General Assembly passed legislation to give technology companies a tax credit for research and development equipment, under the same law that gives manufacturers credit for equipment.

Although the industry had to accept an amended bill, which affects only new equipment and credits only 75 percent of the cost of the equipment, executives said it would promote research.

The industry also received:

* $7 million more toward completing construction of the Christopher Columbus Center, $4 million of which depends on ** the center's raising $12 million in private donations.

* $2 million more toward completing funding for the Maryland Bioprocessing Center, which is designed to help companies take biotech products from the laboratory into drug testing.

* $480,000 to develop a technology development center for the information technology industry at the National Institute of Standards and Technology in Gaithersburg.

* $409,000 for the Shady Grove Educational Facility, a building to be used for higher education for employees of biotechnology companies.

* Rewriting of the sales and use-tax law so that technology companies are not penalized for their research. Under the old law, a company had to pay taxes on a laboratory coat or a glass beaker if it was reused, but not if it was discarded.

* A provision allowing the state to use the Challenge Investment Program to make equity investments instead of loans to small companies. Last year, about $500,000 was lent to 10 companies in the state.

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