Victory! Long Sought Measures Passed by Congress
Monday, December 21, 2015
Last Friday, the Senate passed a combined omnibus appropriations and tax extenders package 65-33 (27 Rs and 38 Ds). Prior to that, the omnibus passed the House 316-113 and the extenders package by 318-109. The legislation now goes to President Obama to be signed into law. That concludes all major Congressional business for the rest of the year.
The legislation had several measures of critical importance to the bio-industry:
- Medical Device Tax Suspended for 2 Years: Congress voted to suspend the Medical Device Excise Tax for two years, through December 31, 2017. The suspension is welcome relief to the medical technology sector, especially small companies that haven’t made a profit but are working to develop life-saving innovations, as the tax took money away from growth or research and development. Companies should see an immediate relief as the tax was being collected on a bi-weekly basis.
While MichBio and its national/regional device industry coalition partners continue to support full repeal of the medical device tax, this suspension of the tax is a significant step forward in that effort. A full statement from the coalition can be found HERE. (1/1/16-12/31/17)
MichBio applauds all the elected officials, especially those in the Michigan delegation that voted to support the tax extenders bill (Benishek, Huizenga, Moolenaar, Upton, Walburg, Bishop, Trott, Miller, Stabenow and Peters), and ultimately the omnibus appropriations legislation. We will continue to urge policymakers to eliminate the device tax completely.
Many thanks to our device companies that worked with us in the fight to repeal the medical device tax since the summer of 2009 when it was first proposed. Six years later, our commitment and tenacity has paid off. During the suspension period, MichBio and other industry representatives will be carefully monitoring the impact of device tax relief on R&D, manufacturing, jobs, and innovation. So please continue to convey your stories to us.
- Research and Development (R&D) Tax Credit: The R&D Credit was made permanent. In addition, it was expanded to pre-tax startup companies by allowing them to use the R&D Credit against their payroll tax liability. This was a very long fought battle going back many years. MichBio and other state associations, along with our national partners BIO, AdvaMed and MDMA, pressed Congress incessantly on the importance of the R&D Tax Credit for the livelihood of bioscience companies.
- National Institutes of Health (NIH): The bill includes a program level of $32 billion for the NIH, $2 billion above the 2015 enacted level. It includes specific increases for Alzheimer’s disease research, brain research, antibiotic research, and the Precision Medicine Initiative. Plus, it provides a general increase to all NIH Institutes and Centers to continue basic bio-medical research and translational research through programs like the Clinical and Translational Science Awards and Institutional Development Award program to help scientists discover cures.
- Food and Drug Administration (FDA): The FDA receives a total of $2.72 billion in discretionary funding in the bill, an increase of $132 million over the fiscal year 2015 enacted level and $14 million below the President’s budget request. This is roughly $90 - $100 million above the House and Senate committee bills passed earlier this year. Total funding for the FDA, including revenue from user fees, is $4.68 billion. Within this total, food safety activities are increased by $104.5 million, and various medical product safety activities – including additional funds for the Combating Antibiotic Resistant Bacteria initiative, orphan product development grants, foreign high-risk inspections, and precision medicine – are increased by over $24.3 million.
- Second Generation Biofuels Production Credit: The production tax credit for second generation biofuels was extended for two years (1/1/15 to 12/31/16).
- Capital Gain Exclusion for Small Business Stock: The 100 percent exclusion of the capital gain on certain qualified small business stock was extended for two years (1/1/15 to 12/31/16).
Engagement with Congress on the aforementioned issues and others was challenging in 2015, with many fast turns and actions. With the support of our members MichBio was able to deliver on some long sought matters. We look forward to working with you in 2016 to ensure that the bio-industry is supported by business-friendly policies and laws that promote growth and innovation.