1 Bioscience Association of North Dakota 4200 James Ray Drive ...

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Bioscience Association of North Dakota 4200 James Ray Drive Suite 500 #503 Grand Forks, ND 58202 Ph: 701-738-2431 [email protected]

February 17, 2022

Chair Patten and members of the Interim Taxation Committee,

Thank you for the opportunity to present the committee with important information regarding the emerging and growing bioscience industry in the State of North Dakota. The committee’s interest in this industry could not be at a more exciting time, a time when innovations in both the health and agriculture sectors are propelling forward rapidly. North Dakota leaders continue to push for diversifying the state’s economy, and the bioscience industry will continues to play an increasing role in meeting those economic development goals. We welcome the committee’s interest in learning more about the industry and about ways the state of ND can help support and grow this industry, including further consideration and support for a bioscience sales and use tax exemption for manufacturing.

The goal of Bioscience Association of North Dakota is to build a vibrant, growing, life sciences industry in North Dakota. To do that, North Dakota needs to not only develop its resources from within and convince entrepreneurs to remain in the state but to recruit companies from outside the state to establish their businesses within the state. The competition for life sciences development is fierce, and other states, regions, and nations are making significant investments to advance their life science industries and leverage comparative advantages. One of their significant investments is the exemption of those businesses from the payment of sales and use taxes on equipment for both research and development (R&D) and manufacturing.

To achieve our goal, we need the “economic tools” that our contemporaries in 38 other states are utilizing to attract innovators and business to make their regions more attractive to life science companies. One of these “economic tools” is to offer sales tax exemptions on equipment for both research and development (R&D) and manufacturing with several exemptions specifically for biomanufacturing. Attached in this brief packet, there is a map of the United States. The blue color represents state sales tax exemptions to support the growth of bioscience companies. The gray color represents states that do not currently have any sales tax exemptions that are specific to the growth of bioscience companies. *Puerto Rico is not pictured on the map but is included in the count of 38 states.

Please do not look at these exemptions as “lost revenue” but as an investment in an emerging industry. An industry that will maintain a large base of existing high-paying jobs and will consistently generate new employment opportunities across each region of the state and its varied, highly concentrated component subsectors. This translates into outsized impacts for an industry generating high-value products, services, and innovations—broader economic impacts that extend throughout the state via the industry’s extensive supply chain network and the personal spending of its workforce.

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APPENDIX B

Testimony, Richard Glynn, on Biologic Manufacturing Sales Use and Tax Exemption Study, Interim Taxation Committee

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We have provided answers to the committee’s specific questions below. Should the committee want to see first-hand the activities of the industry, we would welcome the opportunity to showcase some of the companies you’ll learn about today by providing tours or future testimony to this committee.

Best Regards,

Richard Glynn CEO, BioND

QUESTIONS FROM LEGISLATIVE COUNCIL & ANSWERS FROM BioND

QUESTION: Updated employment data regarding the number of people employed in the bioscience/biotechnology industry in North Dakota.

ANSWER: The industry employs 3,959 employees in the state, with an average annual wage of $73,937 from over 570 establishments. In salaries alone, BIO’s analysis finds that the industry provides $292.7 million in salaries that benefit the North Dakota economy.

The national Biotechnology Innovation Organization facilities the compilation of this information for each state. The attached one-page resource is the ninth biennial TEConomy/BIO report from 2020 that focuses on the economic footprint of the industry geographically including the latest trends in the bioscience industry for the nation, states, and metropolitan areas. We have also attached the fact sheets from Wisconsin and Massachusetts as resources to provide context. For other fact sheets, you can go to https://www.bio.org/csba-resources-and-reports.

QUESTION: BioND's opinion regarding potential employment opportunities in the North Dakota bioscience/biotechnology industry within the next year. Committee members recalled testimony during the previous legislative session indicating at that time, BioND was actively recruiting 16 bioscience/biotechnology companies to North Dakota. The committee is interested in information regarding whether any of the 16 companies referenced last session came to North Dakota and any reasons cited by those companies for deciding whether to relocate to North Dakota.

ANSWER: Nowadays, the world demands evolution. An evolution that will involve a combination of biology and technology. Biotechnology majorly concentrates on four areas: medicine, agriculture, energy, and the environment. With a growing national sense of the social and economic value of the biosciences in our daily lives, the industry continues to be a preferred technology sector for company creation and growth by states and regions for several reasons. With an environment of increasing and sustained international competition, the industry is a vital component of the durable goods manufacturing sector of the U.S. economy. North Dakota has the perfect bioscience-manufacturing presence that produces some of the highest quality products in the global marketplace. As with past economic slowdowns, the bioscience industry has been resilient. According to the Biotechnology Innovation Organization Growing Jobs and Quality of Life Report in 2018, there were 524 entities and 2,159 employees and in 2021 there were 570 entities and 3,959 employees here in the North Dakota biotechnology industry. Since 2018, the industry entities in have increased by 8.7% and its employees by 83.3%, in North Dakota. The bioscience industry stands out for being a generator and source of high-wage jobs. Industry wages are consistently growing faster, on average, than those for the overall economy. This reflects the skilled, high-quality jobs in demand within an industry advancing a wide range of value-adding products and services, and it further

https://www.bio.org/csba-resources-and-reports


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reflects the importance of the industry as a national economic engine. In 2021, the national bioscience workers earned an average annual wage of $107,610 versus the private sector average annual wage of $57,043. North Dakota’s bioscience annual average wage falls short of the national average at $73,937.

The testimony that is being referenced is a statement from Richard Glynn, Executive Director of the Bioscience Association of North Dakota. In 2019, the Department of Agriculture established the Bioscience Innovation Grant Program, which had $500,000 to be awarded as grants to bioscience companies that met specific criteria established by the Department of Agriculture over the 2019-2021 biennium. Then once CARES Act money became available, the Emergency Commission awarded

$5,000,000 to the Department of Agriculture for additional funding to the Bioscience Innovation Grant Program. Thirteen companies received funding from the $5.5 million. Of the 13 companies, 7 of them were recruited here from outside of North Dakota. A few examples of those companies are:

1. National Agricultural Genotyping Center - $106,666 – services provide quality control and food safety technologies through genotyping. They moved to the NDSU campus from Los Alamos National Laboratory.

2. ImmunoPrecise Antibodies, Ltd - $1,575,000 – from Canada to develop a therapeutic drug with US headquarters in Fargo. IPA USA employs 16, growing to 25 after completion of their expansion.

3. Access Point Technologies - $56,678 - is a medical device company located in Horace, ND focused on the production of Catheters. Moved from Rogers, Minnesota.

4. SafetySpect, Inc. - $1,500,000 – developed a handheld device that combines complex contamination identification of respiratory droplets and saliva with immediate remediation of any potential COVID-19 threat using UVC light. They moved from California to Grand Forks.

5. Checkable Medical, Inc. - $40,000 – was recruited from Eden Prairie, MN to focus on delivering innovative at-home diagnostic testing to employers and individuals. They will both manufacture and distribute their product.

Three of these 7 companies solely came here because of the introductions that were made with ComDel and manufacturing capabilities. ComDel Innovation is in Wahpeton, North Dakota, and provides a variety of services that complement various business operations in manufacturing. Whether it’s the fulfillment of customer orders on a company’s behalf or processing and testing support or prototyping. To date, we have 38 companies that are members of BioND. Our members represent a variety of industries and backgrounds ranging from industry members, educational institutions, service providers (accountants, lawyers, consultants), non-profits, and/or start-ups.

QUESTION: Updated information regarding how many and which bioscience/biotechnology companies BioND is actively recruiting to come to North Dakota.

ANSWER: This information continues to evolve. Some companies take longer to move and recruit, while some companies come here without any second thoughts; and some end up not coming here at all. Over the last 6 months, BioND is continuously recruiting companies to either relocate, do the majority of their business operations, be a partner, or be an asset to North Dakota. We know that not every single company is going to relocate their business, their families, and their employees to North Dakota. Continuing those relationships with those that do not end up relocating here helps build the bioscience pipeline and network. Following are a few examples of companies that have been in the pipeline with BioND and are actively recruiting or has successfully recruited to relocate to North Dakota:


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1. CorVent Medical – a medical device company, launched its new base of operations at the NDSU Research and Technology Park on January 11, 2022. CorVent is developing smart, versatile, lifesaving ventilators for critical care and intends to start designing new ventilatory products for home and transport. Relocated to North Dakota from Santa Clara, CA.

2. WoundExam – using a clinical flow approach of how a patient is cared for to reveal overlooked ways of improving care for the patients, opened its headquarters in the UND Center for Innovation. WoundExam’s analysis uses an approach of measuring skin lesions of interest with multiple spectral sensors and custom-made Machine Learning algorithms to create and identify ‘spectral signatures’.

3. Maynard Cooper & Gale – Law Firm, New York, New York. The individual is a UND Alumnus, Shareholder, Registered Patent Attorney.

4. Kernel Foods – a high-quality protein source that is a good ingredient with a meat-like texture. Partnered with UND Aerospace for long-term sustainable solutions for going to Mars and then reached out to us, Bioscience Association of North Dakota, and how we can assist to connect them to individuals in the bio-mass manufacturing sector and then selling their product to companies to make the final product. They are working with entities such as NASA and Xperience Foundation to focus on 3-year shelf life for space food versus the current shelf life of 1.5 years for space food. Headquarters are in Buenos Aires, Argentina, offices in Houston, London, and Spain.

5. Dakota Micro – dependable camera system for the harshest environments. Originally from the Red River Valley, moved to Southern California and then back to North Dakota in April of 1994. Developed a variety of camera systems for rugged equipment beyond the farm, and in industries like construction, public works, military, and recreation.

6. Dakota Energy Systems – developed and deployed a patented technology that harvests energy from municipal and private water systems. The Dakota Energy System Hydro-Electic Power System harvests inherent energy by flowing the water through a turbine that reduces the water’s pressure while harvesting energy. Headquarters in Phoenix, AZ, and a satellite office in San Diego, CA.

A company that is not listed above, BioND worked with for over a year- that sought us out to make introductions in Fargo and Grand Forks at the Higher Education Institutions. With leadership changes in one of the departments in Fargo and conversations at a stand-still with a potential location in Grand Forks being demolished in 3 years, the company moved its Headquarters from Richmond, VA, and its operations to Silicon Valley, CA and New York, NY.

Currently, Richard Glynn is in New York attending the BIO CEO & Investor Conference. For more than 20 years, the BIO CEO & Investor Conference has fueled the biotech industry networking with premier investor and banking communities, focused on established and emerging publicly traded and select private biotech companies, where institutional investors, industry analysts, and senior biotechnology executives meet and have the opportunity to shape the future investment landscape of the biotechnology industry. This is one of the largest investor conferences with over 1,200 attendees, and 33 countries participating. Prior to the CEO & Investor Conference, Richard was able to review the list of 950+ prospective companies that are attending the conference. He actively reaches out and establishes a relationship with these companies prior to the conference to set up one-on-one partnering meetings during the conference. Of the 950+ participating companies, Richard will have received presentations


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from 18 of them and in return showcase what North Dakota and the Bioscience Association of North Dakota has to offer. Ultimately, the end goal is to recruit them to come to do business in North Dakota.

Additionally, in June, BIO will host its annual International Convention with over 15,000 biotechnology and pharma leaders who come together for a week of intensive networking to discover new opportunities and partnerships. There is a wide spectrum of life science and application, including drug discovery, biomanufacturing, genomics, biofuels, nanotechnology, and cell therapy. North Dakota is in competition with 39 other states.

QUESTION: A list of incentives and information BioND representatives provide to prospective bioscience/biotechnology companies when recruiting companies to North Dakota.

ANSWER: For the committee’s reference, we have attached a recruitment letter from CEO Richard Glynn that highlights the business climate, incentives, and information that BioND provides to prospective companies. This information includes highlighting our favorable corporate income tax environment, a list of about 10 potentially relevant state tax credits, exemptions, and incentives, the Bioscience Innovation Grant Fund, the ND Development Fund, the LIFT Program, and various other federal and local programs. While these are very helpful in our efforts to recruit companies to ND, one deficiency we continue to hear about from prospective companies is a lack of a sales and use tax exemption for biologic manufacturing activities—an incentive that we are confident would propel our industry forward in ND and provide an important draw to set us apart.

QUESTION: Information regarding states that are leading in the bioscience/biotechnology industry and what those states do to attract bioscience/biotechnology businesses to their state.

ANSWER: We’ve highlighted various states below that offer a more competitive business environment for the bioscience industry than we currently offer in ND. Because of our scale, we could become a stronger force in the country should the legislature authorize the sales and use tax exemption for biologic manufacturing. We’d encourage you to review the various programs offered by seven of the top states in the industry, below, many of which offer sales and use tax exemptions that we are asking this committee to support. There are 38 states reported exempting sales tax for equipment use in R&D, and 36 states reported exempting equipment purchased for biomanufacturing from sales tax. Eleven states have sales tax exemptions specifically targeted to bioscience firms.

California – California is home to the most biotech firms in the US. Number of firms: 255. Number of jobs: About 481,000 in life sciences. Incentives: The top state for biotech companies also offers the highest R&D tax credit, at 15%. The state also offers firms engaged in R&D a sales and use tax exemption. While California doesn't offer any biotech investment funding at the state level, it offers proximity to some of the nation's largest venture-capital funds. Some cities like Los Angeles offer their own investment funds. Example, the County of Los Angles has created an $15 million dollar Bioscience Investment Fund for seed investments in startups.

Massachusetts – Massachusetts's biotech firms are mostly concentrated around Boston. Number of firms: 175. Number of jobs: 84,296 in biopharma. Incentives: Massachusetts offers life-sciences startups access to hundreds of thousands of college graduates and the opportunity to apply for up to $1 million in investment. The state also offers grants to companies analyzing healthcare data and innovating in biomanufacturing. Massachusetts offers R&D tax credits of up to 10% and


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investment tax credits of up to 3% as well as additional tax incentives (State Sales Tax Incentives and Sales Tax Exemptions on Equipment Purchased for Biomanufacturing) for companies located in "economic target areas."

New Jersey, New York, and Connecticut – The region's biotech companies are mostly located around New York City. Number of firms: 55 in New Jersey, 46 in New York, and 20 in Connecticut. New Jersey incentives: New Jersey offers biotech companies up to $1 million in funding, depending on their size. New Jersey offers science startups up to $1.25 million in payroll-tax cash rebates and a 5-8% R&D tax credit. New Jersey offers a 20% angel-investment tax credit. New York incentives: New York offers up to $4 million in funding for companies developing solutions to infectious-disease threats. The state also offers tax credits of up to about 7% of employee wages, up to 2% of investments, and up to 50% of R&D costs through its Excelsior Jobs Program. New York lets startups near eligible universities operate tax-free for up to 10 years and offers a tax credit of up to 15% for biotech R&D. Connecticut incentives: Connecticut offers biotech companies up to $500,000 in funding through its Connecticut Bioscience Innovation Fund. The state also offers companies up to $5 million to build labs. Connecticut also offers a five-year 80% property-tax abatement to companies that acquire or renovate existing bioscience facilities in certain areas. Connecticut's other tax incentives include a 6% tax credit for R&D expenses and a 25% angel-investment tax credit. All three area’s offer State Sales Tax Exemptions to support the growth of Bioscience Corporations and Sales Tax Exemptions on Equipment Purchased for Biomanufacturing.

Pennsylvania – Metropolitan Philadelphia is home to most of Pennsylvania's biotech industry. Number of firms: 58. Incentives: Pennsylvania will match companies' funding by up to 50% through its Ben Franklin Technology Development Authority Technology Development Grant. Pennsylvania biotech companies can also apply for additional funding through local Life Science Greenhouses. The state offers loan guarantees for later-stage companies. Pennsylvania touts a 10% tax credit for R&D expenses as well as additional benefits for companies in its Keystone Innovation Zones. Pennsylvania also offer State Sales Tax Exemptions to support the growth of Bioscience Corporations and Sales Tax Exemptions on Equipment Purchased for Biomanufacturing.

Maryland – Maryland's biotech companies are mostly concentrated around Washington, D.C. Number of firms: 36. Number of jobs: 41,322. Incentives: Maryland offers some early-stage biomedical and medical-tech companies up to $1 million in funding. Maryland also offers funding for stem-cell research and ventures born out of university partnerships. Maryland has a 10% R&D tax credit for biotech companies. The state offers investors a tax credit of up to 33% (or 50% in specific counties) of their investment in a Maryland biotech company. Maryland also offers State Sales Tax Exemptions to support the growth of Bioscience Corporations and Sales Tax Exemptions on Equipment Purchased for Biomanufacturing. In addition to the state funding, popular counties for biotech companies like Montgomery County and Prince George's County offer their own funding. Also, BioHealth Innovation (BHI) was created in 2012 to accelerate the commercialization of high potential scientists, entrepreneurs, and companies. Prior to BHI’s launch, the region’s development efforts were heavily focused on academic and government research assets. BHM is now taking the next step in its evolution by creating its BioHealth Capital Fund to support emerging companies with early-stage funding. The BioHealth Capital Fund will look to invest in


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commercially relevant, scalable companies that have a market and a distinct advantage over the competition. The fund will invest in promising BHCR companies, as well as organizations from other regions in the U.S. and internationally. The fund is currently in the process of closing the first $25M round of its $50M fund.

North Carolina – North Carolina's biotech industry is concentrated in its Research Triangle area. Number of firms: 32. Number of jobs: More than 64,500 workers in life sciences. Incentives: North Carolina offers its biotech companies, mostly located in the Research Triangle area, access to thousands of college graduates as well as up to $500,000 in funding for innovative startups. North Carolina also offers State Sales Tax Exemptions to support the growth of Bioscience Corporations and Sales Tax Exemptions on Equipment Purchased for Biomanufacturing. The North Carolina Biotechnology Center provides low-interest loans to early-stage biotechnology companies across the state. The Business and Technology Development Program loans are designed to help recipients meet meaningful research and commercial milestones. The North Carolina Biotechnology Center (NCBiotech) collaborates with North Carolina communities to attract life science economic development projects. EDA grants awards are made in amounts of up to $100,000 per project based on project job-creation estimates.

Thermo Fisher Scientific Inc. just announced it will invest $154 million and create 290 additional jobs with an expansion of its Pitt County, NC operations. Thermo Fisher’s Greenville site provides both sterile and oral solid dose pharmaceutical manufacturing and packaging services from early development to commercial phase. As one of Thermo Fisher’s largest locations and Pitt County’s largest industrial employer, the Greenville campus employs approximately 1,800 and occupies 1.5 million square feet on 142 acres. This is Thermo Fisher’s second expansion in Pitt County in less than 12 months. In December, the company announced a $500 million capital investment and 500 new jobs in Greenville. This latest expansion will increase the company’s manufacturing capacity for sterile liquid and lyophilized filling, pre-filled syringes, and solid dose continuous manufacturing. The North Carolina Department of Commerce led the state’s efforts to support Thermo Fisher’s decision to expand Greenville, NC. The project will be facilitated, in part, by a Job Development Investment Grant (JDIG) which authorizes the potential reimbursement to the company of up to $4,528,800 spread over 12 years.

Texas – Life-sciences companies are spread out across Texas metro areas. Number of firms: 27. Number of jobs: 106,017 in life sciences and research. Incentives: Texas offers existing companies as much as $1.5 million from its Texas Enterprise Fund to move to Texas and as much as $4 million to startups through its Texas Emerging Technology Fund. Texas also has a program to give smaller firms loans of up to $5 million. Texas offers taxpayers an R&D tax credit of up to 5%. Texas also offers State Sales Tax Exemptions to support the growth of Bioscience Corporations and Sales Tax Exemptions on Equipment Purchased for Biomanufacturing. Texas voters overwhelmingly approved a constitutional amendment in 2007 establishing the Cancer Prevention and Research Institute of Texas (CPRIT) and authorizing the state to issue $3 billion in bonds to fund groundbreaking cancer research and prevention in Texas, the state continues to build innovation in cancer research and product development and enhancing access to cancer prevention services across the state. Since 2010, CPRIT has committed $411 million to 34 companies started in Texas or relocated to Texas. In turn, these companies have raised $1.75 billion in additional investments after their CPRIT awards. As of January 2019, 17 companies had CPRIT projects in Phase 1 or Phase


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2 clinical trials. Twenty-two CPRIT companies have connections with Texas institutions, further strengthening the life science infrastructure and ecosystem across the state.

QUESTION: BioND's position regarding whether an income tax reduction or elimination would have a bigger impact than a potential sales tax exemption. Any other information or comment related to the bioscience/biotechnology industry and BioND's position regarding a potential biologic manufacturing sales tax exemption.

ANSWER: The fewer taxes a company has to deal with is always incentive to locate there. In the case of whether or not it would be more beneficial to abolish the income tax or exempt sales and use income tax, we have never had anyone question the income tax in North Dakota because it is so low in comparison to the income taxes they are already paying in their respective state. They do look at the sales and use tax because it affects their bottom line. For example, from private conversations, and without naming company or individual names, one company was in the works of deciding between building here in North Dakota or Massachusetts. I found out, after the fact when the legislature adjourned, that this company was building their next facility in Massachusetts because of the long-term incentives. The building budget alone was $406 million that could have been right here, in North Dakota. The $406 million number was not including jobs, salaries, economic impact overall. That company is now building in Massachusetts.

QUESTION: The committee would also be interested in hearing from any of your member companies that would like to provide testimony related to the study. The committee has specifically indicated information from Aldevron would be of assistance, including:

• What portion of Aldevron employees are located in North Dakota as compared to other states. • The cost of the resin Aldevron referenced in testimony provided during the last legislative session. • Any other information or comment related to the bioscience/biotechnology industry and

Aldevron's position regarding a potential biologic manufacturing sales tax exemption.

ANSWER: From Senior Director of Communications at Aldevron:

Aldevron had no idea that Danaher would be acquiring them during the 67th Legislative Session and when the bioscience tax exemption legislation was introduced. But it did happen, and it will be a higher and steeper hill for North Dakota to climb now to attract growth and new companies into the state. Danaher cares about economics and if the state is willing to work with them to make things more approachable for businesses alike to grow. Aldevron’s Headquarters are in Fargo, North Dakota. 250,000 square foot Breakthrough Campus, which encompasses their GMP/GMP- Source Production and GMP Production Suites and an mRNA Production Suites which will be coming in Fall 2022. Recently, in Spring 2021, Aldevron tripled their Research Grade Plasmid DNA Expansion to a 45,000 square foot building purchased on South University in Fargo and converted the space to support the manufacture of pDNA for pre-clinical projects and housing technical operations’. Of those two campuses in Fargo, Aldevron has 707 total staff, 548 who live in Fargo. Aldevron has a Protein Expansion facility located in Madison, WI. This facility provides custom process development, manufacturing, and testing of recombinant proteins and enzymes supporting research through clinical applications. Aldevron is at about 845 total across all locations. Fargo will see close to 1,000 employees by the end of the year. Aldevron’s projected spend for buffers and resins is $16,000,000.


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CLOSING COMMENT:

North Dakota is being recognized as an upcoming leader in the Biotech Industry. We want to expand our industry in this State. There is great opportunity for growth in North Dakota and diversification of the state’s economy.

We are here to answer any questions, concerns, or be a gopher for the committee to provide more information as requested.

Thank you.

Richard Glynn Executive Director & CEO Bioscience Association of North Dakota

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■ State Sales Tax Exemptions to Support the Growth of Bioscience Companies

Bioscience Sales Tax Exemptions By State

*Puerto Rico is not pictured, but offers sales tax exemptions to support the growth of bioscience companies. **Information from 2019 - Biotechnology Innovation Organization - Transforming Ideas into Advances: Best Practices in State and Regional Bioscience Economic Development Plan Initiatives.

CURE PATIENTS Biotechnology companies, small and large, continue to drive innovation and discover more treatments and cures for patients. Within the biopharmaceutical ecosystem, small and mid-size firms make up 99% of all biopharmaceutical businesses and 71% of all biopharmaceutical jobs. And more than 76% of therapies in the clinical pipeline are either led by these smaller companies or together in partnership with larger companies. Biotechnology companies are developing new treatments and cures for cancer, rare diseases, antibiotic-resistant superbugs, and many other devastating diseases around the world.

PROTECT OUR CLIMATE Industrial and environmental biotechnology companies are developing technologies to reduce waste, improve industrial processes, and reduce our reliance on foreign sources of energy. Successful commercialization of cellulosic biofuels and renewable chemicals have created 9,500 new jobs in the past five years.

NOURISH HUMANITY Agricultural biotechnology benefits farmers, consumers and the environment by increasing crop yields and farm income, decreasing pesticide applications, increasing environmental sustainability, and enhancing the nutritional profile of many foods – while also spurring America’s economy.

For additional information, please visit BIO’s Advocate Toolkit at www.bio.org/[email protected] | 202.962.9200

Source: TEConomy Partners analysis of Bureau of Labor Statistics, QCEW data; enhanced file from IMPLAN. Economic impact analysis using IMPLAN Input/Output model.Note: U.S. totals include Puerto Rico.

AMERICA’S BIOSCIENCE

ECONOMY

ANNUAL AVERAGE WAGE:

$107,610

TOTAL EMPLOYMENT IMPACT:

9.4M JOBS

ESTABLISHMENTS:

101,143

EMPLOYEES:

1.87M

North Dakota’s bioscience industry is a strategic and growing technology component of the overall U.S. economy. American bioscience innovation in health, energy, and agriculture supports state & local communities in a variety of ways ranging from job creation, construction, tax revenues, and other economic impact values. Driven by small-company innovators, this valued industry is also mobilizing in an unprecedented manner to address the global COVID-19 pandemic, and other life-saving and life-enhancing products and services for the U.S. and elsewhere. America’s bioscience industry has never been more important, both for our health and our economic recovery.

NORTH DAKOTA’S

BIOSCIENCE ECONOMY

EMPLOYEES:

3,959


$73,937

ESTABLISHMENTS:

570

NORTH DAKOTA’S 3,959 BIOTECHNOLOGY WORKERS areCURING, PROTECTING NOURISHING the World

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ECONOMY


$107,610


9.4M JOBS

ESTABLISHMENTS:

101,143

EMPLOYEES:

1.87M

Wisconsin’s bioscience industry is a strategic and growing technology component of the overall U.S. economy. American bioscience innovation in health, energy, and agriculture supports state & local communities in a variety of ways ranging from job creation, construction, tax revenues, and other economic impact values. Driven by small-company innovators, this valued industry is also mobilizing in an unprecedented manner to address the global COVID-19 pandemic, and other life-saving and life-enhancing products and services for the U.S. and elsewhere. America’s bioscience industry has never been more important, both for our health and our economic recovery.

WISCONSIN’S BIOSCIENCE

ECONOMY

EMPLOYEES:

36,388


$86,425

ESTABLISHMENTS:

1,773

WISCONSIN’S 36,388 BIOTECHNOLOGY WORKERS areCURING, PROTECTING NOURISHING the World

&







ECONOMY


$107,610


9.4M JOBS

ESTABLISHMENTS:

101,143

EMPLOYEES:

1.87M

Massachusetts’ bioscience industry is a strategic and growing technology component of the overall U.S. economy. American bioscience innovation in health, energy, and agriculture supports state & local communities in a variety of ways ranging from job creation, construction, tax revenues, and other economic impact values. Driven by small-company innovators, this valued industry is also mobilizing in an unprecedented manner to address the global COVID-19 pandemic, and other life-saving and life-enhancing products and services for the U.S. and elsewhere. America’s bioscience industry has never been more important, both for our health and our economic recovery.

MASSACHU-SETTS’

BIOSCIENCE ECONOMY

EMPLOYEES:

107,190


$157,570

ESTABLISHMENTS:

3,460

MASSACHUSETTS’ 107,190 BIOTECHNOLOGY WORKERS areCURING, PROTECTING NOURISHING the World

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February 2, 2022

NAME BUSINESS ADDRESS ADDRESS Re: Information Regarding Economic Opportunity in North Dakota Dear_____________: It was a pleasure visiting with you yesterday. It was a most informative session. I think I should describe the business climate in North Dakota as well as the possible incentive packages available in North Dakota. As you know, I am the Executive Director for the Bioscience Association of North Dakota. As such I am very familiar with the biotech business climate in North Dakota as well as possible incentive packages available in North Dakota. North Dakota’s business climate has gained a reputation for supporting emerging businesses, entrepreneurs, and expansions. The state’s growing manufacturing, technology-based businesses, agricultural, and energy industries, enhanced with numerous incentives, are drawing some of the world’s most recognized companies into the state. Leading the Nation for the past five out of six years, North Dakota’s economy has outpaced all other states according to the U.S. Bureau of Economic Analysis reports. Factors driving the state’s robust economy include continued growth in economic production, new jobs, and increasing export sales, leading economic indicators show. Business incentives, accessibility to government officials, and workforce performance, combined with North Dakota’s favorable position as one of the lowest cost states for operating a business, are driving top companies to establish operations in North Dakota, and investors to invest in North Dakota-based enterprises. TAXATION North Dakota has a progressive income tax that is among the lowest in the country. In fact, the top marginal rate is the lowest of any state that has an income tax. The current income tax rates are the lowest in the country. The state’s sales taxes stand below the national average. When accounting for local rates, the average sales tax in the Roughrider State is 6.94%, 28th-lowest in the country. As for Corporate Income Tax, North Dakota levies a corporate income tax rate of 1.41 to 4.31 percent. Further the North Dakota’s gas tax is 23 cents per gallon while California’s gas tax, basically, .73 cents per gallon. Gasoline costs in North Dakota are approximately $1.24 cheaper than in California.

Bioscience Association of North Dakota 4200 James Ray Drive Suite 500 #503 Grand Forks, ND 58202 Ph: 701-738-2431 [email protected]

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The following are Business Tax Incentives that are available to you:

• Agricultural Business Investment Tax Credit • Angel Fund Investment Tax Credit • Automation Tax Credit • Seed Capital Investment Tax Credit • Corporate Income Tax Exemption • Opportunity Zones Incentive • Property Tax Exemption • Renaissance Zones • Research Expense Credit

ECONOMIC DEVELOPMENT INCENTIVES Business Innovation Grant Program (BIG) This is a program administered by the Agriculture Commissioner with the advice of the Bioscience Innovation Grant Committee. The committee consists of three statutory members consisting of one representative from the North Dakota Department of Agriculture, one representative from the Bioscience Association of North Dakota, and one Representative from the North Dakota Department of Commerce. The purpose of the BIG program is to foster the growth of the bioscience industry in the state. Applicants should focus on one or more of the following areas:

• Supporting biotechnology innovation and commercialization in areas including: o Crop genetics; o Biofuels; o Biomaterials; o Biosensors and biotechnology in relation to food, nutrition, animals, humans, equipment,

medical and health products and services; o Medical diagnostics; o Medical therapeutics; and o Farm-based pharmaceuticals;

• Promoting the creation of bioscience jobs in the state to be filled by graduates from institutions under the control of the state board of higher education;

• Encouraging the development of new bioscience technologies and bioscience startup companies in the state;

• Leveraging the agriculture industry in the state to support the development of bioscience technologies impacting livestock operations and crop production;

• Promoting bioscience research and development at institutions under the control of the state board of higher education;

• Encouraging coordination and collaboration among other entities and programs in the state to promote bioscience innovation goals.

Applicants must meet the following requirements to be considered eligible to apply for the BIG:

• Minimum of fifty percent match of the grant funds received; • Employ at least two employees; • Have documented sales of less than $2,500,000; and

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• Be a corporation, partnership, limited liability company, limited partnership, or a limited liability partnership registered in North Dakota.

Funding cannot be used for: • Capital improvements; • Academic programming or curriculum; • Workforce training.

North Dakota Development Fund The North Dakota Development Fund was created through legislation in 1991 as an economic development tool. It coordinates efforts between all the sources of financing, the business and the community. Any project considered for this financing must be feasible and have a reasonable chance of succeeding. The fund provides “flexible financing” through loans and equity investments not available from most conventional lenders and is available to any primary sector business with the exception of production agriculture. The Development Fund also administers the Regional Rural Revolving Loan Fund, which provides funding for primary sector projects located in a community of less than 8,000 in population or located more than five miles outside the city limits. The Development Fund has a funding limit of up to $1,000,000. The board of directors may adjust the limit when deemed appropriate. The Innovation Technology Loan Fund (LIFT) The Innovation Technology Loan Fund (LIFT) is an innovation loan fund to support technology advancement put in place by the 2019 legislative session. LIFT is administered by the North Dakota Department of Commerce. LIFT is a loan fund established for the purpose of providing financing for commercialization of intellectual property within the State of ND. The legislation outlines the following industries as appropriate uses for these funds:

• Advanced computing and data management • Agriculture technology • Autonomous and unmanned vehicles and related technologies • Energy • Health care • Value-added agriculture • Value-added energy • Any industry or area specifically identified by the committee as an industry that will contribute to

the diversification of the state’s economy. The amount of money that can be obtained is up to the Board, but they have given out loans exceeding $2.5 million dollars. The terms of the loan must include:

• Zero percent interest for the first three years of the loan; • Two percent interest for the next two years of the loan and; • An interest rate equal to a standard Bank of North Dakota loan for all subsequent years

Additional Programs

• Agricultural Products Utilization Commission • Community Development Block Grant • USDA/SBA Programs

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• Local Economic Development Programs • Public Finance Authority • Business Incentives Database • Corporate Income Tax Exemption • Opportunity Zones Incentive • Property Tax Exemption • Sales & Use Tax Exemption • Renaissance Zones • Research Expense Credit • Others – depending on industry specific

CONGRESSIONAL DELEGATION Our Congressional delegation is very supportive of North Dakota Businesses. Now before we can do anything for you, you would have to join the Bioscience Association. We do not work with anyone who is not a member of the Association. You can go to our website, ndbio.com, go to Membership Application, print out, fill out and then send to us with appropriate membership fee. We look forward to talking with you soon. Richard Glynn Executive Director & CEO Bioscience Association of North Dakota

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