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Biocom’s Recently Published 2026 Economic Impact Report; OMB’s Proposed Regulation on Federal Research Grants; R&D Tax Credit Negotiations; San Francisco and Berkeley Pass Budgets to Close Deficits; Apply for California Competes Tax Credit Program; and more.
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Biocom’s EIR Shows Continued Significant Impact to CA Economy
Last month, Biocom released its 2026 Life Science Economic Impact Report, developed in partnership with UC San Diego and HSBC Innovation Banking. The report provides a comprehensive analysis of the economic strength, innovation capacity and continued resilience of California’s life science industry.
In 2025, the industry generated $394 billion in economic output, supported more than 1.08 million jobs and attracted $73.1 billion in private investment despite a challenging funding and policy environment. The industry directly employed more than 406,000 Californians in 2025, with average annual wages of $192,179. California also remained the nation’s largest recipient of NIH and NSF funding, securing $6.26 billion in research support through 9,486 awards.
As these numbers show, the life sciences are a key pillar of California’s economy, and their contribution is incredibly stable despite the industry’s recent headwinds.
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Advocating for Our Members
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Federal ► OMB Proposes Major Changes to Federal Grantmaking Rules
- The Office of Management and Budget (OMB) has proposed a new regulation that would revise how federal research grants are awarded and managed across the government. The proposal would allow grants to be terminated for policy-based reasons, require political appointees to serve as the final decision-makers on all grants and cooperative agreements, create new administrative requirements for agencies and recipients, and codify restrictions on certain race-, ethnicity- and sex-related research activities.
- Biocom has submitted comments opposing the proposed rule and urging OMB to rescind the rule in its entirety. If finalized, this rule could create uncertainty for the entire life science ecosystem, potentially slowing medical research, disrupting funding for lifesaving discoveries and weakening local economies. Send a letter to your Member of Congress urging them to oppose the proposed rule by using our action alert.
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State ► R&D Tax Credit — Budget Negotiations Continue
- On June 29th, Governor Newsom signed the state budget which includes a permanent limitation on the state’s R&D tax credit. For the 2027 through 2029 tax years, utilization is capped at $5 million but includes a refundability feature. Starting in 2030, refundability ends and utilization is limited to the greater of $5 million or 70% of the taxpayer’s liability.
- As has been the case in recent years, budget negotiations will continue beyond June 30, with additional trailer bills and budget items expected to be negotiated through the July recess and taken up in August. Biocom continues to advocate for the full restoration of the R&D tax credit as well as providing alternative proposals to limit the long-term economic harm that a permanent cap would impose on California’s innovation economy.
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San Diego ► San Diego County Advances Tax Measure, Governance Reform and FY Budget
- The San Diego County Board of Supervisors voted to place a half-cent sales tax measure and a county governance reform measure on the November ballot while approving a $9.2 billion fiscal year budget that relies on reserves to maintain services. The board also adopted new transparency requirements for most advisory subcommittees.
- Biocom will continue monitoring these measures as they move toward the November election. If approved by voters, the sales tax could affect investments in public health, infrastructure and environmental priorities, while governance changes could influence how future county policies and budgets are developed and implemented.
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Bay Area ► San Francisco and Berkeley Pass Budgets to Close Deficits Amid Fiscal Challenge
- San Francisco approved a $16.9 billion budget that helps close a $600 million deficit while restoring $28 million for key public services, reversing proposed layoffs and setting aside more than $1 billion in reserves to prepare for potential future federal funding cuts. Meanwhile, Berkeley adopted a $917 million budget to address a $30 million deficit through layoffs and service reductions, preserving fire department positions while relying on a proposed November sales tax increase to avoid deeper cuts in the future.
- Biocom will continue monitoring the city budgets as they move forward to ensure they don’t lead to any major impacts on the life science industry.
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- The Los Angeles County Board of Supervisors approved agreements with Local Initiatives Support Corporation and PACE Finance Corporation to administer $23.3 million in capital access programs supporting the County’s Life Science Strategy and Action Plan. The funding will expand graduation and manufacturing space while providing tenant improvement assistance to help growing life science companies commercialize and scale.
- Biocom has worked closely with the Department of Economic Opportunity to advance the implementation of the Life Science Strategy and Action Plan and support investments that expand laboratory and manufacturing space. These programs will help address infrastructure barriers for emerging companies and strengthen Los Angeles County’s life science ecosystem.
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Federal:
- Biocom submitted comments in response to Representative Auchincloss’ request for information on a proposal for next-generation US clinical development to accelerate cures.
- Biocom also provided the FDA with feedback on its draft guidance titled Safety Assessment of Genome Editing in Human Gene Therapy Products Using Next-Generation Sequencing.
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State:
- Biocom has submitted formal opposition and public comment to AB 1776, a sweeping overhaul of California’s antitrust laws that would create a new Single Firm Conduct standard and weaken reliance on longstanding federal antitrust precedent and case law.
- While the author accepted most Senate Judiciary Committee amendments on June 30, significant concerns remain — particularly the bill’s private right of action, which gives private citizens the ability to file civil lawsuits on issues that would normally be raised by regulatory enforcement agencies — and Biocom will continue aggressively advocating for additional changes throughout July and August.
Additionally:
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Biocom Policy & Advocacy
Biocom is the leading advocate for California’s life science sector. Our Policy & Advocacy staff across the Bay Area, Los Angeles, San Diego, Sacramento and Washington, D.C. work with lawmakers and regulators to shape policy and strengthen government relations through coordinated regional, state and federal engagement, supporting industry growth and keeping California globally competitive.
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