The Life Sciences Jobs and Investment Act (S.4018/H.R.6165), introduced last week, would allow companies to double their tax credit on the first $150 million they invest in research and development, or to repatriate up to $150 million in foreign earnings at a reduced tax rate.
The bill was introduced by U.S. Rep. Allyson Schwartz who was joined by fellow Pennsylvania Reps. Pat Meehan (R), Charlie Dent (R), Jim Gerlach (R), Jason Altmire (D) and Chaka Fattah (R). California Republican Devin Nunes and New Jersey Democrat William Pascrell also were co-sponsors.
The Act encourages investment in the United States by reducing the tax burden on the mostly small and medium sized companies responsible for life science research today. Credits could be used for:
- Hiring additional scientists, researchers, and comparable personnel engaged in life sciences research
- Making new investments in research at American universities and post-graduate institutions, state-sponsored incubators, and comparable scientific organizations
- Investing in new laboratory and related life sciences research facilities
"Targeted investments in life sciences are vital to our economy. In Philadelphia alone, life sciences is responsible for one out of every six jobs and generates 15% of all economic activity," Schwartz said. "This legislation will enhance medical innovation, life sciences education and high quality job creation across the country through targeted tax incentives. It promotes the type of opportunity businesses need to create private sector economic growth."
Christopher P. Molineaux, president of Pennsylvania Bio believes the policy will assist in directing funds to the thriving network of research institutions, business incubators, and private companies that contribute to the innovation environment in Pennsylvania."
Pascrell points out that in New Jersey this sector is a $29 billion industry. "Encouraging life science research and development will allow our nation to harness the vast resources of our highly-educated workers and develop the next generation of medicine and pharmaceutical technology that will be exported to the world."
Federal support of this industry is vital since annual venture investment for the life sciences sector dropped by 2% in dollars from 2009, according to a new PricewaterhouseCoopers LLP/National Venture Capital Association MoneyTree report as reported on IndustryWeek.
"In the aftermath of the liquidity crises and Great Recession of 2008 and 2009, it is essential that the U.S. pursue policies that allow -- even if only on a temporary basis -- the redeployment of overseas earnings to address domestic capital needs," said David Jory, spokesperson for theLife Sciences Investment Act Coalition. "We should pursue an economic strategy that makes it more attractive for some capital now invested abroad to be invested domestically, provided that the capital is invested in specific projects, such as life sciences jobs, research, and infrastructure, and only if it is paid from funds that are otherwise permanently invested abroad."
MassBio is also supporting the bill as more 46,000 people are employed in the life sciences industry in Massachusetts and contribute more than $4 billion in payroll dollars to the state's economy. However, as the unemployment rate in Massachusetts has reached 8.1%, adding additional jobs to the life sciences sector is a critical way to rebuild the economy and keep the Commonwealth at the forefront of innovation, the group says.
"This legislation will help strengthen the biotech sector's culture of innovation, discovery, education and job creation across the nation," said Stephen S. Tang, Ph.D., MBA, President and CEO of the University City Science Center.