THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY PILEGGI, ERICKSON, YAW, FOLMER, RAFFERTY, PIPPY, ALLOWAY, M. WHITE, BRUBAKER, WILLIAMS, WASHINGTON, DINNIMAN, ARGALL, KITCHEN, COSTA, MENSCH, SOLOBAY, VOGEL, BROWNE, BAKER, STACK, YUDICHAK, WOZNIAK AND FARNESE, JANUARY 31, 2011

REFERRED TO FINANCE, JANUARY 31, 2011  

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," establishing a life sciences education tax

credit.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, is amended by adding an article to

read:

ARTICLE XVIII-E

LIFE SCIENCES EDUCATION TAX CREDIT

Section 1801-E.  Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Contribution."  A donation of cash, personal property or

services, the value of which is the net cost of the donation to

the donor or the pro rata hourly wage, including benefits, of

the individual performing the services.

"Department."  The Department of Community and Economic

Development of the Commonwealth.

"Independent institution of higher education."  An accredited

nonprofit private or independent college or university located

in this Commonwealth.

"Life sciences."  The study of biology, biochemistry,

biophysics, bioengineering, microbiology, genetics or

physiology. The term does not include the study of sociology or

psychology.

"Life sciences entity."  An entity, including a pass-through

entity, which has all of the following:

(1)  Its principal place of business in this

Commonwealth.

(2)  Its primary business purpose is the application of

the life sciences.

(3)  Is subject to taxes imposed under Article III, IV,

VI, VII, former VII-A, VIII, IX or XV.

"Life sciences internship."  A term of employment in the

Commonwealth of a life sciences student at any of the following

as an intern or fellow in conjunction with the student's course

of study:

(1)  A public institution of higher education.

(2)  A State-related institution.

(3)  An independent institution of higher education.

"Life sciences student."  A resident of this Commonwealth who

is enrolled in an undergraduate, master's degree, doctorate or

postdoctorate program in the life sciences at a public

institution of higher education, State-related institution or an

independent institution of higher learning.

"Pass-through entity."  A partnership as defined in section

301(n.0), a single-member limited liability company treated as a

disregarded entity for Federal income tax purposes or a

Pennsylvania S corporation as defined in section 301(n.1).

"Public institution of higher education."  A community

college or an institution which is part of the State System of

Higher Education under Article XIX-A or XX-A of the act of March

10, 1949 (P.L.30, No.14), known as the Public School Code of

1949.

"State-related institution."  The Pennsylvania State

University, the University of Pittsburgh, Temple University,

Lincoln University and their branch campuses.

Section 1802-E.  Establishment.

A life sciences education tax credit program is established

to encourage the creation of internships and fellowships by life

sciences entities for life sciences students.

Section 1803-E.  Procedure.

(a)  Application.--A life sciences entity shall apply to the

department for a tax credit under subsection (b). The

application shall be in the form and contain the information

prescribed by the department.

(b)  Amount.--Subject to the limitations in section 1804-E, a

life sciences entity shall receive a tax credit equal to 50% of

the funds contributed by a life sciences entity to a public

institution of higher education, independent institution of

higher education or State-related institution for the specific

purpose of funding salaries of life sciences students employed

at the institution in a life sciences internship.

(c)  Pass-through entity.--

(1)  If a pass-through entity does not intend to use all

approved tax credits under this section, it may elect in

writing to transfer all or a portion of the credit to

shareholders, members or partners in proportion to the share

of the entity's distributive income to which the shareholder,

member or partner is entitled for use in the taxable year in

which the contribution is made or in the taxable year

immediately following the year in which the contribution is

made. The election shall designate the year in which the

transferred credits are to be used and shall be made

according to procedures established by the Department of

Revenue.

(2)  A pass-through entity and a shareholder, member or

partner of a pass-through entity shall not claim the credit

under this section for the same contribution.

(3)  The shareholder, member or partner may not carry

forward, carry back, obtain a refund of or sell or assign the

credit.

Section 1804-E.  Limitations.

(a)  Period.--A life sciences entity shall not qualify for a

tax credit under this article for employment of a life sciences

student in a life sciences internship for a period in excess of

an aggregate of nine months for all tax years.

(b)  Course requirement.--A life sciences entity shall not

qualify for a tax credit under this article unless the life

sciences internship in which the student is employed is a

requirement the student has not yet completed and must satisfy

in order to complete his course of study.

(c)  Application of tax credit.--A tax credit granted under

this article shall be nontransferable, nonrefundable and may not

be carried forward or back to any other tax year.

(d)  Amount.--Any credit granted under this article may not

exceed 25% of the tax liability of the life sciences entity.

(e)  Other credit.--No tax credit shall be granted under this

article if the contributions of the life sciences entity under

section 1803-E(b) qualify for any other Federal or State tax

credit and the life sciences entity receives a Federal or State

tax credit for those contributions.

(f)  Activity.--No tax credit shall be granted under this

article for activities that are part of a life science entity's

normal course of business.

Section 1805-E.  Availability.

Tax credits under this article shall be made available by the

department on a first-come-first-served basis.

Section 1806-E.  Applicable taxes.

The department may grant a tax credit to a life sciences

entity for any tax due under Article III, IV, VI, VII, former

VII-A, VIII, IX or XV. No credits granted under this article

shall be applied against any tax withheld by an employer from an

employee under Article III.

Section 1807-E.  Applications.

The department may accept applications for tax credits

available during a fiscal year no earlier than July 1 of each

fiscal year.

Section 1808-E.  Aggregate amount.

The total aggregate amount of all tax credits approved by the

department shall not exceed $5,000,000 in a fiscal year.

Section 1809-E.  Guidelines.

The department, in consultation with the Department of

Education, shall develop guidelines for the approval of

applications under this article.

Section 2.  This act shall take effect in 120 days.