Bill Text: PA HB2139 | 2011-2012 | Regular Session | Amended

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Bill Title: Further providing for the Tax Credit for New Jobs; and providing for the Keystone Job Training Tax Credit.

Sponsorship: Partisan Bill (Democrat 48-2)

Status: (Introduced - Dead) 2012-01-24 - Corrective Reprint, Printer's No. 3000 [HB2139 Detail]

Download: Pennsylvania-2011-HB2139-Amended.html

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CORRECTIVE REPRINT
PRIOR PRINTER'S NO. 2991 PRINTER'S NO. 3000
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2139 Session of2012
INTRODUCED BY THOMAS, BISHOP, BROWNLEE, CALTAGIRONE, COHEN, DALEY, DONATUCCI, FABRIZIO, HUTCHINSON, JOSEPHS AND MYERS, JANUARY 23, 2012
REFERRED TO COMMITTEE ON FINANCE, JANUARY 23, 2012
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," further providing for the Tax Credit for New
Jobs; and providing for the Keystone Job Training Tax Credit. <--
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 1801-B, 1802-B, 1803-B, 1804-B and
1805-B of the act of March 4, 1971 (P.L.6, No.2), known as the
Tax Reform Code of 1971, added June 22, 2001 (P.L.353, No.23),
are amended to read:
Section 1801-B. 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:
"Base period." The three years immediately preceding the
date on which a company may begin creating new jobs which may be
eligible for job creation tax credits.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Job creation tax credits." Tax credits for which the
department has issued a certificate under this article.
"New job." A full-time job, the average hourly rate,
excluding benefits, for which must be at least 150% of the
Federal minimum wage, created within a municipality located in
this Commonwealth by a company within three years from the start
date. This term does not include a temporary or seasonal job.
"Start date." The date on which a company may begin creating
new jobs which may be eligible for job creation tax credits.
"Year one." A one-year period immediately following the
start date.
"Year three." A one-year period immediately following the
end of year two.
"Year two." A one-year period immediately following the end
of year one.
Section 1802-B. Eligibility.
In order to be eligible to receive job creation tax credits,
a company must demonstrate to the department the following:
(1) The company's ability to create the number of jobs
required by the department within three years from the start
date.
[(2) Leadership in the application, development or
deployment of leading technologies.]
(3) [Financial] The company's financial stability and
the project's financial viability.
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(4) The company's express intent to maintain operations
in this Commonwealth for a period of five years from the date
the company submits its tax credit certificate to the
Department of Revenue.
(5) An affirmation by the company that the decision to
expand or locate in this Commonwealth was due in large part
to the availability of a job creation tax credit.
Section 1803-B. Application process.
(a) Application.--A company must complete and submit to the
department a job creation tax credit application.
(b) Creation of jobs.--The applicant must agree to create at
least 25 new jobs or to increase the applicant's number of
employees by at least 20% within three years of the start date.
(b.1) Priority.--The department shall review and approve or
disapprove applications in the order in which they are received
and shall give priority to applications from taxpayers applying
for credits for the following types of new employees:
(1) A dislocated worker as defined in the act of
December 18, 2001 (P.L.949, No.114), known as the Workforce
Development Act, who meets any one of the following criteria:
(i) Has been terminated or laid off or has received
notice of termination or layoff, and is eligible for or
has exhausted unemployment compensation benefits.
(ii) Is unlikely to return to the industry or
occupation in which the individual was employed.
(iii) Has been terminated or received notice of
termination as a result of the permanent closure or
relocation of a plant, facility or plant operation in
which the individual was employed.
(iv) Is chronically unemployed.
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(v) Has limited opportunities of employment in the
geographic area in which the individual resides.
(vi) Is an individual who may face substantial
barriers to employment because of age or disability.
(2) An individual who has been unemployed for at least
six consecutive months.
(c) Approval.--If the department approves the company's
application, the department and the company shall execute a
commitment letter containing the following:
(1) A description of the project.
(2) The number of new jobs to be created.
(3) The amount of private capital investment in the
project.
(4) The maximum job creation tax credit amount the
company may claim.
(5) A signed statement that the company intends to
maintain its operation in this Commonwealth for five years
from the start date.
(6) Such other information as the department deems
appropriate.
(d) Commitment letter.--After a commitment letter has been
signed by both the Commonwealth and the company, the company
shall receive a job creation tax credit certificate and filing
information.
Section 1804-B. Tax credits.
(a) Maximum amount.--A company may claim a tax credit of
$1,000 per new job created up to the maximum job creation tax
credit amount specified in the commitment letter, which may not
exceed $100,000 annually.
(b) Determination of new jobs created.--
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(1) New jobs shall be deemed created in year one to the
extent that the company's average employment by quarter
during year one exceeds the company's average employment
level during the company's base period.
(2) New jobs shall be deemed created in year two to the
extent that the company's average employment by quarter
during year two exceeds the company's average employment by
quarter during year one.
(3) New jobs shall be deemed created in year three to
the extent that the company's average employment by quarter
during year three exceeds the company's average employment by
quarter during year two.
(c) Applicable taxes.--A company may apply the tax credit to
100% of the company's State corporate net income tax, capital
stock and franchise tax or the capital stock and franchise tax
of a shareholder of the company if the company is a Pennsylvania
S corporation, gross premiums tax, gross receipts tax, bank and
trust company shares tax, mutual thrift institution tax, title
insurance company shares tax, personal income tax or the
personal income tax of shareholders of a Pennsylvania S
corporation or any combination thereof.
(d) Tax credit term.--A company may claim the job creation
tax credit for each new job created, as approved by the
department, for a period determined by the department but not to
exceed five years from the date the company first submits a job
creation tax credit certificate.
(e) Availability of tax credits.--[Each] Subject to section
1804-C(b), each fiscal year, $22,500,000 in tax credits shall be
made available to the department and may be awarded by the
department in accordance with this article. In addition, in any
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fiscal year, the department may reissue or assign prior fiscal
year tax credits which have been recaptured under section 1806-
B(a) or (b) and may award prior fiscal year credits not
previously issued. Prior fiscal year credits may be reissued,
assigned or awarded by the department without limitation by
section 1805-B(b).
Section 1805-B. Prohibitions.
(a) Prohibitions.--The following actions with regard to job
creation tax credits are prohibited:
(1) Approval of jobs that have been created prior to the
start date.
(2) Approval for a company which is relocating
operations from one municipality in this Commonwealth to
another unless special circumstances exist and the
municipality that is losing the existing jobs has an
opportunity to submit comments prior to action by the
department. If the department approves the tax credits, the
company must commit to preserving the existing employees, and
the credit shall apply only to the new jobs.
(3) The assignment, transfer or use of credits by any
other company, provided, however, that tax credits may be
assigned in whole or in part to an affiliated entity. As used
in this paragraph, the term "affiliated entity" means an
entity which is part of the same "affiliated group," as
defined by section 1504(a)(1) of the Internal Revenue Code of
1986 (Public Law 99-514, 26 U.S.C. § 1504(a)(1)), as the
company awarded the credit.
(b) Allocations.--Twenty-five percent of the total amount of
all tax credits authorized in any fiscal year under section
1804-B(e) shall be available to companies with fewer than 100
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employees. Any portion of this allocation not committed by April
30 of each year shall be available to any [business] company
which meets the remaining program criteria.
Section 2. The act is amended by adding sections to read:
Section 1807-B. Annual reports.
(a) Contents.--The department shall prepare an annual report
on job creation tax credits which at a minimum shall include:
(1) A list of all job creation tax credit certificates
provided during the previous fiscal year.
(2) The name and location of each company receiving job
creation tax credit certificates.
(3) An analysis of the effectiveness of the job creation
tax credits in creating jobs in this Commonwealth.
(4) Any other information that may be deemed relevant by
the department.
(b) Submission.--The annual report shall be submitted to the
Governor, the Majority Leader of the Senate, the Minority Leader
of the Senate, the Majority Leader of the House of
Representatives and the Minority Leader of the House of
Representatives by March 1 of the first full year following the
effective date of this section and March 1 of each year
thereafter.
Section 1808-B. Notice of availability of tax credits.
The department shall publish notice of the availability of
the job creation tax credits on its publicly accessible Internet
website and make information available annually to the
Department of Labor and Industry Workforce Investment Board for
distribution to local boards.
Section 3. The heading of Article XVIII-C of the act, added
July 9, 2008 (P.L.902, No.66), is amended to read:
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ARTICLE XVIII-C
[RESERVED]
KEYSTONE JOB TRAINING TAX CREDIT
Section 4. The act is amended by adding sections to read:
Section 1801-C. 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:
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Eligible job." A full-time job in this Commonwealth, the
annual wage, excluding benefits, for which is at least equal to
150% of the Federal minimum wage. The term shall not include a
temporary or seasonal job.
"Job training." Training designed to provide a trainee with
the skills and knowledge necessary to meet a company's
specifications for an occupation or trade that results in the
trainee's employment or continued employment in an eligible job
with the company in this Commonwealth.
"Job training tax credits." Tax credits for providing job
training authorized under this article.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV, VI, VII, VIII, IX or XV. The term shall
not include liability for any tax withheld or required to be
withheld by a taxpayer from an employee under Article III.
"Small business." Any of the following with fewer than 100
employees at the time the taxpayer applies for a job training
tax credit under this article and which is operating in this
Commonwealth:
(1) A for-profit corporation.
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(2) A limited liability company.
(3) A partnership.
(4) A proprietorship.
"Start date." The effective date of this section.
"Taxpayer." A small business subject to a tax imposed under
Article III, IV, VI, VII, VIII, IX or XV. The term shall not
include a small business that does not file combined income tax
returns with the Department of Revenue with its in-State or out-
of-State subsidiaries and other affiliates.
"Trainee." An individual receiving job training for which a
taxpayer applies for a job training tax credit under this
article.
"Year four." A one-year period immediately following the end
of year three.
"Year one." A one-year period immediately following the
start date.
"Year three." A one-year period immediately following the
end of year two.
"Year two." A one-year period immediately following the end
of year one.
Section 1802-C. Job training tax credits.
(a) Criteria.--A taxpayer that provides job training from
and after the start date shall be entitled to a job training tax
credit against the taxpayer's qualified liability as provided
under this article. To be eligible for a tax credit, the
taxpayer must certify and agree in the taxpayer's application to
all of the following:
(1) The taxpayer shall maintain the operation of its
small business in this Commonwealth for at least five years
following the taxable year for which the taxpayer first
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claims a job training tax credit awarded under this article.
(2) The taxpayer has the ability to provide a level of
job training appropriate for the employment or continued
employment of the trainee, as determined by the department.
(3) During each taxable year that the taxpayer claims a
job training tax credit, the taxpayer shall dedicate at least
25% of a trainee's work time to job training for at least six
months during the trainee's first year of employment.
(4) If the job training credit is for a new employee,
the individual was hired for a new position in the taxpayer's
small business or was hired to fill the position of another
employee who voluntarily separated from employment with the
taxpayer.
(b) Amount.--The following shall apply:
(1) The tax credit shall be equal to $1,500 for each
trainee and shall be available for each taxable year that the
taxpayer provides job training through the end of the taxable
year in which the end of year four occurs.
(2) Notwithstanding paragraph (1), a taxpayer may not
claim more than an aggregate of $100,000 of job training tax
credits in any taxable year.
(c) Eligibility for other tax credits.--A taxpayer that
claims tax credits under any other Federal or State law shall be
eligible for a job training tax credit if the taxpayer also
meets the requirements of this article.
Section 1803-C. Application and award.
(a) Application.--A taxpayer wishing to claim a job training
tax credit shall apply to the department on a form required by
the department. The application shall contain information as the
department deems necessary for the department to determine that
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the taxpayer is entitled to the tax credit or credits for which
the taxpayer is applying.
(b) Priority.--The department shall review and approve or
disapprove applications in the order in which they are received
and shall give priority to applications from taxpayers applying
for tax credits for the following types of trainees:
(1) A dislocated worker as defined in section 701-A of
the act of December 18, 2001 (P.L.949, No.114), known as the
Workforce Development Act, who meets any of the following
criteria:
(i) Has been terminated or laid off or has received
notice of termination or layoff and is eligible for or
has exhausted unemployment compensation benefits.
(ii) Is unlikely to return to the industry or
occupation in which the individual was employed.
(iii) Has been terminated or received notice of
termination as a result of the permanent closure or
relocation of a plant, facility or plant operation in
which the individual was employed.
(iv) Is chronically unemployed.
(v) Has limited opportunities of employment in the
geographic area in which the individual resides.
(vi) Is an individual who may face substantial
barriers to employment because of age or disability.
(2) An individual who has been unemployed for at least
six consecutive months.
(3) An underemployed individual who requires training to
meet industry demands or increased employment opportunities.
(4) An individual who will receive job training related
to a high priority occupation within this Commonwealth, as
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identified in consultation with the Department of Labor and
Industry, including a green job, a clean and renewable energy
job or a job within an industry cluster.
(c) Award.--Upon determining that the taxpayer is entitled
to one or more job training tax credits, the department shall
award the credits and issue a job training tax credit
certificate to the taxpayer.
Section 1804-C. Limitations.
(a) Use by taxpayer.--A taxpayer may not carry over, carry
back, assign or obtain a refund of any portion of a job training
tax credit.
(b) Aggregate amount of awards.--Twenty-five percent of the
amount available for tax credits under section 1804-B(e) in any
fiscal year shall be available for job training credits under
this article.
(c) Length of program.--A taxpayer shall not be entitled to
a job training tax credit in taxable years ending December 31 of
the year in which the end of year four occurs and beyond.
Section 1805-C. Repayment and penalty.
(a) Repayment.--A taxpayer who has claimed one or more job
training tax credits and fails to meet any of the criteria
required under section 1802-C or a taxpayer who has received a
job training tax credit in error shall repay to the Commonwealth
the amount of all tax credits claimed.
(b) Penalty.--If it is determined that the failure or error
referred to under subsection (a) occurred as a result of fraud
perpetrated by the taxpayer, the taxpayer, in addition to being
required to repay the amount of all tax credits claimed, shall
be subject to other appropriate penalties and remedies as
provided by law.
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Section 1806-C. Reports.
(a) Taxpayer reports.--Within 30 days following the close of
each taxable year that a taxpayer claims a job training tax
credit awarded under this article, the taxpayer shall submit a
written report to the department describing all job training
provided to trainees hired in new positions in the taxpayer's
small business during the taxable year.
(b) Department reports.--On or before March 1 of each
calendar year, the department shall submit a written report to
the Governor, the Majority Leader of the Senate, the Minority
Leader of the Senate, the Majority Leader of the House of
Representative and the Minority Leader of the House of
Representatives containing the following information:
(1) A list of all job training tax credit certificates
issued by the department during the previous calendar year
and the name and location of each taxpayer to whom the
certificates were issued.
(2) An analysis of the effectiveness of the job training
tax credits issued in creating new eligible jobs or retaining
existing eligible jobs.
(3) Any other information the department deems relevant
with respect to the job training tax credit program
established under this article.
Section 1807-C. Notice.
The department shall, no later than 60 days following the
effective date of this section, post the following on its
publicly accessible Internet website:
(1) The availability and start date of the job training
tax credits.
(2) Guidelines for the awarding of the job training tax
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credits.
(3) A downloadable copy of the application form.
Section 5. This act shall take effect in 30 days.
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