Bill Text: PA SB697 | 2011-2012 | Regular Session | Introduced


Bill Title: Providing for definitions; further providing for public policy and for tax credit; providing for neighborhood assistance contribution; further providing for grant of tax credit and for decision in writing; and providing for limitations.

Spectrum: Moderate Partisan Bill (Democrat 12-3)

Status: (Introduced - Dead) 2011-05-03 - Referred to FINANCE [SB697 Detail]

Download: Pennsylvania-2011-SB697-Introduced.html

  

 

    

PRINTER'S NO.  1168

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

697

Session of

2011

  

  

INTRODUCED BY HUGHES, BREWSTER, STACK, FONTANA, TARTAGLIONE, FARNESE, COSTA, SOLOBAY, BOSCOLA, KITCHEN, YUDICHAK AND ERICKSON, MAY 3, 2011

  

  

REFERRED TO FINANCE, MAY 3, 2011  

  

  

  

AN ACT

  

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

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act relating to tax reform and State taxation by codifying

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and enumerating certain subjects of taxation and imposing

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taxes thereon; providing procedures for the payment,

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collection, administration and enforcement thereof; providing

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for tax credits in certain cases; conferring powers and

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imposing duties upon the Department of Revenue, certain

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employers, fiduciaries, individuals, persons, corporations

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and other entities; prescribing crimes, offenses and

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penalties," providing for definitions; further providing for

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public policy and for tax credit; providing for neighborhood

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assistance contribution; further providing for grant of tax

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credit and for decision in writing; and providing for

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limitations.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  Section 1902-A of the act of March 4, 1971

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(P.L.6, No.2), known as the Tax Reform Code of 1971, is amended

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by adding definitions to read:

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Section 1902-A.  Definitions.--The following words, terms and

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phrases, when used in this article, shall have the meanings

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ascribed to them in this section, except where the context

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clearly indicates a different meaning:

 


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* * *

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"Neighborhood assistance contribution."  An amount equal to

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100% of withholding tax related to each new job created by the

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nonprofit entity after the effective date of this definition.

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"New job."  A full-time job, the average hourly rate,

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excluding benefits, of which must be at least 150% of the

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Federal minimum wage, created within a municipality located in

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this Commonwealth by a nonprofit entity.

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"Nonprofit entity."  An entity with fewer than 300 employees

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which is incorporated as a not-for-profit entity under the laws

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of this Commonwealth and which is tax exempt under section

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501(c)(3) of the Internal Revenue Code of 1986 (Public Law

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99-514, 26 U.S.C. § 501(c)(3).

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* * *

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"Withholding tax."  The amount a nonprofit entity is required

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to withhold from employee compensation under Part VII of Article

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III.

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Section 2.  Section 1903-A of the act, added June 16, 1994

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(P.L.279, No.48), is amended to read:

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Section 1903-A.  Public Policy.--It is hereby declared to be

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public policy of this Commonwealth to encourage investment by

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business firms and nonprofit entities in offering neighborhood

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assistance and providing job training, education, crime

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prevention and community services, to encourage contributions by

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business firms and nonprofit entities to neighborhood

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organizations which offer and provide such assistance and

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services and to promote qualified investments made by private

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companies and nonprofit entities to rehabilitate, expand or

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improve buildings or land which promote community economic

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development and which occur in impoverished areas or portions of

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impoverished areas which have been designated as enterprise

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zones.

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Section 3.  Section 1904-A of the act, amended July 25, 2007

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(P.L.373, No.55), is amended to read:

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Section 1904-A.  Tax Credit.--(a)  Any business firm which

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engages or contributes to a neighborhood organization which

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engages in the activities of providing neighborhood assistance,

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comprehensive service projects, job training or education for

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individuals, community services or crime prevention in an

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impoverished area or private company which makes qualified

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investment to rehabilitate, expand or improve buildings or land

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located within portions of impoverished areas which have been

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designated as enterprise zones shall receive a tax credit as

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provided in section 1905-A if the secretary annually approves

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the proposal of such business firm or private company. The

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proposal shall set forth the program to be conducted, the

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impoverished area selected, the estimated amount to be invested

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in the program and the plans for implementing the program.

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(b)  The secretary is hereby authorized to promulgate rules

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and regulations for the approval or disapproval of such

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proposals by business firms or private companies. The secretary

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shall provide a report listing of all applications received and

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their disposition in each fiscal year to the General Assembly by

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October 1 of the following fiscal year. The secretary's report

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shall include all taxpayers utilizing the credit and the amount

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of credits approved, sold or assigned. Notwithstanding any law

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providing for the confidentiality of tax records, the

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information in the report shall be public information, and all

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report information shall be posted on the secretary's Internet

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website.

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(b.1)  The secretary shall take into special consideration,

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when approving applications for neighborhood assistance tax

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credits, applications which involve multiple projects in various

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markets throughout this Commonwealth.

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(c)  [The total amount of tax credit granted for programs

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approved under this act shall not exceed eighteen million

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dollars ($18,000,000) of tax credit in any fiscal year.]

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(Reserved).

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(d)  A taxpayer, upon application to and approval by the

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Department of Community and Economic Development, may

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immediately sell or assign, in whole or in part, a neighborhood

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assistance tax credit granted to the business firm under this

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article [if no claim for allowance of the credit is filed within

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one year from the date the credit is granted by the Department

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of Revenue under section 1905-A]. The Department of Community

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and Economic Development and the Department of Revenue shall

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jointly promulgate guidelines for the approval of applications

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under this subsection.

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(e)  The purchaser or assignee of a neighborhood assistance

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tax credit under subsection (d) shall immediately claim the

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credit in the taxable year in which the purchase or assignment

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is made. The purchaser or assignee may not carry over, carry

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back, obtain a refund of or sell or assign the neighborhood

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assistance tax credit. The purchaser or assignee shall notify

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the Department of Revenue of the seller or assignor of the

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neighborhood assistance tax credit in compliance with procedures

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specified by the Department of Revenue.

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(f)  The neighborhood assistance tax credit approved by the

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Department of Community and Economic Development shall be

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applied against the business firm's tax liability for the taxes

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under section 1905-A for the current taxable year as of the date

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on which the credit was approved before the neighborhood

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assistance tax credit may be carried over, sold or assigned.

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Section 4.  The act is amended by adding a section to read:

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Section 1904.1-A.  Neighborhood Assistance Contribution.--(a)

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(1)  A nonprofit entity may make a neighborhood assistance

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contribution to a neighborhood organization which engages in the

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activities of providing neighborhood assistance, comprehensive

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service projects, job training or education for individuals,

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community services or crime prevention in an impoverished area

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or may make a qualified investment to rehabilitate, expand or

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improve buildings or land located in an impoverished area if the

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secretary annually approves the proposal of the nonprofit

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entity.

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(2)  The proposal under paragraph (1) shall set forth the

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program in which the contribution will be made, the impoverished

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area selected, the estimated amount to be contributed to the

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program and the plans for implementing the program.

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(b)  The secretary is authorized to promulgate rules and

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regulations for the approval or disapproval of neighborhood

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assistance contributions by nonprofit entities under this

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section. The secretary shall provide a report listing of all

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applications received and their disposition in each fiscal year

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to the General Assembly by October 1 of the following fiscal

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year. The secretary's report shall include all nonprofit

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entities making neighborhood assistance contributions and the

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amount of contributions made. Notwithstanding any law providing

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for the confidentiality of tax records, the information in the

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report shall be public information and all report information

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shall be posted on the Department of Community and Economic

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1

Development's Internet website.

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(c)  The secretary shall take into special consideration,

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when approving applications for neighborhood assistance

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contributions, applications which involve multiple projects in

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various markets throughout this Commonwealth.

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(d)  A nonprofit entity may make a neighborhood assistance

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contribution for each new job created, as approved by the

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department, for a three-year period beginning in the year in

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which the new job is created. Upon completion of the three-year

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period, the nonprofit entity shall remit the tax contribution to

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the Commonwealth as required under Part VII of Article III.

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(e)  A nonprofit entity may not claim more than two hundred

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fifty thousand dollars ($250,000) in neighborhood assistance

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contributions in any taxable year.

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Section 5.  Section 1905-A of the act, amended July 25, 2007

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(P.L.373, No.55), is amended to read:

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Section 1905-A.  Grant of Tax Credit.--The Department of

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Revenue shall grant a tax credit against any tax due under

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Article III, IV, VI, VII, VIII, IX or XV of this act, or any tax

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substituted in lieu thereof in an amount which shall not exceed

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fifty-five per cent of the total amount contributed during the

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taxable year by a business firm or twenty-five per cent of

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qualified investments by a private company in programs approved

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pursuant to section 1904-A of this act: Provided, That a tax

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credit of up to seventy-five per cent of the total amount

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contributed during the taxable year by a business firm or up to

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thirty-five per cent of the amount of qualified investments by a

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private company may be allowed for investment in programs where

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activities fall within the scope of special program priorities

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as defined with the approval of the Governor in regulations

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promulgated by the secretary, and Provided further, That a tax

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credit of up to seventy-five per cent of the total amount

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contributed during the taxable year by a business firm in

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comprehensive service projects with five-year commitments and up

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to eighty per cent of the total amount contributed during the

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taxable year by a business firm in comprehensive service

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projects with six-year or longer commitments shall be granted.

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Such credit shall not exceed five hundred thousand dollars

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($500,000) annually for contributions or investments to fewer

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than four projects or one million two hundred fifty thousand

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dollars ($1,250,000) annually for contributions or investments

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to four or more projects. No tax credit shall be granted to any

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bank, bank and trust company, insurance company, trust company,

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national bank, savings association, mutual savings bank or

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building and loan association for activities that are a part of

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its normal course of business. Any tax credit not used in the

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period the contribution or investment was made may be carried

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over for the next five succeeding calendar or fiscal years until

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the full credit has been allowed. A business firm shall not be

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entitled to carry back or obtain a refund of an unused tax

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credit. [The total amount of all tax credits allowed pursuant to

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this act shall not exceed eighteen million dollars ($18,000,000)

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in any one fiscal year. Of that amount, two million dollars

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($2,000,000) shall be allocated exclusively for pass-through

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entities. However, if the total amounts allocated to either the

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group of applicants, exclusive of pass-through entities, or the

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group of pass-through entity applicants is not approved in any

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fiscal year, the unused portion shall become available for use

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by the other group of qualifying taxpayers.]

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Section 6.  Section 1906-A of the act, amended May 7, 1997

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(P.L.85, No.7), is amended to read:

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Section 1906-A.  Decision in Writing.--The decision of the

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secretary to approve or disapprove a proposal pursuant to

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section 1904-A [of this act] or 1904.1-A shall be in writing,

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and, if it approves the proposal, it shall state the maximum

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credit allowable to the business firm or contribution allowable

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by the nonprofit entity. A copy of the decision of the secretary

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shall be transmitted to the Governor and to the Secretary of

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Revenue.

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Section 7.  The act is amended by adding a section to read:

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Section 1908-A.  Limitations.--The total amount of all tax

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credits and neighborhood assistance contributions allowed

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pursuant to this act shall not exceed eighteen million dollars

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($18,000,000) in any one fiscal year. Of that amount, two

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million dollars ($2,000,000) shall be allocated exclusively for

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pass-through entities, except that if the total amounts

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allocated to either the group of applicants, exclusive of pass-

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through entities, or the group of pass-through entity applicants

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are not approved in any fiscal year, the unused portion shall

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become available for use by the other group of qualifying

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taxpayers.

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Section 8.  This act shall take effect in 60 days.

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