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

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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

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PRINTER'S NO. 1168
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 697 Session of2011
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
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," 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.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1902-A of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, is amended
by adding definitions to read:
Section 1902-A. Definitions.--The following words, terms and
phrases, when used in this article, shall have the meanings
ascribed to them in this section, except where the context
clearly indicates a different meaning:
* * *
"Neighborhood assistance contribution." An amount equal to
100% of withholding tax related to each new job created by the
nonprofit entity after the effective date of this definition.
"New job." A full-time job, the average hourly rate,
excluding benefits, of which must be at least 150% of the
Federal minimum wage, created within a municipality located in
this Commonwealth by a nonprofit entity.
"Nonprofit entity." An entity with fewer than 300 employees
which is incorporated as a not-for-profit entity under the laws
of this Commonwealth and which is tax exempt under section
501(c)(3) of the Internal Revenue Code of 1986 (Public Law
99-514, 26 U.S.C. § 501(c)(3).
* * *
"Withholding tax." The amount a nonprofit entity is required
to withhold from employee compensation under Part VII of Article
III.
Section 2. Section 1903-A of the act, added June 16, 1994
(P.L.279, No.48), is amended to read:
Section 1903-A. Public Policy.--It is hereby declared to be
public policy of this Commonwealth to encourage investment by
business firms and nonprofit entities in offering neighborhood
assistance and providing job training, education, crime
prevention and community services, to encourage contributions by
business firms and nonprofit entities to neighborhood
organizations which offer and provide such assistance and
services and to promote qualified investments made by private
companies and nonprofit entities to rehabilitate, expand or
improve buildings or land which promote community economic
development and which occur in impoverished areas or portions of
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impoverished areas which have been designated as enterprise
zones.
Section 3. Section 1904-A of the act, amended July 25, 2007
(P.L.373, No.55), is amended to read:
Section 1904-A. Tax Credit.--(a) Any business firm which
engages or contributes to a neighborhood organization which
engages in the activities of providing neighborhood assistance,
comprehensive service projects, job training or education for
individuals, community services or crime prevention in an
impoverished area or private company which makes qualified
investment to rehabilitate, expand or improve buildings or land
located within portions of impoverished areas which have been
designated as enterprise zones shall receive a tax credit as
provided in section 1905-A if the secretary annually approves
the proposal of such business firm or private company. The
proposal shall set forth the program to be conducted, the
impoverished area selected, the estimated amount to be invested
in the program and the plans for implementing the program.
(b) The secretary is hereby authorized to promulgate rules
and regulations for the approval or disapproval of such
proposals by business firms or private companies. The secretary
shall provide a report listing of all applications received and
their disposition in each fiscal year to the General Assembly by
October 1 of the following fiscal year. The secretary's report
shall include all taxpayers utilizing the credit and the amount
of credits approved, sold or assigned. Notwithstanding any law
providing for the confidentiality of tax records, the
information in the report shall be public information, and all
report information shall be posted on the secretary's Internet
website.
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(b.1) The secretary shall take into special consideration,
when approving applications for neighborhood assistance tax
credits, applications which involve multiple projects in various
markets throughout this Commonwealth.
(c) [The total amount of tax credit granted for programs
approved under this act shall not exceed eighteen million
dollars ($18,000,000) of tax credit in any fiscal year.]
(Reserved).
(d) A taxpayer, upon application to and approval by the
Department of Community and Economic Development, may
immediately sell or assign, in whole or in part, a neighborhood
assistance tax credit granted to the business firm under this
article [if no claim for allowance of the credit is filed within
one year from the date the credit is granted by the Department
of Revenue under section 1905-A]. The Department of Community
and Economic Development and the Department of Revenue shall
jointly promulgate guidelines for the approval of applications
under this subsection.
(e) The purchaser or assignee of a neighborhood assistance
tax credit under subsection (d) shall immediately claim the
credit in the taxable year in which the purchase or assignment
is made. The purchaser or assignee may not carry over, carry
back, obtain a refund of or sell or assign the neighborhood
assistance tax credit. The purchaser or assignee shall notify
the Department of Revenue of the seller or assignor of the
neighborhood assistance tax credit in compliance with procedures
specified by the Department of Revenue.
(f) The neighborhood assistance tax credit approved by the
Department of Community and Economic Development shall be
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
on which the credit was approved before the neighborhood
assistance tax credit may be carried over, sold or assigned.
Section 4. The act is amended by adding a section to read:
Section 1904.1-A. Neighborhood Assistance Contribution.--(a)
(1) A nonprofit entity may make a neighborhood assistance
contribution to a neighborhood organization which engages in the
activities of providing neighborhood assistance, comprehensive
service projects, job training or education for individuals,
community services or crime prevention in an impoverished area
or may make a qualified investment to rehabilitate, expand or
improve buildings or land located in an impoverished area if the
secretary annually approves the proposal of the nonprofit
entity.
(2) The proposal under paragraph (1) shall set forth the
program in which the contribution will be made, the impoverished
area selected, the estimated amount to be contributed to the
program and the plans for implementing the program.
(b) The secretary is authorized to promulgate rules and
regulations for the approval or disapproval of neighborhood
assistance contributions by nonprofit entities under this
section. The secretary shall provide a report listing of all
applications received and their disposition in each fiscal year
to the General Assembly by October 1 of the following fiscal
year. The secretary's report shall include all nonprofit
entities making neighborhood assistance contributions and the
amount of contributions made. Notwithstanding any law providing
for the confidentiality of tax records, the information in the
report shall be public information and all report information
shall be posted on the Department of Community and Economic
20110SB0697PN1168 - 5 -
Development's Internet website.
(c) The secretary shall take into special consideration,
when approving applications for neighborhood assistance
contributions, applications which involve multiple projects in
various markets throughout this Commonwealth.
(d) A nonprofit entity may make a neighborhood assistance
contribution for each new job created, as approved by the
department, for a three-year period beginning in the year in
which the new job is created. Upon completion of the three-year
period, the nonprofit entity shall remit the tax contribution to
the Commonwealth as required under Part VII of Article III.
(e) A nonprofit entity may not claim more than two hundred
fifty thousand dollars ($250,000) in neighborhood assistance
contributions in any taxable year.
Section 5. Section 1905-A of the act, amended July 25, 2007
(P.L.373, No.55), is amended to read:
Section 1905-A. Grant of Tax Credit.--The Department of
Revenue shall grant a tax credit against any tax due under
Article III, IV, VI, VII, VIII, IX or XV of this act, or any tax
substituted in lieu thereof in an amount which shall not exceed
fifty-five per cent of the total amount contributed during the
taxable year by a business firm or twenty-five per cent of
qualified investments by a private company in programs approved
pursuant to section 1904-A of this act: Provided, That a tax
credit of up to seventy-five per cent of the total amount
contributed during the taxable year by a business firm or up to
thirty-five per cent of the amount of qualified investments by a
private company may be allowed for investment in programs where
activities fall within the scope of special program priorities
as defined with the approval of the Governor in regulations
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promulgated by the secretary, and Provided further, That a tax
credit of up to seventy-five per cent of the total amount
contributed during the taxable year by a business firm in
comprehensive service projects with five-year commitments and up
to eighty per cent of the total amount contributed during the
taxable year by a business firm in comprehensive service
projects with six-year or longer commitments shall be granted.
Such credit shall not exceed five hundred thousand dollars
($500,000) annually for contributions or investments to fewer
than four projects or one million two hundred fifty thousand
dollars ($1,250,000) annually for contributions or investments
to four or more projects. No tax credit shall be granted to any
bank, bank and trust company, insurance company, trust company,
national bank, savings association, mutual savings bank or
building and loan association for activities that are a part of
its normal course of business. Any tax credit not used in the
period the contribution or investment was made may be carried
over for the next five succeeding calendar or fiscal years until
the full credit has been allowed. A business firm shall not be
entitled to carry back or obtain a refund of an unused tax
credit. [The total amount of all tax credits allowed pursuant to
this act shall not exceed eighteen million dollars ($18,000,000)
in any one fiscal year. Of that amount, two million dollars
($2,000,000) shall be allocated exclusively for pass-through
entities. However, if the total amounts allocated to either the
group of applicants, exclusive of pass-through entities, or the
group of pass-through entity applicants is not approved in any
fiscal year, the unused portion shall become available for use
by the other group of qualifying taxpayers.]
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:
Section 1906-A. Decision in Writing.--The decision of the
secretary to approve or disapprove a proposal pursuant to
section 1904-A [of this act] or 1904.1-A shall be in writing,
and, if it approves the proposal, it shall state the maximum
credit allowable to the business firm or contribution allowable
by the nonprofit entity. A copy of the decision of the secretary
shall be transmitted to the Governor and to the Secretary of
Revenue.
Section 7. The act is amended by adding a section to read:
Section 1908-A. Limitations.--The total amount of all tax
credits and neighborhood assistance contributions allowed
pursuant to this act shall not exceed eighteen million dollars
($18,000,000) in any one fiscal year. Of that amount, two
million dollars ($2,000,000) shall be allocated exclusively for
pass-through entities, except that if the total amounts
allocated to either the group of applicants, exclusive of pass-
through entities, or the group of pass-through entity applicants
are not approved in any fiscal year, the unused portion shall
become available for use by the other group of qualifying
taxpayers.
Section 8. This act shall take effect in 60 days.
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