PRINTER'S NO. 2709
No. 2063 Session of 1997
INTRODUCED BY TRICH, STERN, STURLA, C. WILLIAMS, WALKO,
VAN HORNE, STABACK, CAPPABIANCA, MELIO, STEELMAN AND
BELFANTI, DECEMBER 16, 1997
REFERRED TO COMMITTEE ON FINANCE, DECEMBER 16, 1997
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," reducing the rate of corporate net income tax;
11 and allocating portions of the proceeds of the corporate net
12 income tax to provide a low-interest loan program for
13 existing job development and a grant program to assist job
14 creation projects.
15 The General Assembly of the Commonwealth of Pennsylvania
16 hereby enacts as follows:
17 Section 1. Section 402 of the act of March 4, 1971 (P.L.6,
18 No.2), known as the Tax Reform Code of 1971, amended June 30,
19 1995 (P.L.139, No.21), is amended to read:
20 Section 402. Imposition of Tax.--Every corporation shall be
21 subject to, and shall pay for the privilege of (i) doing
22 business in this Commonwealth; or (ii) carrying on activities in
23 this Commonwealth; (iii) having capital or property employed or
1 used in this Commonwealth; or (iv) owning property in this
2 Commonwealth, by or in the name of itself, or any person,
3 partnership, association, limited partnership, joint-stock
4 association, or corporation, a State excise tax at the rate of
5 twelve per cent per annum upon each dollar of taxable income of
6 such corporation received by, and accruing to, such corporation
7 during the calendar year 1971 and the first six months of 1972
8 and at the rate of eleven per cent per annum upon each dollar of
9 taxable income of such corporation received by, and accruing to,
10 such corporation during the second six months of calendar year
11 1972 through the calendar year 1973 and at the rate of nine and
12 one-half per cent per annum upon each dollar of taxable income
13 of such corporation received by, and accruing to, such
14 corporation during the calendar years 1974, 1975 and 1976 and at
15 the rate of ten and one-half per cent per annum upon each dollar
16 of taxable income of such corporation received by, and accruing
17 to, such corporation during the calendar year 1977 through the
18 calendar year 1984 and at the rate of nine and one-half per cent
19 per annum upon each dollar of taxable income of such corporation
20 received by and accruing to such corporation during the calendar
21 year 1985 through calendar year 1986 and at the rate of eight
22 and one-half per cent per annum upon each dollar of taxable
23 income of such corporation received by and accruing to such
24 corporation during the calendar year 1987 through the calendar
25 year 1990 and at the rate of ten and one-half per cent per annum
26 upon each dollar of taxable income of such corporation received
27 by and accruing to such corporation during calendar year 1991
28 through the calendar year 1994 and at the rate of nine and
29 ninety-nine hundredths per cent per annum upon each dollar of
30 taxable income of such corporation received by and accruing to
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1 such corporation during the calendar year 1995 through the
2 calendar year 1998 and at the rate of nine and three-fourths per
3 cent per annum upon each dollar of taxable income of such
4 corporation received by and accruing to such corporation during
5 calendar year 1999 and at the rate of nine and one-half per cent
6 per annum upon each dollar of taxable income of such corporation
7 received by and accruing to such corporation during calendar
8 year 2000 and during each calendar year thereafter, with an
9 additional surtax equal to one and seventy-five hundredths per
10 cent per annum upon each dollar of taxable income of such
11 corporation received by and accruing to such corporation during
12 calendar year 1991 and through calendar year 1993 and with an
13 additional surtax equal to one and forty-nine hundredths per
14 cent per annum upon each dollar of taxable income of such
15 corporation received by and accruing to such corporation during
16 calendar year 1994 and with no surtax during calendar year 1995
17 and each calendar year thereafter, except where a corporation
18 reports to the Federal Government on the basis of a fiscal year,
19 and has certified such fact to the department as required by
20 section 403 of this article, in which case, such tax, at the
21 rate of twelve per cent, shall be levied, collected, and paid
22 upon all taxable income received by, and accruing to, such
23 corporation during the first six months of the fiscal year
24 commencing in the calendar year 1972 and at the rate of eleven
25 per cent, shall be levied, collected, and paid upon all taxable
26 income received by, and accruing to, such corporation during the
27 second six months of the fiscal year commencing in the calendar
28 year 1972 and during the fiscal year commencing in the calendar
29 year 1973 and at the rate of nine and one-half per cent, shall
30 be levied, collected, and paid upon all taxable income received
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1 by, and accruing to, such corporation during the fiscal year
2 commencing in the calendar years 1974, 1975 and 1976 and at the
3 rate of ten and one-half per cent, shall be levied, collected,
4 and paid upon all taxable income received by, and accruing to,
5 such corporation during the fiscal year commencing in the
6 calendar year 1977 through the fiscal year commencing in 1984
7 and at the rate of nine and one-half per cent, shall be levied,
8 collected, and paid upon all taxable income received by and
9 accruing to such corporation during the fiscal year commencing
10 in 1985 through the fiscal year commencing in 1986 and at the
11 rate of eight and one-half per cent per annum upon each dollar
12 of taxable income of such corporation received by and accruing
13 to such corporation during the fiscal year commencing in 1987
14 through the fiscal year commencing in 1990 and at the rate of
15 ten and one-half per cent per annum upon each dollar of taxable
16 income of such corporation received by and accruing to such
17 corporation during the fiscal year commencing in 1991 through
18 the fiscal year commencing in 1994 and at the rate of nine and
19 ninety-nine hundredths per cent per annum upon each dollar of
20 taxable income of such corporation received by and accruing to
21 such corporation during the fiscal year commencing in 1995
22 through the fiscal year commencing in 1998 and at the rate of
23 nine and three-fourths per cent per annum upon each dollar of
24 taxable income of such corporation received by and accruing to
25 such corporation during the fiscal year commencing in 1999 and
26 at the rate of nine and one-half per cent per annum upon each
27 dollar of taxable income of such corporation received by and
28 accruing to such corporation during the fiscal year commencing
29 in 2000 and during each fiscal year thereafter, with an
30 additional surtax equal to one and seventy-five hundredths per
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1 cent per annum upon each dollar of taxable income of such
2 corporation received by and accruing to such corporation during
3 the fiscal year commencing in 1991 and through fiscal year 1993
4 and with an additional surtax equal to one and forty-nine
5 hundredths per cent per annum upon each dollar of taxable income
6 of such corporation received by and accruing to such corporation
7 during fiscal year 1994 and with no surtax during the fiscal
8 year commencing in 1995 and each fiscal year thereafter. No
9 penalty prescribed by subsection (e) of section 3003 shall be
10 assessed against a corporation for the additional tax which may
11 be due as a result of the increase in tax rate from nine and
12 one-half per cent to ten and one-half per cent imposed
13 retroactively by this section for the calendar year 1977 or for
14 the fiscal year commencing in 1977.
15 Section 2. The act is amended by adding sections to read:
16 Section 402.2. Allocation of Tax Revenue to Business
17 Expansion Loan Fund.--(a) For the calendar year beginning
18 January 1, 1998, the Secretary of the Budget shall transfer to
19 the Business Expansion Loan Fund an amount of money equal to the
20 revenue raised under section 402 by a tax rate of one-half of
21 one per cent. For the calendar year beginning January 1, 1999,
22 the Secretary of the Budget shall transfer to the Business
23 Expansion Loan Fund an amount of money equal to the revenue
24 raised under section 402 by a tax rate of one-eighth of one per
25 cent.
26 (b) There is hereby established in the Department of
27 Community and Economic Development a low-interest loan program
28 to assist existing businesses which desire to expand operations
29 within this Commonwealth by offering loans with an interest rate
30 of two per cent per annum with payments spread over a ten-year
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1 period. The Department of Community and Economic Development
2 shall promulgate regulations relating to:
3 (1) Applications.
4 (2) Financial assets necessary to secure the loans.
5 (3) Repayment provisions and procedures.
6 (4) Criteria for the prioritization of loan applicants.
7 (5) All other matters necessary to implement and administer
8 the provisions of this section.
9 (c) There is hereby established in the State Treasury the
10 Business Expansion Loan Fund which shall receive moneys from the
11 transfer of revenues under subsection (a). The moneys in this
12 fund are hereby appropriated to the Department of Community and
13 Economic Development on a continuing basis for use in the
14 implementation and administration of the low-interest loan
15 program under subsection (b).
16 Section 402.3. Allocation of Tax Revenue to Job Creation
17 Grant Fund.--(a) For the calendar year beginning January 1,
18 1999, the Secretary of the Budget shall transfer to the Job
19 Creation Grant Fund an amount of money equal to the revenue
20 raised under section 402 by a tax rate of one-eighth of one per
21 cent.
22 (b) There is hereby established in the Department of
23 Community and Economic Development a grant program to provide
24 grants to existing businesses to assist in the creation of new
25 jobs. The Department of Community and Economic Development shall
26 promulgate regulations relating to:
27 (1) The amount of the grant used to create each new job not
28 to exceed the sum of ten thousand dollars ($10,000) per job.
29 (2) The number of jobs created by a grant recipient not to
30 be less than twenty new jobs over a calendar year.
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1 (3) Applications, forms and other documents necessary to
2 implement and administer the grant program.
3 (4) The amount of time measured in years which each job
4 created under this program shall exist.
5 (5) The return of the grant or any portion thereof if the
6 grant recipient fails to comply with the provisions of this
7 section or the regulations of the department.
8 (6) All other matters necessary to implement and administer
9 the provisions of this subsection.
10 (c) There is hereby established in the State Treasury the
11 Job Creation Grant Fund which shall receive moneys from the
12 transfer of revenues under subsection (a). The moneys in this
13 fund are hereby appropriated to the Department of Community and
14 Economic Development on a continuing basis for the
15 implementation and administration of the job creation grant
16 program under subsection (b).
17 Section 3. This act shall take effect immediately.
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