PRIOR PRINTER'S NOS. 254, 1076, 1194 PRINTER'S NO. 1479
No. 256 Session of 2001
INTRODUCED BY COY, DeWEESE, LESCOVITZ, READSHAW, GORDNER, BELARDI, SANTONI, ALLEN, CALTAGIRONE, VEON, M. BAKER, BARRAR, BEBKO-JONES, BELFANTI, BLAUM, BROWNE, CAPPABIANCA, CAPPELLI, CIVERA, L. I. COHEN, COLAFELLA, CURRY, DALEY, DeLUCA, EACHUS, FREEMAN, GEORGE, GRUCELA, HERMAN, HERSHEY, HESS, HORSEY, JOSEPHS, KAISER, KENNEY, LAUGHLIN, LAWLESS, LEVDANSKY, LUCYK, MANN, McCALL, McGILL, McILHATTAN, MICHLOVIC, MUNDY, PETRARCA, PETRONE, PRESTON, ROONEY, SAINATO, SATHER, SEMMEL, SHANER, SOLOBAY, STABACK, STEELMAN, STURLA, SURRA, TRAVAGLIO, TRELLO, WALKO, WANSACZ, WASHINGTON, C. WILLIAMS, WILT, WOJNAROSKI, WRIGHT, YEWCIC, YOUNGBLOOD, YUDICHAK, ZUG, D. EVANS AND SAMUELSON, JANUARY 29, 2001
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES, APRIL 3, 2001
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," further providing for personal income tax 11 definitions; and providing for a higher education credit 12 against personal income tax. 13 The General Assembly of the Commonwealth of Pennsylvania 14 hereby enacts as follows: 15 Section 1. Section 301 of the act of March 4, 1971 (P.L.6, 16 No.2), known as the Tax Reform Code of 1971, is amended by 17 adding a definition to read:
1 Section 301. Definitions.--The following words, terms and 2 phrases when used in this article shall have the meaning 3 ascribed to them in this section except where the context 4 clearly indicates a different meaning. Unless specifically 5 provided otherwise, any reference in this article to the 6 Internal Revenue Code shall include the Internal Revenue Code of 7 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), as amended to 8 January 1, 1997: 9 * * * 10 (o.2a) "Qualified institution of higher education" means an 11 educational institution which has the authority from a state to 12 confer degrees for the satisfactory completion of programs in 13 postsecondary education. 14 * * * 15 Section 2. The act is amended by adding a section to read: 16 Section 304.1. Credit for Higher Education.--(a) A taxpayer 17 is entitled to a credit against the tax imposed by this article 18 in accordance with this section. 19 (b) A taxpayer is eligible for the credit under this section 20 if any of the following clauses apply: 21 (1) The taxpayer is an individual who: 22 (i) is matriculated at a qualified institution of higher 23 education; and 24 (ii) pays more than half of the taxpayer's tuition at that 25 institution. 26 (2) The taxpayer: 27 (i) is the parent of a child who is matriculated at a 28 qualified institution of higher education; and 29 (ii) pays more than half of that child's tuition at that 30 institution. 20010H0256B1479 - 2 -
1 (3) The taxpayer: 2 (i) is the spouse of an individual who is matriculated at a 3 qualified institution of higher education; and 4 (ii) pays more than half of that individual's tuition at 5 that institution. 6 (c) The amount of the credit under subsection (b) shall be 7 the per cent specified in section 302(a)(2) or (b)(2) times up 8 to five thousand dollars ($5,000) of the amount of tuition spent 9 each calendar year by the taxpayer on: 10 (1) tuition for the taxpayer under subsection (b)(1); 11 (2) tuition for each child under subsection (b)(2); and 12 (3) tuition for the spouse under subsection (b)(3). 13 (D) (1) A TAXPAYER SHALL BE ELIGIBLE FOR THE CREDIT UNDER <-- 14 THIS SECTION FOR ANY PAYMENTS MADE BY SUCH TAXPAYER INTO A 15 TUITION ACCOUNT OWNED BY THE TAXPAYER THAT MEETS THE 16 REQUIREMENTS OF THE ACT OF APRIL 3, 1992 (P.L.28, NO.11), KNOWN 17 AS THE "TUITION ACCOUNT PROGRAMS AND COLLEGE SAVINGS BOND ACT." 18 (2) THE AMOUNT OF THE CREDIT SHALL BE THE PER CENT SPECIFIED 19 IN SECTION 302(A)(2) OR (B)(2) TIMES UP TO FIVE THOUSAND DOLLARS 20 ($5,000) OF THE ANNUAL AMOUNT OF PAYMENTS PLACED INTO THE 21 TUITION ACCOUNT. 22 (3) IN THE EVENT THE TUITION ACCOUNT IS NOT UTILIZED BY THE 23 BENEFICIARY OF THE ACCOUNT FOR THE PAYMENT OF TUITION IN 24 ACCORDANCE WITH THE "TUITION ACCOUNT PROGRAMS AND COLLEGE 25 SAVINGS BOND ACT," AN AMOUNT EQUAL TO THE TOTAL CREDITS RECEIVED 26 UNDER THIS SECTION SHALL BE TRANSFERRED TO THE DEPARTMENT OF 27 REVENUE FROM THE REFUND OF THE TUITION ACCOUNT PAID BY THE STATE 28 TREASURER. SUCH TRANSFER SHALL OCCUR IN ACCORDANCE WITH 29 REGULATIONS PROMULGATED BY THE DEPARTMENT OF REVENUE, IN 30 CONSULTATION WITH THE TREASURY DEPARTMENT. 20010H0256B1479 - 3 -
1 (4) PAYMENT BY THE TREASURY DEPARTMENT FROM A TUITION 2 ACCOUNT TO AN INSTITUTION FOR TUITION SHALL BE ELIGIBLE FOR 3 CREDIT UNDER SUBSECTION (B), PROVIDED THAT THE REQUIREMENTS OF 4 SUBSECTION (B) ARE SATISFIED AND THAT THE AMOUNT OF THE CREDIT 5 IS REDUCED BY THE AMOUNT OF CREDIT, IF ANY, THAT THE TAXPAYER 6 HAS RECEIVED FOR PAYMENTS INTO THE TUITION ACCOUNT UNDER THIS 7 SUBSECTION. 8 (d) (E) For purposes of this section, the term "tuition" <-- 9 means the actual cash payments that are a direct expense to the 10 taxpayer for the price of instruction at a qualified institution 11 of higher education. The term shall not include scholarships, 12 gifts or other reductions to the price of instruction that are 13 not a direct expense to the taxpayer. 14 Section 3. The addition of sections 301(o.2a) and 304.1 of 15 the act shall apply to taxable years beginning after December 16 31, 2000, and to tuition paid on or after the effective date of 17 this act. 18 Section 4. This act shall take effect immediately. A2L72VDL/20010H0256B1479 - 4 -