PRIOR PRINTER'S NOS. 132, 1166 PRINTER'S NO. 1217
No. 97 Session of 2007
INTRODUCED BY D. WHITE, ARMSTRONG, CORMAN, EARLL, PUNT,
RAFFERTY, BRUBAKER, WOZNIAK, PIPPY, BROWNE, STACK, REGOLA AND
WONDERLING, FEBRUARY 15, 2007
SENATOR ARMSTRONG, APPROPRIATIONS, RE-REPORTED AS AMENDED,
JUNE 25, 2007
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, in bank and trust company
11 shares tax, for ascertainment of taxable amount and exclusion
12 of United States obligations.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 701.1 of the act of March 4, 1971 (P.L.6,
16 No.2), known as the Tax Reform Code of 1971, amended June 16,
17 1994 (P.L.279, No.48), is amended to read:
18 Section 701.1. Ascertainment of Taxable Amount; Exclusion of
19 United States Obligations.--(a) The taxable amount of shares
20 shall be ascertained and fixed by adding together the value
21 determined under subsection (b) for the current and preceding
22 five years and dividing the resulting sum by six. If an
1 institution has not been in existence for a period of six years,
2 the taxable amount of shares shall be ascertained and fixed by
3 adding together the values determined under subsection (b) for
4 the number of years the institution has been in existence and
5 dividing the resulting sum by such number of years.
6 (b) The value for each year required by subsection (a) shall
7 be determined by [adding together] deducting from the book value
8 of [capital stock paid in, the book value of the surplus and the
9 book value of undivided profits with a deduction from the total
10 thereof of] total equity capital an amount equal to the same
11 percentage of [such total] total equity capital as the book
12 value of obligations of the United States bears to the book
13 value of the total assets[.], except that for the value of
14 shares reported on tax returns due on January 1, MARCH 15, 2008, <--
15 and thereafter, any goodwill recorded as a result of the use of
16 purchase accounting for an acquisition or combination as
17 described in this section and occurring after June 30, 2001, may
18 be subtracted from the book value of total equity capital and
19 disregarded in determining the deduction provided for
20 obligations of the United States for the six-year period
21 described in subsection (a). For purposes of this subsection,
22 book values and deductions for United States obligations for
23 each year shall be determined by the Reports of Condition for
24 each calendar quarter of the preceding calendar year in
25 accordance with the requirements of the Board of Governors of
26 the Federal Reserve System, the Comptroller of the Currency, the
27 Federal Deposit Insurance Corporation or other applicable
28 regulatory authority; and book values shall be averaged as
29 calculated by averaging book values as determined by such
30 Reports of Condition. For purposes of this article, United
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1 States obligations shall be obligations coming within the scope
2 of 31 U.S.C. § 3124. For any year in which an institution does
3 not file four quarterly Reports of Condition, book values and
4 deductions for United States obligations shall be determined by
5 adding together the book values and deductions for United States
6 obligations from each quarterly Reports of Condition filed for
7 such year and dividing the resulting sums by the number of such
8 Reports of Condition. In the case of institutions which do not
9 file such Reports of Condition, book values shall be determined
10 by generally accepted accounting principles as of the end of
11 each calendar quarter. For any year in which an institution
12 which does not file Reports of Condition is not in existence for
13 four quarters, the book value for that year shall be determined
14 by adding together the book values for each quarter in which the
15 institution was in existence and dividing by that number of
16 quarters. For purposes of this section, a partial year shall be
17 treated as a full year.
18 (c) For purposes of this section:
19 (1) a mere change in identity, form or place of organization
20 of one institution, however effected, shall be treated as if a
21 single institution had been in existence prior to as well as
22 after such change; and
23 (2) the combination of two or more institutions into one
24 shall be treated as if the constituent institutions had been a
25 single institution in existence prior to as well as after the
26 combination and the book values and deductions for United States
27 obligations from the Reports of Condition of the constituent
28 institutions shall be combined. For purposes of [the preceding
29 sentence] this section, a combination shall include any
30 acquisition required to be accounted for [by the surviving
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1 institution under the pooling of interest method] by using the
2 purchase method in accordance with generally accepted accounting
3 principles or a statutory merger or consolidation.
4 Section 2. The amendment of section 701.1 of the act is not
5 intended to reverse or modify the ruling of First Union National
6 Bank v. Commonwealth, 867 A.2d 711 (Pa. Cmwlth. 2005).
7 Section 3. This act shall take effect in 60 days or December
8 31, 2007, whichever is sooner.
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