PRINTER'S NO.  3997

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

2626

Session of

2012

  

  

INTRODUCED BY BENNINGHOFF, AUMENT, BAKER, BOBACK, BRADFORD, CALTAGIRONE, CUTLER, DENLINGER, FLECK, GABLER, GILLEN, GINGRICH, GODSHALL, GROVE, HELM, HENNESSEY, HICKERNELL, KAMPF, KORTZ, MICOZZIE, MILLER, MILNE, QUINN, ROCK, SAYLOR, SCAVELLO, SWANGER, TALLMAN AND WATSON, SEPTEMBER 5, 2012

  

  

REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 5, 2012  

  

  

  

AN ACT

  

1

Establishing the Promoting Employment Across Pennsylvania

2

Program; and providing for tax benefits to qualified

3

companies in the form of withholding tax relief.

4

The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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TABLE OF CONTENTS

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Chapter 1.  Preliminary Provisions

8

Section 101.  Short title.

9

Section 102.  Scope of act.

10

Section 103.  Definitions.

11

Chapter 3.  Promoting Employment Across Pennsylvania

12

Section 301.  Qualification.

13

Section 302.  Benefits.

14

Section 303.  Application and review.

15

Section 304.  Agreement.

16

Section 305.  Recapture of withholding taxes.

17

Section 306.  Annual form.

 


1

Section 307.  Prohibitions.

2

Section 308.  Administration and regulation.

3

Section 309.  Review.

4

Section 310.  Report to General Assembly.

5

Chapter 51.  Miscellaneous Provisions

6

Section 5101.  Effective date.

7

CHAPTER 1

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PRELIMINARY PROVISIONS

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Section 101.  Short title.

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This act shall be known and may be cited as the Promoting

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Employment Across Pennsylvania Act.

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Section 102.  Scope of act.

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This act relates to fostering economic development, creating

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new jobs and opportunities for the citizens of this Commonwealth

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and providing incentives to locate business facilities, other

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operations and jobs in this Commonwealth.

17

Section 103.  Definitions.

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The following words and phrases when used in this act shall

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have the meanings given to them in this section unless the

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context clearly indicates otherwise:

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"Agreement."  An agreement entered into under section 304.

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"County average wage."  The average annual wage paid to

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employees located in the county where the qualified company

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intends to employ new employees, as reported by the Center for

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Workforce Information and Analysis.

26

"Department."  The Department of Community and Economic

27

Development of the Commonwealth.

28

"High-impact project."  A business development project in

29

which a qualified company agrees to hire at least 100 new

30

employees within five years from the date the agreement is

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1

entered into under section 304.

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"New employee."  Any of the following:

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(1)  An employee who meets all of the following:

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(i)  Has never been employed by the qualified company

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in the qualified company's business operating in this

6

Commonwealth during the taxable year for which benefits

7

are sought under section 301.

8

(ii)  Performs duties in this Commonwealth in

9

connection with the business operating in this

10

Commonwealth on:

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(A)  a regular, full-time basis; or

12

(B)  a part-time basis if the individual is

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customarily performing the duties at least 20 hours

14

per week throughout the taxable year.

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(2)  An individual who is acquired or relocated to this

16

Commonwealth from another state through an expansion or

17

relocation of a business operation, notwithstanding if the

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individual was previously employed by the qualified company.

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"Qualified company."  As follows:

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(1)  A for-profit corporation, partnership or other

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entity that makes available to its full-time employees health

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insurance coverage, pays at least 50% of the premium for the

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health insurance and meets the requirements of section 301.

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The term includes a company whose headquarters or

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administrative offices, located in this Commonwealth, serve

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an international or multistate territory and the company

27

meets the requirements of section 301.

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(2)  The term shall not include any corporation,

29

partnership or other entity which meets any of the following: 

30

(i)  Is identified by any of the following North

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1

American Industry Classification System code groups,

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sectors or subsectors:

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(A)  Industry group 7132 or 8131.

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(B)  Sectors 44, 45, 61, 92 or 221, including

5

water and sewer services.

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(C)  Subsector 722.

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(ii)  Is delinquent in the payment of any taxes or

8

any other amounts to the Federal Government, the

9

Commonwealth or any political subdivision.

10

(iii)  Has filed for or has publicly announced its

11

intention to file for bankruptcy protection.

12

"Third party."  A third party as described under section 301. 

13

"Withholding tax."  The tax required to be withheld under

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section 316 of the act of March 4, 1971 (P.L.6, No.2), known as

15

the Tax Reform Code of 1971.

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CHAPTER 3

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PROMOTING EMPLOYMENT ACROSS PENNSYLVANIA

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Section 301.  Qualification.

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In order to qualify for benefits under this act a qualified

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company must relocate an existing business facility, office,

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department or other operation located outside this Commonwealth

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and the jobs from the business facility, office, department or

23

other operation to this Commonwealth. A qualified company may

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meet the requirements of this section by contracting with an

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unrelated third party to perform services as follows:

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(1)  the third party serves as the legal employer of the

27

new employees providing services to the qualified company;

28

(2)  the services are performed in this Commonwealth; and

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(3)  the third party and the new employees are subject to

30

withholding tax.

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1

Section 302.  Benefits.

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(a)  Requirement.--A qualified company that enters into an

3

agreement must meet one of the following:

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(1)  The business operations of the qualified company

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must be located in a first, second or second class A county

6

and at least 15 new employees must be hired within two years

7

of the date the qualified company enters into the agreement.

8

(2)  The business operations of the qualified company

9

must be located in a third, fourth or fifth class county and

10

at least ten new employees must be hired within two years

11

from the date the qualified company enters into the

12

agreement.

13

(3)  The business operations of the qualified company

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must be located in a sixth, seventh or eighth class county

15

and at least five new employees must be hired within two

16

years from the date the qualified company enters into the

17

agreement.

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(b)  Normal retention.--A qualified company that meets the

19

requirements of subsection (a) shall be eligible to retain 95%

20

of the qualified company's withholding taxes for the new

21

employees for one of the following periods:

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(1)  Five years, if the new employees are compensated at

23

a rate equal to at least 100% of the county average wage.

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(2)  Six years, if the new employees are compensated at a

25

rate equal to at least 110% of the county average wage.

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(3)  Seven years, if the new employees are compensated at

27

a rate equal to at least 120% of the county average wage.

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(c)  High-impact project retention.--A qualified company that

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meets the requirements of subsection (a) and engages in a high-

30

impact project shall be eligible to retain 95% of the qualified

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1

company's withholding taxes for new employees for one of the

2

following periods:

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(1)  Seven years, if the new employees are compensated at

4

a rate equal to at least 100% of the county average wage.

5

(2)  Eight years, if the new employees are compensated at

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a rate equal to at least 110% of the county average wage.

7

(3)  Nine years, if the new employees are compensated at

8

a rate equal to at least 120% of the county average wage.

9

(4)  Ten years, if the new employees are compensated at a

10

rate equal to at least 140% of the county average wage.

11

(d)  Third party.--If a qualified company contracts with a

12

third party, the third party shall remit payments equal to the

13

amount of withholding taxes the qualified company is eligible to

14

retain under this section to the qualified company and shall

15

report the amount to the Department of Revenue as required under

16

section 304.

17

Section 303.  Application and review.

18

(a)  Application.--A qualified company that meets the

19

requirements of section 301 may apply to the department for

20

benefits under this act. The application shall be on a form

21

required by the department and shall include all of the

22

following:

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(1)  The name and address of the applicant.

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(2)  Documentation that the applicant is a qualified

25

company.

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(3)  Documentation that the applicant meets the

27

requirements of section 301.

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(4)  Documentation that the applicant does not owe any

29

delinquent taxes or any other amounts to the Federal

30

Government, this Commonwealth or any political subdivision.

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1

(5)  An affidavit that the applicant has not filed for or

2

publicly announced its intention to file for bankruptcy

3

protection.

4

(6)  Any other information required by the department.

5

(b)  Review.--Within 30 days of receipt of the application,

6

the department, in conjunction with the Department of Revenue,

7

shall review the application and determine if the applicant is a

8

qualified company and that the requirements of section 301 have

9

been met.

10

(c)  Approval.--Upon approval of an application, the

11

department shall notify the applicant in writing and, under

12

section 304, enter into an agreement with the qualified company

13

for benefits under this act. The department may enter into an

14

agreement with a third party, or the third party may be a party

15

to the agreement between the qualified company and the

16

department.

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(d)  Additional benefits.--A qualified company that is

18

receiving benefits under this act may apply to the department

19

for additional benefits if the qualified company meets the

20

requirements of section 301.

21

Section 304.  Agreement.

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The agreement between the qualified company and the

23

department shall be entered into before any benefits may be

24

provided under this act. The agreement shall do all of the

25

following:

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(1)  Specify the terms and conditions the qualified

27

company must comply with in order to receive benefits under

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this act.

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(2)  State that the department must certify all of the

30

following to the Department of Revenue every taxable year:

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1

(i)  That the qualified company is eligible to

2

receive benefits under this act.

3

(ii)  The number of new employees hired by the

4

company during the taxable year.

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(iii)  The amount of gross wages being paid to each

6

new employee.

7

(3)  Include any other information deemed necessary by

8

the department.

9

Section 305.  Recapture of withholding taxes.

10

If the qualified company fails to comply with the terms and

11

conditions set forth in the agreement or fails to comply with

12

this act, the department shall immediately terminate the

13

agreement. The qualified company shall not be entitled to any

14

further benefits provided for under this act and shall be

15

required to remit to the Commonwealth an amount equal to the

16

aggregate withholding taxes retained by the qualified company or

17

remitted to the qualified company by a third party under this

18

act as of the date the agreement is terminated.

19

Section 306.  Annual form.

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(a)  Development.--The Department of Revenue, in conjunction

21

with the department, shall develop a form which must be

22

completed annually by any qualified company or third party that

23

is subject to an agreement under section 304.

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(b)  Contents.--The form shall request:

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(1)  The amount of withholding tax being retained by the

26

qualified company or remitted by a third party to the

27

qualified company.

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(2)  The number of new employees hired.

29

(3)  The wages of the new employees.

30

(4)  Any other information as required by the Department

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1

of Revenue and the department.

2

(c)  Filing.--The qualified company or third party completing

3

the form shall file the form with the Department of Revenue as

4

prescribed by the Department of Revenue.

5

(d)  Confidentiality.--The contents of the completed form

6

shall be confidential except as provided under the act of March

7

4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, and

8

the act of February 14, 2008 (P.L.6, No.3), known as the Right-

9

to-Know Law.

10

Section 307.  Prohibitions.

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A qualified company claiming benefits under this act may not

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do any of the following:

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(1)  Participate in any program in which any portion of

14

the qualified company's withholding taxes have been pledged

15

to finance indebtedness or transferred to or for the benefit

16

of the qualified company.

17

(2)  Claim any payments or credits authorized by the

18

General Assembly or any other program established by the

19

Commonwealth, if the payments or credits would be earned for

20

the hiring of new employees.

21

Section 308.  Administration and regulation.

22

The department, in conjunction with the Department of

23

Revenue, shall adopt guidelines necessary to implement and

24

administer this act.

25

Section 309.  Review.

26

(a)  Duty.--The department shall conduct an annual review of

27

the activities undertaken by a qualified company under this act

28

to ensure that the qualified company is in compliance with this

29

act, any guidelines adopted under section 308 and any agreement.

30

(b)  Inspection.--The books and records concerning employment

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1

and wages of any employees for which the qualified company or

2

third party has retained any withholding taxes shall be

3

available for inspection by the department at all times during

4

business hours. The department may request the Department of

5

Revenue to audit the qualified company or third party for

6

compliance with this act.

7

Section 310.  Report to General Assembly.

8

(a)  Duty.--The department shall submit an annual report to

9

the General Assembly indicating the effectiveness of the tax

10

benefits provided by this act no later than March 15 following

11

the year in which the benefits were approved. The report shall

12

include the following information:

13

(1)  The names of all qualified companies and taxpayers

14

utilizing the benefit as of the date of the report.

15

(2)  The types of qualified companies utilizing this act.

16

(3)  The location of the qualified companies and the

17

location of the qualified companies' business operations in

18

this Commonwealth.

19

(4)  The number of new employees hired.

20

(5)  The wages paid for the new employees.

21

(6)  The annual amount of benefits provided under this

22

act.

23

(7)  The estimated net Commonwealth fiscal impact,

24

including the direct and indirect new Commonwealth taxes

25

derived from the new employees hired.

26

(8)  An estimate of the multiplier effect on the

27

Commonwealth's economy of the benefits received under this

28

act.

29

(b)  Confidentiality.--Notwithstanding any law providing for

30

the confidentiality of tax records, the information contained in

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1

the report shall be public information. The report shall include

2

any recommendations for changes in the calculation or

3

administration of the benefit.

4

CHAPTER 51

5

MISCELLANEOUS PROVISIONS

6

Section 5101.  Effective date.

7

This act shall take effect in 60 days.

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