1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," providing for a manufacturing jobs tax credit.

11The General Assembly of the Commonwealth of Pennsylvania
12hereby enacts as follows:

13Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
14the Tax Reform Code of 1971, is amended by adding an article to
15read:

16ARTICLE XVIII-E

17MANUFACTURING JOBS TAX CREDIT

18Section 1801-E. Definitions.

19The following words and phrases when used in this article
20shall have the meanings given to them in this section unless the
21context clearly indicates otherwise:

1"Approval." A document submitted by the Department of
2Community and Economic Development to the qualified
3manufacturing facility or qualified supplier that states the
4benefits that may be provided under this article.

5"Department." The Department of Community and Economic
6Development of the Commonwealth.

7"Employee." A person employed by a qualified manufacturing
8facility or qualified supplier.

9"NAICS." The 1997 edition of the North American Industry
10Classification System as prepared by the Executive Office of the
11President, Office of Management and Budget.

12"New job." The number of full-time employees located at the
13project facility that exceeds the project facility base
14employment, less any decrease in the number of full-time
15employees at related facilities below the related facility base
16employment. The term does not include a job that was created 
17prior to the date of the notice of intent. An employee that
18spends less than 50% of the employee's work time at the facility
19is deemed to be located at a facility if:

20(1) the employee receives direction and control from
21that facility;

22(2) is on the facility's payroll;

23(3) one hundred percent of the employee's income from
24such employment is Pennsylvania income; and

25(4) the employee is paid at or above the industry
26average wage for Pennsylvania, as determined by the
27Department of Community and Economic Development using NAICS
28industry classifications.

29"Notice of intent." A form developed by the Department of
30Community and Economic Development, completed by the qualified

1manufacturing facility or qualified supplier and submitted to
2the department, which states the qualified manufacturing
3facility's or qualified supplier's intent to hire individuals
4for new jobs or retain current jobs and request benefits under
5this article.

6"Qualified manufacturing facility." A taxpayer that meets
7all of the following:

8(1) Manufactures goods in this Commonwealth.

9(2) Derives more than 10% of total sales revenues of the
10facility from goods produced at the facility, which are
11exported outside the United States or sold to the Federal
12Government for export outside the United States or that
13derives more than 20% of all total sales revenues of the
14facility from goods produced at the facility which are
15exported outside this Commonwealth.

16(3) Makes an additional capital investment of no less
17than $50,000 per full-time employee equivalent retained at
18the facility.

19(4) Manufactures a new product that has not been
20manufactured in this Commonwealth by the company that owns
21the facility at any time prior to the date of the notice of
22intent.

23(5) Continues to manufacture goods under paragraphs (1),
24(2), (3) and (4) for a period of no less than five years from
25the date of the notice of intent.

26"Qualified supplier." A taxpayer that meets all of the
27following:

28(1) Derives more than 10% of the total annual revenues
29of the company from sales to a qualified manufacturing
30facility.

1(2) Adds five or more new jobs.

2(3) Pays wages for the new jobs that are equal to or
3exceed the industry average wage for Pennsylvania as
4determined by the Department of Community and Economic
5Development using NAICS industry classifications.

6(4) Provides health insurance to employees and pays no
7less than 50% of the premiums of the insurance.

8"Retained job." The number of full-time employees located at
9the project facility that existed in the taxable year
10immediately preceding the year in which application for the
11program is made.

12"Taxpayer." An individual or entity subject to the tax
13imposed under Article III, IV or VI.

14Section 1802-E. Notice of intent.

15(a) Department response.--The department shall respond no
16later than 30 days to a qualified manufacturing facility or a
17qualified supplier that provides a notice of intent to receive
18benefits under this article with either an approval or a
19rejection of the notice of intent.

20(b) Deemed approval.--Failure to respond on behalf of the
21department shall result in the notice of intent being deemed an
22approval for the purposes of this article.

23(c) Effect of approval.--A qualified manufacturing facility
24or qualified supplier that is provided an approval shall be
25allowed a benefit as provided in this article.

26Section 1803-E. Benefit for qualified manufacturing facility.

27(a) General rule.--A qualified manufacturing facility may
28retain, upon approval of a notice of intent by the department,
2950% of the amount of tax required to be withheld under section
30316 from retained jobs for a period of ten years.

1(b) Department of Revenue regulation.--The method of
2determining the amount to be withheld shall be prescribed by
3regulation of the Department of Revenue.

4Section 1804-E. Benefit for qualified supplier.

5A qualified supplier may retain, upon approval of a notice of
6intent by the department, the total amount of tax required to be
7withheld under section 316 from new jobs for a period of:

8(1) three years from the date of approval of the notice
9of intent; or

10(2) five years if the supplier pays wages for the new
11jobs equal to or greater than 120% of the industry average
12wage for Pennsylvania as determined by the department using
13NAICS industry classifications.

14Section 1805-E. Limitation.

15The total aggregate amount of retained withholding tax
16authorized under this article shall not exceed $35,000,000 per
17year.

18Section 1806-E. Other tax credits and hiring.

19(a) Ineligibility to receive other tax credit.--
20Notwithstanding any provision of law to the contrary, any
21qualified manufacturing facility that is awarded benefits under
22this article shall not simultaneously receive tax credits
23otherwise under this act or any other law of this Commonwealth.

24(b) Certain hiring prohibited.--A taxpayer who is awarded
25benefits under this article who knowingly hires individuals who
26are not allowed to work legally in the United States shall
27immediately forfeit the benefits and shall repay the
28Commonwealth an amount equal to any withholding taxes already
29retained.

30Section 1807-E. Regulations.

1The department may promulgate regulations to implement the
2provisions of this article.

3Section 1808-E. Report.

4Prior to March 1 each year, the department shall provide a
5report to the General Assembly. The report shall include:

6(1) The names of participating qualified manufacturing
7facilities or qualified suppliers.

8(2) The location of participating qualified
9manufacturing facilities or qualified suppliers.

10(3) The annual amount of benefits provided.

11(4) The estimated net State fiscal impact.

12(5) The number of new jobs created or jobs retained.

13Section 2. The addition of Article XVIII-E of the act shall
14apply to taxable years beginning after December 31, 2012.

15Section 3. This act shall take effect immediately.