1Providing for establishment of the Innovate Pennsylvania
2Program, for sale of premium tax credits, for yearly
3payments, for premium tax credit certificate, for default,
4for annual limitation, for duties of State Treasurer, for
5carryover, carryback, refund and assignment, for repayment,
6for guidelines and for reports.

7The General Assembly of the Commonwealth of Pennsylvania
8hereby enacts as follows:

9Section 1. Short title.

10This act shall be known and may be cited as the Innovate
11Pennsylvania Act.

12Section 2. Definitions.

13The following words and phrases when used in this act shall
14have the meanings given to them in this section unless the
15context clearly indicates otherwise:

16"Authority." As defined in section 2 of the act of June 22,
172001 (P.L.569, No.38), known as the Ben Franklin Technology
18Development Authority Act.

1"Ben Franklin Technology Development Authority Act." The act
2of June 22, 2001 (P.L.569, No.38), known as the Ben Franklin
3Technology Development Authority Act.

4"Ben Franklin Technology Partner." As defined in section 2
5of the act of June 22, 2001 (P.L.569, No.38), known as the Ben
6Franklin Technology Development Authority Act.

7"Board." As defined in section 2 of the act of June 22, 2001
8(P.L.569, No.38), known as the Ben Franklin Technology
9Development Authority Act.

10"Department." The Department of Revenue of the Commonwealth.

11"Fund." The Ben Franklin Technology Development Authority
12Fund established in section 10 the act of June 22, 2001
13(P.L.569, No.38), known as the Ben Franklin Technology
14Development Authority Act.

15"Insurance premium tax liability." The liability for taxes
16imposed under section 902 of the act of March 4, 1971 (P.L.6,
17No.2), known as the Tax Reform Code of 1971.

18"Premium tax credit." The tax credit established under
19section 3.

20"Program." The Innovate Pennsylvania Program.

21"Regional biotechnology research center." A regional
22biotechnology center as established under Chapter 17 of the act
23of June 26, 2001 (P.L.755, No.77), known as the Tobacco
24Settlement Act.

25"Secretary." The Secretary of Revenue of the Commonwealth.

26"Specified contribution rate." The percentage equal to the
27amount of the taxpayer contribution divided by the dollar amount
28of the premium tax credit.

29"Taxpayer." An entity subject to the taxation under section
30902 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax

1Reform Code of 1971.

2"Taxpayer contribution." An amount equal to the taxpayer's
3approved specified contribution rate multiplied by the amount of
4premium tax credits awarded to the taxpayer.

5"Tobacco Settlement Act." The act of June 26, 2001 (P.L.755,
6No.77), known as the Tobacco Settlement Act.

7"Venture investment program." A program employed under the
8statutory authority of the Ben Franklin Technology Development
9Authority Act.

10Section 3. Establishment of Innovate Pennsylvania Program.

11There is established within the department a tax credit
12program to be known as the Innovate Pennsylvania Program. The
13program shall provide a source of funds for venture capital
14investment through the authority and regional biotechnology
15research centers.

16Section 4. Sale of premium tax credits.

17(a) Securing capital commitments.--The department shall
18contract with an independent third party or develop guidelines
19to conduct a bidding process in order to secure capital
20commitments from taxpayers for the program.

21(b) Application.--A taxpayer may apply to the department for
22a premium tax credit by October 1, 2013. The application shall
23be an irrevocable offer consistent with all of the following:

24(1) The amount of premium tax credits sought by the
25taxpayer may not be less than $500,000.

26(2) The applicant's specified contribution rate may not
27be less than the greater of:

28(i) eighty percent; or

29(ii) the percentage determined by the secretary to
30be consistent with market conditions.

1(3) Any other information the department requires.

2(c) Duties of department.--The department shall review the
3applications and award the premium tax credits to applicants.
4Preference shall be given to the applicants possessing the
5highest specified contribution rate until the maximum amount of
6premium tax credits provided for in subsection (d) is awarded.

7(d) Limitation.--The maximum amount of premium tax credits
8that may be awarded under this act shall be $175,000,000.

9(e) Notification.--The department shall notify the applicant
10of the amount of the applicant's premium tax credit awarded by
11January 15, 2014.

12Section 5. Payments.

13(a) Requirements.--Upon being awarded premium tax credits
14under section 4, a taxpayer shall pay to the department the
15amount of taxpayer contribution that is due. Payment shall be
16due within 90 days of when the department provides the
17notification under section 4(e).

18(b) Deposit of funds.--All taxpayer contributions received
19under subsection (a) shall be deposited as follows:

20(1) Ninety-three percent shall be deposited in the fund.
21Moneys in the fund shall be allocated as follows:

22(i) Forty percent to the Ben Franklin Technology
23Partners, as distributed by the authority.

24(ii) Sixty percent to the venture investment program
25being operated by the board.

26(2) Seven percent to the health account established
27under section 303(b) of the Tobacco Settlement Act, for
28distribution in equal proportions to each regional
29biotechnology research center.

30Section 6. Premium tax credit certificate.

1(a) Issuance.--Upon receipt of payment, the department shall
2issue to the taxpayer a premium tax credit certificate equal to
3the total premium tax credits awarded to the taxpayer.

4(b) Contents.--The premium tax credit certificate shall
5state:

6(1) The amount of premium tax credits that the taxpayer
7may claim.

8(2) The tax years in which the premium tax credits may
9first be utilized by the taxpayer.

10(3) A penalty or other remedy for noncompliance.

11(4) The procedure to be used for transferring the
12premium tax credits to another taxpayer.

13(5) Other requirements the department considers to be
14necessary.

15(c) Prohibition.--A premium tax credit certificate may not
16be issued to a taxpayer which fails to make payment under
17section 5 within the time specified under this act.

18(d) Reallocation.--If a timely payment is not received the
19department may reallocate any premium tax credits to another
20qualified taxpayer in accordance with section 4.

21Section 7. Premium tax credit.

22For tax years beginning after June 30, 2015, and ending
23before July 1, 2020, a taxpayer may claim a premium tax credit
24against its insurance premium tax liability equal to one-fifth
25of the amount awarded in section 4.

26Section 8. Duties of State Treasurer.

27In a fiscal year that a premium tax credit is claimed under
28this act, the secretary shall notify the State Treasurer to do
29all of the following prior to June 30 of that fiscal year:

30(1) Transfer an amount from the General Fund equal to

1the amount of premium tax credits claimed by the foreign fire
2insurance company against taxes that otherwise would be
3distributed in accordance with Chapter 7 of the act of
4December 18, 1984 (P.L.1005, No.205), known as the Municipal
5Pension Plan Funding Standard and Recovery Act, to the fund
6as defined in section 702 of the Municipal Pension Plan
7Funding Standard and Recovery Act.

8(2) Transfer from the General Fund an amount equal to
9the amount of a premium tax credit claimed by a foreign
10casualty insurance company against taxes that otherwise would
11be distributed and used for police pension, retirement or
12disability purposes as provided by the act of May 12, 1943
13(P.L.259, No.120), referred to as the Foreign Casualty
14Insurance Premium Tax Allocation Law, for distribution in
15accordance with the Foreign Casualty Insurance Premium Tax
16Allocation Law.

17Section 9. Carryover, carryback, refund and assignment.

18(a) Carryover.--If the taxpayer cannot use the entire amount
19of the premium tax credit for the taxable year in which the
20premium tax credit is first permitted to be claimed, the excess
21may be carried over for not more than five succeeding taxable
22years and used as a credit against the taxpayer's insurance
23premium tax liability for those taxable years. Each time that
24the premium tax credit is carried over to a succeeding taxable
25year, it shall be reduced by the amount of tax credits claimed
26during the immediately preceding taxable year. The premium tax
27credits expire no later than June 30, 2026.

28(b) Carryback or refund.--A taxpayer may not be entitled to
29carry back or obtain a refund of an unused premium tax credit.

30(c) Sale or assignment.--A taxpayer, upon application to and

1approval by the department, may sell or assign, in whole or in
2part, a premium tax credit granted to the taxpayer under this
3act if the taxpayer does not have an insurance premium tax
4liability against which the premium tax credit may be applied in
5a taxable year in which the premium tax credit is permitted to
6be claimed. The department shall establish guidelines for the
7approval of an application under this subsection. Before an
8application is approved, the department shall make a finding
9that the taxpayer and its assignee have filed the required State
10tax reports and returns for the taxable years and paid any
11balance of State tax due as determined by the department.

12(d) Purchaser and assignee.--The purchaser or assignee of a
13premium tax credit under subsection (c) shall immediately claim
14the credit against its insurance premium tax liability in the
15taxable year in which the purchase or assignment is made. The
16purchaser or assignee may not carry back, carry forward or
17obtain a refund of or sell or assign the premium tax credit. The
18purchaser or assignee shall notify the department of the seller
19or assignor of the premium tax credit in compliance with
20procedures specified by the department.

21Section 10. Repayment.

22In addition to any other sanction or penalty provided by law,
23the department shall require a taxpayer to repay the premium tax
24credit received under this act where the department determines
25that either of the following conditions exist:

26(1) the taxpayer did not satisfy the requirements of
27this act; or

28(2) the taxpayer received the premium tax credit as a
29result of fraud.

30Section 11. Guidelines.

1The department shall develop written guidelines for the
2implementation and administration of this act. The guidelines
3shall be posted on the department's publicly accessible Internet
4website.

5Section 12. Reports.

6(a) Duty of authority.--The authority shall include
7information relating to projects funded by the program in the
8report to the General Assembly required by section 12 of the Ben
9Franklin Technology Development Authority Act.

10(b) Duty of regional biotechnology research center.--A
11regional biotechnology research center shall include information
12relating to projects funded by the program in the report to the
13General Assembly required by section 1703(j)(2) of the Tobacco
14Settlement Act.

15Section 20. Effective date.

16This act shall take effect immediately.