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 the basic needs services tax
11credit.

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
15the Tax Reform Code of 1971, is amended by adding an article to
16read:

17ARTICLE XVII-J

18BASIC NEEDS SERVICES TAX CREDIT

19Section 1701-J. Scope of article.

20This article relates to basic needs services tax credits.

21Section 1702-J. Definitions.

22The following words and phrases when used in this article

1shall have the meanings given to them in this section unless the
2context clearly indicates otherwise:

3"Basic needs services." Cash assistance, medical care, child
4care, adult care, food, clothing, shelter, job placement or job
5training services, or another assistance that is reasonably
6necessary to meet the immediate basic needs of an individual and
7that is provided and used in this Commonwealth.

8"Department." The Department of Community and Economic
9Development of the Commonwealth.

10"Individual." A person who is eligible to receive basic
11needs services provided by a qualified provider.

12"Qualified contribution." A donation to a qualified provider
13that meets all of the following:

14(1) Is cash, personal property or services, the value of
15which is the net cost of the donation to the donor or the pro
16rata hourly wage, including benefits, of the individual
17performing the service.

18(2) Is a permissible charitable tax deduction on a
19qualified taxpayer's Federal income tax return as provided by
20the Internal Revenue Code of 1986 (Public Law 99-514, 26
21U.S.C. § 1 et seq.).

22"Qualified provider." A nonprofit entity that meets all of
23the following:

24(1) Provides basic needs services to individuals who do
25one of the following:

26(i) Receive temporary assistance to needy families.

27(ii) Have household income fall below 150% of the
28Federal poverty level.

29(2) Is exempt from Federal taxation under section 501(c)
30(3) of the Internal Revenue Code of 1986 (Public Law 99-514,

126 U.S.C. §501(c)(3)).

2"Qualified taxpayer." An entity that is authorized to do
3business in this Commonwealth and subject to taxes imposed under
4Article III, IV, VI, VII, VIII, IX or XV.

5"Tax credit." The basic needs services tax credit provided
6under this article.

7Section 1703-J. Basic needs services tax credit program.

8A basic needs services tax credit program is established to
9supplement existing Federal and State funding for basic needs
10services for individuals in this Commonwealth.

11Section 1704-J. Qualified provider application.

12(a) Information.-–In order to qualify under this article, a
13qualified provider must submit information to the department to
14confirm that the qualified provider is exempt from taxation
15under section 501(c)(3) of the Internal Revenue Code of 1986
16(Public Law 99-514, 26 U.S.C. §503(c)(3)).

17(b) Application.--An application submitted to the department
18by the qualified provider shall contain all of the following:

19(1) Name and address of the entity seeking approval as a
20qualified provider.

21(2) A description of the basic needs services the entity
22provides to individuals on a form provided by the department.

23(3) Additional information required by the department.

24(c) Review and approval.--The department shall review and
25approve or disapprove the application. The department shall
26consult with the Department of State and the Department of
27Public Welfare as necessary to determine that the qualified
28provider provides basic needs services for individuals.

29(d) Notification.--The department shall notify the provider
30that the provider meets the requirements under this article for

1the fiscal year no later than 60 days after the provider has
2submitted the application required under this section.

3(e) Publication.--The department shall annually publish a
4list of each qualified provider under this section in the
5Pennsylvania Bulletin. The list shall be posted and updated on
6the publicly accessible Internet website of the department.

7Section 1705-J. Application for tax credit certificate.

8(a) Grant.-–In accordance with section 1706-J(a), the
9department shall grant a tax credit certificate. The certificate
10may be used against a tax liability owed to the Department of
11Revenue by a qualified taxpayer who provides proof of a
12qualified contribution to a qualified provider in the taxable
13year the qualified contribution is made. The taxpayer may apply
14the tax credit against any tax imposed under Article III, IV,
15VI, VII, VIII, IX, or XV, excluding tax withheld by an employer
16under Article III.

17(b) Application.-–A qualified taxpayer may apply to the
18department for a tax credit if the qualified provider that
19receives the qualified contribution appears on the list
20established under section 1704-J(e). The application shall
21include all of the following:

22(1) Name, address and tax identification number of the
23qualified taxpayer applying for a tax credit.

24(2) Name and address of each qualified provider the
25qualified taxpayer made a qualified contribution to.

26(3) Proof of each qualified contribution.

27(4) Amount of each qualified contribution.

28(5) Additional information required by the department.

29(c) Review and approval.-–

30(1) The department shall review and approve applications

1for tax credit certificates in the order applications are
2received and the availability of tax credits under this
3article.

4(2) A tax credit issued under this section may not
5exceed:

6(1) Fifty percent of the total amount of qualified
7contributions made by a qualified taxpayer.

8(2) One hundred thousand dollars annually.

9(d) Notification.-–The department shall notify the qualified
10taxpayer of the determination within 30 days of receipt of the
11application.

12(e) Issuance.-–If the application is approved, the
13department shall issue a tax credit certificate to the qualified
14taxpayer within 15 days of the approval.

15Section 1706-J. Limitations.

16(a) Aggregate amount of tax credits.--The total aggregate
17amount of all tax credits approved under this article may not
18exceed $10,000,000 in a fiscal year.

19(b) Activities.--A tax credit may not be approved for
20activities that are part of a qualified taxpayer's normal course
21of business.

22(c) Tax liability.--A tax credit granted for one taxable
23year may not exceed the tax liability of a qualified taxpayer.

24(d) Use.--The amount of tax credit not used in the taxable
25year the qualified contribution was made may not be carried
26forward or carried back and may not be refunded or transferred.

27(e) Contributions.--The contributions received by a
28qualified provider from a qualified taxpayer claiming a tax
29credit under this article must be used for direct care or
30services relating to the basic needs of an individual.

1Section 1707-J. Shareholder, owner or member pass-through.

2(a) Shareholder entitlement.-–If a Pennsylvania S
3corporation does not have an eligible tax liability against
4which the tax credit may be applied, a shareholder of the
5Pennsylvania S corporation shall be entitled to a tax credit
6equal to the tax credit determined for the Pennsylvania S
7corporation for the taxable year multiplied by the percentage of
8the Pennsylvania S corporation's distributive income to which
9the shareholder is entitled.

10(b) Pass-through entity entitlement.--If a pass-through
11entity other than a Pennsylvania S corporation does not have tax
12liability against which the tax credit can be applied, an owner
13or member of the pass-through entity shall be entitled to a tax
14credit equal to the tax credit determined for the pass-through
15entity for the taxable year multiplied by the percentage of the
16pass-through entity's distributive income to which the owner or
17member is entitled.

18(c) Additional credit.--

19(1) Except as provided under paragraph (2), the tax
20credit provided under subsection (a) or (b) shall be in
21addition to another tax credit to which a shareholder, owner
22or member of a pass-through entity is otherwise entitled
23under this chapter.

24(2) A pass-through entity and a shareholder, owner or
25member of a pass-through entity may not claim a tax credit
26under this chapter for the same qualified contribution.

27Section 1708-J. Guidelines.

28The department, in conjunction with the Department of
29Revenue, the Department of Public Welfare and the Department of
30State, may establish guidelines as necessary to implement this

1article. The guidelines shall be posted on the department's
2publicly accessible Internet website.

3Section 1709-J. Reports.

4No later than June 1, 2016, and each June 1 thereafter, the
5department shall submit a report on the effectiveness of the tax
6credits granted under this article. The report shall include the
7names of taxpayers who were issued tax credits as of the date of
8the report. The report may include recommendations for changes
9in the calculation or administration of the tax credits and
10other information as the department deems appropriate. The
11report shall be submitted to all of the following:

12(1) The chairman and minority chairman of the
13Appropriations Committee of the Senate.

14(2) The chairman and minority chairman of the
15Appropriations Committee of the House of Representatives.

16(3) The chairman and minority chairman of the Finance
17Committee of the Senate.

18(4) The chairman and the minority chairman of the
19Finance Committee of the House of Representatives.

20Section 2. The addition of Article XVII-J of the act shall
21apply to taxable years beginning after December 31, 2014.

22Section 3. This act shall take effect immediately.