PRINTER'S NO. 797
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY BLAKE, STACK, GORDNER, YUDICHAK, TARTAGLIONE, KASUNIC, FONTANA, ERICKSON, TEPLITZ, FARNESE, SMITH, BREWSTER, PILEGGI, SOLOBAY, BROWNE, COSTA, WASHINGTON, MENSCH, HUGHES AND FERLO, APRIL 1, 2013
REFERRED TO FINANCE, APRIL 1, 2013
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 Innovate in PA Program.
18INNOVATE IN PA TAX CREDIT
19Section 2. The act is amended by adding sections to read:
20Section 1801-C. Scope of article.
21This article relates to the Innovate in PA Tax Credit.
1Section 1802-C. Legislative intent.
2It is the intent of this article to invest in innovation as a
3catalyst for economic growth. Investment, in the Ben Franklin
4Technology Development Authority, the Ben Franklin Technology
5Partners, the Partnerships for Regional Economic Performance,
6the department and venture capital funds will advance the
7competitiveness of this Commonwealth's companies in the global
8economy. It is the goal of this article to maximize the
9available funding from a minimum amount of $157,500,000 and up
10to and exceeding $190,000,000.
11Section 1803-C. Definitions.
17"Authority." The Ben Franklin Technology Development
18Authority established to manage and fund programs in this
19Commonwealth that support the development of technology as
20described in the act of June 22, 2001 (P.L.569, No.38), known as
21The Ben Franklin Technology Development Authority Act.
22"Ben Franklin Technology Partners Program." A program under
23the Ben Franklin Technology Development Authority that funds
24four regionally based economic development organizations
25dedicated to a common mission of technology commercialization.
30"Fund." The Innovate in PA Fund.
1"Impact investment." An investment intended to solve social
2or environmental challenges while generating financial profit.
3Impact investing recognizes that investments have social and
4environmental returns in addition to financial returns and
5attempts to maximize the three returns rather than one at the
6expense of others.
9"Program." The Innovate in PA Program.
27Section 1804-C. Tax credit.
1Section 1805-C. Duties.
2(a) Sale of tax credits.--The department, shall have the
3authority to sell up to $225,000,000 in tax credits to qualified
4taxpayers. The sale of the tax credits shall be in accordance
5with section 1808-C.
8Section 1806-C. Use of tax credits by qualified taxpayers.
9(a) Use against insurance premium tax liability.--A
10qualified taxpayer that purchases tax credits under section
111805-C may claim the credits beginning in calendar year 2017
12against insurance premium tax liability incurred for a taxable
13year that begins on or after January 1, 2016.
17(c) Construction.--The following shall apply:
18(1) A qualified taxpayer may not be required to reduce
19the amount of insurance premium tax included by the taxpayer
20in connection with rate-making for any insurance contract
21written in this Commonwealth because of a reduction of the
22taxpayer's insurance premium tax liability derived from the
23tax credit purchased under this article.
24(2) If, under the insurance laws of this Commonwealth,
25the assets of the qualified taxpayer are examined or
26considered, the taxpayer's balance of tax credits shall be
27treated as an admitted asset subject to the same financial
28rating as held by the Commonwealth.
29(d) Limitations.--The following shall apply:
30(1) The total amount of tax credits applied against
10(1) Transfer an amount equal to the amount of any tax
11credit claimed by a foreign fire insurance company against
12taxes that otherwise would be distributed in accordance with
13Chapter 7 of the act of December 18, 1984 (P.L.1005, No.205),
14known as the Municipal Pension Plan Funding Standard and
15Recovery Act, to the fund as defined in section 702 of the
16Municipal Pension Plan Funding Standard and Recovery Act.
17(2) Transfer an amount equal to the amount of any tax
18credit claimed by a foreign casualty insurance company
19against taxes that otherwise would be distributed and used
20for police pension, retirement or disability purposes as
21provided by the act of May 12, 1943 (P.L.259, No.120),
22referred to as the Foreign Casualty Insurance Premium Tax
23Allocation Law, for distribution in accordance with the
24Foreign Casualty Insurance Premium Tax Allocation Law.
25(3) Ensure that the programs under paragraphs (1) and
26(2) do not experience a negative fiscal impact due to a
27foreign fire insurance company or a foreign casualty
28insurance company claiming a tax credit authorized under this
30Section 1807-C. Sale, carryover and carryback.
1(a) Carryover.--If the qualified taxpayer cannot use the
2entire amount of the tax credit for the taxable year in which
3the taxpayer is eligible for the credit, the excess may be
4carried over to succeeding taxable years and used as a credit
5against the qualified tax liability of the taxpayer for those
6taxable years, provided that the credit may not be carried over
7to any taxable year that begins after December 31, 2025.
8(b) Sale.--No sooner than 30 days after providing the
9Insurance Department and the department written notice of the
10intent to transfer tax credits, a qualified taxpayer may
11transfer tax credits held without restriction to any entity that
12is a qualified taxpayer in good standing with the Insurance
13Department and that agrees to assume all of the transferor's
14obligations with respect to the tax credit.
17Section 1808-C. Sale of tax credits to qualified taxpayers.
21(b) Process.--The department may sell the tax credits
22authorized under this article or may contract with an
23independent third party to conduct a bidding process among
24qualified taxpayers to purchase the credits. In raising capital
25for the program, the department shall have the discretion to
26distribute credits using a market-driven approach or any
27approach that maximizes the yield to the Commonwealth.
1(d) Bidding process.--Using procedures adopted by the
2department or, if applicable, by an independent third party,
3each qualified taxpayer that submits an application shall make a
4timely and irrevocable offer, subject only to the department's
5issuance to the taxpayer of tax credit certificates, to make
6specified contributions of capital to the department on dates
7specified by the department.
17(ii) The percentage of the requested dollar amount
18of tax credits that the department and, if applicable,
19the independent third party, determines to be consistent
20with market conditions as of the offer date.
23(f) Notice of approval.--Each qualified taxpayer that
24submits an application under this section shall receive a
25written notice from the department indicating whether or not it
26has been approved as a purchaser of tax credits and, if so, the
27amount of tax credits allocated.
3(a) Payment of capital.--Capital committed by a qualified
4taxpayer shall be paid to the department for deposit into the
5fund. Nothing under this section shall prohibit the department
6from establishing an installment payment schedule for capital
7payments to be made by the qualified taxpayer.
8(b) Issuance of tax credit certificates.--On receipt of
9payment of capital, the department shall issue to each qualified
10taxpayer a tax credit certificate representing a fully vested
11credit against insurance premium tax liability.
12(c) Certificate issued in accordance with bidding process.--
13The department shall issue tax credit certificates to qualified
14taxpayers in accordance with the bidding process selected by the
15department or the independent third party.
25(4) Any penalties or other remedies for noncompliance.
30Section 1810-C. Failure to make contribution of capital and
6(b) Penalty.--A qualified taxpayer that fails to make a
7contribution of capital within the time the department specifies
8shall be subject to a penalty equal to 10% of the amount of
9capital that remains unpaid. The penalty shall be paid to the
10department within 30 days after demand.
11(c) Reallocation.--The department may offer to reallocate
12the defaulted capital among other qualified taxpayers, so that
13the result after reallocation is the same as if the initial
14allocation had been performed without considering the tax credit
15allocation to the defaulting qualified taxpayer.
16(d) Contribution.--If the reallocation of capital under
17subsection (c) results in the contribution by another qualified
18taxpayer of the amount of capital not contributed by the
19defaulting qualified taxpayer, the department may waive the
20penalty provided under subsection (b).
21(e) Transfer.--A qualified taxpayer that fails to make a
22contribution of capital within the time specified may avoid the
23imposition of the penalty by transferring the allocation of tax
24credits to a new or existing qualified taxpayer within 30 days
25after the due date of the defaulted installment. Any transferee
26of an allocation of tax credits of a defaulting qualified
27taxpayer under this subsection shall agree to make the required
28contribution of capital within 30 days after the date of the
30Section 1811-C. Innovate in PA Program.
14(ii) Five and one-half percent shall be distributed
15by the authority for technology-based economic
16development programs designed to support
17entrepreneurship, including, but not limited to,
18university-based entrepreneurial programs and new or
19existing programs designed to support early stage
20technology companies through seed grants or programming.
21(iii) Sixty percent shall be distributed to the
22Venture Investment Program for use according to program
23guidelines including traditional venture investments or
24impact investments. The authority may consider impact
25investments based on performance. Impact investments may
26not exceed 15% of the Venture Investment Program
27distribution under this subparagraph.
12(B) program creation or enhancements; and
18Section 1812-C. Guidelines.
21Section 1813-C. Report.
27(i) The Governor.
30(iii) The chairman and minority chairman of the
1Appropriations Committee of the House of Representatives.
6(1) The name of the purchaser of premium tax credits.
28Section 3. This act shall take effect in 60 days.