PRINTER'S NO. 20
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
37
Session of
2015
INTRODUCED BY WILLIAMS, TEPLITZ, BREWSTER, FONTANA, STACK,
BLAKE, SCHWANK, COSTA, BOSCOLA, HUGHES, TARTAGLIONE, SMITH,
FARNESE AND RAFFERTY, JANUARY 14, 2015
REFERRED TO FINANCE, JANUARY 14, 2015
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for a tax credit for new jobs for
unemployed veterans.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XVIII-G
TAX CREDIT FOR NEW JOBS FOR UNEMPLOYED VETERANS
Section 1801-G. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Department." The Department of Community and Economic
Development of the Commonwealth.
"Disabled veteran." Any of the following:
(1) An unemployed veteran who is entitled to
compensation or who, except for the receipt of military
retired pay, would be entitled to compensation, under laws
administered by the Secretary of Veterans Affairs.
(2) An unemployed person who was discharged or released
from active duty because of a service-connected disability.
"Full-time employment." Employment in which an individual is
employed by a recipient corporation for at least 35 hours per
week.
"Long term." A period of at least six months.
"New job." A full-time job, the average hourly rate,
excluding benefits, for which must be at least 150% of the
Federal minimum wage, created within a municipality located in
this Commonwealth by a company.
"Short term." A period of less than six months.
"Start date." January 1, 2015.
"Tax credit." A tax credit applied for or granted under this
article.
"Unemployed person." An individual who has not held any type
of full-time employment prior to being hired by a company
seeking a tax credit under this article.
"Unemployed veteran." An individual that meets all of the
following:
(1) Has performed active service in the armed forces of
the United States, including the reserve components and the
National Guard, who was discharged from the active service
under honorable conditions.
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(2) Has not held any type of full-time employment prior
to being hired by a company seeking a tax credit under this
article.
Section 1802-G. Application.
(a) Application to department.--A company may submit an
application for a tax credit under this article in a manner
required by the department.
(b) Procedure.--The application shall be attached to the
company's annual tax return required to be filed under this act.
Section 1803-G. Tax credits.
(a) Amount.--A company may claim the following tax credits
per new job created:
(1) A $1,200 tax credit for each short-term unemployed
veteran hired.
(2) A $2,400 tax credit for each long-term unemployed
veteran hired.
(3) A $2,400 tax credit for each disabled veteran hired.
(b) Maximum amount.--A company may combine tax credits under
subsection (a) for each unemployed veteran hired but not to
exceed $4,800.
(c) Determination of new jobs created.--New jobs shall be
deemed created to the extent that the company's average
employment by quarter during the year in which an unemployed
veteran is hired exceeds the company's average employment level
by quarter during the previous year.
(d) Applicable taxes.--A company may apply the tax credit to
100% of the company's State corporate net income tax, capital
stock and franchise tax or the capital stock and franchise tax
of a shareholder of the company, if the company is a
Pennsylvania S corporation, gross premiums tax, gross receipts
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tax, bank and trust company shares tax, mutual thrift
institution tax, title insurance company shares tax, personal
income tax or the personal income tax of shareholders of a
Pennsylvania S corporation or any combination thereof.
(e) Availability of tax credits.--
(1) Each fiscal year, $1,200,000 in tax credits shall be
made available to the department and may be awarded by the
department in accordance with this article.
(2) In addition to the tax credits under paragraph (1),
in any fiscal year, the department may reissue or assign
prior fiscal year tax credits which have been recaptured
under section 1805-G(a) and may award prior fiscal year
credits not previously issued.
Section 1804-G. Prohibitions.
The following actions with regard to job creation tax credits
are prohibited:
(1) Approval of jobs that have been created prior to the
start date.
(2) Approval for tax credits for a company which is
relocating operations from one municipality in this
Commonwealth to another unless special circumstances exist
and the municipality that is losing the existing jobs has an
opportunity to submit comments prior to action by the
department. If the department approves the tax credits, the
company must commit to preserving the existing employees, and
the credit shall apply only to the new jobs.
(3) The assignment, transfer or use of credits by any
other company, except that tax credits may be assigned in
whole or in part to an affiliated entity. As used in this
paragraph, the term "affiliated entity" means an entity which
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is part of the same "affiliated group," as defined by section
1504(a)(1) of the Internal Revenue Code of 1986 (Public Law
99-514, 26 U.S.C. ยง 1504(a)(1)), as the company awarded the
credit.
Section 1805-G. Penalties.
(a) Failure to maintain operations.--A company which
receives tax credits and fails to substantially maintain
existing operations and the operations related to the tax
credits in this Commonwealth for a period of five years from the
date the company first receives a tax credit shall be required
to refund to the Commonwealth the total amount of credits
granted.
(b) Waiver.--The department may waive the penalties outlined
in subsection (a) if it is determined that a company's
operations were not maintained or the new jobs were not created
because of circumstances beyond the company's control. Such
circumstances include natural disasters, unforeseen industry
trends or a loss of a major supplier or market.
Section 2. This act shall take effect in 60 days.
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