PRINTER'S NO. 2477
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1820
Session of
2017
INTRODUCED BY YOUNGBLOOD, HANNA, O'BRIEN, MURT, THOMAS,
DRISCOLL, READSHAW AND ROZZI, SEPTEMBER 26, 2017
REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 26, 2017
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 community diaper and incontinence
product tax credit.
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 XVII-L
COMMUNITY DIAPER AND INCONTINENCE
PRODUCT TAX CREDIT
Section 1701-L. Scope of article.
This article establishes the community diaper and
incontinence product tax credit.
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Section 1702-L. 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:
"Business firm." An entity authorized to do business in this
Commonwealth and subject to taxes imposed under Article III, IV,
VI, VII, VIII, IX or XV or the tax under Article XVI of the act
of May 17, 1921 (P.L.682, No.284), known as The Insurance
Company Law of 1921. The term includes a pass-through entity.
"Contribution." A donation of cash or personal property made
under this article.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Diaper bank." A nonprofit charitable organization or a
fiscally sponsored project of a nonprofit charitable
organization that collects or purchases diapers and other
hygiene products for infants, children or incontinent adults and
regularly distributes diapers over an extended period through
two or more partner agencies for eventual distribution to
individuals free of charge.
"Diaper pantry." A nonprofit charitable organization or a
fiscally sponsored project of a nonprofit charitable
organization that collects or purchases diapers for the purpose
of regularly distributing the diapers directly to individuals
free of charge.
"Diaper program." A program within a nonprofit charitable
organization or a fiscally sponsored project of a nonprofit
charitable organization, including, but not limited to, a food
bank, service agency or health clinic that collects or purchases
diapers and regularly distributes the diapers either through a
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direct service free of charge or through two or more partner
agencies for eventual distribution to individuals free of
charge.
"Eligible organization." An organization that meets the
criteria under section 1704-L(a).
"Nonprofit charitable organization." A nonprofit
organization under section 501(c)(3) of the Internal Revenue
Code of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)).
"Pass-through entity." A partnership as defined in section
301(n.0), a single-member limited liability company treated as a
disregarded entity for Federal income tax purposes or a
Pennsylvania S corporation as defined in section 301(n.1).
"Program." The Community Diaper and Incontinence Product Tax
Credit Program.
Section 1703-L. Community Diaper and Incontinence Product Tax
Credit Program.
The department shall establish the Community Diaper and
Incontinence Product Tax Credit Program for the following
purposes:
(1) Encouraging private investment for services that
expand access to diapers and incontinence products in order
to protect the health and well-being of infants, children and
incontinent adults who reside in this Commonwealth.
(2) Encouraging contributions from business firms for
diaper banks, diaper pantries and diaper programs in order to
protect infants, children and incontinent adults who reside
in this Commonwealth from health problems associated with a
lack of diapers and incontinence products.
(3) Removing obstacles that prevent individuals in this
Commonwealth from maintaining employment due to a lack of
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supply of diapers and other related products.
Section 1704-L. Program qualifications.
(a) Qualifications.--A diaper bank, diaper pantry or diaper
program located within this Commonwealth shall be eligible to
receive contributions under the program if the diaper bank,
diaper pantry or diaper program:
(1) has a budget approved by the board of directors or
other entity associated with the diaper bank, diaper pantry
or diaper program;
(2) does not require participation in religious,
financial or organizational activities for the receipt of the
diapers;
(3) s ubmits information to the department that enables
the department to confirm that the organization is exempt
from Federal taxation as a nonprofit charitable organization;
and
(4) certifies to the department, on a form provided by
the department, that the diaper bank, diaper pantry or diaper
program meets the requirements under this subsection.
(b) Forms.--Upon request by a diaper bank, diaper pantry, or
diaper program, the department shall provide a form as specified
under subsection (a)(4) to the diaper bank, diaper pantry or
diaper program no later than May 1 of each year.
(c) Additional information.--The department may not require
additional information from an eligible organization exceeding
the required information under subsection (a).
(d) Notice.--The department shall notify a diaper bank,
diaper pantry or diaper program as to whether or not the diaper
bank, diaper pantry or diaper program meets the requirements to
receive contributions under the program no later than 60 days
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after the diaper bank, diaper pantry or diaper program has
submitted the information required under subsection (a).
(e) List of eligible organizations.--The department shall
submit a list of eligible organizations each year to the
Legislative Reference Bureau for publication in the Pennsylvania
Bulletin. The department shall post and update the list of
eligible organizations as necessary on the department's publicly
accessible Internet website.
(f) Outreach.--The department may collaborate with other
State agencies to provide information about the program to
diaper banks, diaper pantries and diaper programs throughout
this Commonwealth.
Section 1705-L. Contribution requirements.
(a) Contributions.--To qualify for a tax credit under th e
program, an individual or a business firm must make a
contribution for the following purposes:
(1) Direct collection and distribution of diapers.
(2) Warehousing, shelving and storing of collected
diapers.
(3) Collecting bins, volunteer training or other
promotional and marketing programs and materials relating to
the eligible organization.
(4) Mobile diaper banks, partnerships with child-care
centers serving low-income families, partnerships with senior
centers serving senior citizens or other similar entities.
(5) Fundraising assistance or other financial management
programs relating to the eligible organization.
(6) Establishing new diaper banks, diaper pantries or
diaper programs in underserved areas of this Commonwealth.
(7) Any other program or activity approved by the
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department that improves, enhances or expands access to clean
diapers for infants, children and incontinent adults residing
in this Commonwealth.
Section 1706-L. Application for tax credit.
(a) Application.--An individual or a business firm must
apply to the department to receive a tax credit under the
program.
(b) Deadlines.--The following shall apply:
(1) Except as otherwise provided in paragraph (2), the
department may accept applications for tax credits under the
program not earlier than July 1 of each fiscal year.
(2) An application submitted by an individual or
business firm as part of the second year of a two-year
commitment or as a renewal of a two-year commitment which was
fulfilled in the previous fiscal year may be accepted no
earlier than May 15 preceding the start of the fiscal year.
(c) Availability of tax credits.--Tax credits under th e
program shall be made available by the department on a first-
come, first-served basis within the limitation established under
section 1708-L.
(d) Contribution.--A contribution by an individual or
business firm shall be made within 60 days after the approval of
an application.
(e) Compliance.--Before an application is approved, the
Department of Revenue must ensure that the applicant has filed
all required State tax reports and returns for all applicable
tax years and paid the balance of State tax due as determined at
settlement, assessment or determination by the Department of
Revenue.
Section 1707-L. Grant of tax credit and amount.
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(a) General rule.--In accordance with section 1708-L(a), the
Department of Revenue shall grant a tax credit against the tax
due under Article III, IV, VI, VII, VIII, IX or XV or under
Article XVI of the act of May 17, 1921 (P.L.682, No.284), known
as The Insurance Company Law of 1921, to an individual or
business firm upon proof of a contribution to a n eligible
organization in the taxable year in which the contribution is
made. The tax credit shall not exceed 55% of the total amount
contributed by the individual or business firm during the
taxable year.
(b) Combination of tax credits.--An eligible organization
may receive tax credits in any tax year under subsection (a).
(c) Pass-through entities.--The following shall apply:
(1) If a pass-through entity does not intend to use all
the approved tax credits under the program, the pass-through
entity may elect in writing to transfer a portion of the tax
credit to the pass-through entity's shareholders, members or
partners in proportion to the share of the pass-through
entity's distributive income for use:
(i) in the taxable year in which the contribution is
made; or
(ii) in the taxable year immediately after the year
in which the contribution is made.
(2) The transfer under paragraph (1) shall designate the
year in which the credits are to be used and shall be made
according to procedures established by the Department of
Revenue.
(3) A pass-through entity and a shareholder, member or
partner of a pass-through entity shall not claim a tax credit
under the program for the same contribution.
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(4) The shareholder, member or partner of a pass-through
entity may not carry forward, carry back, obtain a refund of,
sell or assign the tax credit.
(d) Restriction on credits.--No tax credits granted under
the program shall be applied against the tax withheld by an
employer from an employee under Article III.
Section 1708-L. Limitations.
(a) Aggregate amount.--The total aggregate amount of all tax
credits under the program shall not exceed $1,000,000 in any
fiscal year.
(b) Activities.--No tax credit shall be granted for
activities that are a part of the normal course of business of
an individual or a business firm.
(c) Tax liability.--The following shall apply:
(1) Except as provided for in paragraph (2), a tax
credit granted under the program for any one taxable year may
not exceed the tax liability of an individual or business
firm.
(2) A tax credit granted for any one taxable year and
transferred to a shareholder, member or partner under section
1707-L(c) may not exceed the tax liability of the
shareholder, member or partner.
(d) Use.--A tax credit granted under the program and not
used by an individual or a business firm in the taxable year the
contribution was made or in the year designated by the
shareholder, member or partner to whom the credit was
transferred under section 1707-L(c) may not be carried forward
or carried back and is not refundable or transferable.
Section 1709-L. Annual report and recommendations.
(a) Annual report.--The Department of Revenue shall submit
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an annual report to the General Assembly listing all eligible
organizations receiving contributions from individuals and
business firms granted tax credits under the program no later
than June 30 of each year.
(b) Recommendations.--The Department of Revenue shall
evaluate the program and make recommendations, if necessary, on
changes to the program to improve the effectiveness and
utilization of the tax credits in expanding access to clean
diapers and incontinence products. Recommendations shall be
included in the annual report under subsection (a).
Section 2. This act shall take effect in 90 days.
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