Amendment 3071 to House Bill 542 P.N. 1563, Regular Session 2017-2018

H0542B1563A03071 MSP:CMD 07/26/17 #90 A03071

AMENDMENTS TO HOUSE BILL NO. 542

Sponsor: SENATOR BROWNE

Printer's No. 1563

Amend Bill, page 1, lines 12 through 23, by striking out all

of said lines and inserting

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,"

further providing for the title of the act;

in sales and use tax, further providing for definitions,

for imposition of tax and for exclusions from tax; providing

for marketplace providers and marketplace sellers; further

providing for remote sales reports;

in personal income tax, providing for the Pennsylvania

ABLE Savings Program Tax Exemption, repealing provisions

relating to contribution for Korea/Vietnam Memorial National

Education Center and further providing for operational

provisions;

in corporate net income tax, further providing for

definitions and providing for qualified manufacturing

innovation and reinvestment deduction;

in gross receipts tax, further providing for imposition

of tax and establishing the Natural Gas Optimization Fund and

Natural Gas Optimization Program;

in realty transfer tax, further providing for definitions

and for exempt parties;

in entertainment production tax credit, further providing

for definitions and for credit for qualified film production

expenses, providing for film production tax credit districts

and establishing the Entertainment Economic Enhancement

Program;

in city revitalization and improvement zones, further

providing for restrictions and for transfer of property;

in neighborhood improvement zones, further providing for

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definitions and providing for transfer of property;

in keystone opportunity zones, keystone opportunity

expansion zones and keystone opportunity improvement zones,

further providing for additional keystone opportunity zones;

in inheritance tax, further providing for timely mailing

treated as timely filing and payment;

providing for an electric grid virtual financial

transactions tax;

in Public Transportation Assistance Fund, further

providing for fund;

providing for fireworks, for unconventional gas wells,

for unconventional natural gas air quality protection and for

environmental permitting reform;

in procedure and administration, further providing for

petition for reassessment, for petition procedure and for

review by board;

providing for Tobacco Master Settlement Payment Fund;

in general provisions, further providing for timely

filing;

providing for severability; and

making related repeals.

Amend Bill, page 2, lines 20 through 30; page 3, lines 1

through 30; page 4, lines 1 through 4; by striking out all of

said lines on said pages and inserting

Section 1. The title of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971, is amended to read:

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; providing for environmental

permitting; conferring powers and imposing duties upon the

Department of Revenue, certain employers, fiduciaries,

individuals, persons, corporations and other entities;

prescribing crimes, offenses and penalties.

Section 1.1. Section 201(m) of the act, amended July 13,

2016 (P.L.526, No.84), is amended and the section is amended by

adding clauses to read:

Section 201. Definitions.--The following words, terms and

phrases when used in this Article II shall have the meaning

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

(m) "Tangible personal property."

(1) Corporeal personal property including, but not limited

to, goods, wares, merchandise, steam and natural and

manufactured and bottled gas for non-residential use,

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electricity for non-residential use, prepaid telecommunications,

premium cable or premium video programming service, spirituous

or vinous liquor and malt or brewed beverages and soft drinks,

interstate telecommunications service originating or terminating

in the Commonwealth and charged to a service address in this

Commonwealth, intrastate telecommunications service with the

exception of (i) subscriber line charges and basic local

telephone service for residential use and (ii) charges for

telephone calls paid for by inserting money into a telephone

accepting direct deposits of money to operate, provided further,

the service address of any intrastate telecommunications service

is deemed to be within this Commonwealth or within a political

subdivision, regardless of how or where billed or paid. In the

case of any such interstate or intrastate telecommunications

service, any charge paid through a credit or payment mechanism

which does not relate to a service address, such as a bank,

travel, credit or debit card, but not including prepaid

telecommunications, is deemed attributable to the address of

origination of the telecommunications service.

(2) The term shall include the following, whether

electronically or digitally delivered, streamed or accessed and

whether purchased singly, by subscription or in any other

manner, including maintenance[,] and updates [and support]:

(i) video;

(ii) photographs;

(iii) books;

(iv) any other otherwise taxable printed matter;

(v) applications, commonly known as apps;

(vi) games;

(vii) music;

(viii) any other audio, including satellite radio service;

(ix) canned software, notwithstanding the function

performed, including support, except separately invoiced help

desk or call center support; or

(x) any other otherwise taxable tangible personal property

electronically or digitally delivered, streamed or accessed.

* * *

(eee) "Marketplace provider." A person who, either directly

or indirectly through agreements or arrangements with third

parties and pursuant to an agreement with a marketplace seller,

facilitates a sale by a marketplace seller. For purposes of this

definition, a person "facilitates a sale" if the person or an

affiliated person:

(1) collects the payment made by a customer to or for a

marketplace seller regardless of whether the marketplace

provider receives compensation or other consideration in

exchange for its services; and

(2) provides the forum in which, or by means of which, the

sale takes place, including a shop, a store, a booth, an

Internet website, a catalog or a similar forum.

(fff) "Marketplace seller." A person, whether or not the

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person is required to register to collect tax under this

article, who:

(1) has an agreement with a marketplace provider under which

the marketplace provider will facilitate sales for the person;

and

(2) makes sales at retail subject to tax under this article.

Section 2. Section 202(a) of the act is amended to read:

Section 202. Imposition of Tax.--(a) There is hereby

imposed upon each separate sale at retail of tangible personal

property or services, as defined herein, within this

Commonwealth a tax of six per cent of the purchase price, which

tax shall be collected by the vendor from the purchaser, or by

the marketplace provider for each separate sale at retail

facilitated for a marketplace seller, and shall be paid over to

the Commonwealth as herein provided.

* * *

Section 2.1. Section 204(13) of the act, amended July 13,

2016 (P.L.526, No.84), is amended to read:

Section 204. Exclusions from Tax.--The tax imposed by

section 202 shall not be imposed upon any of the following:

* * *

(13) The sale at retail, or use of wrapping paper, wrapping

twine, bags, cartons, tape, rope, labels, nonreturnable

containers [and], all other wrapping supplies and kegs used to

contain malt or brewed beverages, when such use is incidental to

the delivery of any personal property, except that any charge

for wrapping or packaging shall be subject to tax at the rate

imposed by section 202, unless the property wrapped or packaged

will be resold by the purchaser of the wrapping or packaging

service. As used in this paragraph, the term "cartons" includes

corrugated boxes used by a person engaged in the manufacture of

snack food products to deliver the manufactured product, whether

or not the boxes are returnable for potential reuse.

* * *

Section 2.2. Article II of the act is amended by adding a

part to read:

PART V-A

MARKETPLACE PROVIDERS AND MARKETPLACE SELLERS

Section 213. Marketplace Providers and Marketplace

Sellers.--(a) A marketplace provider shall:

(1) comply with all of the provisions of this article with

respect to the collection of tax by vendors;

(2) have all the duties, benefits and entitlements of a

person required to collect tax under this article with respect

to sales facilitated for a marketplace seller, as if the

marketplace provider were the vendor with respect to the sale,

including the right to receive the refund authorized by section

247 or section 247.1; and

(3) keep the records and information required of a vendor

under this article.

(b) A marketplace seller is not a person required to collect

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tax for purposes of this section regarding a particular sale at

retail if:

(1) the marketplace seller can show that the sale was

facilitated by a marketplace provider from whom the seller has

received a properly completed certificate of collection on a

form prescribed by the department certifying that the

marketplace provider is registered to collect tax and will

collect tax on all taxable sales by the marketplace seller and

with other information as the department may prescribe; and

(2) any failure of the marketplace provider to collect the

proper amount of tax in regard to the sale was not the result of

the marketplace seller providing the marketplace provider with

incorrect information.

consistent with this article as if a certificate of collection

were a resale or exemption certificate, including with regard to

the completeness of the certificate of collection and the timing

of its acceptance by the marketplace seller, provided that, with

regard to any sales by a marketplace seller that are facilitated

by a marketplace provider who is affiliated with the marketplace

seller, the marketplace seller shall be deemed liable as a

person under a duty to act for the marketplace provider for

purposes of this article.

(d) A marketplace provider is relieved of liability under

this section for failure to collect the correct amount of tax to

the extent that the marketplace provider can show that the error

was due to incorrect information given to the marketplace

provider by the marketplace seller. This subsection shall not

apply if the marketplace seller and marketplace provider are

affiliated.

(e) For purposes of this section, two persons are affiliated

if one person has an ownership interest of more than five per

cent, whether direct or indirect, in the other, or where an

ownership interest of more than five per cent, whether direct or

indirect, is held in each of the persons by another person or by

a group of other persons which are affiliated persons with

respect to each other.

Section 2.3. Section 278 of the act is amended by adding a

subsection to read:

Section 278. Remote Sales Reports.--* * *

not been enacted by December 31, 2018, the Independent Fiscal

Office, in conjunction with the Department of Revenue, shall

conduct a study assessing the legal implications and fiscal

impact of mandating notice requirements for remote sellers. By

April 1, 2019, results of the study, if a study is produced,

shall be provided to the chairman and minority chairman of the

Appropriations Committee of the Senate, the chairman and

minority chairman of the Finance Committee of the Senate, the

chairman and minority chairman of the Appropriations Committee

of the House of Representatives and the chairman and minority

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chairman of the Finance Committee of the House of

Representatives.

Section 3. The act is amended by adding a section to read:

Section 304.2. Pennsylvania ABLE Savings Program Tax

Exemption.--(a) The following shall be exempt from all taxation

by the Commonwealth and its political subdivisions:

(1) Undistributed earnings on an account.

(2) An amount distributed from an account that is not

included in gross income under section 529A(c)(1) of the

Internal Revenue Code .

(b) The following shall apply:

(1) An amount contributed to an account shall be deductible

from the taxable income of the contributor under this article

for the tax year the contribution was made.

(2) The total contributions made by a contributor during a

taxable year to all accounts that are allowable as a deduction

under this section shall not exceed the dollar amount under

section 2503(b) of the Internal Revenue Code .

(3) The deduction shall not result in the contributor's

taxable income being less than zero.

(4) The department and the Treasury Department shall

cooperate in verifying account information relating to

contributions to an account itemized by a contributor and the

contributor's specific contributions.

otherwise exempt from taxation under this section shall be

taxable income to the designated beneficiary under this article.

(d) A change in designated beneficiaries under section

529A(c) of the Internal Revenue Code shall not constitute a

taxable event.

(e) As used in this section, the following words and phrases

shall have the meanings given to them in this subsection unless

the context clearly indicates otherwise:

"Account." An ABLE savings account as defined in section 102

of the Pennsylvania ABLE Act.

"Contributor." An individual who makes a contribution to an

account as defined in section 102 of the Pennsylvania ABLE Act.

"Designated beneficiary." The term shall have the same

meaning as provided in section 102 of the Pennsylvania ABLE Act.

"Internal Revenue Code." The Internal Revenue Code of 1986

(Public Law 99-514, 26 U.S.C. § 1 et seq.), as amended.

"Pennsylvania ABLE Act." The act of April 18, 2016 (P.L.128,

No.17), known as the Pennsylvania ABLE Act.

"Pennsylvania ABLE Savings Program." The program established

under the Pennsylvania ABLE Act.

"Qualified disability expense." The term shall have the same

meaning as provided in section 102 of the Pennsylvania ABLE Act.

"Rollover distribution." The term shall have the same

meaning as provided in section 102 of the Pennsylvania ABLE Act

* * *

Section 4. Section 315.6 of the act is repealed:

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[Section 315.6. Contribution for Korea/Vietnam Memorial

National Education Center.--(a) For tax years 1997, 1998, 1999,

2000, 2001, 2002, 2003 and 2004, the department shall provide a

space on the face of the Pennsylvania individual income tax

return form whereby an individual may voluntarily designate a

contribution of any amount from the individual's tax refund to

the Korea/Vietnam Memorial National Education Center.

(b) The amount designated by an individual on the

Pennsylvania individual income tax return form shall be deducted

from the tax refund to which the individual is entitled and

shall not constitute a charge against the income tax revenues

due the Commonwealth.

designated by individual taxpayers under this section and shall

report the amount to the State Treasurer, who shall prepare the

appropriate documentation and transfer the designated amount

from the General Fund to the Korea/Vietnam Memorial National

Education Center.

(d) The department shall provide adequate information

regarding the center and its purposes in its instructions for

tax years 1997, 1998, 1999, 2000, 2001, 2002, 2003 and 2004

which accompany Pennsylvania individual income tax return forms

to include the address of the Korea/Vietnam Memorial National

Education Center to which contributions may be sent by taxpayers

who wish to make additional contributions to the center.

(e) On or before March 31 of each year, the Korea/Vietnam

Memorial National Education Center shall submit a report

detailing contributions received and activities undertaken

during the prior calendar year to the Military and Veterans'

Affairs Committee of the Senate and the Veterans Affairs and

Emergency Preparedness Committee of the House of

Representatives.

(f) This section shall expire December 31, 2005.]

Section 4.1. Section 315.9(b.1) and (c) of the act are

amended to read:

Section 315.9. Operational Provisions.--

* * *

(b.1) Notwithstanding subsection (b), the checkoffs

established in sections 315.2 [and], 315.3, 315.4, 315.7, 315.8,

315.10 and 315.11 shall not expire.

[(c) Sections 315.3, 315.4 and 315.8 shall expire January 1,

2018.]

Section 4.2. Section 401(3)4(c) of the act is amended and

the subsection is amended by adding a clause to read:

Section 401. Definitions.--The following words, terms, and

phrases, when used in this article, shall have the meaning

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

(3) "Taxable income." * * *

4. * * *

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(A) (I) For taxable years beginning before January 1, 2007,

two million dollars ($2,000,000);

(II) For taxable years beginning after December 31, 2006,

the greater of twelve and one-half per cent of taxable income as

determined under subclause 1 or, if applicable, subclause 2 or

three million dollars ($3,000,000);

(III) For taxable years beginning after December 31, 2008,

the greater of fifteen per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or three

million dollars ($3,000,000);

(IV) For taxable years beginning after December 31, 2009,

the greater of twenty per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or three

million dollars ($3,000,000);

(V) For taxable years beginning after December 31, 2013, the

greater of twenty-five per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or four million

dollars ($4,000,000);

(VI) For taxable years beginning after December 31, 2014,

the greater of thirty per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or five million

dollars ($5,000,000); [or]

(VII) For taxable years beginning after December 31, 2017,

thirty-five per cent of taxable income as determined under

subclause 1 or, if applicable, subclause 2;

(VIII) For taxable years beginning after December 31, 2018,

forty per cent of taxable income as determined under subclause 1

or, if applicable, subclause 2;

(B) The amount of the net loss or losses which may be

carried over to the taxable year or taxable income as determined

under subclause 1 or, if applicable, subclause 2.

(1.1) In no event shall the net loss deduction include more

than five hundred thousand dollars ($500,000), in the aggregate,

of net losses from taxable years 1988 through 1994.

(2) (A) A net loss for a taxable year may only be carried

over pursuant to the following schedule:

Taxable Year Carryover

1981 1 taxable year

1982 2 taxable years

1983-1987 3 taxable years

1988 2 taxable years plus

1 taxable year

starting with the

1995 taxable year

1989 1 taxable year plus

2 taxable years

starting with the

1995 taxable year

1990-1993 3 taxable years

starting with the

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1995 taxable year

1994 1 taxable year

1995-1997 10 taxable years

1998 and thereafter 20 taxable years

(B) The earliest net loss shall be carried over to the

earliest taxable year to which it may be carried under this

schedule. The total net loss deduction allowed in any taxable

year shall not exceed:

(I) Two million dollars ($2,000,000) for taxable years

beginning before January 1, 2007.

(II) The greater of twelve and one-half per cent of the

taxable income as determined under subclause 1 or, if

applicable, subclause 2 or three million dollars ($3,000,000)

for taxable years beginning after December 31, 2006.

(III) The greater of fifteen per cent of the taxable income

as determined under subclause 1 or, if applicable, subclause 2

or three million dollars ($3,000,000) for taxable years

beginning after December 31, 2008.

(IV) The greater of twenty per cent of the taxable income as

determined under subclause 1 or, if applicable, subclause 2 or

three million dollars ($3,000,000) for taxable years beginning

after December 31, 2009.

(V) The greater of twenty-five per cent of taxable income as

determined under subclause 1 or, if applicable, subclause 2 or

four million dollars ($4,000,000) for taxable years beginning

after December 31, 2013.

(VI) The greater of thirty per cent of taxable income as

determined under subclause 1 or, if applicable, subclause 2 or

five million dollars ($5,000,000) for taxable years beginning

after December 31, 2014.

(VII) Thirty-five per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 for taxable

years beginning after December 31, 2017.

(VIII) Forty per cent of taxable income as determined under

subclause 1 or, if applicable, subclause 2 for taxable years

beginning after December 31, 2018.

(c.1) A deduction under part IV.1 shall be allowed from

taxable income as proscribed in a satisfaction commitment letter

executed between the Department of Community and Economic

Development and a taxpayer under section 407.7(c).

* * *

Section 4.3. Article IV of the act is amended by adding a

part to read:

PART IV-A

QUALIFIED MANUFACTURING INNOVATION

AND REINVESTMENT DEDUCTION

Section 407.6. Definitions.--(a) For the purposes of this

part only, the following words, terms and phrases shall have the

meaning ascribed to them in this subsection, except where the

context clearly indicates a different meaning:

(1) "Annual taxable payroll." The total amount of wages

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paid in this Commonwealth by a taxpayer for the base year or

year one, as applicable, from which personal income tax under

Article III is withheld.

(2) "Base year." The four calendar quarters preceding the

start date.

(3) "Department." The Department of Community and Economic

Development of the Commonwealth.

(4) "Manufacture." The mechanical, physical, biological or

chemical transformation of materials, substances or components

into new products that are creations of new items of tangible

personal property for sale.

(5) "Qualified manufacturing innovation and reinvestment

deduction." An allowable deduction as determined, calculated

and executed in a commitment letter between the department and

the taxpayer.

(6) "Qualified tax liability." A taxpayer's tax liability

under this article.

(7) "Start date." The first day of the calendar quarter in

which a taxpayer advises the department of the taxpayer's intent

to initiate an eligible project unless the applicant requests

and the department agrees to a later start date.

(8) "Taxpayer." An employer subject to the tax under this

article.

(9) "Year one." The four calendar quarters immediately

following the start date.

Section 407.7. Manufacturing Innovation and Reinvestment

Deduction.--(a) In order to be eligible to receive a

manufacturing innovation and reinvestment deduction, a taxpayer

must demonstrate to the department a capital investment in

excess of one hundred million dollars ($100,000,000) for the

creation of new or refurbished manufacturing capacity within

three years of a designated start date.

(b) (1) A taxpayer must advise the department in advance of

the start date of any project for which the taxpayer may seek a

qualified manufacturing innovation and reinvestment deduction. A

taxpayer must attest the taxpayer's intent to meet the

eligibility criteria and provide relevant information pertinent

to the project's size and scope in a manner as determined by the

department.

(2) Within five years of a project's start date, a taxpayer

must complete to the department's satisfaction an application on

a form and in a manner as determined by the department to attest

that the project has been completed and the eligibility criteria

has been satisfied.

Department of Revenue must make a finding that the applicant has

filed all required State tax reports and returns for all

applicable tax years and paid any balance of State tax due as

determined at settlement, assessment or determination and the

department, then in conjunction with the Department of Revenue,

shall make an eligibility or satisfaction determination within

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ninety days of submission. If the department makes a

satisfaction determination, the department and the taxpayer

shall execute a satisfaction commitment letter containing the

following:

(1) The number of new jobs created and their corresponding

description.

(2) The number of new jobs created during construction of

the project.

(3) The amount of private capital investment in the creation

of new jobs.

(4) The increase in the annual taxable payroll attributable

to new manufacturing jobs.

(5) A determination of the maximum allowable deduction

against a taxpayer's qualified tax liability under this article.

(6) Any other information as the department deems

appropriate.

(d) (1) Upon determining a taxpayer's satisfaction of the

eligibility criteria, the department shall calculate the maximum

allowable deduction that a taxpayer may claim against the

taxpayer's taxable income under this article. The deduction

shall be equal to five per cent of the private capital

investment utilized in the creation of new or refurbished

manufacturing capacity per tax year for a period of five years.

(2) A taxpayer may utilize the amount of the deduction in

each year of the succeeding five tax years immediately following

the department's satisfaction determination and the execution of

a satisfaction commitment letter.

(3) A taxpayer cannot use the deduction to reduce its tax

liability by more than fifty per cent of the tax liability under

this article for the taxable year. The deduction is

nontransferable and any unused portion in a tax year shall

expire at the end of the corresponding tax year.

Section 4.4. Section 1101(a) introductory paragraph, (b)

heading and introductory paragraph, (c), (c.1), (e) and (f) of

the act, amended July 13, 2016 (P.L.526, No.84), are amended and

the section is amended by adding subsections to read:

Section 1101. Imposition of Tax.--(a) General Rule.--Every

pipeline company, conduit company, steamboat company, canal

company, slack water navigation company, transportation company,

and every other company, association, joint-stock association,

or limited partnership, now or hereafter incorporated or

organized by or under any law of this Commonwealth, or now or

hereafter organized or incorporated by any other state or by the

United States or any foreign government, and doing business in

this Commonwealth, and every copartnership, person or persons

owing, operating or leasing to or from another corporation,

company, association, joint-stock association, limited

partnership, copartnership, person or persons, any pipeline,

conduit, steamboat, canal, slack water navigation, or other

device for the transportation of freight, passengers, baggage,

or oil, except motor vehicles and railroads, and every limited

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partnership, association, joint-stock association, corporation

or company engaged in, or hereinafter engaged in, the

transportation of freight or oil within this State, and every

telephone company, telegraph company or provider of mobile

telecommunications services now or hereafter incorporated or

organized by or under any law of this Commonwealth, or now or

hereafter organized or incorporated by any other state or by the

United States or any foreign government and doing business in

this Commonwealth, and every limited partnership, association,

joint-stock association, copartnership, person or persons,

engaged in telephone or telegraph business or providing mobile

telecommunications services in this Commonwealth, shall pay to

the State Treasurer, through the Department of Revenue, a tax

[of forty-five mills with a surtax equal to five mills] at the

rate set forth in subsection (j.1) upon each dollar of the gross

receipts of the corporation, company or association, limited

partnership, joint-stock association, copartnership, person or

persons received from:

* * *

(b) Electric Light, Waterpower and Hydro-electric

[Utilities] Companies.--Every electric light company, waterpower

company and hydro-electric company now or hereafter incorporated

or organized by or under any law of this Commonwealth, or now or

hereafter organized or incorporated by any other state or by the

United States or any foreign government and doing business in

this Commonwealth, and every limited partnership, association,

joint-stock association, copartnership, person or persons,

engaged in electric light and power business, waterpower

business and hydro-electric business in this Commonwealth, shall

pay to the State Treasurer, through the Department of Revenue, a

tax [of forty-four mills] at the rate set forth in subsection

(j.1) upon each dollar of the gross receipts of the corporation,

company or association, limited partnership, joint-stock

association, copartnership, person or persons, received from:

* * *

(b.2) Natural Gas Supply and Natural Gas Distribution

Companies.--

(1) Every natural gas supply company and natural gas

distribution company, incorporated or organized under the laws

of the United States, this Commonwealth, a state or a foreign

government, on or after the effective date of this subsection

and doing business in this Commonwealth, and every limited

partnership, association, joint-stock association,

copartnership, or person, engaged in natural gas supply or

natural gas distribution business in this Commonwealth, shall

pay to the State Treasurer, through the Department of Revenue, a

tax at the rate set forth in subsection (j.1) upon each dollar

of the gross receipts of the corporation, company or

association, limited partnership, joint-stock association,

copartnership or person, received from the sales and delivery of

natural gas to retail gas customers within this Commonwealth,

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except gross receipts derived from:

(i) sales of liquefied petroleum gas;

(ii) (Reserved);

(iii) (Reserved);

(iv) sales to an electric generation company that are

consumed for the purpose of generating electricity; and

(v) gross receipts derived from the sales for resale to

persons, partnerships, associations or corporations subject to

the tax imposed by this act upon gross receipts derived from the

resale.

(2) For purposes of this subsection, sales of natural gas to

retail gas customers shall include all receipts from natural gas

supply services and natural gas distribution services.

(3) For the purposes of this subsection, the terms "natural

gas distribution services," "natural gas supply services" and

"retail gas customers" shall have the same meanings as the terms

have in 66 Pa.C.S. § 2202 (relating to definitions).

subsections (a) [and (b)], (b) and (b.2) shall be paid within

the time prescribed by law, and for the purpose of ascertaining

the amount of the same, it shall be the duty of the treasurer or

other proper officer of the said company, copartnership, limited

partnership, association, joint-stock association or

corporation, or person or persons, to transmit to the Department

of Revenue on or before March 15 of each year an annual report,

and under oath or affirmation, of the amount of gross receipts

of the said companies, copartnerships, corporations,

associations, joint-stock associations, limited partnerships,

person or persons, derived from all sources, and of gross

receipts from business done wholly within this State and in the

case of electric energy producers that transmit energy to other

states referred to in clause (2) of subsection (b), a

compilation of the relevant information regarding operating and

maintenance expenses and depreciation, during the period of

twelve months immediately preceding January 1 of each year.

(c.1) Safe Harbor Base year.--For purposes of the estimated

tax requirements under sections 3003.2 and 3003.3, the "safe

harbor base year" tax amount for providers of mobile

telecommunications services and for a natural gas supply company

and a natural gas distribution company subject to the provisions

of subsection (b.2) shall be the amount that would have been

required to be paid by the taxpayer if the taxpayer had been

subject to this article.

(e) Time to File Reports.--The time for filing annual

reports may be extended, estimated assessments may be made by

the Department of Revenue if reports are not filed, and the

penalties for failing to file reports and pay the taxes imposed

under subsection (a) [and (b)], (b) and (b.2) shall be as

prescribed by the laws defining the powers and duties of the

Department of Revenue. In any case where the works of any

corporation, company, copartnership, association, joint-stock

2017/90MSP/HB0542A03071 - 13 -

association, limited partnership, person or persons are operated

by another corporation, company, copartnership, association,

joint-stock association, limited partnership, person or persons,

the taxes imposed under subsections (a) [and (b)], (b) and (b.2)

shall be apportioned between the corporations, companies,

copartnerships, associations, joint-stock associations, limited

partnerships, person or persons in accordance with the terms of

their respective leases or agreements, but for the payment of

the said taxes the Commonwealth shall first look to the

corporation, company, copartnership, association, joint-stock

association, limited partnership, person or persons operating

the works, and upon payment by the said company, corporation,

copartnership, association, joint-stock association, limited

partnership, person or persons of a tax upon the receipts, as

herein provided, derived from the operation thereof, no other

corporation, company, copartnership, association, joint-stock

association, limited partnership, person or persons shall be

held liable for any tax imposed under subsections (a) [and (b)],

(b) and (b.2) upon the proportion of said receipts received by

said corporation, company, copartnership, association, joint-

stock association, limited partnership, person or persons for

the use of said works.

(f) Application to Municipalities.--This article shall be

construed to apply to municipalities, and to impose a tax upon

the gross receipts derived from any municipality owned or

operated public utility or from any public utility service,

natural gas distribution service or natural gas supply service

furnished by any municipality, except that, except as provided

under subsection (f.1), gross receipts shall be exempt from the

tax, to the extent that such gross receipts are derived from

business done inside the limits of the municipality, owning or

operating the public utility or furnishing the public utility

service.

(f.1) Certain Gross Receipts Taxed.--The exemption from tax

under subsection (f) shall not apply to gross receipts received

from the sales and delivery of natural gas to retail gas

customers under subsection (b.2).

* * *

(j.1) The tax imposed under this section shall be imposed at

the following rates:

(1) Sixty mills for receipts subject to tax under subsection

(a).

(2) Fifty mills for receipts subject to tax under subsection

(b).

(3) Fifty-seven mills for receipts subject to tax under

subsection (b.2).

(j.2) Schedule for Certain Payments.--

(1) For calendar year 2017, the tax applicable to the

payment of the tax under subsection (b.2) shall be due on March

15, 2018.

(2) For calendar year 2018, the following schedule applies

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to the payment of the tax under subsection (b.2):

(i) Fifty per cent of the estimated tax shall be due on

March 15, 2018.

(ii) Fifty per cent of the estimated tax shall be due on

June 15, 2018.

(3) For calendar years after 2018, the payment of the

estimated tax under subsection (b.2) shall be due in accordance

with section 3003.2.

* * *

Section 5. Article XI of the act is amended by adding parts

to read:

PART V

NATURAL GAS OPTIMIZATION FUND

Section 1111. Natural Gas Optimization Fund.

The Natural Gas Optimization Fund is established in the State

Treasury.

Section 1112. Transfer of funds.

(a) Natural Gas Optimization Fund.--Money from the tax

imposed under section 1101(b.2) shall be deposited into the

General Fund. Twenty million dollars of the money deposited into

the General Fund under this section shall be transferred

annually to the Natural Gas Optimization Fund established in

section 1111.

(b) Low-Income Home Energy Assistance Program.--Twenty

million dollars of the money deposited into the General Fund in

accordance with this section shall be transferred annually to

the Department of Human Services of the Commonwealth to augment

activities related to the Low-Income Home Energy Assistance

Program as authorized under sections 201 and 206 of Article II

of the act of June 13, 1967 (P.L.31, No.21), known as the Human

Services Code.

PART VI

NATURAL GAS OPTIMIZATION PROGRAM

Section 1113. Definitions.

The following words and phrases when used in this part shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Commission." The Pennsylvania Public Utility Commission.

"Eligible applicant." A natural gas distribution company

subject to the tax imposed under section 1101(b.2).

"Fund." The Natural Gas Optimization Fund established under

section 1111.

"Program." The Natural Gas Optimization Program established

under section 1114.

Section 1114. Natural Gas Optimization Program.

(a) Establishment and purpose.--The Natural Gas Optimization

Program is established and the program's purpose shall be to

fund projects as permitted under this part.

(b) Funding.--Grants made under this section shall be made

from the fund.

2017/90MSP/HB0542A03071 - 15 -

(1) Except as provided in paragraph (2), for fiscal

years beginning 2017-2018, and each fiscal year thereafter,

the total amount of grants approved under this section may

not exceed $20,000,000.

(2) If the total amount of grants approved in a fiscal

year is less than $20,000,000, the unused portion may be

carried over and approved in future fiscal years.

(d) Powers of commission.--The commission shall have the

authority to administer the program.

(e) Guidelines.--Funds under this part shall be used in

accordance with guidelines adopted by the commission.

(f) Eligible projects.--Money deposited into the fund under

section 1112(a) may be utilized by the commission for

competitive grants to eligible applicants for eligible projects

as provided in this part. In order to be eligible to receive a

grant, an eligible applicant must provide or demonstrate to the

commission one or more of the following:

(1) A plan to expand access to natural gas

infrastructure.

(2) A plan to expand access to natural gas in

residential areas.

(3) A plan to accelerate the rate of infrastructure

placement and replacement necessary to advance the purposes

of this part.

(4) A plan to promote the use of natural gas in

residential areas.

(5) A plan to provide rebates or buy down expenditures

in order to reduce upfront costs associated with connecting

to a natural gas line, in-house piping and natural gas

equipment owned by new or existing customers, including high

efficiency natural gas furnaces.

(g) Application.--An eligible applicant shall submit an

application, including supporting information as required by the

commission.

(h) Project review.--The commission shall review and prepare

an assessment of each application and determine which projects

will best utilize and promote the use of domestically produced

natural gas in this Commonwealth. The commission's review and

assessment shall consider the following:

(1) The economic impact of the project included in the

application.

(2) The number of new end users that will gain access to

natural gas as a result of the project.

(3) The extent to which the project extends access to

natural gas to serve an unserved or underserved area.

(4) The extent to which the project will make the use of

natural gas more efficient and affordable to customers.

(5) The projected cost of the project.

(6) The source and amount of any funds to be contributed

by the eligible applicant.

(7) Any other relevant factors as determined by the

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commission.

(i) Notice of application deadlines.--The commission shall

establish and publish application deadlines in the Pennsylvania

Bulletin and on its publicly accessible Internet website.

(j) Approval schedule.--The commission shall develop a

schedule for the approval of applications under this section.

(k) Reapplication.--If an application is not approved under

this section, the eligible applicant may revise and resubmit the

application and plan for approval.

(l) Administrative costs.--No more than two percent of the

money deposited into the fund annually may be used by the

commission for administrative costs.

(m) Program report.--The commission shall provide a report

to the chairperson and minority chairperson of the Consumer

Protection and Professional Licensure Committee of the Senate

and the chairperson and minority chairperson of the Consumer

Affairs Committee of the House of Representatives by October 1,

2018, and each October 1 thereafter. The report shall be

maintained on the commission's publicly accessible Internet

website and shall include:

(1) A list of all grants approved during the previous

fiscal year, including the amount of the grant and a

description of each approved project.

(2) The estimated natural gas optimization benefits to

date for all projects receiving funding during the fiscal

year and the methods used to determine estimated benefits.

Section 6. The definition of "veterans' organization" in

section 1101-C of the act, added July 13, 2016 (P.L.526, No.84),

is amended to read:

Section 1101-C. Definitions.--The following words when used

in this article shall have the meanings ascribed to them in this

section:

* * *

"Veterans' service organization." A not-for-profit

organization that [is recognized by the Internal Revenue Service

as a tax exempt organization described under section 501(c)(19)

of the Internal Revenue Code of 1986 (Public Law 99-514, 26

U.S.C. § 501(c)(19)). For the purposes of this article, the term

shall only include a not-for-profit organization for the period

in which the organization has a valid tax exemption under

section 501(c)(19) of the Internal Revenue Code of 1986, as

determined by the Internal Revenue Service.] has been chartered

by the Congress of the United States to service veterans or is a

member of the Pennsylvania State Veterans' Commission under 51

Pa.C.S. Ch. 17 (relating to State Veterans' Commission and

Deputy Adjutant General for Veterans' Affairs).

* * *

Section 7. Section 1102-C.2 of the act, amended July 13,

2016 (P.L.526, No.84), is amended to read:

Section 1102-C.2. Exempt Parties.--The United States, the

Commonwealth or any of their instrumentalities, agencies or

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political subdivisions, or veterans' service organizations shall

be exempt from payment of the tax imposed by this article. The

exemption under this section shall not, however, relieve any

other party to a transaction from liability for the tax.

Section 7.1. Section 1711-D of the act is amended by adding

definitions to read:

Section 1711-D. Definitions.

The following words and phrases when used in this subarticle

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Deteriorated property." Any blighted, impoverished area

containing industrial, commercial or other real property that is

abandoned, unsafe, vacant, undervalued, underutilized,

overgrown, defective, condemned, demolished or which contains

economically undesirable land use.

* * *

"Film production tax credit district." A district authorized

under section 1716.2-D.

* * *

Section 7.2. Section 1712-D of the act is amended by adding

a subsection to read:

Section 1712-D. Credit for qualified film production expenses.

* * *

(b.1) Review and approval of applications for film

production tax credit district activity.--For applications

involving film production expenses incurred within a designated

film production tax credit district authorized under section

1716.2-D, the department shall accept applications at any time.

Applications shall be reviewed by the department utilizing the

criteria required under subsection (b). Upon determining the

taxpayer has incurred or will incur qualified film production

expenses, the department shall approve the taxpayer for a tax

credit utilizing the tax credits authorized under 1716.2-D, not

to exceed the amount authorized for the fiscal year.

* * *

Section 7.3. The act is amended by adding a section to read:

Section 1716.2-D. Film production tax credit districts.

(a) Establishment.--The department may designate not more

than two film production tax credit districts for the purpose of

enhancing, promoting and expanding film production opportunities

and establishing a film production industry within this

Commonwealth.

(b) Criteria.--A film production tax credit district shall:

(1) Be at least 55 acres in size.

(2) Be located on deteriorated property.

(3) Be comprised of a parcel that is or will be occupied

by two or more qualified businesses that:

(i) in the aggregate, make a capital investment of

at least $400,000,000 within the district within five

years after the effective date of the designation of the

district; and

2017/90MSP/HB0542A03071 - 18 -

(ii) are dedicated to film production activity,

postproduction activity or other activities that directly

or indirectly support film production activity occurring

within the district or within this Commonwealth.

(4) Contain at least one qualified production facility

and six soundstages.

(1) An application to designate a film production tax

credit district may be made by the county or municipality in

which all or part of the district will be located. The

department shall review the application and, if approved,

issue a designation for the film production tax credit

district. The application period shall be set by the

department.

(2) The application shall contain the following

information:

(i) The geographic area of the proposed film

production tax credit district.

(ii) A detailed map of the proposed district,

including geographic boundaries, total area and present

use and conditions of the land and structures.

(iii) A description of the current social, economic

and demographic characteristics of the proposed district

and anticipated improvements in education, health, human

services, public safety and employment that will result

from designation of the district.

(iv) A description of anticipated film production

activity and ancillary activities in the proposed

district.

(v) Evidence of potential private and public

investment in the proposed district.

(vi) The role of the proposed district in regional

economic and community development.

(d) Designation period.--A district designated under

subsection (c) shall expire 15 years after the effective date of

the designation.

(e) Construction.--The tax credits authorized under this

section are in addition to the tax credits under section 1716-

D(a) and are available exclusively for activities occurring

within the designated district.

(f) Annual tax credits.--The department may authorize a tax

credit for a film production tax credit district in fiscal year

2019-2020 and in each fiscal year thereafter.

Section 8. Article XVII-D of the act is amended by adding a

subarticle to read:

SUBARTICLE E

ENTERTAINMENT ECONOMIC ENHANCEMENT PROGRAM

Section 1771-D. Scope of subarticle.

This subarticle relates to the Entertainment Economic

Enhancement Program.

Section 1772-D. Definitions.

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The following words and phrases when used in this subarticle

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Class 1 venue." A stadium, arena, other structure or

property owned by a municipality or an authority formed under

Article XXV-A of the act of July 28, 1953 (P.L.723, No.230),

known as the Second Class County Code, at which concerts are

performed and which is all of the following:

(1) Located in a city of the first class or a county of

the second class.

(2) Constructed in a manner in which the venue has a

seating capacity of at least 14,000.

"Class 2 venue." A stadium, arena or other structure at

which concerts are performed and which is all of the following:

(1) Located outside the geographic boundaries of a city

of the first class or a county of the second class.

(2) Constructed in a manner in which the venue has a

seating capacity of at least 6,000.

"Class 3 venue." A stadium, arena or other structure which

is any of the following:

(1) Located within a neighborhood improvement zone, as

defined in section 1902-B.

(2) Owned by or affiliated with a State-related

institution as defined in 62 Pa.C.S. § 103 (relating to

definitions).

(3) Owned by the Commonwealth and affiliated with the

State System of Higher Education.

"Concert." A live performance of music in the presence of

individuals who view the performance.

"Concert tour equipment." Includes stage, set, scenery,

design elements, automation, rigging, trusses, spotlights,

lighting, sound equipment, video equipment, special effects,

cases, communication devices, power distribution equipment,

backline and other miscellaneous equipment or supplies used

during a concert or rehearsal.

"Department." The Department of Community and Economic

Development of the Commonwealth.

"Maintained a place of business" or "maintaining a place of

business." All of the following:

(1) Having, maintaining or using within this

Commonwealth an office, warehouse or other place of business.

(2) Regularly engaging in an activity as a business

within this Commonwealth in connection with the lease, sale

or delivery of tangible personal property or the performance

of a service for residents of this Commonwealth.

"Minimum rehearsal and tour requirements." During a tour,

all of the following must occur:

(1) The purchase or rental of concert tour equipment

delivered to a location in this Commonwealth, in an amount of

at least $3,000,000, from companies located and maintaining a

place of business in this Commonwealth for use on the tour.

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(2) A rehearsal at a qualified rehearsal facility for a

minimum of 10 days.

(3) At least one concert performed at a class 1 venue.

(4) At least one concert performed at a venue which is

located in a municipality other than the municipality in

which the class 1 venue under paragraph (3) is located.

"Pass-through entity." Any of the following:

(1) A partnership as defined in section 301(n.0).

(2) A Pennsylvania S corporation as defined in section

301(n.1).

(3) An unincorporated entity subject to section 307.21.

"Pennsylvania rehearsal and tour expenses." The sum of

Pennsylvania rehearsal expenses and tour expenses. The term

includes Pennsylvania rehearsal expenses and tour expenses paid

prior to or during a rehearsal or tour.

"Pennsylvania rehearsal expense." A rehearsal expense which

is incurred or will be incurred within this Commonwealth. The

term includes:

(1) A payment which is made or will be made by a

recipient to a person upon which withholding will be made on

the payment by the recipient as required under Part VII of

Article III or a payment which is made or will be made to a

person who is required to make estimated payments under Part

VIII of Article III.

(2) A payment which is made or will be made to a

personal service corporation representing individual talent

if the tax imposed by Article IV will be paid or accrued on

the net income of the corporation for the taxable year.

(3) A payment which is made or will be made to a pass-

through entity representing individual talent for which

withholding will be made by the pass-through entity on the

payment as required under Part VII or VII-A of Article III.

"Qualified rehearsal and tour expense." All Pennsylvania

rehearsal and tour expenses if Pennsylvania rehearsal expenses

comprise or will comprise at least 60% of the total rehearsal

expenses. The term shall not include more than $2,000,000 in the

aggregate of compensation paid or to be paid to individuals or

payment made or to be made to entities representing an

individual for services provided in the tour.

"Qualified rehearsal facility." A rehearsal facility which

meets at least six of the following criteria:

(1) Has had a minimum of $8,000,000 invested in the

rehearsal facility in land or structure, or a combination of

land and structure.

(2) Has a permanent grid system with a capacity of

1,000,000 pounds.

(3) Has a built-in power supply system available at a

minimum of 3,200 amps without the need for supplemental

generators.

(4) Has a height from floor to permanent grid of a

minimum of 80 feet.

2017/90MSP/HB0542A03071 - 21 -

(5) Has at least two sliding or roll-up access doors

with a minimum height of 14 feet.

(6) Has a perimeter security system which includes 24-

hour, seven-days-a-week security cameras and the use of

access control identification badges.

(7) Has a service area with production offices, catering

and dressing rooms with a minimum of 5,000 square feet.

(8) Is located within one mile of a minimum of two

companies which provide concert tour equipment for use on a

tour.

"Qualified tax liability." The liability for taxes imposed

under Article III, IV, VI, VII or IX. The term does not include

tax withheld by an employer from an employee under Article III.

"Recipient." A taxpayer that has been awarded a tax credit

under section 1773-D(e).

"Rehearsal." An event or series of events which occur in

preparation for a tour prior to the start of the tour or during

a tour when additional preparation may be needed.

"Rehearsal expense." All of the following when incurred or

will be incurred during a rehearsal:

(1) Compensation paid or to be paid to an individual

employed in the rehearsal of the performance.

(2) Payment to a personal service corporation

representing individual talent.

(3) Payment to a pass-through entity representing

individual talent.

(4) The costs of construction, operations, editing,

photography, staging, lighting, wardrobe and accessories.

(5) The cost of leasing vehicles.

(6) The cost of transportation of people or concert tour

equipment to or from a train station, bus depot, airport or

other transportation facility or directly from a residence or

business entity.

(7) The cost of insurance coverage.

(8) The cost of food and lodging.

(9) The cost of purchase or rental of concert tour

equipment.

(10) The cost of renting a rehearsal facility.

(11) The cost of emergency or medical support services

required to conduct a rehearsal.

"Rehearsal facility." As follows:

(1) A facility primarily used for rehearsals which is

all of the following:

(i) Located within this Commonwealth.

(ii) Has a minimum of 25,000 square feet of column-

free, unobstructed floor space.

(2) The term does not include a facility at which

concerts are capable of being held.

"Start date." The date the first set of concert tour

equipment arrives or is expected to arrive at a qualified

rehearsal facility.

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"Tax credit." The concert rehearsal and tour tax credit as

provided under this subarticle.

"Taxpayer." A concert tour promotion company, concert tour

management company or other concert management company subject

to tax under Article III, IV or VI. The term does not include

contractors or subcontractors of a concert tour promotion

company, concert tour management company or other concert

management company.

"Tour." A series of concerts performed or to be performed by

a musical performer in more than one location. The term includes

at least one rehearsal.

"Tour expense." As follows:

(1) Costs incurred or which will be incurred during a

tour for venues located in this Commonwealth. The term

includes all of the following:

(i) A payment which is made or will be made by a

recipient to a person upon which withholding will be made

on the payment by the recipient as required under Part

VII of Article III or a payment which is made or will be

made to a person who is required to make estimated

payments under Part VIII of Article III.

(ii) The cost of transportation of people or concert

touring equipment which is incurred or will be incurred

while transporting to or from a train station, bus depot,

airport or other transportation facility or while

transporting directly from a residence or business entity

located in this Commonwealth, or which is incurred or

will be incurred for transportation provided by a company

which is subject to the tax imposed under Article III or

IV.

(iii) The cost of leasing vehicles upon which the

tax imposed by Article II will be paid or accrued.

(iv) The cost of insurance coverage which is

purchased or will be purchased through an insurance agent

based in this Commonwealth.

(v) The cost of purchasing or renting facilities and

equipment from or through a resident of this Commonwealth

or an entity subject to taxation in this Commonwealth.

(vi) The cost of food and lodging which is incurred

or will be incurred from a facility located in this

Commonwealth.

(vii) Expenses which are incurred or will be

incurred in marketing or advertising a tour at venues

located within this Commonwealth.

(viii) The cost of merchandise which is purchased or

will be purchased from a company located within this

Commonwealth and used on the tour.

(ix) A payment which is made or will be made to a

personal service corporation representing individual

talent if the tax imposed by Article IV will be paid or

accrued on the net income of the corporation for the

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taxable year.

(x) A payment which is made or will be made to a

pass-through entity representing individual talent for

which withholding will be made by the pass-through entity

on the payment as required under Part VII or VII-A of

Article III.

(2) The term does not include development cost,

including the writing of music or lyrics.

"Venue." A class 1, class 2 or class 3 venue.

Section 1773-D. Procedure.

(a) Application.--A taxpayer may apply to the department for

a tax credit under this section. The application shall be on the

form required by the department.

(b) Review and approval.--

(1) The department shall establish application periods

not to exceed 30 days. All applications received during an

application period shall be reviewed and evaluated by the

department based on the following criteria:

(i) The anticipated number of rehearsal days in a

qualified rehearsal facility.

(ii) The anticipated number of concerts at class 1

venues.

(iii) The anticipated number of concerts at class 2

venues.

(iv) The anticipated number of concerts at class 3

venues.

(v) The anticipated amount of Pennsylvania rehearsal

expenses in comparison to the anticipated aggregate

amount of rehearsal expenses.

(vi) The anticipated amount of the tour expenses.

(vii) The anticipated amount of the concert tour

equipment expenses which are or will be purchased or

rented from a company located and maintaining a place of

business in this Commonwealth and which will be used on

the tour.

(viii) The anticipated number of days spent in

Commonwealth hotels.

(ix) Other criteria that the department deems

appropriate to ensure maximum employment opportunities

and entertainment benefits for the residents of this

Commonwealth.

(2) Except as provided in subsection (c) and upon

determining that the taxpayer has paid the applicable

application fee not to exceed $300, has met or will meet the

minimum rehearsal and tour requirements and has incurred or

will incur qualified rehearsal and tour expenses, the

department may approve the taxpayer for a tax credit.

Applications not approved may be reviewed and considered in

subsequent application periods. The department may approve a

taxpayer for a tax credit based on its evaluation of the

criteria under this subsection.

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rehearsals held or to be held, and qualified rehearsal and tour

expenses incurred or to be incurred, after January 1, 2017, in

determining whether a taxpayer has met or will meet the minimum

rehearsal and tour requirements.

(d) Contract.--If the department approves the taxpayer 's

application under subsection (b), the department and the

taxpayer shall enter into a contract containing the following:

(1) An itemized list of rehearsal expenses incurred or

to be incurred for the tour.

(2) An itemized list of Pennsylvania rehearsal expenses

incurred or to be incurred for the tour.

(3) With respect to a contract entered into prior to

completion of a tour, a commitment by the taxpayer to incur

the Pennsylvania rehearsal expenses as itemized.

(4) An itemized list of the qualified rehearsal and tour

expenses incurred or to be incurred for the tour.

(5) With respect to a contract entered into prior to

completion of a tour, a commitment by the taxpayer to incur

the qualified rehearsal and tour expenses as itemized.

(6) With respect to a contract entered into prior to

completion of a tour, a commitment by the taxpayer to hold at

least one concert at a class 1 venue.

(7) With respect to a contract entered into prior to

completion of a tour, a commitment by the taxpayer to hold at

least one concert at a venue located in a municipality other

than the municipality in which the class 1 venue under

paragraph (6) is located.

(8) The start date or the expected start date.

(9) Any other information the department deems

appropriate.

(e) Certificate.--Upon execution of the contract required by

subsection (d), the department shall award the taxpayer a

concert rehearsal and tour tax credit and issue the recipient a

tax credit certificate.

Section 17 7 4-D. Claim.

Beginning July 1, 2017, a recipient may claim a concert

rehearsal and tour tax credit against the qualified tax

liability of the recipient.

Section 17 7 5-D. Carryover, carryback and assignment of tax

credit.

(a) General rule.--If a recipient cannot use the entire

amount of a tax credit for the taxable year in which the tax

credit is first approved, the excess may be carried over to

succeeding taxable years and used as a tax credit against the

qualified tax liability of the recipient for those taxable

years. Each time the tax credit is carried over to a succeeding

taxable year, the tax credit shall be reduced by the amount that

was used as a credit during the immediately preceding taxable

year. The tax credit may be carried over and applied to

succeeding taxable years for no more than three taxable years

2017/90MSP/HB0542A03071 - 25 -

following the first taxable year for which the recipient was

entitled to claim the tax credit.

(b) Application.--A tax credit approved by the department in

a taxable year first shall be applied against the recipient's

qualified tax liability for the current taxable year as of the

date on which the tax credit was approved before the tax credit

can be applied against tax liability under subsection (a).

entitled to carry back or obtain a refund of any portion of an

unused tax credit granted to the recipient under this

subarticle.

(d) Sale or assignment.--The following shall apply:

(1) A recipient, upon application to and approval by the

department, may sell or assign, in whole or in part, a tax

credit granted to the recipient under this subarticle.

(2) The department and the Department of Revenue shall

jointly promulgate regulations for the approval of

applications under this subsection.

(3) Before an application is approved, the Department of

Revenue must make a finding that the recipient has filed all

required State tax reports and returns for all applicable

taxable years and paid any balance of State tax due as

determined at settlement, assessment or determination by the

Department of Revenue.

(4) Notwithstanding any other provision of law, the

Department of Revenue shall settle, assess or determine the

tax of a taxpayer under this subsection within 60 days of the

filing of all required final returns or reports in accordance

with section 806.1(a)(5) of the act of April 9, 1929

(P.L.343, No.176), known as The Fiscal Code.

(e) Purchasers and assignees.--The following apply:

(1) The purchaser or assignee of all or a portion of a

tax credit under subsection (d) shall immediately claim the

tax credit in the taxable year in which the purchase or

assignment is made.

(2) The amount of the tax credit that a purchaser or

assignee may use against one qualified tax liability may not

exceed 50% of the qualified tax liability for the taxable

year.

(3) The purchaser or assignee may not carry forward,

carry back or obtain a refund of or sell or assign the tax

credit.

(4) The purchaser or assignee shall notify the

Department of Revenue of the seller or assignor of the tax

credit in compliance with procedures specified by the

Department of Revenue.

Section 17 7 6-D. Determination of Pennsylvania rehearsal and

tour expenses.

When prescribing standards for determining which rehearsal or

tour expenses are considered Pennsylvania rehearsal and tour

expenses for purposes of computing the tax credit provided by

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