H0017B1851A03921 PWK:JMT 11/18/19 #90 A03921
AMENDMENTS TO HOUSE BILL NO. 17
Sponsor: SENATOR SCARNATI
Printer's No. 1851
Amend Bill, page 1, line 12, by inserting after "collection."
in sales and use tax, further providing for exclusions from
tax;
Amend Bill, page 1, line 12, by inserting after "PROVISIONS,"
further providing for administrative bank attachment for
accounts of obligors to the Commonwealth and
Amend Bill, page 1, lines 12 and 13, by striking out "STATUTE
OF LIMITATION FOR"
Amend Bill, page 1, lines 13 and 14, by striking out "PERIOD
OF LIMITATIONS ON"
Amend Bill, page 2, lines 18 through 20, by striking out all
of said lines and inserting
Section 1. Section 204 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is amended by
adding a paragraph to read:
Section 204. Exclusions from Tax.--The tax imposed by
section 202 shall not be imposed upon any of the following:
* * *
(73) The sale at retail or use by a financial institution of
canned computer software directly utilized in conducting the
business of banking. For the purposes of this clause, the
following words and phrases shall have the following meanings:
"Financial institution" means an institution doing business
in this Commonwealth subject to the tax imposed by Article VII
or Article XV.
"Directly utilized in conducting the business of banking"
includes the purchase of canned computer software by a financial
institution to be used in transactions with customers and
service providers. The term does not include the purchase of
canned computer software by entities, other than a financial
institution, such as holding companies and subsidiaries of a
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financial institution.
Section 2. Section 3003.22 of the act is amended to read:
Section 3003.22. Administrative Bank Attachment for Accounts
of Obligors to the Commonwealth.--(a) The following shall
apply:
(1) Except as prohibited by Federal or State law, a
financial institution doing business in this Commonwealth shall,
upon request, and not more often than quarterly, undertake
reasonable efforts to provide a report containing identifying
information and asset information as the department may specify
for any obligor as identified by the department by name and
Social Security number, Federal employer identification number
or other taxpayer identification number. The report and
information shall be in the form and format as prescribed by the
department pursuant to subsections (e) and (p).
(2) The department shall provide information identifying the
obligors for which financial institutions are required to
provide reports under paragraph (1) in a standard and generally
utilized electronic machine readable format. If requested by a
financial institution, the department shall coordinate the
requests and the submission of reports under this section with
similar procedures utilized for data exchanges under 23 Pa.C.S.
§ 4304.1 (relating to cooperation of government and
nongovernment agencies).
(3) Reports providing identifying and asset information
under this subsection shall be provided to the department within
thirty days of receipt of requests for reports from the
department, unless the department for good cause extends the
deadline for providing reports.
(b) The department and financial institutions are authorized
to enter into agreements for the purpose of carrying out the
provisions of this section, which may modify the procedures
contained in the department's guidelines as otherwise provided
by subsection (p).
(c) The following shall apply:
(1) Information transmitted, provided or collected pursuant
to this section shall be confidential and may be used by the
department solely for official purposes relating to the
administration and collection of taxes.
(2) Information transmitted, provided or collected pursuant
to this section by a financial institution or the institution's
agents and sent to the department shall not constitute a breach
of confidentiality and this section shall not impose additional
confidentiality requirements upon a financial institution.
(3) The department shall establish procedures to review, on
at least a quarterly basis, whether information collected
pursuant to this section continues to be needed to collect
delinquent taxes and, upon a determination that the information
is not needed, to require the permanent expungement of the
information from the department's records and the records of any
person to which the information has been made available,
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including any automated data exchange utilized by the
department. Within seven days following the receipt of new
reports and information under subsection (a), all previous
information collected pursuant to this section shall be
permanently expunged from the records of the department and the
department's representatives, including any automated data
exchange utilized by the department.
(4) Any employe or agent of the department, or an automated
data exchange who divulges or retains information in a manner
not provided in this subsection, or lacks good faith for a
disclosure not authorized under this section, commits a
misdemeanor of the third degree and, upon conviction, shall be
sentenced to pay a fine of up to one thousand dollars ($1,000)
per violation and costs and shall be subject to a term of
imprisonment of not more than one year, or both.
(d) A financial institution shall be entitled to payment
from the department in the amount of two hundred and fifty
dollars ($250) per quarter for conducting data matches pursuant
to this section.
(e) The department, in consultation with associations
representing financial institutions, shall develop proposed
guidelines and the department shall publish final guidelines for
the department's data matching processes and uses for the
collection of information required under this section which
shall be conducted no more frequently than on a quarterly basis.
The department may designate an agent for the collection of
information under this section from the financial institutions,
which may include an automated data exchange organization who
shall have the authority to enter into agreements for the manner
of providing information exchanges as the agent and financial
institution may agree. The guidelines shall not be subject to
review under section 205 of the act of July 31, 1968 (P.L.769,
No.240), referred to as the Commonwealth Documents Law, or
section 204(b) of the act of October 15, 1980 (P.L.950, No.164),
known as the Commonwealth Attorneys Act, or the act of June 25,
1982 (P.L.633, No.181), known as the Regulatory Review Act.
(f) Provided that an obligor has not entered into and is in
compliance with a deferred payment plan with the department, the
department may order the attachment and seizure of funds in an
obligor's account that the department reasonably believes to
hold property subject to a tax lien recorded in favor of the
Commonwealth for tax, interest, additions or penalties due to
the Commonwealth. Upon receiving seized funds, the department
shall apply the amount seized to the obligor's tax lien
obligation.
[(b)] (g) (1) If the department has a reasonable belief
that an obligor's account holds property subject to a tax lien
in favor of the Commonwealth, the department may order the
attachment of funds in the obligor's account by sending a notice
to the financial institution.
(2) The notice given to a financial institution attaching an
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account of the obligor shall be sent by an electronic format or
any other reasonable manner as agreed to by the department and
the financial institution.
(3) The notice shall include all of the following:
(i) The name of the obligor.
(ii) The amount of the Commonwealth's tax lien, including
interest and penalty accrued up to forty-five days after the
date of notice.
(iii) The current or last known address of the obligor.
(iv) The Social Security number, Federal employer
identification number or other taxpayer identification number of
the obligor.
(v) An order to immediately attach one or more accounts held
by the financial institution in the name of the obligor for an
aggregate amount equal to the lesser of the amounts in all
accounts or the Commonwealth's tax lien.
[(c)] (h) (1) Upon receipt of the notice described in
subsection [(b)] (g), the financial institution shall, by the
end of the fifth business day following the date of the notice,
attach one or more of the accounts of the obligor held by the
financial institution for an aggregate amount equal to the
lesser of:
(i) the total of the amounts in all the accounts of the
obligor held by the financial institution as of the date of
attachment; or
(ii) the amount stated in the notice.
Upon the attachment and until the financial institution receives
further notice from the department or on order of a court, as
provided in this section, the financial institution may not
allow any activity to reduce the amounts in any of the accounts
below the amount of the attachment.
(2) Within five days after date of notice to the financial
institution described in subsection [(b)] (g), the financial
institution shall inform the department that the financial
institution has complied with the attachment order and shall
specify the aggregate amount attached pursuant to the order.
(3) Financial institution fees for costs are allowable as
follows:
(i) The financial institution may assess a reasonable
administrative fee against the accounts or the obligor in
addition to the amount attached. An administrative fee may
include a fee permitted to be assessed under an agreement
between the obligor and the financial institution in connection
with the early withdrawal of a certificate of deposit attached
under this section.
(ii) In the case of insufficient funds to cover both the fee
authorized by subparagraph (i) and the amount identified in the
notice under subsection [(b)] (g), the financial institution may
first deduct the fee from the amount attached and retain it from
the amount seized and forwarded to the department as provided in
this section.
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(iii) A financial institution shall not be required to
reimburse fees assessed against an account or an obligor as a
result of the department instituting an action under this
section or as otherwise permitted by law or authorized by
contract even if there is a successful challenge or relief is
granted under subsection (j).
[(d)] (i) (1) Except as otherwise provided in paragraph
(3), no later than five business days after the date of the
notice in subsection [(b)(2)] (g)(2), the department shall send
a notice to the obligor by first class mail to the obligor's
current or last known address and may attempt to deliver
personal notice to the obligor.
(2) The notice shall contain the following information:
(i) The address of the department.
(ii) The telephone number, address and name of a contact
person at the department.
(iii) The name and Social Security number, Federal employer
identification number or other taxpayer identification number of
the obligor.
(iv) The current or last known address of the obligor.
(v) The total amount of the Commonwealth's tax lien owed by
the obligor, including interest and penalty accrued up to forty-
five days after the date of notice.
(vi) The date the notice is being sent.
(vii) A statement informing the obligor that the department
has ordered the financial institution to attach the amount of
the Commonwealth's tax lien owed by the obligor from one or more
of the accounts of the obligor.
(viii) For each account of the obligor, the name of the
financial institution that has been given notice to attach
amounts as required by this section.
(ix) A statement that the order may be challenged or relief
from the order requested in accordance with subsection [(e)]
(j).
(x) A statement informing the obligor that unless a timely
challenge is made by the obligor, the financial institution or
an account holder of interest under subsection [(e)] (j), the
department shall notify the financial institution to seize the
amount attached by the financial institution and forward it to
the department.
(3) The department shall not be required to send the notice
described under this subsection if, prior to the time that the
notice must be sent, the department and the obligor agree to an
arrangement under which the obligor will pay amounts owed under
the Commonwealth's tax lien.
[(e)] (j) (1) An obligor, the financial institution or an
account holder of interest may challenge the actions of the
department under this section by filing a [motion] petition with
the court of common pleas within ten days of the date of the
notice sent under subsection [(d)] (i).
(2) An obligor, the financial institution or an account
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holder of interest may challenge or seek relief from the actions
of the department based on:
(i) a mistake as to any of the following:
(A) The identity of the obligor.
(B) The ownership of the account.
(C) The contents of the account.
(D) The amount of the tax lien obligation due.
(ii) the exclusion of the account from attachment under this
section;
(iii) the failure of the department to properly record the
tax lien upon which the attachment is based;
(iv) the failure of the department to send notice to the
obligor of the assessment or determination of the tax, interest,
penalties or addition to tax upon which the attachment is based;
(v) severe economic hardship;
(vi) a request for spousal relief from joint liability; or
(vii) any other good cause.
(3) Except as provided in paragraph (2)(iv), an obligor, the
financial institution or an account holder of interest may not
challenge the actions of the department based on a mistake or
error in the original assessment underlying a tax lien against
the obligor.
[(f)] (k) (1) If a timely challenge or request from relief
is not made by the obligor, the financial institution or an
account holder of interest under subsection [(e)] (j), the
department shall direct the financial institution to:
(i) seize the amount attached by the financial institution
and forward it to the department;
(ii) reduce the amount attached by the financial institution
to a revised amount as stated by the department, seize the
revised amount and forward it to the department and release the
balance of the account; or
(iii) release the amount attached by the financial
institution.
(2) The department may direct a financial institution to
seize and forward attached funds before the time for filing a
timely challenge under subsection [(e)] (j) upon agreement among
the department, the obligor and, in cases where the department
is aware of an account holder of interest, the account holder of
interest.
[(g)] (l) (1) If a determination is made by the court,
pursuant to a challenge or request for relief under subsection
[(e)] (j), that the account of the obligor should not have been
attached, the department shall notify the financial institution,
in the manner specified in subsection [(b)(2)] (g)(2), to
release the amount attached by the financial institution.
(2) If a determination is made by the court, pursuant to a
challenge or request for relief under subsection [(e)] (j), to
reduce the amount attached by the financial institution, the
department shall notify the financial institution, in the manner
specified in subsection [(b) (2)] (g)(2), to revise the amount
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as stated by the department, to seize and forward the revised
amount to the department and to release the balance of the
account attached by the financial institution.
(3) If a determination is made by the court, pursuant to a
challenge or request for relief made under subsection [(e)] (j),
that the attachment by the financial institution was proper, the
department shall notify the financial institution, in the manner
specified in subsection [(b) (2)] (g)(2), to seize the amount
attached by the financial institution and forward it to the
department.
[(h) A financial institution that complies with an order and
notice from the department under this section shall not be
criminally or civilly liable to any person, including the
department, the obligor or any account holder of interest, for
any of the following:
(1) disclosing information to the department under this
section;
(2) attaching an account as directed by the department;
(3) sending any amount seized to the department;
(4) wrongful dishonor or any other claim relating to the
attachment and seizure of any account as ordered by the
department; or
(5) any other action taken in good faith to comply with the
requirements of this section.
(i) A financial institution shall not be required to
reimburse fees assessed against an account or an obligor as a
result of the department instituting an action under this
section or as otherwise permitted by law or authorized by
contract even if there is a successful challenge or relief is
granted under subsection (e).
(j) (1)] (m) A person, government agency or financial
institution shall not be subject to any civil or criminal
liability for providing, reporting or matching information and
data or encumbering or surrendering assets under this section.
The immunity provided under this subsection shall not apply to
any person or agent of a government agency or financial
institution who knowingly supplies false information under this
section.
(n) The following shall apply:
(1) The department may impose a penalty upon a financial
institution that willfully fails to comply or respond to, or
refuses to process without reasonable cause, a request by the
department for information pursuant to subsection (a).
(2) The department shall provide a financial institution
twenty-five days' notice and a hearing before the Board of
Finance and Revenue prior to imposing a penalty under paragraph
(1). The penalty shall be in an amount equal to fifty dollars
($50) for each record not provided and the total penalty imposed
on any financial institution for all such failures during any
calendar year shall not exceed ten thousand dollars ($10,000).
(3) If, under the provisions of this section, a financial
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institution fails to attach accounts as required in a timely
manner or fails to forward the proper amount of funds attached
to the department at the time and in the manner required by this
section, the financial institution may be subject to a penalty
of five per cent of the amount of funds which should have been
attached or forwarded for each month or fraction thereof from
the date the funds should have been attached or forwarded to the
date the funds are attached or forwarded. The total amount of
the penalty shall not exceed fifty per cent of the proper amount
of funds which should have been attached or forwarded.
[(2)] (4) The penalty imposed by this section shall be
assessed, enforced, administered or collected under the
provisions of Article II.
[(k)] (o) This section shall not be construed to prohibit
the department or any other Commonwealth agency from requesting
information or collecting obligations due from an obligor in any
other manner authorized by law.
[(l) No financial institution may be required to notify an
obligor or an account holder of interest of a request for
information under this section by the department or a court.
(m)] (p) Prior to requesting information or attaching an
account under this section, the department shall develop
guidelines:
(1) describing its tax collection procedures;
(2) describing the rights and remedies available to
taxpayers;
(3) describing acceptable formats of information reports
between the department and financial institution pursuant to
subsection (b);
(4) describing the manner in which accounts must be
disclosed by the financial institution completing the reports;
[(3)] (5) disclosing the circumstances in which the
department may attach an account under this section;
[(4)] (6) describing the policies regarding spousal relief
and severe economic hardship relief;
[(5)] (7) advising financial institutions of the requirements
of this section; and
[(6)] (8) describing the department's policies and
procedures used to attach and seize accounts under this section.
(q) Accounts, funds and property subject to attachment under
this section shall not include the following:
(1) An account subject to a security interest, control
agreement or pledged security for a loan or other obligation.
(2) Money or property deposited to an account after the time
that a financial institution initially attaches the account.
(3) An account that a financial institution has a present
right to exercise a right of setoff either under an agreement
between the financial institution and the obligor or otherwise
under applicable law.
(4) An account that has an account holder of interest named
as an owner on the account.
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(5) An account to which an obligor does not have an
unconditional right of access.
(6) An account that may not be attached under Federal law.
[(n)] (r) As used in this section, the following words and
phrases shall have the meanings given to them in this
subsection:
"Account." [(1)] Any of the following:
[(i)] (1) Funds from a demand deposit account, checking
account, negotiable order of withdrawal account, savings
account, time deposit account, money market mutual fund account
or certificate of deposit account.
[(ii)] (2) Funds paid toward the purchase of shares or other
interest in an entity as described in paragraphs (1) and (2) of
the definition of "financial institution."
[(iii)] (3) Funds or property held by a depository
institution as described in paragraph (3) of the definition of
"financial institution."
[(2) The term shall not include any of the following:
(i) An account subject to a security interest, control
agreement or pledged security for a loan or other obligation.
(ii) Funds or property deposited to an account after the
time that a financial institution initially attaches the
account.
(iii) An account that a financial institution has a present
right to exercise a right of setoff either under an agreement
between the financial institution and the obligor or otherwise
under applicable law.
(iv) An account that has an account holder of interest named
as an owner on the account.
(v) An account that an obligor does not have an
unconditional right of access.
(vi) An account that can not be attached under Federal law.]
"Account holder of interest." A person, other than an
obligor of an account, who asserts an interest in an account
based upon ownership, possession of a security interest, lien or
judgment.
"Asset information." Account balances and account
identifying information provided by a report requested under
subsection (a).
"Department." The Department of Revenue of the Commonwealth.
"Financial institution." Any of the following:
(1) A depository institution as defined in section 3(c) of
the Federal Deposit Insurance Act (64 Stat. 873, 12 U.S.C. §
1813(c)).
(2) A Federal credit union or State credit union as defined
in section 1752(1) of the Federal Credit Union Act (48 Stat.
1216, 12 U.S.C. § 1752(1)).
(3) A benefit association, safe deposit company, money
market mutual fund or similar entity doing business in this
Commonwealth that holds property or maintains accounts
reflecting property belonging to others.
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"Identifying information." Name, record address, Social
Security number of an individual or other taxpayer
identification number.
"Obligor." Any of the following:
(1) An entity engaged in a business whose property is
subject to a Commonwealth tax lien or liens totaling at least
one thousand dollars ($1,000).
(2) An individual operating as a sole proprietor whose
property is subject to a Commonwealth tax lien or liens totaling
at least one thousand dollars ($1,000).
(3) A shareholder, member or partner of a pass-through
entity whose property is subject to a Commonwealth tax lien or
liens totaling at least one thousand dollars ($1,000).
(4) A corporate officer or other responsible individual who
has been assessed pursuant to the provisions of section 225 or
320 and whose property is subject to a Commonwealth tax lien or
liens totaling at least one thousand dollars ($1,000).
"Pass-through entity." A partnership as defined in section
301(n.0) or a Pennsylvania S corporation as defined in section
301(n.1).
"Tax lien."
(1) A lien recorded as provided by law to reflect a final
tax liability. A tax lien may be recorded only after:
(i) an assessment or similar determination that a taxpayer
has a tax liability is issued by the department;
(ii) the assessment or similar determination under
subparagraph (i) is issued in the manner required by law; and
(iii) the appeal rights to the assessment or similar
determination have expired, the liability was sustained through
the appeals process or the taxpayer failed to provide an appeal
bond if required to do so by the department as authorized by
law.
(2) A tax lien does not include a statutory lien that has
not been recorded in accordance with paragraph (1).
Section 3. The act is amended by adding sections to read:
Amend Bill, page 2, line 21, by striking out "STATUTE OF
LIMITATION FOR"
Amend Bill, page 4, line 26, by striking out "PERIOD OF
LIMITATIONS ON"
Amend Bill, page 5, line 6, by striking out "OF LIMITATION"
and inserting
under subsection (a)
Amend Bill, page 5, lines 10 and 11, by striking out "OF
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LIMITATION" and inserting
under subsection (a)
Amend Bill, page 5, line 25, by striking out "2" and
inserting
4
Amend Bill, page 5, by inserting between lines 25 and 26
(1) The addition of section 204(73) of the act shall
apply to the sale at retail or use of canned software on or
after the effective date of this section.
Amend Bill, page 5, line 26, by striking out "(1)" and
inserting
(2)
Amend Bill, page 5, line 30, by striking out "(2)" and
inserting
(3)
Amend Bill, page 6, line 8, by striking out "(3)" and
inserting
(4)
Amend Bill, page 6, line 17, by striking out "STATUTE" and
inserting
period
Amend Bill, page 6, lines 20 and 21, by striking out "BEFORE
OR ON" and inserting
as of
Amend Bill, page 6, line 22, by striking out "STATUTE" and
inserting
period
Amend Bill, page 6, line 24, by striking out "(4)" and
inserting
(5)
Amend Bill, page 6, line 29, by striking out "3" and
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inserting
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Amend Bill, page 7, by inserting between lines 1 and 2
(2) The amendment of section 3003.22 shall take effect
in 60 days.
Amend Bill, page 7, line 2, by striking out "(2)" and
inserting
(3)
2019/90PWK/HB0017A03921 - 12 -
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