S0030B0474A06004 DMS:CDM 06/08/20 #90 A06004
AMENDMENTS TO SENATE BILL NO. 30
Sponsor: REPRESENTATIVE QUINN
Printer's No. 474
Amend Bill, page 1, lines 16 through 21; pages 2 through 7,
lines 1 through 30; page 8, lines 1 through 10; by striking out
all of said lines on said pages and inserting
ARTICLE XIX-G
PENNSYLVANIA HOUSING TAX CREDIT
Section 1901-G. Scope of article.
This article establishes the Pennsylvania Housing Tax Credit.
Section 1902-G. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Agency." The Pennsylvania Housing Finance Agency.
"Credit period." A 5-year period that begins with the
taxable year in which a taxpayer is awarded a tax credit
certificate in accordance with section 1904-G or, at the
irrevocable election of a taxpayer, the next succeeding taxable
year following the completion of a qualified low-income housing
project.
"Department." The Department of Revenue of the Commonwealth.
"Federal housing tax credit." The Federal tax credit created
under section 42 of the Internal Revenue Code of 1986 (Public
Law 99-514, 26 U.S.C. § 42).
"Pass-through entity." Any of the following:
(1) A partnership as defined in section 301(n.1).
(2) A Pennsylvania S Corporation as defined in section
301(n.1).
(3) An unincorporated entity subject to section 307.21.
"Qualified allocation plan." The agency's plan for
allocation of Federal housing tax credits developed under
section 42(m)(1) of the Internal Revenue Code of 1986 (Public
Law 99-514, 26 U.S.C. § 42(m)(1)).
"Qualified low-income housing project." The term shall have
the same meaning as provided under section 42(g)(1) of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
42(g)(1)).
"Qualified tax liability." The tax liability imposed on a
taxpayer under Article III, IV, VII, VIII, IX, XI or XV,
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excluding any tax withheld by an employer under Article III.
"Tax credit." The Pennsylvania Housing Tax Credit
established under this article.
"Taxable year." The term shall have the same meaning as
provided under section 441(b) of the Internal Revenue Code of
1986 (Public Law 99-514, 26 U.S.C. § 441(b)).
"Taxpayer." An individual, business firm, corporation,
business trust, limited liability company, partnership, limited
liability partnership, association or any other form of legal
business entity.
Section 1903-G. Pennsylvania Housing Tax Credit.
(a) Establishment.--The Pennsylvania Housing Tax Credit is
established to encourage the development of qualified low-income
housing projects in this Commonwealth. The agency and department
shall administer the tax credit as provided in this article.
(b) Availability.--
(1) Beginning in fiscal year 2020-2021 and each fiscal
year thereafter, the agency may award a total of $10,000,000
in tax credits per fiscal year in accordance with this
article.
(2) In addition to the amount available under paragraph
(1), the agency may award the following, as available, during
a fiscal year:
(i) unused and unallocated tax credits for the
preceding fiscal year; and
(ii) tax credits returned to the agency.
(c) Maximum amount.--No taxpayer may be awarded a tax credit
in an amount that exceeds $1,500,000 for a qualified low-income
housing project.
(d) Application.--
(1) A taxpayer may apply to the agency for a tax credit
under this section by submitting an application on a form
required by the agency.
(2) The agency may require such information on the
application as necessary to verify the costs incurred in
constructing the qualified low-income housing project.
(e) Review of application by agency.--
(1) The agency shall review applications submitted for a
tax credit and, in accordance with the procedures established
by the agency under section 1909-G, issue a certificate
stating the amount of the tax credit for a qualified low-
income housing project.
(2) The agency shall conditionally award a tax credit in
a manner that the agency, at the time of allocation,
reasonably believes will result in at least 10% of the tax
credits being used to provide housing units targeting
households with incomes at or below 30% of area median
income.
(3) The agency shall determine the amount of a tax
credit conditionally awarded to a taxpayer based on the
merits of the qualified low-income housing project.
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Section 1904-G. Use of tax credits.
(a) Initial use.--
(1) Unless otherwise permitted under paragraph (2),
prior to the sale or assignment of a tax credit under section
1905-G, a taxpayer must first use a tax credit against the
qualified tax liability incurred in the taxable year in which
the tax credit was approved.
(2) A taxpayer may elect to use a tax credit the next
succeeding taxable year following the completion of a
qualified low-income housing project.
(b) Application.--The tax credit shall be applied against a
taxpayer's qualified tax liability only after all other tax
credits and deductions available to the taxpayer under act of
the General Assembly have been used.
(c) Amount.--The tax credit may be claimed for an amount not
to exceed 50% of the taxpayer's qualified tax liability or 20%
of the amount certified per taxable year during the credit
period, whichever is less.
Section 1905-G. Carryover, sale and assignment.
(a) General rule.--A taxpayer shall be entitled to carry
forward a tax credit for a period not to exceed five taxable
years from the taxable year in which the tax credit was awarded.
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.
(b) Application.--A tax credit certificate received by the
department in a taxable year shall first be applied against the
taxpayer's qualified tax liability for the current taxable year
as of the date on which the credit was issued before the tax
credit can be applied against a qualified tax liability under
subsection (a).
(c) No carryback or refund.--A taxpayer may not carry back
or obtain a refund of all or any portion of an unused tax credit
granted to the taxpayer under this article.
Section 1906-G. Pass-through entity.
(a) General rule.--If a pass-through entity has any unused
tax credit under section 1906-G, the taxpayer may elect in
writing, according to procedures established by the department,
to transfer all or a portion of the tax credit to shareholders,
members or partners in proportion to the share of the entity's
distributive income to which the shareholder, member or partner
is entitled.
(b) Limitation.--A pass-through entity and a shareholder,
member or partner of a pass-through entity may not claim the
credit under subsection (a) for the same qualified project.
(c) Application.--A shareholder, member or partner of a
pass-through entity to whom a credit is transferred under
subsection (a) shall immediately claim the credit in the taxable
year in which the transfer is made. The shareholder, member or
partner may not carry forward, carry back, obtain a refund of or
sell or assign the tax credit.
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(d) Tax credit allocation.--The distribution under section
1908-G may be allocated in any manner provided by the
partnership agreement or other agreement governing the
operations of the taxpayer.
Section 1907-G. Sale or assignment.
(a) Authorization.--Upon approval by the department, a
qualified taxpayer may sell or assign, in whole or in part, a
tax credit granted to the taxpayer under this article.
(b) Application.--The following provisions shall apply to
the sale and assignment of a tax credit:
(1) To sell or assign a tax credit, a qualified taxpayer
must file an application for the sale or assignment of the
tax credit with the department. The application must be on a
form required by the department.
(2) The department shall approve a sale or assignment if
the purchaser or assignee has:
(i) filed all required State tax reports and returns
for all applicable taxable years; and
(ii) paid any balance of State tax due as determined
by assessment or determination by the department and not
under timely appeal.
Section 1908-G. Purchasers and assignees.
(a) Claim.--The purchaser or assignee of all or a portion of
a tax credit under section 1710-J shall immediately claim the
tax credit in the taxable year in which the purchase or
assignment is made.
(b) Amount.--The amount of the tax credit that a purchaser
or assignee may use against any one qualified tax liability may
not exceed 75% of such qualified tax liability for the taxable
year.
(c) Use.--The purchaser or assignee may not carry forward,
carry back or obtain a refund of or sell or assign the tax
credit.
Section 1909-G. Administration.
(a) Agency guidelines and procedures.--The agency shall
issue guidelines and procedures for the administration of the
tax credit in conjunction with the qualified allocation plan and
when possible, administer the tax credit using the same
guidelines, procedures and priorities that the agency uses to
administer the Federal housing tax credit.
(b) Recapture.--The department, in consultation with the
agency, shall establish guidelines that include procedures for
recapture of tax credits during the credit period that are
similar in structure and effect to events of noncompliance under
section 42 of the Internal Revenue Code of 1986 (Public Law 99-
514, 26 U.S.C. § 42). The guidelines shall provide for the
mechanism and formula that the tax credit may be recaptured over
the remaining credit period.
(c) Fraud or misrepresentation.--If a taxpayer engages in
fraud or intentional misrepresentation of information required
to be provided to the agency or the department under this
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article or the agency's guidelines, the department may:
(1) Recapture all or a portion of the tax credit.
(2) Deem ineligible the applicant or taxpayer from
future tax credits.
(3) Impose other penalties as specified in the agency's
guidelines.
(d) Fee.--The agency may charge a taxpayer applying for a
tax credit a reasonable fee not to exceed 5% of the tax credit
allocated for the administrative expenses of the agency for
processing applications under this article.
Section 1910-G. Annual report.
(a) Duty of agency.--By June 30, 2021, and each June 30
thereafter, the agency shall submit a report on the tax credit
to the chairperson and minority chairperson of the
Appropriations Committee of the Senate, the chairperson and
minority chairperson of the Appropriations Committee of the
House of Representatives, the chairperson and minority
chairperson of the Urban Affairs and Housing Committee of the
Senate and the chairperson and minority chairperson of the Urban
Affairs Committee of the House of Representatives. The report
shall include:
(1) The number and amount of tax credits awarded.
(2) The taxpayers that were awarded tax credits.
(3) The amount of tax credits issued to each taxpayer.
(b) Public posting.--The agency shall make the report
identified in subsection (a) available on the agency's publicly
accessible Internet website.
Section 2. This act shall take effect immediately.
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See A06004 in
the context
of SB0030