PRINTER'S NO. 1777
No. 1485 Session of 1997
INTRODUCED BY CASORIO, DeWEESE, ITKIN, EVANS, VAN HORNE,
GIGLIOTTI, READSHAW, C. WILLIAMS, COLAIZZO, LAUGHLIN,
PETRONE, GRUITZA, LEDERER, STABACK, JOSEPHS, TRAVAGLIO,
ROBINSON, MANDERINO, SANTONI, DALEY, TIGUE, SURRA, TRELLO,
CORPORA, BOSCOLA, WOJNAROSKI, PETRARCA, BROWNE, SEYFERT AND
RAMOS, MAY 8, 1997
REFERRED TO COMMITTEE ON FINANCE, MAY 8, 1997
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further providing for the neighborhood assistance
11 tax credit program.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 1902-A of the act of March 4, 1971
15 (P.L.6, No.2), known as the Tax Reform Code of 1971, added June
16 16, 1994 (P.L.279, No.48), is amended to read:
17 Section 1902-A. Definitions.--The following words, terms and
18 phrases, when used in this article, shall have the meanings
19 ascribed to them in this section, except where the context
20 clearly indicates a different meaning:
1 "Business firm." Any business entity authorized to do
2 business in this Commonwealth and subject to taxes imposed by
3 Article IV, VI, VII, VII-A, VIII, VIII-A, IX, X or XV of this
4 act. P.L.413, No.67)
5 "Community services." Any type of counseling and advice,
6 emergency assistance or medical care furnished to individuals or
7 groups in an impoverished area.
8 "Comprehensive service plan." A strategy developed jointly
9 by a neighborhood organization and a sponsoring business firm or
10 private company for the stabilization and improvement of an
11 impoverished area within an urban neighborhood or rural
12 community.
13 "Comprehensive service project." Any activity conducted
14 jointly by a neighborhood organization and a sponsoring business
15 firm which implements a comprehensive service plan.
16 "Crime prevention." Any activity which aids in the reduction
17 of crime in an impoverished area.
18 "Education." Any type of scholastic instruction or
19 scholarship assistance to an individual who resides in an
20 impoverished area that enables him to prepare himself for better
21 life opportunities.
22 "Enterprise [zones] communities." Specific locations with
23 identifiable boundaries within impoverished areas which are
24 designated as enterprise zones by the Secretary of Community
25 [Affairs.] and Economic Development and shall include federally
26 designated enterprise communities and federally designated
27 empowerment zones as provided for in the Omnibus Budget
28 Reconciliation Act of 1993 (Public Law 103-66, 107 Stat. 312)
29 and those municipalities designated as distressed municipalities
30 under the act of July 10, 1987 (P.L.246, No.47), known as the
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1 "Municipalities Financial Recovery Act."
2 "Impoverished area." Any area in this Commonwealth which is
3 certified as such by the Department of Community [Affairs] and
4 Economic Development and the certification is approved by the
5 Governor. Such certification shall be made on the basis of
6 Federal census studies and current indices of social and
7 economic conditions.
8 "Job training." Any type of instruction to an individual who
9 resides in an impoverished area that enables him to acquire
10 vocational skills so that he can become employable or be able to
11 seek a higher grade of employment.
12 "Neighborhood assistance." Furnishing financial assistance,
13 labor, material and technical advice to aid in the physical
14 improvement of any part or all of an impoverished area.
15 "Neighborhood organization." Any organization performing
16 community services, offering neighborhood assistance or
17 providing job training, education or crime prevention in an
18 impoverished area, holding a ruling from the Internal Revenue
19 Service of the United States Department of the Treasury that the
20 organization is exempt from income taxation under the provisions
21 of the Internal Revenue Code of 1986 (Public Law 99-514, 26
22 U.S.C. § 1 et seq.) and approved by the Department of Community
23 [Affairs] and Economic Development.
24 "Private company." Any agricultural, industrial,
25 manufacturing or research and development enterprise as defined
26 in section 3 of the act of May 17, 1956 (1955 P.L.1609, No.537),
27 known as the "Pennsylvania Industrial Development Authority
28 Act," or any commercial enterprise as defined in section 3 of
29 the act of August 23, 1967 (P.L.251, No.102), known as the
30 "Economic Development Financing Law."
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1 "Qualified investments." Any investments made by a private
2 company which promote community economic development pursuant to
3 a plan which has been developed in cooperation with and approved
4 by a neighborhood organization operating pursuant to a plan for
5 the administration of tax credits approved by the Department of
6 Community [Affairs] and Economic Development.
7 Section 2. Sections 1904-A and 1905-A of the act, amended or
8 added June 16, 1994 (P.L.279, No.48) and June 30, 1995 (P.L.139,
9 No.21) are amended to read:
10 Section 1904-A. Tax Credit.--(a) Any business firm which
11 engages or contributes to a neighborhood organization which
12 engages in the activities of providing neighborhood assistance,
13 job training or education for individuals, community services or
14 crime prevention in an impoverished area or private company
15 which makes qualified investment to rehabilitate, expand or
16 improve buildings or land, whether through purchase or long-term
17 lease, leasehold improvements or other agreements as approved by
18 the Department of Community and Economic Development, located
19 within portions of impoverished areas which have been designated
20 as enterprise zones shall receive a tax credit as provided in
21 section 1905-A if the Secretary of Community [Affairs] and
22 Economic Development annually approves the proposal of such
23 business firm or private company. The proposal shall set forth
24 the program to be conducted, the impoverished area selected, the
25 estimated amount to be invested in the program and the plans for
26 implementing the program.
27 (b) The Secretary of Community [Affairs] and Economic
28 Development is hereby authorized to promulgate rules and
29 regulations for the approval or disapproval of such proposals by
30 business firms or private companies and provide a listing of all
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1 applications received and their disposition in each fiscal year
2 to the General Assembly by October 1 of the following fiscal
3 year.
4 (c) The total amount of tax credit granted for programs
5 approved under this act shall not exceed [sixteen million seven
6 hundred fifty thousand dollars ($16,750,000)] twenty-five
7 million dollars ($25,000,000) of tax credit in any fiscal year,
8 subject to the following:
9 (1) [two million dollars ($2,000,000)] a minimum of eight
10 million dollars ($8,000,000) of the total amount of tax credit
11 shall be allocated for comprehensive service projects, but the
12 Secretary of Community [Affairs] and Economic Development may
13 reallocate any unused portion of the [two million dollars
14 ($2,000,000)] eight million dollars ($8,000,000) for any other
15 program authorized by this act if insufficient applications are
16 made for comprehensive service projects; and
17 (2) [four million dollars ($4,000,000)] a minimum of six
18 million dollars ($6,000,000) of the total amount of tax credit
19 shall be set aside exclusively for private companies which make
20 qualified investments to rehabilitate, expand or improve
21 buildings or land which promote community economic development
22 and which occur in portions of impoverished areas which have
23 been designated as enterprise [zones] communities.
24 Section 1905-A. Grant of Tax Credit.--The Department of
25 Revenue shall grant a tax credit against any tax due under
26 Article IV, VI, VII, VII-A, VIII, VIII-A, IX, X or XV of this
27 act, or any tax substituted in lieu thereof in an amount which
28 shall not exceed fifty per cent of the total amount invested
29 during the taxable year by the business firm or twenty per cent
30 of qualified investments by a private company in programs
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1 approved pursuant to section 1904-A of this act: Provided, That
2 a tax credit of up to seventy per cent of the total amount
3 invested during the taxable year by a business firm or up to
4 thirty per cent of the amount of qualified investments by a
5 private company may be allowed for investment in programs where
6 activities fall within the scope of special program priorities
7 as defined with the approval of the Governor in regulations
8 promulgated by the Secretary of the Department of Community
9 [Affairs] and Economic Development. Regulations establishing
10 special program priorities are to be promulgated during the
11 first month of each fiscal year and at such times during the
12 year as the public interest dictates. Such credit shall not
13 exceed two hundred fifty thousand dollars ($250,000) annually,
14 except in the case of comprehensive service projects which shall
15 be allowed an additional credit equal to seventy per cent of the
16 qualifying investments made in comprehensive service projects;
17 however, such additional credit shall not exceed one hundred
18 seventy-five thousand dollars ($175,000) annually. No tax credit
19 shall be granted to any bank, bank and trust company, insurance
20 company, trust company, national bank, savings association,
21 mutual savings bank or building and loan association for
22 activities that are a part of its normal course of business. Any
23 tax credit not used in the period the investment was made may be
24 carried over for the next five succeeding calendar or fiscal
25 years until the full credit has been allowed. The total amount
26 of all tax credits allowed pursuant to this act shall not exceed
27 [sixteen million seven hundred fifty thousand dollars
28 ($16,750,000)] twenty-five million dollars ($25,000,000) in any
29 one fiscal year.
30 Section 3. Section 1906-A, added June 16, 1994 (P.L.279,
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1 No.48) is amended to read:
2 Section 1906-A. Decision in Writing.--The decision of the
3 Secretary of Community [Affairs] and Economic Development to
4 approve or disapprove a proposal pursuant to section 1904-A of
5 this act shall be in writing, and, if it approves the proposal,
6 it shall state the maximum credit allowable to the business
7 firm. A copy of the decision of the Secretary of Community
8 [Affairs] and Economic Development shall be transmitted to the
9 Governor and to the Secretary of Revenue.
10 Section 4. This act shall take effect in 60 days.
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