THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY VULAKOVICH, BOYD, BRADFORD, CALTAGIRONE, CLYMER, D. COSTA, CUTLER, EVERETT, GROVE, KAUFFMAN, METCALFE, MURT, PICKETT, RAPP, REESE, REICHLEY, ROAE, ROSS, SAYLOR, SCAVELLO, SIPTROTH, STEVENSON, SWANGER AND TURZAI, JUNE 9, 2010

REFERRED TO COMMITTEE ON FINANCE, JUNE 9, 2010  

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," providing for an individual health insurance tax

credit.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, is amended by adding an article to

read:

ARTICLE XVII-G

INDIVIDUAL HEALTH INSURANCE TAX CREDIT

Section 1701-G.  Scope of article.

This article relates to individual health insurance tax

credit.

Section 1702-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:

"Department."  The Department of Revenue of the Commonwealth.

"Insurer."  A health insurance entity licensed in this

Commonwealth to issue group health insurance, subscriber

contracts, certificates or plans which provide medical or health

care coverage by a health care facility or licensed health care

provider and which are offered or governed under any of the

following:

(1)  The act of May 17, 1921 (P.L.682, No.284), known as

The Insurance Company Law of 1921.

(2)  The act of December 29, 1972 (P.L.1701, No.364),

known as the Health Maintenance Organization Act.

(3)  The act of May 18, 1976 (P.L.123, No.54), known as

the Individual Accident and Sickness Insurance Minimum

Standards Act.

(4)  A nonprofit corporation subject to 40 Pa.C.S. Ch. 61

(relating to hospital plan corporations) or 63 (relating to

professional health services plan corporations).

"Qualified health insurance policy."  Any individual or group

health insurance policy, subscriber contract, certificate or

plan which provides health or sickness and accident coverage

which is offered, executed, issued or delivered by an insurer.

The term does not include any of the following:

(1)  Accident only.

(2)  Credit.

(3)  Long-term or disability income.

(4)  Medicare supplement policy.

(5)  Civilian Health and Medical Program of the Uniformed

Services (CHAMPUS) supplement.

(6)  Specified disease.

(7)  Workers' compensation policy.

(8)  Automobile medical payment policy.

(9)  Fixed indemnity.

(10)  Dental only.

(11)  Vision only.

"Qualified tax liability."  The liability for taxes imposed

under Article III.

"Secretary."  The Secretary of Revenue of the Commonwealth.

"Tax credit."  The individual insurance tax credit authorized

under this article.

"Taxpayer."  An individual subject to payment of taxes under

Article III. The term includes a sole proprietor.

Section 1703-G.  Credit for health insurance contributions.

(a)  Application.--A taxpayer who purchases a qualified

health insurance policy in a taxable year may apply for a tax

credit as provided in this article. By September 15, a taxpayer

must submit an application to the department for the aggregate

contribution made by the taxpayer to a qualified health

insurance policy in the taxable year that ended in the prior

calendar year.

(b)  Computation.--A taxpayer that qualifies under subsection

(a) may claim a tax credit of up to $1,000.

(c)  Notification.--By December 15 of the calendar year

following the close of the taxable year during which the

contribution to the qualified health insurance policy is made,

the department shall notify the taxpayer of the amount of

taxpayer's tax credit approved by the department.

Section 1704-G.  Limitation on credits.

(a)  Limit.--The total amount of credits approved by the

department shall not exceed $25,000,000 in any fiscal year.

(b)  Availability of tax credits.--Tax credits under this

article shall be made available by the department on a first-

come-first-served basis within the limitations established under

subsection (a).

Section 1705-G.  Carryover, carryback, refund and assignment of

credit.

(a)  Carryover.--If the taxpayer cannot use the entire amount

of the 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 credit against the qualified tax

liability of the taxpayer for those taxable years. Each time

that the tax credit is carried over to a succeeding taxable

year, it is to 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 not more than ten taxable years for which the taxpayer

was entitled to claim the credit.

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

department for monetary contributions made to a qualified health

insurance policy in a taxable year first shall be applied

against the taxpayer's qualified tax liability for the current

taxable year as of the date on which the credit was approved

before the tax credit is applied against any tax liability under

subsection (a).

(c)  Prohibition.--A taxpayer is not entitled to assign,

carry back or obtain a refund of an unused tax credit.

Section 1706-G.  Report to General Assembly.

The secretary shall submit an annual report to the General

Assembly indicating the effectiveness of the credit provided by

this article no later than March 15 following the year in which

the credits were approved. The report shall include the name of

all taxpayers utilizing the credit as of the date of the report

and the amount of credits approved and utilized by each

taxpayer. Notwithstanding any law providing for the

confidentiality of tax records, the information contained in the

report shall be public information. The report may also include

any recommendations for changes in the calculation or

administration of the credit.

Section 1707-G.  Regulations.

The department shall promulgate regulations necessary for the

implementation and administration of this article.

Section 2.  The addition of Article XVII-G of the act shall

apply to tax years beginning after December 31, 2009.

Section 3.  This act shall take effect immediately.