THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY BROWNE, SEPTEMBER 28, 2011

AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 29, 2012   

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled,

as amended, "An act relating to the finances of the State

government; providing for the settlement, assessment,

collection, and lien of taxes, bonus, and all other accounts

due the Commonwealth, the collection and recovery of fees and

other money or property due or belonging to the Commonwealth,

or any agency thereof, including escheated property and the

proceeds of its sale, the custody and disbursement or other

disposition of funds and securities belonging to or in the

possession of the Commonwealth, and the settlement of claims

against the Commonwealth, the resettlement of accounts and

appeals to the courts, refunds of moneys erroneously paid to

the Commonwealth, auditing the accounts of the Commonwealth

and all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," in general budget implementation, further

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providing for the Department of Labor and Industry. in

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general provisions, further providing for method of payment;

in Department of Revenue, further providing for transmission

of moneys; in Treasury Department, further providing for

replacement checks; in State Treasury disbursements,

providing for settlement agreements and enforcement actions;

in capital facilities debt, further providing for

definitions, for Neighborhood Improvement Zone Fund, for

Keystone Opportunity Zone and for Commonwealth pledges; in

financially distressed municipalities, further providing for

administrative oversight; in oil and gas wells, providing for

conventional gas well bonding and for oil and gas operations

in the South Newark Basin; in Keystone Special Development

Zones, further providing for definitions; in tax credits,

repealing provisions relating to the Department of Education,

the Department of Revenue and the Department of Community and

Economic Development; in permit extensions, further providing

for definitions; in special funds, further providing for

funding; in general budget implementation, further providing

for Auditor General, for Department of Labor and Industry and

for Department of Public Welfare; providing for 2012-2013

budget implementation; providing for 2012-2013 appropriations

restrictions; in audits, further providing for audits of Race

Horse Development Funds; and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 1727-E of the act of April 9, 1929

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(P.L.343, No.176), known as The Fiscal Code, added July 17, 2007

(P.L.141, No.42), is amended to read:

Section 1727-E.  Department of Labor and Industry [(Reserved)].

For the "Reed Act-Unemployment Insurance" and "Reed Act-

Employment Services and Unemployment Insurance" appropriations,

the total amount which may be obligated shall not exceed the

limitations under section 903 of the Social Security Act (49

Stat. 620, 42 U.S.C. § 1103).

Section 2.  This act shall take effect immediately.

Section 1.  Section 9 of the act of April 9, 1929 (P.L.343,

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No.176), known as The Fiscal Code, added November 21, 1990

(P.L.542, No.134), is amended to read:

Section 9.  Method of Payment.--(a)  Notwithstanding any

other provisions of this act or any other acts, the State

Treasurer and the Secretary of Revenue shall jointly prescribe

by regulation the method of payment of obligations due the

Commonwealth. Such regulations shall include:

(1)  Requiring payment by electronic funds transfers (EFT)

which includes automated clearinghouse debit, automated

clearinghouse credit, wire transfer and any other means that may

be available to obtain funds due the Commonwealth in the most

expeditious manner. The payor shall select which method of

electronic funds transfer he wishes to utilize from among these

options.

(2)  Setting the date on which a payment is deemed to have

been received when a method other than mail is required.

(3)  Establishing procedures to be followed when a method

other than mail is required.

(4)  Any other provisions necessary to ensure the prompt

deposit of funds legally due the Commonwealth.

(5)  An option permitting payment by certified or cashier's

check delivered in person or by courier to the Department of

Revenue on or before the due date of the obligation, in lieu of

payment by electronic funds transfer.

(b)  The regulations shall not require:

(1)  Any payment to be posted to a Commonwealth account prior

to the due date, including grace periods, established by law or

regulations.

(2)  Changes to the method of payment for those payments made

by individuals under Article III of the act of March 4, 1971

(P.L.6, No.2), known as the "Tax Reform Code of 1971."

(3)  Changes to the method of payment when the payment is

less than [twenty thousand dollars ($20,000)] ten thousand

dollars ($10,000).

(4)  Automated clearinghouse debit as the sole and exclusive

means of complying with this act and the regulations promulgated

pursuant to this act.

Section 2.  Section 209 of the act, amended June 1, 1931

(P.L.318, No.143), is amended to read:

Section 209.  Transmission of Moneys.--[All] (a)  Except as

provided in subsection (b), all moneys received by the

Department of Revenue during any day shall be transmitted

promptly to the Treasury Department, and the Treasury Department

shall forthwith issue its receipt to the Department of Revenue

for such moneys, and credit them to the fund and account

designated by the Department of Revenue.

Detailed statements of all moneys received shall be furnished

to the Treasury Department and the Department of the Auditor

General contemporaneously with the transmission of such moneys

to the Treasury Department.

(b)  The following apply to contracts:

(1)  The Department of Revenue may enter into contracts

allowing the contractor to be paid for products provided or

services rendered, on a contingent fee basis, for taxes,

interest, penalty or fees collected or refunds saved.

(2)  The money collected under paragraph (1) shall be

deposited into a restricted receipt account, out of which the

contingent fees shall be paid. By the last day of each month,

all money remaining in the restricted receipt account shall be

transferred to the General Fund.

(3)  The Department of Revenue shall submit an annual report

setting forth the number of contracts entered into under

paragraph (1), the amount collected, and the percentage of the

contingency.

Section 3.  Section 309 of the act, amended or added June 30,

1972 (P.L.717, No.165) and May 2, 1986 (P.L.145, No.45), is

amended to read:

Section 309.  Replacement Checks.--(a)  Upon presentation for

payment of any check to the Treasury Department which is more

than [one year and not more than seven years] one hundred and

eighty days and not more than one year old, the Treasury

Department shall requisition and issue a replacement check to

the person entitled thereto [which shall be paid from an

executive authorization by the Governor made to the Treasury

Department for such purpose] from each of the various funds. All

reportable Commonwealth checks which have not been presented for

payment in excess of one year from the date issuance shall be

delivered to the custodial control of the State Treasurer as

abandoned or unclaimed property and shall be disposed of under

Article XIII.1.

(b)  The Treasury Department as of January 1, 1972, and on

each July 1 thereafter, shall take credit on its books and

calculate as cash to the credit of the proper funds all amounts

held in State depositories or otherwise for the payment of

nonreportable checks which on said dates had been issued for a

period of one year or more and which had not been presented for

payment.

Section 3.1.  The act is amended by adding a section to read:

Section 1507.1.  Settlement Agreements; Enforcement

Actions.--(a)  Except as set forth in subsection (b), the

following apply:

(1)  Unless otherwise provided by this section or another

provision of law, money received by an agency as a result of a

settlement, litigation or an enforcement action shall be deemed

funds of the Commonwealth and shall, upon receipt, be deposited

into the General Fund.

(2)  If money to pursue a settlement, litigation or

enforcement action was expended by the agency from the General

Fund or other fund or account established by law, those costs

recovered shall be credited to the appropriation, fund or

account from which the original costs were expended and used as

provided by law and shall be available for expenditure in

accordance with the law governing the expenditure.

(3)  Amounts that exceed the actual costs of a settlement,

litigation or enforcement action and are deposited in the

General Fund may be redirected to the agency that was the party

to the settlement, litigation or enforcement action to

supplement the activities of the agency upon request of the

agency and approval of the Secretary of the Budget.

(4)  If there is a redirection under paragraph (3), the

secretary shall provide notice of the transfer to the chair of

the Appropriations Committee of the Senate and the chair of the

Appropriations Committee of the House of Representatives and

include a detailed determination of actual costs incurred by the

agency and the identification of the associated settlement,

litigation or enforcement action.

(b)  Subsection (a) shall not apply as follows:

(1)  The recovery of Federal money shall be disposed of in

accordance with this section and applicable Federal or State law

or contract.

(2)  Nothing in this section shall supersede any payments,

including restitution, ordered by a court.

(c)  Definition.--As used in this section, the term "Agency"

includes the Commonwealth and an agency or instrumentality of

the Commonwealth.

Section 4.  The definitions of "city" and "fund" in section

1602-B of the act, added October 9, 2009 (P.L.537, No.50), are

amended and the section is amended by adding a definition to

read:

Section 1602-B.  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:

* * *

"City."  A city of the third class with, [on the effective

date of this section] on the date of the designation of a

neighborhood improvement zone by the contracting authority, a

population of at least 106,000 [and not more than 107,000],

based on the [2000] most recent Federal decennial census.

* * *

"Earned income tax."  A tax or portion of a tax imposed on

earned income within a neighborhood improvement zone under the

act of December 31, 1965 (P.L.1257, No.511), known as The Local

Tax Enabling Act, which a city, or a school district contained

entirely within the boundaries of or coterminous with the city,

is entitled to receive.

* * *

"Fund."  [The] A Neighborhood Improvement Zone Fund

established under section 1604-B.

* * *

Section 5.  Section 1604-B(a), (a.1)(3), (b) introductory

paragraph, (d), (e), (f) introductory paragraph and (g)

introductory paragraph of the act, amended or added October 9,

2009 (P.L.537, No.50) and June 30, 2011 (P.L.159, No.26), are

amended and the section is amended by adding a subsection to

read:

Section 1604-B.  Neighborhood Improvement Zone [Fund] Funds.

(a)  Special [fund] funds.--[There is established a special

fund known as the Neighborhood Improvement Zone Fund.] Following

the designation of a neighborhood improvement zone, the

contracting authority shall, within ten days of making the

designation or, in the case of a neighborhood improvement zone

designated prior to July 1, 2012, within ten days of the

effective date of this subsection, notify the State Treasurer of

the designation. Upon the notice, the State Treasurer shall

establish a special fund for the benefit of each contracting

authority to be known as the "Neighborhood Improvement Zone

Fund." Interest income derived from investment of the money in

[the] each fund shall be credited by the Treasury Department to

the fund.

(a.1)  Certification.--

* * *

(3)  Any penalty imposed under this subsection shall be

imposed, assessed and collected by the department under the

provisions for imposing, assessing and collecting penalties

under Article II of the Tax Reform Code of 1971. When the

penalty is received, the money shall be transferred from the

General Fund to the fund of the contracting authority that

designated the neighborhood improvement zone in which the

qualifying business is located.

* * *

(a.2)  Transition.--

(1)  Subject to paragraphs (3) and (4), within 15 days of

the effective date of this subsection, the State Treasurer

shall:

(i)  determine the amount of money in the

Neighborhood Improvement Zone Fund existing on the

effective date of this subsection which is attributable

to each neighborhood improvement zone; and

(ii)  transfer the amount of money in the

Neighborhood Improvement Zone Fund existing on the

effective date of this subsection to the fund for each

contracting authority for which money was deposited.

(2)  An entity collecting a local tax that, on the

effective date of this subsection, is in possession of money

attributable to a local tax not included in the amount to be

calculated and certified under subsection (b) shall promptly

remit that money to the local taxing authority entitled to

receive the money.

(3)  Transfer and repayment is subject to the following:

(i)  Before making the transfer under paragraph (1),

the State Treasurer shall:

(A)  determine the amount of money deposited in

the fund which was attributable to earned income

taxes that a contracting authority is not entitled to

receive under subsection (b); and

(B)  deduct the amount of money determined under

clause (A) from the money to be transferred under

paragraph (1).

(ii)  If any amount of the money under subparagraph

(i)(A) has already been transferred to a contracting

authority, the State Treasurer shall take action as

necessary to recover the money from the contracting

authority, including by way of setoff from money to be

paid to the contracting authority under paragraph (1).

The contracting authority shall comply with a demand made

by the State Treasurer for the repayment of money under

this paragraph.

(4)  As to the money deducted or recovered under

paragraph (3), the State Treasurer shall:

(i)  identify the local taxing authorities that were

entitled to receive the money which was deposited in the

fund;

(ii)  determine the amount to which each local taxing

authority was entitled; and

(iii)  remit the amount under subparagraph (ii) to

the proper local taxing authority.

(b)  Calculation.--Within 60 days of the end of each calendar

year, the department shall certify separately for each

neighborhood improvement zone the amounts of State taxes paid,

less any State tax refunds received, by the qualified businesses

filing reports under subsection (a.1)(1) to the Office of the

Budget. Beginning in [2012] the first full calendar year

following the designation of a neighborhood improvement zone and

in each calendar year thereafter, by November 1, the department

shall calculate, in accordance with this subsection, amounts of

State taxes actually received by the Commonwealth from each

qualified business that filed a report under subsection (a.1)(1)

in the prior calendar year, and the department shall certify the

amounts received to the office. An entity collecting a local tax

within the neighborhood improvement zone shall, within 30 days

of the end of each calendar year, submit all of the local taxes

that are to be calculated under this subsection and which were

paid in the prior calendar year, less any certified local tax

refunds received by a qualified business in the prior calendar

year, to the State Treasurer to be deposited in the fund under

subsection (d) of the contracting authority that established the

neighborhood improvement zone. This subsection shall not apply

to any taxes subject to a valid pledge or security interest

entered into in order to secure debt service on bonds if the

pledge or security interest was entered into prior to May 1,

2011, or in the case of the neighborhood improvement zone

designated after July 1, 2011, on the date of the designation, 

and is still in effect. The following shall be the amounts

calculated and certified separately for each neighborhood

improvement zone: 

* * *

(d)  Transfers.--

(1)  Within ten days of receiving certification under

subsection (b), the Secretary of the Budget shall direct the

State Treasurer to, notwithstanding any other law, transfer

the amounts certified under subsection (b) for each

neighborhood improvement zone from the General Fund to the

fund of the contracting authority that established the

neighborhood improvement zone. Beginning in [2013] the second

calendar year following the designation of a neighborhood

improvement zone and in each year thereafter, the amounts

certified by the secretary to the State Treasurer and the

amounts transferred by the State Treasurer to the fund of

each contracting authority shall be determined as follows:

(i)  Add amounts certified by the department under

subsection (b) for the prior calendar year.

(ii)  Subtract from the sum under subparagraph (i)

any State tax refunds paid as certified by the department

under subsection (b).

(iii)  Add to the difference under subparagraph (ii)

any amounts certified under subsection (b) with respect

to the second prior calendar year.

(iv)  Subtract from the sum under subparagraph (iii)

any amounts certified under subsection (b) which are less

than the amounts previously certified under subsection

(b) with respect to the second prior calendar year.

(2)  The State Treasurer shall provide an annual transfer

to the contracting authority until the bonds issued to

finance and refinance the improvement and development of the

neighborhood improvement zone and the construction of the

facility or facility complex are retired. Each annual

transfer to the contracting authority shall be equal to the

balance of the fund of the contracting authority on the date

of the transfer under paragraph (1).

(e)  Restriction on use of [funds.--Funds] money.--Money 

transferred under subsection (d) is subject to the following:

(1)  [May] The money may only be utilized [for] as

follows:

(i)  For payment of debt service, directly or

indirectly through a multitiered ownership structure or

other structure authorized by a contracting authority to

facilitate financing mechanisms, on bonds, or on

refinancing loans used to repay bonds, issued [for] to

finance or refinance:

(A)  the improvement and development of all or

any part of the neighborhood improvement zone; and

(B)  the [purpose of constructing] construction

of all or part of a facility or facility complex[,

for].

(ii)  For payment of debt service on bonds issued to

refund those bonds [and to replenish].

(iii)  For replenishment of amounts required in any

debt service reserve funds established to pay debt

service on bonds.

(1.1)  The term of a bond to be refunded shall not exceed

the maximum term permitted for the original bond issued for

the improvement or development of the neighborhood

improvement zone and the construction of a facility or

facility complex.

(2)  [May] The money may not be utilized for purposes of

renovating or repairing a facility or facility complex,

except for capital maintenance and improvement projects.

(f)  Ticket surcharge.--The entity operating the facility may

collect a capital repair and improvement ticket surcharge, the

proceeds of which shall be deposited into the fund of each

contracting authority. The [funds] fund of each contracting

authority shall be maintained and utilized as follows:

* * *

(g)  Excess money.--Within 30 days of the end of each

calendar year, any money remaining in the fund of each

contracting authority at the end of the prior calendar year

after the required payments under subsection (d)(2) were made in

the prior calendar year shall be refunded in the following

manner:

* * *

Section 6.  Sections 1605-B, 1607-B and 1601-D.1 of the act,

amended or added June 30, 2011 (P.L.159, No.26), are amended to

read:

Section 1605-B.  Keystone Opportunity Zone.

[Before September 1, 2011, the] Within four months following

the designation of a neighborhood improvement zone, a city

[shall] may apply to the Department of Community and Economic

Development to decertify and remove the designation of all or

part of the Keystone Opportunity Zone on behalf of all political

subdivisions. The provisions of section 309 of the act of

October 6, 1998 (P.L.705, No.92), known as the Keystone

Opportunity Zone, Keystone Opportunity Expansion Zone and

Keystone Opportunity Improvement Zone Act shall be deemed

satisfied as to all political subdivisions. The Department of

Community and Economic Development shall act on the application

within 30 days.

Section 1607-B.  Commonwealth pledges.

If and to the extent that the contracting authority pledges

amounts required to be transferred to the fund of the

contracting authority under section 1604-B for the payment of

bonds issued by the contracting authority, until all bonds

secured by the pledge of the contracting authority, together

with the interest on the bonds, are fully paid or provided for,

the Commonwealth pledges to and agrees with any person, firm,

corporation or government agency, whether in this Commonwealth

or elsewhere, and to and with any Federal agency subscribing to

or acquiring the bonds issued by the contracting authority that

the Commonwealth itself will not, nor will it authorize any

government entity to, abolish or reduce the size of the

neighborhood improvement zone; to amend or repeal section 1604-

B(a.1), (b) or (d); to limit or alter the rights vested in the

contracting authority in a manner inconsistent with the

obligations of the contracting authority with respect to the

bonds issued by the contracting authority; or to otherwise

impair revenues to be paid under this article to the contracting

authority necessary to pay debt service on bonds. Nothing in

this section shall limit the authority of the Commonwealth or

any government entity to change the rate, tax bases or any

subject of any specific tax or repealing or enacting any tax.

Section 1601-D.1.  Administrative oversight.

(a)  Scope of article.--This section applies to a city of the

third class which is determined to be financially distressed

under section 203 of the act of July 10, 1987 (P.L.246, No.47),

known as the Municipalities Financial Recovery Act.

(b)  Limitation on bankruptcy.--Notwithstanding any other

provision of law, including section 261 of the Municipalities

Financial Recovery Act, no distressed city may file a petition

for relief under 11 U.S.C. Ch. 9 (relating to adjustment of

debts of a municipality) or any other Federal bankruptcy law,

and no government agency may authorize the distressed city to

become a debtor under 11 U.S.C. Ch. 9 or any other Federal

bankruptcy law.

(c)  Penalty.--If a city subject to this section fails to

comply with subsection (b), all Commonwealth funding to the city

shall be suspended.

(d)  Expiration.--This section shall expire [July 1, 2012]

November 30, 2012.

Section 7.  (Reserved).

Section 8.  (Reserved).

Section 9.  The act is amended by adding sections to read:

Section 1606-E.  Conventional oil and gas well bonding.

(a)  Requirement.--Notwithstanding 58 Pa.C.S. § 3225(a)(1)

(relating to bonding), the bond amount for conventional oil or

gas wells shall be $2,500 per well or a blanket bond of $25,000.

The Environmental Quality Board shall undertake a review of the

existing bond requirements for conventional oil and gas wells.

Nothing in this section shall be construed to alter or repeal

section 1934-A of the act of April 9, 1929 (P.L.177, No.175),

known as The Administrative Code of 1929.

(b)  Definition.--As used in this section, the term

"conventional oil or gas well" means any oil or gas well which

is not an unconventional well as defined in 58 Pa.C.S. § 3203

(relating to definitions).

Section 1607-E.  Oil and gas operations in the South Newark

Basin.

(a)  Legislative findings.--The General Assembly finds and

declares that:

(1)  The United States Geological Survey issued a report

in June of 2012, entitled "Assessment of Undiscovered Oil and

Gas Resources of the East Coast Mesozoic Basins of the

Piedmont, Blue Ridge Thrust Belt, Atlantic Coastal Plain, and

New England Provinces, 2011."

(2)  The report under paragraph (1) revealed a mean

average of 876,000,000,000 cubic feet of total undiscovered

natural gas resources in the South Newark Basin assessment

unit.

(3)  The unique geologic and geochemical characteristics

of the South Newark Basin evaluated in the report under

paragraph (1) have not been adequately evaluated by the

Commonwealth and are deserving of further study.

(b)  Well permits.--The Department of Environmental

Protection may not issue well permits under 58 Pa.C.S. Ch. 32

(relating to development) to engage in oil and gas operations

within the geographic boundaries of the South Newark Basin, as

defined by the report under subsection (a), until all of the

following has occurred:

(1)  A study is completed by the Department of

Conservation and Natural Resources, in consultation with the

municipalities located in the South Newark Basin, evaluating

the practical resource recovery implications of the report

under subsection (a) and the fiscal impact of oil and gas

operations on the South Newark Basin.

(2)  Legislation authorizes the governing body of a

county situated in whole or in part within the South Newark

Basin that has spud a gas well located within its borders to

elect whether to impose a fee on gas wells pursuant to 58

Pa.C.S. Ch. 23 (relating to unconventional gas well fee).

(c)  Expiration.--This section shall expire January 1, 2018.

Section 10.  Section 1602-F of the act, added June 30, 2011

(P.L.159, No.26), is amended to read:

Section 1602-F.  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:

"Affiliate."  As follows:

(1)  an entity which is part of the same "affiliated

group," as defined in section 1504(a) of the Internal Revenue

Code of 1986 (Public Law 99-514, 26 U.S.C. § 1504(a)), as a

Keystone Special Development Zone employer; or

(2)  an entity that would be part of the same "affiliated

group" except that the entity or the Keystone Special

Development employer is not a corporation.

"Department."  The Department of Community and Economic

Development of the Commonwealth.

"Employee."  An individual who:

(1)  is employed in this Commonwealth by a Keystone

Special Development Zone employer, or its predecessor, after

the effective date of this article;

(2)  is employed for at least 35 hours per week by a

Keystone Special Development Zone employer; and

(3)  spends at least 90% of his or her working time for

the Keystone Special Development Zone employer at the

Keystone Special Development Zone location.

"Full-time equivalent employee."  The whole number of

employees, rounded down, that equals the sum of:

(1)  the total paid hours, including paid time off and

family leave under the Family and Medical Leave Act of 1993

(Public Law 103-3, 29 U.S.C. § 2601 et seq.), of all of a

Keystone Special Development Zone employer's employees

classified as nonexempt during the Keystone Special

Development Zone employer's tax year divided by 2000; and

(2)  a total number arrived at by adding, for each

Keystone Special Development Zone employer's employee

classified as exempt scheduled to work at least 35 hours per

week, the fraction equal to the portion of the year the

exempt employee was paid by the Keystone Special Development

Zone employer. Whether an employee shall be classified as

exempt or nonexempt shall be determined under the Fair Labor

Standards Act of 1938 (52 Stat. 1060, 29 U.S.C. § 201 et

seq.).

The calculation under this definition excludes employees

previously employed by an affiliate and employees previously

employed by the Keystone Special Development Zone employer

outside of a Keystone Special Development Zone.

"Keystone Special Development Zone."  A parcel of real

property that meets all of the following:

(1)  On July 1, 2011, was within a special industrial

area, as described in section 305(a) of the act of May 19,

1995 (P.L.4, No.2), known as the Land Recycling and

Environmental Remediation Standards Act, for which the

Department of Environmental Protection has executed a special

industrial area consent order and agreement, as provided

under section 502(a) of the Land Recycling and Environmental

Remediation Standards Act.

(2)  On July 1, 2011[,]:

(i)  had no permanent vertical structures affixed to

it; or

(ii)  had a permanent vertical structure affixed to

it which has been deteriorated or abandoned for at least

20 years.

(3)  Is certified by the Department of Environmental

Protection as meeting the requirements of paragraphs (1) and

(2).

"Keystone Special Development Zone employer."  A person or

entity subject to the taxes imposed under Article III, IV, VI,

VII, VIII or XV of the act of March 4, 1971 (P.L.6, No.2) known

as the Tax Reform Code of 1971, who employs one or more

employees at a Keystone Special Development Zone. The term shall

include a pass-through entity. The term shall not include any of

the following:

(1)  An employer who, after January 1, 1990,

intentionally or negligently caused or contributed to, in any

material respect, a level of regulated substance above the

cleanup standards in the act of May 19, 1995 (P.L.4, No.2),

known as the Land Recycling and Environmental Remediation

Standards Act, on, in or under the Keystone Special

Development Zone at which an employee is employed.

(2)  An employer engaged in construction improvements on

a Keystone Special Development Zone.

"Pass-through entity."  A partnership as defined in section

301(n.0) of the act of March 4, 1971 (P.L.6, No.2), known as the

Tax Reform Code of 1971, or a Pennsylvania S corporation as

defined in section 301(n.1) of the Tax Reform Code of 1971.

"Qualified tax liability."  Any tax owed by a Keystone

Special Development Zone employer attributable to a business

activity conducted within a Keystone Special Development Zone

for a tax year under Article III, IV, VI, VII, VIII or XV of the

act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code

of 1971.

Section 10.1.  Section 1601-H of the act, added July 6, 2010

(P.L.279, No.46), is repealed:

[Section 1601-H.  Department of Education.

(a)  Applicability.--This section shall apply to Educational

Improvement Tax Credits awarded in fiscal year 2010-2011.

(b)  Restoration.--Notwithstanding Articles XVII-F and XXIX-E

of the act of March 4, 1971 (P.L.6, No.2), known as the Tax

Reform Code of 1971, for the tax credit established under

Article XVII-F of the Tax Reform Code of 1971, the amount

available to be awarded pursuant to section 1706-F(a) of the Tax

Reform Code of 1971 shall be $60,000,000 in fiscal year

2010-2011. The amount available to be awarded under section

1706-F(a)(1) and (2) of the Tax Reform Code of 1971 shall be as

follows:

(1)  The total aggregate amount of all tax credits

approved shall not exceed $53,604,000 in fiscal year

2010-2011. No less than $40,202,400 of the total aggregate

amount shall be used to provide tax credits for contributions

from business firms to scholarship organizations. No less

than $13,401,600 of the total aggregate amount shall be used

to provide tax credits for contributions from business firms

to educational improvement organizations.

(2)  The total aggregate amount of all tax credits

approved for contributions from business firms to

prekindergarten scholarship programs shall not exceed

$6,396,000 in fiscal year 2010-2011.]

Section 10.1a.  Sections 1602-H and 1603-H, added June 30,

2011 (P.L.159, No.26), are repealed:  

[Section 1602-H.  Department of Revenue.

For fiscal year 2011-2012 and each fiscal year thereafter and

notwithstanding section 1709-B(a) of the act of March 4, 1971

(P.L.6, No.2), known as the Tax Reform Code of 1971, the amount

of credits approved by the Department of Revenue under Article

XVII-B of the Tax Reform Code of 1971 shall not exceed

$55,000,000 in a fiscal year, and $11,000,000 of that amount

shall be allocated exclusively for small business. As used in

this section, the term "small business" has the meaning ascribed

in section 1702-B of the Tax Reform Code of 1971.

Section 1603-H.  Department of Community and Economic

Development.

For fiscal year 2011-2012 and each fiscal year thereafter,

the Department of Community and Economic Development may approve

tax credits as follows:

(1)  Notwithstanding section 1707-D(a) of the act of

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

1971, the aggregate amount of tax credits awarded under

Article XVII-D of the Tax Reform Code of 1971 shall not

exceed $60,000,000 in a fiscal year.

(2)  Notwithstanding section 1804-B(e) of the Tax Reform

Code of 1971, awards by the department shall not exceed

$10,100,000 in tax credits under Article XVIII-B of the Tax

Reform Code of 1971.]

Section 10.2.  The definition of "extension period" in

section 1602-I of the act, added July 6, 2010 (P.L.279, No.46),

is amended to read:

Section 1602-I.  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:

* * *

"Extension period."  The period beginning after December 31,

2008, and ending before July 2, [2013] 2016.

* * *

Section 11.  Sections 1702-A and 1715-E of the act, amended

June 30, 2011 (P.L.159, No.26), are amended to read:

Section 1702-A.  Funding.

(a)  Intent.--It is hereby declared as the intent and goal of

the General Assembly to create a stabilization reserve in an

eventual amount of 6% of the revenues of the General Fund of the

Commonwealth.

(b)  Transfer of portion of surplus.--

(1)  Except as may be provided in paragraph (2), for

fiscal years beginning after June 30, 2002, the following

apply:

(i)  Except as set forth in this paragraph, if the

Secretary of the Budget certifies that there is a surplus

in the General Fund for a specific fiscal year, 25% of

the surplus shall be deposited by the end of the next

succeeding quarter into the Budget Stabilization Reserve

Fund.

(ii)  If the Secretary of the Budget certifies, after

June 30, 2005, that there is a surplus in the General

Fund for the fiscal year 2004-2005, 15% of the surplus

shall be deposited by the end of the next succeeding

quarter into the Budget Stabilization Reserve Fund.

(iii)  No amount of the surplus in the General Fund

for fiscal year 2007-2008 may be deposited into the

Budget Stabilization Reserve Fund.

(iv)  No amount of the surplus in the General Fund

for fiscal year 2010-2011 may be deposited into the

Budget Stabilization Reserve Fund.

(v)  No amount of the surplus in the General Fund for

fiscal year 2011-2012 may be deposited into the Budget

Stabilization Reserve Fund.

(2)  If, at the end of any fiscal year, the ending

balance of the Budget Stabilization Reserve Fund equals or

exceeds 6% of the actual General Fund revenues received for

the fiscal year in which the surplus occurs, 10% of the

surplus shall be deposited by the end of the next succeeding

quarter into the Budget Reserve Stabilization Fund.

(c)  Appropriated funds.--The General Assembly may at any

time provide additional amounts from any funds available to this

Commonwealth as an appropriation to the Budget Stabilization

Reserve Fund.

Section 1715-E.  Auditor General.

The following shall apply to appropriations to the Auditor

General:

(1)  Funds appropriated to the Department of the Auditor

General shall be for the purpose of performing postaudits in

accordance with generally accepted government auditing

standards.

(2)  [If] By March 31, the Auditor General [fails to]

shall deliver [an] to the Office of the Budget a complete 

annual audit of Commonwealth-managed federally funded

programs [by March 31, 2012, and each March 31 thereafter,]

in accordance with the Single Audit Act of 1984 (Public Law

98-502, 31 U.S.C. § 7501 et seq.) and related guidance issued

by the [United States] Office of Management and Budget; or

the Auditor General and the Office of the Budget must agree

in writing that extenuating circumstances prevent the Auditor

General from completing the audit by the specified date. If

there is noncompliance with this paragraph, the State

Treasurer shall not authorize the release of any funds

appropriated to the Auditor General in the quarter following

the failure of the Auditor General to deliver the audit until

the Auditor General completes the audit and delivers it to

the Office of the Budget. The Auditor General shall not bill

any Commonwealth agency to make up for any funding deficiency

caused by the State Treasurer withholding payments under this

paragraph.

(3)  The Auditor General shall provide the Office of the

Budget a Single Audit Engagement Letter, including the total

cost to perform the audit and a timeline each year for annual

funding approval.

Section 12.  Sections 1727-E and 1729-E(2)(i) of the act,

added July 17, 2007 (P.L.141, No.42), are amended to read:

Section 1727-E.  Department of Labor and Industry [(Reserved)].

For the "Reed Act-Unemployment Insurance" and "Reed Act-

Employment Services and Unemployment Insurance" appropriations,

the total amount which may be obligated shall not exceed the

limitations under section 903 of the Social Security Act (49

Stat. 620, 42 U.S.C. § 1103).

Section 1729-E.  Department of Public Welfare.

The following shall apply to appropriations for the

Department of Public Welfare:

* * *

(2)  Federal and State medical assistance payments. The

following shall apply:

(i)  [(Reserved).] No funds appropriated for approved

capitation plans shall be used to pay a provider who

fails to supply information in a form required by the

department in order to facilitate claims for Federal

financial participation for services rendered to general

assistance clients.

* * *

Section 13.  Repeals are as follows:

(1)  The General Assembly finds and declares as follows:

(i)  Each year, articles on budget implementation are

added to the act.

(ii)  These articles are temporary in nature but are

placed permanently into the act, utilizing article

numbers and section numbers.

(iii)  Reusing article numbers and section numbers

will keep the text of the act more concise.

(iv)  The repeal under paragraph (2) is necessary to

effectuate subparagraph (iii).

(2)  Articles XVII-F and XVII-G of the act, added July

17, 2007 (P.L.141, No.42), are repealed.

Section 14.  The act is amended by adding articles to read:

ARTICLE XVII-F

2012-2013 BUDGET IMPLEMENTATION

SUBARTICLE A

PRELIMINARY PROVISIONS

Section 1701-F.  Applicability.

Except as specifically provided in this article, this article

applies to the General Appropriation Act and all other

appropriation acts of 2012.

Section 1702-F.  Definitions and abbreviations.

(a)  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:

"General Appropriation Act."  The act of     , 2012 (P.L.   ,

No.   A), known as the General Appropriation Act of 2012.

"Secretary."  The Secretary of the Budget of the

Commonwealth.

(b)  Abbreviations.--The following abbreviations when used in

this article shall have the meanings given to them in this

section:

"AIDS."  Acquired Immune Deficiency Syndrome.

"ARC."  Appalachian Regional Commission.

"ARRA."  The American Recovery and Reinvestment Act of 2009

(Public Law 111-5, 123 Stat. 115).

"BG."  Block Grant.

"CCDFBG."  Child Care and Development Fund Block Grant.

"CSBG."  Community Services Block Grant.

"DCSI."  Drug Control and Systems Improvement Formula Grant

Program.

"DFSC."  The Safe and Drug-Free Schools and Communities Act

(Public Law 107-110, 20 U.S.C. § 7101 et seq.).

"DOE."  Department of Energy.

"EEOC."  Equal Employment Opportunity Commission.

"EPA."  Environmental Protection Agency.

"ESEA."  The Elementary and Secondary Education Act of 1965

(Public Law 89-10, 20 U.S.C. § 6301 et seq.).

"FEMA."  Federal Emergency Management Agency.

"FTA."  Federal Transit Administration.

"HUD."  Department of Housing and Urban Development.

"ID."  Intellectual Disability.

"LIHEABG."  Low-Income Home Energy Assistance Block Grant.

"LSTA."  The Library Services and Technology Act (Public Law

104-208, 20 U.S.C. § 9101 et seq.).

"MCHSBG."  Maternal and Child Health Services Block Grant.

"MHSBG."  Mental Health Services Block Grant.

"PAFE."  Pennsylvania Agricultural Food Exposition.

"PHHSBG."  Preventive Health and Health Services Block Grant.

"RSAT."  Residential Substance Abuse Treatment.

"SABG."  Substance Abuse Block Grant.

"SCDBG."  Small Communities Development Block Grant.

"SDA."  Service Delivery Area.

"SSBG."  Social Services Block Grant.

"TANF."  Temporary Assistance for Needy Families.

"TANFBG."  Temporary Assistance for Needy Families Block

Grant.

"TEFAP."  Temporary Emergency Food Assistance Program.

"WIA."  The Workforce Investment Act of 1998 (Public Law

105-220, 112 Stat. 936).

"WIC."  Women, Infants and Children Program.

SUBARTICLE B

EXECUTIVE DEPARTMENTS

Section 1711-F.  Governor (Reserved).

Section 1712-F.  Executive Offices.

(1)  Money appropriated to the Pennsylvania Commission on

Crime and Delinquency for intermediate punishment treatment

programs shall be allocated in the same proportion as funding

provided in fiscal year 2011-2012 for intermediate punishment

programs and for intermediate punishment drug and alcohol

treatment.

(2)  From money appropriated to the commission, at least

$85,000 shall be used to support the Statewide Automated

Victim Information and Notification System (SAVIN) to provide

offender information through county jails.

(3)  From money appropriated to the commission, at least

$50,000 shall be used for gang violence prevention

initiatives in counties of the third class.

(4)  From money appropriated for violence prevention

programs, at least $250,000 shall be used for programs in a

city of the first class.

Section 1713-F.  Lieutenant Governor (Reserved).

Section 1714-F.  Attorney General (Reserved).

Section 1715-F.  Auditor General (Reserved).

Section 1716-F.  Treasury Department (Reserved).

Section 1717-F.  Department of Aging (Reserved).

Section 1718-F.  Department of Agriculture.

At least 80% of the funds appropriated for hardwoods research

and promotion shall be equally distributed among the hardwood

utilization groups of this Commonwealth established prior to the

effective date of this section.

Section 1719-F.  Department of Community and Economic

Development.

The following shall apply to appropriations for the

Department of Community and Economic Development:

(1)  For fiscal year 2012-2013, money appropriated for

the Keystone Communities shall include allocations for the

Main Street and Elm Street programs in the same proportion as

amounts allocated in fiscal year 2011-2012.

(2)  Money appropriated for PennPORTS for fiscal year

2012-2013 shall be allocated as follows:

(i)  Six and ninety-seven hundredths percent for

PennPORTS operation.

(ii)  Eight percent for the Port of Pittsburgh.

(iii)  Twenty-three and three hundredths percent for

the Port of Erie.

(iv)  Sixty-two percent for the operating and

administrative expenses of the Philadelphia Regional Port

Authority.

(3)  Money appropriated for marketing to attract tourists

includes an allocation to market a biennial arts and cultural

activity which generates regional and Statewide economic

impact and allocations to promote annual arts and cultural

activities.

(4)  From money appropriated for Pennsylvania First,

$800,000 shall be distributed through a pilot program to

purchase mobile imaging and cardiovascular hospital

equipment.

Section 1720-F.  Department of Conservation and Natural

Resources (Reserved).

Section 1721-F.  Department of Corrections (Reserved).

Section 1722-F.  Department of Education.

The following shall apply to appropriations for the

Department of Education in the General Appropriation Act:

(1)  Notwithstanding section 1905-D of the act of March

10, 1949 (P.L.30, No.14), known as the Public School Code of

1949, funds appropriated for community education councils

shall be distributed as follows:

(i)  Each community education council which received

funding in fiscal year 2011-2012 shall receive an amount

equal to the amount it received in that fiscal year and a

pro rata share of $170,000.

(ii)  In addition to the funds received under

subparagraph (i), a grant in an amount not less than

$100,000 shall be awarded to a community education

council located in Potter County.

(iii)  No less than $350,000 shall be awarded to an

education consortium serving Cameron, Clarion,

Clearfield, Crawford, Elk, Forest, Jefferson, McKean,

Potter, Venango and Warren Counties.

(iv)  No less than $50,000 shall be awarded to an

education partnership located in Lackawanna County that

previously received funding from the department for a

postsecondary career training grant and is currently

providing community education services which support

business education partnerships.

(v)  No less than $50,000 shall be awarded to a

community education council located in Wayne County.

(2)  From funds appropriated for regional community

college services, $500,000 shall be distributed to a

community college in a county of the fourth class with a

population, based on the most recent Federal decennial

census, of at least 165,000 but not more than 180,000.

(3)  From funds appropriated for approved private

schools, $700,000 shall be allocated to a school which has

received approval from the department to begin serving

students as an approved private school for the 2012-2013

school year.

(4)  Notwithstanding 24 Pa.C.S. § 8329(a) (relating to

payments on account of social security deductions from

appropriations), when calculating payments by the

Commonwealth under 24 Pa.C.S. § 8329, the department shall

treat the following as covered wages which are not federally

funded:

(i)  Wages paid out of the ARRA State Stabilization

Fund.

(ii)  Wages paid out of the ARRA funds appropriated

for individuals with disabilities education (Part B -

preschool age 3-5).

(iii)  Wages paid out of the Education Jobs Fund

Grant.

(5)  For Federal funds redistributed to the department

from the act of August 10, 2010 (Public Law 111-226, 124

Stat. 2389), each district shall receive a pro rata share of

the Federal education job funds based on the amount of the

allocation it received in accordance with section 1722-L(14).

If a district notifies the department that it will refuse its

pro rata share of these funds, the department shall include

those refused funds in the pro rata distribution among the

remaining districts. This shall apply to appropriations made

to the department under Part XIX of the General Appropriation

Act.

(6)  Notwithstanding section 1724-A of the Public School

Code of 1949 or 24 Pa.C.S. § 8329, no payments shall be made

to charter schools or cyber charter schools authorized under

Article XVII-A of the Public School Code of 1949, from funds

appropriated for school employee's Social Security.

(7)  Notwithstanding any other provision of law, funds

from the set-aside under section 2509.8(e) of the Public

School Code of 1949 shall be allocated to each approved

private school with a day tuition rate determined to be less

than $32,000 during the 2010-2011 school year. The allocation

shall be determined as follows:

(i)  Subtract:

(A)  the approved private school's 2010-2011

school year day tuition rate; from

(B)  $38,072.

(ii)  Multiply:

(A)  the difference under subparagraph (i); by

(B)  the number of approved students enrolled in

the approved private school during the 2010-2011

school year.

(8)  From funds appropriated for Pennsylvania Charter

Schools for the Deaf and Blind, $750,000 shall be distributed

pro rata based on each school's share of required

contributions for public school employees' retirement.

(9)  Notwithstanding any other provision of law, the

department may directly distribute money from funds

appropriated in Part XIX of the General Appropriations Act

for basic education formula enhancement on behalf of a school

district located in a home rule county that was formerly a

county of the second class A and which has, as of June 30,

2012, outstanding statutory and accounts payable obligations

for the 2011-2012 fiscal year.

Section 1723-F.  Department of Environmental Protection.

The following shall apply to appropriations for the

Department of Environmental Protection in the General

Appropriation Act:

(1)  Notwithstanding section 502 of the act of July 9,

2008 (1st Sp.Sess., P.L.1873, No.1), known as the Alternative

Energy Investment Act, in fiscal year 2012-2013, no funds

shall be appropriated from the General Fund to the department

for the Consumer Energy Program. Any appropriation for fiscal

year 2012-2013 is revoked.

(2)  (Reserved).

Section 1724-F.  Department of General Services (Reserved).

Section 1725-F.  Department of Health.

(1)  Funds appropriated for lupus programs shall be

distributed in the same proportion as distributed in fiscal

year 2011-2012.

(2)  Funds appropriated for biotechnology research

include allocations for regenerative medicine research; for

hepatitis and viral research; for drug research and clinical

trials related to cancer; and for genetic and molecular

research for disease identification and eradication.

Section 1726-F.  Insurance Department (Reserved).

Section 1727-F.  Department of Labor and Industry.

The following shall apply to appropriations for the

Department of Labor and Industry from the General Appropriation

Act:

(1)  The appropriation for payment to the Vocational

Rehabilitation Fund for work of the State Board of Vocational

Rehabilitation includes $2,153,000 for a Statewide

professional service provider association for the blind to

provide specialized services and prevention of blindness

services and $431,000 to provide specialized services and

prevention of blindness services in cities of the first

class.

(2)  From funds appropriated to the department for

general government operations, $250,000 shall be used for the

purchase of transportation assistance for job retention, job

training and job search activities for displaced, unemployed

and disabled individuals and families in counties of the

second class.

Section 1728-F.  Department of Military and Veterans Affairs

(Reserved).

Section 1729-F.  Department of Public Welfare.

The following shall apply to appropriations for the

Department of Public Welfare from the General Appropriation Act:

(1)  Authorized transfers for child-care services. The

following shall apply:

(i)  The department, upon approval of the secretary,

may transfer Federal funds appropriated for TANFBG Child

Care Assistance to the CCDFBG Child Care Services

appropriation to provide child-care services to

additional low-income families if the transfer of funds

will not result in a deficit in the appropriation. The

secretary shall provide notice ten days prior to a

transfer under this subparagraph to the chairman and

minority chairman of the Appropriations Committee of the

Senate and the chairman and minority chairman of the

Appropriations Committee of the House of Representatives.

(ii)  The department, upon approval of the secretary,

may transfer Federal funds appropriated for CCDFBG Child

Care Assistance to the CCDFBG Child Care Services

appropriation to provide child-care services to

additional low-income families, provided that the

transfer of funds will not result in a deficit in the

appropriation. The secretary shall provide notice ten

days prior to a transfer under this subparagraph to the