PRINTER'S NO. 1266
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
244
Session of
2015
INTRODUCED BY HUGHES, FARNESE, FONTANA, TARTAGLIONE, YUDICHAK,
BREWSTER, COSTA, SCHWANK, BOSCOLA AND BLAKE,
SEPTEMBER 25, 2015
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
SEPTEMBER 25, 2015
AN ACT
Providing for the sale of Build Pennsylvania Bonds; and
conferring powers and imposing duties on the Commonwealth
Financing Authority and the Department of Revenue.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Build
Pennsylvania Bond and Tax Credit Act.
Section 102. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Authority." The Commonwealth Financing Authority.
"Build Pennsylvania Bonds." Build Pennsylvania Bonds
authorized under section 301 that entitle the beneficial owners
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of the Build Pennsylvania Bonds to tax credits authorized under
this act.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV, VII, VIII, IX or XV of the Tax Reform
Code. The term does not include amounts withheld or required to
be withheld from employees under Article III of the Tax Reform
Code.
"Tax credit." The tax credit established under section 501.
"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
CHAPTER 3
BONDS
Section 301. Issuance of Build Pennsylvania Bonds.
(a) Limit.--The authority may incur indebtedness under this
section in an amount up to $1,000,000,000 plus the payment of
all reasonable costs and expenses related to the issuance of
indebtedness in accordance with 64 Pa.C.S. Ch. 15 (relating to
Commonwealth Financing Authority) for up to 30 years. The total
principal amount of bond proceeds authorized to be issued under
this act shall be limited to $200,000,000 per year for a period
of five years beginning in fiscal year 2015-2016.
(b) Use.--Proceeds of Build Pennsylvania Bonds issued under
this section shall be used for the purposes under section 302.
(c) Future use.--Any portion of the authorization under
subsection (a) not used in a fiscal year may be used in a future
fiscal year if, prior to the issuance of the Build Pennsylvania
Bonds, the authority determines that the aggregate amount of tax
credits for which taxpayers would be eligible based on the
issuance does not exceed the maximum amount of tax credits
authorized in that fiscal year under section 501(c).
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(d) Final maturity.--Build Pennsylvania Bonds may not have a
final maturity in excess of 30 years from the date of issuance.
The principal of each series of Build Pennsylvania Bonds must be
structured on an approximately level debt service basis, taking
into account the annual tax credits and any supplemental
interest payable by the authority.
Section 302. Use of bond proceeds.
Funds received from the issuance of Build Pennsylvania Bonds
shall be used by the authority as follows:
(1) No more than $500,000,000 over five years may be
used by the authority to fund eligible projects under the act
of July 9, 2008 (P.L.908, No.63), known as the H2O PA Act.
The prohibition on grants for projects located in a city or
county of the first class or second class under section 301
of the H2O PA Act shall not apply to funds distributed for
H2O PA projects under this paragraph.
(2) No more than $500,000,000 over five years may be
transferred to the Pennsylvania Infrastructure Investment
Authority to be used for eligible projects under the act of
March 1, 1988 (P.L.82, No.16), known as the Pennsylvania
Infrastructure Investment Authority Act.
Section 303. Debt service.
Payments on the principal of bond funds received by the
authority shall be paid from funds received by the authority or
by the Pennsylvania Infrastructure Investment Authority under 58
Pa.C.S. § 2315(a.1)(4) (relating to Statewide initiatives).
Section 304. Transfers from Pennsylvania Infrastructure
Investment Authority.
Notwithstanding any other provision of law, all funds
received by the Pennsylvania Infrastructure Investment Authority
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under 58 Pa.C.S. § 2315(a.1)(4) (relating to Statewide
initiatives) shall be transferred to the authority and used for
the payment of debt service under this act.
Section 305. Debt or liability of Commonwealth or political
subdivision.
(a) Commonwealth.--Build Pennsylvania Bonds issued under
this act shall not be a debt or liability of the Commonwealth
and shall not create or constitute any indebtedness, liability
or obligation of the Commonwealth.
(b) Revenue.--Build Pennsylvania Bonds shall be payable
solely from revenues listed under section 303 and funds
appropriated to the authority for repayment.
(c) Statements.--All Build Pennsylvania Bonds must contain
on their faces statements to the effect that:
(1) The authority is obligated to pay the principal of
the Build Pennsylvania Bonds only from the revenue sources
under section 303 or funds appropriated to the authority for
repayment.
(2) Interest on the Build Pennsylvania Bonds will be
paid in the form of tax credits under section 501.
(3) Neither the Commonwealth nor any political
subdivision is obligated to pay the principal or interest on
the Build Pennsylvania Bonds.
(4) Neither the faith and credit nor the taxing power of
the Commonwealth or any political subdivision is pledged to
the payment of the principal of or the interest on the Build
Pennsylvania Bonds.
Section 306. Commonwealth pledges.
The Commonwealth pledges to and agrees with each obligee of
the authority that the Commonwealth will not limit or alter the
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rights and powers vested in the authority or created under this
act in any manner inconsistent with the obligations of the
authority to its obligees until all Build Pennsylvania Bonds
issued, together with the interest on the Build Pennsylvania
Bonds paid through tax credits authorized under section 501, are
fully paid and discharged.
CHAPTER 5
TAX CREDIT
Section 501. Build Pennsylvania Bond tax credit.
(a) Claim.--A holder of a Build Pennsylvania Bond may claim
a tax credit against its qualified tax liability.
(b) Refund or 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 taxpayer may request a
refund of the excess or 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
if the aggregate amount of tax credits for which taxpayers would
be eligible based on the issuance does not exceed the maximum
amount of tax credits authorized in that fiscal year under
subsection (c). Each time the tax credit is carried over to a
succeeding taxable year, it shall 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 no more than five taxable years
following the first taxable year for which the taxpayer was
entitled to claim the credit, or until the credit has been
exhausted, whichever occurs first.
(c) Amount.--The amount of the tax credit may not exceed any
of the following:
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(1) The greater of 5% of the face amount of the Build
Pennsylvania Bonds outstanding.
(2) The yield required to market the Build Pennsylvania
Bonds to investors at the price of par.
(3) Any of the following:
(i) For fiscal year 2015-2016, $10,000,000.
(ii) For fiscal year 2016-2017, $20,000,000.
(iii) For fiscal year 2017-2018, $30,000,000.
(iv) For fiscal year 2018-2019, $40,000,000.
(v) For fiscal year 2019-2020 through fiscal year
2024-2025, $50,000,000.
(vi) For fiscal year 2025-2026 through fiscal year
2029-2030, $40,000,000.
(vii) For fiscal year 2030-2031 through fiscal year
2035-2036, $30,000,000.
(viii) For fiscal year 2036-2037 through fiscal year
2041-2042, $20,000,000.
(ix) For fiscal year 2042-2043 through fiscal year
2049-2050, $10,000,000.
(d) Duties.--The authority, in consultation with the
Department of Revenue, shall do all of the following:
(1) Certify the amount of each annual tax credit
awarded.
(2) Issue documentation evidencing the tax credit to the
registered owners of the Build Pennsylvania Bonds on each
record date and request from those registered owners the
names of the beneficial owners of the Build Pennsylvania
Bonds on the record date, the taxpayer identification number
of each beneficial owner and the amount of tax credit to
which each beneficial owner is entitled.
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(3) Request each registered owner of each Build
Pennsylvania Bond to provide each beneficial owner of that
Build Pennsylvania Bond with a copy of the information under
paragraph (2).
CHAPTER 21
MISCELLANEOUS PROVISIONS
Section 2101. Effective date.
This act shall take effect in 60 days.
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