PRINTER'S NO. 2294
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1990
Session of
2021
INTRODUCED BY PISCIOTTANO, SCHLOSSBERG, POLINCHOCK, MALAGARI,
SANCHEZ, A. DAVIS, STAATS, DELLOSO, McNEILL, HILL-EVANS,
DEASY, A. BROWN, CIRESI, O'MARA, BROOKS, KULIK AND
FITZGERALD, OCTOBER 22, 2021
REFERRED TO COMMITTEE ON FINANCE, OCTOBER 22, 2021
AN ACT
Amending Title 35 (Health and Safety) of the Pennsylvania
Consolidated Statutes, providing for property tax relief for
volunteer firefighters.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 35 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read
CHAPTER 79B
PROPERTY TAX RELIEF FOR VOLUNTEER FIREFIGHTERS
Sec.
79B01. Scope of chapter.
79B02. Definitions.
79B03. Volunteer Firefighter Tax Aid Program.
79B04. Qualifications for tax credits.
79B05. Award of tax credits.
79B06. Temporary increase in maximum tax credits available.
79B07. Limitations.
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79B08. List of tax relief organizations.
79B09. Ineligibility after receiving benefits.
§ 79B01. Scope of chapter.
This article provides provides property tax relief for
volunteer firefighters.
§ 79B02. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Applicable tax." A tax due under Article III, IV, VII,
VIII, IX, XV or XX of the Tax Reform Code of 1971 or a tax under
Article XVI of the act of May 17, 1921 (P.L.682, No.284), known
as The Insurance Company Law of 1921.
"Applicant." An individual who submits an application to the
department for a tax relief payment.
"Contribution." A donation of cash, personal property or
services, the value of which is the cost of the donation to the
donor.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Fire company." As defined in section 7412 (relating to
definitions).
"Fire service." As defined in section 7412.
"Internal Revenue Code of 1986." The Internal Revenue Code
of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).
"Pass-through entity." A partnership as defined in section
301(n.0) of the Tax Reform Code of 1971, a single-member limited
liability company treated as a disregarded entity for Federal
income tax purposes or a Pennsylvania S corporation as defined
in section 301(n.1) of the Tax Reform Code of 1971. The term
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includes a pass-through entity that owns an interest in a pass-
through entity and a qualified Subchapter S trust.
"Program." The Volunteer Firefighter Tax Aid Program
established under section 79B03 (relating to Volunteer
Firefighter Tax Aid Program ).
"Qualified Subchapter S trust." As defined in section
1361(d)(3) of the Internal Revenue Code of 1986.
"Recipient." A volunteer firefighter who receives real
property relief from a tax relief payment.
"Tax credit." A tax credit under this chapter.
"Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
"Tax relief organization." As follows:
(1) A nonprofit entity which:
(i) is exempt from Federal taxation under section
501(c)(3) of the Internal Revenue Code of 1986; and
(ii) contributes at least 90% of the nonprofit
entity's annual cash receipts to a tax relief program.
(2) For the purpose of this definition, a nonprofit
entity contributes the nonprofit entity's annual cash
receipts to a tax relief program when the nonprofit entity
expends or otherwise irrevocably encumbers the funds for
distribution during the then-current fiscal year of the
nonprofit entity or during the next succeeding fiscal year of
the nonprofit entity.
(3) The term includes a volunteer firefighter
foundation, nonprofit volunteer fire company, volunteer
firefighters' relief association, public safety authority or
any other organized nonprofit firefighting entity that meets
the criteria specified under paragraph (1).
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"Tax relief payment." A payment to a local school district,
municipality, county or other tax jurisdiction towards the
property tax bill of a recipient.
"Tax relief program." A program, including an application
process and a review process, to provide tax relief payments
for the purpose of making awards on behalf of volunteer
firefighters.
"Volunteer firefighter." As defined in section 7412.
"Volunteer firefighter company." As defined in section 7802
(relating to definitions).
"Volunteer firefighters' relief association." As defined in
section 7412.
§ 79B03. Volunteer Firefighter Tax Aid Program.
(a) Establishment.--The Volunteer Firefighter Tax Aid
Program is established within the department.
(b) Qualifications.--In order to qualify for participation
in the program, a tax relief organization shall have the
following duties:
(1) Certify to the department that the tax relief
organization is exempt from Federal taxation under section
501(c)(3) of the Internal Revenue Code of 1986.
(2) Annually report the following information to the
department by November 1 of each year:
(i) The total number of tax relief payments awarded
during the immediately preceding fiscal year to
recipients.
(ii) The total and average amount of tax relief
payments awarded during the immediately preceding fiscal
year to recipients.
(iii) The total number and total amount of tax
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relief payments awarded during the immediately preceding
fiscal year to recipients in each county in which the tax
relief organization awarded tax relief payments.
(iv) The total number of tax relief payment
applications processed and the amount of application fees
charged, either per tax relief payment application or in
the aggregate through a third-party processor.
(v) The tax relief organization's Federal Form 990
or other Federal form indicating the tax status of the
tax relief organization for Federal tax purposes, if any,
and a copy of a compilation, review or audit of the tax
relief organization's financial statements conducted by a
certified public accounting firm.
(vi) The amount of funds in accounts held by the tax
relief organization that has not been spent on tax relief
payments and the amount of funds held in accounts as a
ratio of the total funds or contributions raised in the
fiscal year.
(c) Submission.--A tax relief organization shall submit the
report under subsection (b)(2) on a form specified by the
department. No later than September 1 of each year, the
department shall annually distribute sample forms, including the
forms on which the reports under subsection (b)(2) are required
to be made, to each tax relief organization listed under
subsection (f).
(d) Relief organizations and authorities.-- A volunteer
firefighters' relief organization or public safety authority
that operates a tax relief organization for the purpose of this
chapter shall deposit contributions in a separate account from
other tax relief payment funds. The volunteer firefighters'
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relief organization or public safety authority shall submit the
report under subsection (b)(2) to the department in a manner
separate from any other report on firefighter or public safety
authority activities.
(e) Notice.--No later than 60 days after a tax relief
organization completes the certification and submits the report
under subsection (b), the department shall notify the tax relief
organization whether the tax relief organization is qualified to
participate in the program.
(f) Publication.--The department shall annually submit a
list of each tax relief organization qualified to participate in
the program to the Legislative Reference Bureau for publication
in the Pennsylvania Bulletin. The department shall post and
update the list under this subsection as necessary on the
department's publicly accessible Internet website.
§ 79B04. Qualifications for tax credits.
(a) Applications.--A business firm may apply to the
department for a tax credit under this chapter for a
contribution to a tax relief organization on the list under
section 79B03(f) (relating to Volunteer Firefighter Tax Aid
Program).
(b) Availability.--The department shall make tax credits
available under this section on a first-come, first-served basis
in accordance with limitations specified under this chapter.
(c) Contributions.--In order to qualify for a tax credit
under this chapter, a business firm shall make a contribution to
a tax relief organization no later than 60 days after the
department approves the business firm's application under
subsection (a). If the business firm does not make a minimum of
50% of the full amount of the approved contribution and has not
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notified the department of the amount of unused contributions
within 14 days after the department approves the business firm's
application under subsection (a), the department may not approve
the business firm's application in the immediately succeeding
fiscal year for more than 150% of the actual amount contributed
in the previous fiscal year.
§ 79B05. Award of tax credits.
(a) Business firms.--In accordance with section 79B04
(relating to qualification for tax credits), the Department of
Revenue shall award a tax credit against any applicable tax to a
business firm that provides proof of a contribution to a tax
relief organization on the list under section 79B03(f) (relating
to Volunteer Firefighter Tax Aid Program) in the taxable year in
which the contribution is made. The department shall award the
tax credit in accordance with the following:
(1) Except as provided in paragraph (2), the tax credit
shall not exceed 75% of the total amount contributed during
the taxable year by the business firm.
(2) If the business firm provides a written commitment
to provide the tax relief organization with the same amount
of contribution for two consecutive tax years, the Department
of Revenue shall grant a tax credit of up to 90% of the total
amount contributed during the taxable year. The business firm
shall provide the written commitment under this paragraph to
the department at the time of application under section
79B04(a).
(3) Except as provided under section 79B06 (relating to
t emporary increase in maximum tax credits available), for
fiscal year 2021-2022 and each fiscal year thereafter, the
tax credit shall not exceed $750,000 annually per business
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firm.
(b) Pass-through entities.--
(1) If a pass-through entity does not intend to use all
of approved tax credits, the pass-through entity may elect in
writing to distribute for no consideration all or a portion
of the tax credit to a shareholder, member or partner in
proportion to the percentage interest of the shareholder,
member or partner in the distribution from the pass-through
entity. A shareholder, member or partner may use the tax
credit in the taxable year in which the contribution is made
or in the taxable year immediately after the year in which
the contribution is made. An election under this paragraph
shall designate the year in which the distributed tax credits
are to be used and shall be made according to procedures
established by the Department of Revenue. A pass-through
entity that received a distribution of tax credits from a
pass-through entity under this paragraph may distribute the
tax credits in accordance with this paragraph.
(2) A pass-through entity and a shareholder, member or
partner of a pass-through entity shall not claim a tax credit
for the same contribution.
(3) A shareholder, member or partner of a pass-through
entity may not carry forward, carry back, obtain a refund of,
sell or assign a tax credit.
(4) A shareholder, partner or member of a pass-through
entity may apply a tax credit against income taxable under
Article III of the Tax Reform Code of 1971 for the
shareholder, partner or member, the spouse of the
shareholder, partner or member or both the shareholder,
partner or member and the spouse if filing a joint personal
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income tax return.
(c) Restriction.--No tax credits shall be applied against
any tax withheld by an employer from an employee under Article
III of the Tax Reform Code of 1971.
(d) Deadline for applications.--
(1) Except as provided in paragraph (2), the department
may accept applications under section 79B04(a) for tax
credits available during a fiscal year no earlier than July 1
of each fiscal year.
(2) The application of a business firm under section
79B04(a) for a tax credit available during a fiscal year as
part of the second year of a two-year commitment under
subsection (a)(2) , or as a renewal of a two-year commitment
under subsection (a)(2) that was fulfilled in the previous
fiscal year, may be accepted by the department no earlier
than May 15 preceding the fiscal year. In order to be
eligible for the early application date under this paragraph,
the business firm's contribution in the second year of a two-
year commitment or a renewal of a two-year commitment shall
be made to the same tax relief organization.
(3) The application for a tax credit submitted on July 1
under paragraph (1) for a two-year commitment by a business
firm that applied for and was denied a tax credit in the
prior fiscal year and had been approved for a tax credit in a
prior fiscal year shall be considered before an application
from a business firm that does not meet the criteria
specified under this paragraph. A business firm seeking a
preference under this paragraph shall provide proof of
approval of a tax credit in a prior fiscal year in the
business firm's application under paragraph (1).
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(e) Notice.--Unless otherwise requested by a business firm
and agreed to by the business firm and the department and unless
all authorized tax credits have already been awarded, the
following shall apply:
(1) For fiscal year 2021-2022 and each fiscal year
thereafter, the department shall provide written notice of
the department's approval or disapproval of a completed
application under section 79B04(a) to the business firm by
August 15, or 30 days after receipt of the completed
application, whichever is later.
(2) For fiscal year 2021-2022 and each fiscal year
thereafter, the department shall provide written notice of
the department's approval or disapproval of a completed
application under section 79B04(a) to the business firm
within 30 days after receipt of the completed application.
(3) If the department fails to provide the written
notice under paragraph (1) or (2) within 10 days after the
deadline specified under paragraph (1) or (2), the affected
business firm may bring an action for injunction or other
appropriate relief in Commonwealth Court.
(f) Waiting list.--The department shall maintain a waiting
list consisting of each business firm that elects to be on the
list and has a pending application under section 79B04(a) that
has not been approved under subsection (e) due to a lack of
available tax credits. The department shall, by written notice,
offer a business firm that has not been issued a tax credit due
to a lack of available tax credits a place on the waiting list.
When tax credits become available, the department shall award
the tax credits to a business firm in the order in which the
business firm is placed on the waiting list.
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§ 79B06. Temporary increase in maximum tax credits available.
(a) Increase.--If all tax credits authorized for
contributions to tax relief organizations have not been awarded
as of October 1 of a fiscal year, the limitation on tax credits
specified under section 79B07 (relating to l imitations) shall
not apply for applications under section 79B04(a) (relating to
qualifications for tax credits) received by the department from
October 1 through November 30 of the fiscal year. The department
may accept applications under section 79B04(a) from October 1
through November 30 from a business firm, including a business
firm that already applied for the maximum tax credits under
section 79B05(a)(1) (relating to award of tax credits).
(b) Award.--
(1) Before the award of tax credits under subsection
(a), the department shall first award tax credits applied for
by a business firm during the period beginning October 1 and
ending November 30 in an amount no greater than the maximum
amount of tax credits for which a business firm is eligible
under section 79B05(a)(1). The tax credits shall be awarded
on a first-come, first-served basis as specified under
79B04(b).
(2) After the department has awarded tax credits under
paragraph (1), the department shall award any remaining tax
based on the total amount of tax credits for which
applications are received under subsection (a) during the
period beginning October 1 and ending November 30 of the
fiscal year.
(i) If the total amount of tax credits applied for
by all business firms under subsection (a) does not
exceed the total amount of tax credits that remain
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available as of October 1, less the tax credits awarded
under paragraph (1), the department shall award a
business firm the full amount of tax credits applied for
in the business firm's application under this subsection.
(ii) If the total amount of tax credits applied for
by all business firms subsection (a) exceeds the total
amount of tax credits that remain available for award as
of October 1, less the tax credits awarded under
paragraph (1), the department shall award a business firm
the amount of tax credits determined by multiplying the
amount of tax credits applied for by the business firm by
a ratio, the numerator of which is the total amount of
tax credits that remain available for award as of October
1, less the tax credits awarded under paragraph (1), and
the denominator of which is the total amount of tax
credits applied for by all business firms under this
subsection.
(c) Maximum amount.--Notwithstanding subsection (a), the
maximum amount of tax credits for which a business firm is
eligible under section 79B05(a)(1) shall apply to an application
approved by the department on or after December 1 of a fiscal
year.
(d) Applicability.--Subsection (a) shall not apply to an
application for a tax credit made under section 79B05(a)(2). A
tax credit awarded under subsection (a) shall not exceed 75% of
the total amount contributed during the taxable year by a
business firm.
§ 79B07. Limitations.
(a) Amount.--The total aggregate amount of all tax credits
awarded by the department for contributions from business firms
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to tax relief organizations shall not exceed $10,000,000 in a
fiscal year.
(b) Activities.--The department may not award a tax credit
for activities that are a part of a business firm's normal
course of business.
(c) Tax liability.--
(1) Except as provided under paragraph (2), the
department may not award a tax credit to a business firm for
any one taxable year that exceeds the tax liability of the
business firm.
(2) In the case of a pass-through entity that elects to
distribute a tax credit to a shareholder, member or partner
under section 79B05(b) (relating to award of tax credits) ,
the tax credit awarded and distributed for any one taxable
year may not exceed the tax liability of the shareholder,
member or partner.
(d) Carry forward.--A tax credit not used by the applicant
in the taxable year the contribution was made or in the year
designated by a shareholder, member or partner under section
79B05(b) may not be carried forward or carried back and is not
refundable or transferable.
(e) Nontaxable income.--A tax relief payment shall not be
considered to be taxable income for the purposes of Article III
of the Tax Reform Code of 1971.
(f) Appropriation.--A tax relief payment shall not
constitute an appropriation to a local school district,
municipality, county or other tax jurisdiction of the recipient.
§ 79B08. List of tax relief organizations.
The Department of Revenue shall provide a list of all tax
relief organizations receiving contributions from business firms
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that received tax credits to the General Assembly by June 30 of
each year.
§ 79B09. Ineligibility after receiving benefits.
If a recipient is no longer associated with a volunteer
firefighting company, the volunteer fire company shall provide
written notice to a tax relief organization that the recipient
no longer qualifies for a tax relief payment. Upon receipt of
the notice under this section, the tax relief organization shall
discontinue a tax relief payment on behalf of the recipient.
Section 2. This act shall take effect in 60 days.
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