PRINTER'S NO. 3542
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2869
Session of
2022
INTRODUCED BY HOWARD, SCHLOSSBERG, SANCHEZ, DELLOSO AND MADDEN,
OCTOBER 6, 2022
REFERRED TO COMMITTEE ON FINANCE, OCTOBER 6, 2022
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 phoenix employee and returnship tax
credits; and imposing penalties.
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-M
PHOENIX EMPLOYEE AND RETURNSHIP TAX CREDITS
Section 1701-M. 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:
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"Company." A corporation, partnership, limited liability
company, limited liability partnership, business trust,
affiliate, unincorporated joint venture or other business entity
doing business in this Commonwealth.
"Department." The Department of Revenue of the Commonwealth.
"Educational program." A program offered by a secondary
school or institution of higher education. The term does not
include trainings or classes taken to maintain an occupational
licensure or certification.
"Occupation of high demand." An occupation that has a
shortage of qualified individuals to fill working positions as
determined by the department in consultation with the Department
of Labor and Industry.
"Phoenix employee." An employee or prospective employee who
has not been enrolled in an educational program within the last
three years and meets one of the following:
(1) has been out of the workforce for two years; or
(2) has been hired into a position that would increase
the employee's earnings by at least 50% over the employee's
previous company.
"Phoenix employee tax credit." A phoenix employee tax credit
issued under section 1703-M.
"Returnship." A paid internship that reintroduces a phoenix
employee into the workforce or an industry , with the intent of
the company to hire the phoenix employee into a permanent,
substantially similar position .
"Returnship tax credit." A tax credit issued under section
1704-M.
Section 1702-M. Eligibility.
To be eligible to receive a phoenix employee tax credit or
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returnship tax credit under this article for occupations of high
demand under this article, a company must demonstrate to the
department:
(1) The ability to hire or create jobs for phoenix
employees.
(2) The ability to provide applicable training and
resources for phoenix employees who are reentering the
workforce.
(3) A signed statement stating the intent to retain a
phoenix employee for at least three years.
(4) A signed statement stating the intent to maintain
operations in this Commonwealth for a period of five years
from the date the company submits a phoenix employee tax
credit or returnship tax credit certificate to the
department.
Section 1703-M. Phoenix employee tax credit.
(a) Maximum amount.--A company may claim a phoenix employee
tax credit equal to two times the percentage of the State
personal income tax, prior to deductions, imposed on a phoenix
employee within the company.
(b) Evidence of phoenix employee.--The company shall submit
the following evidence that the employee meets qualifications of
a phoenix employee:
(1) Evidence of a phoenix employee's salary from
previous employment, if applicable.
(2) Evidence of a phoenix employee's previous enrollment
in an educational program, including photographic or written
evidence of a degree or diploma, photographic or written
evidence of enrollment in an educational program or other
form of evidence deemed acceptable by the department.
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(3) Evidence that a job was created to hire a phoenix
employee, if applicable.
(c) Applicable taxes.--A company may apply the phoenix
employee tax credit to 100% of the company's State corporate net
income tax, capital stock and franchise tax or the capital stock
and franchise tax of a shareholder of the company if the company
is a Pennsylvania S corporation, gross premiums tax, gross
receipts tax, bank and trust company shares tax, mutual thrift
institution tax, title insurance company shares tax, personal
income tax or the personal income tax of shareholders of a
Pennsylvania S corporation or any combination thereof.
(d) Phoenix employee tax credit term.--A company may claim a
phoenix employee tax credit for each new phoenix employee hired
or job created for three consecutive years after the phoenix
employee's date of hire, provided the phoenix employee is still
employed by the company.
(e) Limitation.--A company may not receive more than
$150,000 in the first fiscal year, $300,000 in the second fiscal
year and $450,000 in subsequent fiscal years in phoenix employee
tax credits. This amount shall be adjusted to reflect any upward
changes in the Consumer Price Index for All Urban Consumers
(CPI-U) for the Pennsylvania, New Jersey, Delaware and Maryland
area.
(f) Availability of phoenix employee tax credit.--
(1) During the first fiscal year of the phoenix employee
tax credit program, $15,000,000 in phoenix employee tax
credits shall be made available to the department and may be
awarded by the department under this section.
(2) In the second fiscal year of the phoenix employee
tax credit program, a minimum of $30,000,000 in phoenix
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employee tax credits shall be made available to the
department and may be awarded by the department under this
section. This amount shall be adjusted to reflect any upward
changes in the Consumer Price Index for All Urban Consumers
(CPI-U) for the Pennsylvania, New Jersey, Delaware and
Maryland area.
(3) In the third and subsequent fiscal years of the
phoenix employee tax credit program, a minimum of $45,000,000
in phoenix employee tax credits shall be made available to
the department and may be awarded by the department under
this section. This amount shall be adjusted to reflect any
upward changes in the Consumer Price Index for All Urban
Consumers (CPI-U) for the Pennsylvania, New Jersey, Delaware
and Maryland area.
Section 1704-M. Returnship tax credit.
(a) Duty of department.--The department shall establish
standards for returnships that qualify for a returnship tax
credit under this section.
(b) Maximum amount of returnship tax credit.--A company may
claim a returnship tax credit of $1,000 for each returnship
completed by an employee in a tax year. This amount shall be
adjusted to reflect any upward changes in the Consumer Price
Index for All Urban Consumers (CPI-U) for the Pennsylvania, New
Jersey, Delaware and Maryland area.
(c) Limitation.--A company may not receive more than
$100,000 in returnship tax credits in a year. This amount shall
be adjusted to reflect any upward changes in the Consumer Price
Index for All Urban Consumers (CPI-U) for the Pennsylvania, New
Jersey, Delaware and Maryland area.
(d) Evidence of returnship.--To receive a tax credit under
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this section, a company must submit the following evidence of a
returnship an employee completes to the department:
(1) Salary of the returnship.
(2) Certification of completion of the returnship.
(3) Details of a job offer the employee was offered
after the completion of the returnship.
(4) Other evidence the department requires.
(e) Applicable taxes.--A company may apply the returnship
tax credit to 100% of the company's State corporate net income
tax, capital stock and franchise tax or the capital stock and
franchise tax of a shareholder of the company if the company is
a Pennsylvania S corporation, gross premiums tax, gross receipts
tax, bank and trust company shares tax, mutual thrift
institution tax, title insurance company shares tax, personal
income tax or the personal income tax of shareholders of a
Pennsylvania S corporation or any combination thereof.
(f) Availability of returnship tax credit.--Each fiscal
year, $10,000,000 in returnship tax credits shall be made
available to the department and may be awarded by the department
under this section. In each subsequent year, this amount shall
be adjusted to reflect any upward changes in the Consumer Price
Index for All Urban Consumers (CPI-U) for the Pennsylvania, New
Jersey, Delaware and Maryland area.
Section 1705-M. Phoenix employee tax credit for occupations of
high demand.
(a) Occupations of high demand list.--The department shall
consult with the Department of Labor and Industry and publish on
the department's publicly accessible Internet website a list of
occupations of high demand by January 1 of each year.
(b) Credit amount.--The amount of a phoenix employee tax
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credit for occupations of high demand shall be $1,000 per year
and contingent upon the phoenix employee's continued employment
in the occupation of high demand and employment with the company
that is receiving a phoenix employee tax credit for occupations
of high demand under this section. This amount shall be adjusted
to reflect any upward changes in the Consumer Price Index for
All Urban Consumers (CPI-U) for the Pennsylvania, New Jersey,
Delaware and Maryland area.
(c) Phoenix employee tax credit.--A phoenix employee may
apply the phoenix employee tax credit for occupations of high
demand to the phoenix employee's personal income taxes.
(d) Length of phoenix employee tax credit.--A phoenix
employee may be eligible for the phoenix employee tax credit for
occupations of high demand for a period of three consecutive
years after the phoenix employee's date of hire.
(e) Availability of phoenix employee tax credit for
occupations of high demand.--
(1) During the first fiscal year of the phoenix employee
tax credit for occupations of high demand program,
$10,000,000 in phoenix employee tax credits for occupations
of high demand shall be made available to the department and
may be awarded by the department under this section.
(2) In the second fiscal year of the phoenix employee
tax credit for occupations of high demand program, a minimum
of $20,000,000 in phoenix employee tax credits for
occupations of high demand shall be made available to the
department and may be awarded by the department under this
section. This amount shall be adjusted to reflect any upward
changes in the Consumer Price Index for All Urban Consumers
(CPI-U) for the Pennsylvania, New Jersey, Delaware and
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Maryland area.
(3) In the third and subsequent fiscal years of the
phoenix employee tax credit for occupations of high demand
program, a minimum of $30,000,000 in phoenix employee tax
credits for occupations of high demand shall be made
available to the department and may be awarded by the
department under this section. If a phoenix employee is
terminated without cause, the employee is still eligible for
a phoenix employee tax credit under this section despite the
employee's termination. This amount shall be adjusted to
reflect any upward changes in the Consumer Price Index for
All Urban Consumers (CPI-U) for the Pennsylvania, New Jersey,
Delaware and Maryland area.
Section 1706-M. Fair payment of phoenix employees.
No company shall pay a phoenix employee, either in salary or
benefits, less than other employees of the same position and
years of experience, including any prior experience in a similar
job. The department may take complaints from employees regarding
this article and shall investigate any credible complaint.
Section 1707-M. Severing of employment.
(a) Termination.--If a phoenix employee is terminated with
cause, the company shall provide evidence to the department of
the termination and if the termination was merited, the
department shall provide the phoenix employee tax credit for
that year. If the termination is found to be without cause and
not merited, the department may not award the phoenix employee
tax credit to the company.
(b) Separation.--If a phoenix employee voluntarily separates
from a company, the company shall receive the phoenix employee
tax credit for that year.
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Section 1708-M. Penalties.
(a) Failure to maintain operations.--A company that receives
a phoenix employee tax credit or returnship tax credit and fails
to substantially maintain existing operations or operations
related to the phoenix employee tax credit or returnship tax
credit for a period of five years from the date the company
first receives the phoenix employee tax credit or returnship tax
credit shall be required to refund to the Commonwealth the total
amount of phoenix employee tax credit or returnship tax credit
granted.
(b) Fraud.--It is a felony of the third degree if a company
or the company's representative, employee, agent or phoenix
employee knowingly submits false documentation to the department
or commits fraud to obtain benefits under this article.
Section 2. This act shall take effect in 60 days.
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