Regular Session 2023-2024 House Bill 1219 P.N. 1310

PRINTER'S NO. 1310

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1219

Session of

2023

INTRODUCED BY BRIGGS, FREEMAN, MADDEN, SCHLOSSBERG, SANCHEZ,

HILL-EVANS, GUENST, GREINER, HANBIDGE, WEBSTER, NEILSON,

SCOTT AND HOGAN, MAY 24, 2023

REFERRED TO COMMITTEE ON FINANCE, MAY 24, 2023

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," in corporate net income tax, further providing

for manufacturing innovation and reinvestment deduction.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 407.7 of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971, is amended to read:

Section 407.7. Manufacturing Innovation and Reinvestment

Deduction.--(a) In order to be eligible to receive a

manufacturing innovation and reinvestment deduction, a taxpayer

must demonstrate to the department a private capital investment

in excess of [sixty million dollars ($60,000,000)] fifty million

dollars ($50,000,000) for the creation of new or refurbished

manufacturing capacity within [three years of a designated start

date] the applicable time period specified in subsection (b).

(b) (1) A taxpayer must advise the department in advance of

the start date of any project for which the taxpayer may seek a

qualified manufacturing innovation and reinvestment deduction. A

taxpayer must attest the taxpayer's intent to meet the

eligibility criteria and provide relevant information pertinent

to the project's size and scope in a manner as determined by the

department.

(2) For a private capital investment of less than one

hundred fifty million dollars ($150,000,000), the following

shall apply:

(i) The project must be completed within three years of the

project's start date.

(ii) Within five years of [a] the project's start date, [a]

the taxpayer must complete to the department's satisfaction an

application on a form and in a manner as determined by the

department to attest that the project has been completed and the

eligibility criteria has been satisfied.

(3) For a private capital investment greater than one

hundred fifty million dollars ($150,000,000) and less than two

hundred fifty million dollars ($250,000,000), the following

shall apply:

(i) The project must be completed within five years of the

project's start date.

(ii) Within seven years of the project's start date, the

taxpayer must complete to the department's satisfaction an

application on a form and in a manner as determined by the

department to attest that the project has been completed and the

eligibility criteria has been satisfied.

(4) For a private capital investment greater than two

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hundred fifty million dollars ($250,000,000) and less than three

hundred fifty million dollars ($350,000,000), the following

shall apply:

(i) The project must be completed within seven years of the

project's start date.

(ii) Within nine years of the project's start date, the

taxpayer must complete to the department's satisfaction an

application on a form and in a manner as determined by the

department to attest that the project has been completed and the

eligibility criteria has been satisfied.

(5) For a private capital investment greater than three

hundred fifty million dollars ($350,000,000), the department

shall establish the time period from the project's start date in

which the project must be completed and the time period in which

the application as described in paragraph (4) must be completed.

Department of Revenue [must] shall make a finding [that] whether

the applicant has filed all required State tax reports and

returns for all applicable tax years and paid any balance of

State tax due as determined at settlement, assessment or

determination, and the department, then in conjunction with the

Department of Revenue, shall make an eligibility or satisfaction

determination within ninety days of submission. If the

department makes a satisfaction determination, the department

and the taxpayer shall execute a satisfaction commitment letter

containing the following:

(1) The number of new jobs created and their corresponding

description.

(2) The number of new jobs created during construction of

the project.

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(3) The amount of private capital investment in the creation

of new jobs.

(4) The increase in the annual taxable payroll attributable

to new manufacturing jobs.

(5) A determination of the maximum allowable deduction

against a taxpayer's qualified tax liability under this article.

(6) Any other information as the department deems

appropriate.

(d)

[(1.1) If the private capital investment is in excess of

sixty million dollars ($60,000,000), but not more than one

hundred million dollars ($100,000,000), the maximum allowable

deduction shall be equal to thirty-seven and one-half per cent

of the private capital investment utilized in the creation of

new or refurbished manufacturing capacity. A taxpayer may

utilize the deduction in an amount not to exceed seven and one-

half per cent of the private capital investment utilized in the

creation of new or refurbished manufacturing capacity in any one

year of the succeeding ten tax years immediately following the

department's satisfaction determination and the execution of a

satisfaction commitment letter, up to the maximum allowable

deduction.]

(1.2) If [the] a taxpayer's private capital investment for a

project exceeds [one hundred million dollars ($100,000,000)]

fifty million dollars ($50,000,000), the maximum allowable

deduction shall be equal to twenty-five per cent of the private

capital investment utilized in the creation of new or

refurbished manufacturing capacity. A taxpayer may utilize the

deduction in an amount not to exceed five per cent of the

private capital investment utilized in the creation of new or

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refurbished manufacturing capacity in any one year of the

succeeding ten tax years immediately following the department's

satisfaction determination and the execution of a satisfaction

commitment letter, up to the maximum allowable deduction.

(1.3) If a taxpayer executes a satisfaction commitment

letter for more than two concurrent projects with a total

private capital investment exceeding five hundred million

dollars ($500,000,000), the maximum allowable deduction for any

succeeding project shall be equal to twenty-five per cent of the

private capital investment utilized in the creation of new or

refurbished manufacturing capacity. A taxpayer may utilize the

deduction in an amount not to exceed five per cent of the

private capital investment utilized in the creation of new or

refurbished manufacturing capacity in any one year of the

succeeding twenty tax years immediately following the

department's satisfaction determination and the execution of a

satisfaction commitment letter, up to the maximum allowable

deduction.

(3) A taxpayer cannot use the deduction to reduce [its] the

taxpayer's tax liability by more than fifty per cent of the tax

liability under this article for the taxable year. The deduction

is nontransferable and any unused portion in a tax year shall

expire at the end of the corresponding tax year.

Section 2. This act shall apply to tax years beginning after

December 31, 2023.

Section 3. This act shall take effect immediately.

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