Amendment 2596 to House Bill 262 P.N. 0233, Regular Session 2019-2020

H0262B0233A02596 MSP:JSL 06/26/19 #90 A02596

AMENDMENTS TO HOUSE BILL NO. 262

Sponsor: SENATOR BROWNE

Printer's No. 233

Amend Bill, page 1, lines 1 through 11, by striking out all

of said lines and inserting

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 sales and use tax, further providing for

definitions, for imposition of tax, for exclusions from tax,

for licenses, for persons required to make returns, for tax

held in trust for the Commonwealth, for assessment, for

collection of tax and for crimes and providing for class

actions; in personal income tax, further providing for

classes of income, providing for contributions for Veterans'

Trust Fund, further providing for returns of married

individuals, deceased or disabled individuals and fiduciaries

and providing for paid tax return preparers and required

information on personal income tax returns; in corporate net

income tax, further providing for manufacturing innovation

and reinvestment deduction; in realty transfer tax, further

providing for definitions and for excluded transactions and

providing for transfer of tax; in entertainment production

tax credit, further providing for definitions, for carryover,

carryback and assignment of credit, for limitations, for film

production tax credit districts, for definitions, for

carryover, carryback and assignment of tax credit and for

limitations; in resource enhancement and protection tax

credit, further providing for definitions, for Resource

Enhancement and Protection Tax Credit Program, for tax

credits, for project certification and for annual tax

credits; in historic preservation incentive tax credit,

further providing for definitions and for tax credit

certificates, establishing the Historic Rehabilitation Tax

Credit Administration Account, further providing for

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carryover, carryback and assignment of credit, for pass-

through entity, providing for annual report to General

Assembly, further providing for application of Internal

Revenue Code and for limitation and providing for recapture;

in coal refuse energy and reclamation tax credit, further

providing for definitions, for application and approval of

tax credit and for limitation on tax credits; in tax credit

for new jobs, further providing for application process; in

city revitalization and improvement zones, further providing

for definitions and for restrictions; in manufacturing and

investment tax credit, further providing for definitions, for

rural growth funds, for requirements, for rural growth fund

failure to comply, for reporting obligations, for business

firms, for tax credit certificates, for claiming the tax

credit, for prohibitions, for revocation of tax credit

certificates and for exit; in neighborhood assistance tax

credit, further providing for definitions, for public policy

and for tax credit; in keystone opportunity zones, keystone

opportunity expansion zones and keystone opportunity

improvement zones, providing for additional designations; in

mixed-use development tax credit, further providing for

mixed-use development tax credits; in inheritance tax,

further providing for inheritance tax; in table game taxes,

reenacting provisions relating to table game taxes and

further providing for expiration; in strategic development

areas, further providing for sales and use tax and for local

sales and use tax; in computer data center equipment

incentive program, further providing for limitations;

providing for independent public schools; and making a

related repeal.

Amend Bill, page 1, lines 14 through 22; page 2, lines 1

through 9; by striking out all of said lines on said pages and

inserting

Section 1. Section 201(n) and (p) of the act of March 4,

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

amended, clauses (b) and (g) are amended by adding subclauses

and the section is amended by adding clauses to read:

Section 201. Definitions.--The following words, terms and

phrases when used in this Article II shall have the meaning

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

(b) "Maintaining a place of business in this Commonwealth."

* * *

(3.5) (i) Engaging in any activity as a business by any

person, either directly or through a subsidiary, representative

or an agent, in connection with the lease, sale or delivery of

tangible personal property into this Commonwealth or the

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performance of services for use, storage or consumption or in

connection with the sale or delivery for use in this

Commonwealth of at least one hundred thousand dollars ($100,000)

during the preceding twelve-month calendar period.

(ii) For a marketplace facilitator, this activity includes

all sales, leases and deliveries of tangible personal property,

and all sales of services by the marketplace seller whose sales

are facilitated through the marketplace facilitator's forum.

* * *

(g) "Purchase price."

* * *

(9) The purchase price of "malt or brewed beverages" sold by

a "manufacturer of malt or brewed beverages" directly to the

ultimate consumer for consumption on or off premises shall be

twenty-five per cent of the retail sales price of the "malt or

brewed beverages" sold for consumption on or off premises.

* * *

(n) "Taxpayer." Any person required to pay or collect the

tax imposed by this article, including a marketplace facilitator

and a marketplace seller.

* * *

(p) "Vendor." Any person maintaining a place of business in

this Commonwealth, selling or leasing tangible personal

property, or rendering services, the sale or use of which is

subject to the tax imposed by this article, including a

marketplace facilitator and a marketplace seller, but not

including any employe who in the ordinary scope of employment

renders services to his employer in exchange for wages and

salaries.

* * *

(eee) "Liquor." Liquor as that term is defined in the

"Liquor Code."

(fff) "Malt or brewed beverages." Malt or brewed beverages

as that term is defined in the "Liquor Code."

(ggg) "Manufacturer of malt or brewed beverages."

Manufacturer of malt or brewed beverages as that term is defined

in the "Liquor Code."

(hhh) "Forum." A place where sales at retail occur, whether

physical or electronic. The term includes a store, a booth, an

Internet website, a catalog or similar place.

(iii) "Marketplace facilitator." A person that facilitates

the sale at retail of tangible personal property. For purposes

of this article, a person facilitates a sale at retail if the

person or an affiliated person:

(1) lists or advertises tangible personal property for sale

at retail in any forum; and

(2) either directly or indirectly through agreements or

arrangements with third parties, collects the payment from the

purchaser and transmits the payment to the person selling the

property.

The term includes a person that may also be a vendor.

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(jjj) "Marketplace seller." A person that has an agreement

with a marketplace facilitator to facilitate sales for the

person.

(kkk) "Affiliated person." A person that, with respect to

another person:

(1) has a direct or indirect ownership interest of more than

five percent in the other person; or

(2) is related to the other person because a third person,

or group of third persons who are affiliated with each other as

defined in this subsection, holds a direct or indirect ownership

interest of more than five percent in the related person.

(lll) "Animal housing facility." A roofed structure or

facility, or a portion of the facility, used for occupation by

livestock or poultry.

Section 2. Section 202(a) and (b) of the act are amended and

the section is amended by adding a subsection to read:

Section 202. Imposition of Tax.--(a) There is hereby

imposed upon each separate sale at retail of tangible personal

property or services, as defined herein, within this

Commonwealth a tax of six per cent of the purchase price, which

tax shall, except as otherwise provided, be collected by the

vendor or any other person required by this article from the

purchaser, and shall be paid over to the Commonwealth as herein

provided.

(b) There is hereby imposed upon the use, on and after the

effective date of this article, within this Commonwealth of

tangible personal property purchased at retail on or after the

effective date of this article, and on those services described

herein purchased at retail on and after the effective date of

this article, a tax of six per cent of the purchase price, which

tax shall be paid to the Commonwealth by the person who makes

such use as herein provided, except that such tax shall not be

paid to the Commonwealth by such person where he has paid the

tax imposed by subsection (a) of this section or has paid the

tax imposed by this subsection (b) to the vendor with respect to

such use[.], or such vendor advertises or holds out or states to

such person directly or indirectly subject to the conditions set

forth in 268(b) that such vendor will pay the tax imposed by

subsection (a) or this subsection for such person. The tax at

the rate of six per cent imposed by this subsection shall not be

deemed applicable where the tax has been incurred under the

provisions of the "Tax Act of 1963 for Education."

* * *

(h) (1) Notwithstanding any other provision of this

article, Article II-B, the act of July 28, 1953 (P.L.723,

No.230), known as the Second Class County Code, or Chapter 5 or

6 of the act of June 5, 1991 (P.L.9, No.6), known as the

Pennsylvania Intergovernmental Cooperation Authority Act for

Cities of the First Class, the tax shall be imposed on a

manufacturer of malt or brewed beverages with respect to sales

of malt or brewed beverages sold by the manufacturer directly to

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the ultimate consumer for consumption on or off premises.

(2) The tax imposed under clause (1) shall be paid and

reported by the manufacturer of malt or brewed beverages to the

department in the time and manner provided in this article.

(3) Notwithstanding any law to the contrary, a school

district or local government authorized to impose a local

alcoholic beverage tax under the act of June 10, 1971 (P.L.153,

No.7), known as the First Class School District Liquor Sales Tax

Act of 1971, or 53 Pa.C.S. § 8602 (relating to local financial

support), may impose or continue to impose a local alcoholic

beverage tax on the sale at retail of malt or brewed beverages

made by a manufacturer of malt or brewed beverages to the

ultimate consumer for consumption on or off premises at the same

rate as authorized under the First Class School District Liquor

Sales Tax Act of 1971 or 53 Pa.C.S. § 8602 and notwithstanding

anything to the contrary in such laws or in a local law or

ordinance in existence on the effective date of this section.

(4) The payment of the tax imposed under clause (1) shall

eliminate the need for the ultimate consumer to pay or remit a

sales or use tax on the related transaction or upon the

subsequent use of the malt or brewed beverages.

Section 3. Section 204(49) of the act is amended and the

section is amended by adding clauses to read:

Section 204. Exclusions from Tax.--The tax imposed by

section 202 shall not be imposed upon any of the following:

* * *

(49) The sale at retail or use of food and beverages by

nonprofit associations which support sports programs or youth

centers. For purposes of this clause, the phrases:

(i) "nonprofit association" means an entity which is

organized as a nonprofit corporation or nonprofit unincorporated

association under the laws of this Commonwealth or the United

States or any entity which is authorized to do business in this

Commonwealth as a nonprofit corporation or unincorporated

association under the laws of this Commonwealth, including, but

not limited to, youth or athletic associations, volunteer fire,

ambulance, religious, charitable, fraternal, veterans, civic, or

any separately chartered auxiliary of the foregoing, if

organized and operated on a nonprofit basis;

(iv) "sports program" means baseball (including softball),

football, basketball, soccer and any other competitive sport

formally recognized as a sport by the United States Olympic

Committee as specified by and under the jurisdiction of the

Amateur Sports Act of 1978 (Public Law 95-606, 36 U.S.C. § 371

et seq.), the Amateur Athletic Union or the National Collegiate

Athletic Association. The term shall be limited to a program or

that portion of a program that is organized for recreational

purposes and whose activities are substantially for such

purposes and which is primarily for participants who are 18

years of age or younger or whose 19th birthday occurs during the

year of participation or the competitive season, whichever is

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longer. There shall, however, be no age limitation for programs

operated for persons with physical handicaps or persons with

mental retardation;

(v) "support" means:

(A) the funds raised from sales are used to pay the expenses

of a sports program or a youth center; or

(B) the nonprofit association sells the food and beverages

at a youth center or a location where a sports program is being

conducted under this act[.];

(vi) "youth center" means a fixed location used exclusively

for programs for individuals who are 19 years of age or younger

as long as the programs are:

(A) conducted primarily by volunteers;

(B) designed to advance recreational, civic or moral

objectives; and

section 501(c)(3) of the Internal Revenue Code of 1986 (Public

Law 99-514, 26 U.S.C. § 501(c)(3)) and that has obtained an

exemption number from the department as a charitable

organization under clause (10).

* * *

(71) The sale at retail or use of food and beverages by a

volunteer firemen's organization to raise funds for the purposes

of the volunteer firemen's organization.

(72) The sale at retail of building materials and supplies

used for the construction or repair of an animal housing

facility, regardless if the sale is made to the purchaser

directly or pursuant to a construction contract.

Section 4. Sections 208(a), 215 and 225 of the act are

amended to read:

Section 208. Licenses.--(a) Every person maintaining a

place of business in this Commonwealth, with the exception of a

marketplace seller who makes no sales outside a forum for which

a marketplace facilitator is required to collect sales tax on

the seller's behalf, selling or leasing services or tangible

personal property, the sale or use of which is subject to tax

and who has not hitherto obtained a license from the department,

shall, prior to the beginning of business thereafter, make

application to the department, on a form prescribed by the

department, for a license. If such person maintains more than

one place of business in this Commonwealth, the license shall be

issued for the principal place of business in this Commonwealth.

* * *

Section 215. Persons Required to Make Returns.--Every person

required to pay tax to the department or collect and remit tax

to the department, but not including a marketplace seller who

solely makes sales through a marketplace facilitator that is

required to collect sales tax on the seller's behalf and

receives a certification from the marketplace facilitator that

the marketplace facilitator will collect, report and remit the

proper sales tax, shall file returns with respect to such tax.

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Section 225. Tax Held in Trust for the Commonwealth.--All

taxes collected by any person from purchasers in accordance with

this article and all taxes collected by any person from

purchasers under color of this article, including all taxes paid

by any person who advertises or holds out or states, directly or

indirectly, that such person will pay the tax for the purchaser,

which have not been properly refunded by such person to the

purchaser shall constitute a trust fund for the Commonwealth,

and such trust shall be enforceable against such person, his

representatives and any person (other than a purchaser to whom a

refund has been made properly) receiving any part of such fund

without consideration, or knowing that the taxpayer is

committing a breach of trust: Provided, however, That any person

receiving payment of a lawful obligation of the taxpayer from

such fund shall be presumed to have received the same in good

faith and without any knowledge of the breach of trust. Any

person, other than a taxpayer, against whom the department makes

any claim under this section shall have the same right to

petition and appeal as is given taxpayers by any provisions of

this part.

Section 5. Section 230 of the act is amended by adding

subsections to read:

Section 230. Assessment.--* * *

subsection (a) if the marketplace facilitator can show to the

satisfaction of the department that the failure to collect the

correct amount of tax was due to incorrect information given to

the marketplace facilitator by a marketplace seller.

(d) A marketplace seller is relieved of liability under

subsection (a) pertaining to those sales made through a

marketplace facilitator, when the marketplace facilitator

certifies to the seller that the marketplace facilitator will

collect, report and remit the proper sales tax, unless the

seller gave incorrect information to the marketplace

facilitator.

Section 6. Section 237(b)(1) of the act is amended,

subsection (b) is amended by adding a paragraph and the section

is amended by adding subsections to read:

Section 237. Collection of Tax.--* * *

(b) Collection by Persons Maintaining a Place of Business in

the Commonwealth. (1) Every person maintaining a place of

business in this Commonwealth and selling or leasing tangible

personal property or services, with the exception of a

marketplace seller who solely makes sales through a marketplace

facilitator that is required to collect sales tax on the

marketplace seller's behalf and receives a certification from

the marketplace facilitator that the marketplace facilitator

will collect, report and remit the proper sales tax, the sale or

use of which is subject to tax shall collect the tax from the

purchaser or lessee at the time of making the sale or lease, and

shall remit the tax to the department, unless such collection

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and remittance is otherwise provided for in this article.

* * *

(1.2) (i) A vendor maintaining a place of business within

this Commonwealth under section 201(b)(3.5) in calendar year

2018 shall collect sales tax from July 1, 2019, through March

31, 2020.

(ii) A vendor maintaining a place of business within this

Commonwealth under section 201(b)(3.5) in calendar years after

2018 shall collect sales tax from the second quarter, beginning

April 1, of the following calendar year through the first

quarter, ending March 31, of the next calendar year.

* * *

(b.1) Collection by Marketplace Facilitators. A marketplace

facilitator maintaining a place of business in this Commonwealth

must collect and remit the sales tax on all sales, leases and

deliveries of tangible personal property, and all sales of

services, by marketplace sellers whose sales are facilitated

through the marketplace facilitator's forum.

* * *

(c.1) Authorization to Obtain Information. In lieu of the

exemption certificate required under subsection (c), the

department may authorize a vendor to obtain similarly specific

information from the vendor's purchasers. This information

includes, but is not limited to, the name and address of the

purchaser and a valid basis for exemption. The purchases made

pursuant to this subsection must be made with a verifiable

source of payment connected to the specific purchaser. The

information regarding each purchase shall be available at the

time the return is filed for the period covering the purchase.

The information shall be retained in accordance with section

271. No such authority shall be granted or exercised, except

upon application to and acceptance by the department, in the

department's discretion. If authority is granted, it shall be

subject to conditions specified by the department.

* * *

Section 7. Section 268(b) of the act is amended to read:

Section 268. Crimes.--* * *

(b) Other Crimes. (1) Except as otherwise provided by

subsection (a) of this section, any person who advertises or

holds out or states to the public or to any purchaser or user,

directly or indirectly, that the tax or any part thereof imposed

by this article will [be absorbed by such person, or that it

will] not be added to the purchase price of the tangible

personal property or services described in subclauses (2), (3),

(4) and (11) through (18) of clause (k) of section 201 of this

article [sold] or[, if added,] that the tax or any part thereof

will be refunded, other than when such person refunds the

purchase price because of such property being returned to the

vendor, and any person selling or leasing tangible personal

property or said services the sale or use of which by the

purchaser is subject to tax hereunder, who, except as otherwise

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provided, shall wilfully fail to collect the tax from the

purchaser and timely remit the same to the department, and any

person who shall wilfully fail or neglect to timely file any

return or report required by this article or any taxpayer who

shall refuse to timely pay any tax, penalty or interest imposed

or provided for by this article, or who shall wilfully fail to

preserve his books, papers and records as directed by the

department, or any person who shall refuse to permit the

department or any of its authorized agents to examine his books,

records or papers, or who shall knowingly make any incomplete,

false or fraudulent return or report, or who shall do, or

attempt to do, anything whatever to prevent the full disclosure

of the amount or character of taxable sales purchases or use

made by himself or any other person, or shall provide any person

with a false statement as to the payment of tax with respect to

particular tangible personal property or said services, or shall

make, utter or issue a false or fraudulent exemption

certificate, shall be guilty of a misdemeanor, and, upon

conviction thereof, shall be sentenced to pay a fine not

exceeding one thousand dollars ($1000) and costs of prosecution,

or undergo imprisonment not exceeding one year, or both:

Provided, however, [That any person maintaining a place of

business outside this Commonwealth may absorb the tax with

respect to taxable sales made in the normal course of business

to customers present at such place of business without being

subject to the above penalty and fines: and Provided further,

That advertising tax-included prices shall be permissible, if

the prepaid services are sold by the service provider, for

prepaid telecommunications services not evidenced by the

transfer of tangible personal property or for prepaid mobile

telecommunications services.] That any person may advertise or

hold out or state to the public or to any purchaser or user,

directly or indirectly, that the tax or any part thereof imposed

by this article will be absorbed and paid by such person subject

to the following conditions:

(i) Such person shall expressly state on any receipt,

invoice, sales slip, or other similar document evidencing such

sale given to the purchaser that such person will pay the tax

imposed by this article on behalf of such purchaser and shall

not indicate or imply that the transaction is exempt or excluded

from any tax imposed by this article.

(ii) Any receipt, invoice, sales slip, or other similar

document evidencing a sale given to the purchaser shall

separately state the amount of tax.

(iii) Such person, when recording the sale in the person's

books and records, shall separately state the purchase price and

the tax.

(iv) The amount of tax shall be calculated by multiplying

the total purchase price by the rate of tax imposed by section

202.

(3) If any person advertises or holds out or states to the

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public or to any purchaser or user, directly or indirectly, that

such person will absorb and pay the tax, subject to the

conditions of this subsection, such person shall be solely

responsible and liable for any tax imposed by this article,

notwithstanding any provisions of this article to the contrary

and shall not be entitled to a refund of such tax.

* * *

Section 8. The act is amended by adding a section to read:

Section 279. Class Actions.--A class action may not be

brought against a marketplace facilitator on behalf of

purchasers arising from or in any way related to an overpayment

of sales or use tax collected by the marketplace facilitator,

regardless of whether such action is characterized as a tax

refund claim. Nothing in this subsection shall affect a

purchaser's right to seek a refund from the department under

other provisions of this article.

Section 9. (Reserved).

Section 10. Section 303(a)(5) and (a.7)(2) of the act are

amended and subsection (a)(3) is amended by adding a

subparagraph to read:

Section 303. Classes of Income.--(a) The classes of income

referred to above are as follows:

* * *

(3) Net gains or income from disposition of property. Net

gains or net income, less net losses, derived from the sale,

exchange or other disposition of property, including real

property, tangible personal property, intangible personal

property or obligations issued on or after the effective date of

this amendatory act by the Commonwealth; any public authority,

commission, board or other agency created by the Commonwealth;

any political subdivision of the Commonwealth or any public

authority created by any such political subdivision; or by the

Federal Government as determined in accordance with accepted

accounting principles and practices. For the purpose of this

article:

* * *

(viii) The term "net gains or income" and "net losses" shall

not include gains or income or loss which are excluded from

Federal taxation under section 1400Z-2 of the Internal Revenue

Code of 1986 (Public Law 99-514, 26 U.S.C. § 1400Z-2), as

amended. Net gains or net income, less net losses, which are

excluded under this subparagraph shall be included in income to

the extent they are included in gross income under section

1400Z-2(b) of the Internal Revenue Code of 1986, as amended.

Section 1400Z-2(c) of the Internal Revenue Code of 1986, as

amended, shall apply in the computation of net gains or net

income and net losses.

* * *

(5) Dividends. The term "dividends" shall not include gains

or income or loss which are excluded from Federal taxation under

section 1400Z-2 of the Internal Revenue Code of 1986, as

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amended. Gains or income or loss which are excluded under this

subparagraph shall be included in income to the extent they are

included in gross income under section 1400Z-2(b) of the

Internal Revenue Code of 1986, as amended. Section 1400Z-2(c) of

the Internal Revenue Code of 1986, as amended, shall apply in

the computation of net gains or net income and net losses.

* * *

(a.7) The following apply:

* * *

(2) (i) The following shall not be subject to tax under

this article:

(A) Any amount distributed from a qualified tuition program

that is excludable from tax under section 529(c)(3)(B) of the

Internal Revenue Code of 1986, as amended.

(B) Any rollover that is excludable from tax under section

529(c)(3)(C) of the Internal Revenue Code of 1986, as amended.

(D) The value of a medal awarded by or prize money received

from the United States Olympic Committee on account of

competition in the Olympic Games or Paralympic Games.

(ii) A change in designated beneficiaries under section

529(c)(3)(C) of the Internal Revenue Code of 1986, as amended,

shall not constitute a taxable event under this article.

* * *

Section 10.1. The act is amended by adding a section to

read:

Section 315.14. Contribution for Veterans' Trust Fund.--(a)

For taxable years beginning after December 31, 2019, the

department shall provide a space on the Pennsylvania individual

income tax return form whereby an individual may voluntarily

designate a contribution, in any amount, to the Veterans' Trust

Fund. The amount so designated shall be deducted from the tax

refund to which the individual is entitled and shall not

constitute a charge against the income tax revenues due to the

Commonwealth.

(b) The department shall determine annually the total amount

designated under this section, less reasonable administrative

costs, and shall report the amount to the State Treasurer who

shall transfer the amount to the Veterans' Trust Fund.

concerning the checkoff for the Veterans' Trust Fund in its

instructions which accompany the Pennsylvania income tax return

forms. The information concerning the checkoff shall include the

listing of an address furnished by the Department of Military

and Veterans Affairs to which contributions may be sent by

taxpayers wishing to contribute to this effort but who do not

receive refunds.

(d) The Department of Military and Veterans Affairs shall

report annually to the respective committees of the Senate and

the House of Representatives which have jurisdiction over

military and veterans affairs on the amount received via the

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checkoff plan and how the funds were utilized.

Section 10.2. Section 331(g) of the act is amended to read:

Section 331. Returns of Married Individuals, Deceased or

Disabled Individuals and Fiduciaries.--* * *

(g) The return for an estate or trust shall be made and

filed by the fiduciary. If two or more fiduciaries are acting

jointly, the return may be made by any one of them. If the

executor of the estate and trustee of the trust make an election

under section 645 of the Internal Revenue Code of 1986 (Public

Law 99-514, 26 U.S.C. § 645), as amended, to treat the income of

the trust as part of the estate, the fiduciary may make and file

a joint tax return for the estate and trust under this

subsection for the taxable years when the trust income is

reported as part of the estate income in accordance with section

645 of the Internal Revenue Code of 1986, as amended. If the

income tax liabilities of the estate and trust are filed on a

joint tax return under this subsection, the tax liabilities of

the estate and trust shall be joint and several. The provisions

of subsection (d) shall be applicable to a joint tax return

filed under this subsection.

Section 10.3. The act is amended by adding a section to

read:

Section 336.3 . Paid Tax Return Preparers; Required

Information on Personal Income Tax Returns.--(a) For taxable

years beginning on or after January 1, 2020, any personal income

tax return prepared by a paid tax return preparer shall be

signed by the paid tax return preparer and shall bear the paid

tax return preparer's Internal Revenue Service preparer tax

identification number.

(b) (1) The department may impose an administrative penalty

of fifty dollars ($50) on a paid tax return preparer each time

the paid tax return preparer fails to sign the return or fails

to provide the preparer's tax identification number.

(2) The maximum amount imposed on any individual paid tax

return preparer under paragraph (1) shall not exceed twenty-five

thousand dollars ($25,000) per paid tax return preparer in a

calendar year.

"Paid tax return preparer" shall mean a person who prepares

for compensation, or employs one or more persons to prepare for

compensation, a personal income tax return required to be filed

under this act. Preparation of a substantial portion of a

personal income tax return shall be treated as if it were the

preparation of the personal income tax return.

Section 10.4. Section 407.7(a) and (d)(1) and (2) of the act

are amended and subsection (d) is amended by adding paragraphs

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

2019/90MSP/HB0262A02596 - 12 -

in excess of [one hundred million dollars ($100,000,000)] sixty

million dollars ($60,000,000) for the creation of new or

refurbished manufacturing capacity within three years of a

designated start date.

* * *

(d) [(1) Upon determining a taxpayer's satisfaction of the

eligibility criteria, the department shall calculate the maximum

allowable deduction that a taxpayer may claim against the

taxpayer's taxable income under this article. The deduction

shall be equal to five per cent of the private capital

investment utilized in the creation of new or refurbished

manufacturing capacity per tax year for a period of five years.

(2) A taxpayer may utilize the amount of the deduction in

each year of the succeeding five tax years immediately following

the department's satisfaction determination and the execution of

a satisfaction commitment letter.]

(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 private capital investment exceeds one hundred

million dollars ($100,000,000), 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 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.

* * *

Section 10.5. Section 1101-C of the act is amended by adding

definitions to read:

Section 1101-C. Definitions.--The following words when used

in this article shall have the meanings ascribed to them in this

section:

"Agricultural production." As defined in section 3 of the

act of June 30, 1981 (P.L.128, No.43), known as the

"Agricultural Area Security Law."

* * *

"Qualified beginner farmer." A person that:

2019/90MSP/HB0262A02596 - 13 -

(1) Has demonstrated experience in the agriculture industry

or related field or has transferable skills as determined by the

Department of Agriculture.

(2) Has not received Federal gross income from agricultural

production for more than the ten most recent taxable years.

(3) Intends to engage in agricultural production within the

borders of this Commonwealth and to provide the majority of the

labor and management involved in that agricultural production.

(4) Has obtained written certification from the Department

of Agriculture confirming qualified beginner farmer status.

* * *

Section 10.6. Section 1102-C.3(18) of the act is amended by

adding a subparagraph to read:

Section 1102-C.3. Excluded Transactions.--The tax imposed by

section 1102-C shall not be imposed upon:

* * *

(18) Any of the following:

* * *

(vii) A transfer of real estate that is subject to an

agricultural conservation easement established under authority

of the act of June 30, 1981 (P.L.128, No.43), known as the

"Agricultural Area Security Law," to a qualified beginner

farmer.

* * *

Section 10.7. The act is amended by adding a section to

read:

Section 1102-C.6. Transfer of Tax.--(a) Subject to

subsection (b), beginning July 31, 2019, and each July 31

thereafter, the State Treasurer shall transfer from the General

Fund to the Housing Affordability and Rehabilitation Enhancement

Fund under Article IV-D of the act of December 3, 1959

(P.L.1688, No.621), known as the "Housing Finance Agency Law,"

an amount equal to forty per cent of the difference between:

(1) the total amount of the tax imposed under section 1102-C

and collected by the Commonwealth for the prior fiscal year; and

(2) the total dollar amount of such tax estimated for the

fiscal year beginning July 1, 2014, and as contained in the

final estimate signed by the Governor for that fiscal year as

required by section 618 of the act of April 9, 1929 (P.L.177,

No.175), known as "The Administrative Code of 1929."

(b) The amount transferred under subsection (a) may not

exceed forty million dollars ($40,000,000).

prohibit increased funding for the Housing Affordability and

Rehabilitation Enhancement Fund or the Keystone Recreation, Park

and Conservation Fund as provided in the "Housing Finance Agency

Law" or other law.

Section 10.8. The definition of "postproduction expense" in

section 1711-D of the act is amended and the section is amended

by adding a definition to read:

Section 1711-D. Definitions.

2019/90MSP/HB0262A02596 - 14 -

The following words and phrases when used in this subarticle

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Postproduction expense." A postproduction expense of

original content for a film as follows:

(1) The term includes traditional, emerging and new

work-flow techniques used in postproduction for any of the

following:

(i) Picture, sound and music editorial, rerecording

and mixing.

(ii) Visual effects.

(iii) Graphic design.

(iv) Original scoring.

(v) Animation.

(vi) Musical composition.

(vii) Mastering.

(viii) Dubbing.

(ix) The purchase of music rights if the following

apply:

(A) The purchase is from a resident of this

Commonwealth.

(B) The purchase is from an entity subject to

taxation in this Commonwealth and the transaction is

subject to taxation under Article III, IV or VI.

(2) The term does not include any of the following:

(i) Editing previously produced content for a film.

(ii) News or current affairs.

(iii) Talk shows.

(iv) Instructional videos.

(v) Content which contains obscene material or

performances as defined in 18 Pa.C.S. § 5903(b).

* * *

"Tax district capital investment." Investment within a film

production tax credit district that may consist of new

construction, renovation, real property improvement and a

similar investment as well as other economic development

expenditures within the Commonwealth arising directly from the

investment.

Section 10.9. Section 1714-D(f) of the act is amended and

the section is amended by adding a subsection to read:

Section 1714-D. Carryover, carryback and assignment of credit.

* * *

(f) Purchasers and assignees.--Except as [set forth in

subsection (g)] provided in subsections (g) and (h), the

following apply:

(1) The purchaser or assignee of all or a portion of a

tax credit under subsection (e) shall immediately claim the

credit in the taxable year in which the purchase or

assignment is made.

(2) The amount of the tax credit that a purchaser or

2019/90MSP/HB0262A02596 - 15 -

assignee may use against any one qualified tax liability may

not exceed 50% of such qualified tax liability for the

taxable year.

(3) The purchaser or assignee may not carry forward,

carry back or obtain a refund of or sell or assign the tax

credit.

(4) The purchaser or assignee shall notify the

Department of Revenue of the seller or assignor of the tax

credit in compliance with procedures specified by the

Department of Revenue.

* * *

(h) Full utilization of tax credits.--A tax credit awarded

under this article may be sold or assigned to a purchaser or

assignee included in the same Federal consolidated tax return as

permitted under sections 1501 and 1502 of the Internal Revenue

Code of 1986 (Public Law 99-514, 26 U.S.C. §§ 1501 and 1502),

filed by the taxpayer under subsection (a) to reduce or

eliminate the qualified tax liability to the same extent

allowable for the taxpayer under subsections (a), (b) and (c).

Tax credits sold or assigned under this subsection are limited

to the taxable year in which the purchase or assignment is made

and may only be carried forward for the remainder of the carry-

forward period of the original credit.

Section 11. Sections 1716-D(a) and 1716.2-D(b) of the act

are amended to read:

Section 1716-D. Limitations.

(a) Cap.--Except for tax credits reissued under section

[1761.1-D] 1716.1-D, in no case shall the aggregate amount of

tax credits awarded in any fiscal year under this subarticle

exceed [$65,000,000] $70,000,000. The department may, in its

discretion, award in one fiscal year up to:

(1) Thirty percent of the dollar amount of film

production tax credits available to be awarded in the next

succeeding fiscal year.

(2) Twenty percent of the dollar amount of film

production tax credits available to be awarded in the second

successive fiscal year.

(3) Ten percent of the dollar amount of film production

tax credits available to be awarded in the third successive

fiscal year.

* * *

Section 1716.2-D. Film production tax credit districts.

* * *

(b) Criteria.--A film production tax credit district shall:

(1) Be at least 55 acres in size.

(2) Be located on deteriorated property.

(3) Be comprised of a parcel that is or will be occupied

by two or more qualified businesses that:

(i) in the aggregate, make a tax district capital

investment of at least $400,000,000 [within the district]

within [five] eight years after the effective date of the

2019/90MSP/HB0262A02596 - 16 -

designation of the district; and

(ii) are dedicated to film production activity,

postproduction activity or other activities that directly

or indirectly support film production activity occurring

within the district or within this Commonwealth.

(4) Contain at least one qualified production facility

and [six] two sound stages.

* * *

Section 12. The definitions of "minimum rehearsal and tour

requirements," "rehearsal expense," "rehearsal facility,"

"taxpayer" and "tour expense" in section 1772-D of the act are

amended and the section is amended by adding a definition to

read:

Section 1772-D. Definitions.

The following words and phrases when used in this subarticle

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Minimum rehearsal and tour requirements." During a tour,

all of the following must occur:

(1) The purchase or rental of concert tour equipment

delivered to a location in this Commonwealth, in an amount of

at least $3,000,000, from companies located and maintaining a

place of business in this Commonwealth for use on the tour.

(2) A rehearsal at a qualified rehearsal facility for a

minimum of 10 days.

(3) At least one concert performed at a class 1 venue.

(4) At least one concert performed at a venue which is

located in a municipality other than the municipality in

which the class 1 venue under paragraph (3) is located.

(5) The taxpayer shall maintain a place of business in

the Commonwealth or employ a representative for the period

beginning with the start date and ending with the award of

tax certificates under section 1773-D(e).

* * *

"Rehearsal expense." All of the following when incurred or

will be incurred during a rehearsal:

(1) Compensation paid or to be paid to an individual

employed in the rehearsal of the performance.

(2) Payment to a personal service corporation

representing individual talent.

(3) Payment to a pass-through entity representing

individual talent.

(4) The costs of construction, operations, editing,

photography, staging, lighting, wardrobe and accessories.

(5) The cost of leasing vehicles.

(6) The cost of transportation of people or concert tour

equipment to or from a train station, bus depot, airport or

other transportation facility or directly from a residence or

business entity.

(6.1) The cost of ground transportation of individuals

2019/90MSP/HB0262A02596 - 17 -

for an entire tour if the ground transportation is purchased

or will be purchased from a transportation company

maintaining a place of business in this Commonwealth and is

provided or will be provided by a resident of this

Commonwealth.

(6.2) The cost of ground transportation of concert tour

equipment for an entire tour if the ground transportation is

purchased or will be purchased from a transportation company

maintaining a place of business in this Commonwealth and is

provided or will be provided by a resident of this

Commonwealth.

(7) The cost of insurance coverage[.] for an entire tour

if the insurance coverage is purchased or will be purchased

through an insurance agent maintaining a place of business in

this Commonwealth.

(8) The cost of food and lodging.

(9) The cost of purchase or rental of concert tour

equipment.

(10) The cost of renting a rehearsal facility.

(11) The cost of emergency or medical support services

required to conduct a rehearsal.

"Rehearsal facility." As follows:

(1) A facility primarily used for rehearsals which is

all of the following:

(i) Located within this Commonwealth.

(ii) Has a minimum of [25,000] 20,000 square feet of

column-free, unobstructed floor space.

(2) The term does not include a facility at which

concerts are capable of being held.

* * *

"Representative." A person that meets all of the following

criteria:

(1) Is authorized to communicate with the department on

behalf of a taxpayer regarding an application submitted under

section 1773-D(e).

(2) Maintains a place of business in this Commonwealth.

(3) Has substantial experience working with the

Pennsylvania live events industry.

* * *

"Taxpayer." A [concert tour promotion company, concert tour

management company or other concert management company] musical

performer or performers or a concert tour management company of

a musical performer or performers subject to tax under Article

III, IV or VI. The term does not include contractors or

subcontractors of a [concert tour promotion company, concert

tour management company or other concert management company]

musical performer or performers or of a concert tour management

company of a musical performer or performers.

* * *

"Tour expense." As follows:

(1) Costs incurred or which will be incurred during a

2019/90MSP/HB0262A02596 - 18 -

tour for venues located in this Commonwealth. The term

includes all of the following:

(i) A payment which is made or will be made by a

recipient to a person upon which withholding will be made

on the payment by the recipient as required under Part

VII of Article III or a payment which is made or will be

made to a person who is required to make estimated

payments under Part VIII of Article III.

(ii) The cost of transportation of people [or

concert touring equipment] which is incurred or will be

incurred while transporting to or from a train station,

bus depot, airport or other transportation facility or

while transporting directly from a residence or business

entity located in this Commonwealth, or which is incurred

or will be incurred for transportation provided by a

company which is subject to the tax imposed under Article

III or IV.

(iii) The cost of leasing vehicles upon which the

tax imposed by Article II will be paid or accrued.

[(iv) The cost of insurance coverage which is

purchased or will be purchased through an insurance agent

based in this Commonwealth.]

(v) The cost of purchasing or renting facilities and

equipment from or through a resident of this Commonwealth

or an entity subject to taxation in this Commonwealth.

(vi) The cost of food and lodging which is incurred

or will be incurred from a facility located in this

Commonwealth.

(vii) Expenses which are incurred or will be

incurred in marketing or advertising a tour at venues

located within this Commonwealth.

(viii) The cost of merchandise which is purchased or

will be purchased from a company located within this

Commonwealth and used on the tour.

(ix) A payment which is made or will be made to a

personal service corporation representing individual

talent if the tax imposed by Article IV will be paid or

accrued on the net income of the corporation for the

taxable year.

(x) A payment which is made or will be made to a

pass-through entity representing individual talent for

which withholding will be made by the pass-through entity

on the payment as required under Part VII or VII-A of

Article III.

(2) The term does not include development cost,

including the writing of music or lyrics.

* * *

Section 13. Sections 1775-D and 1777-D of the act are

amended to read:

Section 1775-D. Carryover, carryback and assignment of tax

credit.

2019/90MSP/HB0262A02596 - 19 -

(a) General rule.--If a recipient cannot use the entire

amount of a tax credit for the taxable year in which the tax

credit is first approved, the excess may be carried over to

succeeding taxable years and used as a tax credit against the

qualified tax liability of the recipient for those taxable

years. Each time the tax credit is carried over to a succeeding

taxable year, the tax credit 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 three taxable years

following the first taxable year for which the recipient was

entitled to claim the tax credit.

(b) Application.--A tax credit approved by the department in

a taxable year first shall be applied against the recipient's

qualified tax liability for the current taxable year as of the

date on which the tax credit was approved before the tax credit

can be applied against tax liability under subsection (a).

entitled to carry back or obtain a refund of any portion of an

unused tax credit granted to the recipient under this

subarticle.

(d) Sale or assignment.--The following shall apply:

(1) A recipient, upon application to and approval by the

department, may sell or assign, in whole or in part, a tax

credit granted to the recipient under this subarticle.

(2) The department and the Department of Revenue shall

jointly promulgate regulations for the approval of

applications under this subsection.

(3) Before an application is approved, the Department of

Revenue must make a finding that the recipient has filed all

required State tax reports and returns for all applicable

taxable years and paid any balance of State tax due as

determined at settlement, assessment or determination by the

Department of Revenue.

(4) Notwithstanding any other provision of law, the

Department of Revenue shall settle, assess or determine the

tax of a taxpayer under this subsection within 60 days of the

filing of all required final returns or reports in accordance

with section 806.1(a)(5) of the act of April 9, 1929

(P.L.343, No.176), known as The Fiscal Code.

(e) Purchasers and assignees.--The following apply:

(1) The purchaser or assignee of all or a portion of a

tax credit under subsection (d) shall immediately claim the

tax credit in the taxable year in which the purchase or

assignment is made.

(2) The amount of the tax credit that a purchaser or

assignee may use against one qualified tax liability may not

exceed 50% of the qualified tax liability for the taxable

year.

(3) The purchaser or assignee may not carry forward,

carry back or obtain a refund of or sell or assign the tax

2019/90MSP/HB0262A02596 - 20 -

credit.

(4) The purchaser or assignee shall notify the

Department of Revenue of the seller or assignor of the tax

credit in compliance with procedures specified by the

Department of Revenue.

(f) Exception.--Notwithstanding any other provision of law

to the contrary, a recipient which held a rehearsal after

January 1, 2017, but before October 1, 2018, may use the tax

credit granted to the recipient under this subarticle against

the recipient's 2018 qualified tax liability or may sell or

assign the tax credit granted to the recipient under this

subarticle upon satisfaction of the recipient's 2018 qualified

tax liability.

Section 1777-D. Limitations.

(a) Cap.--[Except as provided in this subsection, the

department may not award tax credits for qualified rehearsal and

tour expenses incurred or to be incurred related to more than

five tours in a fiscal year.] The aggregate amount of tax

credits awarded in a fiscal year under this subarticle may not

exceed $8,000,000. In a fiscal year, the department may, in the

department's discretion, advance the award of tax credits for

qualified rehearsal and tour expenses incurred or to be incurred

[related to a maximum of two additional tours.] equal to

$2,000,000 of the tax credits available to be awarded in the

succeeding fiscal year.

(b) Advance award of credits.--The advance award of tax

credits under subsection (a) shall:

(1) count against the total [number of tours] amount of

tax credits that the department may award [tax credits] for

qualified rehearsal and tour expenses incurred or to be

incurred related to a tour in that next succeeding fiscal

year; and

(2) reduce the [number of tours] total amount of tax

credits that the department may award [tax credits] for

qualified rehearsal and tour expenses incurred or to be

incurred related to a tour in that next succeeding fiscal

year.

(1) [A taxpayer may not be awarded more than $800,000 of

tax credits for a tour.] If a taxpayer's purchase or rental

of concert tour equipment from companies located and

maintaining a place of business in this Commonwealth for use

on a tour is at least $3,000,000 but less than $4,000,000,

the taxpayer may not be awarded more than $800,000 of tax

credits for the tour.

(1.1) If a taxpayer's purchase or rental of concert tour

equipment from companies located and maintaining a place of

business in this Commonwealth for use on a tour is at least

$4,000,000 but less than $8,000,000, the taxpayer may not be

awarded more than $1,250,000 of tax credits for the tour.

(1.2) If a taxpayer's purchase or rental of concert tour

2019/90MSP/HB0262A02596 - 21 -

equipment from companies located and maintaining a place of

business in this Commonwealth for use on a tour is at least

$8,000,000, the taxpayer may not be awarded more than

$2,000,000 of tax credits for the tour.

(2) Except as provided under paragraph (5), the

aggregate amount of tax credits awarded by the department

under section 1773-D(e) to a taxpayer for a tour with

concerts at two class 1 venues or a class 1 venue and a class

2 venue may not exceed 25% of the qualified rehearsal and

tour expenses incurred or to be incurred.

(3) Except as provided under paragraph (5), the

aggregate amount of tax credits awarded by the department

under section 1773-D(e) to a taxpayer for a tour with

concerts at a class 1 venue and a class 3 venue may not

exceed 30% of the qualified rehearsal and tour expenses

incurred or to be incurred.

(4) Except as provided under paragraph (5), the

aggregate amount of tax credits awarded by the department

under section 1773-D(e) to a taxpayer for a tour with

concerts at a class 1 venue and a class 3 venue which does

not serve alcohol may not exceed 35% of the qualified

rehearsal and tour expenses incurred or to be incurred.

(5) In addition to the tax credits under paragraph (2),

(3) or (4), a taxpayer is eligible for a tax credit in the

amount of 5% of the qualified rehearsal and tour expenses

incurred or to be incurred by the taxpayer if the taxpayer

holds concerts at a total of two or more class 2 venues or

class 3 venues.

(d) Qualified rehearsal facility.--To be considered a

qualified rehearsal facility under this subarticle, the owner of

a rehearsal facility shall provide evidence to the department to

verify the development or facility specifications and capital

improvement costs incurred for the rehearsal facility so that

the threshold amounts set in the definition of qualified

rehearsal facility under section 1772-D are satisfied, and, upon

verification, the rehearsal facility shall be registered by the

department officially as a qualified rehearsal facility.

(e) Waiver.--The department may make a determination that

the financial benefit to this Commonwealth resulting from the

direct investment in or payments made to Pennsylvania rehearsal

and concert facilities outweighs the benefit of maintaining the

60% Pennsylvania rehearsal expenses requirement contained in the

definition of qualified rehearsal and tour expense under section

1772-D. If the determination is made, the department may waive

the requirement that 60% of a tour's aggregate rehearsal

expenses be comprised of Pennsylvania rehearsal expenses.

Section 13.1. The definitions of "conservation plan,"

"eligible applicants" and "riparian forest buffer" in section

1702-E of the act are amended and the section is amended by

adding definitions to read:

Section 1702-E. Definitions.

2019/90MSP/HB0262A02596 - 22 -

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:

* * *

"Conservation plan." A United States Department of

Agriculture Natural Resources Conservation Service plan,

including a schedule for implementation, that identifies site-

specific conservation best management practices on an

agricultural operation.

* * *

"Eligible applicants." [A business firm or an individual who

is subject to the taxes imposed by Article III, IV, VI, VII,

VIII, IX or XV.] Any of the following subject to the taxes

imposed by Article III, IV, VI, VII, VIII, IX or XV:

(1) A business firm.

(2) An individual.

(3) Individuals filing jointly.

* * *

"Manure management plan." A written site-specific plan that:

(1) outlines practices for the land application of

manure and agricultural process wastewaters acceptable to the

commission; and

(2) is developed to meet the requirements of 25 Pa. Code

§ 91.36(b) (relating to pollution control and prevention at

agricultural operations).

* * *

"Riparian forest buffer." An area of mostly trees or shrubs

which is adjacent to and up-gradient from watercourses or water

bodies and which meets standards established [by the United

States Department of Agriculture Natural Resources and

Conservation Service] or adopted by the commission.

* * *

"Total maximum daily load" or "TMDL." The sum of individual

waste load allocations for point sources, load allocations for

nonpoint sources and natural quality and a margin of safety

expressed in terms of mass per time, toxicity or other

appropriate measures.

* * *

Section 13.2. Sections 1703-E(b)(1), (2) and (5) and (c),

1704-E(a)(2), (4) and (5), (b)(1)(i), (2) and (3) and (c), 1705-

E(2) and (3), 1709-E, 1702-H, 1703-H, 1705-H(d) and (e) and

1706-H(a) of the act are amended to read:

Section 1703-E. Resource Enhancement and Protection Tax Credit

Program.

* * *

(b) Limits.--The following limits shall apply:

(1) Except as set forth in paragraph (5), an eligible

applicant may be granted a maximum of [$150,000 in tax

credits under this program] $250,000 in tax credits in any

consecutive seven-year period, calculated from the date the

tax credit is issued.

2019/90MSP/HB0262A02596 - 23 -

(2) [No more than $150,000 in tax credits shall be

granted toward projects for an agricultural operation.] An

agricultural operation may be granted a maximum of $250,000

in tax credits in any consecutive seven-year period,

calculated from the date the tax credit is issued.

* * *

(5) Notwithstanding paragraph (1), there shall be no

limit on the amount of tax credits granted to a sponsor under

subsection (e)[.], except the commission may establish annual

aggregate limits on tax credits awarded to sponsors to ensure

fair and equitable distribution of tax benefits to eligible

applicants.

* * *

(1) If the eligible applicant cannot use the entire

amount of the tax credit for the taxable year in which the

tax credit is first granted, then the excess may be carried

over to succeeding taxable years and used as a credit against

the qualified tax liability of the eligible applicant for

those taxable years. Each time that the tax credit is carried

over to a succeeding taxable year, it is to be reduced by the

amount that was used as a credit during the immediately

preceding taxable year. The tax credit provided by this

article may be carried over and applied to succeeding taxable

years for no more than 15 taxable years following the first

taxable year for which the eligible applicant was entitled to

claim the credit.

(2) A tax credit granted by the department shall be

applied against the taxpayer's qualified tax liability for

the current taxable year as of the date on which the credit

was granted before the tax credit is applied against any tax

liability under paragraph (1).

(2.1) A tax credit granted under this article may be

applied to the tax liability of the spouse of an eligible

applicant if both the eligible applicant and the spouse

report income on a joint income tax return.

(3) A tax credit granted under this article shall not be

carried back or refunded.

* * *

Section 1704-E. Tax credits.

(a) General eligibility.--Projects shall be eligible for a

tax credit as follows:

* * *

(2) An agricultural operation shall have in place a

current conservation plan[,] or a current agricultural

erosion and sediment control plan if engaged in plowing and

tilling, and a current nutrient management plan or manure

management plan, if required, or the development of such

plans shall be included in an application for a tax credit.

* * *

(4) An agricultural operation with an uncompleted best

2019/90MSP/HB0262A02596 - 24 -

management practice of either a conservation plan or an

agricultural erosion and sediment control plan if engaged in

plowing and tilling or a nutrient management plan or manure

management plan, if required, shall first include the

remaining best management practices included in such plans in

an application for a tax credit.

(5) A project shall meet the planning, design [and],

construction and certification standards established by the

commission. If standards do not exist for a best management

practice approved by the commission, the commission may

establish or approve planning, design, construction and

certification standards for such a best management practice.

(b) Amount of tax credit.--

(1) A tax credit equal to 75% of the eligible costs

under subsection (c) of a project authorized under section

1707-E shall be granted for any of the following:

(i) Development of a voluntary or mandatory nutrient

management plan or manure management plan.

* * *

(2) A tax credit equal to 50% of the eligible costs

under subsection (c) of a project authorized under section

1707-E shall be granted for any of the following:

(i) For an agricultural operation, design and

implementation of agricultural best management practices

or the installation and use of equipment, provided that

the best management practice or equipment is necessary to

reduce existing sediment and nutrient pollution to

surface waters. Such best management practices and

equipment shall be identified by the commission and may

include manure storage systems, alternative uses for

manure, filter strips, grassed waterways, management

intensive grazing systems and no-till planting equipment.

(ii) Design and implementation of best management

practices necessary to exclude livestock access to

streams through fencing, stabilized crossings and

improved watering systems, if there is established and

maintained a vegetated riparian or riparian forest buffer

with a minimum width of 35 feet.

(iii) The remediation of legacy sediment, if the

legacy sediment is exposed and discharges or threatens to

discharge into surface waters as a result of acute stream

bank erosion. The project shall meet standards

established by the commission as being effective in

mitigating or eliminating the harmful effects of legacy

sediment.

[(3) A tax credit equal to 25% of the eligible costs

under subsection (c) of a project authorized under section

1707-E shall be granted for the remediation of legacy

sediment if the legacy sediment is exposed and is discharging

or threatens to discharge into surface waters as a result of

acute stream bank erosion. The project shall meet standards

2019/90MSP/HB0262A02596 - 25 -

established by the commission as being effective in

mitigating or eliminating the harmful effects of legacy

sediment.]

(4) Notwithstanding any other provision of this section,

a tax credit equal to 90% of the eligible costs under

subsection (c) of a project authorized under section 1707-E

may be granted for certain high-priority best management

practices as determined by the commission and implemented

within a watershed covered under an approved TMDL, including:

(i) Riparian forest buffers and their maintenance.

(ii) Livestock exclusion from streams and supporting

practices.

(iii) Stream crossings.

(iv) Cover crops.

(v) Soil health best management practices as

determined appropriate by the commission.

(vi) Other best management practices as determined

appropriate by the commission.

(1) The following shall be considered eligible costs of

a project to which a tax credit may be applied:

(i) Project design, engineering and associated

planning.

(ii) Project management costs, including

contracting, document preparation and applications.

(iii) Project construction or installation.

(iv) Equipment, materials and all other components

of projects eligible under subsection (a).

(v) Postconstruction inspections.

(vi) Interest payments on loans for project

implementation for up to one year prior to the award of

the tax credit.

(2) A tax credit shall not be applied to that portion of

a project cost for which public funding was received.

(3) Eligible costs of a project shall include any of the

services listed in paragraph (1) that may be provided by a

conservation district.

(4) Notwithstanding any other provision of this article,

tax credits for annual maintenance best management practices,

such as cover crops, buffer maintenance and other annual

practices approved by the commission, shall not exceed fixed

rates or schedules established by the commission in annual

program guidelines.

Section 1705-E. Project certification.

A project shall be certified by the commission as meeting

standards under section 1704-E(a)(5) by the following:

* * *

(2) riparian forest buffer: technical service provider

or staff from a conservation district or USDA-NRCS approved

by the commission;

(3) [nutrient management plan: nutrient management

2019/90MSP/HB0262A02596 - 26 -

specialist] nutrient management plan or manure management

plan: a nutrient management specialist or any person trained

and experienced in manure and nutrient management planning

techniques and whose qualifications are acceptable to the

commission; and

* * *

Section 1709-E. Annual tax credits.

(a) Total amount.--The total amount of tax credits

authorized by the commission shall not exceed [$10,000,000]

$13,000,000 in any fiscal year.

(b) Chesapeake Bay watershed prioritization.--

Notwithstanding any provision of this article to the contrary,

the commission may reserve and target up to $3,000,000 of the

total amount under subsection (a) in any fiscal year for

geographic areas and best management practices for nutrient and

sediment reductions within the Chesapeake Bay watershed area.

Section 1702-H. 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:

"Commission." The Pennsylvania Historical and Museum

Commission.

"Completed project." The completion of the [restoration]

rehabilitation of a qualified historic structure in accordance

with a qualified rehabilitation plan and the receipt of an

occupancy certificate for the structure.

"Department." The Department of Revenue of the Commonwealth.

"Internal Revenue Code." The Internal Revenue Code of 1986

(Public Law 99-514, 26 U.S.C. § 1 et seq.).

"Qualified expenditures." The costs and expenses incurred by

a qualified taxpayer in the [restoration] rehabilitation of a

qualified historic structure pursuant to a qualified

rehabilitation plan and which are defined as qualified

rehabilitation expenditures under section 47(c)(2) of the

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

47(c)(2)).

"Qualified historic structure." A [commercial] building

located in this Commonwealth that qualifies as a certified

historic structure under section 47(c)(3) of the Internal

Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 47(c)(3)).

"Qualified rehabilitation plan." A plan to rehabilitate a

qualified historic structure that is approved by the

Pennsylvania Historical and Museum Commission as being

consistent with the standards for rehabilitation and guidelines

for rehabilitation of historic buildings as adopted by the

United States Secretary of the Interior.

"Qualified tax liability." Tax liability imposed on a

taxpayer under Article III, IV, VI, VII, VIII, IX, XI or XV,

excluding any tax withheld by an employer under Article III.

"Qualified taxpayer." Any natural person, corporation,

business trust, limited liability company, partnership, limited

2019/90MSP/HB0262A02596 - 27 -

liability partnership, association or any other form of legal

business entity that:

(1) Is subject to a tax imposed under Article III, IV,

VI, VII, VIII, IX, XI or XV, excluding any tax withheld by an

employer under Article III.

(2) Owns a qualified historic structure.

"Region." A community action team region as established by

the Department of Community and Economic Development.

"Workforce housing project." A completed project in which,

for a period of seven years after the building is placed in

service, at least 20% of the units meet the Department of

Housing and Urban Development's definition of "affordable" for

individuals earning 80% of the area median income.

Section 1703-H. Tax credit certificates.

(a) Application.--

(1) A qualified taxpayer may apply to the Department of

Community and Economic Development for a tax credit

certificate under this section.

(2) The application shall be on the form required by the

Department of Community and Economic Development [and], shall

include a qualified rehabilitation plan[.], shall state

whether the project meets the definition of "workforce

housing project" and, if applicable, shall include the plan

for the project to meet the definition of "workforce housing

project."

(3) [The application shall be filed on or before

February 1 for qualified expenditures incurred and to be

incurred in connection with the completed project.] The

Department of Community and Economic Development shall

establish an application processing fee. The fee structure

shall be tiered based on the amount of tax credits requested

and in no case shall exceed $2,000.

(4) The proceeds of the fee under paragraph (3) shall be

deposited into the Historic Rehabilitation Tax Credit

Administration Account, which is established as a special

fund in the State Treasury. The money in the account shall be

appropriated on a continuing basis to the Department of

Community and Economic Development and used by the commission

and the Department of Community and Economic Development to

offset the costs of the review of tax credit applications and

awarding of tax credit certificates.

(5) The Department of Community and Economic Development

shall begin accepting applications for credit certificates on

October 1 and close the initial application period on October

31.

(b) Review, recommendation and approval.--

(1) The Department of Community and Economic Development

shall forward applications received under this section to the

commission for review.

[(2) The commission shall review the proposed

rehabilitation plan, verify that the building is a qualified

2019/90MSP/HB0262A02596 - 28 -

historic structure and recommend approval or disapproval to

the Department of Community and Economic Development within

30 days of receipt of the application. The commission shall

notify the qualified taxpayer within 15 days of its

determination.]

(2.1) The commission shall review the proposed

rehabilitation plan in each application, verify that the

building is a qualified historic structure and by December 1

provide the Department of Community and Economic Development

a list of eligible projects.

(2.2) The Department of Community and Economic

Development shall allocate the credits and release a list of

allocated projects within 15 days. Applicants with approved

allocations shall be provided with an award letter.

(2.3) Any amount of tax credit certificates up to the

annual program limit of $5,000,000 not awarded within the

initial application period shall be available on a first-

come, first-served basis through a process determined by the

Department of Community and Economic Development.

(3) The commission shall notify the Department of

Community and Economic Development of verification of a

completed project and notify the Department of Community and

Economic Development of the amount of qualified expenditures

incurred by the taxpayer in connection with the completed

project.

(4) If the Department of Community and Economic

Development has approved the application and received

notification of a completed project, it shall issue the

qualified taxpayer a tax credit certificate [by April 1]

within 45 days of the receipt of an approved, completed

project. A tax credit certificate issued under this section

shall not exceed [25%] either:

(i) twenty-five percent of qualified expenditures

determined by the commission to have been incurred by the

qualified taxpayer in connection with the completed

project[.]; or

(ii) thirty percent of qualified expenditures

determined by the commission to have been incurred by the

qualified taxpayer in connection with a workforce housing

project.

(5) In granting tax credit certificates under this

article, the Department of Community and Economic

Development:

(i) Shall not grant more than [$3,000,000]

$5,000,000 in tax credit certificates in any fiscal year

exclusive of any tax credit certificates not awarded or

returned from previous fiscal years.

(ii) Shall not grant more than $500,000 in tax

credit certificates to a single qualified taxpayer in any

fiscal year.

(iii) Shall assure that credits are awarded in an

2019/90MSP/HB0262A02596 - 29 -

equitable manner to each region in this Commonwealth.

However, credits allocated to a region that are unclaimed

shall be promptly reallocated to eligible projects in

other regions.

[(6) Tax credits under this article shall be made

available on a first-come, first-served basis within the

limitation established under subsection (b)(5).]

Section 1705-H. Carryover, carryback and assignment of credit.

* * *

(d) Sale or assignment.--The following shall apply:

(1) A qualified taxpayer or a purchaser or assignee of a

tax credit obtained under section 1703-H or a shareholder,

member or partner of a pass-through entity that was

transferred the tax credit or a portion of the tax credit

from such pass-through entity subject to section 1706-H, upon

application to and approval by the Department of Community

and Economic Development, may sell or assign, in whole or in

part, a tax credit granted to the qualified taxpayer under

this article.

(2) Before an application is approved, the department

must find that the applicant has filed all required State tax

reports and returns for all applicable taxable years and paid

any balance of State tax due as determined at settlement,

assessment or determination by the department.

(e) Purchasers and assignees.--[The purchaser or assignee of

all or a portion of a tax credit obtained under section 1703-H

shall immediately claim the credit in the taxable year in which

the purchase or assignment is made. The purchaser or assignee

may not carry forward, carry back or obtain a refund of or sell

or assign the tax credit. The purchaser or assignee shall notify

the department of the seller or assignor of the tax credit in

compliance with procedures specified by the department.]

(1) If a purchaser or assignee of all or a portion of a

tax credit obtained under section 1703-H cannot use the

entire amount of the tax credit for the taxable year in which

the tax credit was purchased or assigned, the excess may be

carried over to succeeding taxable years and used as a credit

against the qualified tax liability of the purchaser or

assignee for those taxable years.

(2) Each time a tax credit is carried over to a

succeeding taxable year, the tax credit shall be reduced by

the amount that was used as a credit during the immediately

preceding taxable year.

(3) The tax credit may be carried over and applied to

succeeding taxable years for not more than seven taxable

years following the first taxable year for which the

qualified taxpayer was entitled to claim the credit.

(4) The purchaser or assignee may not carry back the

credit or obtain a refund.

Section 1706-H. Pass-through entity.

(a) General rule.--If a pass-through entity has any unused

2019/90MSP/HB0262A02596 - 30 -

tax credit under section 1705-H, it may elect, in writing,

according to procedures established by the department, to

transfer all or a portion of the credit to its shareholders,

members or partners in proportion to the share of the entity's

distributive income to which the shareholder, member or partner

is entitled.

* * *

Section 13.3. The act is amended by adding a section to

read:

Section 1707.1-H. Annual report to General Assembly.

(a) Report on tax credit.--By October 1, 2020, and October 1

of each year thereafter, the Department of Community and

Economic Development shall submit a report on the tax credit

under this article to:

(1) The chairperson and minority chairperson of the

Appropriations Committee of the Senate.

(2) The chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives.

(3) The chairperson and minority chairperson of the

Finance Committee of the Senate.

(4) The chairperson and minority chairperson of the

Finance Committee of the House of Representatives.

(b) Report content.--The report shall include:

(1) The list of completed projects that have been

awarded tax credits.

(2) The amount of Federal rehabilitation tax credits

received by each completed project.

(3) The amount of State historic preservation incentive

tax credits received by each completed project.

(4) Total project costs and the amount of private

investment in each completed project.

(5) The total number of completed projects placed into

service in the past year that were vacant for at least 12

months prior to commencement of rehabilitation work.

(6) The total number of completed projects placed into

service in the past year that had not paid property taxes for

at least 12 months prior to the commencement of

rehabilitation work.

(7) The total number of temporary construction jobs and

permanent jobs created by completed projects placed into

service in the prior year.

(8) The amount of workforce housing projects placed into

service in the prior year.

Notwithstanding any law providing for the confidentiality of tax

records, the information in the report shall be public

information and shall be posted on the Department of Community

and Economic Development's publicly accessible Internet website.

(d) Review of tax credit program.--The Department of

Community and Economic Development, in cooperation with the

commission, shall undertake a review of the Historic

2019/90MSP/HB0262A02596 - 31 -

Preservation Incentive Tax Credit Program to determine the

effectiveness of the program in preserving and rehabilitating

the Commonwealth's historic structures and the impact these

efforts have had on the stimulation of investment in this

Commonwealth. The results of the review shall be included in the

annual report due October 1, 2025.

Section 13.4. Sections 1708-H and 1709-H of the act are

amended to read:

Section 1708-H. Application of Internal Revenue Code.

The provisions of section 47 of the Internal Revenue Code and

the regulations promulgated regarding those provisions shall

apply to the department's interpretation and administration of

the credit provided under this article without regard to ratably

allocating the credit over a five-year period as required by

section 47(a) of the Internal Revenue Code. References to the

Internal Revenue Code shall mean the sections of the Internal

Revenue Code as existing on any date of interpretation of this

article, except, if those sections of the Internal Revenue Code

referenced in this article are repealed or terminated,

references to the Internal Revenue Code shall mean those

sections last having full force and effect without regard to

ratably allocating the credit over a five-year period as

required by section 47(a) of the Internal Revenue Code. If after

repeal or termination the Internal Revenue Code sections are

revised or reenacted, references in this article to Internal

Revenue Code sections shall mean those revised or reenacted

sections.

Section 1709-H. Limitation.

Taxpayers shall not be entitled to apply for historic

preservation tax credits after [the seventh fiscal year

following the effective date of this article] February 1, 2031.

Section 13.5. The act is amended by adding a section to

read:

Section 1710-H. Recapture.

In the event that a tax credit or a portion of a tax credit

is subject to recapture and the tax credit has been purchased,

assigned or transferred, the Commonwealth shall pursue its

recapture remedies and rights against the qualified taxpayer

that applied for the credit. No redress shall be sought against

an assignee, purchaser or transferee of the tax credit if the

assignee, purchaser or transferee acquired the tax credit by way

of an arm's-length transaction, for value and without notice of

violation, fraud or misrepresentation.

Section 14. Section 1703-J of the act is amended by adding

definitions to read:

Section 1703-J. 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:

* * *

"Federal coal refuse reclamation tax credit amount." The

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actual amount of tax credits obtained by an eligible facility

under a Federal coal refuse reclamation tax credit program in

the four Federal tax quarters that precede the fiscal year in

which credits are awarded under section 1707-J(a).

"Federal coal refuse reclamation tax credit program." A

program established under the Federal Internal Revenue Code that

provides a tax credit for an eligible facility against Federal

income taxes based upon the amount of coal refuse used at the

eligible facility.

* * *

Section 15. Section 1704-J(d) of the act is amended and the

section is amended by adding a subsection to read:

Section 1704-J. Application and approval of tax credit.

* * *

(c.1) Netting of Federal tax credit.--If a Federal coal

refuse reclamation tax credit program is adopted and becomes

effective, the following shall apply:

(1) Each eligible facility shall report as part of its

application under subsection (a) the Fed eral coal refuse

reclamation tax credit amount received by the eligible

facility for the four Federal tax quarters that immediately

preceded the submittal of the application.

(2) The amount of tax credits received by an eligible

facility as calculated under subsection (b) shall be reduced

by the Federal coal refuse reclamation tax credit amount

received by the eligible facility for the four Federal tax

quarters that immediately preceded the submittal of the

application under this section.

(d) Expiration.--The department may not approve an

application for a tax credit under this article after December

31, [2026] 2036.

Section 16. Section 1707-J(a) of the act is amended to read:

Section 1707-J. Limitation on tax credits.

(a) Amount.--The total amount of tax credits issued by the

department may not exceed $7,500,000 in fiscal year 2016-2017

[and $10,000,000 in each fiscal year thereafter], $10,000,000 in

fiscal years 2017-2018 and 2018-2019 and $20,000,000 in each

fiscal year thereafter.

* * *

Section 17. Section 1803-B of the act is amended by adding a

subsection to read:

Section 1803-B. Application process.

* * *

(e) Expiration.--The department may not approve an

application for a tax credit under this article after June 30,

2020.

Section 17.1. The definition of "infrastructure" in section

1802-C of the act is amended to read:

Section 1802-C. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

2019/90MSP/HB0262A02596 - 33 -

context clearly indicates otherwise:

* * *

"Infrastructure." Any improvements in or out of the zone

[primarily] that the contracting authority determines to be

related to the development of [and required by] a facility in

the zone, including, but not limited to, improvements to

utilities, water, sewer, storm water, parking, road improvements

or telecommunications within the city or municipality or within

a municipality contiguous to that city or municipality.

* * *

Section 17.2. Section 1813-C(a) of the act is amended by

adding a paragraph to read:

Section 1813-C. Restrictions.

(a) Utilization.--Money transferred under section 1812-C may

only be utilized for the following:

* * *

(1.1) Payment of debt service on bonds issued or

refinanced to establish a revolving loan fund that will

provide financial assistance in the form of a loan to a

qualified business acquiring property for the business,

constructing a new facility, reconstructing or renovating an

existing facility or acquiring new equipment to be used by

the qualifying business in a zone.

* * *

Section 18. The definitions of "principal business

operations," "rural business" and "rural growth investment" in

section 1822-G of the act are amended and the section is amended

by adding definitions to read:

Section 1822-G. Definitions.

The following words and phrases when used in this part shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Full-time equivalent employee." The quotient obtained by

dividing the total number of hours for which employees were

compensated for employment over the preceding 12-month period by

2,080.

* * *

"Jobs created." Full-time equivalent employee positions

that:

(1) Are created by the rural business.

(2) Are currently located in this Commonwealth.

(3) Were not located in this Commonwealth at the time of

the rural growth investment in the rural business.

(4) Pay at least 150% of the Federal or State minimum

wage, whichever is greater.

"Jobs retained." Full-time equivalent employee positions

that:

(1) Are l ocated in this Commonwealth.

(2) Existed before the initial rural growth investment

in the rural business.

2019/90MSP/HB0262A02596 - 34 -

(3) Pay at least 150% of the Federal or State minimum

wage, whichever is greater.

(4) Would have been lost or moved out of this

Commonwealth had a rural growth investment not been made, as

certified in writing by an executive officer of the rural

business and approved by the department.

"Principal business operations." The place or places where

at least 60% of a rural business' employees work or where

employees that are paid at least 60% of the business' payroll

work. An out-of-State business that has agreed to relocate

employees or an in-State business that has agreed to hire

employees using the proceeds of a rural growth investment to

establish principal business operations in a rural area in this

Commonwealth shall be deemed to have the principal business

operations in this new location if the business satisfies this

definition within 180 days after receiving the rural growth

investment, unless the department agrees to a later date.

* * *

"Rural business." A business that, at the time of the

initial rural growth investment in the business by a rural

growth fund, meets the following conditions:

(1) Has fewer than [250] 150 employees and not more than

$15,000,000 in net income as determined by generally accepted

accounting principles for the preceding calendar year.

(2) Has principal business operations in one or more

rural areas in this Commonwealth.

(3) Is engaged in industries related to manufacturing,

plant sciences, services or technology or, if not engaged in

those industries, the department makes a determination that

the investment will be highly beneficial to the economic

growth of this Commonwealth.

* * *

"Rural growth investment." A capital or equity investment in

a rural business or any loan to a rural business with a stated

maturity at least one year after the date of issuance. A secured

loan or a revolving line of credit provided to a rural business

is a rural growth investment only if the growth fund obtains an

affidavit from the president or chief executive officer or

equivalent position of the rural business attesting that the

rural business sought and was denied similar financing from a

commercial bank.

"State repayment amount." The amount by which the rural

growth fund's credit-eligible capital contributions exceed the

product obtained by multiplying $30,000 by the aggregate number

of jobs created and jobs retained reported in annual reports

under section 1827-G(b).

* * *

Section 19. Sections 1824-G(b)(2) and (3), (d)(4) and (e),

1825-G(a)(2), 1826-G(a), 1827-G, 1828-G(c), 1829-G(b)(2.1) and

(3), 1830-G(a), 1832-G(c), 1833-G(a) and 1834-G(a) of the act

are amended to read:

2019/90MSP/HB0262A02596 - 35 -

Section 1824-G. Rural growth funds.

* * *

(b) Information.--An application to qualify as a rural

growth fund shall include all of the following:

* * *

(2) Documents and other evidence sufficient to prove to

the satisfaction of the department that the applicant meets

all of the following criteria:

(i) The applicant or an affiliate of the applicant

is licensed as a rural business investment company under

the Consolidated Farm and Rural Development Act (Public

Law 87-128, 75 Stat. 307) or as a small business

investment company under the Small Business Investment

Act of 1958 (Public Law 85-699, 72 Stat. 689).

(ii) Evidence that as of the date the application is

submitted, the applicant or affiliates of the applicant

have invested at least $100,000,000 in nonpublic

companies located in rural areas of this Commonwealth or

other states.

(iii) At least one principal in a rural business

investment company or a small business investment company

has been an officer or employee of the applicant or of an

affiliate of the applicant for at least four years prior

to the date the application is submitted.

(3) An estimate of the number of jobs [that will be]

created or retained in this Commonwealth [as a result of]

that will result from the applicant's rural growth

investments.

* * *

(d) Notice of approval or disapproval.--

* * *

(4) An applicant may resubmit the application within 30

days after receipt of a notice of disapproval[.] and provide

additional information to complete, clarify or cure defects

identified in the application by the department. The

department shall consider that application submitted before

any pending applications submitted after the date the

application was originally submitted.

(e) Request for determination.--A rural growth fund, before

making a rural growth investment, may request from the

department a written opinion as to whether the business in which

the rural growth fund [proposed] proposes to invest is a rural

business. The department shall notify the rural growth fund of

the determination within 15 days after receipt of the request.

If the department fails to notify a rural growth fund of the

determination within 15 days, the business in which the rural

growth fund proposes to invest shall be considered a rural

business.

* * *

Section 1825-G. Requirements.

(a) Collections.--Upon receiving approval under section

2019/90MSP/HB0262A02596 - 36 -

1824-G, a rural growth fund must do all of the following within

60 days:

* * *

(2) Collect one or more investments of cash that, when

added to the contributions collected under paragraph (1),

equal the rural growth fund's investment authority. At least

10% of the rural growth fund's investment authority shall be

comprised of equity investments contributed, directly or

indirectly, by affiliates of the rural growth fund, including

employees, officers and directors of the affiliates.

* * *

Section 1826-G. Rural growth fund failure to comply.

(a) Revocation.--If a rural growth fund fails to meet the

requirements of section 1825-G, the rural growth fund's approval

shall be revoked, and, the corresponding investment authority

and credit-eligible capital contributions may not be included in

determining the limits on total investment authority and credit-

eligible capital contributions prescribed in sections 1824-G(f)

and 1828-G(c), respectively.

* * *

Section 1827-G. Reporting obligations.

(a) Initial report.--Each rural growth fund shall submit a

report to the department on or before the fifth business day

after the second anniversary of the closing date. The report

shall provide documentation as to the rural growth fund's rural

growth investments and include the following information:

(1) A bank statement evidencing each rural growth

investment.

(2) The name, location and industry of each business

receiving a rural growth investment, including either the

determination letter issued by the department under section

1824-G(e) or other evidence that the business qualified as a

rural business at the time the investment was made.

(3) [The number of jobs created or retained as a result

of the fund's rural growth investments as of the last day of

the preceding calendar year.]

(4) Any other information required by the department.

(5) A copy of the commitment letter or summary of the

terms and conditions of the rural growth investment offered

to and accepted by the rural business.

(b) Annual report.--No later than March 1 of each year

following the [year in which the report required under

subsection (a) is due,] closing date the rural growth fund shall

submit an annual report to the department that includes the

following information:

(1) The number of jobs created [or retained as a result

of the fund's rural growth investments as of the last day of

the preceding calendar year.] and retained by each rural

business. The number of jobs created and retained shall be

calculated as follows:

(i) The number of jobs created by a rural business

2019/90MSP/HB0262A02596 - 37 -

is calculated each year by subtracting the number of

full-time equivalent employee positions in this

Commonwealth at the time of the initial rural growth

investment in the rural business from the monthly average

of those employment positions for that year. If the

number calculated is less than zero, the number shall be

reported as zero. The monthly average of full-time

equivalent employee positions for a year is calculated by

adding together the number of full-time equivalent

employee positions existing on the last day of each month

of the year and dividing by 12.

(ii) The number of jobs retained by a rural business

is calculated each year based on the monthly average of

full-time equivalent employee positions for that year.

The monthly average of full-time equivalent employee

positions for a year is calculated by adding together the

number of full-time equivalent employee positions

existing on the last day of each month of the year and

dividing by 12. The reported number of jobs retained for

a year may not exceed the number reported on the annual

report under this subsection. The rural growth fund shall

reduce the number of jobs retained for a year if

employment at the rural business drops below the number

reported on the annual report.

(1.1) If not provided under subsection (a)(2), the name

and location of each business receiving a rural growth

investment, including either the determination letter issued

by the department under section 1824-G(e) or other evidence

that the business qualified as a rural business at the time

the investment was made.

(2) The average [annual salary] hourly wage of the jobs

reported in paragraph (1).

(3) Any other information required by the department.

(1) No later than March 1 of each year following the

year in which the report required under subsection (a) is

due, a rural business that receives a rural growth investment

shall submit the following information on a form required by

the department:

(i) The number of jobs existing at the rural

business prior to the rural growth investment.

(ii) The number of new jobs created as a result of

the rural growth investment.

(iii) The number of jobs retained as a result of the

rural growth investment.

(2) Failure by the rural business to submit the report

may result in the reduction of investment authority or credit

eligible contribution authority of the rural growth fund.

Section 1828-G. Business firms.

* * *

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[$4,000,000] $30,000,000 in credit-eligible capital

contributions under this part.

Section 1829-G. Tax credit certificates.

* * *

(b) Review, recommendation and approval.--

* * *

(2.1) [A tax credit] Tax credits awarded under this

section to a business firm shall not exceed [90%] the amount

of the credit-eligible capital contributions made by [a] the

business firm.

(3) In awarding tax credit certificates under this part,

the department:

(i) Beginning with fiscal year [2017-2018] 2019-

2020, may not award tax credit certificates that would

result in the utilization of more than [$1,000,000]

$6,000,000 in tax credits in any fiscal year, except for

tax credits carried forward.

(ii) May not award more than [$4,000,000]

$30,000,000 in tax credit certificates, in the aggregate,

under this part.

Section 1830-G. Claiming the tax credit.

(a) Presentation.--Beginning July 1, [2017] 2019, upon

presenting a tax credit certificate to the Department of

Revenue, a business firm may claim a tax credit of up to [25%]

20% of the amount awarded under section 1829-G for each of the

taxable years that includes the third, fourth, fifth [and],

sixth and seventh anniversaries of the closing date, exclusive

of any tax credit amounts carried over under section 1831-G(b).

* * *

Section 1832-G. Prohibitions.

* * *

any business firm that invests in the rural growth fund shall be

an affiliate of or have a pecuniary interest in a rural business

that receives a rural growth investment from the rural growth

fund prior to the rural growth fund's initial rural growth

investment in the rural business.

Section 1833-G. Revocation of tax credit certificates.

(a) Revocation.--The department shall revoke a tax credit

certificate awarded under section 1829-G if any of the following

occur with respect to a rural growth fund before the rural

growth fund exits the program under section 1834-G:

(1) The rural growth fund in which the credit-eligible

capital contribution was made does not invest all of its

investment authority in rural growth investments in this

Commonwealth within [two] three years of the closing date

with at least 25% of its investment authority initially

invested in rural businesses engaged in manufacturing.

(2) The rural growth fund, after satisfying the

conditions of paragraph (1), fails to maintain rural growth

investments equal to 100% of its investment authority until

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the [sixth] seventh anniversary of the closing date. For the

purposes of this paragraph, [an] a rural growth investment is

"maintained" even if the rural growth investment is sold or

repaid so long as the rural growth fund reinvests an amount

equal to the capital returned or recovered by the rural

growth fund from the original rural growth investment,

exclusive of any profits realized, in other rural growth

investments in this Commonwealth within 12 months of the

receipt of the capital. Amounts received periodically by a

rural growth fund shall be treated as continually invested in

rural growth investments if the amounts are reinvested in one

or more rural growth investments by the end of the following

calendar year. A rural growth fund is not required to

reinvest capital returned from rural growth investments after

the [fifth] sixth anniversary of the closing date, and the

rural growth investments shall be considered held

continuously by the rural growth fund through the [sixth]

seventh anniversary of the closing date.

(3) The rural growth fund, before exiting the program in

accordance with section 1834-G, makes a distribution or

payment that results in the rural growth fund having less

than 100% of its investment authority invested in rural

growth investments in this Commonwealth or available for

investment in rural growth investments and held in cash and

other marketable securities.

[(4) The rural growth fund invests more than 20% of its

investment authority in the same rural business, including

amounts invested in affiliates of the rural business.]

(5) The rural growth fund makes a rural growth

investment in a rural business that directly or indirectly

through an affiliate owns, has the right to acquire an

ownership interest, makes a loan to or makes an investment in

the rural growth fund, an affiliate of the rural growth fund

or an investor in the rural growth fund. This paragraph does

not apply to investments in publicly traded securities by a

rural business or an owner or affiliate of a rural business.

For purposes of this paragraph, a rural growth fund shall not

be considered an affiliate of a rural business solely as a

result of its rural growth investment. The amount by which a

rural growth investment in a rural business, exclusive of

receipts or redeemed rural growth investments, exceeds 20% of

a rural growth fund's investment authority may not count

toward the satisfaction of the requirements of subsections

(a)(1) and (2).

* * *

Section 1834-G. Exit.

(a) Application for exit.--On or after the [sixth] seventh

anniversary of the closing date, a rural growth fund may apply

to the department to exit the Rural Jobs and Investment Tax

Credit Program and no longer be subject to regulation under this

part. A rural growth fund shall calculate the State repayment

2019/90MSP/HB0262A02596 - 40 -

amount in its application for exit and if the product is greater

than the rural growth fund's credit-eligible capital

contributions, the State repayment amount shall equal zero. The

department shall respond to the application within 30 days after

receipt and confirm the State repayment amount. In evaluating

the application, the fact that no tax credit certificates have

been revoked and that the rural growth fund has not received a

notice of revocation that has not been cured under section 1833-

G(b) shall be sufficient evidence to show that the rural growth

fund is eligible for exit. The department may not deny an

application submitted under this subsection without reasonable

cause. If the application is denied, the department shall issue

a notice which shall include the reasons for the denial. If the

rural growth fund owes a State repayment amount, the rural

growth fund may not be permitted to make distributions or

payments in excess of the investment authority until the rural

growth fund first remits the State repayment amount to the

department . All amounts received by the department under this

section shall be credited to the General Fund.

* * *

Section 19.1. Section 1902-A of the act is amended by adding

a definition to read:

Section 1902-A. Definitions.--The following words, terms and

phrases, when used in this article, shall have the meanings

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

"Youth and adolescent development services." Financial

assistance to provide services to youth and adolescents who are

21 years of age and younger, including job training and

apprenticeship programs, job placement and retention training,

education and after school programs, such as school programs

with shared governance by students, teachers and parents, and

activities for youth between the hours of 3 p.m. and 11 p.m.,

mentoring programs, conflict resolution skills training, sports,

arts, life skills, employment and recreation programs, summer

jobs, summer recreation programs and alternative school

resources for youth who have dropped out of school or

demonstrate chronic truancy.

Section 19.2. Section 1903-A of the act is amended to read:

Section 1903-A. Public Policy.--It is hereby declared to be

public policy of this Commonwealth to encourage investment by

business firms in offering neighborhood assistance and providing

job training, education, crime prevention, youth and adolescent

development services and community services, to encourage

contributions by business firms to neighborhood organizations

which offer and provide such assistance and services and to

promote qualified investments made by private companies to

rehabilitate, expand or improve buildings or land which promote

community economic development and which occur in portions of

impoverished areas which have been designated as enterprise

2019/90MSP/HB0262A02596 - 41 -

zones.

Section 19.3. Section 1904-A(a) and (b.1) of the act are

amended and the section is amended by adding a subsection to

read:

Section 1904-A. Tax Credit.--(a) Any business firm which

engages or contributes to a neighborhood organization which

engages in the activities of providing neighborhood assistance,

comprehensive service projects, affordable housing, domestic

violence or veterans' housing assistance, job training or

education for individuals, community services, youth and

adolescent development services or crime prevention in an

impoverished area or private company which makes qualified

investment to rehabilitate, expand or improve buildings or land

located within portions of impoverished areas which have been

designated as enterprise zones shall receive a tax credit as

provided in section 1905-A if the secretary annually approves

the proposal of such business firm or private company. The

proposal shall set forth the program to be conducted, the

impoverished area selected, the estimated amount to be invested

in the program and the plans for implementing the program.

* * *

(b.1) The secretary shall take into special consideration,

when approving applications for neighborhood assistance tax

credits, applications which involve:

(1) multiple projects in various markets throughout this

Commonwealth; [and]

(2) charitable food programs[.]; and

(3) youth and adolescent development services.

* * *

(c.1) No more than two million dollars ($2,000,000) of the

total amount of tax credit available under subsection (c) shall

be used for youth and adolescent development services.

* * *

Section 20. Article XIX-D of the act is amended by adding a

part to read:

PART III

ADDITIONAL DESIGNATIONS

Section 1921-D. Additional keystone opportunity expansion

zones.

(a) Establishment.--In addition to any designations under

Part II or section 301.1 of the KOZ Act, the department may

designate one or more additional keystone opportunity expansion

zones within the following counties:

(1) A county that has a population of at least 500,000

but less than 525,000 based on the 2010 Federal decennial

census.

(2) A county that has a population of at least 140,000

but less than 145,000 based on the 2010 Federal decennial

census.

(3) A county that has a population of at least 80,000

but less than 85,000 based on the 2010 Federal decennial

2019/90MSP/HB0262A02596 - 42 -

census.

(b) Criteria.--Notwithstanding Part II and the KOZ Act, an

additional keystone opportunity expansion zone under this part:

(1) May be less than 10 acres in size.

(2) May not exceed, in the aggregate, a total of 375

acres.

(3) Shall be comprised of parcels that are deteriorated,

underutilized or unoccupied on the effective date of this

paragraph.

(1) Persons and businesses within an additional keystone

opportunity expansion zone authorized under subsection (a)

shall be entitled to all tax exemptions, deductions,

abatements or credits under this section and exemptions for

sales and use tax under section 511(a) or 705(a) of the KOZ

Act for a period of 10 years.

(2) Exemptions for sales and use taxes under sections

511 and 705 of the KOZ Act shall commence upon issuance of a

certificate under section 307 of the KOZ Act by the

department.

(d) Application.--

(1) In order to receive a designation under this

section, the department must receive an application from a

political subdivision or its designee no later than October

1, 2021. The application must contain the information

required under section 302(a)(1), (2)(i) and (ix), (5) and

(6) of the KOZ Act.

(2) The department, in consultation with the Department

of Revenue, shall review the application and, if approved,

issue a certification of all tax exemptions, deductions,

abatements or credits under this act for the zone within

three months of receipt of the application.

(3) The department shall act on an application for a

designation under section 302(a)(1) of the KOZ Act by

December 31, 2021.

(4) The department may make designations under this

section on a rolling basis during the application period.

(e) Disapproval.--If the department does not approve of a

designation as an additional keystone opportunity expansion zone

of a parcel under subsection (d), the department shall hold a

public hearing in the municipality for which the application was

made within 30 days of the disapproval. The Secretary of

Community and Economic Development, or a designee, shall provide

the following information at the public hearing:

(1) The reason for the disapproval.

(2) The estimated number of new jobs that would have

been created in the parcel.

(3) The estimated dollar amount of new investment that

would have been made in the parcel.

(4) An alternative economic development plan developed

by the department that would, if implemented, provide an

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equivalent number of jobs and amount of investment in the

municipality for which the application was made.

(f) Transparency.--The department shall conduct the public

hearing required under subsection (e) in accordance with

applicable provisions of 65 Pa.C.S. Ch. 7 (relating to open

meetings).

Section 20.1. Section 1907-E(a) of the act is amended to

read:

Section 1907-E. Mixed-use development tax credits.

(a) Tax credit authority.--For purposes, and in accordance

with the provisions of this article, the agency may allocate an

amount not to exceed [$2,000,000] $3,000,000 in each fiscal year

in mixed-use development tax credits and is directed to deposit

proceeds and earnings derived from the sale into the fund.

* * *

Section 21. Section 2116(a)(2) of the act is amended and the

clause is amended by adding a subclause to read:

Section 2116. Inheritance Tax.--(a) * * *

(1.4) Inheritance tax upon the transfer of property to or

for the use of a child twenty-one years of age or younger from a

natural parent, an adoptive parent or a stepparent of the child

shall be at the rate of zero per cent.

(2) Inheritance tax upon the transfer of property passing to

or for the use of all persons other than those designated in

subclause (1), (1.1), (1.2) [or], (1.3) or 1.4 or exempt under

section 2111(m) shall be at the rate of fifteen per cent.

* * *

Section 21.1. The heading of Article XXV and sections 2501

and 2502 of the act are reenacted to read:

ARTICLE XXV

TABLE GAME TAXES

Section 2501. 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:

"Certificate holder." As defined in 4 Pa.C.S. § 1103

(relating to definitions).

"Gross table game revenue." As defined in 4 Pa.C.S. § 1103.

"Table game." As defined in 4 Pa.C.S. § 1103.

Section 2502. Table game taxes.

Commencing August 1, 2016, in addition to the tax payable

under 4 Pa.C.S. § 13A62(a)(1) (relating to table game taxes),

each certificate holder shall report to the Department of

Revenue and pay from its daily gross table game revenue an

additional tax of 2% of its daily gross table game revenue. The

additional tax shall be subject to all provisions of 4 Pa.C.S.

Ch. 13A (relating to table games) relating to the payment of

taxes by a certificate holder in the same manner as the tax

payable under 4 Pa.C.S. § 13A62(a)(1).

Section 22. Section 2503 of the act is reenacted and amended

to read:

2019/90MSP/HB0262A02596 - 44 -

Section 2503. Expiration.

(a) Expiration.--This article shall expire [June 30, 2019]

August 1, 2021.

[(b) Tax not applicable.--Notwithstanding any law to the

contrary, the tax imposed by 4 Pa.C.S. § 13A62(a)(3) (relating

to table game taxes) shall not apply for the period from the

effective date of this section until after the expiration date

in subsection (a).]

Section 23. Sections 2931-C and 2945-C of the act are

amended by adding subsections to read:

Section 2931-C. Sales and use tax.

* * *

determination whether tangible personal property is for the

exclusive use, consumption and utilization by the qualified

business at its facility located within a strategic development

area, the Department of Revenue shall construe the term

"exclusive use, consumption and utilization" to include use,

consumption or utilization at a location other than the facility

of computers, laptops, tablet computers, computer hardware,

related software, storage media, portable scanners and printers,

mobile radio devices, cell phones, cell phone accessories,

telecommunications services, global positioning systems and

accessories and parts for motor vehicles, by an employee

assigned to the facility within the strategic development area.

Section 2945-C. Local sales and use tax.

* * *

(b.1) Exclusive use, consumption and utilization.--In making

a determination whether tangible personal property is for the

exclusive use, consumption and utilization by the qualified

business at its facility located within a strategic development

area, the Department of Revenue and the political subdivision

imposing the tax shall construe the term "exclusive use,

consumption and utilization" to include use, consumption or

utilization at a location other than the facility of computers,

laptops, tablet computers, computer hardware, related software,

storage media, portable scanners and printers, mobile radio

devices, cell phones, cell phone accessories, telecommunications

services, global positioning systems and accessories and parts

for motor vehicles, by an employee assigned to the facility

within the strategic development area.

* * *

Section 24. Section 2914-D(a) of the act is amended to read:

Section 2914-D. Limitations.

(a) Total.--The total amount of State tax refunds approved

by the department under this article shall not exceed

[$5,000,000] $7,000,000 in any fiscal year.

* * *

Section 25. The act is amended by adding an article to read:

ARTICLE XXIX-H

INDEPENDENT PUBLIC SCHOOLS

2019/90MSP/HB0262A02596 - 45 -

Section 2901-H. Taxability of independent public schools.

A charter school, regional charter school or cyber charter

school, as defined in section 1703-A of the act of March 10,

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

is an independent public school and shall be free from taxation

within this Commonwealth to the same extent as a school district

for purposes of the surplus lines tax under section 1621 of the

act of May 17, 1921 (P.L.682, No.284), known as The Insurance

Company Law of 1921.

Section 26. The addition of sections 201(g)(9), (eee),

(fff), (ggg) and 202(h) of the act shall apply to sales of malt

or brewed beverages sold by a manufacturer of malt or brewed

beverages occurring after September 30, 2019.

Section 27. The amendment or addition of section 204(49),

(71) and (72) of the act shall apply to sales made after

December 31, 2019.

Section 28. The amendment or addition of section 303(a)(3)

(viii) and (5) of the act shall apply to tax years beginning

after December 31, 2019.

Section 29. The amendment or addition of sections 331(g) and

336.3 of the act shall apply to tax years beginning after

December 31, 2019.

Section 30. The amendment or addition of section 407.7(a)

and (d)(1), (1.1) and (1.2) of the act shall apply to tax years

beginning after December 31, 2019.

Section 31. The amendment of sections 1716-D(a), 1777-D,

1709-E, 1702-H, 1703-H, 1705-H(d) and (e) and 1706-H(a) of the

act shall apply to fiscal years beginning on or after July 1,

2019.

Section 32. The amendment or addition of section 2116(a)

(1.4) and (2) of the act shall apply to property transferred by

a natural parent, an adoptive parent or a stepparent who dies

after December 31, 2019.

Section 32.1. The reenactment and amendment of section 2503

of the act shall apply retroactively to June 29, 2019.

Section 33. The following shall apply:

(1) The operation of sections 213, 213.1, 213.2, 213.3,

213.4, 213.5 and 213.6 of the act shall be suspended as of

July 1, 2019.

(2) If section 201(b)(3.5) or 237(b)(1.2) of the act are

deemed unconstitutional as a result of a decision of the

Pennsylvania Supreme Court or if a substantially similar

statute from another state is deemed unconstitutional by a

decision of the United States Supreme Court, the Secretary of

Revenue shall submit a notice of the decision to the

Legislative Reference Bureau for publication in the

Pennsylvania Bulletin.

(3) The suspension of sections 213, 213.1, 213.2, 213.3,

213.4, 213.5 and 213.6 of the act shall lapse as of the date

of the publication of the notice under paragraph (2).

Section 34. The addition of sections 2931-C(c) and 2945-

2019/90MSP/HB0262A02596 - 46 -

C(b.1) of the act shall not affect any audit, appeal or

proceeding pending before the Department of Revenue, the Board

of Finance and Revenue or a court of competent jurisdiction in

this Commonwealth on the effective date of this section.

Section 35. Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of

section 1102-C.6 of the act.

(2) Section 406-D(c) of the act of December 3, 1959

(P.L.1688, No.621), known as the Housing Finance Agency Law,

is repealed.

Section 36. Continuation is as follows:

(1) The addition of section 1102-C.6 of the act is a

continuation of section 406-D(c) of the act of December 3,

1959 (P.L. 1688, No. 621), known as the Housing Finance

Agency Law. The following apply:

(i) All activities initiated under section 406-D(c)

of the Housing Finance Agency Law shall continue and

remain in full force and effect and may be completed

under section 1102-C.6 of the Tax Reform Code of 1971.

Orders, regulations, rules and decisions which were made

under section 406-D(c) of the Housing Finance Agency Law

and which are in effect on the effective date of section

35 of this act shall remain in full force and effect

until revoked, vacated or modified under section 1102-C.6

of the Tax Reform Code of 1971. Contracts, obligations

and collective bargaining agreements entered into under

section 406-D(c) of the Housing Finance Agency Law are

not affected nor impaired by the repeal of section 406-

D(c) of the Housing Finance Agency Law.

(ii) Any difference in language between section

1102-C.6 of the Tax Reform Code of 1971 and section 406-

D(c) of the Housing Finance Agency Law is not intended to

change or affect the legislative intent, judicial

construction or administration and implementation of

section 406-D(c) of the Housing Finance Agency Law.

(2) (Reserved).

Section 37. The amendment of sections 2931-C and 2945-C of

the act shall apply to taxable years beginning on or after

January 1, 2019.

Section 38. This act shall take effect as follows:

(1) The following shall take effect immediately:

(i) This section.

(ii) The amendment or addition of section 303(a)(3)

(viii) and (5).

(2) The amendment or addition of sections 1714-D(f) and

(h), 1703-J(b)(1), (2) and (5) and (c)(1), (2), (2.1) and

(3), 1704-J(a)(2), (4) and (5), (b)(1)(i), (2), (3) and (4)

and (c) and 1707-J(a) of the act shall take effect in 60

days.

(3) The remainder of this act shall take effect July 1,

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2019, or immediately, whichever is later.

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