PRINTER'S NO. 1218
No. 1062 Session of 2005
INTRODUCED BY BOYD, SCAVELLO, DeWEESE, CAPPELLI, CALTAGIRONE, HARRIS, TRUE, CAWLEY, NAILOR, BAKER, ROSS, HENNESSEY, REICHLEY, CRAHALLA, T. STEVENSON, GRELL, HARHAI, RAPP, ARMSTRONG, KIRKLAND, BARRAR, JAMES, SCHRODER, FRANKEL, BALDWIN, MANDERINO, TURZAI, E. Z. TAYLOR, HICKERNELL, GOODMAN, KILLION, MANN, GABIG, RUBLEY, YOUNGBLOOD AND YUDICHAK, MARCH 21, 2005
REFERRED TO COMMITTEE ON FINANCE, MARCH 21, 2005
AN ACT 1 Providing for a tax credit program to support community-based 2 mental retardation services in this Commonwealth. 3 The General Assembly finds and declares as follows: 4 (1) In July 1999, the Supreme Court issued the Olmstead 5 v. L.C. decision that clearly challenges Federal, state and 6 local governments to develop more opportunities for 7 individuals with disabilities through more accessible systems 8 of cost-effective community-based services. 9 (2) The Olmstead decision interpreted Title II of the 10 Americans with Disabilities Act of 1990 (Public Law 101-336, 11 104 Stat. 327) and its implementing regulation, requiring 12 states to administer their services, programs and activities 13 in the most integrated setting appropriate to the needs of 14 qualified individuals with disabilities. 15 (3) In Pennsylvania, services for individuals with
1 mental retardation are evolving from a system comprised of 2 large public and private residential facilities to a system 3 of community supports and services so that individuals may 4 remain in their homes and communities. 5 (4) Community services include a variety of residential 6 and day support services which are either administered or 7 operated by county mental health and mental retardation 8 offices, contracted private residential intermediate care 9 facilities for persons with mental retardation (ICF/MR) and 10 contracted private providers of community-based services. 11 (5) In 1999, the Office of Mental Retardation of the 12 Department of Public Welfare released a report with a long- 13 term plan to address the waiting list for mental retardation 14 services in Pennsylvania. 15 (6) The waiting list is comprised of three categories: 16 the emergency category, for individuals who need services 17 immediately; the critical list, for individuals who will need 18 services within one year; and the planning category, for 19 individuals who will need services in five years. 20 (7) In 1999, a total of 14,083 persons were on the 21 waiting list for services. As of December 2004, the Office of 22 Mental Retardation reported that there are 20,652 individuals 23 on the waiting list for mental retardation services. Of that 24 group, 2,180 individuals are in the emergency category; 8,000 25 individuals are in the critical category and 10,000 26 individuals are in the planning category. 27 (8) Since 2001, decreasing revenues and rising Medicaid 28 costs have impacted state budgets across the United States 29 with the results that Federal and State funding has been 30 insufficient to meet the needs of the growing number of 20050H1062B1218 - 2 -
1 individuals with mental retardation waiting for community- 2 based services. 3 (9) It is critical to access other sources of revenue to 4 address the waiting list for services. 5 The General Assembly of the Commonwealth of Pennsylvania 6 hereby enacts as follows: 7 Section 1. Short title. 8 This act shall be known and may be cited as the Mental 9 Retardation Services Tax Credit Act. 10 Section 2. Definitions. 11 The following words and phrases when used in this act shall 12 have the meanings given to them in this section unless the 13 context clearly indicates otherwise: 14 "Business firm." An entity authorized to do business in this 15 Commonwealth and subject to taxes imposed under Article IV, VI, 16 VII, VII-A, IX or XV of the act of March 4, 1971 (P.L.6, No.2), 17 known as the Tax Reform Code of 1971. 18 "Contribution." A donation of cash, personal property or 19 services, the value of which is the net cost of the donation to 20 the donor or the pro rata hourly wage, including benefits, of 21 the individual performing the service. 22 "Department." The Department of Community and Economic 23 Development of the Commonwealth. 24 "Individual." An individual who is eligible for community- 25 based services funded through the Office of Mental Retardation 26 of the Department of Public Welfare. 27 "Provider." A nonprofit entity that: 28 (1) Provides community-based services to individuals 29 with mental retardation, including, but not limited to, 30 community residential options and nonresidential services, 20050H1062B1218 - 3 -
1 such as supported employment, training and recreation, 2 mobility training, employment training and opportunities and 3 adult day care. 4 (2) Is exempt from Federal taxation under section 5 501(c)(3) of the Internal Revenue Code of 1986 (Public Law 6 99-514, 26 U.S.C. § 1 et seq.). 7 Section 3. Mental retardation services tax credit program. 8 (a) Establishment.--A mental retardation services tax credit 9 program is hereby established to supplement, not supplant, 10 existing Federal and State funding for community-based services 11 for individuals with mental retardation in this Commonwealth. 12 (b) Information.--In order to qualify under this act, a 13 provider must submit information to the department that enables 14 the department to confirm that the provider is exempt from 15 taxation under section 501(c)(3) of the Internal Revenue Code of 16 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.). 17 (c) Provider application.-- 18 (1) An application submitted to the department by the 19 provider must describe the community-based services it 20 provides to individuals with mental retardation on a form 21 provided by the department. 22 (2) The department shall consult with the Department of 23 Public Welfare as necessary to determine that the provider 24 provides community-based services for individuals with mental 25 retardation. The department shall review and approve or 26 disapprove the application. 27 (d) Notification.--The department shall notify the provider 28 that the provider meets the requirements of this act for that 29 fiscal year not later than 60 days after the provider has 30 submitted the application required under this section. 20050H1062B1218 - 4 -
1 (e) Publication.--The department shall annually publish a 2 list of each provider qualified under this section in the 3 Pennsylvania Bulletin. The list shall also be posted and updated 4 as necessary on the publicly accessible Internet website of the 5 department. 6 Section 4. Availability of tax credits. 7 (a) Application.--A business firm shall apply to the 8 department for a tax credit under section 5 (relating to grant 9 of tax credits). A business firm shall receive a tax credit 10 under this act if the provider that receives the contribution 11 from the business firm appears on the list under section 3(e) 12 (relating to mental retardation services tax credit program). 13 (b) Availability of tax credits.--Tax credits under this 14 section shall be made available by the department on a first- 15 come-first-served basis within the limitation established under 16 section 6(a) (relating to amount of tax credits). 17 (c) Contributions.--A contribution by a business firm to a 18 provider shall be made no later than 60 days following the 19 approval of an application under subsection (a). 20 Section 5. Grant of tax credits. 21 (a) General rule.--In accordance with section (6)(a) 22 (relating to amount of tax credits) the Department of Revenue 23 shall grant a tax credit against a tax liability owed to the 24 Department of Revenue by a business firm that provides proof of 25 a contribution to a provider in the taxable year in which the 26 contribution is made. The business firm may apply the credit 27 against any tax due under Article III, IV, V, VI, VII, VIII, IX 28 or XV of the act of March 4, 1971 (P.L.6, No.2), known as the 29 Tax Reform Code of 1971. 30 (b) Limitation.--The tax credit shall not exceed 50% of the 20050H1062B1218 - 5 -
1 total amount contributed by a business firm to a provider during 2 the taxable year of the business firm. The tax credit shall not 3 exceed $100,000 annually per business firm. 4 (c) Additional amount.-- 5 (1) A business firm that contributes to a provider in 6 two or more consecutive years shall qualify for a 75% tax 7 credit for the contributions made in the second year and 8 every consecutive year of making a contribution to a 9 provider. 10 (2) Nothing in this section shall be construed to 11 require a business firm to contribute to the same provider 12 every year in order for the business firm to qualify for a 13 tax credit under this subsection. 14 Section 6. Amount of tax credits. 15 (a) General rule.--The total aggregate amount of all tax 16 credits approved shall not exceed $30,000,000 in a fiscal year. 17 (b) Activities.--No tax credit shall be approved for 18 activities that are part of a business firm's normal course of 19 business. 20 (c) Tax liability.--A tax credit granted for any one taxable 21 year may not exceed the tax liability of a business firm. 22 (d) Use.--A tax credit not used in the taxable year the 23 contribution was made may not be carried forward or carried back 24 and is not refundable or transferable. 25 Section 7. Report to General Assembly. 26 The Department of Revenue shall provide a list of all 27 providers receiving contributions from business firms granted a 28 tax credit under this act to the General Assembly by June 30th 29 of each year. 30 Section 8. Effective date. 20050H1062B1218 - 6 -
1 This act shall take effect in 60 days. C1L72DMS/20050H1062B1218 - 7 -