PRIOR PRINTER'S NO. 132 PRINTER'S NO. 1166
No. 97 Session of 2007
INTRODUCED BY D. WHITE, ARMSTRONG, CORMAN, EARLL, PUNT,
RAFFERTY, BRUBAKER, WOZNIAK, PIPPY, BROWNE, STACK AND REGOLA,
FEBRUARY 15, 2007
SENATOR BROWNE, FINANCE, AS AMENDED, JUNE 13, 2007
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further providing, in bank and trust company
11 shares tax, for ascertainment of taxable amount and exclusion
12 of United States obligations.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 701.1 of the act of March 4, 1971 (P.L.6,
16 No.2), known as the Tax Reform Code of 1971, amended June 16,
17 1994 (P.L.279, No.48), is amended to read:
18 Section 701.1. Ascertainment of Taxable Amount; Exclusion of
19 United States Obligations.--(a) The taxable amount of shares
20 shall be ascertained and fixed by adding together the value
21 determined under subsection (b) for the current and preceding
22 five years and dividing the resulting sum by six. If an
1 institution has not been in existence for a period of six years,
2 the taxable amount of shares shall be ascertained and fixed by
3 adding together the values determined under subsection (b) for
4 the number of years the institution has been in existence and
5 dividing the resulting sum by such number of years.
6 (b) The value for each year required by subsection (a) shall
7 be determined by [adding together] DEDUCTING FROM the book value <--
8 of [capital stock paid in, the book value of the surplus and the <--
9 book value of undivided profits with a deduction from the total
10 thereof of] TOTAL EQUITY CAPITAL an amount equal to the same <--
11 percentage of [such total] TOTAL EQUITY CAPITAL as the book <--
12 value of obligations of the United States bears to the book
13 value of the total assets[.], except that for the value of
14 shares reported on tax returns due on January 1, 2008, and
15 thereafter, any goodwill recorded as a result of the use of
16 purchase accounting for an acquisition or combination as
17 described in this section and occurring after June 30, 2001, may
18 be disregarded in determining the book value of total assets and <--
19 SUBTRACTED FROM THE BOOK VALUE OF TOTAL EQUITY CAPITAL AND <--
20 DISREGARDED IN DETERMINING the deduction provided for
21 obligations of the United States for the six-year period
22 described in subsection (a). For purposes of this subsection,
23 book values and deductions for United States obligations for
24 each year shall be determined by the Reports of Condition for
25 each calendar quarter of the preceding calendar year in
26 accordance with the requirements of the Board of Governors of
27 the Federal Reserve System, the Comptroller of the Currency, the
28 Federal Deposit Insurance Corporation or other applicable
29 regulatory authority; and book values shall be averaged as
30 calculated by averaging book values as determined by such
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1 Reports of Condition. For purposes of this article, United
2 States obligations shall be obligations coming within the scope
3 of 31 U.S.C. § 3124. For any year in which an institution does
4 not file four quarterly Reports of Condition, book values and
5 deductions for United States obligations shall be determined by
6 adding together the book values and deductions for United States
7 obligations from each quarterly Reports of Condition filed for
8 such year and dividing the resulting sums by the number of such
9 Reports of Condition. In the case of institutions which do not
10 file such Reports of Condition, book values shall be determined
11 by generally accepted accounting principles as of the end of
12 each calendar quarter. For any year in which an institution
13 which does not file Reports of Condition is not in existence for
14 four quarters, the book value for that year shall be determined
15 by adding together the book values for each quarter in which the
16 institution was in existence and dividing by that number of
17 quarters. For purposes of this section, a partial year shall be
18 treated as a full year.
19 (c) For purposes of this section:
20 (1) a mere change in identity, form or place of organization
21 of one institution, however effected, shall be treated as if a
22 single institution had been in existence prior to as well as
23 after such change; and
24 (2) the combination of two or more institutions into one
25 shall be treated as if the constituent institutions had been a
26 single institution in existence prior to as well as after the
27 combination and the book values and deductions for United States
28 obligations from the Reports of Condition of the constituent
29 institutions shall be combined. For purposes of [the preceding
30 sentence] this section, a combination shall include any
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1 acquisition required to be accounted for [by the surviving
2 institution under the pooling of interest method] by using the
3 purchase method in accordance with generally accepted accounting
4 principles or a statutory merger or consolidation.
5 SECTION 2. THE AMENDMENT OF SECTION 701.1 OF THE ACT IS NOT <--
6 INTENDED TO REVERSE OR MODIFY THE RULING OF FIRST UNION NATIONAL
7 BANK V. COMMONWEALTH, 867 A.2D 711 (PA. CMWLTH. 2005).
8 Section 2 3. This act shall take effect in 60 days or <--
9 December 31, 2007, whichever is sooner.
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