PRINTER'S NO.  784

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

761

Session of

2011

  

  

INTRODUCED BY CUTLER, MIRABITO, BAKER, BOYD, CLYMER, COX, DENLINGER, FLECK, FREEMAN, GILLEN, GINGRICH, GODSHALL, GRELL, HARHART, HENNESSEY, HICKERNELL, HUTCHINSON, KAUFFMAN, KORTZ, LAWRENCE, LONGIETTI, MARSHALL, METZGAR, MILLER, MOUL, PICKETT, PYLE, REICHLEY, ROAE, ROSS, STERN, SWANGER, TOEPEL, VULAKOVICH AND WATSON, FEBRUARY 23, 2011

  

  

REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 23, 2011  

  

  

  

AN ACT

  

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Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

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act relating to tax reform and State taxation by codifying

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and enumerating certain subjects of taxation and imposing

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taxes thereon; providing procedures for the payment,

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collection, administration and enforcement thereof; providing

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for tax credits in certain cases; conferring powers and

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imposing duties upon the Department of Revenue, certain

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employers, fiduciaries, individuals, persons, corporations

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and other entities; prescribing crimes, offenses and

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penalties," in realty transfer tax, further providing for

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definitions, for excluded transactions and for acquired

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company.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  The definitions of "association," "corporation,"

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"family farm corporation" and "family farm partnership" in

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section 1101-C of the act of March 4, 1971 (P.L.6, No.2), known

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as the Tax Reform Code of 1971, amended July 2, 1986 (P.L.318,

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No.77) and April 23, 1998 (P.L.239, No.45), are amended to read:

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

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

 


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section:

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"Association."  A partnership, limited partnership, limited

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liability partnership or any other form of unincorporated

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enterprise, owned or conducted by two or more persons other than

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a private trust or decedent's estate.

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"Corporation."  A corporation, limited liability company, 

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joint-stock association, business trust or banking institution

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which is organized under the laws of this Commonwealth, the

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United States, or any other state, territory, or foreign

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country, or dependency.

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* * *

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"Family farm corporation."  A corporation of which at least

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seventy-five per cent of its assets are devoted to the business

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of agriculture and at least seventy-five per cent of each class

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of stock of the corporation is continuously owned by members of

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the same family. The term includes any corporation that may be

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formed to succeed the business operations of a family farm

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corporation or a family farm partnership. The business of

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agriculture shall include the leasing to members of the same

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family of property which is directly and principally used for

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agricultural purposes. The business of agriculture shall not be

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deemed to include:

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(1)  Recreational activities such as, but not limited to,

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hunting, fishing, camping, skiing, show competition or racing;

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(2)  The raising, breeding or training of game animals or

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game birds, fish, cats, dogs or pets or animals intended for use

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in sporting or recreational activities;

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(3)  Fur farming;

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(4)  Stockyard and slaughterhouse operations; or

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(5)  Manufacturing or processing operations of any kind.

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"Family farm partnership."  A general, limited or limited

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liability partnership of which at least seventy-five per cent of

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its assets are devoted to the business of agriculture and at

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least seventy-five per cent of the interests in the general,

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limited or limited liability partnership are continuously owned

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by members of the same family. The business of agriculture shall

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include the leasing to members of the same family of property

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which is directly and principally used for agricultural

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purposes. The business of agriculture shall not be deemed to

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include:

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(1)  recreational activities such as, but not limited to,

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hunting, fishing, camping, skiing, show competition or racing;

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(2)  the raising, breeding or training of game animals or

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game birds, fish, cats, dogs or pets or animals intended for use

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in sporting or recreational activities;

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(3)  fur farming;

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(4)  stockyard and slaughterhouse operations; or

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(5)  manufacturing or processing operations of any kind.

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* * *

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Section 2.  Section 1102-C.3(19.1) and (20) of the act,

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amended or added June 16, 1994 (P.L.279, No.48), are amended to

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read:

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

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section 1102-C shall not be imposed upon:

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* * *

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(19.1)  A transfer of real estate devoted to the business of

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agriculture to a family farm, general, limited or limited

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liability partnership by a member of the same family, which

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family directly owns at least seventy-five per cent of the

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interests in the partnership.

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(20)  A transfer between members of the same family of an

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ownership interest in a real estate company, family farm

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corporation or family farm, general, limited or limited

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liability partnership which owns real estate.

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* * *

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Section 3.  Section 1102-C.5 of the act, amended or added

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July 2, 1986 (P.L.318, No.77) and June 16, 1994 (P.L.279,

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No.48), is amended to read:

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Section 1102-C.5.  Acquired Company.--(a)  A real estate

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company is an acquired company upon a change in the ownership

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interest in the company, however effected, if the change:

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(1)  does not affect the continuity of the company; and

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(2)  of itself or together with prior changes has the effect

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of transferring, directly or indirectly, ninety per cent or more

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of the total ownership interest in the company within a period

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of three years.

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(b)  With respect to real estate acquired after February 16,

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1986, a family farm corporation is an acquired company when,

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because of voluntary or involuntary dissolution, it ceases to be

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a family farm corporation or when, because of issuance or

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transfer of stock or because of acquisition or transfer of

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assets that are devoted to the business of agriculture, it fails

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to meet the minimum requirements of a family farm corporation

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under this act.

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(b.1)  A family farm partnership or family farm corporation

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is an acquired company when, because of voluntary or involuntary

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dissolution, it ceases to be a family farm partnership or family

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farm corporation or when, because of transfer of partnership or

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other interests or because of acquisition or transfer of assets

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that are devoted to the business of agriculture, it fails to

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meet the minimum requirements of a family farm partnership or

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family farm corporation under this act.

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(b.2)  The conveyance of assets held by a family farm

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corporation or family farm partnership to a limited partnership,

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limited liability partnership or limited liability company in

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which at least seventy-five per cent of the ownership interest

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is held by members of the same family as the family holding

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ownership interest in the conveying corporation or partnership

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shall not be considered to be a transfer of assets under this

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article.

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(c)  Within thirty days after becoming an acquired company,

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the company shall present a declaration of acquisition with the

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recorder of each county in which it holds real estate for the

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affixation of documentary stamps and recording. Such declaration

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shall set forth the value of real estate holdings of the

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acquired company in such county.

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Section 4.  This act shall apply retroactively to

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transactions occurring after December 31, 2008.

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Section 5.  The provisions of 61 Pa. Code 91.222 (relating to

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family farm corporation) are abrogated.

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Section 6.  This act shall take effect immediately.

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