PRIOR PRINTER'S NO. 2032

PRINTER'S NO.  2176

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

1460

Session of

2012

  

  

INTRODUCED BY BRUBAKER, ERICKSON, ALLOWAY, GREENLEAF, HUGHES, YUDICHAK, SOLOBAY, WAUGH, COSTA, FERLO, KASUNIC, BROWNE, TARTAGLIONE, LEACH, MENSCH, FARNESE, BOSCOLA, BLAKE AND DINNIMAN, MARCH 23, 2012

  

  

SENATOR BRUBAKER, FINANCE, AS AMENDED, MAY 9, 2012   

  

  

  

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," providing for industry partnership tax credits.

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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 act of March 4, 1971 (P.L.6, No.2), known as

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the Tax Reform Code of 1971, is amended by adding an article to

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read:

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ARTICLE XVII-G

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INDUSTRY PARTNERSHIP TAX CREDIT

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Section 1701-G.  Scope of article.

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This article relates to industry partnership tax credits.

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Section 1702-G.  Definitions.

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The following words and phrases when used in this article

 


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

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context clearly indicates otherwise:

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"Department."  The Department of Labor and Industry of the

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Commonwealth.

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"Industry partnership tax credit."  The credit provided under

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this article.

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"Pass-through entity."  A partnership as defined in section

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301(n.0) or a Pennsylvania S corporation as defined in section

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301(n.1).

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"Qualified tax liability."  The liability for taxes imposed

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under Article III, IV or VI. The term shall not include any tax

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withheld by an employer from an employee under Article III.

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"Taxpayer."  An entity A person subject to tax under Article

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III, IV or VI. The term shall include the shareholder of a

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Pennsylvania S corporation that receives an industry partnership

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tax credit.

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Section 1703-G.  Industry partnership tax credit for cash

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contributions to industry partnerships.

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(a)  Claim.--A taxpayer may claim an industry partnership tax

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credit against any qualified tax liability in an amount equal to

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75% of any cash contribution to an industry partnership.

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(b)  Application.--By September 15, a taxpayer must submit an

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application to the department for an industry partnership tax

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credit incurred in the taxable year that ended in the prior

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calendar year.

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(c)  Notification.--By December 15 of the calendar year

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following the close of the taxable year during which the

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contribution was made, the department shall notify the taxpayer

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of the amount of the taxpayer's industry partnership tax credit

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approved by the department.

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(d)  Claim prohibited.--A taxpayer may not claim an industry

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partnership tax credit for any portion of a cash contribution

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provided to satisfy the private sector matching funding

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requirement for State grant funding under section 1304 of the

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act of December 18, 2001 (P.L.949, No.114), known as the

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Workforce Development Act.

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Section 1704-G.  Carryover, carryback, refund and assignment and

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refund.

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

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amount of the industry partnership tax credit for the taxable

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year in which the industry partnership tax credit is first

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approved, the excess may be carried over to succeeding taxable

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years and used as a credit against the qualified tax liability

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of the taxpayer for those taxable years. Each time that the

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industry partnership tax credit is carried over to a succeeding

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taxable year, it shall be reduced by the amount that was used as

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a credit during the immediately preceding taxable year. The

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industry partnership tax credit may be carried over and applied

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to succeeding taxable years for no more than 15 five taxable

<--

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years following the first taxable year for which the taxpayer

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was entitled to claim the industry partnership tax credit.

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(b)  Application.--An industry partnership tax credit

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approved by the department in a taxable year first shall be

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applied against the taxpayer's qualified tax liability for the

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current taxable year as of the date on which the industry

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partnership tax credit was approved before the industry

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partnership tax credit is applied against any tax liability

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under subsection (a).

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(c)  Prohibition.--A taxpayer shall not be entitled to carry

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back or obtain a refund of an unused industry partnership tax

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credit.

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Section 1705-G.  Guidelines for industry partnership tax

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credits.

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The department, in consultation with the Department of

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Revenue, shall prescribe guidelines for determining whether

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contributions qualify for industry partnership tax credits. The

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department may deem contributions that fund any activity of an

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industry partnership authorized under section 1303(b) of the act

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of December 18, 2001 (P.L.949, No.114), known as the Workforce

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Development Act, as qualifying for an industry partnership tax

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credit.

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Section 1706-G.  Time limitations.

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A taxpayer shall not be entitled to an industry partnership

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tax credit for contribution made in taxable years ending after

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December 31, 2016.

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Section 1707-G.  Limitations.

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(a)  Total.--The total amount of industry partnership tax

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credits approved by the department may not exceed $7,500,000 in

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any taxable year.

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(b)  Individual taxpayer.--No taxpayer may receive more than

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$37,500 in industry partnership tax credits for any taxable

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year.

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(c)  Industry partnership.--The total amount of industry

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partnership tax credits resulting from contributions to certain

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industry partnerships shall be limited to $375,000 per industry

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partnership in any taxable year.

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(d)  Allocation.--If the total amount of industry partnership

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tax credits applied for by all taxpayers exceeds the amount

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allocated for those credits, the industry partnership tax credit

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to be received by each applicant shall be the product of the

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allocated amount multiplied by the quotient of the industry

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partnership tax credit applied for by the applicant divided by

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the total of all industry partnership tax credits applied for by

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all applicants, the algebraic equivalent of which is:

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taxpayer's industry partnership tax credit=amount allocated

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for those credits X (industry partnership tax credit applied

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for by the applicant/total of all industry partnership tax

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credits applied for by all applicants).

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Section 1708-G.  Pass-through entity.

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

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industry partnership tax credit under section 1704-G, the entity

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may elect, in writing, according to the department's procedures,

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to transfer all or a portion of the industry partnership tax

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credit to shareholders, members or partners in proportion to the

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share of the entity's distributive income to which the

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shareholder, member or partner is entitled.

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(b)  Additional credit.--The industry partnership tax credit

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provided under subsection (a) shall be in addition to any

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industry partnership tax credit to which a shareholder, member

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or partner of a pass-through entity is otherwise entitled under

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this article.

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(c)  Claim.--A shareholder, member or partner of a pass-

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through entity to whom an industry partnership tax credit is

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transferred under subsection (a) must immediately claim the

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industry partnership tax credit in the taxable year in which the

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transfer is made. The shareholder, member or partner may not

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carry forward, carry back, obtain a refund of or sell or assign

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the industry partnership tax credit.

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Section 1709-G.  Report to General Assembly.

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The Secretary of Labor and Industry shall submit an annual

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report to the General Assembly indicating the effectiveness of

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the industry partnership tax credit no later than March 15

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following the year in which the industry partnership tax credits

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were approved. The report shall include the names of all

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taxpayers utilizing the industry partnership tax credit as of

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the date of the report and the amount of industry partnership

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tax credits approved and utilized by each taxpayer.

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Notwithstanding any law providing for the confidentiality of tax

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records, the information contained in the report shall be public

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information. The report may also include any recommendations for

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changes in the calculation or administration of the industry

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partnership tax credit.

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Section 1710-G.  Termination.

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The department shall not approve an industry partnership tax

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credit under this article for taxable years ending after

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December 31, 2016.

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Section 2.  This act shall take effect immediately January 1,

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2013.

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