Regular Session 2017-2018 House Bill 0151 P.N. 1571

SENATE AMENDED

PRIOR PRINTER'S NO. 115

PRINTER'S NO. 1571

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

151

Session of

2017

INTRODUCED BY CUTLER, DOWLING, LONGIETTI, WHEELAND, BAKER,

MILLARD, A. HARRIS, MENTZER, D. COSTA, MILNE AND JOZWIAK,

JANUARY 23, 2017

SENATOR SCAVELLO, COMMUNITY, ECONOMIC AND RECREATIONAL

DEVELOPMENT, IN SENATE, AS AMENDED, APRIL 26, 2017

AN ACT

Amending Title 12 (Commerce and Trade) of the Pennsylvania

Consolidated Statutes, in Small Business First, further

providing for definitions; in machinery and equipment loans,

further providing for definitions and for reporting and

inspection; and, in Pennsylvania Industrial Development

Program, further providing for definitions.; PROVIDING FOR

ENTERTAINMENT ECONOMIC ENHANCEMENT PROGRAM; AND MAKING A

RELATED REPEAL.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Sections 2302 and 2902 of Title 12 of the

Pennsylvania Consolidated Statutes are amended by adding

definitions to read:

§ 2302. Definitions.

The following words and phrases when used in this chapter

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

context clearly indicates otherwise:

"Agent." The term includes the Department of Community and

Economic Development.

<--

* * *

§ 2902. Definitions.

The following words and phrases when used in this chapter

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

context clearly indicates otherwise:

"Agent." The term includes the Department of Community and

Economic Development.

* * *

Section 2. Section 2908(a) of Title 12 is amended to read:

§ 2908. Reporting and inspection.

(a) Inspection.--Each business enterprise which applies for

or receives assistance under this chapter[, upon reasonable

request of the authority, shall permit duly authorized employees

of the department or the authority] shall, upon request, permit

authorized employees of the authority or its agent to inspect

the plant, books and records of the business enterprise.

* * *

Section 3. Section 3002 of Title 12 is amended by adding a

definition to read:

§ 3002. Definitions.

The following words and phrases when used in this chapter

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

context clearly indicates otherwise:

"Agent." The term includes the Department of Community and

Economic Development.

* * *

Section 4. This act shall take effect immediately.

SECTION 4. CHAPTER 33 OF TITLE 12 IS AMENDED TO READ:

CHAPTER 33

[ECONOMIC ENHANCEMENT

20170HB0151PN1571 - 2 -

<--

(RESERVED)]

ENTERTAINMENT ECONOMIC ENHANCEMENT PROGRAM

SEC.

3301. SCOPE OF CHAPTER.

3302. DEFINITIONS.

3303. PROCEDURE.

3304. CLAIM.

3305. CARRYOVER, CARRYBACK AND ASSIGNMENT OF TAX CREDIT.

3306. DETERMINATION OF PENNSYLVANIA REHEARSAL AND TOUR

EXPENSES.

3307. LIMITATIONS.

3308. PENALTY.

3309. PASS-THROUGH ENTITY.

3310. DEPARTMENT GUIDELINES AND REGULATIONS.

3311. REPORT TO GENERAL ASSEMBLY.

§ 3301. SCOPE OF CHAPTER.

THIS CHAPTER RELATES TO THE ENTERTAINMENT ECONOMIC

ENHANCEMENT PROGRAM.

§ 3302. DEFINITIONS.

THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER

SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE

CONTEXT CLEARLY INDICATES OTHERWISE:

"APPLICANT." A CONCERT TOUR PROMOTION COMPANY, CONCERT TOUR

MANAGEMENT COMPANY OR OTHER CONCERT MANAGEMENT COMPANY SUBJECT

TO TAX UNDER ARTICLE III, IV OR VI OF THE TAX REFORM CODE. THE

TERM DOES NOT INCLUDE CONTRACTORS OR SUBCONTRACTORS OF A CONCERT

TOUR PROMOTION COMPANY, CONCERT TOUR MANAGEMENT OR OTHER CONCERT

MANAGEMENT COMPANY.

"CLASS 1 VENUE." A STADIUM, ARENA, OTHER STRUCTURE OR

PROPERTY OWNED BY A MUNICIPALITY OR AN AUTHORITY FORMED UNDER

20170HB0151PN1571 - 3 -

ARTICLE XXV-A OF THE ACT OF JULY 28, 1953 (P.L.723, NO.230),

KNOWN AS THE SECOND CLASS COUNTY CODE, AT WHICH CONCERTS ARE

PERFORMED AND WHICH IS ALL OF THE FOLLOWING:

(1) LOCATED IN A CITY OF THE FIRST CLASS OR A COUNTY OF

THE SECOND CLASS.

(2) IS CONSTRUCTED IN A MANNER IN WHICH THE VENUE HAS A

SEATING CAPACITY OF AT LEAST 14,000.

"CLASS 2 VENUE." A STADIUM, ARENA OR OTHER STRUCTURE AT

WHICH CONCERTS ARE PERFORMED AND WHICH IS ALL OF THE FOLLOWING:

(1) LOCATED OUTSIDE THE GEOGRAPHIC BOUNDARIES OF A CITY

OF THE FIRST CLASS OR A COUNTY OF THE SECOND CLASS.

(2) IS CONSTRUCTED IN A MANNER IN WHICH THE VENUE HAS A

SEATING CAPACITY OF AT LEAST 6,000.

"CLASS 3 VENUE." A STADIUM, ARENA OR OTHER STRUCTURE WHICH

IS ANY OF THE FOLLOWING:

(1) LOCATED WITHIN A NEIGHBORHOOD IMPROVEMENT ZONE, AS

DEFINED IN SECTION 1902-B OF THE TAX REFORM CODE.

(2) OWNED BY OR AFFILIATED WITH A STATE-RELATED

INSTITUTION AS DEFINED IN 62 PA.C.S. § 103 (RELATING TO

DEFINITIONS).

(3) OWNED BY THE COMMONWEALTH AND AFFILIATED WITH THE

STATE SYSTEM OF HIGHER EDUCATION.

"CONCERT." A LIVE PERFORMANCE OF MUSIC IN THE PRESENCE OF

INDIVIDUALS WHO VIEW THE PERFORMANCE.

"CONCERT TOUR EQUIPMENT." INCLUDES STAGE, SET, SCENERY,

DESIGN ELEMENTS, AUTOMATION, RIGGING, TRUSSES, SPOTLIGHTS,

LIGHTING, SOUND EQUIPMENT, VIDEO EQUIPMENT, SPECIAL EFFECTS,

CASES, COMMUNICATION DEVICES, POWER DISTRIBUTION EQUIPMENT,

BACKLINE AND OTHER MISCELLANEOUS EQUIPMENT OR SUPPLIES USED

DURING A CONCERT OR REHEARSAL.

20170HB0151PN1571 - 4 -

"DEPARTMENT." THE DEPARTMENT OF COMMUNITY AND ECONOMIC

DEVELOPMENT OF THE COMMONWEALTH.

"MAINTAINED A PLACE OF BUSINESS" OR "MAINTAINING A PLACE OF

BUSINESS." ALL OF THE FOLLOWING:

(1) HAVING, MAINTAINING OR USING WITHIN THIS

COMMONWEALTH AN OFFICE, WAREHOUSE OR OTHER PLACE OF BUSINESS.

(2) REGULARLY ENGAGING IN AN ACTIVITY AS A BUSINESS

WITHIN THIS COMMONWEALTH IN CONNECTION WITH THE LEASE, SALE

OR DELIVERY OF TANGIBLE PERSONAL PROPERTY OR THE PERFORMANCE

OF A SERVICE FOR RESIDENTS OF THIS COMMONWEALTH.

"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.

"PASS-THROUGH ENTITY." ANY OF THE FOLLOWING:

(1) A PARTNERSHIP AS DEFINED IN SECTION 301(N.0) OF THE

TAX REFORM CODE.

(2) A PENNSYLVANIA S CORPORATION AS DEFINED IN SECTION

301(N.1) OF THE TAX REFORM CODE.

(3) AN UNINCORPORATED ENTITY SUBJECT TO SECTION 307.21

OF THE TAX REFORM CODE.

"PENNSYLVANIA REHEARSAL AND TOUR EXPENSES." THE SUM OF

20170HB0151PN1571 - 5 -

PENNSYLVANIA REHEARSAL EXPENSES AND TOUR EXPENSES. THE TERM

INCLUDES PENNSYLVANIA REHEARSAL EXPENSES AND TOUR EXPENSES PAID

PRIOR TO OR DURING A REHEARSAL OR TOUR.

"PENNSYLVANIA REHEARSAL EXPENSE." A REHEARSAL EXPENSE WHICH

IS INCURRED OR WILL BE INCURRED WITHIN THIS COMMONWEALTH. THE

TERM INCLUDES:

(1) 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 OF THE TAX REFORM CODE 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 OF THE TAX REFORM

CODE.

(2) A PAYMENT WHICH IS MADE OR WILL BE MADE TO A

PERSONAL SERVICE CORPORATION REPRESENTING INDIVIDUAL TALENT

IF THE TAX IMPOSED BY ARTICLE IV OF THE TAX REFORM CODE WILL

BE PAID OR ACCRUED ON THE NET INCOME OF THE CORPORATION FOR

THE TAXABLE YEAR.

(3) 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 OF

THE TAX REFORM CODE.

"QUALIFIED REHEARSAL AND TOUR EXPENSE." ALL PENNSYLVANIA

REHEARSAL AND TOUR EXPENSES IF PENNSYLVANIA REHEARSAL EXPENSES

COMPRISE OR WILL COMPRISE AT LEAST 60% OF THE TOTAL REHEARSAL

EXPENSES. THE TERM SHALL NOT INCLUDE MORE THAN $2,000,000 IN THE

AGGREGATE OF COMPENSATION PAID OR TO BE PAID TO INDIVIDUALS OR

PAYMENT MADE OR TO BE MADE TO ENTITIES REPRESENTING AN

INDIVIDUAL FOR SERVICES PROVIDED IN THE TOUR.

20170HB0151PN1571 - 6 -

"QUALIFIED REHEARSAL FACILITY." A REHEARSAL FACILITY WHICH

MEETS AT LEAST SIX OF THE FOLLOWING CRITERIA:

(1) HAS HAD A MINIMUM OF $8,000,000 INVESTED IN THE

REHEARSAL FACILITY IN LAND OR STRUCTURE, OR A COMBINATION OF

LAND AND STRUCTURE.

(2) HAS A PERMANENT GRID SYSTEM WITH A CAPACITY OF

1,000,000 POUNDS.

(3) HAS A BUILT-IN POWER SUPPLY SYSTEM AVAILABLE AT A

MINIMUM OF 3,200 AMPS WITHOUT THE NEED FOR SUPPLEMENTAL

GENERATORS.

(4) HAS A HEIGHT FROM FLOOR TO PERMANENT GRID OF A

MINIMUM OF 80 FEET.

(5) HAS AT LEAST TWO SLIDING OR ROLL-UP ACCESS DOORS

WITH A MINIMUM HEIGHT OF 14 FEET.

(6) HAS A PERIMETER SECURITY SYSTEM WHICH INCLUDES 24-

HOUR, SEVEN-DAYS-A-WEEK SECURITY CAMERAS AND THE USE OF

ACCESS CONTROL IDENTIFICATION BADGES.

(7) HAS A SERVICE AREA WITH PRODUCTION OFFICES, CATERING

AND DRESSING ROOMS WITH A MINIMUM OF 5,000 SQUARE FEET.

(8) IS LOCATED WITHIN ONE MILE OF A MINIMUM OF TWO

COMPANIES WHICH PROVIDE CONCERT TOUR EQUIPMENT FOR USE ON A

TOUR.

"QUALIFIED TAX LIABILITY." THE LIABILITY FOR TAXES IMPOSED

UNDER ARTICLE III, IV, VI, VII OR IX OF THE TAX REFORM CODE. THE

TERM DOES NOT INCLUDE TAX WITHHELD BY AN EMPLOYER FROM AN

EMPLOYEE UNDER ARTICLE III OF THE TAX REFORM CODE.

"RECIPIENT." AN APPLICANT THAT HAS BEEN AWARDED A TAX CREDIT

UNDER SECTION 3303(E) (RELATING TO PROCEDURE).

"REHEARSAL." AN EVENT OR SERIES OF EVENTS WHICH OCCUR IN

PREPARATION FOR A TOUR PRIOR TO THE START OF THE TOUR OR DURING

20170HB0151PN1571 - 7 -

A TOUR WHEN ADDITIONAL PREPARATION MAY BE NEEDED.

"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.

(7) THE COST OF INSURANCE COVERAGE.

(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 SQUARE FEET OF COLUMN-

FREE, UNOBSTRUCTED FLOOR SPACE.

(2) THE TERM DOES NOT INCLUDE A FACILITY AT WHICH

20170HB0151PN1571 - 8 -

CONCERTS ARE CAPABLE OF BEING HELD.

"START DATE." THE DATE THE FIRST SET OF CONCERT TOUR

EQUIPMENT ARRIVES OR IS EXPECTED TO ARRIVE AT A QUALIFIED

REHEARSAL FACILITY.

"TAX CREDIT." THE CONCERT REHEARSAL AND TOUR TAX CREDIT AS

PROVIDED UNDER THIS CHAPTER.

"TAX REFORM CODE." THE ACT OF MARCH 4, 1971 (P.L.6, NO.2),

KNOWN AS THE TAX REFORM CODE OF 1971.

"TOUR." A SERIES OF CONCERTS PERFORMED OR TO BE PERFORMED BY

A MUSICAL PERFORMER IN MORE THAN ONE LOCATION. THE TERM INCLUDES

AT LEAST ONE REHEARSAL.

"TOUR EXPENSE." AS FOLLOWS:

(1) COSTS INCURRED OR WHICH WILL BE INCURRED DURING A

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 OF THE TAX REFORM CODE 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

OF THE TAX REFORM CODE.

(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

20170HB0151PN1571 - 9 -

IV OF THE TAX REFORM CODE.

(III) THE COST OF LEASING VEHICLES UPON WHICH THE

TAX IMPOSED BY ARTICLE II OF THE TAX REFORM CODE 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 OF THE TAX REFORM

CODE 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 OF THE TAX REFORM CODE.

(2) THE TERM DOES NOT INCLUDE DEVELOPMENT COST,

20170HB0151PN1571 - 10 -

INCLUDING THE WRITING OF MUSIC OR LYRICS.

"VENUE." A CLASS 1, CLASS 2 OR CLASS 3 VENUE.

§ 3303. PROCEDURE.

(A) APPLICATION.--AN APPLICANT MAY APPLY TO THE DEPARTMENT

FOR A TAX CREDIT UNDER THIS SECTION. THE APPLICATION SHALL BE ON

THE FORM REQUIRED BY THE DEPARTMENT.

(B) REVIEW AND APPROVAL.--

(1) THE DEPARTMENT SHALL ESTABLISH APPLICATION PERIODS

NOT TO EXCEED 30 DAYS. ALL APPLICATIONS RECEIVED DURING AN

APPLICATION PERIOD SHALL BE REVIEWED AND EVALUATED BY THE

DEPARTMENT BASED ON THE FOLLOWING CRITERIA:

(I) THE ANTICIPATED NUMBER OF REHEARSAL DAYS IN A

QUALIFIED REHEARSAL FACILITY.

(II) THE ANTICIPATED NUMBER OF CONCERTS AT CLASS 1

VENUES.

(III) THE ANTICIPATED NUMBER OF CONCERTS AT CLASS 2

VENUES.

(IV) THE ANTICIPATED NUMBER OF CONCERTS AT CLASS 3

VENUES.

(V) THE ANTICIPATED AMOUNT OF PENNSYLVANIA REHEARSAL

EXPENSES IN COMPARISON TO THE ANTICIPATED AGGREGATE

AMOUNT OF REHEARSAL EXPENSES.

(VI) THE ANTICIPATED AMOUNT OF THE TOUR EXPENSES.

(VII) THE ANTICIPATED AMOUNT OF THE CONCERT TOUR

EQUIPMENT EXPENSES WHICH ARE OR WILL BE PURCHASED OR

RENTED FROM A COMPANY LOCATED AND MAINTAINING A PLACE OF

BUSINESS IN THIS COMMONWEALTH AND WHICH WILL BE USED ON

THE TOUR.

(VIII) THE ANTICIPATED NUMBER OF DAYS SPENT IN

COMMONWEALTH HOTELS.

20170HB0151PN1571 - 11 -

(IX) OTHER CRITERIA THAT THE DEPARTMENT DEEMS

APPROPRIATE TO ENSURE MAXIMUM EMPLOYMENT OPPORTUNITIES

AND ENTERTAINMENT BENEFITS FOR THE RESIDENTS OF THIS

COMMONWEALTH.

(2) EXCEPT AS PROVIDED IN SUBSECTION (C) AND UPON

DETERMINING THAT THE APPLICANT HAS PAID THE APPLICABLE

APPLICATION FEE NOT TO EXCEED $300, HAS MET OR WILL MEET THE

MINIMUM REHEARSAL AND TOUR REQUIREMENTS AND HAS INCURRED OR

WILL INCUR QUALIFIED REHEARSAL AND TOUR EXPENSES, THE

DEPARTMENT MAY APPROVE THE APPLICANT FOR A TAX CREDIT.

APPLICATIONS NOT APPROVED MAY BE REVIEWED AND CONSIDERED IN

SUBSEQUENT APPLICATION PERIODS. THE DEPARTMENT MAY APPROVE AN

APPLICANT FOR A TAX CREDIT BASED ON ITS EVALUATION OF THE

CRITERIA UNDER THIS SUBSECTION.

REHEARSALS HELD OR TO BE HELD, AND QUALIFIED REHEARSAL AND TOUR

EXPENSES INCURRED OR TO BE INCURRED, AFTER JANUARY 1, 2017, IN

DETERMINING WHETHER AN APPLICANT HAS MET OR WILL MEET THE

MINIMUM REHEARSAL AND TOUR REQUIREMENTS.

(D) CONTRACT.--IF THE DEPARTMENT APPROVES THE APPLICANT'S

APPLICATION UNDER SUBSECTION (B), THE DEPARTMENT AND THE

APPLICANT SHALL ENTER INTO A CONTRACT CONTAINING THE FOLLOWING:

(1) AN ITEMIZED LIST OF REHEARSAL EXPENSES INCURRED OR

TO BE INCURRED FOR THE TOUR.

(2) AN ITEMIZED LIST OF PENNSYLVANIA REHEARSAL EXPENSES

INCURRED OR TO BE INCURRED FOR THE TOUR.

(3) WITH RESPECT TO A CONTRACT ENTERED INTO PRIOR TO

COMPLETION OF A TOUR, A COMMITMENT BY THE APPLICANT TO INCUR

THE PENNSYLVANIA REHEARSAL EXPENSES AS ITEMIZED.

(4) AN ITEMIZED LIST OF THE QUALIFIED REHEARSAL AND TOUR

20170HB0151PN1571 - 12 -

EXPENSES INCURRED OR TO BE INCURRED FOR THE TOUR.

(5) WITH RESPECT TO A CONTRACT ENTERED INTO PRIOR TO

COMPLETION OF A TOUR, A COMMITMENT BY THE APPLICANT TO INCUR

THE QUALIFIED REHEARSAL AND TOUR EXPENSES AS ITEMIZED.

(6) WITH RESPECT TO A CONTRACT ENTERED INTO PRIOR TO

COMPLETION OF A TOUR, A COMMITMENT BY THE APPLICANT TO HOLD

AT LEAST ONE CONCERT AT A CLASS 1 VENUE.

(7) WITH RESPECT TO A CONTRACT ENTERED INTO PRIOR TO

COMPLETION OF A TOUR, A COMMITMENT BY THE APPLICANT TO HOLD

AT LEAST ONE CONCERT AT A VENUE LOCATED IN A MUNICIPALITY

OTHER THAN THE MUNICIPALITY IN WHICH THE CLASS 1 VENUE UNDER

PARAGRAPH (6) IS LOCATED.

(8) THE START DATE OR THE EXPECTED START DATE.

(9) ANY OTHER INFORMATION THE DEPARTMENT DEEMS

APPROPRIATE.

(E) CERTIFICATE.--UPON EXECUTION OF THE CONTRACT REQUIRED BY

SUBSECTION (D), THE DEPARTMENT SHALL AWARD THE APPLICANT A

CONCERT REHEARSAL AND TOUR TAX CREDIT AND ISSUE THE RECIPIENT A

TAX CREDIT CERTIFICATE.

§ 3304. CLAIM.

BEGINNING JULY 1, 2017, A RECIPIENT MAY CLAIM A CONCERT

REHEARSAL AND TOUR TAX CREDIT AGAINST THE QUALIFIED TAX

LIABILITY OF THE RECIPIENT.

§ 3305. CARRYOVER, CARRYBACK AND ASSIGNMENT OF TAX CREDIT.

(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

20170HB0151PN1571 - 13 -

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 CHAPTER.

(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 CHAPTER.

(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 AN APPLICANT UNDER THIS SUBSECTION WITHIN 30 DAYS OF

20170HB0151PN1571 - 14 -

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

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.

§ 3306. DETERMINATION OF PENNSYLVANIA REHEARSAL AND TOUR

EXPENSES.

WHEN PRESCRIBING STANDARDS FOR DETERMINING WHICH REHEARSAL OR

TOUR EXPENSES ARE CONSIDERED PENNSYLVANIA REHEARSAL AND TOUR

EXPENSES FOR PURPOSES OF COMPUTING THE TAX CREDIT PROVIDED BY

THIS CHAPTER, THE DEPARTMENT SHALL CONSIDER:

(1) THE LOCATION WHERE SERVICES ARE PERFORMED.

(2) THE LOCATION WHERE CONCERT TOUR EQUIPMENT IS

PURCHASED, RENTED, DELIVERED AND USED.

(3) THE LOCATION WHERE REHEARSALS OR CONCERTS ARE HELD.

(4) OTHER FACTORS THE DEPARTMENT DETERMINES ARE

20170HB0151PN1571 - 15 -

RELEVANT.

§ 3307. 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. 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.

(B) ADVANCE AWARD OF CREDITS.--THE ADVANCE AWARD OF TAX

CREDITS UNDER SUBSECTION (A) SHALL:

(1) COUNT AGAINST THE TOTAL NUMBER OF TOURS 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 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) AN APPLICANT MAY NOT BE AWARDED MORE THAN $800,000

OF TAX CREDITS FOR A TOUR.

(2) EXCEPT AS PROVIDED UNDER PARAGRAPH (5), THE

AGGREGATE AMOUNT OF TAX CREDITS AWARDED BY THE DEPARTMENT

UNDER SECTION 3303(E) (RELATING TO PROCEDURE) TO AN APPLICANT

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

20170HB0151PN1571 - 16 -

UNDER SECTION 3303(E) TO AN APPLICANT 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 3303(E) TO AN APPLICANT 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), AN APPLICANT 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 APPLICANT IF THE APPLICANT

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 CHAPTER, 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 3302 (RELATING TO DEFINITIONS)

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

20170HB0151PN1571 - 17 -

60% PENNSYLVANIA REHEARSAL EXPENSES REQUIREMENT CONTAINED IN THE

DEFINITION OF "QUALIFIED REHEARSAL AND TOUR EXPENSE" UNDER

SECTION 3302. 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.

§ 3308. PENALTY.

A RECIPIENT WHICH CLAIMS A TAX CREDIT AND FAILS TO INCUR THE

AMOUNT OF QUALIFIED REHEARSAL AND TOUR EXPENSES AGREED TO UNDER

SECTION 3303(D)(4) (RELATING TO PROCEDURE) FOR A TOUR IN THAT

TAXABLE YEAR SHALL REPAY TO THE COMMONWEALTH AN AMOUNT EQUAL TO

110% OF THE DIFFERENCE BETWEEN THE AMOUNT AGREED TO UNDER

SECTION 3303(D)(4) AND THE AMOUNT OF QUALIFIED REHEARSAL AND

TOUR EXPENSES ACTUALLY INCURRED BY THE RECIPIENT. THE PENALTY

SHALL BE ASSESSED AND COLLECTED UNDER ARTICLE II OF THE TAX

REFORM CODE.

§ 3309. PASS-THROUGH ENTITY.

(A) GENERAL RULE.--IF A PASS-THROUGH ENTITY HAS ANY UNUSED

TAX CREDITS UNDER SECTION 3305 (RELATING TO CARRYOVER, CARRYBACK

AND ASSIGNMENT OF TAX CREDIT), THE PASS-THROUGH ENTITY MAY ELECT

IN WRITING, ACCORDING TO PROCEDURES ESTABLISHED BY THE

DEPARTMENT OF REVENUE, TO TRANSFER ALL OR A PORTION OF THE TAX

CREDITS TO SHAREHOLDERS, MEMBERS OR PARTNERS IN PROPORTION TO

THE SHARE OF THE ENTITY'S DISTRIBUTIVE INCOME TO WHICH EACH

SHAREHOLDER, MEMBER OR PARTNER IS ENTITLED.

(B) LIMITATION.--A PASS-THROUGH ENTITY AND A SHAREHOLDER,

MEMBER OR PARTNER OF A PASS-THROUGH ENTITY MAY NOT CLAIM THE TAX

CREDIT UNDER SUBSECTION (A) FOR THE SAME QUALIFIED REHEARSAL AND

TOUR EXPENSE.

PASS-THROUGH ENTITY TO WHOM A TAX CREDIT IS TRANSFERRED UNDER

20170HB0151PN1571 - 18 -

SUBSECTION (A) SHALL IMMEDIATELY CLAIM THE TAX CREDIT IN THE

TAXABLE YEAR IN WHICH THE TRANSFER IS MADE. THE SHAREHOLDER,

MEMBER OR PARTNER MAY NOT CARRY FORWARD, CARRY BACK, OBTAIN A

REFUND OF OR SELL OR ASSIGN THE TAX CREDIT.

§ 3310. DEPARTMENT GUIDELINES AND REGULATIONS.

THE DEPARTMENT SHALL DEVELOP WRITTEN GUIDELINES FOR THE

IMPLEMENTATION OF THIS CHAPTER. THE GUIDELINES SHALL BE IN

EFFECT UNTIL THE DEPARTMENT PROMULGATES REGULATIONS FOR THE

IMPLEMENTATION OF THIS CHAPTER.

§ 3311. REPORT TO GENERAL ASSEMBLY.

NO LATER THAN JUNE 1, 2018, AND SEPTEMBER 1 OF EACH YEAR

THEREAFTER, THE SECRETARY OF COMMUNITY AND ECONOMIC DEVELOPMENT

SHALL SUBMIT A REPORT TO THE GENERAL ASSEMBLY SUMMARIZING THE

EFFECTIVENESS OF THE TAX CREDITS PROVIDED BY THIS CHAPTER. THE

REPORT SHALL INCLUDE THE NAME OF THE TOURS WHICH REHEARSED IN

THIS COMMONWEALTH, THE NAMES OF ALL RECIPIENTS AWARDED A TAX

CREDIT AS OF THE DATE OF THE REPORT AND THE AMOUNT OF TAX

CREDITS APPROVED FOR EACH RECIPIENT. THE REPORT MAY ALSO INCLUDE

RECOMMENDATIONS FOR CHANGES IN THE CALCULATION OR ADMINISTRATION

OF THE TAX CREDITS PROVIDED UNDER THIS CHAPTER. THE REPORT SHALL

BE SUBMITTED TO THE CHAIRPERSON AND MINORITY CHAIRPERSON OF THE

APPROPRIATIONS COMMITTEE OF THE SENATE, THE CHAIRPERSON AND

MINORITY CHAIRPERSON OF THE FINANCE COMMITTEE OF THE SENATE, THE

CHAIRPERSON AND MINORITY CHAIRPERSON OF THE APPROPRIATIONS

COMMITTEE OF THE HOUSE OF REPRESENTATIVES AND THE CHAIRPERSON

AND MINORITY CHAIRPERSON OF THE FINANCE COMMITTEE OF THE HOUSE

OF REPRESENTATIVES. THE REPORT SHALL INCLUDE THE FOLLOWING

INFORMATION, WHICH SHALL BE SEPARATED BY GEOGRAPHIC LOCATION

WITHIN THIS COMMONWEALTH:

(1) THE AMOUNT OF TAX CREDITS CLAIMED DURING THE FISCAL

20170HB0151PN1571 - 19 -

YEAR BY TOUR.

(2) THE TOTAL AMOUNT SPENT IN THIS COMMONWEALTH DURING

THE FISCAL YEAR BY TOURS AND CONCERT TOUR PROMOTION COMPANIES

FOR SERVICES AND SUPPLIES.

(3) THE TOTAL AMOUNT OF TAX REVENUES, BOTH DIRECTLY AND

INDIRECTLY, GENERATED FOR THE COMMONWEALTH DURING THE FISCAL

YEAR BY THE CONCERT REHEARSAL AND TOUR INDUSTRY.

SECTION 5. REPEALS ARE AS FOLLOWS:

(1) THE GENERAL ASSEMBLY DECLARES THAT THE REPEAL UNDER

PARAGRAPH (2) IS NECESSARY TO EFFECTUATE THE AMENDMENT OF

CHAPTER 33 OF TITLE 12.

(2) SUBCHAPTER C OF ARTICLE XVII-D OF THE ACT OF MARCH

4, 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE OF 1971,

IS REPEALED.

SECTION 6. THIS ACT SHALL TAKE EFFECT IMMEDIATELY.

20170HB0151PN1571 - 20 -