PRINTER'S NO. 4566
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2949
Session of
2020
INTRODUCED BY RABB, BROOKS, HOWARD, PASHINSKI, MURT,
CALTAGIRONE, McNEILL, HOHENSTEIN, KENYATTA, WILLIAMS, HILL-
EVANS, SCHLOSSBERG, LEE, WEBSTER, GREEN AND DRISCOLL,
OCTOBER 20, 2020
REFERRED TO COMMITTEE ON AGRICULTURE AND RURAL AFFAIRS,
OCTOBER 20, 2020
AN ACT
Amending Title 3 (Agriculture) of the Pennsylvania Consolidated
Statutes, in development, marketing and promotion, providing
for food security initiative; establishing the Food Security
Initiative Grant Program and the Food Security Initiative Tax
Credit Program; imposing duties on the Department of
Agriculture; and making an appropriation.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 3 of the Pennsylvania Consolidated Statutes
is amended by adding a chapter to read:
CHAPTER 49
FOOD SECURITY INITIATIVE
Subchapter
A. Preliminary Provisions
B. Grant Program
C. Tax Credit Program
D. Miscellaneous Provisions
SUBCHAPTER A
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PRELIMINARY PROVISIONS
Sec.
4901. Short title of chapter.
4902. Definitions.
§ 4901. Short title of chapter.
This chapter shall be known and may be cited as the Food
Security Initiative Program Act.
§ 4902. 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:
"Credit period." A five-year period that begins with the
taxable year in which a taxpayer is awarded a tax credit
certificate in accordance with Subchapter C (relating to tax
credit program).
"Department." The Department of Agriculture of the
Commonwealth.
"Food desert." A low-income census tract where a substantial
number or share of residents has low access to a supermarket or
large grocery store.
"Grant." A grant awarded under the program.
"Low access." Access to a supermarket or large grocery store
by an individual who resides more than:
(1) one mile from the supermarket or large grocery store
in an urban area; or
(2) ten miles from the supermarket or large grocery
store in a rural area.
"Low-income census tract." A census tract where:
(1) the poverty rate is at least 20%;
(2) for a tract not located within a metropolitan area,
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the median family income for the tract does not exceed 80% of
the Statewide median family income; or
(3) for a tract located within a metropolitan area, the
median family income for the tract does not exceed 80% of the
greater of the Statewide median family income and the median
family income for the metropolitan area.
"NAICS." A classification within the North American Industry
Classification System developed for use by Federal statistical
agencies for the collection, analysis and publication of
statistical data related to the United States economy.
"Pass-through entity." Any of the following:
(1) A partnership as defined in section 301(n.0) of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
Code of 1971.
(2) A Pennsylvania S Corporation as defined in section
301(n.1) of the Tax Reform Code of 1971.
(3) An unincorporated entity subject to section 307.21
of the Tax Reform Code of 1971.
"Program." The Food Security Initiative Program established
under Subchapter B (relating to grant program).
"Qualified tax liability." The tax liability imposed on a
taxpayer under Article III, IV, VII, VIII, IX, XI or XV of the
Tax Reform Code of 1971, excluding any tax withheld by an
employer under Article III of the Tax Reform Code of 1971.
"Restaurant." As follows:
(1) A place within this Commonwealth that receives a
NAICS designation of 72241 or 72251 from the United States
Census Bureau and where food or drink is served to or
provided for the public, with or without charge.
(2) The term does not include a dining car operated by a
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railroad company in interstate commerce or a bed and
breakfast homestead or inn.
"Tax credit." A tax credit awarded under the Food Security
Initiative Tax Credit Program under Subchapter C.
"Taxable year." The term shall have the same meaning as
provided under section 441(b) of the Internal Revenue Code of
1986 (Public Law 99-514, 26 U.S.C. § 441(b)).
"Taxpayer." An individual, business firm, corporation,
business trust, limited liability company, partnership, limited
liability partnership, association or any other form of legal
business entity.
SUBCHAPTER B
GRANT PROGRAM
Sec.
4911. Establishment.
4912. Eligibility.
4913. Application.
4914. Review and approval.
4915. Agreement.
4916. Program guidelines.
§ 4911. Establishment.
The Food Security Initiative Grant Program is established
within the department for the purpose of providing financial
assistance to restaurants in this Commonwealth that open or are
operating in a food desert.
§ 4912. Eligibility.
To be considered eligible for a grant, a restaurant must meet
all of the following:
(1) Operate or prepare to operate in a food desert.
(2) Employ no more than 20 full-time equivalent
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employees per restaurant location.
(3) Be organized as a co-op, employee ownership trust,
low-profit limited liability corporation or B corporation. An
entity organized as a corporation must offer employee stock
option programs to be eligible under this section.
§ 4913. Application.
A restaurant may submit an application to the department on a
form and in a manner prescribed by the department. In addition
to the application, the department may require information as
necessary to determine the eligibility of a restaurant for a
grant.
§ 4914. Review and approval.
(a) Time period.--Within 30 days of the effective date of
this subsection, the department shall establish a time period of
not less than 30 days for restaurants to submit an application
for a grant.
(b) Distribution.--Upon closure of the time period
established in subsection (a), the department shall distribute
all money made available to the department for the purpose of
making grants to restaurants considered eligible in an amount
equal to the quotient resulting from dividing the total amount
of money made available for grants under this subchapter by the
total number of eligible restaurants.
(c) Limitation.--The department may not award a grant under
the program that exceeds $50,000 to an eligible restaurant.
§ 4915. Agreement.
(a) Use of grant money.--Each eligible restaurant and the
department shall enter into an agreement of the use of an
awarded grant. The agreement shall state that the grant shall be
used for costs incurred and payments made for any of the
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following:
(1) Payroll costs.
(2) Payment of interest on a mortgage obligation, which
shall not include any prepayment of or payment of principal
on a covered mortgage obligation.
(3) Payment on a rent obligation.
(4) Payment for utilities.
(5) Other costs incurred by the restaurant for the
acquisition of raw materials to sustain the operations of the
restaurant.
(b) Failure to comply.--A restaurant that receives a grant
and fails to comply with subsection (a) shall repay the amount
of the grant to the department, in addition to a fee that
amounts to 10% of the grant amount.
§ 4916. Program guidelines.
The department shall develop and issue guidelines for the
program, which shall be posted on the publicly accessible
Internet website of the department.
SUBCHAPTER C
TAX CREDIT PROGRAM
Sec.
4921. Establishment.
4922. Availability.
4923. Application.
4924. Review of application by department.
4925. Tax credit certificates.
4926. Use of tax credits.
4927. Carryover, carryback and refund.
4928. Sale or assignment.
4929. Pass-through entity.
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4930. Purchasers and assignees.
4931. Administration.
4932. Annual report.
§ 4921. Establishment.
The Food Security Initiative Tax Credit Program is
established to encourage the development of qualified
restaurants in this Commonwealth that operate in a food desert.
The department and the Department of Revenue shall administer
the tax credit as provided in this subchapter.
§ 4922. Availability.
(a) Awards.--Beginning in fiscal year 2021-2022 and each
fiscal year thereafter, the department may award a total of
$10,000,000 in tax credits per fiscal year in accordance with
this subchapter.
(b) Unallocated tax credits.--In addition to the amount
available under subsection (a), the department may award
unallocated tax credits from the preceding fiscal year.
(c) Maximum amount.--A taxpayer may not be awarded a tax
credit in an amount that exceeds $100,000 for a qualified
restaurant.
§ 4923. Application.
(a) Submittal.--A taxpayer may apply to the department for a
tax credit under this section by submitting an application on a
form required by the department.
(b) Verification.--The department may require information on
the application as necessary to verify compliance with this
subchapter.
(c) Other requirements.--Except as otherwise provided by
law, before the tax credit may be awarded, the Department of
Revenue must find that the taxpayer has filed all required State
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tax reports and returns for all applicable tax years and paid
any balance of State tax due as determined at settlement or
assessment by the Department of Revenue, unless the tax due is
currently under appeal.
§ 4924. Review of application by department.
(a) Duties of department.--The department shall review
applications submitted for a tax credit and, in accordance with
the procedures established by the department under section 4931
(relating to administration), conditionally reserve tax credits
for a qualified restaurant operating in a food desert.
(b) Conditional reservation.--The department shall
conditionally reserve tax credits in a manner that the
department, at the time of conditional reservation, reasonably
believes will result in funding of a restaurant that operates in
a food desert.
(c) Merits.--The department shall determine the amount of
tax credits conditionally reserved to a taxpayer based on the
merits of the qualified restaurant project.
§ 4925. Tax credit certificates.
(a) Determination of compliance.--Upon notification that a
qualified restaurant project receiving a conditional reservation
of tax credits has been completed, the department shall
determine compliance with this subchapter.
(b) Amount.--Following verification of compliance, the
department shall issue the tax credit certificates in an amount
not to exceed 20% of the conditional reservation for each
taxable year in the tax credit period.
§ 4926. Use of tax credits.
(a) Claiming tax credit.--Upon presentation of a tax credit
certificate to the Department of Revenue, the taxpayer may claim
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a tax credit against the qualified tax liability.
(b) Amount.--The tax credit may be claimed at an amount not
to exceed 50% of the taxpayer's qualified tax liability for a
single taxable year.
§ 4927. Carryover, carryback and refund.
(a) General rule.--A taxpayer shall be entitled to carry
forward a tax credit for a period not to exceed five taxable
years from the taxable year in which the tax credit was awarded.
Each time the tax credit is carried over to a succeeding taxable
year, the tax credit shall be reduced by the amount that was
used as a credit during the immediately preceding taxable year.
(b) Application.--A tax credit certificate received by the
Department of Revenue in a taxable year shall first be applied
against the taxpayer's qualified tax liability for the current
taxable year as of the date on which the credit was issued
before the tax credit can be applied against a qualified tax
liability under subsection (a).
(c) No carryback or refund.--A taxpayer may not carry back
or obtain a refund of all or any portion of an unused tax credit
granted to the taxpayer under this subchapter.
§ 4928. Sale or assignment.
(a) Application.--A taxpayer, upon application to and
approval by the Department of Revenue, may sell or assign, in
whole or in part, a tax credit granted to the taxpayer under
this subchapter.
(b) Compliance.--Before an application under subsection (a)
is approved, the Department of Revenue must find that the
applicant 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
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by the Department of Revenue.
§ 4929. Pass-through entity.
(a) General rule.--If a pass-through entity has any unused
tax credit under section 4926 (relating to use of tax credits),
the taxpayer may elect in writing, according to procedures
established by the Department of Revenue, to transfer all or a
portion of the tax credit to shareholders, members or partners
in proportion to the share of the entity's distributive income
to which the 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
credit under subsection (a) for the same qualified project.
(c) Application.--A shareholder, member or partner of a
pass-through entity to whom a credit is transferred under
subsection (a) shall immediately claim the 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.
§ 4930. Purchasers and assignees.
The purchaser or assignee of all or a portion of the tax
credit under section 4928 (relating to sale or assignment) shall
immediately claim the tax credit in the taxable year in which
the purchase or assignment is made, subject to the following:
(1) If a purchaser or assignee of all or a portion of
the tax credit obtained under section 4928 cannot use the
entire amount of the tax credit for the taxable year in which
the tax credit was purchased or assigned, the excess may be
carried over to succeeding taxable years and used as a credit
against the qualified tax liability of the purchaser or
assignee for those taxable years.
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(2) Each time a tax credit is carried over to a
succeeding taxable year, the tax credit shall be reduced by
the amount that was used as a credit during the immediately
preceding taxable year.
(3) The tax credit may be carried over and applied to
succeeding taxable years for the remainder of the
carryforward period from the original tax credit certificate.
(4) The purchaser or assignee may not carry back the
credit or obtain a refund.
§ 4931. Administration.
(a) Department guidelines and procedures.--The department
shall issue guidelines and procedures for the administration of
the tax credit.
(b) Recapture.--The Department of Revenue, in consultation
with the department, shall establish guidelines that include
procedures for recapture of tax credits during the credit period
that are similar in structure and effect to events of
noncompliance under section 42 of the Internal Revenue Code of
1986 (Public Law 99-514, 26 U.S.C. § 42). The guidelines shall
provide for the mechanism and formula that the tax credit may be
recaptured over the remaining credit period.
(c) Fraud or misrepresentation.--If a taxpayer engages in
fraud or intentional misrepresentation of information required
to be provided to the department or the Department of Revenue
under this subchapter or the department's guidelines, the
Department of Revenue may:
(1) Recapture all or a portion of the tax credit.
(2) Deem ineligible the applicant or taxpayer from
future tax credits.
(3) Impose other penalties as specified in the
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department's guidelines.
(d) Fee.--The department may charge a taxpayer applying for
a tax credit a reasonable fee not to exceed 5% of the tax credit
awarded for the administrative expenses of the department for
processing applications under this subchapter.
§ 4932. Annual report.
(a) Submittal.--By June 30, 2022, and each June 30
thereafter, the department shall submit a report on the tax
credit to:
(1) The chairperson and minority chairperson of the
Agriculture and Rural Affairs Committee of the Senate.
(2) The chairperson and minority chairperson of the
Agriculture and Rural Affairs Committee of the House of
Representatives.
(3) The chairperson and minority chairperson of the
Appropriations Committee of the Senate.
(4) The chairperson and minority chairperson of the
Appropriations Committee of the House of Representatives.
(b) Contents.--The report under subsection (a) shall
include:
(1) The number and amount of tax credits awarded.
(2) The taxpayers that were awarded tax credits.
(3) The amount of tax credits issued to each taxpayer.
(c) Public posting.--The department shall make the report
identified in subsection (a) available on the department's
publicly accessible Internet website.
SUBCHAPTER D
MISCELLANEOUS PROVISIONS
Sec.
4941. Funding.
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§ 4941. Funding.
The sum of $20,000,000 shall be appropriated from the General
Fund for the purpose of making grants and tax credits under this
chapter.
Section 2. This act shall take effect immediately.
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