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PRINTER'S NO. 474
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
30
Session of
2019
INTRODUCED BY KILLION, VOGEL, HUGHES, HAYWOOD, ARGALL, BLAKE,
BROWNE, COSTA, FONTANA, LEACH, MUTH, SANTARSIERO,
TARTAGLIONE, J. WARD AND YUDICHAK, MARCH 21, 2019
REFERRED TO URBAN AFFAIRS AND HOUSING, MARCH 21, 2019
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for Pennsylvania Housing Tax Credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XIX-G
PENNSYLVANIA HOUSING TAX CREDIT
Section 1901-G. Scope of article.
This article establishes the Pennsylvania Housing Tax Credit.
Section 1902-G. Definitions.
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
context clearly indicates otherwise:
"Agency." The Pennsylvania Housing Finance Agency.
"Credit period." A 5-year period that begins with the
taxable year in which the qualified low-income housing project
is eligible to claim the credit under section 1907-G or, at the
irrevocable election of the eligible applicant, the next
succeeding taxable year.
"Department." The Department of Revenue of the Commonwealth.
"Eligible applicant." An applicant that meets the agency's
applicant criteria for Federal housing tax credits.
"Federal housing tax credit." The Federal tax credit created
under section 42 of the Internal Revenue Code of 1986 (Public
Law 99-514, 26 U.S.C. § 42).
"Qualified allocation plan." The agency's plan for
allocation of Federal housing tax credits developed under 26
C.F.R. § 1.42-17 (relating to qualified allocation plan).
"Qualified low-income housing project." The term shall have
the same meaning as provided under section 42(g)(1) of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
42(g)(1)).
"Qualified tax liability." The tax liability imposed on a
taxpayer under Article III, IV, VI, VII, VIII, IX, XI or XV,
excluding any tax withheld by an employer under Article III.
"Qualified taxpayer." An individual, business firm,
corporation, business trust, limited liability company,
partnership, limited liability partnership, association or any
other form of legal business entity that:
(1) is subject to a tax imposed under Article III, IV,
VI, VII, VIII, IX, XI or XV, excluding any tax withheld by an
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employer under Article III; and
(2) meets the criteria set forth in guidelines adopted
and promulgated by the agency in accordance with section
1904-G.
"Tax credit." An amount made available to qualified
taxpayers to offset against qualified tax liability as
authorized and allocated under this article.
"Tax credit certificates." The document provided by the
agency evidencing the allocation of tax credits under section
1906-G.
"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)).
Section 1903-G. Pennsylvania Housing Tax Credit.
(a) Tax credit authority.--The agency may allocate tax
credits in an amount not to exceed the sum of:
(1) $10 million per fiscal year;
(2) unused and unallocated tax credits for the preceding
fiscal years ; and
(3) tax credits returned to the agency for the preceding
fiscal years.
(b) Application.--An eligible applicant may apply to the
agency for tax credits for a qualified low-income housing
project.
(c) Selection.--The agency shall review applications
submitted for tax credits and, in accordance with this article
and the procedures established by the agency, shall select and
shall conditionally award tax credits to eligible applicants.
(d) Integration with the Federal housing tax credit.--The
agency shall, as much as practical and unless otherwise
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indicated in this article, administer the tax credit using the
same guidelines, procedures and priorities that the agency uses
to administer the Federal housing tax credit.
(e) Income targeting.--The agency shall allocate tax credits
in a manner that the agency, at the time of allocation,
reasonably believes will result in at least 10% of the tax
credits being used to provide housing units targeting households
with incomes at or below 30% of area median income.
Section 1904-G. Guidelines and procedures.
The agency shall adopt guidelines and procedures for the tax
credit in conjunction with the qualified allocation plan and
administrative guidelines.
Section 1905-G. Reporting.
The agency shall annually publish a report on the tax credit
allocations on the agency's publicly accessible Internet
website. The report shall include:
(1) Tax credits awarded.
(2) Eligible applicants receiving tax credits.
(3) The amount of tax credits issued to each recipient.
Section 1906-G. Tax credit certificate.
The agency shall issue tax credit certificates in a form
determined by the agency in consultation with the department.
Section 1907-G. Claiming the credit.
(a) General rule.--On presentation to the department, a
qualified taxpayer may claim a dollar for dollar tax credit
against the qualified tax liability of the qualified taxpayer if
a tax credit certificate, issued by the agency after a
determination by the agency that the qualified low-income
housing project for which the tax credit was allocated, has
fully certified its costs and is in compliance with agency
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requirements.
(b) Exception.--The agency shall only issue the
certification under subsection (a) for the first year that the
qualified taxpayer claims the tax credit.
(c) Time period.--Presentation under subsection (a) shall be
made within the time specified by the guidelines issued by the
agency in consultation with the department.
Section 1908-G. Carryover, sale and assignment.
(a) General rule.--The department, in consultation with the
agency, shall establish guidelines that include procedures for
the carryover, sale and assignment of credits.
(b) Application.--A tax credit certification presented to
the department in accordance with section 1907-G shall first be
applied against the qualified taxpayer's qualified tax liability
for the current taxable year as of the date on which the tax
credit certification was presented and before any carryover is
applied against the qualified tax liability.
(c) Carryover.--If a qualified taxpayer cannot use the
entire amount of the tax credit for the taxable year in which it
is first claimed, the excess may be carried over to subsequent
taxable years. 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. In no event shall tax credits provided
by this article be carried over and applied to succeeding
taxable years more than five taxable years following the first
taxable year for which the qualified taxpayer claimed the
credit.
(d) No carryback or refund.--A qualified taxpayer may not
carry back or obtain a refund of all or any portion of an unused
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tax credit granted to the qualified taxpayer under this article.
(e) Sale or assignment.--A qualified taxpayer, on
application and approval by the department, in consultation with
the agency and in conformance with department and agency
guidelines, may sell or assign, in whole or in part, a tax
credit granted to the qualified taxpayer under this article. No
relation to the eligible applicant is required of a purchaser or
assignee of tax credits under this article.
(f) Purchasers and assignees.--The purchaser or assignee of
all or a portion of a tax credit obtained under subsection (e)
must be a qualified taxpayer and must, unless determined to be a
pass-through entity distribution under subsection (g),
immediately claim the credit in the taxable year in which the
purchase or assignment is made. The purchaser or assignee may
not carryover, carryback or obtain a refund for the tax credit.
The purchaser or assignee shall notify the department and the
agency of the purchase or assignment of the tax credit in
compliance with procedures specified by the department.
(g) Pass-through entity distributions.--The department shall
establish guidelines that include procedures and limitations for
pass-through entity distributions of tax credits. Subject to the
provisions of section 1909-G, the guidelines shall include, but
not be limited to, provisions allowing the allocation of the tax
credit to the following in order to assign the tax credit to a
qualified taxpayer who wishes to claim the tax credit:
(1) A partner or member.
(2) The parent organizations of any partner or member.
(3) Any successive parent organization.
(h) Tax credit allocation.--The distribution under
subsection (g) may be allocated in any manner provided by the
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partnership agreement or other agreement governing the
operations of an eligible applicant. Tax credits allocated under
this subsection may, in accordance with subsection (e) and
agency guidelines, be sold or assigned.
Section 1909-G. Recapture.
(a) Guidelines.--The department, in consultation with the
agency, 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:
(1) An affirmative duty to notify the agency and the
department of any recapture of Federal housing tax credits
within sixty days of the Federal recapture during the five-
year credit period.
(2) The mechanism and formula that the tax credit may be
recaptured over the remaining credit period.
(b) Failure to notify agency and department of Federal
recapture.--A qualified taxpayer receiving tax credits under
this section that fails to give timely notice to the agency and
the department of Federal housing tax credit recapture shall be
subject to debarment of future tax credits and Federal housing
tax credits.
Section 1910-G. Eligible uses.
The use of any money generated in connection with the sale,
assignment or pass-through of tax credits under this article
shall be limited to the uses allowed under the Federal housing
tax credit set forth in guidelines issued by the agency.
Section 1911-G. Fraud and misrepresentation.
If an eligible applicant or a qualified taxpayer engages in
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fraud or intentional misrepresentation of information required
to be provided to the agency or the department under this
article or the agency's guidelines, the department may:
(1) Recapture all or a portion of the tax credit.
(2) Debar the applicant or qualified taxpayer from
future tax credits and Federal housing tax credit
opportunities.
(3) Impose other penalties as specified in the agency's
guidelines.
Section 2. This act shall take effect in 60 days.
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