PRIOR PRINTER'S NOS. 1057, 2263 PRINTER'S NO. 3702
No. 948 Session of 1999
INTRODUCED BY TANGRETTI, ARGALL, CORRIGAN, MAITLAND, SCHULER,
MARKOSEK, READSHAW, GEIST, BEBKO-JONES, BELFANTI, SCRIMENTI,
WOJNAROSKI, HALUSKA, PISTELLA, LAUGHLIN, CURRY, WALKO, PESCI,
TRELLO, STURLA, STABACK, McILHINNEY, MICOZZIE, VAN HORNE,
GIGLIOTTI, MELIO, RAMOS, McCALL, SOLOBAY, M. COHEN,
L. I. COHEN, GRUCELA, ORIE, SAINATO, JAMES, FREEMAN,
WILLIAMS, BELARDI, YOUNGBLOOD, BUNT, STEELMAN, PETRARCA,
HUTCHINSON, ROSS, CIVERA, JOSEPHS, HARHAI, STETLER, SERAFINI,
HERMAN, FRANKEL, E. Z. TAYLOR, ROEBUCK, DALEY, BOYES, RUBLEY,
LEH, NICKOL, CLYMER AND CAPPABIANCA, MARCH 22, 1999
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 12, 2000
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further providing for sales and use tax
11 definitions, for sales and use tax exclusions, for sales and
12 use tax penalties, for personal income tax definitions and
13 for classes of personal income; providing for a credit
14 against personal income tax; further providing for personal
15 income tax penalties, for realty transfer tax definitions,
16 for realty transfer tax exclusions and for realty transfer
17 tax penalties; and conferring powers and duties on the
18 Pennsylvania Historical and Museum Commission.
19 The General Assembly of the Commonwealth of Pennsylvania
20 hereby enacts as follows:
21 Section 1. Section 201 of the act of March 4, 1971 (P.L.6, <--
1 No.2), known as the Tax Reform Code of 1971, is amended by
2 adding definitions to read:
3 Section 201. Definitions.--The following words, terms and
4 phrases when used in this Article II shall have the meaning
5 ascribed to them in this section, except where the context
6 clearly indicates a different meaning:
7 * * *
8 (uu) "Historic homesite." A building which complies with
9 all of the following:
10 (1) The building has been in existence for at least fifty
11 years.
12 (2) The building is occupied by the owner as a principal
13 residence.
14 (3) If partially leased by the owner, the building is
15 divided into no more than three units, other than the owner's
16 principal residence, leased for:
17 (i) residential use on at least a monthly basis; or
18 (ii) commercial use.
19 (4) The building:
20 (i) has been designated by Federal, State or local
21 government as a historic property;
22 (ii) is located in an area designated by Federal, State or
23 local government as a historic district; or
24 (iii) is located in a residential conservation district.
25 (vv) "Residential conservation district." A zoning overlay
26 district intended, in selected areas of residential districts,
27 to encourage:
28 (1) infill development which respects the historic context
29 of the environment;
30 (2) rehabilitation of existing housing through the use of
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1 sound maintenance and repair rather than replacement; and
2 (3) preservation, protection and enhancement of streetscapes
3 and areas of architectural, historic or cultural importance.
4 Section 2. Section 204 of the act is amended by adding a
5 clause to read:
6 Section 204. Exclusions from Tax.--The tax imposed by
7 section 202 shall not be imposed upon
8 * * *
9 (58) The sale at retail or use of tangible personal property
10 or services which are valued in excess of one thousand dollars
11 ($1,000) and which are used in the conversion to or
12 rehabilitation of a historic homesite if all of the conditions
13 set forth in this clause apply. This clause includes costs
14 chargeable to the rehabilitation and restoration of the physical
15 elements of the building, such as historic decorative elements;
16 upgrading of the structural, mechanical, electrical and plumbing
17 systems to applicable code; and alterations associated with the
18 conversion to a historic homesite. This clause does not include
19 costs attributable to the acquisition of the property; the
20 enlargement of an existing building; landscaping, driveways and
21 other site features; outbuildings or garages; nor personal labor
22 performed by the owner. The following conditions must be met:
23 (i) By the date of purchase, the purchaser covenants all of
24 the following with the department:
25 (A) Within five years of the date of purchase, the
26 rehabilitation work will be completed to the satisfaction of the
27 Pennsylvania Historical and Museum Commission in accordance with
28 36 CFR 67.7 (relating to standards for rehabilitation).
29 (B) The historic homesite:
30 (I) has been maintained, for a five-year period prior to the
19990H0948B3702 - 3 -
1 date of purchase, as the principal residence of the purchaser;
2 (II) will be maintained, for a five-year period subsequent
3 to the date of purchase, as the principal residence of the
4 purchaser or a successor in interest; or
5 (III) will have been maintained, for a total of five years
6 prior and subsequent to the date of purchase, as the principal
7 residence of the purchaser or a successor in interest.
8 (ii) The seller submits to the department the form which
9 provides for the exclusion under this clause.
10 (iii) The purchaser has not previously taken advantage of
11 the exemption under this clause for the same historic homesite.
12 Section 3. Section 267 of the act is amended to read:
13 Section 267. Penalties.--(a) Penalty Assessed as Tax. The
14 penalties, additions, interest and liabilities provided by this
15 article shall be paid upon notice and demand by the department,
16 and shall be assessed and collected in the same manner as taxes.
17 Except as otherwise provided, any reference in this article to
18 "tax" imposed by this article shall be deemed also to refer to
19 the penalties, additions, interest and liabilities provided by
20 this part.
21 (b) Attempt to Evade or Defeat Tax. Any person who wilfully
22 attempts, in any manner, to evade or defeat the tax imposed by
23 this article, or the payment thereof, or to assist any other
24 person to evade or defeat the tax imposed by this article, or
25 the payment thereof, or to receive a refund improperly, shall,
26 in addition to other penalties provided by law, be liable for a
27 penalty equal to one-half of the total amount of the tax evaded.
28 In any direct proceeding arising out of a petition for
29 reassessment or refund as provided in this article, in which an
30 issue of fact is raised with respect to whether a return is
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1 fraudulent or with respect to the propriety of the imposition by
2 the department of the penalty prescribed in this subsection (b),
3 the burden of proof with respect to such issue shall be upon the
4 department.
5 (c) Historic Homesite. If a purchaser fails to comply with
6 the covenant under section 204(58)(i), unless it determines that
7 the failure to comply is justified, the department shall assess
8 a penalty against the purchaser in the amount of twelve per cent
9 of the purchase price of the property.
10 Section 4. Section 301 introductory paragraph of the act is
11 amended and the section is amended by adding clauses to read:
12 Section 301. Definitions.--The following words, terms and
13 phrases when used in this article shall have the meaning
14 ascribed to them in this section except where the context
15 clearly indicates a different meaning[. Unless specifically
16 provided otherwise, any reference in this article to the
17 Internal Revenue Code shall include the Internal Revenue Code of
18 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), as amended to
19 January 1, 1997]:
20 * * *
21 (i.3) "Historic homesite" means a building which complies
22 with all of the following:
23 (1) The building has been in existence for at least fifty
24 years.
25 (2) The building is divided into no more than four units
26 used or leased for:
27 (i) residential use on at least a monthly basis; or
28 (ii) commercial use.
29 (3) The building:
30 (i) has been designated by Federal, State or local
19990H0948B3702 - 5 -
1 government as a historic property;
2 (ii) is located in an area designated by Federal, State or
3 local government as a historic district; or
4 (iii) is located in a residential conservation district.
5 * * *
6 (o.4) "Residential conservation district" means a zoning
7 overlay district intended, in selected areas of residential
8 districts, to encourage:
9 (1) infill development which respects the historic context
10 of the environment;
11 (2) rehabilitation of existing housing through the use of
12 sound maintenance and repair rather than replacement; and
13 (3) preservation, protection and enhancement of streetscapes
14 and areas of architectural, historic or cultural importance.
15 * * *
16 Section 5. Section 303(a)(3) of the act is amended by adding
17 a subparagraph to read:
18 Section 303. Classes of Income.--(a) The classes of income
19 referred to above are as follows:
20 * * *
21 (3) Net gains or income from disposition of property. Net
22 gains or net income, less net losses, derived from the sale,
23 exchange or other disposition of property, including real
24 property, tangible personal property, intangible personal
25 property or obligations issued on or after the effective date of
26 this amendatory act by the Commonwealth; any public authority,
27 commission, board or other agency created by the Commonwealth;
28 any political subdivision of the Commonwealth or any public
29 authority created by any such political subdivision; or by the
30 Federal Government as determined in accordance with accepted
19990H0948B3702 - 6 -
1 accounting principles and practices. For the purpose of this
2 article:
3 * * *
4 (viii) The term "net gains or income" shall not include the
5 net gain on the sale of a historic homesite if all of the
6 following apply:
7 (A) By the date of transfer of title to the property, the
8 purchaser covenants with the Pennsylvania Historical and Museum
9 Commission to:
10 (I) within five years of the date of transfer of title to
11 the property complete, to the satisfaction of the commission,
12 the rehabilitation work, in an amount not less than one thousand
13 dollars ($1,000), in accordance with 36 CFR 67.7 (relating to
14 standards for rehabilitation) and occupy the premises as the
15 principal residence of the purchaser or a successor in interest;
16 (II) maintain the premises as the principal residence of the
17 purchaser or a successor in interest for at least five years
18 after the occupation begins; and
19 (III) if part of the premises is leased, divide the premises
20 into no more than three units, in addition to the unit
21 maintained as a residence by the purchaser or successor in
22 interest, leased for residential use on a monthly basis or for
23 commercial use.
24 (B) At the time of purchase, the purchaser provides a copy
25 of the covenant under clause (A) to the seller.
26 (C) The seller submits to the department a copy of the
27 covenant under clause (A) and the form which provides for the
28 exclusion under this subparagraph (viii).
29 * * *
30 Section 6. The act is amended by adding a section to read:
19990H0948B3702 - 7 -
1 Section 314.1. Rehabilitation of Historic Homesite.--(a) A
2 resident taxpayer shall be allowed a credit against the tax
3 otherwise due under this article in the amount of twenty per
4 cent of the cost of the rehabilitation of a historic homesite if
5 all of the following apply:
6 (1) The cost of the rehabilitation is in excess of one
7 thousand dollars ($1,000).
8 (2) Before commencing rehabilitation of the property, the
9 taxpayer covenants with the department to:
10 (i) complete, to the satisfaction of the Pennsylvania
11 Historical and Museum Commission, the rehabilitation work in
12 accordance with 36 CFR 67.7 (relating to standards for
13 rehabilitation) within five years and occupy the premises as the
14 principal residence of the taxpayer or a successor in interest;
15 (ii) maintain the residence as the principal residence of
16 the taxpayer or a successor in interest for at least five years
17 after the occupation begins; and
18 (iii) if part of the premises is leased, divide the premises
19 into no more than three units, in addition to the unit
20 maintained as a residence by the taxpayer or successor in
21 interest, leased for residential use on a monthly basis or for
22 commercial use.
23 (3) The taxpayer submits to the department the form which
24 provides for the credit under this subsection.
25 (b) If the credit under subsection (a) exceeds the tax due
26 under this article, the taxpayer may carry the credit over to
27 the next taxable year. No credit under subsection (a) may be
28 carried over beyond the fifth taxable year after the taxpayer
29 enters into the covenant under subsection (b)(1).
30 Section 7. Section 352 of the act is amended by adding
19990H0948B3702 - 8 -
1 subsections to read:
2 Section 352. Additions, Penalties and Fees.--* * *
3 (k) If a purchaser fails to comply with the covenant under
4 section 303(a)(3)(viii)(A), unless it determines that the
5 failure to comply is justified, the department shall assess a
6 penalty against the purchaser in the amount of ten per cent of
7 the assessed value of the property.
8 (l) If a taxpayer fails to comply with the covenant under
9 section 314(a)(2), unless it determines that the failure to
10 comply is justified, the department shall assess a penalty
11 against the taxpayer in the amount of one hundred ten per cent
12 of any tax credits received under section 314.
13 Section 8. Section 1101-C of the act is amended by adding
14 definitions to read:
15 Section 1101-C. Definitions.--The following words when used
16 in this article shall have the meanings ascribed to them in this
17 section:
18 * * *
19 "Historic homesite." A building which complies with all of
20 the following:
21 (1) The building has been in existence for at least fifty
22 years.
23 (2) The building is divided into no more than four units
24 leased for:
25 (i) residential use on at least a monthly basis; or
26 (ii) commercial use.
27 (3) The building:
28 (i) has been designated by Federal, State or local
29 government as a historic property;
30 (ii) is located in an area designated by Federal, State or
19990H0948B3702 - 9 -
1 local government as a historic district; or
2 (iii) is located in a residential conservation district.
3 * * *
4 "Residential conservation district." A zoning overlay
5 district intended, in selected areas of residential districts,
6 to encourage:
7 (1) infill development which respects the historic context
8 of the environment;
9 (2) rehabilitation of existing housing through the use of
10 sound maintenance and repair rather than replacement; and
11 (3) preservation, protection and enhancement of streetscapes
12 and areas of architectural, historic or cultural importance.
13 * * *
14 Section 9. Section 1102-C.3 of the act, amended or added
15 July 2, 1986 (P.L.318, No.77), June 16, 1994 (P.L.279, No.48)
16 and May 7, 1997 (P.L.85, No.7), is amended to read:
17 Section 1102-C.3. Excluded Transactions.--(a) The tax
18 imposed by section 1102-C shall not be imposed upon:
19 (1) A transfer to the Commonwealth or to any of its
20 instrumentalities, agencies or political subdivisions by gift,
21 dedication or deed in lieu of condemnation or deed of
22 confirmation in connection with condemnation proceedings, or a
23 reconveyance by the condemning body of the property condemned to
24 the owner of record at the time of condemnation, which
25 reconveyance may include property line adjustments provided said
26 reconveyance is made within one year from the date of
27 condemnation.
28 (2) A document which the Commonwealth is prohibited from
29 taxing under the Constitution or statutes of the United States.
30 (3) A conveyance to a municipality, township, school
19990H0948B3702 - 10 -
1 district or county pursuant to acquisition by the municipality,
2 township, school district or county of a tax delinquent property
3 at sheriff sale or tax claim bureau sale.
4 (4) A transfer for no or nominal actual consideration which
5 corrects or confirms a transfer previously recorded, but which
6 does not extend or limit existing record legal title or
7 interest.
8 (5) A transfer of division in kind for no or nominal actual
9 consideration of property passed by testate or intestate
10 succession and held by cotenants; however, if any of the parties
11 take shares greater in value than their undivided interest, tax
12 is due on the excess.
13 (6) A transfer between husband and wife, between persons who
14 were previously husband and wife who have since been divorced,
15 provided the property or interest therein subject to such
16 transfer was acquired by the husband and wife or husband or wife
17 prior to the granting of the final decree in divorce, between
18 parent and child or the spouse of such child, between brother or
19 sister or spouse of a brother or sister and brother or sister or
20 the spouse of a brother or sister and between a grandparent and
21 grandchild or the spouse of such grandchild, except that a
22 subsequent transfer by the grantee within one year shall be
23 subject to tax as if the grantor were making such transfer.
24 (7) A transfer for no or nominal actual consideration of
25 property passing by testate or intestate succession from a
26 personal representative of a decedent to the decedent's devisee
27 or heir.
28 (8) A transfer for no or nominal actual consideration to a
29 trustee of an ordinary trust where the transfer of the same
30 property would be exempt if the transfer was made directly from
19990H0948B3702 - 11 -
1 the grantor to all of the possible beneficiaries that are
2 entitled to receive the property or proceeds from the sale of
3 the property under the trust, whether or not such beneficiaries
4 are contingent or specifically named. A trust clause which
5 identifies the contingent beneficiaries by reference to the
6 heirs of the trust settlor as determined by the laws of the
7 intestate succession shall not disqualify a transfer from the
8 exclusion provided by this clause. No such exemption shall be
9 granted unless the recorder of deeds is presented with a copy of
10 the trust instrument that clearly identifies the grantor and all
11 possible beneficiaries.
12 (8.1) A transfer for no or nominal actual consideration to a
13 trustee of a living trust from the settlor of the living trust.
14 No such exemption shall be granted unless the recorder of deeds
15 is presented with a copy of the living trust instrument.
16 (9) A transfer for no or nominal actual consideration from a
17 trustee of an ordinary trust to a specifically named beneficiary
18 that is entitled to receive the property under the recorded
19 trust instrument or to a contingent beneficiary where the
20 transfer of the same property would be exempt if the transfer
21 was made by the grantor of the property into the trust to that
22 beneficiary. However, any transfer of real estate from a living
23 trust during the settlor's lifetime shall be considered for the
24 purposes of this article as if such transfer were made directly
25 from the settlor to the grantee.
26 (9.1) A transfer for no or nominal actual consideration from
27 a trustee of a living trust after the death of the settlor of
28 the trust or from a trustee of a trust created pursuant to the
29 will of a decedent to a beneficiary to whom the property is
30 devised or bequeathed.
19990H0948B3702 - 12 -
1 (9.2) A transfer for no or nominal actual consideration from
2 the trustee of a living trust to the settlor of the living trust
3 if such property was originally conveyed to the trustee by the
4 settlor.
5 (10) A transfer for no or nominal actual consideration from
6 trustee to successor trustee.
7 (11) A transfer:
8 (i) for no or nominal actual consideration between principal
9 and agent or straw party; or
10 (ii) from or to an agent or straw party where, if the agent
11 or straw party were his principal, no tax would be imposed under
12 this article.
13 Where the document by which title is acquired by a grantee or
14 statement of value fails to set forth that the property was
15 acquired by the grantee from, or for the benefit of, his
16 principal, there is a rebuttable presumption that the property
17 is the property of the grantee in his individual capacity if the
18 grantee claims an exemption from taxation under this clause.
19 (12) A transfer made pursuant to the statutory merger or
20 consolidation of a corporation or statutory division of a
21 nonprofit corporation, except where the department reasonably
22 determines that the primary intent for such merger,
23 consolidation or division is avoidance of the tax imposed by
24 this article.
25 (13) A transfer from a corporation or association of real
26 estate held of record in the name of the corporation or
27 association where the grantee owns stock of the corporation or
28 an interest in the association in the same proportion as his
29 interest in or ownership of the real estate being conveyed and
30 where the stock of the corporation or the interest in the
19990H0948B3702 - 13 -
1 association has been held by the grantee for more than two
2 years.
3 (14) A transfer from a nonprofit industrial development
4 agency or authority to a grantee of property conveyed by the
5 grantee to that agency or authority as security for a debt of
6 the grantee or a transfer to a nonprofit industrial development
7 agency or authority.
8 (15) A transfer from a nonprofit industrial development
9 agency or authority to a grantee purchasing directly from it,
10 but only if:
11 (i) the grantee shall directly use such real estate for the
12 primary purpose of manufacturing, fabricating, compounding,
13 processing, publishing, research and development,
14 transportation, energy conversion, energy production, pollution
15 control, warehousing or agriculture; and
16 (ii) the agency or authority has the full ownership interest
17 in the real estate transferred.
18 (16) A transfer by a mortgagor to the holder of a bona fide
19 mortgage in default in lieu of a foreclosure or a transfer
20 pursuant to a judicial sale in which the successful bidder is
21 the bona fide holder of a mortgage, unless the holder assigns
22 the bid to another person.
23 (17) Any transfer between religious organizations or other
24 bodies or persons holding title for a religious organization if
25 such real estate is not being or has not been used by such
26 transferor for commercial purposes.
27 (18) A transfer to a conservancy which possesses a tax-
28 exempt status pursuant to section 501(c)(3) of the Internal
29 Revenue Code of 1954 (68A Stat. 3, 26 U.S.C. § 501(c)(3)) and
30 which has as its primary purpose preservation of land for
19990H0948B3702 - 14 -
1 historic, recreational, scenic, agricultural or open-space
2 opportunities; or a transfer from such a conservancy to the
3 United States, the Commonwealth or to any of their
4 instrumentalities, agencies or political subdivisions; or any
5 transfer from such a conservancy where the real estate is
6 encumbered by a perpetual agricultural conservation easement as
7 defined by the act of June 30, 1981 (P.L.128, No.43), known as
8 the "Agricultural Area Security Law," and such conservancy has
9 owned the real estate for at least two years immediately prior
10 to the transfer.
11 (19) A transfer of real estate devoted to the business of
12 agriculture to a family farm corporation by a member of the same
13 family which directly owns at least seventy-five per cent of
14 each class of the stock thereof.
15 (19.1) A transfer of real estate devoted to the business of
16 agriculture to a family farm partnership by a member of the same
17 family, which family directly owns at least seventy-five per
18 cent of the interests in the partnership.
19 (20) A transfer between members of the same family of an
20 ownership interest in a real estate company, family farm
21 corporation or family farm partnership which owns real estate.
22 (21) A transaction wherein the tax due is one dollar ($1) or
23 less.
24 (22) Leases for the production or extraction of coal, oil,
25 natural gas or minerals and assignments thereof.
26 In order to exercise any exclusion provided in this section, the
27 true, full and complete value of the transfer shall be shown on
28 the statement of value. For leases of coal, oil, natural gas or
29 minerals, the statement of value may be limited to an
30 explanation of the reason such document is not subject to tax
19990H0948B3702 - 15 -
1 under this article.
2 (b) The State tax imposed by section 1102-C shall not be
3 imposed upon a sale of a historic homesite as follows:
4 (1) To qualify for an exclusion under this subsection, all
5 of the following must apply:
6 (i) By the date of transfer of title to the property, the
7 purchaser covenants with the department to:
8 (A) within five years of the date of transfer of title to
9 the property complete, to the satisfaction of the Pennsylvania
10 Historical and Museum Commission, the rehabilitation work in
11 accordance with 36 CFR 67.7 (relating to standards for
12 rehabilitation) and occupy the premises as the principal
13 residence of the purchaser or a successor in interest;
14 (B) maintain the residence as the principal residence of the
15 purchaser or a successor in interest for at least five years
16 after the occupation begins; and
17 (C) if part of the premises is leased, divide the premises
18 into no more than three units, in addition to the unit
19 maintained as a residence by the purchaser or successor in
20 interest, leased for residential use on a monthly basis or for
21 commercial use.
22 (ii) At the time of purchase, the purchaser provides a copy
23 of the covenant under subclause (i) to the seller.
24 (2) A taxpayer who has paid the tax and who is eligible for
25 exclusion under clause (1) is entitled to a refund.
26 (3) By July 31, a taxpayer requesting a refund under clause
27 (2) for the prior fiscal year must submit to the department
28 proof of all of the following:
29 (i) Payment of the tax.
30 (ii) Eligibility for exclusion under clause (1).
19990H0948B3702 - 16 -
1 (4) Within ninety days of submission of proof under clause
2 (3), the department must approve or deny a refund. Failure to
3 meet time requirement of this clause shall be deemed an approval
4 of the refund.
5 (5) By August 31, the department shall compute the total
6 amount of approved refunds under clause (4).
7 (6) Refunds shall be made as follows:
8 (i) The department shall compute ten per cent of the tax
9 collected under section 1102-C for the prior fiscal year which,
10 after allocation to the Keystone Recreation, Park and
11 Conservation Fund, is allocated to the General Fund.
12 (ii) If the total amount of approved refunds is not more
13 than the amount computed under subclause (i), the department
14 shall make, out of the amount computed under subclause (i), full
15 refunds.
16 (iii) If the total amount of approved refunds is more than
17 the amount computed under subclause (i), the department shall
18 make, out of the amount computed under subclause (i),
19 proportionate refunds in the ratio that each approved refund
20 bears to the total amount of approved refunds.
21 Section 10. Section 1109-C.1 of the act, added July 2, 1986
22 (P.L.318, No.77), is amended to read:
23 Section 1109-C.1. Civil Penalties.--(a) If any part of any
24 underpayment of tax imposed by this article is due to fraud,
25 there shall be added to the tax an amount equal to fifty per
26 cent of the underpayment.
27 (b) In the case of failure to record a declaration required
28 under this article on the date prescribed therefor, unless it is
29 shown that such failure is due to reasonable cause, there shall
30 be added to the tax five per cent of the amount of such tax if
19990H0948B3702 - 17 -
1 the failure is for not more than one month, with an additional
2 five per cent for each additional month or fraction thereof
3 during which such failure continues, not exceeding fifty per
4 cent in the aggregate.
5 (c) If a purchaser fails to comply with the covenant under
6 section 1102-C.3(b)(1)(i), unless it determines that the failure
7 to comply is justified, the department shall assess a penalty
8 against the purchaser in the amount of ten per cent of the
9 assessed value of the property.
10 Section 11. The Pennsylvania Historical and Museum
11 Commission may promulgate regulations to administer this act.
12 Section 12. The amendment or addition of sections
13 303(a)(3)(viii) and (ix) and 352(k) of the act shall apply to
14 taxable years beginning after December 31, 1998.
15 Section 13. This act shall take effect in 60 days.
16 SECTION 1. SECTION 201 OF THE ACT OF MARCH 4, 1971 (P.L.6, <--
17 NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, IS AMENDED BY
18 ADDING A CLAUSE TO READ:
19 SECTION 201. DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND
20 PHRASES WHEN USED IN THIS ARTICLE II SHALL HAVE THE MEANING
21 ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT
22 CLEARLY INDICATES A DIFFERENT MEANING:
23 * * *
24 (AAA) "HISTORIC HOMESITE." A BUILDING WHICH COMPLIES WITH
25 ALL OF THE FOLLOWING:
26 (1) THE BUILDING HAS BEEN IN EXISTENCE FOR AT LEAST FIFTY
27 YEARS.
28 (2) THE BUILDING IS DIVIDED INTO NO MORE THAN FOUR UNITS,
29 ONE OF WHICH IS USED AS THE OWNER'S PRINCIPAL RESIDENCE. THE
30 REQUIREMENTS OF THIS CLAUSE SHALL BE SATISFIED IF THE PURCHASER
19990H0948B3702 - 18 -
1 OF A BUILDING HAS ENTERED INTO A COVENANT WITH THE PENNSYLVANIA
2 HISTORICAL AND MUSEUM COMMISSION TO DIVIDE THE BUILDING INTO NO
3 MORE THAN FOUR UNITS, ONE OF WHICH WILL BE USED AS THE
4 PURCHASER'S PRINCIPAL RESIDENCE BEGINNING NO LATER THAN FOUR
5 MONTHS AFTER THE DATE OF THE TRANSFER OF TITLE TO THE REAL
6 PROPERTY.
7 (3) THE BUILDING:
8 (I) HAS BEEN DESIGNATED BY FEDERAL OR STATE GOVERNMENT AS A
9 HISTORIC PROPERTY;
10 (II) IS LOCATED IN AN AREA DESIGNATED BY FEDERAL OR STATE
11 GOVERNMENT AS A HISTORIC DISTRICT;
12 (III) IS LOCATED IN AN AREA DESIGNATED AS A HISTORIC
13 DISTRICT UNDER SECTION 2 OF THE ACT OF JUNE 13, 1961 (P.L.282,
14 NO.167), ENTITLED "AN ACT AUTHORIZING COUNTIES, CITIES,
15 BOROUGHS, INCORPORATED TOWNS AND TOWNSHIPS TO CREATE HISTORIC
16 DISTRICTS WITHIN THEIR GEOGRAPHIC BOUNDARIES; PROVIDING FOR THE
17 APPOINTMENT OF BOARDS OF HISTORICAL ARCHITECTURAL REVIEW;
18 EMPOWERING GOVERNING BODIES OF POLITICAL SUBDIVISIONS TO PROTECT
19 THE DISTINCTIVE HISTORICAL CHARACTER OF THESE DISTRICTS AND TO
20 REGULATE THE ERECTION, RECONSTRUCTION, ALTERATION, RESTORATION,
21 DEMOLITION OR RAZING OF BUILDINGS WITHIN THE HISTORIC
22 DISTRICTS."
23 (IV) HAS BEEN DESIGNATED AS A HISTORIC PROPERTY OR IS
24 LOCATED IN AN AREA DESIGNATED AS A HISTORIC DISTRICT PURSUANT TO
25 THE HISTORIC PRESERVATION ORDINANCE, SECTION 14-2007 OF THE
26 PHILADELPHIA CITY CODE; OR
27 (V) HAS BEEN DESIGNATED AS A HISTORIC PROPERTY OR IS LOCATED
28 IN AN AREA DESIGNATED AS A HISTORIC DISTRICT PURSUANT TO TITLE
29 11 OF THE PITTSBURGH CITY CODE, CHAPTER 1, SECTION 3, AS AMENDED
30 BY CITY COUNCIL ON JULY 22, 1997.
19990H0948B3702 - 19 -
1 (4) THE OWNER OR PURCHASER OF THE BUILDING HAS ENTERED INTO
2 A COVENANT WITH THE PENNSYLVANIA HISTORICAL AND MUSEUM
3 COMMISSION PROVIDING THAT:
4 (I) REHABILITATION OR RESTORATION WORK, WITH A TOTAL COST OF
5 REHABILITATION OR RESTORATION VALUED IN EXCESS OF ONE THOUSAND
6 DOLLARS ($1,000), WILL BE COMPLETED TO THE SATISFACTION OF THE
7 PENNSYLVANIA HISTORICAL AND MUSEUM COMMISSION IN ACCORDANCE WITH
8 36 CFR 67.7 (RELATING TO STANDARDS FOR REHABILITATION) WITHIN
9 FIVE YEARS OF THE DATE THE COVENANT WAS ENTERED INTO WITH THE
10 PENNSYLVANIA HISTORICAL AND MUSEUM COMMISSION; AND
11 (II) THE BUILDING:
12 (A) HAS BEEN OR WILL BE OCCUPIED AS THE PRINCIPAL RESIDENCE
13 OF THE OWNER OR SUCCESSOR IN INTEREST FOR AT LEAST FIVE
14 CONSECUTIVE YEARS, INCLUDING THE DATE THE COVENANT WAS ENTERED
15 INTO WITH THE PENNSYLVANIA HISTORICAL AND MUSEUM COMMISSION; OR
16 (B) WILL BE OCCUPIED AS THE PRINCIPAL RESIDENCE OF THE
17 PURCHASER OR SUCCESSOR IN INTEREST FOR AT LEAST FIVE CONSECUTIVE
18 YEARS, BEGINNING NO LATER THAN FOUR MONTHS AFTER THE DATE OF
19 TRANSFER OF TITLE TO THE REAL PROPERTY.
20 (BBB) "COST OF REHABILITATION OR RESTORATION." COSTS
21 ATTRIBUTED TO THE REHABILITATION OR RESTORATION OF A HISTORIC
22 HOMESITE, INCLUDING HISTORIC DECORATIVE ELEMENTS; UPGRADING OF
23 THE STRUCTURAL, MECHANICAL, ELECTRICAL AND PLUMBING SYSTEMS TO
24 APPLICABLE CODE; AND ALTERATIONS ASSOCIATED WITH THE CONVERSION
25 OF THE BUILDING TO RESIDENTIAL USE. THE TERM SHALL NOT INCLUDE
26 COSTS ATTRIBUTABLE TO THE ACQUISITION OF THE REAL PROPERTY; THE
27 ENLARGEMENT OF AN EXISTING BUILDING; LANDSCAPING, DRIVEWAYS AND
28 OTHER SITE FEATURES; OUTBUILDINGS OR GARAGES; AND PERSONAL LABOR
29 PERFORMED BY THE OWNER.
30 SECTION 2. SECTION 204 OF THE ACT IS AMENDED BY ADDING A
19990H0948B3702 - 20 -
1 CLAUSE TO READ:
2 SECTION 204. EXCLUSIONS FROM TAX.--THE TAX IMPOSED BY
3 SECTION 202 SHALL NOT BE IMPOSED UPON
4 * * *
5 (61) THE SALE AT RETAIL OR USE OF TANGIBLE PERSONAL PROPERTY
6 OR SERVICES WHICH ARE COSTS OF REHABILITATION OR RESTORATION OF
7 A HISTORIC HOMESITE. THE PURCHASER SHALL FURNISH TO THE VENDOR A
8 CERTIFICATE SUBSTANTIALLY IN THE FORM AS THE PENNSYLVANIA
9 HISTORICAL AND MUSEUM COMMISSION, IN CONJUNCTION WITH THE
10 DEPARTMENT, SHALL PRESCRIBE STATING THAT THE SALE IS EXEMPT FROM
11 TAX PURSUANT TO THIS CLAUSE.
12 SECTION 3. SECTION 301 OF THE ACT IS AMENDED BY ADDING A
13 CLAUSE TO READ:
14 SECTION 301. DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND
15 PHRASES WHEN USED IN THIS ARTICLE SHALL HAVE THE MEANING
16 ASCRIBED TO THEM IN THIS SECTION EXCEPT WHERE THE CONTEXT
17 CLEARLY INDICATES A DIFFERENT MEANING. UNLESS SPECIFICALLY
18 PROVIDED OTHERWISE, ANY REFERENCE IN THIS ARTICLE TO THE
19 INTERNAL REVENUE CODE SHALL INCLUDE THE INTERNAL REVENUE CODE OF
20 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 1 ET SEQ.), AS AMENDED TO
21 JANUARY 1, 1997:
22 * * *
23 (I.3) "HISTORIC HOMESITE" MEANS A HISTORIC HOMESITE AS
24 DEFINED IN SECTION 201(AAA).
25 SECTION 4. SECTION 303(A)(3) OF THE ACT IS AMENDED BY ADDING
26 A SUBPARAGRAPH TO READ:
27 SECTION 303. CLASSES OF INCOME.--(A) THE CLASSES OF INCOME
28 REFERRED TO ABOVE ARE AS FOLLOWS:
29 * * *
30 (3) NET GAINS OR INCOME FROM DISPOSITION OF PROPERTY. NET
19990H0948B3702 - 21 -
1 GAINS OR NET INCOME, LESS NET LOSSES, DERIVED FROM THE SALE,
2 EXCHANGE OR OTHER DISPOSITION OF PROPERTY, INCLUDING REAL
3 PROPERTY, TANGIBLE PERSONAL PROPERTY, INTANGIBLE PERSONAL
4 PROPERTY OR OBLIGATIONS ISSUED ON OR AFTER THE EFFECTIVE DATE OF
5 THIS AMENDATORY ACT BY THE COMMONWEALTH; ANY PUBLIC AUTHORITY,
6 COMMISSION, BOARD OR OTHER AGENCY CREATED BY THE COMMONWEALTH;
7 ANY POLITICAL SUBDIVISION OF THE COMMONWEALTH OR ANY PUBLIC
8 AUTHORITY CREATED BY ANY SUCH POLITICAL SUBDIVISION; OR BY THE
9 FEDERAL GOVERNMENT AS DETERMINED IN ACCORDANCE WITH ACCEPTED
10 ACCOUNTING PRINCIPLES AND PRACTICES. FOR THE PURPOSE OF THIS
11 ARTICLE:
12 * * *
13 (VIII) THE TERM "NET GAINS OR INCOME" SHALL NOT INCLUDE THE
14 NET GAIN ON THE SALE OF A HISTORIC HOMESITE. NO LATER THAN THE
15 DATE OF TRANSFER OF TITLE TO THE REAL PROPERTY, THE PURCHASER
16 SHALL PROVIDE A COPY OF THE COVENANT WITH THE PENNSYLVANIA
17 HISTORICAL AND MUSEUM COMMISSION TO THE SELLER.
18 * * *
19 SECTION 5. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
20 SECTION 314.1. HISTORIC HOMESITE REHABILITATION CREDIT.--(A)
21 AN INDIVIDUAL SHALL BE ALLOWED A CREDIT AGAINST THE TAX
22 OTHERWISE DUE UNDER THIS ARTICLE FOR THE REHABILITATION OR
23 RESTORATION OF A HISTORIC HOMESITE.
24 (B) SUBJECT TO SUBSECTION (C), THE CREDIT AUTHORIZED UNDER
25 THIS SECTION SHALL BE TWENTY PER CENT OF THE AMOUNT EXPENDED BY
26 THE INDIVIDUAL DURING THE TAXABLE YEAR ON TANGIBLE PERSONAL
27 PROPERTY OR SERVICES THAT QUALIFY FOR A SALES AND USE TAX
28 EXCLUSION UNDER SECTION 204(61) AS CERTIFIED BY THE PENNSYLVANIA
29 HISTORICAL AND MUSEUM COMMISSION.
30 (C) THE CUMULATIVE CREDIT FOR REHABILITATION OR RESTORATION
19990H0948B3702 - 22 -
1 OF A HISTORIC HOMESITE SHALL NOT EXCEED SIX THOUSAND DOLLARS
2 ($6,000), REGARDLESS OF THE NUMBER OF YEARS OVER WHICH THE
3 QUALIFYING EXPENDITURES TAKE PLACE.
4 (D) IF THE TAXPAYER CANNOT USE THE ENTIRE AMOUNT OF THE
5 HISTORIC HOMESITE REHABILITATION CREDIT FOR THE TAXABLE YEAR IN
6 WHICH THE EXPENDITURES ARE FIRST MADE, THEN THE EXCESS MAY BE
7 CARRIED OVER TO SUCCEEDING TAXABLE YEARS. EACH TIME THAT THE
8 HISTORIC HOMESITE REHABILITATION CREDIT IS CARRIED OVER TO A
9 SUCCEEDING TAXABLE YEAR, IT SHALL BE REDUCED BY THE AMOUNT THAT
10 WAS USED AS A CREDIT DURING THE IMMEDIATELY PRECEDING TAXABLE
11 YEAR. THE CREDIT MAY BE CARRIED OVER AND APPLIED TO SUCCEEDING
12 TAXABLE YEARS FOR NO MORE THAN FIVE TAXABLE YEARS FOLLOWING THE
13 FIRST TAXABLE YEAR FOR WHICH THE TAXPAYER WAS ENTITLED TO CLAIM
14 THE CREDIT.
15 SECTION 6. SECTION 1101-C OF THE ACT IS AMENDED BY ADDING A
16 DEFINITION TO READ:
17 SECTION 1101-C. DEFINITIONS.--THE FOLLOWING WORDS WHEN USED
18 IN THIS ARTICLE SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THIS
19 SECTION:
20 * * *
21 "HISTORIC HOMESITE." A HISTORIC HOMESITE AS DEFINED IN
22 SECTION 201(AAA).
23 * * *
24 SECTION 7. SECTION 1102-C.3 OF THE ACT, AMENDED OR ADDED
25 JULY 2, 1986 (P.L.318, NO.77), JUNE 16, 1994 (P.L.279, NO.48)
26 AND MAY 7, 1997 (P.L.85, NO.7), IS AMENDED TO READ:
27 SECTION 1102-C.3. EXCLUDED TRANSACTIONS.--THE TAX IMPOSED BY
28 SECTION 1102-C SHALL NOT BE IMPOSED UPON:
29 (1) A TRANSFER TO THE COMMONWEALTH OR TO ANY OF ITS
30 INSTRUMENTALITIES, AGENCIES OR POLITICAL SUBDIVISIONS BY GIFT,
19990H0948B3702 - 23 -
1 DEDICATION OR DEED IN LIEU OF CONDEMNATION OR DEED OF
2 CONFIRMATION IN CONNECTION WITH CONDEMNATION PROCEEDINGS, OR A
3 RECONVEYANCE BY THE CONDEMNING BODY OF THE PROPERTY CONDEMNED TO
4 THE OWNER OF RECORD AT THE TIME OF CONDEMNATION, WHICH
5 RECONVEYANCE MAY INCLUDE PROPERTY LINE ADJUSTMENTS PROVIDED SAID
6 RECONVEYANCE IS MADE WITHIN ONE YEAR FROM THE DATE OF
7 CONDEMNATION.
8 (2) A DOCUMENT WHICH THE COMMONWEALTH IS PROHIBITED FROM
9 TAXING UNDER THE CONSTITUTION OR STATUTES OF THE UNITED STATES.
10 (3) A CONVEYANCE TO A MUNICIPALITY, TOWNSHIP, SCHOOL
11 DISTRICT OR COUNTY PURSUANT TO ACQUISITION BY THE MUNICIPALITY,
12 TOWNSHIP, SCHOOL DISTRICT OR COUNTY OF A TAX DELINQUENT PROPERTY
13 AT SHERIFF SALE OR TAX CLAIM BUREAU SALE.
14 (4) A TRANSFER FOR NO OR NOMINAL ACTUAL CONSIDERATION WHICH
15 CORRECTS OR CONFIRMS A TRANSFER PREVIOUSLY RECORDED, BUT WHICH
16 DOES NOT EXTEND OR LIMIT EXISTING RECORD LEGAL TITLE OR
17 INTEREST.
18 (5) A TRANSFER OF DIVISION IN KIND FOR NO OR NOMINAL ACTUAL
19 CONSIDERATION OF PROPERTY PASSED BY TESTATE OR INTESTATE
20 SUCCESSION AND HELD BY COTENANTS; HOWEVER, IF ANY OF THE PARTIES
21 TAKE SHARES GREATER IN VALUE THAN THEIR UNDIVIDED INTEREST, TAX
22 IS DUE ON THE EXCESS.
23 (6) A TRANSFER BETWEEN HUSBAND AND WIFE, BETWEEN PERSONS WHO
24 WERE PREVIOUSLY HUSBAND AND WIFE WHO HAVE SINCE BEEN DIVORCED,
25 PROVIDED THE PROPERTY OR INTEREST THEREIN SUBJECT TO SUCH
26 TRANSFER WAS ACQUIRED BY THE HUSBAND AND WIFE OR HUSBAND OR WIFE
27 PRIOR TO THE GRANTING OF THE FINAL DECREE IN DIVORCE, BETWEEN
28 PARENT AND CHILD OR THE SPOUSE OF SUCH CHILD, BETWEEN BROTHER OR
29 SISTER OR SPOUSE OF A BROTHER OR SISTER AND BROTHER OR SISTER OR
30 THE SPOUSE OF A BROTHER OR SISTER AND BETWEEN A GRANDPARENT AND
19990H0948B3702 - 24 -
1 GRANDCHILD OR THE SPOUSE OF SUCH GRANDCHILD, EXCEPT THAT A
2 SUBSEQUENT TRANSFER BY THE GRANTEE WITHIN ONE YEAR SHALL BE
3 SUBJECT TO TAX AS IF THE GRANTOR WERE MAKING SUCH TRANSFER.
4 (7) A TRANSFER FOR NO OR NOMINAL ACTUAL CONSIDERATION OF
5 PROPERTY PASSING BY TESTATE OR INTESTATE SUCCESSION FROM A
6 PERSONAL REPRESENTATIVE OF A DECEDENT TO THE DECEDENT'S DEVISEE
7 OR HEIR.
8 (8) A TRANSFER FOR NO OR NOMINAL ACTUAL CONSIDERATION TO A
9 TRUSTEE OF AN ORDINARY TRUST WHERE THE TRANSFER OF THE SAME
10 PROPERTY WOULD BE EXEMPT IF THE TRANSFER WAS MADE DIRECTLY FROM
11 THE GRANTOR TO ALL OF THE POSSIBLE BENEFICIARIES THAT ARE
12 ENTITLED TO RECEIVE THE PROPERTY OR PROCEEDS FROM THE SALE OF
13 THE PROPERTY UNDER THE TRUST, WHETHER OR NOT SUCH BENEFICIARIES
14 ARE CONTINGENT OR SPECIFICALLY NAMED. A TRUST CLAUSE WHICH
15 IDENTIFIES THE CONTINGENT BENEFICIARIES BY REFERENCE TO THE
16 HEIRS OF THE TRUST SETTLOR AS DETERMINED BY THE LAWS OF THE
17 INTESTATE SUCCESSION SHALL NOT DISQUALIFY A TRANSFER FROM THE
18 EXCLUSION PROVIDED BY THIS CLAUSE. NO SUCH EXEMPTION SHALL BE
19 GRANTED UNLESS THE RECORDER OF DEEDS IS PRESENTED WITH A COPY OF
20 THE TRUST INSTRUMENT THAT CLEARLY IDENTIFIES THE GRANTOR AND ALL
21 POSSIBLE BENEFICIARIES.
22 (8.1) A TRANSFER FOR NO OR NOMINAL ACTUAL CONSIDERATION TO A
23 TRUSTEE OF A LIVING TRUST FROM THE SETTLOR OF THE LIVING TRUST.
24 NO SUCH EXEMPTION SHALL BE GRANTED UNLESS THE RECORDER OF DEEDS
25 IS PRESENTED WITH A COPY OF THE LIVING TRUST INSTRUMENT.
26 (9) A TRANSFER FOR NO OR NOMINAL ACTUAL CONSIDERATION FROM A
27 TRUSTEE OF AN ORDINARY TRUST TO A SPECIFICALLY NAMED BENEFICIARY
28 THAT IS ENTITLED TO RECEIVE THE PROPERTY UNDER THE RECORDED
29 TRUST INSTRUMENT OR TO A CONTINGENT BENEFICIARY WHERE THE
30 TRANSFER OF THE SAME PROPERTY WOULD BE EXEMPT IF THE TRANSFER
19990H0948B3702 - 25 -
1 WAS MADE BY THE GRANTOR OF THE PROPERTY INTO THE TRUST TO THAT
2 BENEFICIARY. HOWEVER, ANY TRANSFER OF REAL ESTATE FROM A LIVING
3 TRUST DURING THE SETTLOR'S LIFETIME SHALL BE CONSIDERED FOR THE
4 PURPOSES OF THIS ARTICLE AS IF SUCH TRANSFER WERE MADE DIRECTLY
5 FROM THE SETTLOR TO THE GRANTEE.
6 (9.1) A TRANSFER FOR NO OR NOMINAL ACTUAL CONSIDERATION FROM
7 A TRUSTEE OF A LIVING TRUST AFTER THE DEATH OF THE SETTLOR OF
8 THE TRUST OR FROM A TRUSTEE OF A TRUST CREATED PURSUANT TO THE
9 WILL OF A DECEDENT TO A BENEFICIARY TO WHOM THE PROPERTY IS
10 DEVISED OR BEQUEATHED.
11 (9.2) A TRANSFER FOR NO OR NOMINAL ACTUAL CONSIDERATION FROM
12 THE TRUSTEE OF A LIVING TRUST TO THE SETTLOR OF THE LIVING TRUST
13 IF SUCH PROPERTY WAS ORIGINALLY CONVEYED TO THE TRUSTEE BY THE
14 SETTLOR.
15 (10) A TRANSFER FOR NO OR NOMINAL ACTUAL CONSIDERATION FROM
16 TRUSTEE TO SUCCESSOR TRUSTEE.
17 (11) A TRANSFER:
18 (I) FOR NO OR NOMINAL ACTUAL CONSIDERATION BETWEEN PRINCIPAL
19 AND AGENT OR STRAW PARTY; OR
20 (II) FROM OR TO AN AGENT OR STRAW PARTY WHERE, IF THE AGENT
21 OR STRAW PARTY WERE HIS PRINCIPAL, NO TAX WOULD BE IMPOSED UNDER
22 THIS ARTICLE.
23 WHERE THE DOCUMENT BY WHICH TITLE IS ACQUIRED BY A GRANTEE OR
24 STATEMENT OF VALUE FAILS TO SET FORTH THAT THE PROPERTY WAS
25 ACQUIRED BY THE GRANTEE FROM, OR FOR THE BENEFIT OF, HIS
26 PRINCIPAL, THERE IS A REBUTTABLE PRESUMPTION THAT THE PROPERTY
27 IS THE PROPERTY OF THE GRANTEE IN HIS INDIVIDUAL CAPACITY IF THE
28 GRANTEE CLAIMS AN EXEMPTION FROM TAXATION UNDER THIS CLAUSE.
29 (12) A TRANSFER MADE PURSUANT TO THE STATUTORY MERGER OR
30 CONSOLIDATION OF A CORPORATION OR STATUTORY DIVISION OF A
19990H0948B3702 - 26 -
1 NONPROFIT CORPORATION, EXCEPT WHERE THE DEPARTMENT REASONABLY
2 DETERMINES THAT THE PRIMARY INTENT FOR SUCH MERGER,
3 CONSOLIDATION OR DIVISION IS AVOIDANCE OF THE TAX IMPOSED BY
4 THIS ARTICLE.
5 (13) A TRANSFER FROM A CORPORATION OR ASSOCIATION OF REAL
6 ESTATE HELD OF RECORD IN THE NAME OF THE CORPORATION OR
7 ASSOCIATION WHERE THE GRANTEE OWNS STOCK OF THE CORPORATION OR
8 AN INTEREST IN THE ASSOCIATION IN THE SAME PROPORTION AS HIS
9 INTEREST IN OR OWNERSHIP OF THE REAL ESTATE BEING CONVEYED AND
10 WHERE THE STOCK OF THE CORPORATION OR THE INTEREST IN THE
11 ASSOCIATION HAS BEEN HELD BY THE GRANTEE FOR MORE THAN TWO
12 YEARS.
13 (14) A TRANSFER FROM A NONPROFIT INDUSTRIAL DEVELOPMENT
14 AGENCY OR AUTHORITY TO A GRANTEE OF PROPERTY CONVEYED BY THE
15 GRANTEE TO THAT AGENCY OR AUTHORITY AS SECURITY FOR A DEBT OF
16 THE GRANTEE OR A TRANSFER TO A NONPROFIT INDUSTRIAL DEVELOPMENT
17 AGENCY OR AUTHORITY.
18 (15) A TRANSFER FROM A NONPROFIT INDUSTRIAL DEVELOPMENT
19 AGENCY OR AUTHORITY TO A GRANTEE PURCHASING DIRECTLY FROM IT,
20 BUT ONLY IF:
21 (I) THE GRANTEE SHALL DIRECTLY USE SUCH REAL ESTATE FOR THE
22 PRIMARY PURPOSE OF MANUFACTURING, FABRICATING, COMPOUNDING,
23 PROCESSING, PUBLISHING, RESEARCH AND DEVELOPMENT,
24 TRANSPORTATION, ENERGY CONVERSION, ENERGY PRODUCTION, POLLUTION
25 CONTROL, WAREHOUSING OR AGRICULTURE; AND
26 (II) THE AGENCY OR AUTHORITY HAS THE FULL OWNERSHIP INTEREST
27 IN THE REAL ESTATE TRANSFERRED.
28 (16) A TRANSFER BY A MORTGAGOR TO THE HOLDER OF A BONA FIDE
29 MORTGAGE IN DEFAULT IN LIEU OF A FORECLOSURE OR A TRANSFER
30 PURSUANT TO A JUDICIAL SALE IN WHICH THE SUCCESSFUL BIDDER IS
19990H0948B3702 - 27 -
1 THE BONA FIDE HOLDER OF A MORTGAGE, UNLESS THE HOLDER ASSIGNS
2 THE BID TO ANOTHER PERSON.
3 (17) ANY TRANSFER BETWEEN RELIGIOUS ORGANIZATIONS OR OTHER
4 BODIES OR PERSONS HOLDING TITLE FOR A RELIGIOUS ORGANIZATION IF
5 SUCH REAL ESTATE IS NOT BEING OR HAS NOT BEEN USED BY SUCH
6 TRANSFEROR FOR COMMERCIAL PURPOSES.
7 (18) A TRANSFER TO A CONSERVANCY WHICH POSSESSES A TAX-
8 EXEMPT STATUS PURSUANT TO SECTION 501(C)(3) OF THE INTERNAL
9 REVENUE CODE OF 1954 (68A STAT. 3, 26 U.S.C. § 501(C)(3)) AND
10 WHICH HAS AS ITS PRIMARY PURPOSE PRESERVATION OF LAND FOR
11 HISTORIC, RECREATIONAL, SCENIC, AGRICULTURAL OR OPEN-SPACE
12 OPPORTUNITIES; OR A TRANSFER FROM SUCH A CONSERVANCY TO THE
13 UNITED STATES, THE COMMONWEALTH OR TO ANY OF THEIR
14 INSTRUMENTALITIES, AGENCIES OR POLITICAL SUBDIVISIONS; OR ANY
15 TRANSFER FROM SUCH A CONSERVANCY WHERE THE REAL ESTATE IS
16 ENCUMBERED BY A PERPETUAL AGRICULTURAL CONSERVATION EASEMENT AS
17 DEFINED BY THE ACT OF JUNE 30, 1981 (P.L.128, NO.43), KNOWN AS
18 THE "AGRICULTURAL AREA SECURITY LAW," AND SUCH CONSERVANCY HAS
19 OWNED THE REAL ESTATE FOR AT LEAST TWO YEARS IMMEDIATELY PRIOR
20 TO THE TRANSFER.
21 (19) A TRANSFER OF REAL ESTATE DEVOTED TO THE BUSINESS OF
22 AGRICULTURE TO A FAMILY FARM CORPORATION BY A MEMBER OF THE SAME
23 FAMILY WHICH DIRECTLY OWNS AT LEAST SEVENTY-FIVE PER CENT OF
24 EACH CLASS OF THE STOCK THEREOF.
25 (19.1) A TRANSFER OF REAL ESTATE DEVOTED TO THE BUSINESS OF
26 AGRICULTURE TO A FAMILY FARM PARTNERSHIP BY A MEMBER OF THE SAME
27 FAMILY, WHICH FAMILY DIRECTLY OWNS AT LEAST SEVENTY-FIVE PER
28 CENT OF THE INTERESTS IN THE PARTNERSHIP.
29 (20) A TRANSFER BETWEEN MEMBERS OF THE SAME FAMILY OF AN
30 OWNERSHIP INTEREST IN A REAL ESTATE COMPANY, FAMILY FARM
19990H0948B3702 - 28 -
1 CORPORATION OR FAMILY FARM PARTNERSHIP WHICH OWNS REAL ESTATE.
2 (21) A TRANSACTION WHEREIN THE TAX DUE IS ONE DOLLAR ($1) OR
3 LESS.
4 (22) LEASES FOR THE PRODUCTION OR EXTRACTION OF COAL, OIL,
5 NATURAL GAS OR MINERALS AND ASSIGNMENTS THEREOF.
6 IN ORDER TO EXERCISE ANY EXCLUSION PROVIDED IN THIS SECTION, THE
7 TRUE, FULL AND COMPLETE VALUE OF THE TRANSFER SHALL BE SHOWN ON
8 THE STATEMENT OF VALUE. FOR LEASES OF COAL, OIL, NATURAL GAS OR
9 MINERALS, THE STATEMENT OF VALUE MAY BE LIMITED TO AN
10 EXPLANATION OF THE REASON SUCH DOCUMENT IS NOT SUBJECT TO TAX
11 UNDER THIS ARTICLE.
12 (23) A TRANSFER OF A HISTORIC HOMESITE. NO LATER THAN THE
13 DATE OF TRANSFER OF TITLE TO THE REAL PROPERTY, THE PURCHASER
14 SHALL PROVIDE A COPY OF THE COVENANT WITH THE PENNSYLVANIA
15 HISTORICAL AND MUSEUM COMMISSION TO THE SELLER.
16 SECTION 8. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
17 SECTION 3003.14. FAILURE TO FULFILL HISTORIC HOMESITE
18 COVENANT.--(A) THE PENNSYLVANIA HISTORICAL AND MUSEUM
19 COMMISSION SHALL NOTIFY THE DEPARTMENT WHEN AN INDIVIDUAL WHO
20 HAS ENTERED INTO A COVENANT TO REHABILITATE OR RESTORE A
21 HISTORIC HOMESITE UNDER SECTION 201(AAA), 301(I.3) OR 1101-C
22 FAILS TO ABIDE BY THE TERMS OF THE COVENANT.
23 (B) UPON NOTIFICATION BY THE PENNSYLVANIA HISTORICAL AND
24 MUSEUM COMMISSION THAT THE INDIVIDUAL HAS FAILED TO ABIDE BY THE
25 TERMS OF THE COVENANT, THE DEPARTMENT SHALL LEVY A PENALTY
26 AGAINST THAT INDIVIDUAL EQUAL TO TWO HUNDRED PER CENT OF THE TAX
27 BENEFITS GRANTED UNDER SECTIONS 204(61), 303(A)(3)(VIII), 314.1
28 AND 1102-C.3 WITH RESPECT TO THE HISTORIC HOMESITE TO WHICH THE
29 COVENANT APPLIED.
30 (C) THE PENALTY PROVIDED BY SUBSECTION (B), OR ANY PORTION
19990H0948B3702 - 29 -
1 THEREOF, MAY BE ABATED IF THE FAILURE TO ABIDE BY THE TERMS OF
2 THE COVENANT IS JUSTIFIED BY REASON OF CHANGE IN EMPLOYMENT,
3 HEALTH OR, TO THE EXTENT PROVIDED IN REGULATION, UNFORESEEN
4 CIRCUMSTANCES. THE DEPARTMENT AND THE PENNSYLVANIA HISTORICAL
5 AND MUSEUM COMMISSION SHALL PROMULGATE REGULATIONS TO IMPLEMENT
6 THIS SUBSECTION.
7 SECTION 9. THIS ACT SHALL APPLY TO COVENANTS WITH THE
8 PENNSYLVANIA HISTORICAL AND MUSEUM COMMISSION WHICH ARE ENTERED
9 INTO AFTER JUNE 30, 2000.
10 SECTION 10. THIS ACT SHALL TAKE EFFECT JULY 1, 2000, OR
11 IMMEDIATELY, WHICHEVER IS LATER.
B16L72VDL/19990H0948B3702 - 30 -