PRINTER'S NO. 2570
No. 1986 Session of 1997
INTRODUCED BY EVANS, DeWEESE, ITKIN, BELARDI, COY, VEON, STURLA,
BATTISTO, CARN, ROBINSON, TANGRETTI, L. I. COHEN, LEVDANSKY,
PISTELLA, BAKER, TRELLO, CORPORA, TRAVAGLIO, MANDERINO,
SURRA, YOUNGBLOOD, OLASZ, PETRONE, SCRIMENTI, STABACK, ORIE,
BOSCOLA, RUBLEY, VAN HORNE, J. TAYLOR, THOMAS, WASHINGTON AND
CAPPABIANCA, NOVEMBER 18, 1997
REFERRED TO COMMITTEE ON FINANCE, NOVEMBER 18, 1997
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 the neighborhood assistance
11 tax credit.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 1902-A of the act of March 4, 1971
15 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended May
16 7, 1997 (P.L. , No.7), is amended to read:
17 Section 1902-A. Definitions.--The following words, terms and
18 phrases, when used in this article, shall have the meanings
19 ascribed to them in this section, except where the context
20 clearly indicates a different meaning:
1 "Business firm." Any business entity authorized to do
2 business in this Commonwealth and subject to taxes imposed by
3 Article IV, VI, VII, VII-A, VIII, VIII-A, IX, X or XV of this
4 act.
5 "Community services." Any type of counseling and advice,
6 emergency assistance or medical care furnished to individuals or
7 groups in an impoverished area.
8 "Comprehensive service plan." A strategy developed jointly
9 by a neighborhood organization and a sponsoring business firm or
10 private company for the stabilization and improvement of an
11 impoverished area within an urban neighborhood or rural
12 community.
13 "Comprehensive service project." Any activity conducted
14 jointly by a neighborhood organization and a sponsoring business
15 firm which implements a comprehensive service plan.
16 "Crime prevention." Any activity which aids in the reduction
17 of crime in an impoverished area.
18 "Education." Any type of scholastic instruction or
19 scholarship assistance to an individual who resides in an
20 impoverished area that enables that individual to prepare for
21 better life opportunities.
22 "Enterprise zones." Specific locations with identifiable
23 boundaries within impoverished areas which are designated as
24 enterprise zones by the Secretary of Community and Economic
25 Development.
26 "Impoverished area." Any area in this Commonwealth which is
27 certified as such by the Department of Community and Economic
28 Development and the certification is approved by the Governor.
29 Such certification shall be made on the basis of Federal census
30 studies and current indices of social and economic conditions.
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1 "Job training." Any type of instruction to an individual who
2 resides in an impoverished area that enables that individual to
3 acquire vocational skills so that the individual can become
4 employable or be able to seek a higher grade of employment.
5 "Neighborhood assistance." Furnishing financial assistance,
6 labor, material and technical advice to aid in the physical
7 improvement of any part or all of an impoverished area.
8 "Neighborhood organization." Any organization performing
9 community services, offering neighborhood assistance or
10 providing job training, education or crime prevention in an
11 impoverished area, holding a ruling from the Internal Revenue
12 Service of the United States Department of the Treasury that the
13 organization is exempt from income taxation under the provisions
14 of the Internal Revenue Code of 1986 (Public Law 99-514, 26
15 U.S.C. § 1 et seq.) and approved by the Department of Community
16 and Economic Development.
17 "Private company." Any agricultural, industrial,
18 manufacturing or research and development enterprise as defined
19 in section 3 of the act of May 17, 1956 (1955 P.L.1609, No.537),
20 known as the "Pennsylvania Industrial Development Authority
21 Act," or any commercial enterprise as defined in section 3 of
22 the act of August 23, 1967 (P.L.251, No.102), known as the
23 "Economic Development Financing Law."
24 "Public school." Any school within this Commonwealth
25 conducted under the order and superintendence of the Department
26 of Education, including, but not limited to: elementary,
27 intermediate, middle and high schools, vocational-technical
28 schools and intermediate units.
29 "Qualified donation." A donation of new computer software,
30 new computers or new computer peripheral equipment from a
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1 business firm for the direct purpose of providing computer
2 science education. The term also includes a donation of computer
3 science training or teaching services from a business firm to a
4 public school for the direct purpose of providing computer
5 science education.
6 "Qualified investments." Any investments made by a private
7 company which promote community economic development pursuant to
8 a plan which has been developed in cooperation with and approved
9 by a neighborhood organization operating pursuant to a plan for
10 the administration of tax credits approved by the Department of
11 Community and Economic Development.
12 Section 2. Section 1903-A of the act, added June 16, 1994
13 (P.L.279, No.48), is amended to read:
14 Section 1903-A. Public Policy.--It is hereby declared to be
15 public policy of this Commonwealth to encourage investment by
16 business firms in offering neighborhood assistance and providing
17 job training, education, crime prevention and community
18 services, to encourage contributions by business firms to
19 neighborhood organizations which offer and provide such
20 assistance and services and to promote qualified investments
21 made by private companies to rehabilitate, expand or improve
22 buildings or land which promote community economic development
23 and which occur in portions of impoverished areas which have
24 been designated as enterprise zones[.] and to encourage
25 donations by business firms of new computer equipment and
26 training services to public schools in impoverished areas.
27 Section 3. Sections 1904-A and 1905-A of the act, amended
28 May 7, 1997, (P.L., No.7), are amended to read:
29 Section 1904-A. Tax Credit.--(a) (1) Any business firm
30 which engages or contributes to a neighborhood organization
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1 which engages in the activities of providing neighborhood
2 assistance, job training or education for individuals, community
3 services or crime prevention in an impoverished area or private
4 company which makes qualified investment to rehabilitate, expand
5 or improve buildings or land located within portions of
6 impoverished areas which have been designated as enterprise
7 zones shall receive a tax credit as provided in section 1905-A
8 if the secretary annually approves the proposal of such business
9 firm or private company. The proposal shall set forth the
10 program to be conducted, the impoverished area selected, the
11 estimated amount to be invested in the program and the plans for
12 implementing the program.
13 (2) Any business firm which makes a qualified donation to a
14 public school in an impoverished area for the purpose of
15 educating students shall receive a tax credit as provided in
16 section 1905-A if the receiving school and the Secretary of
17 Community and Economic Development annually approve the proposal
18 of such business firm. The proposal shall set forth:
19 (i) The donation to be made.
20 (ii) The impoverished area selected.
21 (iii) The estimated market value of the donation to the
22 public school.
23 (iv) The plans for providing the donation.
24 (b) The secretary is hereby authorized to promulgate rules
25 and regulations for the approval or disapproval of such
26 proposals by business firms or private companies and provide a
27 listing of all applications received and their disposition in
28 each fiscal year to the General Assembly by October 1 of the
29 following fiscal year.
30 (c) The total amount of tax credit granted for programs
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1 approved under this act shall not exceed [eighteen million
2 dollars ($18,000,000)] twenty-two million dollars ($22,000,000)
3 of tax credit in any fiscal year, subject to the following:
4 (1) three million two hundred fifty thousand dollars
5 ($3,250,000) of the total amount of tax credit shall be
6 allocated for comprehensive service projects, but the secretary
7 may reallocate any unused portion of the three million two
8 hundred fifty thousand dollars ($3,250,000) for any other
9 program authorized by this act if insufficient applications are
10 made for comprehensive service projects; and
11 (2) four million dollars ($4,000,000) of the total amount of
12 tax credit shall be set aside exclusively for private companies
13 which make qualified investments to rehabilitate, expand or
14 improve buildings or land which promote community economic
15 development and which occur in portions of impoverished areas
16 which have been designated as enterprise zones.
17 (3) four million dollars ($4,000,000) of the total amount of
18 tax credit shall be set aside exclusively for business firms
19 which make qualified donations, but the Secretary of Community
20 and Economic Development may reallocate any unused portion of
21 the four million dollars ($4,000,000) for any other program
22 authorized by this act if insufficient applications are made for
23 qualified donations.
24 Section 1905-A. Grant of Tax Credit.--The Department of
25 Revenue shall grant a tax credit against any tax due under
26 Article IV, VI, VII, VII-A, VIII, VIII-A, IX, X or XV of this
27 act, or any tax substituted in lieu thereof in an amount which
28 shall not exceed fifty per cent of the total amount invested or
29 of the total market value of qualified donations during the
30 taxable year by the business firm or twenty per cent of
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1 qualified investments by a private company in programs approved
2 pursuant to section 1904-A of this act: Provided, That a tax
3 credit of up to seventy per cent of the total amount invested
4 during the taxable year by a business firm or up to thirty per
5 cent of the amount of qualified investments by a private company
6 may be allowed for investment in programs where activities fall
7 within the scope of special program priorities as defined with
8 the approval of the Governor in regulations promulgated by the
9 secretary. Regulations establishing special program priorities
10 are to be promulgated during the first month of each fiscal year
11 and at such times during the year as the public interest
12 dictates. Such credit shall not exceed two hundred fifty
13 thousand dollars ($250,000) annually, except in the case of
14 comprehensive service projects which shall be allowed an
15 additional credit equal to seventy per cent of the qualifying
16 investments made in comprehensive service projects; however,
17 such additional credit shall not exceed three hundred fifty
18 thousand dollars ($350,000) annually. No tax credit shall be
19 granted to any bank, bank and trust company, insurance company,
20 trust company, national bank, savings association, mutual
21 savings bank or building and loan association for activities
22 that are a part of its normal course of business. Any tax credit
23 not used in the period the investment or donation was made may
24 be carried over for the next five succeeding calendar or fiscal
25 years until the full credit has been allowed. The total amount
26 of all tax credits allowed pursuant to this act shall not exceed
27 [eighteen million dollars ($18,000,000)] twenty-two million
28 dollars ($22,000,000) in any one fiscal year.
29 Section 4. This act shall apply to taxable years beginning
30 after December 31, 1996.
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1 Section 5. This act shall take effect July 1, 1997, or
2 immediately, whichever is later.
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