1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," in neighborhood assistance tax credit, further
11providing for definitions, for tax credit and for grant of
12tax credit.

13The General Assembly of the Commonwealth of Pennsylvania
14hereby enacts as follows:

15Section 1. Section 1902-A of the act of March 4, 1971
16(P.L.6, No.2), known as the Tax Reform Code of 1971, amended May
177, 1997 (P.L.85, No.7), July 25, 2007 (P.L.373, No.55) and July 
182, 2012 (P.L.751, No.85), is amended to read:

19Section 1902-A. Definitions.--The following words, terms and
20phrases, when used in this article, shall have the meanings

1ascribed to them in this section, except where the context
2clearly indicates a different meaning:

3"Affordable home." A home available to a household at or
4below eighty percent of the area median household income whose
5total cost, including cost of utilities, does not exceed thirty
6percent of a household's income.

7"Affordable housing development." A development approved by
8the department, including a rental home, home for sale,
9supportive or special needs housing, cooperative, community land
10trust and resident or nonprofit-owned manufactured home
11community, that:

12(1) increases the number of affordable homes available to
13low-income households by new construction, rehabilitation or
14manufacture;

15(2) preserves affordable homes which would otherwise be
16converted to higher priced homes or demolished;

17(3) provides for sustained affordability; or

18(4) is partially funded through a program of the agency.

19"Affordable housing developer." A business firm or
20neighborhood organization responsible for developing an
21affordable housing development.

22"Agency." The Pennsylvania Housing Finance Agency.

23"Business firm." Any business entity authorized to do
24business in this Commonwealth and subject to taxes imposed by
25Article III, IV, VI, VII, VIII, IX or XV of this act. The term
26shall include a pass-through entity.

27"Charitable food program." An emergency food provider or a
28regional food bank as defined in section 2 of the act of
29December 11, 1992 (P.L.807, No.129), known as the "State Food
30Purchase Program Act."

1"Community services." Any type of counseling and advice,
2legal services, emergency assistance, food assistance or medical
3care furnished to individuals or groups in an impoverished area.

4"Comprehensive service plan." A strategy developed jointly
5by a neighborhood organization and a sponsoring business firm or
6private company for the stabilization and improvement of an
7impoverished area within an urban neighborhood or rural
8community.

9"Comprehensive service project." Any activity conducted
10jointly by a neighborhood organization and a sponsoring business
11firm which implements a comprehensive service plan.

12"Crime prevention." Any activity which aids in the reduction
13of crime in an impoverished area.

14"Department." The Department of Community and Economic
15Development of the Commonwealth.

16"Education." Any type of scholastic instruction or
17scholarship assistance to an individual who resides in an
18impoverished area that enables that individual to prepare for
19better life opportunities.

20"Enterprise zones." Specific locations with identifiable
21boundaries within impoverished areas which are designated as
22enterprise zones by the Secretary of Community and Economic
23Development.

24"Impoverished area." Any area in this Commonwealth which is
25certified as such by the Department of Community and Economic
26Development and the certification is approved by the Governor.
27Such certification shall be made on the basis of Federal census
28studies and current indices of social and economic conditions.

29"Intermediary." A multicounty or Statewide organization that
30meets all of the following:

1(1) Holds a ruling from the Internal Revenue Service of the
2United States Department of the Treasury that the organization
3is exempt from income taxation under the provisions of the
4Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1
5et seq.).

6(2) Is approved by the Department of Community and Economic
7Development.

8(3) Solicits contributions under this act and distributes
9the funds as appropriate to a neighborhood organization in this
10Commonwealth, if the following apply:

11(i) At least sixty per cent of the funds go to a
12neighborhood organization in an area that has underutilized
13neighborhood assistance tax credits on average over the
14preceding three years.

15(ii) The intermediary retains not more than ten per cent of
16the contributions received to administer the program.

17"Job training." Any type of instruction to an individual who
18resides in an impoverished area that enables that individual to
19acquire vocational skills so that the individual can become
20employable or be able to seek a higher grade of employment.

21"Neighborhood assistance." Furnishing financial assistance,
22labor, material and technical advice to aid in the physical
23improvement of any part or all of an impoverished area.

24"Neighborhood organization." Any organization performing
25community services, offering neighborhood assistance or
26providing job training, education, legal services or crime
27prevention in an impoverished area, or providing housing 
28assistance to vulnerable populations, or developing affordable 
29homes holding a ruling from the Internal Revenue Service of the
30United States Department of the Treasury that the organization

1is exempt from income taxation under the provisions of the
2Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1
3et seq.) and approved by the Department of [Community Affairs]
4Community and Economic Development.

5"Pass-through entity." A partnership as defined under
6section 301(n.0) or a Pennsylvania S corporation as defined
7under section 301(n.1).

8"Private company." Any agricultural, industrial,
9manufacturing or research and development enterprise as defined
10in section 3 of the act of May 17, 1956 (1955 P.L.1609, No.537),
11known as the "Pennsylvania Industrial Development Authority
12Act," or any commercial enterprise as defined in section 3 of
13the act of August 23, 1967 (P.L.251, No.102), known as the
14"Economic Development Financing Law."

15"Qualified investments." Any investments made by a private
16company which promote community economic development pursuant to
17a plan which has been developed in cooperation with and approved
18by a neighborhood organization operating pursuant to a plan for
19the administration of tax credits approved by the Department of
20Community and Economic Development.

21"Secretary." The Secretary of Community and Economic
22Development of the Commonwealth.

23"Sustained affordability." A legally binding assurance that
24a home will continue to be rented or resold for prices
25affordable to a household at or below eighty per cent of the
26area household median income, adjusted for number of bedrooms
27and appropriate household size, for at least fifty years after
28the initial occupancy of the affordable housing development.

29Section 2. Section 1904-A of the act, amended July 25, 2007
30(P.L.373, No.55) and July 2, 2012 (P.L.751, No.85), is amended

1to read:

2Section 1904-A. Tax Credit.--(a) [Any business firm which
3engages or contributes to a neighborhood organization which
4engages in the activities of providing neighborhood assistance,
5comprehensive service projects, job training or education for
6individuals, community services or crime prevention in an
7impoverished area or private company which makes qualified
8investment to rehabilitate, expand or improve buildings or land
9located within portions of impoverished areas which have been
10designated as enterprise zones shall receive a tax credit as
11provided in section 1905-A if the secretary annually approves
12the proposal of such business firm or private company. The
13proposal shall set forth the program to be conducted, the
14impoverished area selected, the estimated amount to be invested
15in the program and the plans for implementing the program.]

16(1) The following shall be eligible for a tax credit
17provided under section 1905-A if the secretary approves the
18proposal of the business firm or private company:

19(i) A business firm which engages or contributes to any of
20the following:

21(A) An intermediary or neighborhood organization, which
22engages in the activities of providing:

23(I) neighborhood assistance, a comprehensive service
24project, job training or education for individuals, community
25services or crime prevention in an impoverished area; or

26(II) housing assistance to a vulnerable population.

27(B) An affordable housing developer for the purposes of an
28affordable housing development.

29(ii) A private company which makes a qualified investment to
30rehabilitate, expand or improve a building or land located

1within a portion of an impoverished area which has been
2designated as an enterprise zone.

3(2) A proposal under paragraph (1) must include the
4following:

5(i) The program conducted.

6(ii) The impoverished area selected, if any.

7(iii) The estimated amount to be invested in the program.

8(iv) The plans for implementing for the program.

9(b) The secretary is hereby authorized to promulgate rules
10and regulations for the approval or disapproval of such
11proposals by business firms or private companies. The secretary
12shall provide a report listing [of] all applications received
13and their disposition in each fiscal year to the General
14Assembly by October 1 of the following fiscal year. The
15secretary's report shall include all taxpayers utilizing the
16credit [and], the amount of credits approved, sold or assigned, 
17the recipient organization, if any, the name of the project and 
18a brief description of the project. Notwithstanding any law
19providing for the confidentiality of tax records, the
20information in the report shall be public information, and all
21report information shall be posted on the secretary's Internet
22website.

23(b.1) The secretary shall take into special consideration,
24when approving applications for neighborhood assistance tax
25credits, applications which involve:

26(1) multiple projects in various markets throughout this
27Commonwealth; [and]

28(2) charitable food programs[.]; and

29(3) programs to provide housing assistance to vulnerable
30populations.

1(b.2) The secretary, in cooperation with the Department of
2Agriculture, shall promulgate guidelines for the approval or
3disapproval of applications for tax credits by business firms
4that contribute food or money to charitable food programs.

5(b.3) The secretary, in cooperation with the Department of
6Military and Veterans Affairs, shall promulgate guidelines for
7the approval or disapproval of applications for tax credits by
8business firms that contribute to programs to provide housing
9assistance to vulnerable populations.

10(c) The total amount of tax credit granted for programs
11approved under this act shall not exceed [eighteen million
12dollars ($18,000,000)] thirty-six million dollars ($36,000,000)
13of tax credit in any fiscal year.

14(d) A taxpayer, upon application to and approval by the
15[Department of Community and Economic Development] department,
16may sell or assign, in whole or in part, a neighborhood
17assistance tax credit granted to the business firm under this
18article if no claim for allowance of the credit is filed within
19one year from the date the credit is granted by the Department
20of Revenue under section 1905-A. The [Department of Community
21and Economic Development] department and the Department of
22Revenue shall jointly promulgate guidelines for the approval of
23applications under this subsection.

24(e) The purchaser or assignee of a neighborhood assistance
25tax credit under subsection (d) shall immediately claim the
26credit in the taxable year in which the purchase or assignment
27is made. The purchaser or assignee may not carry over, carry
28back, obtain a refund of or sell or assign the neighborhood
29assistance tax credit. The purchaser or assignee shall notify
30the Department of Revenue of the seller or assignor of the

1neighborhood assistance tax credit in compliance with procedures
2specified by the Department of Revenue.

3(f) The neighborhood assistance tax credit approved by the
4[Department of Community and Economic Development] department
5shall be applied against the business firm's tax liability for
6the taxes under section 1905-A for the current taxable year as
7of the date on which the credit was approved before the
8neighborhood assistance tax credit may be carried over, sold or
9assigned.

10Section 3. Section 1905-A of the act, amended July 25, 2007
11(P.L.373, No.55), is amended to read:

12Section 1905-A. Grant of Tax Credit.--[The] (a) Except as 
13provided under subsections (b) and (c), the Department of
14Revenue shall grant a tax credit against any tax due under
15Article III, IV, VI, VII, VIII, IX or XV of this act, or any tax
16substituted in lieu thereof in an amount which shall not exceed
17[fifty-five] seventy-five per cent of the total amount
18contributed during the taxable year by a business firm or
19twenty-five per cent of qualified investments by a private
20company in programs approved pursuant to section 1904-A of this
21act[: Provided, That a].

22(b) A tax credit of up to [seventy-five] ninety per cent of
23the total amount contributed during the taxable year by a
24business firm or up to thirty-five per cent of the amount of
25qualified investments by a private company may be allowed for
26investment in programs where activities fall within the scope of
27special program priorities as defined with the approval of the
28Governor in regulations promulgated by the secretary[, and
29Provided further, That a].

30(c) A tax credit of up to [seventy-five] ninety per cent of

1the total amount contributed during the taxable year by a
2business firm in comprehensive service projects with five-year
3commitments and up to [eighty] one hundred per cent of the total
4amount contributed during the taxable year by a business firm in
5comprehensive service projects with six-year or longer
6commitments shall be granted. Such credit shall not exceed five
7hundred thousand dollars ($500,000) annually for contributions
8or investments to fewer than four projects [or one million two
9hundred fifty thousand dollars ($1,250,000) annually for
10contributions or investments to four or more projects], and two 
11million dollars ($2,000,000) annually for contributions or 
12investments to four or more projects.

13(d) No tax credit shall be granted to any bank, bank and
14trust company, insurance company, trust company, national bank,
15savings association, mutual savings bank or building and loan
16association for activities that are a part of its normal course
17of business.

18(e) Any tax credit not used in the period the contribution
19or investment was made may be carried over for the next five
20succeeding calendar or fiscal years until the full credit has
21been allowed.

22(f) A business firm shall not be entitled to carry back or
23obtain a refund of an unused tax credit.

24(g) The total amount of all tax credits allowed pursuant to
25this act shall not exceed [eighteen] thirty-six million dollars
26[($18,000,000)] ($36,000,000) in any one fiscal year. Of that
27amount[, two]:

28(1) Two million dollars ($2,000,000) shall be allocated
29exclusively for pass-through entities. However, if the total
30amounts allocated to either the group of applicants, exclusive

1of pass-through entities, or the group of pass-through entity
2applicants is not approved in any fiscal year, the unused
3portion shall become available for use by the other group of
4qualifying taxpayers.

5(2) Ten million dollars ($10,000,000) shall be allocated
6exclusively for affordable housing developments. The following
7shall apply:

8(i) A tax credit of ninety per cent of the total amount
9contributed during the taxable year by a business firm may be
10allowed for investment in an affordable housing development.

11(ii) Affordable housing developers which are neighborhood
12organizations and affordable housing developers which are
13business developers shall share equally in the tax credit
14allocations, except that in any year when insufficient qualified
15applications are received during the first six (6) months of the
16year for either neighborhood organization developments or
17business entity developments, an unallocated tax credit shall be
18made available to all affordable housing developments for the
19remainder of the year.

20(iii) If qualified applications received by the department
21by the end of the ninth month of the year are less than ten
22million dollars ($10,000,000) the remaining amount of tax
23credits shall be made available for all eligible activities
24under this act.

25(iv) The department shall engage in outreach and work with
26intermediaries to ensure that all areas of this Commonwealth
27participate to the greatest extent possible.

28(v) The secretary, in cooperation with the agency, shall
29promulgate guidelines for the approval or disapproval of
30applications for tax credits by business firms that contribute

1to affordable housing developers for the purpose of affordable
2housing developments. The approval or disapproval of an
3application for tax credit shall be made by the department.

4(vi) A contribution which is made to an affordable housing
5developer for the purpose of an affordable housing development
6may be invested in or lent to the affordable housing development
7in a manner which maximizes private investment in the
8development.

9(vii) At least five million dollars ($5,000,000) of the tax
10credit authorized by this subsection must support an affordable
11housing development for households at or below fifty per cent of
12the area median household income, as determined by the most
13recent American Community Survey for the area.

14(viii) A tax credit under this section may not exceed one
15million dollars ($1,000,000) annually for each contribution to
16an affordable housing developer for the purpose of an affordable
17housing development.

18(3) Three million dollars ($3,000,000) shall be allocated
19exclusively for programs to provide housing assistance to
20vulnerable populations. A tax credit of ninety per cent of the
21total amount contributed during the taxable year by a business
22firm may be allowed for contributions under this paragraph.

23Section 4. This act shall take effect in 60 days.