PRIOR PRINTER'S NO. 3178 PRINTER'S NO. 3622
No. 2288 Session of 2004
INTRODUCED BY REED, TURZAI, THOMAS, GOOD, ALLEN, BAKER, BALDWIN,
BOYD, CAPPELLI, CAUSER, COLEMAN, CORRIGAN, DALLY, DENLINGER,
FAIRCHILD, GINGRICH, GOODMAN, HARRIS, HENNESSEY, HICKERNELL,
HUTCHINSON, KENNEY, METCALFE, NICKOL, PAYNE, PETRARCA,
PICKETT, REICHLEY, SAYLOR, SCAVELLO, SCHRODER, STAIRS, STERN,
R. STEVENSON, T. STEVENSON, E. Z. TAYLOR, TIGUE, WILT,
YOUNGBLOOD, ZUG, CREIGHTON, WANSACZ, FORCIER, WATSON, HORSEY
AND O'NEILL, JANUARY 6, 2004
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, MARCH 31, 2004
AN ACT
1 Establishing the Career Development Credit Program; and <--
2 providing for a fiscal cap, for carryforward and carryback
3 provisions, for assignment of credit, for credit against
4 qualified tax liability, for qualified employee, for
5 qualified and unqualified career development training
6 programs, for location of qualified career development
7 training programs, for qualified and unqualified training
8 costs, for application, assignment and allocation of capped
9 credits, for Pennsylvania S corporation shareholder and
10 limited liability company member pass-through, for reporting
11 requirements and for recapture and forfeiture.
12 TABLE OF CONTENTS
13 Section 1. Short title.
14 Section 2. Establishment.
15 Section 3. Purpose of act.
16 Section 4. Definitions.
17 Section 5. Fiscal cap.
18 Section 6. Assignment of credit.
19 Section 7. Credit against qualified tax liability.
1 Section 8. Qualified employee.
2 Section 9. Qualified career development training programs.
3 Section 10. Programs that do not qualify as career
4 development training programs.
5 Section 11. Required location of qualified career development
6 training programs.
7 Section 12. Qualified training costs.
8 Section 13. Training costs that are not qualified.
9 Section 14. Application for capped credits.
10 Section 15. Pennsylvania S corporation shareholder
11 pass-through.
12 Section 16. Pennsylvania limited liability company member
13 pass-through.
14 Section 17. Reporting requirements.
15 Section 18. Recapture provisions.
16 Section 19. Forfeiture provisions.
17 Section 20. Effective date.
18 AMENDING THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), ENTITLED "AN <--
19 ACT RELATING TO TAX REFORM AND STATE TAXATION BY CODIFYING
20 AND ENUMERATING CERTAIN SUBJECTS OF TAXATION AND IMPOSING
21 TAXES THEREON; PROVIDING PROCEDURES FOR THE PAYMENT,
22 COLLECTION, ADMINISTRATION AND ENFORCEMENT THEREOF; PROVIDING
23 FOR TAX CREDITS IN CERTAIN CASES; CONFERRING POWERS AND
24 IMPOSING DUTIES UPON THE DEPARTMENT OF REVENUE, CERTAIN
25 EMPLOYERS, FIDUCIARIES, INDIVIDUALS, PERSONS, CORPORATIONS
26 AND OTHER ENTITIES; PRESCRIBING CRIMES, OFFENSES AND
27 PENALTIES," ESTABLISHING A CAREER DEVELOPMENT TAX CREDIT.
28 The General Assembly of the Commonwealth of Pennsylvania
29 hereby enacts as follows:
30 Section 1. Short title. <--
31 This act shall be known and may be cited as the Career
32 Development Credit Program Act.
33 Section 2. Establishment.
34 The Career Development Credit Program is hereby established
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1 in the Department of Revenue.
2 Section 3. Purpose of act.
3 Currently, Federal and State taxpayers provide about
4 $1,200,000,000 annually into work force development programs
5 aimed at assisting Pennsylvania businesses in training and
6 finding workers and assisting those workers in training and
7 finding jobs. The programs are administered by five State
8 agencies and consist of 49 separate programs for work force
9 development, job training and education. That is almost double
10 the number of similar programs the State administered only 15
11 years ago. The business community believes that employers are
12 best able to recognize deficiency of job skills and that the
13 government should fund employers' training needs to reduce
14 training costs.
15 Section 4. Definitions.
16 The following words and phrases when used in this act shall
17 have the meanings given to them in this section unless the
18 context clearly indicates otherwise:
19 "CDC." The Career Development Credit Program established in
20 section 2.
21 "Department." The Department of Revenue of the Commonwealth.
22 "Highly compensated individual."
23 (1) An individual who is one of the following:
24 (i) an officer;
25 (ii) a shareholder owning more than 5% of the voting
26 power or value of all classes of stock of the employer;
27 or
28 (iii) an individual who, for the preceding taxable
29 year:
30 (A) received compensation from the employer in
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1 excess of the Federal limitation (after adjustment by
2 the Secretary of the United States Treasury for
3 inflation) set forth in section 414(q)(1)(B) of the
4 Internal Revenue Code of 1986 (Public Law 99-514, 26
5 U.S.C. § 414(q)(1)(B), 1 et seq.); or
6 (B) is in the group consisting of the top 20% of
7 all full-time employees of the employer with at least
8 three years of service when ranked on the basis of
9 compensation paid during the taxable year.
10 (2) A partner or self-employed individual.
11 "LLC." Limited liability company.
12 "Secretary." The Secretary of Revenue of the Commonwealth.
13 Section 5. Fiscal cap.
14 CDC funding shall be capped at $20,000,000 annually. Unused
15 credits may be carried forward for 15 taxable years. There are
16 no carryback provisions.
17 Section 6. Assignment of credit.
18 The amount of the CDC that a taxpayer may use against any one
19 qualified tax liability during any year may not exceed 50% of
20 that tax liability for that taxable year.
21 Section 7. Credit against qualified tax liability.
22 A CDC will be credited against the following liability for
23 taxes: corporate net income tax, capital stock and franchise
24 tax, the personal income tax liability on a shareholder pro rata
25 portion of its ownership of a Pennsylvania S corporation, and
26 personal income tax liability on a member's pro rata portion of
27 its ownership of a limited liability company.
28 Section 8. Qualified employee.
29 The credit for worker training is allowed for an employee who
30 is a Commonwealth resident, is employed in this Commonwealth by
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1 the taxpayer, averages at least 30 hours of work per week (at
2 the time training commences and for a period of 12 months
3 following the employee's completion of the program) and is in a
4 position that is not classified as one of the following:
5 (1) highly compensated;
6 (2) physician;
7 (3) veterinarian;
8 (4) legal;
9 (5) accounting; or
10 (6) executive.
11 Section 9. Qualified career development training programs.
12 Qualified training programs are those that meet recognized
13 industry standards or recognized basic skill levels required by
14 the firms, thus increasing the employee's potential for
15 continued employment or work performance. If the eligible
16 training program requires activities to be conducted while on
17 the job, the employee must be under direct supervision during
18 the training and no more than 50% of the employee's time may be
19 spent fulfilling normal employment functions. Training program
20 activities must be directly related to the eligible employee's
21 current job function.
22 Section 10. Programs that do not qualify as career development
23 training programs.
24 Executive and personal enrichment programs, orientation
25 programs, general health programs and seminars and conferences
26 not directly related to the employee's job description do not
27 qualify as career development training programs.
28 Section 11. Required location of qualified career development
29 training programs.
30 Training must take place within this Commonwealth unless
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1 training is not available in this Commonwealth or is available
2 at a lower price out of this Commonwealth.
3 Section 12. Qualified training costs.
4 Wages paid to eligible employees during normal working hours
5 while participating in an eligible training program are eligible
6 training costs. Eligible training expenses include: preskill and
7 postskill assessment, direct costs of instructors, instructional
8 materials, instructional supplies, instructional media,
9 necessary training equipment, tuition reimbursement, travel
10 costs to and from class and other instructional activities. An
11 eligible training expense would qualify as a business or
12 education deduction for Commonwealth business taxation purposes
13 but would be limited to expenses for career development
14 training.
15 Section 13. Training costs that are not qualified.
16 The following training costs are not qualified under this
17 act:
18 (1) Expenditures either reimbursed or subject to
19 reimbursement through any Federal or State training program.
20 (2) Federal, State or local grants or other payments
21 received by the employer to provide training or retraining.
22 (3) Costs for consumables (calculators, pencils, etc.).
23 (4) Employers' capital expenses.
24 (5) Equipment, materials and software used beyond the
25 training program.
26 (6) Expenses for out-of-State travel.
27 (7) Convention or conference expenses, unless directly
28 related to a qualifying training program.
29 Section 14. Application for capped credits.
30 (a) General rule.--A taxpayer who incurs a Commonwealth
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1 career development or job training expense in a taxable year may
2 apply for a CDC by submitting an application to the department
3 by September 15. The application must contain the qualified
4 career development and job training expenses incurred in the
5 taxable year that ended in the prior calendar year.
6 (b) Assignment of capped credits.--By December 15 of the
7 calendar year, the department shall notify the taxpayer of the
8 amount of the approved taxpayer's CDC.
9 (c) Allocation of capped credits.--The allocation of capped
10 credits is determined by the following formula: taxpayer's
11 career development credit equals the amount allocated for those
12 credits times career development credits applied for by
13 applicant, divided by the total of all career development
14 credits applied for by all applicants.
15 Section 15. Pennsylvania S corporation shareholder pass-
16 through.
17 If a Pennsylvania S corporation does not have an eligible tax
18 liability against which the CDC may be applied, a shareholder of
19 the Pennsylvania S corporation is entitled to a CDC equal to the
20 CDC determined for the Pennsylvania S corporation for the
21 taxable year multiplied by the percentage of the Pennsylvania S
22 corporation's distributive income to which the shareholder is
23 entitled. A Pennsylvania S corporation and a shareholder of a
24 Pennsylvania S corporation may not claim a credit under this
25 article for the same qualified job training expense.
26 Section 16. Pennsylvania limited liability company member pass-
27 through.
28 If a Pennsylvania limited liability company (LLC) does not
29 have an eligible tax liability against which the CDC may be
30 applied, a member of the Pennsylvania LLC is entitled to a CDC
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1 equal to the CDC determined for the Pennsylvania LLC for the
2 taxable year multiplied by the percentage of the Pennsylvania
3 LLC's distributive income to which the member is entitled. A
4 Pennsylvania LLC and a member of a Pennsylvania LLC may not
5 claim a credit under this article for the same qualified job-
6 training expense.
7 Section 17. Reporting requirements.
8 The secretary shall submit an annual report to the General
9 Assembly indicating the effectiveness of the credit no later
10 than March 15 following the year in which the credits were
11 approved. The report shall include the number of taxpayers
12 utilizing the credit, the amount approved and utilized and any
13 suggestions for improvements.
14 Section 18. Recapture provisions.
15 The credit allowed shall be recaptured if the employee
16 involuntarily, other than as the result of death or disability,
17 no longer qualifies as a qualifying employee of the employer or
18 if the employer terminates the employee at any time during the
19 12-month period following the employee's completion of the
20 training program.
21 Section 19. Forfeiture provisions.
22 A taxpayer forfeits a credit allowed under this act if the
23 taxpayer was not eligible for the credit at the time the
24 taxpayer applied for the credit. A taxpayer that forfeits a
25 credit under this act is liable for all past taxes avoided as a
26 result of the credit.
27 Section 20. Effective date.
28 This act shall take effect in 60 days.
29 SECTION 1. THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS <--
30 THE TAX REFORM CODE OF 1971, IS AMENDED BY ADDING AN ARTICLE TO
20040H2288B3622 - 8 -
1 READ:
2 ARTICLE XVII-C
3 CAREER DEVELOPMENT TAX CREDIT
4 SECTION 1701-C. SHORT TITLE OF ARTICLE.
5 THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS THE CAREER
6 DEVELOPMENT TAX CREDIT ACT.
7 SECTION 1702-C. DEFINITIONS.
8 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ARTICLE
9 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
10 CONTEXT CLEARLY INDICATES OTHERWISE:
11 "CAREER DEVELOPMENT TAX CREDIT," OR "TAX CREDIT." THE CREDIT
12 PROVIDED UNDER THIS ARTICLE.
13 "DEPARTMENT." THE DEPARTMENT OF REVENUE OF THE COMMONWEALTH.
14 "NONQUALIFIED INDIVIDUAL."
15 (1) AN INDIVIDUAL WHO IS ONE OF THE FOLLOWING:
16 (I) AN OFFICER OF A BUSINESS ENTITY;
17 (II) A MEMBER OR SHAREHOLDER OWNING MORE THAN 5% OF
18 THE VOTING POWER OR VALUE OF ALL CLASSES OF STOCK OF A
19 BUSINESS ENTITY; OR
20 (III) AN INDIVIDUAL WHO, FOR THE PRECEDING TAXABLE
21 YEAR:
22 (A) RECEIVED COMPENSATION FROM THE EMPLOYER IN
23 EXCESS OF THE FEDERAL LIMITATION, AFTER ADJUSTMENT BY
24 THE SECRETARY OF THE UNITED STATES TREASURY FOR
25 INFLATION, SET FORTH IN SECTION 414(Q)(1)(B) OF THE
26 INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26
27 U.S.C. § 414(Q)(1)(B); OR
28 (B) IS IN THE GROUP CONSISTING OF THE TOP 20% OF
29 ALL FULL-TIME EMPLOYEES OF THE EMPLOYER WITH AT LEAST
30 THREE YEARS OF SERVICE WHEN RANKED ON THE BASIS OF
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1 COMPENSATION PAID DURING THE TAXABLE YEAR.
2 (2) A PARTNER OR SELF-EMPLOYED INDIVIDUAL.
3 (3) A PHYSICIAN.
4 (4) A VETERINARIAN.
5 (5) AN ATTORNEY.
6 (6) AN EXECUTIVE.
7 "NONQUALIFIED TRAINING EXPENSE." ALL OF THE FOLLOWING:
8 (1) EXPENDITURES EITHER REIMBURSED OR SUBJECT TO
9 REIMBURSEMENT THROUGH ANY FEDERAL OR STATE TRAINING PROGRAM.
10 (2) FEDERAL, STATE OR LOCAL GRANTS OR OTHER PAYMENTS TO
11 PROVIDE TRAINING OR RETRAINING.
12 (3) CAPITAL EXPENSES.
13 (4) EQUIPMENT, MATERIALS AND SOFTWARE USED BEYOND THE
14 TRAINING PROGRAM.
15 (5) EXPENSES FOR OUT-OF-STATE TRAVEL.
16 (6) CONVENTION OR CONFERENCE EXPENSES, UNLESS DIRECTLY
17 RELATED TO A QUALIFIED CAREER DEVELOPMENT TRAINING PROGRAM.
18 "QUALIFIED CAREER DEVELOPMENT TRAINING PROGRAM." A TRAINING
19 PROGRAM THAT IS CERTIFIED BY THE DEPARTMENT OF LABOR AND
20 INDUSTRY AS MEETING RECOGNIZED INDUSTRY STANDARDS, DESIGNED TO
21 MEET THE SPECIAL REQUIREMENTS OF AN EMPLOYER, AND CONDUCTED WITH
22 A COMMITMENT BY THE EMPLOYER TO CONTINUE TO EMPLOY AN INDIVIDUAL
23 ON SUCCESSFUL COMPLETION OF THE TRAINING. THE TERM DOES NOT
24 INCLUDE THE FOLLOWING:
25 (1) ANY PROGRAM IN WHICH 50% OR MORE OF THE EMPLOYEE'S
26 TIME IS SPENT ON ACTIVITIES OTHER THAN THOSE DIRECTLY RELATED
27 TO THE TRAINING PROGRAM.
28 (2) AN EXECUTIVE TRAINING PROGRAM.
29 (3) A PERSONAL ENRICHMENT PROGRAM.
30 (4) A GENERAL HEALTH PROGRAM.
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1 (5) A SEMINAR OR CONFERENCE UNLESS DIRECTLY RELATED TO
2 THE EMPLOYEE'S JOB REQUIREMENTS.
3 "QUALIFIED EMPLOYEE." A COMMONWEALTH RESIDENT WHO IS
4 EMPLOYED IN THIS COMMONWEALTH BY A TAXPAYER AND WHO AVERAGES AT
5 LEAST 30 HOURS OF WORK PER WEEK AT THE TIME TRAINING COMMENCES
6 AND FOR A PERIOD OF 12 MONTHS FOLLOWING THE EMPLOYEE'S
7 COMPLETION OF THE QUALIFIED CAREER DEVELOPMENT PROGRAM. THE TERM
8 EXCLUDES AN INDIVIDUAL WHO IS A NONQUALIFIED INDIVIDUAL.
9 "QUALIFIED TAX LIABILITY." THE LIABILITY FOR TAXES IMPOSED
10 UNDER ARTICLE III, IV OR VI. THE TERM SHALL INCLUDE THE
11 LIABILITY FOR TAXES IMPOSED UNDER ARTICLE III ON A SHAREHOLDER
12 OF A PENNSYLVANIA S CORPORATION.
13 "QUALIFIED TRAINING EXPENSE." WAGES PAID TO A QUALIFIED
14 EMPLOYEE DURING NORMAL WORKING HOURS WHILE PARTICIPATING IN A
15 QUALIFIED CAREER DEVELOPMENT TRAINING PROGRAM. THE TERM INCLUDES
16 PRESKILL AND POSTSKILL ASSESSMENT, DIRECT COSTS OF INSTRUCTORS,
17 INSTRUCTIONAL MATERIALS, INSTRUCTIONAL SUPPLIES, INSTRUCTIONAL
18 MEDIA, NECESSARY TRAINING EQUIPMENT, TUITION REIMBURSEMENT,
19 TRAVEL COSTS TO AND FROM CLASS AND OTHER INSTRUCTIONAL
20 ACTIVITIES. THE TERM EXCLUDES NONQUALIFIED TRAINING EXPENSE.
21 "SECRETARY." THE SECRETARY OF REVENUE OF THE COMMONWEALTH.
22 "TAXPAYER." AN ENTITY SUBJECT TO TAX UNDER ARTICLE III, IV
23 OR VI. THE TERM SHALL INCLUDE THE SHAREHOLDER OF A PENNSYLVANIA
24 S CORPORATION THAT RECEIVES A CAREER DEVELOPMENT TAX CREDIT OR
25 THE MEMBER OF A LIMITED LIABILITY COMPANY THAT RECEIVES A CAREER
26 DEVELOPMENT TAX CREDIT.
27 SECTION 1703-C. TAX CREDIT FOR QUALIFIED TRAINING EXPENSES.
28 (A) GENERAL RULE.--A TAXPAYER WHO INCURS QUALIFIED TRAINING
29 EXPENSES IN A TAXABLE YEAR MAY APPLY FOR A CAREER DEVELOPMENT
30 TAX CREDIT AS PROVIDED IN THIS ARTICLE. BY SEPTEMBER 15, A
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1 TAXPAYER MUST SUBMIT AN APPLICATION TO THE DEPARTMENT FOR
2 QUALIFIED TRAINING EXPENSE INCURRED IN THE TAXABLE YEAR THAT
3 ENDED IN THE PRIOR CALENDAR YEAR.
4 (B) AMOUNT OF TAX CREDIT.--A TAXPAYER THAT IS QUALIFIED
5 UNDER SUBSECTION (A) SHALL RECEIVE A CAREER DEVELOPMENT TAX
6 CREDIT FOR THE TAXABLE YEAR IN THE AMOUNT OF 25% OF THE
7 TAXPAYER'S TOTAL QUALIFIED TRAINING EXPENSE FOR THE TAXABLE
8 YEAR.
9 (C) NOTIFICATION OF APPROVED TAX CREDIT.--BY DECEMBER 15 OF
10 THE CALENDAR YEAR FOLLOWING THE CLOSE OF THE TAXABLE YEAR DURING
11 WHICH THE PENNSYLVANIA QUALIFIED TRAINING EXPENSE WAS INCURRED,
12 THE DEPARTMENT SHALL NOTIFY THE TAXPAYER OF THE AMOUNT OF THE
13 TAXPAYER'S CAREER DEVELOPMENT TAX CREDIT APPROVED BY THE
14 DEPARTMENT.
15 SECTION 1704-C. CARRYOVER, CARRYBACK, REFUND AND ASSIGNMENT OF
16 TAX CREDIT.
17 (A) GENERAL RULE.--IF THE TAXPAYER CANNOT USE THE ENTIRE
18 AMOUNT OF THE CAREER DEVELOPMENT TAX CREDIT FOR THE TAXABLE YEAR
19 IN WHICH THE CAREER DEVELOPMENT TAX CREDIT IS FIRST APPROVED,
20 THEN THE EXCESS MAY BE CARRIED OVER TO SUCCEEDING TAXABLE YEARS
21 AND USED AS A CREDIT AGAINST THE QUALIFIED TAX LIABILITY OF THE
22 TAXPAYER FOR THOSE TAXABLE YEARS. EACH TIME THAT THE CAREER
23 DEVELOPMENT TAX CREDIT IS CARRIED OVER TO A SUCCEEDING TAXABLE
24 YEAR, IT IS TO BE REDUCED BY THE AMOUNT THAT WAS USED AS A
25 CREDIT DURING THE IMMEDIATELY PRECEDING TAXABLE YEAR. THE CAREER
26 DEVELOPMENT TAX CREDIT PROVIDED BY THIS ARTICLE MAY BE CARRIED
27 OVER AND APPLIED TO SUCCEEDING TAXABLE YEARS FOR NO MORE THAN 15
28 TAXABLE YEARS FOLLOWING THE FIRST TAXABLE YEAR FOR WHICH THE
29 TAXPAYER WAS ENTITLED TO CLAIM THE CREDIT.
30 (B) TAXABLE YEAR IN WHICH TAX CREDIT APPLIED.--A CAREER
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1 DEVELOPMENT TAX CREDIT APPROVED BY THE DEPARTMENT FOR QUALIFIED
2 TRAINING EXPENSES IN A TAXABLE YEAR FIRST SHALL BE APPLIED
3 AGAINST THE TAXPAYER'S QUALIFIED TAX LIABILITY FOR THE CURRENT
4 TAXABLE YEAR AS OF THE DATE ON WHICH THE CREDIT WAS APPROVED
5 BEFORE THE CAREER DEVELOPMENT TAX CREDIT IS APPLIED AGAINST ANY
6 TAX LIABILITY UNDER SUBSECTION (A).
7 (C) LIMITATION.--A TAXPAYER IS NOT ENTITLED TO CARRY BACK OR
8 OBTAIN A REFUND OF AN UNUSED CAREER DEVELOPMENT TAX CREDIT.
9 SECTION 1705-C. TIME LIMITATIONS.
10 A TAXPAYER IS NOT ENTITLED TO A CAREER DEVELOPMENT TAX CREDIT
11 FOR QUALIFIED TRAINING EXPENSES INCURRED IN TAXABLE YEARS ENDING
12 AFTER DECEMBER 31, 2008.
13 SECTION 1706-C. LIMITATION ON TAX CREDITS.
14 (A) GENERAL RULE.--THE TOTAL AMOUNT OF CAREER DEVELOPMENT
15 TAX CREDITS APPROVED BY THE DEPARTMENT SHALL NOT EXCEED
16 $20,000,000 IN ANY FISCAL YEAR.
17 (B) PRORATION REQUIRED.--IF THE TOTAL AMOUNT OF CAREER
18 DEVELOPMENT TAX CREDITS APPLIED FOR BY ALL TAXPAYERS EXCEEDS THE
19 AMOUNT ALLOCATED FOR THOSE CREDITS, THEN THE CAREER DEVELOPMENT
20 TAX CREDIT TO BE RECEIVED BY EACH APPLICANT SHALL BE PRORATED BY
21 THE DEPARTMENT AMONG ALL APPLICANTS WHO HAVE QUALIFIED FOR THE
22 TAX CREDIT.
23 SECTION 1707-C. PENNSYLVANIA S CORPORATION SHAREHOLDER PASS-
24 THROUGH.
25 (A) GENERAL RULE.--IF A PENNSYLVANIA S CORPORATION DOES NOT
26 HAVE AN ELIGIBLE TAX LIABILITY AGAINST WHICH THE CAREER
27 DEVELOPMENT TAX CREDIT MAY BE APPLIED, A SHAREHOLDER OF THE
28 PENNSYLVANIA S CORPORATION IS ENTITLED TO A TAX CREDIT EQUAL TO
29 THE TAX CREDIT DETERMINED FOR THE PENNSYLVANIA S CORPORATION FOR
30 THE TAXABLE YEAR MULTIPLIED BY THE PERCENTAGE OF THE
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1 PENNSYLVANIA S CORPORATION'S DISTRIBUTIVE INCOME TO WHICH THE
2 SHAREHOLDER IS ENTITLED.
3 (B) OPERATION OF TAX CREDIT.--THE CAREER DEVELOPMENT TAX
4 CREDIT PROVIDED UNDER SUBSECTION (A) IS IN ADDITION TO ANY
5 CAREER DEVELOPMENT TAX CREDIT TO WHICH A SHAREHOLDER OF A
6 PENNSYLVANIA S CORPORATION IS OTHERWISE ENTITLED UNDER THIS
7 ARTICLE. HOWEVER, A PENNSYLVANIA S CORPORATION AND A SHAREHOLDER
8 OF A PENNSYLVANIA S CORPORATION MAY NOT CLAIM A TAX CREDIT FOR
9 THE SAME QUALIFIED TRAINING EXPENSE.
10 SECTION 1708-C. PENNSYLVANIA LIMITED LIABILITY COMPANY MEMBER
11 PASS-THROUGH.
12 (A) GENERAL RULE.--IF A LIMITED LIABILITY COMPANY DOES NOT
13 HAVE AN ELIGIBLE TAX LIABILITY AGAINST WHICH THE CAREER
14 DEVELOPMENT TAX CREDIT MAY BE APPLIED, A MEMBER OF THE LIMITED
15 LIABILITY COMPANY IS ENTITLED TO A TAX CREDIT EQUAL TO THE TAX
16 CREDIT DETERMINED FOR THE LIMITED LIABILITY COMPANY FOR THE
17 TAXABLE YEAR MULTIPLIED BY THE PERCENTAGE OF THE LIMITED
18 LIABILITY COMPANY'S DISTRIBUTIVE INCOME TO WHICH THE MEMBER IS
19 ENTITLED.
20 (B) OPERATION OF TAX CREDIT.--THE CAREER DEVELOPMENT TAX
21 CREDIT UNDER SUBSECTION (A) IS IN ADDITION TO ANY CAREER
22 DEVELOPMENT TAX CREDIT TO WHICH A MEMBER OF A LIMITED LIABILITY
23 COMPANY IS OTHERWISE ENTITLED UNDER THIS ARTICLE. A LIMITED
24 LIABILITY COMPANY AND A MEMBER OF A LIMITED LIABILITY COMPANY
25 MAY NOT CLAIM A TAX CREDIT FOR THE SAME QUALIFIED TRAINING
26 EXPENSE.
27 SECTION 1709-C. RECAPTURE OF CREDIT.
28 (A) GENERAL RULE.--IF AN EMPLOYEE FOR WHOM A CREDIT HAS BEEN
29 AWARDED DOES NOT MAINTAIN CONTINUOUS EMPLOYMENT WITH THE
30 TAXPAYER FOR A PERIOD OF 12 MONTHS FOLLOWING THE COMPLETION OF
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1 THE QUALIFIED CAREER DEVELOPMENT TRAINING PROGRAM, THE
2 DEPARTMENT SHALL RECAPTURE ANY CREDIT AWARDED TO THE TAXPAYER
3 FOR THE QUALIFIED TRAINING EXPENSE OF THAT EMPLOYEE.
4 (B) NONAPPLICABILITY.--THIS SECTION SHALL NOT APPLY IF THE
5 EMPLOYEE:
6 (1) IS DECEASED;
7 (2) IS DISABLED;
8 (3) VOLUNTARILY LEAVES EMPLOYMENT; OR
9 (4) IS DISCHARGED FOR CAUSE AS CERTIFIED BY THE
10 DEPARTMENT OF LABOR AND INDUSTRY.
11 SECTION 1710-C. REPORT TO GENERAL ASSEMBLY.
12 THE SECRETARY SHALL SUBMIT AN ANNUAL REPORT TO THE GENERAL
13 ASSEMBLY INDICATING THE EFFECTIVENESS OF THE CAREER DEVELOPMENT
14 TAX CREDIT NO LATER THAN MARCH 15 FOLLOWING THE YEAR IN WHICH
15 THE TAX CREDITS WERE APPROVED. THE REPORT SHALL INCLUDE THE
16 NAMES OF ALL TAXPAYERS UTILIZING THE TAX CREDIT AS OF THE DATE
17 OF THE REPORT AND THE AMOUNT OF TAX CREDITS APPROVED AND
18 UTILIZED BY EACH TAXPAYER. NOTWITHSTANDING ANY LAW PROVIDING FOR
19 THE CONFIDENTIALITY OF TAX RECORDS, THE INFORMATION CONTAINED IN
20 THE REPORT SHALL BE PUBLIC INFORMATION. THE REPORT MAY ALSO
21 INCLUDE ANY RECOMMENDATIONS FOR CHANGES IN THE CALCULATION OR
22 ADMINISTRATION OF THE TAX CREDIT.
23 SECTION 1711-C. TERMINATION.
24 THE DEPARTMENT SHALL NOT APPROVE A CAREER DEVELOPMENT TAX
25 CREDIT FOR TAXABLE YEARS ENDING AFTER DECEMBER 31, 2008.
26 SECTION 1712-C. REGULATIONS.
27 THE SECRETARY SHALL PROMULGATE REGULATIONS NECESSARY FOR THE
28 IMPLEMENTATION AND ADMINISTRATION OF THIS ARTICLE.
29 SECTION 2. THIS ACT SHALL APPLY TO TAXABLE YEARS COMMENCING
30 AFTER DECEMBER 31, 2003.
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1 SECTION 3. THIS ACT SHALL TAKE EFFECT IMMEDIATELY.
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