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," providing for the Vets First Tax Credit Program
11to honor veterans for their service to our country and
12provide incentives for their employment.

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

15Section 1. Article XVIII-C of the act of March 4, 1971
16(P.L.6, No.2), known as the Tax Reform Code of 1971, added July
179, 2008 (P.L.922, No.66), is amended to read:

18ARTICLE XVIII-C

19[(RESERVED)]

20THE VETS FIRST TAX CREDIT PROGRAM

21Section 1801-C. Definitions.

22The following words and phrases when used in this article
23shall have the meanings given to them in this section unless the

1context clearly indicates otherwise:

2"Department." The Department of Community and Economic
3Development of the Commonwealth.

4"Eligible job." A full-time job in this Commonwealth, the
5annual wage, excluding benefits, for which is at least equal to
6the average annual wage in the county where the job is located
7as posted on the Department of Labor and Industry's publicly
8accessible Internet website. The term does not include a
9temporary or seasonal job.

10"Qualified tax liability." The liability for taxes imposed
11under Article III, IV, VI, VII, VIII, IX or XV. The term shall
12not include liability for any tax withheld or required to be
13withheld by a taxpayer from an employee under Article III.

14"Small business." A for-profit corporation, limited
15liability company, partnership or proprietorship operating in
16this Commonwealth with fewer than 100 employees at the time the
17taxpayer applies for a Vets First tax credit under this article.

18"Start date." The effective date of this section.

19"Taxpayer." An individual or small business subject to a tax
20imposed under Article III, IV, VI, VII, VIII, IX or XV. The term
21shall not include an individual or small business that is
22delinquent, at the time the credit is awarded, in the payment of
23any taxes or any other amounts to the Federal Government, the
24Commonwealth or any political subdivision.

25"Veteran." An individual who meets all of the following:

26(1) Served in the active United States military,
27including service in a reserve component or National Guard.

28(2) Was released or discharged from active military
29service under conditions other than dishonorable, after
30September 30, 2001.

1(3) Has not worked for at least six months prior to
2being hired by a taxpayer in an eligible job or in a job in
3another state that is substantially similar to an eligible
4job.

5"Vets First tax credits." Tax credits for hiring veterans
6authorized under this article.

7"Year four." A one-year period immediately following the end
8of year three.

9"Year one." A one-year period immediately following the
10start date.

11"Year three." A one-year period immediately following the
12end of year two.

13"Year two." A one-year period immediately following the end
14of year one.

15Section 1802-C. Vets First tax credits.

16(a) Criteria.--A taxpayer that employs a veteran in an 
17eligible job shall qualify for a Vets First tax credit against 
18the taxpayer's qualified tax liability as provided in this 
19article. In order to be eligible for a Vets First tax credit, 
20the taxpayer shall certify and agree to the following:

21(1) The veteran was hired for a new position in the
22taxpayer's small business or was hired to fill the position
23of another employee who voluntarily separated from employment
24with the taxpayer.

25(2) The taxpayer shall continue the operation of its
26small business for at least five years following the taxable
27year for which the taxpayer first claims a Vets First tax
28credit awarded under this article.

29(b) Amount.--

30(1) The Vets First tax credit shall be equal to $4,000 

1for each veteran hired from and after the start date and 
2shall be available annually through the end of year three so 
3long as the veteran has been continuously employed in the 
4eligible job from the date hired until the end of year three. 
5The Vets First tax credit shall be available through the end 
6of year four for each veteran who has been continuously 
7employed in the eligible job from the date hired until the 
8end of year four who resides in this Commonwealth and has 
9resided in this Commonwealth since the date the veteran was 
10released or discharged from active military service under 
11conditions other than dishonorable.

12(2) The provisions of this subsection shall be subject
13to the limitations in section 1804-C.

14(c) Eligibility for other tax credits.--A taxpayer that
15claims tax credits under any other Federal or State law shall be
16eligible for a Vets First tax credit so long as the taxpayer
17also meets the applicable requirements of this article.

18Section 1803-C. Application and award.

19(a) Annual application required.--A taxpayer wishing to 
20claim a Vets First tax credit shall apply to the department on a 
21form required by the department. An application shall be 
22submitted for each tax year that the taxpayer desires to claim 
23the Vets First tax credit and shall contain such information as 
24the department deems necessary for the department to determine 
25that the taxpayer qualifies for the Vets First tax credit or 
26credits for which the taxpayer is applying. The department shall 
27review and approve or disapprove applications in the order in 
28which they are received.

29(b) Award.--Upon determining that the taxpayer qualifies for 
30one or more Vets First tax credits, the department shall award 

1the credits and issue a Vets First tax credit certificate to the 
2taxpayer.

3Section 1804-C. Limitations.

4(a) Use by taxpayer.--A taxpayer may not carry over, carry
5back or obtain a refund of any portion of a Vets First tax
6credit.

7(b) Aggregate amount of awards.--No more than $50,000,000 in
8Vets First tax credits shall be awarded in any fiscal year.

9(c) Length of program.--A taxpayer shall not be eligible to 
10apply for Vets First tax credits after the fourth taxable year 
11following the effective date of this section.

12Section 1805-C. Sale or assignment.

13(a) Sale or assignment.--A taxpayer, upon application to and
14approval by the department, may sell or assign, in whole or in
15part, a Vets First tax credit granted to the taxpayer under this
16article. The department shall establish guidelines for the
17approval of applications under this subsection.

18(b) Claim and use.--The purchaser or assignee of a portion
19of a Vets First tax credit under subsection (a) shall
20immediately claim the credit in the taxable year in which the
21purchase or assignment is made. The amount of the Vets First
22credit that a purchaser or assignee may use against any one
23qualified tax liability may not exceed 75% of such qualified tax
24liability for the taxable year. The purchaser or assignee may
25not carry over, carry back, obtain a refund of or assign the
26Vets First tax credit. The purchaser or assignee shall notify
27the department of the seller or assignor of the Vets First tax
28credit in compliance with procedures specified by the
29department.

30Section 1806-C. Repayment and penalty.

1(a) Repayment.--A taxpayer who has claimed one or more Vets
2First tax credits and fails to meet any of the criteria required
3under section 1802-C, or a taxpayer who has received a Vets
4First tax credit in error shall repay to the Commonwealth the
5amount of all Vets First tax credits claimed.

6(b) Penalty.--If it is determined that the failure or error
7referred to in subsection (a) occurred as a result of fraud
8perpetrated by the taxpayer, the taxpayer, in addition to being
9required to repay the amount of all Vets First tax credits
10claimed, shall be subject to such other appropriate penalties
11and remedies as may be provided in this act or in other
12applicable law.

13Section 1807-C. Report.

14The department shall submit an annual report to the Governor,
15the Majority Leader of the Senate, the Minority Leader of the
16Senate, the Majority Leader of the House of Representatives and
17the Minority Leader of the House of Representatives on March 1
18of each year following the effective date of this section. The
19report shall include the following information:

20(1) A description of the Vets First tax credit
21certificates issued by the department during the preceding
22period, including the amount of the Vets First tax credits
23awarded to each taxpayer and the taxpayer's name and address.

24(2) The number of veterans who are residents of this
25Commonwealth and who were hired by each taxpayer to whom a
26Vets First tax credit certificate has been issued.

27Section 1808-C. Notice to public.

28The department shall, not later than 60 days following the
29effective date of this section, publish notice of the following
30on its publicly accessible Internet website:

1(1) Availability of the Vets First tax credits.

2(2) Guidelines for the awarding of Vets First tax
3credits.

4(3) A downloadable copy of the application form.

5Section 2. This act shall take effect in 30 days.