PRINTER'S NO. 132
No. 97 Session of 2007
INTRODUCED BY D. WHITE, ARMSTRONG, CORMAN, EARLL, PUNT, RAFFERTY, BRUBAKER, WOZNIAK, PIPPY, BROWNE, STACK AND REGOLA, FEBRUARY 15, 2007
REFERRED TO FINANCE, FEBRUARY 15, 2007
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, in bank and trust company 11 shares tax, for ascertainment of taxable amount and exclusion 12 of United States obligations. 13 The General Assembly of the Commonwealth of Pennsylvania 14 hereby enacts as follows: 15 Section 1. Section 701.1 of the act of March 4, 1971 (P.L.6, 16 No.2), known as the Tax Reform Code of 1971, amended June 16, 17 1994 (P.L.279, No.48), is amended to read: 18 Section 701.1. Ascertainment of Taxable Amount; Exclusion of 19 United States Obligations.--(a) The taxable amount of shares 20 shall be ascertained and fixed by adding together the value 21 determined under subsection (b) for the current and preceding 22 five years and dividing the resulting sum by six. If an
1 institution has not been in existence for a period of six years, 2 the taxable amount of shares shall be ascertained and fixed by 3 adding together the values determined under subsection (b) for 4 the number of years the institution has been in existence and 5 dividing the resulting sum by such number of years. 6 (b) The value for each year required by subsection (a) shall 7 be determined by adding together the book value of capital stock 8 paid in, the book value of the surplus and the book value of 9 undivided profits with a deduction from the total thereof of an 10 amount equal to the same percentage of such total as the book 11 value of obligations of the United States bears to the book 12 value of the total assets[.], except that for the value of 13 shares reported on tax returns due on January 1, 2008, and 14 thereafter, any goodwill recorded as a result of the use of 15 purchase accounting for an acquisition or combination as 16 described in this section and occurring after June 30, 2001, may 17 be disregarded in determining the book value of total assets and 18 the deduction provided for obligations of the United States for 19 the six-year period described in subsection (a). For purposes of 20 this subsection, book values and deductions for United States 21 obligations for each year shall be determined by the Reports of 22 Condition for each calendar quarter of the preceding calendar 23 year in accordance with the requirements of the Board of 24 Governors of the Federal Reserve System, the Comptroller of the 25 Currency, the Federal Deposit Insurance Corporation or other 26 applicable regulatory authority; and book values shall be 27 averaged as calculated by averaging book values as determined by 28 such Reports of Condition. For purposes of this article, United 29 States obligations shall be obligations coming within the scope 30 of 31 U.S.C. § 3124. For any year in which an institution does 20070S0097B0132 - 2 -
1 not file four quarterly Reports of Condition, book values and 2 deductions for United States obligations shall be determined by 3 adding together the book values and deductions for United States 4 obligations from each quarterly Reports of Condition filed for 5 such year and dividing the resulting sums by the number of such 6 Reports of Condition. In the case of institutions which do not 7 file such Reports of Condition, book values shall be determined 8 by generally accepted accounting principles as of the end of 9 each calendar quarter. For any year in which an institution 10 which does not file Reports of Condition is not in existence for 11 four quarters, the book value for that year shall be determined 12 by adding together the book values for each quarter in which the 13 institution was in existence and dividing by that number of 14 quarters. For purposes of this section, a partial year shall be 15 treated as a full year. 16 (c) For purposes of this section: 17 (1) a mere change in identity, form or place of organization 18 of one institution, however effected, shall be treated as if a 19 single institution had been in existence prior to as well as 20 after such change; and 21 (2) the combination of two or more institutions into one 22 shall be treated as if the constituent institutions had been a 23 single institution in existence prior to as well as after the 24 combination and the book values and deductions for United States 25 obligations from the Reports of Condition of the constituent 26 institutions shall be combined. For purposes of [the preceding 27 sentence] this section, a combination shall include any 28 acquisition required to be accounted for [by the surviving 29 institution under the pooling of interest method] by using the 30 purchase method in accordance with generally accepted accounting 20070S0097B0132 - 3 -
1 principles or a statutory merger or consolidation. 2 Section 2. This act shall take effect in 60 days or December 3 31, 2007, whichever is sooner. B5L72SFL/20070S0097B0132 - 4 -