Bill Text: PA HB2633 | 2011-2012 | Regular Session | Introduced

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Bill Title: Providing for establishment of Innovate Pennsylvania Program, for sale of premium tax credits, for yearly payments, for premium tax credit certificate, for default, for annual limitation, for duties of the General Assembly, for carryover, carryback, refund and assignment, for repayment, for guidelines and for reports.

Spectrum: Moderate Partisan Bill (Republican 21-6)

Status: (Introduced - Dead) 2012-09-27 - Referred to FINANCE [HB2633 Detail]

Download: Pennsylvania-2011-HB2633-Introduced.html

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PRINTER'S NO. 4106
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2633 Session of2012
INTRODUCED BY KAMPF, HACKETT, REED, ADOLPH, BARRAR, BEAR, CALTAGIRONE, DALEY, DENLINGER, EVERETT, GEIST, GINGRICH, GROVE, HESS, KAUFFMAN, LONGIETTI, MANN, MURT, PAYTON, PETRI, QUINN, ROSS, SAYLOR, SONNEY, TURZAI, WATSON AND YOUNGBLOOD, SEPTEMBER 27, 2012
REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 27, 2012
AN ACT
Providing for establishment of Innovate Pennsylvania Program,
for sale of premium tax credits, for yearly payments, for
premium tax credit certificate, for default, for annual
limitation, for duties of the General Assembly, for
carryover, carryback, refund and assignment, for repayment,
for guidelines and for reports.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Innovate
Pennsylvania Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Authority." As defined in section 2 of the act of June 22,
2001 (P.L.569, No.38), known as the Ben Franklin Technology
Development Authority Act.
"Ben Franklin Technology Partner" or "partner." As defined
in section 2 of the act of June 22, 2001 (P.L.569, No.38), known
as the Ben Franklin Technology Development Authority Act.
"Board." As defined in section 2 of the act of June 22, 2001
(P.L.569, No.38), known as the Ben Franklin Technology
Development Authority Act.
"Department." The Department of Revenue of the Commonwealth.
"Fund." The Ben Franklin Technology Development Authority
Fund established in section 10 the act of June 22, 2001
(P.L.569, No.38), known as the Ben Franklin Technology
Development Authority Act.
"Insurance premium tax liability." The liability for taxes
imposed under section 902 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
"Premium tax credit." The tax credit established under
section 3.
"Program." The Innovate Pennsylvania Program.
"Regional biotechnology research center." A regional
biotechnology center as established under Chapter 17 of the act
of June 26, 2001 (P.L.755, No.77), known as the Tobacco
Settlement Act.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Taxpayer." An entity subject to the taxation under section
902 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971. The term includes the shareholder, owner or
member of a pass-through entity that receives a premium tax
credit.
"Venture investment program." A program employed under the
statutory authority of the Ben Franklin Technology Development
Authority.
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Section 3. Establishment of Innovate Pennsylvania Program.
There is established within the department a tax credit
program to be known as the Innovate Pennsylvania Program. The
program shall provide a source of funds for venture capital
investment through the authority and regional biotechnology
research centers.
Section 4. Sale of premium tax credits.
(a) Securing capital commitments.--The department may
contract with an independent third party or develop guidelines
to conduct a bidding process in order to secure capital
commitments from taxpayers for the program.
(b) Duty of applicant.--Each applicant shall make a timely
and irrevocable offer subject only to the department's approval
consistent with the following:
(1) The amount of premium tax credits sought by the
taxpayer, which may not be less than $500,000.
(2) The applicant's specified contribution for each
premium tax credit dollar requested, which may not be less
than the greater of:
(i) eighty percent of the requested dollar amount of
premium tax credits; or
(ii) the percentage of the requested dollar amount
of premium tax credits that the secretary determines to
be consistent with market conditions as of the offer
date.
(3) Any other information the department requires.
(c) Duties of department.--The department shall review the
offers and award the premium tax credits to the applicant with
the highest percentage of contribution of requested credits
until all premium tax credits are allocated.
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(d) Limitation.--The maximum amount of premium tax credits
that may be awarded to a taxpayer under this act shall be
$175,000,000.
(e) Notification.--The department shall notify the taxpayer
of the amount of the taxpayer's premium tax credit approved by
the department by January 15, 2013.
Section 5. Yearly payments.
(a) Requirements.--Upon approval of an offer under section
4, a taxpayer approved for a premium tax credit shall make
payments to the department totaling the amount of capital bid
for the premium tax credits for which the taxpayer was approved.
Payments shall be due on the dates specified by the department
at the time the taxpayer is approved.
(b) Deposit of funds.--Upon receipt of payments under
subsection (a), the department shall deposit the funds as
follows:
(1) Ninety-three percent of each payment must be
deposited in the fund. The funds must be allocated by the
board as follows:
(i) Forty percent of the amount deposited to the
partners.
(ii) Sixty percent of the amount deposited to the
venture investment program being operated by the board.
(2) Seven percent of each payment must be deposited in
the health account established under section 303(b) of the
act of June 26, 2001 (P.L.755, No.77), known as the Tobacco
Settlement Act, for distribution in equal proportions to each
regional biotechnology research center.
Section 6. Premium tax credit certificate.
(a) Issuance.--On receipt of each payment under section 5,
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the department shall issue to the taxpayer a premium tax credit
certificate representing a credit equal to the total premium tax
credits awarded to the taxpayer to be used against the
taxpayer's insurance premium tax liability in the tax years
specified by the purchase agreement.
(b) Contents.--The premium tax credit certificate shall
state:
(1) The amount of premium tax credits that the taxpayer
may claim.
(2) The amount of capital that the taxpayer has
contributed in return for the issuance of the premium tax
credit certificate.
(3) The dates on which the premium tax credits will be
available for use by the taxpayer.
(4) A penalty or other remedy for noncompliance.
(5) The procedure to be used for transferring the
premium tax credits to another taxpayer.
(6) Other requirements the department considers to be
necessary.
Section 7. Default.
(a) Prohibition.--A premium tax credit certificate may not
be issued to a taxpayer which fails to make a payment within the
time specified by the department.
(b) Failure to make timely payment.--A taxpayer which fails
to make a payment within the time specified by the department is
subject to a penalty equal to 10% of the amount of payment that
remains unpaid, payable to the department within 30 days after
demand by the department.
(c) Reallocation.--The department may reallocate the tax
credits from the defaulted pledged capital to other taxpayers.
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(d) Waiver.--If the reallocation of pledged capital results
in a payment by another taxpayer, the department may waive part
or all of the penalty provided under subsection (b).
(e) Penalty avoidance.--A taxpayer which anticipates an
inability to make a payment within the time specified by the
department may, with consent of the department, avoid the
imposition of the penalty by transferring the allocation of
premium tax credits to a new or existing taxpayer at least 30
days prior to the due date of the defaulted installment.
(f) Requirement.--A transferee of an allocation of premium
tax credits of a defaulting taxpayer under this section shall
make the payment by the date originally specified by the
department prior to the transfer.
Section 8. Annual limitation.
The department shall ensure that the cumulative amount of tax
credits claimed by taxpayers for the taxpayers' liability under
section 902 of the act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, does not exceed $35,000,000 in a
single tax year beginning after June 30, 2015, except to the
extent that taxpayers have claimed unused tax credits carried
forward from prior years.
Section 9. Duties of the General Assembly.
In a year that a tax credit is claimed under this act, the
secretary shall notify the State Treasurer to:
(1) Transfer an amount equal to the amount of a tax
credit claimed by the foreign fire insurance company against
taxes that otherwise would be distributed in accordance with
Chapter 7 of the act of December 18, 1984 (P.L.1005, No.205),
known as the Municipal Pension Plan Funding Standard and
Recovery Act, to the fund as defined in section 702 of the
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Municipal Pension Plan Funding Standard and Recovery Act.
(2) Transfer an amount equal to the amount of a tax
credit claimed by a foreign casualty insurance company
against taxes that otherwise would be distributed and used
for police pension, retirement or disability purposes as
provided by the act of May 12, 1943 (P.L.259, No.120),
referred to as the Foreign Casualty Insurance Premium Tax
Allocation Law, for distribution in accordance with the
Foreign Casualty Insurance Premium Tax Allocation Law.
(3) Ensure that the programs under paragraphs (1) and
(2) do not experience a negative fiscal impact due to a
foreign fire insurance company claiming a tax credit
authorized under this act.
Section 10. Carryover, carryback, refund and assignment.
(a) Carryover.--If the taxpayer cannot use the entire amount
of the premium tax credit for the taxable year in which the
premium tax credit is first permitted to be claimed, the excess
may be carried over to succeeding taxable years and used as a
credit against the taxpayer's liability under section 902 of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971, for those taxable years. Each time that the premium tax
credit is carried over to a succeeding taxable year, it shall be
reduced by the amount of tax credits claimed during the
immediately preceding taxable year. The premium tax credits
expire June 30, 2026.
(b) Carryback or refund.--A taxpayer may not be entitled to
carry back or obtain a refund of an unused premium tax credit.
(c) Sale or assignment.--A taxpayer, upon application to and
approval by the department, may sell or assign, in whole or in
part, a premium tax credit granted to the taxpayer under this
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act if the taxpayer does not have a tax liability under section
902 of the Tax Reform Code of 1971 against which the premium tax
credit may be applied in a taxable year in which the premium tax
credit is permitted to be claimed. The department shall
establish guidelines for the approval of an application under
this subsection. Before an application is approved, the
department shall make a finding that the taxpayer and its
assignee have filed the required State tax reports and returns
for the taxable years and paid any balance of State tax due as
determined by the department.
(d) Purchaser and assignee.--The purchaser or assignee of a
premium tax credit under subsection (c) shall immediately claim
the credit against its tax liability under section 902 of the
Tax Reform Code of 1971 in the taxable year in which the
purchase or assignment is made. The purchaser or assignee may
not carry back or obtain a refund of or sell or assign the
premium tax credit. The purchaser or assignee shall notify the
department of the seller or assignor of the premium tax credit
in compliance with procedures specified by the department.
Section 11. Repayment.
The department shall require a taxpayer to repay the premium
tax credit received under this act where the department
determines that either of the following conditions exist:
(1) the taxpayer did not satisfy the requirements of
this act; or
(2) the taxpayer received the premium tax credit as a
result of fraud.
Section 12. Guidelines.
The department shall develop written guidelines for the
implementation and administration of this act. The guidelines
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shall be posted on the department's publicly accessible Internet
website.
Section 13. Reports.
(a) Duty of authority.--The authority shall include
information relating to projects funded by the program in the
report to the General Assembly required by section 12 of the act
of June 22, 2001 (P.L.569, No.38), known as the Ben Franklin
Technology Development Authority Act.
(b) Duty of regional biotechnology research center.--A
regional biotechnology research center shall include information
relating to projects funded by the program in the report to the
General Assembly required by section 1703(j)(2) of the act of
June 26, 2001 (P.L.755, No.77), known as the Tobacco Settlement
Act.
Section 20. Effective date.
This act shall take effect in 60 days.
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