Bill Text: PA HB2656 | 2009-2010 | Regular Session | Introduced

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Bill Title: Further providing for definitions, for excluded transactions and for acquired company.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2010-09-28 - Re-committed to APPROPRIATIONS [HB2656 Detail]

Download: Pennsylvania-2009-HB2656-Introduced.html

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PRINTER'S NO. 4114
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2656 Session of2010
INTRODUCED BY MIRABITO, CUTLER, BAKER, BEAR, BRADFORD, CALTAGIRONE, DALEY, FARRY, FREEMAN, GIBBONS, GODSHALL, HELM, HENNESSEY, HORNAMAN, HOUGHTON, KORTZ, LONGIETTI, MARSHALL, MOUL, MURPHY, PETRI, ROHRER, ROSS, SEIP, SIPTROTH, STERN, SWANGER, TOEPEL AND VULAKOVICH, JULY 22, 2010
REFERRED TO COMMITTEE ON FINANCE, JULY 22, 2010
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," further providing for definitions, for excluded
transactions and for acquired company.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "association," "corporation,"
"family farm corporation" and "family farm partnership" in
section 1101-C of the act of March 4, 1971 (P.L.6, No.2), known
as the Tax Reform Code of 1971, amended July 2, 1986 (P.L.318,
No.77) and April 22, 1998 (P.L.239, No.45), are amended to read:
Section 1101-C. Definitions.--The following words when used
in this article shall have the meanings ascribed to them in this
section:
"Association." A partnership, limited partnership, limited
liability partnership or any other form of unincorporated
enterprise, owned or conducted by two or more persons other than
a private trust or decedent's estate.
"Corporation." A corporation, limited liability company,
joint-stock association, business trust or banking institution
which is organized under the laws of this Commonwealth, the
United States, or any other state, territory, or foreign
country, or dependency.
* * *
"Family farm corporation." A corporation of which at least
seventy-five per cent of its assets are devoted to the business
of agriculture and at least seventy-five per cent of each class
of stock of the corporation is continuously owned by members of
the same family. The term includes any corporation that may be
formed to succeed the business operations of a family farm
corporation or a family farm partnership. The business of
agriculture shall include the leasing to members of the same
family of property which is directly and principally used for
agricultural purposes. The business of agriculture shall not be
deemed to include:
(1) Recreational activities such as, but not limited to,
hunting, fishing, camping, skiing, show competition or racing;
(2) The raising, breeding or training of game animals or
game birds, fish, cats, dogs or pets or animals intended for use
in sporting or recreational activities;
(3) Fur farming;
(4) Stockyard and slaughterhouse operations; or
(5) Manufacturing or processing operations of any kind.
"Family farm partnership." A general, limited or limited
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liability partnership of which at least seventy-five per cent of
its assets are devoted to the business of agriculture and at
least seventy-five per cent of the interests in the general,
limited or limited liability partnership are continuously owned
by members of the same family. The business of agriculture shall
include the leasing to members of the same family of property
which is directly and principally used for agricultural
purposes. The business of agriculture shall not be deemed to
include:
(1) recreational activities such as, but not limited to,
hunting, fishing, camping, skiing, show competition or racing;
(2) the raising, breeding or training of game animals or
game birds, fish, cats, dogs or pets or animals intended for use
in sporting or recreational activities;
(3) fur farming;
(4) stockyard and slaughterhouse operations; or
(5) manufacturing or processing operations of any kind.
* * *
Section 2. Section 1102-C.3(19.1) and (20) of the act,
amended or added June 16, 1994 (P.L.279, No.48), are amended to
read:
Section 1102-C.3. Excluded Transactions.--The tax imposed by
section 1102-C shall not be imposed upon:
* * *
(19.1) A transfer of real estate devoted to the business of
agriculture to a family farm, general, limited or limited
liability partnership by a member of the same family, which
family directly owns at least seventy-five per cent of the
interests in the partnership.
(20) A transfer between members of the same family of an
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ownership interest in a real estate company, family farm
corporation or family farm, general, limited or limited
liability partnership which owns real estate.
* * *
Section 3. Section 1102-C.5 of the act, amended or added
July 2, 1986 (P.L.318, No.77) and June 16, 1994 (P.L.279,
No.48), is amended to read:
Section 1102-C.5. Acquired Company.--(a) A real estate
company is an acquired company upon a change in the ownership
interest in the company, however effected, if the change:
(1) does not affect the continuity of the company; and
(2) of itself or together with prior changes has the effect
of transferring, directly or indirectly, ninety per cent or more
of the total ownership interest in the company within a period
of three years.
(b) With respect to real estate acquired after February 16,
1986, a family farm corporation is an acquired company when,
because of voluntary or involuntary dissolution, it ceases to be
a family farm corporation or when, because of issuance or
transfer of stock or because of acquisition or transfer of
assets that are devoted to the business of agriculture, it fails
to meet the minimum requirements of a family farm corporation
under this act.
(b.1) A family farm partnership or family farm corporation
is an acquired company when, because of voluntary or involuntary
dissolution, it ceases to be a family farm partnership or family
farm corporation or when, because of transfer of partnership or
other interests or because of acquisition or transfer of assets
that are devoted to the business of agriculture, it fails to
meet the minimum requirements of a family farm partnership or
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family farm corporation under this act.
(b.2) The conveyance of assets held by a family farm
corporation or family farm partnership to a limited partnership,
limited liability partnership or limited liability company in
which at least seventy-five per cent of the ownership interest
is held by members of the same family as the family holding
ownership interest in the conveying corporation or partnership
shall not be considered to be a transfer of assets under this
article.
(c) Within thirty days after becoming an acquired company,
the company shall present a declaration of acquisition with the
recorder of each county in which it holds real estate for the
affixation of documentary stamps and recording. Such declaration
shall set forth the value of real estate holdings of the
acquired company in such county.
Section 4. This act shall be applied retroactively to
transactions on or after December 15, 2007.
Section 5. The provisions of 61 Pa. Code 91.222 (relating to
family farm corporation) are abrogated.
Section 6. This act shall take effect immediately.
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