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| PRIOR PRINTER'S NO. 1432 | PRINTER'S NO. 1721 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY SMUCKER, ERICKSON, ARGALL, RAFFERTY, COSTA, ALLOWAY, FONTANA, WASHINGTON, BOSCOLA, YUDICHAK, WAUGH, YAW, SCHWANK, FERLO, PICCOLA, BROWNE AND BLAKE, JUNE 26, 2011 |
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| SENATOR BRUBAKER, FINANCE, AS AMENDED, OCTOBER 26, 2011 |
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| AN ACT |
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1 | Providing tax incentives and credits for rehabilitation of | <-- |
2 | blighted historic structures. |
3 | Providing tax credits for the rehabilitation of historic | <-- |
4 | structures. |
5 | The General Assembly of the Commonwealth of Pennsylvania |
6 | hereby enacts as follows: |
7 | Section 1. Short title. | <-- |
8 | This act shall be known and may be cited as the Historic |
9 | Rehabilitation Investment Incentive Act. |
10 | Section 2. Definitions. |
11 | The following words and phrases when used in this act shall |
12 | have the meanings given to them in this section unless the |
13 | context clearly indicates otherwise: |
14 | "Commission." The Pennsylvania Historical and Museum |
15 | Commission. |
16 | "DCED." The Department of Community and Economic Development |
17 | of the Commonwealth. |
18 | "Department." The Department of Revenue of the Commonwealth. |
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1 | "Part 2." Part 2 of the application for a tax credit |
2 | provided for under section 47 of the Internal Revenue Code of |
3 | 1986 (Public Law 99-514, 26 U.S.C. § 47), or any future similar |
4 | application requirement provided for under Federal law. |
5 | "Qualified expenditures." The costs and expenses incurred by |
6 | a qualified taxpayer in the restoration of a qualified historic |
7 | structure pursuant to a qualified rehabilitation plan which are |
8 | defined as qualified rehabilitation expenditures under section |
9 | 47(c)(2) of the Internal Revenue Code of 1986 (Public Law |
10 | 99-514, 26 U.S.C. § 47(c)(2)). |
11 | "Qualified historic structure." A commercial building |
12 | located in Pennsylvania that is defined as a certified historic |
13 | structure under section 47(c)(3) of the Internal Revenue Code of |
14 | 1986 (Public Law 99-514, 26 U.S.C. § 47(c)(3)). |
15 | "Qualified rehabilitation plan." A project that is approved |
16 | by the Pennsylvania Historical and Museum Commission as being |
17 | consistent with the standards for rehabilitation and guidelines |
18 | for rehabilitation of historic buildings as adopted by the |
19 | United States Secretary of the Interior. |
20 | "Qualified tax liability." Tax liability imposed on a |
21 | taxpayer under Article III, IV, VI, VII, VIII, IX, XI or XV of |
22 | the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform |
23 | Code of 1971, excluding any tax withheld by an employer under |
24 | Article III of the Tax Reform Code of 1971. |
25 | "Qualified taxpayer." The owner of a qualified historic |
26 | structure or any other person who may qualify for the Federal |
27 | rehabilitation tax credit allowable under section 47 of the |
28 | Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § |
29 | 47). |
30 | Section 3. Credit allowed. |
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1 | For all taxable years commencing after December 31, 2011, |
2 | there shall be allowed a tax credit against qualified tax |
3 | liability in an amount equal to 25% of qualified expenditures |
4 | incurred by a qualified taxpayer pursuant to a qualified |
5 | rehabilitation plan. |
6 | Section 4. Limitations on credits. |
7 | (a) Aggregation of credits.--Credits may not exceed an |
8 | aggregate of $10,000,000 in any fiscal year in which tax credits |
9 | are allowed. |
10 | (b) Qualified historic structure.--Credits allowed to any |
11 | qualified historic structure owner shall not exceed $500,000 in |
12 | any fiscal year in which tax credits shall be allowed. |
13 | Section 5. Excess of credits. |
14 | (a) Seven-year carryover.--If the amount of the credits |
15 | exceeds the total of a qualified taxpayer's qualified tax |
16 | liability, the excess amount shall be carried over for offset |
17 | against such taxes in the next succeeding year or years until |
18 | the seventh taxable year succeeding the taxable year in which |
19 | the qualified rehabilitation plan was placed in service. |
20 | (b) Application.--A tax credit certificate issued by the |
21 | department shall first be applied against the applicant's |
22 | qualified tax liability for the current taxable year as of the |
23 | date on which the tax credit certificate was issued before the |
24 | tax credit can be applied against any tax liability under |
25 | subsection (a). |
26 | (c) No carryback or refund.--An applicant is not entitled to |
27 | carry back or obtain a refund of all or any portion of an unused |
28 | tax credit allowed to the taxpayer under this chapter. |
29 | Section 6. Pass-through entities. |
30 | If a qualified taxpayer is a corporation having an election |
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1 | in effect under Subchapter S of the Federal Internal Revenue |
2 | Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), a |
3 | partnership or a limited liability company, the credit provided |
4 | under this act shall be claimed by the shareholders of such |
5 | corporation, the partners of such partnership or the members of |
6 | such limited liability company, pro rata, in the same manner as |
7 | the shareholders, partners or members account for the |
8 | proportionate share of the income and loss of the corporation, |
9 | partnership or limited liability company, or as the |
10 | shareholders, partners or members may agree pursuant to an |
11 | executed agreement among the shareholders, partners or members |
12 | documenting an alternative distribution method, a copy of which |
13 | shall be furnished to the department. |
14 | Section 7. Transfer of credits. |
15 | (a) General rule.--Any person, hereafter designated the |
16 | assignor, may sell, assign, convey or otherwise transfer tax |
17 | credits allowed or earned under section 3. The taxpayer or |
18 | taxpayers acquiring credits, hereafter designated the assignee, |
19 | may use the amount of the acquired credits to offset 100% of its |
20 | qualified tax liability for either the taxable year in which the |
21 | qualified rehabilitation plan was first placed in service or for |
22 | the taxable year in which the credit was acquired. |
23 | (b) Carryover of seven years.--Unused credits may be carried |
24 | forward for seven years following the taxable year in which the |
25 | acquisition was made. |
26 | (c) Written agreement.--The assignor shall enter into a |
27 | written agreement with the assignee establishing the terms and |
28 | conditions of the agreement and shall perfect such transfer by |
29 | notifying the department and the commission within 90 days of |
30 | the effective date of the transfer and shall provide such |
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1 | information as may be required by the department or the |
2 | commission to administer and carry out the provisions of this |
3 | section. |
4 | Section 8. Applications; allocation of credits. |
5 | (a) Joint approval by department and commission required.-- |
6 | Applications for credits shall be made jointly to DCED and the |
7 | commission, in such form as DCED and the commission shall |
8 | jointly approve. The commission shall be responsible for |
9 | reviewing the applications to determine whether the project |
10 | proposed qualifies for a credit under section 3. In the event |
11 | that the aggregate amount proposed to be claimed in any tax year |
12 | and tentatively approved by the commission exceeds the |
13 | limitation set forth in section 4, DCED shall be responsible for |
14 | allocating the credits among the applicants. In making such |
15 | allocation, DCED shall give priority to applications for |
16 | qualified historic structures so as to achieve equitable |
17 | geographic distribution of the credits throughout this |
18 | Commonwealth. |
19 | (b) Application deadline.--Applications shall be filed on or |
20 | before February 1 of each year for which tax credits are |
21 | allowed. |
22 | (c) Action on application.--The commission shall complete |
23 | its review of the application no later than April 1 or 30 days |
24 | following receipt of a complete Part 2 application, whichever |
25 | shall occur later, and shall promptly notify the applicant |
26 | whether the application has been tentatively approved or the |
27 | application has been disapproved and, if disapproved, the |
28 | reasons for disapproval. In the event the aggregate amount of |
29 | credits claimed on applications timely received by the |
30 | commission does not exceed the limitations set forth in section |
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1 | 4, approval by the commission shall be deemed final, and the |
2 | commission shall issue a certificate to the applicant to that |
3 | effect. If the aggregate amount of credits reflected in |
4 | applications tentatively approved by the commission exceeds the |
5 | limitations set forth in section 4, any approval by the |
6 | commission shall be deemed tentative, and final approval may be |
7 | granted only by DCED. Upon final approval by DCED, DCED shall |
8 | issue a certificate to the applicant to that effect. |
9 | (d) Finding.--Before an application is approved, the |
10 | department must make a finding that the applicant has filed all |
11 | required State tax reports and returns for all applicable |
12 | taxable years and paid any balance of State tax due as |
13 | determined by assessment or final determination by the |
14 | department or court of law upon appeal from a determination of |
15 | the department. |
16 | Section 9. Fees. |
17 | DCED and the commission shall agree upon a schedule of fees |
18 | for applications which shall not exceed $5,000 for an |
19 | application. The proceeds of fees shall be applied to offset the |
20 | costs of administration of the program in such manner as DCED |
21 | and the commission agree. |
22 | Section 10. Certificates. |
23 | The developer of a project for which a certificate has been |
24 | issued shall notify the commission when the project has been |
25 | placed in service. Upon verifying that the project has been |
26 | placed in service and was allowed a Federal credit, the |
27 | commission shall endorse the certificate. The certificate shall |
28 | state the amount of the credit claimed. The developer or an |
29 | assignee of the credit shall attach a copy of the certificate, |
30 | as so endorsed, together with any other documentation specified |
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1 | by the department to any tax return on which the credit or |
2 | portion thereof is claimed. |
3 | Section 11. Repeals. |
4 | (1) The General Assembly declares that the repeal under |
5 | paragraph (2) is necessary to effectuate the provisions of |
6 | this act. |
7 | (2) Section 6104(d.2)(2) of the act of July 13, 2005 |
8 | (P.L.213, No.45), entitled "An act amending Title 27 |
9 | (Environmental Resources) of the Pennsylvania Consolidated |
10 | Statutes, further providing for definitions, for allocation |
11 | of Environmental Stewardship Fund and for administrative |
12 | expenses; deleting provisions relating to environmental |
13 | infrastructure grants; providing for fee deposits; |
14 | authorizing indebtedness for environmental initiatives; |
15 | authorizing sale of bonds, temporary financing and debt |
16 | retirement; further providing for disposal fee for municipal |
17 | waste landfills and deposit of disposal fee; deleting certain |
18 | sunset provisions; and making a repeal relating to the |
19 | Hazardous Sites Cleanup Fund," is repealed. |
20 | Section 21. Effective date. |
21 | This act shall take effect immediately. |
22 | Section 1. Short title. | <-- |
23 | This act shall be known and may be cited as the Historic |
24 | Preservation Incentive Act. |
25 | Section 2. Definitions. |
26 | The following words and phrases when used in this act shall |
27 | have the meanings given to them in this section unless the |
28 | context clearly indicates otherwise: |
29 | "Commission." The Pennsylvania Historical and Museum |
30 | Commission. |
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1 | "Department." The Department of Revenue of the Commonwealth. |
2 | "Qualified expenditures." The costs and expenses incurred by |
3 | a qualified taxpayer in the restoration of a qualified historic |
4 | structure pursuant to a qualified rehabilitation plan and which |
5 | are defined as qualified rehabilitation expenditures under |
6 | section 47(c)(2) of the Internal Revenue Code of 1986 (Public |
7 | Law 99-514, 26 U.S.C. § 47(c)(2)). |
8 | "Qualified historic structure." A commercial building that |
9 | qualifies as a certified historic structure under section 47(c) |
10 | (3) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 |
11 | U.S.C. § 47(c)(3)). |
12 | "Qualified rehabilitation plan." A project that is approved |
13 | by the Pennsylvania Historical and Museum Commission as being |
14 | consistent with the standards for rehabilitation and guidelines |
15 | for rehabilitation of historic buildings as adopted by the |
16 | United States Secretary of the Interior. |
17 | "Qualified tax liability." Tax liability imposed on a |
18 | taxpayer under Article III, IV, VI, VII, VIII, IX, XI or XV of |
19 | the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform |
20 | Code of 1971, excluding any tax withheld by an employer under |
21 | Article III of the Tax Reform Code of 1971. |
22 | "Qualified taxpayer." Any natural person, corporation, |
23 | business trust, limited liability company, partnership, limited |
24 | liability partnership, association or any other form of legal |
25 | business entity that: |
26 | (1) Is subject to a tax imposed under Article III, IV, |
27 | VI, VII, VIII, IX, XI or XV of the act of March 4, 1971 |
28 | (P.L.6, No.2), known as the Tax Reform Code of 1971, |
29 | excluding any tax withheld by an employer under Article III |
30 | of the Tax Reform Code of 1971. |
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1 | (2) Owns a qualified historic structure. |
2 | Section 3. Tax credit certificates. |
3 | (a) Application.-- |
4 | (1) A qualified taxpayer may apply to the Department of |
5 | Community and Economic Development for a tax credit |
6 | certificate under this section. |
7 | (2) The application shall be on the form required by the |
8 | Department of Community and Economic Development. |
9 | (3) The application shall be filed on or before February |
10 | 1 for qualified expenditures incurred in the prior calendar |
11 | year. |
12 | (b) Review, recommendation and approval.-- |
13 | (1) The Department of Community and Economic Development |
14 | shall forward applications received under this section to the |
15 | commission for review. |
16 | (2) The commission shall determine the amount of the |
17 | qualified expenditures incurred by the taxpayer in the prior |
18 | calendar year. |
19 | (3) If the commission determines that the qualified |
20 | taxpayer has incurred qualified expenditures, the commission |
21 | may recommend approval of the application and shall notify |
22 | the Department of Community and Economic Development of its |
23 | recommendation within 30 days following receipt of the |
24 | completed application by the commission. |
25 | (4) Upon receipt of the commission's recommendation for |
26 | approval, the Department of Community and Economic |
27 | Development: |
28 | (i) may approve the application; and |
29 | (ii) by April 1, shall notify the applicant and the |
30 | commission of its action. |
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1 | (5) If the Department of Community and Economic |
2 | Development approves the application, it shall issue the |
3 | qualified taxpayer a tax credit certificate by April 1. A tax |
4 | credit certificate issued under this section shall not exceed |
5 | 25% of qualified expenditures determined by the commission to |
6 | have been incurred by the qualified taxpayer in the prior |
7 | calendar year. |
8 | (6) In granting tax credit certificates under this act, |
9 | the Department of Community and Economic Development: |
10 | (i) Shall not grant more than $10,000,000 in tax |
11 | credit certificates in any fiscal year. |
12 | (ii) Shall not grant more than $500,000 in tax |
13 | credit certificates to a single qualified taxpayer in any |
14 | fiscal year in which the approval of all recommendations |
15 | received from the commission would cause the limit in |
16 | subparagraph (i) to be exceeded. |
17 | (iii) Shall take into account the geographical |
18 | distribution of tax credit certificates when taking |
19 | action to implement the limit in subparagraph (i). |
20 | Section 4. Claiming the credit. |
21 | Upon presenting a tax credit certificate to the department, |
22 | the qualified taxpayer may claim a tax credit against the |
23 | qualified tax liability of the qualified taxpayer. |
24 | Section 5. Carryover, carryback and assignment of credit. |
25 | (a) General rule.--If a qualified taxpayer cannot use the |
26 | entire amount of the tax credit for the taxable year in which |
27 | the tax credit is first approved, then the excess may be carried |
28 | over to succeeding taxable years and used as a credit against |
29 | the qualified tax liability of the qualified taxpayer for those |
30 | taxable years. Each time the tax credit is carried over to a |
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1 | succeeding taxable year, it shall be reduced by the amount that |
2 | was used as a credit during the immediately preceding taxable |
3 | year. The tax credit provided by this act may be carried over |
4 | and applied to succeeding taxable years for not more than seven |
5 | taxable years following the first taxable year for which the |
6 | qualified taxpayer was entitled to claim the credit. |
7 | (b) Application.--A tax credit certificate received by the |
8 | department in a taxable year first shall be applied against the |
9 | qualified taxpayer's qualified tax liability for the current |
10 | taxable year as of the date on which the credit was issued |
11 | before the tax credit can be applied against any qualified tax |
12 | liability under subsection (a). |
13 | (c) No carryback or refund.--A qualified taxpayer may not |
14 | carry back or obtain a refund of all or any portion of an unused |
15 | tax credit granted to the qualified taxpayer under this act. |
16 | (d) Sale or assignment.--The following shall apply: |
17 | (1) A qualified taxpayer, upon application to and |
18 | approval by the Department of Community and Economic |
19 | Development, may sell or assign, in whole or in part, a tax |
20 | credit granted to the qualified taxpayer under this act. |
21 | (2) Before an application is approved, the department |
22 | must find that the applicant has filed all required State tax |
23 | reports and returns for all applicable taxable years and paid |
24 | any balance of State tax due as determined at settlement, |
25 | assessment or determination by the department. |
26 | (3) Notwithstanding any other provision of law, the |
27 | department shall settle, assess or determine the tax of an |
28 | applicant under this subsection within 90 days of the filing |
29 | of all required final returns or reports in accordance with |
30 | section 806.1(a)(5) of the act of April 9, 1929 (P.L.343, |
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1 | No.176), known as The Fiscal Code. |
2 | (e) Purchasers and assignees.--The purchaser or assignee of |
3 | all or a portion of a tax credit obtained under section 3 shall |
4 | immediately claim the credit in the taxable year in which the |
5 | purchase or assignment is made. The purchaser or assignee may |
6 | not carry forward, carry back or obtain a refund of or sell or |
7 | assign the tax credit. The purchaser or assignee shall notify |
8 | the department of the seller or assignor of the tax credit in |
9 | compliance with procedures specified by the department. |
10 | Section 6. Pass-through entity. |
11 | (a) General rule.--If a pass-through entity has any unused |
12 | tax credit under section 5, it may elect in writing, according |
13 | to procedures established by the department, to transfer all or |
14 | a portion of the credit to shareholders, members or partners in |
15 | proportion to the share of the entity's distributive income to |
16 | which the shareholder, member or partner is entitled. |
17 | (b) Limitation.--A pass-through entity and a shareholder, |
18 | member or partner of a pass-through entity shall not claim the |
19 | credit under subsection (a) for the same qualified expenditures. |
20 | (c) Application.--A shareholder, member or partner of a |
21 | pass-through entity to whom a credit is transferred under |
22 | subsection (a) shall immediately claim the credit in the taxable |
23 | year in which the transfer is made. The shareholder, member or |
24 | partner may not carry forward, carry back, obtain a refund of or |
25 | sell or assign the credit. |
26 | Section 7. Administration. |
27 | The Department of Community and Economic Development, the |
28 | commission and the department shall jointly develop written |
29 | guidelines for the implementation of the provisions of this act. |
30 | Section 8. Report to General Assembly. |
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1 | (a) General rule.--Not later than September 1 of each year |
2 | after the first year in which tax credit certificates are issued |
3 | by the Department of Community and Economic Development, the |
4 | Secretary of Community and Economic Development and the |
5 | Secretary of Revenue shall submit a report to the General |
6 | Assembly summarizing the tax credit certificates awarded and the |
7 | tax credits claimed under this act. The report shall be |
8 | submitted to the chairman and minority chairman of the |
9 | Appropriations and Finance Committees of the Senate and the |
10 | chairman and minority chairman of the Appropriations and Finance |
11 | Committees of the House of Representatives. The report shall |
12 | include all awards of tax credit certificates, claims for tax |
13 | credits, sale or assignment of credits and tax credit |
14 | utilization that have occurred since the conclusion of the |
15 | period covered by the prior year's report through the June 30 |
16 | immediately preceding the date of the report. The report shall |
17 | include: |
18 | (1) The name of each qualified taxpayer that has been |
19 | awarded a tax credit certificate. |
20 | (2) The name of each qualified taxpayer that has claimed |
21 | a credit and the amount of the credit claimed by the |
22 | qualified taxpayer. |
23 | (3) The name of each qualified taxpayer that has |
24 | received approval to sell or assign a credit and the amount |
25 | of the credit sold or assigned by the qualified taxpayer. |
26 | (4) The name of each taxpayer who has acquired a credit |
27 | by sale or assignment, the amount of the credit acquired by |
28 | sale or assignment by the taxpayer, the amount of the credit |
29 | acquired by sale or assignment that has been utilized by the |
30 | taxpayer and the taxes and tax years against which the |
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1 | taxpayer utilized the credit. |
2 | (b) Public information.--Notwithstanding any law providing |
3 | for the confidentiality of tax records, the information in the |
4 | report shall be public information and all report information |
5 | shall be posted on the department's publicly accessible Internet |
6 | website. |
7 | Section 9. Repeal. |
8 | (a) Declaration.--The General Assembly declares that the |
9 | repeal under subsection (b) is necessary to effectuate the |
10 | provisions of this act. |
11 | (b) Specific law repealed.--The provisions of 27 Pa.C.S. § |
12 | 6104(d.2)(2) are repealed. |
13 | Section 10. Effective date. |
14 | This act shall take effect July 1, 2012, or immediately, |
15 | whichever is later. |
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