Bill Text: PA HB356 | 2011-2012 | Regular Session | Introduced

---

Bill Title: Reenacting and amending provisions relating to employment incentive payments.

Spectrum: Slight Partisan Bill (Republican 20-10)

Status: (Introduced - Dead) 2011-02-01 - Referred to FINANCE [HB356 Detail]

Download: Pennsylvania-2011-HB356-Introduced.html

---

PRINTER'S NO. 321
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 356 Session of2011
INTRODUCED BY PEIFER, ADOLPH, BARRAR, CALTAGIRONE, CARROLL, D. COSTA, DENLINGER, FLECK, GEIST, GIBBONS, GOODMAN, GRELL, HORNAMAN, JOSEPHS, M.K. KELLER, KILLION, MAJOR, MURT, OBERLANDER, PICKETT, PYLE, READSHAW, REICHLEY, SAYLOR, SCAVELLO, K. SMITH, SONNEY, SWANGER AND WAGNER, FEBRUARY 1, 2011
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 1, 2011
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," reenacting and amending provisions relating to
employment incentive payments.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1702-A of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, added
December 15, 1999 (P.L.926, No.63), is reenacted and amended to
read:
Section 1702-A. Definitions.--The following words, terms and
phrases when used in this article shall have the meanings
ascribed to them in this section, except where the context
clearly indicates a different meaning:
"Department." The Department of Revenue of the Commonwealth.
"Eligible individual" means any of the following:
(1) A person who at any time within the twelve months
preceding the date of hire received general assistance.
(2) A person who at any time within the twelve months
preceding the date of hire received temporary assistance to
needy families.
(3) A person who:
(i) has a physical or mental disability which, for such
individual, constitutes or results in a substantial handicap to
employment; and
(ii) is referred to the employer upon completion of or while
receiving rehabilitative services pursuant to an individualized
written rehabilitation plan under a State plan for vocational
rehabilitation services approved under the Rehabilitation Act of
1973 (Public Law 93-112, 29 U.S.C. § 701 et seq.), or a program
of vocational rehabilitation carried out under Title I of the
Veterans' Rehabilitation and Education Amendments of 1980
(Public Law 96-466, 94 Stat. 2171).
(4) A person who at any time within the twelve months
preceding the date of hire received compensation under the act
of December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897, No.1), known
as the "Unemployment Compensation Law."
"Employment incentive payment" means the employment incentive
payment credit provided by this article.
"Pass-through entity" means any of the following:
(1) A partnership, limited partnership, limited liability
company, business trust or other unincorporated entity that for
Federal income tax purposes is taxable as a partnership.
20110HB0356PN0321 - 2 -
(2) A Pennsylvania S corporation.
"Qualified first-year wages" means the qualified wages
attributable to service rendered by an eligible individual
during the one-year period beginning with the day the eligible
individual begins work for the employer.
"Qualified second-year wages" means the qualified wages
attributable to service rendered by an eligible individual
during the one-year period beginning one year after the eligible
individual begins work for the employer.
"Qualified tax liability" means the liability for taxes
imposed under Article III, IV, VII, VIII, IX or XV of this act.
The term includes the liability for taxes imposed under Article
III of this act on the owner or owners of a pass-through entity.
The term does not include amounts withheld or required to be
withheld from employees under Article III of this act.
"Qualified third-year wages" means the qualified wages
attributable to service rendered by an eligible individual
during the one-year period beginning two years after the
eligible individual begins work for the employer.
"Qualified wages" means wages as that term is defined in
section 51A(b)(5) of the Internal Revenue Code of 1986 (Public
Law 99-514, 26 U.S.C. § 51A(b)(5)).
"Taxpayer" means a person or entity subject to tax under
Article III, IV, VII, VIII, IX or XV of this act. This term
includes a pass-through entity.
Section 2. Sections 1703-A and 1704-A of the act, added
December 15, 1999 (P.L.926, No.63), are reenacted to read:
Section 1703-A. Employment Incentive Payments.--(a) A
taxpayer who employs an eligible individual shall be entitled to
employment incentive payments as provided by this article.
20110HB0356PN0321 - 3 -
(b) No employment incentive payment shall be provided for:
(1) The employment of a person who displaces any other
individual from employment except persons discharged for cause
as certified by the Department of Labor and Industry.
(2) The employment of a person closely related, as defined
by clauses (1) through (8) of section 152(a) of the Internal
Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 152(a)(1)
through(8)), to the taxpayer or, if the taxpayer is a
corporation, to an individual who owns, directly or indirectly,
more than 50% of the outstanding stock of the taxpayer.
(3) Wages paid to an individual during the time period for
which the employer received federally funded or State funded job
training payments for that individual.
(c) The employment incentive payment shall be calculated on
an annual basis as provided in clauses (1) and (2):
(1) The employment incentive payment shall be the sum of
thirty per cent of the first nine thousand dollars ($9,000) of
qualified first-year wages, twenty per cent of the first nine
thousand dollars ($9,000) of qualified second-year wages and ten
per cent of the first nine thousand dollars ($9,000) of
qualified third-year wages.
(2) A taxpayer eligible to receive a credit under clause (1)
shall be eligible to receive an additional employment incentive
payment as provided in this clause if:
(i) the taxpayer provides or pays for day care services for
the children of an eligible individual; or
(ii) the taxpayer provides or pays for transportation
services that enable an eligible individual to travel to and
from work.
The additional employment incentive payments under this clause
20110HB0356PN0321 - 4 -
shall be the expenses incurred by the taxpayer for services
listed in subclauses (i) and (ii), but in no case shall the
additional employment incentive payment for each eligible
individual exceed eight hundred dollars ($800) during the first
year of employment, six hundred dollars ($600) during the second
year of employment or four hundred dollars ($400) during the
third year of employment.
(d) The employment incentive payment shall be utilized as a
credit against a qualified tax liability to which the taxpayer
is subject. The employment incentive payment applicable to a
pass-through entity shall be allocated in the same manner as
income is allocated.
(e) (1) Except in cases where an eligible individual
voluntarily leaves the employment of the taxpayer, becomes
disabled or is terminated for cause, no taxpayer shall be
entitled to receive an employment incentive payment if the
eligible individual is employed by the taxpayer for less than
one year.
(2) If the eligible individual leaves the employment of the
taxpayer voluntarily, becomes disabled or is terminated for
cause in less than one year, the employment incentive payment
shall be reduced by the proportion of the year not worked.
(f) The total employment incentive payment credit shall not
exceed ninety per cent of the total taxes paid by the employer
against which the employment incentive payments may be claimed
as a credit.
(g) Employment incentive payments unused as a tax credit in
a taxable year may be carried over against a qualified tax
liability in the ten immediately subsequent taxable years.
(h) For the purposes of computing a tax liability against
20110HB0356PN0321 - 5 -
which the employment incentive payments may be applied,
deductions from taxable income shall be reduced by the
employment incentive payments.
Section 1704-A. Administration and Regulations.--The
department, in cooperation with the Department of Public Welfare
and the Department of Labor and Industry, shall administer the
provisions of this article, promulgate appropriate rules,
regulations and forms for that purpose and make such
determinations as may be required. Determinations made with
respect to the employment incentive payment provided in this
section may be reviewed and appealed in the manner provided by
law for other corporate or personal tax credits.
Section 3. Section 1705-A of the act, added December 15,
1999 (P.L.926, No.63), is reenacted and amended to read:
Section 1705-A. Limitation on Credits.--The total amount of
employment incentive payments authorized by this article shall
not exceed [twenty-five] seven million dollars [($25,000,000)]
($7,000,000) in any fiscal year. To insure that credits are not
claimed in excess of this amount, a taxpayer may claim the
incentive payments only upon presentation of an authorizing
certificate. Certificates will be issued to the taxpayer by the
Department of Labor and Industry upon presentation to the
Department of Labor and Industry of evidence of a qualifying
offer of employment. If necessary to avoid certificate issuances
in excess of the maximum authorized amount for any fiscal year,
the department shall advise the Department of Labor and Industry
of the total number of certificates which may be issued in each
calendar quarter.
Section 4. Section 1706-A of the act, amended November 19,
2004 (P.L.873, No.116), is reenacted and amended to read:
20110HB0356PN0321 - 6 -
Section 1706-A. Time Limitations and Report.--Employment
incentive payments shall not be available for employees hired
after December 31, [2009, unless reenacted by the General
Assembly] 2013. Not later than July 1, [2004, and December 31,
2008] 2012, the Secretary of Public Welfare and the Secretary of
Labor and Industry shall report to the General Assembly on the
effectiveness of incentive payments to encourage the employment
of general assistance [and], temporary assistance to needy
families and unemployment compensation recipients and recommend
whether the program should be continued. Credits may be claimed
against taxes payable for tax years beginning January 1, 2000,
and thereafter, and may be claimed for employees hired after
December 31, 1999.
Section 5. The reenactment and amendment of sections 1702-A,
1703-A, 1704-A, 1705-A and 1706-A of the act shall be
retroactive to January 1, 2011.
Section 6. This act shall take effect immediately.
20110HB0356PN0321 - 7 -