RULES AND REGULATIONS
Title 12--COMMERCE, TRADE AND LOCAL GOVERNMENT
DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT
[12 PA. CODE CH. 135]
Neighborhood Assistance Program
[28 Pa.B. 4893] By this order, the Department of Community and Economic Development (Department), under the authority of Article XIX-A of the Neighborhood Assistance Act (72 P. S. §§ 8901-A--8906-A) (act) amends Chapter 135 (relating to Neighborhood Assistance Program). The purpose of the amendments is to establish special program priorities for the Fiscal Year (FY) 1997-98.
Introduction
Under the authority of the act, the Department administers the Neighborhood Assistance Tax Credit Program (NATCP) and the Enterprise Zone Tax Credit Program (EZTCP). The goal of NATCP is to encourage business firms to provide, either directly or indirectly through neighborhood organizations, neighborhood assistance and job training, education, crime prevention and community services. To meet this objective, the Department of Revenue grants tax credits, equivalent to 50% of the business firms' contributions, to business firms approved by the Department. The goal of EZTCP is to encourage private companies to invest in the rehabilitation, expansion and improvement of buildings or land which promote community economic development and which occur in portions of impoverished areas which have been designated as enterprise zones. To meet this objective, the Department of Revenue grants tax credits, equivalent to 20% of the private companies' investments, to private companies approved by the Department.
Section 8905-A of the act (72 P. S. § 8905-A) directs the Secretary of the Department to promulgate, during the first month of each fiscal year, regulations establishing special program priorities. Under the special program priorities of § 135.41(b) (relating to special program priorities), contributors may earn an additional 20%, for an overall 70% tax credit. Under the special program priorities of § 135.49(a) (relating to Enterprise Zone Tax Credit Program--special program priorities), contributors may earn a 30% tax credit.
Analysis
Section 135.41(b)--NATCP--special program priorities. No changes, except for the reference to the current fiscal year, have been made to this section. Special program priorities adopted for FY 1997-98 continue the priorities that were in effect last year.
Section 135.49(a)--EZTCP--special program priorities. No changes, except for the reference to the current fiscal year, have been made to this section. Special program priorities adopted for FY 1997-98 continue the priorities that have been in effect for several years.
Fiscal Impact
(a) Commonwealth. The tax credits extended to corporations and businesses under these regulations represent a proportionate reduction in Commonwealth Corporate Tax revenues. The costs are substantially justified by the creation and retention of jobs and the amelioration of the factors which tend to cause poverty within this Commonwealth.
(b) Political subdivisions. The amendments have no measurable cost-effect upon political subdivisions.
(c) Public. The amendments continue the tax credits to eligible business firms and private companies.
Paperwork
Organizations interested in participating in the special program priorities for NATCP shall submit an addendum to their original NAP proposal.
Private companies and neighborhood organizations interested in participating in the special program priorities for EZTCP shall submit an addendum to their original EZP project application proposal.
Notice
Notice of proposed rulemaking has been omitted under section 204(3) of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. § 1204(3)) (CDL), which specifies that a regulation may be adopted without notice of proposed rulemaking if proposed rulemaking procedures are ''in the circumstances impracticable, unnecessary, or contrary to the public interest.'' The proposed rulemaking procedures in this instance are not necessary because the special program priorities for the 1997-98 fiscal year continue the priorities that were in effect last year. The only changes being made to this regulation are to change the reference to the ''1996-97'' fiscal year to the ''1997-98'' fiscal year.
Regulatory Review
Under section 5.1(c) of the Regulatory Review Act (71 P. S. § 745.5a(c)), on August 12, 1998, the Department submitted a copy of the final-omitted regulations with proposed rulemaking omitted to the Independent Regulatory Review Commission (IRRC), the Chairpersons of the House Commerce and Economic Development Committee and the Senate Community and Economic Development Committee. On the same date, the final-omitted regulations were submitted to the Attorney General for review and approval under the Commonwealth Attorneys Act (71 P. S. §§ 732-101--732-506). In accordance with section 5.1(d) of the Regulatory Review Act, these final-omitted regulations were deemed approved by the House and Senate Committees on September 1, 1998. IRRC met on September 10, 1998, and approved the final-omitted regulations.
Effective Date/Sunset Date
(a) These final-omitted regulations will become effective upon final publication in the Pennsylvania Bulletin.
(b) The final-omitted regulations, by law, are monitored on an annual basis and updated as needed.
Contact Person
For an explanation of these regulations contact Jill B. Busch, Deputy Chief Counsel, Department of Community and Economic Development, 416 Forum Building, Harrisburg, PA 17120, (717) 783-8452.
Findings
The Department finds that:
(1) The proposed rulemaking procedures in sections 201 and 202 of the CDL (45 P. S. §§ 1201 and 1202), are impracticable and unnecessary, because the special program priorities for the 1997-98 fiscal year continue the priorities that were in effect last year. The only changes being made to these final-omitted regulations is to change the reference to the ''1996-97'' fiscal year to the ''1997-98'' fiscal year.
(2) Public notice of intention to adopt the final-omitted regulations has been omitted under section 204 of the CDL and the regulation thereunder, 1 Pa. Code § 7.4.
(3) Delay in implementing the final-omitted regulations will have a serious adverse impact on the public interest.
Order
The Department, acting under the authorizing statute, orders that:
(a) The regulations of the Department, 12 Pa. Code Chapter 135, are amended by amending §§ 135.41b and 135.49a to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(b) The Department shall submit this order and Annex A to the Office of Attorney General and the Office of General Counsel for approval as to legality as required by law.
(c) This order shall take effect upon publication in the Pennsylvania Bulletin.
SAMUEL MCCULLOUGH,
Secretary(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 28 Pa.B. 4845 (September 26, 1998).)
Fiscal Note: 4-68. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 12. COMMERCE, TRADE AND
LOCAL GOVERNMENT
PART V. COMMUNITY AFFAIRS
AND DEVELOPMENT
Subpart B. COMMUNITY EMPOWERMENT
CHAPTER 135. NEIGHBORHOOD
ASSISTANCE PROGRAM
TAX CREDITS § 135.41b. Special program priorities.
For Fiscal Year 1997-98, the special program priorities will be accepted in four categories: Community Development, Comprehensive Services, Affordable Housing Programs and Enterprise Zone Programs. Projects in each category shall relate to activities which will improve the physical and economic environment of low income neighborhoods or which will contribute to neighborhood stabilization by reversing patterns of deterioration and blight. The projects shall demonstrate the local commitment through partnerships of community based organizations, local government and the private sector. The following paragraphs set forth the requirements for the project to be eligible for tax credit valuation of 70%.
* * * * * (5) Limitations. During Fiscal Year 1997-98, the Department will allocate no more than $1.3 million of the available tax credits for valuation at 70%. No more than $1 million dollars of the tax credits will be allocated to the combined applicants for Community Development and Affordable Housing Projects, and no more than $300,000 will be awarded for Comprehensive Service Programs. Approval of projects under special program priorities will be contingent upon the availability of tax credits.
(6) Applicability. The special program priorities in this section are applicable to programs implemented during Fiscal Year 1997-98.
* * * * * § 135.49a. Enterprise Zone Tax Credit Program--special program priorities.
(a) Applicability. The special program priorities in this section are applicable to projects for the Fiscal Year 1997-98.
(b) Special program priority status. For the Fiscal Year 1997-98, special program priority status may be granted for projects that will provide employment opportunities for low-income residents of this Commonwealth, or enhance public facilities. If approved under this section, projects will receive tax credits equal to 30% of eligible project costs, up to the maximum amount approved by the Department. The Commonwealth will consider all 20% tax credit requests prior to consideration of 30% tax credit addendum requests for Fiscal Year 1997-98. To qualify for the 30% tax credit, projects shall submit an addendum that addresses the following requirements:
(1) A demonstration that jobs will be created for low-income individuals as a result of the investment made through the Enterprise Zone Tax Credit Program. Project activities shall:
(i) Create at least one job for low-income individuals for each $15,000 of private investment.
(ii) Include coordination with a local private industry council, office of employment security or county assistance office to assure assistance in job placement of low-income individuals.
(2) A demonstration that the project will include construction of or substantial repairs to a publicly owned facility, for example, streets, sidewalks or street lights.
[Pa.B. Doc. No. 98-1596. Filed for public inspection October 2, 1998, 9:00 a.m.]
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