HB 1087 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, establishing the Active Volunteer First Responder Education Tax Credit Program.

PRINTER'S NO.   1204

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1087
                                                  Session of
                                                    2025

     INTRODUCED BY STEELE, MADDEN, SANCHEZ, PROBST, GIRAL, KENYATTA,
        BRENNAN, HILL-EVANS, DEASY, MAYES, BOROWSKI, CEPEDA-FREYTIZ,
        RIVERA, MALAGARI, D. WILLIAMS, SCOTT AND GREEN, APRIL 1, 2025

     REFERRED TO COMMITTEE ON FINANCE, APRIL 1, 2025


                                     AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," establishing the Active Volunteer First Responder
11      Education Tax Credit Program.
12      The General Assembly of the Commonwealth of Pennsylvania
13   hereby enacts as follows:
14      Section 1.     The act of March 4, 1971 (P.L.6, No.2), known as
15   the Tax Reform Code of 1971, is amended by adding an article to
16   read:
17                              ARTICLE XVIII-I
18                      ACTIVE VOLUNTEER FIRST RESPONDER
19                            EDUCATION TAX CREDIT
20   Section 1801-I.    Scope of article.
21      This article relates to the Active Volunteer First Responder
22   Tax Credit.
 1   Section 1802-I.   Definitions.
 2      The following words and phrases when used in this article
 3   shall have the meanings given to them in this section unless the
 4   context clearly indicates otherwise:
 5      "Active volunteer first responder."     A volunteer for a
 6   volunteer fire company or nonprofit emergency medical services
 7   agency who is certified under 35 Pa.C.S. § 79A23 (relating to
 8   certification).
 9      "Approved institution of higher learning."     Any of the
10   following:
11          (1)   A public college or technical institute that is
12      established and operated in accordance with the act of March
13      10, 1949 (P.L.30, No.14), known as the Public School Code of
14      1949, by a local sponsor that provides a two-year,
15      postsecondary, college-parallel, terminal-general, terminal-
16      technical, out-of-school youth or adult education program or
17      any combination of the programs.
18          (2)   An institution that is part of the State System of
19      Higher Education under Article XX-A of the Public School Code
20      of 1949, and all branches and campuses of a State-owned
21      institution.
22      "Approved program of education."      A curriculum or course of
23   study pursued at an approved institution of higher learning.
24      "Business firm."   An entity authorized to do business in this
25   Commonwealth and subject to taxes imposed under Article III, IV,
26   VI, VII, VIII, IX, XV or XX or a tax imposed under Article XVI
27   of the act of May 17, 1921 (P.L.682, No.284), known as The
28   Insurance Company Law of 1921. The term includes a pass-through
29   entity, including a pass-through entity the purpose of which is
30   making contributions under this article and whose shareholders,

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 1   partners or members are composed of owners or employees of other
 2   business firms.
 3      "Contribution."    A donation of cash, personal property or
 4   services, the value of which is the net cost of the donation to
 5   the donor or the pro rata hourly wage, including benefits, of
 6   the individual performing the service.
 7      "Department."    The Department of Community and Economic
 8   Development of the Commonwealth.
 9      "Eligible organization."     An approved institution of higher
10   learning that is determined to be eligible by the department.
11      "Eligible student."    An active volunteer first responder who
12   meets the following criteria:
13          (1)     Is a resident of this Commonwealth.
14          (2)     Has been an active volunteer first responder for a
15      period of at least one year in this Commonwealth.
16          (3)     Has enrolled as a student in an approved program of
17      education at an approved institution of higher learning.
18          (4)     Provides the approved institution of higher learning
19      with a sworn or official statement by the Office of the State
20      Fire Commissioner or the chief or president of the volunteer
21      emergency medical services agency, attesting that the
22      applicant is a member in good standing of the volunteer
23      emergency medical services agency or volunteer fire company.
24      "Nonprofit emergency medical services agency."    An emergency
25   medical services agency, as defined in 35 Pa.C.S. § 8103
26   (relating to definitions), that is chartered as a nonprofit
27   corporation.
28      "Program."     The Active Volunteer First Responder Education
29   Tax Credit Program established under section 1803-I(a).
30      "Scholarship."    An award under this article to pay tuition

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 1   and school-related fees to attend an approved institution of
 2   higher learning.
 3      "School-related fees."      A fee charged by an approved
 4   institution of higher learning to all students for books,
 5   instructional materials, technology equipment and services,
 6   uniforms and activities.
 7      "Tax credit."     The tax credit authorized under this article.
 8      "Volunteer fire company."      A nonprofit chartered corporation,
 9   association or organization, located in this Commonwealth that
10   provides fire protection services and may offer other voluntary
11   emergency services within this Commonwealth.
12   Section 1803-I.    Active Volunteer First Responder Education Tax
13                Credit Program.
14      (a)   Establishment.--The Active Volunteer First Responder
15   Education Tax Credit Program is established to assist active
16   volunteer first responders with access to higher education by an
17   approved institution of higher learning. The department shall
18   administer the program.
19      (b)   Eligible organization application.--In order to qualify
20   for contributions under this article, an eligible organization
21   must submit information to the department to confirm that the
22   eligible organization offers accredited degrees or certificate
23   programs. The information shall be submitted on a form provided
24   by the department.
25      (c)   Restriction on use of contributions.--The contributions
26   received by an eligible organization from a business firm
27   claiming a tax credit under this article must be used for
28   scholarships awarded to eligible students.
29      (d)   Publication.--The department shall do all of the
30   following:

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 1            (1)   Annually transmit a list of each eligible
 2      organization under this section to the Legislative Reference
 3      Bureau for publication in the next available issue of the
 4      Pennsylvania Bulletin.
 5            (2)   Post and update the list under paragraph (1) as
 6      necessary on the publicly accessible Internet website of the
 7      department.
 8   Section 1804-I.    Business firm.
 9      (a)   Business firm application.--A business firm may apply to
10   the department for a tax credit for contributions made to an
11   eligible organization that appears on the list under section
12   1803-I(d)(1) on a form provided by the department.
13      (b)   Notification.--No later than 60 days after the
14   organization or business firm has submitted the application
15   required under this section, the department shall notify the
16   eligible organization and business firm whether the eligible
17   organization and business firm meet the requirements under this
18   article for the fiscal year.
19      (c)   Contributions.--A contribution by a business firm to an
20   eligible organization must be made no later than 60 days
21   following the approval of an application under subsection (b).
22   Section 1805-I.    Award of scholarships.
23      (a)   Eligible organizations.--An eligible organization shall
24   award an eligible student a scholarship of up to $5,000 per
25   eligible student to attend an approved institution of higher
26   learning. The award of a scholarship shall be based on
27   enrollment status as follows:
28            (1)   A full-time student who is enrolled in at least six
29      credits per semester shall be eligible to receive a
30      scholarship of up to $5,000.

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 1            (2)   A part-time student who is enrolled in at least
 2      three credits per semester shall be eligible to receive a
 3      scholarship of up to $2,500.
 4      (b)   Requirements.--An eligible student must do all of the
 5   following:
 6            (1)   Apply to the department for a scholarship under the
 7      program.
 8            (2)   Be enrolled as a student at an approved institution
 9      of higher learning.
10            (3)   Be enrolled as a student in an approved program of
11      education.
12            (4)   Obtain signatures on the application attesting to
13      the individual's status as an active volunteer first
14      responder of:
15                  (i)    the chief or president of the volunteer fire
16            company or volunteer rescue company and another officer
17            of the volunteer fire company or volunteer rescue
18            company; or
19                  (ii)    the chief or president of the emergency medical
20            services agency and another officer of the emergency
21            medical services agency.
22            (5)   Upon completion of an accredited degree or
23      certificate program, maintain active volunteer first
24      responder status for at least five years.
25      (c)   Penalty.--If an eligible student does not maintain
26   active volunteer first responder status for five years upon
27   completion of an approved program of education the eligible
28   student must pay back 20% per year pro rata of the awarded
29   scholarship.
30   Section 1806-I.       Grant of tax credit.

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 1      (a)   Authorization.--In accordance with section 1804-I, the
 2   department shall grant a tax credit certificate. The certificate
 3   may be used against a tax liability owed to the Department of
 4   Revenue by a business firm that provides proof of a contribution
 5   to a provider in the taxable year in which the contribution is
 6   made. The business firm may apply the credit against any tax due
 7   under Article III, IV, VI, VII, VIII, IX or XV, except for any
 8   tax withheld by an employer under Article III.
 9      (b)   Availability of tax credits.--Tax credits under this
10   section shall be made available by the department on a first-
11   come, first-served basis.
12      (c)   Limitation.--The tax credit may not exceed 50% of the
13   total amount contributed by a business firm to an eligible
14   organization during the taxable year of the business firm. The
15   tax credit shall not exceed $2,500 annually per business firm.
16      (d)   Additional amount.--
17            (1)   A business firm that contributes to a provider in
18      two or more consecutive years shall qualify for a 90% tax
19      credit for the contributions made in the second year and
20      every consecutive year of making a contribution to a
21      provider.
22            (2)   Nothing under this subsection may be construed to
23      require a business firm to contribute to the same eligible
24      organization every year in order for the business firm to
25      qualify for a tax credit under this subsection.
26      (e)   Pass-through entity.--
27            (1)   If a pass-through entity does not intend to use
28      each approved tax credit under this section, the pass-through
29      entity may elect in writing to distribute for no
30      consideration all or a portion of the credit to shareholders,

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 1      members or partners in proportion to the percentage interest
 2      of the shareholder, member or partner in distributions from
 3      the pass-through entity. The credits may be used by the
 4      shareholders, members or partners in the taxable year in
 5      which the contribution is made or in the taxable year
 6      immediately following the year in which the contribution is
 7      made. The election shall designate the year in which the
 8      distributed credits are to be used and shall be made
 9      according to procedures established by the Department of
10      Revenue. A pass-through entity that received a distribution
11      from a pass-through entity under this paragraph may make a
12      distribution under this paragraph.
13            (2)   A pass-through entity and a shareholder, member or
14      partner of a pass-through entity may not claim the credit
15      under this section for the same contribution.
16            (3)   A shareholder, member or partner may not carry
17      forward, carry back, obtain a refund of or sell or assign the
18      credit.
19            (4)   An individual shareholder, partner or member may
20      apply a credit distributed under this section to income
21      taxable under Article III to the shareholder, partner or
22      member, to the spouse of the shareholder, partner or member
23      or to both, if both the shareholder, partner or member and
24      the spouse report income on a joint personal income tax
25      return.
26   Section 1807-I.    Amount of tax credit.
27      (a)   Limitation.--The total aggregate amount of all tax
28   credits approved under this article may not exceed $10,000,000
29   in a fiscal year.
30      (b)   Activities.--A tax credit may not be approved for

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 1   activities that are part of a business firm's normal course of
 2   business.
 3      (c)     Tax liability.--
 4            (1)   A tax credit granted for any one taxable year may
 5      not exceed the tax liability of a business firm.
 6            (2)   A tax credit granted to a pass-through entity that
 7      elects to distribute the granted tax credit according to
 8      section 1806-I(a) for any one taxable year to a shareholder,
 9      member or partner may not exceed the tax liability of the
10      shareholder, member or partner.
11      (d)     Use.--A tax credit not used in the taxable year the
12   contribution was made may not be carried forward or carried back
13   and is not refundable or transferable.
14   Section 1808-I.    Guidelines.
15      The department, in consultation with the Department of
16   Revenue, shall establish guidelines to implement this article
17   within 90 days of the effective date of this section.
18   Section 1809-I.    Limitation.
19      A business firm may not apply for a tax credit after the
20   seventh fiscal year following the effective date of this
21   section.
22      Section 2.     The addition of Article XVIII-I of the act shall
23   apply to taxable years commencing after December 31, 2025.
24      Section 3.     This act shall take effect immediately.




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