Bill Text: PA HB880 | 2011-2012 | Regular Session | Introduced

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Bill Title: Establishing the Pennsylvania Coal and Air Quality Improvement Tax Credit.

Spectrum: Strong Partisan Bill (Republican 36-3)

Status: (Introduced - Dead) 2011-03-02 - Referred to FINANCE [HB880 Detail]

Download: Pennsylvania-2011-HB880-Introduced.html

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PRINTER'S NO. 936
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 880 Session of2011
INTRODUCED BY PYLE, ADOLPH, BAKER, BENNINGHOFF, BOYD, CAUSER, CLYMER, CUTLER, DENLINGER, ELLIS, EVERETT, FABRIZIO, FLECK, GABLER, GEIST, GROVE, HARHART, HARPER, HENNESSEY, HESS, HUTCHINSON, KNOWLES, LONGIETTI, MARSICO, METZGAR, MOUL, MURT, OBERLANDER, PICKETT, RAPP, READSHAW, REED, REICHLEY, ROAE, ROCK, SONNEY, STERN, STEVENSON AND VULAKOVICH, MARCH 2, 2011
REFERRED TO COMMITTEE ON FINANCE, MARCH 2, 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," establishing the Pennsylvania Coal and Air
Quality Improvement Tax Credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Article XVIII-C heading of the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, added
July 9, 2008 (P.L.922, No.66), is amended to read:
ARTICLE XVIII-C
[RESERVED]
PENNSYLVANIA COAL AND AIR QUALITY IMPROVEMENT
TAX CREDIT
Section 2. The act is amended by adding sections to read:
Section 1801-C. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Compliance facility." Property that is designed,
constructed or installed, and used at a coal-fired or waste
coal-fired electric generating facility for the primary purpose
of complying with acid rain control requirements under Title IV
of the Clean Air Act Amendments of 1990 (Public Law 101-549, 42
U.S.C. § 7651 et seq.) or that controls or limits emissions of
sulphur or nitrogen compounds or mercury resulting from the
combustion of coal through the removal or reduction of those
compounds before, during or after the combustion of the coal,
but before the combustion products are emitted into the
atmosphere. The term includes, but is not limited to, the
following:
(1) A facility that removes sulfur compounds from coal
before the combustion of the coal and is located off the
premises of an electric generating facility where the coal
processed by the facility that removes sulfur compounds from
coal is burned.
(2) Modifications to an electric generating facility
where such property is constructed or installed that are
necessary to accommodate the construction or installation,
and operation of such property.
(3) A by-product disposal facility that exclusively
disposes of wastes produced by such property and other coal
combustion by-products produced by the generating unit in or
to which such property is incorporated or connected
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regardless of whether the by-product disposal facility is
located on the same premises as such property or generating
unit that produces the wastes disposed of at such property.
(4) A facility or equipment that is acquired,
constructed or installed, and used at a coal-fired electric
generating facility exclusively for the purpose of handling
the by-products produced by the first facility or other coal
combustion by-products produced by the generating unit in or
to which the first facility is incorporated or connected.
(5) A flue gas desulfurization system that is connected
to a coal-fired electric generating unit.
(6) A selective catalytic reduction system that is
connected to a coal-fired electric generation unit and used
to reduce the level of nitrogen oxide emissions.
(7) Low nitrogen oxide burners that are used to reduce
the level of nitrogen oxide emissions.
(8) An activated carbon injection system or other
similar system designed to reduce the level of mercury
emissions.
(9) A facility or equipment acquired, constructed or
installed, and used, at a coal-fired electric generating unit
primarily for the purpose of handling the by-products
produced by such facility or other coal combustion by-
products produced by the generating unit in or to which such
facility is incorporated or connected.
"Department." The Department of Revenue of the Commonwealth.
"Pass-through entity." A partnership as defined in section
301(n.0) or a Pennsylvania S corporation as defined in section
301(n.1).
"Pennsylvania coal." Coal mined from coal deposits located
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in or waste coal recovered within this Commonwealth.
"Pennsylvania qualified coal expense." The cost to purchase
Pennsylvania qualified coal that is delivered to coal-fired
electric generating units or the handling cost incurred to
recover waste coal for use in a waste coal-fired electric
generating unit. For purposes of this definition, the handling
cost does not include costs to transport coal from the mine to
an end-user.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV or VI. The term shall not include any tax
withheld by an employer from an employee under Article III.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Taxpayer." An entity subject to tax under Article III, IV
or VI. The term shall include the shareholder of a Pennsylvania
S corporation that receives a research and development tax
credit.
"Waste coal facility." A facility that utilizes coal
previously disposed or abandoned prior to July 31, 1982, or
disposed of thereafter in a permitted coal refuse disposal site
or classified as waste coal.
Section 1802-C. Establishment of program.
(a) General rule.--A qualified entity shall receive the tax
credit authorized under section 1803-C.
(b) Administration and regulations.--The department shall
administer this article and cooperate with the Department of
Environmental Protection. The Department of Environmental
Protection and the Pennsylvania Public Utility Commission shall
provide assistance to the department in identifying compliance
facilities and providing other information that may be necessary
to ensure the proper administration of this article.
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Section 1803-C. Credit for Pennsylvania qualified coal
expenses.
(a) General rule.--A taxpayer who incurs Pennsylvania
qualified coal expense in a calendar year may apply for a tax
credit as provided in this article. By September 15 of each
calendar year a taxpayer must submit an application to the
department for Pennsylvania qualified coal expense incurred in
the calendar year that ended in the prior calendar year.
(b) Amount.--A taxpayer that is qualified under subsection
(a) shall receive a tax credit for the calendar year in the
amount of $3 per ton for each ton of Pennsylvania qualified coal
expense.
(c) Notification to taxpayer.--By December 15 of the
calendar year following the close of the calendar year during
which the Pennsylvania qualified coal expense was incurred, the
department shall notify the taxpayer of the amount of the
taxpayer's tax credit approved by the department.
Section 1804-C. Carryover, carryback, refund and assignment of
credit.
(a) General rule.--If the taxpayer cannot use the entire
amount of the tax credit for the taxable year in which the tax
credit is first approved, then the excess may be carried over to
succeeding taxable years and used as a credit against the
qualified tax liability of the taxpayer for those taxable years.
Each time that the tax credit is carried over to a succeeding
taxable year, it is to be reduced by the amount that was used as
a credit during the immediately preceding taxable year. The tax
credit provided by this article may be carried over and applied
to succeeding taxable years for no more than 15 taxable years
following the first taxable year for which the taxpayer was
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entitled to claim the credit.
(b) Application.--A tax credit approved by the department
for Pennsylvania qualified coal expense in a calendar year first
shall be applied against the taxpayer's qualified tax liability
for the current taxable year as of the date on which the credit
was approved before the tax credit is applied against any tax
liability under subsection (a).
(c) Restriction.--A taxpayer is not entitled to carry back
or obtain a refund of an unused tax credit.
Section 1805-C. Determination of Pennsylvania qualified coal
expense.
In prescribing standards for determining which qualified coal
expenses are considered Pennsylvania qualified coal expense for
purposes of computing the credit provided by this article, the
department may consider:
(1) The location where the coal deposits are mined.
(2) The residence or business location of the person or
persons where the qualifying entity is located.
(3) The location and the characteristics of the
compliance facility.
(4) Other factors that the department determines are
relevant for the determination.
Section 1806-C. Time limitation.
A taxpayer is not entitled to a tax credit for expenses
incurred in calendar years beginning after December 31, 2015.
Section 1807-C. Limitation on credits.
(a) General rule.--The total amount of credits approved by
the department shall not exceed $30,000,000 in any fiscal year.
(b) Calculation.--If the total amount of tax credits applied
for by all taxpayers exceeds the amount allocated for those
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credits, then the tax credit to be received by each applicant
shall be the product of the allocated amount multiplied by the
quotient of the tax credit applied for by the applicant divided
by the total of all tax credits applied for by all applicants,
the algebraic equivalent of which is:
taxpayer's tax credit = amount allocated for those
credits X tax credit applied for by the applicant/total
of all tax credits applied for by all applicants.
Section 1808-C. Pass-through entity.
(a) General rule.--If a pass-through entity has any unused
tax credit under section 1804-C, the entity may elect, in
writing, according to the department's procedures, to transfer
all or a portion of the credit to shareholders, members or
partners in proportion to the shares of the entity's
distributive income to which the shareholder, member or partner
is entitled.
(b) Independent from other tax credits.--The tax credit
provided under subsection (a) is in addition to any tax credit
to which a shareholder, member or partner of a pass-through
entity is otherwise entitled under this article. However, a
pass-through entity and a shareholder, member or partner of a
pass-through entity may not claim a credit under this article
for the same qualified coal expense.
(c) Claim of tax credit.--A shareholder, member or partner
of a pass-through entity to whom credit is transferred under
subsection (a) must immediately claim the credit in the taxable
year in which the transfer is made. The shareholder, member or
partner may not carry forward, carry back, obtain a refund of or
sell or assign the credit.
Section 1809-C. Termination.
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The department shall not approve a tax credit under this
article for calendar years ending after December 31, 2015.
Section 1810-C. Report.
The department shall annually make a report to the
Environmental Resources and Energy Committee of the Senate and
the Environmental Resources and Energy Committee of the House of
Representatives on the activities undertaken pursuant to this
article including, but not limited to:
(1) The number and amount of tax credits provided.
(2) The number and description of the business entities
receiving the tax credits.
(3) The amount of coal on which the tax credits were
provided against.
Section 1811-C. Regulations.
The secretary shall promulgate regulations necessary for the
implementation and administration of this article.
Section 1812-C. Applicability.
This article shall apply to Pennsylvania qualified coal
expenses on or after January 1, 2010.
Section 3. This act shall take effect in 60 days.
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