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The Coal Waste Removal and Ultraclean Fuels Tax Credit Act. (Penna. S.B. 650) has been enacted into law.
PRINTER'S NO. 681
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THE GENERAL ASSEMBLY OF PENNSYLVANIA
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SENATE BILL
No. 650 Session of 1999
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INTRODUCED BY RHOADES, HELFRICK, ROBBINS, SLOCUM, HART, MOWERY,
KUKOVICH, COSTA, STAPLETON, MELLOW, KASUNIC, BRIGHTBILL,
LEMMOND, O'PAKE, CORMAN, SCHWARTZ, STOUT, CONTI AND WOZNIAK,
MARCH 22, 1999
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REFERRED TO FINANCE, MARCH 22, 1999
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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," providing for a program of tax incentives,
11 including investment tax credits to remove coal waste from
12 the environment and to stimulate the development of a
13 synthetic fuels industry within this Commonwealth.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
17 the Tax Reform Code of 1971, is amended by adding an article to
18 read:
19 ARTICLE XVIII-A
20 COAL WASTE REMOVAL AND ULTRACLEAN FUELS
21 TAX CREDIT
22 Section 1801-A. Short Title.--This article shall be known
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1 and may be cited as the "Coal Waste Removal and Ultraclean Fuels
2 Act."
3 Section 1802-A. Definitions.--The following words, terms and
4 phrases, when used in this article, shall have the meanings
5 ascribed to them in this section, except where the context
6 clearly indicates a different meaning:
7 "Act" means the act of March 4, 1971 (P.L.6, No.2), known as
8 the "Tax Reform Code of 1971," as amended.
9 "Department" means the Department of Revenue of the
10 Commonwealth of Pennsylvania.
11 "Developer" means the owner-operator of a facility as defined
12 herein or the operator of such a facility that has sold the
13 facility in new condition to a third party from whom that
14 operator has simultaneously leased back such facility for a
15 minimum period of twelve (12) years.
16 "Facility" means and includes all plant and equipment,
17 purchased or constructed by or on behalf of the developer, used
18 within this Commonwealth by the developer to produce one or more
19 qualified fuels.
20 "Internal Revenue Code" means the Internal Revenue Code of
21 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), as amended.
22 "Qualified fuels" means those fuels produced from non-
23 traditional coal culm and silt feedstocks, as further defined in
24 section 29(c) of the Internal Revenue Code of 1986 (Public Law
25 99-514, 26 U.S.C. § 1 et seq.).
26 Section 1803-A. Investment Tax Credits Program.--(a) A new
27 developer of a new facility for the production of one or more
28 qualified fuels shall be allowed an investment tax credit
29 against the taxes imposed under Articles II, IV and VI of the
30 act. The amount of the credit shall be computed as a percentage
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1 applied to the cost or other basis, for Federal income tax
2 purposes, of tangible personal property and other forms of
3 tangible property described in subsection (b).
4 (b) Tangible personal property and other forms of tangible
5 property which qualify for investment tax credit treatment under
6 this section, hereinafter collectively identified as "qualifying
7 property," shall meet all of the following requirements:
8 (1) Be acquired through a purchase, as defined under section
9 179(d)(2) of the Internal Revenue Code, or constructed by the
10 developer for its own use.
11 (2) Be depreciable under section 167 of the Internal Revenue
12 Code.
13 (3) Have a useful life of greater than or equal to four
14 years.
15 (4) Be located within this Commonwealth.
16 (5) Be used by the developer in the production of qualified
17 fuels.
18 (6) Be acquired by purchase or constructed on or after
19 January 1, 2000, and before January 1, 2013.
20 (7) Not be the subject of any tax credit otherwise available
21 to the developer under this act.
22 (c) Only such portion of the cost or other basis of
23 qualifying property that is properly transferred to the
24 facility's basis for depreciation for Federal income tax
25 purposes between January 1, 2000, and December 31, 2012,
26 hereinafter identified as the "tax credit base," shall be
27 subject to the investment tax credit.
28 (d) (1) The investment tax credit shall be computed as
29 fifteen per cent of the tax credit base.
30 (2) The maximum investment tax credit available for
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1 application, whether claimed by one or more taxpayers, shall not
2 exceed fifteen per cent of the capital cost of the facility.
3 (3) Any amount of allowable investment tax credit not used
4 in the tax year for which the credit was claimed can be carried
5 forward by the claiming taxpayer to succeeding years until the
6 full amount of allowable credit has been used.
7 (e) (1) The developer, upon notice to the department as
8 specified by the department, may sell or assign, in whole or in
9 part, any investment tax credit afforded under this section to
10 one or more taxpayers, provided that no claim for allowance of
11 such credit has been filed.
12 (2) A taxpayer recipient by purchase or assignment of any
13 portion of the developer's investment tax credit under paragraph
14 (1) shall initially claim such credit, upon notice to the
15 department of the derivative basis of the credit in compliance
16 with procedures specified by the department, for the tax year in
17 which the purchase or assignment is made, but in no event
18 subsequent to the filing of an income tax return for the year
19 2012.
20 (3) Any taxpayer who acquires any portion of the developer's
21 investment tax credit by sale or assignment, for value and
22 without notice of any irregularity or invalidity, shall not
23 suffer any disallowance of the credit or the imposition of any
24 adjustment or fraud penalty attributable to conduct by the
25 developer.
26 (f) (1) If, prior to the expiration of any qualifying
27 property's useful life, as used to calculate depreciation for
28 Federal income tax purposes, the developer, upon mandatory
29 notice to the department in compliance with procedures specified
30 by the department, disposes of any qualifying property in a
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1 transaction other than a sale-leaseback, upon which the
2 department has previously allowed an investment tax credit
3 claimed by any taxpayer, a portion of all such credit shall be
4 recaptured and added to the developer's tax liability for the
5 tax year in which the qualifying property is disposed.
6 (2) The portion of the investment tax credit previously
7 allowed, which is subject to recapture from the developer, shall
8 be equal to a fraction whose numerator is the number of years
9 remaining to fully depreciate for Federal income tax purposes
10 the qualifying property disposed and whose denominator is the
11 total number of years over which the property would otherwise
12 have been subject to depreciation by the developer.
13 (3) In calculating the recapture percentage, the year of
14 disposition of the qualifying property is considered a year of
15 remaining depreciation.
16 (g) The department shall verify the validity of any claim
17 for allowance of any investment tax credit afforded under this
18 section and, in the case of a fraudulent claim, may assess
19 against the developer a penalty of one hundred and twenty-five
20 per cent of the credit improperly claimed.
21 Section 1804-A. Tax Exemption.--Any qualified fuel produced
22 by a facility subject to an investment tax credit afforded by
23 section 1803-A shall be exempt from any tax otherwise imposed by
24 75 Pa.C.S. Ch. 90 (relating to liquid fuels and fuels tax).
25 Section 2. This act shall take effect immediately.
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