1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," providing for a natural gas fleet vehicle tax
11credit; and imposing penalties.

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
15the Tax Reform Code of 1971, is amended by adding an article to
16read:

17ARTICLE XVII-G.2

18NATURAL GAS FLEET VEHICLE TAX CREDIT

19Section 1701-G.2. Definitions.

20The following words and phrases when used in this article
21shall have the meanings given to them in this section unless the

1context clearly indicates otherwise:

2"Applicant." A company which meets the eligibility
3requirements for the tax credit issued under this article.

4"Committee." The Natural Gas Fleet Vehicle Tax Credit
5Committee.

6"Company." An entity doing business in this Commonwealth
7which owns five or more vehicles and which is subject to tax
8under Article III, IV or VI. The term includes the shareholder
9of a Pennsylvania S corporation that is eligible for the tax
10credit provided under this article.

11"Conversion plan." A natural gas conversion plan.

12"Dedicated compressed natural gas vehicle." A vehicle that
13is produced by an original equipment manufacturer or a small
14volume manufacturer that operates on 90% or more compressed
15natural gas fuel and 10% or less on gasoline or diesel fuel.

16"Dedicated liquefied natural gas vehicle." A vehicle that is
17produced by an original equipment manufacturer or a small volume
18manufacturer that operates on 90% or more liquefied natural gas
19fuel and 10% or less on gasoline or diesel fuel.

20"Department." The Department of Revenue of the Commonwealth.

21"Fleet vehicle." A vehicle registered to a company.

22"Incremental cost." The excess cost of a new natural gas
23motor vehicle over the price for a gasoline or diesel fuel motor
24vehicle of the same model. The term includes the cost to retro-
25fit a vehicle to operate on natural gas.

26"Natural gas conversion plan." A company's plan to convert
27existing fleet vehicles to compressed or liquid natural gas-
28fueled vehicles by converting existing vehicles or purchasing
29new natural gas-fueled vehicles.

30"Natural gas fleet vehicle tax credit." Tax credits for

1which the Department of Revenue has issued a certificate under
2this article.

3"Secretary." The Secretary of Revenue of the Commonwealth.

4"Start date." The date on which the company may begin the
5company's conversion plan to natural gas-fueled fleet vehicles

6Section 1702-G.2. Eligibility.

7(a) Demonstration.--In order to be eligible to receive a
8natural gas fleet vehicle tax credit, a company must demonstrate
9to the department the following:

10(1) A comprehensive natural gas conversion plan of fleet
11vehicles within four years of the start date.

12(2) A natural gas conversion plan with financial
13viability.

14(3) A statement of the projected usage of natural gas
15stated in gasoline gallon equivalents accompanied by the
16methodology utilized.

17(4) The intent to maintain operations in this
18Commonwealth for a period of no less than five years from the
19start date.

20(5) Minimum fuel usage of 900 gasoline gallon
21equivalents per day. Fuel usage requirements may be met from
22a single applicant or multiple companies under a single
23application if:

24(i) The companies have an agreement to utilize a
25single natural gas fueling facility.

26(ii) The companies demonstrate that the utilization
27of the single natural gas fueling facility would be at a
28minimum level of 900 gasoline gallon equivalents per day
29or have an existing contract with a third party fuel
30provider that is willing to construct the station if the

1natural gas vehicle tax credit is awarded.

2(b) Eligible vehicle and retrofit types.--The following
3shall constitute eligible vehicle and retrofit types under this
4chapter:

5(1) Dedicated compressed natural gas vehicles having a
6gross vehicle weight rating of at least 14,000 pounds.

7(2) Dedicated liquefied natural gas vehicles having a
8gross vehicle weight rating of at least 14,000 pounds.

9Section 1703-G.2. Application process.

10(a) Application.--A company must complete and submit to the
11department a natural gas fleet vehicle tax credit application.

12(b) Natural Gas Fleet Vehicle Tax Credit Committee
13establishment and duties.--

14(1) The Natural Gas Fleet Vehicle Tax Credit Committee
15is established and shall consist of members designated by the
16following, except that none of the following may be
17designees:

18(i) The Secretary of Community and Economic
19Development of the Commonwealth.

20(ii) The Secretary of Transportation of the
21Commonwealth.

22(iii) The Secretary of Environmental Protection.

23(iv) The secretary.

24(v) The chairman of the Marcellus Shale Coalition.

25(vi) The Executive Director of Associated Petroleum
26Industries of Pennsylvania.

27(2) Once applications have been filed with the
28department, the committee shall review all applications, rank
29applications according to projected gasoline gallon
30equivalents of natural gas and recommend applications to the

1department.

2(c) Approval.--Once applications are ranked by the committee
3under subsection (b)(2), the department shall approve the
4applications according to their discretion and availability of
5natural gas fleet vehicle tax credits. The department and the
6company shall execute a commitment letter containing the
7following:

8(1) A description of the natural gas conversion plan.

9(2) The amount of private capital investment in the
10natural gas conversion plan.

11(3) A signed statement that the company intends to
12complete its conversion plan and remain in this Commonwealth
13for five years from the start date.

14(4) Any other information as the department deems
15appropriate.

16(d) Commitment letter.--After a commitment letter has been
17signed by the Commonwealth and the company, the company shall
18receive a natural gas fleet vehicle tax credit certificate and
19filing information.

20Section 1704-G.2. Natural gas fleet vehicle tax credits.

21(a) Maximum amount.--A company may claim a natural gas fleet
22vehicle tax credit of up to 60% of the incremental cost for
23vehicles having a gross vehicle weight rating of at least 14,000
24pounds but no more than 26,000 pounds, or 50% of the incremental
25cost for vehicles having a gross vehicle weight rating over
2626,000 pounds. The incremental cost for vehicles with a gross
27vehicle weight rating between 14,000 pounds and 26,000 pounds
28shall be capped at $25,000. The incremental cost for vehicles
29with a gross vehicle weight rating of more than 26,000 pounds
30shall be capped at $50,000.

1(b) Applicable taxes.--A company may apply the natural gas
2fleet vehicle tax credit to 100% of all or a combination of any
3of the following taxes of the company:

4(1) State corporate net income tax.

5(2) Capital stock and franchise tax or the capital stock
6and franchise tax of a shareholder of the company if the
7company is a Pennsylvania S corporation.

8(3) Gross premiums tax.

9(4) Gross receipts tax.

10(5) Bank and trust company shares tax.

11(6) Mutual thrift institution tax.

12(7) Title insurance company shares tax.

13(8) Personal income tax or the personal income tax of
14shareholders of a Pennsylvania S corporation.

15(c) Term.--A company may claim the natural gas fleet vehicle
16tax credit in one year or spread the credit over a period
17determined by the department but not to exceed five years from
18the date the company first submits a certificate.

19(d) Sale or assignment.--

20(1) A natural gas fleet vehicle tax credit recipient,
21upon application to and approval by the department, may sell
22or assign, in whole or in part, a natural gas fleet vehicle
23tax credit granted to the recipient if no claim for allowance
24of the credit is filed within one year from the date the
25credit is granted by the department.

26(2) The purchaser or assignee of a natural gas fleet
27vehicle tax credit shall immediately claim the credit in the
28taxable year in which the purchase or assignment is made. The
29purchaser or assignee may not carry back, obtain a refund of
30or sell or assign the natural gas fleet vehicle tax credit.

1The purchaser or assignee shall notify the department of the
2seller or assignor of the natural gas fleet vehicle tax
3credit in compliance with procedures specified by the
4department.

5(3) The department shall promulgate guidelines for the
6approval of applications under this subsection.

7(e) Availability.--Each fiscal year, $25,000,000 in natural
8gas fleet vehicle tax credits shall be made available to the
9department and may be awarded by the department in accordance
10with this article.

11Section 1705-G.2. Penalties.

12(a) Failure to maintain operations.--A company which
13receives natural gas fleet vehicle tax credits and fails to keep
14and operate in this Commonwealth 80% of the natural gas vehicles
15for which they received the tax credits for a period of five
16years from the start date shall refund to the Commonwealth the
17total amount of credits granted.

18(b) Failure to complete conversion plan.--A company which
19receives a natural gas fleet vehicle tax credit and fails to
20complete the conversion plan within four years shall refund to
21the Commonwealth the total amount of credits granted.

22(c) Waiver.--The department may waive the penalties under
23subsections (a) and (b) if it is determined that a company's
24conversion plan was not completed because of circumstances
25beyond the company's control. Circumstances shall include
26natural disasters, unforeseen industry trends or a loss of a
27major supplier or market. The company must promptly notify the
28department of circumstances beyond its control which would delay
29completion of the project.

30Section 1706-G.2. Report to General Assembly

1No later than June 1, 2014, and each June 1 thereafter, the
2department shall submit a report on the natural gas fleet
3vehicle tax credits granted under this article. The report shall
4include the names of taxpayers who utilized the credit as of the
5date of the report and the amount of credits approved. The
6report may include recommendations for changes in the
7calculation or administration of the natural gas fleet vehicle
8tax credit and other information as the department deems
9appropriate. The report shall be submitted to all of the
10following:

11(1) The chairman and minority chairman of the
12Appropriations Committee of the Senate.

13(2) The chairman and minority chairman of the
14Appropriations Committee of the House of Representatives.

15(3) The chairman and minority chairman of the Finance
16Committee of the Senate.

17(4) The chairman and the minority chairman of the
18Finance Committee of the House of Representatives.

19Section 1707-G.2. Time limitations.

20A company shall not be entitled to a natural gas fleet
21vehicle tax credit for taxable years ending after December 31,
222016.

23Section 1708-G.2. Regulations.

24The secretary shall promulgate regulations necessary for the
25implementation and administration of this article.

26Section 2. This act shall take effect in 60 days.