AN ACT

 

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

1shall have the meanings given to them in this section unless the
2context clearly indicates otherwise:

3"Applicant." A company which meets the eligibility
4requirements for the tax credit issued under this article.

5"Committee." The Natural Gas Fleet Vehicle Tax Credit
6Committee.

7"Company." An entity doing business in this Commonwealth
8which owns five or more vehicles and which is subject to tax
9under Article III, IV or VI. The term includes the shareholder
10of a Pennsylvania S corporation that is eligible for the tax
11credit provided under this article.

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

13"Dedicated compressed natural gas vehicle." A vehicle that
14is <-produced by an original equipment manufacturer or a small
15volume manufacturer that operates on 90% or more compressed
16natural gas fuel and 10% or less on gasoline or diesel fuel.
<-17manufactured by an original equipment manufacturer or original
18and third party equipment manufacturers provided that the third
19party manufacturers provide the parts or services prior to the
20original sale of the vehicle to a purchaser and the vehicle
21components, including the alternative fuel system, are covered
22by the original equipment manufacturer or under separate
23warranties.

24"Dedicated liquefied natural gas vehicle." A vehicle that <-is
25produced by an original equipment manufacturer or a small volume
26manufacturer that operates on 90% or more liquefied natural gas
27fuel and 10% or less on gasoline or diesel fuel. <-operates on 90%
28or more liquefied natural gas fuel and 10% or less on gasoline
29or diesel fuel and is manufactured by an original equipment
30manufacturer or original and third party equipment manufacturers

1provided that the third party manufacturers provide the parts or
2services prior to the original sale of the vehicle to a
3purchaser and the vehicle components, including the alternative
4fuel system, are covered by the original equipment manufacturer
5or under separate warranties.

6"Department." The Department of <-Revenue Community and
7Economic Development of the Commonwealth.

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

9"Incremental cost." The excess cost of a new natural gas
10motor vehicle over the price for a gasoline or diesel fuel motor
11vehicle of the same model. The term <-includes does not include
12the cost to retro-fit a vehicle to operate on natural gas.

13"Natural gas conversion plan." A company's plan to convert
<-14existing fleet vehicles its vehicle fleet to compressed or
15liquid liquefied natural gas-fueled vehicles by <-converting
16existing vehicles or purchasing new natural gas-fueled vehicles.

17"Natural gas fleet vehicle tax credit." Tax credits for
18which the Department of Revenue has issued a certificate under
19this article.

<-20"Secretary." The Secretary of Revenue of the Commonwealth.

21"Start date." The date on which the company may begin the
22company's conversion plan to natural gas-fueled fleet vehicles

23Section 1702-G.2. Eligibility.

24(a) Demonstration.--In order to be eligible to receive a
25natural gas fleet vehicle tax credit, a company must demonstrate
26to the department the following:

27(1) A comprehensive natural gas conversion plan of fleet
28vehicles within four years of the start date.

29(2) A natural gas conversion plan with financial
30viability.

1(3) A statement of the projected usage of natural gas
2stated in gasoline gallon equivalents <-for compressed natural 
3gas vehicles and diesel gallon equivalents for liquefied 
4natural gas vehicles accompanied by the methodology utilized.

5(4) The intent to maintain operations in this
6Commonwealth for a period of no less than five years from the
7start date.

8(5) Minimum fuel usage of 900 gasoline <-or diesel gallon
9equivalents per day. Fuel usage requirements may be met from
10a single applicant or multiple companies under a single
11application if:

12(i) The companies have an agreement to utilize a
<-13single natural gas fueling facility.

14(ii) The companies demonstrate that the utilization
15of <-the single a natural gas fueling facility would be at
16a minimum level of 900 gasoline <-or diesel gallon
17equivalents per day or have an existing contract with a
18third party fuel provider that is willing to construct
19the station if the natural gas vehicle tax credit is
20awarded.

21(b) Eligible vehicle <-and retrofit types.--The following
22shall constitute eligible vehicle and retrofit types under this
23chapter:

24(1) Dedicated compressed natural gas vehicles having a
25gross vehicle weight rating of at least 14,000 pounds.

26(2) Dedicated liquefied natural gas vehicles having a
27gross vehicle weight rating of at least 14,000 pounds.

28Section 1703-G.2. Application process.

29(a) Application.--<-A company must complete and submit to the
30department a natural gas fleet vehicle tax credit application. <-A

1company may apply to the department for a natural gas fleet
2vehicle tax credit under this article. The application must be
3on the form required by the department and include the
4documentation to establish eligibility as required by section
51702-G.2.

6(b) Natural Gas Fleet Vehicle Tax Credit <-Committee
7establishment and duties.

8(1) The Natural Gas Fleet Vehicle Tax Credit Committee
<-9Committee.--The Natural Gas Fleet Vehicle Tax Credit
10Committee is established and shall consist of members
11designated by the following, except that none of the
12following may be designees:

<-13(i) The Secretary of Community and Economic
14Development of the Commonwealth.

15(ii) The Secretary of Transportation of the
16Commonwealth.

17(iii) The Secretary of Environmental Protection.

18(iv) The secretary.

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

20(vi) The Executive Director of Associated Petroleum
21Industries of Pennsylvania.

22(2) Once applications have been filed with the
23department, the committee shall review all applications, rank
24applications according to projected gasoline gallon
25equivalents of natural gas and recommend applications to the
26department.

<-27(1) The Secretary of Community and Economic Development.

28(2) The Secretary of Transportation.

29(3) The Secretary of Environmental Protection.

30(4) The Secretary of Revenue.

1(5) The chairman of the Marcellus Shale Coalition.

2(6) The Executive Director of Associated Petroleum
3Industries of Pennsylvania.

4(c) Application period and review.--The department shall
5establish application periods that may not exceed 90 days. The
6applications received during an application period shall be
7reviewed by the committee and ranked based on natural gas
8utilization. The committee shall recommend applications to the
9department.

<-10(c) (d) Approval.--Once applications are ranked by the
11committee under subsection (b)(2) (c), the department <-shall may
12approve the applications according to their discretion and
13availability of <-natural gas fleet vehicle tax credits. The
14department and the company shall execute a commitment letter
15containing the following: <-natural gas fleet vehicle tax credits.
16Applications that are not approved must be returned to the
17committee for review during the next application period.

18(e) Contract.--The department and the company shall execute
19a contract containing the following:

20(1) A description of the natural gas conversion plan.

21(2) The amount of private capital investment in the
22natural gas conversion plan.

23(3) A signed statement that the company intends to
24complete its conversion plan and remain in this Commonwealth
25for five years from the start date.

26(4) Any other information as the department deems
27appropriate.

<-28(d) Commitment letter.--After a commitment letter has been
29signed by the Commonwealth and the company, the company shall
30receive a natural gas fleet vehicle tax credit certificate and

1filing information.

<-2(f) Certificate.--Upon execution of the contract required in
3subsection (e), the department shall award the company a natural
4gas fleet vehicle tax credit and issue the company a natural gas
5fleet vehicle tax credit certificate.

6Section 1704-G.2. Natural gas fleet vehicle tax credits.

7(a) Maximum amount.--A company may claim a natural gas fleet
8vehicle tax credit of up to 60% of the incremental cost for
9vehicles having a gross vehicle weight rating of at least 14,000
10pounds but no more than 26,000 pounds, or 50% of the incremental
11cost for vehicles having a gross vehicle weight rating over
1226,000 pounds. The incremental cost for vehicles with a gross
13vehicle weight rating between 14,000 pounds and 26,000 pounds
14shall be capped at $25,000. The incremental cost for vehicles
15with a gross vehicle weight rating of more than 26,000 pounds
16shall be capped at $50,000.

17(b) Applicable taxes.--A company may apply the natural gas
18fleet vehicle tax credit to 100% of all or a combination of any
19of the following taxes of the company:

20(1) State corporate net income tax.

21(2) Capital stock and franchise tax or the capital stock
22and franchise tax of a shareholder of the company if the
23company is a Pennsylvania S corporation.

24(3) Gross premiums tax.

25(4) Gross receipts tax.

26(5) Bank and trust company shares tax.

27(6) Mutual thrift institution tax.

28(7) Title insurance company shares tax.

29(8) Personal income tax or the personal income tax of
30shareholders of a Pennsylvania S corporation.

1(c) Term.--A company may claim the natural gas fleet vehicle
2tax credit in one year or spread the credit over a period
3determined by the department but not to exceed five years from
4the date the company first submits a certificate. <-A company may 
5not carry back or obtain a refund of the natural gas fleet 
6vehicle tax credit.

7(d) Sale or assignment.--

8(1) A natural gas fleet vehicle tax credit recipient,
9upon application to and approval by the department, may sell
10or assign, in whole or in part, a natural gas fleet vehicle
11tax credit granted to the recipient if no claim for allowance
12of the credit is filed within one year from the date the
13credit is granted by the department.

14(2) The purchaser or assignee of a natural gas fleet
15vehicle tax credit shall immediately claim the credit in the
16taxable year in which the purchase or assignment is made. The
17purchaser or assignee may not carry back, obtain a refund of
18or sell or assign the natural gas fleet vehicle tax credit.
19The purchaser or assignee shall notify the department of the
20seller or assignor of the natural gas fleet vehicle tax
21credit in compliance with procedures specified by the
22department.

23(3) The department shall promulgate guidelines for the
24approval of applications under this subsection.

<-25(e) Availability.--Each fiscal year, $25,000,000 in natural
26gas fleet vehicle tax credits shall be made available to the
27department and may be awarded by the department in accordance
28with this article.

<-29(e) Limitation.--In granting a natural gas fleet vehicle tax
30credit certificate under this article, the department:

1(i) may not grant more than $25,000,000 in natural
2gas fleet vehicle tax credit certificates in a fiscal
3year; or

4(ii) may not grant more than $1,000,000 in natural
5gas fleet vehicle tax credit certificates to a single
6company in a fiscal year.

7Section 1705-G.2. Penalties.

8(a) Failure to maintain operations.--A company which
9receives natural gas fleet vehicle tax credits and fails to <-keep
10and operate in this Commonwealth 80% of <-maintain Pennsylvania
11registration for the natural gas vehicles for which they
12received the tax credits for a period of five years from the
13start date shall refund to the Commonwealth the total amount of
14credits granted.

15(b) Failure to complete conversion plan.--A company which
16receives a natural gas fleet vehicle tax credit and fails to
17complete the conversion plan within four years shall refund to
18the Commonwealth the total amount of credits granted.

19(c) Waiver.--The department may waive the penalties under
20subsections (a) and (b) if it is determined that a company's
21conversion plan was not completed because of circumstances
22beyond the company's control. Circumstances shall include
23natural disasters, unforeseen industry trends or a loss of a
24major supplier or market. The company must promptly notify the
25department of circumstances beyond its control which would delay
26completion of the project.

27Section 1706-G.2. Report to General Assembly

28No later than June 1, 2014, and each June 1 thereafter, the
29department shall submit a report on the natural gas fleet
30vehicle tax credits granted under this article. The report shall

1include the names of taxpayers who utilized the credit as of the
2date of the report and the amount of credits approved. The
3report may include recommendations for changes in the
4calculation or administration of the natural gas fleet vehicle
5tax credit and other information as the department deems
6appropriate. The report shall be submitted to all of the
7following:

8(1) The chairman and minority chairman of the
9Appropriations Committee of the Senate.

10(2) The chairman and minority chairman of the
11Appropriations Committee of the House of Representatives.

12(3) The chairman and minority chairman of the Finance
13Committee of the Senate.

14(4) The chairman and the minority chairman of the
15Finance Committee of the House of Representatives.

16Section 1707-G.2. Time limitations.

17A company shall not be entitled to a natural gas fleet
18vehicle tax credit for taxable years ending after December 31,
192016.

20Section 1708-G.2. <-Regulations Guidelines.

21The <-secretary shall promulgate regulations department, in
22conjunction with the Department of Revenue, shall promulgate
23guidelines necessary for the implementation and administration
24of this article.

25Section 2. This act shall take effect in 60 days.