THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY GROVE, GERGELY, MOUL, BARBIN, BARRAR, BENNINGHOFF, BOBACK, R. BROWN, CLYMER, CUTLER, DAVIS, FABRIZIO, GINGRICH, GODSHALL, KAUFFMAN, MAHONEY, MATZIE, MICOZZIE, PAYTON, PICKETT, PYLE, READSHAW, ROCK, SAINATO, SAYLOR, SCHMOTZER AND TRUITT, SEPTEMBER 17, 2012

REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 17, 2012  

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," providing for a natural gas vehicle tax credit.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, is amended by adding an article to

read:

ARTICLE XIX-B

NATURAL GAS VEHICLE TAX CREDIT

Section 1901-B.  Scope of article.

This article provides for a natural gas vehicle tax credit.

Section 1902-B.  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:

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

"Incremental cost."  The difference between the cost of a

natural gas vehicle and the cost of the same or similar motor

vehicle, manufactured to operate exclusively on gasoline or

diesel fuel.

"Internal Revenue Code."  The Internal Revenue Code of 1986

(Public Law 99-514, 26 U.S.C. § 1 et seq.).

"Natural gas vehicle."  A motor vehicle that has a gross

vehicle weight of at least 33,000 pounds, is produced by an

original equipment manufacturer and operates:

(1)  on 100% compressed natural gas fuel; or

(2)  on 90% or more liquefied natural gas fuel and 10% or

less on gasoline or diesel fuel.

"Original equipment manufacturer."  An entity which

originally manufactures a natural gas vehicle for sale.

"Pass-through entity."  A partnership as defined in section

301(n.0) or a Pennsylvania S corporation as defined in section

301(n.1).

"Qualified expense."  The expense paid by a taxpayer for a

natural gas vehicle.

"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.

"Tax credit."  The natural gas vehicle tax credit established

by this article.

"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.

Section 1903-B.  Credit for purchase of natural gas vehicle.

(a)  General rule.--A taxpayer who incurs a qualified expense

in a taxable year may apply for a tax credit as provided in this

article. By September 15, a taxpayer must submit an application

to the department for a qualified expense incurred in the

taxable 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 taxable year in the

amount of, for each qualified expense, the lesser of 50% of the

incremental cost of the natural gas vehicle or $12,500.

(c)  Notification from department.--By December 15 of the

calendar year following the close of the taxable year during

which the qualified expense was incurred, the department shall

notify the taxpayer of the amount of the taxpayer's tax credit

approved by the department.

Section 1904-B.  Carryover, Carryback, Refund and Assignment of

Credit.

(a)  The following shall apply to tax credits:

(1)  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.

(2)  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.

(3)  The tax credit may be carried over and applied to

succeeding taxable years for no more than five taxable years

following the first taxable year for which the taxpayer was

entitled to claim the credit.

(4)  A tax credit approved by the department for a

qualified expense in a taxable year first shall be applied

against the taxpayer's qualified tax liability for the

current taxable year as of the date on which the tax credit

was approved before the tax credit is applied against any tax

liability under paragraph (1).

(5)  A taxpayer may not carry back or obtain a refund of

an unused tax credit.

(6)  A taxpayer, upon application to and approval by the

Department of Community and Economic Development, may sell or

assign, in whole or in part, a tax credit granted to the

taxpayer. The Department of Community and Economic

Development shall establish guidelines for the approval of

applications under this paragraph.

(7)  The purchaser or assignee of a portion of a tax

credit under paragraph (6) shall immediately claim the credit

in the taxable year in which the purchase or assignment is

made. The amount of the tax credit that a purchaser or

assignee may use against any one qualified tax liability may

not exceed 100% of the qualified tax liability for the

taxable year. The purchaser or assignee may not carry over,

carry back, obtain a refund of or assign the tax credit. The

purchaser or assignee shall notify the department of the

seller or assignor of the tax credit in compliance with

procedures specified by the department.

Section 1905-B.  Application of Internal Revenue Code.

The provisions of section 41 of the Internal Revenue Code and

the regulations promulgated regarding those provisions shall

apply to the department's interpretation and administration of

the credit provided by this article. References to the Internal

Revenue Code shall mean the sections of the Internal Revenue

Code as existing on any date of interpretation of this article.

However, if those sections of the Internal Revenue Code

referenced in this article are repealed or terminated,

references to the Internal Revenue Code shall mean those

sections last having full force and effect. If, after repeal or

termination, the Internal Revenue Code sections are revised or

reenacted, references in this article to Internal Revenue Code

sections shall mean those revised or reenacted sections.

Section 1906-B.  (Reserved).

Section 1907-B.  Time Limitations.

A taxpayer is not entitled to a tax credit for qualified

expenses incurred in taxable years ending after December 31,

2020. The termination date in section 41(h) of the Internal

Revenue Code does not apply to a taxpayer who is eligible for

the tax credit under this article for the taxable year in which

the qualified expense is incurred.

Section 1908-B.  Limitation on credits.

(a)  General rule.--The total amount of credits approved by

the department shall not exceed:

(1)  In fiscal year 2012-2013, $30,000,000.

(2)  In fiscal year 2013-2014, $30,000,000.

(3)  In fiscal year 2014-2015, $30,000,000.

(b)  Prorata distribution.--If the total amount of tax

credits applied for by all taxpayers, exceeds the amount

allocated for those tax 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 2.  This act shall take effect in 60 days.