PRINTER'S NO. 976
No. 866 Session of 1983
INTRODUCED BY STUBAN, LAUGHLIN, HASAY, JAROLIN, CAWLEY,
PETRARCA, BLAUM, SERAFINI, LUCYK, SHOWERS, BELFANTI, TIGUE,
WARGO, BATTISTO, BALDWIN, PHILLIPS, BELARDI, KLINGAMAN,
GRIECO, LETTERMAN, W. W. FOSTER, COSLETT, DAVIES, LESCOVITZ,
PISTELLA, McCALL, FREEMAN, McHALE, CLARK, RUDY, KASUNIC,
GALLAGHER, F. E. TAYLOR, WAMBACH, KOWALYSHYN, DOMBROWSKI,
STEIGHNER, DALEY, ALDERETTE AND MORRIS, APRIL 26, 1983
REFERRED TO COMMITTEE ON TRANSPORTATION, APRIL 26, 1983
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," further providing for maintenance-of-way tax
11 credits.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 1101.2 of the act of March 4, 1971
15 (P.L.6, No.2), known as the Tax Reform Code of 1971, added March
16 27, 1980 (P.L.60, No.24), is amended to read:
17 Section 1101.2. Credit Against Tax.--(a) Subject to the
18 further provisions hereof, a credit against the tax imposed by
19 this act shall be granted to every railroad company, equal to
20 twenty-five per cent of the amount expended in this Commonwealth
1 during calendar year 1980 and each calendar year thereafter, for
2 the maintenance and improvement of rights-of-way, said credit to
3 be applied to the succeeding tax year; however, in order to
4 qualify for the credit each year, a railroad company must spend,
5 in Pennsylvania, an amount equivalent to at least twice the
6 amount of the tax credit granted for the prior year; and,
7 further, in no taxable year shall the amount of the credit
8 allowed exceed the total of the tax due.
9 (b) For the purpose of this act, "maintenance and
10 improvement of rights-of-way" shall mean and include only those
11 capital and maintenance expenditures, except depreciation, in
12 the official maintenance-of-way and capital track accounts of
13 said railroad company for ties, rails, signals and interlockers,
14 communication systems, power transmission systems, other track
15 materials, ballast and related labor as presently prescribed
16 under the ICC Uniform System of Accounts.
17 (c) Applications for tax credits shall be filed with the
18 Secretary of Revenue in such form as the secretary shall
19 prescribe, not later than sixty days prior to the commencement
20 of the tax year to which the credit is to be applied. The
21 secretary shall review each such application, and shall grant
22 the same provided that the applicant certifies that the claimed
23 expenditures have been made, and that the railroad company will
24 continue to make substantial investment in the Commonwealth in
25 the maintenance and improvement of rights-of-way during the
26 ensuing year. Investment in the improvement and maintenance of
27 rights-of-way during the taxable year shall be increased above
28 the level which would have been budgeted for such purposes
29 without the credit by at least the amount of the credit. For
30 purposes of this section, "claimed expenditures" shall not
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1 include any funds spent as a consequence of the allowance of a
2 tax credit. The decision of the secretary granting or denying a
3 claimed credit shall be communicated to the applicant prior to
4 the commencement of the tax year to which the credit is proposed
5 to be applied, and said decision shall be final, subject only to
6 review by the Commonwealth Court in the manner prescribed by 2
7 Pa.C.S. § 701 et seq. (relating to judicial review of
8 Commonwealth agency action).
9 (d) Every railroad company which applies for and is granted
10 a tax credit under the provisions of this act shall be required
11 to furnish to the members of the General Assembly and the
12 Secretary of Revenue an annual report of systemwide expenditures
13 for those items included in subsection (b) which includes data
14 on Pennsylvania as well as comparable data for those other
15 states in which the railroad company operates together with an
16 accounting of additional expenditure directly attributable to
17 tax credit statutes.
18 (e) No railroad company shall be entitled to receive the
19 credit established pursuant to this section unless and until
20 such railroad company agrees, in writing, that whenever such
21 railroad company abandons any part of its right-of-way, the
22 abandoned portion of its right-of-way shall be transferred to
23 the Department of Environmental Resources at fair market value
24 within five years of the abandonment proceeding. The railroad
25 company will continue to pay any or all real property taxes
26 imposed on such abandoned right-of-way, or in lieu of such
27 payment, then the property shall be conveyed to the Commonwealth
28 to be used for recreational purposes.
29 (f) All tax credits received by an individual railroad
30 company under this section shall accrue and be applied to the
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1 transfer cost the Commonwealth would pay to such railroad
2 company for the acquisition of rights-of-way, motive power,
3 rolling stock, signals and interlockers, communication systems,
4 power transmission systems or any other property or equipment
5 incidental to railroad operations that may become available as a
6 result of abandonment proceedings.
7 [(f)] (g) (1) Unless the Secretary of Revenue shall
8 determine it to be inconsistent with the public interest, or the
9 cost to be unreasonable, only such rail as has been manufactured
10 in the United States of America shall be acquired for use in
11 projects for which the credit established pursuant to this
12 section is claimed.
13 (2) This requirement shall not apply if, at the time such
14 items must be contracted for purchases in connection with a
15 particular project, rail manufactured in the United States of
16 America is not available in sufficient and reasonable commercial
17 quantities and of a satisfactory quality to meet the needs of
18 such projects on a timely and economical basis.
19 Section 2. This act shall take effect immediately.
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