PRINTER'S NO. 1382
No. 1208 Session of 1991
INTRODUCED BY HALUSKA, DALEY, LESCOVITZ, DeWEESE, RICHARDSON,
GIGLIOTTI, BELFANTI, TRELLO, BELARDI, PETRARCA, LEVDANSKY,
HERMAN, STISH, FARGO, FAIRCHILD, MELIO, PESCI, CARLSON,
LAUGHLIN, VAN HORNE, KASUNIC, BILLOW, PISTELLA, ITKIN,
D. R. WRIGHT, CORRIGAN, S. H. SMITH, CIVERA, TANGRETTI,
JAROLIN, TELEK AND COLAIZZO, APRIL 22, 1991
REFERRED TO COMMITTEE ON FINANCE, APRIL 22, 1991
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 credits against the utilities gross
11 receipts tax.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 1101 of the act of March 4, 1971 (P.L.6,
15 No.2), known as the Tax Reform Code of 1971, is amended by
16 adding subsections to read:
17 Section 1101. Imposition of Tax.--* * *
18 (i) Coal Use Tax Credit.--
19 (1) For the tax year beginning on January 1, 1992, and
20 thereafter, every legal entity in this Commonwealth subject to
1 this section shall be allowed a credit against the tax imposed
2 by this section in the amount of one dollar per ton for each ton
3 of coal purchased by such legal entity in excess of the number
4 of tons of Pennsylvania coal purchased by such legal entity in
5 1990, provided such coal was mined and consumed in Pennsylvania.
6 This credit shall be prorated equally against the taxpayer's
7 estimated payments for the tax year in which the coal is
8 purchased.
9 (2) For tax years beginning on and after January 1, 1993,
10 every legal entity subject to this section shall be allowed an
11 additional credit against the tax imposed by this section in the
12 amount of one dollar per ton for each ton of coal purchased by
13 the legal entity in excess of the number of tons of Pennsylvania
14 coal purchased by such legal entity in 1990, provided such coal
15 was mined and consumed in Pennsylvania. The credit shall be
16 prorated equally against the taxpayer's estimated payments for
17 the tax year in which the coal is purchased.
18 (j) Coal Research and Development Tax Credit.--
19 (1) For the tax year beginning on January 1, 1992, and
20 thereafter, every legal entity in this Commonwealth subject to
21 this section shall be allowed a credit against the tax imposed
22 by this section equivalent to twenty per cent of the amount
23 spent by the entity for research, development or demonstrations,
24 as defined by the Federal Energy Regulatory Commission (FERC),
25 of equipment, process or consumption methods which utilize clean
26 coal technologies and result in increased use of coal mined in
27 Pennsylvania or continue the consumption of coal mined in
28 Pennsylvania which may have been curtailed except for the
29 performance of such research, development or demonstration. The
30 tax credit, in the year in which claimed, shall be in addition
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1 to any other credits which result from increased coal usage.
2 Eligible legal entities may recover in tax year 1992 such
3 creditable expenditures from tax years 1990 and 1991 which meet
4 the requirements of this section. Taxpayers may receive such
5 research credits in the year in which the expenditure occurs.
6 Credits for multi-year projects, however, will be subject to
7 rescission if the completed project does not satisfy the
8 requirements of this section for increasing or maintaining use
9 of Pennsylvania coal.
10 (2) As used in paragraph (1), research and development means
11 expenditures incurred by public utilities and licensees either
12 directly or through another person or organization, including,
13 but not limited to, a research institute, industry association,
14 foundation, university, engineering company or similar
15 contractor, in pursuing research and development activities,
16 including experiment, design, installation, construction or
17 operation. Research and development costs shall be reasonably
18 related to existing or future utility business, broadly defined,
19 of the public utility or licensee or in the environment in which
20 it operates or expects to operate. The term includes, but is not
21 limited to: all costs incidental to the design, development or
22 implementation of an experimental facility, a plant process, a
23 product, a formula, an invention, a system or similar items and
24 the improvement of already existing items of a like nature;
25 amounts expended in connection with the proposed delivery of
26 alternate sources of electricity; and the costs of obtaining its
27 own patent, such as attorney fees expended in making and
28 perfecting a patent application. The term does not include
29 expenditures for efficiency surveys; studies of management,
30 management techniques and organization; consumer surveys,
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1 advertising promotions or items of a like nature.
2 (3) The Pennsylvania Energy Office shall review research,
3 development and demonstration expenditures submitted to the
4 Department of Revenue pursuant to paragraph (1) to determine
5 eligibility for the tax credit. The office shall advise the
6 department of its determination and the reasons therefor within
7 sixty days of receipt of a request from the department to
8 conduct such a review.
9 Section 2. This act shall apply to tax years beginning on
10 and after January 1, 1992.
11 Section 3. This act shall take effect immediately.
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