PRINTER'S NO. 3450
No. 2434 Session of 2002
INTRODUCED BY BARD, TULLI, HERSHEY, WOJNAROSKI, BASTIAN, RUBLEY,
ADOLPH, M. BAKER, BELARDI, BELFANTI, BROWNE, CALTAGIRONE,
L. I. COHEN, COLAFELLA, CORRIGAN, CURRY, EACHUS, J. EVANS,
FREEMAN, GRUCELA, HARPER, HENNESSEY, HERMAN, KENNEY,
LAUGHLIN, LEH, LEVDANSKY, MANDERINO, MANN, MARKOSEK, McCALL,
McGEEHAN, McILHATTAN, MELIO, R. MILLER, MUNDY, PALLONE,
PHILLIPS, PISTELLA, RAYMOND, READSHAW, ROSS, SAINATO, SATHER,
SAYLOR, SHANER, B. SMITH, STEELMAN, STEIL, STURLA, SURRA,
E. Z. TAYLOR, THOMAS, TRELLO, TRICH, VANCE, VEON, VITALI,
WALKO, WANSACZ, WATSON AND YOUNGBLOOD, MARCH 14, 2002
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MARCH 14, 2002
AN ACT
1 Providing for wind energy enterprise designation to foster the
2 development of wind energy generation sites; providing for
3 tax exemptions and tax credits; establishing the Wind Energy
4 Infrastructure Improvement Fund; prescribing powers and
5 duties of certain State departments; and making an
6 appropriation.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Short title.
10 This act shall be known and may be cited as the Wind Energy
11 Enterprise Act.
12 Section 2. Definitions.
13 The following words and phrases when used in this act shall
14 have the meanings given to them in this section unless the
15 context clearly indicates otherwise:
16 "Department." The Department of Community and Economic
1 Development of the Commonwealth.
2 "Fund." The Wind Energy Infrastructure Improvement Fund
3 established pursuant to section 8.
4 "Person." An individual, partnership, association, company,
5 corporation, joint venture or other business entity,
6 municipality, municipal authority or political subdivision.
7 "Qualified business." A partnership, association, company,
8 corporation, joint venture or other business entity qualified
9 pursuant to section 4.
10 "Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
11 No.2), known as the Tax Reform Code of 1971.
12 Section 3. Wind energy enterprise designation.
13 (a) Establishment.--There is hereby established within the
14 department a program providing for wind energy enterprise
15 designation.
16 (b) Authorization.--The department shall designate persons
17 or businesses as wind energy enterprises. Persons and businesses
18 that are qualified under this act shall be entitled to all tax
19 exemptions, deductions, abatements or credits set forth in this
20 act for a period not to exceed 15 years beginning January 1,
21 2002, and ending on or before December 31, 2016.
22 Section 4. Qualified businesses.
23 In order to qualify each year for a tax exemption, deduction,
24 abatement or credit under this act, a business shall actively be
25 engaged in the business of generating electricity from wind
26 resources, including the design, manufacture, distribution,
27 operation, servicing or maintenance of wind energy projects or
28 equipment. The qualified business shall receive certification
29 from the department that the business is designated as such and
30 is actively engaged in wind generation business. The business
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1 shall obtain annual renewal of the certification from the
2 department to continue to qualify under this section.
3 Section 5. State taxes.
4 (a) General rule.--A qualified business shall receive the
5 exemptions, deductions, abatements or credits as provided in
6 sections 6 and 7 for the duration of the wind energy enterprise
7 designation. Exemptions, deductions, abatements or credits shall
8 expire on the date of expiration of the wind energy enterprise
9 designation.
10 (b) Construction.--The Department of Revenue shall
11 administer, construe and enforce the provisions of this section
12 and sections 6 and 7 in conjunction with Articles II, III, IV,
13 V, VI, VII, VII-A, IX and XV of the Tax Reform Code of 1971.
14 Section 6. Sales and use tax exemption.
15 (a) Exemption.--Sales at retail of services or tangible
16 personal property, other than motor vehicles, to a qualified
17 business for the exclusive use, consumption and utilization of
18 the tangible personal property or service by the qualified
19 business at its wind generation business facility are exempt
20 from the sales and use tax imposed under Article II of the Tax
21 Reform Code of 1971.
22 (b) Electric generation.--Electricity generated by a
23 qualified business at its facility installed after January 1,
24 1999, and sold at retail shall be exempt from the sales and use
25 tax imposed under Article II of the Tax Reform Code of 1971.
26 Section 7. Investment tax credit.
27 (a) Credit.--Any person investing in a qualified business as
28 described in section 4(a) shall receive a tax credit pursuant to
29 subsection (c) if the department annually approves the written
30 proposal of such person. The proposal shall set forth the
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1 investment to be made, including the amount and the qualified
2 business invested in and what the investment is specifically
3 anticipated to be used for, including, but not limited to, the
4 purchase of land, equipment or facilities.
5 (b) Decision in writing.--The decision of the department to
6 approve or disapprove a proposal pursuant to subsection (a)
7 shall be in writing, and if it approves the proposal, it shall
8 state the maximum credit allowable to the business firm. A copy
9 of the decision of the department shall be transmitted to the
10 Governor and to the Department of Revenue.
11 (c) Grant of investment tax credit.--
12 (1) The Department of Revenue shall grant a tax credit
13 against any tax due under the Tax Reform Code of 1971 in an
14 amount equal to the total amount invested during the taxable
15 year by the person approved pursuant to subsection (a).
16 (2) The tax credit shall equal 1.5¢ for each kilowatt-
17 hour of electricity generated and shall not be based upon the
18 amount invested. The investment provided herein is intended
19 to be in addition to and not a replacement of any Federal
20 production tax credit now existing or hereafter enacted, and
21 the department and the Department of Revenue shall adopt such
22 regulations and take such action as necessary and appropriate
23 to effectuate this intent.
24 (3) No tax credit shall be granted to any bank, bank and
25 trust company, insurance company, trust company, national
26 bank, savings association, mutual savings bank or building
27 and loan association for activities that are a part of its
28 normal course of business. Any tax credit not used in the
29 period the investment was made may be carried over for the
30 next five succeeding calendar or fiscal years until the full
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1 credit has been allowed. The total amount of all tax credits
2 allowed pursuant to this act shall not exceed $18,000,000 in
3 any one fiscal year.
4 (d) Regulations.--The department is hereby authorized to
5 promulgate rules and regulations for the approval or disapproval
6 of such proposals and provide a listing of all applications
7 received and their disposition in each fiscal year to the
8 General Assembly by October 1 of the following fiscal year.
9 Section 8. Wind Energy Infrastructure Improvement Fund.
10 (a) Establishment.--There is hereby established a separate
11 fund in the State Treasury to be known as the Wind Energy
12 Infrastructure Improvement Fund. The fund shall be administered
13 by the department.
14 (b) Use.--The fund may be used to provide grants to assist a
15 qualified business or a person intending to establish a
16 qualified business with infrastructure improvements, such as
17 access roads or transmission, distribution and interconnection
18 facilities, for an existing or proposed wind energy generation
19 site or facility. The department shall promulgate regulations
20 for the issuance of grants.
21 (c) Grants.--Any qualified business or person intending to
22 establish a qualified business wishing to obtain a grant shall
23 submit a written proposal for such grant. The department shall
24 promulgate regulations for the submittal and contents of
25 proposals.
26 (d) Decision in writing.--The decision of the department to
27 approve or disapprove a proposal pursuant to subsection (c)
28 shall be in writing, and, if it approves the proposal, it shall
29 state the maximum amount of the proposal. A copy of the decision
30 of the department shall be transmitted to the Governor.
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1 (e) Appropriation.--Appropriations to the fund shall not
2 lapse. Sufficient appropriations shall be made annually in order
3 to maintain a minimum balance of $10,000,000. Should annual
4 grant activity exceed the funds available, the General Assembly
5 may supplement the fund to restore it to the full annual
6 appropriation.
7 Section 9. Appropriation.
8 The sum of $10,000,000 is hereby appropriated to the
9 Department of Community and Economic Development for deposit
10 into the Wind Energy Infrastructure Improvement Fund.
11 Section 10. Effective date.
12 This act shall take effect in 60 days.
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