PRIOR PRINTER'S NO. 2023
PRINTER'S NO. 2690
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1436
Session of
2015
INTRODUCED BY GODSHALL, KOTIK, SAINATO, KILLION, SACCONE,
DUNBAR, QUIGLEY, MARSHALL, GROVE, HARHAI, LONGIETTI, KORTZ,
PICKETT, BARBIN, EVANKOVICH, COHEN, GIBBONS, EVERETT,
SCHLOSSBERG, KAUFFMAN, BURNS, MUSTIO, P. DALEY, SCHWEYER,
DeLUCA AND FARRY, JULY 6, 2015
AS REPORTED FROM COMMITTEE ON CONSUMER AFFAIRS, HOUSE OF
REPRESENTATIVES, AS AMENDED, DECEMBER 19, 2015
AN ACT
Amending Title 66 (Public Utilities) of the Pennsylvania
Consolidated Statutes, in rates and distribution systems,
providing for computation of income tax expense for
ratemaking purposes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 66 of the Pennsylvania Consolidated
Statutes is amended by adding a section to read:
ยง 1301.1. Computation of income tax expense for ratemaking
purposes.
(A) COMPUTATION.-- If an expense or investment is allowed to
be included in a public utility's rates for ratemaking purposes,
the related income tax deductions and credits shall also be
included in the computation of current or deferred income tax
expense to reduce rates. If an expense or investment is not
allowed to be included in a public utility's rates, the related
income tax deductions and credits, including tax losses of the
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public utility's parent or affiliated companies, shall not be
included in the computation of income tax expense to reduce
rates. The deferred income taxes used to determine the rate base
of a public utility for ratemaking purposes shall be based
solely on the tax deductions and credits received by the public
utility and shall not include any deductions or credits
generated by the expenses or investments of a public utility's
parent or any affiliated entity. The income tax expense shall be
computed using the applicable statutory income tax rates.
(B) REVENUE USE.--IF A DIFFERENTIAL ACCRUES TO A PUBLIC
UTILITY RESULTING FROM APPLYING THE RATEMAKING METHODS EMPLOYED
BY THE COMMISSION PRIOR TO THE EFFECTIVE DATE OF SUBSECTION (A)
FOR RATEMAKING PURPOSES, THE DIFFERENTIAL SHALL BE USED AS
FOLLOWS:
(1) FIFTY PERCENT TO SUPPORT RELIABILITY OR
INFRASTRUCTURE RELATED TO THE RATE-BASE ELIGIBLE CAPITAL
INVESTMENT AS DETERMINED BY THE COMMISSION; AND
(2) FIFTY PERCENT FOR GENERAL CORPORATE PURPOSES.
(C) APPLICATION.--THE FOLLOWING SHALL APPLY:
(1) SUBSECTION (B) SHALL NO LONGER APPLY AFTER DECEMBER
31, 2025.
(2) THIS SECTION SHALL APPLY TO ALL CASES WHERE THE
FINAL ORDER IS ENTERED AFTER THE EFFECTIVE DATE OF THIS
SECTION.
Section 2. This act shall take effect in 60 days.
20150HB1436PN2690 - 2 -
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