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PRINTER'S NO. 4386
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2869
Session of
2020
INTRODUCED BY HELM, BOBACK, CALTAGIRONE, DRISCOLL, FARRY, KAIL,
KAUFER, MARSHALL, MEHAFFIE, MIHALEK, RADER, READSHAW, REESE,
SOLOMON, STEPHENS, WHITE, TOMLINSON, THOMAS, POLINCHOCK,
SCHROEDER AND STAATS, SEPTEMBER 17, 2020
REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 17, 2020
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 mechanical insulation installation
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 XVIII-I
MECHANICAL INSULATION INSTALLATION TAX CREDIT
Section 1801-I. Scope of article.
This article relates to the tax credits for the installation
of mechanical insulation using the minimum ASHRAE standard for
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shovel-ready, cost-saving and energy-saving projects .
Section 1802-I. 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.
"Mechanical insulation." Insulation materials, facings and
accessory products used for thermal requirements for mechanical
piping and equipment, hot and cold applications and heating,
venting and air conditioning applications.
"Minimum ASHRAE standard." The minimum American Society of
Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE)
standard 90.1-2007.
"Qualified tax liability." The liability for a tax imposed
under Article IV.
"Qualified taxpayer." A company to which the following
applies:
(1) Makes a capital investment of at least $10,000 for
the installation of mechanical insulation on a commercial or
industrial property within this Commonwealth.
(2) Adheres to the minimum ASHRAE standard for
installations under paragraph (1).
"Tax credit." The mechanical insulation installation tax
credit established under this article.
Section 1803-I. Mechanical insulation installation tax credit.
(a) Purpose.--The mechanical insulation installation tax
credit is established to motivate owners, developers and
contractors to advance and install mechanical insulation using
the minimum ASHRAE standard for shovel-ready, cost-saving and
energy-saving projects .
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(b) Availability.--Each fiscal year, $5,000,000 in tax
credits shall be made available to the department to be awarded
in accordance with this article.
Section 1804-I. Application and approval of tax credit.
(a) Rate.--The tax credit shall be equal to no more than 30%
of the total capital investment for the installation of
mechanical insulation on a commercial or industrial property
within this Commonwealth for the applicable taxable year. Total
capital investment shall include, but not be limited to, the
following:
(1) Amounts paid during the taxable year for the
purchase of mechanical insulation that is installed on the
commercial or industrial property.
(2) Labor costs paid that are properly allocable to the
preparation, assembly and installation of mechanical
insulation on the commercial or industrial property during
the taxable year.
(b) Application.--
(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
(2) The application must be submitted on a form
prescribed by the department and shall include all the
following:
(i) Information required by the department to
document the total cost of the capital investment for the
installation of mechanical insulation on a commercial or
industrial property as specified under subsection (a).
(ii) Information required by the department to
verify the applicant is a qualified taxpayer.
(iii) Any other information as the department deems
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appropriate.
(c) Review and approval.--The department shall review the
application for the tax credit and issue an approval or
disapproval to the applicant. Upon approval, the department
shall issue a certificate stating the amount of tax credit
granted to the qualified taxpayer.
Section 1805-I. Use of tax credits.
(a) Claiming the credit.--Upon receipt of the approval of
the application and the certificate under section 1804-I(c), the
qualified taxpayer may claim a tax credit against the qualified
tax liability for the taxable year in which the capital
investment was made.
(b) Limitation.--The tax credit may be applied against up to
50% of the qualified taxpayer's qualified tax liability for the
taxable year.
(c) Sale or assignment.--A tax credit awarded under this
article may not be sold, assigned or transferred.
(d) Carryover, carryback, and refund.--A tax credit awarded
under this article may not be carried back, carried forward or
used to obtain a refund.
Section 1806-I. Report to General Assembly.
(a) Report.--No later than one year after the year in which
tax credits are first awarded under this article, and each
October 1 thereafter, the department shall submit a report on
the tax credit to all of the following:
(1) The chair and minority chair of the Appropriations
Committee of the Senate.
(2) The chair and minority chair of the Finance
Committee of the Senate.
(3) The chair and minority chair of the Appropriations
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Committee of the House of Representatives.
(4) The chair and minority chair of the Finance
Committee of the House of Representatives.
(b) Contents.--The report under subsection (a) shall include
the names of the qualified taxpayers utilizing the tax credit as
of the date of the report and the amount of tax credits approved
for and utilized by each qualified taxpayer.
Section 2. This act shall take effect in 60 days.
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