PRINTER'S NO. 293
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
319
Session of
2021
INTRODUCED BY PUSKARIC, ECKER, HILL-EVANS AND N. NELSON,
JANUARY 28, 2021
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
JANUARY 28, 2021
AN ACT
Providing for issuance of consolidated general microhydropower
permits by the Department of Environmental Protection; and
establishing a microhydropower pilot program.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Consolidated
General Microhydropower Pilot Program Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Approved applicant." A qualified applicant that has been
approved for a consolidated general microhydropower permit in
this Commonwealth by the department and is participating in the
program.
"Department." The Department of Environmental Protection of
the Commonwealth.
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"Microhydropower." Technology that produces electric power
no greater than 100 kilowatts per turbine and harnesses the
hydroelectric potential of moving water impoundments and meets
the certification standards established by the second edition of
the Low Impact Hydropower Institute's Low Impact Hydropower
Certification Handbook.
"Nonparticipant." An applicant or qualified applicant that
is no longer participating or has never participated in the
program.
"Pass-through entity." Any of the following:
(1) A partnership as defined in section 301(n.0) of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
Code of 1971.
(2) A Pennsylvania S corporation as defined in section
301(n.1) of the Tax Reform Code of 1971.
(3) Any nonparticipant of the program.
"Permit." The consolidated general microhydropower permit
authorized under this act.
"Program." The pilot program established under section 4.
"Qualified applicant." An agency of this Commonwealth or the
political subdivisions of the Commonwealth, municipal or other
local authorities or an agency of the political subdivision or
local authority. The term includes State-aided and State-related
colleges and universities.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV, VII, VIII, IX or XV of the Tax Reform
Code of 1971. The term includes the liability for taxes imposed
under Article III of the Tax Reform Code of 1971 on the owner or
owners of a pass-through entity. The term does not include
amounts withheld or required to be withheld from employees under
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Article III of the Tax Reform Code of 1971.
"Tax credit." The Microhydropower Tax Credit authorized in
this act.
"Vendor." An offeror, bidder or contractor that sells or
provides a service or supply or engages in the construction of
microhydropower. The term does not include an attorney at law, a
lobbyist or a lobbying firm.
Section 3. Consolidated general microhydropower permits.
(a) General rule.--An applicant shall receive a permit which
shall encompass all necessary permits required by Federal or
State law.
(b) Procedure.--Within 180 days of the effective date of
this section, the department shall develop a procedure to issue
a permit for the installation of microhydropower generators. In
carrying out its duty under this subsection, the department
shall consult with other Commonwealth departments and interstate
agencies. Application shall be made on a form prescribed and
furnished by the department on its publicly accessible Internet
website. Notification of the completion of the form availability
on the department's publicly accessible Internet website shall
be transmitted to the Legislative Reference Bureau for
publication in the Pennsylvania Bulletin.
(c) Timeframe.--The department shall approve or deny an
application of an applicant within 60 days of filing. If the
department fails to approve or deny an application, the
department shall correspond by mail with the applicant as to the
circumstances pertaining to the department's noncompliance. The
correspondence shall occur no less than five days before the
initial timeframe established under this subsection. The
department shall detail the remaining provisions necessary to
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approve or deny the application. If the proper notification
process is followed, the department shall be granted an
additional 30-day extension from the original 60-day deadline to
approve or deny an application.
(d) Authorization of permit.--The permit authorizes the
entity to which the permit is issued to install a
microhydropower generator at a specific location in this
Commonwealth.
Section 4. Pilot program.
(a) Intent.--The program is established to better understand
the capabilities of microhydropower utilization as a reliable
and efficient form of alternative energy generation in this
Commonwealth.
(b) Eligibility.--No less than 10 but no more than 25
qualified applicants shall be accepted by the department for
participation in the program. The likely qualified applicants
shall be identified by members of the General Assembly during a
30-day comment period and provided to the department by way of
written correspondence from the President pro tempore of the
Senate and the Speaker of the House of Representatives. A
qualified applicant shall be deemed eligible upon approval of a
permit.
(c) Length.--The program shall extend no more than five
years from the date the department establishes and transmits
notice to the Legislative Reference Bureau under section 3.
(d) Vendors.--No less than five vendors shall be accepted by
the department for participation in the program.
(e) Report.--The department, as well as the Department of
Community and Economic Development, shall develop a procedure to
obtain the necessary information from an approved applicant
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participating in the program. No later than January 1, 2022, and
each January 1 thereafter in which the program existed in the
previous year, the department shall submit a report to the
chairperson and minority chairperson of the Environmental
Resources and Energy Committee of the Senate and the chairperson
and minority chairperson of the Environmental Resources and
Energy Committee of the House of Representatives which shall
include:
(1) The number of days taken by the department to issue
a permit to each qualified applicant.
(2) The number of days from permit approval to
installation of a microhydropower generator.
(3) The monetary costs of implementing, maintaining and
utilizing microhydropower generators.
(4) The geographical location of each microhydropower
generator and the implications and considerations that should
be examined for future implementation.
(5) Data concerning the amount of energy generated and
the resulting output from a microhydropower generator.
(6) Any existing data from previous studies specifically
related to microhydropower.
(7) Any negative effects which have occurred during the
implementation and utilization of microhydropower.
(8) The dollar amount of tax credits granted under this
act in aggregate.
(9) An enumeration of any complications that have arisen
regarding the issuance of the tax credit established in this
act to each nonparticipant.
(10) The number of applications received, approved and
denied.
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(f) Approved applicant duties.--An approved applicant shall
make a good faith effort to comply with and provide the
department all information needed to complete the report under
subsection (e).
(g) Microhydropower Pilot Program Restricted Account.--The
Microhydropower Pilot Program Restricted Account is established
in the General Fund. All money deposited into the restricted
account shall be used by the Commonwealth to implement
microhydropower generators for approved applicants of the
program established in this section. The account shall expire on
the day succeeding the last day of the program. All remaining
money in the account shall be returned to the General Fund.
(h) Funding.--The Commonwealth shall be responsible for 80%
of the total costs associated with the implementation and
maintenance of a microhydropower generator for approved
applicants for the duration of the program. The approved
applicant shall be responsible for the remaining 20%. Money
appropriated to the restricted account shall come from a one-
time appropriation of $5,000,000.
(i) Compensation.--An approved applicant shall be prohibited
from receiving compensation or revenue from any electric
distribution company for the duration of the approved
applicant's participation in the program.
(j) Termination.--If an approved applicant terminates
participation at any point during the program, the approved
applicant shall be responsible for refunding all payments under
subsection (h).
Section 5. Microhydropower Tax Credit application and approval.
(a) Establishment.--The Microhydropower Tax Credit is
established by the Department of Community and Economic
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Development to encourage private investment in the utilization
of nontraditional and alternative forms of renewable energy,
reduction of greenhouse gas emissions and the overall
proliferation of clean energy generation and consumption in this
Commonwealth.
(b) General rule.--For the purposes of this section, only
nonparticipants shall be eligible for the Microhydropower Tax
Credit.
(c) Application.--The following shall apply:
(1) Beginning January 1, 2022, and each January 1
thereafter, a nonparticipant may submit an application
prescribed and provided by the Department of Community and
Economic Development to the Department of Community and
Economic Development no later than February 1, 2022, and each
February 1 thereafter.
(2) Before the tax credit is granted, the Department of
Community and Economic Development shall ensure that the
nonparticipant has filed all required State tax reports and
returns for all applicable taxable years and paid any balance
of State tax due as determined at settlement or assessment by
the Department of Community and Economic Development.
(d) Approval.--The Department of Community and Economic
Development may approve an application under subsection (c). If
the Department of Community and Economic Development chooses to
approve an application under subsection (c), the application
must be approved no later than March 1. The Department of
Community and Economic Development shall notify the
nonparticipating applicant of the approved application
accompanied by a certificate of the authorized tax credit amount
established in this act no later than April 1. The Department of
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Community and Economic Development may promulgate any rule or
regulation deemed necessary to expeditiously approve or deny
applications.
Section 6. Use of tax credit.
(a) Rate.--A tax credit may be applied against up to 30% of
the nonparticipant's qualified tax liability incurred while
implementing a microhydropower generator in the taxable year for
which the tax credit was approved.
(b) Carryforward, transfer and refund.--The credit provided
in this section may be carried over or transferred and applied
to no more than two taxable years following the first taxable
year for which the nonparticipant or pass-through entity was
entitled to claim the credit. The credit provided under this
section may not be refunded if not used within the period
provided under this subsection.
(c) Applicability.--The tax credit shall be applied against
the nonparticipant's qualified tax liability only after all
other statutory tax credits and deductions available to the
nonparticipant have been used. Notwithstanding the tax credit
provided in this act, a nonparticipant may be eligible for
grants provided under Federal acts and regulations and grants
provided under acts and regulations of this Commonwealth.
(d) Pass-through entity.--If a tax credit certificate is
issued to a pass-through entity, the pass-through entity may
elect in writing, according to procedures established by the
Department of Community and Economic Development, to transfer
all or a portion of the credit to shareholders, members or
partners in proportion to the share of the entity's distributive
income to which the shareholders, members or partners are
entitled or in any other manner designated by the pass-through
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entity in accordance with the pass-through entity's governance
documents and without regard to how distributive income, losses
or credits are allocated for other tax purposes.
(e) Shareholders, members or partners of a pass-through
entity.--The following shall apply:
(1) A shareholder, member or partner of a pass-through
entity to whom the credit is transferred under subsection (d)
shall immediately claim the credit in the taxable year in
which the transfer is made.
(2) If a shareholder, member or partner of a pass-
through entity does not utilize the entirety of the tax
credit transferred to them by a pass-through entity, the
shareholder, member or partner may not carryback, obtain a
refund of or sell or assign the credit under subsection (b).
(3) Notwithstanding the provisions of paragraph (1), if
a shareholder, member or partner of a pass-through entity
does not utilize the entirety of the tax credit transferred
by a pass-through entity under this section, the shareholder,
member or partner may carry forward the remainder of the
unused tax credit to succeeding taxable years as provided
under subsection (b).
(f) Expiration.--This section shall expire for taxable years
beginning after December 31, 2031.
Section 7. Effective date.
This act shall take effect in 60 days.
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