PRINTER'S NO. 142
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
161
Session of
2021
INTRODUCED BY HUTCHINSON, J. WARD AND PITTMAN, FEBRUARY 4, 2021
REFERRED TO FINANCE, FEBRUARY 4, 2021
AN ACT
Providing for the establishment of affordable energy development
zones and for powers and duties of the Department of
Community and Economic Development and the Department of
Revenue; authorizing expenditures; and providing for tax
exemptions and tax credits.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Legislative findings.
Section 103. Definitions.
Chapter 3. Affordable Energy Development Zones
Section 301. Affordable energy development zones.
Section 302. Qualified businesses.
Chapter 5. State Taxes
Subchapter A. General Provisions
Section 501. State taxes.
Subchapter B. Particular State Taxes
Section 511. Sales and use tax.
Section 512. Personal income tax.
Section 513. Nonresidency considerations.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Section 514. Corporate net income tax.
Section 515. Capital stock and franchise tax.
Chapter 7. Administration of Tax Provisions
Section 701. Transferability and use of tax exemptions and
credits.
Section 702. Carryover, carryback and assignment of credit.
Section 703. Pass-through entity.
Section 704. Recapture.
Section 705. Delinquent or deficient State or local taxes.
Section 706. Appeals.
Section 707. Notice requirements and State and local
authorities.
Section 708. Application time.
Chapter 9. Administration of Well Information
Section 901. Well information.
Chapter 21. Miscellaneous Provisions
Section 2101. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Affordable
Energy Development Zones Act.
Section 102. Legislative findings.
The General Assembly finds and declares as follows:
(1) There exist in this Commonwealth rural areas of
economic distress characterized by high unemployment, low
investment of new capital, inadequate dwelling conditions,
blighted conditions, underutilized, obsolete or abandoned
20210SB0161PN0142 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
industrial, commercial and residential structures and
deteriorating tax bases.
(2) These rural areas require coordinated efforts by
private and public entities to restore prosperity and enable
the rural areas to make significant contributions to economic
and social conditions in this Commonwealth.
(3) Long-term economic viability of these rural areas
requires the cooperative involvement of residents,
businesses, State and local elected officials and community
and economic development organizations. It is in the best
interest of the Commonwealth to assist and encourage the
creation of affordable energy development zones and to
provide temporary relief from certain taxes within the zones
to accomplish the purposes of this act.
(4) Rural areas with a large supply of natural gas
provide an opportunity to use this energy to build a base of
new businesses and expand existing businesses which would
foster increased employment and investment in these areas.
Section 103. 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:
"Affordable energy development zone." A defined geographic
area comprised of one or more political subdivisions or portions
of political subdivisions designated by the department under
Chapter 3.
"Business." An association, partnership, corporation, sole
proprietorship, limited liability company or employer with an
NAICS classification of 31, 32 or 33.
"Department." The Department of Community and Economic
20210SB0161PN0142 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Development of the Commonwealth.
"Domicile." The place where a person has a true and fixed
home and principal establishment for an indefinite time and to
which, whenever absent, that person intends to return. Domicile
continues until another place of domicile is established.
"Employee." An individual who:
(1) is employed in this Commonwealth by an affordable
energy development zone employer, or its predecessor, after
January 1, 2022;
(2) is employed for at least 35 hours per week by an
affordable energy development zone employer; and
(3) spends at least 90% of the employee's working time
for the affordable energy development zone employer at the
affordable energy development zone location.
"Full-time equivalent employee." The whole number of
employees, rounded down, that equals the sum of:
(1) the total paid hours, including paid time off and
family leave under the Family and Medical Leave Act of 1993
(Public Law 103-3, 29 U.S.C. § 2601 et seq.), of all of a
affordable energy development zone employer's employees
classified as nonexempt during the affordable energy
development zone employer's tax year divided by 2,000; and
(2) a total number arrived at by adding, for each
affordable energy development zone employer's employee
classified as exempt scheduled to work at least 35 hours per
week, the fraction equal to the portion of the year the
exempt employee was paid by the affordable energy development
zone employer. Whether an employee shall be classified as
exempt or nonexempt shall be determined under the Fair Labor
Standards Act of 1938 (52 Stat. 1060, 29 U.S.C. § 201 et
20210SB0161PN0142 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
seq.).
"NAICS." The 2012 North American Industry Classification
System developed by the Federal Office of Management and Budget
and published at 76 Fed. Reg. 159 (Aug. 17, 2011).
"Pass-through entity." A partnership as defined in section
301(n.0) of the Tax Reform Code or a Pennsylvania S corporation
as defined in section 301(n.1) of the Tax Reform Code.
"Person." A natural person.
"Political subdivision." A county, city, borough, township,
town or school district with taxing jurisdiction in a defined
geographic area within this Commonwealth.
"Qualified business." A business authorized to do business
in this Commonwealth which is located or partially located
within a affordable energy development zone and is engaged in a
trade, business or profession involving energy or manufacturing,
or a related activity, in accordance with the requirements of
section 302 for the taxable year. An agent, broker or
representative of a business is not engaged in manufacturing.
"Resident." A person who is domiciled and resides in an
affordable energy development zone for a period of 184
consecutive days, which may begin on the date of authorization
by the department or on the date the person first resides within
the affordable energy development zone.
"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
"Unconventional formation." A geological shale formation
existing below the base of the Elk Sandstone or its geologic
equivalent stratigraphic interval where natural gas generally
cannot be produced at economic flow rates or in economic volumes
except by vertical or horizontal well bores stimulated by
20210SB0161PN0142 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
hydraulic fracture treatments or by using multilateral well
bores or other techniques to expose more of the formation to the
well bore.
"Unconventional gas well." A bore hole drilled or being
drilled for the purpose of or to be used for the production of
natural gas from an unconventional formation.
CHAPTER 3
AFFORDABLE ENERGY DEVELOPMENT ZONES
Section 301. Affordable energy development zones.
(a) Establishment.--A program providing for affordable
energy development zones is established within the department.
An affordable energy development zone shall be comprised of
property located in one or more political subdivisions in which
unconventional gas wells are located.
(b) Affordable energy development zone authorization.--
(1) The department shall authorize affordable energy
development zones in this Commonwealth.
(2) No portion of an authorized affordable energy
development zone shall be used as a licensed facility as
defined in 4 Pa.C.S. § 1103 (relating to definitions) or any
other similar type of facility authorized under the laws of
this Commonwealth.
(c) Term of authorization.--Qualified businesses established
within an authorized affordable energy development zone that are
eligible under this act shall be entitled to all tax exemptions
or credits set forth in this act for a period not to exceed 10
years beginning on the date of approval by the department or
January 1, 2022, whichever occurs later.
Section 302. Qualified businesses.
In order to qualify for tax exemptions or credits under this
20210SB0161PN0142 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
act, a business must own or lease real property in an affordable
energy development zone on which the business actively conducts
a trade, business or profession involving energy or
manufacturing, or a related activity, that uses natural gas from
an unconventional formation and must meet one of the following
criteria:
(1) Hires and employs a minimum of 10 new full-time
equivalent employees within the first three years of full
operation within the affordable energy development zone.
(2) Invests $500,000 in new capital investment in the
property located in the affordable energy development zone
within the first three years of full operation.
CHAPTER 5
STATE TAXES
SUBCHAPTER A
GENERAL PROVISIONS
Section 501. State taxes.
(a) General rule.--A qualified business shall receive the
exemptions or credits as provided in this chapter for the
duration of the affordable energy development zone
authorization. Exemptions or credits shall expire on the date of
expiration of the affordable energy development zone
authorization.
(b) Construction.--The Department of Revenue shall
administer, construe and enforce the provisions of this chapter
in conjunction with Articles II, III, IV and VI of the Tax
Reform Code.
SUBCHAPTER B
PARTICULAR STATE TAXES
Section 511. Sales and use tax.
20210SB0161PN0142 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(a) Exemption.--Sales at retail of services or tangible
personal property, other than motor vehicles, to a qualified
business for the exclusive use, consumption and utilization of
the tangible personal property or service by the qualified
business at its facility located within an affordable energy
development zone are exempt from the sales and use tax imposed
under Article II of the Tax Reform Code. No qualified business
shall be allowed an exemption for sales conducted prior to
authorization of the affordable energy development zone.
(b) Construction contracts.--For any construction contract
performed in an affordable energy development zone, the
exemption provided in subsection (a) shall only apply to the
sale at retail or use of building machinery and equipment to a
qualified business, or to a construction contractor under a
construction contract with a qualified business, for the
exclusive use, consumption and utilization by the qualified
business at its facility in an affordable energy development
zone.
Section 512. Personal income tax.
(a) General rule.--A person who is a partner, member or
shareholder of a pass-through entity shall be allowed an
exemption for:
(1) Net income from the operation of a qualified
business received by a resident or nonresident of an
affordable energy development zone attributable to business
activity conducted within an affordable energy development
zone, except that a business that operates both within and
outside this Commonwealth, before computing its affordable
energy development zone exemption, shall first determine its
Pennsylvania activity over its activity everywhere by
20210SB0161PN0142 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
applying the three-factor apportionment formula as provided
in Department of Revenue personal income tax regulations
applicable to income apportionment in connection with a
business, trade or profession carried on both within and
outside this Commonwealth.
(2) Net gains or income, less net losses, derived by a
resident or nonresident of an affordable energy development
zone from the sale, exchange or other disposition of real or
tangible personal property used by a qualified business and
located in an affordable energy development zone and as
determined in accordance with accepted accounting principles
and practices. The exemption provided in this paragraph shall
not apply to the sale, exchange or other disposition of any
stock of goods, merchandise or inventory or any operational
assets unless the transfer is in connection with the sale,
exchange or other disposition of all of the assets in
complete liquidation of a qualified business located in N
affordable energy development zone. This paragraph shall
apply to intangible personal property employed in a trade,
profession or business in an affordable energy development
zone by a qualified business but only when transferred in
connection with a sale, exchange or other disposition of all
of the assets in complete liquidation of the qualified
business in the affordable energy development zone.
(3) In the case of gains, less net losses, in paragraph
(2), the exemption shall be prorated based on the percentage
of time, based on calendar days, the property located in an
affordable energy development zone was held by a resident or
nonresident of the affordable energy development zone during
the time period the affordable energy development zone was in
20210SB0161PN0142 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
effect in relation to the total time the property was held.
(b) Applicability of exemption.--The exemptions provided for
in subsection (a)(1) and (2) shall apply to all of the
following:
(1) The income or gain of a partnership or association.
The partner or member shall be entitled to the exemptions
under this section for the partner's or member's share,
whether or not distributed, of the income or gain received by
the partnership or association for its taxable year.
(2) The income or gain of a Pennsylvania S corporation.
The shareholder shall be entitled to the exemptions under
this section for the shareholder's pro rata share, whether or
not distributed, of the income or gain received by the
corporation for its taxable year ending within or with the
shareholder's taxable year.
(c) Limitation.--A pass-through entity may not apply an
exemption from income under this act for any class of income
against any other classes of income or gain. A pass-through
entity may not carry back or carry forward any exemption under
this act from year to year. The exemption allowed under this
section shall not exceed the tax liability of the taxpayer under
Article III of the Tax Reform Code for the tax year.
(d) Section not applicable to certain entities.--Any portion
of net income or gain that is attributable to operation of a
railroad, truck, bus or airline company, pipeline or natural gas
company, water transportation company or entity which would
qualify as a regulated investment company under Article IV of
the Tax Reform Code or would qualify as a holding company under
Article VI of the Tax Reform Code shall not be used to calculate
an exemption under this section.
20210SB0161PN0142 - 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Section 513. Nonresidency considerations.
If a nonresident realizes income attributable to business
activity or property within an affordable energy development
zone on or before the end of the tax year, the person may claim
the exemptions from income for the items for that portion of the
tax year that the person was a resident or for that portion of
the tax year during which the area is designated as an
affordable energy development zone.
Section 514. Corporate net income tax.
(a) Credits.--For the tax years that begin on or after
January 1, 2022, a corporation that is a qualified business may
claim a credit against the tax imposed by Article IV of the Tax
Reform Code for tax liability attributable to business activity
conducted within the affordable energy development zone in the
taxable year. No credit may be claimed for activities conducted
prior to authorization of the affordable energy development
zone. The business activity must be conducted directly by a
corporation in the affordable energy development zone in order
for the corporation to claim the tax credit.
(b) Tax liability determinations.--The corporate net income
tax liability attributable to business activity conducted within
an affordable energy development zone shall be determined by
multiplying the corporation's taxable income that is
attributable to business activity conducted within the
affordable energy development zone by the rate of tax imposed
under Article IV of the Tax Reform Code for the taxable year.
(c) Determinations of attributable tax liability.--Tax
liability attributable to business activity conducted within an
affordable energy development zone shall be computed, construed,
administered and enforced in conformity with Article IV of the
20210SB0161PN0142 - 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Tax Reform Code and with specific reference to the following:
(1) If the entire business of the corporation in this
Commonwealth is transacted wholly within the affordable
energy development zone, the taxable income attributable to
business activity within an affordable energy development
zone shall consist of the Pennsylvania taxable income as
determined under Article IV of the Tax Reform Code.
(2) If the entire business of the corporation in this
Commonwealth is not transacted wholly within the affordable
energy development zone, the taxable income of a corporation
in an affordable energy development zone shall be determined
upon the portion of the Pennsylvania taxable income of the
corporation attributable to business activity conducted
within the affordable energy development zone and apportioned
in accordance with subsection (d).
(d) Income apportionment.--The taxable income of a
corporation that is a qualified business shall be apportioned to
the affordable energy development zone by multiplying the
Pennsylvania taxable income by a fraction, the numerator of
which is the property factor plus the payroll factor plus the
sales factor and the denominator of which is three, in
accordance with the following:
(1) The property factor is a fraction, the numerator of
which is the average value of the corporation's real and
tangible personal property owned or rented and used in the
affordable energy development zone during the tax period and
the denominator of which is the average value of all the
corporation's real and tangible personal property owned or
rented and used in this Commonwealth during the tax period
but shall not include the security interest of any
20210SB0161PN0142 - 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
corporation as seller or lessor in personal property sold or
leased under a conditional sale, bailment lease, chattel
mortgage or other contract providing for the retention of a
lien or title as security for the sales price of the
property.
(2) The payroll factor is a fraction, the numerator of
which is the total amount paid in the affordable energy
development zone during the tax period by the corporation for
compensation and the denominator of which is the total
compensation paid in this Commonwealth during the tax period.
Compensation is paid in the affordable energy development
zone if:
(i) the person's service is performed entirely
within the affordable energy development zone;
(ii) the person's service is performed both within
and without the affordable energy development zone, but
the service performed without the affordable energy
development zone is incidental to the person's service
within the affordable energy development zone; or
(iii) some of the service is performed in the
affordable energy development zone and the base of
operations or, if there is no base of operations, the
place from which the service is directed or controlled is
in the affordable energy development zone, or the base of
operations or the place from which the service is
directed or controlled is not in any location in which
some part of the service is performed, but the person's
residence is in the affordable energy development zone.
(3) The sales factor is a fraction, the numerator of
which is the total sales of the corporation in the affordable
20210SB0161PN0142 - 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
energy development zone during the tax period and the
denominator of which is the total sales of the corporation in
this Commonwealth during the tax period. The following apply:
(i) Sales of tangible personal property are in the
affordable energy development zone if the property is
delivered or shipped to a purchaser that takes possession
within the affordable energy development zone regardless
of the F.O.B. point or other conditions of the sale.
(ii) Sales other than sales of tangible personal
property are in the affordable energy development zone
if:
(A) the income-producing activity is performed
within the affordable energy development zone; or
(B) the income-producing activity is performed
both within and without the affordable energy
development zone and a greater proportion of the
income-producing activity is performed in the
affordable energy development zone than in any other
location, based on costs of performance.
(e) Computation.--A corporation shall compute its
Commonwealth taxable income in conformity with Article IV of the
Tax Reform Code with no adjustments or subtractions for
affordable energy development zone taxable income.
(f) Credit not available.--Any portion of the taxpayer's
taxable income that is attributable to the operation of a
railroad, truck, bus or airline company, pipeline or natural gas
company, water transportation company, a corporation that
qualifies as a regulated investment company under Article IV of
the Tax Reform Code or holding company as defined in Article VI
of the Tax Reform Code shall not be used to calculate a credit
20210SB0161PN0142 - 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
under this section.
(g) Section not applicable to certain businesses or
qualified businesses.--
(1) A business that relocates from a location in a
political subdivision in this Commonwealth that is not in an
affordable energy development zone to a location in an
affordable energy development zone may not apply for a credit
for an existing job that is transferred, discontinued or lost
in this Commonwealth which is attributable to the relocation.
(2) A business that has relocated under paragraph (1)
and becomes a qualified business may apply for an affordable
energy development zone job creation tax credit for a new
full-time job that is created in the affordable energy
development zone. A new full-time job is created with a
qualified business if the average monthly employment for that
qualified business has increased from the prior 12-month
calendar year in the affordable energy development zone.
Section 515. Capital stock and franchise tax.
(a) Credits.--For tax years that begin on or after January
1, 2020, a corporation that is a qualified business may claim a
credit against the tax imposed by Article VI of the Tax Reform
Code for tax liability attributable to the capital employed
within the affordable energy development zone in the taxable
year. No credit may be claimed for capital employed prior to
authorization of the real property as part of an affordable
energy development zone. The business activity must be conducted
directly by a corporation in the affordable energy development
zone in order for the corporation to claim the tax credit.
(b) Tax liability.--The corporation's tax liability
attributable to capital employed within an affordable energy
20210SB0161PN0142 - 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
development zone shall be determined by multiplying the
corporation's taxable value attributable to capital employed
within the affordable energy development zone by the rate of tax
imposed under Article VI of the Tax Reform Code for the taxable
year. The corporation shall compute its Pennsylvania taxable
value in conformity with Article VI of the Tax Reform Code with
no adjustments or subtractions for the capital employed in the
affordable energy development zone.
(c) Determination of attributable tax liability.--The
determination of the corporation's taxable value attributable to
the capital employed within an affordable energy development
zone shall be determined with specific reference to the
following:
(1) If the entire business of the corporation in this
Commonwealth is transacted wholly within an affordable energy
development zone, the taxable value attributable to the
capital employed within an affordable energy development zone
shall consist of the Pennsylvania taxable value as determined
under Article VI of the Tax Reform Code.
(2) If the entire business of the corporation in this
Commonwealth is not wholly transacted within an affordable
energy development zone, the taxable value of a corporation
in an affordable energy development zone shall be determined
upon the portion of the Pennsylvania taxable value
attributable to the capital employed within the affordable
energy development zone by employing the apportionment
factors set forth in section 514(d).
(d) Credit not available.--Any portion of the taxpayer's tax
liability that is attributable to the capital employed in the
operation of a railroad, truck, bus or airline company, pipeline
20210SB0161PN0142 - 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
or natural gas company, water transportation company, a
corporation that qualifies as a regulated investment company
under Article IV of the Tax Reform Code or holding company as
defined in Article VI of the Tax Reform Code shall not be used
to calculate a credit under this section.
(e) Section not applicable to certain businesses or
qualified businesses.--
(1) A business that relocates from a location in a
political subdivision in this Commonwealth that is not in an
affordable energy development zone to a location in an
affordable energy development zone may not apply for a credit
for an existing job that is transferred, discontinued or lost
in this Commonwealth which is attributable to the relocation.
(2) A business that has relocated under paragraph (1)
and becomes a qualified business may apply for an affordable
energy development zone job creation tax credit for a new
full-time job that is created in the affordable energy
development zone. A new full-time job is created with a
qualified business if the average monthly employment for that
qualified business has increased from the prior 12-month
calendar year in the affordable energy development zone.
CHAPTER 7
ADMINISTRATION OF TAX PROVISIONS
Section 701. Transferability and use of tax exemptions and
credits.
(a) Exemptions.--Any exemption provided to any person or
qualified business under Chapter 5 is nontransferable and cannot
be applied, used or assigned to any other person, business or
tax account.
(b) Credits.--Prior to sale or assignment of a tax credit
20210SB0161PN0142 - 17 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
under section 702(d), the taxpayer granted the credit under
Chapter 5 must first use the credit against the liability of the
taxpayer for taxes imposed under Article IV or VI of the Tax
Reform Code for the taxable year in which the credit is
approved.
Section 702. Carryover, carryback and assignment of credit.
(a) General rule.--If the taxpayer cannot use the entire
amount of the tax credit under section 514 or 515 for the
taxable year in which the credit is first approved, then the
excess may be carried over to succeeding taxable years and used
as a credit against the liability of the taxpayer for taxes
imposed under Article IV or VI of the Tax Reform Code for those
taxable years. Each time the tax credit is carried over to a
succeeding taxable year, it shall be reduced by the amount that
was used as a credit during the immediately preceding taxable
year. The tax credit provided by section 514 or 515 may be
carried over and applied to succeeding taxable years for no more
than three taxable years following the first taxable year for
which the taxpayer was entitled to claim the credit.
(b) Application.--A tax credit approved by the department in
a taxable year first shall be applied against the taxpayer's tax
liability for the current taxable year as of the date on which
the credit was approved before the credit can be applied against
any tax liability under subsection (a).
(c) No carryback or refund.--A taxpayer is not entitled to
carry back or obtain a refund of all or any portion of an unused
tax credit granted to the taxpayer under section 514 or 515.
(d) Sale or assignment.--The following shall apply:
(1) A taxpayer, upon application to and approval by the
department, may sell or assign, in whole or in part, a tax
20210SB0161PN0142 - 18 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
credit granted to the taxpayer under section 514 or 515.
(2) The department and the Department of Revenue shall
jointly promulgate regulations for the approval of
applications under this subsection.
(3) Before an application is approved, the Department of
Revenue must make a finding that the applicant 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, assessment or determination by the
Department of Revenue.
(4) Notwithstanding any other provision of law, the
Department of Revenue shall settle, assess or determine the
tax of an applicant under this subsection within 90 days of
the filing of all required final returns or reports in
accordance with section 806.1(a)(5) of the act of April 9,
1929 (P.L.343, No.176), known as The Fiscal Code.
(e) Purchasers and assignees.--The following apply:
(1) The purchaser or assignee of all or a portion of a
tax credit under subsection (d) shall immediately claim the
credit in the taxable year in which the purchase or
assignment is made.
(2) The amount of the tax credit that a purchaser or
assignee may use against any one liability of the taxpayer
for taxes imposed under Article IV or VI of the Tax Reform
Code may not exceed 50% of the liability of the taxpayer for
taxes imposed under Article IV or VI of the Tax Reform Code
for the taxable year.
(3) The purchaser or assignee may not carry forward,
carry back or obtain a refund of or sell or assign the tax
credit.
20210SB0161PN0142 - 19 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(4) The purchaser or assignee shall notify the
Department of Revenue of the seller or assignor of the tax
credit in compliance with procedures specified by the
Department of Revenue.
Section 703. Pass-through entity.
(a) General rule.--If a pass-through entity has any unused
tax credit under section 702, it may elect in writing, according
to procedures established by the Department of Revenue, 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 shareholder, member or partner
is entitled.
(b) Limitation.--A pass-through entity and a shareholder,
member or partner of a pass-through entity shall not claim the
tax credit under subsection (a) for the same business activity
conducted within the affordable energy development zone in the
taxable year or for the same capital employed within the
affordable energy development zone in the taxable year.
(c) Application.--A shareholder, member or partner of a
pass-through entity to whom a tax credit is transferred under
subsection (a) shall immediately claim the credit in the taxable
year in which the transfer is made. The shareholder, member or
partner may not carry forward, carry back, obtain a refund of or
sell or assign the credit.
Section 704. Recapture.
(a) General rule.--If any qualified business located within
an affordable energy development zone has received an exemption
or credit under this act and subsequently relocates outside the
affordable energy development zone within the first five years
of locating in an affordable energy development zone, that
20210SB0161PN0142 - 20 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
business shall refund to the Commonwealth, which granted the
exemption or credit received, in accordance with the following:
(1) If a qualified business relocates within three years
from the date of first locating in an affordable energy
development zone, 66% of all the exemptions or credits
attributed to that qualified business's participation in the
affordable energy development zone shall be refunded to the
Commonwealth.
(2) If a qualified business relocates within three to
five years from the date of first locating in an affordable
energy development zone, 33% of all exemptions or credits
attributed to that qualified business's participation in the
affordable energy development zone shall be refunded to the
Commonwealth.
(b) Waiver.--The department may waive or modify recapture
requirements under this section if the department determines
that the business relocation was due to circumstances beyond the
control of the business, including:
(1) natural disaster;
(2) unforeseen industry trends; or
(3) loss of a major supplier or market.
Section 705. Delinquent or deficient State or local taxes.
(a) Person.--No person may claim or receive an exemption or
credit under this act unless that person is in full compliance
with all State and local tax laws, ordinances and resolutions.
(b) Qualified business.--
(1) No qualified business may claim or receive an
exemption or credit under this act unless that qualified
business is in full compliance with all State and local tax
laws, ordinances and resolutions.
20210SB0161PN0142 - 21 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) No qualified business may claim or receive an
exemption or credit under this act if any person or business
with a 20% or greater interest in that qualified business is
not in full compliance with all State and local tax laws,
ordinances and resolutions.
(c) Later compliance and eligibility.--Any person or
qualified business that is not eligible to claim an exemption or
credit due to noncompliance with any State or local tax law may
become eligible if that person or qualified business
subsequently comes into full compliance with all State and local
tax laws to the satisfaction of the Department of Revenue or the
political subdivision within the calendar year in which the
noncompliance first occurred. If full compliance is not attained
by February 5 of the calendar year following the calendar year
during which noncompliance first occurred, then that person or
qualified business is precluded from claiming any exemption or
credit for that calendar year, whether or not full compliance is
achieved subsequently.
Section 706. Appeals.
A person or qualified business shall be deemed to be in
compliance with any State or local tax for purposes of this
chapter if that person or qualified business had made a timely
administrative or judicial appeal for that particular tax or has
entered into and is in compliance with a duly authorized
deferred payment plan with the Department of Revenue or
political subdivision for that particular tax.
Section 707. Notice requirements and State and local
authorities.
(a) Requirement.--After compliance reviews have been
conducted by appropriate Commonwealth and local authorities, the
20210SB0161PN0142 - 22 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
department shall notify each affordable energy development zone
applicant by regular mail each year of the department's approval
or denial of the affordable energy development zone application.
No affordable energy development zone applicant is entitled to
any tax benefits unless it receives approval from the
department.
(b) Notice.--The department shall provide a one-time
notification to every current affordable energy development zone
property owner within 15 days of authorization. Failure to
receive departmental notification under this section shall not
extend nor restrict any benefits or rights real property owners
possess under this act.
(c) Transmittal.--The department or its designated official
shall, within 15 business days of receipt of an affordable
energy development zone application made under this act, forward
a copy of the application to appropriate Commonwealth and local
authorities for review and processing.
Section 708. Application time.
An applicant must file an application in a manner prescribed
by the department by December 31 of each calendar year for which
the applicant claims any exemption or credit under this act. No
exemption or credit may be claimed or received for that calendar
year until approval has been granted by the department.
CHAPTER 9
ADMINISTRATION OF WELL INFORMATION
Section 901. Well information.
Within 30 days of the effective date of this section, the
Department of Environmental Protection shall provide the
department with a list of all unconventional gas wells
categorized by location within political subdivisions in this
20210SB0161PN0142 - 23 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Commonwealth.
CHAPTER 21
MISCELLANEOUS PROVISIONS
Section 2101. Effective date.
This act shall take effect in 60 days.
20210SB0161PN0142 - 24 -
1
2
3
4
5