PRINTER'S NO. 4331
No. 2862 Session of 2002
INTRODUCED BY GEORGE, DeWEESE, FAIRCHILD, FRANKEL, HALUSKA,
HARHAI, HERSHEY, JOSEPHS, LEVDANSKY, McGEEHAN, MICHLOVIC,
R. MILLER, MUNDY, PALLONE, PETRARCA, RUBLEY, SAYLOR,
SCRIMENTI, SOLOBAY, STABACK, STEELMAN, TANGRETTI, THOMAS,
TIGUE, WALKO, WANSACZ, WATERS, YOUNGBLOOD AND YUDICHAK,
SEPTEMBER 26, 2002
REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 26, 2002
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," providing for the establishment, implementation
11 and administration of a wastewater treatment and reuse tax
12 credit program.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
16 the Tax Reform Code of 1971, is amended by adding an article to
17 read:
18 ARTICLE XVIII-C
19 WASTEWATER TREATMENT AND REUSE TAX CREDIT
20 Section 1801-C. Short title.
21 This article shall be known and may be cited as the
1 Wastewater Treatment and Reuse Tax Credit Program.
2 Section 1802-C. Definitions.
3 The following words and phrases when used in this article
4 shall have the meanings given to them in this section, unless
5 context clearly indicates otherwise:
6 "Department." The Department of Environmental Protection of
7 the Commonwealth.
8 "Facilities." A manufacturing industrial facility or power
9 plant that uses average amounts of water in excess of 100,000
10 gallons a day and seeks approval from the Department of
11 Environmental Protection to be eligible for the Wastewater
12 Treatment and Reuse Tax Credit Program.
13 "Manufacturing industrial facility." Establishments engaged
14 in mechanical, physical or chemical transformation of materials,
15 substances or components into new products, including, but not
16 limited to, textile mills, paper manufacturers, chemical
17 manufacturers and facilities producing leather and allied
18 products, pharmaceuticals, plastics and rubbers, fabricated
19 metals, computers and electronics, electrical equipment,
20 transportation equipment, furniture and paint, coatings and
21 adhesives.
22 "Taxpayer." An entity subject to tax under Article III, IV,
23 VI or XI.
24 "Wastewater." The spent or used water from an industrial
25 facility that contains dissolved or suspended matter.
26 "Wastewater treatment and reuse equipment." Any equipment
27 that is used exclusively to treat wastewater produced in an
28 industrial process for purposes of reuse in the same application
29 for which it was originally used or for reuse in a different
30 aspect of the industrial process.
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1 Section 1803-C. Public policy.
2 It is hereby declared to be public policy of the Commonwealth
3 to encourage investment in wastewater treatment and reuse
4 equipment by owners of manufacturing industrial facilities and
5 power plants that use an average amount of water in excess of
6 100,000 gallons per day and to promote the reuse of the treated
7 industrial wastewater.
8 Section 1804-C. Tax credit.
9 (a) Authorization.--Any taxpayer of a manufacturing
10 industrial facility or power plant that invests in wastewater
11 treatment and reuse equipment for use exclusively within this
12 Commonwealth shall be allowed a credit against any tax due under
13 Article III, IV, VI or XI, provided that the department has
14 issued a determination that the facility uses an average of more
15 than 100,000 gallons of water a day and that the operation of
16 the equipment and the subsequent reuse of the treated wastewater
17 will be beneficial to the environment.
18 (b) Amount of credit.--The amount of the credit shall be
19 computed as 30% of the cost of the treatment equipment,
20 excluding the amount of any sales or use tax paid for the
21 equipment. The tax credits authorized by this section shall not
22 exceed $20,000,000 in the aggregate during any year.
23 (c) Agreement.--In order for a facility owner to claim the
24 wastewater treatment and reuse tax credit under this article,
25 the taxpayer must enter into an agreement with the Commonwealth.
26 The agreement shall last ten years, beginning the first tax year
27 in which the treatment equipment is purchased, and no more than
28 20% of the total credit shall be claimed for each tax year in
29 the ten-year agreement.
30 (d) Excess application.--If the total requests for
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1 wastewater treatment and reuse tax credits exceed $20,000,000
2 during any calendar year, the credits will be allocated on a pro
3 rata basis. If the total amount of wastewater treatment and
4 reuse tax credits applied for by all facility taxpayers under
5 this article exceeds $20,000,000, then the credit to be received
6 by each facility taxpayer shall be the product of $20,000,000
7 multiplied by the quotient of the credit applied for by an
8 individual facility taxpayer divided by the total of all credits
9 applied for.
10 Section 1805-C. Qualifications.
11 (a) Determination.--In order to qualify for the tax credit,
12 the taxpayer shall apply for a determination from the Secretary
13 of Environmental Protection that the equipment, with respect to
14 which the credit is sought, qualifies as treatment equipment
15 that is used exclusively to treat wastewater produced in an
16 industrial process, for purposes of reusing the wastewater which
17 would otherwise be discharged into the waters of the State.
18 (b) Rules and regulations.--The Secretary of Environmental
19 Protection in conjunction with the Secretary of Revenue shall
20 adopt rules and regulations establishing technical and
21 administrative requirements for the qualification of treatment
22 and reuse equipment. For the purpose of establishing a
23 taxpayer's eligibility for a credit pursuant to this article, a
24 determination shall be made by the Secretary of the Department
25 of Environmental Protection that the operation of the equipment
26 and the reuse of wastewater that has been treated will be
27 beneficial to the environment.
28 Section 1806-C. Application.
29 (a) Contents.--An application for the tax credit shall be
30 submitted in writing in a form as the department prescribes and
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1 shall include:
2 (1) The date or anticipated date of purchase of the
3 equipment.
4 (2) A physical and functional description of the
5 equipment.
6 (3) The cost.
7 (4) The name and address of the facility in which the
8 treatment and reuse equipment shall be installed.
9 (5) The nature of the reuse.
10 (6) The volume of treated wastewater that is to be
11 reused.
12 (7) The taxpayer's explanation of how the operation of
13 the system and the reuse of the wastewater will be beneficial
14 to the environment.
15 (b) Affidavit.--The application shall also include the
16 taxpayer's affidavit that, to the best of the taxpayer's
17 knowledge, the equipment has not previously qualified for a
18 credit under this article either for the taxpayer or for a
19 previous owner.
20 (c) Multiple facilities.--A taxpayer of multiple facilities
21 is eligible to receive a separate tax credit for each facility
22 that qualifies under the department's standards for the program.
23 A separate application must be submitted for each facility
24 seeking to receive a tax credit for the purchase of wastewater
25 treatment and reuse equipment.
26 (d) Use for upgrade of equipment.--Once the ten-year
27 agreement between the facility taxpayer and the Commonwealth has
28 been fulfilled, the taxpayer may apply for an equipment upgrade
29 tax credit from the department. A new and complete application
30 must be submitted to the department and a determination will be
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1 made based on how substantial the effects of the equipment will
2 be in further conserving the water resources of this
3 Commonwealth.
4 Section 2. This act shall take effect January 1, 2003.
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