THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY GORDNER, SCARNATI, TARTAGLIONE, FOLMER, ROBBINS, ERICKSON, GREENLEAF, WOZNIAK, RAFFERTY, STACK, BOSCOLA, PIPPY, ALLOWAY, O'PAKE, WONDERLING, WAUGH AND YAW, FEBRUARY 19, 2009

REFERRED TO FINANCE, FEBRUARY 19, 2009  

AN ACT

Authorizing certain tax credits for qualified alternative fuel

distributors; and imposing powers and duties on the

Department of Revenue.

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 Alternative

Fuel Deployment Act.

Section 2.  Legislative findings.

The General Assembly finds and declares that:

(1)  There is an increasing need for the development and

deployment of alternative forms of transportation fuels.

(2)  It is the intent of this act to assist in the

establishment of a balanced portfolio of renewable energy

technologies while adopting a strategy to fulfill the

Commonwealth's long-term needs and goals for both energy and

the environment.

(3)  It is the intent of this act to encourage the

deployment of alternative fuels to the greatest extent

practical throughout this Commonwealth and to provide

incentives to businesses to encourage greater availability of

these fuels to the motoring public.

Section 3.  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:

"Alternative fuel."  A motor vehicle fuel that, when compared

to conventional or reformulated gasoline, results in lower

emissions of oxides of nitrogen (NOx), volatile organic

compounds (VOC), carbon monoxide (CO), particulates or any

combination thereof. This term includes, but is not limited to:

compressed natural gas (CNG), liquefied natural gas (LNG),

liquid petroleum or propane gas (LPG), ethanol blended as E85,

methanol blended as M85, hydrogen, hythane, any combination of

compressed natural gas and hydrogen, electricity, coal-derived

liquid fuels and other fuels determined by rule of the Secretary

of the United States Department of Energy under the definition

of "alternative fuel" in section 301 of the Energy Policy Act of

1992 (Public Law 102-486, 42 U.S.C. § 13211). The term shall

also include biofuels.

"Biofuel."  A fuel derived from alcohol, ether, ester and

other chemicals made from cellulosic biomass, including, but not

limited to, herbaceous and woody plants and agricultural and

forestry residues. This term also includes a fuel derived from

vegetable oils or animal fats designated B100 that meets the

American Society of Testing and Materials Specification DG751,

and B20, and that is comprised of 20% biodiesel with 80% diesel

fuel.

"Department."  The Department of Revenue of the Commonwealth.

"Pass-through entity."  A partnership as defined in section

301 (n.0) or a Pennsylvania S corporation as defined in section

301(n.1) of the act of March 4, 1971 (P.L.6, No.2), known as the

Tax Reform Code of 1971.

"Person."  An individual resident of this Commonwealth.

"Qualified alternative fuel distribution expense."  The cost

of capital equipment directly related to the distribution,

dispensing or storing of alternative fuel.

"Qualified alternative fuel distributor."  A commercial

facility that distributes or dispenses alternative fuel to the

motoring public.

"Qualified business."  A partnership, association, company,

corporation, joint venture or other business entity qualified

pursuant to section 5.

"Qualified tax liability."  The liability for taxes imposed

under Article III, IV or VI of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971. The term does not

include any tax withheld by an employer from an employee under

Article III of the Tax Reform Code of 1971.

"Tax Reform Code of 1971."  The act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971.

"Taxpayer."  An entity subject to tax under Article III, IV

or VI of the act of March 4, 1971 (P.L.6, No.2), known as the

Tax Reform Code of 1971. The term includes a shareholder of a

Pennsylvania S corporation.

Section 4.  Establishment of program.

(a)  General rule.--A qualified business shall be eligible to

receive the tax credit authorized under section 5.

(b)  Administration and regulations.--The department shall

administer this act and cooperate with the Department of

Environmental Protection. The Department of Environmental

Protection shall provide assistance to the department in

identifying specific types of alternative fuel and the

appropriate alternative fuel dispensing, deployment and storage

equipment and in providing other information that may be

necessary to ensure the proper administration of this act.

(c)  Qualified alternative fuel distributor designation.--The

regulations established by the department shall provide for the

designation of a qualified alternative fuel distributor. The

department shall, in cooperation with the Department of

Environmental Protection, develop criteria to establish

eligibility as a qualified alternative fuel distributor. The

criteria shall include, but not be limited to, a provision

mandating that equipment used to store, dispense or distribute

alternative fuel be clearly identified as associated with

renewable fuel.

Section 5.  Credit for qualified alternative fuel distribution

expense.

(a)  General rule.--A qualified alternative fuel distributor

who incurs a qualified alternative fuel distribution expense in

a calendar year may apply for a tax credit as provided in this

section. The tax credit shall be limited to the cost of the

capital equipment including pumps, storage tanks and related

equipment used to store, distribute or dispense the alternative

fuel. A business that is qualified under this section shall be

eligible for an alternative fuel distributor tax credit

authorized under this act. By September 15, a qualified

alternative fuel distributor must submit an application to the

department for qualified expenses incurred in the prior calendar

year.

(b)  Amount.--A qualified business shall be eligible under

Article III, IV and VI of the Tax Reform Code of 1971 for an

alternative fuel distribution tax credit equal to 30% of a

qualified alternative fuel distribution expense.

(c)  Notification to taxpayer.--By December 15 of the

calendar year following the close of the taxable year during

which a qualified alternative fuel distributor expense was

incurred, the department shall notify the qualified alternative

fuel distributor of the amount of the qualified alternative fuel

distributor's tax credit approved by the department.

(d)  Limitations on tax credits.--A taxpayer shall be subject

to the following limitations in the application of the tax

credits:

(1)  A qualified alternative fuel distributor shall

receive the tax credits for a period not to exceed two years

beginning with the taxable year in which the alternative fuel

dispensing equipment was placed in service. The credits shall

expire on the date of expiration required by this act.

(2)  The tax credit shall be limited to the cost of the

capital equipment, including pumps, storage tanks and related

equipment used to store, distribute or dispense the

alternative fuel.

Section 6.  Carryover, carryback, refund and assignment of

credit.

(a)  General rule.--The amount of the alternative fuel

distribution tax credit that a qualified business entity may use

against any tax under Article III, IV or VI of the Tax Reform

Code of 1971 during any year may not exceed 30% of the qualified

tax liability for that taxable year. If the qualified business

entity cannot use the entire amount of the credit for the

taxable year in which the credit is first approved, the excess

may be carried over one succeeding taxable year and used as a

credit against any tax under Article III, IV or VI of the Tax

Reform Code of 1971 of the qualified alternative fuel

distributor for that taxable year. In the event that the

alternative fuel distribution 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.

(b)  Application.--An alternative fuel distribution tax

credit approved by the department for a qualified alternative

fuel distribution expense in a taxable year first shall be

applied against the qualified alternative fuel distributor's tax

liability for the current taxable year as of the date on which

the credit was approved.

(c)  Restriction.--A qualified business entity may not carry

back, obtain a refund of or assign any unused alternative fuel

distribution tax credit.

Section 7.  Pass-through entity.

(a)  General rule.--If a pass-through entity has any unused

tax credit under section 6, the entity may elect in writing,

according to the department's procedures, to transfer all or a

portion of the tax credit to shareholders, members or partners

in proportion to the shares of the entity's distributive income

to which the shareholder, member or partner is entitled.

(b)  Independent from other tax credits.--

(1)  The tax credit provided under subsection (a) is in

addition to any tax credit to which a shareholder, member or

partner of a pass-through entity is otherwise entitled under

the Tax Reform Code of 1971.

(2)  A pass-through entity and a shareholder, member or

partner of a pass-through entity may not claim a credit under

this act for the same qualified expense.

(c)  Claim of tax credit.--A shareholder, member or partner

of a pass-through entity to whom credit is transferred under

subsection (a) must 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 8.  Report.

The department shall annually make a report to the

Environmental Resources and Energy Committee of the Senate and

the Environmental Resources and Energy Committee of the House of

Representatives on the activities undertaken pursuant to this

act, including, but not limited to:

(1)  The number and amount of tax credits provided.

(2)  The number and description of the business entities

receiving the tax credits.

(3)  The total cost of the equipment investment against

which the tax credits were provided.

Section 9.  Applicability.

For purposes of this act, the tax credit shall be applicable

beginning with the taxable years beginning after December 31,

2008.

Section 10.  Effective date.

This act shall take effect in 60 days.