Bill Text: PA HB351 | 2011-2012 | Regular Session | Introduced

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Bill Title: In film production tax credit, further providing for limitations; and authorizing an onsite use natural gas well tax credit.

Spectrum: Partisan Bill (Republican 8-0)

Status: (Introduced - Dead) 2011-01-31 - Referred to FINANCE [HB351 Detail]

Download: Pennsylvania-2011-HB351-Introduced.html

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PRINTER'S NO. 306
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 351 Session of2011
INTRODUCED BY SONNEY, BARRAR, CAUSER, DENLINGER, EVERETT, HUTCHINSON, PYLE AND STEVENSON, JANUARY 31, 2011
REFERRED TO COMMITTEE ON FINANCE, JANUARY 31, 2011
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," in film production tax credit, further providing
for limitations; and authorizing an onsite use natural gas
well tax credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1707-D(a) of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, added July
25, 2007 (P.L.373, No.55), is amended to read:
Section 1707-D. Limitations.
(a) Cap.--In no case shall the aggregate amount of tax
credits awarded in any fiscal year under this article exceed
[$75,000,000] $50,000,000.
* * *
Section 2. The act is amended by adding an article to read:
ARTICLE XVII-G
ONSITE USE NATURAL GAS WELL TAX CREDIT
Section 1701-G. Scope.
This article authorizes an onsite use natural gas well tax
credit.
Section 1702-G. 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:
"Cogeneration." The use of a heat engine or power station to
simultaneously generate space or water heat as well as
electricity.
"Department." The Department of Revenue of the Commonwealth.
"Expense." Any actual cost incurred by a taxpayer through
the construction of a qualified natural gas well.
"Pass-through entity." Any of the following:
(1) A partnership, limited partnership, limited
liability company, business trust or other unincorporated
entity that for Federal income tax purposes is taxable as a
partnership.
(2) A Pennsylvania S corporation.
"Qualified natural gas well." A bore hole drilled on real
property owned or leased by a taxpayer for the purpose of
producing or extracting gas to be used for the following
purposes:
(1) onsite by the taxpayer for the purposes of space or
water heating for use in the taxpayer's primary residence; or
(2) onsite by the taxpayer for the purposes of space or
water heating or cogeneration for use in the taxpayer's small
business.
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"Qualified tax liability." The liability for taxes imposed
under Article III, IV or VI. The term includes liability for
taxes imposed under Article III on an owner of a pass-through
entity.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Small business." A Pennsylvania business employing 100 or
fewer employees during the taxable year for which a tax credit
article is sought.
"Tax credit." The onsite use natural gas well tax credit
authorized under this article.
"Taxpayer." A person or small business subject to tax under
Article III, IV or VI. The term includes the shareholder, owner
or member of a pass-through entity that receives a tax credit.
Section 1703-G. Credit for onsite use natural gas wells.
(a) General rule.--A taxpayer that incurs expenses through
drilling and construction of a qualified natural gas well in a
taxable year may apply for a tax credit as provided in this
article. By September 15, a taxpayer must submit an application
to the department for qualified natural gas well expenses
incurred in the taxable year that ended in the prior calendar
year.
(b) Amount of tax credit.--A taxpayer that is qualified
under subsection (a) shall receive a tax credit for the taxable
year in the amount of 25% of the total qualified natural gas
well expenses, not to exceed $1,000,000.
(c) Notification to taxpayer.--By December 15 of the
calendar year following the close of the taxable year during
which the qualified natural gas well expenses were incurred, the
department shall notify the taxpayer of the amount of the
taxpayer's tax credit approved by the department.
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Section 1704-G. Carryover, carryback, refund and assignment of
tax credit.
A tax credit is subject to the following provisions:
(1) If a taxpayer cannot use the entire amount of the
tax credit for the taxable year in which the tax credit is
first approved, then the excess may be carried over to
succeeding taxable years and used as a credit against the
qualified tax liability of the taxpayer for those taxable
years. Each time that 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 may be carried over and applied
to succeeding taxable years for no more than 15 taxable years
following the first taxable year for which the taxpayer was
entitled to claim the credit.
(2) The tax credit approved by the department for
qualified natural gas well expenses in a taxable year first
shall be applied against the taxpayer's qualified tax
liability for the current taxable year as of the date on
which the credit was approved before the tax credit is
applied against any tax liability under paragraph (1).
(3) A taxpayer is not entitled to assign, carry back or
obtain a refund of an unused tax credit.
Section 1705-G. Time limitations.
A taxpayer is not entitled to a tax credit for qualified
natural gas well expenses incurred in taxable years ending after
December 31, 2015.
Section 1706-G. Limitation on tax credits.
(a) Cap.--In no case shall the aggregate amount of tax
credits awarded in any fiscal year exceed $25,000,000.
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(b) Proration.--If the total amount of tax credits applied
for by all taxpayers exceeds the amount allocated for those
credits, then the tax credit to be received by each applicant
shall be prorated by the department among all applicants.
Section 1707-G. Shareholder, owner or member pass-through.
(a) General rule.--If a Pennsylvania S corporation does not
have an eligible tax liability against which the tax credit may
be applied, a shareholder of the Pennsylvania S corporation is
entitled to a tax credit equal to the tax credit determined for
the Pennsylvania S corporation for the taxable year multiplied
by the percentage of the Pennsylvania S corporation's
distributive income to which the shareholder is entitled.
(b) Pass-through entities.--If a pass-through entity other
than a Pennsylvania S corporation does not have an eligible tax
liability against which the tax credit may be applied, an owner
or member of the pass-through entity is entitled to a tax credit
equal to the tax credit determined for the pass-through entity
for the taxable year multiplied by the percentage of the pass-
through entities' distributive income to which the owner or
member is entitled.
(c) Nature of tax credit.--The tax credit provided under
subsection (a) or (b) is in addition to any tax credit to which
a shareholder, owner or member of a pass-through entity is
otherwise entitled under this article. However, a pass-through
entity and a shareholder, owner or member of a pass-through
entity may not claim a credit under this article for the same
qualified natural gas well expenses.
Section 1708-G. Report to General Assembly.
The secretary shall submit an annual report to the General
Assembly indicating the effectiveness of the tax credit no later
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than March 15 following the year in which the tax credits were
approved. The report shall include the names of all taxpayers
utilizing the tax credit as of the date of the report and the
amount of tax credits approved and utilized by each taxpayer.
Notwithstanding any law providing for the confidentiality of tax
records, the information contained in the report shall be public
information. The report may also include any recommendations for
changes in the calculation or administration of the tax credit.
Section 1709-G. Regulations.
The secretary, in conjunction with the Department of
Environmental Protection, shall promulgate regulations necessary
for the implementation and administration of this article.
Section 3. This act shall apply to taxable years beginning
after December 31, 2011.
Section 4. This act shall take effect immediately.
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