Bill Text: PA HB1291 | 2009-2010 | Regular Session | Introduced

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Bill Title: Establishing the Agricultural Capital Investment Tax Credit Program for the modernization or expansion of agricultural operations in this Commonwealth; establishing a sponsorship program; authorizing the transferability of tax credits; and imposing powers and duties on the Department of Agriculture.

Spectrum: Moderate Partisan Bill (Republican 63-7)

Status: (Introduced - Dead) 2009-04-20 - Referred to AGRICULTURE AND RURAL AFFAIRS [HB1291 Detail]

Download: Pennsylvania-2009-HB1291-Introduced.html

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PRINTER'S NO. 1529
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1291 Session of2009
INTRODUCED BY DENLINGER, BAKER, BARRAR, BEAR, BENNINGHOFF, BOBACK, BOYD, BROOKS, CAUSER, CLYMER, COX, CREIGHTON, CUTLER, DAY, ELLIS, EVERETT, FLECK, GABIG, GABLER, GEIST, GIBBONS, GILLESPIE, GINGRICH, GRELL, GROVE, HARHAI, HARHART, HARRIS, HENNESSEY, HESS, HICKERNELL, KAUFFMAN, M. KELLER, KORTZ, KRIEGER, LONGIETTI, MAJOR, MARSHALL, MARSICO, MENSCH, METCALFE, METZGAR, MILLARD, MILLER, MOUL, MURT, O'NEILL, PAYNE, PEIFER, PHILLIPS, PICKETT, PYLE, RAPP, REED, REESE, REICHLEY, ROAE, ROCK, ROHRER, SAINATO, SAYLOR, SIPTROTH, STERN, STEVENSON, SWANGER, TALLMAN, TURZAI, VULAKOVICH, WATSON AND WHEATLEY, APRIL 20, 2009
REFERRED TO COMMITTEE ON AGRICULTURE AND RURAL AFFAIRS, APRIL 20, 2009
AN ACT
Establishing the Agricultural Capital Investment Tax Credit
Program for the modernization or expansion of agricultural
operations in this Commonwealth; establishing a sponsorship
program; authorizing the transferability of tax credits; and
imposing powers and duties on the Department of Agriculture.
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 Agricultural
Capital Investment Tax Credit 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:
"Agricultural erosion and sediment control plan." A site-
specific plan that does all of the following:
(1) Meets the requirements of the act of June 22, 1937
(P.L.1987, No.394), known as The Clean Streams Law, and 25
Pa. Code Ch. 102 (relating to erosion and sediment control).
(2) Identifies best management practices to minimize
accelerated erosion and sediment from an agricultural
operation.
"Agricultural operation." A normal agricultural operation as
defined under section 2 of the act of June 10, 1982 (P.L.454,
No.133), referred to as the Right-to-Farm Law.
"Agricultural operation modernization or expansion plan." A
comprehensive document that summarizes the operational and
financial objectives of a business and contains detailed plans
and budgets showing how the objectives are to be realized
through investment in modernization or expansion of the
agricultural operation.
"Business firm." An entity authorized to do business in this
Commonwealth and subject to the taxes imposed under Article III,
IV, VI, VII, VIII, IX or XV of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
"Conservation plan." A plan, including a schedule for
implementation, that identifies site-specific conservation best
management practices on an agricultural operation.
"Agricultural operation modernization and expansion." Any of
the following:
(1) The construction, improvement or acquisition of
buildings or facilities used exclusively for an agricultural
operation.
(2) The acquisition of equipment for animal housing,
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confinement, feeding, ventilation or animal comfort and well-
being acquired and placed in service on an agricultural
operation.
(3) The construction or acquisition of equipment or
other technology used in any of the following:
(i) Projects which will generate energy from on-farm
resources of the agricultural operation.
(ii) Conserve the use of energy by the agricultural
operation.
"Department." The Department of Agriculture of the
Commonwealth.
"Eligible applicant." A business firm or an individual who
is subject to taxation under Article III of the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
"Individual." A natural person.
"Nutrient management plan." As defined under 3 Pa.C.S. Ch. 5
(relating to nutrient management and odor management).
"Pass-through entity." A partnership or Pennsylvania S
corporation as defined under section 301(n.0) and (s.2) of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971.
"Program." The Agricultural Capital Investment Tax Credit
Program.
"Project." Each component of an agricultural modernization
or expansion plan included in an application for tax credits
under this act.
"Qualified tax liability." The liability for taxes imposed
upon an eligible applicant under Article III, IV, VI, VII, VIII,
IX or XV of the act of March 4, 1971 (P.L.6, No.2), known as the
Tax Reform Code of 1971.
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Section 3. Agricultural Capital Investment Tax Credit Program.
(a) Establishment.-- The Agricultural Capital Investment Tax
Credit Program is established to encourage private investment in
the modernization of the Commonwealth's agricultural industry.
(b) Limits.--The following limits shall apply:
(1) Except as set forth under paragraph (5), an eligible
applicant may be granted a maximum of $250,000 in tax credits
under the program.
(2) No more than $250,000 in tax credits shall be
granted for projects on an agricultural operation under the
program.
(3) An eligible applicant may submit an application for
a single project or multiple applications for multiple
projects within the limits of this section.
(4) There shall be no limit on the amount of tax credits
that may be purchased or assigned from an eligible applicant.
(5) Notwithstanding paragraph (1), there shall be no
limit on the amount of tax credits granted to a sponsor under
subsection (f).
(c) Carryover.--
(1) If an eligible applicant cannot use the entire
amount of the tax credit for the taxable year in which the
tax credit is first granted, the excess may be carried over
to succeeding taxable years and used as a credit against the
qualified tax liability of the eligible applicant for those
taxable years. Each time that the tax credit is carried over
to a succeeding taxable year, it is to be reduced by the
amount that was used as a credit during the immediately
preceding taxable year. The tax credit provided under this
act may be carried over and applied to succeeding taxable
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years for no more than 15 taxable years following the first
taxable year for which the eligible applicant was entitled to
claim the credit.
(2) A tax credit granted by the Department of Revenue
shall be applied against the taxpayer's qualified tax
liability for the current taxable year as of the date on
which the credit was granted before the tax credit is applied
against any tax liability under paragraph (1).
(3) A tax credit granted under this section shall not be
carried back or refunded.
(d) Sale or assignment of credit.--
(1) An eligible applicant, upon application to and
approval by the department, may sell or assign, in whole or
in part, a tax credit granted to the eligible applicant under
this act. The department, in consultation with the Department
of Revenue, shall establish guidelines for the approval of
applications under this subsection.
(2) The purchaser or assignee of a portion of a tax
credit under this subsection shall immediately claim the
credit in the taxable year in which the purchase or
assignment is made. The amount of the credit that a purchaser
or assignee may use against a qualified tax liability may not
exceed 75% of the qualified tax liability for the taxable
year. The purchaser or assignee may not carry over, carry
back, obtain a refund of or sell or assign the tax credit.
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.
(3) Before an application is approved, the Department of
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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) Sponsorship.--An eligible applicant may become a sponsor
by applying for a tax credit for a project authorized under
section 6 if a written contract between the eligible applicant
and the owner of an agricultural operation on which the project
will be completed is submitted to the department, certifying
that the owner of the agricultural operation will comply with
all provisions of this act.
(f) Tax credits for pass-through entities.--
(1) If a pass-through entity has any unused tax credit
under section 4, 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.
(2) The credit provided under paragraph (1) shall be in
addition to any tax credit to which the shareholder, member
or partner is otherwise entitled under The Fiscal Code,
except that a pass-through entity and its shareholders,
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members or partners may not claim a tax credit under this
section for the same project authorized under section 4.
(3) A shareholder, member or partner of a pass-through
entity to whom credit is transferred under paragraph (1)
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 4. Tax credits.
(a) General eligibility.--Projects shall be eligible for a
tax credit as follows:
(1) Only eligible project costs incurred after the
effective date of this section shall be eligible for a tax
credit.
(2) An agricultural operation shall have in place a
current conservation plan, a current agricultural erosion and
sediment control plan if engaged in plowing and tilling and,
if required, a current nutrient management plan and
Concentrated Animal Feeding Operation National Pollutant
Discharge Elimination System permit or the costs of
development of the plans shall be included in the
agricultural modernization or expansion plan submitted with
the application.
(3) A project shall meet the design and construction
standards acceptable to the department.
(b) Amount of tax credit.--A tax credit equal to 25% of the
eligible costs under subsection (c) of a project authorized
under section 6 shall be granted.
(c) Eligible costs of a project.--
(1) All purchases of depreciable property related to the
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agricultural operation modernization or expansion shall be
considered eligible costs of a project to which a tax credit
may be applied.
(2) In addition to the eligible costs under paragraph
(1), the following shall be considered eligible costs to
which a tax credit may be applied:
(i) Project design, engineering and associated
planning.
(ii) Project management costs, including
contracting, document preparation and applications.
(iii) Project construction or installation.
(iv) Required post-construction inspections.
(v) Interest payments on loans for project
implementation for up to one year prior to the award of
the tax credit.
(3) A tax credit shall not be applied to that portion of
a project cost under this section for which public funding
was received.
Section 5. Project maintenance.
(a) Time period.--The owners of an agricultural operation
receiving a tax credit under this act shall maintain each
component of a project receiving a tax credit for the
depreciable life of the component.
(b) Failure.--If the project is not maintained for the time
period required under subsection (a), the owner of the property
upon which the project exists shall return to the Department of
Revenue the amount of the tax credit originally granted. Any
amount paid to the Department of Revenue under this subsection
shall be deposited in the General Fund.
(c) Exception.--If the recipient of a tax credit provides
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prior written notification to the department that the recipient
will be unable to maintain all components of an agricultural
operation modernization or expansion due to sale of the
property, cessation of an agricultural operation or other
factors, the department may direct the Department of Revenue to
prorate the amount of the tax credit that shall be returned
based on the remaining lifespan of the component of the
agricultural operation modernization or expansion in question.
Section 6. Application, review and authorization by department.
(a) Application process.--An eligible applicant shall apply
to the department for authorization that a project is eligible
for a tax credit under the program. An application shall be
developed by the department and shall include all of the
following:
(1) An agricultural operation modernization or expansion
plan acceptable to the department.
(2) A description and total cost of the components of
the agricultural operation modernization and expansion plan
for which a tax credit is being applied.
(3) Verification of eligibility under section 4(a).
(b) Review, notification and authorization.--The department
shall, within 30 days of receipt, review each application and
notify an eligible applicant whether or not the eligible
applicant meets the requirements and is authorized to receive a
tax credit under this act.
(c) Authorization of tax credit.--The department shall not
authorize tax credits that exceed the limits under sections 3(b)
and 9. The department shall authorize tax credits on a first-
come-first-served basis.
(d) Completion of project.--Upon completion of a project
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authorized under this section, an eligible applicant shall
submit to the department written notice of project completion.
The notice shall include all of the following:
(1) Documentation satisfactory to the department that
the project is complete.
(2) Documentation of the final eligible costs included
in the initial application.
(3) Any other documentation as may be required by the
department.
(e) Notification to Department of Revenue.--Upon
determination that a project authorized under this section is
complete, the department shall provide notification to the
Department of Revenue of all of the following:
(1) That the eligible applicant has completed a project
which meets the criteria for a tax credit under this act.
(2) The amount of tax credit for the eligible applicant.
(f) Inspection.--Projects authorized under this section may
be subject to inspection by the department or an agent of the
department.
Section 7. Grant of tax credit.
The Department of Revenue shall grant a tax credit authorized
under section 6. The department shall, within 60 days of receipt
of the notice under section 6(e), issue a notice of grant of a
tax credit to the eligible applicant.
Section 8. Annual cap of tax credits.
Tax credits shall be granted to the extent that funds are
appropriated by the General Assembly. The total amount of tax
credits granted by the department shall not exceed the
following:
(1) For fiscal year 2009-2010, $50,000,000.
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(2) For fiscal years 2010-2011, 2011-2012, 2012-2013 and
2013-2014, $50,000,000 per fiscal year.
Section 9. Report.
The department, in consultation with the Department of
Revenue, shall annually report to the General Assembly on the
program as follows:
(1) The number of tax credits granted under the program.
(2) The types and locations of projects.
(3) The estimated benefits of the projects.
Section 30. Effective date.
This act shall take effect July 1, 2009, or immediately,
whichever is later.
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