SB 269 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for imposition of tax; in gross receipts tax, further providing for imposition of tax, providing for transfers to Alternative Fuels Incentive Fund and further providing for establishment of revenue-neutral reconciliation; in tax credit and tax benefit administration, further providing for definitions; providing for volunteer certified emergency medical technician tax credit; imposing duties on the Department of Revenue; eliminating the tax imposed upon each dollar of the gross receipts received from the sales of electric energy; providing for the benefit of consumers and for a civil penalty; and making a repeal.

PRIOR PRINTER'S NO.NOS.

233233, 1575 PRINTER'S NO.

15751584 THE GENERAL ASSEMBLY OF PENNSYLVANIA SENATE BILL Session of No.

269 2023 INTRODUCEDINTLANGERHOLC, BY GEBHARD, BROOKS, COLLETT, DILLON, STEFANO, LANGERHOLC, COSTA, J.

WARD, HUTCHINSON AND ROBINSON,ROBINSON,, JANUARY 31, 2023 SENATOR HUTCHINSON,PITTMAN, FINANCE,RULES AND EXECUTIVE NOMINATIONS, RE-REPORTED AS AMENDED, MAY 1,6, 2024 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 andtaxes enumeratingthereon; certain subjects of taxation and imposing collection, administration and enforcement thereof;

providing procedures for the payment,osing collection, administration and enforcement thereof;

prescribing crimes, offenses and penalties," IN TAXPERSONAL CREDITINCOME ANDTAX, TAXFURTHER BENEFITPROVIDING ADMINISTRATION,FOR <-- FURTHERIMPOSITION PROVIDINGOF FORTAX; DEFINITIONS;

IN GROSS RECEIPTS TAX, FURTHER PROVIDING FOR IMPOSITION OF TAX, PROVIDING FOR TRANSFERS TO ALTERNATIVE FUELS INCENTIVE FUND AND FURTHER PROVIDING FOR ESTABLISHMENT OF REVENUE-NEUTRAL RECONCILIATION;

in tax credit and tax benefit administration, further providing for definitions;

and imposing duties on the Department <-- of Revenue.Revenue.;

ELIMINATING THE TAX IMPOSED UPON EACH DOLLAR OF <-- ENERGY;

PROVIDING FOR THE BENEFIT OF CONSUMERS AND FOR A CIVIL PENALTY;

AND MAKING A REPEAL.

The definition of "tax credit" in section 1701- <-- A.1 of the act of March 4, 1971 (P.L.6, No.2), known as <-- the Tax Reform Code of 1971, is amended by adding ana articleparagraph to read:

THE DEFINITION OF "TAX CREDIT" IN SECTION 1701-302(A) <--AND A.1(B) OF THE ACT OF MARCH 4, <-- 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, IS AMENDED BYDECEMBER ADDING14, A2023 PARAGRAPH(P.L.460, NO.64), ARE AMENDED TO READ:

SECTION 1701-A.1.302.

DEFINITIONS.IMPOSITION OF TAX.--(A) EXCEPT AS PROVIDED IN SUBSECTION (C), EVERY RESIDENT INDIVIDUAL, ESTATE OR TRUST SHALL BE SUBJECT TO, AND SHALL PAY FOR THE PRIVILEGE OF RECEIVING EACH OF THE CLASSES OF INCOME HEREINAFTER ENUMERATED IN SECTION 303, A TAX UPON EACH DOLLAR OF INCOME RECEIVED BY THAT RESIDENT DURING THAT RESIDENT'S TAXABLE YEAR AT THE RATE OF [THREE AND SEVEN HUNDREDTHS] TWO AND EIGHT-TENTHS PER CENT.

THE(B) FOLLOWINGEXCEPT WORDSAS ANDPROVIDED PHRASESIN WHENSUBSECTION USED(C), INEVERY THISNONRESIDENT ARTICLEINDIVIDUAL, ESTATE OR TRUST SHALL HAVEBE SUBJECT TO, AND SHALL PAY FOR THE MEANINGSPRIVILEGE GIVENOF TORECEIVING THEMEACH OF THE CLASSES OF INCOME HEREINAFTER ENUMERATED IN SECTION 303 FROM SOURCES WITHIN THIS SECTIONCOMMONWEALTH, UNLESSA TAX UPON EACH DOLLAR OF INCOME RECEIVED BY THAT NONRESIDENT DURING THAT NONRESIDENT'S TAXABLE YEAR AT THE CONTEXTRATE CLEARLYOF INDICATES[THREE OTHERWISE:AND SEVEN HUNDREDTHS] TWO AND EIGHT-TENTHS PER CENT.

* * * "TAX CREDIT." A TAX CREDIT AUTHORIZED UNDER ANY OF THE FOLLOWING:

* * * (14.2) ARTICLE XVIII-I.

SECTION 1101(B) AND (H) OF THE ACT ARE AMENDED AND THE SECTION IS AMENDED BY ADDING ANA ARTICLESUBSECTION TO READ:

ARTICLESECTION XVIII-I1101. VOLUNTEER CERTIFIED EMERGENCY MEDICAL TECHNICIAN TAX CREDIT Section 1801-I.

IMPOSITION OF TAX.--* * * (A.2) TRANSFER TO ALTERNATIVE FUELS INCENTIVE FUND.-- NOTWITHSTANDING ANY OTHER PROVISION OF LAW, BEGINNING IN FISCAL YEAR 2024-2025, AND EACH FISCAL YEAR THEREAFTER, SIX MILLION DOLLARS ($6,000,000) OF THE TAXES RECEIVED UNDER SUBSECTION (A) SHALL BE TRANSFERRED TO THE ALTERNATIVE FUELS INCENTIVE FUND ESTABLISHED UNDER SECTION 3 OF THE ACT OF NOVEMBER 29, 2004 (P.L.1376, NO.178), KNOWN AS THE ALTERNATIVE FUELS INCENTIVE ACT.

THE TRANSFER REQUIRED UNDER THIS SUBSECTION SHALL BE MADE ANNUALLY BY MAY 31, 2025, AND EACH MAY 31 THEREAFTER.

20230SB0269PN1584 - 2 - (B) ELECTRIC LIGHT, WATERPOWER AND HYDRO-ELECTRIC UTILITIES.-- (1) EVERY ELECTRIC LIGHT COMPANY, WATERPOWER COMPANY AND HYDRO-ELECTRIC COMPANY NOW OR HEREAFTER INCORPORATED OR ORGANIZED BY OR UNDER ANY LAW OF THIS COMMONWEALTH, OR NOW OR HEREAFTER ORGANIZED OR INCORPORATED BY ANY OTHER STATE OR BY THE UNITED STATES OR ANY FOREIGN GOVERNMENT AND DOING BUSINESS IN THIS COMMONWEALTH, AND EVERY LIMITED PARTNERSHIP, ASSOCIATION, JOINT-STOCK ASSOCIATION, COPARTNERSHIP, PERSON OR PERSONS, ENGAGED IN ELECTRIC LIGHT AND POWER BUSINESS, WATERPOWER BUSINESS AND HYDRO-ELECTRIC BUSINESS IN THIS COMMONWEALTH, SHALL PAY TO THE STATE TREASURER, THROUGH THE DEPARTMENT OF REVENUE, A TAX OF FORTY-FOUR MILLS UPON EACH DOLLAR OF THE GROSS RECEIPTS OF THE CORPORATION, COMPANY OR ASSOCIATION, LIMITED PARTNERSHIP, JOINT-STOCK ASSOCIATION, COPARTNERSHIP, PERSON OR PERSONS, RECEIVED FROM:

[(1)] (I) THE SALES OF ELECTRIC ENERGY WITHIN THIS STATE, EXCEPT GROSS RECEIPTS DERIVED FROM THE SALES FOR RESALE OF ELECTRIC ENERGY TO PERSONS, PARTNERSHIPS, ASSOCIATIONS, CORPORATIONS OR POLITICAL SUBDIVISIONS SUBJECT TO THE TAX IMPOSED BY THIS SUBSECTION UPON GROSS RECEIPTS DERIVED FROM SUCH RESALE;

AND [(2)] (II) THE SALES OF ELECTRIC ENERGY PRODUCED IN PENNSYLVANIA AND MADE OUTSIDE OF PENNSYLVANIA IN A STATE THAT HAS TAKEN ACTION SINCE DECEMBER 21, 1977 WHICH RESULTS IN HIGHER COSTS FOR ELECTRIC ENERGY PRODUCED IN THAT STATE AND SOLD IN PENNSYLVANIA UNLESS THE ACTION THAT WAS TAKEN AFTER DECEMBER 21, 1977 IS RESCINDED ACCORDING TO THE FOLLOWING APPORTIONMENT FORMULA:

EXCEPT FOR GROSS RECEIPTS DERIVED FROM SALES UNDER CLAUSE (1), THE GROSS RECEIPTS FROM ALL SALES OF ELECTRICITY OF 20230SB0269PN1584 - 3 - THE PRODUCER SHALL BE APPORTIONED TO THE COMMONWEALTH OF PENNSYLVANIA BY THE RATIO OF THE PRODUCER'S OPERATING AND MAINTENANCE EXPENSES IN PENNSYLVANIA AND DEPRECIATION ATTRIBUTABLE TO PROPERTY IN PENNSYLVANIA TO THE PRODUCER'S TOTAL OPERATING AND MAINTENANCE EXPENSES AND DEPRECIATION.

(2) THIS SUBSECTION SHALL EXPIRE FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2024.

* * * (H) BENEFITS TO CONSUMER.-- (1) FOR PURPOSES OF THIS ARTICLE, THE REDUCTION IN THE TAXES IMPOSED UNDER SUBSECTIONS (A) AND (B) SHALL DERIVE TO THE BENEFIT OF THE CONSUMER PURCHASING SERVICES FROM SAID UTILITIES.

SAID BENEFIT SHALL BE PROVIDED IN THE FORM OF A REDUCTION IN THE STATE TAX SURCHARGE.

FAILURE TO PASS THROUGH THE REDUCTION TO THE CONSUMER SHALL SUBJECT THE PUBLIC UTILITY TO A CIVIL PENALTY OF AT LEAST ONE THOUSAND DOLLARS ($1,000), BUT NOT MORE THAN FIVE THOUSAND DOLLARS ($5,000), AND SUCH ADDITIONAL RELIEF AS THE COURT MAY DEEM APPROPRIATE.

(2) FOR PURPOSES OF THIS ARTICLE, THE ELIMINATION OF THE TAXES IMPOSED UNDER SUBSECTION (B) SHALL DERIVE TO THE BENEFIT OF THE CONSUMER PURCHASING ELECTRIC ENERGY.

SAID BENEFIT SHALL BE PROVIDED IN THE FORM OF THE ELIMINATION OF OR A REDUCTION IN THE STATE TAX SURCHARGE.

FAILURE TO PASS THROUGH THE ELIMINATION OR REDUCTION TO THE CONSUMER SHALL SUBJECT THE ENTITY TO A CIVIL PENALTY OF AT LEAST ONE THOUSAND DOLLARS ($1,000), BUT NOT MORE THAN FIVE THOUSAND DOLLARS ($5,000), AND SUCH ADDITIONAL RELIEF AS THE COURT MAY DEEM APPROPRIATE.

* * * SECTION 3.

SECTION 1101.2 OF THE ACT IS AMENDED TO READ:

SECTION 1101.2.

ESTABLISHMENT OF REVENUE-NEUTRAL 20230SB0269PN1584 - 4 - RECONCILIATION.--(A) NOTWITHSTANDING THE PROVISIONS OF 66 PA.C.S.

§ 2810(C)(1) (RELATING TO REVENUE-NEUTRAL RECONCILIATION), THE RATE OF TAX ESTABLISHED UNDER 66 PA.C.S.