House passes budget after all-night marathon
HARRISBURG The news on-
Capital Hill this week is an all-,
night marathon- pulled by the
state's House of Representatives
on Wednesday. The legislators
passed the budget (S.B. 712) art
a.m. Thursday morning, and most
went home to take a well-earned
rest.
As far as the Department of
Agriculture's budget goes, Darwin
Moyer, director of PDA’s Ad
ministrative Services commented,
“We came out of the budget pretty
good.”
When the budget finally was
approved in the wee hours of the
morning, a $200,000 line item
setting up funds for agricultural
research had been restored in the
legislation." And an ag budget of
$15,529 million had been
established.
Because of the additions of
several items, the bill now passes
back to the Senate for a ‘yes’ or
‘no’ vote no changes in the
legislation can be made And then
it’s on to the Governor’s desk f<sr
signing
The House also passed the catch
all Senate Bill 161, introduced by
Senator Clarence F Manbeck,
with a vote of 112-88. Two amend
ments to the Bill are important to
ag groups.
The first amendment allows
implements of husbandry to be
driven between farms with only
the slow moving vehicle sign
displayed on the back during
daylight hours. Present law
requires lights.
The other amendment calls for a
3% percent oil franchise tax to be
paid by the oil companies for fuel
used in transportation. This tax
replaces the previously proposed
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SWAP tax, and will create funds to
repair and maintain rural roads
and bridges '
Other action on the Hill this week
included the session of the House
Agricultural Committee on
Tuesday morning. Slated for
discussion were House Bill 1472,
the Food Act, and HB 1429, the
Noxious Weed Bill.
Introduced by Lancaster’s
Representative Noah Wenger, HB
1472 calls for the repeal of 15
Pennsylvania food-related acts
presently on the books in order to
provide the Department of
Agriculture with uniform stan
dards, violations, and penalties.
Questions, answers on oil franchise tax
What is the Oil Company
Franchise Tax?
It is a tax of 3.5 percent upon
each dollar of taxable revenue
generated by oil companies
operating in Pennsylvania from
the sale of motor fuel within the
state.
What is taxable revenue?
Taxable revenues are all
receipts from the first sale of
motor fuel within Pennsylvania, or
revenue generated by importing
motor fuel into the state for sale
within Pennsylvania.
What motor fuel products are
taxable?
The tax is on the sales of
gasoline, diesel fuel, kerosene,
propane and any other petroleum
products used to propel motor
vehicles on the public highways.
The tax is not imposed on sales of
home heating oil, lubricating oil
and upon sales of petroleum
1981
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Legislative Roundtij
The Food Act provides for the
detention and condemnation of
adulterated or misbranded foods,
allows for emergency actions by
the Secretary of Agriculture in the
event of a health hazard to the
consumer, and defines en
forcement limits and penalties.
Three amendments to the Act
tied up the morning session so that
no final action was taken on any of
the bills.
Drawing considerable discussion
was the section calling for out-of
state firms to be able to use the
state registration label “Reg.
Penna. Dept. Agr.” —, after the
Department deems the f ood
products to public utilities for
electricity generation, upon any off
the highway use of motor fuel,
upon the use of motor fuel in non
registered farm vehicles, upon
sales of motor fuel to the state,
federal, or local governments,
upon motor fuel used by non-profit
school. Or upon motor fuel by
volunteer fire companies, or
ambulance, or rescue squads.
How -much revenue will be
generated by the tax?
In 1981-82 the tax will yield about
|193 million.
How will the proceeds of the tax
be nied?
The total proceeds of the tax will
be deposited in the Motor License
Fund. Twenty percent of the
proceeds will be appropriated out
of the MLF to municipalities for
distribution pursuant to the Per
manent Allocation of Fuel Taxes
Act, and an additional amount will
Regional
Circuit Event
111 1)1
II 11
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Lancaster Farming, Saturday, June 13,1951-A35
product worthy and the firm
purchases a permit for a $l5O fee.
It was questioned whether this
could be considered a revenue
raising measure, or just another
fee tacked on by the state which
could discourage business.
Comments from the floor ex
pounded on the difficulties of
policing the use of this label and
how the voluntary labeling
program, which would allow
certain food products to be sold
without the registration, would go
against the PDA logo of “We’re
growing better.” It was assured
there would be ‘peer pressure’
forcing compliance and the
be appropriated out of the MLF to
municipalities sufficient to raise
their share of all existing motor
fuel tax revenues to 20%. This
means that about $63 million of the
revenue generated will go to
municipalities, and $129 million
will be used for state owned roads
and bridges.
How will local government
Liquid Fuels Grants be affected by
.the tax?
For every one dollar received for
local roads and bridges this year,
local governments will recive $1.65
next year.
WhatJus a franchise Tax?
It is a tax imposed for the
privilege of doing business in
Pennsylvania. '
Is a franchise tax different from
a gross receipts tax?
The taxes are similar, but the
franchise tax is imposed for the
privilege of operating in the state,
whereas the gross receipts tax is
imposed upon sales made within
the state.
It is constitutional to impose a
special tax on oil companies?
Yes. Currently in Pennsylvania,
we have special taxes on utilities,
financial institutions, and in
surance companies.
How will the tax be collec-
How will the tax be collected?
Oil companies will on the 10th
day of the month following the
month in which sales are made pay
the taxes due for the month. The
tax will be collected mainly from
wholesale distributors and im
porters of oil into Pennsylvania.
How will distributors distinguish
between the sale of motor fuel for
registration would not be dropped
from labels.
When the roll call was read, the
amendment carried with a vote of
18 to 3.
Retail food merchants
questioned whether H 81472 would
actually streamline the state’s
regulations at their level, along
with the proposed $1 a month fee
that would be levied. It was agreed
these concerned groups would
work with Rep. Noah Wenger and a
motion on a hearing was tabled.
Commented Wenger, “There’s
no real urgency here. Some of
these laws date back to 1909.”
taxable versus tax exempt pur
poses?
Purchasers will be required to
provide documentation to
distributors showing what portion
of fuel purchased mil be used for
exempt purposes. If the purchaser
cannot reasonably predict fuel use
at the time of purchase, all of the
fuel will be presumed to be
taxable, but the purchaser may
subsequently provide documen
tation to the oil company showing
exempt uses.
Whenever subsequent
documentation is provided, the oil
company may claim a credit
against taxes currently due for
taxes previously paid on exempt
products. If the purchaser is
unable to provide documentation
on exempt uses, either at the time
of sale or subsequent to the sale,
then the Department of Revenue
may pay to the ultimate exempt
user of fuel a credit equal to the
amount of the tax paid on the fuel
by the oil company. Finally, if a
purchaser claims that fuel will be
used for an exempt purpose and
later uses or sells the fuel for a
taxable purpose, than the pur
chaser must directly pay the
franchise tax.
Will home heating oil customers
be required to apply to the
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