An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in Pennsylvania Economic Development for a Growing Economy (PA EDGE) Tax Credits, repealing provisions relating to local resource manufacturing, providing for Reliable Energy Investment Tax Credit, repealing provisions relating to Pennsylvania milk processing and providing for Pennsylvania milk processing; in regional clean hydrogen hubs, further providing for definitions, for eligibility, for application and approval of tax credit, for use of tax credits and for applicability; in semiconductor manufacturing and biomedical manufacturing and research, further providing for definitions and for application and approval of tax credit and providing for geothermal energy and for sustainable aviation fuel; and, in application of Prevailing Wage Act, further providing for definitions.

PRINTER'S NO. 1036
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 500
Session of
2025
INTRODUCED BY PISCIOTTANO, COSTA, TARTAGLIONE, SANTARSIERO,
KANE, STREET, COMITTA, COLLETT, FONTANA, SCHWANK, BOSCOLA,
HUGHES, HAYWOOD, CAPPELLETTI AND MILLER, JULY 8, 2025
REFERRED TO FINANCE, JULY 8, 2025
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 Pennsylvania Economic Development for a
Growing Economy (PA EDGE) Tax Credits, repealing provisions
relating to local resource manufacturing, providing for
Reliable Energy Investment Tax Credit, repealing provisions
relating to Pennsylvania milk processing and providing for
Pennsylvania milk processing; in regional clean hydrogen
hubs, further providing for definitions, for eligibility, for
application and approval of tax credit, for use of tax
credits and for applicability; in semiconductor manufacturing
and biomedical manufacturing and research, further providing
for definitions and for application and approval of tax
credit and providing for geothermal energy and for
sustainable aviation fuel; and, in application of Prevailing
Wage Act, further providing for definitions.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Subarticle B of Article XVII-L of the act of
March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971, is repealed:
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[SUBARTICLE B
LOCAL RESOURCE MANUFACTURING
Section 1711-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Dry natural gas." Natural gas in which there are no
appreciable natural gas liquids recoverable by separation at the
wellhead.
"Fertilizer." A chemical product derived from petrochemicals
which is added to soil or land to increase fertility.
"Natural gas liquids." As defined in 58 Pa.C.S. § 3203
(relating to definitions).
"Petrochemical." Chemical products obtained from refining
and processing natural gas. The term does not include
liquefaction or other processing of natural gas for the purpose
of transport.
"Project facility." A facility located in this Commonwealth
which manufactures petrochemicals or fertilizers using dry
natural gas and which required a capital investment of at least
$400,000,000 to construct and place into service.
"Qualified taxpayer." A company that satisfies all of the
following:
(1) Purchases and uses dry natural gas produced in this
Commonwealth in the manufacture of petrochemicals or
fertilizers at a project facility in this Commonwealth that
has been placed in service on or after the effective date of
this section.
(2) Has made a capital investment of at least
$400,000,000 in order to construct the project facility and
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place the project facility into service in this Commonwealth.
(3) Has created a minimum aggregate total of 800 new
jobs and permanent jobs.
(4) Has made good faith efforts to recruit and employ,
and to encourage any contractors or subcontractors to recruit
and employ, workers from the local labor market for
employment during the construction of the project facility.
(5) Has demonstrated that the new jobs created at the
project facility or for work covered by Subarticle F are paid
at least the prevailing minimum wage and benefit rates for
each craft or classification as determined by the Department
of Labor and Industry.
(6) The construction work to place a project facility
into service shall be performed subject to the act of March
3, 1978 (P.L.6, No.3), known as the Steel Products
Procurement Act.
Section 1712-L. Eligibility.
In order to be eligible to receive a tax credit, a company
shall demonstrate the following:
(1) The company meets the requirements of a qualified
taxpayer.
(2) The use of carbon capture and sequestration
technology, or similar technologies, at the project facility
to the extent it is cost effective and feasible at the
discretion of the qualified taxpayer.
(3) Confirmation that the company has filed all required
State tax reports and returns for all applicable taxable
years and paid any balance of State tax due as determined by
assessment or determination by the department and not under
timely appeal.
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Section 1713-L. Application and approval of tax credit.
(a) Rate.--The tax credit shall be equal to $0.47 per unit
of dry natural gas that is purchased and used in the
manufacturing of petrochemicals or fertilizers at the project
facility by a qualified taxpayer.
(b) Application.--
(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
(2) The application must be submitted to the department
by March 1 for the tax credit claimed for dry natural gas
purchased and used in manufacturing of petrochemicals or
fertilizers by the qualified taxpayer at the project facility
during the prior calendar year.
(3) The application must be on the form required by the
department which shall include the following:
(i) information required by the department to
document the amount of dry natural gas purchased and used
in the manufacture of petrochemicals or fertilizers at
the project facility;
(ii) information required by the department to
verify that the applicant is a qualified taxpayer; and
(iii) any other information as the department deems
appropriate.
(c) Review and approval.--
(1) The department shall review the applications and
shall issue an approval or disapproval by May 1.
(2) Upon approval, the department shall issue a
certificate stating the amount of tax credit granted for dry
natural gas purchased and used in the manufacture of
petrochemicals or fertilizers at the project facility in the
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prior calendar year.
(d) Availability of tax credits.--
(1) Each fiscal year, $56,666,668 in tax credits shall
be made available to the department in accordance with this
subarticle.
(2) No more than two qualified taxpayers shall receive a
tax credit annually, for a maximum credit of $6,666,667 each.
(3) The department shall issue unallocated tax credits
to no more than one qualified taxpayer, notwithstanding the
maximum credit limit under paragraph (2), if the qualified
taxpayer:
(i) has made a total capital investment of at least
$1,000,000,000 in order to construct the project facility
and place the project facility into service in this
Commonwealth;
(ii) has created a minimum aggregate total of 1,800
new jobs and permanent jobs; and
(iii) has satisfied all other eligibility
requirements for a qualified taxpayer under this
subarticle.
(4) For purposes of paragraph (3), the term "unallocated
tax credits" means the difference between tax credits
authorized under paragraph (1) and approved under paragraph
(2).
Section 1714-L. Use of tax credits.
(a) Initial use.--Prior to sale or assignment of a tax
credit under section 1716-L, a qualified taxpayer must first use
a tax credit against the qualified tax liability incurred in the
taxable year for which the tax credit was approved.
(b) Eligibility.--The tax credit may be applied against up
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to 20% of the qualified taxpayer's qualified tax liabilities
incurred in the taxable year for which the tax credit was
approved.
(c) Limit.--A qualified taxpayer that has been granted a tax
credit under this subarticle shall be ineligible for any other
tax credit provided under this act.
Section 1715-L. Carryover, carryback and refund.
A tax credit cannot be carried back, carried forward or be
used to obtain a refund.
Section 1716-L. Sale or assignment.
(a) Authorization.--If the qualified taxpayer holds a tax
credit through the end of the calendar year in which the tax
credit was granted, the qualified taxpayer may sell or assign a
tax credit, in whole or in part, provided the sale is effective
by the close of the following calendar year.
(b) Application.--
(1) To sell or assign a tax credit, a qualified taxpayer
must file an application for the sale or assignment of the
tax credit with the department. The application must be on a
form required by the department.
(2) To approve an application, the department must
receive:
(i) a finding from the department that the applicant
has:
(A) filed all required State tax reports and
returns for all applicable taxable years; and
(B) paid any balance of State tax due as
determined by assessment or determination by the
department and not under timely appeal; and
(ii) for a sale or assignment to a company that is
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not an upstream company or downstream company, a
certification from the qualified taxpayer that the
qualified taxpayer has offered to sell or assign the tax
credit:
(A) exclusively to a downstream company for a
period of 30 days following approval of the tax
credit under section 1713-L(c); and
(B) to an upstream company or downstream company
for a period of 30 days following expiration of the
period under clause (A).
(c) Approval.--Upon approval by the department, a qualified
taxpayer may sell or assign, in whole or in part, a tax credit.
Section 1717-L. Purchasers and assignees.
(a) Time.--The purchaser or assignee under section 1716-L
must claim the tax credit in the calendar year in which the
purchase or assignment is made.
(b) Amount.--The amount of the tax credit that a purchaser
or assignee under section 1716-L may use against any one
qualified tax liability may not exceed 50% of any of the
qualified tax liabilities of the purchaser or assignee for the
taxable year.
(c) Resale and assignment.--
(1) A purchaser under section 1716-L may not sell or
assign the purchased tax credit.
(2) An assignee under section 1716-L may not sell or
assign the assigned tax credit.
(d) Notice.--The purchaser or assignee under section 1716-L
shall notify the department of the seller or assignor of the tax
credit in compliance with procedures specified by the
department.
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Section 1718-L. Pass-through entity.
(a) Election.--If a pass-through entity has an unused tax
credit, the pass-through entity may elect, in writing, according
to procedures established by the department, to transfer all or
a portion of the tax credit to shareholders, members or partners
in proportion to the share of the entity's distributive income
to which the shareholders, members or partners are entitled.
(b) Limitation.--The same unused tax credit under subsection
(a) may not be claimed by:
(1) the pass-through entity; and
(2) a shareholder, member or partner of the pass-through
entity.
(c) Amount.--The amount of the tax credit that a transferee
under subsection (a) may use against any one qualified tax
liability may not exceed 20% of any qualified tax liabilities
for the taxable year.
(d) Time.--A transferee under subsection (a) must claim the
tax credit in the calendar year in which the transfer is made.
(e) Sale and assignment.--A transferee under subsection (a)
may not sell or assign the tax credit.
Section 1719-L. (Reserved).
Section 1720-L. Administration.
(a) Audits and assessments.--
(1) The department may audit a taxpayer awarded a tax
credit to ascertain the validity of the amount awarded.
(2) The department may issue an assessment against a
taxpayer for an improperly issued tax credit. The procedures,
collection, enforcement and appeals of an assessment made
under this section shall be governed by Article II.
(b) Guidelines and regulations.--The department shall
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develop written guidelines for the implementation of this
subarticle. The guidelines shall be in effect until the
department promulgates regulations for the implementation of the
provisions of this subarticle.
Section 1721-L. Reports to General Assembly.
(a) Annual report.--No later than the year after which tax
credits are first awarded under this subarticle, and each
October 1 thereafter, the department shall submit a report on
the tax credit provided under this subarticle to the chairperson
and minority chairperson of the Appropriations Committee of the
Senate, the chairperson and minority chairperson of the
Appropriations Committee of the House of Representatives, the
chairperson and minority chairperson of the Finance Committee of
the Senate and the chairperson and minority chairperson of the
Finance Committee of the House of Representatives. The report
must include the names of the qualified taxpayers utilizing the
tax credit as of the date of the report and the amount of tax
credits approved for, utilized by or sold or assigned by a
qualified taxpayer.
(b) Reconciliation report.--On May 1 of the year which is 10
years after the year in which tax credits are first awarded
under this subarticle, the department shall submit to the
Secretary of the Senate and the Chief Clerk of the House of
Representatives a reconciliation report on the effectiveness of
this subarticle. The report shall include, to the extent
possible, the following information for the preceding 10 years:
(1) The name and business address of all qualified
taxpayers who have been granted tax credits under this
subarticle.
(2) The amount of tax credits granted to each qualified
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taxpayer.
(3) The total number of jobs created by the qualified
taxpayer, upstream company and downstream company and any
companies that provide goods, utilities or other services
that support the business operations of the qualified
taxpayer, upstream company and downstream company. This
paragraph includes the average annual salary and hourly wage
information.
(4) The amount of taxes paid under Article II by the
qualified taxpayer, upstream company and downstream company
and any companies that provide goods, utilities or other
services that support the business operations of the
qualified taxpayer, upstream company and downstream company.
(5) The amount of taxes withheld from employees or paid
by members, partners or shareholders of the pass-through
entities under Article III of the qualified taxpayer,
upstream company and downstream company and any companies
that provide goods, utilities or other services that support
the business operations of the qualified taxpayer, upstream
company and downstream company.
(6) The amount of taxes paid under Article IV by the
qualified taxpayer, upstream company and downstream company
and any companies that provide goods, utilities or other
services that support the business operations of the
qualified taxpayer, upstream company and downstream company.
(7) The amount of taxes paid under Article XI by the
qualified taxpayer, upstream company and downstream company
and any companies that provide goods, utilities or other
services that support the business operations of the
qualified taxpayer, upstream company and downstream company.
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(8) The amount of any other State or local taxes paid by
the qualified taxpayer, upstream company and downstream
company and any companies that provide goods, utilities or
other services that support the business operations of the
qualified taxpayer, upstream company and downstream company.
(9) Any other information pertaining to the economic
impact of this subarticle on this Commonwealth.
(c) Reduction.--If the reconciliation report issued under
subsection (b) reveals that the total amount of the tax credits
granted under this subarticle exceeds the total amount of tax
revenue reported under subsection (b)(4), (5), (6), (7), (8) and
(9), the report must include any recommendation for changes in
the calculation of the credit.
(d) Publication.--The reports required by this section shall
be a public record as defined under section 102 of the act of
February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law,
and shall be available electronically on the publicly accessible
Internet website of the department. The reports required under
this section may not contain "confidential proprietary
information" as defined in section 102 of the Right-to-Know Law.
Section 1722-L. Applicability.
This subarticle shall apply to the purchase of dry natural
gas produced in this Commonwealth for the period beginning
January 1, 2024, and ending December 31, 2049.
Section 1723-L. Expiration.
This subarticle shall expire December 31, 2050.]
Section 2. Article XVII-L of the act is amended by adding a
subarticle to read:
SUBARTICLE B.1
RELIABLE ENERGY INVESTMENT TAX CREDIT
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Section 1711.1-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Affiliate." An entity or disregarded entity for Federal
income tax purposes as defined in 26 CFR 1.1502-77(b)(2) and (3)
(iii) (relating to agent for the group), that is included in the
filing of a Federal consolidated income tax return of an
affiliated group as the term is defined in 26 U.S.C. § 1504(a)
(1) (relating to definitions).
"Capital investment." The amount of money spent and recorded
in capital accounts by a taxpayer in the development, restart,
expansion or modification of a reliable energy project facility,
including direct and indirect costs, up to the commercial
operation date of the reliable clean energy project facility, as
reflected in the taxpayer's books of account consistent with
generally accepted accounting principles. The term shall not
include money spent after a reliable clean energy project
facility achieves commercial operation.
"Clean energy." Electric energy generation that emits carbon
dioxide equivalent emissions of less than 100 pounds per
megawatt-hour.
"Clean energy emissions threshold." One hundred pounds of
carbon dioxide equivalent per megawatt-hour of electricity
generated.
"Commercial operation." The condition of a reliable energy
generation facility or reliable energy storage facility when the
facility has satisfied applicable testing and is generating or
discharging electric power to earn revenue on a reasonably
continuous basis.
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"Commercial operation date." The date on which commercial
operation of a reliable energy generation facility or reliable
energy storage facility commences.
"Commission." The Pennsylvania Public Utility Commission or
a successor agency.
"Company." A corporation, partnership, limited liability
company, limited liability partnership, business trust,
unincorporated joint venture or other business entity doing
business within this Commonwealth.
"Department." The Department of Revenue of the Commonwealth.
"Electric distribution company." As defined in 66 Pa.C.S. §
2803 (relating to definitions).
"Full-time equivalent job." A unit of measurement that
represents the number of full-time hours a company's employees
work determined as the quotient obtained by dividing the total
number of hours for which employees were compensated for
employment over the preceding 12-month period by 2,080.
"Maximum facility output." The maximum net electrical power
output in megawatts, after supply of any parasitic or host
facility loads, that a reliable energy project facility or
reliable energy storage facility is expected to produce or
store. For an expansion or modification of an existing facility,
only the incremental clean energy output that results from the
expansion or modification shall be considered. For purposes of
this definition, incremental clean energy output may be
calculated on the basis of an expected increase in the actual
maximum facility output of clean energy resulting from the
expansion or modification, including as reflected in modified or
amended facility operating licenses from the Federal Energy
Regulatory Commission or the Nuclear Regulatory Commission, or
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related reports prepared by either commission as part of the
licensing process. The term does not include nominal electrical
power output. To calculate maximum facility output, a new
electric generating facility directly connected to a new
reliable energy storage facility may elect to subtract the
maximum facility output of the reliable energy storage facility
from the maximum net electrical power output, after supply of
any parasitic or host facility loads, that the facility is
expected to produce or store.
"Pass-through entity." Any of the following:
(1) A partnership as defined in section 301(n.0).
(2) A Pennsylvania S corporation as defined in section
301(n.1).
(3) An unincorporated entity subject to section 307.21.
"Permanent job." A full-time equivalent job to support the
ongoing commercial operation of a reliable energy project
facility.
"Project index price." The average of the day-ahead
locational marginal prices at the PJM pricing node nearest to
the reliable energy project facility for each hour of the three
years prior to the commercial operation date.
"Qualified reliable energy tax credit." A tax credit granted
under this subarticle.
"Qualified reliable energy tax credit rate." One hundred
percent, unless the project index price is greater than $70 per
megawatt-hour, adjusted for inflation in the Consumer Price
Index after the effective date of this definition, in which case
the qualified reliable energy tax credit rate shall be reduced
by 1.5% for each $1 per megawatt-hour that the project index
price is greater than $70 per megawatt-hour adjusted for
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inflation, to a minimum of 10%.
"Qualified reliable energy taxpayer." The following apply:
(1) A company that:
(i) has made a capital investment to construct a
reliable energy project facility;
(ii) owns and operates a reliable energy project
facility; and
(iii) otherwise satisfies the requirements of this
subarticle.
(2) The term includes all affiliates of the company.
"Qualified tax liability." The liability of the qualified
reliable energy taxpayer and affiliates for taxes imposed under
Articles III, IV, VII, VIII, IX, XI and XV. The term does not
include tax withheld under section 316.1.
"Reliable energy generation facility." A new electric
generating facility or an expansion or modification of an
electric generating facility located in this Commonwealth that
meets the following:
(1) Is owned by a qualified reliable energy taxpayer.
(2) Required a capital investment of at least
$25,000,000 to place into commercial operation.
(3) Required at least 10,000 work hours to place into
commercial operation or is a surplus interconnection
facility.
(4) For a new electric generating facility, has a
maximum facility output of at least 25 megawatts, or for an
expansion or modification of an electric generating facility,
an additional maximum facility output of at least 25
megawatts.
(5) Is either:
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(i) projected to generate an amount of clean energy
in each full average operating year that is greater than
the product of 60% of its maximum facility output,
multiplied by 8,760 hours; or
(ii) a surplus interconnection facility.
(6) Delivers the electricity it generates to a
distribution system of an electric distribution company or a
transmission system operated by a regional transmission
organization.
(7) If the electric generating facility is being
restarted, no substantial step towards restarting occurred
prior to the effective date of this section.
"Reliable energy storage facility."
(1) A facility located in this Commonwealth employing
technology, including any electrochemical, thermal or
electromechanical technology, or any technology defined as
"energy storage technology" in 26 U.S.C. § 48E (relating to
clean electricity investment credit) or 26 CFR 1.48E-2(g)(6)
(relating to qualified investments in qualified facilities
and EST for purposes of section 48E) as of the effective date
of this section, that is capable of absorbing and storing
energy for use at a later time that:
(i) Is owned by a qualified reliable energy
taxpayer.
(ii) Required a capital investment of at least
$50,000,000 to place into commercial operation.
(iii) Required at least 10,000 work hours to place
into commercial operation.
(iv) Has a maximum facility output of at least 10
megawatts.
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(v) For a reliable energy storage project facility
that applied for interconnection with PJM
Interconnection, LLC after the effective date of this
subsection, the system has a technical capacity to
deliver its maximum facility output in a minimum duration
of no less than four hours, for a reliable energy storage
project that applied for interconnection with PJM
Interconnection, LLC prior to the effective date of this
subsection but has not yet received an interconnection
agreement as of that date, the system is projected to
possess a rated technical capacity to deliver its maximum
facility output in a minimum duration of no less than one
hour.
(vi) Delivers the electricity it discharges to a
distribution system of an electric distribution company
or a transmission system operated by a regional
transmission organization.
(2) The term does not include a new pumped storage
hydropower facility which uses a change in elevation as a
means of hydroelectric energy storage and has been granted a
preliminary permit by the Federal Energy Regulatory
Commission prior to the effective date of this section.
"Restart." The process of reactivating a reliable energy
generation facility that has not generated significant amounts
of electricity for a period of at least 365 days.
"Substantial step." The term includes submitting a letter
notifying the Nuclear Regulatory Commission of the intent to
restore operations or submitting a detailed regulatory path to
reauthorize power operations.
"Surplus interconnection facility." A new electric
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generating facility that generates clean energy, shares
interconnection infrastructure and a single point of
interconnection with an existing electric generating facility,
and exclusively uses the surplus portion of the existing
generating facility's interconnection service established in a
large generator interconnection agreement. The surplus portion
shall be determined such that, if the surplus interconnection
service were utilized, the total amount of interconnection
service at the point of interconnection would remain the same.
"Work hour." One hour of compensation during the
construction or the restart of a reliable energy generation
facility or reliable energy storage facility.
Section 1712.1-L. Amount, claiming and audit of qualified
reliable energy tax credit.
(a) Amount of qualified reliable energy tax credits.--
(1) Qualified reliable energy tax credits shall be made
available in accordance with this subarticle.
(2) A qualified reliable energy taxpayer shall receive
qualified reliable energy tax credits equal to the product of
the qualified reliable energy tax credit rate multiplied by
$300,000 per new or additional megawatt of maximum facility
output, up to a total maximum of $100,000,000 for each
project, which may be carried over as described in section
1713-L(c), but may not be re-awarded in multiple years.
(3) Applications for qualified reliable energy tax
credits shall continue to be made available by the department
unabated annually from the period beginning January 1, 2026,
and ending December 31, 2036. A reliable energy generation
facility or reliable energy storage facility that has
commenced construction prior to December 31, 2036, shall be
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eligible for qualified reliable energy tax credits.
(b) Application.--
(1) An applicant for a qualified reliable energy tax
credit shall complete a form as prescribed by the department
that shall include:
(i) A description of the reliable energy facility or
reliable energy storage facility.
(ii) Verification that the taxpayer has made or will
make a capital investment greater than $25,000,000 prior
to the placing in service of the reliable energy
generation facility or reliable energy storage facility.
(iii) An estimate of the total capital investment
that will be made.
(iv) The expected commercial operation date of the
reliable energy project facility or reliable energy
storage facility.
(1.1) If the applicant deems the form under paragraph
(1) to contain confidential proprietary information, the form
may be submitted on a confidential basis, shall be treated
and maintained by the department as confidential proprietary
information and is exempt from access under the act of
February 14, 2008 (P.L.6, No.3), known as the Right-to-Know
Law.
(2) The department shall review applications submitted
and issue a written approval or disapproval, stating the
reasons for the department's decision, within 60 days of the
application's submission. The department's decision on the
application may be appealed in the same manner as an
assessment issued under section 407.1.
(3) Upon approval of an application, the department
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shall issue a certificate confirming that the applicant is
eligible for a qualified reliable energy tax credit,
conditioned on completion of a reliable energy generation
facility or reliable energy storage facility that becomes
commercially operational and satisfies the requirements of
this subarticle. The qualified reliable energy taxpayer shall
retain tax credit eligibility, as determined under this
section, until the qualified reliable energy taxpayer has
received the qualified reliable energy tax credit.
(c) Claiming qualified reliable energy tax credits.--
(1) A qualified reliable energy taxpayer shall complete
a form as prescribed by the department verifying that the
taxpayer has met the requirements of a qualified reliable
energy taxpayer and may claim qualified reliable energy tax
credits. The qualified reliable energy taxpayer shall include
on the form a calculation of the applicable project index
price and verification that electricity produced was below
the clean energy emissions threshold. Acceptable forms of
verification with respect to the clean energy emissions
threshold shall include, but not be limited to, documented
inclusion of the type or category of facility in Table 1 of
Revenue Procedure 2025-14, published by the Internal Revenue
Service in 2025-7 Internal Revenue Bulletin 770-771 or any
successor table published in the Internal Revenue Bulletin.
(2) The qualified reliable energy taxpayer shall attach
the form to the tax return on which the qualified reliable
energy taxpayer is claiming to offset a qualified tax
liability with qualified reliable energy tax credits.
(d) Audit of qualified reliable energy tax credits
claimed.--
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(1) The department shall have the right to audit all
qualified reliable energy credits claimed.
(2) If the department denies a qualified reliable energy
tax credit, the department shall issue an assessment in the
same manner as issued under section 407.1. The assessment may
be appealed in the same manner as an assessment issued under
section 407.1.
(e) Election to be treated as a single facility.--A
qualified reliable energy taxpayer who owns and operates
multiple co-located energy generating units may make an
irrevocable election at the time of application to treat the
units for the purposes of this subarticle:
(1) as a single facility; or
(2) as multiple facilities.
Section 1713.1-L. Year of use and carryover.
(a) Year of use.--A qualified reliable energy taxpayer shall
claim qualified reliable energy tax credits on the tax return
filed in the year immediately following the year in which the
reliable energy generation facility or reliable energy storage
facility is placed into commercial operation.
(b) Use.--A qualified reliable energy taxpayer may utilize
up to one-third of the qualified reliable energy tax credits in
the taxable year in which the credits are received and up to the
same amount in each subsequent taxable year.
(c) Carryover.--A qualified reliable energy tax credit not
fully utilized in the taxable year in which the tax credit was
received may be carried forward for not more than 10 consecutive
taxable years but shall not be carried back or be used to obtain
a tax refund.
Section 1714.1-L. Sale or assignment.
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(a) Authorization required.--
(1) To sell or assign a tax credit, a qualified taxpayer
must file an application for the sale or assignment of the
tax credit with the department. The application must be on a
form required by the department.
(2) The department shall approve an application for the
sale or assignment of a qualified reliable energy tax credit
if the applicant has filed each State tax report and return
required by law for each applicable taxable year.
(b) Approval.--Upon approval by the department of an
application under subsection (a), a qualified reliable energy
taxpayer that holds a qualified reliable energy tax credit
through the end of the calendar year in which the tax credit was
received may sell or assign the tax credit, in whole or in part,
if the sale is effective by the close of the following calendar
year.
Section 1715.1-L. Purchasers, transferees and assignees.
(a) Time.--A purchaser, transferee or assignee under this
subarticle shall claim the qualified reliable energy tax credit
no later than 12 months following the end of the calendar year
in which the purchase, transfer or assignment is made.
(b) Amount.--The amount of the qualified reliable energy tax
credit that a purchaser, transferee or assignee under this
section may use against any one qualified tax liability may not
exceed 100% of the qualified tax liability of the purchaser,
transferee or assignee for the taxable year.
(c) Resale and assignment.--
(1) A purchaser under this section may not sell,
transfer or assign the purchased qualified reliable energy
tax credit.
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(2) An assignee or transferee under this section may not
sell, transfer or assign the assigned or transferred
qualified reliable energy tax credit.
(d) Notice.--The purchaser, transferee or assignee under
this section shall notify the department of the seller,
transferor or assignor of the qualified reliable energy tax
credit in compliance with procedures specified by the
department.
Section 1716.1-L. Pass-through entity.
(a) Election.--If a pass-through entity has an unused
qualified reliable energy tax credit, the pass-through entity
may elect, in writing, according to procedures established by
the department, to transfer all or a portion of the tax credit
to shareholders, members or partners in proportion to the share
of the entity's distributive income to which the shareholders,
members or partners are entitled.
(b) Limitation.--The same unused qualified reliable energy
tax credit under subsection (a) may not be claimed by both:
(1) the pass-through entity; and
(2) a shareholder, member or partner of the pass-through
entity.
(c) Amount.--The amount of the qualified reliable energy tax
credit that a transferee under subsection (a) may use against
any one qualified tax liability may not exceed 100% of the
qualified tax liabilities for the taxable year.
(d) Time.--A transferee under subsection (a) must claim the
qualified reliable energy tax credit not later than 12 months
following the calendar year in which the transfer is made.
(e) Sale and assignment.--A transferee under subsection (a)
may sell or assign the qualified reliable energy tax credit.
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Section 1717.1-L. Guidelines and regulations.
The department and the Department of Community and Economic
Development shall jointly develop written guidelines for the
implementation of this subarticle. The guidelines shall be in
effect until the department promulgates regulations for the
implementation of this subarticle.
Section 1718.1-L. Reports to General Assembly.
(a) Annual report.--No later than the calendar year after
which qualified reliable energy tax credits are first awarded
under this subarticle, and each October 1 thereafter up to
October 1, 2035, the department shall submit a report on the
qualified reliable energy tax credits provided for under this
subarticle to the chairperson and minority chairperson of the
Appropriations Committee of the Senate, the chairperson and
minority chairperson of the Finance Committee of the Senate, the
chairperson and minority chairperson of the Appropriations
Committee of the House of Representatives and the chairperson
and minority chairperson of the Finance Committee of the House
of Representatives. The report shall include the names of the
qualified reliable energy taxpayers utilizing qualified reliable
energy tax credits as of the date of the report and the amount
of tax credits approved for, utilized by or sold, transferred or
assigned by all qualified reliable energy taxpayers.
(b) Five-year report.--On May 1, 2030, and May 1, 2035, the
department and the commission shall jointly submit to the
Secretary of the Senate and the Chief Clerk of the House of
Representatives a report on the effectiveness of this
subarticle. The report shall include, to the extent possible,
the following information for the preceding five calendar years:
(1) The aggregate amount of qualified reliable energy
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tax credits granted to all qualified reliable energy
taxpayers up to the date of the report.
(2) The total number of work hours and permanent jobs
created by the qualified reliable energy taxpayers up to the
date of the report.
(3) The total number of megawatt-hours produced by each
reliable energy project facility up to the date of the
report.
(4) The total amount of capital investment made by each
qualified reliable energy taxpayer up to the date of the
report.
(5) Recommendations for changes to this subarticle to
promote increased use of qualified reliable energy tax
credits.
(6) Any other information pertaining to the economic
impact of this subarticle on this Commonwealth.
(c) Publication.--The reports required by this section shall
be a public record as defined under section 102 of the act of
February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law,
and shall be posted electronically on the department's publicly
accessible Internet website. The reports required under this
section may not contain confidential proprietary information as
defined in section 102 of the Right-to-Know Law.
Section 3. Subarticle C of Article XVII-L of the act is
repealed:
[SUBARTICLE C
PENNSYLVANIA MILK PROCESSING
Section 1731-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
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context clearly indicates otherwise:
"Gallon." A United States liquid gallon equal to a volume of
231 cubic inches and equal to 3.785411784 liters or 0.13368
cubic feet, where volumetric measurements made at ambient
flowing conditions are typically adjusted for composition and to
standard conditions using established industry standard
practices.
"Milk." The lacteal secretion, practically free from
colostrum, obtained by the complete milking of one or more
healthy cows.
"Project facility." A facility located in this Commonwealth
which is owned and operated by a qualified taxpayer and which
utilizes milk purchased from sources within this Commonwealth
and processed by a qualified taxpayer at the project facility.
"Qualified taxpayer." A company that satisfies all of the
following:
(1) Purchases and processes milk produced in this
Commonwealth at a project facility in this Commonwealth that
has been placed in service on or after the effective date of
this section.
(2) Has made a capital investment of at least
$500,000,000 in order to construct the project facility and
place the project facility into service in this Commonwealth.
(3) Has created a minimum aggregate total of 1,200 new
jobs and permanent jobs.
(4) Has made good faith efforts to recruit and employ,
and to encourage any contractors or subcontractors to recruit
and employ, workers from the local labor market for
employment during the construction of the project facility.
(5) Has demonstrated that the new jobs created at the
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project facility or for work covered by Subarticle F are paid
at least the prevailing minimum wage and benefit rates for
each craft or classification as determined by the Department
of Labor and Industry.
(6) The construction work to place a project facility
into service shall be performed subject to the act of March
3, 1978 (P.L.6, No.3), known as the Steel Products
Procurement Act.
Section 1732-L. Eligibility.
In order to be eligible to receive a tax credit, a company
shall demonstrate the following:
(1) The company meets the requirements of a qualified
taxpayer.
(2) Confirmation that the company has filed all required
State tax reports and returns for all applicable taxable
years and paid any balance of State tax due as determined by
assessment or determination by the department and not under
timely appeal.
Section 1733-L. Application and approval of tax credit.
(a) Rate.--The tax credit shall be equal to $0.05 per gallon
of milk purchased and produced from sources exclusively within
this Commonwealth and processed at the project facility by a
qualified taxpayer.
(b) Application.--
(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
(2) The application must be submitted to the department
by March 1 for the tax credit claimed for milk purchased and
processed by the qualified taxpayer at the project facility
during the prior calendar year.
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(3) The application must be on the form required by the
department which shall include the following:
(i) information required by the department to
document the amount of milk purchased and processed at
the project facility;
(ii) information required by the department to
verify that the applicant is a qualified taxpayer; and
(iii) any other information as the department deems
appropriate.
(c) Review and approval.--
(1) The department shall review the applications and
shall issue an approval or disapproval by May 1.
(2) Upon approval, the department shall issue a
certificate stating the amount of tax credit granted for milk
purchased and processed at the project facility in the prior
calendar year.
(d) Availability of tax credits.--
(1) Each fiscal year, $15,000,000 in tax credits shall
be made available to the department in accordance with this
subarticle.
(2) The department shall issue up to $15,000,000 in tax
credits in a fiscal year to the qualified taxpayer which
first meets the qualifications to receive a tax credit under
this subarticle.
(3) An amount under paragraph (1) which remains
unallocated under paragraph (2) shall be issued to the
qualified taxpayer which next meets the qualifications to
receive a tax credit under this subarticle.
(4) The total aggregate amount of tax credits awarded to
a qualified taxpayer under this subarticle may not exceed 25%
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of the capital investment made to construct a project
facility and place the project facility into service in this
Commonwealth.
Section 1734-L. Use of tax credits.
(a) Initial use.--Prior to sale or assignment of a tax
credit under section 1736-L, a qualified taxpayer must first use
a tax credit against the qualified tax liability incurred in the
taxable year for which the tax credit was approved.
(b) Eligibility.--The tax credit may be applied against up
to 20% of a qualified taxpayer's qualified tax liabilities
incurred in the taxable year for which the tax credit was
approved.
(c) Limit.--A qualified taxpayer that has been granted a tax
credit under this subarticle shall be ineligible for any other
tax credit provided under this act or a tax benefit as defined
in section 1701-A.1.
Section 1735-L. Carryover, carryback and refund.
A tax credit cannot be carried back, carried forward or be
used to obtain a refund.
Section 1736-L. Sale or assignment.
(a) Authorization.--If the qualified taxpayer holds a tax
credit through the end of the calendar year in which the tax
credit was granted, the qualified taxpayer may sell or assign a
tax credit, in whole or in part, provided the sale is effective
by the close of the following calendar year.
(b) Application.--
(1) To sell or assign a tax credit, a qualified taxpayer
must file an application for the sale or assignment of the
tax credit with the department. The application must be on a
form required by the department.
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(2) To approve an application, the department must
receive:
(i) a finding from the department that the applicant
has:
(A) filed all required State tax reports and
returns for all applicable taxable years; and
(B) paid any balance of State tax due as
determined by assessment or determination by the
department and not under timely appeal; and
(ii) for a sale or assignment to a company that is
not an upstream company or downstream company, a
certification from the qualified taxpayer that the
qualified taxpayer has offered to sell or assign the tax
credit:
(A) exclusively to a downstream company for a
period of 30 days following approval of the tax
credit under section 1733-L(c); and
(B) to an upstream company or downstream company
for a period of 30 days following expiration of the
period under clause (A).
(c) Approval.--Upon approval by the department, a qualified
taxpayer may sell or assign, in whole or in part, a tax credit.
Section 1737-L. Purchasers and assignees.
(a) Time.--The purchaser or assignee under section 1736-L
must claim the tax credit in the calendar year in which the
purchase or assignment is made.
(b) Amount.--The amount of the tax credit that a purchaser
or assignee under section 1736-L may use against any one
qualified tax liability may not exceed 50% of any of the
qualified tax liabilities of the purchaser or assignee for the
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taxable year.
(c) Resale and assignment.--
(1) A purchaser under section 1736-L may not sell or
assign the purchased tax credit.
(2) An assignee under section 1736-L may not sell or
assign the assigned tax credit.
(d) Notice.--The purchaser or assignee under section 1736-L
shall notify the department of the seller or assignor of the tax
credit in compliance with procedures specified by the
department.
Section 1738-L. Pass-through entity.
(a) Election.--If a pass-through entity has an unused tax
credit, the pass-through entity may elect, in writing, according
to procedures established by the department, to transfer all or
a portion of the tax credit to shareholders, members or partners
in proportion to the share of the entity's distributive income
to which the shareholders, members or partners are entitled.
(b) Limitation.--The same unused tax credit under subsection
(a) may not be claimed by:
(1) the pass-through entity; and
(2) a shareholder, member or partner of the pass-through
entity.
(c) Amount.--The amount of the tax credit that a transferee
under subsection (a) may use against any one qualified tax
liability may not exceed 20% of any qualified tax liabilities
for the taxable year.
(d) Time.--A transferee under subsection (a) must claim the
tax credit in the calendar year in which the transfer is made.
(e) Sale and assignment.--A transferee under subsection (a)
may not sell or assign the tax credit.
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Section 1739-L. (Reserved).
Section 1740-L. Guidelines and regulations.
The department shall develop written guidelines for the
implementation of this subarticle. The guidelines shall be in
effect until the department promulgates regulations for the
implementation of the provisions of this subarticle.
Section 1741-L. Report to General Assembly.
(a) Report.--
(1) No later than the year after which tax credits are
first awarded under this subarticle, and each October 1
thereafter, the department shall submit a report to the
General Assembly summarizing the effectiveness of the tax
credit. The report shall include the names of all qualified
taxpayers utilizing the tax credit as of the date of the
report and the amount of tax credits approved for, utilized
by or sold or assigned by each qualified taxpayer. The report
shall be submitted to the following:
(i) The chair and minority chair of the Agriculture
and Rural Affairs Committee of the Senate.
(ii) The chair and minority chair of the Agriculture
and Rural Affairs Committee of the House of
Representatives.
(iii) The chair and minority chair of the Finance
Committee of the Senate.
(iv) The chair and minority chair of the Finance
Committee of the House of Representatives.
(2) In addition to the information required under
paragraph (1), the report shall include the following
information in a manner that is separated by geographic
location within this Commonwealth:
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(i) The amount of tax credits claimed by qualified
taxpayers during the fiscal year.
(ii) The total number of new jobs and permanent jobs
created by qualified taxpayers during the fiscal year,
including the duration of the jobs.
(b) Public information.--Notwithstanding any law providing
for the confidentiality of tax records, the information in the
report under subsection (a) shall be public information, and all
report information shall be posted on the department's publicly
accessible Internet website.
Section 1742-L. Applicability.
(a) Duration.--The tax credit under this subarticle shall
apply to the purchase and processing of milk produced in this
Commonwealth for a period of eight years from the date the first
project facility is placed into service.
(b) Limitation.--The total aggregate amount of tax credits
awarded by the department under this subarticle may not exceed
$120,000,000.]
Section 4. Article XVII-L of the act is amended by adding a
subarticle to read:
SUBARTICLE C.1
PENNSYLVANIA MILK PROCESSING
Section 1731-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Downstream company." A company that purchases Class I,
Class II, Class III or Class IV milk products as defined in the
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Federal Milk Marketing Order Program produced by a qualified
taxpayer.
"Federal Milk Marketing Order Program." The Federal Milk
Marketing Order Program established under 7 U.S.C. § 608c
(relating to orders) under the Agricultural Marketing Agreement
Act of 1937 (Public Law 75-137, 50 Stat. 246).
"Hundred weight." A unit of weight equal to 100 pounds.
"Milk." The lacteal secretion, practically free from
colostrum, obtained by the complete milking of one or more
healthy cows.
"Organic dairy." The product of a farm or processing
operation that in whole or in part has been certified as organic
or in transition to organic by a third party accredited by the
United States Department of Agriculture.
"Project facility." A facility located in this Commonwealth
which is owned and operated by a qualified taxpayer and which
utilizes milk purchased from sources within this Commonwealth
and processed by a qualified taxpayer at the project facility.
"Qualified taxpayer." A company that satisfies all of the
following:
(1) Purchases and processes milk produced in this
Commonwealth into a Class I, Class II, Class III or Class IV
milk product as defined by the Federal Milk Marketing Order
Program at a project facility in this Commonwealth that has
been constructed, expanded or renovated on or after the
effective date of this section.
(2) Has made a capital investment of at least
$50,000,000 in order to construct, expand or renovate the
project facility and place the project facility into service
in this Commonwealth or has created a minimum aggregate total
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of 100 new jobs or permanent jobs.
(3) Has made good faith efforts to recruit and employ,
and to encourage contractors or subcontractors to recruit and
employ, workers from the local labor market for employment
during the construction of the project facility.
(4) Has demonstrated that the new jobs created at the
project facility or for work covered by Subarticle F are paid
at least the prevailing minimum wage and benefit rates for
each craft or classification as determined by the Department
of Labor and Industry.
(5) Performs the construction work to place a project
facility into service subject to the act of March 3, 1978
(P.L.6, No.3), known as the Steel Products Procurement Act.
Section 1732-L. Eligibility.
In order to be eligible to receive a tax credit under this
subarticle, a company shall demonstrate the following:
(1) The company meets the requirements of a qualified
taxpayer.
(2) Confirmation that the company has filed all required
State tax reports and returns for all applicable taxable
years and paid any balance of State tax due as determined by
assessment or determination by the Department of Revenue and
not under timely appeal.
Section 1733-L. Application and approval of tax credit.
(a) Rate.--The tax credit shall be up to $2.30 per hundred
weight of milk purchased and produced from sources exclusively
within this Commonwealth and processed at the project facility
by a qualified taxpayer in excess of purchases as of January 1
of the year in which an application is made.
(a.1) Organic dairy.--Any qualifying use of milk in which at
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least 80% organic dairy is utilized shall be eligible for an
additional $1.15 per hundred weight of milk in addition to the
amount denominated under subsection (a).
(b) Application.--
(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
(2) The application must be submitted to the department
by March 1 for the tax credit claimed for milk purchased and
processed by the qualified taxpayer at the project facility
during the prior calendar year.
(3) The application must be on the form required by the
department which shall include the following:
(i) information required by the department to
document the amount of milk purchased and processed at
the project facility;
(ii) information required by the department to
verify that the applicant is a qualified taxpayer; and
(iii) any other information as the department deems
appropriate.
(c) Review and approval.--
(1) The department shall review the applications and
shall issue an approval or disapproval by May 1.
(2) Upon approval, the department shall issue a
certificate stating the amount of tax credit granted for milk
purchased and processed at the project facility in the prior
calendar year.
(d) Availability of tax credits.--
(1) Each fiscal year, up to $15,000,000 in tax credits
shall be made available to the department in accordance with
this subarticle.
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(2) The department shall issue up to $15,000,000 in tax
credits in a fiscal year to the qualified taxpayers which
meet the qualifications to receive a tax credit under this
subarticle.
(3) The total aggregate amount of tax credits awarded to
a qualified taxpayer under this subarticle may not exceed 25%
of the capital investment made to construct a project
facility and place the project facility into service in this
Commonwealth.
Section 1734-L. Use of tax credits.
(a) Initial use.--Prior to sale or assignment of a tax
credit under section 1736-L, a qualified taxpayer must first use
a tax credit against the qualified tax liability incurred in the
taxable year for which the tax credit was approved.
(b) Eligibility.--The tax credit may be applied against up
to 20% of a qualified taxpayer's qualified tax liabilities
incurred in the taxable year for which the tax credit was
approved.
(c) Limit.--A qualified taxpayer that has been granted a tax
credit under this subarticle shall be ineligible for any other
tax credit provided under this act or a tax benefit as defined
in section 1701-A.1.
Section 1735-L. Carryover, carryback and refund.
A tax credit cannot be carried back, carried forward or be
used to obtain a refund.
Section 1736-L. Sale or assignment.
(a) Authorization.--If the qualified taxpayer holds a tax
credit through the end of the calendar year in which the tax
credit was granted, the qualified taxpayer may sell or assign a
tax credit, in whole or in part, provided the sale is effective
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by the close of the following calendar year.
(b) Application.--
(1) To sell or assign a tax credit, a qualified taxpayer
must file an application for the sale or assignment of the
tax credit with the Department of Revenue. The application
must be on a form required by the Department of Revenue.
(2) To approve an application, the Department of Revenue
must:
(i) find that the applicant has:
(A) filed all required State tax reports and
returns for all applicable taxable years; and
(B) paid any balance of State tax due as
determined by assessment or determination by the
Department of Revenue and not under timely appeal;
and
(ii) for a sale or assignment to a company that is
not an upstream company or downstream company, receive a
certification from the qualified taxpayer that the
qualified taxpayer has offered to sell or assign the tax
credit:
(A) exclusively to a downstream company for a
period of 30 days following approval of the tax
credit under section 1733-L(c); and
(B) to an upstream company or downstream company
for a period of 30 days following expiration of the
period under clause (A).
(c) Approval.--Upon approval by the Department of Revenue, a
qualified taxpayer may sell or assign, in whole or in part, a
tax credit.
Section 1737-L. Purchasers and assignees.
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(a) Time.--The purchaser or assignee under section 1736-L
must claim the tax credit in the calendar year in which the
purchase or assignment is made.
(b) Amount.--The amount of the tax credit that a purchaser
or assignee under section 1736-L may use against any one
qualified tax liability may not exceed 50% of any of the
qualified tax liabilities of the purchaser or assignee for the
taxable year.
(c) Resale and assignment.--
(1) A purchaser under section 1736-L may not sell or
assign the purchased tax credit.
(2) An assignee under section 1736-L may not sell or
assign the assigned tax credit.
(d) Notice.--The purchaser or assignee under section 1736-L
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.
Section 1738-L. Pass-through entity.
(a) Election.--If a pass-through entity has an unused tax
credit, the pass-through entity may elect, in writing, according
to procedures established by the Department of Revenue, to
transfer all or a portion of the tax credit to shareholders,
members or partners in proportion to the share of the entity's
distributive income to which the shareholders, members or
partners are entitled.
(b) Limitation.--The same unused tax credit under subsection
(a) may not be claimed by:
(1) the pass-through entity; and
(2) a shareholder, member or partner of the pass-through
entity.
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(c) Amount.--The amount of the tax credit that a transferee
under subsection (a) may use against any one qualified tax
liability may not exceed 20% of any qualified tax liabilities
for the taxable year.
(d) Time.--A transferee under subsection (a) must claim the
tax credit in the calendar year in which the transfer is made.
(e) Sale and assignment.--A transferee under subsection (a)
may not sell or assign the tax credit.
Section 1739-L. (Reserved).
Section 1740-L. Guidelines and regulations.
The department, in consultation with the Department of
Revenue, shall develop written guidelines for the implementation
of this subarticle. The guidelines shall be in effect until the
department promulgates regulations for the implementation of the
provisions of this subarticle.
Section 1741-L. Report to General Assembly.
(a) Report.--
(1) No later than one year after which tax credits are
first awarded under this subarticle, and each October 1
thereafter, the department and the Department of Revenue
shall jointly submit a report to the General Assembly
summarizing the effectiveness of the tax credit. The report
shall include the names of all qualified taxpayers utilizing
the tax credit as of the date of the report and the amount of
tax credits approved for, utilized by or sold or assigned by
each qualified taxpayer. The report shall be submitted to the
following:
(i) The chair and minority chair of the Agriculture
and Rural Affairs Committee of the Senate.
(ii) The chair and minority chair of the Finance
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Committee of the Senate.
(iii) The chair and minority chair of the
Agriculture and Rural Affairs Committee of the House of
Representatives.
(iv) The chair and minority chair of the Finance
Committee of the House of Representatives.
(2) In addition to the information required under
paragraph (1), the report shall include the following
information in a manner that is separated by geographic
location within this Commonwealth:
(i) The amount of tax credits claimed by qualified
taxpayers during the fiscal year.
(ii) The total number of new jobs and permanent jobs
created by qualified taxpayers during the fiscal year,
including the duration of the jobs.
(b) Public information.--Notwithstanding any law providing
for the confidentiality of tax records, the information in the
report under subsection (a) shall be public information, and all
report information shall be posted on the department's publicly
accessible Internet website.
Section 1742-L. Applicability.
(a) Duration.--The tax credit under this subarticle shall
apply to the purchase and processing of milk produced in this
Commonwealth for a period of eight years from the date the
project facility is placed into service.
(b) Limitation.--The total aggregate amount of tax credits
awarded by the department under this subarticle may not exceed
$120,000,000.
Section 5. Sections 1751-L, 1752-L(b), 1753-L, 1754-L(c) and
1762-L of the act are amended to read:
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Section 1751-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Clean hydrogen." [Hydrogen used in a project which has been
determined by the United States Department of Energy to
demonstrably aid achievement of the clean hydrogen production
standard under section 822 of the Energy Policy Act of 2005
(Public Law 109-58, 11 Stat. 594) by mitigating emissions across
the supply chain through aggressive carbon capture, by measures
to mitigate fugitive methane emissions or by the use of clean
electricity or other technologies or practices approved by the
United States Department of Energy.] Hydrogen produced through a
process that results in a lifecycle greenhouse gas emissions
rate of less than 4 kilograms of CO2e per kilogram of hydrogen.
"Lifecycle greenhouse gas emissions." As defined under 26
CFR §§ 1.45V-1 (relating to credit for production of clean
hydrogen), 1.45V-2 (relating to special rules), 1.45V-3
(relating to rules relating to the increased credit amount for
prevailing wage and apprenticeship), 1.45V-4 (relating to
procedures for determining lifecycle greenhouse gas emissions
rates for qualified clean hydrogen), 1.45V-5 (relating to
procedures for verification of qualified clean hydrogen
production and sale or use) and 1.45V-6 (relating to rules for
determining the placed in service date for an existing facility
that is modified or retrofitted to produce qualified clean
hydrogen) as of the effective date of this definition.
"Project facility." A facility located in this Commonwealth
which is owned by a qualified taxpayer [which is part of a
Regional Clean Hydrogen Hub designated by the United States
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Department of Energy authorized under section 813 of the Energy
Policy Act of 2005].
"Qualified taxpayer." A company that satisfies all of the
following:
(1) Owns and operates a project facility [located within
a Regional Clean Hydrogen Hub designated by the United States
Department of Energy authorized under section 813 of the
Energy Policy Act of 2005] in this Commonwealth.
[(2) Has entered into a commitment letter under section
1752-L(b) to purchase clean hydrogen from a Regional Clean
Hydrogen Hub within this Commonwealth for use in
manufacturing at a project facility in this Commonwealth
which has been placed in service on or after the effective
date of this section.]
(2.1) Has entered into a commitment letter under section
1752-L(b) to use or purchase clean hydrogen for use in
manufacturing, aviation fuel production, heat or energy
generation or transportation and logistics at a project
facility in this Commonwealth which has been placed in
service on or after the effective date of this paragraph.
(3) Has made a capital investment of at least
[$500,000,000] $100,000,000 in order to construct the project
facility and place the project facility into service in this
Commonwealth.
(4) Has created a minimum aggregate total of [1,200] 200
new jobs and permanent jobs.
(5) Has made good faith efforts to recruit and employ,
and to encourage any contractors or subcontractors to recruit
and employ, workers from the local labor market for
employment during the construction of the project facility.
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(6) Has demonstrated that the new jobs created at the
project facility or for work covered by Subarticle F are paid
at least the prevailing minimum wage and benefit rates for
each craft or classification as determined by the Department
of Labor and Industry.
(7) The construction work to place a project facility
into service shall be performed subject to the act of March
3, 1978 (P.L.6, No.3), known as the Steel Products
Procurement Act.
Section 1752-L. Eligibility.
* * *
(b) Commitment letter.--A company that applies for and
receives a tax credit under this subarticle shall enter into a
commitment letter with the Department of Community and Economic
Development to prescribe the date by which the project facility
will begin to use or purchase clean hydrogen [from sources
within the Regional Clean Hydrogen Hub in this Commonwealth for
use in manufacturing at the project facility.] for use in
manufacturing, aviation fuel production, heat and energy
generation or transportation and logistics at the project
facility from sources within this Commonwealth.
Section 1753-L. Application and approval of tax credit.
(a) Rate.--[The tax credit shall be equal to any one or more
of the following:
(1) $0.81 per kilogram of clean hydrogen purchased from
a Regional Clean Hydrogen Hub within this Commonwealth and
used in manufacturing at the project facility by a qualified
taxpayer.
(2) $0.47 per unit of natural gas that is purchased and
used in manufacturing at the project facility by a qualified
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taxpayer.] The tax credit shall be equal to the following
based on the lifecycle greenhouse gas emissions of each
kilogram of clean hydrogen used or purchased for use in
manufacturing, aviation fuel production, heat and energy
generation or transportation and logistics at the project
facility by the qualified taxpayer:
Carbon Intensity
(kg of CO2e / kg H2) Base Credit per kg
2.50kg to 4.00kg $0.16
1.50kg to 2.49kg $0.20
0.45kg to 1.49kg $0.27
Less than 0.45kg $0.81
(b) Application.--
(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
(2) The application must be submitted to the department
by March 1 for the tax credit claimed for clean hydrogen [or
natural gas purchased and used in manufacturing by the
qualified taxpayer at the project facility during the prior
calendar year.] used or purchased and used in manufacturing,
aviation fuel production, heat and energy generation or
transportation and logistics at the project facility during
the prior calendar year.
(3) The application must be on a form required by the
department which shall include the following:
[(i) information required by the department to
document the amount of natural gas purchased and used in
manufacturing at the project facility;]
(ii) information required by the department to
document the amount of clean hydrogen to be used or
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purchased [from sources within the Regional Clean
Hydrogen Hub in this Commonwealth] and used in
manufacturing [at the project facility;], aviation fuel
production, heat and energy generation or transportation
and logistics at the project facility from sources
located within this Commonwealth;
(iii) information required by the department to
verify that the applicant is a qualified taxpayer; and
(iv) any other information as the department deems
appropriate.
(c) Review and approval.--
(1) The department shall review the applications and
shall issue an approval or disapproval by May 1.
[(2) Upon approval, the department shall issue a
certificate stating the amount of the tax credit granted for
natural gas purchased and used in manufacturing at the
project facility in the prior calendar year.]
(3) Upon approval, the department shall issue a
certificate stating the amount of the tax credit granted for
clean hydrogen used or purchased [from sources located in a
Regional Clean Hydrogen Hub located in this Commonwealth and
used in manufacturing at the project facility in the prior
calendar year.] for use in manufacturing, aviation fuel
production, heat and energy generation or transportation and
logistics at the project facility in the prior calendar year
from sources located within this Commonwealth.
(d) Availability of tax credits.--
(1) Each fiscal year, [$50,000,000] $49,000,000 in tax
credits shall be made available to the department in
accordance with this subarticle.
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(2) The department shall issue up to [$50,000,000 in a
fiscal year to the qualified taxpayer which first meets the
qualifications to receive a tax credit under this
subarticle.] $7,000,000 to each of seven qualified taxpayers
which first meet the qualifications to receive a tax credit
under this subarticle and which are located in the regionally
diverse areas of the Commonwealth as follows:
(i) two qualified taxpayers which are located east
of the Susquehanna River;
(ii) two qualified taxpayers which are located west
of the Susquehanna River;
(iii) one qualified taxpayer which is located in a
county of the fifth, sixth, seventh or eighth class; and
(iv) two qualified taxpayers which may be located
anywhere in this Commonwealth.
(3) An amount under paragraph (1) which remains
unallocated under paragraph (2) shall be issued to the
qualified taxpayer which next meets the qualifications to
receive a tax credit under this subarticle.
(4) The total aggregate amount of tax credits awarded to
a qualified taxpayer under this subarticle may not exceed 50%
of the capital investment made to construct a project
facility and place the project facility into service in this
Commonwealth.
Section 1754-L. Use of tax credits.
* * *
(c) Limit.--A qualified taxpayer that has been granted a tax
credit under this subarticle shall be ineligible for any other
tax credit provided under this act [or a tax benefit as defined
in section 1701-A.1].
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Section 1762-L. Applicability.
This subarticle shall apply to the use or purchase of clean
hydrogen from sources located [in a Regional Clean Hydrogen Hub]
within this Commonwealth [or natural gas used in manufacturing]
at a project facility for the period beginning January 1, [2024]
2025, and ending December 31, [2043] 2045.
Section 6. The definitions of "qualified taxpayer" and
"semiconductor manufacturing" in section 1771-L of the act are
amended and the section is amended by adding a definition to
read:
Section 1771-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Early stage semiconductor business." A business with less
than $10,000,000 in revenue and in the areas of research or
design of semiconductor materials, semiconductor devices or
semiconductor packing and testing.
* * *
"Qualified taxpayer." A company that satisfies all of the
following or is an early stage semiconductor business:
(1) Conducts semiconductor manufacturing, biomedical
manufacturing or biomedical research in this Commonwealth at
a project facility in this Commonwealth that has been placed
in service on or after the effective date of this section.
(2) Has made a capital investment of at least
[$200,000,000] $100,000,000 in order to construct the project
facility and place the project facility into service in this
Commonwealth.
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(3) Has created a minimum aggregate total of [800] 100
permanent jobs.
(4) Has made good faith efforts to recruit and employ,
and to encourage any contractors or subcontractors to recruit
and employ, workers from the local labor market for
employment during the construction of the project facility.
(5) Has demonstrated that the new jobs created at the
project facility or for work covered by Subarticle F are paid
at least the prevailing minimum wage and benefit rates for
each craft or classification as determined by the Department
of Labor and Industry.
(6) The construction work to place a project facility
into service shall be performed subject to the act of March
3, 1978 (P.L.6, No.3), known as the Steel Products
Procurement Act.
"Semiconductor manufacturing." [The manufacture of
components or the creation of advanced processes or technology
within the semiconductor manufacturing and related equipment and
material supplier sector.] Any of the following within the
semiconductor manufacturing and related equipment and material
supplier sector:
(1) The manufacture of components including
"semiconductor manufacturing," "semiconductor wafer
production," "semiconductor fabrication," "semiconductor
packaging," "manufacturing of semiconductors," "manufacturing
of semiconductor manufacturing equipment" or "semiconductor
manufacturing equipment" in 26 CFR § 1.48D-2 (relating to
definitions) as of the effective date of this paragraph.
(2) The creation of advanced processes or technology.
(3) The advanced testing and packaging of components.
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Section 7. Section 1773-L(a) and (d)(2) of the act are
amended and subsection (d) is amended by adding a paragraph to
read:
Section 1773-L. Application and approval of tax credit.
(a) Determination of tax credit amount.--[The] Except as
provided under paragraph (3), the annual tax credit amount may
be determined based upon any one or more of the following:
(1) No more than 2.5% of the capital investment.
(2) No more than 100% of tax withheld from employees and
paid under Article III or $20,000, whichever is less, for
each permanent job at the project facility.
(3) If the applicant is an early-stage semiconductor
business, the applicant must have at least $3,000,000 in
research and development investment during the previous three
years.
* * *
(d) Availability of tax credits.--
* * *
(2) The department shall issue [up to $10,000,000] a
minimum of $1,000,000 in a fiscal year to [the] qualified
[taxpayer] taxpayers engaged in semiconductor manufacturing
which first [meets] meet the qualifications to receive a tax
credit under this subarticle. The department shall not exceed
$8,000,000 in aggregate tax credits issued in a year.
* * *
(3.1) The department shall issue minimum of $100,000 in
a fiscal year to an early stage semiconductor business. An
individual early stage semiconductor business may not receive
more than $1,000,000 in any fiscal year. An award may be for
up to five years. The department shall not exceed $2,000,000
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in aggregate tax credits in a year.
* * *
Section 8. Article XVII-L of the act is amended by adding
subarticles to read:
SUBARTICLE E.1
GEOTHERMAL ENERGY
Section 1785-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Eligible geothermal site." A site that meets one or more of
the following criteria:
(1) Owned or operated by a municipality, county or
Commonwealth agency.
(2) Designated as a brownfield site under the act of May
19, 1995 (P.L.4, No.2), known as the Land Recycling and
Environmental Remediation Standards Act.
(3) Located within an environmental justice area as
defined by the Department of Environmental Protection.
(4) Managed by or conveyed to a land bank under 68
Pa.C.S. Ch. 21 (relating to land banks).
(5) Owned, managed or permanently protected by a
recognized land trust or conservancy.
(6) Involves the conversion, repurposing or reclamation
of abandoned or orphaned wells.
"Project facility." A facility, system or installation
located at an eligible geothermal site that produces electricity
from geothermal energy sources, including ground-source or
enhanced geothermal systems, for primary or supplemental energy
production.
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"Qualified taxpayer." A company that satisfies the
following:
(1) Operates a project facility at an eligible
geothermal site.
(2) Has made a capital investment of at least
$25,000,000 in order to construct the project facility and
place the geothermal electricity generation project into
service in this Commonwealth.
(3) Has made good faith efforts to recruit and employ,
and to encourage any contractors or subcontractors to recruit
and employ, workers from the local labor market for
employment during the construction of the project facility.
(4) Has demonstrated that the new jobs created at the
project facility or for work covered by Subarticle F are paid
at least the prevailing minimum wage and benefit rates for
each craft or classification as determined by the Department
of Labor and Industry.
(5) The construction work to place a project facility
into service shall be performed subject to the act of March
3, 1978 (P.L.6, No.3), known as the Steel Products
Procurement Act.
Section 1785.1-L. Eligibility.
In order to be eligible to receive a tax credit, a company
shall demonstrate the following:
(1) The company meets the requirements of a qualified
taxpayer.
(2) Confirmation that the company has filed all required
State tax reports and returns for all applicable taxable
years and paid any balance of State tax due as determined by
assessment or determination by the department and not under
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timely appeal.
Section 1785.2-L. Application and approval of tax credit.
(a) Determination of tax credit amount.--A qualified
taxpayer shall be eligible for a tax credit of 30% of the
capital investment, up to a maximum of $5,000,000.
(b) Application.--
(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
(2) The application must be submitted to the department
by March 1 for the tax credit claimed for geothermal
electricity generation conducted by the qualified taxpayer at
the project facility during the prior calendar year.
(3) The application must be on the form required by the
department which shall include the following:
(i) information required by the department to
document the geothermal electricity generation conducted
at the project facility;
(ii) information required by the department to
verify that the applicant is a qualified taxpayer; and
(iii) any other information as the department deems
appropriate.
(c) Review and approval.--
(1) The department shall review the applications and
shall issue an approval or disapproval by May 1.
(2) Upon approval, the department shall issue a
certificate stating the amount of the tax credit granted for
geothermal electricity generation conducted at the project
facility in the prior calendar year.
(d) Availability of tax credits.--
(1) Each fiscal year, $40,000,000 in tax credits shall
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be made available to the department in accordance with this
subarticle.
(2) The department may issue up to $40,000,000 in a
fiscal year to qualified taxpayers engaged in geothermal
electricity generation at a project facility.
Section 1785.3-L. Carryover, carryback and refund.
A tax credit cannot be carried back, carried forward or be
used to obtain a refund.
Section 1785.4-L. Sale or assignment.
(a) Authorization.--If the qualified taxpayer holds a tax
credit through the end of the calendar year in which the tax
credit was granted, the qualified taxpayer may sell or assign a
tax credit, in whole or in part, if the sale is effective by the
close of the following calendar year.
(b) Application.--
(1) To sell or assign a tax credit, a qualified taxpayer
must file an application for the sale or assignment of the
tax credit with the department. The application must be on a
form required by the department.
(2) To approve an application, the department must
receive:
(i) a finding from the department that the applicant
has:
(A) filed all required State tax reports and
returns for all applicable taxable years; and
(B) paid any balance of State tax due as
determined by assessment or determination by the
department and not under timely appeal; and
(ii) for a sale or assignment to a company that is
not an upstream company or downstream company, a
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certification from the qualified taxpayer that the
qualified taxpayer has offered to sell or assign the tax
credit:
(A) exclusively to a downstream company for a
period of 30 days following approval of the tax
credit under section 1773-L(c); and
(B) to an upstream company or downstream company
for a period of 30 days following expiration of the
period under clause (A).
(c) Approval.--Upon approval by the department, a qualified
taxpayer may sell or assign, in whole or in part, a tax credit.
Section 1785.5-L. Purchasers and assignees.
(a) Time.--The purchaser or assignee under section 1785.4-L
must claim the tax credit in the calendar year in which the
purchase or assignment is made.
(b) Amount.--The amount of the tax credit that a purchaser
or assignee under section 1785.4-L may use against any one
qualified tax liability may not exceed 50% of any of the
qualified tax liabilities of the purchaser or assignee for the
taxable year.
(c) Resale and assignment.--
(1) A purchaser under section 1776-L may not sell or
assign the purchased tax credit.
(2) An assignee under section 1785.4-L may not sell or
assign the assigned tax credit.
(d) Notice.--The purchaser or assignee under section 1785.4-
L shall notify the department of the seller or assignor of the
tax credit in compliance with procedures specified by the
department.
Section 1785.6-L. Pass-through entity.
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(a) Election.--If a pass-through entity has an unused tax
credit, the pass-through entity may elect, in writing, according
to procedures established by the department, to transfer all or
a portion of the tax credit to shareholders, members or partners
in proportion to the share of the entity's distributive income
to which the shareholders, members or partners are entitled.
(b) Limitation.--The same unused tax credit under subsection
(a) may not be claimed by:
(1) the pass-through entity; and
(2) a shareholder, member or partner of the pass-through
entity.
(c) Amount.--The amount of the tax credit that a transferee
under subsection (a) may use against any one qualified tax
liability may not exceed 20% of any qualified tax liabilities
for the taxable year.
(d) Time.--A transferee under subsection (a) must claim the
tax credit in the calendar year in which the transfer is made.
(e) Sale and assignment.--A transferee under subsection (a)
may not sell or assign the tax credit.
Section 1785.7-L. Guidelines and regulations.
The department shall develop written guidelines for the
implementation of this subarticle. The guidelines shall be in
effect until the department promulgates regulations for the
implementation of this subarticle.
Section 1785.8-L. Report to General Assembly.
(a) Report.--
(1) No later than the year after which tax credits are
first awarded under this subarticle, and each October 1
thereafter, the department shall submit a report to the
General Assembly summarizing the effectiveness of the tax
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credit. The report shall include the names of all qualified
taxpayers utilizing the tax credit as of the date of the
report and the amount of tax credits approved for, utilized
by or sold or assigned by each qualified taxpayer. The report
shall be submitted to the following:
(i) The chair and minority chair of the
Appropriations Committee of the Senate.
(ii) The chair and minority chair of the Finance
Committee of the Senate.
(iii) The chair and minority chair of the
Appropriations Committee of the House of Representatives.
(iv) The chair and minority chair of the Finance
Committee of the House of Representatives.
(2) In addition to the information required under
paragraph (1), the report shall include the following
information in a manner separated by geographic location
within this Commonwealth:
(i) The amount of tax credits claimed by qualified
taxpayers during the fiscal year.
(ii) The total number of new jobs and permanent jobs
created by qualified taxpayers during the fiscal year,
including the duration of the jobs.
(b) Public information.--Notwithstanding any law providing
for the confidentiality of tax records, the information in the
report under subsection (a) shall be public information, and all
report information shall be posted on the department's publicly
accessible Internet website.
Section 1785.9-L. Applicability.
The tax credit under this subarticle shall apply to
geothermal electricity generation at each project facility for a
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period of 15 years.
SUBARTICLE E.2
SUSTAINABLE AVIATION FUEL
Section 1789.10-L. Duty and standards.
(a) Duty.--The Constitution of Pennsylvania guarantees the
right to clean air, pure water and to the preservation of the
natural, scenic, historic and esthetic values of the
environment. It is the Commonwealth's duty as trustee to
conserve and maintain them for the benefit of all the people.
(b) Standards.--The General Assembly finds and declares as
follows:
(1) Prohibiting degradation, diminution and depletion of
public natural resources during the production and use of
aircraft fuel carries out the duty under subsection (a).
(2) Tax credits are an effective measure to improve the
economy of this Commonwealth.
(3) Providing tax credits for the production of aircraft
fuel under paragraph (1) is affirmative legislation to
protect the environment.
Section 1789.11-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Project facility." A facility located in this Commonwealth
which is owned by a qualified taxpayer which manufactures
sustainable aviation fuel.
"Qualified taxpayer." An entity that satisfies all of the
following:
(1) owns and operates a project facility located within
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this Commonwealth;
(2) has entered into a commitment letter under section
1789.12-L(b) to produce sustainable aviation fuel at a
project facility in this Commonwealth which has been placed
in service on or after the effective date of this paragraph;
(3) has made a capital investment of at least
$250,000,000 in order to construct the project facility and
place the project facility into service in this Commonwealth;
(4) has created a minimum aggregate total of 400 new
jobs and permanent jobs;
(5) has made good faith efforts to recruit and employ,
and to encourage any contractors or subcontractors to recruit
and employ, workers from the local labor market for
employment during the construction of the project facility;
(6) has demonstrated that the new jobs created at the
project facility or that work covered by Subarticle F are
paid at least the prevailing minimum wage and benefit rates
for each craft or classification as determined by the
Department of Labor and Industry; and
(7) guarantees that construction work to place a project
facility into service shall be performed subject to the act
of March 3, 1978 (P.L.6, No.3), known as the Steel Products
Procurement Act.
"Sustainable aviation fuel." Liquid fuel which complies with
all of the following:
(1) Can be used to fuel an aircraft.
(2) Is not kerosene.
(3) Is not derived from palm fatty acid distillates or
petroleum, as defined under ASTM D1655 or a successor
standard adopted by the department.
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(4) Meets the requirements of:
(i) ASTM International Standard D7566;
(ii) the Fischer-Tropsch provisions of ASTM
International Standard D1655, Annex A1 adopted by the
department; or
(iii) a successor standard adopted by the department
in a notice published in the Pennsylvania Bulletin to
satisfy the standards under section 1789.10-L(b)(1) and
(3).
Section 1789.12-L. Eligibility.
(a) Demonstration.--In order to be eligible to receive a tax
credit, an entity shall demonstrate the following:
(1) The entity meets the requirements of a qualified
taxpayer.
(2) Confirmation that the entity has filed all required
State tax reports and returns for all applicable taxable
years and paid any balance of State tax due as determined by
assessment or determination by the department and not under
timely appeal.
(b) Commitment letter.--An entity that applies for and
receives a tax credit under this subarticle shall enter into a
commitment letter with the Department of Community and Economic
Development to prescribe the date by which the project facility
will begin to produce sustainable aviation fuel at the project
facility.
Section 1789.13-L. Application and approval of tax credit.
(a) Rate.--The tax credit shall be equal to 75¢ per gallon
of sustainable aviation fuel produced at the project facility by
a qualified taxpayer.
(b) Application.--
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(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
(2) The application must be submitted to the department
by March 1 for the tax credit claimed for sustainable
aviation fuel produced at the project facility during the
prior calendar year.
(3) The application must be on a form required by the
department which shall include the following:
(i) information required by the department to
document the amount of sustainable aviation fuel produced
at the project facility;
(ii) information required by the department to
verify that the applicant is a qualified taxpayer; and
(iii) any other information as the department deems
appropriate.
(c) Review and approval.--
(1) The department shall review the applications and
shall issue an approval or disapproval by May 1, 2026, and
each May 1 thereafter.
(2) Upon approval, the department shall issue a
certificate stating the amount of the tax credit granted for
sustainable aviation fuel produced at the project facility in
the prior calendar year.
(d) Availability of tax credits.--
(1) Each fiscal year, up to $15,000,000 of tax credits
made available to the department under Subarticle D which
remain unallocated shall be made available to the department
in accordance with this subarticle.
(2) The department shall issue up to $15,000,000 in a
fiscal year to the qualified taxpayers which meet the
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qualifications to receive a tax credit under this subarticle.
(3) The total aggregate amount of tax credits awarded to
a qualified taxpayer under this subarticle may not exceed 25%
of the capital investment made to construct a project
facility and place the project facility into service in this
Commonwealth.
Section 1789.14-L. Use of tax credits.
(a) Initial use.--Prior to sale or assignment of a tax
credit under section 1789.16-L, a qualified taxpayer must first
use a tax credit against the qualified tax liability incurred in
the taxable year for which the tax credit was approved.
(b) Eligibility.--The tax credit may be applied against up
to 20% of the qualified taxpayer's qualified tax liabilities
incurred in the taxable year for which the tax credit was
approved.
Section 1789.15-L. Carryover, carryback and refund.
A tax credit may not be carried back, carried forward or be
used to obtain a refund.
Section 1789.16-L. Sale or assignment.
(a) Authorization.--If the qualified taxpayer holds a tax
credit through the end of the calendar year in which the tax
credit was granted, the qualified taxpayer may sell or assign a
tax credit in whole or in part, provided the sale is effective
by the close of the following calendar year.
(b) Application.--
(1) To sell or assign a tax credit, a qualified taxpayer
must submit an application for the sale or assignment of the
tax credit with the department. The application must be on a
form required by the department.
(2) To approve an application, the department must:
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(i) Find that the applicant has:
(A) filed all required State tax reports and
returns for all applicable taxable years; and
(B) paid any balance of State tax due as
determined by assessment or determination by the
department and not under timely appeal.
(ii) (Reserved).
(c) Approval.--Upon approval by the department, a qualified
taxpayer may sell or assign, in whole or in part, a tax credit.
Section 1789.17-L. Purchasers and assignees.
(a) Time.--The purchaser or assignee under section 1789.16-L
must claim the tax credit in the calendar year in which the
purchase or assignment is made.
(b) Amount.--The amount of the tax credit that a purchaser
or assignee under section 1789.16-L may use against any one
qualified tax liability may not exceed 50% of any of the
qualified tax liabilities of the purchaser or assignee for the
taxable year.
(c) Resale and assignment.--
(1) A purchaser under section 1789.16-L may not sell or
assign the purchased tax credit.
(2) An assignee under section 1789.16-L may not sell or
assign the assigned tax credit.
(d) Notice.--The purchaser or assignee under section
1789.16-L shall notify the department of the seller or assignor
of the tax credit in compliance with procedures specified by the
department.
Section 1789.18-L. Pass-through entity.
(a) Election.--If a pass-through entity has an unused tax
credit, the pass-through entity may elect, in writing, according
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to procedures established by the department, to transfer all or
a portion of the tax credit to shareholders, members or partners
in proportion to the share of the pass-through entity's
distributive income to which the shareholders, members or
partners are entitled.
(b) Limitation.--The same unused tax credit under subsection
(a) may not be claimed by:
(1) the pass-through entity; and
(2) a shareholder, member or partner of the pass-through
entity.
(c) Amount.--The amount of the tax credit that a transferee
under subsection (a) may use against any one qualified tax
liability may not exceed 20% of any qualified tax liabilities
for the taxable year.
(d) Time.--A transferee under subsection (a) must claim the
tax credit in the calendar year in which the transfer is made.
(e) Sale and assignment.--A transferee under subsection (a)
may not sell or assign the tax credit.
Section 1789.19-L. (Reserved).
Section 1789.20-L. Guidelines and regulations.
The department shall develop written guidelines for the
implementation of this subarticle. The guidelines shall be in
effect until the department promulgates regulations for the
implementation of the provisions of this subarticle.
Section 1789.21-L. Report to General Assembly.
(a) Report.--
(1) No later than the year after which tax credits are
first awarded under this subarticle, and each October 1
thereafter, the department shall submit a report to the
General Assembly summarizing the effectiveness of the tax
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credit. The report shall include the names of all qualified
taxpayers utilizing the tax credit as of the date of the
report and the amount of tax credits approved for, utilized
by or sold or assigned by each qualified taxpayer. The report
shall be submitted to all of the following:
(i) The chair and minority chair of the
Appropriations Committee of the Senate.
(ii) The chair and minority chair of the
Appropriations Committee of the House of Representatives.
(iii) The chair and minority chair of the
Environmental Resources and Energy Committee of the
Senate.
(iv) The chair and minority chair of the
Environmental Resources and Energy Committee of the House
of Representatives.
(v) The chair and minority chair of the Finance
Committee of the Senate.
(vi) The chair and minority chair of the Finance
Committee of the House of Representatives.
(2) In addition to the information required under
paragraph (1), the report shall include the following
information in a manner separated by geographic location
within this Commonwealth:
(i) The amount of tax credits claimed by qualified
taxpayers during the fiscal year.
(ii) The total number of new jobs and permanent jobs
created by qualified taxpayers during the fiscal year,
including the duration of the jobs.
(b) Public information.--Notwithstanding any law providing
for the confidentiality of tax records, the information in the
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report under subsection (a) shall be public information, and all
report information shall be posted on the department's publicly
accessible Internet website.
Section 1789.22-L. Applicability.
The tax credit under this subarticle shall apply to the
production of sustainable aviation fuel at a project facility
for the period beginning January 1, 2028, and ending December
31, 2044.
Section 9. Section 1791-L of the act is amended to read:
Section 1791-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Qualified project facility." Any of the following:
(1) A project facility as defined in section 1711-L.
(2) A project facility as defined in section 1731-L.
(3) A project facility as defined in section 1751-L.
(4) A project facility as defined in section 1771-L.
(5) A project facility as defined in section 1789.11-L.
"Qualified tax credit recipient." Any of the following who
have been awarded a tax credit:
(1) A qualified taxpayer as defined in section 1711-L.
(2) A qualified taxpayer as defined in section 1731-L.
(3) A qualified taxpayer as defined in section 1751-L.
(4) A qualified taxpayer as defined in section 1771-L.
(5) A project facility as defined in section 1789.11-L.
Section 10. This act shall take effect in 60 days.
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