HB 2234 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for spent grain donation tax credit.

PRINTER'S NO.   2927

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 2234
                                                 Session of
                                                   2026

     INTRODUCED BY BIZZARRO, FREEMAN, HILL-EVANS, T. DAVIS, MADDEN,
        GOUGHNOUR, McNEILL, PROBST, SANCHEZ, RIVERA, KENYATTA,
        PASHINSKI, HOHENSTEIN, MAYES, CONKLIN, INGLIS AND CEPEDA-
        FREYTIZ, FEBRUARY 20, 2026

     REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 20, 2026


                                     AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," providing for spent grain donation tax credit.
11      The General Assembly of the Commonwealth of Pennsylvania
12   hereby enacts as follows:
13      Section 1.     The act of March 4, 1971 (P.L.6, No.2), known as
14   the Tax Reform Code of 1971, is amended by adding an article to
15   read:
16                                ARTICLE XX-A

17                      SPENT GRAIN DONATION TAX CREDIT

18   Section 2001-A.    Scope of article.
19      This article relates to a tax credit for the donation of
20   spent grain byproduct by qualified taxpayers to eligible
 1   agricultural operations.
 2   Section 2002-A.    Definitions.
 3      The following words and phrases when used in this article
 4   shall have the meanings given to them in this section unless the
 5   context clearly indicates otherwise:
 6      "Department."     The Department of Revenue of the Commonwealth.
 7      "Eligible agricultural operation."      An agricultural operation
 8   located no more than 100 miles from an eligible facility that
 9   engages in normal agricultural operation.
10      "Eligible facility."    A facility within this Commonwealth at
11   which malt or brewed beverages are brewed or manufactured by a
12   qualified taxpayer and that produces spent grain byproduct as a
13   result of the brewing or manufacturing process.
14      "Malt or brewed beverages."       Alcoholic beverages, including
15   beer, lager beer, ale, porter or similar fermented malt liquor,
16   containing 0.5% or more of alcohol, by whatever name the liquors
17   may be called.
18      "Normal agricultural operation."       As defined in section 2 of
19   the act of June 10, 1982 (P.L.454, No.133), referred to as the
20   Right-to-Farm Law.
21      "Qualified tax liability."      The liability for taxes imposed
22   under Article XX.
23      "Qualified taxpayer."     A person engaged in the brewing or
24   manufacturing of malt or brewed beverages for sale and subject
25   to tax under Article XX.
26      "Spent grain byproduct."       Material remaining from grain used
27   to produce malt or brewed beverages.
28      "Tax credit."     The spent grain donation tax credit provided
29   for under this article.
30   Section 2003-A.    Application and approval of tax credit.

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 1      (a)   Application.--
 2            (1)   A qualified taxpayer may apply to the department for
 3      a tax credit against the tax imposed under Article XX. The
 4      application shall be on a form created by the department.
 5            (2)   The application must be submitted to the department
 6      by February 1 of each year for the tax credit claimed for
 7      spent grain byproduct donated to an eligible agricultural
 8      operation during the prior calendar year.
 9      (b)   Amount.--A qualified taxpayer shall receive a tax credit
10   equal to 16¢ multiplied by the number of pounds dry weight of
11   spent grain byproduct donated by the taxpayer during the taxable
12   year to an eligible agricultural operation for agricultural use,
13   not to exceed the lesser of:
14            (1)   $30,000; or
15            (2)   the total amount of the qualified taxpayer's
16      qualified tax liability for the taxable year in which the
17      donation was made.
18      (c)   Review and approval.--
19            (1)   The department shall review and approve applications
20      meeting the requirements of this article by March 20 of each
21      year.
22            (2)   The department may require information necessary to
23      document that a facility qualifies as an eligible facility
24      and the amount of spent grain byproduct donated to an
25      eligible agricultural operation.
26            (3)   In the review of applications for tax credits, the
27      department shall consult with the Liquor Control Board with
28      respect to whether a facility qualifies as an eligible
29      facility and to review the eligible facility's calculation of
30      the amount of spent grain byproduct donated.

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 1            (4)   Prior to approving an application, the applicant
 2      must have:
 3                  (i)    Filed all required State tax reports and returns
 4            for all applicable taxable years.
 5                  (ii)   Paid any balance of State tax due as determined
 6            by assessment or determination by the department and not
 7            under timely appeal.
 8            (5)   Upon approval, the department shall issue to the
 9      applicant a certificate stating the amount of tax credit
10      granted for donation of spent grain byproduct in the prior
11      calendar year.
12   Section 2004-A.       Claim of tax credit.
13      (a)   Claim.--A qualified taxpayer may claim a tax credit
14   against the qualified tax liability of the qualified taxpayer.
15      (b)   Use of credit.--A tax credit may be claimed against a
16   qualified tax liability for a taxable year that begins in the
17   same calendar year that the spent grain byproduct was donated to
18   an eligible agricultural operation.
19   Section 2005-A.       Carryover and carryback.
20      (a)   Carryover.--
21            (1)   If a qualified taxpayer does not use all or any
22      portion of a tax credit for the taxable year in which the tax
23      credit is first approved, the excess may be carried over to
24      succeeding taxable years and used as a credit against the
25      qualified tax liability of the qualified taxpayer for those
26      taxable years.
27            (2)   Each time the tax credit is carried over to a
28      succeeding taxable year, the tax credit shall be reduced by
29      the amount that was used as a credit during the immediately
30      preceding taxable year.

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 1            (3)   The tax credit may be carried over and applied to
 2      succeeding taxable years for no more than seven taxable years
 3      following the first taxable year for which the taxpayer was
 4      entitled to claim the tax credit.
 5      (b)   No carryback or refund.--A qualified taxpayer is not
 6   entitled to carry back or obtain a refund of all or any portion
 7   of an unused tax credit granted to the qualified taxpayer under
 8   this article.
 9   Section 2006-A.    Administration.
10      (a)   Audits and assessments.--The department shall have the
11   following powers:
12            (1)   To audit a qualified taxpayer claiming a tax credit
13      to ascertain the validity of the amount claimed.
14            (2)   To issue an assessment against a qualified taxpayer
15      for an improperly issued tax credit. The procedures,
16      collection, enforcement and appeals of any assessment made
17      under this section shall be governed by Article IV.
18      (b)   Guidelines.--The department shall develop written
19   guidelines for the implementation of this article.
20   Section 2007-A.    Annual report to General Assembly.
21      By October 1, 2027, and October 1 of each year thereafter,
22   the department shall submit a report on the tax credit to the
23   chairperson and minority chairperson of the Appropriations
24   Committee of the Senate, the chairperson and minority
25   chairperson of the Appropriations Committee of the House of
26   Representatives, the chairperson and minority chairperson of the
27   Finance Committee of the Senate and the chairperson and minority
28   chairperson of the Finance Committee of the House of
29   Representatives. The report shall include:
30            (1)   The names of the qualified taxpayers utilizing the

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 1      tax credit as of the date of the report and the amount of tax
 2      credits approved for, utilized by or sold or assigned by a
 3      qualified taxpayer.
 4          (2)   Data concerning the benefits provided to the
 5      Commonwealth in terms of the quantity of spent grain
 6      byproduct donated to eligible agricultural operations.
 7   Section 2008-A.    Applicability.
 8      The tax credit shall apply to taxable years beginning after
 9   December 31, 2025.
10      Section 2.     This act shall take effect in 60 days.




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