HB 500 — 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.   1477

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 500
                                               Session of
                                                 2025

     INTRODUCED BY INGLIS, MATZIE, MEHAFFIE, VENKAT, HOWARD, HILL-
        EVANS, MADDEN, SCHLOSSBERG, GIRAL, MALAGARI, NEILSON, RIVERA,
        BENHAM, SANCHEZ, O'MARA, CEPEDA-FREYTIZ, DAVIDSON, STEELE,
        K.HARRIS, DONAHUE, BOROWSKI, McNEILL, KHAN, FRIEL, PROKOPIAK,
        POWELL, ABNEY, D. MILLER, SALISBURY, MERSKI, PROBST,
        SCHWEYER, McANDREW, BIZZARRO, T. DAVIS, CERRATO, GALLAGHER
        AND HADDOCK, APRIL 23, 2025

     REFERRED TO COMMITTEE ON FINANCE, APRIL 23, 2025


                                    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," in Pennsylvania Economic Development for a
11      Growing Economy (PA EDGE) Tax Credits, repealing provisions
12      relating to local resource manufacturing, providing for
13      Reliable Energy Investment Tax Credit, repealing provisions
14      relating to Pennsylvania milk processing and providing for
15      Pennsylvania milk processing; in regional clean hydrogen
16      hubs, further providing for definitions, for eligibility, for
17      application and approval of tax credit, for use of tax
18      credits and for applicability; in semiconductor manufacturing
19      and biomedical manufacturing and research, further providing
20      for definitions and for application and approval of tax
21      credit and providing for sustainable aviation fuel; and, in
22      application of Prevailing Wage Act, further providing for
23      definitions.
24      The General Assembly of the Commonwealth of Pennsylvania
25   hereby enacts as follows:
26      Section 1.    Subarticle B of Article XVII-L of the act of
 1   March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
 2   1971, is repealed:
 3                               [SUBARTICLE B
 4                        LOCAL RESOURCE MANUFACTURING
 5   Section 1711-L.    Definitions.
 6      The following words and phrases when used in this subarticle
 7   shall have the meanings given to them in this section unless the
 8   context clearly indicates otherwise:
 9      "Dry natural gas."    Natural gas in which there are no
10   appreciable natural gas liquids recoverable by separation at the
11   wellhead.
12      "Fertilizer."     A chemical product derived from petrochemicals
13   which is added to soil or land to increase fertility.
14      "Natural gas liquids."    As defined in 58 Pa.C.S. § 3203
15   (relating to definitions).
16      "Petrochemical."    Chemical products obtained from refining
17   and processing natural gas. The term does not include
18   liquefaction or other processing of natural gas for the purpose
19   of transport.
20      "Project facility."    A facility located in this Commonwealth
21   which manufactures petrochemicals or fertilizers using dry
22   natural gas and which required a capital investment of at least
23   $400,000,000 to construct and place into service.
24      "Qualified taxpayer."     A company that satisfies all of the
25   following:
26          (1)   Purchases and uses dry natural gas produced in this
27      Commonwealth in the manufacture of petrochemicals or
28      fertilizers at a project facility in this Commonwealth that
29      has been placed in service on or after the effective date of
30      this section.

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 1          (2)     Has made a capital investment of at least
 2      $400,000,000 in order to construct the project facility and
 3      place the project facility into service in this Commonwealth.
 4          (3)     Has created a minimum aggregate total of 800 new
 5      jobs and permanent jobs.
 6          (4)     Has made good faith efforts to recruit and employ,
 7      and to encourage any contractors or subcontractors to recruit
 8      and employ, workers from the local labor market for
 9      employment during the construction of the project facility.
10          (5)     Has demonstrated that the new jobs created at the
11      project facility or for work covered by Subarticle F are paid
12      at least the prevailing minimum wage and benefit rates for
13      each craft or classification as determined by the Department
14      of Labor and Industry.
15          (6)     The construction work to place a project facility
16      into service shall be performed subject to the act of March
17      3, 1978 (P.L.6, No.3), known as the Steel Products
18      Procurement Act.
19   Section 1712-L.    Eligibility.
20      In order to be eligible to receive a tax credit, a company
21   shall demonstrate the following:
22          (1)     The company meets the requirements of a qualified
23      taxpayer.
24          (2)     The use of carbon capture and sequestration
25      technology, or similar technologies, at the project facility
26      to the extent it is cost effective and feasible at the
27      discretion of the qualified taxpayer.
28          (3)     Confirmation that the company has filed all required
29      State tax reports and returns for all applicable taxable
30      years and paid any balance of State tax due as determined by

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 1      assessment or determination by the department and not under
 2      timely appeal.
 3   Section 1713-L.        Application and approval of tax credit.
 4      (a)   Rate.--The tax credit shall be equal to $0.47 per unit
 5   of dry natural gas that is purchased and used in the
 6   manufacturing of petrochemicals or fertilizers at the project
 7   facility by a qualified taxpayer.
 8      (b)   Application.--
 9            (1)   A qualified taxpayer may apply to the department for
10      a tax credit under this section.
11            (2)   The application must be submitted to the department
12      by March 1 for the tax credit claimed for dry natural gas
13      purchased and used in manufacturing of petrochemicals or
14      fertilizers by the qualified taxpayer at the project facility
15      during the prior calendar year.
16            (3)   The application must be on the form required by the
17      department which shall include the following:
18                  (i)    information required by the department to
19            document the amount of dry natural gas purchased and used
20            in the manufacture of petrochemicals or fertilizers at
21            the project facility;
22                  (ii)    information required by the department to
23            verify that the applicant is a qualified taxpayer; and
24                  (iii)    any other information as the department deems
25            appropriate.
26      (c)   Review and approval.--
27            (1)   The department shall review the applications and
28      shall issue an approval or disapproval by May 1.
29            (2)   Upon approval, the department shall issue a
30      certificate stating the amount of tax credit granted for dry

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 1      natural gas purchased and used in the manufacture of
 2      petrochemicals or fertilizers at the project facility in the
 3      prior calendar year.
 4      (d)    Availability of tax credits.--
 5             (1)   Each fiscal year, $56,666,668 in tax credits shall
 6      be made available to the department in accordance with this
 7      subarticle.
 8             (2)   No more than two qualified taxpayers shall receive a
 9      tax credit annually, for a maximum credit of $6,666,667 each.
10             (3)   The department shall issue unallocated tax credits
11      to no more than one qualified taxpayer, notwithstanding the
12      maximum credit limit under paragraph (2), if the qualified
13      taxpayer:
14                   (i)    has made a total capital investment of at least
15             $1,000,000,000 in order to construct the project facility
16             and place the project facility into service in this
17             Commonwealth;
18                   (ii)    has created a minimum aggregate total of 1,800
19             new jobs and permanent jobs; and
20                   (iii)    has satisfied all other eligibility
21             requirements for a qualified taxpayer under this
22             subarticle.
23             (4)   For purposes of paragraph (3), the term "unallocated
24      tax credits" means the difference between tax credits
25      authorized under paragraph (1) and approved under paragraph
26      (2).
27   Section 1714-L.         Use of tax credits.
28      (a)    Initial use.--Prior to sale or assignment of a tax
29   credit under section 1716-L, a qualified taxpayer must first use
30   a tax credit against the qualified tax liability incurred in the

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 1   taxable year for which the tax credit was approved.
 2      (b)   Eligibility.--The tax credit may be applied against up
 3   to 20% of the qualified taxpayer's qualified tax liabilities
 4   incurred in the taxable year for which the tax credit was
 5   approved.
 6      (c)   Limit.--A qualified taxpayer that has been granted a tax
 7   credit under this subarticle shall be ineligible for any other
 8   tax credit provided under this act.
 9   Section 1715-L.        Carryover, carryback and refund.
10      A tax credit cannot be carried back, carried forward or be
11   used to obtain a refund.
12   Section 1716-L.        Sale or assignment.
13      (a)   Authorization.--If the qualified taxpayer holds a tax
14   credit through the end of the calendar year in which the tax
15   credit was granted, the qualified taxpayer may sell or assign a
16   tax credit, in whole or in part, provided the sale is effective
17   by the close of the following calendar year.
18      (b)   Application.--
19            (1)    To sell or assign a tax credit, a qualified taxpayer
20      must file an application for the sale or assignment of the
21      tax credit with the department. The application must be on a
22      form required by the department.
23            (2)    To approve an application, the department must
24      receive:
25                   (i)   a finding from the department that the applicant
26            has:
27                         (A)   filed all required State tax reports and
28                   returns for all applicable taxable years; and
29                         (B)   paid any balance of State tax due as
30                   determined by assessment or determination by the

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 1                  department and not under timely appeal; and
 2                  (ii)    for a sale or assignment to a company that is
 3            not an upstream company or downstream company, a
 4            certification from the qualified taxpayer that the
 5            qualified taxpayer has offered to sell or assign the tax
 6            credit:
 7                         (A)   exclusively to a downstream company for a
 8                  period of 30 days following approval of the tax
 9                  credit under section 1713-L(c); and
10                         (B)   to an upstream company or downstream company
11                  for a period of 30 days following expiration of the
12                  period under clause (A).
13      (c)   Approval.--Upon approval by the department, a qualified
14   taxpayer may sell or assign, in whole or in part, a tax credit.
15   Section 1717-L.        Purchasers and assignees.
16      (a)   Time.--The purchaser or assignee under section 1716-L
17   must claim the tax credit in the calendar year in which the
18   purchase or assignment is made.
19      (b)   Amount.--The amount of the tax credit that a purchaser
20   or assignee under section 1716-L may use against any one
21   qualified tax liability may not exceed 50% of any of the
22   qualified tax liabilities of the purchaser or assignee for the
23   taxable year.
24      (c)   Resale and assignment.--
25            (1)   A purchaser under section 1716-L may not sell or
26      assign the purchased tax credit.
27            (2)   An assignee under section 1716-L may not sell or
28      assign the assigned tax credit.
29      (d)   Notice.--The purchaser or assignee under section 1716-L
30   shall notify the department of the seller or assignor of the tax

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 1   credit in compliance with procedures specified by the
 2   department.
 3   Section 1718-L.    Pass-through entity.
 4      (a)   Election.--If a pass-through entity has an unused tax
 5   credit, the pass-through entity may elect, in writing, according
 6   to procedures established by the department, to transfer all or
 7   a portion of the tax credit to shareholders, members or partners
 8   in proportion to the share of the entity's distributive income
 9   to which the shareholders, members or partners are entitled.
10      (b)   Limitation.--The same unused tax credit under subsection
11   (a) may not be claimed by:
12            (1)   the pass-through entity; and
13            (2)   a shareholder, member or partner of the pass-through
14      entity.
15      (c)   Amount.--The amount of the tax credit that a transferee
16   under subsection (a) may use against any one qualified tax
17   liability may not exceed 20% of any qualified tax liabilities
18   for the taxable year.
19      (d)   Time.--A transferee under subsection (a) must claim the
20   tax credit in the calendar year in which the transfer is made.
21      (e)   Sale and assignment.--A transferee under subsection (a)
22   may not sell or assign the tax credit.
23   Section 1719-L.    (Reserved).
24   Section 1720-L.    Administration.
25      (a)   Audits and assessments.--
26            (1)   The department may audit a taxpayer awarded a tax
27      credit to ascertain the validity of the amount awarded.
28            (2)   The department may issue an assessment against a
29      taxpayer for an improperly issued tax credit. The procedures,
30      collection, enforcement and appeals of an assessment made

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 1      under this section shall be governed by Article II.
 2      (b)   Guidelines and regulations.--The department shall
 3   develop written guidelines for the implementation of this
 4   subarticle. The guidelines shall be in effect until the
 5   department promulgates regulations for the implementation of the
 6   provisions of this subarticle.
 7   Section 1721-L.    Reports to General Assembly.
 8      (a)   Annual report.--No later than the year after which tax
 9   credits are first awarded under this subarticle, and each
10   October 1 thereafter, the department shall submit a report on
11   the tax credit provided under this subarticle to the chairperson
12   and minority chairperson of the Appropriations Committee of the
13   Senate, the chairperson and minority chairperson of the
14   Appropriations Committee of the House of Representatives, the
15   chairperson and minority chairperson of the Finance Committee of
16   the Senate and the chairperson and minority chairperson of the
17   Finance Committee of the House of Representatives. The report
18   must include the names of the qualified taxpayers utilizing the
19   tax credit as of the date of the report and the amount of tax
20   credits approved for, utilized by or sold or assigned by a
21   qualified taxpayer.
22      (b)   Reconciliation report.--On May 1 of the year which is 10
23   years after the year in which tax credits are first awarded
24   under this subarticle, the department shall submit to the
25   Secretary of the Senate and the Chief Clerk of the House of
26   Representatives a reconciliation report on the effectiveness of
27   this subarticle. The report shall include, to the extent
28   possible, the following information for the preceding 10 years:
29            (1)   The name and business address of all qualified
30      taxpayers who have been granted tax credits under this

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 1    subarticle.
 2        (2)     The amount of tax credits granted to each qualified
 3    taxpayer.
 4        (3)     The total number of jobs created by the qualified
 5    taxpayer, upstream company and downstream company and any
 6    companies that provide goods, utilities or other services
 7    that support the business operations of the qualified
 8    taxpayer, upstream company and downstream company. This
 9    paragraph includes the average annual salary and hourly wage
10    information.
11        (4)     The amount of taxes paid under Article II by the
12    qualified taxpayer, upstream company and downstream company
13    and any companies that provide goods, utilities or other
14    services that support the business operations of the
15    qualified taxpayer, upstream company and downstream company.
16        (5)     The amount of taxes withheld from employees or paid
17    by members, partners or shareholders of the pass-through
18    entities under Article III of the qualified taxpayer,
19    upstream company and downstream company and any companies
20    that provide goods, utilities or other services that support
21    the business operations of the qualified taxpayer, upstream
22    company and downstream company.
23        (6)     The amount of taxes paid under Article IV by the
24    qualified taxpayer, upstream company and downstream company
25    and any companies that provide goods, utilities or other
26    services that support the business operations of the
27    qualified taxpayer, upstream company and downstream company.
28        (7)     The amount of taxes paid under Article XI by the
29    qualified taxpayer, upstream company and downstream company
30    and any companies that provide goods, utilities or other

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 1      services that support the business operations of the
 2      qualified taxpayer, upstream company and downstream company.
 3            (8)   The amount of any other State or local taxes paid by
 4      the qualified taxpayer, upstream company and downstream
 5      company and any companies that provide goods, utilities or
 6      other services that support the business operations of the
 7      qualified taxpayer, upstream company and downstream company.
 8            (9)   Any other information pertaining to the economic
 9      impact of this subarticle on this Commonwealth.
10      (c)   Reduction.--If the reconciliation report issued under
11   subsection (b) reveals that the total amount of the tax credits
12   granted under this subarticle exceeds the total amount of tax
13   revenue reported under subsection (b)(4), (5), (6), (7), (8) and
14   (9), the report must include any recommendation for changes in
15   the calculation of the credit.
16      (d)   Publication.--The reports required by this section shall
17   be a public record as defined under section 102 of the act of
18   February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law,
19   and shall be available electronically on the publicly accessible
20   Internet website of the department. The reports required under
21   this section may not contain "confidential proprietary
22   information" as defined in section 102 of the Right-to-Know Law.
23   Section 1722-L.    Applicability.
24      This subarticle shall apply to the purchase of dry natural
25   gas produced in this Commonwealth for the period beginning
26   January 1, 2024, and ending December 31, 2049.
27   Section 1723-L.    Expiration.
28      This subarticle shall expire December 31, 2050.]
29      Section 2.     Article XVII-L of the act is amended by adding a
30   subarticle to read:

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 1                               SUBARTICLE B.1
 2                  RELIABLE ENERGY INVESTMENT TAX CREDIT
 3   Section 1711.1-L.    Definitions.
 4      The following words and phrases when used in this subarticle
 5   shall have the meanings given to them in this section unless the
 6   context clearly indicates otherwise:
 7      "Affiliate."     An entity or disregarded entity for Federal
 8   income tax purposes as defined in 26 CFR 1.1502-77(b)(2) and (3)
 9   (iii) (relating to agent for the group), that is included in the
10   filing of a Federal consolidated income tax return of an
11   affiliated group as the term is defined in 26 U.S.C. § 1504(a)
12   (1) (relating to definitions).
13      "Capital investment."     The amount of money spent and recorded
14   in capital accounts by a taxpayer in the development, restart,
15   expansion or modification of a reliable energy project facility,
16   including direct and indirect costs, up to the commercial
17   operation date of the reliable clean energy project facility, as
18   reflected in the taxpayer's books of account consistent with
19   generally accepted accounting principles. The term shall not
20   include money spent after a reliable clean energy project
21   facility achieves commercial operation.
22      "Clean energy."    Electric energy generation that emits carbon
23   dioxide equivalent emissions of less than 100 pounds per
24   megawatt-hour.
25      "Clean energy emissions threshold."       One hundred pounds of
26   carbon dioxide equivalent per megawatt-hour of electricity
27   generated.
28      "Commercial operation."     The condition of a reliable energy
29   generation facility or reliable energy storage facility when the
30   facility has satisfied applicable testing and is generating or

20250HB0500PN1477                    - 12 -
 1   discharging electric power to earn revenue on a reasonably
 2   continuous basis.
 3      "Commercial operation date."     The date on which commercial
 4   operation of a reliable energy generation facility or reliable
 5   energy storage facility commences.
 6      "Commission."    The Pennsylvania Public Utility Commission or
 7   a successor agency.
 8      "Company."   A corporation, partnership, limited liability
 9   company, limited liability partnership, business trust,
10   unincorporated joint venture or other business entity doing
11   business within this Commonwealth.
12      "Department."    The Department of Revenue of the Commonwealth.
13      "Electric distribution company."      As defined in 66 Pa.C.S. §
14   2803 (relating to definitions).
15      "Full-time equivalent job."     A unit of measurement that
16   represents the number of full-time hours a company's employees
17   work determined as the quotient obtained by dividing the total
18   number of hours for which employees were compensated for
19   employment over the preceding 12-month period by 2,080.
20      "Maximum facility output."     The maximum net electrical power
21   output in megawatts, after supply of any parasitic or host
22   facility loads, that a reliable energy project facility or
23   reliable energy storage facility is expected to produce or
24   store. For an expansion or modification of an existing facility,
25   only the incremental clean energy output that results from the
26   expansion or modification shall be considered. The term does not
27   include nominal electrical power output. To calculate maximum
28   facility output, a new electric generating facility directly
29   connected to a new reliable energy storage facility may elect to
30   subtract the maximum facility output of the reliable energy

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 1   storage facility from the maximum net electrical power output,
 2   after supply of any parasitic or host facility loads, that the
 3   facility is expected to produce or store.
 4      "Pass-through entity."     Any of the following:
 5          (1)     A partnership as defined in section 301(n.0).
 6          (2)     A Pennsylvania S corporation as defined in section
 7      301(n.1).
 8          (3)     An unincorporated entity subject to section 307.21.
 9      "Permanent job."     A full-time equivalent job to support the
10   ongoing commercial operation of a reliable energy project
11   facility.
12      "Project index price."     The average of the day-ahead
13   locational marginal prices at the PJM pricing node nearest to
14   the reliable energy project facility for each hour of the three
15   years prior to the commercial operation date.
16      "Qualified reliable energy tax credit."     A tax credit granted
17   under this subarticle.
18      "Qualified reliable energy tax credit rate."       One hundred
19   percent, unless the project index price is greater than $65 per
20   megawatt-hour, in which case the qualified reliable energy tax
21   credit rate shall be reduced by 1.5% for each $1 per megawatt-
22   hour that the project index price is greater than $65 per
23   megawatt-hour, to a minimum of ten percent.
24      "Qualified reliable energy taxpayer."     The following apply:
25          (1)     A company that:
26                (i)    has made a capital investment to construct a
27          reliable energy project facility;
28                (ii)    owns and operates a reliable energy project
29          facility; and
30                (iii)    otherwise satisfies the requirements of this

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 1          subarticle.
 2          (2)     The term includes all affiliates of the company.
 3      "Qualified tax liability."     The liability of the qualified
 4   reliable energy taxpayer and affiliates for taxes imposed under
 5   Articles III, IV, VII, VIII, IX, XI and XV. The term does not
 6   include tax withheld under section 316.1.
 7      "Reliable energy generation facility."    A new electric
 8   generating facility or an expansion or modification of an
 9   electric generating facility located in this Commonwealth that:
10          (1)     Is owned by a qualified reliable energy taxpayer.
11          (2)     Required a capital investment of at least
12      $50,000,000 to place into commercial operation.
13          (3)     Required at least 10,000 work hours to place into
14      commercial operation or is a surplus interconnection
15      facility.
16          (4)     For a new electric generating facility, has a
17      maximum facility output of at least 100 megawatts, or for an
18      expansion or modification of an electric generating facility,
19      an additional maximum facility output of at least 100
20      megawatts.
21          (5)     Is projected to generate an amount of clean energy
22      in each full average operating year that is greater than the
23      product of 60% of its maximum facility output, multiplied by
24      8,760 hours. If the facility is a surplus interconnection
25      facility, the facility is projected to generate an amount of
26      clean energy in each full average operating year that is
27      greater than 60% of the surplus portion of the existing
28      generating facility's interconnection service established in
29      a large generator interconnection agreement.
30          (6)     Delivers the electricity it generates to a

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 1      distribution system of an electric distribution company or a
 2      transmission system operated by a regional transmission
 3      organization.
 4          (7)   If the electric generating facility is being
 5      restarted, the first substantial step of the restart
 6      commenced after the effective date of this section.
 7      "Reliable energy storage facility."   A facility located in
 8   this Commonwealth employing technology, including any
 9   electrochemical, thermal or electromechanical technology, or any
10   technology defined as "energy storage technology" in 26 U.S.C. §
11   48E (relating to clean electricity investment credit) or 26 CFR
12   1.48E-2(g)(6) (relating to qualified investments in qualified
13   facilities and EST for purposes of section 48E) as of the
14   effective date of this section, that is capable of absorbing and
15   storing energy for use at a later time that:
16          (1)   Is owned by a qualified reliable energy taxpayer.
17          (2)   Required a capital investment of at least
18      $50,000,000 to place into commercial operation.
19          (3)   Required at least 10,000 work hours to place into
20      commercial operation.
21          (4)   Has a maximum facility output of at least 10
22      megawatts.
23          (5)   For a reliable energy storage project facility that
24      applied for interconnection with PJM Interconnection, LLC
25      after the effective date of this subsection, the system has a
26      technical capacity to deliver its maximum facility output in
27      a minimum duration of no less than four hours, for a reliable
28      energy storage project that applied for interconnection with
29      PJM Interconnection, LLC prior to the effective date of this
30      subsection but has not yet received an interconnection

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 1      agreement as of that date, the system is projected to possess
 2      a rated technical capacity to deliver its maximum facility
 3      output in a minimum duration of no less than one hour.
 4            (6)   Delivers the electricity it discharges to a
 5      distribution system of an electric distribution company or a
 6      transmission system operated by a regional transmission
 7      organization.
 8      "Restart."     The process of reactivating a reliable energy
 9   generation facility that has not generated significant amounts
10   of electricity for a period of at least 365 days.
11      "Surplus interconnection facility."       A new electric
12   generating facility that generates clean energy, shares
13   interconnection infrastructure and a single point of
14   interconnection with an existing electric generating facility,
15   and exclusively uses the surplus portion of the existing
16   generating facility's interconnection service established in a
17   large generator interconnection agreement. The surplus portion
18   shall be determined such that, if the surplus interconnection
19   service were utilized, the total amount of interconnection
20   service at the point of interconnection would remain the same.
21      "Work hour."     One hour of compensation during the
22   construction or the restart of a reliable energy generation
23   facility or reliable energy storage facility.
24   Section 1712.1-L.     Amount, claiming and audit of qualified
25                  reliable energy tax credit.
26      (a)   Amount of qualified reliable energy tax credits.--
27            (1)   Qualified reliable energy tax credits shall be made
28      available in accordance with this subarticle.
29            (2)   A qualified reliable energy taxpayer shall receive
30      qualified reliable energy tax credits equal to the product of

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 1    the qualified reliable energy tax credit rate multiplied by
 2    $300,000 per new or additional megawatt of maximum facility
 3    output, up to a maximum of $100,000,000.
 4          (3)   Applications for qualified reliable energy tax
 5    credits shall continue to be made available by the department
 6    unabated annually from the period beginning January 1, 2026,
 7    and ending December 31, 2036. A reliable energy generation
 8    facility or reliable energy storage facility that has
 9    commenced construction prior to December 31, 2036, shall be
10    eligible for qualified reliable energy tax credits.
11    (b)   Application.--
12          (1)   An applicant for a qualified reliable energy tax
13    credit shall complete a form as prescribed by the department
14    that shall include:
15                (i)    A description of the reliable energy facility or
16          reliable energy storage facility.
17                (ii)    Verification that the taxpayer has made or will
18          make a capital investment greater than $50,000,000 prior
19          to the placing in service of the reliable energy
20          generation facility or reliable energy storage facility.
21                (iii)   An estimate of the total capital investment
22          that will be made.
23                (iv)    The expected commercial operation date of the
24          reliable energy project facility or reliable energy
25          storage facility.
26          (1.1)   If the applicant deems the form under paragraph
27    (1) to contain confidential proprietary information, the form
28    may be submitted on a confidential basis, shall be treated
29    and maintained by the department as confidential proprietary
30    information and is exempt from access under the act of

20250HB0500PN1477                     - 18 -
 1    February 14, 2008 (P.L.6, No.3), known as the Right-to-Know
 2    Law.
 3           (2)   The department shall review applications submitted
 4    and issue a written approval or disapproval, stating the
 5    reasons for the department's decision, within 60 days of the
 6    application's submission. The department's decision on the
 7    application may be appealed in the same manner as an
 8    assessment issued under section 407.1.
 9           (3)   Upon approval of an application, the department
10    shall issue a certificate confirming that the applicant is
11    eligible for a qualified reliable energy tax credit,
12    conditioned on completion of a reliable energy generation
13    facility or reliable energy storage facility that becomes
14    commercially operational and satisfies the requirements of
15    this subarticle. The qualified reliable energy taxpayer shall
16    retain tax credit eligibility, as determined under this
17    section, until the qualified reliable energy taxpayer has
18    received the qualified reliable energy tax credit.
19    (c)    Claiming qualified reliable energy tax credits.--
20           (1)   A qualified reliable energy taxpayer shall complete
21    a form as prescribed by the department verifying that the
22    taxpayer has met the requirements of a qualified reliable
23    energy taxpayer and may claim qualified reliable energy tax
24    credits. The qualified reliable energy taxpayer shall include
25    on the form a calculation of the applicable project index
26    price and verification that electricity produced was below
27    the clean energy emissions threshold. Acceptable forms of
28    verification with respect to the clean energy emissions
29    threshold shall include, but not be limited to, documented
30    inclusion of the type or category of facility in Table 1 of

20250HB0500PN1477                   - 19 -
 1      Revenue Procedure 2025-14, published by the Internal Revenue
 2      Service in 2025-7 Internal Revenue Bulletin 770-771 or any
 3      successor table published in the Internal Revenue Bulletin.
 4            (2)   The qualified reliable energy taxpayer shall attach
 5      the form to the tax return on which the qualified reliable
 6      energy taxpayer is claiming to offset a qualified tax
 7      liability with qualified reliable energy tax credits.
 8      (d)   Audit of qualified reliable energy tax credits
 9   claimed.--
10            (1)   The department shall have the right to audit all
11      qualified reliable energy credits claimed.
12            (2)   If the department denies a qualified reliable energy
13      tax credit, the department shall issue an assessment in the
14      same manner as issued under section 407.1. The assessment may
15      be appealed in the same manner as an assessment issued under
16      section 407.1.
17   Section 1713.1-L.    Year of use and carryover.
18      (a)   Year of use.--A qualified reliable energy taxpayer shall
19   claim qualified reliable energy tax credits on the tax return
20   filed in the year immediately following the year in which the
21   reliable energy generation facility or reliable energy storage
22   facility is placed into commercial operation.
23      (b)   Use.--A qualified reliable energy taxpayer may utilize
24   up to one-third of the qualified reliable energy tax credits in
25   the taxable year in which the credits are received and up to the
26   same amount in each subsequent taxable year.
27      (c)   Carryover.--A qualified reliable energy tax credit not
28   fully utilized in the taxable year in which the tax credit was
29   received may be carried forward for not more than 10 consecutive
30   taxable years but shall not be carried back or be used to obtain

20250HB0500PN1477                    - 20 -
 1   a tax refund.
 2   Section 1714.1-L.    Sale or assignment.
 3      (a)   Authorization required.--
 4            (1)   To sell or assign a tax credit, a qualified taxpayer
 5      must file an application for the sale or assignment of the
 6      tax credit with the department. The application must be on a
 7      form required by the department.
 8            (2)   The department shall approve an application for the
 9      sale or assignment of a qualified reliable energy tax credit
10      if the applicant has filed each State tax report and return
11      required by law for each applicable taxable year.
12      (b)   Approval.--Upon approval by the department of an
13   application under subsection (a), a qualified reliable energy
14   taxpayer that holds a qualified reliable energy tax credit
15   through the end of the calendar year in which the tax credit was
16   received may sell or assign the tax credit, in whole or in part,
17   if the sale is effective by the close of the following calendar
18   year.
19   Section 1715.1-L.    Purchasers, transferees and assignees.
20      (a)   Time.--A purchaser, transferee or assignee under this
21   subarticle shall claim the qualified reliable energy tax credit
22   no later than 12 months following the end of the calendar year
23   in which the purchase, transfer or assignment is made.
24      (b)   Amount.--The amount of the qualified reliable energy tax
25   credit that a purchaser, transferee or assignee under this
26   section may use against any one qualified tax liability may not
27   exceed 100% of the qualified tax liability of the purchaser,
28   transferee or assignee for the taxable year.
29      (c)   Resale and assignment.--
30            (1)   A purchaser under this section may not sell,

20250HB0500PN1477                    - 21 -
 1      transfer or assign the purchased qualified reliable energy
 2      tax credit.
 3            (2)   An assignee or transferee under this section may not
 4      sell, transfer or assign the assigned or transferred
 5      qualified reliable energy tax credit.
 6      (d)   Notice.--The purchaser, transferee or assignee under
 7   this section shall notify the department of the seller,
 8   transferor or assignor of the qualified reliable energy tax
 9   credit in compliance with procedures specified by the
10   department.
11   Section 1716.1-L.    Pass-through entity.
12      (a)   Election.--If a pass-through entity has an unused
13   qualified reliable energy tax credit, the pass-through entity
14   may elect, in writing, according to procedures established by
15   the department, to transfer all or a portion of the tax credit
16   to shareholders, members or partners in proportion to the share
17   of the entity's distributive income to which the shareholders,
18   members or partners are entitled.
19      (b)   Limitation.--The same unused qualified reliable energy
20   tax credit under subsection (a) may not be claimed by both:
21            (1)   the pass-through entity; and
22            (2)   a shareholder, member or partner of the pass-through
23      entity.
24      (c)   Amount.--The amount of the qualified reliable energy tax
25   credit that a transferee under subsection (a) may use against
26   any one qualified tax liability may not exceed 100% of the
27   qualified tax liabilities for the taxable year.
28      (d)   Time.--A transferee under subsection (a) must claim the
29   qualified reliable energy tax credit not later than 12 months
30   following the calendar year in which the transfer is made.

20250HB0500PN1477                    - 22 -
 1      (e)   Sale and assignment.--A transferee under subsection (a)
 2   may sell or assign the qualified reliable energy tax credit.
 3   Section 1717.1-L.   Guidelines and regulations.
 4      The department and the Department of Community and Economic
 5   Development shall jointly develop written guidelines for the
 6   implementation of this subarticle. The guidelines shall be in
 7   effect until the department promulgates regulations for the
 8   implementation of this subarticle.
 9   Section 1718.1-L.   Reports to General Assembly.
10      (a)   Annual report.--No later than the calendar year after
11   which qualified reliable energy tax credits are first awarded
12   under this subarticle, and each October 1 thereafter up to
13   October 1, 2035, the department shall submit a report on the
14   qualified reliable energy tax credits provided for under this
15   subarticle to the chairperson and minority chairperson of the
16   Appropriations Committee of the Senate, the chairperson and
17   minority chairperson of the Finance Committee of the Senate, the
18   chairperson and minority chairperson of the Appropriations
19   Committee of the House of Representatives and the chairperson
20   and minority chairperson of the Finance Committee of the House
21   of Representatives. The report shall include the names of the
22   qualified reliable energy taxpayers utilizing qualified reliable
23   energy tax credits as of the date of the report and the amount
24   of tax credits approved for, utilized by or sold, transferred or
25   assigned by all qualified reliable energy taxpayers.
26      (b)   Five-year report.--On May 1, 2030, and May 1, 2035, the
27   department and the commission shall jointly submit to the
28   Secretary of the Senate and the Chief Clerk of the House of
29   Representatives a report on the effectiveness of this
30   subarticle. The report shall include, to the extent possible,

20250HB0500PN1477                  - 23 -
 1   the following information for the preceding five calendar years:
 2            (1)   The aggregate amount of qualified reliable energy
 3      tax credits granted to all qualified reliable energy
 4      taxpayers up to the date of the report.
 5            (2)   The total number of work hours and permanent jobs
 6      created by the qualified reliable energy taxpayers up to the
 7      date of the report.
 8            (3)   The total number of megawatt-hours produced by each
 9      reliable energy project facility up to the date of the
10      report.
11            (4)   The total amount of capital investment made by each
12      qualified reliable energy taxpayer up to the date of the
13      report.
14            (5)   Recommendations for changes to this subarticle to
15      promote increased use of qualified reliable energy tax
16      credits.
17            (6)   Any other information pertaining to the economic
18      impact of this subarticle on this Commonwealth.
19      (c)   Publication.--The reports required by this section shall
20   be a public record as defined under section 102 of the act of
21   February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law,
22   and shall be posted electronically on the department's publicly
23   accessible Internet website. The reports required under this
24   section may not contain confidential proprietary information as
25   defined in section 102 of the Right-to-Know Law.
26      Section 3.     Subarticle C of Article XVII-L of the act is
27   repealed:
28                               [SUBARTICLE C
29                        PENNSYLVANIA MILK PROCESSING
30   Section 1731-L.    Definitions.

20250HB0500PN1477                      - 24 -
 1      The following words and phrases when used in this subarticle
 2   shall have the meanings given to them in this section unless the
 3   context clearly indicates otherwise:
 4      "Gallon."    A United States liquid gallon equal to a volume of
 5   231 cubic inches and equal to 3.785411784 liters or 0.13368
 6   cubic feet, where volumetric measurements made at ambient
 7   flowing conditions are typically adjusted for composition and to
 8   standard conditions using established industry standard
 9   practices.
10      "Milk."   The lacteal secretion, practically free from
11   colostrum, obtained by the complete milking of one or more
12   healthy cows.
13      "Project facility."    A facility located in this Commonwealth
14   which is owned and operated by a qualified taxpayer and which
15   utilizes milk purchased from sources within this Commonwealth
16   and processed by a qualified taxpayer at the project facility.
17      "Qualified taxpayer."    A company that satisfies all of the
18   following:
19          (1)     Purchases and processes milk produced in this
20      Commonwealth at a project facility in this Commonwealth that
21      has been placed in service on or after the effective date of
22      this section.
23          (2)     Has made a capital investment of at least
24      $500,000,000 in order to construct the project facility and
25      place the project facility into service in this Commonwealth.
26          (3)     Has created a minimum aggregate total of 1,200 new
27      jobs and permanent jobs.
28          (4)     Has made good faith efforts to recruit and employ,
29      and to encourage any contractors or subcontractors to recruit
30      and employ, workers from the local labor market for

20250HB0500PN1477                    - 25 -
 1      employment during the construction of the project facility.
 2            (5)   Has demonstrated that the new jobs created at the
 3      project facility or for work covered by Subarticle F are paid
 4      at least the prevailing minimum wage and benefit rates for
 5      each craft or classification as determined by the Department
 6      of Labor and Industry.
 7            (6)   The construction work to place a project facility
 8      into service shall be performed subject to the act of March
 9      3, 1978 (P.L.6, No.3), known as the Steel Products
10      Procurement Act.
11   Section 1732-L.    Eligibility.
12      In order to be eligible to receive a tax credit, a company
13   shall demonstrate the following:
14            (1)   The company meets the requirements of a qualified
15      taxpayer.
16            (2)   Confirmation that the company has filed all required
17      State tax reports and returns for all applicable taxable
18      years and paid any balance of State tax due as determined by
19      assessment or determination by the department and not under
20      timely appeal.
21   Section 1733-L.    Application and approval of tax credit.
22      (a)   Rate.--The tax credit shall be equal to $0.05 per gallon
23   of milk purchased and produced from sources exclusively within
24   this Commonwealth and processed at the project facility by a
25   qualified taxpayer.
26      (b)   Application.--
27            (1)   A qualified taxpayer may apply to the department for
28      a tax credit under this section.
29            (2)   The application must be submitted to the department
30      by March 1 for the tax credit claimed for milk purchased and

20250HB0500PN1477                      - 26 -
 1    processed by the qualified taxpayer at the project facility
 2    during the prior calendar year.
 3          (3)   The application must be on the form required by the
 4    department which shall include the following:
 5                (i)    information required by the department to
 6          document the amount of milk purchased and processed at
 7          the project facility;
 8                (ii)    information required by the department to
 9          verify that the applicant is a qualified taxpayer; and
10                (iii)    any other information as the department deems
11          appropriate.
12    (c)   Review and approval.--
13          (1)   The department shall review the applications and
14    shall issue an approval or disapproval by May 1.
15          (2)   Upon approval, the department shall issue a
16    certificate stating the amount of tax credit granted for milk
17    purchased and processed at the project facility in the prior
18    calendar year.
19    (d)   Availability of tax credits.--
20          (1)   Each fiscal year, $15,000,000 in tax credits shall
21    be made available to the department in accordance with this
22    subarticle.
23          (2)   The department shall issue up to $15,000,000 in tax
24    credits in a fiscal year to the qualified taxpayer which
25    first meets the qualifications to receive a tax credit under
26    this subarticle.
27          (3)   An amount under paragraph (1) which remains
28    unallocated under paragraph (2) shall be issued to the
29    qualified taxpayer which next meets the qualifications to
30    receive a tax credit under this subarticle.

20250HB0500PN1477                     - 27 -
 1            (4)   The total aggregate amount of tax credits awarded to
 2      a qualified taxpayer under this subarticle may not exceed 25%
 3      of the capital investment made to construct a project
 4      facility and place the project facility into service in this
 5      Commonwealth.
 6   Section 1734-L.    Use of tax credits.
 7      (a)   Initial use.--Prior to sale or assignment of a tax
 8   credit under section 1736-L, a qualified taxpayer must first use
 9   a tax credit against the qualified tax liability incurred in the
10   taxable year for which the tax credit was approved.
11      (b)   Eligibility.--The tax credit may be applied against up
12   to 20% of a qualified taxpayer's qualified tax liabilities
13   incurred in the taxable year for which the tax credit was
14   approved.
15      (c)   Limit.--A qualified taxpayer that has been granted a tax
16   credit under this subarticle shall be ineligible for any other
17   tax credit provided under this act or a tax benefit as defined
18   in section 1701-A.1.
19   Section 1735-L.    Carryover, carryback and refund.
20      A tax credit cannot be carried back, carried forward or be
21   used to obtain a refund.
22   Section 1736-L.    Sale or assignment.
23      (a)   Authorization.--If the qualified taxpayer holds a tax
24   credit through the end of the calendar year in which the tax
25   credit was granted, the qualified taxpayer may sell or assign a
26   tax credit, in whole or in part, provided the sale is effective
27   by the close of the following calendar year.
28      (b)   Application.--
29            (1)   To sell or assign a tax credit, a qualified taxpayer
30      must file an application for the sale or assignment of the

20250HB0500PN1477                    - 28 -
 1      tax credit with the department. The application must be on a
 2      form required by the department.
 3            (2)    To approve an application, the department must
 4      receive:
 5                   (i)    a finding from the department that the applicant
 6            has:
 7                          (A)   filed all required State tax reports and
 8                   returns for all applicable taxable years; and
 9                          (B)   paid any balance of State tax due as
10                   determined by assessment or determination by the
11                   department and not under timely appeal; and
12                   (ii)    for a sale or assignment to a company that is
13            not an upstream company or downstream company, a
14            certification from the qualified taxpayer that the
15            qualified taxpayer has offered to sell or assign the tax
16            credit:
17                          (A)   exclusively to a downstream company for a
18                   period of 30 days following approval of the tax
19                   credit under section 1733-L(c); and
20                          (B)   to an upstream company or downstream company
21                   for a period of 30 days following expiration of the
22                   period under clause (A).
23      (c)   Approval.--Upon approval by the department, a qualified
24   taxpayer may sell or assign, in whole or in part, a tax credit.
25   Section 1737-L.         Purchasers and assignees.
26      (a)   Time.--The purchaser or assignee under section 1736-L
27   must claim the tax credit in the calendar year in which the
28   purchase or assignment is made.
29      (b)   Amount.--The amount of the tax credit that a purchaser
30   or assignee under section 1736-L may use against any one

20250HB0500PN1477                         - 29 -
 1   qualified tax liability may not exceed 50% of any of the
 2   qualified tax liabilities of the purchaser or assignee for the
 3   taxable year.
 4      (c)   Resale and assignment.--
 5            (1)   A purchaser under section 1736-L may not sell or
 6      assign the purchased tax credit.
 7            (2)   An assignee under section 1736-L may not sell or
 8      assign the assigned tax credit.
 9      (d)   Notice.--The purchaser or assignee under section 1736-L
10   shall notify the department of the seller or assignor of the tax
11   credit in compliance with procedures specified by the
12   department.
13   Section 1738-L.    Pass-through entity.
14      (a)   Election.--If a pass-through entity has an unused tax
15   credit, the pass-through entity may elect, in writing, according
16   to procedures established by the department, to transfer all or
17   a portion of the tax credit to shareholders, members or partners
18   in proportion to the share of the entity's distributive income
19   to which the shareholders, members or partners are entitled.
20      (b)   Limitation.--The same unused tax credit under subsection
21   (a) may not be claimed by:
22            (1)   the pass-through entity; and
23            (2)   a shareholder, member or partner of the pass-through
24      entity.
25      (c)   Amount.--The amount of the tax credit that a transferee
26   under subsection (a) may use against any one qualified tax
27   liability may not exceed 20% of any qualified tax liabilities
28   for the taxable year.
29      (d)   Time.--A transferee under subsection (a) must claim the
30   tax credit in the calendar year in which the transfer is made.

20250HB0500PN1477                    - 30 -
 1      (e)   Sale and assignment.--A transferee under subsection (a)
 2   may not sell or assign the tax credit.
 3   Section 1739-L.        (Reserved).
 4   Section 1740-L.        Guidelines and regulations.
 5      The department shall develop written guidelines for the
 6   implementation of this subarticle. The guidelines shall be in
 7   effect until the department promulgates regulations for the
 8   implementation of the provisions of this subarticle.
 9   Section 1741-L.        Report to General Assembly.
10      (a)   Report.--
11            (1)   No later than the year after which tax credits are
12      first awarded under this subarticle, and each October 1
13      thereafter, the department shall submit a report to the
14      General Assembly summarizing the effectiveness of the tax
15      credit. The report shall include the names of all qualified
16      taxpayers utilizing the tax credit as of the date of the
17      report and the amount of tax credits approved for, utilized
18      by or sold or assigned by each qualified taxpayer. The report
19      shall be submitted to the following:
20                  (i)    The chair and minority chair of the Agriculture
21            and Rural Affairs Committee of the Senate.
22                  (ii)    The chair and minority chair of the Agriculture
23            and Rural Affairs Committee of the House of
24            Representatives.
25                  (iii)    The chair and minority chair of the Finance
26            Committee of the Senate.
27                  (iv)    The chair and minority chair of the Finance
28            Committee of the House of Representatives.
29            (2)   In addition to the information required under
30      paragraph (1), the report shall include the following

20250HB0500PN1477                         - 31 -
 1      information in a manner that is separated by geographic
 2      location within this Commonwealth:
 3                (i)    The amount of tax credits claimed by qualified
 4            taxpayers during the fiscal year.
 5                (ii)    The total number of new jobs and permanent jobs
 6            created by qualified taxpayers during the fiscal year,
 7            including the duration of the jobs.
 8      (b)   Public information.--Notwithstanding any law providing
 9   for the confidentiality of tax records, the information in the
10   report under subsection (a) shall be public information, and all
11   report information shall be posted on the department's publicly
12   accessible Internet website.
13   Section 1742-L.     Applicability.
14      (a)   Duration.--The tax credit under this subarticle shall
15   apply to the purchase and processing of milk produced in this
16   Commonwealth for a period of eight years from the date the first
17   project facility is placed into service.
18      (b)   Limitation.--The total aggregate amount of tax credits
19   awarded by the department under this subarticle may not exceed
20   $120,000,000.]
21      Section 4.      Article XVII-L of the act is amended by adding a
22   subarticle to read:
23                                SUBARTICLE C.1
24                         PENNSYLVANIA MILK PROCESSING
25   Section 1731-L.     Definitions.
26      The following words and phrases when used in this subarticle
27   shall have the meanings given to them in this section unless the
28   context clearly indicates otherwise:
29      "Department."     The Department of Community and Economic
30   Development of the Commonwealth.

20250HB0500PN1477                       - 32 -
 1      "Downstream company."    A company that purchases Class I,
 2   Class II, Class III or Class IV milk products as defined in the
 3   Federal Milk Marketing Order Program produced by a qualified
 4   taxpayer.
 5      "Federal Milk Marketing Order Program."    The Federal Milk
 6   Marketing Order Program established under 7 U.S.C. § 608c
 7   (relating to orders) under the Agricultural Marketing Agreement
 8   Act of 1937 (Public Law 75-137, 50 Stat. 246).
 9      "Gallon."    A United States liquid gallon equal to a volume of
10   231 cubic inches and equal to 3.785411784 liters or 0.13368
11   cubic feet, where volumetric measurements made at ambient
12   flowing conditions are typically adjusted for composition and to
13   standard conditions using established industry standard
14   practices.
15      "Milk."   The lacteal secretion, practically free from
16   colostrum, obtained by the complete milking 

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