SB 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.   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
 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 geothermal energy and for
22      sustainable aviation fuel; and, in application of Prevailing
23      Wage Act, further providing for 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
27   March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
28   1971, is repealed:
 1                               [SUBARTICLE B
 2                       LOCAL RESOURCE MANUFACTURING
 3   Section 1711-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      "Dry natural gas."    Natural gas in which there are no
 8   appreciable natural gas liquids recoverable by separation at the
 9   wellhead.
10      "Fertilizer."    A chemical product derived from petrochemicals
11   which is added to soil or land to increase fertility.
12      "Natural gas liquids."    As defined in 58 Pa.C.S. § 3203
13   (relating to definitions).
14      "Petrochemical."    Chemical products obtained from refining
15   and processing natural gas. The term does not include
16   liquefaction or other processing of natural gas for the purpose
17   of transport.
18      "Project facility."    A facility located in this Commonwealth
19   which manufactures petrochemicals or fertilizers using dry
20   natural gas and which required a capital investment of at least
21   $400,000,000 to construct and place into service.
22      "Qualified taxpayer."     A company that satisfies all of the
23   following:
24          (1)   Purchases and uses dry natural gas produced in this
25      Commonwealth in the manufacture of petrochemicals or
26      fertilizers at a project facility in this Commonwealth that
27      has been placed in service on or after the effective date of
28      this section.
29          (2)   Has made a capital investment of at least
30      $400,000,000 in order to construct the project facility and

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 1      place the project facility into service in this Commonwealth.
 2          (3)     Has created a minimum aggregate total of 800 new
 3      jobs and permanent jobs.
 4          (4)     Has made good faith efforts to recruit and employ,
 5      and to encourage any contractors or subcontractors to recruit
 6      and employ, workers from the local labor market for
 7      employment during the construction of the project facility.
 8          (5)     Has demonstrated that the new jobs created at the
 9      project facility or for work covered by Subarticle F are paid
10      at least the prevailing minimum wage and benefit rates for
11      each craft or classification as determined by the Department
12      of Labor and Industry.
13          (6)     The construction work to place a project facility
14      into service shall be performed subject to the act of March
15      3, 1978 (P.L.6, No.3), known as the Steel Products
16      Procurement Act.
17   Section 1712-L.    Eligibility.
18      In order to be eligible to receive a tax credit, a company
19   shall demonstrate the following:
20          (1)     The company meets the requirements of a qualified
21      taxpayer.
22          (2)     The use of carbon capture and sequestration
23      technology, or similar technologies, at the project facility
24      to the extent it is cost effective and feasible at the
25      discretion of the qualified taxpayer.
26          (3)     Confirmation that the company has filed all required
27      State tax reports and returns for all applicable taxable
28      years and paid any balance of State tax due as determined by
29      assessment or determination by the department and not under
30      timely appeal.

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 1   Section 1713-L.        Application and approval of tax credit.
 2      (a)   Rate.--The tax credit shall be equal to $0.47 per unit
 3   of dry natural gas that is purchased and used in the
 4   manufacturing of petrochemicals or fertilizers at the project
 5   facility by a qualified taxpayer.
 6      (b)   Application.--
 7            (1)   A qualified taxpayer may apply to the department for
 8      a tax credit under this section.
 9            (2)   The application must be submitted to the department
10      by March 1 for the tax credit claimed for dry natural gas
11      purchased and used in manufacturing of petrochemicals or
12      fertilizers by the qualified taxpayer at the project facility
13      during the prior calendar year.
14            (3)   The application must be on the form required by the
15      department which shall include the following:
16                  (i)    information required by the department to
17            document the amount of dry natural gas purchased and used
18            in the manufacture of petrochemicals or fertilizers at
19            the project facility;
20                  (ii)    information required by the department to
21            verify that the applicant is a qualified taxpayer; and
22                  (iii)    any other information as the department deems
23            appropriate.
24      (c)   Review and approval.--
25            (1)   The department shall review the applications and
26      shall issue an approval or disapproval by May 1.
27            (2)   Upon approval, the department shall issue a
28      certificate stating the amount of tax credit granted for dry
29      natural gas purchased and used in the manufacture of
30      petrochemicals or fertilizers at the project facility in the

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

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

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

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

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

20250SB0500PN1036                    - 9 -
 1    taxpayer.
 2        (3)     The total number of jobs created by the qualified
 3    taxpayer, upstream company and downstream company and any
 4    companies that provide goods, utilities or other services
 5    that support the business operations of the qualified
 6    taxpayer, upstream company and downstream company. This
 7    paragraph includes the average annual salary and hourly wage
 8    information.
 9        (4)     The amount of taxes paid under Article II by the
10    qualified taxpayer, upstream company and downstream company
11    and any companies that provide goods, utilities or other
12    services that support the business operations of the
13    qualified taxpayer, upstream company and downstream company.
14        (5)     The amount of taxes withheld from employees or paid
15    by members, partners or shareholders of the pass-through
16    entities under Article III of the qualified taxpayer,
17    upstream company and downstream company and any companies
18    that provide goods, utilities or other services that support
19    the business operations of the qualified taxpayer, upstream
20    company and downstream company.
21        (6)     The amount of taxes paid under Article IV by the
22    qualified taxpayer, upstream company and downstream company
23    and any companies that provide goods, utilities or other
24    services that support the business operations of the
25    qualified taxpayer, upstream company and downstream company.
26        (7)     The amount of taxes paid under Article XI by the
27    qualified taxpayer, upstream company and downstream company
28    and any companies that provide goods, utilities or other
29    services that support the business operations of the
30    qualified taxpayer, upstream company and downstream company.

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

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

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 1      "Commercial operation date."     The date on which commercial
 2   operation of a reliable energy generation facility or reliable
 3   energy storage facility commences.
 4      "Commission."   The Pennsylvania Public Utility Commission or
 5   a successor agency.
 6      "Company."   A corporation, partnership, limited liability
 7   company, limited liability partnership, business trust,
 8   unincorporated joint venture or other business entity doing
 9   business within this Commonwealth.
10      "Department."   The Department of Revenue of the Commonwealth.
11      "Electric distribution company."      As defined in 66 Pa.C.S. §
12   2803 (relating to definitions).
13      "Full-time equivalent job."     A unit of measurement that
14   represents the number of full-time hours a company's employees
15   work determined as the quotient obtained by dividing the total
16   number of hours for which employees were compensated for
17   employment over the preceding 12-month period by 2,080.
18      "Maximum facility output."     The maximum net electrical power
19   output in megawatts, after supply of any parasitic or host
20   facility loads, that a reliable energy project facility or
21   reliable energy storage facility is expected to produce or
22   store. For an expansion or modification of an existing facility,
23   only the incremental clean energy output that results from the
24   expansion or modification shall be considered. For purposes of
25   this definition, incremental clean energy output may be
26   calculated on the basis of an expected increase in the actual
27   maximum facility output of clean energy resulting from the
28   expansion or modification, including as reflected in modified or
29   amended facility operating licenses from the Federal Energy
30   Regulatory Commission or the Nuclear Regulatory Commission, or

20250SB0500PN1036                    - 13 -
 1   related reports prepared by either commission as part of the
 2   licensing process. The term does not include nominal electrical
 3   power output. To calculate maximum facility output, a new
 4   electric generating facility directly connected to a new
 5   reliable energy storage facility may elect to subtract the
 6   maximum facility output of the reliable energy storage facility
 7   from the maximum net electrical power output, after supply of
 8   any parasitic or host facility loads, that the facility is
 9   expected to produce or store.
10      "Pass-through entity."    Any of the following:
11          (1)     A partnership as defined in section 301(n.0).
12          (2)     A Pennsylvania S corporation as defined in section
13      301(n.1).
14          (3)     An unincorporated entity subject to section 307.21.
15      "Permanent job."    A full-time equivalent job to support the
16   ongoing commercial operation of a reliable energy project
17   facility.
18      "Project index price."    The average of the day-ahead
19   locational marginal prices at the PJM pricing node nearest to
20   the reliable energy project facility for each hour of the three
21   years prior to the commercial operation date.
22      "Qualified reliable energy tax credit."    A tax credit granted
23   under this subarticle.
24      "Qualified reliable energy tax credit rate."      One hundred
25   percent, unless the project index price is greater than $70 per
26   megawatt-hour, adjusted for inflation in the Consumer Price
27   Index after the effective date of this definition, in which case
28   the qualified reliable energy tax credit rate shall be reduced
29   by 1.5% for each $1 per megawatt-hour that the project index
30   price is greater than $70 per megawatt-hour adjusted for

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 1   inflation, to a minimum of 10%.
 2      "Qualified reliable energy taxpayer."     The following apply:
 3          (1)     A company that:
 4                (i)    has made a capital investment to construct a
 5          reliable energy project facility;
 6                (ii)    owns and operates a reliable energy project
 7          facility; and
 8                (iii)    otherwise satisfies the requirements of this
 9          subarticle.
10          (2)     The term includes all affiliates of the company.
11      "Qualified tax liability."      The liability of the qualified
12   reliable energy taxpayer and affiliates for taxes imposed under
13   Articles III, IV, VII, VIII, IX, XI and XV. The term does not
14   include tax withheld under section 316.1.
15      "Reliable energy generation facility."     A new electric
16   generating facility or an expansion or modification of an
17   electric generating facility located in this Commonwealth that
18   meets the following:
19          (1)     Is owned by a qualified reliable energy taxpayer.
20          (2)     Required a capital investment of at least
21      $25,000,000 to place into commercial operation.
22          (3)     Required at least 10,000 work hours to place into
23      commercial operation or is a surplus interconnection
24      facility.
25          (4)     For a new electric generating facility, has a
26      maximum facility output of at least 25 megawatts, or for an
27      expansion or modification of an electric generating facility,
28      an additional maximum facility output of at least 25
29      megawatts.
30          (5)     Is either:

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 1              (i)    projected to generate an amount of clean energy
 2        in each full average operating year that is greater than
 3        the product of 60% of its maximum facility output,
 4        multiplied by 8,760 hours; or
 5              (ii)    a surplus interconnection facility.
 6        (6)   Delivers the electricity it generates to a
 7    distribution system of an electric distribution company or a
 8    transmission system operated by a regional transmission
 9    organization.
10        (7)   If the electric generating facility is being
11    restarted, no substantial step towards restarting occurred
12    prior to the effective date of this section.
13    "Reliable energy storage facility."
14        (1)   A facility located in this Commonwealth employing
15    technology, including any electrochemical, thermal or
16    electromechanical technology, or any technology defined as
17    "energy storage technology" in 26 U.S.C. § 48E (relating to
18    clean electricity investment credit) or 26 CFR 1.48E-2(g)(6)
19    (relating to qualified investments in qualified facilities
20    and EST for purposes of section 48E) as of the effective date
21    of this section, that is capable of absorbing and storing
22    energy for use at a later time that:
23              (i)    Is owned by a qualified reliable energy
24        taxpayer.
25              (ii)    Required a capital investment of at least
26        $50,000,000 to place into commercial operation.
27              (iii)    Required at least 10,000 work hours to place
28        into commercial operation.
29              (iv)    Has a maximum facility output of at least 10
30        megawatts.

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 1                (v)    For a reliable energy storage project facility
 2          that applied for interconnection with PJM
 3          Interconnection, LLC after the effective date of this
 4          subsection, the system has a technical capacity to
 5          deliver its maximum facility output in a minimum duration
 6          of no less than four hours, for a reliable energy storage
 7          project that applied for interconnection with PJM
 8          Interconnection, LLC prior to the effective date of this
 9          subsection but has not yet received an interconnection
10          agreement as of that date, the system is projected to
11          possess a rated technical capacity to deliver its maximum
12          facility output in a minimum duration of no less than one
13          hour.
14                (vi)    Delivers the electricity it discharges to a
15          distribution system of an electric distribution company
16          or a transmission system operated by a regional
17          transmission organization.
18          (2)   The term does not include a new pumped storage
19      hydropower facility which uses a change in elevation as a
20      means of hydroelectric energy storage and has been granted a
21      preliminary permit by the Federal Energy Regulatory
22      Commission prior to the effective date of this section.
23      "Restart."      The process of reactivating a reliable energy
24   generation facility that has not generated significant amounts
25   of electricity for a period of at least 365 days.
26      "Substantial step."     The term includes submitting a letter
27   notifying the Nuclear Regulatory Commission of the intent to
28   restore operations or submitting a detailed regulatory path to
29   reauthorize power operations.
30      "Surplus interconnection facility."      A new electric

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 1   generating facility that generates clean energy, shares
 2   interconnection infrastructure and a single point of
 3   interconnection with an existing electric generating facility,
 4   and exclusively uses the surplus portion of the existing
 5   generating facility's interconnection service established in a
 6   large generator interconnection agreement. The surplus portion
 7   shall be determined such that, if the surplus interconnection
 8   service were utilized, the total amount of interconnection
 9   service at the point of interconnection would remain the same.
10      "Work hour."     One hour of compensation during the
11   construction or the restart of a reliable energy generation
12   facility or reliable energy storage facility.
13   Section 1712.1-L.     Amount, claiming and audit of qualified
14                  reliable energy tax credit.
15      (a)   Amount of qualified reliable energy tax credits.--
16            (1)   Qualified reliable energy tax credits shall be made
17      available in accordance with this subarticle.
18            (2)   A qualified reliable energy taxpayer shall receive
19      qualified reliable energy tax credits equal to the product of
20      the qualified reliable energy tax credit rate multiplied by
21      $300,000 per new or additional megawatt of maximum facility
22      output, up to a total maximum of $100,000,000 for each
23      project, which may be carried over as described in section
24      1713-L(c), but may not be re-awarded in multiple years.
25            (3)   Applications for qualified reliable energy tax
26      credits shall continue to be made available by the department
27      unabated annually from the period beginning January 1, 2026,
28      and ending December 31, 2036. A reliable energy generation
29      facility or reliable energy storage facility that has
30      commenced construction prior to December 31, 2036, shall be

20250SB0500PN1036                     - 18 -
 1    eligible for qualified reliable energy tax credits.
 2    (b)    Application.--
 3           (1)   An applicant for a qualified reliable energy tax
 4    credit shall complete a form as prescribed by the department
 5    that shall include:
 6                 (i)    A description of the reliable energy facility or
 7           reliable energy storage facility.
 8                 (ii)    Verification that the taxpayer has made or will
 9           make a capital investment greater than $25,000,000 prior
10           to the placing in service of the reliable energy
11           generation facility or reliable energy storage facility.
12                 (iii)   An estimate of the total capital investment
13           that will be made.
14                 (iv)    The expected commercial operation date of the
15           reliable energy project facility or reliable energy
16           storage facility.
17           (1.1)   If the applicant deems the form under paragraph
18    (1) to contain confidential proprietary information, the form
19    may be submitted on a confidential basis, shall be treated
20    and maintained by the department as confidential proprietary
21    information and is exempt from access under the act of
22    February 14, 2008 (P.L.6, No.3), known as the Right-to-Know
23    Law.
24           (2)   The department shall review applications submitted
25    and issue a written approval or disapproval, stating the
26    reasons for the department's decision, within 60 days of the
27    application's submission. The department's decision on the
28    application may be appealed in the same manner as an
29    assessment issued under section 407.1.
30           (3)   Upon approval of an application, the department

20250SB0500PN1036                      - 19 -
 1      shall issue a certificate confirming that the applicant is
 2      eligible for a qualified reliable energy tax credit,
 3      conditioned on completion of a reliable energy generation
 4      facility or reliable energy storage facility that becomes
 5      commercially operational and satisfies the requirements of
 6      this subarticle. The qualified reliable energy taxpayer shall
 7      retain tax credit eligibility, as determined under this
 8      section, until the qualified reliable energy taxpayer has
 9      received the qualified reliable energy tax credit.
10      (c)   Claiming qualified reliable energy tax credits.--
11            (1)   A qualified reliable energy taxpayer shall complete
12      a form as prescribed by the department verifying that the
13      taxpayer has met the requirements of a qualified reliable
14      energy taxpayer and may claim qualified reliable energy tax
15      credits. The qualified reliable energy taxpayer shall include
16      on the form a calculation of the applicable project index
17      price and verification that electricity produced was below
18      the clean energy emissions threshold. Acceptable forms of
19      verification with respect to the clean energy emissions
20      threshold shall include, but not be limited to, documented
21      inclusion of the type or category of facility in Table 1 of
22      Revenue Procedure 2025-14, published by the Internal Revenue
23      Service in 2025-7 Internal Revenue Bulletin 770-771 or any
24      successor table published in the Internal Revenue Bulletin.
25            (2)   The qualified reliable energy taxpayer shall attach
26      the form to the tax return on which the qualified reliable
27      energy taxpayer is claiming to offset a qualified tax
28      liability with qualified reliable energy tax credits.
29      (d)   Audit of qualified reliable energy tax credits
30   claimed.--

20250SB0500PN1036                    - 20 -
 1            (1)   The department shall have the right to audit all
 2      qualified reliable energy credits claimed.
 3            (2)   If the department denies a qualified reliable energy
 4      tax credit, the department shall issue an assessment in the
 5      same manner as issued under section 407.1. The assessment may
 6      be appealed in the same manner as an assessment issued under
 7      section 407.1.
 8      (e)   Election to be treated as a single facility.--A
 9   qualified reliable energy taxpayer who owns and operates
10   multiple co-located energy generating units may make an
11   irrevocable election at the time of application to treat the
12   units for the purposes of this subarticle:
13            (1)   as a single facility; or
14            (2)   as multiple facilities.
15   Section 1713.1-L.    Year of use and carryover.
16      (a)   Year of use.--A qualified reliable energy taxpayer shall
17   claim qualified reliable energy tax credits on the tax return
18   filed in the year immediately following the year in which the
19   reliable energy generation facility or reliable energy storage
20   facility is placed into commercial operation.
21      (b)   Use.--A qualified reliable energy taxpayer may utilize
22   up to one-third of the qualified reliable energy tax credits in
23   the taxable year in which the credits are received and up to the
24   same amount in each subsequent taxable year.
25      (c)   Carryover.--A qualified reliable energy tax credit not
26   fully utilized in the taxable year in which the tax credit was
27   received may be carried forward for not more than 10 consecutive
28   taxable years but shall not be carried back or be used to obtain
29   a tax refund.
30   Section 1714.1-L.    Sale or assignment.

20250SB0500PN1036                    - 21 -
 1      (a)   Authorization required.--
 2            (1)   To sell or assign a tax credit, a qualified taxpayer
 3      must file an application for the sale or assignment of the
 4      tax credit with the department. The application must be on a
 5      form required by the department.
 6            (2)   The department shall approve an application for the
 7      sale or assignment of a qualified reliable energy tax credit
 8      if the applicant has filed each State tax report and return
 9      required by law for each applicable taxable year.
10      (b)   Approval.--Upon approval by the department of an
11   application under subsection (a), a qualified reliable energy
12   taxpayer that holds a qualified reliable energy tax credit
13   through the end of the calendar year in which the tax credit was
14   received may sell or assign the tax credit, in whole or in part,
15   if the sale is effective by the close of the following calendar
16   year.
17   Section 1715.1-L.    Purchasers, transferees and assignees.
18      (a)   Time.--A purchaser, transferee or assignee under this
19   subarticle shall claim the qualified reliable energy tax credit
20   no later than 12 months following the end of the calendar year
21   in which the purchase, transfer or assignment is made.
22      (b)   Amount.--The amount of the qualified reliable energy tax
23   credit that a purchaser, transferee or assignee under this
24   section may use against any one qualified tax liability may not
25   exceed 100% of the qualified tax liability of the purchaser,
26   transferee or assignee for the taxable year.
27      (c)   Resale and assignment.--
28            (1)   A purchaser under this section may not sell,
29      transfer or assign the purchased qualified reliable energy
30      tax credit.

20250SB0500PN1036                    - 22 -
 1            (2)   An assignee or transferee under this section may not
 2      sell, transfer or assign the assigned or transferred
 3      qualified reliable energy tax credit.
 4      (d)   Notice.--The purchaser, transferee or assignee under
 5   this section shall notify the department of the seller,
 6   transferor or assignor of the qualified reliable energy tax
 7   credit in compliance with procedures specified by the
 8   department.
 9   Section 1716.1-L.    Pass-through entity.
10      (a)   Election.--If a pass-through entity has an unused
11   qualified reliable energy tax credit, the pass-through entity
12   may elect, in writing, according to procedures established by
13   the department, to transfer all or a portion of the tax credit
14   to shareholders, members or partners in proportion to the share
15   of the entity's distributive income to which the shareholders,
16   members or partners are entitled.
17      (b)   Limitation.--The same unused qualified reliable energy
18   tax credit under subsection (a) may not be claimed by both:
19            (1)   the pass-through entity; and
20            (2)   a shareholder, member or partner of the pass-through
21      entity.
22      (c)   Amount.--The amount of the qualified reliable energy tax
23   credit that a transferee under subsection (a) may use against
24   any one qualified tax liability may not exceed 100% of the
25   qualified tax liabilities for the taxable year.
26      (d)   Time.--A transferee under subsection (a) must claim the
27   qualified reliable energy tax credit not later than 12 months
28   following the calendar year in which the transfer is made.
29      (e)   Sale and assignment.--A transferee under subsection (a)
30   may sell or assign the qualified reliable energy tax credit.

20250SB0500PN1036                    - 23 -
 1   Section 1717.1-L.    Guidelines and regulations.
 2      The department and the Department of Community and Economic
 3   Development shall jointly develop written guidelines for the
 4   implementation of this subarticle. The guidelines shall be in
 5   effect until the department promulgates regulations for the
 6   implementation of this subarticle.
 7   Section 1718.1-L.    Reports to General Assembly.
 8      (a)   Annual report.--No later than the calendar year after
 9   which qualified reliable energy tax credits are first awarded
10   under this subarticle, and each October 1 thereafter up to
11   October 1, 2035, the department shall submit a report on the
12   qualified reliable energy tax credits provided for under this
13   subarticle to the chairperson and minority chairperson of the
14   Appropriations Committee of the Senate, the chairperson and
15   minority chairperson of the Finance Committee of the Senate, the
16   chairperson and minority chairperson of the Appropriations
17   Committee of the House of Representatives and the chairperson
18   and minority chairperson of the Finance Committee of the House
19   of Representatives. The report shall include the names of the
20   qualified reliable energy taxpayers utilizing qualified reliable
21   energy tax credits as of the date of the report and the amount
22   of tax credits approved for, utilized by or sold, transferred or
23   assigned by all qualified reliable energy taxpayers.
24      (b)   Five-year report.--On May 1, 2030, and May 1, 2035, the
25   department and the commission shall jointly submit to the
26   Secretary of the Senate and the Chief Clerk of the House of
27   Representatives a report on the effectiveness of this
28   subarticle. The report shall include, to the extent possible,
29   the following information for the preceding five calendar years:
30            (1)   The aggregate amount of qualified reliable energy

20250SB0500PN1036                    - 24 -
 1      tax credits granted to all qualified reliable energy
 2      taxpayers up to the date of the report.
 3            (2)   The total number of work hours and permanent jobs
 4      created by the qualified reliable energy taxpayers up to the
 5      date of the report.
 6            (3)   The total number of megawatt-hours produced by each
 7      reliable energy project facility up to the date of the
 8      report.
 9            (4)   The total amount of capital investment made by each
10      qualified reliable energy taxpayer up to the date of the
11      report.
12            (5)   Recommendations for changes to this subarticle to
13      promote increased use of qualified reliable energy tax
14      credits.
15            (6)   Any other information pertaining to the economic
16      impact of this subarticle on this Commonwealth.
17      (c)   Publication.--The reports required by this section shall
18   be a public record as defined under section 102 of the act of
19   February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law,
20   and shall be posted electronically on the department's publicly
21   accessible Internet website. The reports required under this
22   section may not contain confidential proprietary information as
23   defined in section 102 of the Right-to-Know Law.
24      Section 3.     Subarticle C of Article XVII-L of the act is
25   repealed:
26                               [SUBARTICLE C
27                        PENNSYLVANIA MILK PROCESSING
28   Section 1731-L.    Definitions.
29      The following words and phrases when used in this subarticle
30   shall have the meanings given to them in this section unless the

20250SB0500PN1036                      - 25 -
 1   context clearly indicates otherwise:
 2      "Gallon."    A United States liquid gallon equal to a volume of
 3   231 cubic inches and equal to 3.785411784 liters or 0.13368
 4   cubic feet, where volumetric measurements made at ambient
 5   flowing conditions are typically adjusted for composition and to
 6   standard conditions using established industry standard
 7   practices.
 8      "Milk."   The lacteal secretion, practically free from
 9   colostrum, obtained by the complete milking of one or more
10   healthy cows.
11      "Project facility."    A facility located in this Commonwealth
12   which is owned and operated by a qualified taxpayer and which
13   utilizes milk purchased from sources within this Commonwealth
14   and processed by a qualified taxpayer at the project facility.
15      "Qualified taxpayer."    A company that satisfies all of the
16   following:
17          (1)     Purchases and processes milk produced in this
18      Commonwealth at a project facility in this Commonwealth that
19      has been placed in service on or after the effective date of
20      this section.
21          (2)     Has made a capital investment of at least
22      $500,000,000 in order to construct the project facility and
23      place the project facility into service in this Commonwealth.
24          (3)     Has created a minimum aggregate total of 1,200 new
25      jobs and permanent jobs.
26          (4)     Has made good faith efforts to recruit and employ,
27      and to encourage any contractors or subcontractors to recruit
28      and employ, workers from the local labor market for
29      employment during the construction of the project facility.
30          (5)     Has demonstrated that the new jobs created at the

20250SB0500PN1036                    - 26 -
 1      project facility or for work covered by Subarticle F are paid
 2      at least the prevailing minimum wage and benefit rates for
 3      each craft or classification as determined by the Department
 4      of Labor and Industry.
 5            (6)   The construction work to place a project facility
 6      into service shall be performed subject to the act of March
 7      3, 1978 (P.L.6, No.3), known as the Steel Products
 8      Procurement Act.
 9   Section 1732-L.    Eligibility.
10      In order to be eligible to receive a tax credit, a company
11   shall demonstrate the following:
12            (1)   The company meets the requirements of a qualified
13      taxpayer.
14            (2)   Confirmation that the company has filed all required
15      State tax reports and returns for all applicable taxable
16      years and paid any balance of State tax due as determined by
17      assessment or determination by the department and not under
18      timely appeal.
19   Section 1733-L.    Application and approval of tax credit.
20      (a)   Rate.--The tax credit shall be equal to $0.05 per gallon
21   of milk purchased and produced from sources exclusively within
22   this Commonwealth and processed at the project facility by a
23   qualified taxpayer.
24      (b)   Application.--
25            (1)   A qualified taxpayer may apply to the department for
26      a tax credit under this section.
27            (2)   The application must be submitted to the department
28      by March 1 for the tax credit claimed for milk purchased and
29      processed by the qualified taxpayer at the project facility
30      during the prior calendar year.

20250SB0500PN1036                      - 27 -
 1          (3)   The application must be on the form required by the
 2    department which shall include the following:
 3                (i)    information required by the department to
 4          document the amount of milk purchased and processed at
 5          the project facility;
 6                (ii)    information required by the department to
 7          verify that the applicant is a qualified taxpayer; and
 8                (iii)    any other information as the department deems
 9          appropriate.
10    (c)   Review and approval.--
11          (1)   The department shall review the applications and
12    shall issue an approval or disapproval by May 1.
13          (2)   Upon approval, the department shall issue a
14    certificate stating the amount of tax credit granted for milk
15    purchased and processed at the project facility in the prior
16    calendar year.
17    (d)   Availability of tax credits.--
18          (1)   Each fiscal year, $15,000,000 in tax credits shall
19    be made available to the department in accordance with this
20    subarticle.
21          (2)   The department shall issue up to $15,000,000 in tax
22    credits in a fiscal year to the qualified taxpayer which
23    first meets the qualifications to receive a tax credit under
24    this subarticle.
25          (3)   An amount under paragraph (1) which remains
26    unallocated under paragraph (2) shall be issued to the
27    qualified taxpayer which next meets the qualifications to
28    receive a tax credit under this subarticle.
29          (4)   The total aggregate amount of tax credits awarded to
30    a qualified taxpayer under this subarticle may not exceed 25%

20250SB0500PN1036                     - 28 -
 1      of the capital investment made to construct a project
 2      facility and place the project facility into service in this
 3      Commonwealth.
 4   Section 1734-L.    Use of tax credits.
 5      (a)   Initial use.--Prior to sale or assignment of a tax
 6   credit under section 1736-L, a qualified taxpayer must first use
 7   a tax credit against the qualified tax liability incurred in the
 8   taxable year for which the tax credit was approved.
 9      (b)   Eligibility.--The tax credit may be applied against up
10   to 20% of a qualified taxpayer's qualified tax liabilities
11   incurred in the taxable year for which the tax credit was
12   approved.
13      (c)   Limit.--A qualified taxpayer that has been granted a tax
14   credit under this subarticle shall be ineligible for any other
15   tax credit provided under this act or a tax benefit as defined
16   in section 1701-A.1.
17   Section 1735-L.    Carryover, carryback and refund.
18      A tax credit cannot be carried back, carried forward or be
19   used to obtain a refund.
20   Section 1736-L.    Sale or assignment.
21      (a)   Authorization.--If the qualified taxpayer holds a tax
22   credit through the end of the calendar year in which the tax
23   credit was granted, the qualified taxpayer may sell or assign a
24   tax credit, in whole or in part, provided the sale is effective
25   by the close of the following calendar year.
26      (b)   Application.--
27            (1)   To sell or assign a tax credit, a qualified taxpayer
28      must file an application for the sale or assignment of the
29      tax credit with the department. The application must be on a
30      form required by the department.

20250SB0500PN1036                    - 29 -
 1            (2)    To approve an application, the department must
 2      receive:
 3                   (i)    a finding from the department that the applicant
 4            has:
 5                          (A)   filed all required State tax reports and
 6                   returns for all applicable taxable years; and
 7                          (B)   paid any balance of State tax due as
 8                   determined by assessment or determination by the
 9                   department and not under timely appeal; and
10                   (ii)    for a sale or assignment to a company that is
11            not an upstream company or downstream company, a
12            certification from the qualified taxpayer that the
13            qualified taxpayer has offered to sell or assign the tax
14            credit:
15                          (A)   exclusively to a downstream company for a
16                   period of 30 days following approval of the tax
17                   credit under section 1733-L(c); and
18                          (B)   to an upstream company or downstream company
19                   for a period of 30 days following expiration of the
20                   period under clause (A).
21      (c)   Approval.--Upon approval by the department, a qualified
22   taxpayer may sell or assign, in whole or in part, a tax credit.
23   Section 1737-L.         Purchasers and assignees.
24      (a)   Time.--The purchaser or assignee under section 1736-L
25   must claim the tax credit in the calendar year in which the
26   purchase or assignment is made.
27      (b)   Amount.--The amount of the tax credit that a purchaser
28   or assignee under section 1736-L may use against any one
29   qualified tax liability may not exceed 50% of any of the
30   qualified tax liabilities of the purchaser or assignee for the

20250SB0500PN1036                         - 30 -
 1   taxable year.
 2      (c)   Resale and assignment.--
 3            (1)   A purchaser under section 1736-L may not sell or
 4      assign the purchased tax credit.
 5            (2)   An assignee under section 1736-L may not sell or
 6      assign the assigned tax credit.
 7      (d)   Notice.--The purchaser or assignee under section 1736-L
 8   shall notify the department of the seller or assignor of the tax
 9   credit in compliance with procedures specified by the
10   department.
11   Section 1738-L.    Pass-through entity.
12      (a)   Election.--If a pass-through entity has an unused tax
13   credit, the pass-through entity may elect, in writing, according
14   to procedures established by the department, to transfer all or
15   a portion of the tax credit to shareholders, members or partners
16   in proportion to the share of the entity's distributive income
17   to which the shareholders, members or partners are entitled.
18      (b)   Limitation.--The same unused tax credit under subsection
19   (a) may not be claimed by:
20            (1)   the pass-through entity; and
21            (2)   a shareholder, member or partner of the pass-through
22      entity.
23      (c)   Amount.--The amount of the tax credit that a transferee
24   under subsection (a) may use against any one qualified tax
25   liability may not exceed 20% of any qualified tax liabilities
26   for the taxable year.
27      (d)   Time.--A transferee under subsection (a) must claim the
28   tax credit in the calendar year in which the transfer is made.
29      (e)   Sale and assignment.--A transferee under subsection (a)
30   may not sell or assign the tax credit.

20250SB0500PN1036                    - 31 -
 1   Section 1739-L.        (Reserved).
 2   Section 1740-L.        Guidelines and regulations.
 3      The department shall develop written guidelines for the
 4   implementation of this subarticle. The guidelines shall be in
 5   effect until the department promulgates regulations for the
 6   implementation of the provisions of this subarticle.
 7   Section 1741-L.        Report to General Assembly.
 8      (a)   Report.--
 9            (1)   No later than the year after which tax credits are
10      first awarded under this subarticle, and each October 1
11      thereafter, the department shall submit a report to the
12      General Assembly summarizing the effectiveness of the tax
13      credit. The report shall include the names of all qualified
14      taxpayers utilizing the tax credit as of the date of the
15      report and the amount of tax credits approved for, utilized
16      by or sold or assigned by each qualified taxpayer. The report
17      shall be submitted to the following:
18                  (i)    The chair and minority chair of the Agriculture
19            and Rural Affairs Committee of the Senate.
20                  (ii)    The chair and minority chair of the Agriculture
21            and Rural Affairs Committee of the House of
22            Representatives.
23                  (iii)    The chair and minority chair of the Finance
24            Committee of the Senate.
25                  (iv)    The chair and minority chair of the Finance
26            Committee of the House of Representatives.
27            (2)   In addition to the information required under
28      paragraph (1), the report shall include the following
29      information in a manner that is separated by geographic
30      location within this Commonwealth:

20250SB0500PN1036                         - 32 -
 1                (i)    The amount of tax credits claimed by qualified
 2            taxpayers during the fiscal year.
 3                (ii)    The total number of new jobs and permanent jobs
 4            created by qualified taxpayers during the fiscal year,
 5            including the duration of the jobs.
 6      (b)   Public information.--Notwithstanding any law providing
 7   for the confidentiality of tax records, the information in the
 8   report under subsection (a) shall be public information, and all
 9   report information shall be posted on the department's publicly
10   accessible Internet website.
11   Section 1742-L.     Applicability.
12      (a)   Duration.--The tax credit under this subarticle shall
13   apply to the purchase and processing of milk produced in this
14   Commonwealth for a period of eight years from the date the first
15   project facility is placed into service.
16      (b)   Limitation.--The total aggregate amount of tax credits
17   awarded by the department under this subarticle may not exceed
18   $120,000,000.]
19      Section 4. 

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