PRINTER'S NO. 3274
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2402
Session of
2024
INTRODUCED BY MATZIE, MARSHALL, PISCIOTTANO, McNEILL, HARKINS,
ROZZI, HILL-EVANS, SANCHEZ, JAMES AND MALAGARI, JUNE 10, 2024
REFERRED TO COMMITTEE ON CONSUMER PROTECTION, TECHNOLOGY AND
UTILITIES, JUNE 10, 2024
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in Pennsylvania Economic Development for a
Growing Economy (PA EDGE) tax credits, further providing for
definitions and for application and approval of tax credit,
providing for sustainable aviation fuel and further providing
for definitions.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "capital investment" in section
1702-L of the act of March 4, 1971 (P.L.6, No.2), known as the
Tax Reform Code of 1971, is amended to read:
Section 1702-L. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Capital investment." The amount of money or assets invested
by a qualified taxpayer in constructing and placing into service
one of the following in this Commonwealth:
(1) A project facility as defined in section 1711-L.
(2) A project facility as defined in section 1731-L.
(3) A project facility as defined in section 1751-L.
(4) A project facility as defined in section 1771-L.
(5) A project facility as defined in section 1789.11-L.
* * *
Section 2. Section 1753-L(d) of the act is amended by adding
a paragraph to read:
Section 1753-L. Application and approval of tax credit.
* * *
(d) Availability of tax credits.--
* * *
(3.1) Up to $30,000,000 of an amount under paragraph (1)
which remains unallocated under paragraph (2) or (3) shall be
made available to the department for the purposes specified
under Subarticle E.1.
* * *
Section 3. Article XVII-L of the act is amended by adding a
subarticle to read:
SUBARTICLE E.1
SUSTAINABLE AVIATION FUEL
Section 1789.11-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Project facility." A facility located in this Commonwealth
which is owned by a qualified taxpayer which manufactures
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sustainable aviation fuel and which required a capital
investment of at least $400,000,000 to construct and place into
service.
"Qualified taxpayer." An entity that satisfies all of the
following:
(1) Owns and operates a project facility located within
this Commonwealth.
(2) Has entered into a commitment letter under section
1789.12-L(b) to produce sustainable aviation fuel at a
project facility in this Commonwealth which has been placed
in service on or after the effective date of this section.
(3) Has made a capital investment of at least
$250,000,000 in order to construct the project facility and
place the project facility into service in this Commonwealth.
(4) Has created a minimum aggregate total of 400 new
jobs and permanent jobs.
(5) Has made good faith efforts to recruit and employ,
and to encourage any contractors or subcontractors to recruit
and employ, workers from the local labor market for
employment during the construction of the project facility.
(6) Has demonstrated that the new jobs created at the
project facility or for work covered by Subarticle F are paid
at least the prevailing minimum wage and benefit rates for
each craft or classification as determined by the Department
of Labor and Industry.
(7) The construction work to place a project facility
into service shall be performed subject to the act of March
3, 1978 (P.L.6, No.3), known as the Steel Products
Procurement Act.
"Sustainable aviation fuel." Liquid fuel, the portion of
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which is not kerosene, which is sold for use in an aircraft and
which:
(1) meets the requirements of ASTM International
Standard D7566 or the Fischer Drops provisions of ASTM
International Standard D1655, Annex A1; and
(2) is not derived from palm fatty acid distillates or
petroleum.
Section 1789.12-L. Eligibility.
(a) Demonstration.--In order to be eligible to receive a tax
credit, an entity shall demonstrate the following:
(1) The entity meets the requirements of a qualified
taxpayer.
(2) Confirmation that the entity has filed all required
State tax reports and returns for all applicable taxable
years and paid any balance of State tax due as determined by
assessment or determination by the department and not under
timely appeal.
(b) Commitment letter.--An entity that applies for and
receives a tax credit under this subarticle shall enter into a
commitment letter with the Department of Community and Economic
Development to prescribe the date by which the project facility
will begin to produce sustainable aviation fuel at the project
facility.
Section 1789.13-L. Application and approval of tax credit.
(a) Rate.--The tax credit shall be equal to 75¢ per gallon
of sustainable aviation fuel produced at the project facility by
a qualified taxpayer.
(b) Application.--
(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
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(2) The application must be submitted to the depart ment
by March 1 for the tax credit claimed for sustainable
aviation fuel produced at the project facility during the
prior calendar year.
(3) The application must be on a form required by the
department which shall include the following:
(i) information required by the department to
document the amount of sustainable aviation fuel produced
at the project facility;
(ii) information required by the department to
verify that the applicant is a qualified taxpayer; and
(iii) any other information as the department deems
appropriate.
(c) Review and approval.--
(1) The department shall review the applications and
shall issue an approval or disapproval by May 1.
(2) Upon approval, the department shall issue a
certificate stating the amount of the tax credit granted for
sustainable aviation fuel produced at the project facility in
the prior calendar year.
(d) Availability
of
tax
credits.--
(1) Each fiscal year, up to $30,000,000 of tax credits
made available to the department under Subarticle D which
remain unallocated shall be made available to the department
in accordance with this subarticle.
(2) The department shall issue up to $30,000,000 in a
fiscal year to the qualified taxpayer which first meets the
qualifications to receive a tax credit under this subarticle.
(3) An amount under paragraph (1) which remains
unallocated under paragraph (2) shall be issued to the
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qualified taxpayer which next meets the qualifications to
receive a tax credit under this subarticle.
(4) The total aggregate amount of tax credits awarded to
a qualified taxpayer under this subarticle may not exceed 50%
of the capital investment made to construct a project
facility and place the project facility into service in this
Commonwealth.
Section 1789.14-L. Use of tax credits.
(a) Initial use.--Prior to sale or assignment of a tax
credit under section 1789.16-L, a qualified taxpayer must first
use a tax credit against the qualified tax liability incurred in
the taxable year for which the tax credit was approved.
(b) Eligibility.--The tax credit may be applied against up
to 20% of the qualified taxpayer's qualified tax liabilities
incurred in the taxable year for which the tax credit was
approved.
Section 1789.15-L. Carryover, carryback and refund.
A tax credit may not be carried back, carried forward or be
used to obtain a refund.
Section 1789.16-L. Sale or assignment.
(a) Authorization.--If the qualified taxpayer holds a tax
credit through the end of the calendar year in which
the tax
credit was granted, the qualified taxpayer may
sell or assign a
tax credit, in whole or in part,
provided the sale is effective
by the close of the
following calendar year.
(b) Application.--
(1) To sell or assign a tax credit, a qualified taxpayer
must submit an application for the sale or assignment of the
tax credit with the department. The application must be on a
form required by the department.
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(2) To approve an application, the department must
receive:
(i) a finding from the department that the applicant
has:
(A) filed all required State tax reports and
returns for all applicable taxable years; and
(B) paid any balance of State tax due as
determined by assessment or determination by the
department and not under timely appeal; and
(ii) for a sale or assignment to a company that is
not an upstream company or downstream company, a
certification from the qualified taxpayer that the
qualified taxpayer has offered to sell or assign the tax
credit:
(A) exclusively to a downstream company for a
period of 30 days following approval of the tax
credit under section 1789.13-L(c); and
(B) to an upstream company or downstream company
for a period of 30 days following expiration of the
period under clause (A).
(c) Approval.--Upon approval by the department, a qualified
taxpayer may sell or assign, in whole or in part, a tax credit.
Section 1789.17-L.
Purchasers and assignees.
(a) Time.--The purchaser or assignee under section 1789.16-L
must claim the tax credit in the calendar year in which the
purchase or assignment is made.
(b) Amount.--The amount of the tax credit that a purchaser
or assignee under section 1789.16-L may use against any one
qualified tax liability may not exceed 50% of any of the
qualified tax liabilities of the purchaser or assignee for the
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taxable year.
(c) Resale and assignment.--
(1) A purchaser under section 1789.16-L may not sell or
assign the purchased tax credit.
(2) An assignee under section 1789.16-L may not sell or
assign the assigned tax credit.
(d) Notice.--The purchaser or assignee under section
1789.16-L shall notify the department of the seller or assignor
of the tax credit in compliance with procedures specified by the
department.
Section 1789.18-L. Pass-through entity.
(a) Election.--If a pass-through entity has an unused tax
credit, the pass-through entity may elect, in writing, according
to procedures established by the department, to transfer all or
a portion of the tax credit to shareholders, members or partners
in proportion to the share of the entity's distributive income
to which the shareholders, members or partners are entitled.
(b) Limitation.--The same unused tax credit under subsection
(a) may not be claimed by:
(1) the
pass-through
entity;
and
(2) a shareholder, member or partner of the pass-through
entity.
(c) Amount.--The amount of the tax credit that a transferee
under subsection (a) may use against any one qualified tax
liability may not exceed 20% of any qualified tax liabilities
for the taxable year.
(d) Time.--A transferee under subsection (a) must claim the
tax credit in the calendar year in which the transfer is made.
(e) Sale and assignment.--A transferee under subsection (a)
may not sell or assign the tax credit.
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Section 1789.19-L. (Reserved).
Section 1789.20-L. Guidelines
and regulations.
The department shall develop written guidelines for the
implementation of this subarticle. The guidelines shall be in
effect until the department promulgates regulations for the
implementation
of
the
provisions
of
this
subarticle.
Section 1789.21-L. Report to General Assembly.
(a) Report.--
(1) No later than the year after which tax credits are
first awarded under this subarticle, and each October 1
thereafter, the department shall submit a report to the
General Assembly summarizing the effectiveness of the tax
credit. The report shall include the names of all qualified
taxpayers utilizing the tax credit as of the date of the
report and the amount of tax credits approved for, utilized
by or sold or assigned by each qualified taxpayer. The report
shall be submitted to all of the following:
(i) The chair and minority chair of the
Appropriations Committee of the Senate.
(ii) The chair and minority chair of the
Appropriations Committee of the House of Representatives.
(iii) The chair and minority chair of the
Environmental Resources and Energy Committee of the
Senate.
(iv) The chair and minority chair of the
Environmental Resources and Energy Committee of the House
of Representatives.
(v) The chair and minority chair of the Finance
Committee of the Senate.
(vi) The chair and minority chair of the Finance
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Committee of the House of Representatives.
(2) In addition to the information required under
paragraph (1), the report shall include the following
information in a manner separated by geographic location
within this Commonwealth:
(i) The amount of tax credits claimed by qualified
taxpayers during the fiscal year.
(ii) The total number of new jobs and permanent jobs
created by qualified taxpayers during the fiscal year,
including the duration of the jobs.
(b) Public information.--Notwithstanding any law providing
for the confidentiality of tax records, the information in the
report under subsection (a) shall be public information, and all
report information shall be posted on the department's publicly
accessible Internet website.
Section 1789.22-L. Applicability.
The tax credit under this subarticle shall apply to the
production of sustainable aviation fuel at a project facility
for the period beginning January 1, 2027, and ending December
31, 2043.
Section 4. Section 1791-L of the act is amended to read:
Section 1791-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Qualified project facility." Any of the following:
(1) A project facility as defined in section 1711-L.
(2) A project facility as defined in section 1731-L.
(3) A project facility as defined in section 1751-L.
(4) A project facility as defined in section 1771-L.
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(5) A project facility as defined in section 1789.11-L.
"Qualified tax credit recipient." Any of the following who
have been awarded a tax credit:
(1) A qualified taxpayer as defined in section 1711-L.
(2) A qualified taxpayer as defined in section 1731-L.
(3) A qualified taxpayer as defined in section 1751-L.
(4) A qualified taxpayer as defined in section 1771-L.
(5) A qualified taxpayer as defined in section 1789.11-
L.
Section 5. This act shall take effect in 60 days.
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