PRINTER'S NO. 3544
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2521
Session of
2024
INTRODUCED BY WEBSTER, GUENST, HOHENSTEIN, KINKEAD, HILL-EVANS,
SANCHEZ, D. WILLIAMS AND DALEY, JULY 30, 2024
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
JULY 30, 2024
AN ACT
Providing for duties of Environmental Quality Board, for
investigatory proceedings for clean hydrogen projects, for
regulations for clean hydrogen projects, for applications for
clean hydrogen projects and for duties of investor-owned
utilities; and establishing the Clean Hydrogen Tax Credit
Program.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Scope of act.
Section 103. Definitions.
Chapter 3. Duties of Board
Section 301. Investigatory proceedings for clean hydrogen
projects.
Section 302. Regulations for clean hydrogen projects.
Section 303. Additional requirements for clean hydrogen project
regulations.
Section 304. Federal funding eligibility and marketing
mechanisms.
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Section 305. Coordination with department.
Section 306. Applications for clean hydrogen projects.
Section 307. Consideration of applications.
Chapter 5. Duties of Investor-Owned Utilities
Section 501. Notice of applications for Federal funding.
Section 502. Annual reports.
Chapter 7. Clean Hydrogen Tax Credit Program
Section 701. Tax credit program.
Section 702. Applications for tax credit.
Section 703. Use of tax credits.
Section 704. Carryover, carryback and refund.
Section 705. Sale or assignment.
Section 706. Pass-through entity.
Section 707. Reports to General Assembly.
Section 708. Expiration.
Chapter 9. Miscellaneous Provisions
Section 901. Regulations.
Section 902. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Clean
Hydrogen Production Act.
Section 102. Scope of act.
This act relates to hydrogen production.
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
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context clearly indicates otherwise:
"Alternative energy source." Any of the following existing
and new sources for the production of electricity:
(1) Solar photovoltaic or other solar electric energy.
(2) Solar thermal energy.
(3) Wind power.
(4) Large-scale hydropower.
(5) Nuclear power.
"Board." The Environmental Quality Board of the department.
"Clean hydrogen." A form of hydrogen generated for energy
that satisfies any of the following:
(1) Hydrogen used in a project that has been determined
by the United States Department of Energy to demonstrably aid
achievement of the clean hydrogen production standard under
the Energy Policy Act of 2005 (Public Law 109-58, 11 Stat.
594) by mitigating emissions across the supply chain through
aggressive carbon capture, by measures to mitigate fugitive
methane emissions or by the use of clean electricity or other
technologies or practices approved by the United States
Department of Energy.
(2) Green hydrogen.
(3) Hydrogen that is produced through a process that
results in lifecycle greenhouse gas emissions rates that are
within the lifecycle greenhouse gas emission ranges specified
under 26 U.S.C. ยง 45V(b)(2)(C) and (D) (relating to credit
for production of clean hydrogen).
"Clean hydrogen project." A project that results in the
production of clean hydrogen by an investor-owned utility,
including a project involving a pipeline, electrolyzer,
environmental controls, monitoring equipment, a dedicated
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renewable energy source for electrolysis, the purchase of clean
hydrogen from a third party and an upgrade to a turbine at an
electric generating station if the upgrade is part of a Federal
or State application for a regional clean hydrogen hub under 42
U.S.C. ยง 16161a (relating to regional clean hydrogen hubs).
"Commission." The Pennsylvania Public Utility Commission.
"Cumulative impacts." The incremental effects of a clean
hydrogen project on the environment, including effects on air
quality, water quality, water resource availability, climate and
public health, when added to the effects from other past,
present and reasonably foreseeable future development of any
type on the relevant area, including an airshed or watershed, as
determined by the board's regulations, or on a
disproportionately impacted community.
"Department." The Department of Environmental Protection of
the Commonwealth.
"Disproportionately impacted community." Any of the
following:
(1) A community that is in a census block group, as
determined in accordance with the most recent Federal
decennial census, where the proportion of households that:
(i) are low income is more than 40%;
(ii) identify as minority is more than 40%; or
(iii) are cost-burdened is more than 40%.
(2) A community identified or approved by a State agency
as a disproportionately impacted community if any of the
following apply:
(i) The community has a history of environmental
racism perpetuated through redlining, anti-Indigenous,
anti-immigrant, anti-Hispanic or anti-Black laws.
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(ii) The community is impacted by multiple factors,
including socioeconomic stressors, disproportionate
environmental burdens, vulnerability to environmental
degradation and a lack of public participation, which may
act cumulatively to affect the health and environment and
contribute to persistent disparities.
"Green hydrogen." Hydrogen derived from an alternative
energy source that uses water as the source of the hydrogen.
"Greenhouse gas emission reduction goals." All of the
following:
(1) A reduction in emissions 50% to 52% below 2005
levels, covering all sectors and all gases, by 2030.
(2) One hundred percent carbon pollution-free
electricity by 2035.
(3) Net-zero emissions no later than 2050.
"Hard to decarbonize end use." The generation of heat of at
least 150 degrees Celsius for industrial purposes and the
addition as feedstock for industrial purposes, including the
manufacture of steel, ammonia, fertilizer or chemicals. The term
does not include the direct use of hydrogen for residential or
commercial heating.
"Investor-owned utility." A utility company owned and
operated by a private investor.
"Large-scale hydropower." The production of electric power
by harnessing the hydroelectric potential of moving water
impoundments, including pumped storage that does not meet the
requirements of low-impact hydropower.
"Lifecycle greenhouse gas emissions rate." Lifecycle
greenhouse gas emissions as defined in 26 U.S.C. ยง 45V(c)(1)(A)
and measured in accordance with applicable Internal Revenue
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Service regulations or guidelines.
"Program." The Clean Hydrogen Tax Credit Program established
under section 701.
"Project facility." A facility located in this Commonwealth
that is owned by a qualified taxpayer which is part of a
regional clean hydrogen hub designated by the United States
Department of Energy under the Energy Policy Act of 2005.
"Qualified taxpayer." A company that satisfies all of the
following:
(1) Owns and operates a project facility located within
a regional clean hydrogen hub designated by the United States
Department of Energy authorized under the Energy Policy Act
of 2005.
(2) Has entered into a commitment letter under section
1752-L(b) of the act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, to purchase clean hydrogen from
a regional clean hydrogen hub within this Commonwealth for
use in manufacturing at a project facility in this
Commonwealth that has been placed in service on or after
January 3, 2023.
(3) Has made a capital investment of at least
$500,000,000 to construct the project facility and place the
project facility into service in this Commonwealth.
(4) Has created a minimum aggregate total of 1,200 new
jobs and permanent jobs.
(5) Has made good faith efforts to recruit and employ,
and to encourage a contractor or subcontractor 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
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project facility or for work covered under Subarticle F of
Article XVII-L of the Tax Reform Code of 1971, 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 is performed in accordance with the act of March
3, 1978 (P.L.6, No.3), known as the Steel Products
Procurement Act.
"Qualified use." The use of clean hydrogen in this
Commonwealth for any of the following:
(1) A hard to decarbonize end use.
(2) The operation of a heavy-duty diesel vehicle.
(3) Aviation.
"Taxpayer." An individual, partnership, association,
society, company, corporation, estate, trust, trustee, receiver,
liquidator, fiduciary or other entity subject to or claiming
exemption from a tax administered by the Department of Revenue.
"Tier one greenhouse gas emissions rate." A qualified use of
hydrogen that results in lifecycle greenhouse gas emissions
rates that are within the range specified under 26 U.S.C. ยง
45V(b)(2)(D).
"Tier two greenhouse gas emissions rate." A qualified use of
hydrogen that results in lifecycle greenhouse gas emissions
rates that are within the range specified under 26 U.S.C. ยง
45V(b)(2)(C).
CHAPTER 3
DUTIES OF BOARD
Section 301. Investigatory proceedings for clean hydrogen
projects.
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No later than 60 days after the effective date of this
section, the board shall initiate an investigatory proceeding to
consider all of the following:
(1) The potential for a clean hydrogen project operated
by an investor-owned utility, subject to regulation by the
board, to contribute to meeting Federal greenhouse gas
emission reduction goals, including lifecycle greenhouse gas
emissions rates, with a preference for qualified uses.
(2) The impact of a clean hydrogen project on the
emission of air pollutants, other than greenhouse gases, and
human health.
(3) Potential markets for clean hydrogen in this
Commonwealth.
(4) The impact of clean hydrogen production on water
quality and quantity in this Commonwealth.
(5) The potential impact of pipeline leakage and best
practices for mitigation.
(6) The potential for the development of clean hydrogen
to help create or sustain jobs in this Commonwealth,
including utility jobs.
(7) The cost, capabilities and market availability of
clean hydrogen technology, including a pipeline investment.
(8) The appropriate roles for an investor-owned utility
in the production, sale or use of clean hydrogen, including
considering whether costs may be recovered from ratepayers.
(9) The potential impact of investor-owned utility
investments in a clean hydrogen project on ratepayers,
including on bills, rates and rate stability, and options for
avoiding potential cross-subsidization and cost-shifting
across rate classes.
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(10) Principles and requirements for tariffs for the
sale of clean hydrogen to a third party, including principles
and requirements to ensure that costs arising from the
development, production, transport and delivery of the clean
hydrogen under the tariffs are not borne by customers who do
not take service from the tariffs.
(11) The process and data necessary and available to
implement a requirement for the adoption of methods for all
of the following:
(i) The measurement of lifecycle greenhouse gas
emissions rates, including for hourly matching of
electricity used.
(ii) The tracking of the deployment of new renewable
energy resources or use of curtailed renewable energy to
meet electricity requirements for production of clean
hydrogen in the same load balancing area.
(iii) The board to determine when at least 200
megawatts of electrolyzers are operational in this
Commonwealth.
(12) The process and data necessary for an investor-
owned utility to conduct a cumulative impact analysis of a
clean hydrogen project and the process necessary to avoid
adverse cumulative impacts on disproportionately impacted
communities. For the purpose of this paragraph, the board may
consider any of the following:
(i) The time period when a cumulative impact
analysis should be conducted.
(ii) The geographical scope of a cumulative impact
analysis.
(iii) Whether the cumulative impact analysis should
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be compared to alternative projects.
(13) Requirements for an application for a clean
hydrogen project in addition to the requirements specified
under sections 302(4), 306 and 307.
(14) Data or information necessary or available to
evaluate a clean hydrogen project against alternative
projects, including how to measure, track and report
lifecycle greenhouse gas emissions rates, cumulative impacts
and the cumulative impacts and individual impacts on jobs,
local economic benefits and water use.
(15) Opportunities to encourage nonutility production of
clean hydrogen in this Commonwealth, including opportunities
for an investor-owned utility to propose a tariff for the
sale of renewable energy that would otherwise be curtailed.
(16) Any other relevant issues that the board determines
necessary to consider for the purpose of this act.
Section 302. Regulations for clean hydrogen projects.
No later than two years after the effective date of this
section, unless the board files a notice with the commission
stating that the United States Department of Energy has extended
or otherwise altered the deadline regarding funding for a
hydrogen hub project, the board shall promulgate regulations to
implement all of the following:
(1) Unless the board determines that an investor-owned
utility should not develop a clean hydrogen project for cost
recovery from ratepayers, establish requirements for the
presentation of a clean hydrogen project to the board for the
board's approval.
(2) Establish requirements for lifecycle greenhouse gas
emissions rate accounting for a clean hydrogen project.
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(3) Address the appropriate role of an investor-owned
utility in the production, sale and use of clean hydrogen,
including whether and how costs may be recovered from
ratepayers and appropriate treatment of revenues from clean
hydrogen sales.
(4) Address how an investor-owned utility may use
competitive solicitations in a clean hydrogen project and any
limitations for the use of competitive solicitations to
develop the clean hydrogen project.
(5) Establish a requirement that a planned or potential
use for the clean hydrogen in buildings or gas distribution
systems of an investor-owned utility be proposed to and
approved by the board.
(6) Address what is required in an application by an
investor-owned utility for a clean hydrogen project, subject
to sections 306 and 307, including all of the following:
(i) A comparison of a clean hydrogen project to
alternative projects, including an analysis of the costs
and benefits of the clean hydrogen project compared to
alternative projects.
(ii) A description of how the investor-owned utility
will measure and track the annual and cumulative
lifecycle greenhouse gas emissions rates and the emission
of other air pollutants in accordance with the
regulations promulgated under paragraph (2).
(iii) A description of how the investor-owned
utility will minimize the lifecycle greenhouse gas
emissions rates of the clean hydrogen project, conduct
leak detection throughout the life of the clean hydrogen
project and conduct a cumulative impact analysis of the
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clean hydrogen project.
(iv) An assessment of the annual water volume that
will be used in the clean hydrogen project, including the
source of water to be used.
(v) A description of each planned use, including
potential end uses by the investor-owned utility's
customers, of the clean hydrogen produced through the
clean hydrogen project, with a preference for qualified
uses.
(vi) A description of each planned sale of clean
hydrogen to nonutility customers, with a preference for
qualified uses.
(vii) A description of the proposed method of cost
recovery for the clean hydrogen project, including
information regarding which rate classes will cover the
costs of the clean hydrogen project.
(viii) A description of the total revenue
requirement for the clean hydrogen project.
(ix) A description of the rate and bill impacts of
the clean hydrogen project.
(x) A description of each tariff for the sale of
clean hydrogen produced by the clean hydrogen project.
(xi) A proposal for the allocation of revenues
received from the sale of clean hydrogen produced by the
clean hydrogen project to nonutility customers among
customers and the investor-owned utility, including which
party bears the risk that the amount of revenue
anticipated from the clean hydrogen project is not
ultimately received.
(xii) A cumulative impact analysis framework.
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(xiii) If the investor-owned utility plans to use a
competitive solicitation process as part of the clean
hydrogen project, a description of how the planned
competitive solicitation process will be used and in what
circumstances the process will be used.
Section 303. Additional requirements for clean hydrogen project
regulations.
(a) Requirements.--The board shall include all of the
following requirements in the regulations promulgated under
section 302:
(1) The matching of electrolyzer energy consumption with
electricity production on an hourly basis, if the technology
is available.
(2) Identifying the applicable energy source, if an
investor-owned utility is reporting the energy source as
resulting in zero emissions for clean hydrogen production,
and demonstrating that the electricity used to produce clean
hydrogen comes from renewable energy that would otherwise
have been curtailed or not delivered to load or from new zero
carbon generation that began production no more than 36
months before the start of the operations of the
electrolyzer.
(3) The deliverability of renewable energy used by the
electrolyzer into the same load balancing area as the
electrolyzer.
(b) Deadline.--The board shall promulgate the initial
regulations under section 302(2) no later than one year after
the effective date of this subsection, or no later than one year
after the development of hydrogen electrolyzers in this
Commonwealth exceeds 200 megawatts, whichever is earlier. The
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board shall transmit a notice to the Legislative Reference
Bureau for publication in the next available issue of the
Pennsylvania Bulletin of the date when the development of
hydrogen electrolyzers in this Commonwealth exceeds 200
megawatts if necessary for the purpose of this subsection.
Section 304. Federal funding eligibility and marketing
mechanisms.
(a) Federal funding.--In developing the regulations
promulgated under section 302, the board shall consider the
potential for Federal funding for a clean hydrogen project and
that a clean hydrogen project implemented by an investor-owned
utility may be necessary to secure Federal funding.
(b) Marketing mechanisms.--In developing the regulations
promulgated under section 302, the board shall consider what
information and market mechanisms are necessary and available
for hydrogen producers to comply with the regulations. If the
Internal Revenue Service issues guidelines that meets or exceeds
the requirements in the regulations promulgated under section
302, the board shall promulgate regulations that comply with the
guidelines.
Section 305. Coordination with board.
If the board files the notice described in section 302 with
the commission, the board shall coordinate with the commission
to determine an appropriate effective date for the regulations
promulgated under section 302.
Section 306. Applications for clean hydrogen projects.
(a) Applications.--The board shall allow an investor-owned
utility to submit to the board a stand-alone application for a
clean hydrogen project for which an investor-owned utility has
applied for Federal funding as part of a hydrogen hub project at
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any time before one year from the effective date of this
subsection, unless the board files a notice with the commission
stating that the United States Department of Energy has extended
or otherwise altered the deadline regarding funding for a
hydrogen hub project.
(b) Process.--The application process specified under
subsection (a) shall be consistent with the requirements under
section 302. An investor-owned utility seeking approval of a
clean hydrogen project under subsection (a) shall demonstrate
all of the following:
(1) A time-sensitive review of the investor-owned
utility's application is necessary based on the timing
requirements for obtaining necessary funding, not including
tax credits, from, or in a partnership with, a Federal or
State agency for the acquisition of necessary facilities.
(2) The funding or partnership cannot be accomplished
through a pending or future electric resource planning
process.
(c) Solicitation.--If the funding or partnership specified
under subsection (b), including an associated contract, award or
timing requirement, allows for a competitive solicitation as
part of the development of the clean hydrogen project, the board
may direct the investor-owned utility to issue a solicitation to
acquire the necessary projects or facilities for the clean
hydrogen project. The board shall review an approved competitive
solicitation process and bids received prior to the investor-
owned utility's acquisition of the necessary projects or
facilities for the clean hydrogen project. An investor-owned
utility that submitted an application under subsection (a) may
submit a bid in response to a solicitation under this
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subsection.
Section 307. Consideration of applications.
(a) Consideration.--In reviewing, approving, denying or
amending an application submitted under section 306(a), the
board shall consider, at a minimum, the following:
(1) Whether it is in the public interest for an
investor-owned utility to invest in the elements of the clean
hydrogen project specified in the application.
(2) The potential contribution of the clean hydrogen
project in meeting the greenhouse gas emission reduction
goals, including lifecycle greenhouse gas emissions rates.
(3) The impacts of the clean hydrogen project compared
to alternative projects, including all of the following:
(i) Rate and bill impacts.
(ii) The impacts on rate stability.
(iii) Any other impacts identified by the board
under this subsection.
(4) The use of competitive solicitations.
(5) If the clean hydrogen project contemplates the sale
of clean hydrogen, the potential for cross-subsidization and
cost-shifting across rate classes.
(6) The impacts of the clean hydrogen project on the
utility workforce in this Commonwealth.
(7) The impacts of the clean hydrogen project on a
community's tax base and revenues.
(8) The uses of the clean hydrogen produced by the clean
hydrogen project, with a preference for qualified uses.
(9) The public health and safety impacts of the clean
hydrogen project.
(10) The availability of Federal funding for the clean
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hydrogen project.
(b) Reviews.--The board, in collaboration with the
commission, shall review an application submitted under section
306(a) in accordance with applicable electric resource planning
requirements in 52 Pa. Code (relating to public utilities). The
board shall review, approve, deny or amend an application under
this subsection in accordance with this chapter and regulations
promulgated by the board. The board's determination of an
application shall include a plain language summary of the
board's determination.
(c) Disproportionately impacted communities.--In reviewing,
approving, denying or amending an application submitted under
section 306(a), if the clean hydrogen project is proposed to be
sited in an area that would affect a disproportionately impacted
community, the board shall weigh the applicant's cumulative
impact analysis and determine whether, on balance, the clean
hydrogen project will have a positive effect on the
disproportionately impacted community. The board shall deny an
application with a proposal that will have net negative
cumulative impacts on a disproportionately impacted community.
CHAPTER 5
DUTIES OF INVESTOR-OWNED UTILITIES
Section 501. Notice of applications for Federal funding.
Notwithstanding any other provision of law, an investor-owned
utility shall provide notice to the board of an application for
Federal funding as part of a hydrogen hub project, including all
of the following:
(1) Hydrogen hub project milestones.
(2) A description of each deadline for submission of
materials to support the application, including whether any
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additional filings will be required.
(3) To the extent known or consistent with the
requirements or limitations of the United States Department
of Energy or any related joint memorandum of understanding or
other contract entered into by the investor-owned utility and
the Commonwealth, information regarding when funding awards
will be determined.
Section 502. Annual reports.
(a) Reports.--An investor-owned utility that operates a
clean hydrogen project approved by the board under Chapter 3
shall submit an annual report to the board with all of the
following information:
(1) The lifecycle greenhouse gas emissions rates from
the clean hydrogen project.
(2) The greenhouse gas emissions from the clean hydrogen
project.
(3) Any emission of other air pollutants from the clean
hydrogen project.
(4) The water use of the clean hydrogen project.
(5) Production volumes and sales of hydrogen, including
types of customers and uses.
(6) Project development and cost updates for projects
with cost recovery from ratepayers.
(7) Net cumulative impact updates for projects located
in disproportionately impacted communities.
(b) Production facility and use.--If a clean hydrogen
project includes the production and the use or consumption of
clean hydrogen by an investor-owned utility, the investor-owned
utility shall include the lifecycle greenhouse gas emissions
rates of the clean hydrogen project separately by each
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production facility and use in each annual report under
subsection (a).
(c) Verification.--An investor-owned utility shall ensure
that each annual report under subsection (a) include information
that allows the board, in collaboration with the commission, to
make the verifications required under 52 Pa. Code ยง 1.36
(relating to verification).
CHAPTER 7
CLEAN HYDROGEN TAX CREDIT PROGRAM
Section 701. Tax credit program.
(a) Establishment.--The Clean Hydrogen Tax Credit Program is
established within the department for the purposes specified
under this chapter. Subject to the limitations specified under
subsection (b), for taxable years beginning on or after January
1, 2024, and ending December 31, 2032, a qualified taxpayer
shall be allowed a credit against the personal income tax
imposed under Article III of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, in an amount equal
to any of the following:
(1) One dollar per kilogram of clean hydrogen used for a
qualified use that results in a tier one greenhouse gas
emissions rate in the taxable year.
(2) Thirty-three cents per kilogram of clean hydrogen
used for a qualified use that results in a tier two
greenhouse gas emissions rate in the income tax year.
(b) Conditions.--In order to claim a tax credit under the
program, a qualified taxpayer shall submit an application to the
department in accordance with section 702. If the department
determines that an applicant is not entitled to a tax credit
certificate for the tax credit, the department shall notify the
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applicant of the department's disapproval in writing.
(c) Limitations.--
(1) For taxable years beginning on or after January 1,
2024, and ending December 31, 2025, and not before the board
promulgates the regulations under section 302(a), the
department may not approve a tax credit for a qualified
taxpayer indicating eligibility for a tax credit for an
amount exceeding $1,000,000 in a taxable year.
(2) For taxable years beginning on and after January 1,
2026, and ending December 31, 2028, the department may not
approve a tax credit for a qualified taxpayer indicating
eligibility for a tax credit for an amount exceeding $500,000
in a taxable year.
(3) For taxable years beginning on and after January 1,
2029, and ending December 31, 2032, the department may not
approve a tax credit for a qualified taxpayer indicating
eligibility for a tax credit for an amount exceeding $250,000
in a taxable year.
(d) Availability of tax credits.--Each fiscal year,
$10,000,000 in tax credits under the program shall be made
available to the department in accordance with this chapter.
(e) Allocation.--Tax credits under the program shall be
allocated by the department on a first-come, first-served basis.
Section 702. Applications for tax credit.
(a) Applications.--
(1) A qualified taxpayer may apply to the department for
a tax credit under the program in accordance with this
section.
(2) A qualified taxpayer must submit an application to
the department by March 1 for a tax credit under the program
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claimed for the clean hydrogen used by the qualified taxpayer
at a project facility during the prior calendar year.
(3) An application shall be on a form required by the
department and include all of the following:
(i) Information required by the department to
document the amount of clean hydrogen used.
(ii) Information required by the department to allow
the department to make a determination that the use is a
qualified use.
(iii) Verification that the hydrogen passed to the
user at the point of sale is clean hydrogen.
(iv) Information required by the department to
verify that the applicant is a qualified taxpayer.
(4) Any other information as the department deems
appropriate.
(b) Database.--The department shall maintain a database of
any information deemed necessary by the department to evaluate
the effectiveness of a tax credit under the program and shall
provide the information to the Auditor General.
(c) Processing.--The department shall, in a sufficiently
timely manner to allow the Department of Revenue to process
returns claiming a tax credit under the program, provide the
Department of Revenue with an electronic report for the
preceding tax year listing each qualified taxpayer for which the
department approved the tax credit, including all of the
following information:
(1) Each qualified taxpayer's name.
(2) The amount of each tax credit specified in each tax
credit certificate provided to each qualified taxpayer.
(3) Each qualified taxpayer's Social Security number.
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Section 703. Use of tax credits.
(a) Other tax credits.--Prior to claiming a new tax credit
under the program, a qualified taxpayer shall first use a prior
tax credit granted under the program against the qualified
personal income tax liability incurred in the taxable year for
which the tax credit was approved.
(b) Applicability.--A qualified taxpayer may apply a tax
credit under the program against up to 20% of the qualified
taxpayer's qualified personal income tax liability incurred in
the taxable year for which the tax credit was approved.
(c) Ineligibility for other benefits.--A qualified taxpayer
that has been granted a tax credit under the program shall be
ineligible for any other tax credit or tax benefit as defined in
section 1701-A.1 of the act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
Section 704. Carryover, carryback and refund.
A qualified taxpayer may not carry forward, carry back or
obtain a refund of all or a portion of an unused tax credit
granted to the qualified taxpayer under the program.
Section 705. Sale or assignment.
A qualified taxpayer may not sell or assign a tax credit
granted to the qualified taxpayer under the program.
Section 706. Pass-through entity.
(a) Election.--If a qualified taxpayer is a pass-through
entity, the qualified taxpayer may elect, in writing, according
to procedures established by the department, to transfer all or
a portion of a tax credit under the program to shareholders,
members or partners in proportion to the share of the qualified
taxpayer's distributive income to which the shareholders,
members or partners are entitled or in any other manner
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designated by the qualified taxpayer in accordance with the
pass-through entity's governance documents and without regard to
how distributive income, losses or credits are allocated for
other tax purposes.
(b) Limitation.--The same unused tax credit under subsection
(a) may not be claimed by any of the following:
(1) The pass-through entity under subsection (a).
(2) A shareholder, member or partner of the pass-through
entity.
(c) Deadline.--A shareholder, member or partner of a pass-
through entity under subsection (a) may only use a tax credit
under the program during a taxable year for which the use of the
credit is authorized. The shareholder, member or partner of the
pass-through entity may not carry forward, carry back, obtain a
refund of or sell or assign the tax credit under the program.
Section 707. Reports to General Assembly.
No later than one year after the tax credits are first
awarded under the program and October 1 of each year thereafter,
the department shall submit a report on the tax credits to the
chairperson and minority chairperson of the Appropriations
Committee of the Senate, the chairperson and minority
chairperson of the Appropriations Committee of the House of
Representatives, the chairperson and minority chairperson of the
Finance Committee of the Senate and the chairperson and minority
chairperson of the Finance Committee of the House of
Representatives. The department shall include the names of the
qualified taxpayers that were awarded the tax credit and the
amount of the credit awarded to each qualified taxpayer under
the program.
Section 708. Expiration.
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The authority of the department to approve a tax credit under
the program shall expire in taxable years beginning after
December 31, 2036.
CHAPTER 9
MISCELLANEOUS PROVISIONS
Section 901. Regulations.
The board shall promulgate regulations as necessary to
implement this act.
Section 902. Effective date.
This act shall take effect immediately.
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