HB 2224

PRIOR PRINTER'S NOS. 3414, 3555  PRINTER'S NO.   3646
                THE GENERAL ASSEMBLY OF PENNSYLVANIA
                    HOUSE BILL
                    No. 2224
                                           Session of
                                             2026
INTRODUCED BY FIEDLER, BURGOS, PROBST, WAXMAN, HOWARD, HILL-
   EVANS, D. WILLIAMS, RIVERA, GIRAL, FREEMAN, BOYD, CIRESI,
   CEPEDA-FREYTIZ, CURRY, GILLEN, STEELE, SHUSTERMAN,
   HOHENSTEIN, HANBIDGE, HADDOCK, PROKOPIAK, KINKEAD, McNEILL,
   SALISBURY, KAZEEM AND KHAN, MAY 18, 2026
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
   JUNE 17, 2026
                               AN ACT
1 Amending Title 66 (Public Utilities) of the Pennsylvania
2    Consolidated Statutes, in rates and distribution systems,
3    providing for return on equity; IN SERVICE AND FACILITIES,    <--
4    FURTHER PROVIDING FOR BILLING PROCEDURES; AND, IN
5    RESTRUCTURING OF ELECTRIC UTILITY INDUSTRY, FURTHER PROVIDING
6    FOR REVENUE-NEUTRAL RECONCILIATION.
7    The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9    Section 1.    Chapter 13 of Title 66 of the Pennsylvania
10 Consolidated Statutes is amended by adding a subchapter to read:
11SUBCHAPTER C
12RETURN ON EQUITY
13 Sec.
14 1380.   Definitions.
15 1381.   Default authorized return on equity.
16 1382.   Competitive equity auction.
17 1383.   Annual reporting and transparency.
18 1384.   Applicability to State-jurisdictional rate base.
1 1385.   Applicability to ratemaking.
2 § 1380.    Definitions.
3    The following words and phrases when used in this subchapter
4 shall have the meanings given to them in this section unless the
5 context clearly indicates otherwise:
6    "10-year treasury."        The market yield on United States
7 Treasury securities at 10-year constant maturity, quoted on an
8 investment basis, as reported by the Federal Reserve System.
9    "Auction-clearing return."        The uniform rate of return
10 established as the clearing price in a competitive equity
11 auction conducted under section 1382(e).
12    "Auction equity interest."        The following:
13(1)   An economic interest issued under a competitive
14    equity auction under section 1382 (relating to competitive
15    equity auction). An auction equity interest represents
16    participation in the financial performance of a specific
17    regulated service, which carries the auction-clearing return
18    as adjusted under section 1382(c), and is distinct from the
19    covered utility's base common stock. The following shall
20    apply to an auction equity interest:
21(i)    The authorized return and financial performance
22of an auction equity interest shall be determined solely
23by reference to the regulated service to which it relates
24and shall not be affected by the financial performance
25of, or returns applicable to, any other regulated service
26or any activity of the covered utility not subject to the
27jurisdiction of the commission.
28(ii)   Except if auction equity interests are issued
29by a regulated service corporation established under
30section 1382(l), auction equity interests issued directly
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1by the covered utility are obligations of the covered
2utility and may be subject to all risks applicable to the
3covered utility generally, including the risk of
4insolvency or bankruptcy of the covered utility.
5(iii)   If the covered utility has established a
6regulated service corporation and regulated service LLC
7under section 1382, auction equity interests shall be
8issued by the regulated service corporation rather than
9by the covered utility itself.
10(2)    As used in this definition, the term "covered
11    utility's base common stock" shall mean the stock of the
12    regulated service corporation retained by the covered
13    utility.
14    "Authorized return on equity."  The rate of return on common
15 equity authorized by the commission for ratemaking purposes.
16    "Competitive equity auction."  A process overseen by the
17 commission in accordance with this subchapter that provides a
18 market-based determination of the cost of equity for a covered
19 utility.
20    "Cost of equity."     The minimum rate of return necessary to
21 attract equity capital to invest in a specific regulated
22 service.
23    "Covered utility."     An investor-owned electric distribution
24 company, natural gas distribution company or water or wastewater
25 public utilities regulated by the commission.
26    "Default authorized return."      The authorized return on equity
27 determined under section 1381 (relating to default authorized
28 return on equity).
29    "Rate period."     The time period in which a covered utility
30 collects rates that are authorized and approved by the
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1 commission.
2    "Regulated service."     A service provided by a covered utility
3 for which the commission determines an authorized return on
4 equity. If a covered utility provides more than one category of
5 service subject to the jurisdiction of the commission, each
6 category shall be treated as a separate regulated service for
7 purposes of this subchapter and consistent with the property
8 segregation requirements of section 1305 (relating to advance
9 payment of rates; interest on deposits), unless the commission
10 determines that consolidated treatment is appropriate.
11    "Regulated service corporation."      A corporation organized
12 under the laws of any state, formed or designated by a covered
13 utility under section 1382(l) that:
14(1)   Is treated as a corporation for Federal income tax
15    purposes.
16(2)   Conducts no activities other than holding a
17    membership interest in a regulated service LLC and serving as
18    the issuer of auction equity interests for the regulated
19    service associated with that regulated service LLC.
20    "Regulated service LLC."     A limited liability company that is
21 a wholly owned subsidiary of a regulated service corporation,
22 formed or designated under section 1382(l), to hold assets,
23 rights, franchises and obligations associated with a regulated
24 service. A regulated service LLC shall be treated as a
25 disregarded entity for Federal income tax purposes.
26 § 1381.    Default authorized return on equity.
27    (a)    Default authorized return.--Unless an authorized return
28 on equity is established under section 1382 (relating to
29 competitive equity auction), the commission shall set the
30 authorized return on a covered utility's common equity equal to
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1 the sum of the 10-year treasury and 2%.
2    (b)   Annual reset.--The default authorized return shall be
3 reset annually as of January 1 of each year to reflect the
4 average of the 10-year treasury rate on the 60 business days
5 immediately prior to January 1 of that year.
6    (c)   Alternative benchmark.--If publication of the 10-year
7 treasury is ceased or interrupted, the commission shall identify
8 and use for the calculation the alternative benchmark the
9 commission determines to be the best substitute for carrying out
10 the purposes of this section.
11    (d)   Burden of proof.--The burden of demonstrating that the
12 default authorized return on equity is insufficient to attract
13 capital shall be exclusively with the covered utility. The
14 default authorized return shall be presumed just and reasonable
15 unless rebutted through the competitive equity auction process
16 specified in section 1382.
17    (e)   Initial rate period.--For a rate period commencing
18 between the effective date of this subsection and the first
19 reset date under subsection (b), the 10-year treasury component
20 shall be determined using the averaging methodology prescribed
21 in subsection (b) and applied to the 60 business days
22 immediately preceding the effective date of this subsection.
23    (f)   Rate adjustment.--
24(1)   If the authorized return on equity for a regulated
25    service changes under this section or section 1382, the
26    commission shall adjust the rates applicable to the regulated
27    service to reflect the new authorized return on equity.
28(2)   The adjustment shall be implemented through the
29    mechanism the commission determines to be most expedient,
30    which may include a surcharge or credit applied to existing
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1    tariffs, an automatic rate adjustment mechanism or
2    incorporation into the covered utility's next general rate
3    proceeding.
4(3)   The commission shall implement an adjustment no
5    later than 90 days after the change in authorized return on
6    equity takes effect.
7    (g)   Risk insurance.--Nothing in this subchapter shall
8 preclude a covered utility from procuring third-party insurance
9 to hedge material idiosyncratic risks, with the cost of the
10 insurance recoverable in rates as an operating expense subject
11 to the commission's determination of prudence.
12    (h)   Performance-based ratemaking.--
13(1)   Nothing in this subchapter shall preclude the
14    commission from establishing or maintaining a performance-
15    based ratemaking plan for a covered utility if a plan is
16    designed for the expected value of performance-based
17    adjustments to the authorized return on equity to be neutral.
18(2)   The performance-based ratemaking plan may not permit
19    the aggregate effect of performance-based adjustments to
20    increase the covered utility's realized return on equity for
21    a regulated service by more than two percentage points above
22    the authorized return on equity for that regulated service as
23    determined under this subchapter.
24(3)   For purposes of this subsection, the term
25    "performance-based ratemaking plan" means a plan, mechanism
26    or order that adjusts the authorized return on equity of a
27    covered utility based on measured utility performance against
28    specified benchmarks. The term does not include revenue
29    decoupling mechanisms, formula rate plans or other mechanisms
30    that operate on revenue, cost recovery or rate design without
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1  adjusting the authorized return on equity.
2  (i)   Interaction with alternative ratemaking plans.--
3(1)   An alternative ratemaking plan approved by the
4  commission under section 1330 (relating to alternative
5  ratemaking for utilities) which is in effect as of the
6  effective date of this paragraph shall remain in effect in
7  accordance with the plan's terms, unless a component of the
8  plan that determines, adjusts or is calculated by reference
9  to the authorized return on equity is recalculated using the
10  authorized return on equity upon the next scheduled
11  adjustment or reset of the component, as determined by the
12  commission under this subchapter.
13(2)   Non-return-on-equity components of a plan, including
14  decoupling mechanisms, revenue-per-customer caps, price cap
15  mechanisms and any distribution system improvement charge
16  approved under section 1353 (relating to distribution system
17  improvement charge) without limitation, shall not be affected
18  by this subchapter.
19(3)   An alternative ratemaking plan filed with the
20  commission under section 1330 on or after the effective date
21  of this paragraph shall incorporate the authorized return on
22  equity as determined by the commission under this subchapter.
23(4)   The commission may not approve a plan that permits a
24  return on equity that is greater than the authorized return
25  on equity determined by the commission.
26(5)   Nothing in this subsection shall limit the authority
27  of the commission to approve or maintain a distribution
28  system improvement charge under section 1353 if the return
29  component of the charge is calculated using the authorized
30  return on equity determined by the commission under this
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1  subchapter.
2  (j)   Initial implementation.--
3(1)   Notwithstanding any other provision of this
4  subchapter, title or prior order of the commission, the
5  default authorized return on equity established under this
6  section shall apply to each regulated service of a covered
7  utility immediately upon the effective date of this
8  paragraph, regardless of whether a rate proceeding under
9  section 1308(d) (relating to voluntary changes in rates) is
10  pending and when a rate proceeding was last concluded.
11(2)   A rate component reflecting or implicitly permitting
12  an authorized return on equity greater than the default
13  authorized return established under this section may no
14  longer be considered just and reasonable as of the effective
15  date of this paragraph, except to the extent established
16  through a competitive equity auction conducted under section
17  1382. To implement this subsection, the commission shall:
18(i)    No later than 60 days after the effective date
19of this subparagraph, issue an order for each covered
20utility setting the authorized return on equity for each
21of its regulated services to the default authorized
22return determined under subsection (a), as adjusted under
23subsection (e) for the initial rate period.
24(ii)   No later than 120 days after the effective date
25of this subparagraph, implement corresponding adjustments
26to customer rates, applying the mechanism the commission
27determines to be most expedient under subsection (f),
28which may include a surcharge or credit applied to
29existing tariffs or an automatic rate adjustment
30mechanism and which shall not require the initiation of a
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1base rate proceeding under section 1308(d).
2(iii)   Implement a true-up adjustment for the period
3commencing on the effective date of this subparagraph and
4ending on the date adjusted rates take effect, calculated
5as the difference between the revenue actually collected
6by the covered utility during the period and the revenue
7that would have been collected during the period had the
8default authorized return been reflected in rates
9throughout, with interest accruing at the default
10authorized return calculated from the midpoint of the
11period.
12(3)   A covered utility that believes the default
13  authorized return is insufficient to attract capital may, at
14  any time following the effective date of this paragraph,
15  petition the commission for a competitive equity auction
16  under section 1382(a). The pendency of a petition shall not
17  delay or suspend the implementation required by this
18  subsection.
19(4)   Nothing under this subsection shall be construed to
20  disturb a non-return-on-equity component of a rate currently
21  in effect, including the authorized capital structure or the
22  cost of debt, except to the extent that the components must
23  be adjusted as a mathematical consequence of the change in
24  authorized return on equity required by this subsection.
25  (k)   Rate base.--
26(1)   For purposes of determining the authorized return on
27  equity for a regulated service of a covered utility under
28  this subchapter, whether the return is determined under this
29  section or under a competitive equity auction under section
30  1382, the commission shall determine a rate base to reflect
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1    the full value of all assets prudently invested by or on
2    behalf of the covered utility for the benefit of the
3    regulated service, including construction work in progress
4    and net of accumulated depreciation.
5(2)   Reductions to a rate base shall solely be for
6    capital that is not supplied by investors, which shall be
7    limited to the following:
8(i)    Accumulated deferred income taxes, to the extent
9that deferred tax liabilities exceed deferred tax assets.
10(ii)    Customer deposits.
11(iii)    Customer advances for construction.
12(3)   The commission may not exclude from the rate base of
13    a regulated service an asset on the basis that the asset has
14    not yet been placed in service if the investment has been
15    determined to be prudent and is being undertaken for the
16    benefit of the regulated service.
17(4)   This subsection shall be implemented on the same
18    schedule as the initial implementation required by subsection
19    (j), and the commission's 60-day order and 120-day rate
20    adjustment under subsection (j) shall reflect both the change
21    in authorized return on equity and the rate base determined
22    in accordance with this subsection.
23 § 1382.    Competitive equity auction.
24    (a)    Utility-initiated auction.--
25(1)   If a covered utility believes that its cost of
26    equity exceeds the default authorized return, the covered
27    utility may petition the commission to oversee a competitive
28    equity auction.
29(2)   If the covered utility fails to take all necessary
30    steps to facilitate the competitive equity auction based on
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1  the timeline and procedures determined by the commission, the
2  petition shall be deemed withdrawn and the covered utility is
3  deemed to have accepted the default authorized return.
4(3)   A petition under paragraph (1) shall be filed no
5  later than 30 days after the effective date of this paragraph
6  or the most recent reset of the default authorized return
7  under subsection (b), whichever is later.
8(4)   Upon certification of the auction results by the
9  commission, the auction-clearing return shall become the
10  authorized return on equity for the regulated service, and
11  the commission shall adjust customer rates in accordance with
12  section 1381(f) (relating to default authorized return on
13  equity) no later than 90 days after the certification.
14(5)   The commission shall implement a true-up adjustment
15  under this subsection that is calculated as the difference
16  between the revenue actually collected by the covered utility
17  during the period from the filing of the petition through the
18  date on which adjusted rates take effect and the revenue that
19  would have been collected during that period had the auction-
20  clearing return been reflected in rates throughout. The
21  interest on the difference shall accrue at the auction-
22  clearing return and be calculated from the midpoint of the
23  period.
24(6)   An adjustment to customer rates required by the
25  reset of the default authorized return under section 1381(b)
26  shall be implemented in accordance with section 1381(f)
27  independently of an auction petition, and the true-up
28  adjustment under paragraph (5) shall apply only to the period
29  commencing on the date of the petition under paragraph (1).
30  (b)   Commission-initiated auction.--
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1      (1)   The commission may, on its own motion or upon
2  petition by the Office of Consumer Advocate, order that a
3  competitive equity auction be conducted for a covered utility
4  if the commission finds reasonable cause to believe that the
5  default authorized return materially exceeds the covered
6  utility's cost of equity for a regulated service.
7      (2)   An auction initiated by the commission under this
8  subsection may be ordered no earlier than 30 days after the
9  effective date of this paragraph or the most recent reset of
10  the default authorized return under section 1381(b),
11  whichever is later, and no later than 60 days after the
12  reset.
13      (3)   Upon certification of the auction results, the
14  auction-clearing return shall become the authorized return on
15  equity for the regulated service, and the commission shall
16  adjust customer rates in accordance with section 1381(f) no
17  later than 90 days after the certification.
18      (4)   The commission shall implement a true-up adjustment
19  under this subsection that is calculated as the difference
20  between the revenue actually collected by the covered utility
21  during the period from January 1 of the year in which the
22  auction is conducted through the date on which adjusted rates
23  take effect and the revenue that would have been collected
24  during that period had the auction-clearing return been
25  reflected in rates throughout. The interest on the difference
26  shall accrue at the auction-clearing return and be calculated
27  from the midpoint of the period.
28      (5)   If a covered utility fails to take all steps
29  required to facilitate an auction ordered under this
30  subsection on the timeline prescribed by the commission, the
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1  default authorized return for that regulated service shall be
2  reduced by 0.10 percentage points beginning on the date of
3  the failure and continuing until the covered utility has
4  complied with this subsection.
5(6)   If the covered utility fails to facilitate a
6  subsequent commission-initiated auction for the same
7  regulated service, the reduction shall be cumulative.
8(7)   Upon compliance with this subsection, a reduction
9  under this subsection shall cease to apply prospectively and
10  no retroactive adjustment shall be made for any period during
11  which the reduction was in effect.
12  (c)   Duration and effect.--
13(1)   Holders of auction equity interests issued at an
14  auction under this section shall receive the auction-clearing
15  return for the full duration of the interests. The auction-
16  clearing return shall be adjusted for differences between
17  realized and anticipated profits in a manner determined by
18  the commission's order issued under this section.
19(2)   The rate of return under paragraph (1), whether
20  greater or less than the default authorized return, shall
21  determine the authorized return on equity for the regulated
22  service in accordance with subsection (d), until the
23  following January 1, at which time the covered utility may
24  elect that the default authorized return shall apply to the
25  covered utility's common equity in the regulated service.
26(3)   An election made under paragraph (2) shall not
27  affect the return applicable to outstanding auction equity
28  interests, which shall continue to receive the auction-
29  clearing return for the full duration of the interests.
30  Following an election, the authorized return on equity for
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1    the regulated service shall be determined in accordance with
2    subsection (d).
3    (d)   Multiple auctions.--
4(1)   Where different equity interests in a regulated
5    service bear different authorized rates of return, either for
6    multiple auctions being conducted at different times or the
7    covered utility has elected that the default authorized
8    return shall apply to the covered utility's common equity
9    under subsection (c), the authorized return on equity for the
10    regulated service shall be the weighted average of the return
11    applicable to each equity interest, which shall be weighted
12    by its outstanding equity amount.
13(2)   For the purposes under paragraph (2), the covered
14    utility's common equity shall bear the auction-clearing
15    return established in the most recent auction or the default
16    authorized return following an election under subsection (c).
17    If no auction equity interests remain outstanding, the
18    default authorized return shall apply to the full equity
19    component of the regulated service.
20    (e)   Auction mechanism.--The commission shall oversee a
21 sealed-bid competitive auction administered independently of the
22 covered utility. The following shall apply:
23(1)   The commission shall determine for each auction
24    whether bids are to be expressed as an absolute number or as
25    a premium to the 10-year treasury or another index, with the
26    applicable interest rate to be reset periodically.
27(2)   Qualified bidders shall bid the minimum target
28    return on equity they require.
29(3)   All bids shall be ranked in ascending order and the
30    commission shall accept bids in that order until the total
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1  amount of equity offered in the auction has been fully
2  allocated.
3      (4)    All successful bidders shall receive the same rate
4  of return, equal to the highest accepted bid.
5      (5)    If the aggregate amount bid at the clearing rate
6  exceeds the remaining amount of equity to be allocated, the
7  bids shall be accepted on a pro rata basis. For the avoidance
8  of doubt, all bids submitted at returns below the clearing
9  rate shall be accepted in full but a pro rata reduction shall
10  only apply to bids submitted at the clearing rate itself.
11      (6)    The amount of equity to be offered within each
12  auction shall be the greater of 2.5% of the equity component
13  of the regulated service rate base and the lesser of
14  $50,000,000 and 5% of the equity component of the regulated
15  service rate base.
16      (7)    The commission shall certify the results of an
17  auction if at least five qualified bidders submitted bids and
18  the aggregate equity amount bid by all qualified bidders was
19  at least 1.5 times the total equity amount offered in the
20  auction.
21      (8)    If either threshold under paragraph (7) is not met
22  in a utility-initiated auction under subsection (a), the
23  auction result shall be certified if the auction-clearing
24  return does not exceed the default authorized return by more
25  than two percentage points but, if not exceeded, the auction
26  result shall be void and the default authorized return shall
27  be applied.
28      (9)    If either threshold under paragraph (7) is not met
29  in a commission-initiated auction under subsection (b), the
30  auction result shall be void and the default authorized
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1    return shall continue to apply.
2(10)    In a commission-initiated auction under subsection
3    (b), regardless of whether the participation thresholds are
4    met, the auction result shall be binding only if the auction-
5    clearing return is less than the default authorized return.
6(11)    If the auction-clearing return equals or exceeds
7    the default authorized return in a commission-initiated
8    auction under subsection (b), the default authorized return
9    shall continue to apply.
10(12)    If the aggregate equity amount bid in an auction
11    under subsection (a) or (b) is less than the total equity
12    amount offered, the auction-clearing return shall apply to
13    the equity amount actually subscribed and the default
14    authorized return shall apply to the remainder, in which the
15    authorized return on equity for the regulated service shall
16    be determined in accordance with subsection (d).
17    (f)   Cost recovery.--All reasonable costs incurred by a
18 covered utility in connection with a competitive equity auction
19 under this section, including costs of any required securities
20 registration or offering preparation, reasonable registration
21 costs under subsection (g), reasonable management time allocable
22 to the auction and professional fees, shall be treated as
23 prudently incurred costs for ratemaking purposes and shall be
24 recoverable in rates.
25    (g)   Commission authority and regulations.--The commission
26 shall adopt and promulgate rules and regulations to implement
27 the competitive equity auction procedures under this section,
28 which shall include the following:
29(1)    An application process, eligibility criteria and
30    other measures necessary to ensure that bidders are qualified
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1  to participate in an auction.
2(2)   Ongoing disclosure obligations applicable to the
3  covered utility and to holders of auction equity interests.
4(3)   Guidelines for an independent auction administrator
5  to conduct an auction.
6(4)   Determination of the duties and requisite expertise
7  of the independent auction administrator.
8(5)   Consumer protection standards.
9(6)   Auction disclosure documentation which states that
10  the depreciation and amortization schedule is subject to
11  prospective adjustment in subsequent rate proceedings and may
12  affect the timing of return of capital to holders of auction
13  equity interests.
14(7)   Requirements for the independent auction
15  administrator to disclose to all qualified bidders prior to
16  each auction the conditions in which the auction result will
17  be binding, including whether the auction is utility-
18  initiated or commission-initiated and the consequences
19  thereof for bid acceptance.
20(8)   The form and content of the disclosure required
21  under subsection (l)(2).
22  (h)   Securities law compliance.--
23(1)   The economic interests offered under this section
24  may constitute securities within the meaning of the
25  Securities Act of 1933 (48 Stat. 74, 15 U.S.C. § 77a et
26  seq.), as amended, and the Securities Exchange Act of 1934
27  (48 Stat. 881, 15 U.S.C. § 78a et seq.), as amended, and
28  shall be subject to the registration requirements under
29  section 1901 (relating to registration of securities to be
30  issued or assumed).
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1(2)   Each auction under this section shall be structured
2  to qualify for an available exemption from registration under
3  Federal securities law. Permissible exemptions may include
4  limiting the offering to accredited investors under Rule 506
5  of Regulation D under the Securities Act of 1933 or
6  conducting an intrastate offering exempt under section 3(a)
7  (11) of the Securities Act of 1933 and applicable rules under
8  the Securities Act of 1933.
9(3)   The commission may, in its discretion, direct that a
10  specific auction be conducted on a registered basis if the
11  commission determines, based on the expected size of the
12  offering and an analysis of anticipated investor demand, the
13  following:
14(i)    The expected reduction in the auction-clearing
15return attributable to broader investor participation
16enabled by registration is reasonably expected to
17outweigh the costs and delays of the registration
18process.
19(ii)   The auction will not be delayed by more than 30
20days beyond the timeline that would apply to an exempt
21offering.
22(4)   Any direction by the commission to conduct an
23  auction on a registered basis shall be issued by the
24  commission sufficiently in advance of the covered utility's
25  auction petition to permit timely registration.
26(5)   Nothing in this subsection shall be construed to
27  confer upon the commission any authority to regulate
28  securities except as expressly provided in this subsection.
29  (i)   Instrument design.--
30(1)   A covered utility may not be required to offer its
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1  common stock for sale in the auction, but the auction equity
2  interests offered shall, as approved by the commission,
3  provide prospective investors with the following:
4(i)    Economically equivalent position to that of the
5      covered utility's equity interest in the regulated
6      service which may consist of the covered utility's common
7      stock where auction equity interests are issued directly
8      by the covered utility or the covered utility's retained
9      stock interest in the regulated service corporation where
10      the interests are issued by a regulated service
11      corporation.
12(ii)    Adequate protections against dilution or
13      impairment of value through related-party transactions or
14      other transfers involving the corporation's parent
15      holding company.
16(iii)    If the covered utility's realized profits of
17      the regulated service in each period equal those embedded
18      by the commission in the rates approved to achieve the
19      authorized return on equity, prospective periodic
20      distributions calibrated for holders of auction equity
21      interests to realize an internal rate of return equal to
22      the auction-clearing return which accounts for periodic
23      distributions and any return of equity capital over the
24      life of the interests.
25(iv)    A stated initial equity amount per auction
26      equity interest equal to the purchase price paid by the
27      winning bidder in the auction, which shall be an equity
28      amount to be returned to holders over the life of the
29      interests at a rate and on a schedule consistent with the
30      commission's treatment of rate base depreciation and
20260HB2224PN3646  - 19 -
1      amortization for the regulated service for ratemaking
2      purposes. If the equity component of the regulated
3      service rate base is reduced through depreciation and
4      amortization, a commensurate portion of the initial
5      equity amount shall be returned to holders.
6(v)   A specification of the shortfalls and excesses
7      in realized profits, as determined by the commission
8      under paragraph (2).
9      (2)   The commission shall establish rules or promulgate
10  regulations specifying the methods and calculations in which
11  shortfalls and excesses in realized profits of the regulated
12  service relative to the earnings embedded in approved rates
13  are to be allocated between holders of auction equity
14  interests and the covered utility's common equity, including
15  the allocation methods in the event of multiple outstanding
16  series of auction equity interests.
17      (3)   The commission's regulations governing an auction
18  under this section shall specify the initial equity amount
19  per auction equity interest, the formula for calculating
20  periodic distributions by applying the auction-clearing
21  return to the outstanding equity balance for each period and
22  the schedule for return of equity capital. The commission
23  shall ensure that holders of auction equity interests will
24  realize an internal rate of return equal to the auction-
25  clearing return if the covered utility's realized profits of
26  the regulated service in each period equal those embedded in
27  the rates approved to achieve the authorized return on
28  equity.
29      (4)   Each series of auction equity interests under this
30  subsection shall be redeemed at its book value currently in
20260HB2224PN3646  - 20 -
1  effect until the earlier of 40 years from the date of
2  issuance or the end of the first fiscal quarter in which the
3  outstanding equity amount of such series is less than 5% of
4  the initial equity amount at issuance.
5      (5)   The covered utility or regulated service
6  corporation, as applicable, shall fund a redemption under
7  paragraph (4), whether through retained earnings, a capital
8  contribution from the covered utility's parent company or any
9  other source of equity capital. Upon the redemption, the
10  equity represented by the redeemed series shall revert to the
11  covered utility's common equity in the regulated service. The
12  commission may defer the mandatory redemption date by not
13  more than two years upon a demonstration by the covered
14  utility that immediate redemption would materially impair its
15  financial condition.
16      (6)   In the event of a merger, acquisition or change of
17  control of the covered utility or, where applicable, the
18  regulated service corporation, the successor entity shall
19  assume all obligations to holders of outstanding auction
20  equity interests on terms no less favorable than the terms in
21  effect immediately prior to the transaction.
22      (7)   A transaction under paragraph (6) shall not be
23  consummated without determination by the commission that the
24  rights of holders of auction equity interests will be
25  adequately preserved. The commission may require the terms of
26  each series of auction equity interests to include a
27  provision entitling holders to redemption at the book value
28  then currently in effect upon any change of control, at the
29  option of the holder.
30      (8)   In the event of the insolvency or dissolution of a
20260HB2224PN3646  - 21 -
1  regulated service corporation or regulated service LLC or the
2  permanent discontinuation of the regulated service to which
3  auction equity interests relate, outstanding auction equity
4  interests shall participate in any distribution of remaining
5  assets on a pari passu basis with the covered utility's
6  common equity in the regulated service, in proportion to
7  their respective outstanding equity amounts, in accordance
8  with the commission's specifications under paragraph (2).
9(9)   Nothing under paragraph (8) shall be construed to
10  create a priority or preference in favor of, or against,
11  holders of auction equity interests relative to the covered
12  utility's common equity.
13  (j)   Participants.--
14(1)   An auction under this section shall be open, at
15  minimum, to all accredited investors as that term is defined
16  under applicable Federal securities law.
17(2)   Each qualified bidder shall, as a condition of
18  participation, certify in writing to the independent auction
19  administrator the following:
20(i)    The bidder is submitting its bid based solely on
21the bidder's own assessment of the risk-adjusted
22financial return of the auction equity interest and not
23for the purpose or with the effect of artificially
24suppressing or inflating the auction-clearing return.
25(ii)   The bidder is not acting in concert with any
26other bidder or with the covered utility or any of its
27affiliates with respect to the formulation of its bid.
28(3)   A bidder that is a covered utility subject to cost-
29  of-service regulation by a Federal or State regulatory
30  authority, or a holding company that directly or indirectly
20260HB2224PN3646  - 22 -
1  controls the covered utility, shall not be eligible to
2  participate as a bidder, except that the covered utility, its
3  parent company and any affiliates may participate as bidders
4  and shall be subject to any existing code of conduct policies
5  for affiliate transactions and any further eligibility
6  requirements established by the commission to prohibit
7  inappropriate preferential treatment in the bidding process.
8(4)   The exclusion under paragraph (3) shall not apply to
9  a registered investment company, investment adviser or other
10  institutional investor whose ownership of a covered utility
11  is solely as a passive investor in diversified portfolios.
12  Holdings by the institutional investors in auction equity
13  interests issued under this subchapter shall not be counted
14  toward an investment limitation applicable to ownership of
15  the covered utility or the covered utility's common equity
16  under applicable State law.
17(5)   The commission shall establish rules or promulgate
18  regulations to implement the exclusion and certification
19  requirements under this subsection, including procedures for
20  investigation and disqualification of bidders that submit
21  false certifications or are found to have violated the
22  prohibition on coordinated bidding.
23  (k)   Misconduct and risk attribution.--
24(1)   If the commission or a court of competent
25  jurisdiction has made a formal finding that a covered utility
26  has engaged in unlawful or imprudent conduct which has
27  materially increased the covered utility's cost of equity for
28  a regulated service, the commission may exclude the portion
29  of an increase in the authorized return on equity for the
30  regulated service that is attributable to the conduct from
20260HB2224PN3646  - 23 -
1    the return applicable to the covered utility's common equity.
2(2)   An auction equity interest, whether issued before or
3    after a finding under paragraph (1), shall not be subject to
4    the exclusion under paragraph (1) and all auction equity
5    interests shall continue to bear the auction-clearing return
6    established in the auction in which the interests were issued
7    without reduction on account of any exclusion under this
8    subsection.
9(3)   Nothing in this subsection shall limit the authority
10    of the commission to impose penalties, disallowances or other
11    remedies available under applicable law.
12    (l)   Regulated service corporation and regulated service
13 LLC.--
14(1)   A covered utility may, at any time before or after
15    conducting a competitive equity auction, form a regulated
16    service corporation and a regulated service LLC for a
17    regulated service. The following shall apply:
18(i)    The regulated service corporation formed shall
19be a wholly owned subsidiary of the covered utility,
20organized as a corporation under the laws of any state
21and treated as a corporation for Federal income tax
22purposes.
23(ii)    The regulated service LLC shall be a wholly
24owned subsidiary of the regulated service corporation,
25organized as a limited liability company and treated as a
26disregarded entity for Federal income tax purposes.
27(iii)    The regulated service LLC shall hold all
28material assets, rights, franchises and obligations
29associated with the regulated service.
30(iv)    The regulated service corporation shall serve
20260HB2224PN3646  - 24 -
1      as the issuer of auction equity interests for that
2      regulated service.
3(v)    The formation of a regulated service corporation
4      and regulated service LLC shall not be a prerequisite to
5      conduct an auction under this section.
6(vi)   The absence of the entities shall not impair
7      the validity of auction equity interests issued by the
8      covered utility.
9      (2)   In a competitive equity auction conducted prior to a
10  regulated service corporation and regulated service LLC being
11  established, the commission shall require the covered utility
12  to disclose to all qualified bidders that auction equity
13  interests are being issued as direct obligations of the
14  covered utility and are subject to the risks of any
15  insolvency, bankruptcy or restructuring proceedings affecting
16  the covered utility or the covered utility's affiliates.
17      (3)   The commission shall require each covered utility to
18  ensure that all long-term indebtedness with a stated maturity
19  greater than one year issued or incurred on or after the
20  effective date of this paragraph, whether in the form of
21  bonds, notes, debentures or otherwise, includes a covenant
22  expressly permitting the covered utility to transfer the
23  assets, franchises, rights and obligations associated with
24  each regulated service to a regulated service corporation or
25  regulated service LLC without the transfer constituting a
26  default, event of default or breach under the indebtedness.
27      (4)   The commission may not approve any long-term debt
28  financing by a covered utility that does not include a
29  covenant under paragraph (3).
30      (5)   Nothing in this subsection shall be construed to
20260HB2224PN3646  - 25 -
1  require a covered utility to restructure, refinance or assign
2  any indebtedness outstanding as of the effective date of this
3  paragraph in advance of the formation of a regulated service
4  LLC under paragraph (1).
5      (6)   Each covered utility that has not yet established a
6  regulated service corporation and regulated service LLC shall
7  use commercially reasonable efforts to do so by no later than
8  five years after the effective date of this paragraph or five
9  years after the date of the covered utility's first
10  competitive equity auction, whichever is later. The
11  commission may extend the period under this paragraph upon a
12  showing by the covered utility of good cause, which may
13  include the inability to obtain required bondholder or
14  creditor consents despite commercially reasonable efforts.
15      (7)   Whenever a covered utility has established a
16  regulated service corporation and regulated service LLC, each
17  entity shall be structured and operated as a bankruptcy-
18  remote special-purpose entity. The commission shall adopt or
19  promulgate rules or regulations to ensure the compliance of a
20  regulated service corporation and regulated service LLC,
21  which shall include the following:
22(i)    Maintenance of books of account, bank accounts
23      and financial records separate from those of the covered
24      utility and any affiliate.
25(ii)    Prohibition on commingling of assets.
26(iii)    Requirements for the organizational documents
27      of the regulated service LLC to include at least one
28      independent manager whose affirmative consent is required
29      for a voluntary bankruptcy filing by the regulated
30      service LLC or the regulated service corporation.
20260HB2224PN3646  - 26 -
1(iv)    A covenant by the covered utility not to cause
2      or encourage any involuntary bankruptcy filing against
3      the regulated service corporation or the regulated
4      service LLC.
5(v)    Restrictions on indebtedness of the regulated
6      service corporation and the regulated service LLC unless
7      approved by the commission.
8      (8)    The regulated service corporation may not conduct
9  activities other than holding a membership interest in the
10  regulated service LLC and serving as the issuer of auction
11  equity interests. The corporation may not hold any assets
12  other than the corporation's membership interest in the
13  regulated service LLC and any cash or other assets incidental
14  thereto.
15      (9)    Formation of both the regulated service corporation
16  and the regulated service LLC shall require any approvals
17  that may be required under applicable law, including any
18  certificate of public convenience required under section 1102
19  (relating to enumeration of acts requiring certificate) for
20  the transfer of utility assets or franchises, and any
21  approval required under Chapter 21 (relating to relations
22  with affiliated interests) for transactions between the
23  covered utility and the entities.
24      (10)    If any assets are associated with more than one
25  regulated service, the assets may be held by the regulated
26  service LLC as co-owner with one or more other regulated
27  service LLCs, with each LLC's interest proportionally
28  allocated in a manner approved by the commission for
29  ratemaking purposes.
30      (11)    For the capital structure and indebtedness of the
20260HB2224PN3646  - 27 -
1  regulated service LLC, the following apply:
2(i)    Each regulated service LLC shall maintain a
3      capital structure for the regulated service consistent
4      with the capital structure authorized by the commission
5      for ratemaking purposes, including debt and equity
6      components.
7(ii)    The equity component of the regulated service
8      for the applicable authorized return on equity shall
9      consist of the regulated service corporation's equity
10      interest in the regulated service LLC which is funded by
11      the proceeds of auction equity interests and the covered
12      utility's retained interest.
13(iii)    For ratemaking purposes, the interest on
14      indebtedness of the regulated service LLC shall be
15      treated as a cost of the regulated service.
16(iv)    Upon formation of a regulated service LLC, the
17      commission shall determine the portion of the covered
18      utility's outstanding indebtedness that shall be
19      allocated to the regulated service by applying the
20      methodology used or to be used to allocate the covered
21      utility's capital structure among regulated services for
22      ratemaking purposes.
23(v)    The regulated service LLC shall assume allocated
24      indebtedness as primary obligor in which the covered
25      utility shall provide an unconditional and irrevocable
26      guaranty of all assumed indebtedness for the remaining
27      term of each obligation.
28(vi)    An assumption of allocated indebtedness shall
29      not constitute a default, acceleration event, assignment
30      or breach under the indebtedness, notwithstanding any
20260HB2224PN3646  - 28 -
1      provision of the applicable instrument to the contrary.
2(vii)    Upon formation, the regulated service LLC
3      shall issue its own debt to finance the debt component of
4      the regulated service LLC's capital structure which shall
5      be secured by the regulated service assets held by the
6      regulated service LLC.
7(viii)    Unless the commission determines that a
8      guaranty is necessary to obtain financing on terms
9      consistent with public interest, the regulated service
10      LLC's debt may not require a guaranty by the covered
11      utility. If the commission determines that a guaranty is
12      necessary, it shall be limited in scope and for a minimum
13      duration to fulfill its obligations.
14(ix)    For any period during which the covered utility
15      guarantees indebtedness of a regulated service LLC, the
16      covered utility shall be entitled to a guaranty fee in an
17      amount and under the terms determined by the commission.
18(x)    The rate base of the regulated service LLC shall
19      be determined in accordance section 1381(k).
20      (12)    Upon establishment of a regulated service
21  corporation and regulated service LLC, the regulated service
22  corporation shall become the issuer of all subsequent auction
23  equity interests for the applicable regulated service.
24      (13)    If it is determined to be in the public interest,
25  the commission may authorize the covered utility to offer
26  holders of outstanding auction equity interests the option to
27  convert their interests to equivalent interests issued by the
28  regulated service corporation.
29      (14)    Notwithstanding any other provision under this
30  subsection, a covered utility shall not be required to form a
20260HB2224PN3646  - 29 -
1    regulated service corporation or regulated service LLC if the
2    following apply:
3(i)    The covered utility provides only one regulated
4service subject to the jurisdiction of the commission or
5if multiple categories of service have been determined by
6the commission to warrant consolidated treatment as a
7single regulated service.
8(ii)   The covered utility does not engage in any
9material business activity other than the provision of
10that regulated service.
11(15)    A covered utility that meets the requirements under
12    paragraph (14) may issue auction equity interests directly,
13    in which case all references under this subchapter to a
14    regulated service corporation or regulated service LLC shall
15    be construed as references to the covered utility when
16    applicable.
17 § 1383.    Annual reporting and transparency.
18    (a)    Reports.--Not later than January 15 of each year, the
19 commission shall submit a report to the Governor, the
20 chairperson and minority chairperson of the Consumer Protection
21 and Professional Licensure Committee of the Senate and the
22 chairperson and minority chairperson of the Consumer Protection,
23 Technology and Utilities Committee of the House of
24 Representatives on the implementation of this subchapter. The
25 annual report shall include all of the following:
26(1)    Each covered utility's requested return on equity,
27    rate of return and capitalization mix proposed as part of the
28    covered utility's most recent base rate filing under section
29    1308(d) (relating to voluntary changes in rates), including
30    the corresponding data for the preceding three base rate
20260HB2224PN3646  - 30 -
1    filings.
2(2)   The actual return on equity, rate of return and
3    capitalization mixes authorized by the commission for each
4    covered utility in the most recent three base rate
5    proceedings.
6(3)   The results of any competitive equity auctions
7    conducted under this subchapter for the previous five
8    calendar years.
9(4)   An analysis of the impact on average customer rates
10    resulting from implementation of this subchapter.
11(5)   In clear and accessible language, a description of
12    how authorized returns on equity have changed, reflect new
13    circumstances or remained the same during the previous year.
14(6)   All data used for calculations under this subchapter
15    which is not publicly available, including an explanation on
16    the necessity for using nonpublic data.
17(7)   A summary of enforcement actions taken under this
18    subchapter.
19    (b)    Public information.--The annual report under subsection
20 (a) shall be made publicly available on the commission's
21 publicly accessible Internet website.
22 § 1384.    Applicability to State-jurisdictional rate base.
23    This subchapter shall apply only to the portion of a covered
24 utility's rate base that is subject to the ratemaking
25 jurisdiction of the commission. Nothing in this subchapter shall
26 be construed to apply to, modify or otherwise affect the return
27 on equity applicable to any facilities, assets or services for
28 which the rate of return is determined by the Federal Energy
29 Regulatory Commission or any other Federal regulatory authority.
30 To the extent that a covered utility's rate base includes both
20260HB2224PN3646  - 31 -
1 State-jurisdictional and federally jurisdictional components,
2 the commission shall establish procedures to allocate the rate
3 base between those components. The authorized return on equity
4 determined under this subchapter shall be applied solely to the
5 components subject to the commission's jurisdiction.
6 § 1385.   Applicability to ratemaking.
7    (a)    Application.--This subchapter shall apply to each
8 covered utility and each regulated service of a covered utility
9 as of the effective date of this subsection regardless of
10 whether a rate proceeding under section 1308(d) (relating to
11 voluntary changes in rates) is pending and without regard to
12 when the proceeding was last concluded.
13    (b)    Implementation.--The implementation timeline established
14 under section 1381(j) (relating to default authorized return on
15 equity) shall govern the commission's adjustment of customer
16 rates to reflect the authorized return on equity required by
17 this subchapter.
18    (c)    Construction.--Nothing in this section shall be
19 construed to require the initiation of a rate proceeding under
20 section 1308(d) as a precondition to the application of this
21 subchapter to a covered utility.
22    (d)    Duty to serve.--Nothing in this subchapter relieves a
23 covered utility of its obligation and duty to serve customers
24 through continued investment in maintaining a reliable
25 infrastructure through continued investment and utilizing a
26 qualified workforce to do so.
27    Section 2.   This act shall take effect immediately.  <--
28    SECTION 2.   SECTION 1509 OF TITLE 66 IS AMENDED TO READ:  <--
29 § 1509.   BILLING PROCEDURES.
30    (A)    TIME PERIOD FOR PAYMENT WITHOUT PENALTY.--ALL BILLS
20260HB2224PN3646  - 32 -
1 RENDERED BY A PUBLIC UTILITY AS DEFINED IN PARAGRAPH (1)(I),
2 (II), (VI) OR (VII) OF THE DEFINITION OF "PUBLIC UTILITY" IN
3 SECTION 102 (RELATING TO DEFINITIONS) TO ITS SERVICE CUSTOMERS,
4 EXCEPT BILLS FOR INSTALLATION CHARGES, SHALL ALLOW AT LEAST 15
5 DAYS FOR NONRESIDENTIAL CUSTOMERS AND 20 DAYS FOR RESIDENTIAL
6 CUSTOMERS FROM THE DATE OF TRANSMITTAL OF THE BILL FOR PAYMENT
7 WITHOUT INCURRING ANY LATE PAYMENT PENALTY CHARGES THEREFOR.
8    (B)   RECEIPT OF MONTHLY BILLS.--ALL CUSTOMERS SHALL BE
9 PERMITTED TO RECEIVE BILLS MONTHLY AND SHALL BE NOTIFIED OF
10 THEIR RIGHT THERETO.
11    (C)   ITEMIZATION.--ALL BILLS SHALL BE ITEMIZED TO SEPARATELY
12 SHOW AMOUNTS FOR BASIC SERVICE, FEDERAL EXCISE TAXES, APPLICABLE
13 STATE SALES AND GROSS RECEIPTS TAXES, TO THE EXTENT PRACTICABLE,
14 FUEL ADJUSTMENT CHARGE, IF ANY, STATE TAX ADJUSTMENT CHARGE OR
15 SUCH OTHER SIMILAR COMPONENTS OF THE TOTAL BILL AS THE
16 COMMISSION MAY ORDER.
17    (D)   FUEL ADJUSTMENT CHARGE GENERALLY.--ANY ELECTRIC OR GAS
18 PUBLIC UTILITY BILLING CUSTOMERS ON A BIMONTHLY OR QUARTERLY
19 BASIS AND RENDERING INTERIM STATEMENTS OR BILLS EACH MONTH SHALL
20 INCLUDE IN SUCH INTERIM STATEMENT OR BILL AN AMOUNT FOR THE FUEL
21 ADJUSTMENT CHARGE BASED UPON ONE-HALF OF THE TOTAL EXPECTED
22 BIMONTHLY KILOWATT HOUR OR CUBIC FOOT BILLING OR ONE-THIRD OF
23 THE TOTAL EXPECTED QUARTERLY BILLING AND USING THE FUEL
24 ADJUSTMENT CHARGE RATE APPLICABLE IN THE MONTH OF THE INTERIM
25 STATEMENT OR BILL. AT THE TIME OF PREPARING THE BIMONTHLY OR
26 QUARTERLY BILL, AN APPROPRIATE ADJUSTMENT SHALL BE MADE IN THE
27 TOTAL FUEL ADJUSTMENT CHARGE BILLING FOR THE PERIOD.
28    (E)   CALCULATION OF FUEL ADJUSTMENT CHARGE.--ANY PUBLIC
29 UTILITY RENDERING BILLS ON A BIMONTHLY BASIS OR QUARTERLY BASIS
30 SHALL CALCULATE THE FUEL ADJUSTMENT CHARGE PER KILOWATT HOUR OR
20260HB2224PN3646  - 33 -
1 CUBIC FOOT FOR THE ENTIRE PERIOD AS THE WEIGHTED AVERAGE OF THE
2 TWO MONTHLY RATES OR THE THREE MONTHLY RATES WHICHEVER IS
3 APPLICABLE.
4    (F)    PREVIOUSLY UNBILLED SERVICE.--
5(1)   EXCEPT AS PROVIDED IN PARAGRAPH (2), A PUBLIC
6    UTILITY AS DEFINED IN PARAGRAPH (1)(II) OR (VII) OF THE
7    DEFINITION OF "PUBLIC UTILITY" IN SECTION 102 MAY NOT RENDER
8    A BILL FOR PREVIOUSLY UNBILLED SERVICE THAT HAS ACCRUED
9    OUTSIDE OF THE PREVIOUS 12-MONTH PERIOD.
10(2)   PARAGRAPH (1) DOES NOT APPLY TO A BILL THAT IS
11    DELAYED AS A RESULT OF:
12(I)    PROCEEDINGS OF THE COMMISSION OR A COURT OF
13COMPETENT JURISDICTION; OR
14(II)    FRAUD, THEFT OR METER TAMPERING.
15    SECTION 3.  SECTION 2810(C) OF TITLE 66 IS AMENDED BY ADDING    <--
16 A PARAGRAPH TO READ:
17 § 2810.    REVENUE-NEUTRAL RECONCILIATION.
18    * * *
19    (C)    RATE.--
20* * *
21(2.1)   THE FOLLOWING APPLY:
22(I)    NOTWITHSTANDING ANY PROVISION OF THIS SECTION OR
23SECTION 1101.2 OF THE ACT OF MARCH 4, 1971 (P.L.6, NO.2),
24KNOWN AS THE TAX REFORM CODE OF 1971, TO THE CONTRARY,
25THE RATE OF TAX ESTABLISHED UNDER THIS SECTION SHALL BE
26ZERO MILLS.
27(II)    NOTWITHSTANDING THE PROVISIONS OF SECTION
281101(B) OF THE TAX REFORM CODE OF 1971, THE RATE OF TAX
29UNDER SECTION 1101(B) OF THE TAX REFORM CODE OF 1971
30SHALL BE ZERO MILLS.
20260HB2224PN3646  - 34 -
1(III)   THE ENTIRE BENEFIT OF THE TAX ELIMINATION
2UNDER THIS PARAGRAPH SHALL DERIVE TO THE BENEFIT OF THE
3CONSUMER PURCHASING SERVICES FROM THE UTILITIES. THE
4BENEFIT SHALL BE PROVIDED IN THE FORM OF THE ELIMINATION
5OF THE STATE TAX SURCHARGE, WHICH SHALL BE CLEARLY
6REFLECTED IN EACH CONSUMER'S BILL. FAILURE TO PASS
7THROUGH THE ENTIRE BENEFIT OF THE TAX HOLIDAY TO THE
8CONSUMER SHALL SUBJECT THE PUBLIC UTILITY TO A CIVIL
9PENALTY OF AT LEAST $1,000, BUT NOT MORE THAN $5,000, AND
10ADDITIONAL RELIEF AS THE COURT MAY DEEM APPROPRIATE.
11* * *
12    SECTION 4.    FOR THE 2026-2027 FISCAL YEAR AND EACH FISCAL
13 YEAR THEREAFTER, THE TRANSFER OF MONEY FROM THE TAX UNDER
14 ARTICLE XI OF THE ACT UNDER SECTION 6 OF THE ACT OF NOVEMBER 29,
15 2004 (P.L.1376, NO.178), KNOWN AS THE ALTERNATIVE FUELS
16 INCENTIVE ACT, SHALL BE NO LESS THAN THE AMOUNT TRANSFERRED
17 UNDER SECTION 6 OF THE ALTERNATIVE FUELS INCENTIVE ACT FOR THE
18 2025-2026 FISCAL YEAR.
19    SECTION 5.    THIS ACT SHALL TAKE EFFECT AS FOLLOWS:
20(1)   THE FOLLOWING SHALL TAKE EFFECT JULY 1, 2026, OR
21    IMMEDIATELY, WHICHEVER IS LATER:
22THE ADDITION OF 66 PA.C.S. § 2810(C)(2.1).
23SECTION 4 OF THIS ACT.
24(2)   THE AMENDMENT OF 66 PA.C.S. § 1509 SHALL TAKE EFFECT
25    IN 60 DAYS.
26(3)   THE REMAINDER OF THIS ACT SHALL TAKE EFFECT
27    IMMEDIATELY.
20260HB2224PN3646  - 35 -