Last Week in the Legislature – July 1, 2026

Pennsylvania Legislative Updates

With state budget negotiations reportedly in full swing, the House of Representatives and Senate were in session last week, advancing proposals related to sales taxes, data center and infrastructure regulations, AI, and other areas relevant to business.

Here’s a recap of last week’s legislative action most relevant to employers.

 

Conditioning Sales Tax Exemption (H.B. 2359; Ciresi)

The House Energy Committee voted 23-3 to advance HB 2359.

This bill would condition eligibility for the computer equipment sales tax exemption for data centers on a host of new requirements, including prohibiting state and local government agencies from entering into non-disclosure agreements (NDAs) related to the construction, development, or location of data centers. It would also impose additional certification, disclosure, reporting, and other compliance requirements on qualifying projects.

Developers frequently require confidentiality while evaluating potential sites, negotiating infrastructure needs, and assessing project feasibility, and the use of NDAs during these preliminary discussions is a common and widely accepted practice in economic development projects. Restricting the use of NDAs may discourage companies from engaging with local governments until late in the process and could lead to some projects being directed toward states that might better accommodate confidential business negotiations.

The PA Chamber opposed this legislation (CLICK HERE for their memo), which now awaits consideration on the House floor.

 

GRID Requirements (H.B. 2650; Webster)

The House floor voted 134-68 to pass HB 2650 last Wednesday.

The bill would establish the Governor’s Responsible Infrastructure Development (GRID) program and create a new framework governing the development of data center projects in Pennsylvania. The bill would require qualifying projects to satisfy new certification, reporting, energy, and compliance requirements to access expedited permitting and qualify for the existing sales and use tax exemption for computer equipment.

While the PA Chamber supports efforts to promote responsible data center development and streamline permitting, H.B. 2650 raises concerns by conditioning an existing tax incentive on a host of new requirements. Changing the rules after the exemption has already driven investment creates uncertainty and sends a troubling signal about the predictability of Pennsylvania’s business climate.

The PA Chamber opposed this legislation (CLICK HERE for their memo), which now advances to the Senate following its third consideration and final passage in the House.

 

EITC Overhaul (H.B. 2632; Rivera)

The House floor voted 105-97 to pass HB 2632 last Monday.

This bill would terminate the authority to issue tax credits under the existing Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs beginning in FY 2027-28 and would establish a new Education Options Tax Credit program with revised allocations and requirements.

The bill would upend two long-standing programs that have received bipartisan support and helped expand educational opportunities for thousands of Pennsylvania students. By replacing the existing EITC and OSTC programs with a new framework, the bill creates uncertainty and risks reducing access to scholarships and educational options for the students and families who currently benefit from these successful programs.

The PA Chamber opposed this legislation (CLICK HERE for their memo), which now advances to the Senate for consideration.

 

Utility Bill Tax Cut and Capping ROE (H.B. 2224; Fiedler)

The House floor voted 202-0 to unanimously pass HB 2224 last Monday.

House Bill 2224 started as legislation that would statutorily cap return on equity (ROE) for all Pennsylvania utility companies, which we warned would discourage energy infrastructure investment in Pennsylvania, reduce employment, and ultimately raise costs on residential, commercial, and industrial ratepayers.

The legislation was ultimately amended to eliminate the 6.5 percent gross receipts tax that consumers pay on their electric bills.

 

While The PA Chamber supports eliminating taxes on electric bills, the PA Chamber strongly oppose the underlying bill to cap ROE for utility companies and therefore opposed this legislation (CLICK HERE for their memo), which now moves to the Senate.

 

PA Common Cents Act (H.B. 2388; Davidson)

The House floor voted 187-15 to pass HB 2388 last Wednesday.

The “Pennsylvania Common Cents Act” is intended to address reduced coin availability and an ongoing penny shortage that is making it increasingly difficult for businesses and other entities to consistently provide exact change. The bill outlines cash rounding guidelines to the nearest nickel in situations where exact change is unavailable due to the national penny shortage.

The bill sets forth clear, balanced rounding guidelines that apply only to cash transactions when exact change cannot be provided. Totals ending in 1¢, 2¢, 6¢, or 7¢ are rounded down to the nearest nickel, while totals ending in 3¢, 4¢, 8¢, or 9¢ are rounded up, ensuring an even-handed, predictable approach over time for both consumers and merchants. These provisions are narrowly tailored, do not apply to electronic payments, and are not used when exact change is available. Importantly, the amendment maintains current tax treatment by requiring all taxes to be calculated prior to rounding and includes reasonable protection for when rounding occurs.

The PA Chamber supported this legislation (CLICK HERE for their memo), which now moves onto the Senate for consideration.

 

Flexible Use of County Bridge Funding (H.B. 2437; Davidson)

The House floor voted 202-0 to unanimously pass HB 2437 last Wednesday.

HB 2437 provides a commonsense update to existing bridge funding, allowing counties to reinvest unused dollars from completed Marcellus Legacy Fund bridge projects into other eligible bridge needs within the county. Under current law, these funds are restricted to a narrow category of at-risk deteriorated bridges, which can leave remaining balances unused once those specific projects are complete. This legislation enables counties to apply overage dollars more broadly across bridge maintenance and repair needs, consistent with federal and state requirements.

This legislation ensures that available resources can be fully utilized to address ongoing infrastructure needs without creating new funding obligations or shifting existing allocations. Providing counties with this flexibility supports more efficient project delivery and helps maintain critical transportation infrastructure across the Commonwealth. Well-maintained bridges are essential to economic activity, supply chain reliability, and access to jobs, markets, and services.

The PA Chamber supported this legislation (CLICK HERE for their memo), which now advances to the Senate.

 

AI Companions (H.B. 2006; Shusterman)

The House Communications and Technology Committee voted 14-12 along party lines to advance HB 2006 last Tuesday.

This legislation would establish a new regulatory framework for AI companions, imposing requirements related to disclosures, age verification, and content controls. The bill would authorize enforcement by the Attorney General and expose companies to significant civil penalties for violations.

Although businesses share the objective of ensuring age-appropriate, safe, and transparent interactions with AI systems, H.B. 2006 takes a more prescriptive approach than comparable laws adopted in other states. Its broad requirements, ambiguous standards, and punitive penalties would add to the growing patchwork of state AI regulations, creating compliance uncertainty and potentially discouraging adoption of AI technologies in Pennsylvania.

The PA Chamber opposed this legislation (CLICK HERE for their memo), which now advances to the full House.

 

Reducing Pricing Flexibility (H.B. 2626; Davidson)

The House Consumer Protection, Technology, and Utilities Committee voted 18-8 to advance HB 2626 last Tuesday.

H.B. 2626 would prohibit the use of dynamic pricing in brick-and-mortar retail stores under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law. The bill applies to electronically displayed prices that can be changed remotely in near real time.

Dynamic pricing technologies allow businesses to adjust prices in response to factors such as inventory levels, promotions, and consumer demand, helping retailers manage costs and offer discounts and other programs valued by consumers. The bill would expose retailers to increased litigation and liability risk under Pennsylvania’s consumer protection laws and could discourage the use of these tools, which would result in less pricing flexibility.

The PA Chamber opposed this legislation (CLICK HERE for their memo), which now moves onto the House floor for consideration.

 

Paraquat Ban (H.B. 1135; Mihalek)

The House Consumer Protection, Technology, and Utilities Committee voted 26-0 to unanimously advance HB 1135 last Tuesday.

H.B. 1135 would prohibit the sale and use of paraquat in Pennsylvania, removing it from use as a federally registered restricted-use herbicide in agricultural production.

Paraquat is a critical, federally regulated tool used by growers for fast, effective weed control that supports conservation tillage and resistance management. A statewide ban would eliminate a key input with limited alternatives, increasing production costs, reducing weed control flexibility, and undermining conservation practices in Pennsylvania agriculture.

The PA Chamber opposed this legislation, which now moves onto the full House.

 

Caffeine Disclosure Mandate (H.B. 2377; Dougherty)

The House Consumer Protection Technology and Utilities Committee voted 20-6 to advance HB 2377 last Tuesday.

H.B. 2377 would require beverages containing 80 mg or more of caffeine per serving to carry warning labels when sold in retail and food service establishments in Pennsylvania.

This bill would create inconsistent and burdensome labeling requirements for restaurants, grocery stores, convenience stores, and other food retailers, adding complexity without improving consumer understanding. It could also confuse consumers by applying warnings unevenly across similar products and impose additional operational costs on businesses that already provide caffeine disclosure and adhere to federal regulatory standards.

The PA Chamber opposed this legislation, which now advances to the full House.

 

Amending Public Utility Commission Standards (H.B. 2184; Otten)

The House Consumer Protection, Technology, and Utilities Committee voted 18-8 to advance HB 2184 last Tuesday.

This bill would require the Pennsylvania Public Utility Commission to explicitly consider “public interest” in its proceedings and decisions.

This legislation is both unnecessary, as PUC practice and approval processes already emphasize the concept of “public interest,” and detrimental, as it would complicate PUC proceedings by forcing the PUC to expand the factors it must consider beyond its intended scope.

The PA Chamber opposed this legislation, which now moves to the House floor.

 

Virtual Currency Kiosk Regulatory Structure (H.B. 2643; Ciresi)

The House Commerce Committee voted 16-10 to advance HB 2643 last Monday.

House Bill 2643 would create a regulatory framework for virtual currency kiosks (commonly known as cryptocurrency ATMs) in Pennsylvania. It establishes licensing requirements, oversight by the Department of Banking and Securities, and a dedicated fund to support public education on virtual currency use and risks.

Operators of virtual currency kiosks would be required to obtain licenses, meet financial and operational standards, and comply with ongoing reporting, disclosure, and consumer protection requirements.

The PA Chamber supported this legislation, which now advances to the full House.