Signed by Governor Tom Wolf

Vote Smart's Synopsis:

Vote to pass a bill that establishes a new tax credit for companies that invest and create jobs building petrochemical and fertilizer plants that use Pennsylvania-produced dry natural gas.

Highlights:

• Establishes a “Local Resource Manufacturing” tax credit for any company that demonstrates the following (Sec. 1):

• The company meets the requirements of a qualified taxpayer;

• The use of carbon capture and sequestration technology at the project facility is cost-effective and feasible at the discretion of the qualified taxpayer; and

• There is confirmation that the company has filed all required state tax reports & returns for all applicable tax years and paid any balance of state tax due.

• Defines a “qualified taxpayer” as a company that satisfies all of the following (Sec. 1):

• Purchases and uses dry natural gas produced in Pennsylvania for manufacturing petrochemicals or fertilizers at a facility that has been placed in service on or after the effective date of this bill;

• Has made a capital investment of at least $400 million in order to construct a project facility in Pennsylvania;

• Has created a minimum aggregate total of 800 new construction or permanent jobs;

• Has made good faith efforts to recruit and employ workers from the local labor market for employment during the construction of the project facility; and

• Has demonstrated that the new jobs created at the project facility are paid at least the minimum wage and benefit rates for each classification determined by the Department of Labor.

• Specifies that the tax credit will be $0.47 per unit of dry natural gas that is purchased and used in the manufacturing of petrochemicals or fertilizers (Sec. 1).

• Requires an application for tax credits be filed by March 1 prior to the calendar year a company wants to apply for (Sec. 1).

• Appropriates $26.6 million in tax credits to be made available for this program (Sec. 1).

• Authorizes that tax credits to be applied against up to 20 percent of the qualified taxpayer’s tax liabilities incurred in the year that was approved (Sec. 1).

• Prohibits any taxpayer granted credits in this bill from receiving other tax credits (Sec. 1).

• Prohibits tax credits from being carried back, carried over, or used to obtain a refund (Sec. 1). 

• Authorizes qualified taxpayers to sell or assign a tax credit, in whole or part, if they hold onto any credits through the end of a calendar year (Sec. 1). 

• Requires a report to be submitted by October 1 of every year to the General Assembly specifying the recipients of tax credits and how much credits were distributed (Sec. 1). 

• Specifies that this program applies to the purchase of dry natural gas produced in Pennsylvania from January 1, 2024, to December 31, 2049 (Sec. 1). 

• Specifies that this new credit program takes effect 60 days from this bill’s passage (Sec. 3).

Full Bill Text