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07.14.2020


Northeastern Pennsylvania - Pennsylvania Governor Tom Wolf said Tuesday that he supports legislation that would provide hundreds of millions in tax credits to petrochemical facilities and others that refine natural gas into products like plastic pellets or fertilizer. 


 

The bill, HB 732, passed the state Senate by a 40-9 vote. All Republicans supported the bill and even the majority of Senate Democrats backed the measure. The bill is likely a do-over of an earlier bill, HB 1100, which also was written to offer tax credits to petrochemical companies. HB 1100 passed through the legislature, but Gov. Tom Wolf (D-York) vetoed that bill.

However, Wolf is poised to sign HB 732. Today, the state House passed HB 732 by a 163-38 vote, and it now heads to Wolf’s desk. According to StateImpact Pennsylvania, state Senate leaders said during yesterday’s floor debate that Wolf has agreed to sign the bill.

 

That means Pennsylvania will soon be providing a maximum of $6.7 million a year to companies that qualify, and only four a year can qualify. The incentive program would begin in 2024 and last until 2050, meaning the potential of about $670 million in tax credits could be handed out over the lifetime of the bill.

 

The tax credit legislation has high-profile support from traditional Republican allies, including the Pennsylvania Manufacturers Association and the state’s huge natural gas industry, and traditional Democratic allies in the building trades unions.

 

 


Its backers hailed it as a once-in-a-lifetime opportunity to bring

new prosperity to Northeastern Pennsylvania!


Thanks to a decade of exploration in the prolific Marcellus Shale reservoir, the region now boasts a plentiful supply of dry natural gas that can be turned into fertilizer, ammonia, diesel exhaust fluid, and other chemical products that are in demand across the northeastern United States, backers say.

 

The sponsor, Rep. Aaron Kaufer, R-Luzerne, called it the “the transformative opportunity of a generation.”

 

The natural-gas industry is celebrating HB 732’s passage. And the bill is a major victory for state Sen. John Yudichak (I-Luzerne), who wrote the bill. Yudichak has been lobbying hard for this bill in hopes to attract a petrochemical facility to his district. He said that 150 permanent jobs would be created in each site that qualifies for the tax credits. Two companies have already expressed interest in moving to Pennsylvania because of the bill, which would mean 300 permanent jobs, as well as likely a few thousand temporary construction jobs.
 

The bill is a particular achievement for unions, guaranteeing the facilities that get the tax credit pay union-scale wages for construction.


“This bill is a winner, this bill will lead our state into that 

industrial renaissance that we should have,” 

said Rep. Joshua Kail, R-Beaver.


It also could lure new natural gas customers in the nation’s No. 2 natural gas state behind Texas, as the industry weathers stubbornly low prices and court and regulatory battles that have stalled major interstate pipeline projects.

 

Two projects on the drawing board, targeting sites in Clinton County and Luzerne County, could be candidates for the tax credit.

 

The facilities must meet a capital investment requirement of $400 million and 800 jobs, including construction.

 

The bill is modeled on a 2012 state law that was designed to lure a multibillion-dollar Shell ethane refinery now under construction in western Pennsylvania’s Beaver County.


Sources:

https://apnews.com/022a08ed292fb22152dd328470d9dfe0

https://www.pghcitypaper.com/pittsburgh/pa-poised-to-provide-potentially-670-million-in-tax-breaks-to-natural-gas-manufacturers/Content?oid=17651009



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