Senate Votes to Create New Tax Credit Programs to Bring Jobs and Investment to PA

HARRISBURG – New jobs and more investment could be coming to Pennsylvania after the Senate voted today to create and expand tax credit programs to support targeted investments in key industries.

House Bill 1059 would make new resources available for job growth under the newly established Pennsylvania Economic Development for a Growing Economy (PA EDGE) tax credit program. The program will be made up of four components to attract major new investments to Pennsylvania communities.

One of the new programs is the Regional Clean Hydrogen Hub Tax Credit program, which is designed to support projects requiring a capital investment of at least $500 million. Projects would also be required to make a good faith effort to use the local labor market and create at least 1,200 permanent and new jobs.

The bill authorizes $50 million in tax credits annually, which are not to exceed 50% of facility construction costs.

The bill would also establish a new Pennsylvania Milk Processing Tax Credit program to support Pennsylvania’s dairy industry. The tax credit would be equal to 5 cents per gallon of milk purchased and processed from within Pennsylvania. The program would also require capital investment of at least $500 million, efforts to use local labor, and the creation of at least 1,200 permanent and new jobs.

Tax credits of $15 million would be authorized annually, not to exceed 25% of the capital investment.

The legislation would also create the Semiconductor Manufacturing, Biomedical Manufacturing and Research Tax Credit program. A total of $20 million in tax credits would be available annually, split evenly between semiconductor manufacturing and biomedical projects.

Total tax credits awarded may not exceed 25% of the capital cost to construct the facility.

In addition, House Bill 1059 would increase the cap on the Local Resource Manufacturing Tax Credit Program from $26.6 million to $56.6 million annually, while ensuring tax credits remain available for construction of a smaller project facility in the near future.

The new tax credits are intended to build on Pennsylvania’s previous success in bringing high-quality jobs to the state.

A 2020 law creating the Local Resource Manufacturing Tax Credit program led to Nacero Inc. committing to build a new $6 billion lower carbon gasoline manufacturing facility in northeastern Pennsylvania. A 2012 tax credit plan was a key part of Shell Chemicals’ decision to build its new $2 billion ethane cracker plant in Beaver County, which is expected to create at least 600 permanent jobs.