Senator Yudichak, Representative Kaufer and Supporters Hail Passage of the Local Resource Manufacturing Tax Credit

Harrisburg, July 14, 2020 – State Senator John Yudichak (I-Luzerne/Carbon), Representative Aaron Kaufer (R-Luzerne) and supporters of House Bill 732 hailed passage today of landmark legislation that establishes the Local Resource Manufacturing Tax Credit program.

Senator Yudichak offered an amendment to House Bill 732, after negotiations with the Wolf Administration and several business and labor organizations, that establishes the Local Resource Manufacturing Tax Credit to attract private investment in the construction and operation of Pennsylvania manufacturing facilities that use dry natural gas to produce fertilizer and other petrochemical products.

Specifically, Senator Yudichak’s amendment provides a tax credit against 20 percent of a qualified company’s annual tax liabilities.  Qualifying for the Local Resource Manufacturing Tax Credit requires a company to invest $400 million in the construction of a new manufacturing facility, create 800 new and permanent jobs, pay prevailing wages and benefits, and use carbon capture and sequestration technology when economically feasible.

The Local Resource Manufacturing Tax Credit has no immediate fiscal impact to the state budget, and no tax credit is payable until at least 2025 when companies would become eligible to apply. 

The Pennsylvania Manufacturers’ Association’s economic analysis of House Bill 732 estimates that more than 4,400 jobs and over $1.6 billion in economic benefits would be generated from the construction of four manufacturing facilities under the provisions of the legislation.

The Senate passed House Bill 732 by a vote of 40-9. The House concurred with the changes made in House Bill 732 by a vote of 163-38.

State Senator John Yudichak (I-Luzerne/Carbon)

“Our struggling economy needs new industries to invest in Pennsylvania and working families in northeastern Pennsylvania deserve a fair shot at securing good paying jobs,” said State Senator John Yudichak.  “The Local Resource Manufacturing Tax Credit, which will set the stage for transformative economic growth across a wide swath of industries from the construction trades to manufacturing and energy jobs, is the product of a thoughtful, bipartisan compromise with Governor Tom Wolf and the legislature that proves government can deliver on the promise of economic opportunity for all.”

Representative Aaron Kaufer (R-Luzerne)

“This tax credit further opens the door for manufacturers to not only establish roots here in Pennsylvania, but to generate large revenues, boost our region’s economy and provide vast opportunities for job growth,” said Representative Kaufer. “Again, this is a once-in-a-lifetime chance for Pennsylvania, especially the northeast region, as it will also allow us to use cost-effective, accessible natural gas to compete with overseas manufacturers.”

David Taylor, President and CEO of the Pennsylvania Manufacturers’ Association

“The Local Resource Manufacturing Tax Credit in House Bill 732 will bring a new manufacturing industry to Pennsylvania at a time when economic vitality is needed most,” said David N. Taylor, President & CEO of the Pennsylvania Manufacturers’ Association. “While making new products like fertilizers and fuel, these manufacturing facilities will create high-value jobs, expand the use of Pennsylvania energy, and attract related industries and additional investments, all of which will accelerate our economic recovery. This remarkable effort has brought together Pennsylvania industry – both labor and management – in our shared commitment to a pro-production, pro-jobs, pro-growth agenda for our commonwealth.”

Anthony Seiwell, Business Manager of the Eastern Pennsylvania Laborers’ District Council

“By choosing to evolve rather than abandon the manufacturing tax credit previously associated with HB1100, the lives of working families in northeastern Pennsylvania may also evolve,” said Anthony Seiwell, Business Manager of the Eastern Pennsylvania Laborers’ District Council. “The Governor’s administration along with labor, industry, and bipartisan legislators compromised under our shared commitment to promote local construction and manufacturing as well as create thousands of family-supporting jobs.”

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