Sen. Elder Vogel (R-Beaver) announced Wednesday he has introduced legislation-- Senate Bill 1563--  designed to attract investment into the growing ethane supply market in Pennsylvania.  The legislation is written as a way to encourage Shell and other ethylene producers and downstream manufacturers to locate their operations in Pennsylvania while at the same time protecting taxpayers.

Rep. Jim Christiana (R-Beaver) introduced a similar companion bill in the House-- House Bill 2478 (not yet online).

"This legislation will show Shell and other manufacturers that Pennsylvania is open for business.  The tax credit will be performance based and up for annual review by the legislature.  This will balance the need to attract investment with a strong protection for taxpayers," Sen. Vogel said.

The legislation is designed to attract natural gas ethane feedstock to stay in Pennsylvania, while encouraging manufacturers who use that feedstock to make everyday products to locate their operations in Pennsylvania. Tax credits differ from direct payments by allowing companies to reduce or eliminate their tax burden rather than using direct money from the taxpayers.

Rather than offering a set amount of available tax credits for a long period of time, Sen. Vogel's legislation would require that the amount of the tax credit shall be determined annually by the General Assembly, beginning in 2017.

"We owe it to the taxpayers to ask, is $66 million a year the right amount for this tax credit?  Maybe so."  Sen. Vogel said.  "But let's make that determination.  Let's make sure Shell is going to come, and let's make sure we protect the taxpayers.  This is a once in a life-time opportunity for job creation, so let's make sure the cracker plant gets built, and also ensure accountability measures are in place."

"Anyone that thinks that this legislation is targeted only at Shell is thinking too small.  I foresee the cracker facility as an anchor tenant that spurs investment throughout the Commonwealth.  And that means more jobs and economic growth than western Pennsylvania has seen in generations.  We should help put the people of Pennsylvania back to work," Sen. Vogel added.

Rep. Christiana’s bill would create the Pennsylvania Resource Manufacturing (PRM) tax credit, which would be offered to any manufacturer purchasing natural gas containing ethane as raw material for production.

The nonrefundable PRM tax credit would be five cents per gallon of ethane purchased and would be limited to 20 percent of the company’s qualifying Pennsylvania tax liabilities incurred in the taxable year for which the credit was approved.Under House Bill 2478, PRM tax credits could be sold or assigned to other natural gas suppliers or Pennsylvania manufacturers buying or using an ethane derivative.

Within one year after the credit is approved, a corporation would be able to apply to the Department of Community and Economic Development for approval to assign the credits to an eligible taxpayer. The buyer of the credit would be permitted to use the purchased credit to offset up to 50 percent of its Pennsylvania Tax liability.

PRM tax credits approved for sale or assignment may be used only once and must be used within the tax year approved for assignment.

“These tax credits are crucial to locking in Beaver County as the location for the cracker plant and securing tens of thousands of jobs that will be created for Pennsylvania citizens by an industry of this magnitude,” said Rep. Christiana. “If we allow this company to choose another state to set up shop, we will lose a historic opportunity to cultivate Pennsylvania’s economic future.”

“This is a meaningful step, not just for Beaver County, but the entire Commonwealth; these incentives have the ability to draw other ethane-processing companies to Pennsylvania, encouraging further development and job creation,” said Rep. Christiana. “Attracting chemical and manufacturing industries here will be an important economic investment with long-term benefits for our residents and communities.”

            NewsClips: Vogel Introduces Different Shell Tax Credit Bill

                                House, Senate Shell Tax Credit Bills Introduced

                                Officials Boost $1.65 Billion Shell Subsidy Plan

                                Corbett Begins PR Effort For Refinery Tax Credit

                                Corbett Wants Speedy OK For Cracker Plant Credits

                                DCED Secretary: Shell Asked For Cracker Plan Assistance

                                Corbett: Others Still Vying For Shell Plant

                                West Virginia: No Further Talks With Shell On Plant

                                Corbett Claims Urgency For Shell Incentives

                                Corbett’s $1.7 Billion Shell Tax Break Banks On Jobs

                                Proposed Shell Plant Tax Break Draws Debate

                                Shell Plant Tax Credit Plan Similar To Canadian One

                                Corbett: Shell Negotiations Are Not A Done Deal

                                DCED, DEP Deny Act 2 Program Will Fund Shell Site Cleanup

                                Op-Ed: Corbett Keeps Shoveling Money To Gas Companies

                                Op-Ed: Shell Tax Credit Is About More Jobs, Walker

                                Editorial: Make Shell Tax Credit Pay Off

                                Editorial: Shell-ing Of Plan Is Nearsighted

                                Study Projects 14 Percent Growth In Shale Jobs

                                PA To Lead In Jobs From Shale Development

6/18/2012