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Pennsylvania Lawmakers Consider Marcellus Job Creation Tax Credit

Members of the Pennsylvania General Assembly have begun considering House Bill 2399, which among other things would provide a tax credit to companies that create new jobs related to the Marcellus Shale.

HB 2399, which was introduced by state Rep. Rick Mirabito, a Democrat from Williamsport, would provide $25 million each fiscal year to the Pennsylvania Department of Community and Economic Development (DCED) for the Marcellus Shale Job Creation Tax Credit.

The bill, which would amend Titles 58 (Oil and Gas) and 72 (Taxation and Fiscal Affairs) of the Pennsylvania Consolidated Statutes, was referred this week to the House Committee on Environmental Resources and Energy. In addition to the tax credit, the legislation provides for distribution of the unconventional gas well fee imposed under Act 13 and imposes additional duties on the DCED.

Under the job creation tax credit portion of the legislation, companies would be eligible to receive tax credits if they demonstrate to state officials financial stability and their proposed projects' financial viability; express an intent to maintain operations in Pennsylvania for five years from the date they submit tax credit certificates; and they conform with industry laws and regulations.

Priority would be given to applicants that place workers who have completed approved apprenticeship training programs, dislocated workers, those unemployed for at least six months, or those who are underemployed. The bill sets a maximum credit of $2,500 for every new job created.

A new job is defined by the bill as a full-time job, the average hourly rate that, excluding benefits, has to be at least 350% of the federal minimum wage. The job also has to be created within a municipality located by a company within three years from the start date. The term includes a job that was previously held by a nonresident and is filled by a resident.

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