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Gov. Tom Wolf Plans To Veto Natural Gas Manufacturing Tax Credit

HARRISBURG, Pa. (AP) — A bill that would provide millions in tax breaks for new construction of facilities to use natural gas extracted in the state to make fertilizers and other chemicals will be vetoed by Pennsylvania's governor, his spokesman said Wednesday.

The bill, which passed both legislative chambers this week by veto-proof majorities, authorizes the "energy and fertilizer manufacturing tax credit" for projects that require at least $450 million in construction and start-up costs and create at least 800 jobs.

The Revenue Department estimates the tax credit would be worth about $22 million annually, per plant. The tax break would expire at the end of 2050.

Wolf "believes such projects should be evaluated on a specific case-by-case basis," said his press secretary, J.J. Abbott. "However, if there was a specific project, he would be open to a conversation."

Eligibility will also require payment of prevailing wage rates and an effort to hire local workers during construction.

A 2012 state law, establishing the PA resource manufacturing tax credit, provides a tax credit for turning ethane, found in "wet" natural gas from southwestern Pennsylvania, into ethylene. It was used to lure an enormous cracker plant, Shell's Pennsylvania Petrochemical Complex, now under construction in Monaca, Beaver County.

The new law aims to develop manufacturing from "dry" natural gas, which in Pennsylvania is found mostly in the north-central and northeastern parts of the state.

(Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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