Pennsylvania tax legislation could attract Shell refinery

Posted January 29, 2012


PITTSBURGH - New legislation in Pennsylvania could help the state compete with Ohio and West Virginia for a huge petrochemical refinery by offering millions of dollars in tax breaks for big businesses.

A bill would expand Keystone Opportunity Zones, which grant broad tax cuts and exemptions to spur economic development, the Pittsburgh Tribune-Review reported Saturday.

Businesses that invest at least $1 billion and create at least 400 permanent, full-time jobs would get an extra five years of tax breaks - 15 years in all - under provisions in the bill.

The bill is moving toward passage as state officials court Shell Oil Co., the paper reported. Shell plans to spend as much as $4 billion to build a plant known as an "ethane cracker" to process natural gas from the region and turn it into such products as plastics.

Offering a sweetened Keystone Opportunity Zone is probably the best way to compete with Ohio and West Virginia, several former state economic officials told the paper.

West Virginia's Legislature on Wednesday passed Gov. Earl Ray Tomblin's proposal to slash property taxes for 25 years for any business that invests at least $2 billion toward building a cracker in that state. Tomblin signed it into law before heading to Houston Thursday to promote West Virginia in the cracker chase. Ohio is also believed to be offering major incentives.

The Opportunity Zones have "been the most powerful tool we have had in competing for business," said state Sen. John Blake, D-Scranton, a co-sponsor of the bill and former acting secretary of the Department of Community and Economic Development. "The benefits of the KOZ are powerful enough that they'll drive a business decision."

The legislation awaits a vote by the House Appropriations Committee, and leaders plan to bring it up when they resume work next month, said House Republican spokesman Stephen Miskin.

Industry estimates suggest the ethane cracker would generate thousands of construction jobs and attract many smaller manufacturers to the region.

Shell officials have said they plan to announce their site choice in the next month or two.

Copyright Observer Publishing Co.