HB 1267 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in Pennsylvania Economic Development for a Growing Economy (PA EDGE) tax credits relating to semiconductor manufacturing and biomedical manufacturing and research, further providing for definitions and for application and approval of tax credit.

PRINTER'S NO.   1410

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1267
                                                Session of
                                                  2025

     INTRODUCED BY SAMUELSON, GREINER, HILL-EVANS, SANCHEZ, VENKAT,
        SCHLOSSBERG, KHAN, GIRAL, HADDOCK, CERRATO, NEILSON AND
        D. WILLIAMS, APRIL 17, 2025

     REFERRED TO COMMITTEE ON FINANCE, APRIL 17, 2025


                                       AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," in Pennsylvania Economic Development for a
11      Growing Economy (PA EDGE) tax credits relating to
12      semiconductor manufacturing and biomedical manufacturing and
13      research, further providing for definitions and for
14      application and approval of tax credit.
15      The General Assembly of the Commonwealth of Pennsylvania
16   hereby enacts as follows:
17      Section 1.     The definitions of "qualified taxpayer" and
18   "semiconductor manufacturing" in section 1771-L of the act of
19   March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
20   1971, are amended and the section is amended by adding a
21   definition to read:
22   Section 1771-L.    Definitions.
23      The following words and phrases when used in this subarticle
 1   shall have the meanings given to them in this section unless the
 2   context clearly indicates otherwise:
 3      * * *
 4      "Early stage semiconductor business."   A business with less
 5   than $10,000,000 in revenue and in the areas of research or
 6   design of semiconductor materials, semiconductor devices or
 7   semiconductor packing and testing.
 8      * * *
 9      "Qualified taxpayer."    A company that satisfies all of the
10   following or is an early stage semiconductor business:
11          (1)   Conducts semiconductor manufacturing, biomedical
12      manufacturing or biomedical research in this Commonwealth at
13      a project facility in this Commonwealth that has been placed
14      in service on or after the effective date of this section.
15          (2)   Has made a capital investment of at least
16      [$200,000,000] $100,000,000 in order to construct the project
17      facility and place the project facility into service in this
18      Commonwealth.
19          (3)   Has created a minimum aggregate total of [800] 100
20      permanent jobs.
21          (4)   Has made good faith efforts to recruit and employ,
22      and to encourage any contractors or subcontractors to recruit
23      and employ, workers from the local labor market for
24      employment during the construction of the project facility.
25          (5)   Has demonstrated that the new jobs created at the
26      project facility or for work covered by Subarticle F are paid
27      at least the prevailing minimum wage and benefit rates for
28      each craft or classification as determined by the Department
29      of Labor and Industry.
30          (6)   The construction work to place a project facility

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 1      into service shall be performed subject to the act of March
 2      3, 1978 (P.L.6, No.3), known as the Steel Products
 3      Procurement Act.
 4      "Semiconductor manufacturing."       [The manufacture of
 5   components or the creation of advanced processes or technology
 6   within the semiconductor manufacturing and related equipment and
 7   material supplier sector.] Any of the following within the
 8   semiconductor manufacturing and related equipment and material
 9   supplier sector:
10            (1)   The manufacture of components, including
11      semiconductor manufacturing, semiconductor wafer production,
12      semiconductor fabrication, semiconductor packaging,
13      manufacturing of semiconductors, manufacturing of
14      semiconductor manufacturing equipment or semiconductor
15      manufacturing equipment as defined in 26 CFR 1.48D-2
16      (relating to definitions) as of the effective date of this
17      paragraph.
18            (2)   The creation of advanced processes or technology.
19            (3)   The advanced testing and packaging of components.
20      Section 2.     Section 1773-L(a) and (d)(2) of the act are
21   amended and subsection (d) is amended by adding a paragraph to
22   read:
23   Section 1773-L.    Application and approval of tax credit.
24      (a)   Determination of tax credit amount.--[The] Except as
25   provided under paragraph (3), the annual tax credit amount may
26   be determined based upon any one or more of the following:
27            (1)   No more than 2.5% of the capital investment.
28            (2)   No more than 100% of tax withheld from employees and
29      paid under Article III or $20,000, whichever is less, for
30      each permanent job at the project facility.

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 1          project facility in the prior calendar year.
 2          (3)     If the applicant is an early stage semiconductor
 3    business, the applicant must have at least $3,000,000 in
 4    research and development investment during the previous year.
 5    * * *
 6    (d)   Availability of tax credits.--
 7          * * *
 8          (2)   The department shall issue [up to $10,000,000] a
 9    minimum of $1,000,000 in a fiscal year to [the qualified
10    taxpayer] qualified taxpayers engaged in semiconductor
11    manufacturing which first meets the qualifications to receive
12    a tax credit under this subarticle. The department shall not
13    exceed $8,000,000 in aggregate tax credits issued in one
14    year.
15          * * *
16          (3.1)    The department shall issue a minimum of $100,000
17    in a fiscal year to an early stage semiconductor business. An
18    individual early stage semiconductor business may not receive
19    more than $1,000,000 in any fiscal year. An award may be for
20    up to five years. The department shall not exceed $2,000,000
21    in aggregate tax credits in one year.
22    Section 3.      This act shall take effect in 60 days.




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