SB 440 — 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, for eligibility, for application and approval of tax credit and for sale or assignment.

PRINTER'S NO.   466

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 440
                                                Session of
                                                  2025

     INTRODUCED BY PENNYCUICK, BOSCOLA, GEBHARD, FONTANA, COSTA,
        FARRY, SAVAL AND STEFANO, MARCH 21, 2025

     REFERRED TO FINANCE, MARCH 21, 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, for eligibility,
14      for application and approval of tax credit and for sale or
15      assignment.
16      The General Assembly of the Commonwealth of Pennsylvania
17   hereby enacts as follows:
18      Section 1.     The definitions of "project facility," "qualified
19   taxpayer" and "semiconductor manufacturing" in section 1771-L of
20   the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
21   Code of 1971, are amended and the section is amended by adding a
22   definition to read:
23   Section 1771-L.    Definitions.
24      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 in the areas of research or design
 6   of semiconductor materials, semiconductor devices or
 7   semiconductor packaging and testing.
 8      "Project facility."     A facility located in this Commonwealth
 9   which is owned and operated by [the] a qualified taxpayer and
10   where semiconductor manufacturing, biomedical manufacturing or
11   biomedical research is conducted by [the] a qualified taxpayer
12   at the project facility.
13      "Qualified taxpayer."    [A company that satisfies all of the
14   following:
15          (1)   Conducts semiconductor manufacturing, biomedical
16      manufacturing or biomedical research in this Commonwealth at
17      a project facility in this Commonwealth that has been placed
18      in service on or after the effective date of this section.
19          (2)   Has made a capital investment of at least
20      $200,000,000 in order to construct the project facility and
21      place the project facility into service in this Commonwealth.
22          (3)   Has created a minimum aggregate total of 800
23      permanent jobs.
24          (4)   Has made good faith efforts to recruit and employ,
25      and to encourage any contractors or subcontractors to recruit
26      and employ, workers from the local labor market for
27      employment during the construction of the project facility.
28          (5)   Has demonstrated that the new jobs created at the
29      project facility or for work covered by Subarticle F are paid
30      at least the prevailing minimum wage and benefit rates for

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 1    each craft or classification as determined by the Department
 2    of Labor and Industry.
 3        (6)   The construction work to place a project facility
 4    into service shall be performed subject to the act of March
 5    3, 1978 (P.L.6, No.3), known as the Steel Products
 6    Procurement Act.] A company that either:
 7        (1)   is an early-stage semiconductor business; or
 8        (2)   satisfies all of the following:
 9              (i)    Conducts semiconductor manufacturing, biomedical
10        manufacturing or biomedical research in this Commonwealth
11        at a project facility in this Commonwealth that has been
12        placed in service on or after the effective date of this
13        paragraph.
14              (ii)    Has made a capital investment of at least
15        $20,000,000 in order to construct the project facility
16        and place the project facility into service in this
17        Commonwealth.
18              (iii)    Has created or retained a minimum aggregate
19        total of 100 permanent jobs.
20              (iv)    Has made good faith efforts to recruit and
21        employ, and to encourage any contractor or subcontractor
22        to recruit and employ, workers from the local labor
23        market for employment during the construction of the
24        project facility.
25              (v)    Has demonstrated that the new jobs created at
26        the project facility or for work covered by Subarticle F
27        are paid at least the prevailing minimum wage and benefit
28        rates for each craft or classification as determined by
29        the Department of Labor and Industry.
30              (vi)    The construction work to place a project

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 1          facility into service is subject to the act of March 3,
 2          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.] As follows:
 8          (1)     Any of the following activities:
 9                (i)    the manufacturing of components;
10                (ii)    the creation of advanced processes or
11          technology; or
12                (iii)    advanced testing and packaging of components,
13          in each case within the semiconductor manufacturing and
14          related equipment and material supplier.
15          (2)     The term includes research or design of
16      semiconductor materials, semiconductor devices or
17      semiconductor packaging and testing.
18      Section 2.      Sections 1772-L, 1773-L and 1776-L(a) of the act
19   are amended to read:
20   Section 1772-L.      Eligibility.
21      In order to be eligible to receive a tax credit, a company
22   shall demonstrate the following:
23          (1)     The company meets the requirements of a qualified
24      taxpayer.
25          (2)     Confirmation that the company has filed all required
26      State tax reports and returns for all applicable taxable
27      years and paid any balance of State tax due as determined by
28      assessment or determination by the department and not under
29      timely appeal.
30          (3)     If the applicant is an early-stage semiconductor

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 1      business, the applicant must have at least $3,000,000 in
 2      research and development investment during the previous year.
 3   Section 1773-L.        Application and approval of tax credit.
 4      (a)   Determination of tax credit amount.--The annual tax
 5   credit amount may be determined based upon any one or more of
 6   the following:
 7            (1)   No more than 2.5% of the capital investment.
 8            (2)   No more than 100% of tax withheld from employees and
 9      paid under Article III or $20,000, whichever is less, for
10      each created or retained permanent job at the project
11      facility.
12      (b)   Application.--
13            (1)   A qualified taxpayer may apply to the department for
14      a tax credit under this section.
15            (2)   The application must be submitted to the department
16      by March 1 for the tax credit claimed for semiconductor
17      manufacturing, biomedical manufacturing or biomedical
18      research conducted by the qualified taxpayer at [the] a
19      project facility during the prior calendar year.
20            (3)   The application must be on the form required by the
21      department which shall include the following:
22                  (i)    information required by the department to
23            document the semiconductor manufacturing, biomedical
24            manufacturing or biomedical research conducted at [the] a
25            project facility;
26                  (ii)    information required by the department to
27            verify that the applicant is a qualified taxpayer; and
28                  (iii)    any other information as the department deems
29            appropriate.
30      (c)   Review and approval.--

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 1          (1)   The department shall review the applications and
 2    shall issue an approval or disapproval by May 1.
 3          (2)   Upon approval, the department shall issue a
 4    certificate stating the amount of the tax credit granted for
 5    semiconductor manufacturing, biomedical manufacturing or
 6    biomedical research conducted at [the] a project facility in
 7    the prior calendar year.
 8    (d)   Availability of tax credits.--
 9          (1)   Each fiscal year, $20,000,000 in tax credits shall
10    be made available to the department in accordance with this
11    subarticle.
12          (2)   The department shall issue [up to $10,000,000] a
13    minimum of $1,000,000 in a fiscal year to [the qualified
14    taxpayer] qualified taxpayers engaged in semiconductor
15    manufacturing [which first meets] that first meet the
16    qualifications to receive a tax credit under this subarticle.
17    The department may not issue more than $8,000,000 in
18    aggregate tax credits in a year under this paragraph.
19          (3)   The department shall issue [up to $10,000,000] a
20    minimum of $1,000,000 in a fiscal year to [the qualified
21    taxpayer] qualified taxpayers engaged in biomedical
22    manufacturing or biomedical research [which first meets] that
23    first meet the qualifications to receive a tax credit under
24    this subarticle.
25          (3.1)   The department shall issue a minimum of $100,000
26    in a fiscal year to early-stage semiconductor businesses that
27    first meet the qualifications to receive a tax credit under
28    this subarticle. An early-stage semiconductor business may
29    not receive more than $1,000,000 in any fiscal year and the
30    award may be for up to five years. The department may not

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 1      issue more than $2,000,000 in aggregate tax credits in a year
 2      under this paragraph.
 3            (4)   An amount under paragraph (1) which remains
 4      unallocated under paragraph (2) or (3) after the issuance of
 5      credits under paragraph (3.1) shall be issued to the
 6      qualified taxpayer which next meets the qualifications to
 7      receive a tax credit under this subarticle.
 8            (5)   The total aggregate amount of tax credits awarded to
 9      a qualified taxpayer under this subarticle may not exceed 25%
10      of the capital investment made to construct a project
11      facility.
12   Section 1776-L.    Sale or assignment.
13      (a)   Authorization.--If [the] a qualified taxpayer holds a
14   tax credit through the end of the calendar year in which the tax
15   credit was granted, the qualified taxpayer may sell or assign a
16   tax credit, in whole or in part, provided the sale is effective
17   by the close of the following calendar year.
18      * * *
19      Section 3.     This act shall take effect in 60 days.




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