An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for construction tax credit requirements.
HB288 would add a new article to Pennsylvania’s Tax Reform Code establishing labor-related conditions for certain construction tax credits. The bill applies to several existing construction tax credits and requires the Department of Revenue, in consultation with the Department of Labor and Industry, to verify that a taxpayer seeking a credit for a qualifying construction project made good-faith efforts to recruit local labor and that workers on the project were paid prevailing wage rates. It also requires taxpayers to notify Labor and Industry before soliciting bids or proposals so wage determinations can be issued for the crafts and classifications expected to work on the project.
The bill further provides that facilities receiving a construction tax credit are subject to the Pennsylvania Prevailing Wage Act for new jobs and for construction-related work during the initial construction period and any period in which the credit is sought and awarded. Labor and Industry would enforce the new requirements using the same administration and enforcement framework that applies under the Prevailing Wage Act. If the department finds an intentional failure to pay prevailing wages or benefits, the taxpayer would be required to refund 10% of the construction tax credit for the relevant year, with appeal rights tied to the existing prevailing wage appeal process.
HB288 would not create a new tax credit, but would impose additional eligibility, notice, compliance, and penalty requirements on taxpayers receiving certain existing construction tax credits under the Tax Reform Code. It would expand the role of the Department of Labor and Industry in reviewing projects, issuing wage determinations, enforcing compliance, and adjudicating violations, while also linking tax credit retention to prevailing wage compliance. Contractors, subcontractors, and taxpayers undertaking qualifying construction, reconstruction, demolition, alteration, or repair projects with more than $25,000 in capital expenditures would be directly affected.
Based on the bill’s sponsorship and subject matter, the measure appears to be supported by lawmakers who favor tying state tax incentives to labor standards, local hiring, and prevailing wage protections. No committee transcript or vote record is available here, so there is no documented floor or committee debate to indicate broader support or opposition. The bill’s structure suggests a pro-worker, pro-compliance policy approach rather than a revenue-raising measure.
The main likely point of contention is whether conditioning construction tax credits on local hiring efforts and prevailing wage compliance makes the credits more effective and equitable, or instead adds administrative burden and cost to development projects. Supporters would likely emphasize worker protections, local labor market participation, and accountability for public subsidies, while opponents may argue that the requirements could slow projects, increase costs, and create uncertainty for taxpayers and contractors. Another possible issue is the 10% credit refund penalty for intentional violations, which could be viewed as a strong enforcement tool or as a punitive risk depending on perspective.