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State lawmakers on Monday advanced a bill intended to help Pennsylvania residents affected by the Feb. 3, 2023, Norfolk Southern train derailment just over the state line in East Palestine, Ohio.
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Payments to Pa. residents harmed by train derailment catastrophe would be tax-exempt under proposed state law

AP photo / Gene J. Puskar

Payments to Pa. residents harmed by train derailment catastrophe would be tax-exempt under proposed state law

HARRISBURG — Compensatory payments made to Pennsylvania residents harmed by the 2023 derailment of a Norfolk Southern train carrying toxic chemicals would be exempt from state tax under a proposal that advanced in the Senate on Monday.

Payments exempted under the bill that cleared the Senate Appropriations Committee would include those flowing from a $600 million proposed settlement that got tentative court approval last month and others, according to Sen. Doug Mastriano, R-Franklin.

Mr. Mastriano, the prime sponsor, said the idea sprang out of conversations with affected residents who came to Community College of Beaver County for a hearing on Feb. 23, 2023, 20 days after the derailment in East Palestine, Ohio, just across the state line.

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Some of those residents, he said, asked questions about whether there would be taxes on damage payments. His bill, he said, would exempt from state tax payments “going all the way back to the date of the derailment.”

The Pennsylvania Capitol is seen, Feb. 6, 2024, in Harrisburg, Pa. Pennsylvania lawmakers will return to session Monday, June 3, as they begin a four-week countdown to the state government's new fiscal year, as Democratic Gov. Josh Shapiro and Republican lawmakers offer competing visions for how to use a massive surplus.
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In a memo, Mr. Mastriano and Republican co-sponsoring Sens. Michele Brooks of Mercer County and Elder Vogel of Beaver County said Ohio already had set up a similar financial mechanism for its residents.

“We believe it’s fair to do the same for Pennsylvanians,” the memo said.

A similar measure exempting payments made under the $600 million settlement from federal taxes already has been approved by the U.S. House.

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At the hearing in Beaver County, residents told horror stories of skin rashes, headaches, sick animals and a feeling of helplessness. One, Darlington resident Amanda Kemmer, said “the whole sky was black” after officials set fire to toxic chemicals at the derailment site as a safety measure.

Mr. Mastriano said the proposed tax exclusion would cover — among other things — any “inconvenience” payments residents might have received from Norfolk Southern soon after the catastrophe; any payments under the proposed $600 million settlement; and any payments made to individuals under a separate $310 million settlement reached between Norfolk Southern and the U.S. Environmental Protection Agency and Department of Justice.

The bill received unanimous, bipartisan support from the Appropriations Committee. Observers said it was possible it could be put to a final vote in the Senate later this week.

Ford Turner: fturner@post-gazette.com

First Published: June 3, 2024, 9:10 p.m.
Updated: June 4, 2024, 7:37 p.m.

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State lawmakers on Monday advanced a bill intended to help Pennsylvania residents affected by the Feb. 3, 2023, Norfolk Southern train derailment just over the state line in East Palestine, Ohio.  (AP photo / Gene J. Puskar)
AP photo / Gene J. Puskar
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