PRINTER'S NO. 241
No. 224 Session of 1985
INTRODUCED BY DORR, CAPPABIANCA, F. E. TAYLOR, L. E. SMITH,
GALLEN, PRESTON, HALUSKA, BURD, LESCOVITZ, LIVENGOOD,
SEVENTY, GREENWOOD, VAN HORNE, GEIST, BELFANTI, KENNEDY,
VROON, BOOK, MACKOWSKI, BOWSER, BUSH, G. M. SNYDER, B. SMITH,
CLYMER, NOYE, HAYES, HERMAN, McVERRY, HAGARTY, SERAFINI,
DeVERTER, WASS, JOHNSON, E. Z. TAYLOR, PITTS, BUNT, SEMMEL,
HONAMAN, REBER, NAHILL, CORNELL, BLACK, CARLSON, GRUPPO,
SCHULER, JACKSON, ROBBINS, DAVIES, LANGTRY, BOYES, FARGO,
SCHEETZ, MERRY, FOX, DISTLER, BROUJOS AND LINTON,
FEBRUARY 11, 1985
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE,
FEBRUARY 11, 1985
AN ACT
1 Authorizing the creation and management of enterprise zones; and
2 imposing powers and duties on the Department of Commerce.
3 TABLE OF CONTENTS
4 Section 1. Short title.
5 Section 2. Legislative purpose.
6 Section 3. Definitions.
7 Section 4. Designation of enterprise zones.
8 Section 5. Local commitment.
9 Section 6. Revocation of designation.
10 Section 7. Eligible business organizations.
11 Section 8. Deductions and allowances.
12 Section 9. Loans to business organizations.
13 Section 10. Liability of business organizations.
1 Section 11. Additional duties of the secretary.
2 Section 12. Effective date.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short title.
6 This act shall be known and may be cited as the Enterprise
7 Zone Act.
8 Section 2. Legislative purpose.
9 It is hereby declared to be essential to the welfare of the
10 people of Pennsylvania to aid, assist and foster economic
11 redevelopment in urban, suburban and rural areas of Pennsylvania
12 which are suffering from acute unemployment, poverty and general
13 distress by encouraging cooperation between the State, its
14 political subdivisions and the private sector for the purpose of
15 providing economic, regulatory and financial assistance in the
16 rehabilitation of chronically depressed areas of Pennsylvania.
17 Section 3. Definitions.
18 The following words and phrases when used in this act shall
19 have the meanings given to them in this section unless the
20 context clearly indicates otherwise:
21 "Enterprise zone." An area suffering from pervasive poverty,
22 unemployment and general distress which is designated by the
23 governing authority of a county, city, borough, township,
24 incorporated town or home rule municipality as an enterprise
25 zone and approved by the Secretary of Commerce as an enterprise
26 zone under the provisions of this act.
27 "Pervasive poverty, unemployment and general distress." The
28 fulfillment of any one of the following criteria:
29 (1) Designation as a low income poverty area by the
30 Bureau of the Census during the most recent census.
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1 (2) Existence of an average unemployment rate in the
2 most recent 18-month period which is at least one and one-
3 half times the Statewide average unemployment rate for the
4 same period.
5 (3) Existence of chronic abandonment or demolition of
6 commercial or residential structures.
7 (4) An incidence of at least 50% of commercial or
8 residential structures being 50 years of age or older.
9 (5) Occurrence of substantial real estate tax arrearages
10 on commercial, industrial or residential structures.
11 (6) Lack of viable, widespread commercial, industrial or
12 other economic activity.
13 (7) Occurrence of at least a 10% decrease in population
14 in all census tracts between 1970 and 1980.
15 (8) Existence of a substantial out migration of jobs.
16 (9) Existence of the criteria set forth for designation
17 as deteriorated areas in section 4 of the act of December 1,
18 1977 (P.L.237, No.76), known as the Local Economic
19 Revitalization Tax Assistance Act.
20 "Rehabilitation." Improvement, construction or
21 reconstruction, including alterations and additions requiring
22 substantial investment and having the effect of rehabilitating
23 the structure so that it attains higher standards of safety,
24 health or economic utility.
25 "Secretary." The Secretary of Commerce of the Commonwealth.
26 Section 4. Designation of enterprise zones.
27 The governing authority of any county, city, borough,
28 township, incorporated town or home rule municipality may, with
29 the approval of the secretary, designate as an enterprise zone
30 an area within its boundaries which is suffering from pervasive
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1 poverty, unemployment and general distress. The secretary shall
2 ensure the substantially equal designation and approval of
3 urban, suburban and rural areas as enterprise zones. Designation
4 and approval of an area as an enterprise zone shall continue in
5 full force and effect for a period of 12 years.
6 Section 5. Local commitment.
7 Before the secretary approves the designation of an area as
8 an enterprise zone, the county, city, borough, township,
9 incorporated town or home rule municipality shall submit to the
10 secretary an accountable plan of local commitment to the
11 revitalization of the area. This local commitment plan shall
12 include, but not be limited to:
13 (1) The provision of increased fire, police, sanitation
14 and other local services.
15 (2) Guarantees of flexibility in local regulatory
16 requirements, including the relaxation or modification of
17 zoning ordinances and local building codes.
18 (3) The provision under the act of December 1, 1977
19 (P.L.237, No.76), known as the Local Economic Revitalization
20 Tax Assistance Act, of credits against or exemptions from
21 taxes levied under authority of the act of December 31, 1965
22 (P.L.1257, No.511), known as The Local Tax Enabling Act. All
23 revenue lost by the provision of such credits or exemptions
24 shall be reimbursed by the Commonwealth.
25 Section 6. Revocation of designation.
26 The secretary may revoke any designation of an area only if
27 the secretary determines, following notice and opportunity to be
28 heard, that the county, city, borough, township, incorporated
29 town or home rule municipality which designated such area is not
30 substantially complying with the plan of local commitment as
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1 approved by the secretary.
2 Section 7. Eligible business organizations.
3 Any sole proprietorship, partnership, corporation or other
4 business organization which establishes a place of business, or
5 rehabilitates an existing place of business, within an
6 enterprise zone shall be entitled to tax credits as provided in
7 section 8.
8 Section 8. Deductions and allowances.
9 (a) Grant of credit.--The Department of Revenue shall grant
10 a tax deduction in computing any tax due under Article IV of the
11 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
12 of 1971, or against any tax due from a bank, bank and trust
13 company, trust company, insurance company other than a foreign
14 fire or casualty insurance company, national bank, savings
15 association, mutual savings bank or building and loan
16 association under Article VII, VIII, IX or XVI of the Tax
17 Reform Code of 1971, or any tax substituted in lieu thereof, to
18 business organizations eligible under section 7 in an amount
19 specified in subsection (c).
20 (b) Special costs.--For purposes of Article III of the Tax
21 Reform Code of 1971, sole proprietorships and partnerships
22 meeting the criteria of section 6 shall be deemed to have
23 incurred special costs and expenses in the conduct of business
24 operations because of being located in an enterprise zone in an
25 amount specified in subsection (c).
26 (c) Extent.--The deduction or business expense provided for
27 in subsections (a) and (b) shall be equal to 35% of earned
28 income attributable to operation within a designated enterprise
29 zone. Each such business organization shall be entitled to such
30 deduction or business expense for each year of the eight-year
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1 period following the commencement of initial operations.
2 Section 9. Loans to business organizations.
3 The Department of Revenue shall grant to the lender a credit
4 in the amount of 100% of all income received during any two-year
5 period commencing after the effective date of this act on loans
6 extended by commercial banks, mutual savings institutions or
7 savings and loan associations to business organizations
8 operating within enterprise zones, for use solely in connection
9 with opening or rehabilitating business operations in the
10 enterprise zone, against any tax due under Article VII or XVI
11 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
12 Reform Code of 1971. The credit provided by this section shall
13 be claimed only for income received on and attributable to such
14 loans during the tax year.
15 Section 10. Liability of business organizations.
16 Any business organization which operates within a designated
17 and approved enterprise zone and which receives benefits under
18 the provisions of this act shall continue to operate for a
19 period of at least 12 years following receipt of initial
20 benefits. Failure to continue operations for such period, except
21 in case of insolvency, bankruptcy or other conditions beyond the
22 control of the business organization, shall render the business
23 organization liable to the Commonwealth in an amount equal to
24 the total revenue lost due to extension of benefits under this
25 act.
26 Section 11. Additional duties of the secretary.
27 The secretary shall assist business organizations operating
28 within designated and approved enterprise zones in obtaining
29 benefits under the following statutes:
30 Act of May 17, 1956 (1955 P.L.1609, No.537), known as the
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1 Pennsylvania Industrial Development Authority Act.
2 Act of November 29, 1967 (P.L.636, No.292), known as the
3 Neighborhood Assistance Act.
4 Act of December 1, 1977 (P.L.237, No.76), known as the Local
5 Economic Revitalization Tax Assistance Act.
6 Section 12. Effective date.
7 This act shall take effect in 60 days.
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