PRINTER'S NO. 2094
No. 1478 Session of 2002
INTRODUCED BY D. WHITE, WOZNIAK, TARTAGLIONE, ERICKSON,
KUKOVICH, LAVALLE, PUNT, COSTA, BOSCOLA, A. WILLIAMS, O'PAKE,
DENT, TOMLINSON, STACK, STOUT, WAUGH, CONTI, SCARNATI,
C. WILLIAMS, WENGER, MOWERY, ORIE AND SCHWARTZ, JUNE 17, 2002
REFERRED TO FINANCE, JUNE 17, 2002
AN ACT
1 Amending the act of October 6, 1998 (P.L.705, No.92), entitled,
2 as amended, "An act providing for the creation of keystone
3 opportunity zones and keystone opportunity expansion zones to
4 foster economic opportunities in this Commonwealth, to
5 facilitate economic development, stimulate industrial,
6 commercial and residential improvements and prevent physical
7 and infrastructure deterioration of geographic areas within
8 this Commonwealth; authorizing expenditures; providing tax
9 exemptions, tax deductions, tax abatements and tax credits;
10 creating additional obligations of the Commonwealth and local
11 governmental units; and prescribing powers and duties of
12 certain State and local departments, agencies and officials,"
13 further providing for keystone opportunity zones, for
14 keystone opportunity expansion zones, for application, for
15 review, for criteria for authorization of keystone
16 opportunity zone, for tax credit determination and for
17 expiration of act.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 Section 1. Sections 301, 301.1, 302, 303, 304(c), 518(e),
21 519(e) and 1309 of the act of October 6, 1998 (P.L.705, No.92),
22 known as the Keystone Opportunity Zone and Keystone Opportunity
23 Expansion Zone Act, amended or added December 20, 2000 (P.L.841,
24 No.119), are amended to read:
1 Section 301. Keystone opportunity zones.
2 (a) Establishment.--There is hereby established within the
3 department a program providing for keystone opportunity zones. A
4 keystone opportunity zone shall be comprised of deteriorated
5 property and shall not exceed a total of 5,000 acres.
6 (b) Zone authorization.--The department shall authorize not
7 more than 12 keystone opportunity zones in this Commonwealth.
8 Persons and businesses within an authorized keystone opportunity
9 zone that are qualified under this act shall be entitled to all
10 tax exemptions, deductions, abatements or credits set forth in
11 this act for a period not to exceed 15 years beginning January
12 1, 1999, or at the time the qualified person or business begins
13 active conduct of its trade or business, whichever occurs later,
14 and ending on or before December 31, [2013] 2028.
15 (c) Subzone designation.--The department may designate not
16 more than 12 subzones in each keystone opportunity zone. The
17 total number of subzone acres in a keystone opportunity zone
18 shall not exceed 5,000 acres in the aggregate.
19 (d) Authorization for local tax exemption.--Every political
20 subdivision within which a proposed subzone is located, whether
21 in whole or in part, is hereby authorized to provide tax
22 exemptions, deductions, abatements or credits to persons and
23 businesses qualified under this act. The political subdivision
24 shall agree to provide exemptions, deductions, abatements or
25 credits from all local taxes set forth in this act in order to
26 qualify to be designated a subzone. Except as provided in
27 section 303(e), the exemptions, deductions, abatements or
28 credits shall be effective January 1, 1999, if designation of a
29 subzone within the political subdivision is granted by the
30 department. The exemptions, deductions, abatements or credits
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1 shall be binding upon the political subdivision for the duration
2 of the subzone designation.
3 (e) Authorization to extend the duration of a keystone
4 opportunity zone or subzone.--A subzone of a keystone
5 opportunity zone may request to extend its designation as a
6 subzone for a period of three years. [A subzone that is part of
7 a keystone opportunity zone that will expire on December 31,
8 2008, may extend its designation as a subzone to December 31,
9 2010, or to December 31, 2013.] The request to extend a subzone
10 designation shall be made on a subzone-by-subzone basis. A
11 qualified political subdivision having an approved subzone
12 within its jurisdiction and seeking to extend the subzone
13 designation shall pass the required ordinances, resolutions or
14 other required action of the qualified political subdivision for
15 the necessary exemptions, deductions, abatements or credits
16 pursuant to this act [for the period beginning after December
17 31, 2008, or December 31, 2010, as the case may be,] and shall
18 submit copies of the ordinance, resolution or other action to
19 the department [by June 30, 2001]. The department may grant the
20 request to extend provided all the proper binding ordinances,
21 resolutions or other governing documents are passed by all
22 qualified political subdivisions within the subzone extending
23 the necessary exemptions, deductions, abatements and credits to
24 the entire subzone to December 31, [2010, or December 31, 2013]
25 2028; however, no entity shall have more than 15 years of tax
26 relief under this act. The department [shall approve or deny the
27 request for extension of duration of a subzone by July 31, 2001,
28 and] shall provide written notice, irrespective of whether
29 approved or denied, to each qualified political subdivision,
30 resident and qualified business affected. Upon approval of a
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1 request for extension of duration of a subzone, the exemptions,
2 deductions, abatements or credits shall be binding upon the
3 qualified political subdivision as provided in subsection (d).
4 Section 301.1. Keystone opportunity expansion zones.
5 (a) Establishment.--There is hereby established within the
6 department a program providing for keystone opportunity
7 expansion zones. A keystone opportunity expansion zone shall be
8 comprised of deteriorated property and shall not exceed a total
9 of [1,500] 3,000 acres.
10 (b) Authorization.--The department shall authorize not more
11 than 12 keystone opportunity expansion zones in this
12 Commonwealth. Persons and businesses within an authorized
13 keystone opportunity expansion zone that are qualified under
14 this act shall be entitled to all tax exemptions, deductions,
15 abatements or credits set forth in this act for a period of [ten
16 or 13] 15 years beginning January 1, 2001, or at the time the
17 qualified person or business begins active conduct of its trade
18 or business, whichever occurs later, and ending on [December 31,
19 2010, or December 31, 2013] or before December 31, 2028.
20 (c) Expansion subzone designation.--[The]
21 (1) Except as set forth in paragraph (2), the department
22 may designate not more than eight expansion subzones in a
23 keystone opportunity expansion zone. The total number of
24 expansion subzone acres in a keystone opportunity expansion
25 zone under this paragraph shall not exceed 1,500 acres in the
26 aggregate.
27 (2) The department may designate not more than eight
28 additional expansion subzones in a keystone opportunity
29 expansion zone. The total number of expansion subzone acres
30 in a keystone opportunity expansion zone under this paragraph
20020S1478B2094 - 4 -
1 shall not exceed 1,500 acres in the aggregate.
2 (d) Authorization for local tax exemption.--Every political
3 subdivision within which a proposed expansion subzone is
4 located, whether in whole or in part, is hereby authorized to
5 provide tax exemptions, deductions, abatements or credits to
6 persons and businesses qualified under this act for a period
7 ending December 31, [2010, or December31, 2013] 2028; however,
8 no entity shall have more than 15 years of tax relief under this
9 act. The exemption period shall be uniform within each expansion
10 subzone. The political subdivision shall agree to provide
11 exemptions, deductions, abatements or credits from all local
12 taxes set forth in this act in order to qualify to be designated
13 an expansion subzone. The exemptions, deductions, abatements or
14 credits shall be effective January 1, 2001, or January 1, 2003,
15 for expansion subzones under subsection (c)(2), if designation
16 of an expansion subzone within the political subdivision is
17 granted by the department. The exemptions, deductions,
18 abatements or credits shall be binding upon the political
19 subdivision for the duration of the expansion subzone
20 designation.
21 Section 302. Application.
22 (a) Initial application.--One or more political
23 subdivisions, or a designee of one or more political
24 subdivisions, may apply to the department to designate
25 deteriorated property within the political subdivision or
26 portions thereof a subzone or expansion subzone. The application
27 shall contain the following:
28 (1) The geographic area of the proposed keystone
29 opportunity zone or proposed keystone opportunity expansion
30 zone. The geographic area shall be located within the
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1 boundaries of the participating political subdivision and
2 shall not contain more than 5,000 acres in the case of a
3 keystone opportunity zone or [1,500] 3,000 acres in the case
4 of a keystone opportunity expansion zone.
5 (2) An opportunity plan that shall include the
6 following:
7 (i) A detailed map of the proposed keystone
8 opportunity zone or proposed keystone opportunity
9 expansion zone, including geographic boundaries, total
10 area and present use and conditions of the land and
11 structures of the proposed keystone opportunity zone or
12 proposed keystone opportunity expansion zone.
13 (ii) Evidence of support from and participation of
14 local government, school districts and other educational
15 institutions, business groups, community organizations
16 and the public.
17 (iii) A proposal to increase economic opportunity,
18 reduce crime, improve education, facilitate
19 infrastructure improvement, reduce the local regulating
20 burden and identify potential jobs and job training
21 opportunities and which states whether or not the zone is
22 located in an area which has tax revenue dedicated to the
23 payment of debt.
24 (iv) A description of the current social, economic
25 and demographic characteristics of the proposed keystone
26 opportunity zone or proposed keystone opportunity
27 expansion zone and anticipated improvements in education,
28 health, human services, public safety and employment that
29 will result from keystone opportunity zone or keystone
30 opportunity expansion zone designation.
20020S1478B2094 - 6 -
1 (v) A description of anticipated activity in the
2 proposed keystone opportunity zone or proposed keystone
3 opportunity expansion zone, including, but not limited
4 to, industrial use, industrial site reuse, commercial or
5 retail use and residential use.
6 (vi) Evidence of potential private and public
7 investment in the proposed keystone opportunity zone or
8 proposed keystone opportunity expansion zone.
9 (vii) The role of the proposed keystone opportunity
10 zone or proposed keystone opportunity expansion zone in
11 regional economic and community development.
12 (viii) Plans to utilize existing resources for the
13 administration of the proposed keystone opportunity zone
14 or proposed keystone opportunity expansion zone.
15 (ix) Any other information deemed appropriate by the
16 department.
17 (3) A report on youth at risk to include issues relating
18 to health, welfare and education.
19 (4) The duration of the proposed subzones or proposed
20 expansion subzones. [The duration of a subzone may not exceed
21 15 years. The duration of an expansion subzone may not exceed
22 13 years.]
23 (5) A formal, binding ordinance or resolution passed by
24 every political subdivision in which the proposed subzone or
25 proposed expansion subzone is located that specifically
26 provides for all local tax exemptions, deductions, abatements
27 or credits for persons and businesses set forth in this act.
28 (6) Evidence that the proposed keystone opportunity zone
29 or proposed keystone opportunity expansion zone meets the
30 required criteria under section 304.
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1 (b) Participation limitation.--A political subdivision shall
2 not be a part of more than one proposed keystone opportunity
3 zone [or proposed keystone opportunity expansion zone]. A
4 political subdivision shall not be part of more than two
5 proposed keystone opportunity expansion zones. A proposed
6 expansion subzone may not overlap the boundaries of a subzone.
7 (c) Application limitation.--A political subdivision may
8 submit [only one application] no more than two applications to
9 the department for authorization as [a] keystone opportunity
10 [zone] zones. A political subdivision may submit only one
11 application to the department for authorization as a keystone
12 opportunity expansion zone.
13 Section 303. Review.
14 (a) Action of department.--The department, in consultation
15 with the Department of Revenue, shall review all completed
16 applications submitted under this act. An application for
17 authorization as a keystone opportunity zone and designation of
18 subzones shall be received by the department on or before
19 September 30, 1998, in order to be considered by the department.
20 An application for authorization as a keystone opportunity
21 expansion zone and designation of expansion subzones under
22 section 301.1(c)(1) shall be received by the department on or
23 before February 28, 2001, in order to be considered by the
24 department. An application for designation of expansion subzones
25 under section 301.1(c)(2) shall be received by the department on
26 or before January 1, 2003, in order to be considered by the
27 department.
28 (b) Process.--The department shall authorize up to 12
29 keystone opportunity zones from applications meeting the
30 criteria in section 304 based upon need and likelihood of
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1 success. The department shall authorize up to 12 keystone
2 opportunity expansion zones from applications meeting the
3 criteria in section 304 based upon need and likelihood of
4 success. Additionally, the department shall not alter the
5 geographic boundaries of a subzone or expansion subzone or the
6 duration of a subzone or expansion subzone described in an
7 application.
8 (c) Authorizations.--The department shall authorize all
9 keystone opportunity zones by November 30, 1998. The department
10 shall authorize all keystone opportunity expansion zones by
11 March 30, 2001.
12 (d) Effective date of designation.--The designation of a
13 subzone under this act shall take effect on January 1, 1999. The
14 designation of an expansion subzone under [this act] section
15 301.1(c)(1) shall take effect on January 1, 2001. The
16 designation of an expansion subzone under section 301.1(c)(2)
17 shall take effect January 1, 2003.
18 (e) Extension.--The department may extend the deadline for
19 the receipt of applications for keystone opportunity zones until
20 December 31, 1998, if all 12 zones have not been authorized and
21 the extension is necessary to allow eligible political
22 subdivisions to apply. The department shall authorize additional
23 keystone opportunity zones under this subsection by February 28,
24 1999. The authorization shall take effect January 1, 1999, or if
25 the authorization occurs after January 1, 1999, that subsequent
26 authorization shall for all purposes be retroactive to January
27 1, 1999. The keystone opportunity zone authorization shall end
28 as provided in section 301(b).
29 Section 304. Criteria for authorization of keystone opportunity
30 zone.
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1 * * *
2 (c) Tax exemption ordinances.--An area shall not be
3 authorized as a keystone opportunity zone or a keystone
4 opportunity expansion zone unless, as a part of the application,
5 each political subdivision in which the proposed subzone or
6 proposed expansion subzone is to be located adopts and provides
7 a copy of an ordinance, resolution or other required action from
8 the governing body of each political subdivision that exempts or
9 provides deductions, abatements or credits to qualified persons
10 and qualified businesses from local taxes upon designation of
11 the area as a subzone or expansion subzone. All appropriate
12 ordinances and resolutions shall be effective on or before
13 January 1, 1999, if designation as a subzone is granted. All
14 appropriate ordinances and resolutions shall be effective on
15 January 1, 2001, or January 1, 2003, as the case may be, if
16 designation as an expansion subzone is granted. The resolution,
17 ordinance or other required action shall be binding and
18 nonrevocable on the qualified political subdivisions for the
19 duration of the opportunity plan.
20 * * *
21 Section 518. Keystone opportunity zone job tax credit or
22 keystone opportunity expansion zone job tax
23 credit.
24 * * *
25 (e) Credit determinations.--The keystone opportunity zone
26 job tax credit or keystone opportunity expansion zone job tax
27 credit shall be determined by multiplying the monthly average of
28 all full-time jobs by the allowance. The allowance for purposes
29 of the keystone opportunity zone job tax credit or keystone
30 opportunity expansion zone job tax credit for taxable years
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1 beginning within the dates set forth shall be as follows:
2 January 1, 2001, to
3 December 31, 2001 $500 per job
4 January 1, 2002, to
5 December 31, 2002 $750 per job
6 January 1, 2003, to
7 December 31, 2003 $1,000 per job
8 January 1, 2004, to
9 [December 31, 2004 $1,250 per job
10 January 1, 2005, to
11 December 31, 2005 $1,250 per job
12 January 1, 2006, to
13 December 31, 2006 $1,250 per job
14 January 1, 2007, to
15 December 31, 2007 $1,250 per job
16 January 1, 2008, to
17 December 31, 2008 $1,250 per job
18 January 1, 2009, to
19 December 31, 2009 $1,250 per job
20 January 1, 2010, to
21 December 31, 2010 $1,250 per job
22 January 1, 2011, to
23 December 31, 2011 $1,250 per job
24 January 1, 2012, to
25 December 31, 2012 $1,250 per job
26 January 1, 2013, to
27 December 31, 2013 $1,250 per job]
28 December 31, 2028 $1,250 per job
29 per year
30 * * *
20020S1478B2094 - 11 -
1 Section 519. Keystone opportunity zone job creation tax credit
2 or keystone opportunity expansion zone job
3 creation tax credit.
4 * * *
5 (e) Credit determinations.--The keystone opportunity zone
6 job tax credit or keystone opportunity expansion zone job tax
7 credit shall be determined by multiplying the monthly average of
8 all full-time jobs by the allowance. The allowance for purposes
9 of the keystone opportunity zone job tax credit or keystone
10 opportunity expansion zone job tax credit for taxable years
11 beginning within the dates set forth shall be as follows:
12 January 1, 2001, to
13 December 31, 2001 $500 per job
14 January 1, 2002, to
15 December 31, 2002 $750 per job
16 January 1, 2003, to
17 December 31, 2003 $1,000 per job
18 January 1, 2004, to
19 [December 31, 2004 $1,250 per job
20 January 1, 2005, to
21 December 31, 2005 $1,250 per job
22 January 1, 2006, to
23 December 31, 2006 $1,250 per job
24 January 1, 2007, to
25 December 31, 2007 $1,250 per job
26 January 1, 2008, to
27 December 31, 2008 $1,250 per job
28 January 1, 2009, to
29 December 31, 2009 $1,250 per job
30 January 1, 2010, to
20020S1478B2094 - 12 -
1 December 31, 2010 $1,250 per job
2 January 1, 2011, to
3 December 31, 2011 $1,250 per job
4 January 1, 2012, to
5 December 31, 2012 $1,250 per job
6 January 1, 2013, to
7 December 31, 2013 $1,250 per job]
8 December 31, 2028 $1,250 per job
9 per year
10 * * *
11 Section 1309. Expiration.
12 This act and all benefits associated with this act shall
13 terminate December 31, [2013] 2028.
14 Section 2. This act shall take effect immediately.
F11L72BIL/20020S1478B2094 - 13 -