PRIOR PRINTER'S NO. 2094 PRINTER'S NO. 2362
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, SCHWARTZ, KITCHEN, GERLACH
AND KASUNIC, JUNE 17, 2002
SENATOR THOMPSON, APPROPRIATIONS, RE-REPORTED AS AMENDED,
NOVEMBER 13, 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 QUALIFIED BUSINESSES, for tax credit <--
17 determination and for 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), 307(B), <--
21 518(e), 519(e) and 1309 of the act of October 6, 1998 (P.L.705,
22 No.92), known as the Keystone Opportunity Zone and Keystone
23 Opportunity Expansion Zone Act, amended or added December 20,
1 2000 (P.L.841, No.119), are amended to read:
2 Section 301. Keystone opportunity zones.
3 (a) Establishment.--There is hereby established within the
4 department a program providing for keystone opportunity zones. A
5 keystone opportunity zone shall be comprised of deteriorated
6 property and shall not exceed a total of 5,000 acres.
7 (b) Zone authorization.--The department shall authorize not
8 more than 12 keystone opportunity zones in this Commonwealth.
9 Persons and businesses within an authorized keystone opportunity
10 zone that are qualified under this act shall be entitled to all
11 tax exemptions, deductions, abatements or credits set forth in
12 this act for a period not to exceed 15 years beginning January
13 1, 1999, or at the time the qualified person or business begins
14 active conduct of its trade or business, whichever occurs later,
15 and ending on or before December 31, [2013] 2028.
16 (c) Subzone designation.--The department may designate not
17 more than 12 subzones in each keystone opportunity zone. The
18 total number of subzone acres in a keystone opportunity zone
19 shall not exceed 5,000 acres in the aggregate.
20 (d) Authorization for local tax exemption.--Every political
21 subdivision within which a proposed subzone is located, whether
22 in whole or in part, is hereby authorized to provide tax
23 exemptions, deductions, abatements or credits to persons and
24 businesses qualified under this act. The political subdivision
25 shall agree to provide exemptions, deductions, abatements or
26 credits from all local taxes set forth in this act in order to
27 qualify to be designated a subzone. Except as provided in
28 section 303(e), the exemptions, deductions, abatements or
29 credits shall be effective January 1, 1999, if designation of a
30 subzone within the political subdivision is granted by the
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1 department. The exemptions, deductions, abatements or credits
2 shall be binding upon the political subdivision for the duration
3 of the subzone designation.
4 (e) Authorization to extend the duration of a keystone
5 opportunity zone or subzone.--A subzone of a keystone
6 opportunity zone may request to extend its designation as a
7 subzone for a period of three years. [A subzone that is part of
8 a keystone opportunity zone that will expire on December 31,
9 2008, may extend its designation as a subzone to December 31,
10 2010, or to December 31, 2013.] The request to extend a subzone
11 designation shall be made on a subzone-by-subzone basis. A
12 qualified political subdivision having an approved subzone
13 within its jurisdiction and seeking to extend the subzone
14 designation shall pass the required ordinances, resolutions or
15 other required action of the qualified political subdivision for
16 the necessary exemptions, deductions, abatements or credits
17 pursuant to this act [for the period beginning after December
18 31, 2008, or December 31, 2010, as the case may be,] and shall
19 submit copies of the ordinance, resolution or other action to
20 the department [by June 30, 2001]. The department may grant the
21 request to extend provided all the proper binding ordinances,
22 resolutions or other governing documents are passed by all
23 qualified political subdivisions within the subzone extending
24 the necessary exemptions, deductions, abatements and credits to
25 the entire subzone to December 31, [2010, or December 31, 2013]
26 2028; however, no entity shall have more than 15 years of tax
27 relief under this act. The department [shall approve or deny the
28 request for extension of duration of a subzone by July 31, 2001,
29 and] shall provide written notice, irrespective of whether
30 approved or denied, to each qualified political subdivision,
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1 resident and qualified business affected. Upon approval of a
2 request for extension of duration of a subzone, the exemptions,
3 deductions, abatements or credits shall be binding upon the
4 qualified political subdivision as provided in subsection (d).
5 (F) AUTHORIZATION TO ALTER BOUNDARIES OF KEYSTONE <--
6 OPPORTUNITY ZONE.--
7 (1) A QUALIFIED POLITICAL SUBDIVISION HAVING AN APPROVED
8 SUBZONE WITHIN ITS JURISDICTION MAY APPLY TO THE DEPARTMENT
9 TO ALTER THE GEOGRAPHIC BOUNDARIES OF THE KEYSTONE
10 OPPORTUNITY ZONE WITHIN WHICH THE POLITICAL SUBDIVISION IS
11 LOCATED. IF MORE THAN ONE POLITICAL SUBDIVISION WOULD BE
12 AFFECTED BY THE BOUNDARY ALTERATION, THEN THE APPLICATION
13 MUST BE MADE JOINTLY BY THE AFFECTED POLITICAL SUBDIVISIONS.
14 THE APPLICATION SHALL CONTAIN:
15 (I) THE INFORMATION REQUIRED UNDER SECTION 302(A).
16 (II) EVIDENCE THAT EACH OWNER OF REAL ESTATE WITHIN
17 THE AFFECTED AREA APPROVES OF THE BOUNDARY ALTERATION.
18 THE TERM "OWNER OF REAL ESTATE" INCLUDES THE RECORD OWNER
19 OF REAL ESTATE, THE HOLDER OF AN OPTION EITHER TO
20 PURCHASE REAL ESTATE OR TO ENTER INTO A GROUND LEASE OF
21 REAL ESTATE AND A TENANT UNDER A GROUND LEASE OF REAL
22 ESTATE.
23 (2) THE DEPARTMENT MAY APPROVE THE REQUEST FOR
24 ALTERATION OF THE KEYSTONE OPPORTUNITY ZONE BOUNDARIES IF:
25 (I) THE REQUEST MEETS THE CRITERIA FOR AUTHORIZATION
26 UNDER SECTION 304.
27 (II) THE TOTAL NUMBER OF ACRES WITHIN THE KEYSTONE
28 OPPORTUNITY ZONE AS IT IS PROPOSED TO BE ALTERED DOES NOT
29 DIFFER FROM THE TOTAL NUMBER OF ACRES WITHIN THAT
30 KEYSTONE OPPORTUNITY ZONE AS ORIGINALLY APPROVED.
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1 (3) THE DEPARTMENT SHALL PROVIDE WRITTEN NOTICE OF ITS
2 DETERMINATION TO THE APPLICANT OR JOINT APPLICANTS.
3 (4) UPON APPROVAL OF A REQUEST FOR ALTERATION OF
4 KEYSTONE OPPORTUNITY ZONE BOUNDARIES, THE EXEMPTIONS,
5 DEDUCTIONS, ABATEMENTS OR CREDITS SHALL BE BINDING UPON A
6 POLITICAL SUBDIVISION AS PROVIDED IN SUBSECTION (D).
7 (G) APPLICABILITY.--
8 (1) A POLITICAL SUBDIVISION'S AUTHORITY TO RETRACT ITS
9 PREVIOUS PROVISION OF TAX EXEMPTIONS, DEDUCTIONS, ABATEMENTS
10 OR CREDITS TO PERSONS OR BUSINESSES QUALIFIED UNDER THIS ACT
11 SHALL NOT APPLY TO ANY PORTION OF A SUBZONE AS TO WHICH:
12 (I) ANY QUALIFIED BUSINESS HAS COMMENCED OPERATIONS
13 IN SUCH PORTION OF THE SUBZONE; OR
14 (II) ANY PROSPECTIVE PERSON OR COMPANY HAVING AN
15 INTEREST IN THE PROPERTY LOCATED IN THE SUBZONE OR
16 PORTION OF THE SUBZONE HAS INCURRED EXPENDITURES IN
17 RESPECT OF THE DEVELOPMENT OF THE PROPERTY IN AN AMOUNT
18 EQUAL TO AT LEAST $250,000 IN RELIANCE UPON THE PROPERTY
19 HAVING THE BENEFITS OF TAX EXEMPTIONS, DEDUCTIONS,
20 ABATEMENTS OR CREDITS.
21 (2) FOR PURPOSES OF THIS SUBSECTION, A PERSON OR COMPANY
22 HAVING AN INTEREST IN THE PROPERTY INCLUDES PERSONS HAVING
23 TITLE TO OR A LEASEHOLD INTEREST IN ALL OR A PORTION OF THE
24 PROPERTY OR HAVING AN OPTION TO ACQUIRE TITLE TO OR A
25 LEASEHOLD INTEREST IN ALL OR A PORTION OF THE PROPERTY.
26 Section 301.1. Keystone opportunity expansion zones.
27 (a) Establishment.--There is hereby established within the
28 department a program providing for keystone opportunity
29 expansion zones. A keystone opportunity expansion zone shall be
30 comprised of deteriorated property and shall not exceed a total
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1 of [1,500] 3,000 acres.
2 (b) Authorization.--The department shall authorize not more
3 than 12 keystone opportunity expansion zones in this
4 Commonwealth. Persons and businesses within an authorized
5 keystone opportunity expansion zone that are qualified under
6 this act shall be entitled to all tax exemptions, deductions,
7 abatements or credits set forth in this act for a period of [ten
8 or 13] 15 years beginning January 1, 2001, or at the time the
9 qualified person or business begins active conduct of its trade
10 or business, whichever occurs later, and ending on [December 31,
11 2010, or December 31, 2013] or before December 31, 2028.
12 (c) Expansion subzone designation.--[The]
13 (1) Except as set forth in paragraph (2), the department
14 may designate not more than eight expansion subzones in a
15 keystone opportunity expansion zone. The total number of
16 expansion subzone acres in a keystone opportunity expansion
17 zone under this paragraph shall not exceed 1,500 acres in the
18 aggregate.
19 (2) The department may designate not more than eight
20 additional expansion subzones in a keystone opportunity
21 expansion zone. The total number of expansion subzone acres
22 in a keystone opportunity expansion zone under this paragraph
23 shall not exceed 1,500 acres in the aggregate.
24 (d) Authorization for local tax exemption.--Every political
25 subdivision within which a proposed expansion subzone is
26 located, whether in whole or in part, is hereby authorized to
27 provide tax exemptions, deductions, abatements or credits to
28 persons and businesses qualified under this act for a period
29 ending December 31, [2010, or December31, 2013] 2028; however,
30 no entity shall have more than 15 years of tax relief under this
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1 act. The exemption period shall be uniform within each expansion
2 subzone. The political subdivision shall agree to provide
3 exemptions, deductions, abatements or credits from all local
4 taxes set forth in this act in order to qualify to be designated
5 an expansion subzone. The exemptions, deductions, abatements or
6 credits shall be effective January 1, 2001, or January 1, 2003,
7 for expansion subzones under subsection (c)(2), if designation
8 of an expansion subzone within the political subdivision is
9 granted by the department. The exemptions, deductions,
10 abatements or credits shall be binding upon the political
11 subdivision for the duration of the expansion subzone
12 designation.
13 Section 302. Application.
14 (a) Initial application.--One or more political
15 subdivisions, or a designee of one or more political
16 subdivisions, may apply to the department to designate
17 deteriorated property within the political subdivision or
18 portions thereof a subzone or expansion subzone. The application
19 shall contain the following:
20 (1) The geographic area of the proposed keystone
21 opportunity zone or proposed keystone opportunity expansion
22 zone. The geographic area shall be located within the
23 boundaries of the participating political subdivision and
24 shall not contain more than 5,000 acres in the case of a
25 keystone opportunity zone or [1,500] 3,000 acres in the case
26 of a keystone opportunity expansion zone.
27 (2) An opportunity plan that shall include the
28 following:
29 (i) A detailed map of the proposed keystone
30 opportunity zone or proposed keystone opportunity
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1 expansion zone, including geographic boundaries, total
2 area and present use and conditions of the land and
3 structures of the proposed keystone opportunity zone or
4 proposed keystone opportunity expansion zone.
5 (ii) Evidence of support from and participation of
6 local government, school districts and other educational
7 institutions, business groups, community organizations
8 and the public.
9 (iii) A proposal to increase economic opportunity,
10 reduce crime, improve education, facilitate
11 infrastructure improvement, reduce the local regulating
12 burden and identify potential jobs and job training
13 opportunities and which states whether or not the zone is
14 located in an area which has tax revenue dedicated to the
15 payment of debt.
16 (iv) A description of the current social, economic
17 and demographic characteristics of the proposed keystone
18 opportunity zone or proposed keystone opportunity
19 expansion zone and anticipated improvements in education,
20 health, human services, public safety and employment that
21 will result from keystone opportunity zone or keystone
22 opportunity expansion zone designation.
23 (v) A description of anticipated activity in the
24 proposed keystone opportunity zone or proposed keystone
25 opportunity expansion zone, including, but not limited
26 to, industrial use, industrial site reuse, commercial or
27 retail use and residential use.
28 (vi) Evidence of potential private and public
29 investment in the proposed keystone opportunity zone or
30 proposed keystone opportunity expansion zone.
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1 (vii) The role of the proposed keystone opportunity
2 zone or proposed keystone opportunity expansion zone in
3 regional economic and community development.
4 (viii) Plans to utilize existing resources for the
5 administration of the proposed keystone opportunity zone
6 or proposed keystone opportunity expansion zone.
7 (ix) Any other information deemed appropriate by the
8 department.
9 (3) A report on youth at risk to include issues relating
10 to health, welfare and education.
11 (4) The duration of the proposed subzones or proposed
12 expansion subzones. [The duration of a subzone may not exceed
13 15 years. The duration of an expansion subzone may not exceed
14 13 years.]
15 (5) A formal, binding ordinance or resolution passed by
16 every political subdivision in which the proposed subzone or
17 proposed expansion subzone is located that specifically
18 provides for all local tax exemptions, deductions, abatements
19 or credits for persons and businesses set forth in this act.
20 (6) Evidence that the proposed keystone opportunity zone
21 or proposed keystone opportunity expansion zone meets the
22 required criteria under section 304.
23 (b) Participation limitation.--A political subdivision shall
24 not be a part of more than one proposed keystone opportunity
25 zone [or proposed keystone opportunity expansion zone]. A
26 political subdivision shall not be part of more than two
27 proposed keystone opportunity expansion zones. A proposed
28 expansion subzone may not overlap the boundaries of a subzone.
29 (c) Application limitation.--A political subdivision may
30 submit [only one application] no more than two applications to
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1 the department for authorization as [a] keystone opportunity
2 [zone] zones. A political subdivision may submit only one
3 application to the department for authorization as a keystone
4 opportunity expansion zone.
5 Section 303. Review.
6 (a) Action of department.--The department, in consultation
7 with the Department of Revenue, shall review all completed
8 applications submitted under this act. An application for
9 authorization as a keystone opportunity zone and designation of
10 subzones shall be received by the department on or before
11 September 30, 1998, in order to be considered by the department.
12 An application for authorization as a keystone opportunity
13 expansion zone and designation of expansion subzones under
14 section 301.1(c)(1) shall be received by the department on or
15 before February 28, 2001, in order to be considered by the
16 department. An application for designation of expansion subzones
17 under section 301.1(c)(2) shall be received by the department on
18 or before January JULY 1, 2003, in order to be considered by the <--
19 department.
20 (b) Process.--The department shall authorize up to 12
21 keystone opportunity zones from applications meeting the
22 criteria in section 304 based upon need and likelihood of
23 success. The department shall authorize up to 12 keystone
24 opportunity expansion zones from applications meeting the
25 criteria in section 304 based upon need and likelihood of
26 success. Additionally, the department shall not alter the
27 geographic boundaries of a subzone or expansion subzone or the
28 duration of a subzone or expansion subzone described in an
29 application.
30 (c) Authorizations.--The department shall authorize all
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1 keystone opportunity zones by November 30, 1998. The department
2 shall authorize all keystone opportunity expansion zones by
3 March 30, 2001.
4 (d) Effective date of designation.--The designation of a
5 subzone under this act shall take effect on January 1, 1999. The
6 designation of an expansion subzone under [this act] section
7 301.1(c)(1) shall take effect on January 1, 2001. The
8 designation of an expansion subzone under section 301.1(c)(2)
9 shall take effect January 1, 2003 2004. <--
10 (e) Extension.--The department may extend the deadline for
11 the receipt of applications for keystone opportunity zones until
12 December 31, 1998, if all 12 zones have not been authorized and
13 the extension is necessary to allow eligible political
14 subdivisions to apply. The department shall authorize additional
15 keystone opportunity zones under this subsection by February 28,
16 1999. The authorization shall take effect January 1, 1999, or if
17 the authorization occurs after January 1, 1999, that subsequent
18 authorization shall for all purposes be retroactive to January
19 1, 1999. The keystone opportunity zone authorization shall end
20 as provided in section 301(b).
21 Section 304. Criteria for authorization of keystone opportunity
22 zone.
23 * * *
24 (c) Tax exemption ordinances.--An area shall not be
25 authorized as a keystone opportunity zone or a keystone
26 opportunity expansion zone unless, as a part of the application,
27 each political subdivision in which the proposed subzone or
28 proposed expansion subzone is to be located adopts and provides
29 a copy of an ordinance, resolution or other required action from
30 the governing body of each political subdivision that exempts or
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1 provides deductions, abatements or credits to qualified persons
2 and qualified businesses from local taxes upon designation of
3 the area as a subzone or expansion subzone. All appropriate
4 ordinances and resolutions shall be effective on or before
5 January 1, 1999, if designation as a subzone is granted. All
6 appropriate ordinances and resolutions shall be effective on
7 January 1, 2001, or January 1, 2003, as the case may be, if
8 designation as an expansion subzone is granted. The resolution,
9 ordinance or other required action shall be binding and
10 nonrevocable on the qualified political subdivisions for the
11 duration of the opportunity plan.
12 * * *
13 SECTION 307. QUALIFIED BUSINESSES. <--
14 * * *
15 (B) RELOCATION.--ANY BUSINESS THAT RELOCATES FROM OUTSIDE A
16 SUBZONE OR EXPANSION SUBZONE INTO A SUBZONE OR EXPANSION SUBZONE
17 SHALL NOT RECEIVE ANY OF THE EXEMPTIONS, DEDUCTIONS, ABATEMENTS
18 OR CREDITS SET FORTH IN THIS ACT UNLESS THAT BUSINESS EITHER:
19 (1) INCREASES FULL-TIME EMPLOYMENT BY AT LEAST 20% IN
20 THE FIRST FULL YEAR OF OPERATION WITHIN THE SUBZONE OR
21 EXPANSION SUBZONE; OR
22 (2) MAKES, OR HAS ITS LANDLORD MAKE, A CAPITAL
23 INVESTMENT IN THE PROPERTY LOCATED WITHIN A SUBZONE OR
24 EXPANSION SUBZONE EQUIVALENT TO 10% OF THE GROSS REVENUES [OF
25 THAT BUSINESS] ATTRIBUTABLE TO THE OPERATIONS OF THE BUSINESS
26 AT THE LOCATION FROM WHICH IT RELOCATED INTO THE SUBZONE OR
27 EXPANSION SUBZONE IN THE IMMEDIATELY PRECEDING CALENDAR OR
28 FISCAL YEAR.
29 THE DEPARTMENT, IN CONSULTATION WITH THE DEPARTMENT OF REVENUE,
30 MAY WAIVE OR MODIFY THE REQUIREMENTS OF THIS SUBSECTION, AS
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1 APPROPRIATE.
2 Section 518. Keystone opportunity zone job tax credit or
3 keystone opportunity expansion zone job tax
4 credit.
5 * * *
6 (e) Credit determinations.--The keystone opportunity zone
7 job tax credit or keystone opportunity expansion zone job tax
8 credit shall be determined by multiplying the monthly average of
9 all full-time jobs by the allowance. The allowance for purposes
10 of the keystone opportunity zone job tax credit or keystone
11 opportunity expansion zone job tax credit for taxable years
12 beginning within the dates set forth shall be as follows:
13 January 1, 2001, to
14 December 31, 2001 $500 per job
15 January 1, 2002, to
16 December 31, 2002 $750 per job
17 January 1, 2003, to
18 December 31, 2003 $1,000 per job
19 January 1, 2004, to
20 [December 31, 2004 $1,250 per job
21 January 1, 2005, to
22 December 31, 2005 $1,250 per job
23 January 1, 2006, to
24 December 31, 2006 $1,250 per job
25 January 1, 2007, to
26 December 31, 2007 $1,250 per job
27 January 1, 2008, to
28 December 31, 2008 $1,250 per job
29 January 1, 2009, to
30 December 31, 2009 $1,250 per job
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1 January 1, 2010, to
2 December 31, 2010 $1,250 per job
3 January 1, 2011, to
4 December 31, 2011 $1,250 per job
5 January 1, 2012, to
6 December 31, 2012 $1,250 per job
7 January 1, 2013, to
8 December 31, 2013 $1,250 per job]
9 December 31, 2028 $1,250 per job
10 per year
11 * * *
12 Section 519. Keystone opportunity zone job creation tax credit
13 or keystone opportunity expansion zone job
14 creation tax credit.
15 * * *
16 (e) Credit determinations.--The keystone opportunity zone
17 job tax credit or keystone opportunity expansion zone job tax
18 credit shall be determined by multiplying the monthly average of
19 all full-time jobs by the allowance. The allowance for purposes
20 of the keystone opportunity zone job tax credit or keystone
21 opportunity expansion zone job tax credit for taxable years
22 beginning within the dates set forth shall be as follows:
23 January 1, 2001, to
24 December 31, 2001 $500 per job
25 January 1, 2002, to
26 December 31, 2002 $750 per job
27 January 1, 2003, to
28 December 31, 2003 $1,000 per job
29 January 1, 2004, to
30 [December 31, 2004 $1,250 per job
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1 January 1, 2005, to
2 December 31, 2005 $1,250 per job
3 January 1, 2006, to
4 December 31, 2006 $1,250 per job
5 January 1, 2007, to
6 December 31, 2007 $1,250 per job
7 January 1, 2008, to
8 December 31, 2008 $1,250 per job
9 January 1, 2009, to
10 December 31, 2009 $1,250 per job
11 January 1, 2010, to
12 December 31, 2010 $1,250 per job
13 January 1, 2011, to
14 December 31, 2011 $1,250 per job
15 January 1, 2012, to
16 December 31, 2012 $1,250 per job
17 January 1, 2013, to
18 December 31, 2013 $1,250 per job]
19 December 31, 2028 $1,250 per job
20 per year
21 * * *
22 Section 1309. Expiration.
23 This act and all benefits associated with this act shall
24 terminate December 31, [2013] 2028.
25 Section 2. This act shall take effect immediately.
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