1Amend Bill, page 89, lines 6 through 30; pages 90 through
2103, lines 1 through 30; page 104, lines 1 through 26, by
3striking out all of said lines on said pages and inserting

4Section 1802-C. Definitions.

5The following words and phrases when used in this article
6shall have the meanings given to them in this section unless the
7context clearly indicates otherwise:

8"Baseline year." The calendar year in which a zone was
9established.

10"Bond." The term includes any note, instrument, refunding
11note or other evidence of indebtedness or obligation.

12"City." A city of the second class A or third class.

13"City revitalization and improvement zone." An area of not
14more than 130 acres, comprised of parcels designated by the
15contracting authority, which will provide economic development
16and job creation within a city.

17"Contracting authority." An authority established under 53
18Pa.C.S. Ch. 56 (relating to municipal authorities) by a city or
19home rule county for the purpose of:

20(1) designating zones; and

21(2) engaging in the construction, including related site
22preparation and infrastructure, reconstruction or renovation
23of facilities.

24"Department." The Department of Revenue of the Commonwealth.

25"Earned income tax." A tax imposed on earned income within a
26zone under the act of December 31, 1965 (P.L.1257, No.511),
27known as The Local Tax Enabling Act, which a city, or a school
28district contained entirely within the boundaries of or
29coterminous with the city, is entitled to receive.

30"Eligible tax." Any of the following taxes:

31(1) Corporate net income tax, capital stock and
32franchise tax, bank shares tax or business privilege tax,
33calculated and apportioned as to amount attributable to the
34location within the zone and calculated under section
351904-B(b) and (c).

36(2) Amusement tax, only to the extent the tax is
37related to the activity of a qualified business within the

1zone.

2(3) Sales and use tax, only to the extent the tax is
3related to the activity of a qualified business within the
4zone.

5(4) Personal income tax withheld from its employees by a 
6qualified business for work performed in the zone.

7(5) Local services tax withheld from its employees by a
8qualified business for work performed in the zone.

9(6) Earned income tax withheld from its employees by a
10qualified business for work performed in the zone.

11(7) Tax paid to the Commonwealth on the sale of liquor,
12wine or malt or brewed beverages in the zone.

13The term does not include cigarette tax.

14"Facility." A structure or complex of structures to be used
15for commercial, sports, exhibition, hospitality, conference,
16retail, community, office, recreational or mixed-use purposes.

17"Office." The Office of the Budget.

18"Pilot zone." An area of not more than 130 acres designated
19by the authority following application and approval by the 
20Department of Community and Economic Development, the office and 
21the department which will provide economic development and job
22creation within a township or borough, with a population of at
23least 3,000 based on the most recent Federal decennial census.

24"Qualified business." As follows:

25(1) An entity located or partially located in a zone
26which meets the requirements of all of the following:

27(i) Has conducted an active trade or business in the
28zone.

29(ii) Appears on the timely filed list under section
301807-C(a).

31(2) A construction contractor engaged in construction,
32including infrastructure or site preparation, reconstruction
33or renovation of a facility located in or partially in the
34zone.

35(3) The term does not include an agent, broker or
36representative of a business.

37"Zone." Any of the following:

38(1) A city revitalization and improvement zone.

39(2) A pilot zone.

40"Zone Fund." A city revitalization and improvement fund
41established under section 1808-C.

42Section 1803-C. Establishment of contracting authority.

43(a) Cities.--Except as set forth in subsection (b), a city
44may establish a contracting authority to designate a zone under
45this article.

46(b) Distressed cities.--A city that is a distressed city
47under the act of July 10, 1987 (P.L.246, No.47), known as the
48Municipalities Financial Recovery Act, and is located in a home
49rule county may not establish a contracting authority under this
50article.

51(c) Counties.--The home rule county where a distressed city

1under the Municipalities Financial Recovery Act is located may
2establish a contracting authority to designate a zone under this
3article within the distressed city.

4Section 1804-C. Approval.

5(a) Submission.--A contracting authority may apply to the
6Department of Community and Economic Development for approval of
7a zone plan. The application must include all of the following:

8(1) A plan to establish one or more facilities which
9will promote economic development.

10(2) An economic development plan.

11(3) Specific information relating to the facility which
12will be constructed, including infrastructure and site
13preparation, reconstructed or renovated as part of the plan.

14(4) Other information as required by the Department of
15Community and Economic Development, the office or the
16department.

17(5) A designation of the specific geographic area,
18including parcel numbers and a map of the zone with parcel
19numbers, of which the zone will consist.

20(b) Agencies.--The Department of Community and Economic
21Development, the office and the department must approve each
22application.

23(c) Approval schedule.--The Department of Community and
24Economic Development shall develop a schedule for the approval
25of applications under this section as follows:

26(1) Following the effective date of this paragraph,
27applications for two initial zones may be approved.

28(2) Beginning in 2016, applications for two additional
29zones may be approved each calendar year.

30(3) Following the effective date of this paragraph, the
31Department of Community and Economic Development, the office
32and the department, may approve one pilot zone.

33(d) Time.--An application under this section shall be
34approved or disapproved within 90 days of the postmark date of
35submission. An application which is not disapproved within the
36time period under this subsection shall be deemed to be
37approved.

38(e) Reapplication.--If an application is not approved under
39this section, the applicant may revise the application and plan
40and reapply for approval.

41Section 1805-C. Exclusions.

42A part of a zone may not include a keystone opportunity zone,
43keystone opportunity expansion zone, keystone opportunity
44improvement zone, keystone innovation zone, keystone special
45development zone, neighborhood improvement zone or strategic
46development area.

47Section 1806-C. Functions of contracting authorities.

48(a) Powers.--The contracting authority may do all of the
49following:

50(1) Designate a zone where a facility may be
51constructed, including infrastructure and site preparation,

1reconstructed or renovated.

2(2) Provide or borrow money for any of the following
3purposes:

4(i) Development or improvement within a zone.

5(ii) Construction, including infrastructure and site
6preparation, reconstruction or renovation of a facility
7within a zone which will result in economic development
8in accordance with the contracting authority's plan.

9(b) Money from fund.--A member of the contracting authority
10may not receive money directly or indirectly from the fund.

11Section 1807-C. Qualified businesses.

12(a) List.--By June 1 following the end of the baseline year,
13and for every year thereafter, each contracting authority shall
14file with the department a complete list of all businesses
15located in the zone and all construction contractors engaged in
16construction, reconstruction or renovation of a facility in the
17zone in the prior calendar year. The list shall include for each
18business address, State tax identification number and parcel
19number and a map of the zone with parcel numbers.

20(b) Time.--If the list under subsection (a) is not timely
21provided to the department, no eligible State tax shall be
22certified by the department for the prior calendar year.

23(c) Audit.--The contracting authority shall hire an
24independent auditing firm to perform an annual audit verifying
25all of the following:

26(1) The correct amount of the eligible local tax was
27submitted to the local taxing authorities.

28(2) The local taxing authorities transferred the correct
29amount of eligible local tax to the State Treasurer.

30(3) The moneys transferred to the fund were properly
31expended.

32(4) Verify the correct amount was requested under
33section 1812-C(c).

34Section 1808-C. Funds.

35(a) Notice.--Following the designation of a zone, the
36contracting authority shall notify the State Treasurer.

37(b) Establishment.--Upon receipt of notice under subsection
38(a), the State Treasurer shall establish for each zone a special
39fund for the benefit of the contracting authority to be known as
40the City Revitalization and Improvement Zone Fund. Interest
41income derived from investment of money in a fund shall be
42credited by the State Treasury to the fund.

43Section 1809-C. Reports.

44(a) State zone report.--By June 15 following the baseline
45year and each year thereafter, each qualified business shall
46file a report with the department in a form or manner required
47by the department which includes all of the following:

48(1) Amount of each eligible tax which was paid to the
49Commonwealth by the qualified business in the prior calendar
50year.

51(2) Amount of each eligible tax refund received from the

1Commonwealth in the prior calendar year by the qualified
2business.

3(b) Local zone report.--By June 15 following the baseline
4year and for each year thereafter, each qualified business shall
5file a report with the local taxing authority which includes all
6of the following:

7(1) Amount of each eligible tax which was paid to the
8local taxing authority by the qualified business in the prior
9calendar year.

10(2) Amount of each eligible tax refund received from the
11local taxing authority in the prior calendar year by the
12qualified business.

13(c) Penalties.--

14(1) Failure to file a timely and complete report under
15subsection (a) or (b) may result in the imposition of a
16penalty of the lesser of:

17(i) ten percent of all eligible tax due the taxing
18authority in the prior calendar year; or

19(ii) one thousand dollars.

20(2) A penalty for a violation of subsection (a) shall be
21imposed, assessed and collected by the department under
22procedures set forth in Article II. Money collected under
23this paragraph shall be deposited in the General Fund.

24(3) A penalty for a violation of subsection (b) shall be
25imposed, assessed and collected by the political subdivision
26under procedures for imposing penalties under local tax
27collection laws.

28(4) If a local taxing authority imposes the penalty, the 
29money shall be transferred to the State Treasurer for deposit 
30in the fund of the contracting authority.

31Section 1810-C. Calculation of baseline.

32(a) Baseline tax.--By October 15 following the end of the 
33baseline year and for each year thereafter, the department shall
34verify the State baseline tax amount which consists of the
35following:

36(1) For qualified businesses that file timely zone State
37reports under section 1809-C(a), the amount of eligible State
38tax paid, less eligible State tax refunds.

39(2) For qualified businesses not included under
40paragraph (1) but located or partially located in the zone as
41determined by the department or included in the information
42received by the department under section 1809-C(a), the
43amount of eligible State tax paid, less eligible State tax
44refunds.

45(b) Moves and noninclusions.--

46(1) This subsection applies to a qualified business
47that:

48(i) moves into a zone from within this Commonwealth
49after the baseline year; or

50(ii) is in a zone but not included in the
51calculation of the State baseline tax under subsection

1(a).

2(2) A qualified business subject to paragraph (1) shall
3file a State zone report under section 1809-C following the
4end of the first full calendar year in which the qualified
5business conducted business in the zone and each calendar
6year thereafter. The amount of eligible State tax verified by
7the department for the qualified business for the prior
8calendar year shall be added to the State baseline tax amount
9for the zone for the prior calendar year and each year
10thereafter.

11(3) The calculation under this section may not include
12the eligible taxes of a qualifying business moving into the
13zone from outside this Commonwealth.

14Section 1811-C. Certification.

15(a) Amounts.--By the October 15 following the baseline year,
16and each year thereafter, the department shall do all of the
17following for the prior calendar year:

18(1) Make the following calculation for qualified
19businesses which file State zone reports under section 1809-
20C(a), separately for each zone:

21(i) Subtract:

22(A) the amount of eligible State tax refunds
23received; from

24(B) the amount of eligible State tax paid.

25(ii) Subtract:

26(A) the State tax baseline amount for the zone;
27from

28(B) the difference under subparagraph (i).

29(2) Certify to the office the difference under paragraph
30(1)(ii).

31(b) Content.-

32(1) The certification may include the following:

33(i) Adjustment made to timely filed zone reports by
34the department for eligible State tax actually paid by a
35qualified business in the prior calendar year.

36(ii) Eligible State tax refunds paid to a qualified
37business in the zone in a prior calendar year.

38(iii) State tax penalties paid by a qualified
39business in the prior year under section 1809-C(c).

40(2) The certification shall not include the following:

41(i) Tax paid by a qualified business that did not
42file a timely State zone report under section 1809-C(a).

43(ii) Tax paid by a qualified business whose tax was
44not included in the State tax baseline amount calculation
45under section 1810-C.

46(iii) Tax paid by a qualifying business not
47appearing on a timely filed list under section 1807-C(a).

48(c) Submission.--The following shall apply:

49(1) An entity collecting an eligible local tax within the
50zone shall, by October 15 following the baseline year, and each
51year thereafter, submit the following to the State Treasurer for
 

1transfer to the fund:

2(i) the eligible local tax collected in the prior
3calendar year;

4(ii) less the amount of eligible local tax refunds
5issued in the prior calendar year; and

6(iii) less the amount of local baseline tax for the
7zone.

8(2) The information under this subsection shall also be
9certified by the local taxing authority to the Department of
10Community and Economic Development, the office and the
11department.

12Section 1812-C. Transfers.

13(a) Office.--Within ten days of receiving the certification
14from the department under section 1811-C, the office shall
15direct the State Treasurer to transfer the amount of certified
16eligible State zone tax from the General Fund to each fund of a
17contracting authority.

18(b) State Treasurer.--Within ten days of receiving direction
19under subsection (a), the State Treasurer shall pay into the
20fund the amount directed under subsection (a) until bonds issued 
21to finance the construction, including related infrastructure 
22and site preparation, reconstruction or renovation of a facility 
23or other eligible project in the zone are retired.

24(c) Notification.--The following shall apply:

25(1) If the transfers under subsection (a) and section
261811-C(c) are insufficient to make payments on the bonds
27issued under section 1813-C(a)(1) for the calendar year when
28the transfers are made, the contracting authority shall
29notify the Department of Community and Economic Development,
30the office and the department of the amount of additional
31money necessary to make payments on the bonds.

32(2) The notification under paragraph (1) must be
33accompanied by a detailed account of the contracting
34authority's expenditures and the calculation which resulted
35in the request for additional money. The Department of
36Community and Economic Development, the office or the
37department may request additional information from the
38contracting authority and shall jointly verify the proper
39amount of money necessary to make the payments on the bonds.

40(3) Notwithstanding 53 Pa.C.S. § 5607(e), (relating to
41purposes and powers), within 90 days of the date of the
42notification request, the office shall direct the State
43Treasurer to establish a restricted account within the
44General Fund. The office shall direct the State Treasurer to
45transfer the amount verified under paragraph (2) from the
46General Fund to the restricted account for the use of the
47contracting authority to make payments on the bonds issued
48under section 1813-C(a)(1).

49(4) Money transferred under paragraph (3):

50(i) shall be limited to 50% of the State tax
51baseline amount for the calendar year prior to the date

1the amount is verified under paragraph (2), not to exceed
2$10,000,000; and

3(ii) must occur in the first seven calendar years
4following the baseline year.

5(4.1) Under extraordinary circumstances, a contracting
6authority may request money in excess of the limitations in
7paragraph (4)(i). The Department of Community and Economic
8Development, the office and the department shall determine
9whether the circumstances merit additional money and the
10amount to be transferred. The money shall be transferred
11under the procedure under this section.

12(5) Money transferred under paragraph (4) shall be
13repaid to the General Fund by the contracting authority. If
14money transferred under paragraph (3) is not repaid to the
15General Fund by the contracting authority by the date of the
16final payment on the bonds originally issued under section
171813-C(a)(1), the city or county which established the
18contracting authority shall pay the money not repaid to the
19General Fund plus an additional penalty of 10% of the amount
20outstanding on the date of the final payment on the bonds
21originally issued under section 1813-C(a)(1).

22Section 1813-C. Restrictions.

23(a) Utilization.--If the use was approved in an application 
24filed under section 1804-C, money transferred under section
251812-C may only be utilized for the following:

26(1) Payment of debt service on bonds issued for the
27construction, including related infrastructure and site
28preparation, reconstruction or renovation of a facility in
29the zone.

30(2) Construction, including related infrastructure and
31site preparation, reconstruction or renovation of all or a
32part of a facility.

33(3) Replenishment of amounts in debt service reserve
34funds established to pay debt service on bonds.

35(4) Employment of an independent auditing firm to 
36perform the duties under section 1807-C(c).

37(5) Improvement or development of all or part of a zone.

38(6) Improvement projects, including fixtures and
39equipment for a facility owned by a public authority.

40(b) Prohibition.--Money transferred under section 1812-C may
41not be utilized for maintenance or repair of a facility.

42(c) Excess money.--

43(1) If the amount of money transferred to the fund under
44sections 1811-C(c) and 1812-C in any one calendar year
45exceeds the money utilized under this section in that
46calendar year, the contracting authority shall submit by
47January 15 following the end of the calendar year the excess
48money to the State Treasurer for deposit into the General
49Fund.

50(2) At the time of submission to the State Treasurer,
51the contracting authority shall submit to the State

1Treasurer, the office and department a detailed accounting of
2the calculation resulting in the excess money.

3(3) The excess money shall be credited to the
4contracting authority and applied to the amount required to
5be repaid under section 1812-C(c)(5) until there is full
6repayment.

7(d) Matching funds.--

8(1) The amount of money transferred from the fund
9utilized for the construction, including related site
10preparation and infrastructure, reconstruction or renovation
11of facilities shall be matched by private money at a ratio of
12five fund dollars to one private dollar.

13(2) By April 1, following the baseline year and for each
14year thereafter, the contracting authority shall file an
15annual report with the Department of Community and Economic
16Development, the office and the department that contains
17detailed account of the fund money expenditures and the
18private money expenditures and a calculation of the ratio in
19paragraph (1) for the prior calendar year. The agencies shall
20determine whether sufficient private money was utilized.

21(3) If it is determined that insufficient private money
22was utilized under paragraph (1), the amount of fund money
23utilized under paragraph (1) in the prior calendar year shall
24be deducted from the next transfer of the fund.

25Section 1814-C. Transfer of property.

26(a) Property.--Portions of a zone where a facility has not
27been constructed, reconstructed or renovated using money under
28this article may be transferred out of the zone. Additional
29acreage, not to exceed the acreage transferred out of the zone,
30may be added to the zone.

31(b) Approval.--A transfer under subsection (a) must be
32approved by the Department of Community and Economic
33Development, in consultation with the office and the department.

34Section 1815-C. Duration.

35A zone shall be in effect for a period equal to the length of
36time for the repayment of debt incurred for the zone, including
37bonds issued. Bonds shall be paid, and all zones shall cease no
38later than 30 years following the initial issuance of the bonds.

39Section 1816-C. Commonwealth pledges.

40(a) Pledge.--If and to the extent the contracting authority
41pledges amounts required to be transferred to its fund under
42section 1812-C for payment of bonds issued by the contracting
43authority, until all bonds secured by the pledge of the
44contracting authority, together with interest on the bonds, are
45fully paid or provided for, the Commonwealth pledges to and
46agrees with any person, firm, corporation or government agency,
47in this Commonwealth or elsewhere, and pledges to and agrees
48with any Federal agency subscribing to or acquiring the bonds of
49the contracting authority that the Commonwealth itself will not,
50nor will it authorize any government entity to, do any of the
51following:

1(1) Abolish or reduce the size of the zone.

2(2) Amend or repeal section 1810-C or 1811-C ????.

3(3) Limit or alter the rights vested in the contracting
4authority in a manner inconsistent with the obligations of
5the contracting authority with respect to the bonds issued by
6the contracting authority.

7(4) Impair revenue to be paid under this article to the
8contracting authority necessary to pay debt service on bonds.

9(b) Limitation.--Nothing in this section shall limit the
10authority of the Commonwealth or a political subdivision
11government entity to change the rate, base or subject of a
12specific tax or to repeal or enact any tax.

13Section 1817-C. Confidentiality.

14(a) Sole use.--A zone report or certification under this
15article shall only be used by the contracting authority to
16verify the amount of the State tax baseline amount calculated
17under section 1810-C and State tax certification under section
181811-C.

19(b) Prohibition.--Use of a zone report other than as set
20forth in subsection (a) is prohibited and shall be subject to
21the law applicable to the confidentiality of tax records.

22Section 1818-C. Guidelines.

23By October 31, 2013, the Department of Community and Economic
24Development, the office and the department shall develop and
25publish guidelines necessary to implement this article.