1Amending the act of April 9, 1929 (P.L.343, No.176), entitled,
2as amended, "An act relating to the finances of the State
3government; providing for the settlement, assessment,
4collection, and lien of taxes, bonus, and all other accounts
5due the Commonwealth, the collection and recovery of fees and
6other money or property due or belonging to the Commonwealth,
7or any agency thereof, including escheated property and the
8proceeds of its sale, the custody and disbursement or other
9disposition of funds and securities belonging to or in the
10possession of the Commonwealth, and the settlement of claims
11against the Commonwealth, the resettlement of accounts and
12appeals to the courts, refunds of moneys erroneously paid to
13the Commonwealth, auditing the accounts of the Commonwealth
14and all agencies thereof, of all public officers collecting
15moneys payable to the Commonwealth, or any agency thereof,
16and all receipts of appropriations from the Commonwealth,
17authorizing the Commonwealth to issue tax anticipation notes
18to defray current expenses, implementing the provisions of
19section 7(a) of Article VIII of the Constitution of
20Pennsylvania authorizing and restricting the incurring of
21certain debt and imposing penalties; affecting every
22department, board, commission, and officer of the State
23government, every political subdivision of the State, and
24certain officers of such subdivisions, every person,
25association, and corporation required to pay, assess, or
26collect taxes, or to make returns or reports under the laws
27imposing taxes for State purposes, or to pay license fees or
28other moneys to the Commonwealth, or any agency thereof,
29every State depository and every debtor or creditor of the
30Commonwealth," providing for City Revitalization and
31Improvement Zones.

32The General Assembly of the Commonwealth of Pennsylvania
33hereby enacts as follows:

1Section 1. The act of April 9, 1929 (P.L.343, No.176), known
2as The Fiscal Code, is amended by adding an article to read:

3ARTICLE XVI-K

4CITY REVITALIZATION

5AND IMPROVEMENT ZONES

6Section 1601-K. Scope of article.

7This article relates to city revitalization and improvement
8zones.

9Section 1602-K. Definitions.

10The following words and phrases when used in this article
11shall have the meanings given to them in this section unless the
12context clearly indicates otherwise:

13"City." A city of the third class with a population of at
14least 40,000 and not more than 70,000 based on the most recent
15Federal decennial census. The term shall not include a city that
16has had a receiver appointed under Chapter 7 of the act of July
1710, 1987 (P.L.246, No.47), known as the Municipalities Financial
18Recovery Act.

19"City revitalization and improvement zone." A revitalization
20improvement zone comprised of parcels designated by the
21contracting authority that will result in sustainable economic
22development and job creation within a city.

23"Contracting authority." An authority established under 53
24Pa.C.S. Ch. 56 (relating to municipal authorities) for the
25purpose of designating revitalization zones and constructing
26facilities or other authority established under the laws of this
27Commonwealth.

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

29"Earned income tax." A tax or portion of a tax imposed on
30earned income within a neighborhood improvement zone under the

1act of December 31, 1965 (P.L.1257, No.511), known as The Local
2Tax Enabling Act, which a city, or a school district contained
3entirely within the boundaries of or coterminous with the city,
4is entitled to receive.

5"Facility." A structure to be used for commercial,
6exhibition, hospitality, conference, retail, community, office,
7recreational or mixed-use purposes. The term includes a park.

8"Fund." A city revitalization and improvement fund
9established under section 1606-K.

10"Qualified business." An entity which meets all of the
11following:

12(1) Is any of the following that conducts business or
13provides services:

14(i) A sole proprietorship.

15(ii) A corporation.

16(iii) A limited liability company.

17(iv) A partnership.

18(v) An association.

19(2) Locates or partially locates in a zone.

20(3) Meets the requirements of section 1605-K.

21"Zone." A city revitalization and improvement zone.

22Section 1603-K. Approval.

23(a) Submission.--Prior to the designation of a zone, a
24contracting authority shall apply to the Department of Community
25and Economic Development for approval of a city revitalization
26and improvement zone plan. The plan shall include:

27(1) A plan to establish one or more facilities.

28(2) An economic development plan.

29(3) Specific information relating to a facility which
30will be constructed or renovated as part of the plan.

1(4) Other information as required by the Department of
2Community and Economic Development.

3(b) Approval.--The zone may be designated under section
41604-K upon approval of the plan under subsection (a)(1). If the
5plan is not approved by the department within 180 days, the plan
6shall be deemed approved.

7Section 1604-K. Facility.

8The contracting authority may do the following:

9(1) Designate one or more zones of not greater than 130
10acres in total in which a facility may be constructed or
11redeveloped.

12(2) Provide for or borrow funds for the purpose of:

13(i) improvement and development within the zone;

14(ii) construction or improvement of a facility
15within the zone; or

16(iii) redevelopment of a deteriorated facility in
17existence prior to January 1, 2013.

18Section 1605-K. Qualified business.

19(a) Qualifications.--In order to qualify under this article,
20a business must own or lease real property in the zone from
21which the business actively conducts a trade, profession or
22business. The qualified business must receive certification from
23the department that the business is located and is in the active
24conduct of a trade, profession or business within the zone.

25(b) Relocation.--A business that relocates from outside the
26zone into the zone shall not be a qualified business unless that
27business either:

28(1) increases full-time employment of the qualified
29business by at least 20% within the zone in the first full
30year of operation within the zone; or

1(2) makes a capital investment in the property located
2within a zone equivalent to 20% of the gross revenues of that
3business in the immediately preceding calendar or fiscal
4year.

5Section 1606-K. Fund.

6(a) Establishment.--Following the designation of a zone, the
7contracting authority shall, within ten days of making the
8designation, notify the State Treasurer of the designation. Upon
9receipt of the notification, the State Treasurer shall establish
10a special fund for the benefit of the contracting authority to
11be known as a city revitalization and improvement fund. Interest
12income derived from investment of the money in a fund shall be
13credited by the Treasury Department to the fund.

14(b) Certification.--

15(1) Within 30 days of the end of each calendar year,
16each qualified business shall file a report with the
17department which complies with all of the following:

18(i) States each State tax, calculated in accordance
19with subsection (c), which was paid by the qualified
20business in the prior calendar year.

21(ii) Lists each State tax refund which complies with
22all of the following:

23(A) The refund is for a tax:

24(I) set forth in subsection (c); and

25(II) certified as paid under subsection (c).

26(B) The refund was received in the prior
27calendar year by the qualified business.

28(iii) Is in a form and manner required by the
29department.

30(2) In addition to any penalties imposed under the act

1of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
2of 1971, for failure to timely pay State taxes, failure to
3file a timely and complete report under paragraph (1) shall
4result in the imposition of a penalty of 10% of all State
5taxes, calculated in accordance with subsection (c), which
6were payable by the qualified business in the prior calendar
7year.

8(3) Any penalty imposed under this subsection shall be
9imposed, assessed and collected by the department under the
10provisions for imposing, assessing and collecting penalties
11under Article II of the Tax Reform Code of 1971. When the
12penalty is received, the money shall be transferred from the
13General Fund to the fund of the contracting authority that
14designated the zone in which the qualifying business is
15located.

16(4) Within 30 days of the end of each calendar year,
17each qualified business shall file a report with the local
18taxing authority reporting all local taxes, calculated in
19accordance with subsection (c), which were paid by the
20qualified business in the prior calendar year. The report
21from each qualified business shall also list any local tax
22refunds of taxes set forth in subsection (c) received in the
23prior calendar year by the qualified business and any refunds
24related to the local taxes as calculated in accordance with
25subsection (c). The report shall be in a form and manner
26required by the department.

27(c) Calculation.--

28(1) Within 60 days of the end of each calendar year, the
29department shall certify separately for each zone the amounts
30of State taxes paid, less any State tax refunds received, by

1the qualified businesses filing reports under subsection (a)
2to the Office of the Budget. Beginning in the first full
3calendar year following the designation of a zone and in each
4calendar year thereafter, the department shall calculate
5amounts of State taxes actually received by the Commonwealth
6from each qualified business that filed a report under
7subsection (b) in the prior year, and the department shall
8certify the amounts received to the office.

9(2) The contracting authority shall provide good faith
10estimates of quarterly amounts to be calculated in a form and
11manner prescribed by the department.

12(3) The department shall estimate the quarterly amounts,
13subject to an annual reconciliation, and shall certify the
14amounts to the Office of the Budget within 90 days of the end
15of each fiscal quarter.

16(4) An entity collecting a local tax within the zone
17shall, within 30 days of the end of a fiscal quarter, submit
18all of the local taxes collected that are to be calculated
19under this subsection to the State Treasurer for transfer to
20the fund under subsection (e).

21(5) The following shall be the amounts calculated:

22(i) An amount equal to all corporate net income tax,
23capital stock and franchise tax, personal income tax,
24business privilege tax, business privilege licensing fees
25and earned income tax related to the ownership and
26operation of a facility or qualified business in the
27zone.

28(ii) An amount equal to all of the following:

29(A) All personal income tax, earned income tax
30and local services tax withheld from its employees by

1a facility or qualified business in the zone.

2(B) All personal income tax, earned income tax
3and local services tax withheld from the employees of
4any facility or qualified business in the zone.

5(iii) An amount equal to all sales and use tax
6related to the operation of a facility in the zone. This
7subparagraph shall include sales and use tax paid by any
8provider of events or activities at or services to a
9facility, including sales and use tax paid by vendors and
10concessionaires and contractors at a facility.

11(iv) An amount equal to all tax paid to the
12Commonwealth related to the sale of any liquor, wine or
13malt or brewed beverage in a facility.

14(v) An amount equal to all personal income tax,
15earned income tax and local services tax withheld from
16personnel by a contractor or other entity involved in the
17construction of a facility.

18(vi) An amount equal to all of the following:

19(A) All corporate net income tax, capital stock
20and franchise tax, personal income tax, business
21privilege tax, business privilege licensing fees and
22earned income tax related to the ownership and
23operation of any qualified business within the zone.

24(B) All personal income tax, earned income tax
25and local services tax withheld from its employees by
26a qualified business within the zone.

27(C) All personal income tax, earned income tax
28and local services tax withheld from the employees of
29a qualified business that provides events, activities
30or services in the zone.

1(D) All personal income tax, earned income tax
2and local services tax to which the Commonwealth
3would be entitled from performers or other
4participants at an event or activity in the zone.

5(E) All sales and use tax related to the
6operation of a qualified business within the zone.
7This clause shall include sales and use tax paid by a
8qualified business that provides events, activities
9or services in the zone.

10(F) All tax paid by a qualified business to the
11Commonwealth related to the sale of any liquor, wine
12or malt or brewed beverage within the zone.

13(G) The amount paid a qualified business within
14the zone of any new tax enacted by the Commonwealth
15following the effective date of this section.

16(H) All personal income tax, earned income tax
17and local services tax withheld from personnel by a
18qualified business involved in the improvement,
19development or construction of the zone.

20(I) All sales and use tax paid on materials and
21other construction costs, directly related to the
22improvement, development or construction of a
23facility in the zone.

24(J) An amount equal to any amusement tax paid by
25a facility or a qualified business operating in the
26zone. No political subdivision or other entity
27authorized to collect amusement taxes may impose or
28increase the rate of any tax on admissions to places
29of entertainment, exhibition, amusement or upon
30athletic events in the zone which are not in effect

1on the date the zone is designated by the contracting
2authority.

3(vii) Except for a tax levied against real property,
4an amount equal to any tax imposed by the Commonwealth or
5any of its political subdivisions on a qualified business
6engaged in an activity within a zone or directly or
7indirectly on any sale or purchase of goods or services
8if the point of sale or purchase is within the zone.

9(d) Income apportionment.--A business with locations inside
10and outside the zone shall apportion taxes attributable to the
11location within the zone or calculate the percentage of tax
12payments attributable to the location within the zone.

13(e) Transfers.--

14(1) Within ten days of receiving notification under
15subsection (a), the Secretary of the Budget shall direct the
16State Treasurer to, notwithstanding any other law, transfer
17the amounts calculated under subsection (c) from the General
18Fund to each fund of the contracting authority. Beginning in
19the second calendar year following the designation of a zone
20and in each year thereafter, the amounts certified by the
21department to the State Treasurer and the amounts transferred
22by the State Treasurer to the fund of each contracting
23authority shall be determined as follows:

24(i) Add amounts certified by the department under
25subsection (b) for the prior calendar year.

26(ii) Subtract from the sum under subparagraph (i)
27any State tax refunds paid as certified by the department
28under subsection (b).

29(iii) Add to the difference under subparagraph (ii)
30any amounts certified under subsection (b) with respect

1to the second prior calendar year.

2(iv) Subtract from the sum under subparagraph (iii)
3any amounts certified under subsection (b) which are less
4than the amounts previously certified under subsection
5(b) with respect to the second prior calendar year.

6(2) The State Treasurer shall provide quarterly payments
7to the contracting authority until the bonds issued or the
8other debt incurred to finance the improvement and
9development of the zone and the construction of a contracted
10facility are retired. The payment in each quarter shall be
11equal to the balance of the fund on the date of the last day
12of the prior calendar quarter.

13(f) Restriction on use of funds.--Funds transferred under
14subsection (e):

15(1) May only be utilized for:

16(i) payment of debt service on bonds issued,
17refinancing loans to repay bonds or for payment of other
18debt incurred, for the improvement and development of all
19or any part of the zone. Payments may be made directly or
20indirectly through a multitiered ownership structure or
21other structure authorized by the contracting authority
22to facilitate financing;

23(ii) construction of all or a part of a facility;

24(iii) payment of debt service on bonds issued, or
25payment of other debt incurred, for the development of a
26facility in existence prior to January 1, 2013; or

27(iv) replenishment of amounts in debt service
28reserve funds established to pay debt service on bonds.

29(2) May not be utilized for purposes of renovating or
30repairing a facility, except for capital maintenance,

1improvement projects and furniture, fixtures and equipment
2reserve funds.

3Section 1607-K. Keystone Opportunity Zone.

4Within 30 days of the effective date of this section, the
5contracting authority shall apply to the department to decertify
6and remove the designation of all or part of any Keystone
7Opportunity Zone that is coterminous with the city
8revitalization and improvement zone in accordance with section
9309 of the act of October 6, 1998 (P.L.705, No.92), known as the
10Keystone Opportunity Zone, Keystone Opportunity Expansion Zone
11and Keystone Opportunity Improvement Zone Act. The department
12shall act on the application within 30 days.

13Section 1608-K. Duration.

14The zone shall be in effect for a period equal to the length
15of time for the repayment of debt incurred for the zone,
16including the time of bonds initially issued.

17Section 1609-K. Commonwealth pledges.

18(a) Pledge.--If and to the extent that the contracting
19authority pledges amounts required to be transferred to the fund
20of the contracting authority under section 1605-K for the
21payment of bonds issued by the contracting authority, until all
22bonds secured by the pledge of the contracting authority,
23together with the interest on the bonds, are fully paid or
24provided for, the Commonwealth pledges to and agrees with any
25person, firm, corporation or government agency, whether in this
26Commonwealth or elsewhere, and to and with any Federal agency
27subscribing to or acquiring the bonds issued by the contracting
28authority that the Commonwealth itself will not, nor will it
29authorize any government entity to do any of the following:

30(1) Abolish or reduce the size of the zone.

1(2) Amend or repeal section 1606-K(b), (c) or (d).

2(3) Limit or alter the rights vested in the contracting
3authority in a manner inconsistent with the obligations of
4the contracting authority with respect to the bonds issued by
5the contracting authority.

6(4) Impair revenues to be paid under this article to the
7contracting authority necessary to pay debt service on bonds.

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

12Section 1610-K. Regulations.

13The Department of Community and Economic Development and the
14department shall develop regulations necessary to implement this
15article. The Department of Community and Economic Development
16shall include regulations to require annual reports relating to
17the development of the zone.

18Section 2. This act shall take effect immediately.