| HOUSE AMENDED |
| PRIOR PRINTER'S NOS. 1518, 1666, 1823, 1837, 1876, 1900 | PRINTER'S NO. 1918 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY PILEGGI, TOMLINSON, BROWNE, ERICKSON, STACK, FONTANA, GREENLEAF, FARNESE, RAFFERTY, WAUGH, COSTA, MENSCH, BOSCOLA, SOLOBAY, BLAKE AND FERLO, SEPTEMBER 7, 2011 |
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| AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, JANUARY 25, 2012 |
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| AN ACT |
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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 | in keystone opportunity zones, further providing for |
14 | extension for unoccupied parcels and for additional expansion |
15 | zones; providing for expansion for new job creation; further |
16 | providing for application, for qualified businesses, for | <-- |
17 | corporate net income tax and for capital stock franchise tax; |
18 | and, in tax administration, further providing for application |
19 | time; and providing for monitoring data; and repealing | <-- |
20 | expiration provision. |
21 | The General Assembly of the Commonwealth of Pennsylvania |
22 | hereby enacts as follows: |
23 | Section 1. Sections 301.3 and 301.4 of the act of October 6, |
24 | 1998 (P.L.705, No.92), known as the Keystone Opportunity Zone, |
25 | Keystone Opportunity Expansion Zone and Keystone Opportunity |
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1 | Improvement Zone Act, added July 10, 2008 (P.L.1014, No.79), are |
2 | amended to read: |
3 | Section 301.3. Extension for unoccupied parcels. |
4 | (a) Extension.--The department may approve an application to |
5 | extend the exemptions, deductions, abatements and credits under |
6 | this act as follows: |
7 | (1) One of the following: |
8 | (i) For a parcel in a keystone opportunity zone, |
9 | keystone opportunity expansion zone or keystone |
10 | opportunity improvement zone that is an unoccupied parcel |
11 | on the effective date of this section, for a period of |
12 | seven years from the expiration date of the zone. |
13 | (ii) For a parcel in a keystone opportunity zone or |
14 | keystone opportunity expansion zone that is an unoccupied |
15 | parcel on the effective date of this section, for a |
16 | period of ten years from the date of occupancy, provided |
17 | that the parcel is occupied on or before December 31, |
18 | 2015. |
19 | (iii) For a parcel in a keystone opportunity zone, |
20 | keystone opportunity expansion zone or keystone |
21 | opportunity improvement zone or subzone that expires in |
22 | 2013 or any year thereafter, for an additional period of |
23 | no less than seven years but no more than ten years from | <-- |
24 | the date of occupancy or from the expiration date of the | <-- |
25 | zone as determined by the department. For a zone that |
26 | expires in 2013, the extension shall apply to parcels |
27 | that are unoccupied on the effective date of this |
28 | subparagraph. For a zone that expires after 2013, the |
29 | extension shall apply to parcels that are unoccupied on a |
30 | date determined by the department. |
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1 | (2) The extension of exemptions, deductions, abatements |
2 | or credits authorized under this section, except exemptions |
3 | for sales and use tax under section 511(a) or 705(a), shall |
4 | take effect only upon occupancy. |
5 | (b) Real estate tax abatement.--The owner of an unoccupied |
6 | parcel in a keystone opportunity zone, keystone opportunity |
7 | expansion zone or keystone opportunity improvement zone that has |
8 | expired but that receives an extension of tax abatement |
9 | eligibility following the original expiration date of the |
10 | keystone opportunity zone, keystone opportunity expansion zone |
11 | or keystone opportunity improvement zone under subsection (a) |
12 | shall not receive an abatement of real property tax until the |
13 | parcel becomes occupied or developed. |
14 | (c) Application.--Except as provided in subsection (d), in |
15 | order to extend the tax benefits for unoccupied parcels under |
16 | subsection (a), the department must receive an application from |
17 | a political subdivision or its designee no later than June 30, |
18 | 2009. The application must contain the information required |
19 | under section 302(a)(1), (2), (3), (5) and (6). The application |
20 | must include all ordinances, resolutions or other required |
21 | action adopted by all political subdivisions in which the |
22 | unoccupied parcel is located adopting the extension of all tax |
23 | exemptions, deductions, abatements and credits authorized under |
24 | Chapter 7. The department, in consultation with the Department |
25 | of Revenue, shall review the application and, if approved, issue |
26 | a certification of all tax exemptions, deductions, abatements or |
27 | credits under this part for the unoccupied parcel within three |
28 | months of receipt of the application. The certification shall be |
29 | effective on the day following the expiration date of the |
30 | existing subzone. For a keystone opportunity zone, keystone |
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1 | opportunity expansion zone or keystone opportunity improvement |
2 | zone or subzone that expires in 2013 or any year thereafter, in |
3 | order to extend the tax benefits under subsection (a)(1)(iii), |
4 | the department must receive an application no later than three |
5 | months prior to the expiration date of the zone. |
6 | (d) Applications for certain zones.--For a keystone |
7 | opportunity zone that expires December 31, 2008, an application |
8 | may be submitted to the department to temporarily delay the |
9 | expiration of the exemptions, deductions, abatements and credits |
10 | for the zone until June 30, 2009. The application must be |
11 | submitted by November 30, 2008, and include all ordinances, |
12 | resolutions or other required action from all affected political |
13 | subdivisions approving the requested delay in the expiration of |
14 | the keystone opportunity zone. The department shall certify the |
15 | delay in the expiration by December 31, 2008. If the expiration |
16 | of a keystone opportunity zone is delayed under this subsection, |
17 | a political subdivision or its designee may apply for an |
18 | extension pursuant to subsection (c), provided that the |
19 | application shall be submitted by May 1, 2009, and approved by |
20 | the department no later than June 30, 2009. If an extension is |
21 | granted under subsection (c), the extension shall be deemed to |
22 | be effective January 1, 2009. |
23 | (e) Expiration.--All extensions of an unoccupied parcel |
24 | certified under subsection (a)(1)(i) shall expire no later than |
25 | seven years following the expiration date of the existing |
26 | keystone opportunity zone, keystone opportunity expansion zone |
27 | or keystone opportunity improvement zone. All extensions of an |
28 | unoccupied parcel certified under subsection (a)(1)(ii) shall |
29 | expire no later than ten years following the date of occupancy |
30 | of the unoccupied parcel. All extensions of tax benefits under |
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1 | subsection (a)(1)(iii) for a zone that expires on January 1, |
2 | 2013, shall expire no later than ten years following the |
3 | approval of the extension of the existing keystone opportunity |
4 | zone, keystone opportunity expansion zone or keystone |
5 | opportunity improvement zone or subzone. An extension of tax |
6 | benefits under subsection (a)(1)(iii) shall expire no sooner |
7 | than seven years but no later than ten years following approval |
8 | of the extension or the expiration date of the zone as | <-- |
9 | determined by the department. |
10 | Section 301.4. Additional keystone opportunity expansion zones. |
11 | (a) Establishment.-- |
12 | (1) In addition to any designations under section 301.1, |
13 | the department may designate up to 15 additional keystone |
14 | opportunity expansion zones in accordance with this section. |
15 | Each additional keystone opportunity expansion zone shall: |
16 | (i) Not be less than ten acres in size, unless |
17 | contiguous to an existing zone. |
18 | (ii) Not exceed, in the aggregate, a total of 350 |
19 | acres. |
20 | (iii) Be comprised of parcels that meet any of the |
21 | following criteria: |
22 | (A) Are deteriorated, underutilized or |
23 | unoccupied on the effective date of this clause. |
24 | (B) Are occupied by a business that: |
25 | (I) Creates or retains at least 1,400 full- |
26 | time jobs in this Commonwealth within three years |
27 | of the designation of the keystone opportunity |
28 | expansion zone; and |
29 | (II) Makes a capital investment of at least |
30 | $750,000,000 in the additional keystone |
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1 | opportunity enhancement zone within three years |
2 | of the designation of the keystone opportunity |
3 | expansion zone. |
4 | (2) [The department shall immediately notify political |
5 | subdivisions located within the area designated.] In addition |
6 | to any designations under section 301.1 and paragraph (1), |
7 | the department may designate up to 15 additional keystone |
8 | opportunity expansion zones in accordance with this |
9 | subsection. Each additional keystone opportunity expansion |
10 | zone shall: |
11 | (i) Not be less than ten acres in size unless |
12 | contiguous to an existing zone. |
13 | (ii) Not exceed, in the aggregate, a total of 350 |
14 | acres. |
15 | (iii) Be comprised of parcels that meet any of the |
16 | following criteria: |
17 | (A) Are deteriorated, underutilized or |
18 | unoccupied on the effective date of this clause. |
19 | (B) Are occupied by a qualified business that: | <-- |
20 | (I) creates or retains at least 1,000 full- |
21 | time jobs in this Commonwealth within three years |
22 | of the designation of the keystone opportunity |
23 | expansion zone; and | <-- |
24 | (II) makes a capital investment of at least |
25 | $500,000,000 in the additional keystone |
26 | opportunity expansion zone within three years of |
27 | the designation of the keystone opportunity |
28 | expansion zone. |
29 | (3) If a qualified business in a keystone opportunity | <-- |
30 | expansion zone designated under paragraph (2) makes an |
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1 | investment of at least $1,000,000,000 and creates the | <-- |
2 | business and its affiliates, as determined by the department, |
3 | create at least 400 new permanent full-time jobs in one or | <-- |
4 | more zones within seven years of the date of designation by |
5 | the department, the department shall grant to the business | <-- |
6 | and its affiliates in each of the designated zones |
7 | exemptions, deductions, abatements and credits under this act |
8 | for a period of 15 years from the date of occupancy. If the |
9 | qualified business fails and its affiliates fail to comply | <-- |
10 | with the provisions of this paragraph, the period of the zone |
11 | shall revert to ten years. |
12 | (b) Authorization.--Persons and businesses within an |
13 | additional keystone opportunity expansion zone authorized under |
14 | subsection [(a)] (a)(1) or (2) shall be entitled to all tax |
15 | exemptions, deductions, abatements or credits set forth under |
16 | this act, except exemptions for sales and use tax under section |
17 | 511(a) or 705(a), for a period of ten years, beginning on | <-- |
18 | January [beginning January 1, 2010, and ending on December 31, | <-- |
19 | 2020]. For a keystone opportunity expansion zone established | <-- |
20 | under subsection (a)(1), the ten-year period shall begin on |
21 | January 1, 2010, and end on December 31, 2019 2020. For a | <-- |
22 | keystone opportunity expansion zone established under subsection |
23 | (a)(2), the ten-year period shall begin on January 1, 2013 2014, | <-- |
24 | and end on December 31, 2022 2023. Exemptions for sales and use | <-- |
25 | taxes under sections 511 and 705 shall commence upon designation |
26 | of the zone by the department. |
27 | (c) Application.--In order to receive a designation under |
28 | subsection [(a)] (a)(1), the department must receive an |
29 | application from a political subdivision or its designee no |
30 | later than May 1, 2009, and no later than October 1, 2013, for a |
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1 | keystone opportunity expansion zone established under subsection |
2 | (a)(2). The application must contain the information required |
3 | under section 302(a)(1), (2)(i) and (ix) and (6). The |
4 | application must include all ordinances, resolutions or other |
5 | required action adopted by all political subdivisions in which |
6 | the keystone opportunity expansion zone is located providing the |
7 | tax exemptions, deductions, abatements and credits authorized |
8 | under Chapter 7. The department, in consultation with the |
9 | Department of Revenue, shall review the application and, if |
10 | approved, issue a certification of all tax exemptions, |
11 | deductions, abatements or credits under this [part] act for the |
12 | additional keystone opportunity expansion zone within three |
13 | months of receipt of the application. The department shall act |
14 | on an application under this subsection by June 30, 2009. on an | <-- |
15 | application for a designation under [this] subsection (a)(1) by |
16 | June 30, 2009, and on an application for a designation under |
17 | subsection (a)(2) by November 30, 2013. The department may make |
18 | designations under this section on a rolling basis during the |
19 | application period. The department may make designations under |
20 | subsection (a)(2) that meet the requirements of this act |
21 | provided that at least three keystone opportunity expansion |
22 | zones are reserved for counties of the fifth through eighth |
23 | class. If the department receives less than three applications |
24 | that meet the requirements of this act from counties of the |
25 | fifth through eighth class by the application deadline under |
26 | this subsection, the number of zones reserved under this |
27 | subsection, minus the number of such applications for zones the |
28 | department has approved, shall be available for designation in |
29 | any county. |
30 | (d) Unused keystone opportunity expansion zones.-- |
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1 | (1) The department may designate any of the 15 remaining |
2 | keystone opportunity expansion zones established under |
3 | subsection (a) (a)(1) for which there was no designation by | <-- |
4 | the department as of the effective date of this subsection. |
5 | To receive a designation of a remaining keystone opportunity |
6 | expansion zone under this subsection, the department must |
7 | receive an application from a political subdivision or its |
8 | designee by June 1, 2012. The application must comply with |
9 | subsection (c) except for the application deadline. The |
10 | department, in consultation with the Department of Revenue, |
11 | shall review the application and, if approved, shall issue a |
12 | certification of all tax exemptions, deductions, abatements |
13 | or credits under this act for the additional keystone |
14 | opportunity expansion zone within three months of receipt of |
15 | the application. |
16 | (2) Persons and qualified businesses within an | <-- |
17 | additional keystone opportunity expansion zone authorized |
18 | under paragraph (1) shall be entitled to all tax exemptions, |
19 | deductions, abatements or credits set forth under this act, |
20 | except exemptions for sales and use tax under section 511(a) |
21 | or 705(a), for a period of ten years beginning January 1, |
22 | 2013, and ending December 31, 2022. Exemptions for sales and |
23 | use taxes under sections 511 and 705 shall commence upon |
24 | designation of the zone by the department. |
25 | (e) Notice.--Upon designation under this section, the |
26 | department shall immediately notify political subdivisions |
27 | located within the area designated. |
28 | Section 2. The act is amended by adding a section to read: |
29 | Section 301.7. Expansion for new job creation. |
30 | (a) Expansion.--The department may approve an application to |
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1 | expand the area of a keystone opportunity zone, keystone |
2 | opportunity expansion zone or keystone opportunity improvement |
3 | zone or subzone to include additional parcels that are |
4 | deteriorated, underutilized or unoccupied on the effective date |
5 | of this section and which are contiguous to the existing zone |
6 | not to exceed 15 acres if the expansion approval is expected to | <-- |
7 | increase job creation or capital investment. All exemptions, |
8 | deductions, abatements and credits under this act shall be |
9 | extended to the new parcels for a period of ten years following |
10 | approval of the expansion of the keystone opportunity zone, |
11 | keystone opportunity expansion zone or keystone opportunity |
12 | improvement zone. |
13 | (b) Application.--The following shall apply: |
14 | (1) In order to extend the tax exemptions, deductions, |
15 | abatements and credits under this act to additional parcels |
16 | under subsection (a), the department must receive an |
17 | application from a political subdivision or its designee by |
18 | October 1, 2012. |
19 | (2) The application under paragraph (1) must: |
20 | (i) Contain the information required under section |
21 | 302(a)(1), (2), (3), (5) and (6). |
22 | (ii) Include all ordinances, resolutions or other |
23 | required action adopted by all political subdivisions in |
24 | which the unoccupied, deteriorated or underutilized |
25 | parcel is located adopting the expansion of the zone and |
26 | the extension of all tax exemptions, deductions, |
27 | abatements and credits authorized under Chapter 7. |
28 | (3) The department, in consultation with the Department |
29 | of Revenue, shall review the application and, if approved, |
30 | issue a certification of all tax exemptions, deductions, |
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1 | abatements or credits under this chapter for the unoccupied |
2 | parcel within three months of receipt of the application. |
3 | (4) The certification under paragraph (3) shall be |
4 | effective ten days following designation of the expansion by |
5 | the department. |
6 | (c) Expiration.--All expansions of an unoccupied parcel |
7 | certified under subsection (b) shall expire no later than ten |
8 | years following the effective date of certification by the |
9 | department. |
10 | Section 2.1. Section 302(b) of the act, amended December 9, | <-- |
11 | 2002 (P.L.1727, No.217), is amended to read: |
12 | Section 3. Sections 302(b), 307(a), 515(g), 516(f) and 907 | <-- |
13 | of the act, amended December 9, 2002 (P.L.1727, No.217), are |
14 | amended to read: |
15 | Section 302. Application. |
16 | * * * |
17 | (b) Participation limitation.--A political subdivision shall |
18 | not be a part of more than one proposed keystone opportunity |
19 | zone or proposed keystone opportunity expansion zone, unless the |
20 | department agrees that two zones will bring additional economic |
21 | benefit to the political subdivision. A proposed expansion |
22 | subzone may not overlap the boundaries of a subzone. |
23 | * * * |
24 | Section 307. Qualified businesses. | <-- |
25 | (a) Qualifications.--In order to qualify each year for a tax |
26 | exemption, deduction, abatement or credit under this act, a |
27 | business shall own or lease real property in a subzone, |
28 | improvement subzone or expansion subzone from which the business |
29 | actively conducts a trade, profession or business. The qualified |
30 | business shall receive certification from the department that |
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1 | the business is located and is in the active conduct of a trade, |
2 | profession or business, within the subzone, improvement subzone |
3 | or expansion subzone. The business shall obtain annual renewal |
4 | of the certification from the department to continue to qualify |
5 | under this section. The certification form shall include, but |
6 | not be limited to, all of the following: |
7 | (1) The type and duration of the zone designation. |
8 | (2) The number of jobs created. |
9 | (3) The number of jobs retained. |
10 | (4) The amount of capital investment. |
11 | (5) Any other information, conditions or requirements |
12 | reasonably required by the department. |
13 | * * * |
14 | Section 3. Sections 515(g) and 516(f) of the act, amended | <-- |
15 | December 9, 2002 (P.L.1727, No.217), are amended to read: |
16 | Section 515. Corporate net income tax. |
17 | * * * |
18 | (g) Section not applicable to certain businesses.--[Any |
19 | portion of the taxpayer's taxable income that is attributable to |
20 | the operation of a railroad, truck, bus or airline company, |
21 | pipeline or natural gas company, water transportation company, a |
22 | corporation that qualifies as a regulated investment company |
23 | under Article IV of the Tax Reform Code of 1971 or holding |
24 | company as defined in Article VI of the Tax Reform Code of 1971 |
25 | shall not be used to calculate a credit under this section.] The |
26 | following shall apply: |
27 | (1) Any portion of the taxpayer's taxable income that is |
28 | attributable to the operation of any of the following may not |
29 | be used to calculate a credit under this section: |
30 | (i) Any of the following that are required to use |
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1 | special apportionment under Article IV of the Tax Reform |
2 | Code of 1971 or would be required to use special |
3 | apportionment under Article IV of the Tax Reform Code of |
4 | 1971 if the taxpayer had income from business activity |
5 | taxable both within and without this Commonwealth: |
6 | (A) A railroad, truck, bus or airline company. |
7 | (B) A pipeline or natural gas company. |
8 | (C) A water transportation company. |
9 | (ii) A corporation that qualifies as a regulated |
10 | investment company under Article IV of the Tax Reform |
11 | Code of 1971. |
12 | (iii) A holding company as defined in Article VI of |
13 | the Tax Reform Code of 1971. |
14 | (2) The prohibition under paragraph (1) shall not apply |
15 | to the portion of a qualified business engaged in |
16 | manufacturing or processing. |
17 | Section 516. Capital stock franchise tax. |
18 | * * * |
19 | (f) Credit not available.--[Any portion of the taxpayer's |
20 | tax liability that is attributable to the capital employed in |
21 | the operation of a railroad, truck, bus or airline company, |
22 | pipeline or natural gas company, water transportation company, a |
23 | corporation that qualifies as a regulated investment company |
24 | under Article IV of the Tax Reform Code of 1971 or holding |
25 | company as defined in Article VI of the Tax Reform Code of 1971 |
26 | shall not be used to calculate a credit under this section.] The |
27 | following shall apply: |
28 | (1) Any portion of the taxpayer's tax liability that is |
29 | attributable to the capital employed in the operation of any |
30 | of the following may not be used to calculate a credit under |
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1 | this section: |
2 | (i) Any of the following that are required to use |
3 | special apportionment under Article IV of the Tax Reform |
4 | Code of 1971 or would be required to use special |
5 | apportionment under Article IV of the Tax Reform Code of |
6 | 1971 if the taxpayer had income from business activity |
7 | taxable both within and without this Commonwealth: |
8 | (A) A railroad, truck, bus or airline company. |
9 | (B) A pipeline or natural gas company. |
10 | (C) A water transportation company. |
11 | (ii) A corporation that qualifies as a regulated |
12 | investment company under Article IV of the Tax Reform |
13 | Code of 1971. |
14 | (iii) A holding company as defined in Article VI of |
15 | the Tax Reform Code of 1971. |
16 | (2) The prohibition under paragraph (1) shall not apply |
17 | to the portion of a qualified business engaged in |
18 | manufacturing or processing. |
19 | Section 4. Section 907 of the act, amended December 9, 2002 | <-- |
20 | (P.L.1727, No.217), is amended to read: |
21 | Section 907. Application time. |
22 | [An] (a) Requirement.--Except as set forth in subsection |
23 | (b), an applicant must file an application in a manner |
24 | prescribed by the department by December 31 of each calendar |
25 | year for which the applicant claims any exemption, deduction, |
26 | abatement or credit under this act. |
27 | (b) Extension or waiver.--Upon request of the applicant, the |
28 | department may extend or waive the application deadline for good |
29 | cause shown if the political subdivision does not object to the |
30 | waiver or extension. |
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1 | (c) Approval.--No exemption, deduction, abatement or credit |
2 | may be claimed or received for that calendar year until approval |
3 | has been granted by the department. |
4 | Section 5 4. The act is amended by adding a section to read: | <-- |
5 | Section 1104. Monitoring data. |
6 | In addition to any other requirements of this act, the |
7 | department shall monitor all of the following: |
8 | (1) Verifiable job creation and job retention data. |
9 | (2) Information on the types of jobs created and average |
10 | hourly wages. |
11 | (3) Number of years in the program. |
12 | (4) Annual, unduplicated public and private capital |
13 | investment amounts. |
14 | (5) Business type and description. |
15 | (6) Types and amounts of other economic development |
16 | assistance received from the department. |
17 | (7) Documentation that proper participants identified as |
18 | relocations meet the increased full-time employment, |
19 | increased capital investment or lease agreement requirements |
20 | of this act. |
21 | Section 5. Section 1309 of the act, amended December 9, 2002 | <-- |
22 | (P.L.1727, No.217), is repealed: |
23 | [Section 1309. Expiration. |
24 | This act and all benefits associated with this act shall |
25 | terminate December 31, 2018.] |
26 | Section 6. The amendment of section 907 of the act shall |
27 | apply retroactively to January 1, 2009. |
28 | Section 7. This act shall take effect immediately. |
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