SENATE AMENDED
PRIOR PRINTER'S NOS. 3138, 3382, 3525 PRINTER'S NO. 3614
No. 2328 Session of 1998
INTRODUCED BY GLADECK, REINARD, GRUITZA, PERZEL, FICHTER,
THOMAS, HENNESSEY, BISHOP, McILHINNEY, YOUNGBLOOD, DEMPSEY,
PRESTON, FEESE, KREBS, L. I. COHEN, McGILL, RUBLEY, BARD,
PETRONE, GRUPPO, BARLEY, STAIRS, J. TAYLOR, LEH, ROHRER,
C. WILLIAMS, KIRKLAND, MANDERINO, HASAY, LEDERER, KELLER,
DONATUCCI, D. W. SNYDER, MARSICO, MASLAND, SAYLOR, BIRMELIN,
LYNCH, GEIST, TULLI, ROSS, MAJOR, FAIRCHILD, GODSHALL,
SERAFINI, CIVERA, HUTCHINSON, STEIL, PIPPY, HERMAN,
STEVENSON, CLARK, SCHULER, BAKER, ORIE, NAILOR, S. H. SMITH,
MILLER, SATHER, VANCE, E. Z. TAYLOR, EGOLF, DRUCE,
DiGIROLAMO, ZUG, SEYFERT, HESS, BROWNE, DENT, TRELLO,
READSHAW, COWELL, PESCI, CORNELL, HABAY, CALTAGIRONE AND
ARGALL, MARCH 12, 1998
SENATOR HART, FINANCE, IN SENATE, AS AMENDED, JUNE 1, 1998
AN ACT
1 Providing for the creation of keystone opportunity zones to
2 foster economic opportunities in this Commonwealth, to
3 facilitate economic development, stimulate industrial,
4 commercial and residential improvements and prevent physical
5 and infrastructure deterioration of geographic areas within
6 this Commonwealth; authorizing expenditures; providing tax
7 exemptions, tax deductions, tax abatements and tax credits;
8 creating additional obligations of the Commonwealth and local
9 governmental units; AND prescribing powers and duties of <--
10 certain State and local departments, agencies and officials.
11 providing for economic development zones and grants; <--
12 establishing the Economic Development Zone Assistance Fund;
13 and making appropriations.
14 TABLE OF CONTENTS
15 Chapter 1. Preliminary Provisions
16 Section 101. Short title.
17 Section 102. Legislative findings.
1 Section 103. Definitions.
2 Chapter 3. Keystone Opportunity Zones
3 Section 301. Keystone opportunity zones.
4 Section 302. Application.
5 Section 303. Review.
6 Section 304. Criteria for designation of keystone opportunity
7 zone.
8 Section 305. Zone limitation LIMITATIONS. <--
9 Section 306. Residency.
10 Section 307. Qualified businesses.
11 Section 308. Forms.
12 Section 309. Reduction of exemptions, deductions, <--
13 abatements or credits.
14 Chapter 5. State Taxes
15 Subchapter A. General Provisions
16 Section 501. State taxes.
17 Subchapter B. Particular State Taxes
18 Section 511. Sales and use tax.
19 Section 512. Personal income tax.
20 Section 513. Residency considerations.
21 Section 514. Information for employer.
22 Section 515. Corporate net income tax.
23 Section 516. Capital stock franchise tax.
24 Chapter 7. Local Taxes
25 Section 701. Local taxes.
26 Section 702. Real property tax.
27 Section 703. Local earned income and net profits taxes;
28 business privilege taxes.
29 Section 704. Mercantile license tax.
30 Section 705. Local sales and use tax.
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1 Chapter 9. Administration of Tax Provisions
2 Section 901. Transferability.
3 Section 902. Recapture.
4 Section 903. Delinquent or deficient State or local taxes.
5 Section 904. Code compliance.
6 Section 905. Appeals.
7 Chapter 11. Procedures for Zones
8 Section 1101. Community benefits.
9 Section 1102. Reporting.
10 Section 1103. Other Commonwealth tax credits.
11 Chapter 13. Economic Development Zones <--
12 Section 1301. Short title of chapter.
13 Section 1302. Legislative findings.
14 Section 1303. Definitions.
15 Section 1304. Powers and duties.
16 Section 1305. Study on fiscal impact of development zones;
17 contents; recommendations; submission to Governor
18 and General Assembly; funding for cost of study.
19 Section 1306. Economic development zones; designation;
20 duration.
21 Section 1307. Zone development corporation.
22 Section 1308. Preliminary zone development plan.
23 Section 1309. Eligibility for designation.
24 Section 1310. Priority development zones.
25 Section 1311. Designation of eligible areas as development
26 zones.
27 Section 1312. Application for designation; grant or denial;
28 adoption of ordinance of acceptance.
29 Section 1313. Benefits available to qualified business.
30 Section 1314. Award; eligibility of qualified business;
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1 schedule.
2 Section 1315. Business tax exemption.
3 Section 1316. Development zone employee or investment tax
4 credits; limitations and carryovers.
5 Section 1317. Development zone employee tax credit;
6 qualifications; amount.
7 Section 1318. Sales and use tax.
8 Section 1319. Partial exemption; certification; disposition of
9 revenue.
10 Section 1320. Regulations.
11 Section 1321. State financing assistance; priority to project
12 in municipality with development zone.
13 Section 1322. Skill training programs; delivery.
14 Section 1323. Regulations; exemption of development zones.
15 Section 1324. Review of State regulations by department.
16 Section 1325. Eligibility for incentives by qualified business.
17 Section 1326. Qualified business recipient of benefits; annual
18 certification.
19 Section 1327. Fund.
20 Section 1328. Constitutionality.
21 Chapter 21. Miscellaneous Provisions
22 Section 2101. Illegal activity.
23 Section 2102. Rules and regulations.
24 Section 2103. Compliance.
25 Section 2104. Penalties.
26 Section 2105. Construction.
27 Section 2106. Applicability.
28 Section 2107. Severability.
29 Section 2108. Repeals.
30 Section 2109. Expiration.
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1 Section 2110. Effective date.
2 CHAPTER 13. MISCELLANEOUS PROVISIONS <--
3 SECTION 1301. ILLEGAL ACTIVITY.
4 SECTION 1302. RULES AND REGULATIONS.
5 SECTION 1303. COMPLIANCE.
6 SECTION 1304. PENALTIES.
7 SECTION 1305. CONSTRUCTION.
8 SECTION 1306. APPLICABILITY.
9 SECTION 1307. SEVERABILITY.
10 SECTION 1308. REPEALS.
11 SECTION 1309. EXPIRATION.
12 SECTION 1310. EFFECTIVE DATE.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 CHAPTER 1
16 PRELIMINARY PROVISIONS
17 Section 101. Short title.
18 This act shall be known and may be cited as the Pennsylvania
19 Keystone Opportunity Zone Act.
20 Section 102. Legislative findings.
21 (1) There exists in this Commonwealth areas of economic
22 distress characterized by high unemployment, low investment
23 of new capital, inadequate dwelling conditions, blighted
24 conditions, underutilized, obsolete or abandoned industrial,
25 commercial and residential structures and deteriorating tax
26 bases.
27 (2) These areas require coordinated efforts by private
28 and public entities to restore prosperity and enable the
29 areas to make significant contributions to the economic and
30 social life of this Commonwealth.
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1 (3) Long-term economic viability of these areas requires
2 the cooperative involvement of residents, businesses, State
3 and local elected officials and community organizations. It
4 is in the best interest of the Commonwealth to assist and
5 encourage the creation of keystone opportunity zones and to
6 provide temporary relief from certain taxes within the
7 keystone opportunity zones to accomplish the purposes of this
8 act.
9 Section 103. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Business." An association, partnership, corporation, sole
14 proprietorship, limited liability corporation or employer.
15 "Department." The Department of Community and Economic
16 Development of the Commonwealth.
17 "Deteriorated property." Any blighted, impoverished area
18 containing residential, industrial, commercial or other real
19 property that is abandoned, unsafe, vacant, undervalued,
20 underutilized, overgrown, defective, condemned, demolished or
21 which contains economically undesirable land use. The term
22 includes property adjacent to deteriorated property that is
23 significantly undervalued and underutilized due to the proximity
24 of the deteriorated property.
25 "Domicile." The place where a person has a true and fixed
26 home and principal establishment for an indefinite time and to
27 which, whenever absent, that person intends to return. Domicile
28 continues until another place of domicile is established.
29 "Keystone opportunity zone." A defined geographic area
30 comprised of one or more political subdivisions or portions of
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1 political subdivisions designated by the Department of Community
2 and Economic Development under Chapter 3. A keystone opportunity
3 zone may be comprised of not more than 12 subzones.
4 "METROPOLITAN STATISTICAL AREA." A CORE AREA CONTAINING A <--
5 CITY WITH A POPULATION OF 50,000 OR MORE OR A BUREAU OF CENSUS
6 DEFINED URBANIZED AREA OF 50,000 WITH A TOTAL METROPOLITAN
7 POPULATION OF AT LEAST 100,000.
8 "Opportunity plan." A written plan that addresses the
9 criteria and meets the requirements in section 302(a).
10 "Person." Any natural person.
11 "Political subdivision." A county, city, borough, township,
12 town or school district with taxing jurisdiction in a defined
13 geographic area within this Commonwealth.
14 "Qualified business." Any business authorized to do business
15 in this Commonwealth that is located within a keystone
16 opportunity zone and is engaged in the active conduct of a trade
17 or business in accordance with the requirements of section 307.
18 "Qualified political subdivision." A political subdivision
19 that has been designated as a keystone opportunity zone.
20 "Resident." A person who is domiciled and resides in an area
21 that is designated a keystone opportunity zone who meets the
22 requirements of section 306.
23 "Subzone." A clearly defined geographic area containing a
24 minimum of 20 contiguous acres OR A MINIMUM OF TEN CONTIGUOUS <--
25 ACRES IN A RURAL AREA.
26 "Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
27 No.2), known as the Tax Reform Code of 1971, and any subsequent
28 amendments thereto.
29 CHAPTER 3
30 KEYSTONE OPPORTUNITY ZONES
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1 Section 301. Keystone opportunity zones.
2 (a) Establishment.--There is hereby established within the
3 department a program providing for the designation of portions
4 of this Commonwealth as keystone opportunity zones. A keystone
5 opportunity zone shall be comprised of deteriorated property and
6 shall not exceed a total of 5,000 acres.
7 (b) Designation.--The department shall designate not more
8 than 12 keystone opportunity zones in this Commonwealth. Persons
9 and businesses within the A designated keystone opportunity zone <--
10 that are qualified under this act shall be entitled to all tax
11 exemptions, deductions, abatements and OR credits set forth in <--
12 this act for a period not to exceed 12 years beginning January
13 1, 1999, and ending on or before December 31, 2010.
14 (c) Subzones.--A keystone opportunity zone may be comprised
15 of up to 12 clearly defined subzones containing a minimum of 20
16 contiguous acres each. The subzones may or may not be contiguous
17 to each other. The total number of subzones shall not exceed
18 5,000 acres in the aggregate. THE DEPARTMENT MAY APPROVE THE USE <--
19 OF A SUBZONE CONTAINING A MINIMUM OF TEN ACRES IN AN AREA THAT
20 IS NOT INCLUDED IN A METROPOLITAN STATISTICAL AREA.
21 (d) Authorization for local tax exemption.--Every political
22 subdivision in WITHIN which a proposed keystone opportunity zone <--
23 is located, WHETHER IN WHOLE OR IN PART, is hereby authorized to <--
24 provide tax exemptions, deductions, abatements or credits to
25 persons and businesses qualified under this act. The political
26 subdivision shall agree to provide exemptions, deductions,
27 abatements or credits from all local taxes set forth in this act
28 in order to qualify to be designated a keystone opportunity zone
29 within that political subdivision. Except as provided in section
30 303(e), the exemptions, deductions, abatements or credits shall
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1 be effective January 1, 1999, if designation of a keystone
2 opportunity zone within the political subdivisions is granted by
3 the department. The exemptions, deductions, abatements or
4 credits shall be binding upon the political subdivision for the
5 duration of the keystone opportunity zone designation.
6 Section 302. Application.
7 (a) Initial application.--One or more political
8 subdivisions, or a designee of one or more political
9 subdivisions, may apply to the department to designate a
10 keystone opportunity zone within the political subdivision or
11 portions thereof. The application shall contain the following:
12 (1) The geographic area of the proposed keystone
13 opportunity zone. The geographic area shall be located within
14 the boundaries of the PARTICIPATING political subdivision and <--
15 shall not contain more than 5,000 acres.
16 (2) An opportunity plan that shall include the
17 following:
18 (i) A detailed map of the proposed keystone
19 opportunity zone, including all subzones, to include AND <--
20 SUBZONES, INCLUDING geographic boundaries, total area and
21 present use and conditions of the land and structures OF <--
22 THE PROPOSED KEYSTONE OPPORTUNITY ZONE.
23 (ii) Evidence of support from and participation of
24 local government, school districts and other educational
25 institutions, business groups, community organizations
26 and the public.
27 (iii) A proposal to increase economic opportunity,
28 reduce crime, improve education, facilitate
29 infrastructure improvement, reduce the local regulating
30 burden and identify potential jobs and job training
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1 opportunities, AND WHICH STATES whether or not the zone <--
2 is located in an area which has tax revenue dedicated to
3 the payment of debt.
4 (iv) A description of the current social, economic
5 and demographic characteristics of the proposed keystone
6 opportunity zone and anticipated improvements in
7 education, health, human services, public safety and
8 employment THAT WILL RESULT FROM KEYSTONE OPPORTUNITY <--
9 ZONE DESIGNATION.
10 (v) A description of anticipated activity in the
11 keystone opportunity zone and each subzone, including,
12 but not limited to, industrial use, industrial site re-
13 use, commercial or retail use and residential use.
14 (vi) Evidence of potential private and public
15 investment in the keystone opportunity zone.
16 (vii) The role of the proposed keystone opportunity
17 zone in regional economic and community development.
18 (viii) Plans TO UTILIZE EXISTING RESOURCES for the <--
19 administration of the proposed keystone opportunity zone
20 utilizing existing resources. <--
21 (ix) Any other information deemed appropriate by the
22 department.
23 (3) A report on youth at risk to include issues relating
24 to health, welfare and education.
25 (4) The proposed duration of the keystone opportunity
26 zone and all subzones. THE DURATION MAY not to exceed 12 <--
27 years.
28 (5) A formal, binding ordinance or resolution passed by
29 every political subdivision in which the proposed keystone
30 opportunity zone is located that specifically provides for
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1 all local tax exemptions, deductions, abatements or credits
2 for persons and businesses set forth in this act if
3 designation is received by the department, to be effective
4 January 1, 1999.
5 (6) Evidence that the keystone opportunity zone meets
6 the required criteria under section 304.
7 (b) Participation limitation.--A qualified political
8 subdivision shall not be a part of more than one keystone
9 opportunity zone.
10 (c) Application limitation.--A qualified political
11 subdivision may submit only one application to the department
12 for designation as a keystone opportunity zone.
13 Section 303. Review.
14 (a) Action of department.--The department, in consultation <--
15 with the Department of Revenue, shall review all completed <--
16 applications submitted under this act. An application for
17 designation as a keystone opportunity zone shall be received by
18 the department on or before September 30, 1998, in order to be
19 considered by the department.
20 (b) Process.--The department shall do all of the following: <--
21 (1) Designate up to 12 keystone opportunity zones from
22 DESIGNATE UP TO 12 KEYSTONE OPPORTUNITY ZONES FROM <--
23 applications meeting the criteria in section 304 based upon
24 need and likelihood of success. <--
25 (2) The department shall not alter the geographic
26 SUCCESS. ADDITIONALLY, THE DEPARTMENT SHALL NOT ALTER THE <--
27 GEOGRAPHIC boundaries of the A keystone opportunity zone or <--
28 the duration of the A keystone opportunity zone described in <--
29 the application.
30 (c) Award of designations.--The department shall designate
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1 all keystone opportunity zones by November 30, 1998.
2 (d) Effective date of designation.--The designation of a
3 keystone opportunity zone under this act shall take effect on
4 January 1, 1999.
5 (e) Extension.--The department may extend the deadline for
6 the receipt of applications under subsection (a) until December
7 31, 1998, if all 12 zones have not been designated and the
8 extension is necessary to allow eligible political subdivisions
9 to apply. The department shall designate additional keystone
10 opportunity zones under this subsection by February 28, 1999.
11 The designation shall take effect January 1, 1999, or if the
12 designation occurs after January 1, 1999, that subsequent
13 designation shall for all purposes be retroactive to January 1,
14 1999. The designation shall end as provided in section 301(b).
15 Section 304. Criteria for designation of keystone opportunity
16 zone.
17 (a) Specific criteria.--In order to qualify for designation
18 under this act, the proposed keystone opportunity zone shall
19 meet at least two of the following criteria:
20 (1) At least 20% of the population is below the poverty
21 level.
22 (2) The unemployment rate is 1.25 times the Statewide
23 average.
24 (3) At least 20% of all real property within a five-mile
25 radius of the proposed keystone opportunity zone or subzone
26 in a nonurban area is deteriorated or underutilized.
27 (4) At least 20% of all real property within a one-mile
28 radius of the proposed keystone opportunity zone or subzone
29 in an urban area is deteriorated or underutilized.
30 (5) At least 20% of all occupied housing within a two-
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1 mile radius of the proposed keystone opportunity zone or
2 subzone in a nonurban area is deteriorated.
3 (6) At least 20% of all occupied housing within a one-
4 mile radius of the proposed keystone opportunity zone or
5 subzone in an urban area is deteriorated.
6 (7) In an urban area, the median family income is 80% or
7 less of the Statewide urban median family income. URBAN <--
8 MEDIAN FAMILY INCOME FOR THAT METROPOLITAN STATISTICAL AREA.
9 (8) In an area other than an urban area, the median
10 family income is 80% or less of the Statewide nonurban median
11 family income.
12 (9) The population loss exceeds 10% in an area that
13 includes the proposed keystone opportunity zone and its
14 surrounding area, but is not larger than the county or
15 counties in which the keystone opportunity zone is located,
16 based on census data for the period between 1980 and 1990 or
17 census estimates since 1990 establishing a pattern of
18 population loss.
19 (10) The political subdivision in which the proposed
20 keystone opportunity zone is located has experienced a sudden
21 and/or severe job loss.
22 (11) At least 33% of the real property in a proposed
23 keystone opportunity zone in a nonurban area would otherwise
24 remain underdeveloped or nonperforming due to physical
25 characteristics of the real property.
26 (12) The area has substantial real property with
27 adequate infrastructure and energy to support new or expanded
28 development.
29 (13) Be in an area designated as an enterprise zone by <--
30 the department under the act of July 9, 1986 (P.L.1216,
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1 No.108), known as the Enterprise Zone Municipal Tax Exemption
2 Reimbursement Act.
3 (b) Additional criteria.--In addition to the required
4 criteria under subsection (a), the department shall consider the
5 following criteria:
6 (1) Evidence of distress, including, but not limited to,
7 unemployment, percentage of population below 80% of the State
8 median income, poverty rate, deteriorated property and
9 adverse economic and socioeconomic conditions in the proposed
10 keystone opportunity zone.
11 (2) The strength and viability of the proposed goals,
12 objectives and strategies in the opportunity plan.
13 (3) Whether the opportunity plan is creative and
14 innovative in comparison to other applications.
15 (4) Local public and private commitment to the
16 development of the keystone opportunity zone and the
17 potential cooperation of surrounding communities.
18 (5) Existing resources available to the proposed
19 keystone opportunity zone.
20 (6) How keystone opportunity zone designation or
21 economic redevelopment relate RELATES to other current <--
22 economic and community development projects and to regional
23 initiatives or programs.
24 (7) How the local regulatory burden will be eased for
25 businesses operating in the proposed keystone opportunity
26 zone.
27 (8) Proposals to implement educational opportunities and
28 improvements.
29 (9) Crime statistics and proposals to implement local
30 crime reduction measures.
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1 (10) Proposals to establish and link job creation and
2 job training.
3 (c) Tax exemption ordinances.--An area shall not be
4 designated as a keystone opportunity zone unless, as a part of
5 the application, each political subdivision in which the
6 proposed keystone opportunity zone is to be located adopts and
7 provides a copy of an ordinance, resolution or other required
8 action from the governing body of each political subdivision
9 that exempts or provides deductions, abatements or credits to
10 qualified persons and qualified businesses from local taxes upon
11 designation of the area as a keystone opportunity zone. All
12 appropriate ordinances and resolutions shall be effective on or
13 before January 1, 1999, if designation as a keystone opportunity
14 is granted. The resolution, ordinance or other required action
15 shall be binding and nonrevocable on the qualified political
16 subdivisions for the duration of the opportunity plan.
17 (d) Urban areas.--The department shall promulgate guidelines
18 which include the definition of "urban area" for the purposes of
19 receiving applications for designation as a keystone opportunity
20 zone.
21 Section 305. Zone limitation LIMITATIONS. <--
22 The department shall not designate more than 12 keystone
23 opportunity zones within this Commonwealth. NO KEYSTONE <--
24 OPPORTUNITY ZONE SHALL ENCOMPASS AN ENTIRE POLITICAL
25 SUBDIVISION.
26 Section 306. Residency.
27 In order to qualify each year for a tax exemption, deduction,
28 abatement or credit under this act, a person shall be domiciled
29 and shall reside in the keystone opportunity zone for a period
30 of one year. The one-year period 184 CONSECUTIVE DAYS, WHICH may <--
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1 begin on the date of designation by the department or on the
2 date the person first resides within the zone. Residency <--
3 requirements must be met for each year that the keystone
4 opportunity zone is in existence.
5 Section 307. Qualified businesses.
6 (a) Qualifications.--In order to qualify each year for a tax
7 exemption, deduction, abatement or credit under this act, a
8 business shall own or lease real property in the keystone
9 opportunity zone from which the business actively conducts a
10 trade, profession or business. The qualified business shall
11 receive certification from the department that the business is
12 located, and is in the active conduct of a trade, profession or
13 business, within the keystone opportunity zone. The business
14 shall obtain annual renewal of the certification from the
15 department to continue to qualify under this section.
16 (b) Relocation.--Any business that relocates from outside a
17 keystone opportunity zone into a keystone opportunity zone shall
18 not receive any of the exemptions, deductions, abatements or
19 credits set forth in this act unless that business either:
20 (1) increases full-time employment by at least 20% in
21 the first full year of operation within the keystone
22 opportunity zone; or
23 (2) makes a capital investment IN THE PROPERTY LOCATED <--
24 WITHIN A KEYSTONE OPPORTUNITY ZONE equivalent to 10% of the
25 gross revenues of that business in the immediately preceding
26 calendar or fiscal year.
27 The department, in consultation with the Department of Revenue,
28 may waive or modify the requirements of this subsection, as
29 appropriate.
30 Section 308. Forms.
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1 (a) Application forms.--Applications for designation as a
2 keystone opportunity zone shall be on forms prescribed by the
3 department.
4 (b) Department assistance.--The department shall assist
5 political subdivisions in using the Internet as a tool for
6 encouraging new business DEVELOPMENT, including assisting <--
7 political subdivisions in making available via the Internet
8 information, applications and other forms necessary under this
9 act.
10 Section 309. Reduction of exemptions, deductions, abatements or <--
11 credits.
12 During the last three years that the taxpayer is eligible for
13 an exemption, deduction, abatement or credit, the exemption,
14 deduction, abatement or credit shall be reduced by the following
15 percentages:
16 (1) For the tax year that is two years before the final
17 year of designation as a keystone opportunity zone, the
18 percentage shall be 25%.
19 (2) For the tax year immediately preceding the final
20 year of designation as a keystone opportunity zone, the
21 percentage shall be 50%.
22 (3) For the tax year that is the final year of
23 designation as a keystone opportunity zone, the percentage
24 shall be 75%.
25 CHAPTER 5
26 STATE TAXES
27 SUBCHAPTER A
28 GENERAL PROVISIONS
29 Section 501. State taxes.
30 (a) General rule.--A person who is a resident of a keystone
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1 opportunity zone, a qualified business or a nonresident under
2 section 514 513 shall receive the exemptions, deductions, <--
3 abatements or credits as provided in this chapter and Chapter 7
4 for the duration of the keystone opportunity zone designation.
5 Exemptions, deductions, abatements or credits shall expire on
6 the date of expiration of the keystone opportunity zone
7 designation.
8 (b) Construction.--The Department of Revenue shall
9 administer, construe and enforce the provisions of this chapter
10 in conjunction with Articles II, III, IV and VI of the Tax
11 Reform Code of 1971.
12 SUBCHAPTER B
13 PARTICULAR STATE TAXES
14 Section 511. Sales and use tax.
15 (a) Exemption.--Sales at retail of services or tangible
16 personal property, other than motor vehicles, to a qualified
17 business for the exclusive use, consumption and utilization of
18 the tangible personal property or service by the qualified
19 business at its facility located within a keystone opportunity
20 zone are exempt from the sales and use tax imposed under Article
21 II of the Tax Reform Code of 1971.
22 (b) Limitation.--Sales at retail or use of tangible personal
23 property or services to the tangible personal property that will
24 become a permanent part of real property in accordance with
25 Department of Revenue regulations shall not be eligible for
26 sales or use tax exemption under this section.
27 Section 512. Personal income tax.
28 (a) General rule.--For the 1999 taxable year and each tax
29 year after 1999 and to the extent and for the duration provided
30 in this act a person shall be allowed an exemption for:
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1 (1) Compensation received during the time period when
2 the person was a resident of a keystone opportunity zone.
3 (2) Net income from the operation of a qualified
4 business received by a resident or nonresident of a keystone
5 opportunity zone attributable to business activity conducted
6 within a keystone opportunity zone after provision for all
7 costs and expenses incurred in the conduct thereof,
8 determined either on a cash or accrual basis in accordance
9 with accepted accounting principles and practices but without
10 deduction of taxes based on income.
11 (3) (i) Net gains or income, less net losses, derived
12 by a resident or nonresident of a keystone opportunity
13 zone from the sale, exchange or disposition of real or
14 tangible personal property located in a keystone
15 opportunity zone as determined in accordance with
16 accepted accounting principles and practices.
17 (ii) Net gains, less net losses, realized by a
18 resident of a keystone opportunity zone from the sale,
19 exchange or disposition of intangible personal property
20 or obligations issued on or after February 1, 1994, by
21 the Commonwealth, a public authority, commission, board
22 or other Commonwealth agency, political subdivision or
23 authority created by a political subdivision or by the
24 Federal Government as determined in accordance with
25 accepted accounting principles and practices.
26 (iii) The exemption from income for gain or loss
27 provided for in this subparagraph shall be prorated based
28 on either:
29 (A) the percentage of time, based on calendar
30 days, the property was held by the taxpayer while a
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1 resident of a keystone opportunity zone in relation
2 to the total time THE PROPERTY WAS held by the <--
3 taxpayer; or
4 (B) the percentage of time, based on calendar
5 days, the real or tangible personal property located
6 in the keystone opportunity zone was held by a
7 nonresident of a keystone opportunity zone during the
8 time period the keystone opportunity zone was in
9 effect in relation to the total time held THE REAL OR <--
10 TANGIBLE PERSONAL PROPERTY WAS HELD BY A NONRESIDENT.
11 (4) Net gains or income derived from or in the form of
12 rents received by a person, whether a resident or nonresident
13 of a keystone opportunity zone, to the extent that income or
14 loss from the rental of real or tangible personal property is
15 allocable to a keystone opportunity zone. For purposes of
16 calculating this exemption:
17 (i) Net rents derived from real or tangible personal
18 property located in a keystone opportunity zone are
19 allocable to a keystone opportunity zone.
20 (ii) If the tangible personal property was used both
21 within and without the keystone opportunity zone during
22 the taxable year, only the net income attributable to use
23 in the keystone opportunity zone is exempt. The net
24 rental income shall be multiplied by a fraction, the
25 numerator of which is the number of days the property was
26 used in the keystone opportunity zone and the denominator
27 which is the total days of use.
28 (5) Dividends received during the time the person was a
29 resident of a keystone opportunity zone.
30 (6) Interest received during the time period the person
19980H2328B3614 - 20 -
1 was a resident of a keystone opportunity zone.
2 (7) Net gains or income derived through estates or
3 trusts received by a resident of a keystone opportunity zone
4 at the time of such receipt.
5 (b) Limitation.--A resident or nonresident may not apply an
6 exemption from income under this act for any class of income
7 against any other classes of income or gain. A resident or
8 nonresident may not carry back or carry forward any exemption
9 under this act from year to year.
10 Section 513. Residency considerations.
11 If a person completes the residency requirements under
12 section 306 or if a nonresident realizes income attributable to
13 business activity or property within a keystone opportunity zone
14 on or before the end of the tax year, the person may claim the
15 exemptions from income for the items set forth in section 512
16 for that portion of the tax year that the person was a resident
17 or for that portion of the tax year during which the area is
18 designated as a keystone opportunity zone. If the person
19 completes MEETS the residency requirements under section 306 in <--
20 a tax year subsequent to the tax year in which the person first
21 resided in the keystone opportunity zone, the person may file an
22 amended tax return within the applicable statute of limitations
23 to claim an exemption from income for the period of residency
24 within the keystone opportunity zone.
25 Section 514. Information for employer.
26 (a) Duty of employee.--Every person who is an employee that
27 qualifies as a resident of a keystone opportunity zone shall
28 furnish to his or her employer information, as prescribed by the
29 Department of Revenue, necessary for the employer to withhold
30 the correct amount of tax. An employee shall furnish
19980H2328B3614 - 21 -
1 notification to his or her employer of any changes to the
2 information within 20 days after the change. An employee shall
3 notify his or her employer that the employee has completed the
4 residency requirements under section 306.
5 (b) Duty of employer.--Within 20 days after an employer
6 receives information from an employee pursuant to subsection
7 (a), the employer shall forward a copy of that information to
8 the Department of Revenue. The information shall not be given
9 retroactive effect for withholding purposes. The employer shall
10 not be required to withhold tax from the compensation paid to a
11 resident of a keystone opportunity zone, if reasonable under the
12 circumstances, unless directed by the Department of Revenue to
13 withhold tax from the compensation on some other basis. If an
14 employee fails or refuses to furnish the information, or
15 furnishes information that the employer reasonably and in good
16 faith believes to be inaccurate, the employer shall withhold the
17 full rate of tax from the employee's total compensation.
18 Section 515. Corporate net income tax.
19 (a) Credits.--For the tax years that begin on or after
20 January 1, 1999, a corporation that qualifies as a qualified
21 business under this act may claim a credit against the tax
22 imposed by Article IV of the Tax Reform Code of 1971 for the
23 taxable year to the extent of the tax liability attributable to
24 business activity conducted within a keystone opportunity zone
25 in the taxable year. The business activity must be conducted
26 directly by a corporation in the keystone opportunity zone in
27 order for the corporation to claim the tax credit.
28 (b) Tax liability determinations.--The corporate tax
29 liability attributable to business activity conducted within a
30 keystone opportunity zone shall be determined by multiplying the
19980H2328B3614 - 22 -
1 corporation's taxable income that is attributable to business
2 activity conducted within the keystone opportunity zone by the
3 rate of tax imposed under Article IV of the Tax Reform Code of
4 1971 for the taxable year.
5 (c) Determinations of attributable tax liability.--Tax
6 liability attributable to business activity conducted within a
7 keystone opportunity zone shall be computed, construed,
8 administered and enforced in conformity with Article IV of the
9 Tax Reform Code of 1971 and with specific reference to the
10 following:
11 (1) If the entire business of the corporation in this
12 Commonwealth is transacted wholly within the keystone
13 opportunity zone, the taxable income attributable to business
14 activity within a keystone opportunity zone shall consist of
15 the Pennsylvania taxable income as determined under Article
16 IV of the Tax Reform Code of 1971.
17 (2) If the entire business of the corporation in this
18 Commonwealth is not transacted wholly within the keystone
19 opportunity zone, the taxable income of a corporation in a
20 keystone opportunity zone shall be determined upon such
21 portion of the Pennsylvania taxable income of such
22 corporation attributable to business activity conducted
23 within the keystone opportunity zone and apportioned in
24 accordance with subsection (d).
25 (d) Income apportionment.--All taxable income of a qualified
26 business shall be apportioned to the keystone opportunity zone
27 by multiplying the Pennsylvania taxable income by a fraction,
28 the numerator of which is the property factor plus the payroll
29 factor plus the sales factor and the denominator of which is
30 three.
19980H2328B3614 - 23 -
1 (1) The property factor is a fraction, the numerator of
2 which is the average value of the taxpayer's real and
3 tangible personal property owned or rented and used in the
4 keystone opportunity zone during the tax period and the
5 denominator of which is the average value of all the
6 taxpayer's real and tangible personal property owned or
7 rented and used in this Commonwealth during the tax period
8 but shall not include the security interest of any
9 corporation as seller or lessor in personal property sold or
10 leased under a conditional sale, bailment lease, chattel
11 mortgage or other contract providing for the retention of a
12 lien or title as security for the sales price of the
13 property.
14 (2) (i) The payroll factor is a fraction, the numerator
15 of which is the total amount paid in the keystone
16 opportunity zone during the tax period by the taxpayer
17 for compensation and the denominator of which is the
18 total compensation paid in this Commonwealth during the
19 tax period.
20 (ii) Compensation is paid in the keystone
21 opportunity zone if:
22 (A) the person's service is performed entirely
23 within the keystone opportunity zone;
24 (B) the person's service is performed both
25 within and without the keystone opportunity zone, but
26 the service performed without the keystone
27 opportunity zone is incidental to the person's
28 service within the keystone opportunity zone; or
29 (C) some of the service is performed in the
30 keystone opportunity zone and the base of operations
19980H2328B3614 - 24 -
1 or, if there is no base of operations, the place from
2 which the service is directed or controlled is in the
3 keystone opportunity zone, or the base of operations
4 or the place from which the service is directed or
5 controlled is not in any location in which some part
6 of the service is performed, but the person's
7 residence is in the keystone opportunity zone.
8 (3) The sales factor is a fraction, the numerator of
9 which is the total sales of the taxpayer in the keystone
10 opportunity zone during the tax period, and the denominator
11 of which is the total sales of the taxpayer in this
12 Commonwealth during the tax period.
13 (i) Sales of tangible personal property are in the
14 keystone opportunity zone if the property is delivered or
15 shipped to a purchaser within the keystone opportunity
16 zone regardless of the F.O.B. point or other conditions
17 of the sale.
18 (ii) Sales, other than sales of tangible personal
19 property, are in the keystone opportunity zone if:
20 (A) the income-producing activity is performed
21 in the keystone opportunity zone; or
22 (B) the income-producing activity is performed
23 both within and without the keystone opportunity zone
24 and a greater proportion of the income-producing
25 activity is performed in the keystone opportunity
26 zone than in any other location, based on costs of
27 performance.
28 (e) Computation.--A corporation shall compute its
29 Commonwealth taxable income in conformity with Article IV of the
30 Tax Reform Code of 1971 with no adjustments or subtractions for
19980H2328B3614 - 25 -
1 keystone opportunity zone taxable income.
2 (f) Credit.--The credit allowed under this section shall not
3 exceed the corporate net income tax liability of the taxpayer
4 for the tax year.
5 (g) Section not applicable to certain businesses.--Any
6 portion of the taxpayer's taxable income that is attributable to
7 the operation of a railroad, truck, bus or airline company,
8 pipeline or natural gas company, municipal waste landfill, water <--
9 transportation company, a corporation that qualifies as a
10 regulated investment company under Article IV of the Tax Reform
11 Code of 1971, or holding company as defined in Article VI of the
12 Tax Reform Code of 1971 and any business activity that is
13 associated or affiliated with the operation of these business
14 activities shall not be used to calculate a credit under this
15 section.
16 Section 516. Capital stock franchise tax.
17 (a) Credits.--For tax years that begin on or after January
18 1, 1999, a corporation that is a qualified business under
19 section 307(a) may claim a credit against the tax imposed by
20 Article VI of the Tax Reform Code of 1971 for the taxable year
21 to the extent of the tax liability attributable to the capital
22 employed within a keystone opportunity zone in the taxable year.
23 (b) Tax liability.--The corporation's tax liability
24 attributable to capital employed within a keystone opportunity
25 zone shall be determined by multiplying the corporation's
26 taxable value attributable to capital employed within the
27 keystone opportunity zone by the rate of tax imposed under
28 Article VI of the Tax Reform Code of 1971 for the taxable year.
29 The corporation shall compute its Pennsylvania taxable value in
30 conformity with Article VI of the Tax Reform Code of 1971 with
19980H2328B3614 - 26 -
1 no adjustments or subtractions for the capital employed in the
2 keystone opportunity zone.
3 (c) Determination of attributable tax liability.--The
4 determination of the corporation's taxable value attributable to
5 the capital employed within a keystone opportunity zone shall be
6 determined with specific reference to the following:
7 (1) If the entire business of the corporation in this
8 Commonwealth is transacted wholly within a keystone
9 opportunity zone, the taxable value attributable to the
10 capital employed within a keystone opportunity zone shall
11 consist of the Pennsylvania taxable value as determined under
12 Article VI of the Tax Reform Code of 1971.
13 (2) If the entire business of the corporation in this
14 Commonwealth is not wholly transacted within a keystone
15 opportunity zone, the taxable value of a corporation in a
16 keystone opportunity zone shall be determined upon such
17 portion of the Pennsylvania taxable value attributable to the
18 capital employed within the keystone opportunity zone by
19 employing the apportionment factors set forth in subsection
20 (d).
21 (d) Capital stock and franchise tax apportionment.--For
22 purposes of apportionment of the capital stock and franchise
23 tax, the apportionment fraction shall be the property factor
24 plus the payroll factor plus the sales factor as the numerator
25 and the denominator shall be three. In determining the relevant
26 apportionment factors, the numerator of the property, payroll
27 and sales factors shall not include any property, payroll and
28 sales attributable to manufacturing, processing, research and
29 development activities conducted within a keystone opportunity
30 zone and the denominator of the property, payroll and sales
19980H2328B3614 - 27 -
1 factors shall not include any property, payroll and sales
2 attributable to manufacturing, processing and research and
3 development activities conducted within this Commonwealth but
4 without a keystone opportunity zone.
5 (e) Limitation on amount of credit.--The credit allowed
6 under this section shall not exceed the capital stock franchise
7 tax liability of the taxpayer for the tax year.
8 (f) Credit not available.--Any portion of the taxpayer's tax
9 liability that is attributable to the capital employed in the
10 operation of a railroad, truck, bus or airline company, pipeline
11 or natural gas company, water transportation company, a
12 corporation that qualifies, regulated investment company under
13 Article IV of the Tax Reform Code of 1971, or holding company as
14 defined in Article VI of the Tax Reform Code of 1971 and any
15 capital employed in a business activity that is associated or
16 affiliated with the operation of these business activities shall
17 not be used to calculate a credit under this section.
18 CHAPTER 7
19 LOCAL TAXES
20 Section 701. Local taxes.
21 Every political subdivision in which a designated keystone
22 opportunity zone is located shall exempt, deduct, abate or
23 credit local taxes in accordance with ordinances and resolutions
24 adopted under section 301(d). Failure to exempt, deduct, abate
25 or credit local taxes shall result in the revocation of the
26 keystone opportunity zone designation.
27 Section 702. Real property tax.
28 (a) General rule.--Notwithstanding the act of May 22, 1933
29 (P.L.853, No.155), known as The General County Assessment Law,
30 and the act of May 21, 1943 (P.L.571, No.254), known as The
19980H2328B3614 - 28 -
1 Fourth to Eighth Class County Assessment Law, each qualified
2 political subdivision for taxable years beginning on or after
3 January 1, 1999, shall by ordinance or resolution abate 100% of
4 the real property taxation on the assessed valuation of
5 deteriorated property in an area designated as a keystone
6 opportunity zone within this Commonwealth.
7 (b) Investment in lieu of tax payment.--
8 (1) A qualified political subdivision may require a
9 resident of deteriorated real property to invest up to 25% of
10 all real property taxes, which would have been due if the
11 real property was not located in a keystone opportunity zone,
12 in improvements to the real property, in order for the
13 residents to be qualified for exemptions, credits and
14 abatements under this act.
15 (2) A nonresident owner of deteriorated real property
16 who leases the real property to a person for residential use
17 shall invest 50% of all real property taxes, which would have
18 been due if the real property was not located in a keystone
19 opportunity zone, in improvements to the real property.
20 (c) Application for tax abatement.--Any person requesting
21 real property tax abatement pursuant to ordinances or
22 resolutions adopted pursuant to this act shall notify each
23 political subdivision COUNTY OR OTHER DESIGNATED ASSESSMENT <--
24 OFFICE granting such abatement in writing on a form provided by
25 that political subdivision ASSESSMENT OFFICE within 30 days of <--
26 the designation as a keystone opportunity zone or within 30 days
27 of the transfer of ownership of the real property subject to
28 abatement. A copy of the abatement request shall be forwarded by
29 the political subdivision to the board of assessment or other <--
30 appropriate assessment agency. COUNTY OR OTHER DESIGNATED <--
19980H2328B3614 - 29 -
1 ASSESSMENT OFFICE TO THE POLITICAL SUBDIVISION.
2 (d) Annual real property report.--Every qualified political <--
3 subdivision KEYSTONE OPPORTUNITY ZONE shall submit to the <--
4 department an annual report by December 31 JANUARY 31 of each <--
5 calendar year of all real property and the owners and addresses
6 of that real property at any time during the PRECEDING year <--
7 which is located in a designated keystone opportunity zone.
8 (e) Interest and penalties.--If the department or a
9 political subdivision finds that a person claimed an abatement
10 of real property tax to which the person was not entitled under
11 this act, the person shall be liable for the abated taxes and
12 subject to the applicable interest and penalty provisions
13 provided by law.
14 (f) Calculations for education subsidy for school
15 districts.--In determining the market value of real property in
16 each school district, the State Tax Equalization Board shall
17 exclude any increase in value above the base value prior to the
18 effect of the abatement of local taxes to the extent and during
19 the period of time that real estate tax revenues attributable to
20 such increased value are not available to the school district
21 for general school district purposes.
22 Section 703. Local earned income and net profits taxes;
23 business privilege taxes.
24 (a) General exemption.--To the extent that a qualified
25 political subdivision has enacted any tax on the privilege of
26 engaging in any business or profession, measured by gross
27 receipts or on a flat rate basis, earned income or net profits,
28 as defined in the act of December 31, 1965 (P.L.1257, No.511),
29 known as The Local Tax Enabling Act, imposed within the
30 boundaries of a keystone opportunity zone, such qualified
19980H2328B3614 - 30 -
1 political subdivision shall exempt from the imposition or
2 operation of such local tax ordinances, statutes, regulations or
3 otherwise:
4 (1) The business gross receipts for operations conducted
5 by a qualified business within a keystone opportunity zone.
6 (2) The earned income received by a resident of a
7 keystone opportunity zone.
8 (3) The net profits of a qualified business received by
9 a resident or nonresident of a keystone opportunity zone
10 attributable to business activity conducted within a keystone
11 opportunity zone.
12 (b) Additional exemptions.--To the extent that a qualified
13 political subdivision has:
14 (1) pursuant to the act of August 5, 1932, (Sp.Sess.
15 P.L.45, No.45), referred to as the Sterling Act, the act of
16 March 10, 1949 (P.L.30, No.14), known as the Public School
17 Code of 1949, the act of August 24, 1961 (P.L.1135, No.508),
18 referred to as the First Class A School District Earned
19 Income Tax Act, the act of August 9, 1963 (P.L.640, No.338)
20 entitled, "An act empowering cities of the first class,
21 coterminous with school districts of the first class, to
22 authorize the boards of public education of such school
23 districts to impose certain additional taxes for school
24 district purposes, and providing for the levy, assessment and
25 collection of such taxes," the act of May 30, 1984 (P.L.345,
26 No.69), known as the First Class City Business Tax Reform
27 Act, or the act of June 5, 1991 (P.L.9, No.6), known as the
28 Pennsylvania Intergovernmental Cooperation Authority Act for
29 Cities of the First Class, enacted a tax on:
30 (i) the privilege of engaging in a profession or
19980H2328B3614 - 31 -
1 business;
2 (ii) wages or compensation;
3 (iii) net profits from the operation of a business,
4 profession or other activity; or
5 (iv) the occupancy or use of real property.
6 (2) The qualified political subdivision shall provide an
7 exemption, deduction, abatement or credit from the imposition
8 and operation of such local tax ordinance or resolution any <--
9 ALL of the following: <--
10 (i) a A person or qualified business, whether a <--
11 resident or a nonresident of a keystone opportunity zone,
12 for the privilege of engaging in a business or profession
13 within a keystone opportunity zone. <--
14 (ii) salaries SALARIES, wages, commissions, <--
15 compensation or other income received for services
16 rendered or work performed by a resident of a keystone
17 opportunity zone. <--
18 (iii) the THE gross or net income or gross or net <--
19 profits realized from the operation of a qualified
20 business to the extent attributable to business activity
21 conducted within a keystone opportunity zone; or. <--
22 (iv) the THE occupancy or use of real property <--
23 located within the keystone opportunity zone.
24 (c) Limitation on withholding.--Every employer required to
25 withhold any local tax on the earned income, wages or
26 compensation of one or more persons within the particular
27 political subdivision shall not withhold such tax on earned
28 income, wages or compensation paid to any person or his personal
29 representative during any period when the qualified political
30 subdivision has by ordinance or resolution provided for the
19980H2328B3614 - 32 -
1 exemption from tax as provided in section 701 and the person is
2 a resident of a keystone opportunity zone.
3 (d) Information for employer.--Every person who is an
4 employee that qualifies as a resident of a keystone opportunity
5 zone shall furnish to his or her employer information, as
6 prescribed by the political subdivision, necessary for the
7 employer to withhold the correct amount of tax. An employee
8 shall furnish notification to his or her employer of any changes
9 to the information within 20 days after the change. An employee
10 shall notify his or her employer that the employee has completed
11 the residency requirements under section 306.
12 (e) Duty of employer.--Within 20 days after an employer
13 receives information from an employee pursuant to subsection (a) <--
14 (D), the employer shall forward a copy of that information to <--
15 the political subdivision OR OTHER AGENCY DESIGNATED BY THE <--
16 POLITICAL SUBDIVISION. The information shall not be given
17 retroactive effect for withholding purposes. The employer shall
18 not be required to withhold tax from the wages, earned income or
19 compensation paid to a resident of a keystone opportunity zone,
20 if reasonable under the circumstances, unless directed by the
21 political subdivision to withhold tax from the wages, earned
22 income or compensation on some other basis. If an employee fails
23 or refuses to furnish the information, or furnishes information
24 that the employer reasonably and in good faith believes to be
25 inaccurate, the employer shall withhold the full rate of tax
26 from the employee's total wages, earned income or compensation.
27 (f) Calculation for education subsidy for school district.--
28 In determining the personal income valuation of a school
29 district, the Secretary of Revenue shall exclude any increase in
30 the valuation as defined in section 2501(9.1) of the act of
19980H2328B3614 - 33 -
1 March 10, 1949 (P.L.30, No.14), known as the Public School Code
2 of 1949, above the base value prior to the abatement of local
3 taxes in a keystone opportunity zone located within the school
4 district to the extent and during the period of time that
5 personal income revenues attributable to the increase in the
6 personal income valuation are not available to the school
7 district for general school district purposes.
8 Section 704. Mercantile license tax.
9 No person or qualified business in a keystone opportunity
10 zone shall be required to pay any fee authorized pursuant to a
11 mercantile license tax imposed under the act of June 20, 1947
12 (P.L.745, No.320), entitled, as amended, "An act to provide
13 revenue for school districts of the first class A by imposing a
14 temporary mercantile license tax on persons engaging in certain
15 occupations and businesses therein; providing for its levy and
16 collection; for the issuance of mercantile licenses upon the
17 payment of fees therefor; conferring and imposing powers and
18 duties on boards of public education, receivers of school taxes
19 and school treasurers in such districts; saving certain
20 ordinances of council of certain cities, and providing
21 compensation for certain officers, and employes and imposing
22 penalties."
23 Section 705. Local sales and use tax.
24 (a) General rule.--The political subdivision shall exempt
25 sales at retail of services or tangible personal property,
26 except motor vehicles, to a qualified business for the exclusive
27 use, consumption and utilization of the tangible personal
28 property or service, by the qualified business at its facility
29 located within a keystone opportunity zone from a city or county
30 tax on purchase price authorized under Article XXXI-B of the act
19980H2328B3614 - 34 -
1 of July 28, 1953 (P.L.723, No.230), known as the Second Class
2 County Code, as amended, and the act of June 5, 1991 (P.L.9,
3 No.6), known as the Pennsylvania Intergovernmental Cooperation
4 Authority Act for Cities of the First Class, as amended.
5 (b) Exclusion.--Sales at retail or use of tangible personal <--
6 property or services to that tangible personal property that
7 will become a permanent part of the real property in accordance
8 with Department of Revenue regulations shall not be eligible for
9 the exclusion provided for under this subsection.
10 (B) REAL PROPERTY.--THE EXEMPTION PROVIDED IN SUBSECTION (A) <--
11 SHALL APPLY TO THE SALE AT RETAIL OF BUILDING MACHINERY AND
12 EQUIPMENT TO A QUALIFIED BUSINESS, OR TO A CONSTRUCTION
13 CONTRACTOR PURSUANT TO A CONSTRUCTION CONTRACT WITH A QUALIFIED
14 BUSINESS FOR THE EXCLUSIVE USE, CONSUMPTION AND UTILIZATION BY
15 THE QUALIFIED BUSINESS AT ITS FACILITY IN A KEYSTONE OPPORTUNITY
16 ZONE.
17 (c) Definition.--Sales at retail of tangible personal
18 property and services shall be defined in accordance with
19 Article II of the Tax Reform Code of 1971.
20 CHAPTER 9
21 ADMINISTRATION OF TAX PROVISIONS
22 Section 901. Transferability.
23 Any exemption, deduction, abatement or credit provided to any
24 person under Chapter 5 or 7 is nontransferable and cannot be
25 applied, used or assigned to any other person or tax account.
26 Section 902. Recapture.
27 (a) General rule.--If any qualified business located within
28 a keystone opportunity zone has received an exemption,
29 deduction, abatement or credit under this act and subsequently
30 relocates outside of the zone, that business shall refund to the
19980H2328B3614 - 35 -
1 State and political subdivision which granted the exemption,
2 deduction, abatement or credit received in accordance with the
3 following:
4 (1) If a qualified business relocates within three years
5 from the date of any claim, 66% of all the exemptions,
6 deductions, abatements or credits previously received due to
7 that qualified business's participation in the keystone
8 opportunity zone shall be refunded TO THE COMMONWEALTH AND <--
9 THE POLITICAL SUBDIVISION.
10 (2) If a qualified business relocates within three to
11 five years from the date of any claim, 33% of all exemptions,
12 deductions, abatements or credits previously received from
13 participation in the keystone opportunity zone shall be
14 refunded TO THE COMMONWEALTH AND THE POLITICAL SUBDIVISION. <--
15 (3) If the qualified business was located within a
16 facility operated by a nonprofit organization to assist in
17 the creation and development of a start-up business, no
18 refund, exemption, deduction, abatement or credit shall be <--
19 required. REFUNDED. <--
20 (b) Waiver.-- <--
21 (1) The department, in consultation with the Department
22 (B) WAIVER.--THE DEPARTMENT, IN CONSULTATION WITH THE <--
23 DEPARTMENT of Revenue AND THE POLITICAL SUBDIVISION, may waive <--
24 or modify recapture requirements under this section if the
25 department determines that the business relocation was due to
26 circumstances beyond the control of the business including, but
27 not limited to:
28 (i) natural disaster; <--
29 (ii) unforeseen industry trends; or
30 (iii) loss of a major supplier or market.
19980H2328B3614 - 36 -
1 (2) If the department waives or modifies the recapture
2 requirements, the department shall refund to the political
3 subdivision which granted the exemption, deduction, abatement
4 or credit the amount otherwise due the political subdivision
5 under subsection (a) absent the waiver or modification. This
6 paragraph shall not apply to business relocations due to
7 natural disaster.
8 (1) NATURAL DISASTER; <--
9 (2) UNFORESEEN INDUSTRY TRENDS; OR
10 (3) LOSS OF A MAJOR SUPPLIER OR MARKET.
11 (c) Determination of claim date.--For purposes of this
12 section, an exemption, deduction, abatement or credit is deemed
13 to be claimed on the later of:
14 (1) the date the return or other report for the tax or
15 fee is due;
16 (2) the date the return is filed; or
17 (3) the date the tax or fee would be paid.
18 Section 903. Delinquent or deficient State or local taxes.
19 (a) Persons.--No person may claim or receive an exemption,
20 deduction, abatement or credit under this act unless that person
21 is in full compliance with all State and local tax laws, and
22 related ordinances and resolutions.
23 (b) Qualified business.--
24 (1) No qualified business may claim or receive an
25 exemption, deduction, abatement or credit under this act
26 unless that qualified business is in full compliance with all
27 State and local tax laws, ordinances and resolutions.
28 (2) No qualified business may claim or receive an
29 exemption, deduction, abatement or credit under this act if
30 any person or business with a 20% or greater interest in that
19980H2328B3614 - 37 -
1 qualified business is not in full compliance with all State
2 and local tax laws, ordinances and resolutions.
3 (c) Later compliance and eligibility.--Any person or
4 qualified business that is not eligible to claim an exemption,
5 deduction, abatement or credit due to noncompliance with any
6 State or local tax law may become eligible if that person
7 subsequently comes into full compliance with all State and local
8 tax laws to the satisfaction of the Department of Revenue or the
9 political subdivision within the calendar year in which the
10 noncompliance first occurred. If full compliance is not attained
11 by December 31 of the calendar year in which noncompliance first
12 occurred, then that person or qualified business is precluded
13 from claiming any exemption, deduction, abatement or credit for
14 that calendar year, whether or not full compliance is achieved
15 in subsequent calendar years.
16 Section 904. Code compliance.
17 (a) General rule.--A person or qualified business shall be
18 precluded from claiming any exemption, deduction, abatement or
19 credit provided for in this act if that person or qualified
20 business owns real property in a keystone opportunity zone and
21 the real property is not in compliance with all applicable State
22 and local zoning, building and housing laws, ordinances or codes
23 and the real property owner has not filed an affidavit with the
24 political subdivision attesting to compliance for that calendar
25 year before December 31 with the political subdivision in which
26 the real property is located.
27 (b) Opportunity to achieve compliance.--The person or
28 qualified business who is not in compliance under subsection (a)
29 shall have until December 31 of the calendar year following
30 designation of the real property as part of a keystone
19980H2328B3614 - 38 -
1 opportunity zone to be in compliance in order to claim any State
2 exemptions, deductions, abatements or credits for that year. If
3 full compliance is not attained by December 31 of that calendar
4 year, the person is precluded from claiming any exemption,
5 deduction or credit for that calendar year, whether or not
6 compliance is achieved in a subsequent calendar year. The
7 political subdivision may extend the time period in which a
8 person or qualified business must come into compliance with a
9 local ordinance or building code for a period not to exceed one
10 year if the political subdivision determines that the person or
11 qualified business has made and shall continue to make a good
12 faith effort to come into compliance and that an extension will
13 enable the person to achieve full compliance. Qualified
14 political subdivisions are required to notify the Department of
15 Revenue in writing of all persons or qualified businesses not in
16 compliance with this subsection within 30 days following the end
17 of each calendar year.
18 Section 905. Appeals.
19 A person shall be deemed to be in compliance with any State
20 or local tax for purposes of this section if that person had
21 made a timely administrative or judicial appeal for that
22 particular tax or has entered into and is in compliance with a
23 duly authorized deferred payment plan with the Department of
24 Revenue or political subdivision for that particular tax.
25 CHAPTER 11
26 PROCEDURES FOR ZONES
27 Section 1101. Community benefits.
28 (a) Implementation grant.--The department may provide a one-
29 time $250,000 grant to the keystone opportunity zone to
30 implement the opportunity plan and to provide an annual update
19980H2328B3614 - 39 -
1 of real property ownership and other information to the
2 Department of Revenue. The annual update shall describe progress
3 on all proposals required as part of the opportunity plan and
4 other information as required by the department. A separate
5 application must be submitted to the department outlining a
6 budget and implementation narrative. The grant shall be drawn
7 down as needed over a period not to exceed the first five years
8 of designation as a keystone opportunity zone. Grant funds shall
9 be provided from the housing and redevelopment appropriations.
10 Keystone opportunity zones shall comply with the provisions of
11 the appropriation.
12 (b) Reduced interest.--Projects in designated keystone
13 opportunity zones that are approved for Pennsylvania Industrial
14 Development Authority (PIDA), or Small Business First financing
15 shall receive the lowest interest rate extended to borrowers.
16 (c) Priority consideration.--Projects in keystone
17 opportunity zones shall receive priority consideration for State
18 assistance under State economic, community and economic
19 development programs and community building initiatives.
20 (d) Marketing.--The department shall develop and implement a
21 consolidated marketing strategy for the keystone opportunity
22 zones for use in job retention and attraction activities.
23 (e) Education.--The Department of Education shall provide
24 technical assistance to school districts located in or school
25 districts having parts of their districts located in keystone
26 opportunity zones.
27 (f) Local governments.--The Center for Local Government
28 Services in the department shall provide technical assistance to
29 political subdivisions relating to taxation, implementation of
30 the opportunity plan, establishing annual benchmarks and annual
19980H2328B3614 - 40 -
1 reporting requirements to the departments. Additionally, the
2 Center for Local Government Services shall provide political
3 subdivisions in keystone opportunity zones with technical
4 assistance to encourage the implementation of best practices in
5 achieving efficient and effective local government
6 administration and shall coordinate activities with other
7 departments and agencies providing various assistance to
8 communities.
9 (g) Community-based organizations.--The department shall
10 provide technical assistance for capacity building of existing
11 community-based organizations dealing with socio-economic needs,
12 housing assistance and job training in the keystone opportunity
13 zones.
14 Section 1102. Reporting.
15 The department shall report to the General Assembly on the
16 economic effects of this act in each keystone opportunity zone
17 every four years.
18 Section 1103. Other Commonwealth tax credits.
19 A person or qualified business that is entitled to claim an
20 exemption, deduction, abatement or credit in accordance with the
21 provisions of this act shall not be entitled to claim or
22 accumulate any of the following exemptions, deductions,
23 abatements or credits that it may otherwise have qualified for
24 due to activity within a keystone opportunity zone:
25 (1) Tax Reform Code of 1971:
26 (i) Article XVII relating to economic revitalization
27 tax credits;
28 (ii) Article XVII-A relating to employment incentive
29 payments;
30 (iii) Article XVII-B relating to research and
19980H2328B3614 - 41 -
1 development tax credits; or
2 (iv) Article XIX-A relating to neighborhood
3 assistance and enterprise zone tax credits;
4 (2) tax credits under section 109 of the act of December
5 19, 1996 (P.L.1478, No.190), known as the Waste Tire
6 Recycling Act;
7 (3) homeowners mortgage credits;
8 (4) insurance premiums tax credits; and
9 (5) job creation tax credit under the act of June 29,
10 1996 (P.L.434, No.67), known as the Job Enhancement Act.
11 The person or qualified business may apply the exemptions,
12 deductions, abatements or credits to income realized from
13 activity or transactions outside the keystone opportunity zone,
14 but only for the taxable year to which the exemptions,
15 deductions, abatements or credits apply. The provisions of this
16 section shall apply only to the taxes set forth in Chapters 5
17 and 7.
18 CHAPTER 13 <--
19 ECONOMIC DEVELOPMENT ZONES
20 Section 1301. Short title of chapter.
21 This chapter shall be known and may be cited as the Economic
22 Development Zones Act.
23 Section 1302. Legislative findings.
24 The General Assembly finds and declares as follows:
25 (1) There persist in this Commonwealth areas of economic
26 distress characterized by high unemployment, low investment
27 of new capital, blighted conditions, obsolete or abandoned
28 industrial or commercial structures and deteriorating tax
29 bases.
30 (2) The severe and persistent deterioration of these
19980H2328B3614 - 42 -
1 areas demands vigorous and coordinated efforts by private and
2 public entities to restore their prosperity and enable them
3 to resume significant contributions to the economic and
4 social life of this Commonwealth.
5 (3) The economic revitalization of these areas requires
6 application of the skills and entrepreneurial vigor of
7 private enterprise. It is the responsibility of government to
8 provide a framework within which:
9 (i) encouragement is given to private capital
10 investment in these areas;
11 (ii) disincentives to investment are removed or
12 abated; and
13 (iii) mechanisms are provided for the coordination
14 and cooperation of private and public agencies in
15 restoring the economic viability and prosperity of these
16 areas.
17 Section 1303. Definitions.
18 The following words and phrases when used in this chapter
19 shall have the meanings given to them in this section unless the
20 context clearly indicates otherwise:
21 "Development zone." A zone designated by the department
22 under this chapter. Such a zone shall be known as a PennZone.
23 "Fund." The Economic Development Zone Assistance Fund
24 established in section 1327.
25 "Public assistance." Income maintenance funds administered
26 by the Department of Public Welfare or by a county assistance
27 office.
28 "Qualified business." An entity authorized to do business in
29 this Commonwealth which meets any of the following:
30 (1) At the time of designation as a development zone, is
19980H2328B3614 - 43 -
1 engaged in the active conduct of a trade or business in that
2 zone.
3 (2) After that designation but during the designation
4 period, becomes newly engaged in the active conduct of a
5 trade or business in that development zone and has at least
6 25% of its full-time employees employed at a business
7 location in the zone who are:
8 (i) residents within the zone, within another zone
9 or within a qualifying municipality;
10 (ii) unemployed for at least six months prior to
11 being hired and residing in this Commonwealth;
12 (iii) recipients of public assistance programs for
13 at least six months prior to being hired; or
14 (iv) determined to be economically disadvantaged
15 pursuant to the Jobs Training Partnership Act (Public Law
16 97-300, 29 U.S.C. § 1501 et seq.).
17 "Qualifying municipality." Any of the following:
18 (1) A municipality in which the municipal average annual
19 unemployment rate for the preceding two years exceeded the
20 State average annual unemployment rate.
21 (2) A municipality which qualifies under the act of July
22 10, 1987 (P.L.246, No.47), known as the Municipalities
23 Financial Recovery Act.
24 (3) At the time of designation as a development zone,
25 has at least 1,000 unemployed persons.
26 The annual average of unemployed persons, the total number of
27 unemployed persons and the average annual unemployment rates
28 shall be estimated for the relevant calendar year by the
29 Department of Labor and Industry. For any municipality for which
30 the Department of Labor and Industry is unable to estimate the
19980H2328B3614 - 44 -
1 annual average of unemployed persons, the total number of
2 unemployed persons and the average annual unemployment rate, the
3 Department of Labor and Industry shall determine the estimate
4 based upon unemployment data in the most recent Federal
5 decennial census.
6 "Zone." A development zone.
7 "Zone development corporation." A nonprofit corporation or
8 association created or designated by the governing body of a
9 qualifying municipality to formulate and propose a preliminary
10 zone development plan under section 1308 and to prepare,
11 monitor, administer and implement the zone development plan.
12 "Zone development plan." A plan adopted by the governing
13 body of a qualifying municipality for the development of a
14 development zone in the municipality and for the direction and
15 coordination of activities of the municipality, development zone
16 businesses and community organizations within the development
17 zone toward the economic betterment of the residents of the
18 development zone and the municipality.
19 "Zone neighborhood association." A corporation or
20 association of persons who either are residents of or have their
21 principal place of employment in a municipality in which a
22 development zone has been designated which is organized under 15
23 Pa.C.S. (relating to corporations and unincorporated
24 associations) or other applicable law and which has for its
25 principal purpose the encouragement and support of community
26 activities within, or on behalf of, the zone so as to:
27 (1) stimulate economic activity;
28 (2) increase or preserve residential amenities; or
29 (3) otherwise encourage community cooperation in
30 achieving the goals of the zone development plan.
19980H2328B3614 - 45 -
1 Section 1304. Powers and duties.
2 The department has the following powers and duties:
3 (1) Promulgate regulations to administer this chapter.
4 (2) Receive and evaluate applications of municipalities
5 for the designation of development zones.
6 (3) Enter into discussions with applying municipalities
7 regarding zone development plans.
8 (4) Act as agent of the Commonwealth with respect to
9 zone development plans and in determining the State-furnished
10 components to be included in those plans.
11 (5) Designate development zones.
12 (6) Exercise continuing review and supervision of the
13 implementation of zone development plans.
14 (7) Receive and evaluate proposals of qualifying
15 municipalities in which development zones are designated for
16 funding of projects and increased eligible municipal services
17 from the fund and certify annually to the State Treasurer
18 amounts to be paid from the fund to support approved projects
19 and increased eligible municipal services in development
20 zones.
21 (8) Assist and represent qualifying municipalities in
22 negotiations with, or proceedings before, Federal or State
23 agencies to secure necessary or appropriate assistance,
24 support and cooperation in the implementation of zone
25 development plans in accordance with this chapter and any
26 other applicable Federal or State law.
27 (9) Upon request, assist agencies of municipal
28 government in gathering, compiling and organizing data to
29 support an application for designation of a development zone
30 and in identifying and coordinating the elements of a zone
19980H2328B3614 - 46 -
1 development plan suitable for the development zone seeking to
2 be designated.
3 (10) Provide assistance to State and local government
4 agencies relating to application for the securing of permits,
5 licenses and other regulatory approvals to assure
6 consideration and expeditious handling of regulatory
7 requirements of any development zone business, zone
8 development corporation or zone neighborhood association.
9 Regulatory agencies of the Commonwealth and political
10 subdivisions may agree to simplification, consolidation or
11 other liberalization of procedural requirements requested by
12 the department which is not inconsistent with provisions of
13 law.
14 (11) Assist the Commonwealth in applying to, or entering
15 into negotiations or agreements with, the Federal Government
16 for Federal enterprise zone designations.
17 (12) Exercise continuing review of the implementation of
18 this chapter and report annually to the Governor and the
19 General Assembly on the effectiveness of development zones in
20 addressing the conditions cited in this chapter, including
21 any recommendations for legislation to improve the
22 effectiveness of operation of those development zones. The
23 report shall be submitted annually by July 31.
24 Section 1305. Study on fiscal impact of development zones;
25 contents; recommendations; submission to Governor
26 and General Assembly; funding for cost of study.
27 In addition to the duties of the department required under
28 section 1304, the department shall also prepare a fiscal impact
29 study of each development zone. The study shall include an
30 analysis of the effects of each development zone on the local
19980H2328B3614 - 47 -
1 economy of the area in which the zone is located and an
2 assessment of the effectiveness of the development zones in
3 addressing the purposes of this chapter. The study shall be
4 completed within a reasonable time after the end of one year
5 following the designation of the development zones. The
6 department shall submit its study to the Governor and the
7 General Assembly, including any recommendations for legislation
8 to improve the effectiveness of operation of the development
9 zones, within two years from the effective date of this section.
10 The department shall use funds available from the account
11 created in the name of the department in the fund for the
12 administration of the program to pay for the cost of the study.
13 Section 1306. Economic development zones; designation;
14 duration.
15 The department shall designate development zones from among
16 those areas of qualifying municipalities determined to be
17 eligible under this chapter. No more than 30 development zones
18 shall be in effect at any one time. No more than one development
19 zone shall be designated in any one municipality. A designation
20 granted shall be for a period of 10 years and may be renewed for
21 one additional ten-year period. In designating development
22 zones, the department shall seek to avoid excessive geographic
23 concentration of development zones in any particular region of
24 this Commonwealth. The department shall accept applications
25 within 90 days of the effective date of the final adoption of
26 regulations under this act. Priority consideration for initial
27 designation of these zones by the department shall be given to
28 zones located in qualifying municipalities that had at least
29 1,500 unemployed persons based upon the February 1998
30 Pennsylvania Civilian Labor Force Data by City/Borough/Township
19980H2328B3614 - 48 -
1 of Residence as published by the Department of Labor and
2 Industry. For any municipality for which unemployment data is
3 not available in the February 1998 Pennsylvania Civilian Labor
4 Force Data by City/Borough/Township of Residence as published by
5 the Department of Labor and Industry, the Department of Labor
6 and Industry shall determine the number of unemployed persons in
7 that municipality based upon unemployment data in the most
8 recent Federal decennial census.
9 Section 1307. Zone development corporation.
10 (a) Designation.--The governing body of a qualifying
11 municipality may, by ordinance, designate a nonprofit
12 corporation established pursuant to the provisions of 15 Pa.C.S.
13 (relating to corporations and unincorporated associations) to
14 act as the zone development corporation for the municipality. A
15 zone development corporation so designated shall include on its
16 board of directors representatives of the government of the
17 qualifying municipality, members of the business community, and
18 representatives of community organizations in the municipality.
19 The total membership of the board of directors shall be broadly
20 representative of businesses and communities within the
21 municipality notwithstanding the provisions of any other law to
22 the contrary.
23 (b) Status.--A zone development corporation shall be
24 considered to be an industrial development corporation for the
25 purpose of receiving State financial or technical assistance as
26 may be available. The creation of a zone development corporation
27 shall not preclude a qualifying municipality from creating
28 another industrial development corporation for the municipality
29 with responsibilities not related to the development zone nor
30 preclude that other corporation from receiving State financial
19980H2328B3614 - 49 -
1 or technical assistance.
2 Section 1308. Preliminary zone development plan.
3 Before applying for designation of a development zone, the
4 municipal governing body shall cause a preliminary zone
5 development plan to be formulated, either by a zone development
6 corporation or by the governing body, with the assistance of
7 those officers and agencies of the municipality as the governing
8 body may see fit. The preliminary zone development plan shall
9 set forth the boundaries of the proposed development zone,
10 findings of fact concerning the economic and social conditions
11 existing in the area proposed for a development zone and the
12 municipality's policy and intentions for addressing these
13 conditions. The preliminary zone development plan may include
14 proposals respecting:
15 (1) Utilizing the powers conferred on the municipality
16 by law for the purpose of stimulating investment in and
17 economic development of the proposed zone.
18 (2) Utilizing State assistance through the provisions of
19 this act relating to State taxes.
20 (3) Securing the involvement in and commitment to zone
21 economic development by private entities, including zone
22 neighborhood associations, voluntary community organizations
23 supported by residents and businesses in the development
24 zone.
25 (4) Utilizing the powers conferred by law to revise
26 municipal planning and zoning ordinances and other land use
27 regulations as they pertain to the development zone, in order
28 to enhance the attraction of the zone to prospective
29 developers.
30 (5) Increasing the availability and efficiency of
19980H2328B3614 - 50 -
1 support services, public and private, generally used by and
2 necessary for the efficient functioning of commercial and
3 industrial facilities in the area and the extent to which the
4 increase or improvement is to be provided and financed by the
5 municipal government or by other entities.
6 Section 1309. Eligibility for designation.
7 An area defined by a continuous border within one qualifying
8 municipality or within two or more contiguous qualifying
9 municipalities and two noncontiguous areas each having a
10 continuous border within two noncontiguous qualifying
11 municipalities shall be eligible for designation as a
12 development zone if it meets the criteria established by the
13 department under this chapter relating to the incidence of
14 unemployment and general economic distress.
15 Section 1310. Priority development zones.
16 The first areas and municipalities designated as development
17 zones by the department shall be those areas and municipalities
18 accorded priority consideration under section 1306.
19 Section 1311. Designation of eligible areas as development
20 zones.
21 (a) General rule.--In designating eligible areas as
22 development zones, the department shall accord preference to
23 zone development plans which:
24 (1) Have the greatest potential for success in
25 stimulating primarily new economic activity in the area.
26 (2) Are designed to address the greatest degree of
27 distress, as measured by existing levels of unemployment,
28 poverty and property tax arrearages.
29 (3) Demonstrate the most substantial and reliable
30 commitments of resources by zone businesses, zone
19980H2328B3614 - 51 -
1 neighborhood associations, voluntary community organizations
2 and other private entities to the economic success of the
3 zone.
4 (4) Demonstrate the most substantial effort and
5 commitment by the municipality to encourage economic activity
6 in the area and to remove disincentives for job creation
7 compatible with the fiscal condition of the municipality.
8 (b) Additional considerations.--In addition to the
9 considerations set forth in subsection (a), the department in
10 evaluating a zone development plan for designation purposes
11 shall consider:
12 (1) The likelihood of attracting Federal assistance to
13 projects in the eligible area and of obtaining Federal
14 designation of the area as an enterprise zone for Federal tax
15 purposes.
16 (2) The adverse or beneficial effects of a development
17 zone located at the proposed area upon economic development
18 activities or projects of State or other public agencies or
19 authorities which are in operation, or are approved for
20 operation, in the qualifying municipality.
21 (3) The degree of commitment made by public and private
22 entities to utilize minority contractors and assure equal
23 opportunities for employment in connection with any
24 construction or reconstruction to be undertaken in the
25 eligible area.
26 (4) The impact of the zone development plan upon the
27 social, natural and historic environment of the eligible
28 area.
29 (5) The degree to which the implementation of the plan
30 involves the relocation of residents from the eligible area
19980H2328B3614 - 52 -
1 and the adequacy of commitments and provisions with respect
2 thereto.
3 Section 1312. Application for designation; grant or denial;
4 adoption of ordinance of acceptance.
5 (a) Application.--A qualifying municipality may designate
6 any area set forth in the zone development plan as a development
7 zone. The municipality may then make written application to the
8 department to have the area selected for Federal and State
9 assistance offered to development zones or either type of
10 assistance. The application shall include the zone development
11 plan adopted for the area and any other information the
12 department may require.
13 (b) Review.--Upon receipt of an application from the
14 qualifying municipality, the department shall review the
15 application to determine whether the area described in the
16 application qualifies for State assistance under the criteria of
17 this chapter.
18 (c) Procedure.--The department shall establish a date for
19 the receipt of initial applications for designations under this
20 chapter, which shall be within one year of the effective date of
21 this section. Thereafter, the department shall complete its
22 review within 90 days of receipt of an application, but may
23 extend this time period by an additional 60 days if necessary.
24 If the department denies the application, it shall inform the
25 municipality of that fact in writing setting forth the reasons
26 for the denial.
27 (d) Ordinance.--The designation of a development zone by the
28 department shall take effect upon the adoption by the qualifying
29 municipality of an ordinance accepting that designation.
30 Section 1313. Benefits available to qualified business.
19980H2328B3614 - 53 -
1 A qualified business in a development zone shall be eligible
2 to receive those benefits authorized in sections 1314 through
3 1318 as determined to be applicable by the department. The
4 department shall state in writing to the qualifying municipality
5 at the time of designation its determinations as to which
6 benefits apply in that development zone.
7 Section 1314. Award; eligibility of qualified business;
8 schedule.
9 A qualified business shall be eligible for an award based
10 upon the amount of unemployment insurance tax it has paid for
11 those new employees who meet the criteria set forth in the
12 definition of "qualified business" under section 1303. The award
13 shall apply only to those new employees whose gross salaries are
14 less than $4,500 per quarter and shall commence in the next
15 succeeding quarter. The award shall be based on the following
16 schedule:
17 First four years in zone an amount equal to 50% of the
18 employer's unemployment
19 insurance payment.
20 Second four years in zone an amount equal to 40% of the
21 employer's unemployment
22 insurance payment.
23 Third four years in zone an amount equal to 30% of the
24 employer's unemployment
25 insurance payment.
26 Fourth four years in zone an amount equal to 20% of the
27 employer's unemployment
28 insurance payment.
29 Fifth four years in zone an amount equal to 10% of the
30 employer's unemployment
19980H2328B3614 - 54 -
1 insurance payment.
2 Section 1315. Business tax exemption.
3 A qualified business subject to the provisions of Article VI
4 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
5 Reform Code of 1971, employing a larger number of persons at a
6 place of business located within a development zone than at all
7 other places of business of the taxpayer within this
8 Commonwealth shall be exempt from the tax imposed pursuant to
9 Article VI of the Tax Reform Code of 1971 for a period of 20 tax
10 years from the date of designation of the development zone, or
11 for a period of 20 tax years from the date upon which the
12 taxpayer is first subject to the provisions of Article VI of the
13 Tax Reform Code of 1971, whichever date is later. The
14 termination of the designation of a development zone shall not
15 terminate the exemption provided under this section if the
16 exemption was granted prior to the end of the designation
17 period.
18 Section 1316. Development zone employee or investment tax
19 credits; limitations and carryovers.
20 Development zone employee tax credits or development zone
21 investment tax credits provided under this chapter shall not
22 reduce a taxpayer's tax liability under the act of March 4, 1971
23 (P.L.6, No.2), known as the Tax Reform Code of 1971, for the tax
24 to which the tax credit applies in any tax year by more than 50%
25 of the amount otherwise due; but either employee tax credits or
26 investment tax credits remaining and unused in a tax year may be
27 carried forward by the taxpayer to the next succeeding tax year
28 and applied against 50% of the amount of tax otherwise due in
29 that succeeding tax year.
30 Section 1317. Development zone employee tax credit;
19980H2328B3614 - 55 -
1 qualifications; amount.
2 Any qualified business subject to the provisions of Part IV
3 or IV-A of Article III or Article IV of the act of March 4, 1971
4 (P.L.6, No.2), known as the Tax Reform Code of 1971, as actively
5 engaged in the conduct of business from a location within a
6 development zone which does business at that location consisting
7 primarily of manufacturing or other business that is not retail
8 sales or warehousing-oriented shall receive a development zone
9 employee tax credit against the amount of tax imposed under Part
10 IV or IV-A of Article III or Article IV of the Tax Reform Code
11 of 1971.
12 (1) A one-time credit of $1,500 for each new full-time,
13 permanent employee employed at that location who:
14 (i) is a resident of the qualifying municipality in
15 which the development zone is located or of any other
16 qualifying municipality in which a development zone is
17 located; and
18 (ii) immediately prior to employment by the taxpayer
19 was unemployed for at least 90 days or was dependent upon
20 public assistance as the primary source of income.
21 (2) A one-time credit of $500 for each new full-time,
22 permanent employee employed at that location who:
23 (i) is a resident of a qualifying municipality in
24 which the development zone is located or of any other
25 qualifying municipality in which a development zone is
26 located;
27 (ii) does not meet the requirements of paragraph
28 (1); and
29 (iii) was not, immediately prior to employment by
30 the taxpayer, employed at a location within the
19980H2328B3614 - 56 -
1 qualifying municipality.
2 (3) A qualified business which is not entitled to an
3 employee tax credit under this section but which meets the
4 eligibility criteria under section 1325(3) shall receive a
5 one-time credit in an amount equal to 8% of each new
6 investment made by the qualified business in the development
7 zone under an agreement approved by the department. This
8 credit shall be applied against the taxpayer's tax liability
9 under Part IV or IV-A of Article III or Article IV subject to
10 the limitations and carryforward provisions set forth in
11 section 1316. A qualified business may not claim an employee
12 tax credit and an investment tax credit authorized under this
13 paragraph in the same year, regardless of whether those
14 credits were earned for the tax year or carried forward from
15 a previous year.
16 (4) The development zone employee tax credit shall be
17 allowed in the tax year immediately following the tax year in
18 which the new full-time, permanent employee was first
19 employed by the taxpayer and shall be permitted in any tax
20 year of a 20-year period from the date of designation of the
21 development zone or of a period of 20 tax years from the date
22 within that designation period upon which the taxpayer is
23 first subject to the provisions of Part IV or IV-A of Article
24 III or Article IV of the Tax Reform Code of 1971, whichever
25 date is later. The termination of the designation of a
26 development zone shall not terminate the eligibility period
27 provided under this section.
28 (5) A tax credit shall be permitted under this section
29 only for those new full-time, permanent employees who have
30 been employed for at least six continuous months by the
19980H2328B3614 - 57 -
1 taxpayer during the tax year for which the tax credit is
2 claimed.
3 (6) A newly employed employee shall not be deemed a new
4 full-time, permanent employee for the purposes of this
5 section unless the total number of full-time, permanent
6 employees, including the newly employed employee, employed by
7 the employer in the development zone during the calendar year
8 exceeds the greatest number of full-time, permanent employees
9 employed in the development zone by the employer during any
10 prior calendar year during the period commencing with the
11 date of development zone designation.
12 Section 1318. Sales and use tax.
13 (a) General rule.--Except as set forth in subsection (b),
14 retail sales of tangible personal property and sales of services
15 to a qualified business for the exclusive use or consumption of
16 such business within a development zone are exempt from the
17 taxes imposed under section 202 of the act of March 4, 1971
18 (P.L.6, No.2), known as the Tax Reform Code of 1971.
19 (b) Exception.--Subsection (a) does not apply to retail
20 sales of any of the following:
21 (1) Motor vehicles the sale of which is otherwise
22 taxable under Article II of the Tax Reform Code of 1971.
23 (2) "Liquor" or "malt or brewed beverages" as defined in
24 section 102 of the act of April 12, 1951 (P.L.90, No.21),
25 known as the Liquor Code.
26 (3) "Cigarettes" as defined in section 1201 of the Tax
27 Reform Code of 1971.
28 (4) Utility services.
29 (5) Telecommunications services.
30 (6) Energy.
19980H2328B3614 - 58 -
1 Section 1319. Partial exemption; certification; disposition of
2 revenue.
3 (a) Partial exemption.--
4 (1) Except as set forth in paragraph (2), retail sales
5 made by a certified vendor from a place of business owned or
6 leased and regularly operated by the vendor for the purpose
7 of making retail sales and located in a development zone are
8 exempt from 50% of the tax imposed by section 202 of the act
9 of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
10 of 1971.
11 (2) Paragraph (1) does not apply to retail sales of any
12 of the following:
13 (i) Motor vehicles the sale of which is otherwise
14 taxable under Article II of the Tax Reform Code of 1971.
15 (ii) "Liquor" or "malt or brewed beverages" as
16 defined in section 102 of the act of April 12, 1951
17 (P.L.90, No.21), known as the Liquor Code.
18 (iii) "Cigarettes" as defined in section 1201 of the
19 Tax Reform Code of 1971.
20 (iv) Manufacturing machinery, equipment or
21 apparatus.
22 (v) Energy. (b) Certification.--Any vendor that is
23 a qualified business having a place of business located in a
24 development zone may apply to the Department of Revenue for
25 certification under this section. The Department of Revenue
26 shall certify a vendor if it finds that the vendor owns or
27 leases and regularly operates a place of business located in
28 the development zone for the purpose of making retail sales,
29 that items are regularly exhibited and offered for retail
30 sale at that location and that the place of business is not
19980H2328B3614 - 59 -
1 utilized primarily for the purpose of catalog or mail order
2 sales. The certification under this section shall remain in
3 effect during the time the business retains its status as a
4 qualified business meeting the eligibility criteria of
5 section 1325. The Department of Revenue may revoke a
6 certification granted under this section if it determines
7 that the vendor no longer complies with the provisions of
8 this section notwithstanding any other provisions of law to
9 the contrary.
10 (c) Disposition of revenue.--
11 (1) After first depositing 10% of the gross amount of
12 revenue received from the taxation of retail sales made by
13 certified vendors from business locations in development
14 zones to which the exemption under subsection (a) applies
15 into the account created in the name of the department in the
16 fund, pursuant to section 1327, the remaining 90% shall be
17 deposited immediately upon collection by the Treasury
18 Department, as follows:
19 (i) In the first five-year period during which the
20 Commonwealth has collected reduced rate revenues within a
21 development zone, all of that revenue shall be deposited
22 in the fund.
23 (ii) In the second five-year period during which the
24 Commonwealth has collected reduced rate revenues within a
25 development zone, 66 2/3% of that revenue shall be
26 deposited in the fund; and 33 1/3% shall be deposited in
27 the General Fund.
28 (iii) In the third five-year period during which the
29 Commonwealth has collected reduced rate revenues within a
30 development zone, 33 1/3% of that revenue shall be
19980H2328B3614 - 60 -
1 deposited in the fund; and 66 2/3% shall be deposited in
2 the General Fund.
3 (iv) In the final period, of the lesser of five
4 years or the existence of the development zone during
5 which the Commonwealth has collected reduced rate
6 revenues within a development zone, all of that revenue
7 shall be deposited in the General Fund.
8 (2) No development zone shall receive the deposit
9 benefit granted by any one subparagraph of paragraph (1) for
10 more than five cumulative years.
11 (3) The revenues required to be deposited in the fund
12 under this section shall be used for the purposes of that
13 fund and for the uses prescribed in section 1327, subject to
14 annual appropriations being made for those purposes and uses.
15 (d) Alternate disposition of revenue.--If the partial
16 exemption provided in this section cannot take effect because of
17 the judgment of a court of competent jurisdiction holding it
18 unconstitutional, 50% of the gross amount of revenue received
19 from the taxation of retail sales made by certified vendors from
20 business locations in development zones to which the exemption
21 would have otherwise applied shall be deposited in the fund in
22 the amounts and for the purposes provided in this chapter.
23 Section 1320. Regulations.
24 (a) Department of Revenue.--The Department of Revenue shall
25 promulgate regulations as necessary to effectuate the provisions
26 of sections 1315 through 1319, and sections 1325 and 1327.
27 (b) Department.--The department shall promulgate regulations
28 as may be necessary to effectuate the provisions of section
29 1314.
30 Section 1321. State financing assistance; priority to project
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1 in municipality with development zone.
2 Notwithstanding any provisions of the act of May 17, 1956
3 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial
4 Development Authority Act or any other act to the contrary,
5 projects which are otherwise eligible under the Pennsylvania
6 Industrial Development Authority Act or other statute, but which
7 are located in a municipality in which there is a development
8 zone designated, shall, upon the written recommendation of the
9 department, be accorded priority and the lowest interest rate
10 provided over other eligible projects in receiving assistance
11 from the Pennsylvania Industrial Development Authority or from
12 any agency or authority.
13 Section 1322. Skill training programs; delivery.
14 The Department of Labor and Industry and the Department of
15 Education shall jointly develop and coordinate the delivery of
16 skill training programs necessary to meet the needs of
17 qualifying businesses.
18 Section 1323. Regulations; exemption of development zones.
19 In order to carry out the purposes of this chapter, any
20 Commonwealth or local agency may exempt designated development
21 zones from the provisions of any regulation promulgated by that
22 entity or agency, upon finding by the agency that the exemption
23 would not endanger the health and safety of the citizens of this
24 Commonwealth.
25 Section 1324. Review of State regulations by department.
26 The department shall conduct a continuing review of all
27 Commonwealth regulations and shall recommend to the appropriate
28 administrative bodies including the Independent Regulatory
29 Review Commission the modification or waiver of regulations
30 promulgated by that agency in order to contribute to the
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1 implementation of this chapter.
2 Section 1325. Eligibility for incentives by qualified business.
3 To be eligible for any of the incentives provided under this
4 act, a qualified business must demonstrate to the satisfaction
5 of the department that:
6 (1) The business will create new employment in the
7 municipality.
8 (2) The business will not create unemployment in other
9 areas of this Commonwealth, including the municipality in
10 which the zone is located.
11 (3) For the purposes of eligibility for the incentives
12 provided under sections 1315, 1317, 1318 and 1319, a
13 qualified business shall not be required to meet the
14 requirements of paragraph (1) if all of the following apply:
15 (i) At the time of designation of the development
16 zone or at the time zone designation is extended by
17 expansion to the location of a business, the qualified
18 business had been engaged in the active conduct of a
19 trade or business in that zone or in the added area of
20 that zone for at least one year.
21 (ii) The qualified business employs fewer than 50
22 employees.
23 (iii) The qualified business has entered into an
24 agreement, approved by the department, with the governing
25 body of the qualifying municipality in which the
26 development zone is located under which the qualified
27 business agrees to undertake an investment in the
28 development zone in lieu of the employment of new
29 employees. An investment under this subparagraph must be
30 in an amount and of a nature which the municipal
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1 governing body and the department find contribute
2 substantially to the economic attractiveness of the
3 development zone. An investment under this subparagraph
4 includes all of the following:
5 (A) Improvement of the exterior appearance or
6 customer facilities of the property constituting the
7 place of business of the qualified business within
8 the zone if the improvement is of a permanent nature
9 and not required to meet existing ordinances or code
10 regulations.
11 (B) Purchase of equipment by the qualified
12 business if the equipment is to be used exclusively
13 in the development zone.
14 (C) Monetary contributions to the qualifying
15 municipality to undertake improvements to increase
16 the safety or attractiveness of the zone to
17 businesses which may wish to locate there or to
18 consumer visitors to the zone. This clause includes
19 litter cleanup and control; landscaping; parking
20 areas and facilities; recreational and rest areas and
21 facilities; repair or improvements to public streets,
22 curbing, sidewalks and pedestrian thoroughfares;
23 street lighting; and increased police, fire or
24 sanitation services in the development zone.
25 (4) In order to meet the requirement of paragraph
26 (3)(iii), if the qualified business employs less than 11
27 individuals, an investment must be in an amount of at least
28 $5,000, if the qualified business employs more than ten
29 individuals, an investment must be in an amount of at least
30 the number of individuals employed times $500. A qualified
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1 business must make an investment for each year the qualified
2 business does not meet the requirements of paragraph (1). In
3 order to receive the incentives permitted by this section,
4 the business must provide written evidence of the investment
5 to the department.
6 Section 1326. Qualified business recipient of benefits; annual
7 certification.
8 (a) Requirement.--A firm that receives any benefits set
9 forth in sections 1314 through 1322 shall annually certify to
10 the department that it is a qualified business.
11 (b) Penalty.--
12 (1) A firm may not do any of the following:
13 (i) Fail to make the certification under subsection
14 (a).
15 (ii) Intentionally falsify data in the certification
16 under subsection (a).
17 (2) A firm that violates paragraph (1) commits a
18 misdemeanor of the second degree and shall, upon conviction,
19 be sentenced to pay a fine in the amount of not more than
20 $5,000 or to imprisonment of not more than two years, or
21 both.
22 Section 1327. Fund.
23 (a) Establishment.--There is hereby established the Economic
24 Development Zone Assistance Fund to be held by the State
25 Treasurer. The fund shall be the repository for all money
26 required to be deposited under section 1319 and money
27 appropriated annually to the fund. All money deposited in the
28 fund shall be held and disbursed in the amounts necessary to
29 fulfill the purposes of this section. The State Treasurer may
30 invest and reinvest any money in the fund in legal obligations
19980H2328B3614 - 65 -
1 of the United States or of the Commonwealth or of any political
2 subdivision. Any income from money so invested or reinvested
3 shall be included in the fund. The State Treasurer shall
4 maintain separate accounts for each development zone designated
5 under this chapter and one separate account in the department's
6 name for the administration of the Economic Development Zone
7 Program. The State Treasurer shall credit to each account an
8 amount of the money deposited in the fund proportionate to the
9 amount of revenue collected from the taxation of retail sales
10 made in the zone and appropriated to the development zone
11 assistance fund or an amount of money appropriated to the fund
12 and required to be credited to the development zone account of
13 the qualifying municipality under section 1319. The State
14 Treasurer shall promulgate regulations necessary to govern the
15 administration of the fund for the purposes of this section.
16 (b) Use.--The fund shall be used for the purpose of
17 assisting qualifying municipalities in which development zones
18 are designated in undertaking public improvements and economic
19 development projects and in upgrading eligible municipal
20 services in development zones.
21 (c) Proposal.--The governing body of a qualifying
22 municipality in which a development zone is located and the zone
23 development corporation created or designated by the
24 municipality for that development zone may, by resolution
25 jointly adopted after public hearing, propose to undertake a
26 project for the public improvement of the development zone or to
27 increase eligible municipal services in the development zone and
28 to fund that project or increase eligible municipal services
29 from money deposited in the fund and credited to the account
30 maintained by the State Treasurer for the development zone. The
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1 proposal must set forth a plan for the project or for the
2 increase in eligible municipal services and must include all of
3 the following:
4 (1) A description of the proposed project or of the
5 municipal services to be increased.
6 (2) An estimate of the total project costs, or of the
7 total costs of increasing the municipal services, and an
8 estimate of the amounts of funding necessary annually from
9 the development zone account.
10 (3) A statement of any other revenue sources to be used
11 to finance the project or to fund the increase in eligible
12 municipal services.
13 (4) A statement of the time necessary to complete the
14 project or of the time during which the increased municipal
15 services are to be maintained.
16 (5) A statement of the manner in which the proposed
17 project or increase in municipal services furthers the
18 municipality's policy and intentions for addressing the
19 economic and social conditions existing in the area of the
20 development zone as set forth in the zone development plan
21 approved by the department.
22 (6) A description of the financial and programmatic
23 controls and reporting mechanisms to be used to guarantee
24 that the funds will be spent in accordance with the plan and
25 that the project or increased municipal service will
26 accomplish its purpose.
27 (d) Proposal approval.--Upon adoption by the governing body
28 of the qualifying municipality and by the zone development
29 corporation, the proposal shall be sent to the department for
30 its evaluation and approval. The department shall approve the
19980H2328B3614 - 67 -
1 proposal if it finds all of the following:
2 (1) In the case of a project, that the proposed project
3 furthers the policy and intentions of the zone development
4 plan approved by the department and that the estimated annual
5 payments for the project from the development zone account to
6 which the proposal pertains are not likely to result in a
7 deficit in that account.
8 (2) In the case of an increase in eligible municipal
9 services, that the proposed project furthers the policy and
10 intentions of the zone development plan approved by the
11 department; that the qualifying municipality has furnished
12 satisfactory assurances that the additional policemen or
13 firemen to be hired or the additional vehicles, equipment or
14 apparatus to be purchased or leased shall be used to augment
15 or upgrade public safety in the development zone and shall
16 not be used in other areas of the municipality; that the
17 qualifying municipality shall annually appropriate for the
18 increased eligible municipal services an amount equal to 20%
19 of the amount of annual payments for the eligible municipal
20 services from the development zone account and shall not
21 request for the increased eligible municipal services an
22 amount equal to more than 35% of the amount of annual
23 payments into the development zone account; and that the
24 estimated annual payments for the eligible municipal services
25 from the development zone account to which the proposal
26 pertains are not likely to result in a deficit in that
27 account.
28 (e) Certification.--If the department approves the proposal,
29 it shall annually, upon its receipt of a written statement from
30 the governing body of the qualifying municipality and the zone
19980H2328B3614 - 68 -
1 development corporation, certify to the State Treasurer the
2 amount to be paid in that year from the development zone account
3 in the fund with respect to each project or increase in eligible
4 municipal services approved. The department may revoke approval
5 of a project or an increase in eligible municipal services if it
6 finds that the annual payments made from the fund are not being
7 used as required by this section.
8 (f) Payment.--Upon certification by the department of the
9 annual amount to be paid to a qualifying zone with respect to
10 any project or increase in eligible municipal services, the
11 State Treasurer shall pay in each year to the qualifying
12 municipality the amount certified, within the limits of the
13 amounts credited to the development zone account of the
14 qualifying municipality.
15 (g) Administration.--An amount not to exceed one-third of
16 the amount deposited in the account created in the name of the
17 department in the fund shall be used by the department for the
18 coordination and administration of the program throughout this
19 Commonwealth, including costs for personnel, operating expenses
20 and marketing. The balance of the remaining amount shall be
21 distributed to qualifying municipalities in proportion to each
22 municipality's contribution to the fund for the coordination and
23 administration of the program within the municipality, including
24 costs for personnel, operating expenses and marketing.
25 (h) Definitions.--As used in this section, the following
26 words and phrases shall have the meanings given to them in this
27 subsection:
28 "Eligible municipal services." The hiring of additional
29 police officers or firefighters assigned duties in the
30 development zone or the purchasing or leasing of additional
19980H2328B3614 - 69 -
1 police or fire vehicles, equipment or apparatus to be used for
2 the provision of augmented or upgraded public safety services in
3 the development zone and its immediate vicinity.
4 "Project." An activity funded by the fund through the
5 qualified municipality and implemented by the zone development
6 corporation. The term includes all of the following:
7 (1) Purchasing, leasing, condemning or otherwise
8 acquiring of land or other property in the development zone
9 or as necessary for a right-of-way or other easement to or
10 from the development zone; relocating and moving of persons
11 or businesses displaced by the acquisition of land or
12 property.
13 (2) Rehabilitation and redevelopment of land or
14 property. This paragraph includes demolition, clearance,
15 removal, relocation, renovation, alteration, construction,
16 reconstruction, installation or repair of land or any
17 building, street, highway, alley, utility, service or other
18 structure or improvement which will lead to increased
19 economic activity within the development zone.
20 (3) Acquisition, construction, reconstruction,
21 rehabilitation or installation of public facilities and
22 improvements, except buildings and facilities for the general
23 conduct of government and schools.
24 (4) Establishment of revolving loan or grant programs
25 for qualified businesses in the zone to encourage private
26 investment and job creation.
27 (5) Establishment of matching grant programs for the
28 establishment or operation of pedestrian malls, special
29 improvement districts and tax increment districts or other
30 appropriate entity.
19980H2328B3614 - 70 -
1 (6) The costs associated with activities under
2 paragraphs (1) through (5), including the costs of
3 administrative appraisals, economic and environmental
4 analyses, environmental remediation, engineering, planning,
5 design, architecture, surveying or other professional or
6 managerial services necessary to effectuate the project.
7 Section 1328. Constitutionality.
8 It is the intention of the General Assembly that, if this
9 chapter cannot take effect in its entirety because of the
10 judgment of any court of competent jurisdiction holding
11 unconstitutional any part or parts thereof, the remaining
12 provisions of this chapter shall be given full force and effect,
13 as completely as if the part or parts held unconstitutional had
14 not been included in this chapter. It is the intention of the
15 General Assembly that, if any court of competent jurisdiction
16 shall hold unconstitutional any provision of this chapter
17 providing for tax exemption or special tax provision, that
18 unconstitutional provision shall become inoperative until such
19 time as it is constitutional. The remaining tax exemptions and
20 special tax provisions of this act shall in any such case be
21 given full force and effect.
22 CHAPTER 21
23 CHAPTER 13 <--
24 MISCELLANEOUS PROVISIONS
25 Section 2101 1301. Illegal activity. <--
26 Any funds or other forms of consideration received by a
27 person or business conducting any type of illegal activity shall
28 not be eligible for any of the exemptions, deductions,
29 abatements and credits or any other benefits that are created
30 under this act.
19980H2328B3614 - 71 -
1 Section 2102 1302. Rules and regulations. <--
2 The Department of Revenue shall promulgate such rules and
3 regulations as may be necessary to effectuate the provisions of
4 this act. The department shall promulgate such rules and
5 regulations as may be necessary to effectuate the provisions of
6 this act.
7 Section 2103 1303. Compliance. <--
8 Any person eligible for an exemption, deduction or credit
9 under this act shall comply with all reporting, filing and
10 compliance requirements pursuant to the Tax Reform Code of 1971,
11 unless otherwise provided for in this act.
12 Section 2104 1304. Penalties. <--
13 (a) Civil penalty.--
14 (1) In addition to any penalties authorized by the Tax
15 Reform Code of 1971 for violations of that act, the
16 Department of Revenue may impose an additional administrative
17 penalty not to exceed $10,000 for any act or violation of
18 this act relating to State and local taxes, including the
19 filing of any false statement, return or document.
20 (2) The department may impose a civil penalty not to
21 exceed $10,000 for a violation of this act, including the
22 filing of any false statement, return or document.
23 (b) Criminal penalty.--In addition to any criminal penalty
24 under the Tax Reform Code of 1971, any person who knowingly
25 violates any of the provisions of this act commits a misdemeanor
26 of the third degree.
27 Section 2105 1305. Construction. <--
28 This act shall be interpreted to ensure that all provisions
29 relating to State and local tax exemptions, deductions,
30 abatements and credits are strictly construed in favor of the
19980H2328B3614 - 72 -
1 Commonwealth.
2 Section 2106 1306. Applicability. <--
3 The provisions of this act shall be applied prospectively. No
4 person or business may claim any exemption, deduction, abatement
5 or credit until that person or business becomes qualified under
6 this act, and, in the case of a business, receives certification
7 from the department that the business is qualified.
8 Section 2107 1307. Severability. <--
9 The provisions of this act are severable. If any provision of
10 this act or its application to any person or circumstance is
11 held invalid, the invalidity shall not affect other provisions
12 or applications of this act which can be given effect without
13 the invalid provision or application.
14 Section 2108 1308. Repeals. <--
15 All acts and parts of acts are repealed insofar as they are
16 inconsistent with this act.
17 Section 2109 1309. Expiration. <--
18 Except for Chapter 13 and this chapter, this THIS act and all <--
19 benefits associated with this act shall terminate December 31,
20 2010.
21 Section 2110 1310. Effective date. <--
22 This act shall take effect immediately.
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