THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY PILEGGI, TOMLINSON, BROWNE, ERICKSON, STACK, FONTANA, GREENLEAF, FARNESE, RAFFERTY, WAUGH, COSTA, MENSCH, BOSCOLA, SOLOBAY, BLAKE AND FERLO, SEPTEMBER 7, 2011

SENATOR CORMAN, APPROPRIATIONS, RE-REPORTED AS AMENDED, DECEMBER 5, 2011   

AN ACT

Amending the act of October 6, 1998 (P.L.705, No.92), entitled,

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as amended, "An act providing for the creation of keystone

opportunity zones and keystone opportunity expansion zones to

foster economic opportunities in this Commonwealth, to

facilitate economic development, stimulate industrial,

commercial and residential improvements and prevent physical

and infrastructure deterioration of geographic areas within

this Commonwealth; authorizing expenditures; providing tax

exemptions, tax deductions, tax abatements and tax credits;

creating additional obligations of the Commonwealth and local

governmental units; and prescribing powers and duties of

certain State and local departments, agencies and officials,"

in keystone opportunity zones, further providing for

additional expansion zones; and providing for extension for

new job creation.

Amending the act of October 6, 1998 (P.L.705, No.92), entitled,

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as amended, "An act providing for the creation of keystone

opportunity zones and keystone opportunity expansion zones to

foster economic opportunities in this Commonwealth, to

facilitate economic development, stimulate industrial,

commercial and residential improvements and prevent physical

and infrastructure deterioration of geographic areas within

this Commonwealth; authorizing expenditures; providing tax

exemptions, tax deductions, tax abatements and tax credits;

creating additional obligations of the Commonwealth and local

governmental units; and prescribing powers and duties of

certain State and local departments, agencies and officials,"

in keystone opportunity zones, further providing for 

extension for unoccupied parcels and for additional expansion

zones; providing for expansion for new job creation; and

further providing for corporate net income tax and for

capital stock franchise tax.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 301.4 of the act of October 6, 1998

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(P.L.705, No.92), known as the Keystone Opportunity Zone,

Keystone Opportunity Expansion Zone and Keystone Opportunity

Improvement Zone Act, added July 10, 2008 (P.L.1014, No.79), is

amended to read:

Section 301.4.  Additional keystone opportunity expansion zones.

(a)  Establishment.--

(1)  In addition to any designations under section 301.1,

the department may designate up to 15 additional keystone

opportunity expansion zones in accordance with this section.

Each additional keystone opportunity expansion zone shall:

(i)  Not be less than ten acres in size, unless

contiguous to an existing zone.

(ii)  Not exceed, in the aggregate, a total of 350

acres.

(iii)  Be comprised of parcels that meet any of the

following criteria:

(A)  Are deteriorated, underutilized or

unoccupied on the effective date of this clause.

(B)  Are occupied by a business that:

(I)  Creates or retains at least 1,400 full-

time jobs in this Commonwealth within three years

of the designation of the keystone opportunity

expansion zone; and

(II)  Makes a capital investment of at least

$750,000,000 in the additional keystone

opportunity enhancement zone within three years

of the designation of the keystone opportunity

expansion zone.

(2)  The department shall immediately notify political

subdivisions located within the area designated.

(b)  Authorization.--Persons and businesses within an

additional keystone opportunity expansion zone authorized under

subsection (a) shall be entitled to all tax exemptions,

deductions, abatements or credits set forth under this act,

except exemptions for sales and use tax under section 511(a) or

705(a), for a period of ten years beginning January 1, 2010, and

ending on December 31, 2020. Exemptions for sales and use taxes

under sections 511 and 705 shall commence upon designation of

the zone by the department.

(c)  Application.--In order to receive a designation under

subsection (a), the department must receive an application from

a political subdivision or its designee no later than May 1,

2009. The application must contain the information required

under section 302(a)(1), (2)(i) and (ix) and (6). The

application must include all ordinances, resolutions or other

required action adopted by all political subdivisions in which

the keystone opportunity expansion zone is located providing the

tax exemptions, deductions, abatements and credits authorized

under Chapter 7. The department, in consultation with the

Department of Revenue, shall review the application and, if

approved, issue a certification of all tax exemptions,

deductions, abatements or credits under this [part] act for the

additional keystone opportunity expansion zone within three

months of receipt of the application. The department shall act

on an application under this subsection by June 30, 2009.

(d)  Unused keystone opportunity expansion zones.--

(1)  The department may designate any of the 15 remaining

keystone opportunity expansion zones established under

subsection (a) for which there was no designation by the

department as of the effective date of this subsection. To

receive a designation of a remaining keystone opportunity

expansion zone under this subsection, the department must

receive an application from a political subdivision or its

designee by  June 1, 2012. The application must comply with

subsection (c) except for the application deadline. The

department, in consultation with the Department of Revenue,

shall review the application and, if approved, shall issue a

certification of all tax exemptions, deductions, abatements

or credits under this act for the additional keystone

opportunity expansion zone within three months of receipt of

the application.

(2)  Persons and businesses within an additional keystone

opportunity expansion zone authorized under paragraph (1)  

shall be entitled to all tax exemptions, deductions,

abatements or credits set forth under this act, except

exemptions for sales and use tax under section 511(a) or

705(a), for a period of ten years beginning January 1,  2013,

and ending December 31,  2023. Exemptions for sales and use

taxes under sections 511 and 705 shall commence upon

designation of the zone by the department.

Section 2.  The act is amended by adding a section to read:

Section 301.7.  Extension for new job creation.

(a)  Extension.--The department may approve an application to

extend the exemptions, deductions, abatements and credits under

this act for  an unoccupied, deteriorated or underutilized 

parcel in a keystone opportunity zone, keystone opportunity

expansion zone or keystone opportunity improvement zone or a

subzone for a period of nine years if the extension will result

in the creation of at least 200 new jobs.

(b)  Application.--In order to extend the tax benefits for 

unoccupied, deteriorated or underutilized parcels under

subsection (a), the department must receive an application from

a political subdivision or its designee by March 1, 2012. The

application must contain the information required under section

302(a)(1), (2), (3), (5) and (6). The application must include

all ordinances, resolutions or other required action adopted by

all political subdivisions in which the unoccupied, deteriorated

or underutilized parcel is located adopting the extension of all

tax exemptions, deductions, abatements and credits authorized

under Chapter 7. The department, in consultation with the

Department of Revenue, shall review the application and, if

approved, issue a certification of all tax exemptions,

deductions, abatements or credits under this chapter for the

unoccupied parcel within three months of receipt of the

application. The certification shall be effective on the day

following the expiration date of the existing zone or subzone.

(c)  Expiration.--All extensions of an unoccupied parcel

certified under subsection (a) shall expire no later than nine

years following the expiration date of the existing keystone

opportunity zone, keystone opportunity expansion zone, keystone

opportunity subzone or keystone opportunity improvement zone.

Section 3.  This act shall take effect  immediately.

Section 1.  Sections 301.3 and 301.4 of the act of October 6,

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1998 (P.L.705, No.92), known as the Keystone Opportunity Zone,

Keystone Opportunity Expansion Zone and Keystone Opportunity

Improvement Zone Act, added July 10, 2008 (P.L.1014, No.79), are

amended to read:

Section 301.3.  Extension for unoccupied parcels.

(a)  Extension.--The department may approve an application to

extend the exemptions, deductions, abatements and credits under

this act as follows:

(1)  One of the following:

(i)  For a parcel in a keystone opportunity zone,

keystone opportunity expansion zone or keystone

opportunity improvement zone that is an unoccupied parcel

on the effective date of this section, for a period of

seven years from the expiration date of the zone.

(ii)  For a parcel in a keystone opportunity zone or

keystone opportunity expansion zone that is an unoccupied

parcel on the effective date of this section, for a

period of ten years from the date of occupancy, provided

that the parcel is occupied on or before December 31,

2015.

(iii)  For a parcel in a keystone opportunity zone,

keystone opportunity expansion zone or keystone

opportunity improvement zone or subzone that expires in

2013 or any year thereafter, for an additional period of

ten years from the date of occupancy. For a zone that

expires in 2013, the extension shall apply to parcels

that are unoccupied on the effective date of this

subparagraph. For a zone that expires after 2013, the

extension shall apply to parcels that are unoccupied on a

date determined by the department.

(2)  The extension of exemptions, deductions, abatements

or credits authorized under this section, except exemptions

for sales and use tax under section 511(a) or 705(a), shall

take effect only upon occupancy.

(b)  Real estate tax abatement.--The owner of an unoccupied

parcel in a keystone opportunity zone, keystone opportunity

expansion zone or keystone opportunity improvement zone that has

expired but that receives an extension of tax abatement

eligibility following the original expiration date of the

keystone opportunity zone, keystone opportunity expansion zone

or keystone opportunity improvement zone under subsection (a)

shall not receive an abatement of real property tax until the

parcel becomes occupied or developed.

(c)  Application.--Except as provided in subsection (d), in

order to extend the tax benefits for unoccupied parcels under

subsection (a), the department must receive an application from

a political subdivision or its designee no later than June 30,

2009. The application must contain the information required

under section 302(a)(1), (2), (3), (5) and (6). The application

must include all ordinances, resolutions or other required

action adopted by all political subdivisions in which the

unoccupied parcel is located adopting the extension of all tax

exemptions, deductions, abatements and credits authorized under

Chapter 7. The department, in consultation with the Department

of Revenue, shall review the application and, if approved, issue

a certification of all tax exemptions, deductions, abatements or

credits under this part for the unoccupied parcel within three

months of receipt of the application. The certification shall be

effective on the day following the expiration date of the

existing subzone. For a keystone opportunity zone, keystone

opportunity expansion zone or keystone opportunity improvement

zone or subzone that expires in 2013 or any year thereafter, in

order to extend the tax benefits under subsection (a)(1)(iii),

the department must receive an application no later than three

months prior to the expiration date of the zone.

(d)  Applications for certain zones.--For a keystone

opportunity zone that expires December 31, 2008, an application

may be submitted to the department to temporarily delay the

expiration of the exemptions, deductions, abatements and credits

for the zone until June 30, 2009. The application must be

submitted by November 30, 2008, and include all ordinances,

resolutions or other required action from all affected political

subdivisions approving the requested delay in the expiration of

the keystone opportunity zone. The department shall certify the

delay in the expiration by December 31, 2008. If the expiration

of a keystone opportunity zone is delayed under this subsection,

a political subdivision or its designee may apply for an

extension pursuant to subsection (c), provided that the

application shall be submitted by May 1, 2009, and approved by

the department no later than June 30, 2009. If an extension is

granted under subsection (c), the extension shall be deemed to

be effective January 1, 2009.

(e)  Expiration.--All extensions of an unoccupied parcel

certified under subsection (a)(1)(i) shall expire no later than

seven years following the expiration date of the existing

keystone opportunity zone, keystone opportunity expansion zone

or keystone opportunity improvement zone. All extensions of an

unoccupied parcel certified under subsection (a)(1)(ii) shall

expire no later than ten years following the date of occupancy

of the unoccupied parcel. All extensions of tax benefits under

subsection (a)(1)(iii) for a zone that expires on January 1,

2013, shall expire no later than ten years following the

approval of the extension of the existing keystone opportunity

zone, keystone opportunity expansion zone or keystone

opportunity improvement zone or subzone. An extension of tax

benefits under subsection (a)(1)(iii) shall expire no sooner

than seven years but no later than ten years following approval

of the extension as determined by the department.

Section 301.4.  Additional keystone opportunity expansion zones.

(a)  Establishment.--

(1)  In addition to any designations under section 301.1,

the department may designate up to 15 additional keystone

opportunity expansion zones in accordance with this section.

Each additional keystone opportunity expansion zone shall:

(i)  Not be less than ten acres in size, unless

contiguous to an existing zone.

(ii)  Not exceed, in the aggregate, a total of 350

acres.

(iii)  Be comprised of parcels that meet any of the

following criteria:

(A)  Are deteriorated, underutilized or

unoccupied on the effective date of this clause.

(B)  Are occupied by a business that:

(I)  Creates or retains at least 1,400 full-

time jobs in this Commonwealth within three years

of the designation of the keystone opportunity

expansion zone; and

(II)  Makes a capital investment of at least

$750,000,000 in the additional keystone

opportunity enhancement zone within three years

of the designation of the keystone opportunity

expansion zone.

(2)  [The department shall immediately notify political

subdivisions located within the area designated.] In addition

to any designations under section 301.1 and paragraph (1),

the department may designate up to 15 additional keystone

opportunity expansion zones in accordance with this

subsection. Each additional keystone opportunity expansion

zone shall:

(i)  Not be less than ten acres in size unless

contiguous to an existing zone.

(ii)  Not exceed, in the aggregate, a total of 350

acres.

(iii)  Be comprised of parcels that meet any of the

following criteria:

(A)  Are deteriorated, underutilized or

unoccupied on the effective date of this clause.

(B)  Are occupied by a business that:

(I)  creates or retains at least 1,000 full-

time jobs in this Commonwealth within three years

of the designation of the keystone opportunity

zone; and

(II)  makes a capital investment of at least

$500,000,000 in the additional keystone

opportunity expansion zone within three years of

the designation of the keystone opportunity

expansion zone.

(3)  If a business in a keystone opportunity expansion

zone designated under paragraph (2) makes an investment of at

least $1,000,000,000 and creates at least 400 new permanent

full-time jobs within seven years of the date of designation

by the department, the department shall grant exemptions,

deductions, abatements and credits under this act for a

period of 15 years from the date of occupancy. If the

business fails to comply with the provisions of this

paragraph, the period of the zone shall revert to ten years.

(b)  Authorization.--Persons and businesses within an

additional keystone opportunity expansion zone authorized under

subsection [(a)] (a)(1) or (2) shall be entitled to all tax

exemptions, deductions, abatements or credits set forth under

this act, except exemptions for sales and use tax under section

511(a) or 705(a), for a period of ten years, beginning on 

January 1, 2010, and ending on December 31, 2020. For a keystone

opportunity expansion zone established under subsection (a)(1),

the ten-year period shall begin on January 1, 2010, and end on

December 31, 2019. For a keystone opportunity expansion zone

established under subsection (a)(2), the ten-year period shall

begin on January 1, 2013, and end on December 31, 2022. 

Exemptions for sales and use taxes under sections 511 and 705

shall commence upon designation of the zone by the department.

(c)  Application.--In order to receive a designation under

subsection [(a)] (a)(1), the department must receive an

application from a political subdivision or its designee no

later than May 1, 2009, and no later than October 1, 2013, for a

keystone opportunity expansion zone established under subsection

(a)(2). The application must contain the information required

under section 302(a)(1), (2)(i) and (ix) and (6). The

application must include all ordinances, resolutions or other

required action adopted by all political subdivisions in which

the keystone opportunity expansion zone is located providing the

tax exemptions, deductions, abatements and credits authorized

under Chapter 7. The department, in consultation with the

Department of Revenue, shall review the application and, if

approved, issue a certification of all tax exemptions,

deductions, abatements or credits under this [part] act for the

additional keystone opportunity expansion zone within three

months of receipt of the application. The department shall act

on an application under this subsection by June 30, 2009.

(d)  Unused keystone opportunity expansion zones.--

(1)  The department may designate any of the 15 remaining

keystone opportunity expansion zones established under

subsection (a) for which there was no designation by the

department as of the effective date of this subsection. To

receive a designation of a remaining keystone opportunity

expansion zone under this subsection, the department must

receive an application from a political subdivision or its

designee by June 1, 2012. The application must comply with

subsection (c) except for the application deadline. The

department, in consultation with the Department of Revenue,

shall review the application and, if approved, shall issue a

certification of all tax exemptions, deductions, abatements

or credits under this act for the additional keystone

opportunity expansion zone within three months of receipt of

the application.

(2)  Persons and businesses within an additional keystone

opportunity expansion zone authorized under paragraph (1) 

shall be entitled to all tax exemptions, deductions,

abatements or credits set forth under this act, except

exemptions for sales and use tax under section 511(a) or

705(a), for a period of ten years beginning January 1, 2013,

and ending December 31, 2022. Exemptions for sales and use

taxes under sections 511 and 705 shall commence upon

designation of the zone by the department.

(e)  Notice.--Upon designation under this section, the

department shall immediately notify political subdivisions

located within the area designated.

Section 2.  The act is amended by adding a section to read:

Section 301.7.  Expansion for new job creation.

(a)  Expansion.--The department may approve an application to

expand the area of a keystone opportunity zone, keystone

opportunity expansion zone or keystone opportunity improvement

zone or subzone to include additional parcels that are

deteriorated, underutilized or unoccupied on the effective date

of this section and which are contiguous to the existing zone

not to exceed 15 acres. All exemptions, deductions, abatements

and credits under this act shall be extended to the new parcels

for a period of ten years following approval of the expansion of

the keystone opportunity zone, keystone opportunity expansion

zone or keystone opportunity improvement zone.

(b)  Application.--The following shall apply:

(1)  In order to extend the tax exemptions, deductions,

abatements and credits under this act to additional parcels

under subsection (a), the department must receive an

application from a political subdivision or its designee by

October 1, 2012.

(2)  The application under paragraph (1) must:

(i)  Contain the information required under section

302(a)(1), (2), (3), (5) and (6).

(ii)  Include all ordinances, resolutions or other

required action adopted by all political subdivisions in

which the unoccupied, deteriorated or underutilized

parcel is located adopting the expansion of the zone and

the extension of all tax exemptions, deductions,

abatements and credits authorized under Chapter 7.

(3)  The department, in consultation with the Department

of Revenue, shall review the application and, if approved,

issue a certification of all tax exemptions, deductions,

abatements or credits under this chapter for the unoccupied

parcel within three months of receipt of the application.

(4)  The certification under paragraph (3) shall be

effective ten days following designation of the expansion by

the department.

(c)  Expiration.--All expansions of an unoccupied parcel

certified under subsection (b) shall expire no later than ten

years following the effective date of certification by the

department.

Section 3.  Sections 515(g) and 516(f) of the act, amended

December 9, 2002 (P.L.1727, No.217), are amended to read:

Section 515.  Corporate net income tax.

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(g)  Section not applicable to certain businesses.--[Any

portion of the taxpayer's taxable income that is attributable to

the operation of a railroad, truck, bus or airline company,

pipeline or natural gas company, water transportation company, a

corporation that qualifies as a regulated investment company

under Article IV of the Tax Reform Code of 1971 or holding

company as defined in Article VI of the Tax Reform Code of 1971

shall not be used to calculate a credit under this section.] The

following shall apply:

(1)  Any portion of the taxpayer's taxable income that is

attributable to the operation of any of the following may not

be used to calculate a credit under this section:

(i)  Any of the following that are required to use

special apportionment under Article IV of the Tax Reform

Code of 1971 or would be required to use special

apportionment under Article IV of the Tax Reform Code of

1971 if the taxpayer had income from business activity

taxable both within and without this Commonwealth:

(A)  A railroad, truck, bus or airline company.

(B)  A pipeline or natural gas company.

(C)  A water transportation company.

(ii)  A corporation that qualifies as a regulated

investment company under Article IV of the Tax Reform

Code of 1971.

(iii)  A holding company as defined in Article VI of

the Tax Reform Code of 1971.

(2)  The prohibition under paragraph (1) shall not apply

to the portion of a qualified business engaged in

manufacturing or processing.

Section 516.  Capital stock franchise tax.

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(f)  Credit not available.--[Any portion of the taxpayer's

tax liability that is attributable to the capital employed in

the operation of a railroad, truck, bus or airline company,

pipeline or natural gas company, water transportation company, a

corporation that qualifies as a regulated investment company

under Article IV of the Tax Reform Code of 1971 or holding

company as defined in Article VI of the Tax Reform Code of 1971

shall not be used to calculate a credit under this section.] The

following shall apply:

(1)  Any portion of the taxpayer's tax liability that is

attributable to the capital employed in the operation of any

of the following may not be used to calculate a credit under

this section:

(i)  Any of the following that are required to use

special apportionment under Article IV of the Tax Reform

Code of 1971 or would be required to use special

apportionment under Article IV of the Tax Reform Code of

1971 if the taxpayer had income from business activity

taxable both within and without this Commonwealth:

(A)  A railroad, truck, bus or airline company.

(B)  A pipeline or natural gas company.

(C)  A water transportation company.

(ii)  A corporation that qualifies as a regulated

investment company under Article IV of the Tax Reform

Code of 1971.

(iii)  A holding company as defined in Article VI of

the Tax Reform Code of 1971.

(2)  The prohibition under paragraph (1) shall not apply

to the portion of a qualified business engaged in

manufacturing or processing.

Section 4.  This act shall take effect immediately.