Please wait while the document is loaded.

A01599
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1377
Session of
2021
INTRODUCED BY BOBACK, ZABEL, GALLOWAY, ROWE, MILLARD, BROOKS,
LEE, MOUL, NEILSON, KEEFER, ISAACSON, INNAMORATO,
PISCIOTTANO, SANCHEZ, McNEILL, HANBIDGE, SHUSTERMAN, COX,
T. DAVIS, O'MARA, HELM, BIZZARRO, SOLOMON, DELLOSO, SAYLOR,
WEBSTER, STRUZZI, HOWARD, OTTEN, HILL-EVANS, ROAE, HENNESSEY,
HEFFLEY, FRITZ AND JAMES, MAY 10, 2021
REFERRED TO COMMITTEE ON COMMERCE, MAY 10, 2021
AN ACT
Amending the act of October 6, 1998 (P.L.705, No.92), entitled
"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 preliminary provisions, further providing for definitions;
and, in keystone opportunity zones, providing for limitation
on benefits and for zone relocation and further providing for
qualified businesses.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 103 of the act of October 6, 1998
(P.L.705, No.92), known as the Keystone Opportunity Zone,
Keystone Opportunity Expansion Zone and Keystone Opportunity
Improvement Zone Act, is amended by adding a definition to read:
Section 103. Definitions.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"A ctive conduct of a trade or business." As follows:
(1) The engagement of an active conduct of a trade or
business by a business that meets any of the following
criteria:
(i) The business is subject to tax under Article IV
of the Tax Reform Code of 1971.
(ii) In the case of a pass-through entity, the
business is:
(A) engaged in a commercial enterprise conducted
for profit and earning net profits as classified
under section 303(a)(2) of the Tax Reform Code of
1971, from the operation of the business within a
subzone, expansion subzone or improvement subzone; or
(B) receives net gains or income classified
under section 303(a)(4) of the Tax Reform Code of
1971 derived from renting real or tangible personal
property located in a subzone, improvement subzone or
expansion subzone.
(2) The term does not include activity from real estate
investment trusts, venture capital funds and hedge funds.
* * *
Section 2. This act is amended by adding sections to read:
Section 301.8. Limitation on benefits.
(a) Limitation.--Except as provided subsection (b), a
business may not receive more than 10 years in the aggregate of
tax exemptions, deductions, abatements or credits under this
act.
A01599 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(b) Exception.--Subsection (a) shall not apply to a business
that receives tax exemptions, deductions, abatements or credits
under any of the following:
(1) Section 301.3.
(2) Section 301.4(a)(3).
(3) Section 1719-E(a.1) of the act of April 9, 1929
(P.L.343, No.176), known as the Fiscal Code.
(4) Section 1912-D of the Tax Reform Code of 1971.
Section 1. The act of October 6, 1998 (P.L.705, No.92),
known as the Keystone Opportunity Zone, Keystone Opportunity
Expansion Zone and Keystone Opportunity Improvement Zone Act, is
amended by adding a section to read:
Section 305.1. Zone relocation.
(a) Relocation.-- A business that relocates from one active
or expired subzone, improvement subzone or expansion subzone in
which the business received tax exemptions, deductions,
abatements or credits under this act into another subzone,
improvement subzone or expansion subzone may not receive tax
exemptions, deductions, abatements or credits under this act
unless the relocation is necessary to meet the expansion or
operational needs of the business and the business anticipates a
significant financial impact on the zone into which the business
is relocating. A business relocating under this section shall
have the burden to demonstrate that the relocation is necessary
to meet the expansion or operational needs of the business and
the business anticipates a significant financial impact on the
zone into which the business is relocating. The department, in
consultation with the Department of Revenue, shall have the sole
discretion to determine whether a business has met the burden
required under this section subsection .
A01599 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Section 3. Section 307(b) of the act is amended to read:
Section 307. Qualified businesses.
* * *
(b) Relocation.--Any business that relocates from outside a
subzone, improvement subzone or expansion subzone into a
subzone, improvement subzone or expansion subzone shall not
receive any of the exemptions, deductions, abatements or credits
set forth in this act unless that business does one of the
following:
(1) increases full-time employment by [at least] the
greater of 20% or five full-time jobs in the first [full
year] three years of operation within the subzone,
improvement subzone or expansion subzone[;] and maintains the
increased full-time employment for the entire period benefits
are received; or
(2) makes a capital investment in the property located
within the subzone, improvement subzone or expansion subzone
at least equivalent to [10%] 20% of the gross revenues of
that business in the immediately preceding calendar or fiscal
year.[; or
(3) enters into a lease agreement for property located
within the subzone, improvement subzone or expansion subzone:
(i) for a term at least equivalent to the duration
of the subzone, improvement subzone or expansion subzone;
and
(ii) with aggregate payment under the lease
agreement at least equivalent to 5% of the gross revenues
of that business in the immediately preceding calendar or
fiscal year.
The department, in consultation with the Department of
A01599 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Revenue, may waive or modify the requirements of this
subsection, as appropriate.]
(b) Exemption.--A business may not be subject to subsection
(a), if all the following apply:
(1) The business applied for and received a tax
exemption, deduction, abatement or credit under this act
prior to the effective date of this section.
(2) The business made a commitment to relocate to
another subzone, improvement subzone or expansion subzone
prior to the effective date of this section. The business
shall have the burden to demonstrate to the department
evidence of the commitment.
Section 4 2. This act shall take effect in 60 days.
A01599 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13