THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY DeLUCA, EACHUS, THOMAS, CLYMER, D. COSTA, DONATUCCI, FRANKEL, GEORGE, GERGELY, JOSEPHS, KULA, MILLARD, MUNDY, M. O'BRIEN, READSHAW, SIPTROTH, SOLOBAY, J. TAYLOR, WHITE, BARBIN, BISHOP, BOYLE, BROWN, BUXTON, CASORIO, COHEN, CONKLIN, P. COSTA, CURRY, DERMODY, FABRIZIO, FREEMAN, HARHAI, HARKINS, JOHNSON, W. KELLER, MANDERINO, MARKOSEK, MATZIE, McCALL, McILVAINE SMITH, MELIO, PARKER, SABATINA, SANTONI, SEIP, M. SMITH, R. TAYLOR, WALKO, WANSACZ, WATERS, WILLIAMS, YOUNGBLOOD, YUDICHAK, BRENNAN, MILNE AND GIBBONS, MAY 4, 2009

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, OCTOBER 8, 2009   

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled,

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as amended, "An act relating to the finances of the State

government; providing for the settlement, assessment,

collection, and lien of taxes, bonus, and all other accounts

due the Commonwealth, the collection and recovery of fees and

other money or property due or belonging to the Commonwealth,

or any agency thereof, including escheated property and the

proceeds of its sale, the custody and disbursement or other

disposition of funds and securities belonging to or in the

possession of the Commonwealth, and the settlement of claims

against the Commonwealth, the resettlement of accounts and

appeals to the courts, refunds of moneys erroneously paid to

the Commonwealth, auditing the accounts of the Commonwealth

and all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," further providing for property held by

financial institutions, for property held by insurers, for

property held by utilities, for property held by business

associations, for property held by fiduciaries, for property

held by courts and public officers and agencies and for

miscellaneous property held for or owing to another.

Amending the act of April 9, 1929 (P.L.343, No.176), entitled,

<--

as amended, "An act relating to the finances of the State

government; providing for the settlement, assessment,

collection, and lien of taxes, bonus, and all other accounts

due the Commonwealth, the collection and recovery of fees and

other money or property due or belonging to the Commonwealth,

or any agency thereof, including escheated property and the

proceeds of its sale, the custody and disbursement or other

disposition of funds and securities belonging to or in the

possession of the Commonwealth, and the settlement of claims

against the Commonwealth, the resettlement of accounts and

appeals to the courts, refunds of moneys erroneously paid to

the Commonwealth, auditing the accounts of the Commonwealth

and all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," providing for method of filing; further

providing for definitions and for notice and publication of

lists of property; providing for borrowing for capital

facilities, for water and sewer systems assistance bond

authorization, for H2O Act implementation, for municipal

landfills, recycling, waste tires and solid waste disposal

and for oil and gas wells; reenacting and amending provisions

relating to State Workers' Insurance Board and for

expiration; further providing for Department of Community and

Economic Development, for Department of Corrections, for

Department of Education, for Department of Environmental

Protection, for Pennsylvania State Police and for

Pennsylvania Emergency Management Agency; providing for

2009-2010 budget implementation and for 2009-2010

restrictions on appropriations for funds and accounts;

abolishing the Scranton State School for the Deaf and the

Board of Trustees of the Scranton State School for the Deaf;

and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 1301.3 of the act of April 9, 1929

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(P.L.343, No.176), known as The Fiscal Code, amended June 29,

2002 (P.L.614, No.91) and December 23, 2003 (P.L.243, No.45), is

amended to read:

Section 1301.3.  Property Held by Financial Institutions.--

The following property held or owing by a financial institution

is presumed abandoned and unclaimed:

1.  Any demand, saving or matured time deposit in a financial

institution, or any funds paid toward the purchase of shares or

other interest in a savings association, savings and loan or

building and loan association, excluding any charges that may

lawfully be withheld, unless within the preceding [five (5)]

four (4) years the owner has:

(i)  Increased the amount of the deposit, shares or claim,

otherwise than by the crediting of accrued interest, or

decreased it, or presented to the holder evidence of the

deposit, shares or claim; or

(ii)  Corresponded in writing with the holder concerning the

deposit, shares or claim; or

(iii)  Otherwise indicated an interest in the deposit, shares

or claim as evidenced by a writing on file with the holder; or

(iv)  Received tax reports or regular statements of the

deposits, shares or claim by certified mail or other method of

communication that will provide the financial institution with a

record that such report or statement was transmitted and

received; or

(v)  Owned other property held by the financial institution

to which subclause (i), (ii), (iii) or (iv) applies.

2.  A deposit under clause 1 shall include any interest or

dividend which the financial institution would pay to the owner

upon claim therefor. The charges which may be excluded hereunder

shall not include any charge due to inactivity imposed, directly

or indirectly, after December 31, 1981 unless there is a valid

and enforceable written contract between the financial

institution and the owner of the deposit pursuant to which the

financial institution may impose said charge.

3.  Any sum payable on checks or on written instruments

including, but not limited to, drafts, money orders and

travelers checks, on which a financial institution is directly

liable, and (i) which have been outstanding for more than [five

(5)] four (4) years, or in the case of travelers checks,

[fifteen (15)] ten (10) years, [or in the case of money orders,

six (6) years in calendar year 2003 and seven (7) years in

calendar year 2004 and thereafter,] from the date payable or

from the date of issuance if payable on demand; and (ii) the

owner of which has not written to the financial institution

concerning it, nor otherwise indicated an interest as evidenced

by a writing on file with the financial institution. 

4.  Any funds or other personal property, tangible or

intangible, removed from a safe deposit box or any other

safekeeping repository in the Commonwealth on which the lease or

rental period has expired due to nonpayment of rental charges or

other reason, or any surplus amounts arising from the sale

thereof pursuant to law, if the same has not been claimed by the

owner for more than [five (5)] four (4) years from the date on

which the rental period expired.

5.  The following deposits described in clause 1 shall be

excluded from the presumption of being abandoned and unclaimed

only while the conditions described below are in effect:

(i)  Deposits during any period when withdrawals may be made

only upon an order of a court of competent jurisdiction.

(ii)  Deposits established under 20 Pa.C.S. Ch. 53 (relating

to Pennsylvania Uniform Transfers to Minors Act) or similar law

concerning transfers to minors while the custodianship has not

been terminated.

(iii)  Burial reserve accounts and similar deposits

established under written agreements to provide for the funeral

and/or burial expenses of a person while the person is still

alive.

Section 2.  Section 1301.4 of the act, amended December 23,

2003 (P.L.243, No.45), is amended to read:

Section 1301.4.  Property Held by Insurers.--(a)  In the case

of life insurance, the following property held or owing by an

insurer is presumed abandoned and unclaimed:

1.  Any moneys held or owing by an insurer as established by

its records under any contract of annuity or policy of life

insurance including premiums returnable or dividends payable,

unclaimed and unpaid for more than [five (5)] four (4) years

after the moneys have or shall become due and payable under the

provisions of such contract of annuity or policy of insurance. A

life insurance policy not matured by actual proof of the death

of the insured is deemed to be matured and the proceeds thereof

are deemed to be due and payable if such policy was in force

when the insured attained the limiting age under the mortality

table on which the reserve is based, unless the person appearing

entitled thereto has within the preceding [five (5)] four (4) 

years, (i) assigned, readjusted or paid premiums on the policy,

or subjected the policy to loan, or (ii) corresponded in writing

with the insurer concerning the policy.

2.  If a person other than the insured or annuitant is

entitled to the funds and no address of such person is known to

the insurer or if it is not definite and certain from the

records of the insurer what person is entitled to the funds, it

is presumed that the last known address of the person entitled

to the funds is the same as the last known address of the

insured or annuitant according to the records of the insurer.

3.  Moneys otherwise payable according to the records of the

insurer are deemed due and payable although the policy or

contract has not been surrendered as required.

4.  Property distributable in the course of a demutualization

or related reorganization of an insurance company is deemed

abandoned two (2) years after the date of the demutualization or

reorganization if instruments or statements reflecting the

distribution are either mailed to the owner and returned by the

post office as undeliverable or not mailed to the owner because

of a known bad address on the books and records of the holder.

(b)  In the case of insurance other than life insurance, the

following property held or owing by an insurer is presumed

abandoned and unclaimed:

1.  Any moneys held or owing by an insurer as established by

its records under any contract of insurance other than annuity

or life insurance, including premiums or deposits returnable or

dividends payable to policy or contract holders or other persons

entitled thereto, unclaimed and unpaid for more than [five (5)]

four (4) years after the moneys have or shall become due and

payable under the provisions of such contracts of insurance.

2.  If a person other than the insured, the principal or the

claimant is entitled to the funds and no address of such person

is known to the insurer or if it is not definite and certain

from the records of the insurer what person is entitled to the

funds, it is presumed that the last known address of the person

entitled to the funds is the same as the last known address of

the insured, the principal or the claimant according to the

records of the insurer.

Section 3.  Section 1301.5 of the act, amended June 29, 2002

(P.L.614, No.91), is amended to read:

Section 1301.5.  Property Held by Utilities.--The following

funds held or owing by any utility are presumed abandoned and

unclaimed:

1.  Any customer advance, toll, deposit or collateral

security or any other property held by any utility if under the

terms of an agreement the advance, toll, deposit, collateral

security or other property is due to or demandable by the owner

and has remained unclaimed for [five (5)] four (4) years or more

from the date when it first became due to or demandable by the

owner under the agreement.

2.  Any sum which a utility has been ordered to refund, less

any lawful deductions, and which has remained unclaimed by the

person appearing on the records of the utility entitled thereto

for two (2) years or more after the date it became payable in

accordance with the final order providing for the refund.

Section 4.  Section 1301.6 of the act, amended June 29, 2002

(P.L.614, No.91) and November 9, 2006 (P.L.1335, No.138), is

amended to read:

Section 1301.6.  Property Held by Business Associations.--The

following property held or owing by a business association is

presumed abandoned and unclaimed:

1.  The consideration paid for a gift certificate or gift

card which has remained unredeemed for two (2) years or more

after its redemption period has expired or for [five (5)] four

(4) years or more from the date of issuance if no redemption

period is specified. The provisions of this clause shall not

apply to a qualified gift certificate. 

2.  Any certificate of stock or participating right in a

business association, for which a certificate has been issued or

is issuable but has not been delivered, whenever the owner

thereof has not claimed such property, or corresponded in

writing with the business association concerning it, within

[five (5)] four (4) years after the date prescribed for delivery

of the property to the owner.

3.  Any sum due as a dividend, profit, distribution, payment

or distributive share of principal held or owing by a business

association, whenever the owner has not claimed such sum or

corresponded in writing with the business association concerning

it within [five (5)] four (4) years after the date prescribed

for payment or delivery.

4.  Any sum due as principal or interest on the business

association's bonds or debentures, or coupons attached thereto,

whenever the owner has not claimed such sum or corresponded in

writing with the business association concerning it within [five

(5)] four (4) years after the date prescribed for payment.

5.  Any sum or certificate or participating right due by a

cooperative to a participating patron, whenever the owner has

not claimed such property, or corresponded with the cooperative

concerning the same within [five (5)] four (4) years after the

date prescribed for payment or delivery.

Section 5.  Section 1301.8 of the act, amended June 29, 2002

(P.L.614, No.91), is amended to read:

Section 1301.8.  Property Held by Fiduciaries.--The following

property held by fiduciaries is presumed abandoned and

unclaimed:

All property held in a fiduciary capacity for the benefit of

another person, unless the owner within [five (5)] four (4) 

years after it has or shall become payable or distributable has

increased or decreased the principal, accepted payment of

principal or income, corresponded in writing concerning the

property or otherwise indicated an interest therein as evidenced

by a writing on file with the fiduciary.

Section 6.  Clause 1 of section 1301.9 of the act, amended

November 9, 2006 (P.L.1335, No.138), is amended to read:

Section 1301.9.  Property Held by Courts and Public Officers

and Agencies.--The following property is presumed abandoned and

unclaimed:

1.  Except as provided in clauses 2 and 2.1 or clause 6, all

property held for the owner by any court, public corporation,

public authority or instrumentality of the United States, the

Commonwealth, or any other state, or by a public officer or

political subdivision thereof, unclaimed by the owner for more

than [five (5)] four (4) years from the date it first became

demandable or distributable.

* * *

Section 7.  Section 1301.10 of the act, amended December 23,

2003 (P.L.243, No.45), is amended to read: 

Section 1301.10.  Miscellaneous Property Held for or Owing to

Another.--The following property, held or owing to any owner, is

presumed abandoned and unclaimed:

1.  All property, not otherwise covered by this article, that

is admitted in writing by the holder and adjudicated to be due,

that is held or owing in the ordinary course of the holder's

business, and that has remained unclaimed by the owner for more

than [five (5)] four (4) years after it became payable or

distributable is presumed abandoned and unclaimed except for

clause 2.

2.  Wages or other compensation for personal services that

have remained unclaimed by the owner for more than three (3)

years after the wages or other compensation for personal

services become payable or are distributed are presumed

abandoned and unclaimed.

Section 8.  All additional funds received under Article

XIII.1, including the proceeds from the sale of property under

section 1301.17 of the act, from July 1, 2009, to June 30, 2010,

as a result of the amendment of sections 1301.3, 1301.4, 1301.5,

1301.6, 1301.8, 1301.9 and 1301.10 of the act shall be deposited

into the Tobacco Settlement Fund established under the act of

June 26, 2001 (P.L.755, No.77), known as the Tobacco Settlement

Act, and shall be used only for the purposes set forth under

Chapter 13 of the Tobacco Settlement Act.

Section 9.  This act shall take effect immediately.

Section 1.  The act of April 9, 1929 (P.L.343, No.176), known

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as The Fiscal Code, is amended by adding a section to read:

Section 10.  Method of Filing.--(a)  The Department of

Revenue may require any return, report or other document

required to be filed for a tax administered by the department to

be filed by any method prescribed by the department including by

telephonic, electronic or other method. Notice of the method of

filing shall be published in the Pennsylvania Bulletin and on

the Department of Revenue's Internet website at least sixty days

prior to the due date of the return, report or other document

required to be filed by telephonic, electronic or other method.

The notice shall refer to this section.

(b)  Failure to file a return, report or other document by

the method required under subsection (a) shall subject the

taxpayer to a penalty of one percent of the tax due on the

return, report or other document up to a maximum of five hundred

dollars ($500), but not less than ten dollars ($10). This

penalty shall be assessed and collected in the manner provided

by the act of March 4, 1971 (P.L.6, No.2), known as the "Tax

Reform Code of 1971." This penalty shall be in addition to any

civil penalty imposed in the applicable article of the "Tax

Reform Code of 1971" for failure to file a return, report or

other document. The criminal penalty for failure to file a

return, report or other document by the method required under

subsection (a) shall be the same as the criminal penalty for

failure to file a return, report or other document under the

applicable article of the "Tax Reform Code of 1971."

(c)  (1)  The Department of Revenue may waive the requirement

to file by the method required under subsection (a) when any of

the following apply:

(i)  The department determines that the prescribed filing

method causes an undue hardship.

(ii)  The preparer or taxpayer requests a waiver in writing

that clearly states why the filing method causes an undue

hardship.

(2)  In determining whether filing by the method required

under subsection (a) causes an undue hardship, the Department of

Revenue may consider unusual circumstances that may prevent the

person from filing by the prescribed method or any other factor

that the department determines is relevant.

Section 1.1.  The definition of "cigarettes" in section 202-A

of the act, added July 2, 1993 (P.L.250, No.46), is amended and

the section is amended by adding a definition to read:

Section 202-A.  Definitions.--As used in this article--

* * *

"Cigarettes" shall mean and include any roll for smoking made

wholly or in part of tobacco, irrespective of size or shape, and

whether or not such tobacco is flavored, adulterated or mixed

with any other ingredient, the wrapper or cover of which is made

of paper or any other substance or material, excepting tobacco,

and shall not include cigars. For purposes of licensing under

this article only, the term shall include little cigars.

* * *

"Little cigars" shall mean any roll for smoking that weighs

not more than four pounds per thousand, where the wrapper or

cover is made of natural leaf tobacco or of any substance

containing tobacco.

* * *

Section 2.  Section 1301.12(c) and (d) of the act, amended

June 29, 2002 (P.L.614, No.91), are amended to read:

Section 1301.12.  Notice and Publication of Lists of Property

Subject to Custody and Control of the Commonwealth under this

Article.--* * *

(c)  The State Treasurer is not required to [publish in such

notice] include in such notice published in an English language

newspaper of general circulation any item of less than [one

hundred dollars ($100)] two hundred fifty dollars ($250) or to

include in such notice published in a legal newspaper any item

of less than two hundred fifty dollars ($250), unless the State

Treasurer, in either instance, deems such publication to be in

the public interest.

(d)  Within nine (9) months from the receipt of the report

required by section 1301.11, the State Treasurer shall mail a

notice to each person having an address listed who appears to be

entitled to property of the value of [one hundred dollars

($100)] two hundred fifty dollars ($250) or more subject to

custody and control of the Commonwealth under this article. The

mailed notice shall contain:

* * *

Section 3.  The act is amended by adding articles to read:

ARTICLE XVI-B

BORROWING FOR CAPITAL FACILITIES

Section 1601-B.  Scope.

This article relates to neighborhood improvement zones.

Section 1602-B.  Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Capital Facilities Debt Enabling Act."  The act of February

9, 1999 (P.L.1, No.1), known as the Capital Facilities Debt

Enabling Act.

"City."  A city of the third class with, on the effective

date of this section, a population of at least 106,000 and not

more than 107,000, based on the 2000 Federal decennial census.

"Contracting authority."  An authority created under 53

Pa.C.S. Ch. 56 (relating to municipal authorities) for the

purpose of designating a neighborhood improvement zone and

constructing a facility or other authority created under the

laws of this Commonwealth which is eligible to apply for and

receive redevelopment assistance capital grants under Chapter 3

of the act of February 9, 1999 (P.L.1, No.1), known as the

Capital Facilities Debt Enabling Act, and which is under a

contract with the Office of the Budget to receive those grants.

"Facility."  A stadium, arena or other structure owned or

leased by professional sports organization at which professional

athletic events are conducted in the presence of individuals who

pay admission to view the event constructed or operated by the

contracting authority.

"Facility complex."  A development or complex of residential,

commercial, exhibition, hospitality, conference, retail and

community uses which includes a stadium arena or other place

owned, leased or utilized by a professional sports organization

at which a professional athletic event or other events are

conducted in the presence of individuals who pay admission to

view the event.

"Fund."  The Neighborhood Improvement Zone Fund established

under section 1604-B.

"Neighborhood improvement zone."  A neighborhood improvement

zone designated by the contracting authority for the purposes of

neighborhood improvement and development within a city.

"Professional sports organization."  A sole proprietorship,

corporation, limited liability company, partnership or

association that meets all of the following:

(1)  Owns a professional sports franchise.

(2)  Conducts professional athletic events of the sports

franchise at a facility.

"Qualified business."  An entity authorized to conduct

business in this Commonwealth which is located or partially

located within a neighborhood improvement zone and is engaged in

the active conduct of a trade or business for the taxable year.

An agent, broker or representative of a business shall not be

considered to be in the active conduct of trade or business for

the business.

Section 1603-B.  Facility.

The contracting authority may designate a neighborhood

improvement zone of not greater than 130 acres, in which a

facility or facility complex may be constructed, and may borrow

funds for the purpose of improvement and development within the

neighborhood improvement zone and construction of a facility or

facility complex within the zone.

Section 1604-B.  Neighborhood Improvement Zone Fund.

(a)  Special fund.--There is established a special fund known

as the Neighborhood Improvement Zone Fund. Interest income

derived from investment of the money in the fund shall be

credited by the Treasury Department to the fund.

(b)  Calculation.--Within 60 days of the end of each quarter,

the contracting authority shall calculate and notify the

Department of Revenue of the amounts under this subsection for

improvement and development in the neighborhood improvement

zone, the facility complex and the facility. The contracting

authority shall provide good faith estimates of the quarterly

amounts to be calculated in the event that information necessary

to complete the calculation is not available. In that event,

complete documentation of the estimating sources and methods

shall be provided with the estimate to the Department of

Revenue. The Department of Revenue shall review and adjust the

amounts calculated for accuracy and completeness. The secretary

or the department shall certify the amounts to the Office of the

Budget within 90 days of the end of the quarter. A unit of local

government collecting a local tax within the neighborhood

improvement zone shall, within 30 days of the end of a fiscal

quarter, submit all of the local taxes collected that are to be

calculated under this subsection to the State Treasurer for

transfer to the fund under subsection (d). The following shall

be the amounts calculated:

(1)  An amount equal to all corporate net income tax,

capital stock and franchise tax, personal income tax,

business privilege tax, business privilege licensing fees and

earned income tax related to the ownership and operation of a

professional sports organization conducting professional

athletic events at the facility or facility complex.

(2)  An amount equal to all of the following:

(i)  All personal income tax, earned income tax and

local services tax withheld from its employees by a

professional sports organization conducting professional

athletic events at the facility or facility complex.

(ii)  All personal income tax, earned income tax and

local services tax withheld from the employees of any

provider of events at or services to, or any operator of

an enterprise in, the facility or facility complex.

(iii)  All personal income tax, earned income tax and

local services tax to which the Commonwealth would be

entitled from performers or other participants, including

visiting teams, at an event or activity at the facility

or facility complex.

(3)  An amount equal to all sales and use tax related to

the operation of the professional sports organization and the

facility and enterprises developed as part of the facility

complex. This paragraph shall include sales and use tax paid

by any provider of events or activities at or services to the

facility or facility complex, including sales and use tax

paid by vendors and concessionaires and contractors at the

facility or facility complex.

(4)  An amount equal to all tax paid to the Commonwealth

related to the sale of any liquor, wine or malt or brewed

beverage in the facility or facility complex.

(5)  The amount paid by the professional sports

organization or by any provider of events or activities at or

services to the facility or facility complex of any new tax

enacted by the Commonwealth following the effective date of

this section.

(6)  An amount equal to all personal income tax, earned

income tax and local services tax withheld from personnel by

the professional sports organization or by a contractor or

other entity involved in the construction of the facility or

facility complex.

(7)  An amount equal to all sales and use tax paid on

materials and other construction costs, whether withheld or

paid by the professional sports organization or other entity,

directly related to the construction of the facility or

facility complex.

(8)  An amount equal to all of the following:

(i)  All corporate net income tax, capital stock and

franchise tax, personal income tax, business privilege

tax, business privilege licensing fees and earned income

tax related to the ownership and operation of any

qualified business within the neighborhood improvement

zone.

(ii)  All personal income tax, earned income tax and

local services tax withheld from its employees by a

qualified business within the neighborhood improvement

zone.

(iii)  All personal income tax, earned income tax and

local services tax withheld from the employees of a

qualified business that provides events, activities or

services in the neighborhood improvement zone.

(iv)  All personal income tax, earned income tax and

local services tax to which the Commonwealth would be

entitled from performers or other participants at an

event or activity in the neighborhood improvement zone.

(v)  All sales and use tax related to the operation

of a qualified business within the neighborhood

improvement zone. This subparagraph shall include sales

and use tax paid by a qualified business that provides

events, activities or services in the neighborhood

improvement zone.

(vi)  All tax paid by a qualified business to the

Commonwealth related to the sale of any liquor, wine or

malt or brewed beverage within the neighborhood

improvement zone.

(vii)  The amount paid a qualified business within

the neighborhood improvement zone of any new tax enacted

by the Commonwealth following the effective date of this

section.

(viii)  All personal income tax, earned income tax

and local services tax withheld from personnel by a

qualified business involved in the improvement,

development or construction of the neighborhood

improvement zone.

(ix)  All sales and use tax paid on materials and

other construction costs, whether withheld or paid by the

professional sports organization or other qualified

business, directly related to the improvement,

development or construction of the neighborhood

improvement zone.

(x)  An amount equal to any amusement tax paid by a

qualified business operating in the neighborhood

improvement zone. No political subdivision or other

entity authorized to collect amusement taxes may impose

or increase the rate of any tax on admissions to places

of entertainment, exhibition, amusement or upon athletic

events in the neighborhood improvement zone which are not

in effect on the date the neighborhood improvement zone

is designated by the contracting authority.

(9)  Except for a tax levied against real property, an

amount equal to any tax imposed by the Commonwealth or any of

its political subdivisions on a qualified business engaged in

an activity within the neighborhood improvement zone.

(c)  Income apportionment.--For the purpose of making the

calculations under subsection (b), the taxable income of a

corporation that is a qualified business shall be apportioned to

the neighborhood improvement zone by multiplying the

Pennsylvania taxable income by a fraction, the numerator of

which is the property factor plus the payroll factor plus the

sales factor and the denominator of which is three, in

accordance with the following:

(1)  The property factor is a fraction, the numerator of

which is the average value of the taxpayer's real and

tangible personal property owned or rented and used in the

neighborhood improvement zone during the tax period and the

denominator of which is the average value of all the

taxpayer's real and tangible personal property owned or

rented and used in this Commonwealth during the tax period

but shall not include the security interest of any

corporation as seller or lessor in personal property sold or

leased under a conditional sale, bailment lease, chattel

mortgage or other contract providing for the retention of a

lien or title as security for the sales price of the

property.

(2)  The following apply:

(i)  The payroll factor is a fraction, the numerator

of which is the total amount paid in the neighborhood

improvement zone during the tax period by the taxpayer

for compensation and the denominator of which is the

total compensation paid in this Commonwealth during the

tax period.

(ii)  Compensation is paid in the neighborhood

improvement zone if:

(A)  the person's service is performed entirely

within the neighborhood improvement zone;

(B)  the person's service is performed both

within and without the neighborhood improvement zone,

but the service performed without the neighborhood

improvement zone is incidental to the person's

service within the neighborhood improvement zone; or

(C)  some of the service is performed in the

neighborhood improvement zone and the base of

operations or, if there is no base of operations, the

place from which the service is directed or

controlled is in the neighborhood improvement zone,

or the base of operations or the place from which the

service is directed or controlled is not in any

location in which some part of the service is

performed, but the person's residence is in the

neighborhood improvement zone.

(3)  The sales factor is a fraction, the numerator of

which is the total sales of the taxpayer in the neighborhood

improvement zone during the tax period and the denominator of

which is the total sales of the taxpayer in this Commonwealth

during the tax period.

(i)  Sales of tangible personal property are in the

neighborhood improvement zone if the property is

delivered or shipped to a purchaser that takes possession

within the neighborhood improvement zone regardless of

the F.O.B. point or other conditions of the sale.

(ii)  Sales other than sales of tangible personal

property are in the neighborhood improvement zone if:

(A)  the income-producing activity is performed

in the neighborhood improvement zone; or

(B)  the income-producing activity is performed

both within and without the neighborhood improvement

zone and a greater proportion of the income-producing

activity is performed in the neighborhood improvement

zone than in any other location, based on costs of

performance.

(d)  Transfers.--

(1)  Within ten days of receiving notification under

subsection (b), the Secretary of the Budget shall direct the

State Treasurer to, notwithstanding any other law, transfer

the amounts calculated under subsection (b) from the General

Fund to the fund.

(2)  The State Treasurer shall provide quarterly payments

to the contracting authority until the bonds issued to

finance the improvement and development of the neighborhood

improvement zone and the construction of the contracted

facility or facility complex are retired. The payment in each

quarter shall be equal to the balance of the fund on the last

day of the prior calendar quarter.

(e)  Restriction on use of funds.--Funds transferred under

subsection (d):

(1)  May only be utilized for payment of debt service on

bonds issued for the improvement and development of all or

any part of the neighborhood improvement zone and the purpose

of constructing a facility or facility complex.

(2)  May not be utilized for purposes of renovating or

repairing a facility or facility complex, except for capital

maintenance and improvement projects.

(f)  Ticket surcharge.--The entity operating the facility may

collect a capital repair and improvement ticket surcharge, the

proceeds of which shall be deposited into the fund. The funds

shall be maintained and utilized as follows:

(1)  The money deposited under this subsection may not be

encumbered for any reason and shall be transferred to the

entity for capital repair and improvement projects upon

request from the entity.

(2)  Upon the expiration of the neighborhood improvement

zone under section 1606-B, any and all portions of the fund

attributable to the ticket surcharge shall be immediately

transferred to the contracting authority to be held in escrow

where they shall be unencumbered and maintained by the

contracting authority in the same manner as the fund. Upon

the transfer, any ticket surcharge collected by the operating

entity shall thereafter be deposited in the account

maintained by the contracting authority and dispersed for a

capital repair and improvement project upon request by the

operating entity.

Section 1605-B.  Keystone Opportunity Zone.

Within 30 days of the effective date of this section, the

city shall apply to the department to decertify and remove the

designation of all or part of the Keystone Opportunity Zone in

accordance with section 309 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. The department shall act on the

application within 30 days.

Section 1606-B.  Duration.

The neighborhood improvement zone shall be in effect for a

period equal to the length of time of the bonds that are

initially issued.

ARTICLE XVI-E

WATER AND SEWER SYSTEMS

ASSISTANCE BOND AUTHORIZATION

Section 1601-E.  Scope.

This article deals with water and sewer systems assistance

bond authorization.

Section 1602-E.  Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Assistance Act."  The act of July 9, 2008 (P.L.915, No.64),

known as the Water and Sewer Systems Assistance Act.

"Fund."  The Water and Sewer Systems Assistance Bond Fund.

"Issuing officials."  The Governor, the Auditor General and

the State Treasurer.

"Municipality."  As defined in section 3 of the Assistance

Act.

"Nutrient credit."  As defined in section 3 of the Assistance

Act.

"Project."  As defined in section 3 of the Assistance Act.

Section 1603-E.  Water and Sewer Systems Assistance Bond Fund.

(a)  Establishment.--The Water and Sewer Systems Assistance

Bond Fund, which is created in the State Treasury, shall be the

source from which all payments are authorized, with the approval

of the Governor, to carry out the purposes of this section and

as otherwise provided for in the Assistance Act.

(b)  Purpose of fund.--The money in the fund shall only be

utilized in accordance with the provisions of the Assistance Act

for grants and loans to municipalities, public utilities and

other entities implementing projects and for the purchase or

trading of nutrient credits.

(c)  Exemption.--Money in the fund is exempt and not to be

considered under the limitations of section 5(c)(2) of the act

of March 1, 1988 (P.L.82, No.16), known as the Pennsylvania

Infrastructure Investment Authority Act.

Section 1604-E.  Commonwealth indebtedness.

(a)  Borrowing authorized.--

(1)  If the electorate approves a referendum question, in

accordance with the provisions of the Assistance Act, for

incurring indebtedness in the amount and for the purposes

prescribed in the Assistance Act and this article, the

issuing officials, pursuant to the provisions of section 7(a)

(3) of Article VIII of the Constitution of Pennsylvania, are

authorized and directed to borrow, on the credit of the

Commonwealth, money not exceeding in the aggregate the sum of

$400,000,000, in increments of not more than $150,000,000

every year over a three-year period after the effective date

of this section, not including money borrowed to refund

outstanding bonds, notes or replacement notes, as may be

found necessary to carry out the purposes of the Assistance

Act.

(2)  As evidence of the indebtedness, general obligation

bonds of the Commonwealth shall be issued to provide money

necessary to carry out the purposes of the Assistance Act and

this article for the total amounts, in the form, in the

denominations and subject to the terms and conditions of

issue, redemption and maturity, rate of interest and time of

payment of interest, as the issuing officials direct, except

that the latest stated maturity date shall not exceed 20

years from the date of the first obligation issued to

evidence the debt.

(3)  All bonds and notes issued under the authority of

this article must bear facsimile signatures of the issuing

officials and a facsimile of the Great Seal of the

Commonwealth and must be countersigned by an authorized

officer of an authorized loan and transfer agent of the

Commonwealth.

(4)  All bonds and notes issued in accordance with the

provisions of this section shall be direct obligations of the

Commonwealth; and the full faith and credit of the

Commonwealth is pledged for the payment of the interest on

them, as it becomes due, and for the payment of the principal

at maturity. The principal of and interest on the bonds and

notes shall be payable in lawful money of the United States.

(5)  All bonds and notes issued under the provisions of

this section shall be exempt from taxation for State and

local purposes.

(6)  The bonds may be issued as coupon bonds or

registered as to both principal and interest as the issuing

officials determine. If interest coupons are attached, they

shall contain the facsimile signature of the State Treasurer.

(7)  The issuing officials shall provide for amortization

of the bonds in substantial and regular amounts over the term

of the debt so that the bonds of each issue allocated to the

projects to be funded from the bond issue shall mature within

a period not to exceed the appropriate amortization period

for each project as specified by the issuing officials, but

in no case in excess of 20 years. The first retirement of

principal shall be stated to mature prior to the expiration

of a period of time equal to one-tenth of the time from the

date of the first obligation issued to evidence the debt to

the date of the expiration of the term of the debt.

Retirements of principal shall be regular and substantial if

made in annual or semiannual amounts, whether by stated

serial maturities or by mandatory sinking fund retirements.

(8)  The issuing officials are authorized to provide by

resolution for the issuance of refunding bonds for the

purpose of refunding any debt issued under the provisions of

this article and outstanding, either by voluntary exchange

with the holders of the outstanding debt or by providing

funds to redeem and retire the outstanding debt with accrued

interest, any premium payable on the debt and the costs of

issuance and retirement of the debt, at maturity or at any

call date. The issuance of the refunding bonds, the

maturities and other details of the refunding bonds, the

rights of the holders of the refunding bonds and the duties

of the issuing official in respect to the refunding bonds

shall be governed by the applicable provisions of this

section. Refunding bonds, which are not subject to the

aggregate limitation of $400,000,000 of debt to be issued

under the Assistance Act and this article, may be issued by

the issuing officials to refund debt originally issued or to

refund bonds previously issued for refunding purposes.

(9)  If action is to be taken or decision made by the

issuing officials and the issuing officials are not able

unanimously to agree, the action or decision of the Governor

and either the Auditor General or the State Treasurer shall

be binding and final.

(b)  Sale of bonds.--

(1)  When bonds are issued, they shall be offered for

sale at not less than 98% of the principal amount and accrued

interest and shall be sold by the issuing officials to the

highest and best bidder or bidders after due public

advertisement on the terms and conditions and upon open

competitive bidding as the issuing officials direct. The

manner and character of the advertisement and the time of

advertising shall be prescribed by the issuing officials. No

commission shall be allowed or paid for the sale of any bonds

issued under the authority of this article.

(2)  Any portion of any bond issue so offered and not

sold or subscribed for at public sale may be disposed of by

private sale by the issuing officials in the manner and at

prices, not less than 98% of the principal amount and accrued

interest, as the Governor directs. No commission shall be

allowed or paid for the sale of any bonds issued under the

authority of this article.

(3)  When bonds are issued, the bonds of each issue shall

constitute a separate series to be designated by the issuing

officials or may be combined for sale as one series with

other general obligation bonds of the Commonwealth.

(4)  Until permanent bonds can be prepared, the issuing

officials may issue, in lieu of permanent bonds, temporary

bonds in the form and with the privileges as to registration

and exchange for permanent bonds as determined by the issuing

officials.

(5)  The proceeds realized from the sale of bonds and

notes, except refunding bonds and replacement notes, under

the provisions of the Assistance Act and this article shall

be paid into the fund. The proceeds shall be paid by the

State Treasurer periodically to those Commonwealth officers

and Commonwealth agencies authorized to expend them at the

times and in the amounts necessary to satisfy the funding

needs of those Commonwealth agencies. The proceeds of the

sale of refunding bonds and replacement notes shall be paid

to the State Treasurer and applied to the payment of

principal, any accrued interest and premium and the cost of

redemption of the bonds and notes for which the obligations

shall have been issued.

(6)  Pending application for the purposes authorized,

money held or deposited by the State Treasurer may be

invested or reinvested as are other funds in the custody of

the State Treasurer in the manner provided by law. All

earnings received from the investment or deposit of the funds

shall be paid into the State Treasury to the credit of the

fund. The earnings in excess of bond discounts allowed,

expenses paid for the issuance of bonds and notes and

interest arbitrage rebates due to the Federal Government

shall be transferred annually to the fund. Any interest or

investment income shall be applied to assist in the payment

of the debt service incurred in connection with the

Assistance Act and this article.

(7)  The Auditor General shall prepare the necessary

registry book to be kept in the office of the authorized loan

and transfer agent of the Commonwealth for the registration

of any bonds, at the request of owners of the bonds,

according to the terms and conditions of issue directed by

the issuing officials.

(8)  There is appropriated to the State Treasurer from

the fund as much money as may be necessary for all costs and

expenses in connection with the issue of and sale and

registration of the bonds and notes in connection with the

Assistance Act and this article and the payment of interest

arbitrage rebates or proceeds of the bonds and notes.

(c)  Temporary financing authorization.--

(1)  Pending the authorized issuance of bonds of the

Commonwealth, the issuing officials are authorized, in

accordance with the provisions of the Assistance Act and this

article and on the credit of the Commonwealth, to make

temporary borrowings not to exceed three years in

anticipation of the issue of bonds in order to provide funds

in the amounts deemed advisable prior to the issue of bonds.

In order to provide for and in connection with the temporary

borrowings, the issuing officials are authorized in the name

and on behalf of the Commonwealth to enter into any purchase,

loan or credit agreement or other agreement with any bank,

trust company or other lending institution, investment

banking firm or person, in the United States having power to

enter into the agreement. The agreement may contain

provisions which are not inconsistent with the provisions of

the Assistance Act or this article and authorized by the

issuing officials.

(2)  All temporary borrowings made under the

authorization of this section shall be evidenced by notes of

the Commonwealth, which shall be issued for amounts not

exceeding in the aggregate the applicable statutory and

constitutional debt limitation in the form and in the

denominations and subject to terms and conditions of sale and

issue, prepayment or redemption and maturity, rate of

interest and time of payment of interest as the issuing

officials authorize and direct and in accordance with the

Assistance Act and this article. The authorization and

direction may provide for the subsequent issuance of

replacement notes to refund outstanding notes or replacement

notes. The replacement notes shall, upon issuance, evidence

the borrowing and may specify other terms and conditions with

respect to the notes and replacement notes as the issuing

officials determine and direct.

(3)  If the authorization and direction of the issuing

officials provide for the issuance of replacement notes, the

following shall apply:

(i)  The issuing officials are authorized in the name

and on behalf of the Commonwealth to issue, enter into or

authorize and direct the State Treasurer to enter into an

agreement with any bank, trust company, investment

banking firm or other institution or person, in the

United States having the power to enter the agreement:

(A)  To purchase or underwrite an issue or series

of issues or notes.

(B)  To credit, to enter into any purchase, loan

or credit agreement, to draw money pursuant to the

agreement on the terms and conditions set forth in

the agreement and to issue notes as evidence of

borrowings made under the agreements.

(C)  To appoint an issuing and payment agent or

agents with respect to the notes.

(D)  To do other acts as necessary or appropriate

to provide for the payment, when due, of the interest

on and the principal of the notes.

(ii)  The agreements may provide for the compensation

of any purchasers or underwriters of notes or replacement

notes by discounting the purchase price of the notes or

by payment of a fixed fee or commission at the time of

issuance; and all other costs and expenses, including

fees for agreements related to the notes, issuing and

paying agent costs and costs and expenses of issuance,

may be paid from the proceeds of the notes.

(4)  If the authorization and direction of the issuing

officials provide for the issuance of replacement notes, all

subject to the authorization and direction of the issuing

officials, the following apply:

(i)  At or prior to the time of delivery of the notes

or replacement notes, the State Treasurer shall determine

the principal amount, date of issue, interest rate or

procedure for establishing interest rate, rate of

discount, denominations and all other terms and

conditions relating to the issuance.

(ii)  The State Treasurer shall perform all acts and

things necessary to pay or cause to be paid, when due,

all principal of and interest on the notes being refunded

by replacement notes and to assure that the replacement

notes may draw upon any money available for that purpose

pursuant to any purchase, loan or credit agreement

established with respect to the replacement notes.

(5)  Outstanding notes evidencing the borrowings may be

funded and retired by the issuance and sale of the bonds of

the Commonwealth as authorized in this article. The refunding

bonds shall be issued and sold no later than a date three

years after the date of issuance of the first notes

evidencing the borrowings to the extent that payment of the

notes has not otherwise been made or provided for by sources

other than proceeds of replacement notes.

(6)  The proceeds of all the temporary borrowing shall be

paid to the State Treasurer to be held and disposed of in

accordance with the provisions of the Assistance Act and this

article.

(d)  Debt retirement.--

(1)  All bonds issued under the authority of the

Assistance Act and this article shall be redeemed at

maturity, together with all interest due on the bonds; and

these principal and interest payments shall be paid from the

Water and Sewer Systems Assistance Bond Sinking Fund, which

is hereby created. For the specific purpose of redeeming the

bonds at maturity and paying all interest on the bonds in

accordance with the information received from the Governor,

the General Assembly shall appropriate money to the Water and

Sewer Systems Assistance Bond Sinking Fund for the payment of

interest on the bonds and notes and their principal at

maturity. All money paid into the Water and Sewer Systems

Assistance Bond Sinking Fund and all of the money not

necessary to pay accruing interest shall be invested by the

State Treasurer in the securities as are provided by law for

the investment of the sinking funds of the Commonwealth.

(2)  The State Treasurer, with the approval of the

Governor, is authorized to use any of the money in the fund

not necessary for the purposes of the referendum authorizing

the indebtedness necessary to carry out the Assistance Act

and this article for the purchase and retirement of all or

any part of the bonds and notes issued pursuant to the

authorization of this article. If all or any part of the

bonds and notes are purchased, they shall be canceled and

returned to the loan and transfer agent as canceled and paid

bonds and notes; and, after the purchase, all payments of

interest on them shall cease. The canceled bonds, notes and

coupons, together with any other canceled bonds, notes and

coupons, shall be destroyed as promptly as possible after

cancellation but no later than two years after cancellation.

A certification evidencing the destruction of the canceled

bonds, notes and coupons shall be provided by the loan and

transfer agent to the issuing officials. All canceled bonds,

notes and coupons shall be so marked as to make the canceled

bonds, notes and coupons nonnegotiable.

(3)  The State Treasurer shall determine and report to

the Secretary of the Budget by November 1 of each year the