PRIOR PRINTER'S NOS. 1416, 2828 PRINTER'S NO. 4222
No. 1256 Session of 1995
INTRODUCED BY GLADECK, HASAY, LESCOVITZ, FLEAGLE, GODSHALL,
FICHTER, BAKER, HENNESSEY, DEMPSEY, PITTS, LYNCH, J. TAYLOR,
BUNT, GEIST, ARMSTRONG, FLICK, E. Z. TAYLOR, KING,
HUTCHINSON, CHADWICK, HERMAN, DURHAM, DRUCE, SEMMEL, MARSICO,
MILLER, LEH, HERSHEY, STERN, DALEY, ADOLPH, S. H. SMITH,
TRELLO, B. SMITH, RAYMOND, CLARK, CORNELL, PHILLIPS,
L. I. COHEN, RUBLEY, SERAFINI, BOSCOLA, MERRY, BROWN, BROWNE,
ARGALL, DENT AND RAMOS, MARCH 20, 1995
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
NOVEMBER 13, 1996
AN ACT
1 Establishing a demonstration tax-free development zone program;
2 providing for a land value tax and for businesses that
3 qualify for tax exemptions; and requiring audits.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Tax-Free
8 Development Zone Demonstration Program Act.
9 Section 2. Legislative findings and declaration of purpose.
10 (a) Legislative findings.--The General Assembly finds and
11 declares as follows:
12 (1) A recent study of existing state enterprise zone
13 programs in the United States concluded that:
14 (i) Notable improvements occurred in many zones.
15 (ii) Job growth rates were higher than the national
1 average over a comparable period of time in many zones.
2 (iii) The typical zone experienced the additional
3 investment of several new and expanding businesses.
4 (iv) New firms and the expansion of existing
5 establishments accounted for more than 80% of the
6 establishments in which investments occurred.
7 (v) Manufacturing activities accounted for 73% of
8 all zone investment activity and job gains.
9 (vi) The state and local incentives, including tax
10 incentives, were relatively low-cost inducements and
11 quite small in relation to job gains.
12 (vii) A significant number of state-sponsored
13 enterprise zones have achieved notable successes in
14 revitalizing some of their economically distressed areas.
15 (2) In spite of this, the study cautioned that:
16 (i) The selection of only zones that meet the
17 designation criteria for the most severely distressed
18 areas may result in the choosing of zones with limited
19 development potential.
20 (ii) The good intentions of some incentives for
21 businesses to locate or expand in an enterprise zone were
22 lost by severely restrictive qualification criteria.
23 (3) A recent Statewide survey of Pennsylvania businesses
24 concerning this Commonwealth's economy concluded that:
25 (i) The current system of local services and taxes
26 is a cause of dissatisfaction among many firms in this
27 Commonwealth.
28 (ii) Few firms are using existing State economic
29 development programs.
30 (iii) State economic development programs must be
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1 redesigned to accommodate the new directions and
2 activities being undertaken by businesses in this
3 Commonwealth.
4 (4) While the Commonwealth's existing Enterprise
5 Development Area Program, administered by the Department of
6 Community Affairs AND ITS SUCCESSOR, THE DEPARTMENT OF <--
7 COMMUNITY AND ECONOMIC DEVELOPMENT, since 1982, has been
8 successful in stimulating economic and community development
9 in this Commonwealth's designated enterprise zone
10 communities, this program is notably deficient because:
11 (i) Municipalities must apply and be approved for
12 participation, which results in waiting lists, time
13 delays and administrative expenses.
14 (ii) State program financial assistance targeted to
15 these approved designated zones, including tax credits,
16 is limited by the Commonwealth's financial resources
17 available during any given fiscal year.
18 (iii) There is a need to increase the business tax
19 incentives available to encourage new businesses to
20 locate in these zones and for existing businesses already
21 located in these zones to expand.
22 (iv) There is a need to expedite the process of
23 private sector investment in all of this Commonwealth's
24 urban centers, not only in existing designated zones
25 under the Enterprise Development Area Program currently
26 administered by the Department of Community Affairs AND <--
27 ECONOMIC DEVELOPMENT.
28 (5) Expediting economic development activities in urban
29 areas of this Commonwealth would implement the
30 recommendations made by the Select Committee on Land Use and
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1 Growth Management of the House of Representatives in its
2 final report to the General Assembly in June 1992, which
3 encouraged increased commercial, industrial and housing
4 development in this Commonwealth's urban centers where
5 infrastructure needed to support new development is already
6 in place, thus preserving this Commonwealth's limited
7 farmland, open space and natural resources.
8 (b) Declaration of purpose.--Based on the findings under
9 subsection (a), it is the purpose of this act to:
10 (1) Establish tax-free zones in this Commonwealth's
11 urban centers as an inducement to expedite private sector
12 investment, the result of which will be increased community
13 and economic development activities, including the creation
14 of new employment and housing opportunities FOR RECIPIENTS OF <--
15 ASSISTANCE UNDER THE ACT OF JUNE 13, 1967 (P.L.31, NO.21),
16 KNOWN AS THE PUBLIC WELFARE CODE.
17 (2) Indicate the size of the municipality that would be
18 eligible to participate.
19 (3) Specify the type of area which would qualify as a
20 tax-free zone.
21 (4) Simplify the application process, qualification
22 criteria and administrative procedures currently associated
23 with the Commonwealth's existing Enterprise Development Area
24 Program for tax-free zone designation under this act.
25 (5) Provide a list of the business taxes which would be
26 exonerated in these zones.
27 (6) Establish municipal qualification and implementation
28 procedures, including the initiation of a land value tax
29 system in the municipality.
30 (7) Establish a municipal certification process for
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1 businesses that qualify for the tax exemptions.
2 (8) Require Department of Revenue audits for
3 participating municipalities and qualified businesses.
4 Section 3. Definitions.
5 The following words and phrases when used in this act shall
6 have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 "Business entity" or "business." Any corporation,
9 partnership, sole proprietorship or other entity authorized to
10 do business in this Commonwealth and subject to any of the taxes
11 imposed by Article III, IV or VI of the act of March 4, 1971
12 (P.L.6, No.2), known as the Tax Reform Code of 1971.
13 "Business income." Business income as defined in section 401
14 2(a)(1)(A) of Article IV of the act of March 4, 1971 (P.L.6,
15 No.2), known as the Tax Reform Code of 1971.
16 "DEPARTMENT." THE DEPARTMENT OF COMMUNITY AND ECONOMIC <--
17 DEVELOPMENT OF THE COMMONWEALTH.
18 "Joint tax-free zone." A tax-free zone established by two or
19 more contiguous municipalities which includes areas in each
20 municipality.
21 "Municipal corporation" or "municipality." Any first class,
22 second class, second class A or third class city, borough,
23 incorporated town OR township with a total population of 3,000 <--
24 or more.
25 "Population." The number of persons in each municipality as
26 finally determined by the United States Census Bureau of the
27 United States Department of Commerce in its most recent
28 population estimate report.
29 "Tax-free zone." A specific area with identifiable
30 boundaries within a qualified municipality that has been
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1 designated as a tax-free zone.
2 Section 4. Establishment of tax-free development zones.
3 (a) Establishment.--A municipality or municipalities may
4 establish a specific geographic area or areas within its
5 boundaries as a tax-free zone or a joint tax-free zone, under
6 the requirements of section 6.
7 (b) Requirements.--While there is no limitation on the size
8 of the tax-free zone or zones which a municipality may
9 designate, areas IN NO CASE SHALL AN ENTIRE MUNICIPALITY BE <--
10 DESIGNATED AS A TAX-FREE ZONE. AREAS so designated shall at the
11 time of the zone's establishment:
12 (1) Be predominately zoned commercial and/or industrial
13 or, where there is no zoning, have a current land use in the
14 designated area reflective of the same.
15 (2) Be economically distressed in terms of lacking
16 adequate employment opportunities within the designated area
17 or areas.
18 (3) Show signs of existing physical deterioration of
19 buildings and structures in the area or have significant <--
20 potential for the same without new investment in the area.
21 (4) Show signs of blight and unsafe, unsanitary and
22 inadequate conditions of the dwellings, excessive land
23 coverage by the buildings and economically and socially
24 undesirable land uses.
25 (5) Have the potential of being a catalyst for the
26 creation of a positive economic climate in the community
27 resulting in the formation of new businesses and the
28 expansion of existing businesses within the area.
29 (6) Have the potential of being a catalyst for an
30 improved quality of life in the municipality, including
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1 expanded affordable housing opportunities, which would result
2 from new and expanded development in the area.
3 (7) Provide new jobs and increased employment
4 opportunities for disadvantaged citizens and displaced and
5 unemployed workers within the municipality.
6 (8) Have commercial business and/or industrial sites and
7 structures available within the designated zone or zones with
8 adequate infrastructure and energy availability, capable of
9 supporting new and expanded development.
10 (9) Have existing commercial businesses and/or
11 industries ready and willing to reinvest and expand within
12 the area, if the area was designated as a tax-free zone.
13 (c) Location.--An area designated as a tax-free zone under
14 this act may be located within an existing enterprise zone
15 approved by the Department of Community Affairs DEPARTMENT under <--
16 the Commonwealth's existing Enterprise Development Area Program.
17 (d) Tax exemptions.--A business located or locating in tax-
18 free zones under this act, upon the municipality meeting the
19 requirements under section 6, shall be eligible for the
20 applicable tax exonerations under section 9.
21 Section 5. Certification by Department of Community Affairs <--
22 DEPARTMENT. <--
23 (a) Consideration.--Upon submittal by a municipality of a
24 preliminary description of a tax-free zone under section
25 6(a)(1), the Department of Community Affairs DEPARTMENT may <--
26 certify the proposed zone generally and each business
27 recommended for tax exoneration specifically. The certification
28 shall be based on whether or not the area chosen by the
29 municipality and the businesses within that area comply with the
30 intent of the act as expressed in section 2 AND HAVE THE <--
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1 POTENTIAL TO INCREASE FUTURE STATE AND LOCAL TAX REVENUES AS A
2 RESULT OF JOBS CREATED AND ECONOMIC DEVELOPMENT STIMULATED
3 WITHIN THE ZONE.
4 (b) Criteria.--IN ORDER TO CERTIFY A TAX-FREE ZONE, THE <--
5 DEPARTMENT SHALL DO THE FOLLOWING:
6 (1) The Department of Community Affairs shall promulgate <--
7 (1) THE DEPARTMENT SHALL PROMULGATE AND APPLY criteria <--
8 which objectively measures the following:
9 (i) The proposed zone's compliance with the intent
10 of the act as expressed in section 2.
11 (ii) The fiscal status of the entire municipality
12 proposing the zone.
13 (iii) The compliance of each business with the
14 intent of the act as expressed in section 2.
15 (IV) THE POTENTIAL TO INCREASE FUTURE STATE AND <--
16 LOCAL TAX REVENUES AS A RESULT OF JOBS CREATED AND
17 ECONOMIC DEVELOPMENT STIMULATED WITHIN THE ZONE.
18 (2) The Department of Community Affairs DEPARTMENT shall <--
19 limit its certification of businesses within the tax-free
20 zone to retail, commercial and industrial businesses and
21 shall deny certification to businesses whose regular course
22 of trade consists of real property speculation that does not
23 comply with the intent of the act expressed in section 2.
24 (3) The Department of Community Affairs DEPARTMENT shall <--
25 base its decision to certify or withhold certification a tax-
26 free zone or the businesses in it based on these criteria.
27 (c) Tax exonerations.--When THE DEPARTMENT CERTIFIES a tax- <--
28 free zone and the businesses in it have been certified by the <--
29 Department of Community Affairs, the Department of Community
30 Affairs, IT shall send the following information to the <--
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1 Department of Revenue:
2 (1) a list of all certified businesses in the zone; and
3 (2) the estimated amount of tax exoneration each
4 business is eligible for.
5 (d) Resubmittal.--Any municipality whose preliminary
6 description is not certified may address the concerns that the
7 Department of Community Affairs DEPARTMENT based its decision on <--
8 and resubmit the amended preliminary description for
9 certification.
10 (e) Time limitation.--If the Department of Community Affairs <--
11 DEPARTMENT has not notified the municipality of its decision <--
12 within 60 days of the submittal, the preliminary description
13 shall be deemed to be certified.
14 (F) CERTIFICATION OF CRITICAL ECONOMIC AREAS.--THE <--
15 DEPARTMENT SHALL GIVE PRIORITY IN THE CERTIFICATION OF TAX-FREE
16 ZONES TO MUNICIPALITIES WHICH HAVE BEEN DESIGNATED AS CRITICAL
17 ECONOMIC AREAS OR ARE LOCATED IN COUNTIES WHICH HAVE BEEN
18 DESIGNATED AS CRITICAL ECONOMIC AREAS PURSUANT TO THE ACT OF MAY
19 17, 1956 (1955 P.L.1609, NO.537), KNOWN AS THE PENNSYLVANIA
20 INDUSTRIAL DEVELOPMENT AUTHORITY ACT.
21 Section 6. Implementation procedure.
22 (a) Requirements.--A municipality wishing to designate an
23 area or areas within the municipality as a tax-free zone shall:
24 (1) Submit a preliminary description of the area or
25 areas to be designated as a tax-free zone or zones and the
26 specific businesses to receive tax exonerations to the
27 Department of Community Affairs, or its successor agency or <--
28 assigns, DEPARTMENT to be certified under section 5. The <--
29 preliminary description submitted must be a faithful
30 representation of the tax-free zone to be included in the
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1 ordinance required in paragraph (2). In preparing the
2 preliminary description, the municipality shall consult with
3 nonprofit community development corporations located within
4 the municipality in order to gain their input on what
5 geographical areas are best suited to tax-free zone status.
6 (2) Pass an ordinance indicating a desire to designate
7 an area or areas within the corporate boundaries of the
8 municipality as a tax-free zone or zones under the
9 requirements of this act.
10 (3) Indicate in the ordinance that the area or areas to
11 be so designated meet the qualification requirements of
12 section 4 for a tax-free zone designation.
13 (4) Include as part of the ordinance a clear and
14 complete narrative description of the boundaries of the
15 proposed zone or zones, accompanied by a map. Both the
16 description and the map shall indicate the names of all
17 perimeter and interior streets, bridges, streams and creeks,
18 as well as other natural and manmade landmarks and monuments.
19 The approximate total acreage or square mileage for the
20 proposed zone or zones shall also be included.
21 (5) Include as part of the ordinance a map indicating
22 each parcel of real property located within the zone or zones
23 to be designated as tax-free zones. Vacant land and vacant or
24 underutilized buildings shall be so indicated on the map
25 identifying the parcels of real property within each zone.
26 Parcels on which an existing operating business is located
27 shall also be indicated.
28 (6) Include as part of the ordinance a specific plan the
29 municipality will implement to attract and retain businesses
30 within the zone THAT HAVE THE POTENTIAL TO INCREASE STATE AND <--
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1 LOCAL TAX REVENUES AS A RESULT OF JOBS CREATED AND ECONOMIC
2 DEVELOPMENT STIMULATED.
3 (7) Include as a part of the ordinance a list of the
4 businesses the municipality will recommend to the Department <--
5 of Community Affairs DEPARTMENT for the tax exonerations <--
6 granted under this act.
7 (b) Changes.--Subsequent changes to the boundaries of tax-
8 free zones may be made by a municipality following the initial
9 establishment of the zones. Any changes made shall be reflected
10 in the information required to be submitted to the Department of
11 Revenue under section 8.
12 Section 7. Land value tax.
13 A municipality wishing to designate an area or areas within
14 the municipality as a tax-free zone may, prior to AFTER passing <--
15 the ordinance required by section 5 6, levy separate and <--
16 different rates of taxation for municipal purposes on all real
17 estate classified as land, exclusive of the buildings thereon,
18 and on all real estate classified as buildings, WHICH LANDS AND <--
19 BUILDINGS ARE LOCATED WITHIN THE TAX-FREE ZONE. When real estate
20 tax rates are so levied:
21 (1) The rates shall be determined by the requirements of
22 the municipal budget as approved by the governing body.
23 (2) A higher rate shall be levied on the land than on
24 the buildings situated on the land.
25 (3) The combined rate shall in the aggregate not exceed
26 the maximum rate allowed by law on both land and buildings.
27 (4) The rates shall be uniform as to all real estate
28 within the municipality.
29 Section 8. Municipal certification of businesses that qualify
30 for tax exemptions.
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1 (a) Tax filing.--A municipality that has enacted an
2 ordinance under section 6 shall file with the Department of
3 Revenue and the Department of Commerce COMMUNITY AND ECONOMIC <--
4 DEVELOPMENT by December 31 of each year the following:
5 (1) For the first year only, following enactment of the
6 ordinance, a copy of the municipal ordinance establishing a
7 tax-free zone or zones.
8 (2) For the first year following enactment of the
9 ordinance and for each subsequent year:
10 (i) A parcel identification map for each tax-free
11 zone established, indicating each parcel occupied by a
12 business that qualifies for a tax exemption allowed under
13 section 9.
14 (ii) A list corresponding to the parcel
15 identification map, which indicates:
16 (A) The name and mailing address of each
17 qualified business indicated on the map.
18 (B) The name and mailing address of the owner or
19 owners of each qualifying business indicated on the
20 map.
21 (C) The State tax identification number issued
22 by the department for each qualifying business
23 indicated on the map.
24 (b) Apportionment.--In case the entire business of any
25 business entity eligible for tax exoneration is not transacted
26 within a tax-free zone, the tax exonerations provided by this
27 act shall be apportioned as follows:
28 (1) Tax exonerations shall be apportioned by a fraction,
29 the numerator of which is the property factor plus the
30 payroll factor and the denominator of which is two. The
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1 property factor and the payroll factor shall be determined in
2 accordance with Article IV of the act of March 4, 1971
3 (P.L.6, No.2), known as the Tax Reform Code of 1971.
4 (2) For the purpose of construing this subsection, when
5 the following words and phrases are used in Article IV of the
6 Tax Reform Code, they shall have the meanings given to them
7 in this paragraph unless the context clearly indicates
8 otherwise:
9 "Corporation." Any corporation, partnership, sole
10 proprietorship or other entity authorized to do business in
11 this Commonwealth and subject to any of the taxes imposed by
12 Articles III, IV or VI of the Tax Reform Code of 1971.
13 "State" or "Commonwealth." A tax-free zone as provided
14 by this act.
15 Section 9. Taxes exonerated in tax-free development zones.
16 (a) Exoneration.--In accordance with section 2(b)(iii) of
17 Article VIII of the Constitution of Pennsylvania, businesses
18 which meet the criteria of subsection (e) shall be eligible for
19 exoneration from certain taxes as provided for under subsection
20 (b).
21 (b) Schedule.--A business shall be exonerated from the taxes
22 imposed by Articles III, IV and VI of the Tax Reform Code of
23 1971 in accordance with the following exemption schedule:
24 (1) 20% of total taxes eligible for exoneration in the
25 first year in which the existing business is located in a <--
26 tax-free development zone.
27 (2) 40% of total taxes eligible for exoneration in the
28 second year in which the existing business is located in a <--
29 tax-free development zone.
30 (3) 60% of total taxes eligible for exoneration in the
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1 third year in which the existing business is located in a <--
2 tax-free development zone.
3 (4) 80% of total taxes eligible for exoneration in the
4 fourth year in which the existing business is located in a <--
5 tax-free development zone.
6 (5) 100% of total taxes eligible for exoneration in the
7 fifth year in which the business is located in a tax-free
8 development zone and in each year thereafter.
9 (c) Reinvestment.--For purposes of obtaining the phased-in
10 tax exemptions under subsection (b), a business must have
11 reinvested into its business within the tax-free zone an amount
12 equivalent to the amount of tax liability exempted in any given
13 year or years or have in the aggregate reinvested the total
14 amount of the tax liability for the four years prior to being
15 totally tax exempt in year five as provided for under subsection
16 (b). Where the equivalent reinvestment is not made annually, an
17 amount equal to the tax liability waived shall be annually
18 placed in an escrow account, and the amount in the escrow
19 account must be reinvested in the property by the end of year
20 four or encumbered or under contract for reinvestment in the
21 property by the end of year four, for the property to be tax
22 exempt in year five as provided for under subsection (b).
23 (d) Limitation.--The exoneration provided for in this
24 section shall be effective for a 15-year period.
25 (e) Eligibility.--Businesses located in the tax-free zone at
26 the time the zone is established and new businesses within the
27 zone are eligible for the exoneration provided for in this
28 section. Businesses relocating to a tax-free zone from other
29 areas in this Commonwealth shall not be eligible for the
30 exoneration provided for in this section.
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1 Section 10. Amount of exoneration.
2 (a) Limit on business.--The amount of tax exonerations
3 granted in the first fiscal year following enactment of this act
4 shall be $21,000,000. In each subsequent year the tax
5 exonerations shall be in the following amounts:
6 (1) $21,000,000 in new exonerations to eligible
7 businesses that have not yet received an exoneration; and
8 (2) an amount necessary to fund the exonerations granted
9 in previous years in accordance with section 9.
10 (b) Location of business.--The amount of exonerations
11 granted to businesses in a single municipality under subsection
12 (a)(1) may not exceed 10% of the total annual amount granted
13 under subsection (a).
14 (C) PRIORITY FOR EXONERATION.--IF THE REQUESTS FOR <--
15 EXONERATIONS EXCEED THE AMOUNTS SPECIFIED IN SUBSECTION (A),
16 PRIORITY FOR TAX EXONERATION SHALL BE GIVEN TO ELIGIBLE
17 BUSINESSES WITHIN MUNICIPALITIES WHICH HAVE BEEN DESIGNATED AS
18 CRITICAL ECONOMIC AREAS OR ARE LOCATED IN COUNTIES WHICH HAVE
19 BEEN DESIGNATED AS CRITICAL ECONOMIC AREAS PURSUANT TO THE ACT
20 OF MAY 17, 1956 (1955 P.L.1609, NO.537), KNOWN AS THE
21 PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY ACT.
22 Section 11. Recapture.
23 Any business receiving a tax exoneration under section 9 that
24 relocates out of the tax-free zone within ten years of receiving
25 the exemption must repay a portion of the amount exonerated
26 according to the following schedule:
27 (1) relocation within four years - 70%;
28 (2) four years to five years - 60%;
29 (3) five years to six years - 50%;
30 (4) six years to seven years - 40%;
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1 (5) seven years to eight years - 30%;
2 (6) eight years to nine years - 20%; and
3 (7) nine years to ten years - 10%.
4 Section 12. Priority.
5 The Department of Commerce and the Department of Community <--
6 Affairs, or its successor agency or assigns, shall give THE <--
7 DEPARTMENT SHALL GIVE municipalities with tax-free zones
8 priority consideration in any assistance programs for which they
9 are eligible.
10 Section 13. Audits.
11 (a) Municipalities.--The Department of Revenue shall conduct
12 periodic audits of municipalities that establish tax-free zones
13 as often as deemed necessary to insure compliance with the
14 provisions of this act.
15 (b) Businesses.--The Department of Revenue shall conduct
16 periodic audits of businesses which municipalities have
17 indicated are located in tax-free zones and qualify for tax
18 exemptions under section 9 as often as deemed necessary to
19 insure compliance with the provisions of this act.
20 Section 14. Regulations.
21 (A) TAX INFORMATION.--The Department of Revenue is <--
22 authorized to adopt any TAX forms, procedures, rules and <--
23 regulations as may be necessary to implement and insure
24 compliance with the provisions of this act RELATING TO TAX <--
25 COLLECTION.
26 (B) EXONERATION INFORMATION.--THE DEPARTMENT OF COMMUNITY <--
27 AND ECONOMIC DEVELOPMENT MAY PROMULGATE REGULATIONS ITS
28 SECRETARY DEEMS TO BE NECESSARY TO CARRY OUT THE CERTIFICATION
29 AND ECONOMIC DEVELOPMENT PROVISIONS OF THIS ACT.
30 (C) DUTY OF DEPARTMENT TO COLLECT DATA.--WITHIN TWO YEARS OF
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1 THE EFFECTIVE DATE OF THIS ACT, BOTH DEPARTMENTS SHALL BEGIN TO
2 COLLECT DATA ON THE EFFECT THIS ACT HAS HAD ON THE
3 MUNICIPALITIES THAT HAVE ESTABLISHED TAX-FREE ZONES. THE
4 DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT SHALL
5 PROMULGATE OBJECTIVE CRITERIA TO MEASURE THE EFFECT OF THE
6 PROGRAM. THE CRITERIA SHALL BE DESIGNED TO DETERMINE IF PRIVATE
7 INVESTMENT HAS OCCURRED IN THOSE MUNICIPALITIES THAT WOULD NOT
8 HAVE OCCURRED WITHOUT THE INCENTIVES PROVIDED BY THIS ACT.
9 Section 15. Sunset.
10 (a) Five year expiration date.--Five years after its
11 effective date the General Assembly shall either terminate or
12 reestablish the act. If the General Assembly terminates the act,
13 all regulations promulgated under it shall expire.
14 (b) Duty of Department of Community Affairs to collect <--
15 data.--Within two years of the effective date of this act, the
16 Department of Community Affairs shall begin to collect data on
17 the effect the act has had on the municipalities that have
18 established tax-free zones. The Department of Community Affairs
19 shall promulgate objective criteria to measure the effect of the
20 program. The criteria shall be designed to determine if private
21 investment has occurred in those municipalities that would not
22 have occurred without the incentives provided by the act.
23 (c) (B) Duty of Department of Community Affairs DEPARTMENT <--
24 to make report.--One year prior to the reconsideration of the
25 act by the General Assembly, the Department of Community Affairs <--
26 DEPARTMENT shall submit a report to the General Assembly on the <--
27 effectiveness of the act to date. The report shall recommend one
28 of the following actions:
29 (1) extension of the act as it is currently written for
30 a five-year period;
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1 (2) extension of the act with amendments contained in
2 the report for a five-year period; or
3 (3) termination of the act.
4 (d) Status of tax exonerations upon expiration.--Upon
5 termination of the act, tax exonerations already granted under
6 the act shall continue for the 15-year period contained in the
7 act.
8 Section 16. Effective date.
9 This act shall take effect in 60 days.
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