Regular Session 2015-2016 Senate Bill 0907 P.N. 1142

PRINTER'S NO. 1142

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

907

Session of

2015

INTRODUCED BY ARGALL, VULAKOVICH, SCAVELLO, TEPLITZ, LEACH,

BROOKS, WARD, HUTCHINSON, YUDICHAK, MENSCH, STEFANO, BREWSTER

AND HUGHES, JUNE 29, 2015

REFERRED TO FINANCE, JUNE 29, 2015

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," in city revitalization and improvement districts,

expanding the scope to all municipalities by further

providing for definitions, for establishment of contracting

authority, for funds and for transfers; and making editorial

changes.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Article XVIII-C heading of the act of March 4,

1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,

amended July 9, 2013 (P.L.270, No.52), is amended to read:

ARTICLE XVIII-C

[CITY] MUNICIPALITY REVITALIZATION AND IMPROVEMENT ZONES

Section 2. Section 1801-C of the act, added July 9, 2013

(P.L.270, No.52), is amended to read:

Section 1801-C. Scope of article.

This article relates to [city] municipality revitalization

and improvement zones.

Section 3. Section 1802-C of the act, amended or added July

9, 2013 (P.L.270, No.52) and October 31, 2014 (P.L.2929,

No.194), is amended to read:

Section 1802-C. 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:

"Baseline year." The calendar year in which a zone was

established.

"Bond." The term includes any note, instrument, refunding

note or other evidence of indebtedness or obligation.

"City." A city of the third class with a population of at

least 30,000 based on the most recent Federal decennial census

prior to the effective date of section 1803.1-C. The term shall

not include a city [that has had a receiver] for which a

receiver was appointed under Chapter 7 of the act of July 10,

1987 (P.L.246, No.47), known as the Municipalities Financial

Recovery Act, prior to the effective date of section 1803.1-C.

"City revitalization and improvement zone." An area of not

more than 130 acres, comprised of parcels designated by the

contracting authority, which will provide economic development

and job creation within a city.

"Contracting authority." An authority established under 53

Pa.C.S. Ch. 56 (relating to municipal authorities) by a [city,

borough, township or home rule county] municipality for the

purpose of:

(1) designating zones; and

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(2) engaging in the construction, including related site

preparation and infrastructure, reconstruction or renovation

of facilities.

"Department." The Department of Revenue of the Commonwealth.

"Earned income tax." A tax imposed on earned income within a

zone under the act of December 31, 1965 (P.L.1257, No.511),

known as The Local Tax Enabling Act, which a [city]

municipality, or a school district contained entirely within the

boundaries of or coterminous with the [city] municipality, is

entitled to receive.

"Eligible tax." Any of the following taxes:

(1) Corporate net income tax, capital stock and

franchise tax, bank shares tax or business privilege tax,

calculated and apportioned as to amount attributable to the

location within the zone and calculated under section 1904-

B(b) and (c).

(2) Amusement tax, only to the extent the tax is related

to the activity of a qualified business within the zone.

(3) Sales and use tax, only to the extent the tax is

related to the activity of a qualified business within the

zone.

(4) Personal income tax withheld from its employees by a

qualified business for work performed in the zone.

(5) Local services tax withheld from its employees by a

qualified business for work performed in the zone.

(6) Earned income tax withheld from its employees by a

qualified business for work performed in the zone.

(7) Tax paid to the Commonwealth on the sale of liquor,

wine or malt or brewed beverages in the zone.

The term does not include cigarette tax.

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"Facility." A structure or complex of structures to be used

for commercial, sports, exhibition, hospitality, conference,

retail, community, office, recreational or mixed-use purposes.

"Municipality." A city of any class, township, borough or

incorporated town in this Commonwealth.

"Municipality revitalization and improvement zone." An area

of not more than 130 acres, comprised of parcels designated by

the contracting authority, which will provide economic

development and job creation within a municipality.

"Office." The Office of the Budget.

"Pilot zone." An area of not more than 130 acres designated

by the contracting authority following application and approval

by the Department of Community and Economic Development, the

office and the department which will provide economic

development and job creation within a township or borough, with

a population of at least 7,000 based on the most recent Federal

decennial census.

"Qualified business." As follows:

(1) An entity located or partially located in a zone

which meets the requirements of all of the following:

(i) Has conducted an active trade or business in the

zone.

(ii) Appears on the timely filed list under section

1807-C(a).

(2) A construction contractor engaged in construction,

including infrastructure or site preparation, reconstruction

or renovation of a facility located in or partially in the

zone.

(3) The term does not include an agent, broker or

representative of a business.

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"Zone." Any of the following:

(1) A city revitalization and improvement zone

established prior to the effective date of section 1803.1-C.

(2) A pilot zone.

(3) A municipality revitalization and improvement zone.

"Zone Fund." A [city] municipality revitalization and

improvement zone fund established under section 1808-C. The term

includes a city revitalization and improvement zone fund

established prior to the effective date of section 1803.1-C.

Section 4. Section 1803-C of the act, amended October 31,

2014 (P.L.2929, No.194), is repealed:

[Section 1803-C. Establishment of contracting authority.

(a) Authorization.--Except as set forth in subsection (b), a

city, borough or township may establish a contracting authority

to designate a zone under this article.

(b) Distressed cities.--A city that is a distressed city

under the act of July 10, 1987 (P.L.246, No.47), known as the

Municipalities Financial Recovery Act, and is located in a home

rule county may not establish a contracting authority under this

article.

under the Municipalities Financial Recovery Act is located may

establish a contracting authority to designate a zone under this

article within the distressed city.]

Section 5. The act is amended by adding a section to read:

Section 1803.1-C. Contracting authorities.

A municipality may establish a contracting authority to

designate a zone under this article.

Section 6. Sections 1808-C and 1812-C(c)(5) of the act,

added July 9, 2013 (P.L.270, No.52), are amended to read:

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Section 1808-C. Funds.

(a) Notice.--Following the designation of a zone, the

contracting authority shall notify the State Treasurer.

(b) Establishment.--Upon receipt of notice under subsection

(a), the State Treasurer shall establish for each zone a special

fund for the benefit of the contracting authority to be known as

the [City] Municipality Revitalization and Improvement Zone

Fund. Interest income derived from investment of money in a fund

shall be credited by the State Treasury to the fund.

Section 1812-C. Transfers.

* * *

(5) Money transferred under paragraph (3) shall be

repaid to the General Fund by the contracting authority. If

money transferred under paragraph (3) is not repaid to the

General Fund by the contracting authority by the date of the

final payment on the bonds originally issued under section

1813-C(a)(1), the [city or county] municipality which

established the contracting authority shall pay the money not

repaid to the General Fund plus an additional penalty of 10%

of the amount outstanding on the date of the final payment on

the bonds originally issued under section 1813-C(a)(1).

Section 7. All activities initiated for a city

revitalization and improvement zone established under Article

XVIII-C of the act prior to the effective date of this section

shall continue and remain in full force and effect and may be

completed as a municipality revitalization and improvement zone

under Article XVIII-C of the act. Orders, regulations, rules and

decisions which were made relating to a city revitalization and

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improvement zone established under Article XVIII-C of the act

prior to the effective date of this section and which are in

effect on the effective date of this section shall remain in

full force and effect until revoked, vacated or modified as a

municipality revitalization and improvement zone under Article

XVIII-C of the act. Contracts, obligations and collective

bargaining agreements entered into relating to a city

revitalization and improvement zone established under Article

XVIII-C of the act prior to the effective date of this section

are not affected nor impaired by the authorization of

municipality revitalization and improvement zones under Article

XVIII-C of the act.

Section 8. This act shall take effect in 60 days.

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