PRINTER'S NO. 1413

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

900

Session of

2019

INTRODUCED BY SCARNATI, CORMAN, BARTOLOTTA, KILLION, GORDNER,

BROWNE, MENSCH, K. WARD, YUDICHAK, VOGEL, PITTMAN, SCAVELLO,

REGAN AND J. WARD, NOVEMBER 26, 2019

Manufacturing Initiative Fund, the Keystone Energy Zone

Program and the Keystone Energy Zone Fund; and imposing

powers and duties on the Department of Revenue.

Chapter 1. Preliminary Provisions

Section 101. Short title.

Section 102. Findings and declarations.

Section 103. Definitions.

Chapter 2. Max Manufacturing Initiative Fund

Section 201. Establishment.

Chapter 4. Shared Equipment Grants

Section 401. Establishment.

Section 402. Eligibility.

Section 403. Process and application.

Section 404. Matching funds.

Section 405. Appropriation.

Chapter 5. Max Manufacturing Research Grants

Section 501. Establishment.

Section 502. Process and application.

Section 503. Match.

Section 605. Guidelines.

Section 606. Keystone Energy Zone Fund.

Section 607. Tax prohibition.

Section 608. Property assessment.

Section 609. Duration.

Section 610. Commonwealth pledge.

Section 611. Confidentiality.

Section 612. Limitations.

Chapter 7. Reporting Requirements and Public Access

Section 701. Reporting requirements.

CHAPTER 1

Section 101. Short title.

This act shall be known and may be cited as the Max

Manufacturing Initiative Act.

Section 102. Findings and declarations.

The General Assembly finds and declares as follows:

(1) The intent of this act is to leverage the proximity

of abundant shale gas with university and private research

and engineering expertise to establish public-private

and business incentives to attract high-technology industries

for advanced manufacturing in this Commonwealth to:

(i) Advance and promote the general welfare of the

residents of this Commonwealth.

(ii) Foster stronger business alliances, which will

increase employment opportunities for Pennsylvanians.

(iii) Maximize the research capabilities of the

State-related institutions within this Commonwealth.

(iv) Establish this Commonwealth and its university

and business partnerships as international leaders in

facilities and infrastructures within this Commonwealth

to leverage and maximize the research and development of

advanced materials and manufacturing techniques for

producing high-value products.

(vi) Pool investments as necessary to create and

design academic and work programming that includes

academic restructuring and attracting new industry-driven

workforce and job training centers to convert and sustain

existing regional workforces to next-generation

manufacturing models and goals.

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Advanced manufacturing." New manufacturing activities or

technologies which depend on the use and coordination of

information, automation, computation, software, sensing and

networking, or make use of materials and capabilities enabled by

the physical and biological sciences and which may involve new

ways to manufacture existing products or the manufacture of new

products emerging from new advanced technologies.

"Alternative energy sources." As defined in section 2 of the

is eligible to apply for and receive redevelopment assistance

capital grants or Commonwealth grants under this act.

"Application." A document submitted to the Ben Franklin

Technology Development Authority, Department of Revenue or other

agency under this act to secure funding or designation.

"Application process." The steps necessary to initiate

consideration for funding or designation under this act.

"Ben Franklin Technology Development Authority." The Ben

Franklin Technology Development Authority created under the act

of June 22, 2001 (P.L.569, No.38), known as The Ben Franklin

"Contracting authority." An authority created under 53

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

purpose of designating a Keystone Energy Zone and constructing a

facility or other authority created under the laws of this

Commonwealth that is eligible to apply for and receive

redevelopment assistance capital grants under the Capital

Facilities Debt Enabling Act.

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

"Earned income tax." A tax or portion of a tax imposed on

earned income within a Keystone Energy Zone under the act of

to receive. For purposes of this definition, the term

"municipality" shall mean a city, borough, incorporated town or

township.

"Final determination." A final decision issued in writing by

the Ben Franklin Technology Development Authority.

"Fund." The Max Manufacturing Initiative Fund established

under section 201.

"Keystone Energy Zone." A clearly defined contiguous

geographic area comprising one or more political subdivisions

located in a county that:

that is approved by the department for which all taxes

generated in the Keystone Energy Zone, except school district

and city taxes, can be used to pay debt service on financed

improvements within the Keystone Energy Zone.

"Master list." The list of qualified businesses under

section 606(d).

"Matching funds." Cash or in-kind contributions that

leverage non-Commonwealth funding to enhance the initiative.

"Operating organization." An entity that contracts directly

with the contracting authority to lease or operate a shared

"Public entity." A Commonwealth agency as defined in 62

Pa.C.S. § 103 (relating to definitions) or a municipal

authority. The term does not include the General Assembly and

its members, officers or agencies or a court or other office or

agency of the Pennsylvania judicial system.

"Public-private partnership." An agreement between a public

entity and at least one private entity for the construction,

acquisition, management or operation of a facility created under

a shared research infrastructure project.

"Qualified business." An entity authorized to conduct

activities relating to advanced manufacturing, including, but

not limited to, land acquisition, acquisition or construction of

buildings, equipment, furnishings, site preparation, road and

highway improvements, water and sewer infrastructure or other

infrastructure development.

"State-related institution." Any of the following

institutions of higher education:

(1) Lincoln University.

(2) Temple University.

(3) The Pennsylvania State University.

the Ben Franklin Technology Development Authority containing

accounts to issue grants to support public-private partnerships

grants, shared equipment grants and max manufacturing research

grants. The Ben Franklin Technology Development Authority shall

be responsible for oversight, management and operation of the

fund.

CHAPTER 3

PUBLIC-PRIVATE PARTNERSHIPS GRANTS

Section 301. Establishment.

There is established an account within the fund which shall

The receipt of grants of Commonwealth money by a public-

private partnership under this chapter to finance costs related

to a shared research infrastructure project shall be subject to

the requirements of this chapter.

Section 303. Eligibility.

In order for a shared research infrastructure project to

qualify for grants of Commonwealth money under this chapter, the

applicant shall:

(1) Be a public-private partnership that includes a

State-related institution.

matching funds from non-State sources in an amount equal to

the amount being requested in the application.

(3) Demonstrate that the shared research infrastructure

project to be funded furthers the goals of this act, as

determined by the Ben Franklin Technology Development

Authority.

Section 304. Process and application.

(a) Application process.--The Ben Franklin Technology

Development Authority shall establish an application process for

grants under this chapter no more than 90 days after the

following:

(1) Whether the project proposed to be funded is

authorized under this act.

(2) The applicant's successful completion of the

application, including any additional material or information

requested by the Ben Franklin Technology Development

Authority.

(3) The goals outlined in the application, including,

but not limited to, the project's goals for spurring

innovation, creating jobs and attracting private investment

Representatives.

Section 606. Keystone Energy Zone Fund.

Energy Zone Fund.

for failure to timely pay State taxes, the following shall

apply:

(i) (A) Failure to file a timely and complete

report under paragraph (1) shall result in the

imposition of a penalty of 10% of all State taxes

calculated in accordance with subsection (e) that

were payable by the qualified business in the prior

calendar year. In no case shall the penalty imposed

be less than $1,000.

(B) When the penalty is received, the money

calculated in accordance with subsection (e) by a

contracting authority which were payable by the

qualified business in the prior calendar year. In no

case shall the penalty imposed be less than $250.

(ii) (A) Failure to report a qualified business

operating in the Keystone Energy Zone to the

contracting authority by an operating organization in

accordance with subsection (d)(2) shall result in the

imposition of a penalty by the contracting authority

upon the operating organization of 100% of the taxes

(B) The contracting authority may not waive or

abate any penalties imposed under this subparagraph.

(C) When the penalty is received, the money

shall be transferred from the General Fund to the

account of the contracting authority that designated

the Keystone Energy Zone in which the qualifying

business is located.

(iii) (A) Failure to file a timely and complete

report under paragraph (1) by a qualified business

engaged in the active conduct of a trade or business

report. The penalty may not be less than $1,000.

(B) If the qualified business is properly

included on the master list provided under subsection

(d), the contracting authority may waive or abate

penalties imposed under this subparagraph equal to

the total taxes paid by the qualified business which

are certified under this subsection. When the penalty

is received, the money shall be deposited in the

account of the contracting authority that designated

the Keystone Energy Zone in which the qualifying

penalty is received, the money shall be transferred from the

General Fund to the account of the contracting authority that

designated the Keystone Energy Zone in which the qualified

business is located.

(4) Within 31 days of the end of each calendar year,

each qualified business shall file a report with the local

taxing authority reporting all local taxes, calculated in

accordance with subsection (e), which were paid by the

qualified business in the prior calendar year. The report

from each qualified business shall list any local refund of

(1) Except as provided under paragraph (2), within five

days after the end of each month, the legal business names,

business addresses within a Keystone Energy Zone and parcel

numbers of all qualified businesses engaged in the active

conduct of a trade or business during the previous month

shall be provided to the contracting authority by or on

behalf of the qualified business for purposes of inclusion on

the master list. The name, telephone number and e-mail

address of the person employed by the qualified business who

is primarily responsible for completing reports for the

an operating organization shall provide to the contracting

authority the legal business names and business addresses

within the Keystone Energy Zone of all qualified businesses

engaged in the active conduct of a trade or business in the

Keystone Energy Zone during the previous month along with the

name, telephone number and e-mail address of the individual

employed by the qualified business who is primarily

responsible for completing the reports for the qualified

business required under subsection (c).

(3) Within 10 days after the end of each calendar year,

failure to comply with this section.

(e) Calculation.--

(1) Within 60 days after the end of each calendar year,

the department shall certify separately for each Keystone

Energy Zone the amounts of State taxes paid, less any State

tax refunds received, by the qualified businesses filing

reports under subsection (c)(1) to the Office of the Budget.

(2) Beginning in the first full calendar year following

the designation of a Keystone Energy Zone and in each

calendar year thereafter, by November 1, the department shall

certify the amounts received to the office.

(3) The department shall include reports filed five

months after the due date under subsection (c)(1) in the

November 1 certification.

(4) An entity collecting a local tax within a Keystone

Energy Zone shall, within 31 days after the end of each

calendar year, submit all of the local taxes that are to be

calculated under this subsection and which were paid in the

prior calendar year, less any certified local tax refunds

received by a qualified business in the prior calendar year,

interest was entered into prior to the date of the

designation and is still in effect.

(6) An amount equal to all of the following shall be the

amounts calculated and certified separately for each Keystone

Energy Zone:

(i) All corporate net income tax, personal income

tax, business privilege tax, business privilege licensing

fees and earned income tax related to the ownership and

operation of a qualified business in a Keystone Energy

Zone.

local services tax withheld from the employees of a

qualified business that provides events, activities or

services in a Keystone Energy Zone.

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

of a qualified business in a Keystone Energy Zone. This

subparagraph shall include sales and and use tax paid by

a qualified business that provides events, activities or

services in a Keystone Energy Zone.

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

local services tax withheld from personnel by a

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

other construction costs, whether withheld or paid by any

entity, directly related to the improvement, development

or construction of the shared research infrastructure

project.

(viii) The amount paid by a qualified business

within a Keystone Energy Zone of any new tax enacted by

the Commonwealth following the date of designation.

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

local services tax withheld from personnel by a qualified

and notwithstanding any other law, an amount equal to a

tax imposed by the Commonwealth or any of its political

subdivisions on a qualified business engaged in an

activity within a Keystone Energy Zone or directly or

indirectly on any sale or purchase of goods or services,

where the point of sale or purchase is within a Keystone

Energy Zone.

(f) State tax liability apportionment.--For the purpose of

making the calculations under subsection (e), the State tax

liability of a qualified business shall be apportioned to a

tangible personal property owned or rented and used in a

Keystone Energy 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 sale price of the property.

compensation and the denominator of which is the total

compensation paid in this Commonwealth during the tax

period.

(ii) Compensation is paid in a Keystone Energy Zone

if:

(A) the person's service is performed entirely

within a Keystone Energy Zone;

(B) the person's service is performed both

within and outside a Keystone Energy Zone, but the

service performed outside a Keystone Energy Zone is

Keystone Energy Zone, or the base of operations or

the place from which the service is directed or

controlled is not in a location in which some part of

the service is performed, but the person's residence

is in a Keystone Energy Zone.

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

which is the total sales of the taxpayer in a Keystone Energy

Zone during the tax period and the denominator of which is

the total sales of the taxpayer in this Commonwealth during

the tax period. The following apply:

shipping point or other conditions of the sale.

(ii) Sales other than sales of tangible personal

property are in a Keystone Energy Zone if:

(A) the income-producing activity is performed

in a Keystone Energy Zone; or

(B) the income-producing activity is performed

both within and outside a Keystone Energy Zone and a

greater proportion of the income-producing activity

is performed in a Keystone Energy Zone than in any

other location, based on costs of performance.

contracting authority that designated the Keystone Energy

Zone. Beginning in the second calendar year following the

designation of a Keystone Energy Zone and in each year

thereafter, the amounts certified by the secretary to the

State Treasurer and the amounts transferred by the State

Treasurer to the account of each contracting authority shall

be determined as follows:

(i) Add amounts certified by the department under

subsection (e) for the prior calendar year.

(ii) Subtract from the sum under subparagraph (i)

records, shall be considered public record in accordance with

the Right-to-Know Law.

(c) Federal law supersedes.--If the provisions of this act

related to public access conflict with a Federal or State law

prohibiting access to records, the provisions of this act shall

not apply with regard to access.

Section 703. Effective date.

This act shall take effect immediately.