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
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
NOVEMBER 26, 2019
AN ACT
Providing for advanced manufacturing research, development
facilities and infrastructures through business partnerships
with State-related institutions; establishing the Max
Manufacturing Initiative Fund, the Keystone Energy Zone
Program and the Keystone Energy Zone Fund; and imposing
powers and duties on the Department of Revenue.
TABLE OF CONTENTS
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 3. Public-Private Partnerships Grants
Section 301. Establishment.
Section 302. Commonwealth money.
Section 303. Eligibility.
Section 304. Process and application.
Section 305. Appropriation.
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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 504. Appropriation.
Chapter 6. Keystone Energy Zones
Section 601. Establishment.
Section 602. Shared research infrastructure project.
Section 603. Application.
Section 604. Review and approval.
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.
Section 702. Public access to records.
Section 703. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
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CHAPTER 1
PRELIMINARY PROVISIONS
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
partnerships and State-related institution partnerships
within this Commonwealth.
(2) This collaboration is designed to align with the
Commonwealth's stated economic development goals through the
use and mechanisms of shared research and development as
identified, funding grants, incentivized private investments
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
idea generation and the development, testing and
implementation of cutting-edge advances in science and
technology.
(v) Create shared research and development
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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.
(vii) Expand and incentivize an industry-led
business environment in alignment with the Commonwealth's
economic development goals, including financial
incentives for infrastructure support.
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"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
act of November 30, 2004 (P.L.1672, No.213), known as the
Alternative Energy Portfolio Standards Act.
"Applicant." A State-related institution or a public-private
partnership to which a State-related institution is a party and
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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
Technology Development Authority Act.
"Bonds." Includes notes, instruments, refunding notes and
bonds and other evidences of indebtedness or obligations.
"Capital Facilities Debt Enabling Act." The act of February
9, 1999 (P.L.1, No.1), known as the Capital Facilities Debt
Enabling Act.
"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
December 31, 1965 (P.L.1257, No.511), known as The Local Tax
Enabling Act, or the act of August 24, 1961 (P.L.1135, No.508),
referred to as the First Class A School District Earned Income
Tax Act, which a municipality or a school district is entitled
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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:
(1) Contains an anchor infrastructure asset, including,
but not limited to, an airport or other transportation hub.
(2) Has access to energy resources and assets,
including, but not limited to, natural gas pipelines and
market hubs, or alternative energy sources.
(3) Has the participation of a State-related institution
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
research infrastructure project facility.
"Private entity." A person, entity, group or organization
that is not the Federal Government, the Commonwealth or a
municipal authority.
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"Public entity." A Commonwealth agency as defined in 62
Pa.C.S. ยง 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
business in this Commonwealth that is located or partially
located within a Keystone Energy Zone and is engaged in the
active conduct of a trade or business for the taxable year.
"Shared research infrastructure project." A project to
create collaborative research and development facilities for
State-related institutions and industry partnerships conducting
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.
(4) The University of Pittsburgh.
CHAPTER 2
MAX MANUFACTURING INITIATIVE FUND
Section 201. Establishment.
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The Max Manufacturing Initiative Fund is established within
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
be administered by the Ben Franklin Technology Development
Authority to issue grants for the administration, management and
operations of public-private partnerships for the purpose of
colocating university research with private research and
development in advanced manufacturing.
Section 302. Commonwealth money.
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.
(2) Provide a financial plan for all funding related to
the project, including details regarding the financial
commitment of the parties to the project and documentation of
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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
effective date of this act. The Ben Franklin Technology
Development Authority shall not begin accepting applications for
at least 60 days from the date the application forms are made
publicly available.
(b) Review and determination.--In reviewing a grant
application and reaching a final determination, the Ben Franklin
Technology Development Authority shall consider all of 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
in advanced manufacturing to Pennsylvania.
(4) The proposed private partnership arrangement and
related matching funds.
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Section 305. Appropriation.
The General Assembly may appropriate money to the Ben
Franklin Technology Development Authority for the purposes
specified under this chapter.
CHAPTER 4
SHARED EQUIPMENT GRANTS
Section 401. Establishment.
There is established an account within the fund which shall
be administered by the Ben Franklin Technology Development
Authority to issue shared equipment grants for specialized
equipment or integrated systems for shared-use among university
and private sector researchers conducting research and
development in advanced manufacturing.
Section 402. Eligibility.
(a) Distribution.--The Ben Franklin Technology Development
Authority may make distributions from the fund, subject to the
terms, conditions and restrictions provided under this chapter,
for the purpose of making grants to public-private partnerships
involved in the following:
(1) Advancement in the fields of industrial processes,
mining, manufacturing, production agriculture, information
technology and biotechnology.
(2) Service as a medical facility or in other industrial
or technology sectors as defined by the Ben Franklin
Technology Development Authority.
(3) The acquisition and installation of new machinery
and equipment, upgrading existing machinery and equipment or
retrofitting existing facilities with new or high-demand
technologies as defined by the Ben Franklin Technology
Development Authority.
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(b) Grants.--Grants shall be subject to the following
conditions:
(1) Grants shall be made to eligible public-private
partnerships under this chapter.
(2) Grants shall be designed to include the purchase and
installation of new equipment and machinery, the upgrade of
existing machinery and equipment or the retrofitting of
existing facilities with new or high-demand technologies.
This subparagraph includes the acquisition, application and
utilization of computer hardware and software.
Section 403. 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
effective date of this act. The Ben Franklin Technology
Development Authority shall not begin accepting applications for
at least 60 days from the date the application forms are made
publicly available.
(b) Review and determination.--In reviewing a grant
application and reaching a final determination, the Ben Franklin
Technology Development Authority shall consider all of the
following:
(1) Whether the project proposed to be funded is
authorized under this chapter.
(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 purchase and installation of new
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equipment and machinery, the upgrade of existing machinery
and equipment or the retrofitting of existing facilities with
new or high-demand technologies.
Section 404. Matching funds.
Applicants shall provide documentation of matching funds from
non-State sources in an amount equal to the grant amount being
requested under this chapter.
Section 405. Appropriation.
The General Assembly may appropriate money to the Ben
Franklin Technology Development Authority for the purposes
specified under this chapter.
CHAPTER 5
MAX MANUFACTURING RESEARCH GRANTS
Section 501. Establishment.
(a) Establishment of account.--There is established an
account within the fund which shall be administered by the Ben
Franklin Technology Development Authority to issue research
grants for start-up packages in research areas supporting
advanced manufacturing, including, but not limited to, energy
sciences, engineering and computer science.
(b) Findings.--
(1) It is in the public interest to create incentives
for State-related universities to recruit researchers and
research teams by funding start-up packages in research areas
that support growth in advanced manufacturing capabilities to
create well-paying jobs and enhanced economic opportunities
for the people of Pennsylvania.
(2) Incentives should be used to recruit and maintain
leading scientists and engineers at State-related research
universities for the purposes of developing and leveraging
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the research capabilities of the universities for the
creation of well-paying jobs and enhanced economic
opportunities in accordance with this act.
(3) The use of money under this chapter may be used in
creating incentives to lure, maintain and keep a cutting-edge
knowledge base.
Section 502. Process and application.
(a) Eligibility.--In conjunction with a public-private
partnership, a State-related institution, individually or with
one or more other Pennsylvania higher education institutions,
may make application for awards from a public-private
partnership.
(b) 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
effective date of this act. The Ben Franklin Technology
Development Authority shall not begin accepting applications for
at least 60 days from the date the application forms are made
publicly available.
(c) Review and determination.--In reviewing a grant
application and reaching a final determination, the Ben Franklin
Technology Development Authority shall consider all of the
following:
(1) Whether the project proposed to be funded is
authorized under this chapter.
(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,
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but not limited to, recruiting researchers and research teams
by creating start-up packages in research areas that support
growth in advanced manufacturing capabilities to create well-
paying jobs and enhanced economic opportunities in this
Commonwealth.
Section 503. Match.
Applicants shall provide documentation of matching funds from
non-State sources in an amount equal to the grant amount being
requested under this chapter.
Section 504. Appropriation.
The General Assembly may appropriate money to the Ben
Franklin Technology Development Authority for the purposes
specified under this chapter.
CHAPTER 6
KEYSTONE ENERGY ZONES
Section 601. Establishment.
The Keystone Energy Zone Program is established in the
department to designate a special taxing district that
encourages development within Keystone Energy Zones for the
purpose of improving and encouraging research and development in
advanced manufacturing that benefit from proximity to natural
gas sources, resulting in employment growth and revitalization
of communities. Keystone Energy Zones will also encourage the
use of alternative energy methods, including, but not limited
to, combined heat and power and microgrids.
Section 602. Shared research infrastructure project.
Upon approval by the department, the contracting authority
may designate a Keystone Energy Zone in which a shared research
infrastructure project may be constructed and may borrow money
for the purpose of improvement and development within the
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Keystone Energy Zone and construction of a shared research
infrastructure project within the Keystone Energy Zone.
Section 603. Application.
A public-private partnership seeking to establish a Keystone
Energy Zone may apply to the department for approval. All
applications shall be on the form required by the department and
include the following:
(1) The partnership coordinator's name and address.
(2) A statement that the applicant is a public-private
partnership and the identity of the public-private
partnership's members.
(3) The geographic boundaries of the proposed Keystone
Energy Zone.
(4) A copy of a written strategic plan adopted by the
public-private partnership.
(5) Any other information required by the department.
Section 604. Review and approval.
The department shall review the application and, if all
requirements under section 603 have been met, may approve the
application and authorize the identified area as a Keystone
Energy Zone.
Section 605. Guidelines.
Before a Keystone Energy Zone is approved by the department,
the department shall approve written guidelines for the program
and shall provide a copy of the guidelines to the Majority
Leader and Minority Leader of the Senate, the Majority Leader
and Minority Leader of the House of Representatives, the
chairperson and minority chairperson of the Appropriations
Committee of the Senate and the chairperson and minority
chairperson of the Appropriations Committee of the House of
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Representatives.
Section 606. Keystone Energy Zone Fund.
(a) Establishment.--The Keystone Energy Zone Fund is
established within the State Treasury as a special fund
consisting of a separate account for each contracting authority
that designates a Keystone Energy Zone. Interest income derived
from investment of the money in the Keystone Energy Zone Fund
shall be credited by the Treasury Department to the Keystone
Energy Zone Fund.
(b) Special designation.--Following the designation of a
Keystone Energy Zone, the contracting authority shall, within 10
days after making the designation, notify the State Treasurer of
the designation.
(c) Certification.--
(1) Within 31 days after the end of each calendar year,
each qualified business shall file a report with the
department which complies with all of the following:
(i) States each State tax, calculated in accordance
with subsection (e), which was paid by the qualified
business in the prior calendar year.
(ii) Lists each State tax refund which complies with
all of the following:
(A) The refund is for a tax:
(I) specified in subsection (e); and
(II) certified as paid under subsection (e).
(B) The refund was received in the prior
calendar year by the qualified business.
(iii) Is in a form and manner required by the
department.
(2) In addition to any penalties imposed under this act
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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
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. Failure to file a timely and
complete report under paragraph (4) shall result in
the imposition of a penalty of 10% of all local taxes
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
which would be certified under subsection (e) for
each qualified business which is not reported to the
contracting authority or $1,000, whichever is
greater.
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(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
during the calendar year in the Keystone Energy Zone
shall result in the imposition of a penalty by the
contracting authority upon the operating organization
equal to 100% of the taxes paid which would be
certified under subsection (e) for each qualified
business which fails to file a timely and complete
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
business is located.
(3) Except as otherwise provided under paragraph (2)(ii)
and (iii), a penalty imposed under this subsection shall be
imposed, assessed and collected by the department. When the
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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
taxes specified in subsection (e) received in the prior
calendar year by the qualified business and any refunds
related to the local taxes as calculated in accordance with
subsection (e). The report shall be in a form and manner
required by the department.
(d) Master list.--The following apply:
(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
qualified business required under subsection (c) shall also
be provided.
(2) For purposes of inclusion on the master list, within
five days after the end of each month during a calendar year,
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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,
the contracting authority shall provide to the department the
master list. The department may not certify any taxes paid
directly or indirectly by a qualified business as provided
under subsection (e) during the prior calendar year when the
qualified business is not included on the master list.
(4) A contracting authority shall impose penalties for
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
calculate, in accordance with this subsection, amounts of
State taxes actually received by the Commonwealth from each
qualified business that filed a report under subsection (c)
(1) in the prior calendar year, and the department shall
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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,
to the State Treasurer to be deposited in the account under
subsection (g) of the contracting authority that established
the Keystone Energy Zone.
(5) This subsection shall not apply to taxes subject to
a valid pledge or security interest entered into in order to
secure debt service on bonds if the pledge or security
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.
(ii) All personal income tax, earned income tax and
local services tax withheld from employees by a qualified
business in a Keystone Energy Zone.
(iii) All personal income tax, earned income tax and
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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
contractor or other entity involved in the construction
of the shared research infrastructure project.
(vi) 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 a Keystone Energy Zone.
(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
business involved in the improvement, development or
construction of the shared research infrastructure
project.
(x) Except for a tax levied against real property
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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
Keystone Energy Zone by multiplying the State tax liability 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 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.
(2) The following apply:
(i) The payroll factor is a fraction, the numerator
of which is the total amount paid in a Keystone Energy
Zone during the tax period by the taxpayer for
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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
incidental to the person's service within a Keystone
Energy Zone; or
(C) some of the service is performed in a
Keystone Energy 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 a
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:
(i) Sales of tangible personal property are in a
Keystone Energy Zone if the property is delivered or
shipped to a purchaser that takes possession within a
Keystone Energy Zone regardless of the free on board
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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.
(g) Transfers.--
(1) Notwithstanding any other law, within 10 days of
receiving certification under subsection (c), the Secretary
of the Budget shall direct the State Treasurer to transfer
the amounts certified under subsection (e) for each Keystone
Energy Zone from the General Fund to the account of the
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)
any State tax refunds paid as certified by the department
under subsection (e).
(iii) Add to the difference under subparagraph (ii)
any amounts certified under subsection (e) with respect
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to the second prior calendar year.
(iv) Subtract from the sum under subparagraph (iii)
any amounts certified under subsection (e) which are less
than the amounts previously certified under subsection
(e) with respect to the second prior calendar year.
(2) The State Treasurer shall provide an annual transfer
to the contracting authority until the bonds issued to
finance and refinance the improvement and development of a
Keystone Energy Zone and the construction of a shared
research infrastructure project are retired. Each annual
transfer to the contracting authority shall be equal to the
balance of the account of the contracting authority on the
date of the transfer under paragraph (1).
(h) Restriction on use of money.--Money transferred under
subsection (g) is subject to the following:
(1) The money may only be utilized as follows:
(i) For payment of debt service, directly or
indirectly through a multitiered ownership structure or
other structure authorized by a contracting authority to
facilitate financing mechanisms, on bonds or on
refinancing loans used to repay bonds issued to finance
or refinance:
(A) The improvement and development of all or
any part of a Keystone Energy Zone.
(B) The construction of all or part of a shared
research infrastructure project.
(ii) For payment of debt service on bonds issued to
refund those bonds.
(iii) For replenishment of amounts required in any
debt service reserve money established to pay debt
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service on bonds.
(2) The term of a bond to be refunded shall not exceed
the maximum term permitted for the original bond issued for
the improvement or development of a Keystone Energy Zone and
the construction of a shared research infrastructure project.
(3) The money may not be utilized for purposes of
renovating or repairing a shared research infrastructure
project, except for capital maintenance and improvement
projects.
(i) Excess money.--Within 30 days after the end of each
calendar year, any money remaining in the account of each
contracting authority at the end of the prior calendar year
after the required payments under subsection (e)(2) were made in
the prior calendar year shall be refunded in the following
manner:
(1) Money shall first be returned to the General Fund to
the extent that the excess money is part of the transfer
under subsection (g)(1).
(2) Money shall next be paid to the contracting
authority to the extent that the amounts paid under
subsection (g)(2) consisted of local taxes. The contracting
authority shall return the money to the appropriate entities
collecting local tax who submitted the local taxes to the
State Treasurer under subsection (e).
(j) Audit.--
(1) The contracting authority shall hire an independent
auditing firm to perform an annual audit verifying all of the
following:
(i) The correct amount of the eligible local tax was
submitted to the local taxing authorities.
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(ii) The local taxing authorities transferred the
correct amount of eligible local tax to the State
Treasurer.
(iii) The money transferred to the account was
properly expended.
(iv) The correct amount of excess money was refunded
in accordance with the provisions of subsection (i).
(2) A copy of the annual audit shall be sent to the
department and the Secretary of the Budget.
(3) For purposes of this subsection, an auditing firm
will not be considered independent if it provides services to
an operating organization or any qualified business within a
Keystone Energy Zone which is a party to a separate agreement
with a contracting authority for the allocation of money from
the contracting authority.
Section 607. Tax prohibition.
A division of local government may not assess real estate
taxes on a property in a Keystone Energy Zone owned by a
contracting authority.
Section 608. Property assessment.
Notwithstanding 53 Pa.C.S. Ch. 88 (relating to consolidated
county assessment), for purposes of determining the assessed
value of property located in a Keystone Energy Zone, the actual
fair market value of the property shall be established without
utilizing or considering the cost approach to valuation, and
money received by the contracting authority and utilized
directly or indirectly in connection with the property shall not
be considered real property or income attributable to the
property.
Section 609. Duration.
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A Keystone Energy Zone shall be in effect for a period equal
to one year following retirement of all bonds issued to finance
or refinance the improvement and development of a Keystone
Energy Zone or the construction of a shared research
infrastructure project. The maximum term of the bond, including
the refunding of the bond, shall not exceed 30 years.
Section 610. Commonwealth pledge.
(a) General rule.--If a contracting authority pledges
amounts required to be transferred to the account of the
contracting authority for the payment of bonds issued by the
contracting authority, until all bonds secured by the pledge of
the contracting authority, together with the interest on the
bonds, are fully paid or provided for, the Commonwealth pledges
to and agrees with a person, firm, corporation or government
agency, whether in this Commonwealth or elsewhere, and with a
Federal agency subscribing to or acquiring the bonds issued by
the contracting authority that the Commonwealth itself will not,
nor will the contracting authority authorize a government entity
to do any of the following:
(1) abolish or reduce the size of a Keystone Energy
Zone;
(2) amend or repeal this chapter;
(3) limit or alter the rights vested in the contracting
authority in a manner inconsistent with the obligations of
the contracting authority with respect to the bonds issued by
the contracting authority; or
(4) otherwise impair revenues to be paid under this
chapter to the contracting authority necessary to pay debt
service on bonds.
(b) Authority.--Nothing in this section shall limit the
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authority of the Commonwealth or any government entity to change
the rate, tax bases or subject of a specific tax or repeal or
enact a tax.
Section 611. Confidentiality.
Notwithstanding any law providing for the confidentiality of
tax records, the contracting authority and the local taxing
authorities shall have access to reports and certifications
filed under this act, and the contracting authority shall have
access to State and local tax information filed by a qualified
business in a Keystone Energy Zone solely for the purpose of
documenting the certifications required by this act. Any other
use of the tax information shall be prohibited as provided under
law.
Section 612. Limitations.
After the effective date of this section, none of the
following may be employed by, be contracting with or provide
services for a contracting authority:
(1) An individual employed by, contracting with or
providing service for a county or other political subdivision
that has a Keystone Energy Zone.
(2) An entity contracting with or providing services for
a county or other political subdivision that has a Keystone
Energy Zone.
(3) An individual owning an entity or an entity with
ownership interest in a separate entity which is contracting
with a county or other political subdivision that has a
Keystone Energy Zone.
(4) An individual or entity employed by, contracting
with or providing services for a qualified business within a
Keystone Energy Zone which is party to a separate agreement
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with a contracting authority for the allocation of money from
the contracting authority.
(5) An individual or entity employed by, contracting
with or providing services for an operating organization.
(6) A current board member of a contracting authority.
(7) An entity which is owned by or employs a current
board member of a contracting authority.
CHAPTER 7
REPORTING REQUIREMENTS AND PUBLIC ACCESS
Section 701. Reporting requirements.
Grantees shall be required to provide annually a detailed
accounting of the use of money for projects under this act to
the department no later than January 30 of each year.
Section 702. Public access to records.
(a) General rule.--
(1) Grantees, as State-related institutions, are subject
only to reporting provisions of the act of February 14, 2008
(P.L.6, No.3), known as the Right-to-Know Law. State-related
institutions are otherwise exempted from the provisions and
requirements of the release of records.
(2) Nothing in this act shall supersede the exemption,
nor require a State-related university to provide additional
information related to this act beyond the scope of the
State-related university's current responsibilities under
Chapter 15 of the Right-to-Know Law.
(3) Nothing in this act shall preclude the department
from releasing records deemed to be in the public interest.
(b) Public records.--Any other record identified as a public
record within the Right-to-Know Law in possession or
constructive possession of the department or a Commonwealth
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agency, including contracts, grants, awards and other public
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.
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