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2-MINUTE STATEMENT PRESENTED TO FAYETTE COMMISSIONERS

July 22, 1999: Reference links are what you should know about KOZ

Update 2000: Hospital challenges constitutionality of KOZs

Commissioner Sean Cavanagh stated during the public comment on non-agenda items for the July 8, 1999 meeting that he would send a letter to the state legislature concerning the legislation, Keystone Opportunity Zone, requesting a response about its constitutionality.

Enclosed you will find several pages which are referenced on the website for Dare Inquire Representatives Truth.

These webpages contain links to the actual KOZ legislation and the Pennsylvania state Constitution.

Should you have any questions about this material, please contact me.
My concerns about KOZ are outlined on the website. A summary follows.

Please note Pennsylvania Constitution Section 1 Article VIII and Article VIII Sections 2, 5, and 6.

In particular, my concern is that the section 2 (b) subsection (iii) phrase stating... by which local taxing authorities may make uniform special tax provisions applicable to a taxpayer... has not been followed with the KOZ legislation.

Because separate zones have been designated as permitting 100 percent tax abatement on real property tax, the local taxing authority, you, cannot "make uniform special tax provisions" for its entire taxing jurisdiction for real property taxation.

In the case of the county of Fayette, these KOZ zones in fact appear to prevent the Fayette County commissioners from adhering to their oath of office. That's why this is so crucial.

For those commissioners who will look into this matter, the effort is much appreciated.

Please send me a copy of your letter to the state officials.

3-MINUTE STATEMENT TO FAYETTE COMMISSIONERS

April 8, 1999

Bold lettering totals 3-minute statement. Reference links are what you should know about KOZ

Remember last December when Fay-Penn presented the KOZ plan to the board two citizens asked what would prevent a company from moving out before the 12 years, or after? You responded that there was a provision in the legislation that covered that. But here it - isnt.

The legislation says nothing about a company that takes advantage of all the KOZ tax exemptions and moves on out of Fayette County after five years. The legislation only addresses companies that relocate from the KOZ within three to five years. Then its a 66 or 33 percent payback to the state, and locally, the county.

Reference FYI

Section 902. Recapture.(a) General rule.
If any qualified business located within a keystone opportunity zone has received an exemption, deduction, abatement or credit under this act and subsequently relocates outside of the zone, that business shall refund to the State and political subdivision which granted the exemption, deduction, abatement or credit received in accordance with the following:
(1) If a qualified business relocates within three years from the date of any claim, 66% of all the exemptions, deductions, abatements or credits previously received due to that qualified business's participation in the keystone opportunity zone shall be refunded TO THE COMMONWEALTH AND THE POLITICAL SUBDIVISION.
(2) If a qualified business relocates within three to five years from the date of any claim, 33% of all exemptions, deductions, abatements or credits previously received from participation in the keystone opportunity zone shall be refunded TO THE COMMONWEALTH AND THE POLITICAL SUBDIVISION.

Reference FYI

Section 902. Recapture.(a) General rule. (3)
If the qualified business was located within a facility operated by a nonprofit organization to assist in the creation and development of a start-up business, no exemption, deduction, abatement or credit shall be refunded.

There are other waivers in the legislation for no pay when the business doesnt stay: natural disaster, unforeseen industry trends, or loss of a major supplier or market.

So for the fiber factory, the unforeseen could wipe the slate clean. New business - companies - come on in to Fayette County. You could look at us and see an opportunity to build or locate here in a tax free zone that could save you millions of dollars. Leave after 12 years of tax exemptions, you may not have to pay us back a dime.

The controlling legislation is the state legislation. Youve already passed the required formal, binding ordinance or resolution that specifically provides for all local tax exemptions, deductions, abatements or credits for persons and businesses.

Reference FYI
Section 702.
So residential and commercial - if youre in the zone, or move into the zone any time during the 12 years, this county amendment does nothing to preclude you from seeking the property tax exemptions, income tax exemptions, and other exemptions.

Reference FYI

Section 702. Real property tax.(c) Application for tax abatement.--
Any person requesting real property tax abatement pursuant to ordinances or resolutions adopted pursuant to this act shall notify each political subdivision COUNTY OR OTHER DESIGNATED ASSESSMENT OFFICE granting such abatement in writing on a form provided by that political subdivision ASSESSMENT OFFICE within 30 days of the designation as a keystone opportunity zone or within 30 days of the transfer of ownership of the real property subject to abatement. A copy of the abatement request shall be forwarded by the political subdivision to the board of assessment or other appropriate assessment agency...

All you have to do is fill out a form, correctly.

The commissioners should share with us the knowledge of what is in the original December Fay-Penn application before voting on amending this resolution. How was this property listed on the application?

The board should use its July 23 rules to amend the agenda and require the solicitor to conduct a review of the Constitutionality of KOZs concerning the 100% abatement of local property tax on the whole KOZ properties before any implementation by the chief tax assessor.

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