KOZ. IS IT CONSTITUTIONAL? THREE MAJOR AREAS OF CONCERN
Creation of the Keystone Opportunity Zones in the Commonwealth of PA was done by an act of the General Assembly.
HB 2328 was signed in the House, Sept. 29, 1998.
The House concurred in Senate amendments, Sept. 29, 1998.
Senate and House signed final Sept. 29, 1998.
The legislation was approved by Governor Tom Ridge, Oct. 6, 1998 as Act No. 92
KEYSTONE OPPORTUNITY ZONE:
IS IT CONSTITUTIONAL? AREA NUMBER ONE
Article VIII Section 2 b(ii)
Taxation and Finance
No exemption or special provision shall be made under this clause with respect to taxes upon the sale or use of personal property,
and no exemption from any tax upon real property shall be
by the General Assembly under this clause
the General Assembly shall provide for the reimbursement
of local taxing authorities
by or through the
Commonwealth for revenue losses occasioned by such
Ask school board members, County commission board members, and state representatives and senators of Pennsylvania:
Would you be able to provide, or cite, the area of KOZ
legislation that shows PA will provide for the reimbursement of
local taxing authorities for the revenue losses? If so, what
state revenues garnered through state taxation of citizens will
be used to provide for such reimbursement. If not, has the
General Assembly passed an amendment to the state Constitution
which allows for non-reimbursement? When did that occur?
KOZ: IS IT CONSTITUTIONAL? AREA NUMBER TWO
EXEMPTION FROM TAXATION RESTRICTED
All laws exempting property from taxation, other than the property above enumerated, shall be void.
Ask your local and state representatives:
Please explain the constitutionality of KOZ legislation
given this section of the state Constitution.
Refer to Article VIII Section 2 for constitutional listing of the property above enumerated which would be constitutionally
able to be exempted from taxation.
After numerous attempts to contact the state Dept. of Community and Economic Development, finally, on March 4, 1999 this reply
"Thank you for your inquiry regarding the PA Keystone Opportunity Zone Act (Act 92). Please be advised that the Constitutional
provision under which the local property tax exemption is permitted is Article VIII Section 2. (b) (iii).
The General Assembly may by law exempt from taxation:
(iii) Establish standards and qualification by which local taxing authorities may make uniform special tax provisions applicable
to a taxpayer for a limited period of time to encourage improvement of deteriorating property or areas by an individual, association,
or corporation, or to encourage industrial development by a non-profit corporation...
Consistent with the constitutional limitations, Section 301 of Act 92 provides that (a) keystone opportunity zone shall be
comprised of deteriorated property... In addition, Act 92 places a time limitation on any exemption that shall not exceed
12 years beginning January 1, 1999, and ending on or before December 31, 2010.
As you can see, the exemptions provided pursuant to Act 92 fall within the confines of the Pennsylvania Constitution.
END COMMUNICATION FROM DCED
Citizens of Pennsylvania
Read the referenced section carefully. Read the OFFICIAL'S reply.
Note the wording: by which local taxing authorities may make uniform special tax provisions applicable to a taxpayer...
KEY WORD = UNIFORM
The KOZ legislation does not enable the local taxing bodies to make uniform special tax provisions. The legislation creates
Opportunity Zones which exclude many muncipalities and school districts and the county itself as a taxing body from making
and applying uniform special tax provisions.
Only residential homeowners and businesses locating within the established zone or subzones can be offered the special tax
provisions of full tax forgiveness on certain local taxes.
Homeowners and businesses outside of the established zone are denied access to this special 100 percent tax exemption on real
Local taxing authorites that adopted resolutions to exempt certain local taxes, including local property taxes, are prevented
by the KOZ legislation from applying the special tax provisions in a uniform manner.
Therefore, the KOZ legislation is not in compliance with the Constitutional provision that the local taxing authorities
may make uniform special tax provisions.
Therefore, the General Assembly did not comply with the PA Constitutional duty to:
Establish standards and qualifications by which local taxing authorities may make uniform special tax provisions applicable
to a taxpayer...
KOZ: IS IT CONSTITUTIONAL? AREA NUMBER THREE.
Article VIII Section 6
TAXATION OF CORPORATIONS
The power to tax corporations and corporate property shall not be surrendered or suspended by any contract or grant to which
the Commonwealth shall be a party.
Inquire of your elected public servants:
Isn't the Commonwealth a party with the REGIONAL ORGANIZATION by providing a quarter of a million dollars in start up costs,
and overall start up costs, for the KOZ program? Through that regional organization, businesses locating in the KOZ designated
area will not pay property taxes.
Explain how the KOZ legislation is constitutional given this
section of the state Constitution.
Has Governor Ridge used an executive order to implement
the KOZ legislation?
No one seems to want to answer whether this legislation is part of TEAM PENNSYLVANIA. Please check it out. Ask questions.
Here's the PA legislation:
Obtain a copy of Act No. 92