Pennsylvania Sen. Lloyd Smucker, who represents parts of York and Lancaster counties, proposed a bill today that would allow third-class cities to jumpstart economic revitalization and redevelopment.
Smucker's bill would allow cities to create City Revitalization & Improvement Zones, or CRIZ, to reinvest all tax dollars collected on the redeveloped sites back into the city, particularly to pay off the bonds, said Matt Parido, Smucker's chief of staff.
Once the bond is retired, the remaining taxes go back to the state, he said. Essentially state taxes on the redeveloped property are used to help the city. The increased economic activity in the zones would then create jobs and spur further revitalization.
Here are the major provisions of the bill:
• Eligible properties include vacant, blighted and/or abandoned properties to be used for commercial, exhibition, hospitality, conference, retail community and mixed-use purposes.
• Zones in any one city may not exceed a total of 100 acres.
• All state taxes collected from entities during construction and redevelopment, from businesses currently located in the zone and from any future business would be transferred to the CRIZ fund. The state treasurer will make quarterly payments to the municipal authority from the fund until the bonds are paid off.
• State taxes to be collected and transferred to the CRIZ fund include corporate net income taxes, capital stock and franchise taxes, sales and use taxes, taxes related to the sale of liquor, wine or malt/brewed beverages and personal income taxes.
• Earned income taxes and local services taxes collected from individuals employed within the CRIZ also will be directed to the fund.
• CRIZ funds would be used only to pay debt service on bonds issued for the improvement and redevelopment of all or any part of the zone and for the purpose of paying bonds on qualifying facilities existing prior to the CRIZ creation.
• Funds would not be used for renovating or repairing a facility or facility complex, except for capital maintenance, improvement projects and funding furniture, fixtures and equipment reserve funds of qualifying facilities in existence prior to the creation of the CRIZ.
• The CRIZ would be in effect for a period equal to the length of time of the bonds issued.
• The creation of the CRIZ must be revenue neutral, meaning no net loss of revenue to the state due to the transfer of state tax revenues to the CRIZ fund. To ensure that, a city creating a CRIZ must provide financial support until new state tax revenues created from the zone exceeded those produced prior to its creation. Such financial support could be direct funding, bond guarantees or a combination of the two. Any direct financial investment made by a city would be the first to be repaid from the CRIZ fund.