Section 1631-X. Additional keystone opportunity expansion zone for shipbuilding.
(a) Designation.--In addition to a designation under this article, Article XIX-D of the Tax Reform Code of 1971 or Chapter 3 of the KOZ Act, the department may designate one additional keystone opportunity expansion zone in a city and county of the first class.
(b) Criteria.--Notwithstanding Article XIX-D of the Tax Reform Code of 1971 and the KOZ Act, the additional keystone opportunity expansion zone under subsection (a) shall satisfy all of the following criteria:
(1) The additional keystone opportunity expansion zone may not exceed 350 acres in the aggregate.
(2) Each parcel comprising the additional keystone opportunity expansion zone shall, on a date determined by the department, satisfy any of the following:
(i) Be deteriorated property.
(ii) Be underutilized.
(iii) Be an unoccupied parcel.
(3) Each parcel shall have been formerly used as a naval base or for commercial shipbuilding and related activities.
(4) The additional keystone opportunity expansion zone may not include a parcel designated as a keystone opportunity expansion zone on the effective date of this paragraph.
(c) Authorization.--
(1) A qualified business located within the additional keystone opportunity expansion zone authorized under subsection (a) shall be entitled to all tax exemptions, deductions, abatements or credits under Chapter 5 of the KOZ Act for a period of 10 years.
(2) The exemption for sales and use tax under section 511(a) of the KOZ Act shall commence upon designation of the additional keystone opportunity expansion zone by the department and shall continue for a period of 10 years.
(d) Application.--
(1) To receive a designation under subsection (a), one or more businesses must submit an application to the department on a form developed by the department. The department must receive the application no later than October 1, 2026.
(2) The department, in consultation with the Department of Revenue, shall review the application. If the department approves the application, the department shall issue a certification of all tax exemptions, deductions, abatements or credits under Chapter 5 of the KOZ Act consistent with subsection (c) within three months after receiving the application.
(3) The department shall act on an application for a designation under subsection (a) no later than July 31, 2027. A designation approved under subsection (a) shall take effect August 1, 2027.
(e) Eligibility and noncompliance.--
(1) Upon designation of the additional keystone opportunity expansion zone under subsection (a), a qualified business shall be eligible for all tax exemptions, deductions, abatements or credits under Chapter 5 of the KOZ Act.
(2) If the department determines that a qualified business has failed to satisfy the requirements of the KOZ agreement, the following shall apply:
(i) The qualified business shall no longer be eligible to receive a tax exemption, deduction, abatement or credit under Chapter 5 of the KOZ Act for business activity conducted at one or more parcels in the additional keystone opportunity expansion zone.
(ii) The department may require the qualified business to refund all or part of a tax exemption, deduction, abatement or credit received under this section for business activity conducted at one or more parcels in the additional keystone opportunity expansion zone.
(f) Applicability.--
(1) A tax exemption, deduction, abatement or credit authorized under Chapter 7 of the KOZ Act shall not apply to the additional keystone opportunity expansion zone designated under subsection (a).
(2) The department may not require a qualified political subdivision in which a parcel proposed for inclusion in the additional keystone opportunity expansion zone is located to approve an application submitted under subsection (d).
(3) A tax exemption, deduction, abatement or credit authorized under Chapter 5 of the KOZ Act applies only to business activity conducted within a parcel comprising the additional keystone opportunity expansion zone.
(4) A determination by the department as to whether a qualified business has satisfied the requirements of the KOZ agreement shall bind the Department of Revenue.
(g) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection unless the context clearly indicates otherwise:
"Deteriorated property." As defined in section 103 of the KOZ Act.
"KOZ agreement." An agreement among a business, the business's affiliates and the department, on a form developed by the department, under which the business and the business's affiliates commit, in the aggregate, to satisfy all of the following requirements:
(1) Create at least 250 full-time jobs at one or more parcels in the additional keystone opportunity expansion zone within five years after a date determined by the department and maintain those jobs at one or more parcels in the additional keystone opportunity expansion zone for an additional five years.
(2) Make a capital investment of at least $100,000,000 at one or more parcels in the additional keystone opportunity expansion zone within five years after a date determined by the department.
(3) Conduct shipbuilding activities at one or more parcels in the additional keystone opportunity expansion zone for at least 10 years beginning on a date determined by the department.
"Qualified business." A business that meets all of the following requirements:
(1) Is authorized to do business in this Commonwealth.
(2) Is located or partially located within the additional keystone opportunity expansion zone designated under subsection (a).
(3) Engages in commercial shipbuilding activities within the additional keystone opportunity expansion zone.
(4) Meets the requirements of section 307 of the KOZ Act for the taxable year.
(5) Has entered into a KOZ agreement.
"Qualified political subdivision." As defined in section 103 of the KOZ Act.
(1631-X added July 12, 2026, P.L.265, No.21)