As originally drafted, the bill would expand the existing KOZ program. The prevailing wage language was amended into the bill prior to final passage, a move opposed by the PA Chamber.

"Expansion of prevailing wage would undermine the very purpose of Keystone Opportunity Zones, which is to encourage economic activity in underserved regions of the Commonwealth," said Gene Barr, PA Chamber vice president of government and public affairs.

Pennsylvania’s Keystone Opportunity Zone program was enacted in 1998, with additional zones created in 2001, 2003 and 2004. The zones offer property owners, residents and businesses greatly reduced or no tax burden for a period of 10 years.

With the first of the zones set to expire this year, the General Assembly is looking to extend the program.

Prevailing wage rates can add up to 30 percent to the cost of school district and municipal capital projects. Similar cost add-ons could be expected for projects undertaken within opportunity zones.

"It makes no sense to extend the Keystone Opportunity Zone program in order to encourage the development of underutilized land and buildings while at the same time forcing businesses that would be helped to pay inflated labor rates," Barr said. "Doing so would reduce the benefits of locating or expanding within the KOZ."

<more>

With budget negotiations about to kick into high gear, the PA Chamber and all members of the coalition are upping their efforts to secure enactment of legislation to remove the cap on Net Operating Losses and adopt a Single Sales Factor apportionment formula for the Corporate Net Income tax.

<more>