The Keystone Opportunity Dairy Zone Act is designed to enhance Pennsylvania's dairy industry by creating designated "Keystone Opportunity Dairy Zones" that will provide various tax incentives to qualified businesses and residents. The Department of Community and Economic Development will oversee the establishment of up to 30 zones, classified as either Class A or Class B based on criteria such as size, investment, and job creation. The act emphasizes collaboration among local governments, businesses, and community organizations to support the sustainability of dairy farming in the state. It outlines an application process for zone designation, requiring an opportunity plan that details proposed improvements and expected economic impacts, as well as stipulating residency and business qualifications for maintaining tax benefits.

The bill introduces specific tax exemptions and credits for businesses and individuals within these zones, including exemptions from income tax on gains or losses related to the liquidation of qualified businesses, and tax relief on rents, dividends, and interest for residents. Local political subdivisions are mandated to provide tax incentives, including complete abatement of real property taxes and exemptions from local earned income and net profits taxes. The legislation also includes compliance requirements, stating that individuals and businesses must adhere to state and local tax laws to qualify for benefits, with penalties for violations. Additionally, it allows for waivers of recapture requirements under certain circumstances, ensuring that the benefits remain within the designated areas while promoting economic growth in targeted regions.