THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY FARNESE, FONTANA, ERICKSON, BOSCOLA, STACK, TARTAGLIONE, COSTA AND FERLO, FEBRUARY 22, 2011

REFERRED TO FINANCE, FEBRUARY 22, 2011  

AN ACT

Amending the act of July 9, 1971 (P.L.206, No.34), entitled, as

reenacted and amended, "An act authorizing local taxing

authorities to provide for tax exemption for certain

improvements to deteriorated dwellings and for improvement of

deteriorating areas by the construction of new dwelling

units; and providing for exemption schedules and other

limitations," defining "depressed area"; and expanding

applicability of the act to certain depressed areas.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 103 of the act of July 9, 1971 (P.L.206,

No.34), known as the Improvement of Deteriorating Real Property

or Areas Tax Exemption Act, reenacted and amended August 5, 1977

(P.L.167, No.42), is amended by adding a definition to read:

Section 103.  Definitions.--As used in this act:

"Depressed area" means that portion of a deteriorated

neighborhood or a deteriorating area which the governing body

determines to be in greater need of economic revitalization and

improvement than other areas of the deteriorated neighborhood or

deteriorating area.

* * *

Section 2.  Sections 201 and 202 of the act are amended to

read:

Section 201.  Definitions.--As used in this article:

(1)  "Deteriorated property" means a dwelling unit located in

a deteriorated neighborhood or depressed area, as hereinafter

provided, or a dwelling unit which has been or upon request is

certified by a health, housing or building inspection agency as

unfit for human habitation for rent withholding, or other health

or welfare purposes, or has been the subject of an order by such

an agency requiring the unit to be vacated, condemned or

demolished by reason of noncompliance with laws, ordinances or

regulations.

(2)  "Dwelling unit" means, unless otherwise defined in the

ordinance or resolution providing for tax exemption, a house,

apartment, or group of rooms intended for occupancy as separate

living quarters by family or other groups or a person living

alone, containing a kitchen or cooking equipment for the

exclusive use of the occupants.

(3)  "Improvement" means repair, construction or

reconstruction, including alterations and additions, having the

effect of rehabilitating a structure so that it becomes

habitable or attains higher standards of housing safety, health

or amenity, or is brought into compliance with laws, ordinances

or regulations governing housing standards; ordinary upkeep and

maintenance shall not be deemed an improvement.

Section 202.  Deteriorated Neighborhoods and Depressed Areas;

Procedures.--(a)  Each local taxing authority may by ordinance

or resolution exempt from real property taxation the assessed

valuation of improvements to deteriorated properties in the

amounts and in accordance with the schedules and limitations

hereinafter provided. Prior to the adoption of the ordinance or

resolution authorizing the granting of tax exemptions, the local

taxing authority shall affix the boundaries of a deteriorated

neighborhood or neighborhoods or a depressed area or areas,

wholly or partially located within its jurisdiction, if any. At

least one public hearing shall be held by the local taxing

authority for the purpose of determining said boundaries. At the

public hearing the planning commission or redevelopment

authority and other public and private agencies and individuals,

knowledgeable and interested in the improvement of deteriorated

neighborhoods or depressed areas, shall present their

recommendations concerning the location of boundaries of a

deteriorated neighborhood or neighborhoods or a depressed area

or areas for the guidance of the local taxing authorities, such

recommendations taking into account the criteria set forth in

the act of May 24, 1945 (P.L.991, No.385), known as the "Urban

Redevelopment Law," for the determination of "blighted areas,"

and the criteria set forth in the act of November 29, 1967

(P.L.636, No.292), known as the "Neighborhood Assistance Act,"

for the determination of "impoverished areas," and the following

criteria: unsafe, unsanitary and overcrowded buildings; vacant,

overgrown and unsightly lots of ground; a disproportionate

number of tax delinquent properties; excessive land coverage,

defective design or arrangement of buildings, street or lot

layouts; economically and socially undesirable land uses. The

ordinance shall specify a description of each such neighborhood

or area as determined by the local taxing authority, as well as

the cost of improvements per dwelling unit to be exempted, and

the schedule of taxes exempted as hereinafter provided.

(b)  Two or more local taxing authorities may join together

for the purpose of determining the boundaries of a deteriorated

neighborhood or depressed area, and such local taxing

authorities shall cooperate fully with each other for the

purposes of implementing this act. The local taxing authorities

may by implementing ordinance or resolution agree to adopt tax

exemptions contingent upon the similar adoption by an adjacent

or conterminous local taxing authority, within the limitations

provided herein.

Section 3.  Section 203 of the act, amended December 30, 2002

(P.L.2085, No.235), is amended to read:

Section 203.  Exemption Schedules; Maximum Exemption.--(a)  A

local taxing authority granting a tax exemption pursuant to the

provisions of this article may provide for tax exemption on the

assessment attributable to the actual cost of improvements up to

the maximum cost per dwelling unit herein specified or up to any

lesser multiple of one thousand dollars ($1,000). If a local

taxing authority by ordinance or resolution specifies a lesser

cost than the maximum provided by this act, such amount shall

not be increased by any subsequent ordinance or resolution for a

period of two years, nor shall the schedule of taxes exempted be

changed for such period. Whether or not the assessment eligible

for exemption is based upon a maximum cost or a lesser cost, the

actual amount of taxes exempted shall be in accordance with one

of the following schedules:

(1)  For the first year for which improvements would

otherwise be taxable in a deteriorated neighborhood, one hundred

per cent of the eligible assessment shall be exempted; for the

second year, ninety per cent of the eligible assessment shall be

exempted; for the third through tenth years, eighty, seventy,

sixty, fifty, forty, thirty, twenty, and ten per cent,

respectively, of the eligible assessment shall be exempted;

after the tenth year, the exemption shall terminate;

(2)  For the first year for which improvements would

otherwise be taxable in a deteriorated neighborhood, one hundred

per cent of the eligible assessment shall be exempted; for the

second year, eighty per cent of the eligible assessment shall be

exempted; for the third through fifth years, sixty, forty, and

twenty per cent, respectively, of the eligible assessment shall

be exempted; after the fifth year, the exemption shall

terminate;

(3)  For the first, second and third year for which

improvements would otherwise be taxable in a deteriorated

neighborhood, one hundred per cent of the eligible assessment

shall be exempted; after the third year the exemption shall

terminate; [or]

(4)  For the first, second, third, fourth, fifth, sixth,

seventh, eighth, ninth and tenth year for which improvements

would otherwise be taxable in a deteriorated neighborhood, one

hundred per cent of the eligible assessment shall be exempted;

after the tenth year the exemption shall terminate[.]; or

(4.1)  For the first, second, third, fourth, fifth, sixth,

seventh, eighth, ninth, tenth, eleventh, twelfth, thirteenth,

fourteenth and fifteenth year for which improvements would

otherwise be taxable in a depressed area, one hundred per cent

of the eligible assessment shall be exempted; after the

fifteenth year the exemption shall terminate.

[(5)] (a.1)  A local taxing authority may provide for tax

exemption on the assessment attributable to the actual cost of

construction of the dwelling unit in accordance with a schedule

established by the taxing authority, provided that the exemption

schedule does not exceed a period of ten years in a deteriorated

neighborhood or fifteen years in a depressed area.

(b)  The exemption from taxes shall be limited to the

additional assessment valuation attributable to the actual costs

of improvements to deteriorated property. The date of the

construction shall be the date of issuance of the building

permit, improvement record or other required notification of

construction. No tax exemption shall be granted under the

provisions of this article for any improvements to any dwelling

unit in excess of limitation set forth in this subsection.

(c)  The exemption from taxes authorized by this article

shall be upon the property exempted and shall not terminate upon

the sale or exchange of the property, unless otherwise provided

in this article.

Section 4.  Section 302 of the act is amended to read:

Section 302.  Deteriorating Areas; Procedures.--(a)  Each

local taxing authority may, by ordinance or resolution, exempt

from all real property taxation the assessed valuation of any

residential construction built in a deteriorating area or

depressed area from and after the effective date of this article

in the amounts and in accordance with the schedule and

limitations hereinafter provided. Prior to the adoption of the

ordinance or resolution authorizing the granting of such

exemptions from taxation, an interested municipal governing body

shall determine the boundaries of deteriorating and depressed

areas, wholly or partially located within its jurisdiction. At

least one public hearing shall be held by the municipal

governing body for the purposes of delineating said boundaries.

At the public hearings any local taxing authority, planning

commission or redevelopment authority and other public and

private agencies and individuals, knowledgeable and interested

in the improvement of deteriorating and depressed areas, shall

present their recommendations concerning the location of

boundaries of a deteriorating area or areas or depressed area or

areas for the guidance of the municipal governing bodies, such

recommendations to take into account not only the standards set

forth in section 301, but also those set forth in the act of May

24, 1945 (P.L.991, No.385), known as the "Urban Redevelopment

Law," for the determination of "blighted areas," and the act of

November 29, 1967 (P.L.636, No.292), known as the "Neighborhood

Assistance Act," for the determination of "impoverished areas."

The ordinance or resolution shall specify a description of each

such areas as determined by the municipal governing body, the

maximum assessment per dwelling unit which may be exempted, and

the schedule of taxes exempted as hereinafter provided.

(b)  Two or more municipal governing bodies may join for the

purpose of determining the boundaries of a deteriorating or

depressed area and to establish the maximum cost per dwelling

unit, and such municipal governing bodies shall cooperate fully

with each other for the purpose of implementing this article.

The local taxing authorities may, by implementing ordinance or

resolution, agree to adopt tax exemptions contingent upon the

similar adoption by an adjacent or coterminous local taxing

authority, within the limitations provided herein.

(c)  An area can be established as being deteriorating and

decayed or depressed even though the area so designated is not a

slum consisting exclusively of tangible physical blight. Any

such deteriorating or depressed area may include buildings or

improvements not in themselves blighted or dilapidated.

Section 5.  Section 303 of the act, amended December 30, 2002

(P.L.2085, No.235), is amended to read:

Section 303.  Exemption Schedule; Maximum Exemption.--(a)  A

local taxing authority granting a tax exemption pursuant to the

provisions of this article may provide for tax exemption on the

assessment attributable to the actual cost of construction of

the new dwelling unit in accordance with one of the following

schedules:

(1)  For the first, second and third year for which said

newly-constructed dwelling unit or units would otherwise be

taxable in a deteriorating area, one hundred per cent of the

eligible assessment shall be exempted; after the third year the

exemption shall terminate;

(2)  For the first year for which said newly-constructed

dwelling unit or units would otherwise be taxable in a

deteriorating area, one hundred per cent of the eligible

assessment shall be exempted; for the second year, ninety per

cent of the eligible assessment shall be exempted; for the third

through tenth years, eighty, seventy, sixty, fifty, forty,

thirty, twenty, and ten per cent, respectively, of the eligible

assessment shall be exempted; after the tenth year, the

exemption shall terminate; [or]

(3)  For the first, second, third, fourth, fifth, sixth,

seventh, eighth, ninth and tenth year for which said newly-

constructed dwelling unit or units would otherwise be taxable in

a deteriorating area, one hundred per cent of the eligible

assessment shall be exempted; after the tenth year the exemption

shall terminate[.]; or

(3.1)  For the first, second, third, fourth, fifth, sixth,

seventh, eighth, ninth, tenth, eleventh, twelfth, thirteenth,

fourteenth and fifteenth year for which said newly constructed

dwelling unit or units would otherwise be taxable in a depressed

area, one hundred per cent of the eligible assessment shall be

exempted; after the fifteenth year the exemption shall

terminate.

[(4)] (a.1)  A local taxing authority may provide for tax

exemption on the assessment attributable to the actual cost of

construction of the new dwelling unit in accordance with a

schedule established by the taxing authority, provided that the

exemption schedule does not exceed a period of ten years in a

deteriorating area or fifteen years in a depressed area.

(b)  The exemption from taxes shall be limited to the

assessment valuation attributable to the cost of construction of

the new dwelling unit not in excess of the uniform maximum cost

per dwelling unit specified by the municipal governing body. The

exemption shall commence in the tax year immediately following

the year in which the building permit is issued. No tax

exemption shall be granted under the provisions of this article

for the construction of any dwelling unit in excess of the

uniform maximum cost specified by the municipal governing body.

(c)  The exemption from taxes authorized by this article

shall be upon the newly-constructed dwelling unit or units

exempted and shall not terminate upon the sale or exchange of

the property, unless otherwise provided in this article.

Section 6.  This act shall take effect immediately.