PRINTER'S NO. 1147
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
935
Session of
2015
INTRODUCED BY BROWNE, WHITE, MENSCH, TEPLITZ, FONTANA AND
YUDICHAK, JUNE 29, 2015
REFERRED TO FINANCE, JUNE 29, 2015
AN ACT
Amending the act of July 11, 1990 (P.L.465, No.113), entitled
"An act providing for the creation of tax increment
districts; providing for additional powers and duties to be
exercised by redevelopment authorities and by industrial and
commercial development authorities; authorizing the creation
and approval of project plans for tax increment financing;
providing for the establishment of a tax increment base;
allocating the payment of positive tax increments; providing
for the financing of project costs; and providing for the
issuance of tax increment bonds and notes," further defining
"tax increment" and "tax increment base"; and further
providing for determination of tax increment and tax
increment base and for allocation of positive tax increments.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "tax increment" and "tax
increment base" in section 3 of the act of July 11, 1990
(P.L.465, No.113), known as the Tax Increment Financing Act,
amended December 16, 1992 (P.L.1240, No.164), are amended to
read:
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
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context clearly indicates otherwise:
* * *
"Tax increment." Generally, the incremental tax revenues,
determined with reference to the tax increment base, resulting
from the increase in property values or from the increase in
commercial activity as a result of a project. More specifically,
the term includes the following:
(1) The incremental tax revenues resulting from an
increase in the total market value of taxable real property
situated in a tax increment district and an increase in the
business use and occupancy of such taxable real property.
This paragraph applies only to ad valorem taxes on real
property and tax imposed by the governing body on the use and
occupancy of real property.
(2) The payment in lieu of taxes assigned to or agreed
to be paid by governmental entities or nonprofit
organizations with property situated or otherwise assignable
to a tax increment district. Whether all or only a portion of
this payment is to be considered part of the tax increment
shall be determined at the time the tax increment district is
created.
(3) The incremental tax revenues resulting from an
increase in total taxable sales and rentals of tangible
personal property and in the rendition of taxable services by
vendors located in a tax increment district. [This paragraph
applies only to a sales tax levied by a governing body.]
(4) The incremental tax revenues resulting from an
increase in total gross receipts or gross or net profits or
income realized by persons or entities from business
conducted in a tax increment district. This paragraph applies
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only to those taxes levied under the authority of the act of
August 5, 1932 (Sp.Sess., P.L.45, No.45), referred to as the
Sterling Act, the act of December 31, 1965 (P.L.1257,
No.511), known as The Local Tax Enabling Act, and the act of
May 30, 1984 (P.L.345, No.69), known as the First Class City
Business Tax Reform Act.
"Tax increment base." The term means one or more of the
following, as appropriate:
(1) The aggregate market value of all taxable real
property located within a tax increment district on the date
the district is created.
(2) In a district where the governing body has levied a
tax on the business use and occupancy of real estate, the
average aggregate market value of real property located
within the district and used or occupied for business
purposes during the last available 12-month period preceding
the date of creation of the district.
(3) [In a district where the governing body has levied a
sales tax, the] The total amount of taxable sales, rentals
and services subject to the sales tax of the Commonwealth
under Article II of the act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971, and occurring within
the district during the last calendar year or the last
available 12-month period preceding the date of creation of
the district.
(4) In a district where the governing body has levied a
mercantile license tax, business privilege tax, net profits
tax or similar tax for the privilege of engaging in business
within the district, the total amount of taxable gross
receipts, net income or net profits, as the case may be,
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realized by taxpayers at locations within the district during
their last taxable period which ended before the date of
creation of the district.
* * *
Section 2. Section 6(b) of the act, amended December 16,
1992 (P.L.1240, No.164), is amended and the section is amended
by adding a subsection to read:
Section 6. Determination of tax increment and tax increment
base.
* * *
(b) Determination of base.--Upon application in writing by
the finance officer of the municipality which created the
district, the assessor for that municipality shall determine,
according to its best judgment from all sources available to it,
the full aggregate market value of the taxable property in the
district as of the date on which the district was created. The
finance officer of the municipality may determine the sales tax
base of a sales tax levied by a governing body or any other tax
increment base contemplated hereby, except for the State sales
tax base, in any manner which is reasonable and prudent and
meets sound business practice.
(b.1) Determination of sales tax base.--Upon application in
writing by the finance officer of the municipality which created
the district, the Department of Revenue shall calculate the
State sales tax base under Article II of the act of March 4,
1971 (P.L.6, No.2) , known as the Tax Reform Code of 1971, with
respect to vendors located within the tax incentive district.
* * *
Section 3. Section 7 of the act is amended by adding a
subsection to read:
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Section 7. Allocation of positive tax increments.
* * *
(b.1) Determination and transfer of State sales tax
increments.--Within 30 days of the end of each quarter, the
Department of Revenue shall calculate and notify the Secretary
of the Budget of the amount of the positive State sales tax
increment allocable to each tax increment district. Within 10
days of receiving the notification, the Secretary of the Budget
shall direct the State Treasurer to transfer an amount equal to
the State sales tax increment from the General Fund to the
appropriate issuing authority.
* * *
Section 4. This act shall apply to tax increment districts
created after the effective date of this section.
Section 5. This act shall take effect in 60 days.
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