PRINTER'S NO. 2630
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1880
Session of
2017
INTRODUCED BY DEASY, READSHAW, KINSEY, LONGIETTI, CALTAGIRONE,
YOUNGBLOOD, FREEMAN, MURT, SOLOMON, BRIGGS, O'BRIEN, SAINATO,
D. COSTA, V. BROWN, ROEBUCK, SCHWEYER, THOMAS, MATZIE AND
PASHINSKI, OCTOBER 24, 2017
REFERRED TO COMMITTEE ON URBAN AFFAIRS, OCTOBER 24, 2017
AN ACT
Providing for the establishment of a cultural development
district program for communities in this Commonwealth with
arts and cultural centers which benefit the public; and
establishing Commonwealth tax exemptions for residents and
businesses within the designated cultural development
districts.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Cultural
Development District Act.
Section 2. Legislative findings and policy.
The General Assembly finds and declares as follows:
(1) The General Assembly recognizes that arts and
cultural institutions are a vital and important economic
development tool and offer important educational, cultural
and spiritual benefits for the residents of this
Commonwealth. Therefore, the creation of cultural development
districts is in the best interest of the citizens of this
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Commonwealth because it will help improve the economic
prosperity of the applicable areas and support the economic
growth of areas surrounding these cultural sites.
(2) Cultural centers are currently found throughout this
Commonwealth in both impoverished and flourishing areas, but
cultural centers relating to arts are most likely to be
located in more racially mixed neighborhoods. As the
Commonwealth has already invested a considerable amount of
resources in cultural attractions, the areas in immediate
proximity to the cultural attractions often are not as
successful.
(3) Arts are collective enterprises. Clusters of arts
organizations often develop because they aid the creative
process and help create an environment of competition and
efficiency. Therefore, it is essential to support the art
organizations as a group, which necessitates the creation of
cultural development districts instead of simply promoting
specific art organizations.
(4) Tax abatement may encourage residents and businesses
to relocate to certain areas which are underdeveloped or
blighted.
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
context clearly indicates otherwise:
"Cultural center" or "cultural attraction." A facility that
functions as a community center, museum, marketplace, art
studio, art gallery, theater, library or historic site and that
provides the public with educational, social, artistic or
cultural benefits.
20170HB1880PN2630 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
"Cultural development district." A district established
under section 4.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"District." The contiguous geographic area within one or
more municipalities defined and created by resolution or
ordinance of the governing body of the municipality creating the
cultural development district in accordance with section 4.
"Elm Street Program." The program established by the act of
February 9, 2004 (P.L.61, No.7), known as the Elm Street Program
Act.
"Main Street Program." The program established by the act of
April 23, 2002 (P.L.298, No.39), known as the Main Street Act.
"Municipality." A city, borough, township or incorporated
town.
"Tax abatement." An exemption, deduction, abatement or
credit for any tax owed to the Commonwealth.
"Urban Redevelopment Law." The act of May 24, 1945 (P.L.991,
No.385), known as the Urban Redevelopment Law.
Section 4. Establishment.
(a) General rule.--A cultural development district shall be
created as follows:
(1) A municipality may propose the establishment of a
cultural development district. The proposal shall include:
(i) Evidence of the benefits of the creation of the
cultural development district to the municipality.
(ii) A plan of what is to be done in the cultural
development district, including the types of businesses
or residences the municipality hopes to attract in
designating a cultural development district, including a
20170HB1880PN2630 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
possible theme for the area.
(iii) The potentially affected organization or
residential building which would be a part of the
cultural development district.
(iv) An economic feasibility study of the project
and the fiscal effects on the municipal tax base.
(v) A detailed estimate of the amount of State tax
abatement incurred by the proposal.
(vi) A map showing existing uses and conditions of
real property in the proposed cultural development
district.
(vii) A list of estimated non-tax-related expenses.
(viii) Evidence that the cultural attraction or
cultural center in question provides sufficient benefit
to the community where it is located by creating arts
programs, cultural or ethnic education or programs or
other relevant aid to the general public.
(2) An organization, business or group of residents may
apply to the municipality for the establishment of a cultural
development district.
(b) Hearing.--The following shall apply:
(1) The municipality shall hold at least one public
hearing regarding the establishment of a cultural development
district. The hearing shall be held to inform local residents
and business owners of the benefits and detriments of the
designation.
(2) Each affected municipality shall designate a
representative to discuss the proposed cultural development
district with the community.
(3) An interested party may meet with the representative
20170HB1880PN2630 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
to discuss the establishment of the cultural development
district, its boundaries, the exclusion of a particular
parcel of property from the cultural development district and
other relevant matters. Notice of the hearing shall be
published in accordance with 65 Pa.C.S. Ch. 7 (relating to
open meetings) and shall be mailed to the governing body of a
municipality that levies property taxes within the boundaries
of the proposed cultural development district. The notice
shall be provided at least 30 days prior to the hearing.
(c) Resolution or ordinance.--The following shall apply:
(1) In order to establish a cultural development
district, the governing body of the municipality shall adopt,
no more than three weeks after the public hearing under
subsection (b), a resolution or ordinance that describes the
boundaries of the cultural development district.
(2) A cultural development district may exist for a
period not to exceed five years.
(3) The municipality shall assign a name to the cultural
development district for identification purposes. The
cultural development district may be established in
conjunction with and covering the same area as a Main Street
Program or Elm Street Program.
(4) If the resolution or ordinance is passed by the
municipality in which the cultural development district is
located, the municipality shall apply to the department for
the authority to receive tax abatement from the Commonwealth.
(5) Two or more municipalities may join together to
create a cooperative cultural development district. If
multiple municipalities join together, each municipality
shall pass a resolution or ordinance establishing the
20170HB1880PN2630 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
cultural development district. The municipalities may jointly
apply to the department for review.
Section 5. Review by department.
(a) Criteria.--The department shall review the application
for the establishment of a cultural development district and
determine whether the area is eligible for designation. The
review shall address the following factors:
(1) Whether the attraction in question is a cultural
attraction.
(2) If the boundaries of the proposed cultural
development district exceed one-half of one square mile.
(3) If the application is from a first or second class
city, that no more than 10 cultural development districts
have been proposed or implemented. If more than 10 cultural
development districts are proposed or implemented, the
department shall determine which cultural development
districts meet the greatest needs.
(b) Approval.--If approving a cultural development district,
that the department shall maintain the final authority to
determine whether or not businesses moving into the cultural
development district fall within the proposed plan of the
municipality and are eligible for tax abatement.
Section 6. Eligibility.
(a) Municipal burden of proof.--In order to establish a
cultural development district, the municipality shall provide
evidence to the department that the cultural development
district:
(1) Is a contiguous geographic area.
(2) Is likely to undergo improvement, defined as
significant increase in real property values, if included
20170HB1880PN2630 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
under this program.
(3) Has not adequately capitalized on its cultural
attractions and resources.
(4) Has not been adequately developed through private
enterprise.
(b) Criteria for designation.--An area is eligible to be
designated as a cultural development district if:
(1) less than 50% of the property has been utilized for
commercial, residential or other purposes or the property is
considered blighted under the Urban Redevelopment Law; or
(2) the property is considered to be in a deteriorated
or distressed condition.
(c) Additional criteria for designation.--In addition to the
required criteria under subsections (a) and (b), the department
shall consider the following criteria:
(1) Evidence of distress, including unemployment,
percentage of population below the State median income,
poverty rate, deteriorated property and adverse economic and
socioeconomic conditions in the proposed cultural development
district.
(2) Local public and private commitment to the
development of the proposed cultural development district and
the potential cooperation of surrounding communities.
(3) Existing resources available to the proposed
cultural development district.
(4) How cultural development district approval relates
to other current economic and community development projects
and to regional initiatives or programs.
(5) Crime statistics and proposals to implement local
crime reduction measures.
20170HB1880PN2630 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(6) Proposals to establish and link job creation and job
training.
Section 7. Cultural development districts.
(a) General rule.--The following shall apply:
(1) If a cultural development district has been
established, residences and businesses which enter the area
shall receive tax abatement from the time they move in until
the expiration of the cultural development district.
(2) A business entity's income that is derived directly
from within the cultural development district shall receive
tax abatement.
(3) The department shall create a tax abatement form to
be sent to the Commonwealth in replacement of taxes due.
(4) An entity within the cultural development district
may not receive full tax abatement after the five years for
which the cultural development district is established.
(5) If a business owner or resident sells property
within a cultural development district, the new resident or
owner shall receive tax abatement for the cultural
development district for the time for which the cultural
development district has been established. The abatement of
the cultural development district shall remain with the real
property, not the individual or organization.
(b) Limitation on relocation.--A business owner may not be
granted tax abatement if the business owner relocates the
business from one cultural development district to another. A
business may receive the tax abatement within a cultural
development district once, except that several branches of the
same business may receive tax abatement within numerous cultural
development districts.
20170HB1880PN2630 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(c) Limitation on eminent domain.--A municipality may not
use the power of eminent domain to establish a cultural
development district.
Section 8. Expiration.
(a) General rule.--A cultural development district shall
expire five years after the date set by the municipality for
establishment.
(b) Phased withdrawal of tax credits.--If a cultural
development district has expired, the residences and businesses
within the cultural development district that received the tax
abatement shall receive full tax abatement for a period of five
years and shall be entitled to a phaseout of the tax abatement
as follows:
(1) In the first year after receipt of five full years
of tax abatement, the residents and business owners shall be
liable for 10% of the taxes for which they received abatement
in the past.
(2) In the second year after receipt of five full years
of tax abatement, the residents and business owners shall be
liable for 25% of the taxes for which they received abatement
in the past.
(3) In the third year after receipt of five full years
of tax abatement, the residents and business owners shall be
liable for 50% of the taxes for which they received abatement
in the past.
(4) In the fourth year after receipt of five full years
of tax abatement, the residents and business owners shall be
liable for 75% of the taxes for which they received abatement
in the past.
(5) In the fifth year and each year thereafter after
20170HB1880PN2630 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
receipt of five full years of tax abatement, the residents
and business owners shall be liable for the full amount of
the taxes due.
Section 9. Reports.
(a) Effects.--The department, in cooperation with other
State agencies and local governments, shall develop and submit a
comprehensive report to the Governor and the General Assembly
every two years as to the social, economic and financial effects
and the impact of approved cultural development districts.
(b) Evaluation.--If this act is repealed, the department
shall present to the Governor and the General Assembly a
complete evaluation of the effects of the creation of cultural
development districts in this Commonwealth.
Section 10. Rules and regulations.
The department may promulgate rules and regulations necessary
to carry out this act.
Section 11. Severability.
The provisions of this act are severable. If any provision of
this act or its application to a person or circumstance is held
invalid, the invalidity shall not affect other provisions or
applications of this act which can be given effect without the
invalid provision or application.
Section 12. Repeals.
All acts and parts of acts are repealed insofar as they are
inconsistent with this act.
Section 13. Effective date.
This act shall take effect immediately.
20170HB1880PN2630 - 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27