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PRINTER'S NO. 4513
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2937
Session of
2020
INTRODUCED BY SOLOMON, HELM, CALTAGIRONE, QUINN, HILL-EVANS,
SCHMITT, HOWARD, HOHENSTEIN, WILLIAMS, KINSEY, SANCHEZ,
KIRKLAND, BULLOCK, DOWLING, SCHLOSSBERG AND RIGBY,
OCTOBER 15, 2020
REFERRED TO COMMITTEE ON URBAN AFFAIRS, OCTOBER 15, 2020
AN ACT
Authorizing local taxing authorities to provide for tax
exemptions for improvements to deteriorated areas and
dwellings to incentivize the creation and improvement of
affordable housing units.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
GENERAL PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Affordable
Housing Unit Tax Exemption Act.
Section 102. 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:
"Affordable housing unit."
(1) A multiunit residential dwelling where at least 30%
of the residential units meet all of the following:
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(i) Are rent-restricted.
(ii) Are occupied by an individual or family whose
income is not more than 60% of area median income.
(2) The term includes single family residences that are
subject to deed restrictions and occupied by an individual or
family whose income is not more than 60% of the area median
gross income.
"Area median income." The median household income within the
boundaries of a local taxing authority.
"Blighted property." The term shall have the same meaning as
defined in 1 Pa.C.S. ยง 1991 (relating to definitions).
"Deteriorated area." An area designated by a municipal
corporation which consists of blighted property.
"Dwelling unit." 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.
"Homestead." As follows:
(1) A dwelling used as a home which is occupied by a
taxpayer as a primary residence.
(2) The term includes:
(i) A mobile home which is assessed as realty for
local property tax purposes and the land on which the
mobile home is situated and other similar living
accommodations, including a part of a multidwelling or
multipurpose building and a part of the land upon which
the multidwelling or multipurpose building is built to
the extent that the eligible taxpayer is chargeable by a
local taxing authority for property taxes.
(ii) A premises occupied by an eligible taxpayer if
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the eligible taxpayer is required by law to pay a
property tax by reason of the taxpayer's ownership or
rental of, include a possessory interest in, the
dwelling, land or both. As used in this subparagraph:
(A) The term "by law" shall not include a
contractual obligation between the eligible taxpayer
and a person who would otherwise be responsible to a
local taxing authority for the payment of the tax.
(B) An owner shall include a person in
possession under a contract of sale, deed of trust,
life estate, joint tenancy or tenancy in common.
"Improvement." Repair, construction or reconstruction,
including alterations and additions, having the effect of
rehabilitating a blighted property so that the blighted property
becomes habitable or attains higher standards of safety, health,
economic use or amenity, or is brought into compliance with
laws, ordinances or regulations governing safety, health,
economic use or amenity standards. The term shall not include
ordinary upkeep and maintenance.
"Local taxing authority." A county, city, borough,
incorporated town, township, institution district or school
district having authority to levy real property taxes.
"Low-income taxpayer." A taxpayer whose income does not
exceed the maximum annual income allowable for an eligible
claimant to participate in the Pharmacetuical Assistance
Contract for the Elderly Needs Enhancement Tier (PACENET).
"Municipal code." A building, housing, property maintenance,
fire, health or other public safety ordinance, related to the
use or maintenance of real property, enacted by a municipality.
The term does not include a subdivision and land development
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ordinance or a zoning ordinance enacted by a municipality.
"Municipal corporation." A city, borough, incorporated town
or township.
"Property maintenance code." A municipal ordinance which
regulates the maintenance or development of real property. The
term includes a building code, housing code and public safety
code.
"Real estate taxes." A tax on a homestead imposed or
authorized to be imposed by a local taxing authority.
"Rent-restricted." The maximum rent an owner may charge for
a unit does not exceed 30% of the adjusted income of a family or
taxpayer whose annual income is less than or equal to 60% of the
area median gross income.
"Serious violation." A violation of a State law or a
municipal code that poses an immediate imminent threat to the
health and safety of a dwelling occupant, an occupant in a
surrounding structure or a passerby.
"Special tax provision." The standards and qualifications
provided under this act to establish the eligibility for and the
refund or forgiveness of a portion of the taxpayer's real estate
tax liability.
"Substantial step." An affirmative action as determined by a
property code official or officer of the court on the part of a
property owner or managing agent to remedy a serious violation
of a State law or code, including, but not limited to, physical
improvements or repairs to the property, which affirmative
action is subject to appeal in accordance with applicable law.
"Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
"Taxpayer Relief Act." The act of June 27, 2006 (1st
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Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act.
CHAPTER 2
SPECIAL TAX PROVISIONS FOR IMPOVERISHED PENNSYLVANIANS
Section 201. Construction.
This chapter shall be construed to authorize a local taxing
authority to provide by ordinance or resolution for the
implementation of the special tax provisions contained in this
act which allow for the refund or forgiveness of real property
tax liability of low-income families attributable to real
property tax rate increases and increases in the assessed value
of the low-income family's homestead, implementing section 2(b)
(ii) of Article VIII of the Constitution of Pennsylvania.
Section 202. Declaration of policy (Reserved).
Section 203. Special tax provisions and refund or forgiveness
of real estate taxes.
(a) General rule.--A taxpayer residing within the boundaries
of a local taxing authority who meets the standards and
qualifications established by this act shall be deemed a
separate class of subjects of taxation, and, as such, each
governing body of a local taxing authority may by ordinance
provide that the taxpayer shall be entitled to the benefit of
the special tax provisions of this act.
(b) Refund or forgiveness of real estate taxes.--Under an
ordinance or resolution referenced under subsection (a), an
eligible taxpayer shall receive a refund or forgiveness which
has been paid over to or would, except for this act, be payable
to the local taxing authority for real estate taxes authorized
or imposed by a local taxing authority in accordance with the
following:
(1) A low-income taxpayer shall receive a refund or
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forgiveness of the part of the low-income taxpayer's real
estate tax liability attributable to a real estate tax rate
increase or an increase in the assessed value of the
taxpayer's homestead occurring after the effective date of an
ordinance implementing this act.
(2) If a taxpayer who had previously been eligible to
receive a refund or forgiveness of real estate taxes under
this act is no longer eligible by reason of failing to meet
the low-income requirement provided under this act, the
taxpayer shall be billed and shall pay real estate taxes at
the then current real estate tax rate and assessed value. If
for subsequent tax years a taxpayer reestablishes eligibility
for refunds or forgiveness of real estate taxes by again
meeting the low-income requirements provided under this act,
the amount of real estate taxes that the taxpayer is eligible
to have refunded or forgiven shall be the part of the
taxpayer's real estate tax liability attributable to a real
estate tax rate increase or an increase in the assessed value
of the taxpayer's homestead occurring no earlier than the
calendar year prior to the tax year for which the taxpayer
reestablishes eligibility.
(3) The maximum amount of real estate taxes which may be
refunded or forgiven may be limited by ordinance.
(4) If a homestead is owned for only a portion of a year
or is owned in part by a person who is not a low-income
taxpayer, the tax collector shall apportion the real estate
taxes in accordance with the period or portion of ownership
of the eligible taxpayer in determining the amount of refund
or forgiveness for which a taxpayer is eligible.
Section 204. Application and proof of claim.
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(a) Application.--A taxpayer desiring to take advantage of
the special tax provisions under an ordinance or resolution
adopted under this act shall notify the local taxing authority
granting the special tax provisions in writing on a form
provided by the local taxing authority submitted at the time
provided in the ordinance or resolution. Only one taxpayer for
each homestead shall receive real estate tax refund or
forgiveness of taxes. If at least two taxpayers are residing at
a homestead meet the qualification for a real estate tax refund
or forgiveness of taxes, the taxpayers may determine who shall
receive the refund or forgiveness of taxes. If the taxpayers are
unable to agree, each local taxing authority shall determine to
whom the refund or forgiveness of taxes shall apply.
(b) Proof of claim.--Each application shall include
reasonable proof of household income, the location and nature of
the property claimed as a homestead and the tax bill or receipt
for the real estate taxes owed or paid in connection with the
occupancy of the homestead. For the purposes of this subsection,
a taxpayer shall not be required to directly pay the real estate
taxes.
Section 205. Administration and enforcement.
Each local taxing authority shall provide by ordinance or
resolution, rule or regulation for the administration and
enforcement of an ordinance or resolution adopted under this
act.
CHAPTER 3
CREATING AND IMPROVING AFFORDABLE HOUSING
UNITS IN DETERIORATED AREAS
Section 301. Construction.
This chapter shall be construed to authorize a local taxing
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authority to provide for tax exemption incentives for new
construction for, and improvements to, deteriorated areas of
this Commonwealth to create and improve affordable housing
units. This chapter shall implement section 2(b)(iii) of Article
VIII of the Constitution of Pennsylvania.
Section 302. Exemption.
(a) Real property tax exemption.--
(1) A local taxing authority may, by ordinance or
resolution, exempt from real property taxation the assessed
valuation of improvements to blighted properties for the
creation of, or improvements to, affordable housing units,
and the assessed valuation of new construction within a
deteriorated area in the amounts and in accordance with the
provisions and limitations specified in this act.
(2) An ordinance or resolution under paragraph (1) shall
specify a description of each deteriorated area, the cost of
improvements per unit to be exempted and the schedule or
taxes exempted as provided under this act.
(b) Boundaries.--Prior to the adoption of the ordinance or
resolution authorizing the granting of a tax exemption under
this section, a municipal corporation must designate the
boundaries of the deteriorated area, wholly or partially located
within its jurisdiction, if any.
(c) Public hearing.--
(1) At least one public hearing must be held by the
municipal corporation for the purpose of determining the
boundaries of a deteriorated area.
(2) At a public hearing under paragraph (1), the local
taxing authorities, planning commission or redevelopment
authority and other interested public and private agencies
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and individuals, shall present their recommendations
concerning the location of boundaries of a deteriorated area
for the guidance of the municipal corporation.
(3) The public hearing shall be held in accordance with
65 Pa.C.S. Ch. 7 (relating to open meetings).
(d) Adjacent property inclusions.--Property adjacent to a
deteriorated area may be included within the deteriorated area
if the local taxing authority determines that new construction
on the property would encourage, enhance or accelerate the
development of affordable housing units.
(e) Municipal cooperation.--
(1) Two or more municipal corporations may join together
for the purpose of determining the boundaries of a
deteriorated area and establishing the uniform maximum cost
per unit. Each municipal corporation joining together under
this paragraph shall cooperate fully with each other for the
purpose of implementing this act.
(2) A local taxing authority may, by implementing an
ordinance or resolution, agree to adopt a tax-exemption
schedule contingent upon the similar adoption by an adjacent
local taxing authority or by a local taxing authority with
mutual jurisdiction, within the limitations provided under
this act.
(f) Rescinding deteriorated area designation.--A local
taxing authority may rescind an ordinance or resolution adopted
under subsection (a) if the local taxing authority determines
that the tax exemption in the deteriorated area within the
boundaries established under subsection (b) has accomplished the
goal of creating and improving affordable housing units in the
deteriorated area. Property granted tax exemption within the
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boundaries of the deteriorated area prior to the ordinance or
resolution being rescinded shall continue to receive the tax
exemption granted until the tax exemption is terminated in
accordance with the exemption schedule.
Section 303. Exemption schedule.
(a) Provision.--A local taxing authority granting a tax
exemption under this chapter may provide for a tax exemption on
the assessment attributable to the actual cost of new
construction or improvements for affordable housing units or up
to any maximum cost uniformly established by the local taxing
authority. The maximum cost shall uniformly apply to each
eligible blighted property within the deteriorated area within
the local taxing authority's jurisdiction.
(b) Schedule.--Notwithstanding if the assessment eligible
for exemption is based on actual cost or a maximum cost, the
actual amount of real estate taxes exempted shall be in
accordance with one of the following schedules, as determined by
the local taxing authority:
(1) For the following years for which improvements would
otherwise be taxable:
(i) for the first year, 100% of the eligible
assessment shall be exempted;
(ii) for the second year, 90% of the eligible
assessment shall be exempted;
(iii) for the third through tenth years, 80%, 70%,
60%, 50%, 40%, 30%, 20% and 10%, respectively; and
(iv) after the tenth year, the exemption shall
terminate.
(2) For the following years for which improvements would
otherwise be taxable:
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(i) for the first year, 100% of the eligible
assessment shall be exempted;
(ii) for the second year, 80% of the eligible
assessment shall be exempted;
(iii) for the third through fifth years, 60%, 40%
and 20%, respectively, of the eligible assessment shall
be exempted; and
(iv) after the fifth year, the exemption shall
terminate.
(3) For the following years for which improvements would
otherwise be taxable:
(i) for the first through third years, 100% of the
eligible assessment shall be exempted; and
(ii) after the third year, the exemption shall
terminate.
(4) For the first through tenth years for which
improvements would otherwise be taxable, 100% of the eligible
assessment shall be exempted and after the tenth year the
exemption shall terminate.
(5) 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, if the
exemption schedule does not exceed a period of 10 years.
(c) Limitation.--The exemption from taxes shall be limited
to the additional assessment valuation attributable to the
actual costs of new construction or improvements to blighted
property or not in excess of the maximum cost per unit
established by a local taxing authority.
(d) Sale or exchange.--The exemption from taxes shall be
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upon the property exempted and shall not terminate upon the sale
or exchange of the property.
(e) Estimate.--A local taxing authority shall provide upon
request an estimate of the amount of assessment exempted for
each eligible property based on the exemption schedule under
subsection (b).
(f) Repayment.--
(1) A local taxing authority shall be entitled to a
return of its proportional share of real estate taxes
exempted under the provisions of this act if, within five
years following completion of the new construction or
improvements:
(i) there exists on the property a serious violation
of State law or a municipal code and the owner has taken
no substantial steps to correct the serious violation
within six months following notification of the serious
violation and for which fines or other penalties or a
judgment to abate or correct were imposed by a
magisterial district judge or municipal court, and a
final judgment at law or in equity, not subject to
appellate review, was imposed by a court of common pleas;
or
(ii) the taxpayer is subject to a municipal permit
denial under 53 Pa.C.S. Ch. 61 (relating to neighborhood
blight reclamation and revitalization).
(2) At the time the agreement is entered into between a
local taxing authority and the taxpayer who desires tax
exemption, if the taxpayer has completed all requirements
under section 305, the local taxing authorities shall file a
lien against the tax-exempt properties at the rate of the
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estimated amount of assessment under subsection (b). The lien
shall be forgiven by the local taxing authority at the end of
the fifth year following the completion of the new
construction or improvements, if there have been no serious
violations against the property that have not been corrected.
The lien on the property shall transfer under subsection (d)
in cases of sale or exchange of the property.
Section 304. Procedure for obtaining exemption incentives.
(a) Notification.--A taxpayer desiring tax exemption
authorized by an ordinance or resolution adopted under this
chapter shall notify the local taxing authority granting the
exemption in writing on an application form provided by the
local taxing authority, submitted at the time the taxpayer
secures the building permit or, if no building permit or other
notification of new construction or improvement is required, at
the time the taxpayer commences construction. The application
shall include the following information:
(1) Statement of tax obligations, signed by the
applicant and the local taxing authority and notarized.
(2) Outline of specifications for the new construction
or improvement, indicating with as much specificity as
practicable, the materials to be used for exterior and
interior finishes.
(3) An itemized cost estimate for the new construction
or improvement. The itemization must:
(i) Be on contractor letterhead.
(ii) Indicate the property address of the project.
(iii) Be signed by the applicant.
(4) Preliminary architectural drawings or blueprints for
the new construction or improvement.
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(5) A recent appraisal of the property, if available.
(6) An applicable building permit application or
building permit.
(7) An income and expense report for the property, which
may be submitted directly to the county assessment office in
order to protect the confidentiality of the information.
(8) The final decision of the zoning authority or other
regulatory agency granting relief, if applicable.
(9) The signature of the applicant and the date of
signing.
(b) Estimate.--The amount of assessment deemed eligible for
tax exemption under subsection (c) shall be available for public
inspection and copying under the act of February 14, 2008
(P.L.6, No.3), known as the Right-to-Know Law, so that a
subsequent purchaser is informed of the amount of taxes to be
paid after the 10-year exemption period.
(c) County assessment office.--
(1) A copy of the exemption request shall be forwarded
to the county assessment office. The county assessment office
shall, after completion of the new construction or
improvement, assess separately the new construction or
improvement and calculate the amounts of the assessment
eligible for tax exemption in accordance with the limits
established by the local taxing authorities and notify the
taxpayer and the local taxing authorities of the reassessment
and amounts of the assessment eligible for exemption.
(2) Appeals from the reassessment and the amounts
eligible for the exemption may be taken by the taxpayer or
the local taxing authorities.
(d) Amendment of ordinance or resolution.--The cost of new
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construction or improvements to be exempted and the schedule of
taxes exempted which exist at the time of the initial request
for tax exemption shall apply to the exemption request. A
subsequent amendment to the ordinance or resolution shall not
apply to a request initiated prior to adoption of the amendment.
Section 305. Eligibility requirements.
(a) General rule.--The completed new construction or
improvement must:
(1) Conform to zoning ordinance requirements.
(2) Increase the value of the property by at least 25%.
(3) Correct each municipal code violation.
(b) Ineligibility.--A property shall be ineligible for tax
exemption under section 304(a) if:
(1) The property receives other property tax abatement
or exemption incentives for new construction or improvement.
(2) The property receives tax relief through a State
program, except as provided under subsection (d).
(3) The property owner or developer is delinquent on
property taxes related to the subject property, except if the
delinquent taxes are paid prior to construction or payment of
delinquent taxes has been arranged with the local taxing
authority in accordance with an installment plan.
(4) The property owner has a legal or equitable interest
in other property for which property taxes are delinquent,
except if the delinquent taxes are paid prior to construction
or payment of delinquent taxes has been arranged with the
local taxing authority in accordance with an installment
plan.
(5) New construction or improvement has commenced prior
to filing an application under section 305.
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(6) The property includes an improvement under
subsection (c) that poses a health or safety risk to an
individual residing above the first floor.
(c) Exception.--The amount of assessment eligible for
exemption under this act shall be offset by the amount of
property tax rebate received under Chapter 13 of the Taxpayer
Relief Act.
(d) Limitations.--The property qualifying and receiving a
tax exemption under this chapter shall be ineligible for or
receive additional tax exemptions under the act of July 9, 1971
(P.L.206, No.34), known as the Improvement of Deteriorating Real
Property or Areas Tax Exemption Act, and the act of December 1,
1977 (P.L.237, No.76), known as the Local Economic
Revitalization Tax Assistance Act, for a minimum of 15 years
from the date the property received a tax exemption under this
chapter.
(e) Prohibitions.--For the period of time that a property
receives a tax exemption under this chapter, a purchase or sale
of the property or any portion of the property may not be
structured to exclude or exempt the transaction from a realty
transfer tax due to a taxing authority that would not be
excluded or exempt, except for the following:
(1) A sheriff sale or tax claim bureau sale.
(2) A corrective deed.
(3) A transfer by a mortgagor to the holder of a bona
fide mortgage in default in lieu of a foreclosure.
(4) A transfer to a judicial sale in which the
successful bidder is the bona fide holder of a mortgage.
(5) A transaction excluded from the realty transfer tax
under Article XI-C of the Tax Reform Code of 1971.
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CHAPTER 4
CREATING AND IMPROVING AFFORDABLE HOUSING UNITS
Section 401. Construction.
This chapter shall be construed to authorize local taxing
authorities to provide for special tax provisions on an increase
in value of real estate resulting from construction of
affordable housing units or improvements to an existing
affordable housing unit within the boundaries of the local
taxing authority, implementing section 2(b)(iv) of Article VIII
of the Constitution of Pennsylvania.
Section 402. Exemption schedule.
(a) General rule.--A local taxing authority granting a tax
exemption under this chapter may provide for a tax exemption on
the assessment attributable to the actual cost of new
construction or improvements for affordable housing units or up
to a maximum cost uniformly established by the municipal
corporation. The maximum cost shall uniformly apply to each
eligible affordable housing unit constructed or improved within
the local taxing authority's jurisdiction.
(b) Schedule.--Notwithstanding if an assessment eligible for
exemption is based upon actual cost or a maximum cost, the
actual amount of taxes exempted shall be in accordance with one
of the following schedules, as determined by the local taxing
authority:
(1) For the following years for which new construction
or improvements would otherwise be taxable:
(i) for the first year, 100% of the eligible
assessment shall be exempted;
(ii) for the second year, 100% of the eligible
assessment shall be exempted; and
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(iii) after the second year, the exemption shall
terminate.
(2) For the following years for which new construction
or improvements would otherwise be taxable:
(i) for the first year, 100% of the eligible
assessment shall be exempted;
(ii) for the second year, 50% of the eligible
assessment shall be exempted; and
(iii) after the second year, the exemption shall
terminate.
(c) Limitation.--An exemption from a tax under this chapter
shall be limited to the additional assessment valuation:
(1) attributable to the actual costs of new construction
or improvements to affordable housing units; or
(2) not in excess of the maximum cost per unit
established by a local taxing authority.
(d) Sale or exchange.--An exemption from a tax under this
chapter shall be on the property exempted and shall not
terminate upon the sale or exchange of the property.
(e) Estimate.--A local taxing authority shall provide upon
request an estimate of the amount of assessment exempted for
each eligible property based on the exemption schedule under
subsection (b).
(f) Repayment.--
(1) A local taxing authority shall receive a return of
the local taxing authority's proportional share of taxes
exempted under this act if, within five years following
completion of the new construction or improvements:
(i) a serious violation of State law or a municipal
code exists on the property and the owner has taken no
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substantial steps to correct the violation within six
months following notification of the violation and for
which fines or other penalties or a judgment to abate or
correct were imposed by a magisterial district judge or
municipal court and a final judgment at law or in equity,
not subject to appellate review, was imposed by a court
of common pleas; or
(ii) the taxpayer is subject to a municipal permit
denial under 53 Pa.C.S. Ch. 61 (relating to neighborhood
blight reclamation and revitalization).
(2) At the time the agreement is entered into between a
local taxing authority and the taxpayer who desires tax
exemption, if the taxpayer has completed each requirement
under section 404, the local taxing authority shall file a
lien against the tax-exempt properties at the rate of the
estimated amount of assessment under subsection (b). The lien
shall be forgiven by the local taxing authority at the end of
the fifth year following the completion of the new
construction or improvements, if there have been no serious
violations against the property that have not been corrected.
The lien on the property shall transfer under subsection (d)
for a sale or exchange of the property.
Section 403. Exemption incentives procedure.
(a) Notification.--A taxpayer desiring tax exemption
authorized by an ordinance or resolution adopted under this
chapter shall notify the local taxing authority granting the
exemption in writing on an application form provided by the
local taxing authority, submitted at the time the taxpayer
secures the building permit or, if no building permit or other
notification of new construction or improvement is required, at
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the time the taxpayer commences construction. The application
shall include the following information:
(1) A statement of tax obligations, signed by the
applicant and the local taxing authority and notarized.
(2) An outline of specifications for the new
construction or improvement, indicating with as much
specificity as practicable, the materials to be used for
exterior and interior finishes.
(3) An itemized cost estimate for the new construction
or improvement. The itemization must:
(i) Be on contractor letterhead.
(ii) Indicate the property address of the project.
(iii) Be signed by the applicant.
(4) A preliminary architectural drawing or blueprint for
the new construction or improvement.
(5) A recent appraisal of the property, if available.
(6) An applicable building permit application or
building permit.
(7) An income and expense report for the property, which
may be submitted directly to the county assessment office in
order to protect the confidentiality of the information.
(8) The final decision of the zoning authority or other
regulatory agency granting relief, if applicable.
(9) The signature of the applicant and the date of
signing.
(b) Estimate.--The amount of assessment deemed eligible for
tax exemption under subsection (c) shall be available for public
inspection and copying so a subsequent purchaser is informed of
the amount of taxes to be paid after the 10-year exemption
period.
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(c) County assessment office.--
(1) A copy of the exemption request shall be forwarded
to the county assessment office. After completion of the new
construction or improvement, the county assessment office
shall:
(i) Separately assess the new construction or
improvement and calculate the amounts of the assessment
eligible for tax exemption in accordance with the limits
established by the local taxing authorities.
(ii) Notify the taxpayer and the local taxing
authorities of the reassessment and amounts of the
assessment eligible for exemption.
(2) Appeals from a reassessment and the amounts eligible
for the exemption may be taken by the taxpayer or the local
taxing authorities.
(d) Amendment of ordinance or resolution.--The cost of new
construction or improvements to be exempted and the schedule of
taxes exempted which exist at the time of the initial request
for tax exemption shall apply to the exemption request. A
subsequent amendment to the ordinance or resolution shall not
apply to a request initiated prior to adoption of the amendment.
Section 404. Eligibility requirements.
(a) General rule.--The completed new construction or
improvement must:
(1) Conform to zoning ordinance requirements.
(2) Increase the value of the property by at least 25%.
(3) Correct each municipal code violation.
(b) Ineligibility.--A property shall be ineligible for tax
exemption under section 304(a) if:
(1) The property receives other property tax abatement
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or exemption incentives for new construction or improvement.
(2) The property receives tax relief through a State
program, except as provided under subsection (d).
(3) The property owner or developer is delinquent on
property taxes related to the subject property, except if the
delinquent taxes are paid prior to construction or payment of
delinquent taxes has been arranged with the local taxing
authority in accordance with an installment plan.
(4) The property owner has a legal or equitable interest
in other property for which property taxes are delinquent,
except if the delinquent taxes are paid prior to construction
or payment of delinquent taxes has been arranged with the
local taxing authority in accordance with an installment
plan.
(5) New construction or improvement has commenced prior
to filing an application under section 305.
(6) The property includes an improvement under
subsection (c) that poses a health or safety risk to an
individual residing above the first floor.
(c) Exception.--The amount of assessment eligible for
exemption under this act shall be offset by the amount of
property tax rebate received under Chapter 13 of the Taxpayer
Relief Act.
(d) Limitations.--The property qualifying and receiving a
tax exemption under this chapter shall be ineligible for or
receive additional tax exemption under the act of July 9, 1971
(P.L.206, No.34), known as the Improvement of Deteriorating Real
Property or Areas Tax Exemption Act, and the act of December 1,
1977 (P.L.237, No.76), known as the Local Economic
Revitalization Tax Assistance Act, for a minimum of 15 years
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from the date the property received a tax exemption under this
chapter.
(e) Prohibitions.--For the period of time that a property
receives a tax exemption under this chapter, a purchase or sale
of the property or a portion of the property may not be
structured to exclude or exempt the transaction from a realty
transfer tax due to a taxing authority that would not be
excluded or exempt, except for the following:
(1) A sheriff sale or tax claim bureau sale.
(2) A corrective deed.
(3) A transfer by a mortgagor to the holder of a bona
fide mortgage in default in lieu of a foreclosure.
(4) A transfer to a judicial sale in which the
successful bidder is the bona fide holder of a mortgage.
(5) A transaction excluded from the realty transfer tax
under Article XI-C of the Tax Reform Code of 1971.
CHAPTER 5
MISCELLANEOUS PROVISIONS
Section 501. Effective date.
This act shall take effect in 60 days.
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