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A03996
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1799
Session of
2023
INTRODUCED BY SIEGEL, PISCIOTTANO, HILL-EVANS, MADDEN, BOROWSKI,
FREEMAN, SCHLOSSBERG, BRENNAN, SANCHEZ, STURLA, SCHWEYER,
MALAGARI, CEPEDA-FREYTIZ, SMITH-WADE-EL, CONKLIN, GREEN AND
KHAN, OCTOBER 27, 2023
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
APRIL 10, 2024
AN ACT
Authorizing local taxing authorities to provide for tax
exemptions for improvements and redevelopment of shopping
malls; establishing the ECONOMIC DEVELOPMENT AND Mixed-Use
Redevelopment Advisory Committee within the State Planning
Board; and conferring powers and imposing duties on the
Department of Community and Economic Development.
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 ECONOMIC
DEVELOPMENT AND Mixed-Use Redevelopment of Shopping Malls Act.
Section 2. Findings and declaration of policy.
It is determined and declared as a matter of legislative
finding that there exists in this Commonwealth a number of
underutilized shopping malls which provide an economic liability
to the communities in which they sit. It is in the public
interest to promote redevelopment of these large parcels and
return them to function in accordance with sound and approved
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plans for their redevelopment that will promote public safety,
convenience and welfare.
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:
"Affordable ATTAINABLE housing." Any of the following:
(1) A single-family residence that is subject to home
affordability ATTAINABLE deed restrictions and occupied by an
individual or family whose income is not more than 60% of the
area median gross income.
(2) A multiunit residential dwelling where at least a
percentage, as defined by the municipality, of the
residential units are:
(i) rent-restricted; and
(ii) occupied by an individual or family whose
income is not more than 60% of area median income.
"Board." The State Planning Board established by the act of
April 9, 1929 (P.L.177, No.175), known as The Administrative
Code of 1929.
"Committee." The ECONOMIC DEVELOPMENT AND Mixed-Use
Redevelopment Advisory Committee established by the board under
section 4.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Developer." A taxpayer redeveloping a shopping mall for
ECONOMIC DEVELOPMENT AND mixed-use redevelopment purposes.
"ECONOMIC DEVELOPMENT." CREATING THE CONDITIONS FOR ECONOMIC
GROWTH AND IMPROVED QUALITY OF LIFE BY EXPANDING THE CAPACITY OF
INDIVIDUALS, BUSINESSES AND COMMUNITIES TO MAXIMIZE THE USE OF
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THEIR TALENTS AND SKILLS TO SUPPORT INNOVATION, JOB CREATION AND
PRIVATE INVESTMENT.
"ECONOMIC DEVELOPMENT AND MIXED-USE REDEVELOPMENT." AN
URBAN, SUBURBAN, VILLAGE DEVELOPMENT OR SINGLE BUILDING THAT
COMBINES RESIDENTIAL, COMMERCIAL, CULTURAL, INSTITUTIONAL OR
INDUSTRIAL USES TO PROVIDE EFFICIENCY FOR THE COMMUNITY IN TERMS
OF SPACE, TRANSPORTATION AND ECONOMIC DEVELOPMENT.
"Local taxing authority." A county, municipal corporation,
institution district or school district having authority to levy
real estate taxes.
"Mixed-use redevelopment." An urban, suburban, village
development or single building that combines residential,
commercial, cultural, institutional or industrial uses to
provide efficiency for the community in terms of space,
transportation and economic development.
"Municipal corporation." A city, borough, incorporated town
or township.
"Project agreement." An agreement between a developer and a
local taxing authority stating the terms and conditions of the
mixed-use redevelopment of a shopping mall authorized by the
local taxing authority for a tax exemption or special tax
provision under section 5.
"Property maintenance code." A municipal ordinance that
regulates the maintenance or development of real property. The
term includes a building code, zoning code, housing code and
public safety code.
"Real estate tax." A tax on a homestead imposed or
authorized to be imposed by a local taxing authority.
"Redevelopment." Repair, construction or reconstruction,
including alterations and additions, having the effect of
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rehabilitating a shopping mall so that the shopping mall 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.
"Serious violation." A violation of a State law or a
property maintenance code that poses an immediate imminent
threat to the health and safety of a dwelling occupant,
occupants in surrounding structures or passersby.
"Shopping mall." A large building or series of connected
buildings containing a variety of stores for the purpose of
retail, food service or recreation. The term includes shopping
plazas, shopping centers and mini malls.
"Special tax provision." The refund or forgiveness of a
portion of a taxpayer's real estate tax liability as provided by
this act.
Section 4. ECONOMIC DEVELOPMENT AND Mixed-Use Redevelopment
Advisory Committee.
(a) Establishment.--The board shall establish the ECONOMIC
DEVELOPMENT AND Mixed-Use Redevelopment Advisory Committee for
the purpose of providing municipal corporations with guidance
and best practices for the redevelopment of shopping malls into
affordable ATTAINABLE housing and other mixed-use spaces for the
benefit of the community.
(b) Composition.--
(1) The committee shall be composed of members with
expertise in areas, including:
(i) Real estate development.
(ii) Municipal planning.
(iii) Economic development.
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(iv) Land use planning.
(2) The committee shall include a member of a Statewide
trade association of real estate professionals involved in
all aspects of the residential and commercial real estate
industry.
(c) Guidelines.--The committee shall draft best practices
guidelines for the redevelopment of shopping malls based on
national standards and models. The guidelines shall be posted on
the department's publicly accessible Internet website within six
months of the effective date of this section.
Section 5. Authority to provide special tax provisions.
(a) Construction.--This act shall be construed to authorize
local taxing authorities to provide special tax provisions
related to an increase in the value of real estate resulting
from mixed-use THE redevelopment of shopping malls within the
boundaries of the local taxing authority, implementing section
2(b)(iv) 2(b)(iii) of Article VIII of the Constitution of
Pennsylvania.
(b) Approval required.--A tax exemption or special tax
provision authorized under this act is not enforceable until the
governing body of any one local taxing authority with
jurisdiction to levy real estate taxes on a property has
approved an ordinance or resolution adopting the tax exemption
or special tax provision. Other local taxing authorities may
approve a tax exemption or special tax provision subsequently.
(c) Notice.--
(1) Upon adoption of an ordinance or resolution adopting
the tax exemption or special tax provision under subsection
(a), each local taxing authority must post a notice of the
approval in a newspaper of general circulation in the area. A
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local taxing authority may also post the notice on its
publicly accessible Internet website, if the local taxing
authority possesses a publicly accessible Internet website.
(2) If multiple local taxing authorities have mutual
jurisdiction to levy real estate taxes on a property, a joint
notice of implementation of the tax exemption or special tax
provision must be published in a newspaper of general
circulation in the area upon adoption by each local taxing
authority with mutual jurisdiction to levy real estate taxes
on the property and each local taxing authority must post a
notice of the adoption on its publicly accessible Internet
website, if the local taxing authority possesses a publicly
accessible Internet website.
Section 6. Exemption schedule.
(a) General rule.--A local taxing authority granting a tax
exemption under this act may provide for a tax exemption on the
assessment attributable to the actual cost of the mixed-use
redevelopment of shopping malls or up to a maximum cost
uniformly established by the municipal corporation. The maximum
cost must uniformly apply 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 exempt must be in accordance with at
least one of the following schedules, as determined by the local
taxing authority:
(1) For the first 10 years, 100% of the eligible
assessment is exempt for ECONOMIC DEVELOPMENT AND mixed-use
redevelopment.
(2) For any ECONOMIC DEVELOPMENT AND mixed-use
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redevelopment that is approved by the municipal corporation
in which the shopping mall is located, 100% of the eligible
assessment shall be exempt for an additional two years if at
least one of the following criteria is met to the
satisfaction of and by a date established by the local taxing
authority, and 100% of the eligible assessment shall be
exempt for an additional five years if at least two of the
following criteria are met to the satisfaction of and by a
date established by the local taxing authority:
(i) A minimum amount of affordable ATTAINABLE
housing as defined and determined by the local taxing
authority granting the exemption in consultation with the
local planning authority.
(ii) Improved energy efficiency.
(iii) Installation of a renewable energy system that
provides electricity for 50% of the average electricity
needs for the ECONOMIC DEVELOPMENT AND mixed-use
redevelopment.
(iv) Creation of greener or open space.
(v) Creation of lifestyle improvement projects,
including outdoor recreation space, walking paths,
bicycle paths or farmers markets.
(vi) Installation of charging stations for electric
vehicles.
(vii) Access to public transit.
(viii) The mixed-use redevelopment of the shopping
mall is subject to a project labor agreement.
(c) Sale or exchange.--A tax exemption authorized by an
ordinance or resolution adopted under this act is specific to
real property of the shopping mall and shall not terminate upon
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the sale or exchange of the property.
(d) Estimate.--A local taxing authority must provide upon
request and within 30 days an estimate of the amount of
assessment exempted for each eligible property based on the
exemption schedule under subsection (b).
(e) Repayment.--
(1) A local taxing authority shall receive a return of
the local taxing authority's proportional share of taxes
exempt under this act if, within five years following the
redevelopment of the shopping mall, the following occur:
(i) a serious violation of State law or a property
maintenance code exists on the property and the owner has
taken no 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 at law or in equity, not subject to appellate
review, or imposed by a court of common pleas; or
(ii) the developer is subject to a municipal permit
denial under 53 Pa.C.S. Ch. 61 (relating to neighborhood
blight reclamation and revitalization) in connection with
the redevelopment of the shopping mall.
(2) At the time a project agreement is executed, if the
developer has not completed each requirement for exemption
under section 8(a) or is ineligible under section 8(b) or
(c), the local taxing authority shall file a lien against the
tax-exempt property at the rate of the estimated amount of
assessment under subsection (d). The lien shall be satisfied
by the local taxing authority at the end of the fifth year
following the completion of the redevelopment if there have
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been no serious violations against the property that have not
been corrected to the satisfaction of the local taxing
authority. The lien on the property remains under subsection
(c) upon the sale or exchange of the shopping mall.
Section 7. Exemption incentives procedure.
(a) Notification.--A developer desiring tax exemption for
the redeveloped property as authorized by an ordinance or
resolution adopted under this act must notify the local taxing
authority granting the exemption in writing on an application
form provided by the local taxing authority, which must be
submitted at the time the developer secures the building permit
or, if no building permit or other notification is required for
the redevelopment of the property, at the time the developer
commences construction. The application must include the
following information:
(1) A notarized statement of tax obligations, signed by
the applicant and the local taxing authority.
(2) An outline of specifications for the redevelopment
of the shopping mall indicating, with as much specificity as
practicable, the materials to be used for exterior and
interior finishes.
(3) An itemized cost estimate for the redevelopment of
the shopping mall. The itemization must:
(i) be on contractor letterhead; and
(ii) indicate the property address of the
redevelopment project.
(4) A preliminary architectural drawing or blueprint for
the redevelopment.
(5) A recent appraisal of the property, if available.
(6) An applicable building permit application or
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building permit.
(7) An income and expense report for the shopping mall,
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.
(10) Proof of a project labor agreement for the
redevelopment, if applicable.
(b) Estimate.--The amount of assessment deemed eligible for
tax exemption under subsection (c) shall be available for public
inspection and copying so that a subsequent purchaser may be
informed of the amount of taxes to be paid after the exemption
expires.
(c) County assessment office.--
(1) A copy of the application submitted under subsection
(a) shall be forwarded to the county assessment office. After
completion of the redevelopment of the shopping mall, the
county assessment office shall:
(i) Separately assess the redevelopment 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 developer 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 made by the developer or the local
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taxing authorities.
(d) Amendment of ordinance or resolution.--The cost of
redevelopment to be exempt and the schedule of taxes exempt that
exist at the time of the initial request for tax exemption must
apply to the exemption request. A subsequent amendment to the
ordinance or resolution does not apply to a request initiated
prior to adoption of the amendment.
Section 8. Eligibility requirements.
(a) General rule.--The completed redevelopment must:
(1) Conform to zoning ordinance requirements.
(2) Correct any municipal code violation.
(b) Ineligibility.--A property is deemed ineligible for tax
exemption under section 7(a) if any of the following apply:
(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.
(3) The property owner or developer is delinquent on
property taxes related to the subject property, unless the
delinquent taxes are paid prior to redevelopment, 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 taxes are delinquent, unless the
delinquent taxes are paid prior to redevelopment, or payment
of delinquent taxes has been arranged with the local taxing
authority in accordance with an installment plan.
(5) The property owner has a legal or equitable interest
in other property with within the boundaries of the municipal
corporation for which there exists a serious violation that
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has not been remedied prior to filing the application under
section 7.
(6) Construction or other improvements for the
redevelopment of the shopping mall has commenced prior to
filing an application under section 7.
(c) Prohibitions.--For the period of time that a property
receives tax exemption under this act, 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 act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
Section 9. Effective date.
This act shall take effect in 60 days.
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