Regular Session 2023-2024 House Bill 1799 P.N. 2215

PRINTER'S NO. 2215

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 AND GREEN,

OCTOBER 27, 2023

REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, OCTOBER 27, 2023

AN ACT

Authorizing local taxing authorities to provide for tax

exemptions for improvements and redevelopment of shopping

malls; establishing the Mixed-Use Redevelopment 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 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 empty

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 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 housing." Any of the following:

(1) A single-family residence that is subject to 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 Mixed-Use Redevelopment Board established under

section 4.

"Department." The Department of Community and Economic

Development of the Commonwealth.

"Developer." A taxpayer redeveloping a shopping mall.

"Local taxing authority." A county, city, borough,

incorporated town, township, 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.

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"Property maintenance code." A municipal ordinance that

regulates the maintenance or development of real property. The

term includes a building 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

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. Mixed-Use Redevelopment Board.

(a) Establishment.--The Mixed-Use Redevelopment Board is

established in the department to provide guidance and best

practices for the redevelopment of shopping malls into

affordable housing and other mixed-use spaces for the benefit of

the community.

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(b) Composition.--

(1) The board shall be composed of the following

members:

(i) The Secretary of Community and Economic

Development or a designee.

(ii) Four legislative appointees who shall have

experience in real estate development or economic

development as follows:

(A) One individual appointed by the President

pro tempore of the Senate.

(B) One individual appointed by the Minority

Leader of the Senate.

the House of Representatives.

(D) One individual appointed by the Minority

Leader of the House of Representatives.

(iii) Two gubernatorial appointees who shall have

experience in real estate development.

(2) Legislative appointees under paragraph (1)(ii) shall

serve at the pleasure of the appointing authority.

(3) An individual appointed to the board under paragraph

(1)(ii) shall not be a member of the General Assembly or

staff of a member of the General Assembly.

board to serve as chairperson. The members shall select from

among themselves officers as they shall determine.

(d) Meetings.--The board shall meet at the call of the

chair.

(e) Quorum.--Five members of the board shall constitute a

quorum.

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(f) Compensation.--The members of the board shall be

entitled to no compensation for their service as members of the

board but shall be entitled to reimbursement for all necessary

and reasonable expenses incurred in connection with the

performance of their duties as members of the board.

(g) Fiduciary relationship.--The members of the board and

the professional personnel of the board shall stand in a

fiduciary relationship with the Commonwealth.

(h) Initial appointment and vacancy.--Appointing authorities

shall appoint initial members to the board within 30 days of the

effective date of this subsection. If a vacancy occurs on the

board, the appointing authority shall appoint a successor member

within 30 days of the vacancy.

Section 5. Powers of board.

The board shall do all of the following:

(1) Adopt bylaws and guidelines proposed by the

department as necessary.

(2) Promulgate regulations and adopt guidelines and

statements of policy containing restrictions as the board may

deem necessary and appropriate to effectuate the public

purposes of this act.

(3) Prepare and publish best practices for the

redevelopment of shopping malls based on national standards

and models within six months of the creation of the board.

Section 6. 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 redevelopment within the boundaries of the local

taxing authority, implementing section 2(b)(iv) of Article VIII

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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.

(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 on its publicly accessible Internet website.

(2) If a local taxing authority does not possess a

publicly accessible Internet website, notice of the approval

of the tax exemption or special tax provision must be

published in a newspaper of general circulation in the area.

(3) 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.

Section 7. 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 construction or up to a maximum cost uniformly

established by the municipal corporation. The maximum cost must

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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 mixed-use redevelopment.

(2) For any of the following that are 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 is completed by a date

as established by the municipality, and 100% of the eligible

assessment shall be exempt for an additional five years if at

least two are completed by a date as established by the

municipality:

(i) A minimum amount of affordable 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 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

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vehicles.

(vii) Access to public transit.

(viii) The redevelopment is subject to a project

labor agreement.

ordinance or resolution adopted under this act shall be upon the

shopping mall exempt and shall not terminate upon the sale or

exchange of the property.

(d) Estimate.--A local taxing authority must provide upon

request 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, the following occur:

(i) a serious violation of State law or a municipal

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).

(2) At the time the agreement is entered into between a

local taxing authority and a developer who desires a tax

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exemption under this act, if the developer has not completed

each requirement for exemption under section 9(a) or is

ineligible under section 9(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 forgiven by the local

taxing authority at the end of the fifth year following the

completion of the redevelopment if there have been no serious

violations against the property that have not been corrected.

The lien on the property transfers under subsection (c) for

the sale or exchange of the shopping mall.

Section 8. Exemption incentives procedure.

(a) Notification.--A developer desiring tax exemption

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 statement of tax obligations, signed by the

applicant and the local taxing authority and notarized.

(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

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(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

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.

(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.

(1) A copy of the application submitted under subsection

(a) shall be forwarded to the county assessment office. After

completion of the developer's new construction or

improvement, 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.

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(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 taken by the developer or the local

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 9. 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 8(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

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of delinquent taxes has been arranged with the local taxing

authority in accordance with an installment plan.

(5) Construction or other improvements for the

redevelopment of the shopping mall has commenced prior to

filing an application under section 8.

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 10. Effective date.

This act shall take effect in 60 days.

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