Regular Session 2023-2024 House Bill 1799 P.N. 2920

PRIOR PRINTER'S NOS. 2215, 2754

PRINTER'S NO. 2920

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.

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) 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.

(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

local taxing authority may also post the notice on its

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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

redevelopment that is approved by the municipal corporation

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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.

ordinance or resolution adopted under this act is specific to

real property of the shopping mall and shall not terminate upon

the sale or exchange of the property.

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(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

been no serious violations against the property that have not

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been corrected to the satisfaction of the local taxing

authority. The lien on the property remains under subsection

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

building permit.

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(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.

(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

taxing authorities.

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(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 the boundaries of the municipal

corporation for which there exists a serious violation that

has not been remedied prior to filing the application under

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section 7.

(6) Construction or other improvements for the

redevelopment of the shopping mall has commenced prior to

filing an application under section 7.

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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