SENATE AMENDED
PRIOR PRINTER'S NOS. 544, 1004 PRINTER'S NO. 2900
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 581
Session of
2021
INTRODUCED BY SOLOMON, SANCHEZ, STURLA, D. WILLIAMS, ISAACSON,
HOHENSTEIN, QUINN, SCHMITT, BURGOS, CIRESI, FREEMAN,
SCHLOSSBERG, ZIMMERMAN, HILL-EVANS, STRUZZI, SCHWEYER,
KIRKLAND, WEBSTER, NEILSON, MALAGARI, RIGBY, DOWLING,
INNAMORATO, McCLINTON, HEFFLEY, KINKEAD, C. WILLIAMS,
FITZGERALD, GUZMAN, T. DAVIS, McNEILL, HERRIN, RABB AND
KINSEY, FEBRUARY 22, 2021
SENATOR PITTMAN, URBAN AFFAIRS AND HOUSING, IN SENATE, AS
AMENDED, MARCH 30, 2022
AN ACT
1 Authorizing local taxing authorities to provide for tax
2 exemptions for improvements to deteriorated areas and
3 dwellings to incentivize the creation and improvement of
4 affordable housing units.
5 TABLE OF CONTENTS
6 Chapter 1. General Provisions
7 Section 101. Short title.
8 Section 102. Definitions.
9 SECTION 103. REQUIREMENT. <--
10 Chapter 2. Special Tax Provisions for Impoverished
11 Pennsylvanians
12 Section 201. Construction.
13 Section 202. Declaration of policy (Reserved).
14 Section 203. Special tax provisions and refund or forgiveness
15 of real estate taxes.
 1 Section 204. Application and proof of claim.
2 Section 205. Administration and enforcement.
3 Chapter 3. Creating and Improving Affordable Housing Units in
4 Deteriorated Areas
5 Section 301. Construction.
6 Section 302. Exemption.
7 Section 303. Exemption schedule.
8 Section 304. Procedure for obtaining exemption incentives.
9 Section 305. Eligibility requirements.
10 Chapter 4. Creating and Improving Affordable Housing Units
11 Section 401. Construction.
12 Section 402. Exemption schedule.
13 Section 403. Exemption incentives procedure.
14 Section 404. Eligibility requirements.
15 Chapter 5. Miscellaneous Provisions
16 Section 501. Effective date.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 CHAPTER 1
20 GENERAL PROVISIONS
21 Section 101. Short title.
22 This act shall be known and may be cited as the Affordable
23 Housing Unit Tax Exemption Act.
24 Section 102. Definitions.
25 The following words and phrases when used in this act shall
26 have the meanings given to them in this section unless the
27 context clearly indicates otherwise:
28 "Affordable housing unit."
29 (1) A multiunit residential dwelling where at least 30%
30 of the residential units meet all of the following:
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 1 (i) Are rent-restricted.
2 (ii) Are occupied by an individual or family whose
3 income is not more than 60% of area median income.
4 (2) The term includes single family residences that are
5 subject to deed restrictions and occupied by an individual or
6 family whose income is not more than 60% of the area median
7 gross income.
8 "Area median income." The median household income within the
9 boundaries of a local taxing authority.
10 "Blighted property." The term shall have the same meaning as
11 defined in 1 Pa.C.S. § 1991 (relating to definitions).
12 "Deteriorated area." An area designated by a municipal
13 corporation which consists of blighted property.
14 "Dwelling unit." A house, apartment, or group of rooms
15 intended for occupancy as separate living quarters by family or
16 other groups or a person living alone, containing a kitchen or
17 cooking equipment for the exclusive use of the occupants.
18 "Homestead." As follows:
19 (1) A dwelling used as a home which is occupied by a
20 taxpayer as a primary residence.
21 (2) The term includes:
22 (i) A mobile home which is assessed as realty for
23 local property tax purposes and the land on which the
24 mobile home is situated and other similar living
25 accommodations, including a part of a multidwelling or
26 multipurpose building and a part of the land upon which
27 the multidwelling or multipurpose building is built to
28 the extent that the eligible taxpayer is chargeable by a
29 local taxing authority for property taxes.
30 (ii) A premises occupied by an eligible taxpayer if
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 1 the eligible taxpayer is required by law to pay a
2 property tax by reason of the taxpayer's ownership or
3 rental of, include a possessory interest in, the
4 dwelling, land or both. As used in this subparagraph:
5 (A) The term "by law" shall not include a
6 contractual obligation between the eligible taxpayer
7 and a person who would otherwise be responsible to a
8 local taxing authority for the payment of the tax.
9 (B) An owner shall include a person in
10 possession under a contract of sale, deed of trust,
11 life estate, joint tenancy or tenancy in common.
12 "Improvement." Repair, construction or reconstruction,
13 including alterations and additions, having the effect of
14 rehabilitating a blighted property so that the blighted property
15 becomes habitable or attains higher standards of safety, health,
16 economic use or amenity, or is brought into compliance with
17 laws, ordinances or regulations governing safety, health,
18 economic use or amenity standards. The term shall not include
19 ordinary upkeep and maintenance.
20 "Local taxing authority." A county, city, borough,
21 incorporated town, township, institution district or school
22 district having authority to levy real property taxes.
23 "Low-income taxpayer." A taxpayer whose income does not
24 exceed the maximum annual income allowable for an eligible
25 claimant to participate in the Pharmaceutical Assistance
26 Contract for the Elderly Needs Enhancement Tier (PACENET).
27 "Municipal code." A building, housing, property maintenance,
28 fire, health or other public safety ordinance, related to the
29 use or maintenance of real property, enacted by a municipality.
30 The term does not include a subdivision and land development
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 1 ordinance or a zoning ordinance enacted by a municipality.
2 "Municipal corporation." A city, borough, incorporated town
3 or township.
4 "Property maintenance code." A municipal ordinance which
5 regulates the maintenance or development of real property. The
6 term includes a building code, housing code and public safety
7 code.
8 "Real estate taxes." A tax on a homestead imposed or
9 authorized to be imposed by a local taxing authority.
10 "Rent-restricted." The maximum rent an owner may charge for
11 a unit does not exceed 30% of the adjusted income of a family or
12 taxpayer whose annual income is less than or equal to 60% of the
13 area median gross income.
14 "Serious violation." A violation of a State law or a
15 municipal code that poses an immediate imminent threat to the
16 health and safety of a dwelling occupant, an occupant in a
17 surrounding structure or a passerby.
18 "Special tax provision." The standards and qualifications
19 provided under this act to establish the eligibility for and the
20 refund or forgiveness of a portion of the taxpayer's real estate
21 tax liability.
22 "SUBJECT PROPERTY." REAL PROPERTY SUBJECT TO REAL ESTATE <--
23 TAXES WITHIN THE BOUNDARIES OF A LOCAL TAXING AUTHORITY.
24 "Substantial step." An affirmative action as determined by a
25 property code official or officer of the court on the part of a
26 property owner or managing agent to remedy a serious violation
27 of a State law or code, including, but not limited to, physical
28 improvements or repairs to the property, which affirmative
29 action is subject to appeal in accordance with applicable law.
30 "Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
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 1 No.2), known as the Tax Reform Code of 1971.
2 "Taxpayer Relief Act." The act of June 27, 2006 (1st
3 Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act.
4 SECTION 103. REQUIREMENT. <--
5 A TAX EXEMPTION OR SPECIAL TAX PROVISION PERMITTED UNDER THIS
6 ACT SHALL NOT BE ENFORCEABLE UNTIL THE GOVERNING BODY OF EACH
7 LOCAL TAXING AUTHORITY WITH MUTUAL JURISDICTION TO LEVY REAL
8 ESTATE TAXES ON A SUBJECT PROPERTY HAS APPROVED AN ORDINANCE OR
9 RESOLUTION ADOPTING THE TAX EXEMPTION OR SPECIAL TAX PROVISION.
10 UPON ADOPTION OF AN ORDINANCE OR RESOLUTION, EACH LOCAL TAXING
11 AUTHORITY MUST POST A NOTICE OF THE APPROVAL OF THE TAX
12 EXEMPTION OR SPECIAL TAX PROVISION ON ITS PUBLICLY ACCESSIBLE
13 INTERNET WEBSITE. IF A LOCAL TAXING AUTHORITY DOES NOT POSSESS A
14 PUBLICLY ACCESSIBLE INTERNET WEBSITE, NOTICE OF THE APPROVAL OF
15 THE TAX EXEMPTION OR SPECIAL TAX PROVISION MUST BE PUBLISHED IN
16 A NEWSPAPER OF GENERAL CIRCULATION IN THE AREA. UPON ADOPTION OF
17 AN ORDINANCE OR RESOLUTION BY EACH LOCAL TAXING AUTHORITY WITH
18 MUTUAL JURISDICTION TO LEVY REAL ESTATE TAXES ON A SUBJECT
19 PROPERTY, A JOINT NOTICE OF IMPLEMENTATION OF THE TAX EXEMPTION
20 OR SPECIAL TAX PROVISION MUST BE PUBLISHED IN A NEWSPAPER OF
21 GENERAL CIRCULATION IN THE AREA.
22 CHAPTER 2
23 SPECIAL TAX PROVISIONS FOR IMPOVERISHED PENNSYLVANIANS
24 Section 201. Construction.
25 This chapter shall be construed to authorize a local taxing
26 authority to provide by ordinance or resolution for the
27 implementation of the special tax provisions contained in this
28 act which allow for the refund or forgiveness of real property
29 tax liability of low-income families attributable to real
30 property tax rate increases and increases in the assessed value
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 1 of the low-income family's homestead, implementing section 2(b)
2 (ii) of Article VIII of the Constitution of Pennsylvania.
3 Section 202. Declaration of policy (Reserved).
4 Section 203. Special tax provisions and refund or forgiveness
5 of real estate taxes.
6 (a) General rule.--A taxpayer residing within the boundaries
7 of a local taxing authority who meets the standards and
8 qualifications established by this act shall be deemed a
9 separate class of subjects of taxation, and, as such, each
10 governing body of a local taxing authority may by ordinance
11 provide that the taxpayer shall be entitled to the benefit of
12 the special tax provisions of this act.
13 (b) Refund or forgiveness of real estate taxes.--Under an
14 ordinance or resolution referenced under subsection (a), an
15 eligible taxpayer shall receive a refund or forgiveness which
16 has been paid over to or would, except for this act, be payable
17 to the local taxing authority for real estate taxes authorized
18 or imposed by a local taxing authority in accordance with the
19 following:
20 (1) A low-income taxpayer shall receive a refund or
21 forgiveness of the part of the low-income taxpayer's real
22 estate tax liability attributable to a real estate tax rate
23 increase or an increase in the assessed value of the
24 taxpayer's homestead occurring after the effective date of an
25 ordinance implementing this act.
26 (2) If a taxpayer who had previously been eligible to
27 receive a refund or forgiveness of real estate taxes under
28 this act is no longer eligible by reason of failing to meet
29 the low-income requirement provided under this act, the
30 taxpayer shall be billed and shall pay real estate taxes at
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 1 the then current real estate tax rate and assessed value. If
2 for subsequent tax years a taxpayer reestablishes eligibility
3 for refunds or forgiveness of real estate taxes by again
4 meeting the low-income requirements provided under this act,
5 the amount of real estate taxes that the taxpayer is eligible
6 to have refunded or forgiven shall be the part of the
7 taxpayer's real estate tax liability attributable to a real
8 estate tax rate increase or an increase in the assessed value
9 of the taxpayer's homestead occurring no earlier than the
10 calendar year prior to the tax year for which the taxpayer
11 reestablishes eligibility.
12 (3) The maximum amount of real estate taxes which may be
13 refunded or forgiven may be limited by ordinance.
14 (4) If a homestead is owned for only a portion of a year
15 or is owned in part by a person who is not a low-income
16 taxpayer, the tax collector shall apportion the real estate
17 taxes in accordance with the period or portion of ownership
18 of the eligible taxpayer in determining the amount of refund
19 or forgiveness for which a taxpayer is eligible.
20 Section 204. Application and proof of claim.
21 (a) Application.--A taxpayer desiring to take advantage of
22 the special tax provisions under an ordinance or resolution
23 adopted under this act shall notify the local taxing authority
24 granting the special tax provisions in writing on a form
25 provided by the local taxing authority submitted at the time
26 provided in the ordinance or resolution. Only one taxpayer for
27 each homestead shall receive real estate tax refund or
28 forgiveness of taxes. If at least two taxpayers are residing at
29 a homestead meet the qualification for a real estate tax refund
30 or forgiveness of taxes, the taxpayers may determine who shall
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 1 receive the refund or forgiveness of taxes. If the taxpayers are
2 unable to agree, each local taxing authority shall determine to
3 whom the refund or forgiveness of taxes shall apply.
4 (b) Proof of claim.--Each application shall include
5 reasonable proof of household income, the location and nature of
6 the property claimed as a homestead and the tax bill or receipt
7 for the real estate taxes owed or paid in connection with the
8 occupancy of the homestead. For the purposes of this subsection,
9 a taxpayer shall not be required to directly pay the real estate
10 taxes.
11 Section 205. Administration and enforcement.
12 Each local taxing authority shall provide by ordinance or
13 resolution, rule or regulation for the administration and
14 enforcement of an ordinance or resolution adopted under this
15 act.
16 CHAPTER 3
17 CREATING AND IMPROVING AFFORDABLE HOUSING
18 UNITS IN DETERIORATED AREAS
19 Section 301. Construction.
20 This chapter shall be construed to authorize a local taxing
21 authority to provide for tax exemption incentives for new
22 construction for, and improvements to, deteriorated areas of
23 this Commonwealth to create and improve affordable housing
24 units. This chapter shall implement section 2(b)(iii) of Article
25 VIII of the Constitution of Pennsylvania.
26 Section 302. Exemption.
27 (a) Real property tax exemption.--
28 (1) A local taxing authority may, by ordinance or
29 resolution, exempt from real property taxation the assessed
30 valuation of improvements to blighted properties for the
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 1 creation of, or improvements to, affordable housing units,
2 and the assessed valuation of new construction within a
3 deteriorated area in the amounts and in accordance with the
4 provisions and limitations specified in this act.
5 (2) An ordinance or resolution under paragraph (1) shall
6 specify a description of each deteriorated area, the cost of
7 improvements per unit to be exempted and the schedule or
8 taxes exempted as provided under this act.
9 (b) Boundaries.--Prior to the adoption of the ordinance or
10 resolution authorizing the granting of a tax exemption under
11 this section, a municipal corporation must designate the
12 boundaries of the deteriorated area, wholly or partially located
13 within its jurisdiction, if any.
14 (c) Public hearing.--
15 (1) At least one public hearing must be held by the
16 municipal corporation for the purpose of determining the
17 boundaries of a deteriorated area.
18 (2) At a public hearing under paragraph (1), the local
19 taxing authorities, planning commission or redevelopment
20 authority and other interested public and private agencies
21 and individuals, shall present their recommendations
22 concerning the location of boundaries of a deteriorated area
23 for the guidance of the municipal corporation.
24 (3) The public hearing shall be held in accordance with
25 65 Pa.C.S. Ch. 7 (relating to open meetings).
26 (d) Adjacent property inclusions.--Property adjac