HB 359 — An Act amending the act of July 11, 1990 (P.L.465, No.113), known as the Tax Increment Financing Act, further providing for definitions, for powers of authorities, for creation of tax increment districts and approval of project plans and for financing of project costs.

PRINTER'S NO.   313

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 359
                                               Session of
                                                 2025

     INTRODUCED BY POWELL, SANCHEZ, GIRAL, HILL-EVANS, BRENNAN,
        CIRESI, FREEMAN, FLEMING, FRANKEL, DEASY AND GREEN,
        JANUARY 27, 2025

     REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
        JANUARY 27, 2025


                                    AN ACT
 1   Amending the act of July 11, 1990 (P.L.465, No.113), entitled
 2      "An act providing for the creation of tax increment
 3      districts; providing for additional powers and duties to be
 4      exercised by redevelopment authorities and by industrial and
 5      commercial development authorities; authorizing the creation
 6      and approval of project plans for tax increment financing;
 7      providing for the establishment of a tax increment base;
 8      allocating the payment of positive tax increments; providing
 9      for the financing of project costs; and providing for the
10      issuance of tax increment bonds and notes," further providing
11      for definitions, for creation of tax increment districts and
12      approval of project plans and for financing of project costs.
13      The General Assembly of the Commonwealth of Pennsylvania
14   hereby enacts as follows:
15      Section 1.    The definitions of "project" and "project costs"
16   in section 3 of the act of July 11, 1990 (P.L.465, No.113),
17   known as the Tax Increment Financing Act, are amended and the
18   section is amended by adding definitions to read:
19   Section 3.   Definitions.
20      The following words and phrases when used in this act shall
21   have the meanings given to them in this section unless the
22   context clearly indicates otherwise:
 1      "Anti-displacement activity."        Projects, programs and
 2   operations that prevent or compensate for the effects of
 3   involuntary relocation of a resident or business from the
 4   resident's or business's current location where the resident or
 5   business otherwise would want to remain if not for socioeconomic
 6   and environmental pressures that make staying infeasible or
 7   undesirable.
 8      "Area of impact."    The term includes the area of the project
 9   and the proximate surrounding area as outlined in the project
10   plan approved by the governing body.
11      * * *
12      "Project."    The undertakings and activities of an authority
13   in a tax increment district for the elimination and prevention
14   of the development or spread of blight, which may include
15   property acquisition, clearance, redevelopment, rehabilitation
16   or conservation in a tax increment district, or a combination or
17   part thereof in accordance with a project plan. The term
18   includes anti-displacement activities in the tax increment
19   district and area of impact, as described in the project plan.
20      "Project costs."    Any expenditures made or estimated to be
21   made or monetary obligations incurred or estimated to be
22   incurred which are listed in a project plan as costs of public
23   works or improvements or residential, commercial or industrial
24   development or revitalization or anti-displacement activities
25   within a tax increment district, plus any costs incidental
26   thereto. Project costs include, but are not limited to:
27          (1)     Capital costs, including the actual costs of the
28      construction of public works or improvements or residential,
29      commercial or industrial development or revitalization, new
30      buildings, structures and fixtures; the demolition,

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 1    alteration, remodeling, repair or reconstruction of existing
 2    buildings, structures and fixtures; the acquisition, upgrade
 3    or rehabilitation of machinery and equipment; and the
 4    acquisition, clearing and grading of land. Capital costs also
 5    include the actual cost of the construction, rehabilitation
 6    or repair of publicly owned infrastructure improvements
 7    located outside the boundaries of a tax increment district
 8    which are of direct benefit to a project.
 9        (2)   Financing costs, including all costs of issuance of
10    tax increment bonds or notes, reserve funds for tax increment
11    bonds or notes, all interest paid to holders of evidences of
12    indebtedness issued to pay for project costs, and any premium
13    paid over the principal amount thereof because of the
14    redemption of such obligations prior to maturity.
15        (3)   Real property assembly costs, meaning any deficit
16    incurred resulting from the sale or lease as lessor by the
17    authority of real property within a tax increment district
18    for consideration which is less than its cost to the
19    authority.
20        (4)   Professional service costs, including those costs
21    incurred for architectural, planning, engineering and legal
22    advice and services.
23        (5)   Administrative costs, including reasonable charges
24    for the time spent by employees of a municipality or an
25    authority in connection with the implementation of a project
26    plan.
27        (6)   Relocation [costs.] and anti-displacement activity
28    costs. Anti-displacement activity costs also include the area
29    of impact as described in the project plan.
30        (7)   Organizational costs, including the costs of

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 1      conducting environmental impact and other studies and the
 2      costs of informing the public with respect to the creation of
 3      tax increment districts and the implementation of project
 4      plans.
 5            (8)   Costs which are found to be necessary or convenient
 6      to the creation of tax increment districts or the
 7      implementation of project plans, or for the reimbursement of
 8      prior expenditures made for any of the costs under this
 9      definition.
10      * * *
11      Section 2.        Sections 5(a)(4)(i) and (6)(i) and (ii) and 9(d)
12   of the act are amended to read:
13   Section 5.     Creation of tax increment districts and approval of
14                  project plans.
15      (a)   General rule.--A tax increment district shall be created
16   in the following manner:
17            * * *
18            (4)   The authority shall prepare a project plan for each
19      tax increment district and submit the plan to the governing
20      body of the municipality which will create the district and
21      to the governing body of any other municipality or school
22      district that levies property taxes within the boundaries of
23      the proposed district. The plan shall include the following:
24                  (i)    A statement listing the kind, number and
25            location of all proposed public works or improvements
26            and/or all residential, commercial or industrial
27            development and revitalization improvements and anti-
28            displacement activities.
29                  * * *
30            (6)   In order to create a district and adopt a project

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 1      plan, the governing body of the municipality which will
 2      create the tax increment district shall adopt, not earlier
 3      than three weeks after the public hearing described in
 4      paragraph (5) has been held, a resolution or ordinance which:
 5                (i)    Describes the boundaries of a tax increment
 6            district with sufficient definiteness to identify with
 7            ordinary and reasonable certainty the territory included.
 8            The governing body shall take care that the boundaries
 9            include only those whole units of property assessed for
10            general property tax purposes. The governing body shall
11            also describe any area of impact outside the district
12            where anti-displacement activities may occur.
13                (ii)    Creates the district as of a given date. A tax
14            increment district may exist for a period not to exceed
15            [20] 25 years, unless an amendment is made to the project
16            plan under paragraph (8).
17                * * *
18   Section 9.   Financing of project costs.
19      * * *
20      (d)   Amount and term.--Tax increment bonds or notes may not
21   be issued in an amount exceeding the aggregate project costs.
22   The bonds or notes shall mature over a period not exceeding [20]
23   25 years from the date of issue. The principal and interest on
24   the bonds and notes may be payable at any time and at any place.
25   The bonds or notes may be payable to bearer or may be registered
26   as to the principal or principal and interest. The bonds or
27   notes may be in any denominations. The bonds or notes may be
28   sold at public or private sale.
29      * * *
30      Section 3.      This act shall take effect in 60 days.

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