HB 529 — An Act amending Title 53 (Municipalities Generally) of the Pennsylvania Consolidated Statutes, establishing the Smart Growth Zoning and Housing Program and the Smart Growth Zoning District Fund.

PRINTER'S NO.   522

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 529
                                               Session of
                                                 2025

     INTRODUCED BY PROKOPIAK, SANCHEZ, GIRAL, HILL-EVANS, KHAN,
        SCHLOSSBERG, KENYATTA, DALEY, SHUSTERMAN, GREEN, MADDEN,
        CEPEDA-FREYTIZ, CERRATO, HADDOCK AND BOYD, FEBRUARY 10, 2025

     REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
        FEBRUARY 10, 2025


                                    AN ACT
 1   Amending Title 53 (Municipalities Generally) of the Pennsylvania
 2      Consolidated Statutes, establishing the Smart Growth Zoning
 3      and Housing Program and the Smart Growth Zoning District
 4      Fund.
 5      The General Assembly of the Commonwealth of Pennsylvania
 6   hereby enacts as follows:
 7      Section 1.    Title 53 of the Pennsylvania Consolidated
 8   Statutes is amended by adding a chapter to read:
 9                                CHAPTER 63
10                SMART GROWTH ZONING AND HOUSING PROGRAM
11   Sec.
12   6301.   Definitions.
13   6302.   Smart Growth Zoning and Housing Program.
14   6303.   Submission to department.
15   6304.   Requirements.
16   6305.   Certificate of compliance.
17   6306.   Smart Growth Zoning District Fund.
18   6307.   Other discretionary money.
 1   6308.   Design standards.
 2   6309.   Approval of projects.
 3   6310.   Administration.
 4   6311.   Repayment.
 5   § 6301.    Definitions.
 6      The following words and phrases when used in this chapter
 7   shall have the meanings given to them in this section unless the
 8   context clearly indicates otherwise:
 9      "Approved smart growth zoning district."     A smart growth
10   zoning district that has been adopted by a municipality and
11   approved by the department in accordance with this chapter and
12   the guidelines of the department, so as to be eligible for the
13   receipt of financial and other incentives.
14      "Attainable housing."     Housing attainable to and occupied by
15   individuals and families whose annual income is equal to or less
16   than 120% of the areawide median income as determined by the
17   United States Department of Housing and Urban Development.
18      "Density bonus payment."     A one-time payment to a
19   municipality from the Smart Growth Zoning District Fund or other
20   money authorized by the General Assembly for each housing unit
21   of new construction that is created in a smart growth zoning
22   district.
23      "Department."     The Department of Community and Economic
24   Development of the Commonwealth.
25      "Developable land area."     An area within an approved smart
26   growth zoning district that can be feasibly developed into
27   residential or mixed-use development determined in accordance
28   with guidelines of the department. The term does not include:
29             (1)   Land area that is already substantially developed,
30      including existing parks and dedicated, perpetual open space

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 1      within a substantially developed portion.
 2            (2)   Open space designated by the municipality as
 3      provided in section 6304 (relating to requirements).
 4            (3)   Areas exceeding one-half acre of contiguous land
 5      that are unsuitable for development because of topographic
 6      features or for environmental reasons, such as wetlands.
 7      "Duplex housing."    A residential building with two dwelling
 8   units separated by a horizontal or vertical wall.
 9      "Dwelling unit."     A single unit providing complete
10   independent living facilities for one or more individuals,
11   including permanent facilities for cooking, eating, living,
12   sanitation and sleeping.
13      "Eligible location."    An area that, by virtue of the area's
14   infrastructure, transportation access, existing underutilized
15   facilities or location, makes the area a highly suitable
16   location for residential or mixed-use smart growth zoning
17   districts, including:
18            (1)   Areas near transit stations, including rapid
19      transit, commuter rail and bus and ferry terminals.
20            (2)   Areas of concentrated development, including town
21      and city centers and other existing commercial districts.
22      "Fund."     The Smart Growth Zoning District Fund established
23   under section 6306(a) (relating to Smart Growth Zoning District
24   Fund).
25      "Housing production summary."        A detailed summary of the
26   municipality's:
27            (1)   Attainable housing production history.
28            (2)   Housing needs and housing demand assessment.
29            (3)   Analysis of development constraints and capacity.
30            (4)   Current housing goals and strategy for achieving

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 1      those goals.
 2             (5)   Proposed locations for attainable housing
 3      production.
 4      "Mixed-use development."     A development containing a mix of
 5   residential uses and nonresidential uses, including commercial,
 6   institutional, industrial or other uses, all conceived, planned
 7   and integrated to create vibrant, workable, livable and
 8   attractive neighborhoods.
 9      "Municipality."     A city, borough, incorporated town or
10   township or home rule municipality.
11      "New construction."     Construction of new housing units, the
12   substantial rehabilitation of existing buildings or the
13   conversion to residential use of existing buildings to create
14   additional housing units, to the extent that those units could
15   not have been constructed or converted without the smart growth
16   zoning district.
17      "Program."     The Smart Growth Zoning and Housing Program
18   established under section 6302 (relating to Smart Growth Zoning
19   and Housing Program).
20      "Project."     A proposed residential or mixed-use development
21   within a smart growth zoning district.
22      "Smart growth zoning district."       A zoning district adopted by
23   a municipality under this chapter that replaces or is
24   superimposed over one or more zoning districts in an eligible
25   location, in accordance with section 6304.
26      "Triplex housing."     A residential building with three
27   dwelling units separated by a horizontal or vertical wall.
28   § 6302.    Smart Growth Zoning and Housing Program.
29      (a)    Establishment.--The Smart Growth Zoning and Housing
30   Program is established within the department for the purpose of

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 1   distributing money to a municipality that has adopted by
 2   ordinance an approved smart growth zoning district.
 3      (b)    Creation of district.--By ordinance, a municipality may
 4   adopt a smart growth zoning district in an eligible location and
 5   may include adjacent areas that are served by existing
 6   infrastructure and utilities and that have safe pedestrian
 7   access to at least one destination of frequent pedestrian use,
 8   such as a school, civic facility, place of commercial or
 9   business use, place of employment or recreation or transit
10   station. In a smart growth zoning district, a municipality shall
11   zone for primary residential use as of right and may also permit
12   business, commercial or other uses consistent with primary
13   residential use. A smart growth zoning district ordinance shall
14   be adopted by a majority vote of the governing body of the
15   municipality.
16      (c)    Duties of department.--The department shall establish
17   guidelines necessary to implement and administer this chapter.
18   § 6303.    Submission to department.
19      (a)    Application.--The department shall develop and prescribe
20   a method for a governing body of a municipality to submit to the
21   department the necessary materials for a determination of
22   approval for the program. The application must:
23             (1)   Identify and describe the boundaries of the smart
24      growth zoning district.
25             (2)   Identify and describe the developable land area
26      within the smart growth zoning district.
27             (3)   Identify and describe other residential development
28      opportunities for infill housing and the residential reuse of
29      existing buildings and underutilized buildings within already
30      developed areas.

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 1             (4)   Include a housing production summary, which shall
 2      include an estimate of the projected number of units of new
 3      construction that could be built in the smart growth zoning
 4      district.
 5             (5)   Include a copy of the smart growth zoning district
 6      ordinance.
 7             (6)   By narrative and exhibits, establish the elements
 8      under section 6304 (relating to requirements).
 9      (b)    Determination.--
10             (1)   The department shall approve an application for the
11      program if the smart growth zoning district meets the
12      requirements under section 6304. If approved, the smart
13      growth zoning district shall be eligible for payments and
14      incentives under section 6306 (relating to Smart Growth
15      Zoning District Fund).
16             (2)   If the department denies the application, the
17      department shall inform the applicant of the deficiencies in
18      the application. A governing body of a municipality may
19      reapply for approval after addressing any deficiencies in a
20      prior application.
21             (3)   If the department does not make a determination on a
22      complete application within 60 days of receipt, the
23      application shall be deemed approved.
24      (c)    Revocation.--The department may revoke approval if the
25   municipality fails to meet the minimum requirements for a smart
26   growth zoning district provided under section 6304.
27   § 6304.    Requirements.
28      (a)    Minimum requirements.--A smart growth zoning district
29   shall satisfy the following minimum requirements:
30             (1)   Each smart growth zoning district shall be located

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 1    in an eligible location.
 2        (2)    The zoning for each smart growth zoning district
 3    shall provide for residential use to permit a mix of housing
 4    for families, individuals, persons with special needs and the
 5    elderly.
 6        (3)    Housing density in a smart growth zoning district
 7    shall be at least 20 units per acre for multifamily housing
 8    on the developable land area, eight units per acre for
 9    single-family homes on the developable land area and 12 units
10    per acre for duplex housing and triplex housing on the
11    developable land area.
12        (4)    The ordinance for each smart growth zoning district
13    shall provide that not less than 20% of the residential units
14    constructed in projects of more than 12 units shall be
15    attainable housing and shall contain mechanisms to ensure
16    that not less than 20% of the total residential units
17    constructed in each smart growth zoning district shall be
18    attainable housing.
19        (5)    A smart growth zoning district shall permit infill
20    housing on existing vacant lots and shall allow the provision
21    of additional housing units in existing buildings, consistent
22    with neighborhood building and use patterns, building codes
23    and fire and safety codes.
24        (6)    A smart growth zoning district may not be subject to
25    limitation of the issuance of building permits for
26    residential uses or a local moratorium on the issuance of
27    such permits.
28        (7)    A smart growth zoning district may not impose
29    restrictions on age or any other occupancy restrictions on
30    the district as a whole or any portion thereof or project

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 1    therein. Applicants may pursue the development of specific
 2    projects within a smart growth zoning district that are
 3    exclusively for the elderly, the disabled or for assisted
 4    living. The department shall adopt guidelines limiting the
 5    percentage of units in the district that qualify the
 6    municipality for density bonus payments under section 6306
 7    (relating to Smart Growth Zoning District Fund) that may be
 8    subject to restrictions that limit occupancy exclusively for
 9    the elderly, the disabled or for assisted living. Not less
10    than 25% of the housing units in a project that limits
11    occupancy exclusively for the elderly, the disabled or for
12    assisted living within a smart growth zoning district shall
13    be attainable housing.
14        (8)    Housing in a smart growth zoning district shall
15    comply with Federal, State and local fair housing laws.
16        (9)    A smart growth zoning district may not exceed 15% of
17    the total land area in the municipality. Upon request, the
18    department may approve a larger land area if the approval
19    serves the goals and objectives of this chapter.
20        (10)   The aggregate land area of all approved smart
21    growth zoning districts in the municipality may not exceed
22    25% of the total land area in the municipality. The
23    department may approve a larger combined land area if the
24    department determines that the approval serves the goals and
25    objectives of this chapter.
26        (11)   Housing density in any smart growth zoning district
27    shall not overburden infrastructure as it exists or may be
28    practicably upgraded in light of anticipated density and
29    other uses to be retained in the district.
30        (12)   A smart growth zoning district ordinance shall

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 1      define the manner of review by the municipality in accordance
 2      with section 6309 (relating to approval of projects) and
 3      shall specify the procedure for review in accordance with
 4      guidelines.
 5      (b)   Open space.--A smart growth zoning district ordinance
 6   may modify or eliminate the municipality's dimensional standards
 7   in order to support desired densities, mix of uses and physical
 8   character. The standards that are subject to modification or
 9   waiver may include height, setbacks, lot coverage, parking
10   ratios and locations and roadway design standards. Modified
11   requirements may be applied as of right throughout all or a
12   portion of the smart growth zoning district, or on a project-
13   specific basis through the smart growth zoning district plan
14   review process as provided in the ordinance. A municipality may
15   designate certain areas within a smart growth zoning district as
16   dedicated perpetual open space as defined in section 2(4) of the
17   act of January 19, 1968 (1967 P.L.992, No.442), entitled "An act
18   authorizing the Commonwealth of Pennsylvania and the local
19   government units thereof to preserve, acquire or hold land for
20   open space uses." The amount of open space shall not be included
21   as a developable land area within the smart growth zoning
22   district. Open space may include an amount of land equal to up
23   to 10% of what would otherwise be the developable land area if
24   the developable land area would be less than 50 acres and 20% of
25   what would otherwise be the developable land area if the
26   developable land area would be 50 acres or more.
27      (c)   Mixed use.--The smart growth zoning district ordinance
28   may provide for mixed-use development subject to any limitations
29   that may be imposed by guidelines of the department.
30      (d)   Historic district.--A smart growth zoning district may

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 1   encompass an existing historic district. A municipality, with
 2   the approval of the department, may establish a historic
 3   district in an approved smart growth zoning district in
 4   accordance with the act of June 13, 1961 (P.L.282, No 167),
 5   entitled "An act authorizing counties, cities, boroughs,
 6   incorporated towns and townships to create historic districts
 7   within their geographic boundaries; providing for the
 8   appointment of Boards of Historical Architectural Review;
 9   empowering governing bodies of political subdivisions to protect
10   the distinctive historical character of these districts and to
11   regulate the erection, reconstruction, alteration, restoration,
12   demolition or razing of buildings within the historic
13   districts," as long as the establishment of the historic
14   district meets the requirements for a historic district and does
15   not render the municipality noncompliant with this chapter, as
16   determined by the department. The historic districts may be
17   coterminous or noncoterminous with the smart growth zoning
18   district. Within any historic district, the requirements of the
19   historic district may apply to existing and proposed buildings.
20      (e)   Municipal requirements.--A municipality may require more
21   attainable housing than required by this chapter, both in the
22   percentage of units that must be attainable housing and in the
23   levels of income for which the attainable housing must be
24   accessible, provided that the thresholds may not unduly restrict
25   opportunities for development.
26      (f)   Density requirement.--With respect to a municipality
27   with a population of fewer than 10,000, as determined by the
28   most recent Federal decennial census, for hardship shown, the
29   department may, in accordance with guidelines adopted under this
30   chapter, approve zoning for a smart growth zoning district with

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 1   lower densities than provided in this chapter if the
 2   municipality satisfies the other requirements under this
 3   section. Approval may not be withdrawn solely because, in a
 4   future census, the population of the municipality exceeds
 5   10,000.
 6      (g)    Amendment or repeal of ordinance.--Any amendment or
 7   repeal of a zoning ordinance affecting an approved smart growth
 8   zoning district shall require the municipality to make the
 9   payment required under section 6311(b) (relating to repayment).
10   Each amendment or repeal shall be submitted to the department
11   with an evaluation of the effect on the number of projected
12   units that will remain developable, if any, in relation to the
13   number of units that have been built and the number of units
14   that determined any corresponding zoning incentive payment paid
15   to the municipality.
16      (h)    Authority.--Nothing in this chapter shall affect a
17   municipality's authority to amend its ordinances.
18   § 6305.    Certificate of compliance.
19      On or before October 1 of each year after the year of
20   approval of a smart growth zoning district by the department,
21   the department shall send a smart growth zoning district
22   certificate of compliance to each municipality with an approved
23   district. In order to receive a certificate, the municipality
24   shall verify within the time specified by the department that:
25             (1)   The municipality has adopted an approved smart
26      growth zoning district ordinance.
27             (2)   The certification has not been revoked by the
28      department.
29             (3)   The smart growth zoning district is being developed
30      in a manner that reasonably complies with the applicable

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 1      minimum requirements in section 6304 (relating to
 2      requirements).
 3             (4)    The municipality has not unreasonably denied plans
 4      for projects or has only denied plans for projects in a
 5      manner consistent with the municipality's smart growth zoning
 6      district ordinance and this chapter.
 7   § 6306.    Smart Growth Zoning District Fund.
 8      (a)    Establishment and purpose of fund.--
 9             (1)    The Smart Growth Zoning District Fund is established
10      within the State Treasury to provide funding for the program.
11             (2)    The General Assembly may appropriate money to the
12      fund from the General Fund for the purpose of awarding
13      incentives and bonus payments through the program.
14      (b)    Payments generally.--
15             (1)    Payments under this section shall be made subject to
16      available money appropriated by the General Assembly to the
17      fund.
18             (2)    Money in the fund is appropriated on a continuing
19      basis to the department for the program.
20      (c)    Zoning incentive payment.--
21             (1)    Each municipality with an approved smart growth
22      zoning district shall be eligible for payments under the
23      program.
24             (2)    The Commonwealth shall pay from the fund a zoning
25      incentive payment to municipalities with an approved smart
26      growth zoning district.
27             (3)    The payments shall be made according to the
28      following schedule:
29        Projected Units of New
30                   Construction                     Payment

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 1                    Up to 20                         $10,000
 2                   21 to 100                         $75,000
 3               101 to 200                           $200,000
 4               201 to 500                           $350,000
 5              501 or more                           $600,000
 6             (4)    Subject to any conditions imposed by the department
 7      as a condition of approving a smart growth zoning district,
 8      the zoning incentive payment shall be payable upon
 9      confirmation of approval of the smart growth zoning district
10      by the department. The projected number of units shall be
11      based upon the zoning adopted in the smart growth zoning
12      district.
13      (d)    Density bonus payments.--
14             (1)    The department shall pay from the fund a one-time
15      density bonus payment to each municipality with an approved
16      smart growth zoning district.
17             (2)    The density bonus payment shall be $3,000 for each
18      unit of new construction created in the smart growth zoning
19      district.
20             (3)    The amount due shall be paid on a unit-by-unit basis
21      in accordance with department guidelines, upon submission by
22      a municipality of proof of issuance of a building permit for
23      a particular housing unit or units within the district.
24   § 6307.    Other discretionary money.
25      When awarding discretionary money to municipalities regarding
26   smart growth and housing that is not paid through the fund, the
27   department, the Department of Environmental Protection and the
28   Department of Transportation shall use a methodology of awarding
29   money that favors municipalities with approved smart growth
30   zoning districts and other approved zoning policies or

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 1   initiatives that encourage increased attainable housing
 2   production in this Commonwealth, including inclusionary zoning.
 3   § 6308.    Design standards.
 4      (a)    Adoption.--A municipality may adopt, in accordance with
 5   program guidelines, design standards applicable to projects
 6   undergoing review by the municipality to ensure that the
 7   physical character of development within the smart growth zoning
 8   district is complementary to adjacent buildings and structures.
 9   The standards must provide for high-density quality development
10   consistent with the character of building types, streetscapes
11   and other municipality features traditionally found in densely
12   settled areas of the municipality or in the region of the
13   municipality.
14      (b)    Restrictions.--
15             (1)   A municipality may not adopt a design standard if
16      the design standard adds unreasonable costs to residential or
17      mixed-use developments.
18             (2)   A design standard may not unreasonably impair the
19      economic feasibility of proposed projects.
20             (3)   The department may disapprove a request for a smart
21      growth zoning district because of a design standard that adds
22      unreasonable costs or unreasonably impairs feasibility.
23   § 6309.    Approval of projects.
24      (a)    Municipality approval.--A municipality may incorporate
25   provisions within the smart growth zoning district ordinance
26   that prescribe contents of an application for approval of a
27   project. The ordinance may require the applicant to pay for
28   reasonable consulting fees to provide peer review of the
29   applications for the benefit of the municipality, which may be
30   used only for expenses associated with the review of the

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 1   development application by outside consultants. Any surplus
 2   remaining after the completion of the review, including any
 3   interest accrued, shall be returned to the applicant.
 4      (b)   Zoning.--
 5            (1)   An application to a municipality for approval under
 6      a smart growth zoning district ordinance shall be governed by
 7      the applicable zoning provisions in effect at the time of the
 8      submission while the plan is being processed and pending any
 9      appeal and for three years after approval.
10            (2)   If an application is denied, the zoning provisions
11      in effect at the time of the application shall continue in
12      effect with respect to any further application filed within
13      two years after the date of the denial except as the
14      applicant may otherwise choose within that two-year period.
15      (c)   Filing and hearing.--
16            (1)   An applicant must file an application for approval
17      under this section with the municipal clerk or secretary.
18            (2)   A copy of the application for approval under this
19      section, including the date of filing certified by the
20      municipal clerk or secretary, must be filed with the
21      municipality.
22            (3)   The municipality shall hold a public hearing for
23      which proper notice has been given.
24            (4)   (i)    Within 120 days of the receipt of the
25            application for approval under this section by the
26            municipal clerk or secretary, the municipality shall make
27            a decision on the application.
28                  (ii)   Written notice of the decision under this
29            paragraph must be filed with the municipal clerk or
30            secretary.

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 1                  (iii)    The required time limits for the action under
 2            this paragraph may be extended by written agreement
 3            between the applicant and the municipality.
 4                  (iv)    Failure of the municipality to take action
 5            within the 120-day period or extended time, if
 6            applicable, shall be deemed to be an approval of the
 7            plan.
 8      (d)   Notice and clarification.--
 9            (1)   The municipality shall issue to the applicant a copy
10      of the decision under subsection (c) that:
11                  (i)    Contains the name and address of the owner.
12                  (ii)    Identifies the land affected.
13                  (iii)    Identifies the plans that were the subject of
14            the decision.
15                  (iv)    Certifies that:
16                         (A)   A copy of the decision has been filed with
17                  the municipal clerk or secretary.
18                         (B)   All plans referred to in the decision are on
19                  file with the municipality.
20            (2)   If 20 days have elapsed after the decision has been
21      filed in the office of the municipal clerk or secretary
22      without an appeal having been filed or if an appeal is
23      dismissed or denied, the municipal clerk or secretary shall
24      so certify on a copy of the decision.
25            (3)   If the plan is approved by reason of the failure of
26      the municipality to timely act, the clerk shall make the
27      certification on a copy of the application.
28      (e)   Conditions.--A municipality shall approve a project
29   under this section only as necessary to:
30            (1)   ensure substantial compliance of the proposed

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 1      project with the requirements of the smart growth zoning
 2      district ordinance; or
 3            (2)   mitigate any extraordinary adverse impacts of the
 4      project on nearby properties.
 5      (f)   Denial.--An application may be denied if:
 6            (1)   The project does not meet the conditions and
 7      requirements under the smart growth zoning district
 8      ordinance.
 9            (2)   The applicant failed to submit information and fees
10      required by the ordinance and necessary for an adequate and
11      timely review of the design of the project or potential
12      project impacts.
13            (3)   It is not possible to adequately mitigate
14      extraordinary adverse project impacts on nearby properties by
15      means of suitable conditions.
16      (g)   Appeals.--
17            (1)   The court of common pleas in the county in which the
18      municipality is located shall hear an appeal of a decision
19      under this section by a party who is aggrieved by the
20      decision.
21            (2)   An appeal under this subsection may be brought
22      within 20 days after the decision has been filed in the
23      office of the municipal clerk or secretary.
24            (3)   Notice of the appeal under this subsection, with a
25      copy of the complaint, must be given to the municipal clerk
26      or secretary within the 20-day period under paragraph (2).
27            (4)   Review shall be based on the record of information
28      and plans presented to the municipality.
29      (h)   Validity.--A project approval shall remain valid and
30   shall run with the land indefinitely if construction on the land

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 1   has commenced within two years after the decision is issued,
 2   which time shall be extended by the time required to adjudicate
 3   an appeal from the approval and if the project proponent is
 4   actively pursuing other required permits for the project or
 5   there is other good cause for the failure to commence
 6   construction, or as may be provided in an approval for a
 7   multiphase project.
 8   § 6310.    Administration.
 9      (a)    Duties of department.--The department shall administer
10   the program and annually review and report on the program.
11      (b)    Reports.--
12             (1)   The department shall undertake or cause to be
13      undertaken an annual review and may require municipalities
14      with smart growth zoning districts to provide data for the
15      preparation of the annual report.
16             (2)   Each annual report must:
17                   (i)    Be prepared on the basis of the data and made
18             available to the general public and submitted to the
19             General Assembly, not later than November 15 of each
20             year, and must cover the status of the program through
21             the end of the prior fiscal year.
22                   (ii)    Identify and describe the status of
23             municipalities that are actively seeking program
24             approval.
25                   (iii)    Identify approved smart growth zoning
26             districts and the amounts and anticipated timing of one-
27             time density bonus payments during the prior and current
28             fiscal year.
29                   (iv)    Summarize the amount of land areas zoned for
30             particular types of projects in both proposed and

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 1             approved districts, the number of projects being reviewed
 2             by municipalities under section 6309 (relating to
 3             approval of projects), including the number and type of
 4             proposed residential units, the number of building
 5             permits issued and the number of completed housing units
 6             and their type, and set out the one-time density bonus
 7             payments made to each municipality.
 8                   (v)   For the then-current and the immediately
 9             succeeding fiscal years, make estimates for the:
10                         (A)   Number and size of proposed new districts.
11                         (B)   Potential number of residential units to be
12                   allowed in new districts.
13                         (C)   Anticipated construction activity.
14   § 6311.    Repayment.
15      (a)    Conditions.--
16             (1)   If construction of an approved project has not been
17      started in the smart growth zoning district within the time
18      period under paragraph (2), the department shall require the
19      municipalities to repay to the department all money paid to
20      the municipality under this chapter for a smart growth zoning
21      district.
22             (2)   Construction must begin within three years of the
23      date of the zoning incentive payment for the smart growth
24      zoning district. This period may be extended by the
25      department for good cause in accordance with the guidelines
26      of the department.
27      (b)    Time.--
28             (1)   Within 60 days of enacting an amendment or repeal of
29      an ordinance affecting an approved smart growth zoning
30      district in accordance with section 6304(g) (relating to

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 1      requirements), the municipality shall repay to the department
 2      any portion of the zoning incentive payment received in
 3      excess of the zoning incentive payment that would have been
 4      payable based on the sum of the number of units that have
 5      been built and the number of units, if any, that will remain
 6      developable under the smart growth zoning district.
 7            (2)   The department may include in the sum under
 8      paragraph (1) any units that are developable in one or more
 9      adopted smart growth zoning districts for which no zoning
10      incentive payment has been paid but for which the
11      municipality is nonetheless eligible if the associated units
12      would have the effect of replacing some or all of the units
13      that will no longer be developable as a result of the
14      proposed amendment or repeal.
15      (c)   Source.--Money repaid to the department under this
16   section shall be credited to the funding source from which the
17   payment originated.
18      Section 2.    This act shall take effect in one year.




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