SB 1277 — An Act amending the act of December 1, 1977 (P.L.237, No.76), known as the Local Economic Revitalization Tax Assistance Act, further providing for title of act, for construction, for definitions and for deteriorated areas; providing for ordinance and resolution limitations; further providing for exemption schedule and for procedure for obtaining exemption; and providing for public registry.

PRINTER'S NO.   1632

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 1277
                                               Session of
                                                 2026

     INTRODUCED BY STEFANO, ROTHMAN, PICOZZI, DUSH, FONTANA AND
        LAUGHLIN, APRIL 23, 2026

     REFERRED TO URBAN AFFAIRS AND HOUSING, APRIL 23, 2026


                                    AN ACT
 1   Amending the act of December 1, 1977 (P.L.237, No.76), entitled
 2      "An act authorizing local taxing authorities to provide for
 3      tax exemption for certain deteriorated industrial, commercial
 4      and other business property and for new construction in
 5      deteriorated areas of economically depressed communities;
 6      providing for an exemption schedule and establishing
 7      standards and qualifications," further providing for title of
 8      act, for construction, for definitions and for deteriorated
 9      areas; providing for ordinance and resolution limitations;
10      further providing for exemption schedule and for procedure
11      for obtaining exemption; and providing for public registry.
12      The General Assembly of the Commonwealth of Pennsylvania
13   hereby enacts as follows:
14      Section 1.    The title and section 2 of the act of December 1,
15   1977 (P.L.237, No.76), known as the Local Economic
16   Revitalization Tax Assistance Act, are amended to read:
17                                  AN ACT
18   Authorizing local taxing authorities to provide for tax
19      exemption for [certain deteriorated industrial, commercial
20      and other business] deteriorated property and for new
21      construction in deteriorated areas of economically depressed
22      communities; providing for an exemption schedule and
 1      establishing standards and qualifications.
 2   Section 2.   Construction.
 3      This act shall be construed to authorize local taxing
 4   authorities to exempt new construction in deteriorated areas of
 5   economically depressed communities and improvements to [certain
 6   deteriorated industrial, commercial and other business]
 7   deteriorated property thereby implementing Article VIII, section
 8   2(b)(iii) of the Constitution of Pennsylvania.
 9      Section 2.   The definitions of "deteriorated property" and
10   "local taxing authority" in section 3 of the act are amended and
11   the section is amended by adding definitions to read:
12   Section 3.   Definitions.
13      The following words and phrases when used in this act shall
14   have, unless the context clearly indicates otherwise, the
15   meanings given to them in this section:
16      "Converted residential portion."   A portion of a building or
17   structure that previously served a use other than residential
18   use and has been converted or improved to provide residential
19   use, including an associated area of the property that serves
20   the converted residential portion, such as resident or guest
21   parking.
22      "Deteriorated property."   Any [industrial, commercial or
23   other business property owned by an individual, association or
24   corporation, and located in a deteriorating area, as hereinafter
25   provided, or any such property which has been the subject of an
26   order by a government agency requiring the unit to be vacated,
27   condemned or demolished by reason of noncompliance with laws,
28   ordinance or regulations.] of the following:
29          (1)   An industrial, commercial or other business property
30      or property previously used for governmental purposes,

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 1      including a school, owned by an individual, association or
 2      corporation that is located in a deteriorated area.
 3          (2)   A property that has been the subject of an order by
 4      a government agency requiring the property to be vacated,
 5      condemned or demolished by reason of noncompliance with laws,
 6      ordinances or regulations.
 7          (3)   A property that is no longer in use and must be
 8      demolished to make residential use economically viable.
 9      "Dwelling unit."     A building or portion of a building
10   intended for occupancy as separate living quarters by one or
11   more individuals and containing living, sleeping, cooking and
12   sanitation facilities for the exclusive use of the occupants.
13      * * *
14      "Local taxing authority."     A county, city, borough,
15   incorporated town, township[, institution district] or school
16   district having authority to levy real property taxes.
17      "Mixed-use building."     A building or portion of a building
18   that combines residential use with a use other than residential
19   use, including business, commercial, industrial, cultural or
20   institutional use.
21      * * *
22      "Residential building."     As follows:
23          (1)   A building or portion of a building that contains
24      one or more dwelling units, including any of the following:
25                (i)    A detached, semidetached or attached one-family
26          or two-family dwelling, including a townhouse, row house
27          or associated accessory dwelling unit.
28                (ii)    A duplex, triplex, quadplex or other
29          multifamily dwelling, including an apartment building.
30                (iii)    The portion of a mixed-use building intended

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 1            for residential use.
 2            (2)   The term does not include a hotel, motel, transient
 3      lodging establishment, dormitory, institutional group living
 4      facility or other occupancy in which the primary purpose is
 5      temporary housing, accommodation or custodial care.
 6      "Residential use."     The occupancy or intended occupancy of a
 7   building or portion of a building through one or more dwelling
 8   units as a permanent home or residence.
 9      Section 3.     Section 4(a) of the act is amended to read:
10   Section 4.     Deteriorated areas.
11      (a)   Each local taxing authority may by ordinance or
12   resolution exempt from real property taxation the assessed
13   valuation of improvements to deteriorated properties and the
14   assessed valuation of new construction within the respective
15   municipal governing bodies designated deteriorated areas of
16   economically depressed communities in the amounts and in
17   accordance with the provisions and limitations hereinafter set
18   forth. Prior to the adoption of the ordinance or resolution
19   authorizing the granting of tax exemptions, the municipal
20   governing body shall affix the boundaries of a deteriorated area
21   or areas, wholly or partially located within its jurisdiction,
22   if any. At least one public hearing shall be held by the
23   municipal governing body for the purpose of determining said
24   boundaries. At the public hearing the local taxing authorities,
25   planning commission or redevelopment authority and other public
26   and private agencies and individuals, knowledgeable and
27   interested in the improvement of deteriorated areas, shall
28   present their recommendations concerning the location of
29   boundaries of a deteriorated area or areas for the guidance of
30   the municipal governing bodies, such recommendations taking into

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 1   account the criteria set forth in the act of May 24, 1945
 2   (P.L.991, No.385), known as the "Urban Redevelopment Law," for
 3   the determination of "blighted areas," and the criteria set
 4   forth in [the act of November 29, 1967 (P.L.636, No.292), known
 5   as the "Neighborhood Assistance Act,"] Article XIX-A of the act
 6   of March 4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of
 7   1971," for the determination of "impoverished areas," and the
 8   following criteria: unsafe, unsanitary and overcrowded
 9   buildings; vacant, overgrown and unsightly lots of ground; a
10   disproportionate number of tax delinquent properties, excessive
11   land coverage, defective design or arrangement of buildings,
12   street or lot layouts; economically and socially undesirable
13   land uses. Property adjacent to areas meeting the criteria of
14   this section, but which would not otherwise qualify, may be
15   included within the deteriorated area designated if the local
16   taxing authority determines that new construction on such
17   property would encourage, enhance or accelerate improvement of
18   the deteriorated properties within economically depressed
19   communities. The ordinance or resolution shall specify a
20   description of each such area as determined by the municipal
21   governing body, as well as the cost of improvements per unit to
22   be exempted, and the schedule of taxes exempted as hereinafter
23   provided.
24      * * *
25      Section 4.    The act is amended by adding a section to read:
26   Section 4.1.    Ordinance and resolution limitations.
27      (a)   A local taxing authority may, by ordinance or
28   resolution, adopt requirements applicable to new construction or
29   improvement of deteriorated property subject to this act.
30      (b)   A local taxing authority may impose only the following

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 1   requirements applicable to new construction or improvement under
 2   this act:
 3            (1)   A contractor or subcontractor shall have the
 4      following duties:
 5                  (i)    Demonstrate that the contractor or subcontractor
 6            maintains each valid license, registration or certificate
 7            required by Federal or State law or local ordinance.
 8                  (ii)    Comply, where applicable, with all of the
 9            following:
10                         (A)   The act of June 2, 1915 (P.L.736, No.338),
11                  known as the "Workers' Compensation Act."
12                         (B)   The act of December 5, 1936 (2nd Sp.Sess.,
13                  1937 P.L.2897, No.1), known as the "Unemployment
14                  Compensation Law."
15                         (C)   The act of August 15, 1961 (P.L.987,
16                  No.442), known as the "Pennsylvania Prevailing Wage
17                  Act."
18            (2)   A local taxing authority may not impose a labor,
19      hiring, procurement or workforce composition requirement that
20      is not expressly required by Federal or State law, including
21      a condition relating to local hiring preference or residency.
22      (c)   A local taxing authority may amend an ordinance or
23   resolution adopted before the effective date of this subsection
24   to comply with subsection (b). Until one year after the
25   effective date of this subsection, an ordinance or resolution
26   adopted before the effective date of this subsection shall
27   remain in effect. On and after one year after the effective date
28   of this subsection, a provision of an ordinance or resolution
29   adopted before the effective date of this subsection that is
30   inconsistent with subsection (b) shall be void.

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 1      Section 5.     Section 5(b)(1) of the act is amended and the
 2   subsection is amended by adding a paragraph to read:
 3   Section 5.     Exemption schedule.
 4      * * *
 5      (b)   Whether or not the assessment eligible for exemption is
 6   based upon actual cost or a maximum cost, the actual amount of
 7   taxes exempted shall be in accordance with the schedule of taxes
 8   exempted established by a local taxing authority subject to the
 9   following limitations:
10            (1)   The length of the schedule of taxes exempted for new
11      construction or improvement that does not include residential
12      use and does not occur within or result in a residential
13      building shall not exceed ten years.
14            (1.1)   The length of the schedule of taxes exempted for
15      new construction or improvement that includes residential use
16      or occurs within or results in a residential building shall
17      not exceed 20 years.
18            * * *
19      Section 6.     Section 6 of the act is amended to read:
20   Section 6.     Procedure for obtaining exemption.
21      (a)   Any person desiring tax exemption pursuant to ordinances
22   or resolutions adopted pursuant to this act, shall notify each
23   local taxing authority granting such exemption in writing on a
24   form provided by [it] the local taxing authority submitted at
25   the time [he] the person secures the building permit, or if no
26   building permit or other notification of new construction or
27   improvement is required, at the time [he] the person commences
28   construction. A copy of the exemption request shall be forwarded
29   to the board of assessment and revision of taxes or other
30   appropriate assessment agency. The assessment agency shall,

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 1   after completion of the new construction or improvement, assess
 2   separately the new construction or improvement, including a
 3   converted residential portion, and calculate the amounts of the
 4   assessment eligible for tax exemption in accordance with the
 5   limits established by the local taxing authorities and notify
 6   the taxpayer and the local taxing authorities of the
 7   reassessment and amounts of the assessment eligible for
 8   exemption. Appeals from the reassessment and the amounts
 9   eligible for the exemption may be taken by the taxpayer or the
10   local taxing authorities as provided by law.
11      (b)   The cost of new construction or improvements to be
12   exempted and the schedule of taxes exempted existing at the time
13   of the initial request for tax exemption shall be applicable to
14   that exemption request, and subsequent amendment to the
15   ordinance, if any, shall not apply to requests initiated prior
16   to their adoption. For purposes of this subsection, the tax
17   exemption schedule for an exemption request shall be the
18   schedule under section 5(b)(1) or (1.1), whichever applies to
19   the new construction or improvement, in effect at the time of
20   the initial request for tax exemption.
21      Section 7.    The act is amended by adding a section to read:
22   Section 6.1.    Public registry.
23      (a)   The Department of Community and Economic Development
24   shall, within one year of the effective date of this subsection,
25   publish and maintain on its publicly accessible Internet website
26   a public registry listing each local taxing authority that has
27   adopted an ordinance or resolution under this act that is in
28   effect on the effective date of this subsection.
29      (b)   The Department of Community and Economic Development
30   shall update the public registry biennially and shall include a

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 1   hyperlink to a copy of each adopted ordinance or resolution in
 2   effect for the local taxing authority at the time of the
 3   biennial update.
 4      (c)   This section shall apply to an ordinance or resolution
 5   in effect regardless of whether the ordinance or resolution was
 6   adopted before, on or after the effective date of this
 7   subsection.
 8      Section 8.   The amendment or addition of sections 4.1, 5(b)
 9   (1) and (1.1) and 6 of the act shall apply to an ordinance or
10   resolution adopted or amended under this act on or after the
11   effective date of this section. Except as provided under section
12   4.1(c) of the act, an ordinance or resolution adopted before the
13   effective date of this section shall continue in effect until
14   amended or repealed.
15      Section 9.   This act shall take effect immediately.




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