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.

PRIOR PRINTER'S NO. 313 PRINTER'S NO. 1582
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
AS REPORTED FROM COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
HOUSE OF REPRESENTATIVES, AS AMENDED, MAY 5, 2025
AN ACT
Amending the act of July 11, 1990 (P.L.465, No.113), entitled
"An act providing for the creation of tax increment
districts; providing for additional powers and duties to be
exercised by redevelopment authorities and by industrial and
commercial development authorities; authorizing the creation
and approval of project plans for tax increment financing;
providing for the establishment of a tax increment base;
allocating the payment of positive tax increments; providing
for the financing of project costs; and providing for the
issuance of tax increment bonds and notes," 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.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "project" and "project costs"
in section 3 of the act of July 11, 1990 (P.L.465, No.113),
known as the Tax Increment Financing Act, are amended and the
section is amended by adding definitions to read:
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
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context clearly indicates otherwise:
"Anti-displacement activity." Projects, programs and
operations that prevent or compensate for the effects of
involuntary relocation of a resident or business from the
resident's or business's current location where the resident or
business otherwise would want to remain if not for socioeconomic
and environmental pressures that make staying infeasible or
undesirable.
"Area of impact." The term includes the area of the project
and the proximate surrounding area as outlined in the project
plan approved by the governing body.
* * *
"Project." The undertakings and activities of an authority
in a tax increment district for the elimination and prevention
of the development or spread of blight, which may include
property acquisition, clearance, redevelopment, rehabilitation
or conservation in a tax increment district, or a combination or
part thereof in accordance with a project plan. The term
includes anti-displacement activities in the tax increment
district and area of impact, as described in the project plan.
"Project costs." Any expenditures made or estimated to be
made or monetary obligations incurred or estimated to be
incurred which are listed in a project plan as costs of public
works or improvements or residential, commercial or industrial
development or revitalization or anti-displacement activities
within a tax increment district, plus any costs incidental
thereto. Project costs include, but are not limited to:
(1) Capital costs, including the actual costs of the
construction of public works or improvements or residential,
commercial or industrial development or revitalization, new
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buildings, structures and fixtures; the demolition,
alteration, remodeling, repair or reconstruction of existing
buildings, structures and fixtures; the acquisition, upgrade
or rehabilitation of machinery and equipment; and the
acquisition, clearing and grading of land. Capital costs also
include the actual cost of the construction, rehabilitation
or repair of publicly owned infrastructure improvements
located outside the boundaries of a tax increment district
which are of direct benefit to a project.
(2) Financing costs, including all costs of issuance of
tax increment bonds or notes, reserve funds for tax increment
bonds or notes, all interest paid to holders of evidences of
indebtedness issued to pay for project costs, and any premium
paid over the principal amount thereof because of the
redemption of such obligations prior to maturity.
(3) Real property assembly costs, meaning any deficit
incurred resulting from the sale or lease as lessor by the
authority of real property within a tax increment district
for consideration which is less than its cost to the
authority.
(4) Professional service costs, including those costs
incurred for architectural, planning, engineering and legal
advice and services.
(5) Administrative costs, including reasonable charges
for the time spent by employees of a municipality or an
authority in connection with the implementation of a project
plan.
(6) Relocation [costs.] and anti-displacement activity
costs. Anti-displacement activity costs also include the area
of impact as described in the project plan.
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(7) Organizational costs, including the costs of
conducting environmental impact and other studies and the
costs of informing the public with respect to the creation of
tax increment districts and the implementation of project
plans.
(8) Costs which are found to be necessary or convenient
to the creation of tax increment districts or the
implementation of project plans, OR FOR THE FUNDING OF A
REDEVELOPMENT FUND AS PROVIDED UNDER SECTION 4(6) or for the
reimbursement of prior expenditures made for any of the costs
under this definition.
* * *
SECTION 2. SECTION 4 OF THE ACT IS AMENDED BY ADDING A
PARAGRAPH TO READ:
SECTION 4. POWERS OF AUTHORITIES.
IN ADDITION TO ALL OTHER POWERS CONFERRED BY LAW, AN
AUTHORITY MAY EXERCISE ANY POWERS NECESSARY AND CONVENIENT TO
CARRY OUT THE PURPOSES OF THIS ACT, INCLUDING THE POWER TO:
* * *
(6) ENTER INTO AGREEMENTS WITH MUNICIPALITIES AND SCHOOL
DISTRICTS FOR THE CREATION OF A REDEVELOPMENT FUND TO BE USED
TO FURTHER THE PURPOSES OF THE AUTHORITY, TO BE FUNDED
THROUGH THE ALLOCATION OF TAX INCREMENTS BOTH DURING THE
EXISTENCE OF A TAX INCREMENT DISTRICT AND AFTER THE DISTRICT
HAS TERMINATED.
Section 2 3. Sections 5(a)(4)(i) and (6)(i) and (ii) and
9(d) of the act are amended to read:
Section 5. Creation of tax increment districts and approval of
project plans.
(a) General rule.--A tax increment district shall be created
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in the following manner:
* * *
(4) The authority shall prepare a project plan for each
tax increment district and submit the plan to the governing
body of the municipality which will create the district and
to the governing body of any other municipality or school
district that levies property taxes within the boundaries of
the proposed district. The plan shall include the following:
(i) A statement listing the kind, number and
location of all proposed public works or improvements
and/or all residential, commercial or industrial
development and revitalization improvements and anti-
displacement activities.
* * *
(6) In order to create a district and adopt a project
plan, the governing body of the municipality which will
create the tax increment district shall adopt, not earlier
than three weeks after the public hearing described in
paragraph (5) has been held, a resolution or ordinance which:
(i) Describes the boundaries of a tax increment
district with sufficient definiteness to identify with
ordinary and reasonable certainty the territory included.
The governing body shall take care that the boundaries
include only those whole units of property assessed for
general property tax purposes. The governing body shall
also describe any area of impact outside the district
where anti-displacement activities may occur.
(ii) Creates the district as of a given date. A tax
increment district may exist for a period not to exceed
[20] 25 years, unless an amendment is made to the project
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plan under paragraph (8).
* * *
Section 9. Financing of project costs.
* * *
(d) Amount and term.--Tax increment bonds or notes may not
be issued in an amount exceeding the aggregate project costs.
The bonds or notes shall mature over a period not exceeding [20]
25 years from the date of issue. The principal and interest on
the bonds and notes may be payable at any time and at any place.
The bonds or notes may be payable to bearer or may be registered
as to the principal or principal and interest. The bonds or
notes may be in any denominations. The bonds or notes may be
sold at public or private sale.
* * *
Section 3 4. This act shall take effect in 60 days.
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