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
Amending the act of December 1, 1977 (P.L.237, No.76), entitled
"An act authorizing local taxing authorities to provide for
tax exemption for certain deteriorated industrial, commercial
and other business property and for new construction in
deteriorated areas of economically depressed communities;
providing for an exemption schedule and establishing
standards and qualifications," 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.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The title and section 2 of the act of December 1,
1977 (P.L.237, No.76), known as the Local Economic
Revitalization Tax Assistance Act, are amended to read:
AN ACT
Authorizing local taxing authorities to provide for tax
exemption for [certain deteriorated industrial, commercial
and other business] deteriorated property and for new
construction in deteriorated areas of economically depressed
communities; providing for an exemption schedule and
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establishing standards and qualifications.
Section 2. Construction.
This act shall be construed to authorize local taxing
authorities to exempt new construction in deteriorated areas of
economically depressed communities and improvements to [certain
deteriorated industrial, commercial and other business]
deteriorated property thereby implementing Article VIII, section
2(b)(iii) of the Constitution of Pennsylvania.
Section 2. The definitions of "deteriorated property" and
"local taxing authority" in section 3 of the 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, unless the context clearly indicates otherwise, the
meanings given to them in this section:
"Converted residential portion." A portion of a building or
structure that previously served a use other than residential
use and has been converted or improved to provide residential
use, including an associated area of the property that serves
the converted residential portion, such as resident or guest
parking.
"Deteriorated property." Any [industrial, commercial or
other business property owned by an individual, association or
corporation, and located in a deteriorating area, as hereinafter
provided, or any such property which has been the subject of an
order by a government agency requiring the unit to be vacated,
condemned or demolished by reason of noncompliance with laws,
ordinance or regulations.] of the following:
(1) An industrial, commercial or other business property
or property previously used for governmental purposes,
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including a school, owned by an individual, association or
corporation that is located in a deteriorated area.
(2) A property that has been the subject of an order by
a government agency requiring the property to be vacated,
condemned or demolished by reason of noncompliance with laws,
ordinances or regulations.
(3) A property that is no longer in use and must be
demolished to make residential use economically viable.
"Dwelling unit." A building or portion of a building
intended for occupancy as separate living quarters by one or
more individuals and containing living, sleeping, cooking and
sanitation facilities for the exclusive use of the occupants.
* * *
"Local taxing authority." A county, city, borough,
incorporated town, township[, institution district] or school
district having authority to levy real property taxes.
"Mixed-use building." A building or portion of a building
that combines residential use with a use other than residential
use, including business, commercial, industrial, cultural or
institutional use.
* * *
"Residential building." As follows:
(1) A building or portion of a building that contains
one or more dwelling units, including any of the following:
(i) A detached, semidetached or attached one-family
or two-family dwelling, including a townhouse, row house
or associated accessory dwelling unit.
(ii) A duplex, triplex, quadplex or other
multifamily dwelling, including an apartment building.
(iii) The portion of a mixed-use building intended
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for residential use.
(2) The term does not include a hotel, motel, transient
lodging establishment, dormitory, institutional group living
facility or other occupancy in which the primary purpose is
temporary housing, accommodation or custodial care.
"Residential use." The occupancy or intended occupancy of a
building or portion of a building through one or more dwelling
units as a permanent home or residence.
Section 3. Section 4(a) of the act is amended to read:
Section 4. Deteriorated areas.
(a) Each local taxing authority may by ordinance or
resolution exempt from real property taxation the assessed
valuation of improvements to deteriorated properties and the
assessed valuation of new construction within the respective
municipal governing bodies designated deteriorated areas of
economically depressed communities in the amounts and in
accordance with the provisions and limitations hereinafter set
forth. Prior to the adoption of the ordinance or resolution
authorizing the granting of tax exemptions, the municipal
governing body shall affix the boundaries of a deteriorated area
or areas, wholly or partially located within its jurisdiction,
if any. At least one public hearing shall be held by the
municipal governing body for the purpose of determining said
boundaries. At the public hearing the local taxing authorities,
planning commission or redevelopment authority and other public
and private agencies and individuals, knowledgeable and
interested in the improvement of deteriorated areas, shall
present their recommendations concerning the location of
boundaries of a deteriorated area or areas for the guidance of
the municipal governing bodies, such recommendations taking into
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account the criteria set forth in the act of May 24, 1945
(P.L.991, No.385), known as the "Urban Redevelopment Law," for
the determination of "blighted areas," and the criteria set
forth in [the act of November 29, 1967 (P.L.636, No.292), known
as the "Neighborhood Assistance Act,"] Article XIX-A of the act
of March 4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of
1971," for the determination of "impoverished areas," and the
following criteria: unsafe, unsanitary and overcrowded
buildings; vacant, overgrown and unsightly lots of ground; a
disproportionate number of tax delinquent properties, excessive
land coverage, defective design or arrangement of buildings,
street or lot layouts; economically and socially undesirable
land uses. Property adjacent to areas meeting the criteria of
this section, but which would not otherwise qualify, may be
included within the deteriorated area designated if the local
taxing authority determines that new construction on such
property would encourage, enhance or accelerate improvement of
the deteriorated properties within economically depressed
communities. The ordinance or resolution shall specify a
description of each such area as determined by the municipal
governing body, as well as the cost of improvements per unit to
be exempted, and the schedule of taxes exempted as hereinafter
provided.
* * *
Section 4. The act is amended by adding a section to read:
Section 4.1. Ordinance and resolution limitations.
(a) A local taxing authority may, by ordinance or
resolution, adopt requirements applicable to new construction or
improvement of deteriorated property subject to this act.
(b) A local taxing authority may impose only the following
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requirements applicable to new construction or improvement under
this act:
(1) A contractor or subcontractor shall have the
following duties:
(i) Demonstrate that the contractor or subcontractor
maintains each valid license, registration or certificate
required by Federal or State law or local ordinance.
(ii) Comply, where applicable, with all of the
following:
(A) The act of June 2, 1915 (P.L.736, No.338),
known as the "Workers' Compensation Act."
(B) The act of December 5, 1936 (2nd Sp.Sess.,
1937 P.L.2897, No.1), known as the "Unemployment
Compensation Law."
(C) The act of August 15, 1961 (P.L.987,
No.442), known as the "Pennsylvania Prevailing Wage
Act."
(2) A local taxing authority may not impose a labor,
hiring, procurement or workforce composition requirement that
is not expressly required by Federal or State law, including
a condition relating to local hiring preference or residency.
(c) A local taxing authority may amend an ordinance or
resolution adopted before the effective date of this subsection
to comply with subsection (b). Until one year after the
effective date of this subsection, an ordinance or resolution
adopted before the effective date of this subsection shall
remain in effect. On and after one year after the effective date
of this subsection, a provision of an ordinance or resolution
adopted before the effective date of this subsection that is
inconsistent with subsection (b) shall be void.
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Section 5. Section 5(b)(1) of the act is amended and the
subsection is amended by adding a paragraph to read:
Section 5. Exemption schedule.
* * *
(b) Whether or not the assessment eligible for exemption is
based upon actual cost or a maximum cost, the actual amount of
taxes exempted shall be in accordance with the schedule of taxes
exempted established by a local taxing authority subject to the
following limitations:
(1) The length of the schedule of taxes exempted for new
construction or improvement that does not include residential
use and does not occur within or result in a residential
building shall not exceed ten years.
(1.1) The length of the schedule of taxes exempted for
new construction or improvement that includes residential use
or occurs within or results in a residential building shall
not exceed 20 years.
* * *
Section 6. Section 6 of the act is amended to read:
Section 6. Procedure for obtaining exemption.
(a) Any person desiring tax exemption pursuant to ordinances
or resolutions adopted pursuant to this act, shall notify each
local taxing authority granting such exemption in writing on a
form provided by [it] the local taxing authority submitted at
the time [he] the person secures the building permit, or if no
building permit or other notification of new construction or
improvement is required, at the time [he] the person commences
construction. A copy of the exemption request shall be forwarded
to the board of assessment and revision of taxes or other
appropriate assessment agency. The assessment agency shall,
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after completion of the new construction or improvement, assess
separately the new construction or improvement, including a
converted residential portion, and calculate the amounts of the
assessment eligible for tax exemption in accordance with the
limits established by the local taxing authorities and notify
the taxpayer and the local taxing authorities of the
reassessment and amounts of the assessment eligible for
exemption. Appeals from the reassessment and the amounts
eligible for the exemption may be taken by the taxpayer or the
local taxing authorities as provided by law.
(b) The cost of new construction or improvements to be
exempted and the schedule of taxes exempted existing at the time
of the initial request for tax exemption shall be applicable to
that exemption request, and subsequent amendment to the
ordinance, if any, shall not apply to requests initiated prior
to their adoption. For purposes of this subsection, the tax
exemption schedule for an exemption request shall be the
schedule under section 5(b)(1) or (1.1), whichever applies to
the new construction or improvement, in effect at the time of
the initial request for tax exemption.
Section 7. The act is amended by adding a section to read:
Section 6.1. Public registry.
(a) The Department of Community and Economic Development
shall, within one year of the effective date of this subsection,
publish and maintain on its publicly accessible Internet website
a public registry listing each local taxing authority that has
adopted an ordinance or resolution under this act that is in
effect on the effective date of this subsection.
(b) The Department of Community and Economic Development
shall update the public registry biennially and shall include a
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hyperlink to a copy of each adopted ordinance or resolution in
effect for the local taxing authority at the time of the
biennial update.
(c) This section shall apply to an ordinance or resolution
in effect regardless of whether the ordinance or resolution was
adopted before, on or after the effective date of this
subsection.
Section 8. The amendment or addition of sections 4.1, 5(b)
(1) and (1.1) and 6 of the act shall apply to an ordinance or
resolution adopted or amended under this act on or after the
effective date of this section. Except as provided under section
4.1(c) of the act, an ordinance or resolution adopted before the
effective date of this section shall continue in effect until
amended or repealed.
Section 9. This act shall take effect immediately.
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