PRINTER'S NO. 1075
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
985
Session of
2025
INTRODUCED BY FREEMAN, MOUL, MADSEN, FLEMING, GIRAL, PROBST,
HILL-EVANS, McNEILL, OTTEN, PIELLI, BRENNAN, KENYATTA, SMITH-
WADE-EL, SANCHEZ, KHAN, DONAHUE, HARKINS, CIRESI,
SCHLOSSBERG, DALEY, DEASY, GREEN, MADDEN, CEPEDA-FREYTIZ AND
DAVIDSON, MARCH 20, 2025
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, MARCH 20, 2025
AN ACT
Providing for an annual revenue-sharing program for
municipalities relating to tax-exempt real property;
establishing the Tax-exempt Property Municipal Assistance
Fund; imposing powers and duties on the Department of
Community and Economic Development; and making a repeal.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Tax-exempt
Property Municipal Assistance Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Common level ratio." The ratio of assessed value to current
market value used generally in the county as last determined by
the State Tax Equalization Board under the act of June 27, 1996
(P.L.403, No.58), known as the Community and Economic
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Development Enhancement Act.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Eligible municipality." A municipality that imposes a tax
on real property determined eligible under section 6(a).
"Fund." The Tax-exempt Property Municipal Assistance Fund
established under section 4.
"Liquor tax." The tax imposed and assessed upon the net
price of all liquors sold by the Pennsylvania Liquor Control
Board under the act of June 9, 1936 (1st Sp.Sess., P.L.13,
No.4), entitled "An act imposing an emergency State tax on
liquor, as herein defined, sold by the Pennsylvania Liquor
Control Board; providing for the collection and payment of such
tax; and imposing duties upon the Department of Revenue and the
Pennsylvania Liquor Control Board."
"Market value." The value of property as calculated by the
State Tax Equalization Board on an annual basis utilizing the
common level ratio.
"Market value of tax-exempt property." The quotient of the
base year market value of a property and the common level ratio
as calculated by the State Tax Equalization Board.
"Municipality." Any of the following:
(1) A city, borough, incorporated town or township.
(2) A home rule municipality which is a city, borough,
incorporated town or township.
"Qualified tax-exempt property." Real property that is
exempt from local real property taxes and owned by one of the
following:
(1) The Federal Government or an instrumentality of the
Federal Government.
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(2) The Commonwealth or an instrumentality of the
Commonwealth.
(3) A political subdivision, except real property owned
by the municipality in which the property is located.
(4) An entity that has obtained the exemption from real
property taxation under the authority granted to the General
Assembly under section 2(a)(i), (ii), (iv) or (v) of Article
VIII of the Constitution of Pennsylvania.
(5) A local authority.
Section 3. Tax-exempt property compilation.
(a) Compilation.--A county shall annually compile a list
identifying the market value of tax-exempt property within the
county.
(b) Annual report.--Beginning in calendar year 2026, a
county assessment office shall submit to the department an
annual report providing the information required in subsection
(c) and any additional information required by the department to
administer this act. The report shall be filed by June 30, 2026,
and each June 30 thereafter.
(c) Contents.--The report required under subsection (b)
shall be a compilation of all property located within the county
that is exempt from real property tax as of January 1 in the
year the report is required to be filed. The report shall
contain the following:
(1) The owner of each tax-exempt property.
(2) The location of the property, including mailing
address, name of the municipality where the property is
located and the uniform parcel identifier.
(3) The assessed value of the property.
(4) Payments in lieu of tax or other funding received
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under a Federal or State program based on the tax-exempt
status of the property. The amounts of the payments shall be
reported by the municipality to the county assessment office.
If the municipality fails to timely report the information to
the county assessment office, the county is not required to
include the information in the report, and the municipality
shall report the information directly to the department.
(5) The millage rate for the tax on real property in
effect in the municipality where the property is located as
of January 1 of the year in which the report is required to
be filed.
(6) The assessed value of all property in each
municipality in the county.
(7) The market value of all property in each
municipality in the county.
(d) Failure to file reports.--A county that fails to provide
to the department the report required under this section by July
31 shall cause all municipalities within the county to forfeit
the right to share in the distribution of funding for the year
in which the information was required to be reported. A
municipality located within a county that has failed to provide
the department with the required report may petition the court
of common pleas to issue a writ of mandamus ordering the county
to collect the data and file the report with the department.
Section 4. Tax-exempt Property Municipal Assistance Fund.
(a) Establishment.--The Tax-exempt Property Municipal
Assistance Fund is established in the State Treasury. The money
deposited into the fund shall be used exclusively for the
purpose of making annual distributions to eligible
municipalities under section 6.
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(b) Revenue-sharing program.--All revenues received by the
Commonwealth from imposition of the liquor tax shall be
transferred to the fund and distributed as provided in section
6.
(c) Timing of transfers.--The State Treasurer shall transfer
revenue required to be transferred under this section in five
equal installments before the last day of February, March,
April, May and June of each fiscal year in which a transfer is
required.
(d) Appropriation.--Money in the fund is appropriated on a
continuing basis to the department for purposes of making
distributions under this act.
Section 5. Distribution of funding.
Money in the fund at the end of a fiscal year shall be
distributed by the department by September 15 of the following
fiscal year in the manner required under section 6.
Section 6. Tax-exempt properties assistance.
(a) Eligibility.--A municipality is eligible to receive
distributions under this section if the department determines
that:
(1) The municipality's total market value of tax-exempt
property equals or exceeds 15% of the total market value of
assessed property within the municipality.
(2) For the first year of distribution of money under
section 5, the municipality's median household income is
within 115% of the Statewide median household income
according to the United States Census Bureau's 2022 American
Community Survey 1-year estimate.
(3) For subsequent fiscal years of distribution under
section 5, the municipality's median household income is
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within 115% of the Statewide median household income
according to the United States Census Bureau's most recently
published American Community Survey 1-year estimate.
(b) Revenue.--The department shall annually distribute money
available under section 5 to an eligible municipality based upon
the following:
(1) The municipality's total market value of qualified
tax-exempt properties shall be divided by the total market
value of qualified tax-exempt property in all eligible
municipalities with the quotient expressed as a percentage.
(2) The percentage under paragraph (1) shall be
multiplied by the money in the fund at the end of the fiscal
year to determine the payment due to the municipality.
(3) A municipality may not receive more than 10% of the
money available. The following apply:
(i) Subject to subparagraph (ii), if a
municipality's allocation as calculated exceeds the 10%
limit, the municipality shall receive 10% of the money
available.
(ii) If the department determines that more than one
municipality's allocation as calculated exceeds the 10%
limit, the department shall calculate the allocation to
those municipalities against the total amount of money in
the fund at the end of the fiscal year.
(iii) For the remaining municipalities, the
department shall recalculate the payment amounts using
the formula in paragraphs (1) and (2), except that the
recalculation shall exclude:
(A) a municipality whose allocation exceeds the
10% limit; and
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(B) the amount equivalent to the municipality's
10% allocation.
(4) A municipality may not receive an amount exceeding
$100 per person based upon the population of the municipality
as of the last Federal decennial census. The following apply:
(i) If the department determines that a
municipality's allocation exceeds the per-person limit,
the municipality shall receive a $100 per-person
allocation from the money available.
(ii) If the department determines that more than one
municipality's allocation as calculated exceeds the $100
per-person limit, the department shall calculate the
allocation to those municipalities against the total
amount of money in the fund at the end of the fiscal
year.
(iii) For the remaining municipalities, the
department shall recalculate the payment amounts using
the formula in paragraphs (1) and (2), except that the
recalculation shall exclude:
(A) a municipality whose allocation exceeds the
$100 per-person limit; and
(B) the amount equivalent to the municipality's
$100 per-person limit.
(5) If the total allocations as calculated result in
$1,000,000 or less remaining in the fund, the money shall be
retained in the fund for allocation in the next fiscal year.
(6) If the total allocations as calculated result in
more than $1,000,000 remaining in the fund, the department
shall recalculate the allocation amounts for the remaining
eligible municipalities that do not exceed the allocation
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limitation under this subsection. The department shall use
the formula under this subsection, except that the
recalculation shall exclude a municipality that exceeds the
allocation limitation and the amount equivalent to the
municipality's limited allocation. If the recalculation
results in money remaining in the fund, the money shall be
retained in the fund for allocation in the next fiscal year.
(7) The department shall deduct the amount of any
payment under section 3(c)(4) from the final payment to a
municipality, and the money deducted shall be returned to the
department and deposited into the fund for disbursement in
the next fiscal year. If a municipality receives a payment
from a government agency under section 3(c)(4) after the
municipality receives a payment under this section, the
municipality shall reimburse the fund the amount of the
payment made under this section. In no case shall a
municipality receive a payment under this act and a payment
from a government agency for the same parcel of tax-exempt
property in the same fiscal year.
Section 7. Regulations.
Within 180 days after the effective date of this section, the
department shall develop written guidelines for the
implementation of this act. The department shall submit the
guidelines to the Local Government Committee of the Senate and
the Local Government Committee of the House of Representatives
upon completion.
Section 8. Repeal.
Section 2 of the act of June 9, 1936 (1st Sp.Sess., P.L.13,
No.4), is repealed insofar as it requires money to be credited
to the General Fund.
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Section 9. Effective date.
This act shall take effect in 60 days.
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