Pennsylvania 2025_0 Regular Session Status: In Committee Bipartisan · 26 D · 1 R cosponsors

HB 985 — 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.

Last action — Laid on the table, Sept. 10, 2025

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed House
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill is in committee in the House. Introduced March 20, 2025. It must pass committee before a floor vote.

Next likely step: a committee vote, then a floor vote in the House.

Prognosis

Advancing 42% · moderate confidence

Where this bill stands today.

Odds of enactment

Low

How often bills like it became law.

  • In Committee

    Current position in the legislative process.

  • 27 sponsors

    1 primary, 26 co-sponsors signed on.

  • Bipartisan support

    Sponsored across 2 parties (26 D · 1 R) — cross-party backing.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Summary

Compensating Municipalities for Tax Exempt Properties

Bill Text

What changed in the latest version

227 added · 307 removed

Plain-language change summary

The recent amendments made to HB 985 introduced additional clarifications regarding tax-exempt real property and adjusted the roles of various departments involved. Notably, references to the "Tax-exempt Property Municipal Assistance Fund" and the "Community and Economic Development Enhancement Act" were refined, improving the overall clarity and focus of the bill. These changes matter because they aim to ensure that municipalities can more effectively manage tax exemptions, thereby potentially enhancing local economies and providing better support to communities.

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PRIOR PRINTER'S NO.
PRINTER'S NO.
1075 PRINTER'S NO.
1075 THE GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.
2023 THE GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.
985 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;
985 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, DAVIDSON, POWELL AND SAPPEY, MARCH 20, 2025 AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 25, 2025 AN ACT Providing for an annual revenue-sharing program for establishing the Tax-exempt Property Municipal Assistance Fund;
Fund;
imposing powers and duties on the Department of Community and Economic Development;
imposing powers and duties on the Department ofance Community and Economic Development;
(1) The Federal Government or an instrumentality of the 20250HB0985PN2023 - 2 - Federal Government.
(1) The Federal Government or an instrumentality of the Federal Government.
(2) The Commonwealth or an instrumentality of the Commonwealth.
20250HB0985PN1075 - 2 - (2) The Commonwealth or an instrumentality of the Commonwealth.
20250HB0985PN2023 - 3 - (4) Payments in lieu of tax or other funding received under a Federal or State program based on the tax-exempt status of the property.
(4) Payments in lieu of tax or other funding received 20250HB0985PN1075 - 3 - under a Federal or State program based on the tax-exempt status of the property.
The money deposited into the fund shall be used exclusively for the purpose of making annual distributions to eligible 20250HB0985PN2023 - 4 - municipalities under section 6.
The money deposited into the fund shall be used exclusively for the purpose of making annual distributions to eligible municipalities under section 6.
(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.
20250HB0985PN1075 - 4 - (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.
<-- (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.
(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.
(3) For subsequent fiscal years of distribution under 20250HB0985PN2023 - 5 - 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 most recently published American Community Survey 1-year estimate.
(3) For subsequent fiscal years of distribution under section 5, the municipality's median household income is 20250HB0985PN1075 - 5 - 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.
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 AND THE MUNICIPALITY MEETS EITHER OF THE FOLLOWING:
(b) Revenue.--The department shall annually distribute money available under section 5 to an eligible municipality based upon the following:
(1) THE MUNICIPALITY'S MEDIAN HOUSEHOLD INCOME THRESHOLD:
(I) FOR THE FIRST YEAR OF DISTRIBUTION OF MONEY UNDER SECTION 5, IS WITHIN 115% OF THE STATEWIDE MEDIAN HOUSEHOLD INCOME ACCORDING TO THE UNITED STATES CENSUS BUREAU'S 2022 AMERICAN COMMUNITY SURVEY 1-YEAR ESTIMATE;
OR (II) FOR A SUBSEQUENT FISCAL YEAR OF DISTRIBUTION UNDER SECTION 5, IS 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.
(2) THE MUNICIPALITY HOSTS A COUNTY SEAT.
(b) Revenue CALCULATION OF DISTRIBUTION.--The department <-- shall annually distribute money available under section 5 to an eligible municipality based upon the following:
(2) The percentage under paragraph (1) shall be multiplied by the money in the fund at the end of the fiscal 20250HB0985PN2023 - 6 - year to determine the payment due to the municipality.
(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.
and (B) the amount equivalent to the municipality's 10% allocation.
and 20250HB0985PN1075 - 6 - (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.
(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.
(4) FOR THE PURPOSE OF ESTABLISHING THE MAXIMUM PAYMENTS <-- A MUNICIPALITY MAY RECEIVE, ALL OF THE FOLLOWING APPLY:
(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.
(I) IF THE MUNICIPALITY HAS A MEDIAN HOUSEHOLD 20250HB0985PN2023 - 7 - INCOME OF GREATER THAN 85% OF THE STATEWIDE MEDIAN HOUSEHOLD INCOME, THE MUNICIPALITY MAY NOT RECEIVE MORE THAN $100 PER PERSON BASED UPON THE POPULATION OF THE MUNICIPALITY AS OF THE LAST FEDERAL DECENNIAL CENSUS CERTIFIED PRIOR TO THE YEAR OF THE CALCULATION.
(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:
(II) IF THE MUNICIPALITY HAS A MEDIAN HOUSEHOLD INCOME FEWER OR EQUAL TO 85% OF THE STATEWIDE MEDIAN HOUSEHOLD INCOME, THE FOLLOWING SHALL APPLY:
(A) IF THE MUNICIPALITY'S TOTAL MARKET VALUE OF TAX-EXEMPT PROPERTY EQUALS OR EXCEEDS 15% AND IS NO MORE THAN 25% OF THE TOTAL MARKET VALUE OF ASSESSED PROPERTY WITHIN THE MUNICIPALITY, THE MUNICIPALITY MAY NOT RECEIVE AN AMOUNT EXCEEDING $100 PER PERSON.
(B) IF THE MUNICIPALITY'S TOTAL MARKET VALUE OF TAX-EXEMPT PROPERTY EXCEEDS 25% AND IS NO MORE THAN 50% OF THE TOTAL MARKET VALUE OF ASSESSED PROPERTY WITHIN THE MUNICIPALITY, THE MUNICIPALITY MAY NOT RECEIVE AN AMOUNT EXCEEDING $125 PER PERSON.
(C) IF THE MUNICIPALITY'S TOTAL MARKET VALUE OF TAX-EXEMPT PROPERTY EXCEEDS 50% AND IS NO MORE THAN 60% OF THE TOTAL MARKET VALUE OF ASSESSED PROPERTY WITHIN THE MUNICIPALITY, THE MUNICIPALITY MAY NOT RECEIVE AN AMOUNT EXCEEDING $150 PER PERSON.
(D) IF THE MUNICIPALITY'S TOTAL MARKET VALUE OF TAX-EXEMPT PROPERTY EXCEEDS 60% AND IS NO MORE THAN 70% OF THE TOTAL MARKET VALUE OF ASSESSED PROPERTY WITHIN THE MUNICIPALITY, THE MUNICIPALITY MAY NOT RECEIVE AN AMOUNT EXCEEDING $175 PER PERSON.
(E) IF THE MUNICIPALITY'S TOTAL MARKET VALUE OF TAX-EXEMPT PROPERTY EXCEEDS 70% OF THE TOTAL MARKET 20250HB0985PN2023 - 8 - VALUE OF ASSESSED PROPERTY WITHIN THE MUNICIPALITY, THE MUNICIPALITY MAY NOT RECEIVE AN AMOUNT EXCEEDING $200 PER PERSON.
(5) IF THE DEPARTMENT DETERMINES THAT A MUNICIPALITY'S ALLOCATION EXCEEDS THE PER-PERSON LIMIT, THE MUNICIPALITY SHALL RECEIVE AN ALLOCATION AS PROVIDED UNDER PARAGRAPH (4) FROM THE MONEY AVAILABLE.
THE FOLLOWING SHALL APPLY:
(ii) (I) 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) (II) 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:
and <-- (B) the amount equivalent to the municipality's $100 per-person limit.
and (B) the amount equivalent to the municipality's $100 per-person limit.
<-- (5) (6) 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.
(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) (7) If the total allocations as calculated result in <-- more than $1,000,000 remaining in the fund, the department <-- FOLLOWING SHALL APPLY:
(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 20250HB0985PN1075 - 7 - limitation under this subsection.
<-- (I) THE DEPARTMENT shall recalculate the allocation amounts for the remaining eligible municipalities that do not exceed the allocation 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.
The 20250HB0985PN2023 - 9 - 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.
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.
(II) IF THE RECALCULATION IN SUBPARAGRAPH (I) <-- RESULTS IN MORE THAN $1,000,000 REMAINING IN THE FUND, THE DEPARTMENT SHALL CONTINUE TO RECALCULATE IN THE MANNER DESCRIBED IN SUBPARAGRAPH (I) UNTIL THERE IS $1,000,000 OR LESS REMAINING IN THE FUND OR THERE ARE NO REMAINING ELIGIBLE MUNICIPALITIES THAT DO NOT EXCEED THE ALLOCATION LIMITATION UNDER THIS SUBSECTION.
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(III) ANY MONEY REMAINING IN THE FUND AFTER THE FINAL RECALCULATION DESCRIBED IN SUBPARAGRAPH (II) SHALL BE RETAINED IN THE FUND FOR ALLOCATION IN THE NEXT FISCAL YEAR.
(7) (8) 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.
PAYMENTS MADE TO A <-- 20250HB0985PN2023 - 10 - MUNICIPALITY IN ACCORDANCE WITH AN APPROPRIATION TO A COMMONWEALTH AGENCY FOR THE PURPOSE OF FIRE PROTECTION SERVICES ON COMMONWEALTH PROPERTY OR EMERGENCY MEDICAL SERVICES FOR INDIVIDUALS ON COMMONWEALTH PROPERTY, OR BOTH, SHALL BE EXCLUDED FROM THE DEDUCTION SPECIFIED IN THIS PARAGRAPH.
Regulations GUIDELINES.
Regulations.
<-- Within 180 days after the effective date of this section, the department shall develop written guidelines for the implementation of this act.
Within 180 days after the effective date of this section, the department shall develop written guidelines for the implementation of this act.
Section 9.
20250HB0985PN1075 - 8 - Section 9.
20250HB0985PN2023 - 11 -
20250HB0985PN1075 - 9 -
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Action History

  1. Laid on the table, Sept. 10, 2025

  2. Re-reported as committed, Sept. 10, 2025

  3. Re-committed to RULES, June 25, 2025

  4. First consideration, June 25, 2025

  5. Reported as amended, June 25, 2025

  6. Referred to LOCAL GOVERNMENT, March 20, 2025

Sponsors

Sponsorship breakdown

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1 sponsors · 26 co-sponsors · 226 not signed on

Sponsors (1)

Co-sponsors (26)

Not signed on (226)

226 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Subjects

taxation housing
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

What does HB 985 do?
Compensating Municipalities for Tax Exempt Properties
Who sponsors HB 985?
HB 985 is sponsored by Robert Freeman (Democratic), Dan Moul (Republican), Dave Madsen (Democratic), Jose Giral (Democratic), Tarah Probst (Democratic), Carol Hill-Evans (Democratic), Jeanne McNeill (Democratic), Danielle Friel Otten (Democratic), Chris Pielli (Democratic), Tim Brennan (Democratic), Ismail Smith-Wade-El (Democratic), Benjamin V. Sanchez (Democratic), Tarik Khan (Democratic), Kyle Donahue (Democratic), Patrick J. Harkins (Democratic), Joe Ciresi (Democratic), Michael H. Schlossberg (Democratic), Mary Jo Daley (Democratic), G. Roni Green (Democratic), Maureen E. Madden (Democratic), Nathan Davidson (Democratic), Lindsay Powell (Democratic), Christina D. Sappey (Democratic), Justin C. Fleming (Democratic), Malcolm Kenyatta (Democratic), Daniel J. Deasy (Democratic), and Johanny Cepeda-Freytiz (Democratic).
What is the current status of HB 985?
This bill is in committee in the House. Introduced March 20, 2025. It must pass committee before a floor vote.
Where can I track HB 985?
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