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.

PRIOR PRINTER'S NO.

1075 THEPRINTER'S GENERALNO. ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

9852023 2025THE INTRODUCEDGENERAL BYASSEMBLY FREEMAN,OF MOUL,PENNSYLVANIA MADSEN,HOUSE FLEMING,BILL GIRAL,Session PROBST,of HILL-EVANS,No. 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;

imposing powers and duties on the Department ofanceof Community and Economic Development;

(1) The Federal Government or an instrumentality of the 20250HB0985PN2023 - 2 - Federal Government.

20250HB0985PN1075 - 2 - (2) The Commonwealth or an instrumentality of the Commonwealth.

20250HB0985PN2023 - 3 - (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.

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.

(3) For subsequent fiscal years of distribution under 20250HB0985PN2023 - 5 - 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.

(b)THE Revenue.--The<-- departmentMUNICIPALITY'S shallTOTAL annuallyMARKET distributeVALUE moneyOF availableTAX-EXEMPT underPROPERTY sectionEQUALS 5OR toEXCEEDS an15% eligibleOF municipalityTHE basedTOTAL uponMARKET theVALUE following:OF ASSESSED PROPERTY WITHIN THE MUNICIPALITY AND THE MUNICIPALITY MEETS EITHER OF 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.

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.

(ii)(4) IfFOR theTHE departmentPURPOSE determinesOF thatESTABLISHING moreTHE thanMAXIMUM onePAYMENTS municipality's<-- allocationA asMUNICIPALITY calculatedMAY exceedsRECEIVE, theALL $100OF per-personTHE limit,FOLLOWING theAPPLY: 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)(I) ForIF theTHE remainingMUNICIPALITY municipalities,HAS theA departmentMEDIAN shallHOUSEHOLD recalculate20250HB0985PN2023 the- payment7 amounts- usingINCOME theOF formulaGREATER inTHAN paragraphs85% (1)OF andTHE (2),STATEWIDE exceptMEDIAN thatHOUSEHOLD theINCOME, recalculationTHE shallMUNICIPALITY exclude: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.

(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.

<-- (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.

(6) (7) If the total allocations as calculated result in <-- more than $1,000,000 remaining in the fund, the department shall<-- recalculateFOLLOWING theSHALL allocationAPPLY: amounts for the remaining eligible municipalities that do not exceed the allocation 20250HB0985PN1075 - 7 - limitation under this subsection.

The<-- department(I) THE DEPARTMENT shall userecalculate the formulaallocation underamounts thisfor subsection, except that the recalculationremaining shalleligible excludemunicipalities athat municipalitydo thatnot exceedsexceed the allocation limitation andunder thethis amountsubsection. equivalent to the municipality's limited allocation.

IfThe the20250HB0985PN2023 recalculation- results9 in- moneydepartment remainingshall inuse the fund,formula under this subsection, except that the moneyrecalculation shall beexclude retaineda inmunicipality thethat fundexceeds forthe allocation inlimitation and the nextamount fiscalequivalent year.to the municipality's limited allocation.

(7)If The department shall deduct the amount<-- ofrecalculation anyresults paymentin undermoney sectionremaining 3(c)(4)in from the finalfund, payment to a municipality, and the money deducted shall be returnedretained toin the department and deposited into the fund for disbursementallocation 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.