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SB 1277

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.

2025-2026 Regular Session Introduced by Cris Dush and 5 co-sponsors

Clarifies and expands LERTA tax exemptions by defining deteriorated areas, widening eligibility for improvements and new construction, and tightening process, boundaries, and trans

Re-referred to Rules & Executive Nominations
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WeVote Research Nonpartisan
Bill Summary · SB 1277

Summary: SB 1277 (Pennsylvania, 2025-2026)

Overview

SB 1277 is a Pennsylvania bill that amends the Local Economic Revitalization Tax Assistance Act (LERTA), originally enacted in 1977. The amendments appear to focus on clarifying and expanding provisions related to the designation of deteriorated areas, the exemptions from real property taxation for improvements and new construction within those areas, and related procedural and administrative questions. The bill title indicates updates to several sections: the act’s title, construction, definitions (including “Residential use”), deteriorated areas, ordinance/resolution limitations, exemption schedules/procedures, and a public registry.

  • Status: Referred to the Urban Affairs & Housing committee on 2026-04-23.
  • Sponsors: Co-sponsors include Joe Picozzi, Pat Stefano, Greg Rothman, Cris Dush, Dan Laughlin, and Wayne Fontana.

1) Main purpose and intent

  • To modify how deteriorated areas are defined and used for tax exemptions under LERTA (Local Economic Revitalization Tax Assistance).
  • To refine the scope of exemptions for improvements to deteriorated properties and for new construction within designated deteriorated areas.
  • To adjust procedural requirements for establishing deteriorated areas (e.g., boundaries, public hearings) and related administrative processes (ordinances, resolutions, exemptions, and public registry).

2) Key provisions and changes

A. Residential use definition (Section 3)

  • The bill includes a clarified or amended definition for “Residential use,” describing occupancy by one or more dwelling units as a permanent home or residence.
  • It explicitly excludes certain transient or non-permanent forms of lodging from residential use, such as:
    • Hotels, motels, transient lodging establishments
    • Dormitories
    • Institutional group living facilities
    • Other occupancies where the primary purpose is temporary housing, accommodation, or custodial care

B. Deteriorated areas and tax exemptions (Section 4(a))

  • Local taxing authorities may, by ordinance or resolution, exempt from real property taxation:
    • The assessed value of improvements to deteriorated properties
    • The assessed value of new construction within deteriorated areas
  • The designation of deteriorated areas must be defined by the municipal governing body before adopting the exemption.
  • A public hearing is required to determine area boundaries.
  • At the public hearing, the local governing body can receive input from the planning commission, redevelopment authority, and other public/private agencies and stakeholders with experience in improving deteriorated areas.
  • Recommendations from those bodies and individuals are to inform the boundary decisions.

C. Ordinance/resolution and procedural frameworks

  • The act will include updated provisions related to:
    • How exemptions are granted (exemption schedule and procedure)
    • Limitations on how exemptions are implemented via ordinances or resolutions
    • The creation or maintenance of a public registry that tracks exemptions and related information

3) Who/what is affected

  • Local taxing authorities (cities, boroughs, townships) that participate in LERTA exemptions.
  • Property owners and developers within designated deteriorated areas seeking tax exemptions for improvements or new construction.
  • Municipal planning and redevelopment entities (planning commissions, redevelopment authorities) involved in defining deteriorated areas and providing input at public hearings.
  • Residents and businesses in areas designated as deteriorated who may benefit from improved tax treatment on eligible projects.
  • Public registry requirements imply increased transparency and public access to exemption data.

4) Procedural and timeline aspects

  • Establishment of deteriorated areas requires:
    • Delineation of boundaries by the municipal governing body
    • At least one public hearing to determine boundaries
    • Input from planning/redevelopment bodies and stakeholders during the hearing
  • Exemption determinations are made by local ordinances or resolutions, specifying:
    • The scope of exemptions (improvements and new construction within deteriorated areas)
    • Any limitations and schedules for exemption applicability
  • Provisions for a public registry to track exemptions and related information (enhancing transparency)

5) Notable specifics

  • The bill text fragment references exclusions from “Residential use” that affect how occupancy classifications interact with eligibility for LERTA exemptions.
  • While the exact numeric exemption schedules, boundaries criteria, and registry specifications are not fully enumerated in the excerpt provided, the bill signals a comprehensive update to LERTA processes and boundaries, with emphasis on local control and public participation.

If you’d like, I can tailor this summary to a particular audience (e.g., municipal officials, developers, or public readers) or track any fiscal impact analysis once official fiscal notes are released.

Compiled from official sources — confirm details with the bill’s official record.

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