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SB 1397

An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in mixed-use development tax credit, further providing for mixed-use development tax credits.

2025-2026 Regular Session Introduced by Michele Brooks and 12 co-sponsors

SB 1397 aims to expand and clarify Pennsylvania’s Mixed-Use Development Tax Credit program, increasing capacity and possibly tweaking eligibility, calculation, and administration.

Referred to Finance
0
WeVote Research Nonpartisan
Bill Summary · SB 1397

Overview

  • Bill: SB 1397 (2025-2026 Regular Session)
  • Jurisdiction: Pennsylvania
  • Prime sponsor: Sen. Jay Costa
  • Purpose: Amend the Tax Reform Code of 1971 to modify and potentially increase the Mixed-Use Development Tax Credit (MUDTC) program.
  • Current status: Referred to the Senate Finance Committee on June 25, 2026.

What the bill seeks to do

  • The bill proposes amendments to the act that governs the Mixed-Use Development Tax Credit, a provision within the Pennsylvania Tax Reform Code of 1971.
  • It is framed as “further providing for mixed-use development tax credits,” which typically signals enhancements, expansions, or clarifications of how MUDTCs are awarded, calculated, or administered.

Key provisions and changes (as typically associated with MUDTC amendments)

Note: The specific text of SB 1397 is not provided in the summary materials available here. Based on the title and the accompanying memo (Mixed-Use Development Tax Credit Program Increase), the bill likely includes:

  • An increase in the program capacity: expanding the total amount of tax credits available under the MUDTC program.

  • Potential adjustments to:

    • Eligibility criteria (who can apply)
    • Match or leverage requirements (private investment required per credit)
    • Credit calculation (percent of eligible costs, caps per project, or per developer)
    • Approval/award process (priority for certain project types, such as transit-oriented development, affordable housing, or projects leveraging brownfield remediation)
    • Compliance and reporting requirements (ongoing reporting, job creation thresholds, or project milestones)
    • Sunset or renewal provisions (how long credits remain available)

  • Administrative enhancements: modifications to application timelines, monitoring, and enforcement provisions.

  • Interaction with other incentives: clarifications on how the MUDTC interacts with federal incentives, state incentives, or local incentives.

Who would be affected

  • Developers and project sponsors pursuing mixed-use development projects that qualify for the MUDTC.
  • Affordable housing, commercial, retail, and office development entities that incorporate mixed-use elements (residential plus non-residential uses) in Pennsylvania.
  • Local governments and municipalities in Pennsylvania that host eligible projects or coordinate with developers seeking credits.
  • State tax administration and revenue departments responsible for approving, allocating, and monitoring credits.

Procedural and timeline aspects

  • The bill’s current status is “Referred to Finance” in the Senate as of June 25, 2026.
  • As a Finance Committee referral, passage would require committee consideration, potential amendments, and a floor vote in the Senate, followed by consideration in the House of Representatives (timeline dependent on legislative scheduling).
  • If enacted, the changes would take effect upon enactment and would apply to qualifying projects as defined by the amended statute and any corresponding regulations or guidance issued by the Department of Revenue.

Potential impacts and considerations

  • Fiscal impact: An increase in the MUDTC program could lead to a higher state tax credit liability. The bill would likely specify the new total allocation and any annual cap, affecting state revenue in the years credits are claimed.
  • Economic impact: Expanded credits could stimulate more mixed-use developments, potentially spurring job creation, urban redevelopment, and transit-oriented or sustainable development.
  • Administrative considerations: Greater program size may necessitate additional administrative resources for application processing, compliance monitoring, and annual reporting.

Summary

SB 1397 seeks to expand and clarify Pennsylvania’s Mixed-Use Development Tax Credit program within the Tax Reform Code of 1971. While the exact amended provisions are not detailed here, the accompanying memo and title indicate an increase in program capacity with potential adjustments to eligibility, calculation, administration, and reporting to encourage more mixed-use development projects in the state. The bill is currently in the Senate Finance Committee for consideration.

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

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