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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY DEASY, BRADFORD, COHEN, D. COSTA, DAVIS, GEIST, HARKINS, HORNAMAN, JOSEPHS, KIRKLAND, KORTZ, KOTIK, LONGIETTI, MURPHY, MURT, M. O'BRIEN, READSHAW, K. SMITH, STURLA, WHEATLEY AND YOUNGBLOOD, FEBRUARY 10, 2011 |
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| REFERRED TO COMMITTEE ON URBAN AFFAIRS, FEBRUARY 10, 2011 |
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| AN ACT |
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1 | Providing for the establishment of a Cultural Development |
2 | District Program for communities in this Commonwealth with |
3 | arts and cultural centers which benefit the public; and |
4 | establishing Commonwealth tax exemptions for residents and |
5 | businesses within the designated cultural development |
6 | districts. |
7 | TABLE OF CONTENTS |
8 | Section 1. Short title. |
9 | Section 2. Legislative findings and policy. |
10 | Section 3. Definitions. |
11 | Section 4. Establishment of cultural development districts. |
12 | Section 5. Review by department. |
13 | Section 6. Eligibility. |
14 | Section 7. Benefits of cultural development district. |
15 | Section 8. Termination of cultural development district. |
16 | Section 9. Reports. |
17 | Section 10. Rules and regulations. |
18 | Section 11. Severability. |
19 | Section 12. Repeals. |
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1 | Section 13. Expiration. |
2 | Section 14. Effective date. |
3 | The General Assembly of the Commonwealth of Pennsylvania |
4 | hereby enacts as follows: |
5 | Section 1. Short title. |
6 | This act shall be known and may be cited as the Cultural |
7 | Development District Program Act. |
8 | Section 2. Legislative findings and policy. |
9 | The General Assembly finds and declares as follows: |
10 | (1) The General Assembly recognizes that arts and |
11 | cultural institutions are a vital and important economic |
12 | development tool as well as offering important educational, |
13 | cultural and spiritual benefits for the citizens of this |
14 | Commonwealth. Therefore, the creation of the Cultural |
15 | Development District Program is in the best interest of the |
16 | citizens of this Commonwealth because it will help improve |
17 | the economic prosperity of the applicable areas and support |
18 | the economic growth of areas surrounding these cultural |
19 | sites. |
20 | (2) Studies have shown that cultural centers are |
21 | currently found throughout this Commonwealth, in both |
22 | impoverished and flourishing areas. However, cultural centers |
23 | relating to arts are most likely to be located in more |
24 | racially mixed neighborhoods. As the Commonwealth has already |
25 | invested a considerable amount of resources in cultural |
26 | attractions, the areas in immediate proximity to the cultural |
27 | attractions often are not as successful. |
28 | (3) Arts are collective enterprises. Clusters of arts |
29 | organizations often develop because they aid the creative |
30 | process and help create an environment of competition and |
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1 | efficiency. Therefore, it is essential to support the art |
2 | organizations as a group, which necessitates the creation of |
3 | cultural zones instead of simply promoting specific art |
4 | organizations. |
5 | (4) Commonwealth tax exemptions could encourage |
6 | residents and businesses to relocate to certain areas which |
7 | are underdeveloped or blighted at the current time. |
8 | Section 3. Definitions. |
9 | The following words and phrases when used in this act shall |
10 | have the meanings given to them in this section unless the |
11 | context clearly indicates otherwise: |
12 | "Cultural center" or "cultural attraction." A facility that |
13 | functions as a community center, museum, marketplace, art |
14 | studio, art gallery, theater, library or historic site and that |
15 | provides the public with educational, social, artistic or |
16 | cultural benefits. |
17 | "Cultural development district." A district established |
18 | under section 4. |
19 | "Department." The Department of Community and Economic |
20 | Development of the Commonwealth. |
21 | "District." The contiguous geographic area within one or |
22 | more municipalities defined and created by resolution or |
23 | ordinance of the governing body of the municipality creating the |
24 | district in accordance with section 5. |
25 | "Elm Street Program." The program established by the act of |
26 | February 9, 2004 (P.L.61, No.7), known as the Elm Street Program |
27 | Act. |
28 | "Main Street Program." The program established by the act of |
29 | April 23, 2002 (P.L.298, No.39), known as the Main Street Act. |
30 | "Municipality." The city, borough, township or incorporated |
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1 | town which has proposed a cultural development district. |
2 | "Urban Redevelopment Law." The act of May 24, 1945 (P.L.991, |
3 | No.385), known as the Urban Redevelopment Law. |
4 | Section 4. Establishment of cultural development districts. |
5 | (a) General rule.--A cultural development district shall be |
6 | created in the following manner: |
7 | (1) A municipality may propose the establishment of a |
8 | cultural development district. The proposal shall include |
9 | evidence of the benefits inclusion in the program would have |
10 | for the municipality. The proposal shall include: |
11 | (i) A plan of what is to be done in the district, |
12 | including the types of businesses or residences the |
13 | municipality hopes to attract in designating a cultural |
14 | development district. This may include a possible theme |
15 | for the area. |
16 | (ii) The potentially affected organizations or |
17 | residential buildings which would be a part of the |
18 | cultural development district. |
19 | (iii) An economic feasibility study of the project |
20 | and the fiscal effects on the municipal tax base. |
21 | (iv) A detailed estimate of the amount of State tax |
22 | expenditure incurred by the proposal. |
23 | (v) A map showing existing uses and conditions of |
24 | real property in the proposed district. |
25 | (vi) A list of estimated nontax related expenses. |
26 | (vii) Evidence that the cultural attraction or |
27 | cultural center in question provides sufficient benefit |
28 | to the community where it is located by creating arts |
29 | programs, cultural or ethnic education or programs, or |
30 | other relevant aid to the general public. |
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1 | (2) An organization, business or group of residents may |
2 | appeal to the municipality for the establishment of a |
3 | cultural development district. |
4 | (b) Hearing.--The municipality shall hold at least one |
5 | public hearing regarding the establishment of a cultural |
6 | development district. The hearing shall be held to inform the |
7 | local residents and business owners of the repercussions of such |
8 | a designation. Each affected municipality shall designate a |
9 | representative to discuss the proposed district with the |
10 | community. Any interested parties may meet with the |
11 | representative to discuss the establishment of the district, its |
12 | boundaries, the exclusion of particular parcels of property from |
13 | the district and other relevant matters. Notice of this hearing |
14 | shall be published in accordance with 65 Pa.C.S. Ch. 7 (relating |
15 | to open meetings) and shall me mailed to the governing body of |
16 | any municipality that levies property taxes within the |
17 | boundaries of the proposed district. This notice shall be |
18 | provided at least 30 days prior to the hearing. |
19 | (c) Resolution or ordinance.--In order to establish a |
20 | cultural development district, the governing body of the |
21 | municipality shall adopt, no more than three weeks after the |
22 | public hearing, a resolution or ordinance which describes the |
23 | boundaries of the district. A cultural development district may |
24 | exist for a period not to exceed five years unless an amendment |
25 | is made to the proposal by the municipality. The municipality |
26 | shall assign a name to the district for identification purposes. |
27 | The cultural development district may be established in |
28 | conjunction with and covering the same area as a Main Street |
29 | Program or Elm Street Program. The governing body of the |
30 | municipality which has proposed a district shall, by ordinance |
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1 | or resolution, agree to participate or not to participate in |
2 | whole or in part with the Cultural Development District Program. |
3 | When the resolution or ordinance is passed by the municipality |
4 | in which the cultural development district is located, the |
5 | municipality shall apply to the department for the authority to |
6 | receive tax exemptions of all kinds from the Commonwealth. Two |
7 | or more municipalities may join together to create a cooperative |
8 | cultural development district. In such a case, each municipality |
9 | shall pass a resolution or ordinance establishing the cultural |
10 | development district. The municipalities may jointly apply to |
11 | the department for review. |
12 | Section 5. Review by department. |
13 | The department shall review the application for the |
14 | establishment of a cultural development district and determine |
15 | whether the area is eligible for that designation. The review |
16 | shall address the following factors: |
17 | (1) Whether the attraction in question fits the |
18 | definition of "cultural." |
19 | (2) The boundaries of the proposed district do not |
20 | exceed one-half of one square mile. |
21 | (3) If the application is from a first or second class |
22 | city, that no more than ten cultural development districts |
23 | have been proposed or implemented. If more than ten districts |
24 | are proposed, the department shall determine which districts |
25 | meet the greatest needs. |
26 | (4) When approving a district, the department shall |
27 | maintain the final authority to determine whether or not |
28 | businesses moving into the district fall within the proposed |
29 | plan of the municipality and are thus eligible for tax |
30 | abatement. |
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1 | Section 6. Eligibility. |
2 | (a) Municipal burden of proof.--In order to establish a |
3 | cultural development district, the municipality shall provide |
4 | evidence to the department that: |
5 | (1) The district is a contiguous geographic area. |
6 | (2) The district is likely to undergo improvement if |
7 | included under this program, defined as significant increase |
8 | in value of real property in the district. |
9 | (3) The area within the district has not, as a whole, |
10 | capitalized upon the cultural attraction in its vicinity to |
11 | the degree of potential it could have. |
12 | (4) Private enterprise has not adequately developed the |
13 | district in question. |
14 | (b) Criteria for cultural development district |
15 | designation.--An area is eligible to be designated as a cultural |
16 | development district if that area may be described as one of the |
17 | following: |
18 | (1) It is considered underdeveloped; that is, less than |
19 | 50% of the land has been utilized for commercial, residential |
20 | or other purposes or it is considered blighted under the |
21 | Urban Redevelopment Law. |
22 | (2) It is considered to be in a deteriorated or |
23 | distressed condition, though not necessarily blighted and the |
24 | department considers it beneficial for it to be included in |
25 | the program. |
26 | (c) Additional criteria for cultural development district |
27 | designation.--In addition to the required criteria under |
28 | subsections (a) and (b), the department shall consider the |
29 | following criteria: |
30 | (1) Evidence of distress, including, but not limited to, |
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1 | unemployment, percentage of population below the State median |
2 | income, poverty rate, deteriorated property and adverse |
3 | economic and socioeconomic conditions in the proposed |
4 | district. |
5 | (2) Local public and private commitment to the |
6 | development of the proposed district and the potential |
7 | cooperation of surrounding communities. |
8 | (3) Existing resources available to the proposed |
9 | district. |
10 | (4) How cultural development district authorization |
11 | relates to other current economic and community development |
12 | projects and to regional initiatives or programs. |
13 | (5) Crime statistics and proposals to implement local |
14 | crime reduction measures. |
15 | (6) Proposals to establish and link job creation and job |
16 | training. |
17 | Section 7. Benefits of cultural development district. |
18 | (a) General rule.--Once a cultural development district has |
19 | been established, those residences and businesses which enter |
20 | the area shall receive the benefits of the program from the time |
21 | they move in until the expiration of the cultural zone. They |
22 | shall be reimbursed for their Commonwealth tax burden. In |
23 | regards to business entities, only that income derived directly |
24 | from within the district shall receive tax abatement. The |
25 | department shall create an exemption form to be sent to the |
26 | Commonwealth in replacement of the tax moneys. Those within the |
27 | district shall not receive full benefits beyond the five years |
28 | for which the zone is established. Should a business owner or |
29 | resident sell the property within a cultural development |
30 | district, the new resident or owner shall receive the benefits |
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1 | of dwelling or conducting business within that zone, extending |
2 | only for the time for which the zone has been established. The |
3 | benefits of the zone shall not remain with the individual or |
4 | organization but with the real property. |
5 | (b) Limitation on relocation.--A business owner may not |
6 | benefit from the program by relocating their business from one |
7 | cultural district to another. A business may only receive the |
8 | benefits of the program within a district once. However, several |
9 | branches of the same business may receive benefits within |
10 | numerous districts. |
11 | (c) Limitation on eminent domain.--A municipality may not |
12 | use the power of eminent domain to establish a cultural |
13 | development district. |
14 | (d) Continuation of benefits.--Should the cultural |
15 | development district be abolished before the expiration of five |
16 | years, the residences and businesses which have already been |
17 | included within the district shall continue to receive the |
18 | benefits provided in this act. |
19 | Section 8. Termination of cultural development district. |
20 | (a) General rule.--A cultural development district shall |
21 | terminate five years after the date set by the municipality for |
22 | establishment. |
23 | (b) Phased withdrawal of tax credits.--Once a district has |
24 | been established and developed and the five years of tax credit |
25 | have expired, the residences and businesses within the zone that |
26 | received the tax credit will no longer receive full tax credit |
27 | but will be entitled to a phaseout of the tax credits as |
28 | follows: |
29 | (1) The first year after the expiration of the cultural |
30 | development district the residents and business owners shall |
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1 | be liable for 10% of the taxes for which they received credit |
2 | in the past. |
3 | (2) The second year after the expiration of the cultural |
4 | development district the residents and business owners shall |
5 | be liable for 25% of the taxes for which they received credit |
6 | in the past. |
7 | (3) The third year after the expiration of the cultural |
8 | development district the residents and business owners shall |
9 | be liable for 50% of the taxes for which they received credit |
10 | in the past. |
11 | (4) The fourth year after the expiration of the cultural |
12 | development district the residents and business owners shall |
13 | be liable for 75% of the taxes for which they received credit |
14 | in the past. |
15 | (5) The fifth year and each year thereafter after the |
16 | expiration of the cultural development district the residents |
17 | and business owners shall be liable for the full amount of |
18 | the taxes due. |
19 | Section 9. Reports. |
20 | The department in cooperation with any other State agencies |
21 | and local governments involved in the Cultural Development |
22 | District Program shall make a comprehensive report to the |
23 | Governor and the General Assembly every two years as to the |
24 | social, economic and financial effects and the impact of the |
25 | Cultural Development District Program. At the conclusion of the |
26 | Cultural Development District Program or if this act is repealed |
27 | before the time period runs out, the department shall present a |
28 | complete evaluation of the effects of the Cultural Development |
29 | District Program. |
30 | Section 10. Rules and regulations. |
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1 | The department may, in the manner provided by law, promulgate |
2 | the rules and regulations necessary to carry out this act. |
3 | Section 11. Severability. |
4 | The provisions of this act are severable. If any provision of |
5 | this act or its application to any person or circumstance is |
6 | held invalid, the invalidity shall not affect other provisions |
7 | or applications of this act which can be given effect without |
8 | the invalid provision or application. |
9 | Section 12. Repeals. |
10 | All acts and parts of acts are repealed insofar as they are |
11 | inconsistent with this act. |
12 | Section 13. Expiration. |
13 | This act shall expire on the first day of January occurring |
14 | 20 full calendar years after the effective date of this section. |
15 | Section 14. Effective date. |
16 | This act shall take effect immediately. |
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