Pennsylvania Act 2016-151 — TRANSIT REVITALIZATION INVESTMENT DISTRICT ACT - OMNIBUS AMENDMENTS

Act text

Session of 2016

No. 2016-151

SB 385

AN ACT

Amending the act of December 8, 2004 (P.L.1801, No.238), entitled "An act empowering municipalities, counties and public transportation agencies to work cooperatively to establish Transit Revitalization Investment Districts (TRID), including partnerships with the National Railroad Passenger Corporation requiring planning studies, comprehensive plan and zoning amendments and use of existing statutes and techniques to achieve transit-oriented development, redevelopment, community revitalization and enhanced community character through TRID creation; establishing value capture areas as a means to reserve and use future, designated incremental tax revenues for public transportation capital improvements, related site development improvements and maintenance; promoting the involvement of and partnerships with the private sector in TRID development and implementation; encouraging public involvement during TRID planning and implementation; and providing for duties of the Department of Community and Economic Development," in general provisions, further providing for definitions; in TRID creation and location, further providing for criteria for proposed TRID, for TRID designation, for implementing authority, for TRID planning study factors, for roles and responsibilities of public transportation agencies and municipalities and for amendments to TRID planning study; in land development powers of public transportation agencies, further providing for development or redevelopment of property and providing for additional powers of management entities and for prohibition on management entities; in value capture approaches, further providing for creation of value capture area and for dedication of tax revenues; providing for grant of TRID revenue and establishing the TRID Fund; and, in community involvement, further providing for public meeting to explain TRID and alternative implementation approaches.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1. Section 103 of the act of December 8, 2004 (P.L.1801, No.238), known as the Transit Revitalization Investment District Act, is amended by adding definitions to read:

Section 103. Definitions.

The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

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"Bond." The term includes bond, note, instrument, refunding bond, refunding note or other evidence of indebtedness or obligation.

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"Eligible project." Development or improvement within a TRID, including construction, infrastructure and site preparation, reconstruction or renovation of a facility within a TRID which will result in economic development or transit-oriented development in accordance with the TRID and the TRID planning study.

"Management entity." Any of the following:

(1) A participating municipality, county or public transportation agency.

(2) A redevelopment authority, municipal authority, neighborhood improvement district management association, business improvement district or a similar governmental or nonprofit organization authorized to act in a manner consistent with the TRID planning study and with a service area compatible with the TRID.

"Project costs." Any expenditures made or estimated to be made, or monetary obligations incurred or estimated to be incurred, which are listed in a TRID plan or agreement as costs of improvements that create economic development or revitalization within a TRID district, plus any costs incidental thereto. Project costs include, but are not limited to, the capital, financing, real property assembly, professional service, administrative, relocation, organizational and other necessary or convenient costs delineated in the act of July 11, 1990 (P.L.465, No.113), known as the Tax Increment Financing Act .

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"Redevelopment authority." An authority created pursuant to the act of May 24, 1945 (P.L.991, No.385), known as the Urban Redevelopment Law.

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Section 2. Sections 301, 302, 303, 304, 305, 306 and 502 of the act are amended to read:

Section 301. Criteria for proposed TRID.

Local municipalities, counties, transportation authorities and public transportation agencies proposing to define and develop a TRID shall use the following criteria and process:

(1) Eligible TRID locations may include any geographic area of a municipality or municipalities, including vacant, underutilized or potentially redevelopable land, within an area [generally formed by a minimum radius of one-eighth mile and] not to exceed a radius of [one-half] three-quarters mile from a railroad, transit, light rail, busway or similar transit stop or station, measured from the centerline of the track or roadway traversing the station or stop location. TRID designation may also include new station locations proposed in conjunction with a planned public transportation service, as defined on an adopted county, regional or public transportation agency plan.

[(2) The specific boundaries of a TRID may be expanded or reduced based on local circumstances such as local economic development and planning goals, community character, property boundary and scale variations but only when:

(i) authorized by the governing body or bodies of the affected jurisdiction or jurisdictions in cooperation with the pertinent public transportation agency; and

(ii) the rationale for the boundaries is supported by the findings of the required TRID planning study.]

(3) A local municipality or municipalities shall [further] define and support the rationale for the TRID designation through a TRID planning study as well as appropriate amendments to the municipal comprehensive plan, zoning ordinance and other pertinent regulations.

(4) A local municipality may designate the county planning agency to undertake or assist the TRID planning study on its behalf.

(5) An existing neighborhood improvement district, tax increment district or urban renewal area may be used as the basis for the boundaries of a TRID when justified by the TRID planning study required in section 304.

Section 302. TRID designation.

(a) Designation.--Local municipalities and counties working with public transportation agencies, transportation authorities, AMTRAK, passenger rail transportation providers or any combination thereof may designate TRIDs in advance of implementation of a new public transit service or in conjunction with an existing public transportation service and in advance of or in conjunction with actual development proposals. A TRID and its boundaries shall be established by ordinance. In a city of the third class situate within a county of the second class A, the designation and boundaries of the TRID shall be made exclusively by the governing body of the county.

(b) Agreement.--To create a TRID, in addition to the planning study described in section 301(3), the municipality or municipalities shall enter into an agreement with the transit agency that approves the TRID planning study under section 301(3) and defines the activities [and] , commitments and administrative and management roles of each party to the TRID, including any specific actions or financial participation to help implement the TRID. The agreement shall include the development agreement specified in section 504 as well as a description of the TRID management entity described in section [502(4)] 303 .

Section 303. [Implementing authority] Management entity .

A [participating county, local municipality, transportation authority and public transportation agency may designate on their behalf the county redevelopment authority to assume responsibility for TRID implementation.] participating local municipality or county , which made the designation under section 302, and the public transportation agency shall designate the management entity in the TRID agreement to administer, manage and facilitate the implementation of the TRID planning study.

Section 304. TRID planning study factors.

The scope and scale of transit improvements and community facility improvements, as well as any needed support facilities, shall be assessed in the TRID planning study. The TRID planning study shall also serve as the basis for a comprehensive plan amendment to establish the TRID if the municipality has a currently adopted comprehensive plan. The following shall apply:

(1) The planning study shall consider the need for capital improvements to transit-related facilities and adjacent public infrastructure, including roads, sidewalks and water, sewer and storm drainage service and public facilities, as well as opportunities for private sector real estate development and ways in which such facilities, services and development can be financed.

(2) Municipalities and counties undertaking a TRID planning study shall receive priority consideration for planning [and implementation] grants and technical assistance from the department[, working in partnership with the pertinent county planning agency or agencies and other State agencies with grant or loan programs that may be applicable to TRID planning or implementations]. Any funding [appropriated to the Department of Community and Economic Development for the purpose of carrying out this act is intended to assist counties and local governments on a 25% matching basis to undertake TRID planning studies and related implementation activities. Individual grants for a TRID planning study or implementation project shall not exceed $75,000. The department in consultation with the Department of Transportation shall administer the supplemental TRID program through the existing land use planning and technical assistance program, with application guidance as necessary.] provided by the department to assist with TRID planning studies, except where otherwise limited by law, shall require a match of 25% .

(3) Commonwealth agencies are directed to provide State resources, programs and new capital investments that will assist local governments, transportation authorities and [transit] public transportation agencies to implement TRIDS.

Section 305. Roles and responsibilities of public transportation agencies and municipalities.

As guidelines to implement the findings and recommendation of the TRID planning study, the following roles and responsibilities are defined:

(1) [The] Identifying the scope and scale of needed or proposed transit capital improvements within the TRID area [are] is the responsibility of the partnering public transportation agency. The cost, financing, phasing and schedule of all transit-related improvements shall be included in the public transportation agency's adopted capital program.

(2) [The] Identifying the scope and scale of needed or proposed support facilities, highway accessways and community or neighborhood facility improvements, for example, sidewalks and recreation facilities, [are] is the responsibility of the partnering county and local jurisdiction or jurisdictions and may include support from the private sector.

(3) [Notwithstanding these stated roles and responsibilities, the parties to a TRID shall be responsible for defining the administrative and management roles and responsibilities that will be most appropriate to achieve implementation of the TRID in their community.] Administration, management and facilitation of the TRID implementation are primarily the responsibility of the management entity, including, but without limitation, issuing bonds, securing grant funds and otherwise raising, expending and administering funds for TRID projects.

Section 306. Amendments [to TRID planning study].

[Proposed real estate development or redevelopment may trigger additional needs for transit improvements and community facility improvements or support facilities and shall be accommodated through pertinent amendments of the TRID planning study and county, multimunicipal or local municipal comprehensive plan.] If warranted by a changing economic or community condition, planning goal, real estate development, redevelopment opportunity or a demonstrated need for transit or community facility improvement, a TRID or TRID planning study may be amended. The following shall apply:

(1) The boundaries of a TRID may be expanded or reduced by an amendment to the ordinance establishing the TRID and shall be accompanied by justification for the boundary change supported by findings in the original or amended TRID planning study.

(2) A TRID planning study may be amended by approval of the municipality, municipalities or counties and the transit agency that are parties to the TRID designation under section 302.

Section 502. Development or redevelopment of property.

Development or redevelopment of property within a TRID shall generally occur in the following manner:

(1) The public transportation agency , municipality or management entity may acquire the property, improve it for future development, such as site clearance, utility work, environmental remediation and similar improvements, and work cooperatively with the pertinent local jurisdiction or jurisdictions and implementing agencies to offer it for sale to the private sector for use or uses consistent with the adopted TRID plan.

(2) Alternatively, the public transportation agency , municipality or management entity may advertise the presence of available development sites within a TRID, including a map of potentially developable or redevelopable properties, and invite interested developers to submit proposals in cooperation with the pertinent local jurisdiction or jurisdictions and implementing agencies.

(3) In the case of either paragraph (1) or (2), the public transportation agency may not be the primary real estate developer, and joint development activities are confined to the construction of support and access facilities: that is, vehicular access, parking, pedestrian ways, building pads, foundation columns, signage and similar items.

(4) [The partnering TRID local municipality or municipalities shall designate a management entity for the TRID which may be a municipal authority or joint municipal authority, in accordance with the requirements of 53 Pa.C.S. Ch. 56 (relating to municipal authorities) to manage and facilitate TRID implementation. The local municipality or municipalities involved in the TRID shall retain policy and oversight responsibilities for all budgetary and programmatic actions of the designated TRID management entity.] Similar to, but not limited by, the act of July 11, 1990 (P.L.465, No.113), known as the Tax Increment Financing Act, a public transportation agency, municipality, management entity or a designated agent may issue bonds, deposit money into the TRID account and enter into any contracts or agreements, including agreements with bondholders, as determined to be necessary or convenient to implement the provisions and effectuate the purposes of TRID project plans. The contracts or agreements may include conditions, restrictions or covenants which either run with the land or otherwise regulate the use of the land.

(5) Creative partnerships with AMTRAK, passenger rail transportation providers, transportation authorities and the private sector to accomplish TRID purposes that use the benefits of AMTRAK's and passenger rail service providers' existing real estate development powers are both desirable and encouraged.

[(6) Neighborhood improvement districts, business improvement districts or similar entities may be designated to manage the TRID implementation activities.]

Section 3. The act is amended by adding sections to read:

Section 505. Additional powers of management entities.

In addition to other powers and functions of management entities granted under this act, a management entity shall have the power to provide or borrow money for purposes of executing a TRID, a TRID planning study or for an eligible project. A management entity may also issue bonds, if permitted to do so under Commonwealth statute, for the purposes of executing a TRID, a TRID planning study or for an eligible project.

Section 506. Prohibition on management entities.

A member of the management entity may not receive money directly or indirectly from the TRID.

Section 4. Sections 701 and 702 of the act are amended to read:

Section 701. Creation of value capture area.

In conjunction with the formal establishment of the TRID boundaries, a coterminous value capture area shall simultaneously be created to enable local municipalities, school districts, the county and the public transportation agency to share the increased tax increment of real estate and other designated tax revenues generated by new real estate investment within the TRID. The participants in the TRID, through the designated management entity, shall develop an administrative and project schedule and budget to implement the project, including future maintenance needs, as defined in the TRID planning study, as well as the shares and use of [such tax] the incremental revenues as are projected to be generated from the TRID value capture area. The participating municipality or municipalities may review and revise the TRID budget.

Section 702. [Dedication of tax revenues] Financing of project costs .

[Tax] A portion of incremental tax revenues [generated within] transferred to a TRID shall be dedicated to completion and future maintenance of the specific and necessary transit capital and public infrastructure improvements designated in the comprehensive plan amendment and TRID planning study as follows:

(1) Local [municipalities and counties shall not use such revenues for general government purposes, and a public transportation agency shall not use such revenues for transit capital investments elsewhere on the public transportation system.] taxing bodies shall approve that portion of revenues which shall be dedicated to support TRID implementation and that portion which shall be dedicated for general government purposes.

(1.1) A public transportation agency may not use the revenue for a transit capital investment outside of a designated TRID except if the investment is necessary and integral to achieve an approved TRID implementation objective.

(2) Local municipalities, school districts and the county shall establish an amortization schedule for receipt, investment and expenditure of any TRID tax incremental revenues[, not to exceed 20 years,] similar to [the amortization schedule] , but not limited by, the financing of costs provisions in the act of July 11, 1990 (P.L.465, No.113), known as the Tax Increment Financing Act. [However, where a municipal or joint municipal authority has been created, it shall be responsible for fixing the amortization schedule and for defining the TRID capital improvement plan.] Incremental tax revenue generated by a TRID property may be directed for use in TRID projects or eligible projects, including for use in financing a bond the proceeds of which are used in TRID projects or eligible projects, for up to 20 years from the date a property is designated as a parcel in a TRID.

(3) For the purposes of this act, project costs and the financing thereof shall be regarded as like and similar to the provisions delineated in the Tax Increment Financing Act.

Section 5. The act is amended by adding a chapter to read:

CHAPTER 8

GRANT OF TRID REVENUE

Section 801. Establishment.

There is established a special fund in the State Treasury to be known as the TRID Fund. Moneys deposited into the fund and interest which accrues from those funds shall be used for the purposes delineated in this chapter.

Section 802. Approval.

(a) Submission.--A management entity may apply to the department for the purposes of funding an eligible project or for covering debt service payments related to debt incurred to fund an eligible project.

(b) Agencies.--The department, in consultation with the Office of the Budget, shall approve two applications within six months of the effective date of this section and may approve additional applications thereafter.

(c) Approval schedule.--The department shall develop a schedule for the approval of applications.

(d) Reapplication.--If an application is not approved under this section, the applicant may revise the application and plan and reapply for approval.

Section 803. Additional powers of management entities.

In addition to other powers and functions of management entities granted under this act, a management entity shall have the power to borrow money for the purposes of executing a TRID or TRID planning study for which an application has been approved under section 802.

Section 804. Prohibition on management entities.

A member of the management entity may not receive money directly or indirectly from the TRID Fund.

Section 805. Transfers.

(a) Matching funds.--The amount of money transferred from the TRID Fund utilized for the construction, including related site preparation and infrastructure, reconstruction or renovation of facilities, shall be matched by other sources of funding at a ratio of two fund dollars to one private dollar.

(b) Report.--By April 1, following year one, and for each year thereafter, the management entity shall file an annual report with the department and the Office of the Budget that contains a detailed account of the TRID Fund money expenditures and the expenditures of funds from other sources and a calculation of the ratio in subsection (a) for the prior calendar year. The agencies shall determine whether sufficient funding from other sources was utilized.

(c) Credit of matching funds.--For the purposes of meeting the matching funding requirement, the agencies shall allow a management entity to demonstrate that a multiyear eligible matching funding investment was made in a particular year. In subsequent years, the management entity shall refer to the gross matching fund investment in the year it was established and carry forward a credit in an amount of the original investment minus the funds already applied as a matching fund requirement, up to the remaining matching funds.

(d) Deduction.--If it is determined that insufficient funding from other sources was utilized under subsection (a), the amount of TRID Fund money utilized under subsection (a) in the prior calendar year shall be deducted from the next transfer of the fund.

(e) Financial approval.--Upon being satisfied that all requirements have been met, including private dollar match, the department shall notify the State Treasurer to issue a grant in an amount not to exceed $350,000 annually, as established by the Secretary of the Budget per TRID.

(f) Sales tax transfer.--On June 1, 2016, and on each June 1 for the next 20 calendar years, $700,000 from the tax imposed by Article II of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, shall be transferred to the TRID Fund for payment to the first two TRIDs approved under section 802(b).

(g) Remaining TRID Fund money.--Each year after the transfers from the TRID Fund to the TRIDs under subsection (f), any money remaining in the TRID Fund shall be returned to the General Fund.

(h) Grants to other TRIDs.--For any TRID other than the first two TRIDs approved under section 802(b), the department may provide grants of up to $350,000 each year for the purposes delineated in this chapter.

Section 806. Restrictions.

(a) Utilization.--If the use was approved in an application filed under section 802, money transferred under section 805 may only be utilized for the following:

(1) Payment of debt service on bonds issued for the construction, including related infrastructure and site preparation, reconstruction or renovation of a facility in the TRID.

(2) Construction, including related infrastructure and site preparation, reconstruction or renovation of all or a part of a facility.

(3) Replenishment of amounts in debt service reserve funds established to pay debt service on bonds.

(4) Improvement or development of all or part of a TRID.

(5) Improvement projects, including fixtures and equipment for a facility owned by a public authority.

(b) Excess money.--

(1) If the amount of money transferred to the fund under section 805 in any one calendar year exceeds the money utilized under this section in that calendar year, the management entity shall submit by January 15 following the end of the calendar year the excess money to the State Treasurer for deposit into the General Fund.

(2) At the time of submission to the State Treasurer, the management entity shall submit to the State Treasurer, the Office of the Budget and department a detailed accounting of the calculation resulting in the excess money.

Section 807. Expiration.

The TRID Fund shall expire on December 31, 2035. Upon expiration, money in the fund not encumbered shall lapse to the General Fund.

Section 808. Commonwealth pledges.

(a) Pledge.--If and to the extent the management entity pledges amounts required to be transferred to the TRID Fund under section 805 for payment of bonds issued by the management entity, until all bonds secured by the pledge of the management entity, together with interest on the bonds, are fully paid or provided for, the Commonwealth pledges to and agrees with any person, firm, corporation or government agency, in this Commonwealth or elsewhere and pledges to and agrees with any Federal agency subscribing to or acquiring the bonds of the management entity that the Commonwealth will not, nor will it authorize any government entity to, do any of the following:

(1) Abolish or reduce the size of the TRID.

(2) Limit or alter the rights vested in the management entity in a manner inconsistent with the obligations of the management entity with respect to the bonds issued by the management entity.

(3) Impair revenue to be paid under this chapter to the management entity necessary to pay debt service on bonds.

(b) Limitation.--Nothing under this section shall limit the authority of the Commonwealth to change the rate, base or subject of a specific tax or to repeal or enact any tax.

Section 809. Guidelines.

The department and the Office of the Budget shall develop and publish guidelines necessary to implement this chapter.

Section 6. Section 901 of the act is amended to read:

Section 901. Public meeting to explain TRID and alternative implementation approaches.

Community and public involvement in the establishment of TRIDs is required. The municipality and the public transportation agency shall jointly conduct at least one public meeting in the proposed TRID area prior to the enactment of a TRID[,] and TRID planning study[, comprehensive plan or zoning amendment]. The meeting is intended to explain the purpose and components of the TRID and the alternative implementation approaches. The public meeting or meetings shall be in addition to any required local government public hearing or hearings prior to comprehensive or multimunicipal plan amendment adoption. However, nothing in this act shall relieve the [TRID management entity] municipality or public transportation agency from conducting all public meetings required by law where the TRID is acting or seeking to act under the:

(1) Act of May 24, 1945 (P.L.991, No.385), known as the Urban Redevelopment Law.

(2) Act of July 11, 1990 (P.L.465, No.113), known as the Tax Increment Financing Act.

(3) Act of December 20, 2000 (P.L.949, No.130), known as the Neighborhood Improvement District Act.

Section 7. This act shall take effect in 90 days.

APPROVED--The 4th day of November, A.D. 2016.

TOM WOLF