A proposed real estate tax-break ordinance up for Luzerne County Council adoption Tuesday has more teeth.
The ordinance sets reporting requirements and procedures for future tax-break requests.
Originally, the document said a property owner’s failure to submit an annual report required by the ordinance “may be considered by County Council” when evaluating future tax break requests, if any, from that same owner or affiliated entities.
The amended version empowers the council to discontinue an entity’s already approved tax exemption if the owner fails to submit the annual report or submits one that “lacks the necessary completeness or accuracy” mandated by the ordinance, it said.
In such a situation, discontinuance is allowable if the county’s community planning and economic development division head issues a notice of reporting failure to the owner and council, it said.
Several council members sought ramifications for noncompliance.
The annual reports on job creation and other economic impacts are a key component of the ordinance to help county officials and the public evaluate whether the break is worthwhile, said council Chairman Jimmy Sabatino.
Breaks fall under the Local Economic Revitalization Tax Assistance (LERTA) program, which allows up to a decade of real estate tax discounts on new construction, but not the underlying land. For a project to be eligible, municipalities must declare a site is distressed.
“When they come to us to ask for a LERTA, we’re taking it on good faith they’ll do the best they can to create the jobs they’re promising. This is one way we can safeguard against them telling us one thing and doing another,” Sabatino said of the potential discontinuance if recipients don’t disclose required information.
A tax break can also be revoked if the owner fails to pay nonexempted real estate taxes. The county already had included this forfeiture in at least some of its past tax break agreements.
Conditional approval of tax breaks is another change since the ordinance was introduced by the council in September.
This was added to address frequent speculative development, when a project commences before one or more end users are identified.
If the subsequent end use is inconsistent with the conditional approval, the applicant could come to the council seeking a modification, it said.
As an example, Sabatino said this clause would prevent a developer from obtaining a tax break for a warehousing project and then switching to a data center.
“If they change uses, they would have to start the whole process over,” Sabatino said.
A required public hearing on the ordinance is scheduled for 5:55 p.m. Tuesday in the county courthouse on River Street in Wilkes-Barre, followed by the voting meeting at 6 p.m. The proposed ordinance is posted with the agenda at luzernecounty.org.
Sabatino noted the ordinance requires more information up front, including analysis projecting the total economic return and a description of estimated infrastructure demands and public service impacts on transportation, utilities, stormwater and emergency services.
Developers should not have an issue with the ordinance because it provides a “clear, documented path for them to get a LERTA,” he said.
“It’s uniform. Everybody applying for a LERTA would have to give the same information from here on out,” he said.