HB 1453 — An Act providing for food desert opportunity zones and for food desert opportunity zone tax credits; and imposing powers and duties on the Department of Community and Economic Development and the Department of Revenue.

PRINTER'S NO.   1701

                    THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        HOUSE BILL
                        No. 1453
                                               Session of
                                                 2025

     INTRODUCED BY SHUSTERMAN, HILL-EVANS, GIRAL, MIHALEK, HANBIDGE,
        SANCHEZ, KINKEAD, KAZEEM, HOHENSTEIN, D. WILLIAMS, MAYES,
        CIRESI AND O'MARA, MAY 13, 2025

     REFERRED TO COMMITTEE ON FINANCE, MAY 13, 2025


                                    AN ACT
 1   Providing for food desert opportunity zones and for food desert
 2      opportunity zone tax credits; and imposing powers and duties
 3      on the Department of Community and Economic Development and
 4      the Department of Revenue.
 5                             TABLE OF CONTENTS
 6   Chapter 1.   Preliminary Provisions
 7   Section 101.   Short title.
 8   Section 102.   Definitions.
 9   Chapter 3.   Food Desert Opportunity Zones
10   Section 301.   Food desert opportunity zones.
11   Section 302.   Application.
12   Section 303.   Review.
13   Section 304.   Qualified healthy food retail outlet.
14   Section 305.   Decertification.
15   Chapter 5.   Tax Credit
16   Section 501.   Food desert opportunity tax credit.
17   Section 502.   Transferability.
18   Section 503.   Recapture.
 1   Section 504.   Delinquent or deficient State or local taxes.
 2   Section 505.   Code compliance.
 3   Section 506.   Appeals.
 4   Section 507.   Notice requirements.
 5   Section 508.   Application time.
 6   Chapter 7.   Miscellaneous Provisions
 7   Section 701.   Illegal activity.
 8   Section 702.   Rules and regulations.
 9   Section 703.   Compliance.
10   Section 704.   Penalties.
11   Section 705.   Construction.
12   Section 706.   Applicability.
13   Section 707.   Effective date.
14      The General Assembly of the Commonwealth of Pennsylvania
15   hereby enacts as follows:
16                                  CHAPTER 1
17                           PRELIMINARY PROVISIONS
18   Section 101.   Short title.
19      This act shall be known and may be cited as the Food Desert
20   Opportunity Zone Act.
21   Section 102.   Definitions.
22      The following words and phrases when used in this act shall
23   have the meanings given to them in this section unless the
24   context clearly indicates otherwise:
25      "Department."    The Department of Community and Economic
26   Development of the Commonwealth.
27      "Food desert."    A low-income census tract where a substantial
28   number or share of residents have low access to a healthy food
29   retail outlet.
30      "Healthy food retail outlet."         A supermarket or large grocery

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 1   store.
 2      "Low access to a healthy food retail outlet."     The following:
 3            (1)   More than one mile from a supermarket or large
 4      grocery store in urban areas.
 5            (2)   More than 10 miles from a supermarket or large
 6      grocery store in rural areas.
 7      "Low-income census tract."     A census tract where:
 8            (1)   the poverty rate for that tract is at least 20%;
 9            (2)   for tracts not located within a metropolitan area,
10      the median family income for the tract does not exceed 80% of
11      Statewide median family income; or
12            (3)   for tracts located within a metropolitan area, the
13      median family income for the tract does not exceed 80% of the
14      greater of Statewide median family income or the metropolitan
15      area median family income.
16      "Tax credit."     A food desert opportunity tax credit under
17   section 501.
18      "Zone."     A food desert opportunity zone established under
19   section 301(a).
20                                 CHAPTER 3
21                       FOOD DESERT OPPORTUNITY ZONES
22   Section 301.    Food desert opportunity zones.
23      (a)   Establishment.--A program providing for food desert
24   opportunity zones is established within the department.
25      (b)   Criteria for zone.--A zone shall be comprised of a low-
26   income census tract where at least 33% of the tract's population
27   or a minimum of 500 people in the tract have low access to a
28   healthy food retail outlet.
29      (c)   Zone authorization.--The department shall authorize not
30   more than 12 zones in this Commonwealth. Healthy food retail

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 1   outlets within a zone that are qualified under this act shall be
 2   entitled to a tax credit for a period not to exceed five years
 3   beginning January 1, 2026, and ending on or before December 31,
 4   2030.
 5   Section 302.   Application.
 6      (a)   Initial application.--One or more political subdivisions
 7   in a low-income census tract, or a designee of one or more
 8   political subdivisions, may apply to the department to designate
 9   the low-income census tract as a zone.
10      (b)   Participation limitation.--A political subdivision shall
11   not be a part of more than one proposed zone, unless the
12   department agrees that two zones will bring additional benefit
13   to the residents of the political subdivision.
14      (c)   Application limitation.--A political subdivision may
15   submit only one application to the department for the
16   authorization of a zone.
17      (d)   Form and manner.--The application shall be in a form and
18   manner as prescribed by the department.
19   Section 303.   Review.
20      (a)   Action of department.--The department, in consultation
21   with the Department of Revenue, shall review all completed
22   applications submitted under section 302. An application for
23   authorization of a zone must be received by the department on or
24   before September 30, 2025, in order to be considered by the
25   department.
26      (b)   Process.--The department shall authorize up to 12 zones
27   from applications meeting the criteria in section 301(b) based
28   upon need and likelihood of success. The department may not
29   alter the geographic boundaries of a zone.
30      (c)   Authorizations.--The department shall authorize all

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 1   zones by November 30, 2025.
 2      (d)   Effective date of designation.--The designation of a
 3   zone under this section shall take effect January 1, 2026.
 4      (e)   Extension.--The department may extend the deadline for
 5   the receipt of applications for zones until December 31, 2025,
 6   if all 12 zones have not been authorized and the extension is
 7   necessary to allow eligible political subdivisions to apply. The
 8   department shall authorize additional zones under this
 9   subsection by February 28, 2026. The authorization shall take
10   effect January 1, 2026, or if the authorization occurs after
11   January 1, 2026, that subsequent authorization shall for all
12   purposes be retroactive to January 1, 2026. The zone
13   authorization shall end as provided in section 301(c).
14   Section 304.    Qualified healthy food retail outlet.
15      (a)   Qualifications.--In order to qualify each year for a tax
16   credit under Chapter 5, a healthy food retail outlet shall own
17   or lease real property in a zone from which the healthy food
18   retail outlet actively conducts business. The qualified healthy
19   food retail outlet shall receive certification from the
20   department that the healthy food retail outlet is located and is
21   in the active conduct of business within the zone. The healthy
22   food retail outlet shall obtain annual renewal of the
23   certification from the department to continue to qualify under
24   this section.
25      (b)   Relocation.--Any healthy food retail outlet that
26   relocates from outside a zone shall not receive a tax credit
27   provided under Chapter 5 unless the healthy food retail outlet
28   does one of the following:
29            (1)   increases full-time employment by at least 20% in
30      the first full year of operation within the zone;

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 1            (2)   makes a capital investment in the property located
 2      within the zone equivalent to at least 10% of the gross
 3      revenues of that healthy food retail outlet in the
 4      immediately preceding calendar or fiscal year; or
 5            (3)   enters into a lease agreement for property located
 6      within the zone:
 7                  (i)    for a term equivalent to at least the duration
 8            of the zone; and
 9                  (ii)   with aggregate payment under the lease
10            agreement equivalent to at least 5% of the gross revenues
11            of that healthy food retail outlet in the immediately
12            preceding calendar or fiscal year.
13      (c)   Waiver of requirements.--The department, in consultation
14   with the Department of Revenue, may waive or modify the
15   requirements under subsection (b), as appropriate.
16   Section 305.     Decertification.
17      (a)   Application.--One or more political subdivisions, or a
18   designee of one or more political subdivisions, may apply to the
19   department to decertify and remove the designation of a zone.
20   The application shall be in a form and manner prescribed by the
21   department.
22      (b)   Process.--The department may grant the request to
23   decertify and remove the designation of a zone after completed
24   applications have been submitted by all qualified political
25   subdivisions in which the zone is located.
26                                    CHAPTER 5
27                                    TAX CREDIT
28   Section 501.     Food desert opportunity tax credit.
29      (a)   Credits.--For tax years beginning on and after January
30   1, 2026, a qualified healthy food retail outlet may apply to the

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 1   Department of Revenue for a tax credit against the tax imposed
 2   by Article III of the act of March 4, 1971 (P.L.6, No.2), known
 3   as the Tax Reform Code of 1971, for the taxable year. The
 4   Department of Revenue shall prescribe the form and manner to
 5   obtain the tax credit.
 6      (b)   Application of credit.--A qualified healthy food retail
 7   outlet shall apply for a tax credit by January 15 for the
 8   previous calendar year.
 9      (c)   Apportionment.--The Department of Revenue shall
10   apportion a tax credit for a qualified healthy food retail
11   outlet that has not operated in a zone for a full fiscal year.
12      (d)   Tax credit determinations.--The tax credit shall be
13   determined by multiplying the monthly average of all full-time
14   jobs at a qualified healthy food retail outlet by the allowance.
15   The allowance for purposes of the tax credit shall be $1,250 per
16   job.
17      (e)   Notification of credit.--By March 15, the Department of
18   Revenue shall notify a qualified healthy food retail outlet of
19   the amount of the qualified healthy food retail outlet's tax
20   credit approved.
21      (f)   Limitation on amount of credit.--The tax credit shall
22   not exceed 50% of the tax liability of the qualified healthy
23   food retail outlet under Article III of the Tax Reform Code of
24   1971 for the taxable year. A qualified healthy food retail
25   outlet may not carry back or carry forward a tax credit received
26   under this section.
27      (g)   Allocation.--The total amount of tax credits approved by
28   the Department of Revenue shall not exceed $1,000,000 annually.
29   If the tax credits exceed the $1,000,000 cap in a given year,
30   the tax credits will be allocated on a pro rata basis.

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 1   Section 502.    Transferability.
 2      A tax credit awarded to a qualified healthy food retail
 3   outlet is nontransferable and cannot be applied, used or
 4   assigned to any other person, business or tax account.
 5   Section 503.    Recapture.
 6      (a)   Refund to Commonwealth.--If a qualified healthy food
 7   retail outlet located within a zone received a tax credit and
 8   subsequently relocates outside of the zone within the first five
 9   years of locating in the zone, the qualified healthy food retail
10   outlet shall refund the Commonwealth in accordance with the
11   following:
12            (1)   If the qualified healthy food retail outlet
13      relocates within three years from the date of first locating
14      in a zone, 66% of the tax credits awarded to the qualified
15      healthy food retail outlet shall be refunded to the
16      Commonwealth.
17            (2)   If the qualified healthy food retail outlet
18      relocates within three to five years from the date of first
19      locating in a zone, 33% of the tax credits awarded to the
20      qualified healthy food retail outlet shall be refunded to the
21      Commonwealth.
22            (3)   If the qualified healthy food retail outlet was
23      located within a facility operated by a nonprofit
24      organization to assist in the creation and development of a
25      start-up business, no tax credit shall be refunded.
26      (b)   Waiver.--The department, in consultation with the
27   Department of Revenue, may waive or modify recapture
28   requirements under subsection (a) if the department determines
29   that the relocation was due to circumstances beyond the control
30   of the qualified healthy food retail outlet, including, but not

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 1   limited to:
 2            (1)   natural disaster;
 3            (2)   unforeseen industry trends; or
 4            (3)   loss of a major supplier or market.
 5   Section 504.    Delinquent or deficient State or local taxes.
 6      (a)   Compliance with tax laws.--
 7            (1)   A qualified healthy food retail outlet may not claim
 8      or receive a tax credit unless the qualified healthy food
 9      retail outlet is in full compliance with all State and local
10      tax laws, ordinances and resolutions.
11            (2)   A qualified healthy food retail outlet may not claim
12      or receive a tax credit if any person or business with a 20%
13      or greater interest in the qualified healthy food retail
14      outlet is not in full compliance with all State and local tax
15      laws, ordinances and resolutions.
16      (b)   Later compliance and eligibility.--A qualified healthy
17   food retail outlet that is not eligible to claim a tax credit
18   due to noncompliance with any State or local tax law may become
19   eligible if the qualified healthy food retail outlet
20   subsequently comes into full compliance with all State and local
21   tax laws to the satisfaction of the Department of Revenue or the
22   political subdivision within the calendar year in which the
23   noncompliance first occurred. If full compliance is not attained
24   by February 5 of the calendar year following the calendar year
25   during which noncompliance first occurred, the qualified healthy
26   food retail outlet is precluded from claiming a tax credit for
27   that calendar year, whether or not full compliance is achieved
28   subsequently.
29   Section 505.    Code compliance.
30      (a)   Compliance with tax laws.--A qualified healthy food

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 1   retail outlet shall be precluded from claiming a tax credit if
 2   the qualified healthy food retail outlet owns real property in a
 3   zone and the real property is not in compliance with all
 4   applicable State and local zoning, building and housing laws,
 5   ordinances or codes.
 6      (b)   Opportunity to achieve compliance.--A qualified healthy
 7   food retail outlet that is not in compliance under subsection
 8   (a) shall have until December 31 of the calendar year following
 9   designation of the real property as part of a zone, to be in
10   compliance in order to claim a tax credit for that year. If full
11   compliance is not attained by December 31 of that calendar year,
12   the qualified healthy food retail outlet is precluded from
13   claiming a tax credit for that calendar year, whether or not
14   compliance is achieved in a subsequent calendar year. The
15   Department of Revenue may extend the time period in which a
16   qualified healthy food retail outlet must come into compliance
17   with a local ordinance or building code for a period not to
18   exceed one year if the Department of Revenue determines that the
19   qualified healthy food retail outlet has made and shall continue
20   to make a good faith effort to come into compliance and that an
21   extension will enable the qualified healthy food retail outlet
22   to achieve full compliance. Political subdivisions in a zone
23   shall notify the Department of Revenue in writing of all
24   qualified healthy food retail outlets not in compliance with
25   this subsection within 30 days following the end of each
26   calendar year.
27   Section 506.   Appeals.
28      A qualified healthy food retail outlet shall be deemed to be
29   in compliance with any State or local tax for purposes of this
30   chapter if the qualified healthy food retail outlet has made a

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 1   timely administrative or judicial appeal for that particular tax
 2   or has entered into and is in compliance with a duly authorized
 3   deferred payment plan with the Department of Revenue or
 4   political subdivision for that particular tax.
 5   Section 507.   Notice requirements.
 6      (a)   Requirement.--After compliance reviews have been
 7   conducted by appropriate Commonwealth and local authorities, the
 8   department shall notify each zone applicant by regular mail each
 9   year of the department's approval or denial of the zone
10   application. No qualified healthy food retail outlet zone is
11   entitled a tax credit unless the zone receives approval from the
12   department.
13      (b)   Notice.--The department shall provide a one-time
14   notification to every current zone real property owner by June
15   1, 2025. Failure to receive departmental notification under this
16   section shall not extend or restrict any benefits or rights real
17   property owners possess under this act.
18      (c)   Transmittal.--The department or its designated official
19   shall, within 15 business days of receipt of a zone application
20   made under this act, forward a copy of the application to
21   appropriate Commonwealth and local authorities for review and
22   processing.
23   Section 508.   Application time.
24      (a)   Deadline.--Except as provided under subsection (b), an
25   applicant for a tax credit must file an application in a manner
26   prescribed by the department by December 31 of each calendar
27   year for which the applicant claims a tax.
28      (b)   Extension or waiver.--Upon request of the applicant, the
29   department may extend or waive the application deadline for good
30   cause shown.

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 1      (c)   Approval.--A tax credit may not be claimed or received
 2   for that calendar year until approval has been granted by the
 3   department.
 4                                 CHAPTER 7
 5                          MISCELLANEOUS PROVISIONS
 6   Section 701.    Illegal activity.
 7      Any funds or other forms of consideration received by a
 8   qualified healthy food retail outlet conducting any type of
 9   illegal activity shall not be eligible for a tax credit or any
10   other benefits that are created under this act.
11   Section 702.    Rules and regulations.
12      The department and the Department of Revenue may promulgate
13   regulations necessary to effectuate the provisions of this act.
14   Section 703.    Compliance.
15      A qualified healthy food retail outlet eligible for a tax
16   credit shall comply with all reporting, filing and compliance
17   requirements under the act of March 4, 1971 (P.L.6, No.2), known
18   as the Tax Reform Code of 1971, unless otherwise provided for in
19   this act.
20   Section 704.    Penalties.
21      (a)   Civil penalty.--
22            (1)   In addition to any penalties authorized by the act
23      of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
24      of 1971, for violations of that act, the Department of
25      Revenue may impose an additional administrative penalty not
26      to exceed $10,000 for any act or violation of this act,
27      including the filing of any false statement, return or
28      document.
29            (2)   The department may impose a civil penalty not to
30      exceed $10,000 for a violation of this act, including the

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 1      filing of any false statement, return or document.
 2      (b)   Criminal penalty.--In addition to any criminal penalty
 3   under the Tax Reform Code of 1971, a qualified healthy food
 4   retail outlet that knowingly violates any of the provisions of
 5   this act commits a misdemeanor of the third degree.
 6   Section 705.    Construction.
 7      This act shall be interpreted to ensure that all provisions
 8   relating to tax credits are strictly construed in favor of the
 9   Commonwealth.
10   Section 706.    Applicability.
11      The provisions of this act shall be applied prospectively. A
12   qualified healthy food retail outlet may not claim a tax credit
13   until the qualified healthy food retail outlet becomes qualified
14   under this act.
15   Section 707.    Effective date.
16      This act shall take effect in 60 days.




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