PRINTER'S NO. 824
No. 733 Session of 2005
INTRODUCED BY SOLOBAY, BAKER, BEBKO-JONES, BELARDI, BELFANTI,
BOYD, BUXTON, CALTAGIRONE, CAPPELLI, CAUSER, CRAHALLA, DALEY,
DeWEESE, FABRIZIO, FAIRCHILD, FRANKEL, FREEMAN, GEORGE,
GINGRICH, GRUCELA, HANNA, HENNESSEY, KOTIK, MANDERINO, MANN,
McNAUGHTON, PALLONE, PRESTON, READSHAW, ROEBUCK, SAINATO,
SANTONI, SCAVELLO, SHANER, STURLA, THOMAS, TIGUE, WALKO,
WHEATLEY, YUDICHAK AND COSTA, MARCH 1, 2005
REFERRED TO COMMITTEE ON FINANCE, MARCH 1, 2005
AN ACT
1 Providing for an annual grant program for counties and school
2 districts relating to tax-exempt real property; establishing
3 a special fund in the State Treasury; and imposing powers and
4 duties on the Department of Community and Economic
5 Development.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Short title.
9 This act shall be known and may be cited as the County and
10 School District Tax-Exempt Property Grant Act.
11 Section 2. Definitions.
12 The following words and phrases when used in this act shall
13 have the meanings given to them in this section unless the
14 context clearly indicates otherwise:
15 "Common level ratio." The ratio of assessed value to current
16 market value used generally in the county as last determined by
17 the State Tax Equalization Board under the act of June 27, 1947
1 (P.L.1046, No.447), referred to as the State Tax Equalization
2 Board Law.
3 "Department." The Department of Community and Economic
4 Development of the Commonwealth.
5 "Fund." The Local Tax-Exempt Property Fund established under
6 section 4 (relating to Local Tax-Exempt Property Fund).
7 "Millage rate." The rate of real property tax levied by a
8 school district. In the event that a school district levies
9 differing millage rates on land and improvements, then any
10 reference in this act to the millage rate shall be deemed to
11 refer to a single combined millage rate for both land and
12 improvements which shall result in the collection of the same
13 amount of tax.
14 "Qualified tax-exempt property." Real property which is
15 exempt from local real property taxes and which is owned by one
16 of the following:
17 (1) the Federal Government or an instrumentality of the
18 Federal Government;
19 (2) the Commonwealth or an instrumentality of the
20 Commonwealth;
21 (3) a political subdivision, except:
22 (i) real property owned by the school district in
23 which the property is located; and
24 (ii) real property owned by any authority,
25 corporation or other entity owned or controlled by the
26 school district in which the property is located; or
27 (4) an entity which has obtained the exemption from real
28 property taxation pursuant to the authority granted to the
29 General Assembly under section 2(a)(i), (ii), (iv) or (v) of
30 Article VIII of the Constitution of Pennsylvania.
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1 The term shall not include real property for which a Federal or
2 State program provides any reimbursement to a county or school
3 district for that tax-exempt real property.
4 "School district." A school district of the first class,
5 first class A, second class, third class or fourth class,
6 including any independent school district.
7 Section 3. Tax-exempt property compilation.
8 (a) Annual report.--Beginning in calendar year 2006 every
9 county shall submit to the department an annual report providing
10 the information required in subsection (b) and such additional
11 information as required by the department to administer this
12 act. The report required under this section shall be filed on or
13 before June 30 of each year.
14 (b) Contents.--The report required under subsection (a)
15 shall be a compilation of all property located within the county
16 that is exempt from the real property tax as of January 1 in the
17 year the report is required to be filed. The report shall also
18 contain the following:
19 (1) The owner of each tax-exempt property.
20 (2) The provisions under which the property is tax-
21 exempt, differentiating between qualified tax-exempt property
22 and other property which is tax-exempt.
23 (3) The location of the property, including mailing
24 address, name of the school district where the property is
25 located and the block and lot designation.
26 (4) The assessed value of the property.
27 (5) The estimated market value of the property, which
28 shall be determined by dividing the assessed value of the
29 property by the common level ratio.
30 (6) An indication whether payment in lieu of tax or
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1 other funding is received under any Federal or State program
2 based on that property.
3 (7) The millage rate for the tax on real property in
4 effect in the school district where the property is located
5 as of January 1 of the year in which the report is required
6 to be filed.
7 (8) The assessed value of all property in each school
8 district in the county.
9 (9) The market value of all property in each school
10 district in the county.
11 (c) Failure to file reports.--
12 (1) Any county that fails to provide to the department
13 the report required under this section by June 30 shall be
14 penalized 25% of the distribution computed under section 6
15 (relating to county cost reimbursement), the amount of the
16 penalty shall be redistributed among the school districts
17 within that county.
18 (2) Notwithstanding any other provision of this act, any
19 county that fails to provide to the department the report
20 required under this section by July 31 shall, together with
21 all school districts within that county, forfeit the right to
22 share in the next following distribution required to be made
23 pursuant to this act.
24 Section 4. Local Tax-Exempt Property Fund.
25 (a) Establishment.--There is hereby established in the State
26 Treasury a fund to be known as the Local Tax-Exempt Property
27 Fund. The money deposited in this fund shall be used exclusively
28 for the purpose of making annual grants pursuant to this act.
29 (b) Funds for base grant program.--Revenues received by the
30 Commonwealth shall be transferred to the fund as provided in
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1 this section.
2 (1) For fiscal year 2005-2006 and fiscal year 2006-2007,
3 $25,000,000 shall be transferred to the fund.
4 (2) For fiscal year 2007-2008, $30,000,000 shall be
5 transferred to the fund.
6 (3) For fiscal year 2008-2009, and each fiscal year
7 thereafter, the amount to be transferred to the fund under
8 this subsection shall be the product of the amount computed
9 under paragraph (2) and the quotient of the Consumer Price
10 Index for All Urban Consumers for December of the year prior
11 to the year in which the transfer is required divided by the
12 Consumer Price Index for All Urban Consumers for December
13 2005.
14 (4) Funds transferred under this subsection shall be
15 distributed as provided in sections 6 (relating to county
16 cost reimbursement) and 7(a) (relating to school district
17 tax-exempt property grants).
18 (c) Funds for supplemental grant program.--
19 (1) In addition to the transfer required by subsection
20 (b), for fiscal year 2005-2006 and 2006-2007, $10,000,000 of
21 the revenues received by the Commonwealth from imposition of
22 the realty transfer tax shall be transferred to the fund.
23 (2) For fiscal year 2007-2008 and each fiscal year
24 thereafter, the amount to be transferred to the fund under
25 this subsection shall be the product of the amount computed
26 under paragraph (1) and the quotient of the Consumer Price
27 Index for All Urban Consumers for December of the year prior
28 to the year in which the transfer is required divided by the
29 Consumer Price Index for All Urban Consumers for December
30 2007.
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1 (3) Funds transferred under this subsection shall be
2 distributed as provided in section 7(b).
3 (d) Timing of transfers.--Revenues required to be
4 transferred under this section shall be transferred by the
5 Secretary of Revenue in five equal installments before the last
6 day of February, March, April, May and June of each fiscal year
7 in which a transfer is required.
8 (e) Appropriation.--All moneys in the fund are hereby
9 appropriated to the department for making distributions pursuant
10 to this act. These funds shall be a continuing appropriation and
11 the funds shall not lapse at the end of the fiscal year.
12 (f) Definition.--As used in this section, the term "Consumer
13 Price Index for All Urban Consumers" shall be the Consumer Price
14 Index for All Urban Consumers computed by the United States
15 Department of Labor, Bureau of Labor Statistics.
16 Section 5. Allocation of funds and requirement to make grants.
17 (a) Base grant funds.--Five percent of the moneys in the
18 fund transferred under section 4(b) (relating to local tax-
19 exempt property fund) shall be set aside for annual distribution
20 to the various counties under section 6 (relating to county cost
21 reimbursement). Ninety-five percent of the moneys in the fund
22 transferred under section 4(b) shall be set aside for annual
23 distribution to the various school districts under section 7(a)
24 (relating to school district tax-exempt property grants).
25 (b) Supplemental grant funds.--All the moneys in the fund
26 transferred under section 4(c) shall be set aside for annual
27 distribution to the various school districts under section 7(b).
28 (c) Mandatory grants.--Subject to the allocations made under
29 this section, all moneys in the fund at the end of a fiscal year
30 shall be distributed by the department on or before the
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1 September 15 next following the end of the fiscal year in the
2 manner required under sections 6 and 7.
3 Section 6. County cost reimbursement.
4 The annual distribution to each county shall be equal to the
5 product of the total amount of moneys set aside for distribution
6 to all counties in section 5(a) (relating to allocation of funds
7 and requirement to make grants) and the percentage determined by
8 dividing the market value of all qualified tax-exempt property
9 in the county by the market value of all qualified tax-exempt
10 property in all counties reporting.
11 Section 7. School district tax-exempt property grants.
12 (a) School district base grants.--The annual base grant to
13 each eligible school district shall be the amount calculated in
14 paragraphs (1) through (3).
15 (1) The market value of the eligible school district's
16 qualified tax-exempt property shall be reduced, but not below
17 zero, by the amount which is equal to 10% of the total of the
18 market value of all property in the school district.
19 (2) The result of paragraph (1) shall be divided by the
20 sum of the values computed under paragraph (1) for all
21 eligible school districts.
22 (3) The result of paragraph (2) shall be multiplied by
23 the amount available for distribution to school districts
24 computed under section 5(a) (relating to allocation of funds
25 and requirement to make grants).
26 (b) School district supplemental grants.--The annual
27 supplemental grant to each eligible school district shall be the
28 amount calculated in paragraphs (1) through (3).
29 (1) The market value of the eligible school district's
30 qualified tax-exempt property shall be reduced, but not below
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1 zero, by the amount which is equal to 25% of the total of the
2 market value of all property in the school district.
3 (2) The result of paragraph (1) shall be divided by the
4 sum of the values computed under paragraph (1) for all
5 eligible school districts.
6 (3) The result of paragraph (2) shall be multiplied by
7 the amount available for distribution to school districts
8 computed under section 5(b).
9 (c) Maximum grants.--Notwithstanding any other provision of
10 this act, the annual base and supplemental grants for a school
11 district computed under subsections (a) and (b) shall not exceed
12 33.3% of the school district real property tax which would be
13 otherwise due in that calendar year, but for the tax exemption,
14 on the amount calculated in subsection (a)(1).
15 (d) Definition.--As used in this section, the term "eligible
16 school district" means a school district for which the county
17 has made a report under section 3 (relating to tax-exempt
18 property compilation).
19 Section 8. Regulations.
20 The department shall promulgate the rules and regulations
21 necessary to implement this act.
22 Section 9. Effective date.
23 This act shall take effect in 60 days.
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