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. 20050H0733B0824 - 2 -
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 20050H0733B0824 - 3 -
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 20050H0733B0824 - 4 -
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. 20050H0733B0824 - 5 -
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 20050H0733B0824 - 6 -
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 20050H0733B0824 - 7 -
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. L15L72SFL/20050H0733B0824 - 8 -