PRINTER'S NO. 3805
No. 2616 Session of 2002
INTRODUCED BY STEIL, RUBLEY, MELIO, GRUCELA, ARMSTRONG, BASTIAN, BUNT, CAPPELLI, CIVERA, CORRIGAN, CREIGHTON, CURRY, DAILEY, DALEY, DALLY, DiGIROLAMO, DIVEN, FEESE, FLICK, FREEMAN, GODSHALL, HANNA, HARHAI, HENNESSEY, HERMAN, HERSHEY, LEH, MARSICO, McCALL, McNAUGHTON, NAILOR, PALLONE, PIPPY, PISTELLA, READSHAW, ROSS, SAINATO, SCHRODER, SEMMEL, SHANER, B. SMITH, STEELMAN, R. STEVENSON, TANGRETTI, E. Z. TAYLOR, THOMAS, TIGUE, VANCE, WALKO, WATSON, M. WRIGHT, YOUNGBLOOD, YUDICHAK AND ZIMMERMAN, MAY 1, 2002
REFERRED TO COMMITTEE ON FINANCE, MAY 1, 2002
AN ACT 1 Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An 2 act relating to the public school system, including certain 3 provisions applicable as well to private and parochial 4 schools; amending, revising, consolidating and changing the 5 laws relating thereto," further providing for tax levies and 6 information related to taxes; authorizing the imposition of 7 personal income taxes by school district; making editorial 8 changes; and making a repeal. 9 The General Assembly of the Commonwealth of Pennsylvania 10 hereby enacts as follows: 11 Section 1. Section 507 of the act of March 10, 1949 (P.L.30, 12 No.14), known as the Public School Code of 1949, amended April 13 27, 1998 (P.L.270, No.46), is amended to read: 14 Section 507. General Powers; Taxation.--In order to 15 establish, enlarge, equip, furnish, operate, and maintain any 16 schools or departments herein provided, or to pay any school 17 indebtedness which any school district is required to pay, or to
1 pay any indebtedness that may at any time hereafter be created 2 by any school district, or to enable it to carry out any 3 provisions of this act, the board of school directors in each 4 school district is hereby vested with all the necessary 5 authority and power annually to levy and collect, in the manner 6 herein provided, the necessary real property taxes, realty 7 transfer taxes and personal income taxes required, in addition 8 to the annual State appropriation, and shall have, and be vested 9 with, all necessary power and authority to comply with and carry 10 out any or all of the provisions of this act. In the case of a 11 school district of the first class, the duties imposed by this 12 section shall apply to a city of the first class that is 13 coterminous with a school district of the first class. 14 Section 2. Section 603 of the act, amended June 2, 1965 15 (P.L.86, No.59) and September 1, 1965 (P.L.433, No.218), is 16 amended to read: 17 Section 603. Only One Annual Tax Levy.--There shall be but 18 one levy of school taxes made in each school district in each 19 year, which shall be assessed, levied, and collected for all the 20 purposes provided in this act, and shall be uniform throughout 21 the territorial limit of each school district.[, except that 22 those school taxes which school districts are empowered to levy 23 under the authority of the act of June 25, 1947 (P.L.1145), as 24 amended, may be levied at any time during the period authorized 25 for the assessment and levy of any school taxes: Provided, That 26 (1) where two or more school districts have voted to become a 27 union school district in accordance with the provisions of this 28 act and prior to the actual creation of the union school 29 district, the school board members by a majority vote of all the 30 members comprising said school boards shall assess and levy a 20020H2616B3805 - 2 -
1 uniform school tax in all of the districts comprising said union 2 school district for general revenue purposes necessary to 3 operate said union school district commencing the first day of 4 July following the vote establishing said union district, and 5 (2) whenever hereafter a school district of the second, third, 6 or fourth class shall be annexed to and merged in, and become a 7 part of a school district of the first class or first class A, 8 or shall be merged into and become a part of a school district 9 of the first class A as a reorganized district under the 10 provisions of Article II, subdivision (i) of this act, the board 11 of public education of said school district of the first class 12 or first class A shall have power to levy a special school tax 13 on the territory which comprised said annexed and merged school 14 district or on the territory which comprised the school district 15 into and becoming a part of a school district of the first class 16 A as a reorganized district, to provide for the expense and 17 maintenance of the schools thereof from the end of the school 18 year of said annexed and merged or merged by force of 19 reorganization school district to the beginning of the next 20 school year in said school district of the first class or first 21 class A, and to provide for and pay the floating indebtedness of 22 said annexed and merged or merged by force of reorganization 23 school district. Said levy shall not exceed one-half of the last 24 previous total annual millage levied by said school district of 25 the first class or first class A.] 26 Section 3. Section 631 of the act, amended December 6, 1972 27 (P.L.1445, No.323), is amended to read: 28 Section 631. Power to Incur Debt; Limitations.--The board of 29 school directors in any school district may, in any year, create 30 and incur an indebtedness against such school district and issue 20020H2616B3805 - 3 -
1 bonds to secure the same, payable as provided by [the act of 2 July 12, 1972 (Act No.185), known as the "Local Government Unit 3 Debt Act,"] 53 Pa.C.S. Pt. VII, Subpt. B (relating to 4 indebtedness and borrowing) or any amendment or re-enactment 5 thereof, for any or all of the following purposes: 6 (1) To purchase or acquire proper sites, buildings or 7 grounds for school use, or any lands additional to any existing 8 school sites or grounds; 9 (2) To erect, enlarge, equip or furnish any building for 10 school use; 11 (3) To repair, remodel or rebuild any building of the school 12 district; 13 (3.1) To lease for an extended period building facilities or 14 portions of buildings constructed for school use and/or existing 15 building facilities or portions of existing building facilities 16 altered for school use; 17 (4) To purchase school buses; 18 (5) To pay any indebtedness incurred by any municipality for 19 or on account of the school district or for school purposes, and 20 required by this act to be assumed by the school district; 21 (6) To pay any refund of taxes decreed by an order of court; 22 (7) To refund certain bonds, as hereinafter provided; 23 (8) To fund floating indebtedness incurred for current 24 expenses and debt service; 25 (9) To fund temporary indebtedness incurred for permanent 26 improvements, or in anticipation of proceeds from a bond issue; 27 (10) To purchase or acquire buildings for school use. 28 The indebtedness of any school district shall never exceed 29 fifteen (15) per centum of the last assessed valuation of 30 property taxable for school purposes therein. 20020H2616B3805 - 4 -
1 Section 4. Section 632 of the act, reenacted and amended 2 March 16, 1967 (P.L.9, No.3), is amended to read: 3 [Section 632. Assent of Electors; When Necessary and When 4 Not Necessary.--The assent of the electors shall be required in 5 all school districts of the second, third and fourth class, to 6 issue bonds which will incur any new debt or increase the 7 indebtedness to an amount in excess of five (5) per centum of 8 the assessed valuation of property taxable for school purposes 9 therein. The assent of the electors shall be required in school 10 districts of the first class and first class A to issue bonds 11 which will incur any new debt or increase the indebtedness to an 12 amount in excess of five (5) per centum of the assessed 13 valuation of property taxable for school purposes therein. The 14 board of school directors of any school district of the first, 15 first class A, second, third, or fourth class shall have 16 authority, without the assent of the electors, to issue bonds 17 which will incur upon its own authority any amount of such 18 indebtedness not in excess of five (5) per centum of the last 19 assessed valuation of property taxable for school purposes 20 therein. 21 If the amount of bonds of any bond issue maturing in any 22 single year is in excess of five percent of the total amount of 23 such bond issue, the amount in excess of five percent of such 24 bond issue may be refunded by the board of school directors of 25 any school district, upon its own authority, without submitting 26 any such refunding bond issue to a vote of the electors. 27 Any school district which calls bonds for payment prior to 28 the date of maturity may issue bonds for the purpose of paying 29 any or all such bonds as may be called for payment. All bonds 30 issued for the purpose of refunding bonds shall be issued as 20020H2616B3805 - 5 -
1 hereinbefore provided for the issuing of such bonds.] 2 Section 5. Section 652 of the act, amended August 5, 1977 3 (P.L.178, No.46), is amended to read: 4 Section 652. Tax Levy; Purposes; Limitations.--In all school 5 districts of the first class the school taxes for the following 6 fiscal year shall be levied annually[, by the board of public 7 education thereof,] on or after the second Monday of November 8 and before the first Monday of December following. In all school 9 districts of the first class A the school taxes for the 10 following fiscal year shall be levied annually by the board of 11 public education on or after the first Monday of December and 12 before the end of the current fiscal year. [The board of public 13 education thereof shall annually levy a tax on each dollar of 14 the total assessments of all property assessed and certified for 15 taxation in said district, which tax shall be ascertained, 16 determined, and fixed by adding together the following: 17 (1) An amount which, with all moneys received from the 18 Commonwealth applicable thereto, shall be sufficient to pay the 19 minimum salaries and increments of the teaching and supervisory 20 staff thereof as fixed and provided by law and to pay the 21 contributions of said district to the teachers' retirement 22 system. For the purpose of computing the amount required to pay 23 the minimum salaries and increments fixed by law, but without 24 otherwise limiting the rights of the district to employ teachers 25 or other employes, (i) The number of teachers on the salary 26 schedule of the elementary schools shall not exceed one for 27 every thirty pupils in average daily membership in such schools, 28 (ii) The number of teachers on the salary schedule of the junior 29 high schools shall not exceed one for every twenty-two pupils in 30 average daily membership in such schools, (iii) The number of 20020H2616B3805 - 6 -
1 teachers on the salary schedule of the senior high schools shall 2 not exceed one for every twenty-two pupils in average daily 3 membership in such schools, (iv) The number of teachers with 4 salaries and increments fixed by law, on any salary schedule now 5 established or hereafter established, and not specially 6 mentioned in this act, shall not exceed one for every twenty-two 7 pupils in average daily membership, (v) The number of principals 8 in the elementary schools, and the principals in charge of all 9 other character of schools now established or hereafter 10 established, and not specially mentioned in this act, shall not 11 exceed one for every six hundred pupils in average daily 12 membership in such schools, (vi) The number of principals in the 13 junior and senior high schools shall not exceed one for every 14 twelve hundred pupils in average daily membership in such 15 schools, (vii) The number of supervisors in all schools shall 16 not exceed one for every fifteen hundred pupils in average daily 17 membership, (viii) The number of attendance officers and home 18 and school visitors shall not exceed one for every two thousand 19 pupils in average daily membership in all elementary and 20 secondary schools, (ix) In all adult and extension school 21 classes, the number of teachers shall not exceed one for every 22 twenty pupils in average daily membership in such schools. 23 The salary and increments, fixed by law, of members of the 24 teaching and supervisory staff whose number is not in some 25 manner limited hereby, shall not be included within the purposes 26 authorized by clause (1) of this section, but shall be construed 27 and regarded as constituting expenses within the meaning of 28 clause (3) of this section. 29 Average daily membership, as used herein, shall be based upon 30 membership during the preceding school term. 20020H2616B3805 - 7 -
1 (2) An amount sufficient to pay the interest on, and retire 2 at maturity the principal of, the indebtedness of said district 3 incurred as authorized by law. 4 (2.1) An amount sufficient to pay any rentals agreed to be 5 paid to the State Public School Building Authority or any other 6 authority created by the General Assembly, having State-wide 7 jurisdiction. 8 (3) An amount sufficient to pay all other expenses and 9 requirements of said school district, which amount shall be 10 equivalent to not less than three, nor more than five, mills on 11 the dollar of the total assessment of all property assessed and 12 certified for taxation therein. 13 The total annual school tax levy for all purposes in any 14 school district of the first class shall not be more than eleven 15 and three-quarter (11 3/4) mills on the dollar of the total 16 assessment of all property assessed and certified for taxation 17 in the territory constituting the district.] 18 Section 6. Section 652.1 of the act, amended June 25, 1982 19 (P.L.643, No.182), is amended to read: 20 Section 652.1. Taxing Power of Elected Board of Public 21 Education of School Districts of the First Class A.--(a) The 22 elected Board of Public Education in any school district of the 23 first class A shall have authority to impose real property 24 taxes, realty transfer taxes and personal income taxes for the 25 purposes of such school district as provided in section 672. [as 26 follows: 27 (1) Without ordinance and under the following statutes their 28 reenactments and amendments, at the rates fixed therein, namely: 29 (i) Act of June 20, 1947 (P.L.745, No.320), (Mercantile 30 License Tax), 20020H2616B3805 - 8 -
1 (ii) Act of June 20, 1947 (P.L.733, No.319), (Personal 2 Property Tax), 3 (iii) Act of August 24, 1961 (P.L.1135, No.508), (Income 4 Tax), 5 (iv) Real property tax acts: 6 Act of March 10, 1949 (P.L.30, No.14), 11.75 mills, 7 Act of November 30, 1955 (P.L.793, No.226), 1.5 mills, 8 Act of July 12, 1957 (P.L.837, No.386), .75 mills, 9 Act of November 19, 1959 (P.L.1552, No.557), 2 mills, 10 Act of October 21, 1965 (P.L.650, No.321), 1 mill, 11 Act of November 26, 1968 (P.L.1098, No.340), 6 mills, 12 Act of December 15, 1975 (P.L.483, No.143), 6 mills. 13 (2) In addition to the taxing authority set forth in the act 14 of August 24, 1961 (P.L.1135, No.508), (Income Tax), by 15 ordinance, a tax of one per centum (1%) on wages, salaries, 16 commissions and other earned income of individuals: Provided, 17 however, That the total tax levied under the act of August 24, 18 1961 (P.L.1135, No.508) and the total tax levied under this 19 subsection on wages, salaries, commissions and other earned 20 income of individuals may equal but shall not exceed two per 21 centum (2%). 22 (3) In addition to the taxing authority set forth in the 23 real property tax acts referred to in section 652.1(a)(1)(iv), 24 by ordinance a tax, sufficient to meet the school district's 25 anticipated expenses on each dollar of the total assessment of 26 all property assessed and certified for taxation in the 27 territory constituting the district. 28 (4) In addition thereto, by ordinance on any persons, 29 transactions, occupations, privileges, subjects and real or 30 personal property as they shall determine not prohibited by 20020H2616B3805 - 9 -
1 section 2 of the act of December 31, 1965 (P.L.1257, No.511), 2 known as "The Local Tax Enabling Act" and not specifically 3 excluded under paragraph (5) hereof; even if the ordinance 4 imposing such tax or taxes is duplicative of the taxes 5 enumerated in section 652.1(a)(1); but no ordinance shall 6 authorize the imposition of a tax on the wages, salary or net 7 income of any person not a resident of such school district. 8 (5)] (a.1) No tax of any kind may be imposed on admission to 9 places of amusement, athletic events, motion picture theaters, 10 occupations or occupational privilege, gross receipts of 11 businesses, including institutions and nonprofit services, and 12 parking, but this [paragraph] subsection shall not apply to 13 taxes imposed on the whole volume of business transacted by 14 retail and wholesale dealers in goods, wares and merchandise. 15 (b) Any ordinance authorizing a tax, other than under a 16 statute and at the rate fixed thereby, shall fix the rate 17 thereof and provide for the levy, assessment and collection of 18 the same. 19 Section 7. Section 672 of the act, amended or added June 16, 20 1972 (P.L.449, No.138), December 10, 1974 (P.L.914, No.302), 21 February 4, 1982 (P.L.1, No.1) and June 7, 1993 (P.L.49, No.16), 22 is amended to read: 23 Section 672. Tax Levy; Limitations.--(a) In all school 24 districts of the second, third, and fourth class, all school 25 taxes shall be levied and assessed by the board of school 26 directors therein, during the month of February or March or 27 April or May or June each year, for the ensuing fiscal year, 28 except in districts of the second class where the fiscal year 29 begins on the first day of January, in which the school taxes 30 shall be levied and assessed during the month of October or 20020H2616B3805 - 10 -
1 November of each year. [In such school districts the tax rate 2 shall not exceed twenty-five mills on the dollar, on the total 3 amount of the assessed valuation of all property taxable for 4 school purposes therein. Each school district of the second, 5 third or fourth class may also collect a per capita tax on each 6 resident or inhabitant of such district over eighteen years of 7 age, as herein provided.] 8 (b) Boards of school directors of districts of the second, 9 third, and fourth classes are hereby authorized to levy 10 annually[, a tax on each dollar of the total assessment of all 11 property assessed and certified for taxation therein, (1)]: 12 (1) A personal income tax under Article VI-A to pay [up to 13 and including the salaries and increments of the teaching and 14 supervisory staff, (2) to pay rentals due any municipality 15 authority or nonprofit corporation or due the State Public 16 School Building Authority,] only the instructional costs of the 17 school district. For purposes of this section, the phrase 18 "instructional costs" means all costs incurred and related to 19 those activities dealing directly with the interaction between 20 teachers and students which can be directly attributed to a 21 program of instruction. All costs that are not "instructional 22 costs" shall be classified as other costs of the school 23 district. 24 (2) A real property tax on each dollar of the total 25 assessment of all real property assessed and certified for 26 taxation within the school district and a realty transfer tax to 27 pay for all other costs of the school district. 28 (3) [to] To pay interest and principal on any indebtedness 29 incurred pursuant to the act of July 12, 1972 (P.L.781, No.185), 30 known as the "Local Government Unit Debt Act," or any prior or 20020H2616B3805 - 11 -
1 subsequent act governing the incurrence of indebtedness of the 2 school district, which tax shall be unlimited[, and]. 3 (4) [to] To pay for the amortization of a bond issue which 4 provided a school building prior to the first Monday of July, 5 1959. 6 (c) The personal income tax levied to pay [salaries and 7 increments of the teaching and supervisory staff] instructional 8 costs shall not be invalidated by reason of the fact that in 9 determining the amount to be raised by such tax [for the payment 10 of salaries and increments] no deduction was made for 11 appropriations or reimbursements paid or payable by the 12 Commonwealth to the School District. [which are applicable 13 directly or indirectly to the salaries and increments. None of 14 said taxes shall be invalidated or affected by reason of the 15 fact that it may increase the total annual school tax levy of 16 any school district beyond the millage fixed or limited by this 17 section. 18 (d) The boards of school directors of all independent school 19 districts in which the board members are elected or appointed by 20 court may, annually, levy a tax as herein authorized, at the 21 same time and in the same manner as other school districts of 22 the same class to which such independent district belongs, in an 23 amount which shall be sufficient with all other taxes imposed by 24 such district to pay the expenses of such district as set forth 25 in subsection (b) of this section and to pay all other expenses 26 and requirements of such district: Provided, That such tax shall 27 not be more than seventy-five (75) mills on the dollar on the 28 total amount of the assessed valuation of all property taxable 29 for school purposes within such district. Each such district may 30 also collect, annually, a per capita tax in an amount of not 20020H2616B3805 - 12 -
1 less than one dollar ($1) and not more than ten dollars ($10) on 2 each resident or inhabitant of such district over eighteen (18) 3 years of age.] 4 (e) The board of school directors of any school district of 5 the third class with a coterminous boundary with a third class 6 city may in any year levy separate and different rates of real 7 property taxation for school purposes on all real estate 8 classified as land, exclusive of the buildings thereon, and on 9 all real estate classified as buildings on land. When real 10 [estate] property taxes are so levied, (1) the rates shall be 11 determined annually by a vote of the board of school directors 12 of a school district of the third class based upon passage of 13 the school district's annual budget, (2) the rates may be levied 14 by a school district of the third class: Provided, That (i) the 15 revenue obtained in the first year of the levy is not in excess 16 of one hundred fifteen (115) per centum of the aggregate revenue 17 which the school district collected from a levy on real estate 18 in the prior year, and (ii) in the second and subsequent years, 19 the school district levy on real estate shall not be in excess 20 of the aggregate revenue which a school district is empowered to 21 collect under existing statute, and (3) the rates levied by a 22 school district of the third class shall be uniform as to all 23 real estate within the classification. 24 (f) After reduction of the rate of real property tax imposed 25 by a school district to account for the increase in tax revenue 26 due to the imposition of a personal income tax under Article VI- 27 A, the board of school directors of a school district may 28 increase the rate of the real property tax as long as that rate 29 does not cause local tax revenue, excluding real property taxes 30 to be levied on newly constructed buildings or structures or on 20020H2616B3805 - 13 -
1 increased valuations based on new improvements made to existing 2 houses, to increase by more than the percentage increase in the 3 Statewide average weekly wage in the preceding year. Prior to 4 any increase under this subsection, the board of school 5 directors must certify to the court of common pleas in the 6 judicial district in which the school district is located the 7 estimates of total local tax revenues used in the calculation 8 under this subsection. The court may, on its own motion or on 9 petition of a person having standing under subsection (i), 10 revise the estimates certified by the board of school directors 11 and reduce the allowable increase in the rate of the real 12 property tax under this subsection. 13 (g) The provisions of subsection (c) shall not apply to 14 increases in the rate of tax on real property: 15 (1) To respond to or recover from an emergency or disaster 16 declared pursuant to 35 Pa.C.S. § 7301 (relating to general 17 authority of Governor) or 75 Pa.C.S. § 6108 (relating to power 18 of Governor during emergency), only for the duration of the 19 emergency or disaster and for the costs of the recovery from the 20 emergency or disaster. 21 (2) To implement a court order or an administrative order 22 from a Federal or State agency that requires the expenditure of 23 funds that exceed current available revenues. The rate increase 24 shall be rescinded following fulfillment of the court order or 25 administrative order. 26 (3) To pay interest and principal on any indebtedness 27 incurred under 53 Pa.C.S. Pt. VII Subpt. B (relating to 28 indebtedness and borrowing). However, in no case may a school 29 district incur additional debt under this paragraph, except for 30 the refinancing of existing debt, including the payment of costs 20020H2616B3805 - 14 -
1 and expenses related to such refinancing and the establishment 2 or funding of appropriate debt service reserves. The increase 3 shall be rescinded following the final payment of interest and 4 principal. 5 (4) To respond to conditions that pose an immediate threat 6 of serious physical harm or injury to the students, staff or 7 residents of the school district until the circumstances causing 8 the threat have been fully resolved. 9 (5) Special purpose tax levies approved by the electorate. 10 (6) To maintain per-student local tax revenue in the school 11 district at an amount not exceeding the amount of per-student 12 local tax revenue at the level of the preceding year, adjusted 13 for the percentage increase in the Statewide average weekly 14 wage. This paragraph shall apply only if the percentage growth 15 in student enrollment in the school district between the current 16 fiscal year and the third fiscal year immediately preceding the 17 current fiscal year exceeds 10%. For the purposes of this 18 paragraph, student enrollment shall be measured by average daily 19 membership as defined in this act. For the purposes of this 20 paragraph, per-student local tax revenue shall be determined by 21 dividing local tax revenue by average daily membership. 22 (h) A person shall have standing as a party to a proceeding 23 under this subsection as long as the person resides within or 24 pays real property taxes to the taxing jurisdiction of the 25 school district instituting the action. 26 Section 8. Section 672.2 of the act, added November 20, 1979 27 (P.L.465, No.97), is amended to read: 28 [Section 672.2. School Districts Lying in More Than One 29 County; Tax Levy on Occupations.--(a) Any school district which 30 lies in more than one (1) county and which levies an occupation 20020H2616B3805 - 15 -
1 tax, shall levy such tax uniformly upon each occupational 2 category existing in all counties in which the district lies, at 3 the lowest assessed valuation for each equivalent occupational 4 category as certified to the school district by the counties in 5 which the district lies. 6 (b) This section shall not apply to any school district 7 which levies an occupational assessment tax on the effective 8 date hereof unless the school district by resolution elected to 9 be subject thereto.] 10 Section 9. Section 679 of the act, amended November 26, 1982 11 (P.L.760, No.215), is amended to read: 12 [Section 679. Per Capita Taxes.--Each resident or 13 inhabitant, over eighteen years of age, in every school district 14 of the second, third, and fourth class, which shall levy such 15 tax, shall annually pay, for the use of the school district in 16 which he or she is a resident or inhabitant, a per capita tax of 17 not less than one dollar nor more than five dollars, as may be 18 assessed by the local school district. The tax collector shall 19 not proceed against a spouse or his employer until he has 20 pursued remedies against the delinquent taxpayer and the 21 taxpayer's employer under this section. 22 Each school district may exempt any person whose total income 23 from all sources is less than five thousand dollars per annum 24 from its per capita tax or any portion thereof. The school 25 district may adopt and employ regulations for the processing of 26 claims for the exemption.] 27 Section 10. Section 680 of the act, amended June 16, 1972 28 (P.L.449, No.138), is amended to read: 29 [Section 680. List of Residents for Per Capita Tax 30 Purposes.--(a) In order that the board of school directors of 20020H2616B3805 - 16 -
1 each school district of the second, third, or fourth class may 2 assess, levy, and collect a per capita tax of not less than one 3 dollar nor more than five dollars on each resident or inhabitant 4 over eighteen years of age in the district, it shall be the duty 5 of the proper assessors in each such school district to prepare 6 a list of residents or inhabitants in such school district over 7 eighteen years of age, and return the same with the other 8 taxable property in the district, as provided by law. In each 9 school district all such lists of residents or inhabitants shall 10 be included and certified in the list of taxable property to be 11 certified to the board of school directors in each such school 12 district, as herein provided. Assessors whose assessment 13 district includes the whole or parts of more than one school 14 district shall return separate lists of residents and 15 inhabitants of each such school district. 16 (b) Every resident or inhabitant in any school district, 17 upon attaining eighteen years of age, and every person eighteen 18 years of age or over becoming a resident or inhabitant in any 19 school district, shall, within twelve months after the happening 20 thereof, notify the proper assessors of his becoming of age or 21 becoming a resident or inhabitant. Any person failing, within 22 said period, to notify the assessors of the school district 23 within which he resides, shall, in addition to the tax levied by 24 such school district, be liable to such school district in a 25 penal sum equal to such tax. 26 The board of school directors shall, at the same time as they 27 give public notice of a proposed budget, include a notice of the 28 requirements of this subsection, together with the name and 29 address of the assessor to be notified.] 30 Section 11. Section 680.1 of the act, added October 20, 1988 20020H2616B3805 - 17 -
1 (P.L.827, No.110), is amended to read: 2 [Section 680.1. Temporary Continuance of Tax on Landfill or 3 Resource Recovery Facilities.--Notwithstanding the provisions of 4 the act of July 28, 1988 (P.L.556, No.101), known as the 5 "Municipal Waste Planning, Recycling and Waste Reduction Act," 6 any school district that initially imposed a tax on a municipal 7 waste landfill or resource recovery facility on or before June 8 30, 1988, but after December 31, 1987, may continue to collect 9 such tax at the rate in effect on July 1, 1988, during the 1988- 10 1989 school year only.] 11 Section 12. The act is amended by adding articles to read: 12 ARTICLE VI-A 13 PERSONAL INCOME TAX 14 Section 601-A. Short title of article. 15 This article shall be known and may be cited as the School 16 District Personal Income Tax Authorization Act. 17 Section 602-A. Definitions. 18 The following words and phrases when used in this article 19 shall have the meanings given to them in this section unless the 20 context clearly indicates otherwise: 21 "Association." A partnership, limited partnership or other 22 unincorporated group of two or more persons. 23 "Business." An enterprise, activity, profession or other 24 undertaking of an unincorporated nature conducted for profit or 25 ordinarily conducted for profit whether by a person, association 26 or other entity. 27 "Compensation." The classes of income included within the 28 definition of "compensation" set forth in section 301 of the act 29 of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 30 1971, and upon which are imposed a personal income tax by the 20020H2616B3805 - 18 -
1 Commonwealth. 2 "Corporation." A corporation or joint stock association 3 organized under the laws of the United States or the 4 Commonwealth of Pennsylvania or any other state, territory, 5 foreign country or dependency. 6 "Current year." The calendar year or fiscal year for which 7 the tax is levied. 8 "Department." The Department of Community and Economic 9 Development of the Commonwealth. 10 "Domicile." The place where one lives and has his permanent 11 home and to which he has the intention of returning whenever he 12 is absent. Actual residence is not necessarily domicile because 13 domicile is the fixed place of abode which, in the intention of 14 the taxpayer, is permanent rather than transitory. Domicile is 15 the voluntarily fixed place of habitation of a person, not for a 16 mere special or limited purpose, but with the present intention 17 of making a permanent home, until some event occurs to induce 18 him to adopt some other permanent home. In the case of 19 businesses or associations, the domicile is any place where the 20 business or association is conducting or engaging in a business 21 for profit within a school district. 22 "Employer." A person, association, corporation, governmental 23 unit or other entity employing one or more persons, other than 24 domestic servants for compensation. 25 "Governing body." The board of school directors of a school 26 district. 27 "Net profits." The class of income described as "net 28 profits" in section 303 of the act of March 4, 1971 (P.L.6, 29 No.2), known as the Tax Reform Code of 1971, and upon which is 30 imposed a personal income tax by the Commonwealth. 20020H2616B3805 - 19 -
1 "Nonresident." A person, association or other entity 2 domiciled outside the school district. 3 "Person" or "individual." A natural person. 4 "Personal income." The classes of income enumerated in 5 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as 6 the Tax Reform Code of 1971, and upon which is imposed a 7 personal income tax by the Commonwealth. 8 "Political subdivision." A school district. 9 "Preceding year." The calendar year or fiscal year before 10 the current year. 11 "Register." The register provided for in this article. 12 "Resident." A person, association, corporation or other 13 entity: 14 (1) living in or maintaining a permanent or fixed place 15 of abode in a school district; or 16 (2) conducting or engaging in a business for profit 17 within a school district. 18 "School district." A school district of the first class, 19 first class A, second class, third class or fourth class, 20 including any independent school district. 21 "Succeeding year." The calendar year or fiscal year 22 following the current year. 23 "Tax officer." The person, public employee or private agency 24 designated by a governing body to collect and administer a tax 25 imposed under this article, and the treasurer of a school 26 district of the first class A. 27 "Taxpayer." A person, association or other entity required 28 under this article to file a tax return or to pay a tax. 29 Section 603-A. Preemption. 30 No act of the General Assembly heretofore or hereinafter 20020H2616B3805 - 20 -
1 enacted shall vacate or preempt any resolution passed or adopted 2 under the authority of this article, or any other act, providing 3 authority for the imposition of a tax by a school district, 4 unless the act of the General Assembly expressly vacates or 5 preempts the authority to pass or adopt such resolutions. 6 Section 604-A. Personal income tax authorization. 7 (a) School districts.--Except as provided in subsection (b), 8 each school district shall have the power and may, by 9 resolution, levy, assess and collect or provide for the levying, 10 assessment and collection of a tax for general revenue purposes 11 at a rate as it shall determine on personal income of the 12 residents of the school district and such other taxes that are 13 specifically permitted under this act. A school district may 14 only increase the rate of personal income tax when that school 15 district experiences an annual increase in weighted average 16 daily membership that equals or exceeds 1%. Any increase shall 17 be limited to a rate that will maintain gross personal income 18 tax revenue per student ratio which existed in the school year 19 immediately preceding the year of the tax increase. 20 (b) Exclusions.--No school district shall have any power or 21 authority to levy, assess or collect: 22 (1) A tax based upon a flat rate or on a millage rate on 23 an assessed valuation of a particular trade, occupation or 24 profession, commonly known as an occupation tax. 25 (2) A tax at a set or flat rate upon persons employed 26 within the taxing district, commonly known as an occupational 27 privilege tax. 28 (3) A per capita, poll, residence or similar head tax. 29 (4) A tax on personal property. 30 (5) The earned income tax previously levied under the 20020H2616B3805 - 21 -
1 act of December 31, 1965 (P.L.1257, No.511), known as The 2 Local Tax Enabling Act. 3 Section 605-A. Continuity of tax. 4 Every tax levied under the provisions of this article shall 5 continue in force on a calendar or fiscal year basis, as the 6 case may be, without annual reenactment unless the rate of the 7 tax is subsequently changed. 8 Section 606-A. Exemption of low-income persons. 9 (a) Low-income exemption.--Each school district shall have 10 the power and shall exempt any person who qualifies under the 11 provisions of section 304 of the act of March 4, 1971 (P.L.6, 12 No.2) known as the Tax Reform Code of 1971, from payment of any 13 or all of the tax imposed under section 604. 14 (b) Special hardship exemption.--Each school district shall 15 have the power and may exempt persons who qualify as claimants 16 under the provisions of the act of March 11, 1971 (P.L.104, 17 No.3), known as the Senior Citizens Rebate and Assistance Act, 18 and who have household income as defined in the Senior Citizens 19 Rebate and Assistance Act which is equal to or less than the 20 maximum income requirement necessary to qualify for a property 21 tax rebate or rent rebate in lieu of property taxes or rent due 22 pursuant to the Senior Citizens Rebate and Assistance Act, from 23 the payment of any tax on personal income. 24 (c) Regulations.--Each school district shall adopt 25 regulations for the processing of claims for these exemptions. 26 Section 607-A. Collection of personal income tax by 27 Commonwealth. 28 The Department of Revenue shall be responsible for the 29 collection of all personal income tax imposed by a school 30 district in conjunction with the collection of any tax on 20020H2616B3805 - 22 -
1 personal income imposed by the Commonwealth under the authority 2 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax 3 Reform Code of 1971. 4 Section 608-A. Limitation on assessment. 5 No assessment may be made of any personal income tax imposed 6 under this article more than five years after the date on which 7 such tax should have been paid except where a fraudulent return 8 or no return has been filed. 9 Section 609-A. Distress and sale of property of taxpayer. 10 (a) General rule.--In case of the neglect or refusal of any 11 person, association or corporation to make payment of the amount 12 of any personal income tax due after two months from the date of 13 the tax notice, the Department of Revenue shall have the power 14 to levy the amount of such tax, penalty, interest and costs 15 thereon, not exceeding costs and charges allowed constables for 16 similar services by distress and sale of the goods and chattels 17 of such delinquent, wherever located, upon giving at least ten 18 days' public notice of such sale by one advertisement in a 19 newspaper of general circulation published in the county. 20 (b) Effect on return.--No failure to demand or collect any 21 taxes by distress and sale of goods and chattels shall 22 invalidate any return made, or lien filed for nonpayment of 23 taxes, or any tax sale for the collection of taxes. 24 Section 610-A. Collection of delinquent taxes from employers. 25 (a) General rule.--The Department of Revenue shall demand, 26 receive and collect from all employers employing persons owing 27 delinquent personal income taxes or having in possession unpaid 28 compensation belonging to any person or persons owing delinquent 29 personal income taxes upon the presentation of a written notice 30 and demand certifying that the information contained therein is 20020H2616B3805 - 23 -
1 true and correct and containing the name of the taxpayer and the 2 amount of tax due. 3 (b) Response to notice.--Upon the presentation of such 4 written notice and demand, the employer shall deduct from the 5 compensation of such employees then owing, or thereafter due, a 6 sum sufficient to pay the amount of the delinquent personal 7 income taxes, interest, penalty and costs shown upon the written 8 notice or demand, and shall pay the same to the Department of 9 Revenue by which such delinquent tax was levied within 60 days 10 after such notice was given. 11 (c) Limitation on deduction.--No more than 10% of the 12 compensation of the delinquent taxpayer may be deducted at any 13 one time for delinquent personal income taxes, penalty, interest 14 and costs. 15 (d) Deduction for costs.--Such employer shall be entitled to 16 deduct from the moneys collected from each employee the costs 17 incurred from the extra bookkeeping necessary to record such 18 transactions, not exceeding 2% of the amount collected and paid 19 over to the Department of Revenue. 20 (e) Forfeiture.--Upon the failure of any such employer to 21 deduct the amount of such taxes or to pay the same over to the 22 Department of Revenue, less the amount deducted under subsection 23 (d), within the time hereby required, such employer shall 24 forfeit and pay the amount of such tax for each such taxpayer 25 whose taxes are not withheld and paid over, or that are withheld 26 and not paid over together with a penalty of 10%, to be 27 recovered by a civil action to be instituted by the Department 28 of Revenue, as debts of like amount are now by law recoverable, 29 except that such person shall not have the benefit of any 30 exemption law or stay of execution. 20020H2616B3805 - 24 -
1 (f) Collection rights preserved.--Nothing in this section 2 shall be deemed to affect or impair the right of any school 3 district or the Department of Revenue to pursue and collect 4 delinquent taxes validly imposed prior to the effective date of 5 this section. 6 Section 611-A. Collection of delinquent taxes from 7 Commonwealth. 8 (a) General rule.--Upon presentation of a written notice and 9 demand under oath to the State Treasurer or any other fiscal 10 officer of the Commonwealth, or its boards, authorities, 11 agencies or commissions, it shall be the duty of the treasurer 12 or officer to deduct from the compensation then owing a sum 13 sufficient to pay the amount of the delinquent personal income 14 taxes, interest, penalty and costs shown on the written notice. 15 The same shall be paid to the Department of Revenue within 60 16 days after such notice shall have been given. 17 (b) Limitation on deduction.--No more than 10% of the 18 compensation of the delinquent taxpayer may be deducted at any 19 one time for delinquent personal income taxes, interest, penalty 20 and costs. 21 (c) Collection rights preserved.--Nothing in this section 22 shall be deemed to affect or impair the right of a school 23 district or the Department of Revenue to pursue and collect 24 delinquent taxes validly imposed prior to the effective date of 25 this section. 26 Section 612-A. Notice to taxpayer. 27 The Department of Revenue shall, at least 15 days prior to 28 the presentation of a written notice and demand under section 29 610-A or 611-A, notify the taxpayer owing the delinquent tax by 30 registered mail that a written notice and demand shall be 20020H2616B3805 - 25 -
1 presented to his employer unless such tax is paid. The return 2 receipt card for registered mail shall be marked delivered to 3 addressee only, and the cost of notification by registered mail 4 shall be included in the costs for collecting taxes. 5 Section 613-A. Collection of taxes by suit. 6 (a) General rule.--Each school district and the Department 7 of Revenue shall have power to collect unpaid taxes from 8 taxpayers and employers owing such taxes by a civil action or 9 other appropriate remedy. Upon judgment, execution may be issued 10 without any stay or benefit of any exemption law. The right to 11 collect unpaid taxes under the provisions of this section shall 12 not be affected by the fact that such taxes have been entered as 13 liens in the office of the prothonotary or the fact that the 14 property against which they were levied has been returned to the 15 county commissioners for taxes for prior years. 16 (b) Limitation of actions.--A suit brought to recover the 17 taxes under subsection (a) shall be instituted within three 18 years after the tax is due or within three years after a 19 declaration or return has been filed, whichever date is later, 20 except in the following cases: 21 (1) If no declaration or return was filed by any person 22 although a declaration or return was required to be filed 23 under provisions of the ordinance, there shall be no 24 limitation. 25 (2) If an examination of the declaration or return filed 26 by any person, or of other evidence relating to such 27 declaration or return in the possession of the Department of 28 Revenue, reveals a fraudulent evasion of taxes, there shall 29 be no limitation. 30 (3) If there is a substantial understatement of tax 20020H2616B3805 - 26 -
1 liability of 25% or more and no fraud, suit shall be 2 instituted within six years. 3 (4) If any person has deducted taxes under the 4 provisions of the resolution, and has failed to pay the 5 amounts so deducted to the Department of Revenue, or if any 6 person has willfully failed or omitted to make the deductions 7 required by this section, there shall be no limitation. 8 (c) Regulations.--The Department of Revenue, by regulation, 9 shall establish the procedures for collecting the personal 10 income tax and paying the full amount collected over to the 11 school district on a quarterly basis. 12 Section 13. The act of December 31, 1965 (P.L.1257, No.511), 13 known as The Local Tax Enabling Act, is repealed insofar as it 14 authorizes the levy, assessment and collection of any tax, other 15 than the tax imposed on the transfer of real property which is 16 hereby specifically saved from repeal. 17 Section 14. This act shall take effect as follows: 18 (1) For school districts where fiscal year begins on 19 January 1, this act shall take effect January 1, 2003. 20 (2) For school districts where fiscal year begins on 21 July 1, this act shall take effect July 1, 2003. D15L24RZ/20020H2616B3805 - 27 -