PRIOR PRINTER'S NO. 574 PRINTER'S NO. 992
No. 100 Session of 2003
INTRODUCED BY JUBELIRER, BRIGHTBILL, PICCOLA, RHOADES, DENT,
RAFFERTY, WENGER, TOMLINSON, ROBBINS, MADIGAN, M. WHITE,
MOWERY, CONTI, WAUGH, THOMPSON, PUNT, HELFRICK, ERICKSON,
WONDERLING AND ARMSTRONG, MARCH 24, 2003
SENATOR THOMPSON, APPROPRIATIONS, RE-REPORTED AS AMENDED,
JUNE 17, 2003
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," providing for the imposition and
6 collection of an earned income and net profits tax by school
7 districts after approval by the electors.
8 The General Assembly of the Commonwealth of Pennsylvania
9 hereby enacts as follows:
10 Section 1. The act of March 10, 1949 (P.L.30, No.14), known
11 as the Public School Code of 1949, is amended by adding an
12 article to read:
13 ARTICLE VI-A
14 TAXATION BY SCHOOL DISTRICTS
15 (a) General Provisions
16 Section 601-A. Short title of article.
17 This article shall be known and may be cited as the Taxpayer
18 Choice Act.
19 Section 602-A. Definitions.
1 The following words and phrases when used in this article
2 shall have the meanings given to them in this section unless the
3 context clearly indicates otherwise:
4 "Board of school directors." A board of school directors of
5 a school district of the second class, third class or fourth
6 class.
7 "Budgeted revenue." Local tax revenue. The term shall not
8 include revenue from any of the following:
9 (1) Delinquent taxes.
10 (2) Payments in lieu of taxes.
11 (3) The real estate transfer tax.
12 (4) The distribution of the public utility realty tax
13 imposed under Article XI-A of the act of March 4, 1971
14 (P.L.6, No.2), known as the Tax Reform Code of 1971.
15 (5) A mercantile or business privilege tax on gross
16 receipts.
17 (6) An amusement or admissions tax.
18 "Business." As defined in section 301 of the act of March 4,
19 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
20 "Current year." The fiscal year for which a tax is levied.
21 "Department." The Department of Community and Economic
22 Development of the Commonwealth.
23 "Domicile." As defined in section 13 of the act of December
24 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
25 Act.
26 "Dwelling." A structure used as a place of habitation by a
27 natural person.
28 "Earned income." All of the classes of income defined as
29 earned income in section 13 of the act of December 31, 1965
30 (P.L.1257, No.511), known as The Local Tax Enabling Act.
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1 "Election officials." The county board of elections of a
2 county.
3 "Employer." As defined in section 301 of the act of March 4,
4 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
5 "Farmstead." All buildings and structures on a farm not less
6 than ten contiguous acres in area, not otherwise exempt from
7 real property taxation or qualified for any other abatement or
8 exclusion pursuant to any other law, that are used primarily:
9 (1) to produce or store any farm product produced on the
10 farm for purposes of commercial agricultural production;
11 (2) to house or confine any animal raised or maintained
12 on the farm for the purpose of commercial agricultural
13 production;
14 (3) to store any agricultural supply to be used on the
15 farm in commercial agricultural production; or
16 (4) to store any machinery or equipment used on the farm
17 in commercial agricultural production.
18 This term shall only apply to farms used as the domicile of an
19 owner.
20 "Farmstead property." A property designated as a farmstead <--
21 by the county in which it is located.
22 "FARMSTEAD PROPERTY." A FARMSTEAD FOR WHICH AN APPLICATION <--
23 HAS BEEN SUBMITTED AND APPROVED UNDER 53 PA.C.S. § 8584
24 (RELATING TO ADMINISTRATION AND PROCEDURE).
25 "Homestead." A dwelling, including the parcel of land on
26 which the dwelling is located and the other improvements located
27 on the parcel for which any of the following apply:
28 (1) The dwelling is primarily used as the domicile of an
29 owner who is a natural person. The homestead for real
30 property qualifying under this paragraph shall not include
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1 the land on which the dwelling is located if the land is not
2 owned by a person who owns the dwelling.
3 (2) The dwelling is a unit in a condominium as the term
4 is defined in 68 Pa.C.S. § 3103 (relating to definitions) and
5 the unit is primarily used as the domicile of a natural
6 person who is an owner of the unit; or the dwelling is a unit
7 in a cooperative as the term is defined in 68 Pa.C.S. § 4103
8 (relating to definitions) and the unit is primarily used as
9 the domicile of a natural person who is an owner of the unit.
10 The homestead for a unit in a condominium or a cooperative
11 shall be limited to the assessed value of the unit, which
12 shall be determined in a manner consistent with the
13 assessment of real property taxes on those units under 68
14 Pa.C.S. (relating to real and personal property) or as
15 otherwise provided by law. If the unit is not separately
16 assessed for real property taxes, the homestead shall be a
17 pro rata share of the real property.
18 (3) The dwelling does not qualify under paragraphs (1)
19 and (2) and a portion of the dwelling is used as the domicile
20 of an owner who is a natural person. The homestead for real
21 property qualifying under this paragraph shall be the portion
22 of the real property that is equal to the portion of the
23 dwelling that is used as the domicile of an owner.
24 "Homestead property." A property designated as a homestead <--
25 by the county in which it is located.
26 "HOMESTEAD PROPERTY." A HOMESTEAD FOR WHICH AN APPLICATION <--
27 HAS BEEN SUBMITTED AND APPROVED UNDER 53 PA.C.S. § 8584
28 (RELATING TO ADMINISTRATION AND PROCEDURE).
29 "Local Tax Enabling Act." The act of December 31, 1965
30 (P.L.1257, No.511), known as The Local Tax Enabling Act.
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1 "Local tax revenue." The revenue from taxes actually levied
2 and assessed by a school district. The term does not include
3 interest or dividend earnings, Federal or State grants,
4 contracts or appropriations, income generated from operations or
5 any other source that is not derived from taxes levied and
6 assessed by a school district.
7 "Municipality." As defined in 1 Pa.C.S. § 1991 (relating to
8 definitions).
9 "Net profits." All of the classes of income defined as net
10 profits in section 13 of the act of December 31, 1965 (P.L.1257,
11 No.511), known as The Local Tax Enabling Act.
12 "Owner." Includes any of the following:
13 (1) A joint tenant or tenant in common.
14 (2) A person who is a purchaser of real property under a
15 contract.
16 (3) A partial owner.
17 (4) A person who owns real property as a result of being
18 a beneficiary of a will or trust or as a result of intestate
19 succession.
20 (5) A person who owns or purchases a dwelling on leased
21 land.
22 (6) A person who holds a life lease in real property
23 previously sold or transferred to another.
24 (7) A person in possession under a life estate.
25 (8) A grantor who has placed the real property in a
26 revocable trust.
27 (9) A member of a cooperative as defined in 68 Pa.C.S. §
28 4103 (relating to definitions).
29 (10) A unit owner of a condominium as defined in 68
30 Pa.C.S. § 3103 (relating to definitions).
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1 (11) A partner of a family farm partnership or a
2 shareholder of a family farm corporation as the terms are
3 defined in section 1101-C of the act of March 4, 1971 (P.L.6,
4 No.2), known as the Tax Reform Code of 1971.
5 "Political subdivision." As defined in 1 Pa.C.S. § 1991
6 (relating to definitions).
7 "Preceding year." The fiscal year before the current year.
8 "Primarily used." Usage of at least 51% of the square
9 footage of a dwelling.
10 "Resident individual." An individual who is domiciled in a
11 school district.
12 "School district." A school district of the second class,
13 third class or fourth class.
14 "Statewide average weekly wage." That amount determined
15 annually for each calendar year by the Department of Labor and
16 Industry under section 105.1 of the act of June 2, 1915
17 (P.L.736, No.338), known as the Workers' Compensation Act.
18 "Succeeding year." The fiscal year following the current
19 year.
20 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
21 known as the Tax Reform Code of 1971.
22 "Taxpayer." An individual required under this article to
23 file a tax return or to pay a tax.
24 Section 603-A. Scope and limitations.
25 (a) General rule.--Except as provided in subsection (b) and
26 section 605-A, it is the intent of this article to confer upon
27 each school district the power to levy, assess and collect an
28 earned income and net profits tax as set forth in subdivision
29 (c).
30 (b) Real estate transfer taxes.--This article shall not be
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1 construed to affect the power of a school district to levy,
2 assess and collect a real estate transfer tax.
3 (c) Occupation tax.--This article shall not be construed to
4 affect the power of a school district to do any of the
5 following:
6 (1) To elect to place a referendum question on the
7 ballot pursuant to the act of June 22, 2001 (P.L.374, No.24),
8 known as the Optional Occupation Tax Elimination Act. A
9 school district may place such referendum question on the
10 ballot at the same municipal election as a referendum
11 question placed on the ballot pursuant to subdivision (b).
12 (2) To eliminate its occupation tax pursuant to the
13 Optional Occupation Tax Elimination Act.
14 Section 604-A. Preemption.
15 No act of the General Assembly shall be construed to vacate
16 or preempt any resolution adopted under this article providing
17 for the imposition of a tax by a school district unless the act
18 of the General Assembly expressly vacates or preempts the
19 authority to adopt the resolution.
20 Section 605-A. Certain rates of taxation limited.
21 If a municipality and school district both impose an earned
22 income and net profits tax on the same individual under the
23 Local Tax Enabling Act and the municipality and school district
24 are limited to or have agreed upon a division of the tax rate in
25 accordance with section 8 of the Local Tax Enabling Act, then
26 the municipality that continues to levy the earned income and
27 net profits tax under the Local Tax Enabling Act shall remain
28 subject to that limitation or agreement in the event that the
29 school district opts to impose an earned income and net profits
30 tax under section 621-A.
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1 (b) Tax Authorization
2 Section 611-A. General tax authorization.
3 Subject to sections 613-A and 614-A, each school district may
4 by resolution levy, assess and collect or provide for the
5 levying, assessment and collection of an earned income and net
6 profits tax under subdivision (c).
7 Section 612-A. Continuity of tax.
8 An earned income and net profits tax levied under the
9 provisions of subdivision (c) shall continue in force on a
10 fiscal year basis without annual reenactment unless the rate of
11 tax is increased or the tax is subsequently repealed.
12 Section 613-A. Adoption of referendum.
13 (a) General rule.--
14 (1) In order to levy an earned income and net profits
15 tax under subdivision (c), a board of school directors shall
16 use the procedures set forth in subsection (b).
17 (2) A board of school directors after making an election
18 to levy an earned income and net profits tax under
19 subdivision (c) may, after a period of at least five full
20 fiscal years, elect under the provisions of subsection (c) to
21 end participation under this subdivision. If the electorate
22 approves a referendum to do so, the board of school directors
23 may not continue to levy an earned income and net profits tax
24 under subdivision (c).
25 (b) Public referendum requirements.--Except as set forth in
26 subsection (d) the following apply:
27 (1) Subject to the notice and hearing requirements of
28 section 626-A, a board of school directors may levy the
29 earned income and net profits tax under subdivision (c) only
30 by obtaining the approval of the electorate of the affected
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1 school district in a public referendum at only the municipal
2 election preceding the fiscal year when the earned income and
3 net profits tax will be initially imposed. At the municipal <--
4 election next occurring after the effective date of this
5 section, each board of school directors shall cause the
6 referendum question required by this section to be submitted
7 to the electors of the school district.
8 (2) If the board of school directors fails to adopt the
9 resolution required under section 626-A within 90 days
10 preceding the municipal election next occurring after the
11 effective date of this section, the county board of elections
12 shall prepare a referendum question for the school district
13 that provides for an earned income and net profits tax as
14 authorized under subdivision (c) at the maximum rate
15 permitted. At the municipal election next occurring after the
16 effective date of this section, the county board of elections
17 NET PROFITS TAX WILL BE INITIALLY IMPOSED. THE COUNTY BOARD <--
18 OF ELECTIONS shall cause the referendum question required by
19 this section to be submitted to the electors of the school
20 district.
21 (3) (2) The referendum question shall state the initial <--
22 rate of the proposed earned income and net profits tax to be
23 levied under subdivision (c), the reason for the tax and the
24 amount of proposed budgeted revenue growth, if any, in the
25 first fiscal year following adoption of the referendum,
26 expressed as a percent increase over the prior year's
27 budgeted revenue. Any increase in budgeted revenue between
28 the first fiscal year following adoption of the referendum
29 and the prior year's budgeted revenue shall not exceed 2%.
30 The question shall be in clear language that is readily
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1 understandable by a layperson. For the purpose of
2 illustration, a referendum question may be framed as follows:
3 Do you favor the imposition of an earned income and net
4 profits tax of X% to be used IN ORDER to reduce <--
5 residential real property taxes by X% by means of a <--
6 homestead or farmstead exclusion and provide for a one-
7 time revenue increase of X% over the preceding fiscal
8 year?
9 A nonlegal interpretative statement shall accompany the
10 referendum question in accordance with section 201.1 of the act
11 of June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
12 Election Code. A board of school directors of a school district
13 in which a referendum under this section has been approved shall
14 not be subject to the provisions of section 614-A for any future
15 increases in the earned income and net profits tax rates
16 authorized under subdivision (c). If the referendum question
17 fails to receive a majority vote pursuant to this section,
18 approval of the electorate under section 614-A shall not be
19 required to levy any tax or increase the rate of any tax which
20 the board of school directors of the affected school district is
21 authorized to levy and increase pursuant to any other act.
22 (C) PUBLIC REFERENDUM REQUIREMENTS FOR THE MUNICIPAL <--
23 ELECTION OF 2003.--IN ADDITION TO THE PROVISIONS OF SUBSECTION
24 (B), THE FOLLOWING SHALL APPLY FOR THE MUNICIPAL ELECTION OF
25 2003:
26 (1) THE REFERENDUM QUESTION REQUIRED BY THIS SECTION
27 SHALL BE SUBMITTED TO THE ELECTORS OF EACH SCHOOL DISTRICT
28 FOR THE MUNICIPAL ELECTION OF 2003.
29 (2) NO LATER THAN AUGUST 5, 2003, THE BOARD OF SCHOOL
30 DIRECTORS OF EACH SCHOOL DISTRICT SHALL ADOPT THE RESOLUTION
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1 REQUIRED UNDER SECTION 626-A AUTHORIZING THE REFERENDUM
2 QUESTION. THE RESOLUTION AND THE REFERENDUM QUESTION SHALL BE
3 BASED ON THE CALCULATION PROVIDED FOR UNDER SECTION 626-A(B).
4 (3) IF THE BOARD OF SCHOOL DIRECTORS FAILS TO ADOPT THE
5 RESOLUTION REQUIRED UNDER SECTION 626-A BY AUGUST 5, 2003,
6 THE COUNTY BOARD OF ELECTIONS SHALL PREPARE A REFERENDUM
7 QUESTION THAT AUTHORIZES AN EARNED INCOME AND NET PROFITS TAX
8 FOR THE SCHOOL DISTRICT AT THE MAXIMUM RATE PERMITTED, BASED
9 ON THE CALCULATION PROVIDED FOR UNDER SECTION 626-A(B).
10 (4) THE COUNTY BOARD OF ELECTIONS SHALL CAUSE THE
11 REFERENDUM QUESTION REQUIRED BY THIS SUBSECTION TO BE
12 SUBMITTED TO THE ELECTORS OF THE SCHOOL DISTRICT CONSISTENT
13 WITH THE PROVISIONS OF THIS SECTION.
14 (c) (D) Public referendum requirements to end participation <--
15 under this subdivision.--Subject to the notice and public
16 hearing requirements in section 4 of the Local Tax Enabling Act,
17 a board of school directors may elect to end participation under
18 this subdivision in accordance with subsection (a)(2) by
19 obtaining the approval of the electorate of the affected school
20 district in a public referendum at a municipal election.
21 (d) (E) Nonapplicability.--This section shall not apply to <--
22 any of the following:
23 (1) A school district in which a referendum question
24 under 53 Pa.C.S. § 8703 (relating to adoption of referendum)
25 has been approved and implemented.
26 (2) A school district of the first class.
27 (3) A school district of the first class A.
28 (4) A school district certified as distressed pursuant
29 to section 691 or an education empowerment district pursuant
30 to section 1705-B or 1707-B.
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1 Section 614-A. Public referendum requirements for increasing
2 certain taxes.
3 (a) Applicability.--This section shall apply to the board of
4 school directors of a school district in which a referendum
5 under section 613-A is approved.
6 (b) Prohibitions.--Except as set forth in subsection (f),
7 unless there is compliance with subsection (c), a board of
8 school directors may not do any of the following:
9 (1) Increase the rate of a tax levied for the support of
10 the public schools by more than the percentage increase in
11 the Statewide average weekly wage in the preceding year.
12 (2) Levy a tax for the support of the public schools
13 which was not levied in the fiscal year in which a referendum
14 under section 613-A was approved.
15 (3) RAISE THE RATE OF THE EARNED INCOME AND NET PROFITS <--
16 TAX, IF ALREADY IMPOSED UNDER THE AUTHORITY OF SECTION 13 OF
17 THE LOCAL TAX ENABLING ACT, EXCEPT AS OTHERWISE PROVIDED FOR
18 UNDER SECTION 621-A.
19 (c) Referendum.--
20 (1) In order to take an action under subsection (b)(1),
21 at the primary election immediately preceding the fiscal year
22 in which the proposed tax increase would take effect:
23 (i) a referendum stating the specific rate or rates
24 of the tax increase must be submitted to the electors
25 residing in the school district; and
26 (ii) a majority of the electors voting on the
27 referendum must approve the increase.
28 (2) In order to take an action under subsection (b)(2),
29 at the primary election immediately preceding the fiscal year
30 in which the proposed tax would take effect:
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1 (i) a referendum stating the specific tax and rate
2 to be levied must be submitted to the electors residing
3 in the school district; and
4 (ii) a majority of the electors voting on the
5 referendum must approve the tax.
6 (d) Failure to approve referendum.--
7 (1) If there is no approval under subsection (c)(1)(ii),
8 the board of school directors may approve an increase in the
9 tax rate of not more than the percentage increase in the
10 Statewide average weekly wage in the preceding year.
11 (2) If there is no approval under subsection (c)(2)(ii),
12 the board of school directors may not levy the tax.
13 (e) Exception to general rule.--The provisions of subsection
14 (b)(1) shall not apply to an increase in the rate of any tax
15 levied for the support of the public schools which is less than
16 or equal to the percentage increase in the Statewide average
17 weekly wage in the preceding year. Prior to any increase under
18 this subsection, the board of school directors shall certify to
19 the Department of Education the estimates of local tax rates
20 under this subsection. The Department of Education may, on its
21 own motion or on petition of a person having standing under
22 subsection (h) (J), revise the estimates certified by the board <--
23 of school directors and reduce the allowable increase in the
24 rate of any tax under this subsection.
25 (f) Referendum exceptions.--The provisions of subsection
26 (b)(1) shall not apply to an increase in the rate of any tax
27 levied for the support of the public schools if WHERE the <--
28 increase is necessary to respond to one or more of the following
29 conditions:
30 (1) To respond to or recover from an emergency or
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1 disaster declared pursuant to 35 Pa.C.S. § 7301 (relating to
2 general authority of Governor) or 75 Pa.C.S. § 6108 (relating
3 to power of Governor during emergency), only for the duration
4 of the emergency or disaster. and for the costs of the <--
5 recovery from the emergency or disaster.
6 (2) To implement a court order or an administrative
7 order from a Federal or State agency that requires the
8 expenditure of funds that exceed current available revenues,
9 provided that the rate increase is rescinded following
10 fulfillment of the court order or administrative order.
11 (3) (i) To pay interest and principal on any
12 indebtedness incurred under 53 Pa.C.S. Pt. VII Subpt. B
13 (relating to indebtedness and borrowing) prior to the
14 effective date of this section, provided that in no case
15 may the school district incur additional debt under this
16 paragraph, except for the refinancing of existing debt,
17 including the payment of costs and expenses related to
18 such refinancing and the establishment or funding of
19 appropriate debt service reserves and provided further
20 that the increase is rescinded following the final
21 payment of interest and principal.
22 (ii) The exception provided under this paragraph may
23 not be used in lieu of the referendum under subsection
24 (c)(2) to pay for costs which could not be financed by
25 the issuance of debt under 53 Pa.C.S. (relating to
26 municipalities generally).
27 (4) To respond to conditions that pose an immediate
28 threat of serious physical harm or injury to the students,
29 staff or residents of the school district, but only until the
30 conditions causing the threat have been fully resolved.
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1 (5) Special purpose tax levies approved by the
2 electorate.
3 (6) (i) To maintain per-student local tax revenue in
4 the school district at an amount not exceeding the amount
5 of per-student local tax revenue at the level of the
6 preceding year, adjusted for the percentage increase in
7 the Statewide average weekly wage.
8 (ii) This paragraph shall apply only if the
9 percentage growth in average daily membership in the
10 school district between the current fiscal year and the
11 third fiscal year immediately preceding the current
12 fiscal year exceeds 10%. For the purposes of this
13 paragraph, per-student local tax revenue shall be
14 determined by dividing local tax revenue by average daily
15 membership.
16 (G) REVENUE DERIVED FROM INCREASE.--ANY REVENUE DERIVED FROM <--
17 AN INCREASE IN THE RATE OF ANY TAX ALLOWED PURSUANT TO AN
18 EXCEPTION UNDER SUBSECTION (F)(3) OR (5) SHALL NOT EXCEED THE
19 ANTICIPATED DOLLAR VALUE OF THE EXPENDITURE FOR WHICH THE
20 EXCEPTION UNDER SUBSECTION (F) WAS SOUGHT.
21 (H) LIMITATION ON RATE.--THE INCREASE IN THE RATE OF ANY TAX
22 ALLOWED PURSUANT TO AN EXCEPTION UNDER SUBSECTION (F)(1), (2),
23 (4) OR (6) SHALL NOT EXCEED THE RATE INCREASE REQUIRED AS
24 DETERMINED BY A COURT OF COMMON PLEAS PURSUANT TO SUBSECTION
25 (I).
26 (g) (I) Court action.--Prior to the imposition of the tax <--
27 increase under subsection (f)(1), (2), (4) or (6), approval by
28 the court of common pleas in the judicial district in which the
29 administrative office of the school district is located must be
30 obtained. The board of school directors shall publish in a
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1 newspaper of general circulation a notice of its intent to file
2 an action under this subsection at least one week prior to the
3 filing of the petition. The board of school directors shall also
4 publish in a newspaper of general circulation notice, as soon as
5 possible following notification from the court that a hearing
6 has been scheduled, stating the date, time and place of the
7 hearing on the petition. The following shall apply to any
8 proceedings instituted under this subsection:
9 (1) The board of school directors must prove by clear
10 and convincing evidence the necessity for the tax increase.
11 (2) THE BOARD OF SCHOOL DIRECTORS MUST PROVE BY CLEAR <--
12 AND CONVINCING EVIDENCE THE ANTICIPATED DOLLAR VALUE OF THE
13 EXPENDITURE FOR WHICH AN EXCEPTION UNDER SUBSECTION (F) IS
14 SOUGHT.
15 (2) (3) The board of school directors must prove by <--
16 clear and convincing evidence that there are no assets or
17 other feasible alternatives available to the school district.
18 (3) The court shall determine the appropriate duration <--
19 of the increase and may retain continuing jurisdiction. The
20 court
21 (4) THE COURT SHALL DETERMINE THE DOLLAR VALUE OF THE <--
22 EXPENDITURE FOR WHICH AN EXCEPTION UNDER SUBSECTION (F) IS
23 SOUGHT, THE RATE INCREASE REQUIRED AND THE APPROPRIATE
24 DURATION OF THE INCREASE. THE COURT MAY RETAIN CONTINUING
25 JURISDICTION AND may, on its own motion or on petition of an
26 interested party, revoke approval for or order rescission of
27 a tax increase.
28 (h) (J) Standing.--A person shall have standing as a party <--
29 to a proceeding under this section as long as the person resides
30 within or pays real property taxes to the taxing jurisdiction of
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1 the board of school directors instituting the action.
2 Section 615-A. Property tax limits on reassessment.
3 After any county makes a countywide revision of assessment of
4 real property at values based upon an established predetermined
5 ratio as required by law or after any county changes its
6 established predetermined ratio, a board of school directors in
7 a school district in which a referendum under section 613-A has
8 been approved, which after the effective date of this section
9 for the first time levies its real estate taxes on that revised
10 assessment or valuation, shall for the first year reduce its tax
11 rate, if necessary, for the purpose of having the percentage
12 increase in taxes levied for that year against the real
13 properties contained in the duplicate for the preceding year be
14 less than or equal to the percentage increase in the Statewide
15 average weekly wage for the preceding year notwithstanding the
16 increased valuations of such properties under the revised
17 assessment. For the purpose of determining the total amount of
18 taxes to be levied for the first year, the amount to be levied
19 on newly constructed buildings or structures or on increased
20 valuations based on new improvements made to existing houses
21 need not be considered. The tax rate shall be fixed for that
22 year at a figure which will accomplish this purpose. The
23 provisions of section 614-A shall apply to increases in the tax
24 rate above the limits provided in this section.
25 (c) Earned Income and Net Profits Tax
26 Section 621-A. Authorization.
27 (A) EARNED INCOME AND NET PROFITS TAX AUTHORIZED.--A board <--
28 of school directors may levy, assess and collect a tax on the
29 earned income and net profits of resident individuals of the
30 school district at a rate determined by the board of school
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1 directors., which rate may not exceed the rate required to <--
2 provide an exclusion for farmstead property and an exclusion for
3 homestead property equal to the maximum exclusion under 53
4 Pa.C.S. § 8586 (relating to limitations), rounded to the nearest
5 tenth of a percent.
6 (B) TAX RATES DETERMINED.--THE EARNED INCOME AND NET PROFITS <--
7 TAX AUTHORIZED UNDER SUBSECTION (A) SHALL NOT BE LESS THAN THE
8 RATE REQUIRED TO PROVIDE AN EXCLUSION FOR FARMSTEAD PROPERTY AND
9 AN EXCLUSION FOR HOMESTEAD PROPERTY EQUAL TO 50% OF THE MAXIMUM
10 EXCLUSION UNDER 53 PA.C.S. § 8586 (RELATING TO LIMITATIONS) AND
11 SHALL NOT EXCEED THE RATE REQUIRED TO PROVIDE AN EXCLUSION FOR
12 FARMSTEAD PROPERTY AND AN EXCLUSION FOR HOMESTEAD PROPERTY EQUAL
13 TO THE MAXIMUM EXCLUSION UNDER 53 PA.C.S. § 8586. THE BOARD OF
14 SCHOOL DIRECTORS SHALL ROUND THE RATE OF THE EARNED INCOME AND
15 NET PROFITS TAX LEVIED PURSUANT TO THIS SECTION TO THE NEAREST
16 TENTH OF A PERCENT. The exclusion for farmstead property granted
17 under this section shall not exceed the amount granted for the
18 exclusion for homestead property.
19 Section 622-A. Collections.
20 A board of school directors imposing a tax under section 621-
21 A shall designate the tax officer who is appointed under section
22 10 of the Local Tax Enabling Act, or otherwise by law, as the
23 collector of the earned income and net profits tax. In the
24 performance of the tax collection duties under this subdivision,
25 the designated tax officer shall have all the same powers,
26 rights, responsibilities and duties for the collection of the
27 taxes which may be imposed under the Local Tax Enabling Act, 53
28 Pa.C.S. Ch. 84, Subch. C (relating to local taxpayers bill of
29 rights) or as otherwise provided by law.
30 Section 623-A. Credits.
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1 (a) General rule.--The provisions of section 14 of the Local
2 Tax Enabling Act shall be applied by a board of school directors
3 to determine any credits under the provisions of this
4 subdivision for a tax imposed under section 621-A.
5 (b) Tax credit.--Notwithstanding any other provisions of law
6 to the contrary, payment of a tax on salaries, wages,
7 commissions or other compensation to a school district by
8 residents of the school district shall be credited and paid to
9 the school district of residence and allowed as a deduction from
10 the liability of the taxpayer for any other tax on salaries,
11 wages, commissions or other compensation imposed by a city of
12 the first class under the authority of the act of August 5, 1932
13 (Sp.Sess., P.L.45, No.45), referred to as the Sterling Act.
14 Section 624-A. Earned income and net profits tax exemption.
15 A school district that imposes a tax under section 621-A may
16 exempt from the payment of that tax any person whose total
17 income from all sources is less than $7,500 $10,000. <--
18 Section 625-A. Rules and regulations.
19 A tax imposed under section 621-A shall be subject to all
20 regulations adopted under section 13 of the Local Tax Enabling
21 Act. A school district may adopt regulations for the processing
22 of claims for credits or exemptions under sections 623-A and
23 624-A.
24 Section 626-A. Procedure and administration.
25 (A) LEVY.--In order to levy a tax under section 621-A, the <--
26 board of school directors shall adopt a resolution which shall
27 refer to this subdivision prior to placing a referendum question
28 on the ballot under section 613-A. Prior to adopting a
29 resolution imposing a tax under section 621-A, the board of
30 school directors shall give public notice of its intent to adopt
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1 the resolution in the manner provided by section 4 of the Local
2 Tax Enabling Act and shall conduct at least one public hearing
3 regarding the proposed adoption of the resolution.
4 (B) CALCULATION.--FOR THE PURPOSES OF PROPOSING A RESOLUTION <--
5 AND REFERENDUM UNDER SECTION 613-A(C), THE BOARD OF SCHOOL
6 DIRECTORS SHALL CALCULATE:
7 (1) THE VALUE OF HOMESTEAD PROPERTY IN THE SCHOOL
8 DISTRICT BY DIVIDING THE TOTAL ASSESSED VALUE OF RESIDENTIAL
9 PROPERTY IN THE SCHOOL DISTRICT IN CALENDAR YEAR 2002, AS
10 COMPILED BY THE STATE TAX EQUALIZATION BOARD, BY THE TOTAL
11 NUMBER OF OWNER-OCCUPIED HOUSING UNITS IN THE SCHOOL DISTRICT
12 AS REPORTED BY THE UNITED STATES CENSUS BUREAU FOR THE 2000
13 CENSUS IN SUMMARY FILE 1.
14 (2) THE MAXIMUM HOMESTEAD EXCLUSION BY MULTIPLYING THE
15 QUOTIENT FROM PARAGRAPH (1) BY 0.50.
16 (3) THE PROPOSED HOMESTEAD EXCLUSION FOR THE SCHOOL
17 DISTRICT BY MULTIPLYING THE PRODUCT FROM PARAGRAPH (2) BY A
18 NUMBER AS DETERMINED BY THE BOARD OF SCHOOL DIRECTORS,
19 PROVIDING THAT SUCH NUMBER IS GREATER THAN OR EQUAL TO 0.50
20 AND LESS THAN OR EQUAL TO 1.0.
21 (4) THE PROPOSED REDUCTION IN REAL PROPERTY TAXES FOR
22 THE SCHOOL DISTRICT BY MULTIPLYING THE PRODUCT FROM PARAGRAPH
23 (3) BY THE REAL PROPERTY TAX MILLAGE RATE OF THE SCHOOL
24 DISTRICT IN EFFECT FOR THE 2001-2002 SCHOOL YEAR.
25 Section 627-A. Disposition of earned income and net profits tax
26 revenue.
27 The disposition of revenue from a tax or an increase in the
28 rate of a tax imposed by school districts under section 621-A
29 shall occur in the following manner:
30 (1) For the fiscal year of implementation of a newly
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1 imposed income tax, all earned income and net profits tax
2 revenue received by a school district shall be used to
3 provide for AN AMOUNT EQUAL TO THE EARNED INCOME AND NET <--
4 PROFITS TAX REVENUE OVER THE PRECEDING FISCAL YEAR; an
5 increase in budgeted revenues over the preceding fiscal year
6 in accordance with the amount specified in the referendum
7 question approved by the voters under section 613-A and to <--
8 reduce; AND A REDUCTION IN the school district real property <--
9 tax by means of an exclusion for farmstead property and
10 homestead property pursuant to section 621-A.
11 (2) For the fiscal year of implementation of an increase
12 in the rate of the existing tax imposed under section 621-A,
13 all revenue received by a school district directly
14 attributable to the increased rate shall be used to reduce
15 the school district real property tax by means of an
16 exclusion for farmstead property and homestead property
17 pursuant to section 621-A.
18 (d) Register. <--
19 (D) HOMESTEAD EXCLUSION <--
20 SECTION 691-A. CHANGES TO THE AMOUNT OF THE HOMESTEAD
21 EXCLUSION.
22 (A) INCREASES IN THE HOMESTEAD EXCLUSION.--A SCHOOL DISTRICT
23 MAY INCREASE THE AMOUNT OF THE EXCLUSION FOR HOMESTEAD PROPERTY
24 REQUIRED PURSUANT TO SECTION 627-A CONSISTENT WITH THE
25 PROHIBITIONS IN 53 PA.C.S. § 8586 (RELATING TO LIMITATIONS).
26 (B) DECREASES IN THE HOMESTEAD EXCLUSION.--A SCHOOL DISTRICT
27 MAY ONLY REDUCE THE EXCLUSION FOR HOMESTEAD PROPERTY BELOW THE
28 LEVEL AUTHORIZED PURSUANT TO THE REFERENDUM REQUIRED UNDER
29 SECTION 613-A, SUBSECTION (C) AND SECTION 692-A(D) WHEN THE
30 MEDIAN ASSESSED VALUE USED IN CALCULATING THE HOMESTEAD
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1 EXCLUSION DECREASES.
2 (C) REASSESSMENT.--AFTER A REVISION OF ASSESSMENTS BY MEANS
3 OF REVALUING ALL PROPERTIES, THE GOVERNING BODY PROVIDING AN
4 EXCLUSION FOR HOMESTEAD PROPERTY UNDER SECTION 613-A SHALL
5 ADJUST THE AMOUNT OF THE EXCLUSION PURSUANT TO 53 PA.C.S. §
6 8583(E) (RELATING TO EXCLUSION FOR HOMESTEAD PROPERTY).
7 SECTION 692-A. HOMESTEAD EXCLUSION PROCESS.
8 (A) LISTING REQUIRED.--NOT LATER THAN SEPTEMBER 1, 2003, AND
9 NOT LATER THAN SEPTEMBER 1 OF EACH YEAR THEREAFTER, THE BOARD OF
10 SCHOOL DIRECTORS OF EACH SCHOOL DISTRICT SHALL COMPILE A LISTING
11 OF ALL REAL PROPERTY WITHIN THE SCHOOL DISTRICT THAT IT BELIEVES
12 TO BE QUALIFIED AS A HOMESTEAD OR A FARMSTEAD AS THOSE TERMS ARE
13 DEFINED UNDER 53 PA.C.S § 8401 (RELATING TO DEFINITIONS) OR 8582
14 (RELATING TO DEFINITIONS). THE SCHOOL DISTRICT SHALL USE
15 INFORMATION OR STATEMENTS FROM THE OWNERS OR RESIDENTS OF THE
16 PROPERTY AND SHALL CONSULT WITH THE ASSESSOR OF THE COUNTY IN
17 COMPILING THE LIST. THIS LISTING MAY BE COMPILED AT THE SAME
18 TIME AS THE ENUMERATION OF SCHOOL CHILDREN IS PERFORMED PURSUANT
19 TO SECTION 1351.
20 (B) NOTIFICATION TO HOMESTEAD OWNERS.--IF THE ELECTORS OF A
21 SCHOOL DISTRICT APPROVE A REFERENDUM QUESTION PURSUANT TO
22 SECTION 613-A, THE BOARD OF SCHOOL DIRECTORS SHALL, BY FIRST
23 CLASS MAIL, NOTIFY THE OWNERS OF EACH HOMESTEAD AND EACH
24 FARMSTEAD ON THE LISTING REQUIRED BY THIS SECTION THAT
25 SUBMITTING AN APPLICATION IS REQUIRED UNDER 53 PA.C.S. CH. 85
26 SUBCH. F (RELATING TO HOMESTEAD PROPERTY EXCLUSION) PRIOR TO THE
27 PROPERTY BEING QUALIFIED FOR ANY HOMESTEAD OR FARMSTEAD
28 EXCLUSION AUTHORIZED BY LAW. THE NOTICE REQUIRED BY THIS SECTION
29 SHALL INCLUDE A COPY OF THE APPLICATION REQUIRED BY THE ASSESSOR
30 OF THE COUNTY WHERE THE PROPERTY IS LOCATED AND THE INSTRUCTIONS
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1 FOR COMPLETING AND RETURNING THE APPLICATION.
2 (C) CALCULATION OF THE HOMESTEAD AND FARMSTEAD EXCLUSION.--
3 THE LISTING OF HOMESTEADS AND FARMSTEADS REQUIRED TO BE COMPILED
4 UNDER THIS SECTION SHALL BE USED BY THE SCHOOL DISTRICT IN
5 ESTIMATING THE AMOUNT OF THE HOMESTEAD EXCLUSION AND FARMSTEAD
6 EXCLUSION FOR PURPOSES OF A REFERENDUM QUESTION UNDER SECTION
7 613-A(B).
8 (D) REVISIONS TO THE INITIAL CALCULATION OF HOMESTEAD AND
9 FARMSTEAD EXCLUSION FOR SCHOOL DISTRICTS.--IF THE ELECTORS OF A
10 SCHOOL DISTRICT APPROVE A REFERENDUM QUESTION PURSUANT TO 613-
11 A(C), THE BOARD OF SCHOOL DIRECTORS SHALL REVISE THE CALCULATION
12 UTILIZED UNDER SECTION 626-A(B) WITH INFORMATION DERIVED FROM
13 THE LISTING REQUIRED UNDER SUBSECTION (A) NO LATER THAN MARCH 1,
14 2004. SUCH REVISED CALCULATION SHALL BE USED TO PROVIDE
15 HOMESTEAD AND FARMSTEAD EXCLUSIONS. WHERE THE TAX IMPOSED UNDER
16 SECTION 621-A IS INSUFFICIENT TO PROVIDE THE HOMESTEAD AND
17 FARMSTEAD EXCLUSIONS AUTHORIZED THROUGH APPROVAL OF A REFERENDUM
18 QUESTION, THE EXCLUSIONS MAY BE REDUCED ACCORDINGLY.
19 (E) APPEALS.--REAL PROPERTY FOR WHICH AN APPLICATION UNDER
20 53 PA.C.S. § 8584 (RELATING TO ADMINISTRATION AND PROCEDURE) HAS
21 BEEN FILED BY MARCH 1, 2004, SHALL BE DEEMED TO BE A HOMESTEAD
22 PROPERTY OR FARMSTEAD PROPERTY, AS THE CASE MAY BE, FOR THE
23 PURPOSES OF IMPLEMENTING A HOMESTEAD OR FARMSTEAD EXCLUSION
24 UNDER 53 PA.C.S. § 8717 (RELATING TO DISPOSITION OF EARNED
25 INCOME AND NET PROFITS TAX REVENUE) IN THE SCHOOL DISTRICT
26 FISCAL YEAR BEGINNING JULY 1, 2004, UNLESS THE ASSESSOR DENIES
27 THE APPLICATION WITHIN THE TIME PROVIDED BY LAW AND THE DENIAL
28 IS UNAPPEALED OR UNAPPEALABLE. THE SCHOOL DISTRICT IS AUTHORIZED
29 TO COLLECT TAXES, INTEREST AND PENALTIES RELATING TO A HOMESTEAD
30 OR FARMSTEAD EXCLUSION THAT IS DENIED AFTER THE DENIAL IS
20030S0100B0992 - 23 -
1 UNAPPEALED OR UNAPPEALABLE.
2 (F) REPORTS.--IN ADDITION TO THE REPORT REQUIRED UNDER 53
3 PA.C.S. § 8584(I), THE ASSESSOR SHALL BE REQUIRED TO PROVIDE A
4 SUPPLEMENTAL REPORT CONTAINING THE INFORMATION REQUIRED UNDER 53
5 PA.C.S. § 8584(I) FOR APPLICATIONS FILED BY MARCH 1, 2004. THE
6 DATE OF THE SUPPLEMENTAL REPORT SHALL BE SET BY THE SCHOOL
7 DISTRICT, BUT SHALL NOT BE EARLIER THAN JUNE 1, 2004.
8 (G) APPLICABILITY.--SUBSECTIONS (B), (C), (D), (E), (F) AND
9 (G) SHALL APPLY ONLY TO SCHOOL DISTRICTS THAT APPROVE A
10 REFERENDUM UNDER SECTION 613-A AT THE 2003 MUNICIPAL ELECTION.
11 (E) REGISTER
12 Section 691-A 693-A. Register for taxes. <--
13 (a) General rule.--The department shall maintain an official
14 continuing register supplemented annually of all earned income
15 and net profits taxes levied under subdivision (c).
16 (b) Contents of register.--The register shall list:
17 (1) The school districts levying the tax.
18 (2) The rate of tax as stated in the resolution levying
19 the tax.
20 (3) The rate on taxpayers.
21 (4) The name and address of the official responsible for
22 administering the collection of the tax and from whom
23 information, forms and copies of regulations are available.
24 Section 692-A 694-A. Information for register. <--
25 Information for the register shall be furnished by the school
26 district to the department as prescribed by the department. The
27 information must be received by the department no later than
28 July 15 of each year to show new tax enactments, repeals and
29 changes. Failure to comply with the filing date may result in
30 the omission of the tax levy from the register for that year.
20030S0100B0992 - 24 -
1 Failure of the department to receive information of taxes
2 continued without change may be construed by the department to
3 mean that the information contained in the previous register
4 remains in force.
5 Section 693-A 695-A. Availability and effective period of <--
6 register.
7 The register, with such annual supplements as may be required
8 by new tax enactments, repeals or changes, shall be available
9 upon request no later than August 15 of each year. The effective
10 period for each register shall be from July 1 of the year in
11 which it is issued to June 30 of the following year.
12 Section 694-A 696-A. Effect of nonfiling. <--
13 Employers shall not be required by any ordinance to withhold
14 from the compensation of their employees any local earned income
15 and net profits tax imposed under subdivision (c) which is not
16 listed in the register or to make reports of compensation in
17 connection with taxes not so listed. If the register is not
18 available by August 15, the register of the previous year shall
19 continue to be effective for an additional period of not more
20 than one year.
21 Section 695-A 697-A. Effect of subdivision on liability of <--
22 taxpayer.
23 The provisions of this subdivision shall not be construed to
24 affect the liability of any taxpayer for taxes lawfully imposed
25 under subdivisions (b) and (c).
26 Section 3. This act shall take effect in 60 days. <--
27 SECTION 2. THIS ACT SHALL TAKE EFFECT IMMEDIATELY. <--
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