PRIOR PRINTER'S NOS. 574, 992, 1027 PRINTER'S NO. 1039
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
AS AMENDED ON THIRD CONSIDERATION, JUNE 25, 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," further providing for per capita
6 taxes; providing for the imposition and collection of an
7 earned income and net profits tax by school districts after
8 approval by the electors; providing for applicability of
9 referendum exceptions; and further providing for the mandate
10 waiver program.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 679 of the act of March 10, 1949 (P.L.30,
14 No.14), known as the Public School Code of 1949, amended
15 November 26, 1982 (P.L.760, No.215), is amended to read:
16 Section 679. Per Capita Taxes.--Each resident or inhabitant,
17 over eighteen years of age, in every school district of the
18 second, third, and fourth class, which shall levy such tax,
19 shall annually pay, for the use of the school district in which
20 he or she is a resident or inhabitant, a per capita tax of not
21 less than one dollar nor more than five dollars, as may be
1 assessed by the local school district. The tax collector shall
2 not proceed against a spouse or his employer until he has
3 pursued remedies against the delinquent taxpayer and the
4 taxpayer's employer under this section.
5 Each school district may exempt any person whose total income
6 from all sources is less than [five thousand dollars] ten
7 thousand dollars per annum from its per capita tax or any
8 portion thereof. The school district may adopt and employ
9 regulations for the processing of claims for the exemption.
10 Section 2. The act is amended by adding an article to read:
11 ARTICLE VI-A
12 TAXATION BY SCHOOL DISTRICTS
13 (a) General Provisions
14 Section 601-A. Short title of article.
15 This article shall be known and may be cited as the Taxpayer
16 Choice 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 "Board of school directors." A board of school directors of
22 a school district of the second class, third class or fourth
23 class.
24 "Budgeted revenue." Local tax revenue. The term shall not
25 include revenue from any of the following:
26 (1) Delinquent taxes.
27 (2) Payments in lieu of taxes.
28 (3) The real estate transfer tax.
29 (4) The distribution of the public utility realty tax
30 imposed under Article XI-A of the act of March 4, 1971
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1 (P.L.6, No.2), known as the Tax Reform Code of 1971.
2 (5) A mercantile or business privilege tax on gross
3 receipts.
4 (6) An amusement or admissions tax.
5 "Business." As defined in section 301 of the act of March 4,
6 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
7 "Consumer Price Index." The Consumer Price Index for All
8 Urban Consumers (CPI-U) for the Pennsylvania, New Jersey,
9 Delaware and Maryland area for the most recent 12-month period
10 for which figures have been officially reported by the United
11 States Department of Labor, Bureau of Labor Statistics,
12 immediately prior to the date of the primary election at which
13 the referendum will be submitted to the voters.
14 "Current year." The fiscal year for which a tax is levied.
15 "Department." The Department of Community and Economic
16 Development of the Commonwealth.
17 "Domicile." As defined in section 13 of the act of December
18 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
19 Act.
20 "Dwelling." A structure used as a place of habitation by a
21 natural person.
22 "Earned income." All of the classes of income defined as
23 earned income in section 13 of the act of December 31, 1965
24 (P.L.1257, No.511), known as The Local Tax Enabling Act.
25 "Election officials." The county board of elections of a
26 county.
27 "Employer." As defined in section 301 of the act of March 4,
28 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
29 "Farmstead." All buildings and structures on a farm not less
30 than ten contiguous acres in area, not otherwise exempt from
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1 real property taxation or qualified for any other abatement or
2 exclusion pursuant to any other law, that are used primarily:
3 (1) to produce or store any farm product produced on the
4 farm for purposes of commercial agricultural production;
5 (2) to house or confine any animal raised or maintained
6 on the farm for the purpose of commercial agricultural
7 production;
8 (3) to store any agricultural supply to be used on the
9 farm in commercial agricultural production; or
10 (4) to store any machinery or equipment used on the farm
11 in commercial agricultural production.
12 This term shall only apply to farms used as the domicile of an
13 owner.
14 "Farmstead property." A farmstead for which an application
15 has been submitted and approved under 53 Pa.C.S. § 8584
16 (relating to administration and procedure).
17 "Homestead." A dwelling, including the parcel of land on
18 which the dwelling is located and the other improvements located
19 on the parcel for which any of the following apply:
20 (1) The dwelling is primarily used as the domicile of an
21 owner who is a natural person. The homestead for real
22 property qualifying under this paragraph shall not include
23 the land on which the dwelling is located if the land is not
24 owned by a person who owns the dwelling.
25 (2) The dwelling is a unit in a condominium as the term
26 is defined in 68 Pa.C.S. § 3103 (relating to definitions) and
27 the unit is primarily used as the domicile of a natural
28 person who is an owner of the unit; or the dwelling is a unit
29 in a cooperative as the term is defined in 68 Pa.C.S. § 4103
30 (relating to definitions) and the unit is primarily used as
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1 the domicile of a natural person who is an owner of the unit.
2 The homestead for a unit in a condominium or a cooperative
3 shall be limited to the assessed value of the unit, which
4 shall be determined in a manner consistent with the
5 assessment of real property taxes on those units under 68
6 Pa.C.S. (relating to real and personal property) or as
7 otherwise provided by law. If the unit is not separately
8 assessed for real property taxes, the homestead shall be a
9 pro rata share of the real property.
10 (3) The dwelling does not qualify under paragraphs (1)
11 and (2) and a portion of the dwelling is used as the domicile
12 of an owner who is a natural person. The homestead for real
13 property qualifying under this paragraph shall be the portion
14 of the real property that is equal to the portion of the
15 dwelling that is used as the domicile of an owner.
16 "Homestead property." A homestead for which an application
17 has been submitted and approved under 53 Pa.C.S. § 8584
18 (relating to administration and procedure).
19 "Local Tax Enabling Act." The act of December 31, 1965
20 (P.L.1257, No.511), known as The Local Tax Enabling Act.
21 "Local tax revenue." The revenue from taxes actually levied
22 and assessed by a school district. The term does not include
23 interest or dividend earnings, Federal or State grants,
24 contracts or appropriations, income generated from operations or
25 any other source that is not derived from taxes levied and
26 assessed by a school district.
27 "Municipality." As defined in 1 Pa.C.S. § 1991 (relating to
28 definitions).
29 "Net profits." All of the classes of income defined as net
30 profits in section 13 of the act of December 31, 1965 (P.L.1257,
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1 No.511), known as The Local Tax Enabling Act.
2 "Owner." Includes any of the following:
3 (1) A joint tenant or tenant in common.
4 (2) A person who is a purchaser of real property under a
5 contract.
6 (3) A partial owner.
7 (4) A person who owns real property as a result of being
8 a beneficiary of a will or trust or as a result of intestate
9 succession.
10 (5) A person who owns or purchases a dwelling on leased
11 land.
12 (6) A person who holds a life lease in real property
13 previously sold or transferred to another.
14 (7) A person in possession under a life estate.
15 (8) A grantor who has placed the real property in a
16 revocable trust.
17 (9) A member of a cooperative as defined in 68 Pa.C.S. §
18 4103 (relating to definitions).
19 (10) A unit owner of a condominium as defined in 68
20 Pa.C.S. § 3103 (relating to definitions).
21 (11) A partner of a family farm partnership or a
22 shareholder of a family farm corporation as the terms are
23 defined in section 1101-C of the act of March 4, 1971 (P.L.6,
24 No.2), known as the Tax Reform Code of 1971.
25 "Political subdivision." As defined in 1 Pa.C.S. § 1991
26 (relating to definitions).
27 "Preceding year." The fiscal year before the current year.
28 "Primarily used." Usage of at least 51% of the square
29 footage of a dwelling.
30 "Resident individual." An individual who is domiciled in a
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1 school district.
2 "School district." A school district of the second class,
3 third class or fourth class.
4 "Statewide average weekly wage." That amount determined
5 annually for each calendar year by the Department of Labor and
6 Industry under section 105.1 of the act of June 2, 1915
7 (P.L.736, No.338), known as the Workers' Compensation Act.
8 "Succeeding year." The fiscal year following the current
9 year.
10 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
11 known as the Tax Reform Code of 1971.
12 "Taxpayer." An individual required under this article to
13 file a tax return or to pay a tax.
14 Section 603-A. Scope and limitations.
15 (a) General rule.--Except as provided in subsection (b) and
16 section 605-A, it is the intent of this article to confer upon
17 each school district the power to levy, assess and collect an
18 earned income and net profits tax as set forth in subdivision
19 (c).
20 (b) Real estate transfer taxes.--This article shall not be
21 construed to affect the power of a school district to levy,
22 assess and collect a real estate transfer tax.
23 (c) Occupation tax.--This article shall not be construed to
24 affect the power of a school district to do any of the
25 following:
26 (1) To elect to place a referendum question on the
27 ballot pursuant to the act of June 22, 2001 (P.L.374, No.24),
28 known as the Optional Occupation Tax Elimination Act. A
29 school district may place such referendum question on the
30 ballot at the same municipal election as a referendum
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1 question placed on the ballot pursuant to subdivision (b).
2 (2) To eliminate its occupation tax pursuant to the
3 Optional Occupation Tax Elimination Act.
4 Section 604-A. Preemption.
5 No act of the General Assembly shall be construed to vacate
6 or preempt any resolution adopted under this article providing
7 for the imposition of a tax by a school district unless the act
8 of the General Assembly expressly vacates or preempts the
9 authority to adopt the resolution.
10 Section 605-A. Certain rates of taxation limited.
11 If a municipality and school district both impose an earned
12 income and net profits tax on the same individual under the
13 Local Tax Enabling Act and the municipality and school district
14 are limited to or have agreed upon a division of the tax rate in
15 accordance with section 8 of the Local Tax Enabling Act, then
16 the municipality that continues to levy the earned income and
17 net profits tax under the Local Tax Enabling Act shall remain
18 subject to that limitation or agreement in the event that the
19 school district opts to impose an earned income and net profits
20 tax under section 621-A.
21 (b) Tax Authorization
22 Section 611-A. General tax authorization.
23 Subject to sections 613-A and 614-A, each school district or
24 county SECOND CLASS A COUNTY GOVERNED BY A HOME RULE CHARTER may <--
25 by resolution levy, assess and collect or provide for the
26 levying, assessment and collection of an earned income and net
27 profits tax under subdivision (c).
28 Section 611.1-A. Second Class A county optional imposition of
29 tax.
30 If a county which is a county of the second class A which is
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1 governed by a home rule charter elects to impose the tax
2 authorized under section 611-A:
3 (1) The county shall make the election 30 days prior to
4 the school district's decision deadline. If the county does
5 not elect to impose the tax each school district shall still
6 have the option of imposing the tax in accordance with this
7 act.
8 (2) Section 613-A(e)(4) does not apply.
9 (3) No school district which is wholly within that
10 county shall impose the tax, unless the county ballot
11 question fails. If the county ballot question fails, the
12 school district may impose the tax in accordance with this
13 act at a later date.
14 (4) If the tax is imposed, the county may retain an
15 amount of money to cover the costs of collecting,
16 distributing and administrating the tax but that amount shall
17 not exceed 1% of the total amount collected.
18 (5) In a school district that crosses county lines, the
19 residents of that school district would have two ballot
20 questions. If both ballot questions pass, the tax is paid
21 first to the school district and used as a credit against the
22 county tax. The county will reduce the amount payable to the
23 school district to the same proportion of actual money paid
24 to the county from residents of that school district in that
25 county after reducing the credit amount paid to the school
26 district.
27 (6) If the county ballot question is passed, the county
28 would give each school district an amount equal to the
29 homestead/farmstead amount up to one-half of the county
30 median school property tax under 53 Pa.C.S. Ch. 85 Subch. F
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1 (relating to homestead property exclusion), which the school
2 district would then credit against the school taxes of the
3 residential properties that are in both that school district
4 and county. The credit shall not exceed 100% of the property
5 taxes of any residential property. Any amount in excess of
6 the 100% limitation must be used by the school district to
7 further reduce millage.
8 Section 612-A. Continuity of tax.
9 An earned income and net profits tax levied under the
10 provisions of subdivision (c) shall continue in force on a
11 fiscal year basis without annual reenactment unless the rate of
12 tax is increased or the tax is subsequently repealed.
13 Section 613-A. Adoption of referendum.
14 (a) General rule.--
15 (1) In order to levy an earned income and net profits
16 tax under subdivision (c), a board of school directors shall
17 use the procedures set forth in subsection (b).
18 (2) A board of school directors after making an election
19 to levy an earned income and net profits tax under
20 subdivision (c) may, after a period of at least five full
21 fiscal years, elect under the provisions of subsection (c) to
22 end participation under this subdivision. If the electorate
23 approves a referendum to do so, the board of school directors
24 may not continue to levy an earned income and net profits tax
25 under subdivision (c).
26 (b) Public referendum requirements.--Except as set forth in
27 subsection (d) the following apply:
28 (1) Subject to the notice and hearing requirements of
29 section 626-A, a board of school directors may levy the
30 earned income and net profits tax under subdivision (c) only
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1 by obtaining the approval of the electorate of the affected
2 school district in a public referendum at only the municipal
3 election preceding the fiscal year when the earned income and
4 net profits tax will be initially imposed. The county board
5 of elections shall cause the referendum question required by
6 this section to be submitted to the electors of the school
7 district.
8 (2) The referendum question shall state the initial rate
9 of the proposed earned income and net profits tax to be
10 levied under subdivision (c), the reason for the tax and the
11 amount of proposed budgeted revenue growth, if any, in the
12 first fiscal year following adoption of the referendum,
13 expressed as a percent increase over the prior year's
14 budgeted revenue. Any increase in budgeted revenue between
15 the first fiscal year following adoption of the referendum
16 and the prior year's budgeted revenue shall not exceed 2%.
17 The question shall be in clear language that is readily
18 understandable by a layperson. For the purpose of
19 illustration, a referendum question may be framed as follows:
20 Do you favor the imposition of an earned income and net
21 profits tax of X% to be used in order to reduce
22 residential real property taxes by X% and provide for a
23 one-time revenue increase of X% over the preceding fiscal
24 year?
25 A nonlegal interpretative statement shall accompany the
26 referendum question in accordance with section 201.1 of the act
27 of June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
28 Election Code. A board of school directors of a school district
29 in which a referendum under this section has been approved shall
30 not be subject to the provisions of section 614-A for any future
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1 increases in the earned income and net profits tax rates
2 authorized under subdivision (c). If the referendum question
3 fails to receive a majority vote pursuant to this section,
4 approval of the electorate under section 614-A shall not be
5 required to levy any tax or increase the rate of any tax which
6 the board of school directors of the affected school district is
7 authorized to levy and increase pursuant to any other act.
8 (c) Public referendum requirements for the municipal
9 election of 2003.--In addition to the provisions of subsection
10 (b), the following shall apply for the municipal election of
11 2003:
12 (1) The referendum question required by this section
13 shall be submitted to the electors of each school district
14 for the municipal election of 2003.
15 (2) No later than August 5, 2003, the board of school
16 directors of each school district shall adopt the resolution
17 required under section 626-A authorizing the referendum
18 question. The resolution and the referendum question shall be
19 based on the calculation provided for under section 626-A(b).
20 (3) If the board of school directors fails to adopt the
21 resolution required under section 626-A by August 5, 2003,
22 the county board of elections shall prepare a referendum
23 question that authorizes an earned income and net profits tax
24 for the school district at the maximum rate permitted, based
25 on the calculation provided for under section 626-A(b).
26 (4) The county board of elections shall cause the
27 referendum question required by this subsection to be
28 submitted to the electors of the school district consistent
29 with the provisions of this section.
30 (d) Public referendum requirements to end participation
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1 under this subdivision.--Subject to the notice and public
2 hearing requirements in section 4 of the Local Tax Enabling Act,
3 a board of school directors may elect to end participation under
4 this subdivision in accordance with subsection (a)(2) by
5 obtaining the approval of the electorate of the affected school
6 district in a public referendum at a municipal election.
7 (e) Nonapplicability.--This section shall not apply to any
8 of the following:
9 (1) A school district in which a referendum question
10 under 53 Pa.C.S. § 8703 (relating to adoption of referendum)
11 has been approved and implemented.
12 (2) A school district of the first class.
13 (3) A school district of the first class A.
14 (4) A school district certified as distressed pursuant
15 to section 691 or an education empowerment district pursuant
16 to section 1705-B or 1707-B.
17 Section 614-A. Public referendum requirements for increasing
18 certain taxes.
19 (a) Applicability.--This section shall apply to the board of
20 school directors of a school district in which a referendum
21 under section 613-A is approved.
22 (b) Prohibitions.--Except as set forth in subsection (f),
23 unless there is compliance with subsection (c), a board of
24 school directors may not do any of the following:
25 (1) Increase the rate of a tax levied for the support of
26 the public schools by more than the percentage increase in
27 the Statewide average weekly wage in the preceding year or in
28 the percentage increase in the Consumer Price Index,
29 whichever is greater.
30 (2) Levy a tax for the support of the public schools
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1 which was not levied in the fiscal year in which a referendum
2 under section 613-A was approved.
3 (3) Raise the rate of the earned income and net profits
4 tax, if already imposed under the authority of section 13 of
5 the Local Tax Enabling Act, except as otherwise provided for
6 under section 621-A.
7 (c) Referendum.--
8 (1) In order to take an action under subsection (b)(1),
9 at the primary election immediately preceding the fiscal year
10 in which the proposed tax increase would take effect:
11 (i) a referendum stating the specific rate or rates
12 of the tax increase must be submitted to the electors
13 residing in the school district; and
14 (ii) a majority of the electors voting on the
15 referendum must approve the increase.
16 (2) In order to take an action under subsection (b)(2),
17 at the primary election immediately preceding the fiscal year
18 in which the proposed tax would take effect:
19 (i) a referendum stating the specific tax and rate
20 to be levied must be submitted to the electors residing
21 in the school district; and
22 (ii) a majority of the electors voting on the
23 referendum must approve the tax.
24 (d) Failure to approve referendum.--
25 (1) If there is no approval under subsection (c)(1)(ii),
26 the board of school directors may approve an increase in the
27 tax rate of not more than the percentage increase in the
28 Statewide average weekly wage in the preceding year or the
29 percentage increase in the Consumer Price Index, whichever is
30 greater.
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1 (2) If there is no approval under subsection (c)(2)(ii),
2 the board of school directors may not levy the tax.
3 (e) Exception to general rule.--The provisions of subsection
4 (b)(1) shall not apply to an increase in the rate of any tax
5 levied for the support of the public schools which is less than
6 or equal to the percentage increase in the Statewide average
7 weekly wage in the preceding year or the percentage increase in
8 the Consumer Price Index, whichever is greater. Prior to any
9 increase under this subsection, the board of school directors
10 shall certify to the Department of Education the estimates of
11 local tax rates under this subsection. The Department of
12 Education may, on its own motion or on petition of a person
13 having standing under subsection (j), revise the estimates
14 certified by the board of school directors and reduce the
15 allowable increase in the rate of any tax under this subsection.
16 (f) Referendum exceptions.--The provisions of subsection
17 (b)(1) shall not apply to an increase in the rate of any tax
18 levied for the support of the public schools where the increase
19 is necessary to respond to one or more of the following
20 conditions:
21 (1) To respond to or recover from an emergency or
22 disaster declared pursuant to 35 Pa.C.S. § 7301 (relating to
23 general authority of Governor) or 75 Pa.C.S. § 6108 (relating
24 to power of Governor during emergency), only for the duration
25 of the emergency or disaster.
26 (2) To implement a court order or an administrative
27 order from a Federal or State agency that requires the
28 expenditure of funds that exceed current available revenues,
29 provided that the rate increase is rescinded following
30 fulfillment of the court order or administrative order.
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1 (3) (i) To pay interest and principal on any
2 indebtedness incurred under 53 Pa.C.S. Pt. VII Subpt. B
3 (relating to indebtedness and borrowing) prior to the
4 effective date of this section, provided that in no case
5 may the school district incur additional debt under this
6 paragraph, except for the refinancing of existing debt,
7 including the payment of costs and expenses related to
8 such refinancing and the establishment or funding of
9 appropriate debt service reserves and provided further
10 that the increase is rescinded following the final
11 payment of interest and principal.
12 (ii) The exception provided under this paragraph may
13 not be used in lieu of the referendum under subsection
14 (c)(2) to pay for costs which could not be financed by
15 the issuance of debt under 53 Pa.C.S. (relating to
16 municipalities generally).
17 (4) To respond to conditions that pose an immediate
18 threat of serious physical harm or injury to the students,
19 staff or residents of the school district, but only until the
20 conditions causing the threat have been fully resolved.
21 (5) Special purpose tax levies approved by the
22 electorate.
23 (6) The basic education funding allocation and special
24 education funding allocation to the school district from the
25 Commonwealth for the year in which the tax rate increase
26 would take effect is equal to or less than the basic
27 education funding allocation and special education funding
28 allocation to the school district for the preceding fiscal
29 year.
30 (7) (i) To maintain per-student local tax revenue in
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1 the school district at an amount not exceeding the amount
2 of per-student local tax revenue at the level of the
3 preceding year, adjusted for the percentage increase in
4 the Statewide average weekly wage or the percentage
5 increase in the Consumer Price Index, whichever is
6 greater.
7 (ii) This paragraph shall apply only if the
8 percentage growth in average daily membership in the
9 school district between the current fiscal year and the
10 third fiscal year immediately preceding the current
11 fiscal year exceeds 10%. For the purposes of this
12 paragraph, per-student local tax revenue shall be
13 determined by dividing local tax revenue by average daily
14 membership.
15 (8) To make payments on behalf of active members of the
16 Public School Employees' Retirement System as required
17 pursuant to 24 Pa.C.S § 8327 (relating to payments by
18 employers), where the increase in the employer contribution
19 rate on behalf of active members as calculated under 24
20 Pa.C.S. § 8328 (relating to actuarial cost method) for the
21 school year for which payments are required is equal to or
22 greater than 200% of the employer contribution rate on behalf
23 of active members in effect for the school year prior to the
24 school year for which an exception under this paragraph is
25 sought.
26 (9) To pay extraordinary expenses incurred in providing
27 special education programs and services to students with
28 disabilities where the anticipated increase in expenditures
29 on special education programs and services is greater than
30 10% of the school district's total expenditures on special
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1 education programs and services for the school year prior to
2 the school year for which an exception under this paragraph
3 is sought.
4 (10) To compensate for a one-year decrease of 10% or
5 more in the school district's real property tax base. For the
6 purposes of this paragraph, the decrease shall be measured by
7 the percent change in the assessed value of all taxable
8 property within the school district between the fiscal year
9 in which an exception under this paragraph is sought and the
10 fiscal year immediately preceding the fiscal year in which an
11 exception under this paragraph is sought.
12 (11) To pay costs associated with implementing new
13 unfunded federally mandated educational programs.
14 (g) Revenue derived from increase.--Any revenue derived from
15 an increase in the rate of any tax allowed pursuant to an
16 exception under subsection (f)(3) or (5) shall not exceed the
17 anticipated dollar value of the expenditure for which the
18 exception under subsection (f) was sought.
19 (h) Limitation on rate.--The increase in the rate of any tax
20 allowed pursuant to an exception under subsection (f)(1), (2),
21 (4), (6), (7), (8), (9), (10) or (11) shall not exceed the rate
22 increase required as determined by a court of common pleas
23 pursuant to subsection (i).
24 (i) Court action.--Prior to the imposition of the tax
25 increase under subsection (f)(1), (2), (4), (6), (7), (8), (9),
26 (10) or (11), approval by the court of common pleas in the
27 judicial district in which the administrative office of the
28 school district is located must be obtained. The board of school
29 directors shall publish in a newspaper of general circulation a
30 notice of its intent to file an action under this subsection at
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1 least one week prior to the filing of the petition. The board of
2 school directors shall also publish in a newspaper of general
3 circulation notice, as soon as possible following notification
4 from the court that a hearing has been scheduled, stating the
5 date, time and place of the hearing on the petition. The
6 following shall apply to any proceedings instituted under this
7 subsection:
8 (1) The board of school directors must prove by clear
9 and convincing evidence the necessity for the tax increase.
10 (2) The board of school directors must prove by clear
11 and convincing evidence the anticipated dollar value of the
12 expenditure for which an exception under subsection (f) is
13 sought.
14 (3) The board of school directors must prove by clear
15 and convincing evidence that there are no assets or other
16 feasible alternatives available to the school district.
17 (4) The court shall determine the dollar value of the
18 expenditure for which an exception under subsection (f) is
19 sought, the rate increase required and the appropriate
20 duration of the increase. The court may retain continuing
21 jurisdiction and may, on its own motion or on petition of an
22 interested party, revoke approval for or order rescission of
23 a tax increase.
24 (j) Standing.--A person shall have standing as a party to a
25 proceeding under this section as long as the person resides
26 within or pays real property taxes to the taxing jurisdiction of
27 the board of school directors instituting the action.
28 Section 615-A. Property tax limits on reassessment.
29 After any county makes a countywide revision of assessment of
30 real property at values based upon an established predetermined
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1 ratio as required by law or after any county changes its
2 established predetermined ratio, a board of school directors in
3 a school district in which a referendum under section 613-A has
4 been approved, which after the effective date of this section
5 for the first time levies its real estate taxes on that revised
6 assessment or valuation, shall for the first year reduce its tax
7 rate, if necessary, for the purpose of having the percentage
8 increase in taxes levied for that year against the real
9 properties contained in the duplicate for the preceding year be
10 less than or equal to the percentage increase in the Statewide
11 average weekly wage for the preceding year notwithstanding the
12 increased valuations of such properties under the revised
13 assessment. For the purpose of determining the total amount of
14 taxes to be levied for the first year, the amount to be levied
15 on newly constructed buildings or structures or on increased
16 valuations based on new improvements made to existing houses
17 need not be considered. The tax rate shall be fixed for that
18 year at a figure which will accomplish this purpose. The
19 provisions of section 614-A shall apply to increases in the tax
20 rate above the limits provided in this section.
21 (c) Earned Income and Net Profits Tax
22 Section 621-A. Authorization.
23 (a) Earned income and net profits tax authorized.--A board
24 of school directors may levy, assess and collect a tax on the
25 earned income and net profits of resident individuals of the
26 school district at a rate determined by the board of school
27 directors.
28 (b) Tax rates determined.--The earned income and net profits
29 tax authorized under subsection (a) shall not be less than the
30 rate required to provide an exclusion for farmstead property and
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1 an exclusion for homestead property equal to 50% of the maximum
2 exclusion under 53 Pa.C.S. § 8586 (relating to limitations) and
3 shall not exceed the rate required to provide an exclusion for
4 farmstead property and an exclusion for homestead property equal
5 to the maximum exclusion under 53 Pa.C.S. § 8586. The board of
6 school directors shall round the rate of the earned income and
7 net profits tax levied pursuant to this section to the nearest
8 tenth of a percent. The exclusion for farmstead property granted
9 under this section shall not exceed the amount granted for the
10 exclusion for homestead property.
11 Section 622-A. Collections.
12 A board of school directors imposing a tax under section 621-
13 A shall designate the tax officer who is appointed under section
14 10 of the Local Tax Enabling Act, or otherwise by law, as the
15 collector of the earned income and net profits tax. In the
16 performance of the tax collection duties under this subdivision,
17 the designated tax officer shall have all the same powers,
18 rights, responsibilities and duties for the collection of the
19 taxes which may be imposed under the Local Tax Enabling Act, 53
20 Pa.C.S. Ch. 84, Subch. C (relating to local taxpayers bill of
21 rights) or as otherwise provided by law.
22 Section 623-A. Credits.
23 (a) General rule.--The provisions of section 14 of the Local
24 Tax Enabling Act shall be applied by a board of school directors
25 to determine any credits under the provisions of this
26 subdivision for a tax imposed under section 621-A.
27 (b) Tax credit.--Notwithstanding any other provisions of law
28 to the contrary, payment of a tax on salaries, wages, THE <--
29 FOLLOWING APPLY:
30 (1) THIS SUBSECTION ONLY APPLIES TO A TAXPAYER WHO IS
20030S0100B1039 - 21 -
1 NOT A RESIDENT OF A CITY OF THE FIRST CLASS BUT WHO IS
2 SUBJECT TO THE TAX ON SALARIES, WAGES, COMMISSIONS OR OTHER
3 COMPENSATION IMPOSED BY A CITY OF THE FIRST CLASS UNDER THE
4 AUTHORITY OF THE ACT OF AUGUST 5, 1932 (SP.SESS., P.L.45,
5 NO.45), REFERRED TO AS THE STERLING ACT.
6 (2) PAYMENT OF A TAX ON SALARIES, WAGES, commissions or
7 other compensation to a school district by residents of the
8 school district shall be credited and paid to the school
9 district of residence and allowed as a deduction from the
10 liability of the taxpayer for personal income tax due to the
11 Commonwealth under section 302 of the Tax Reform Code. The
12 deduction shall not exceed the liability of the taxpayer for
13 any other tax on salaries, wages, commissions or other
14 compensation imposed by a city of the first class under the
15 authority of the act of August 5, 1932 (Sp.Sess., P.L.45, <--
16 No.45), referred to as the Sterling Act.
17 Section 624-A. Earned income and net profits tax exemption.
18 A school district that imposes a tax under section 621-A may
19 exempt from the payment of that tax any person whose total
20 income from all sources is less than $10,000.
21 Section 625-A. Rules and regulations.
22 A tax imposed under section 621-A shall be subject to all
23 regulations adopted under section 13 of the Local Tax Enabling
24 Act. A school district may adopt regulations for the processing
25 of claims for credits or exemptions under sections 623-A and
26 624-A.
27 Section 626-A. Procedure and administration.
28 (a) Levy.--In order to levy a tax under section 621-A, the
29 board of school directors shall adopt a resolution which shall
30 refer to this subdivision prior to placing a referendum question
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1 on the ballot under section 613-A. Prior to adopting a
2 resolution imposing a tax under section 621-A, the board of
3 school directors shall give public notice of its intent to adopt
4 the resolution in the manner provided by section 4 of the Local
5 Tax Enabling Act and shall conduct at least one public hearing
6 regarding the proposed adoption of the resolution.
7 (b) Calculation.--For the purposes of proposing a resolution
8 and referendum under section 613-A(c), the board of school
9 directors shall calculate:
10 (1) The value of homestead property in the school
11 district by dividing the total assessed value of residential
12 property in the school district in calendar year 2002, as
13 compiled by the State Tax Equalization Board, by the total
14 number of owner-occupied housing units in the school district
15 as reported by the United States Census Bureau for the 2000
16 census in Summary File 1.
17 (2) The maximum homestead exclusion by multiplying the
18 quotient from paragraph (1) by 0.50.
19 (3) The proposed homestead exclusion for the school
20 district by multiplying the product from paragraph (2) by a
21 number as determined by the board of school directors,
22 providing that such number is greater than or equal to 0.50
23 and less than or equal to 1.0.
24 (4) The proposed reduction in real property taxes for
25 the school district by multiplying the product from paragraph
26 (3) by the real property tax millage rate of the school
27 district in effect for the 2001-2002 school year.
28 Section 627-A. Disposition of earned income and net profits tax
29 revenue.
30 The disposition of revenue from a tax or an increase in the
20030S0100B1039 - 23 -
1 rate of a tax imposed by school districts under section 621-A
2 shall occur in the following manner:
3 (1) For the fiscal year of implementation of a newly
4 imposed income tax, all earned income and net profits tax
5 revenue received by a school district shall be used to
6 provide for an amount equal to the earned income and net
7 profits tax revenue over the preceding fiscal year; an
8 increase in budgeted revenues over the preceding fiscal year
9 in accordance with the amount specified in the referendum
10 question approved by the voters under section 613-A; and a
11 reduction in the school district real property tax by means
12 of an exclusion for farmstead property and homestead property
13 pursuant to section 621-A.
14 (2) For the fiscal year of implementation of an increase
15 in the rate of the existing tax imposed under section 621-A,
16 all revenue received by a school district directly
17 attributable to the increased rate shall be used to reduce
18 the school district real property tax by means of an
19 exclusion for farmstead property and homestead property
20 pursuant to section 621-A.
21 (d) Homestead Exclusion
22 Section 691-A. Changes to the amount of the homestead
23 exclusion.
24 (a) Increases in the homestead exclusion.--A school district
25 may increase the amount of the exclusion for homestead property
26 required pursuant to section 627-A consistent with the
27 prohibitions in 53 Pa.C.S. § 8586 (relating to limitations).
28 (b) Decreases in the homestead exclusion.--A school district
29 may only reduce the exclusion for homestead property below the
30 level authorized pursuant to the referendum required under
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1 section 613-A, subsection (c) and section 692-A(d) when the
2 median assessed value used in calculating the homestead
3 exclusion decreases.
4 (c) Reassessment.--After a revision of assessments by means
5 of revaluing all properties, the governing body providing an
6 exclusion for homestead property under section 613-A shall
7 adjust the amount of the exclusion pursuant to 53 Pa.C.S. §
8 8583(e) (relating to exclusion for homestead property).
9 Section 692-A. Homestead exclusion process.
10 (a) Listing required.--Not later than September 1, 2003, and
11 not later than September 1 of each year thereafter, the board of
12 school directors of each school district shall compile a listing
13 of all real property within the school district that it believes
14 to be qualified as a homestead or a farmstead as those terms are
15 defined under 53 Pa.C.S § 8401 (relating to definitions) or 8582
16 (relating to definitions). The school district shall use
17 information or statements from the owners or residents of the
18 property and shall consult with the assessor of the county in
19 compiling the list. This listing may be compiled at the same
20 time as the enumeration of school children is performed pursuant
21 to section 1351.
22 (b) Notification to homestead owners.--If the electors of a
23 school district approve a referendum question pursuant to
24 section 613-A, the board of school directors shall, by first
25 class mail, notify the owners of each homestead and each
26 farmstead on the listing required by this section that
27 submitting an application is required under 53 Pa.C.S. Ch. 85
28 Subch. F (relating to homestead property exclusion) prior to the
29 property being qualified for any homestead or farmstead
30 exclusion authorized by law. The notice required by this section
20030S0100B1039 - 25 -
1 shall include a copy of the application required by the assessor
2 of the county where the property is located and the instructions
3 for completing and returning the application.
4 (c) Calculation of the homestead and farmstead exclusion.--
5 The listing of homesteads and farmsteads required to be compiled
6 under this section shall be used by the school district in
7 estimating the amount of the homestead exclusion and farmstead
8 exclusion for purposes of a referendum question under section
9 613-A(b).
10 (d) Revisions to the initial calculation of homestead and
11 farmstead exclusion for school districts.--If the electors of a
12 school district approve a referendum question pursuant to 613-
13 A(c), the board of school directors shall revise the calculation
14 utilized under section 626-A(b) with information derived from
15 the listing required under subsection (a) no later than March 1,
16 2004. Such revised calculation shall be used to provide
17 homestead and farmstead exclusions. Where the tax imposed under
18 section 621-A is insufficient to provide the homestead and
19 farmstead exclusions authorized through approval of a referendum
20 question, the exclusions may be reduced accordingly.
21 (e) Appeals.--Real property for which an application under
22 53 Pa.C.S. § 8584 (relating to administration and procedure) has
23 been filed by March 1, 2004, shall be deemed to be a homestead
24 property or farmstead property, as the case may be, for the
25 purposes of implementing a homestead or farmstead exclusion
26 under 53 Pa.C.S. § 8717 (relating to disposition of earned
27 income and net profits tax revenue) in the school district
28 fiscal year beginning July 1, 2004, unless the assessor denies
29 the application within the time provided by law and the denial
30 is unappealed or unappealable. The school district is authorized
20030S0100B1039 - 26 -
1 to collect taxes, interest and penalties relating to a homestead
2 or farmstead exclusion that is denied after the denial is
3 unappealed or unappealable.
4 (f) Reports.--In addition to the report required under 53
5 Pa.C.S. § 8584(i), the assessor shall be required to provide a
6 supplemental report containing the information required under 53
7 Pa.C.S. § 8584(i) for applications filed by March 1, 2004. The
8 date of the supplemental report shall be set by the school
9 district, but shall not be earlier than June 1, 2004.
10 (g) Applicability.--Subsections (b), (c), (d), (e), (f) and
11 (g) shall apply only to school districts that approve a
12 referendum under section 613-A at the 2003 municipal election.
13 (e) Register
14 Section 693-A. Register for taxes.
15 (a) General rule.--The department shall maintain an official
16 continuing register supplemented annually of all earned income
17 and net profits taxes levied under subdivision (c).
18 (b) Contents of register.--The register shall list:
19 (1) The school districts levying the tax.
20 (2) The rate of tax as stated in the resolution levying
21 the tax.
22 (3) The rate on taxpayers.
23 (4) The name and address of the official responsible for
24 administering the collection of the tax and from whom
25 information, forms and copies of regulations are available.
26 Section 694-A. Information for register.
27 Information for the register shall be furnished by the school
28 district to the department as prescribed by the department. The
29 information must be received by the department no later than
30 July 15 of each year to show new tax enactments, repeals and
20030S0100B1039 - 27 -
1 changes. Failure to comply with the filing date may result in
2 the omission of the tax levy from the register for that year.
3 Failure of the department to receive information of taxes
4 continued without change may be construed by the department to
5 mean that the information contained in the previous register
6 remains in force.
7 Section 695-A. Availability and effective period of register.
8 The register, with such annual supplements as may be required
9 by new tax enactments, repeals or changes, shall be available
10 upon request no later than August 15 of each year. The effective
11 period for each register shall be from July 1 of the year in
12 which it is issued to June 30 of the following year.
13 Section 696-A. Effect of nonfiling.
14 Employers shall not be required by any ordinance to withhold
15 from the compensation of their employees any local earned income
16 and net profits tax imposed under subdivision (c) which is not
17 listed in the register or to make reports of compensation in
18 connection with taxes not so listed. If the register is not
19 available by August 15, the register of the previous year shall
20 continue to be effective for an additional period of not more
21 than one year.
22 Section 697-A. Effect of subdivision on liability of 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. Section 1714-B(g) of the act, added May 10, 2000
27 (P.L.44, No.16), is amended to read:
28 Section 1714-B. Mandate Waiver Program.--* * *
29 (g) The following provisions of this act shall not be
30 subject to waiver pursuant to this section: sections 108, 110,
20030S0100B1039 - 28 -
1 111, 321, 322, 323, 324, 325, 326, 327, 431, 436, 437, 440.1,
2 443, 510, 513, 518, 527, 701.1, 708, 736, 737, 738, 739, 740,
3 741, 752, 753, 755, 771, 776, 777, 808, 809, 810, 1303(a), 1310,
4 1317, 1317.1, 1317.2, 1318, 1327, 1327.1, 1330, 1332, 1361,
5 1366, 1501, 1502, 1513, 1517, 1518, 1521, 1523, 1546 and 1547;
6 provisions prohibiting discrimination; Articles VI, VI-A, XI,
7 XI-A, XII, XIII-A, XIV and XVII-A and this article.
8 * * *
9 Section 4. The addition of section 614-A(f)(6), (8), (9) and <--
10 (10) (9), (10) AND (11) of the act shall apply to school <--
11 districts in which a referendum question under 53 Pa.C.S. § 8703
12 has been approved and implemented.
13 Section 5. This act shall take effect immediately.
B21L24DMS/20030S0100B1039 - 29 -