PRIOR PRINTER'S NOS. 574, 992, 1027, PRINTER'S NO. 1789 1039, 1075, 1110
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
SENATE AMENDMENTS TO HOUSE AMENDMENTS, JULY 2, 2004
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 and for distress in school districts of the first 7 class; providing for the imposition and collection of an 8 earned income and net profits tax or personal income tax by 9 school districts after approval by the electors, for State 10 matching funds formula, for wage and net profits tax relief 11 in cities of the first class and for applicability of 12 referendum exceptions; and further providing for the mandate 13 waiver program. 14 PROVIDING FOR TAXATION BY SCHOOL DISTRICTS, FOR STATE FUNDS AND <-- 15 FOR WAGE AND NET PROFITS TAX RELIEF IN CITIES OF THE FIRST 16 CLASS; AND MAKING AN APPROPRIATION. 17 TABLE OF CONTENTS 18 CHAPTER 1. PRELIMINARY PROVISIONS 19 SECTION 101. SHORT TITLE. 20 SECTION 102. DEFINITIONS. 21 CHAPTER 3. TAXATION BY SCHOOL DISTRICTS 22 SUBCHAPTER A. GENERAL PROVISIONS 23 SECTION 301. SCOPE.
1 SECTION 302. DEFINITIONS. 2 SECTION 303. LIMITATIONS. 3 SECTION 304. CERTAIN RATES OF TAXATION LIMITED. 4 SUBCHAPTER B. SCHOOL DISTRICT BUDGETS 5 SECTION 311. ADOPTION OF PRELIMINARY BUDGET PROPOSALS. 6 SECTION 312. ADOPTION OF ANNUAL BUDGETS. 7 SECTION 313. INFORMATION TO SCHOOL DISTRICTS. 8 SUBCHAPTER C. GENERAL TAX AUTHORIZATION 9 SECTION 321. GENERAL TAX AUTHORIZATION. 10 SECTION 322. COLLECTIONS. 11 SECTION 323. CREDITS. 12 SECTION 324. REIMBURSEMENT. 13 SECTION 325. EXEMPTION AND SPECIAL PROVISIONS. 14 SECTION 326. REGULATIONS. 15 SECTION 327. PROPERTY TAX LIMITS ON REASSESSMENT. 16 SUBCHAPTER D. SCHOOL DISTRICT PROPERTY TAX REDUCTION 17 SECTION 331. QUALIFYING CONTRIBUTION. 18 SECTION 332. ADOPTION OF REFERENDUM. 19 SECTION 333. PUBLIC REFERENDUM REQUIREMENTS FOR INCREASING 20 CERTAIN TAXES. 21 SECTION 334. DISPOSITION OF INCOME TAX REVENUE AND PROPERTY TAX 22 REDUCTION ALLOCATIONS. 23 SUBCHAPTER E. HOMESTEAD EXCLUSION 24 SECTION 341. HOMESTEAD AND FARMSTEAD APPLICATIONS. 25 SECTION 342. HOMESTEAD AND FARMSTEAD EXCLUSION PROCESS. 26 SECTION 343. SCHOOL DISTRICT TAX NOTICES. 27 SUBCHAPTER F. REGISTER 28 SECTION 351. REGISTER FOR TAXES. 29 SECTION 352. INFORMATION FOR REGISTER. 30 SECTION 353. AVAILABILITY AND EFFECTIVE PERIOD OF REGISTER. 20030S0100B1789 - 2 -
1 SECTION 354. EFFECT OF NONFILING. 2 SECTION 355. EFFECT OF SUBCHAPTER ON LIABILITY OF TAXPAYER. 3 CHAPTER 5. STATE FUNDS FORMULA 4 SECTION 501. SCOPE. 5 SECTION 502. DEFINITIONS. 6 SECTION 503. CERTIFICATION; CALCULATION OF MINIMUM AND MAXIMUM 7 MODIFIERS. 8 SECTION 504. PROPERTY TAX RELIEF RESERVE FUND. 9 SECTION 505. STATE PROPERTY TAX REDUCTION ALLOCATION. 10 CHAPTER 7. TAX RELIEF IN CITIES OF THE FIRST CLASS 11 SECTION 701. SHORT TITLE. 12 SECTION 702. (RESERVED) 13 SECTION 703. TAX RELIEF. 14 SECTION 704. SENIOR CITIZEN HOMESTEAD PROPERTY TAX REDUCTION 15 IN CITIES OF THE FIRST CLASS. 16 CHAPTER 50. MISCELLANEOUS PROVISIONS 17 SECTION 5001. OTHER SUBJECTS OF TAXATION. 18 SECTION 5002. APPROPRIATION. 19 SECTION 5003. EFFECTIVE DATE. 20 The General Assembly of the Commonwealth of Pennsylvania 21 hereby enacts as follows: 22 Section 1. Section 679 of the act of March 10, 1949 (P.L.30, <-- 23 No.14), known as the Public School Code of 1949, amended 24 November 26, 1982 (P.L.760, No.215), is amended to read: 25 Section 679. Per Capita Taxes.--Each resident or inhabitant, 26 over eighteen years of age, in every school district of the 27 second, third, and fourth class, which shall levy such tax, 28 shall annually pay, for the use of the school district in which 29 he or she is a resident or inhabitant, a per capita tax of not 30 less than one dollar nor more than five dollars, as may be 20030S0100B1789 - 3 -
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. Section 696(h)(1) of the act, amended June 29, 11 2002 (P.L.524, No.88), is amended to read: 12 Section 696. Distress in School Districts of the First 13 Class.--* * * 14 (h) The School Reform Commission shall be responsible for 15 financial matters related to the distressed school district of 16 the first class and: 17 (1) [All] Except as provided in Article VI-C, all taxes 18 authorized to be levied by a school district of the first class 19 or for a school district of the first class by a city or county 20 of the first class on the date of the declaration of distress 21 shall continue to be authorized and levied in accordance with 22 this act and shall be transmitted to the school district. For 23 the first fiscal year or part thereof and every fiscal year 24 thereafter in which the school district is declared to be 25 distressed, the amount appropriated or paid by the city or 26 county to the school district and the tax authorized by the city 27 or county to be levied for the school district or dedicated to 28 the school district shall be an amount or tax not less than the 29 highest amount paid by the city or county to the school district 30 or authorized by the city or county to be levied for the school 20030S0100B1789 - 4 -
1 district or dedicated to the school district during any of the 2 three full preceding fiscal years. In addition, the city of the 3 first class shall provide to the school district of the first 4 class all other available local non-tax revenue, including 5 grants, subsidies or payments made during the prior year. 6 * * * 7 Section 3. The act is amended by adding articles to read: 8 ARTICLE VI-A 9 TAXATION BY SCHOOL DISTRICTS 10 (a) General Provisions 11 Section 601-A. Short title of article. 12 This article shall be known and may be cited as the Taxpayer 13 Choice Act. 14 Section 602-A. Definitions. 15 The following words and phrases when used in this article 16 shall have the meanings given to them in this section unless the 17 context clearly indicates otherwise: 18 "Assessor." As defined in 53 Pa.C.S. § 8582 (relating to 19 definitions). 20 "Average index" or "index." The average of the percentage 21 increase in the Statewide average weekly wage and the employment 22 cost index calculated by the Department of Education and 23 published in the Pennsylvania Bulletin under section 614-A(k). 24 "Board of school directors." A board of school directors of 25 a school district of the first class A, second class, third 26 class or fourth class. 27 "Current year." The fiscal year for which a tax is levied. 28 "Domicile." As defined in section 13 of the act of December 29 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling 30 Act. 20030S0100B1789 - 5 -
1 "Earned income." As defined in section 13 of the act of 2 December 31, 1965 (P.L.1257, No.511), known as The Local Tax 3 Enabling Act. 4 "Election officials." The county board of elections of a 5 county. 6 "Employer." As defined in section 301 of the act of March 4, 7 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971. 8 "Employment Cost Index." The most recent official figures, 9 for the previous 12-month period for the Employment Cost Index 10 Series for Elementary and Secondary Schools, reported by the 11 Bureau of Labor Statistics of the Department of Labor. 12 "Farmstead." As defined in 53 Pa.C.S. §8582 (relating to 13 definitions). 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 "Fund." The Property Tax Relief Fund. 18 "Homestead." As defined in 53 Pa.C.S. § 8401 (relating to 19 definitions). 20 "Homestead property." A homestead for which an application 21 has been submitted and approved under 53 Pa.C.S. § 8584 22 (relating to administration and procedure). 23 "Income tax." A tax on earned income and net profits or a 24 tax on personal income imposed pursuant to this article. 25 "Local Tax Enabling Act." The act of December 31, 1965 26 (P.L.1257, No.511), known as The Local Tax Enabling Act. 27 "Local tax revenue." The revenue from taxes actually levied 28 and assessed by a school district. The term does not include 29 interest or dividend earnings, Federal or State grants, 30 contracts or appropriations, income generated from operations or 20030S0100B1789 - 6 -
1 any other source that is not derived from taxes levied and 2 assessed by a school district. 3 "Municipality." As defined in 1 Pa.C.S. § 1991 (relating to 4 definitions). 5 "Net profits." As defined in section 13 of the act of 6 December 31, 1965 (P.L.1257, No.511), known as The Local Tax 7 Enabling Act. 8 "Personal income." Income enumerated in section 303 of the 9 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code 10 of 1971, as returned to and ascertained by the Department of 11 Revenue, subject, however, to any correction thereof for fraud, 12 evasion or error as finally determined by the Commonwealth. 13 "Political subdivision." As defined in 1 Pa.C.S. § 1991 14 (relating to definitions). 15 "Preceding year." The fiscal year before the current year. 16 "Resident individual." An individual who is domiciled in a 17 school district. 18 "School district." A school district of the first class A, 19 second class, third class or fourth class. 20 "Statewide average weekly wage." That amount determined 21 annually for each calendar year by the Department of Labor and 22 Industry under section 105.1 of the act of June 2, 1915 23 (P.L.736, No.338), known as the Workers' Compensation Act. 24 "Succeeding year." The fiscal year following the current 25 year. 26 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2), 27 known as the Tax Reform Code of 1971. 28 "Taxpayer." An individual required under this article to 29 file a tax return or to pay a tax. 30 Section 603-A. Intent; scope and limitations. 20030S0100B1789 - 7 -
1 (a) Intent.-- 2 (1) It is the intent of this article to ultimately 3 provide qualifying school districts with State funds which, 4 when supplemented with the minimum local contribution, are 5 sufficient so that school districts in the aggregate are able 6 to reduce property taxes on homestead property and farmstead 7 property by $5 for every dollar of local contribution. 8 (2) It is the intent of this article to permit school 9 districts to supplement the minimum local contribution and 10 the State funds with additional local funds to permit further 11 reductions in property taxes on homestead property and 12 farmstead property. 13 (b) General rule.-- 14 (1) Each school district in which the governing body has 15 adopted a resolution under section 611-A(a)(1) and each 16 school district in which the electors have approved a 17 referendum under section 613-A(b)(2)(i)(A) shall be qualified 18 for a distribution of funds from the fund pursuant to Article 19 VI-B for the purpose of providing exclusions for homestead 20 property and farmstead property. 21 (2) If a school district chooses to impose the tax 22 authorized by section 611-A(a)(1), it shall have the power to 23 impose, subject to section 613-A, additional earned income 24 and net profits tax or personal income tax for the purpose of 25 homestead and farmstead exclusions. 26 (3) This article shall not be construed to affect the 27 power of a school district to do any of the following: 28 (i) To elect to place a referendum question on the 29 ballot pursuant to the act of June 22, 2001 (P.L.374, 30 No.24), known as the Optional Occupation Tax Elimination 20030S0100B1789 - 8 -
1 Act. A school district may place such referendum question 2 on the ballot at the same municipal election as a 3 referendum question placed on the ballot pursuant to 4 Subdivision (b). 5 (ii) To eliminate its occupation tax pursuant to the 6 Optional Occupation Tax Elimination Act. 7 Section 604-A. (Reserved). 8 Section 605-A. Certain rates of taxation limited. 9 If a municipality and school district both impose an earned 10 income and net profits tax on the same individual under the 11 Local Tax Enabling Act and the municipality and school district 12 are limited to or have agreed upon a division of the tax rate in 13 accordance with section 8 of the Local Tax Enabling Act, then 14 the municipality that continues to levy the earned income and 15 net profits tax under the Local Tax Enabling Act shall remain 16 subject to that limitation or agreement in the event that the 17 school district opts to impose an income tax under section 621- 18 A. 19 (b) Tax Authorization 20 Section 611-A. General tax authorization. 21 (a) Minimum local contribution.-- 22 (1) Notwithstanding the provisions of section 613-A, 23 each school district may, by resolution, levy, assess and 24 collect an earned income and net profits tax in the amount of 25 one tenth of one percent (.1%) under subdivision (c) in order 26 to qualify for distribution of money from the fund under 27 Article VI-B. 28 (2) Not later than 30 days after the effective date of 29 this article, the board of school directors shall adopt a 30 resolution imposing the tax authorized by paragraph (1) and 20030S0100B1789 - 9 -
1 shall immediately notify the Department of Education in order 2 to establish the school district's eligibility to receive a 3 property tax reduction allocation pursuant to Article VI-B. 4 The tax imposed under the authority of this subsection shall 5 be effective beginning on the first day of the school 6 district's first school year commencing after December 31, 7 2003. 8 (i) Fifteen days after the deadline in paragraph 9 (2), the Department of Education shall notify the county 10 board of elections of each county of the school districts 11 in that county which have failed to take the action 12 required under this paragraph. 13 (ii) The county board of elections shall proceed to 14 have the referendum question set forth in section 613- 15 A(b)(2)(i)(A) and (B) placed on the ballot at the 16 municipal election of 2003. 17 (iii) The county board of elections shall certify to 18 the Department of Education the results of the referendum 19 referred to in subparagraph (ii) as soon as practicable. 20 (iv) If, subsequent to initial notification that a 21 school district had not complied with the requirements of 22 this paragraph, the Department of Education notifies the 23 board that the school district has subsequently complied, 24 the county board of elections may take whatever action it 25 deems appropriate to either remove the question from the 26 ballot in that school district or declare the vote or 27 potential vote null and void. 28 (b) Supplemental tax relief.-- 29 (1) Subject to section 613-A, each school district may 30 under Subdivision (c), by resolution, levy, assess and 20030S0100B1789 - 10 -
1 collect: 2 (i) an additional tax on earned income and net 3 profits up to the maximum rate authorized under section 4 621-A(b); or 5 (ii) a tax on personal income up to the maximum rate 6 authorized under section 621-A(c). If a school district 7 imposes a personal income tax, it shall relinquish the 8 right to impose an earned income and net profits tax 9 under this article or any other act and shall convert any 10 existing income tax to a personal income tax pursuant to 11 the requirements of section 621-A(c)(2). 12 (2) Imposition of the tax authorized by 611-A(a)(1) 13 shall require the school district to submit a referendum 14 question to the voters requesting their approval for either 15 the imposition of an additional rate of earned income and net 16 profits tax or a newly imposed personal income tax to be used 17 for an additional degree of homestead exclusions, consistent 18 with the requirements of section 613-A. If the school 19 district determines and the Department of Education confirms 20 that estimated tax collections pursuant to the tax authorized 21 by this section together with the estimated property tax 22 reduction allocation, as certified to it by the Department of 23 Education, provide funding sufficient to grant homestead and 24 farmstead exclusions equal to or greater than 50% of the 25 maximum amount authorized by the Constitution of 26 Pennsylvania, the school district shall not be required to 27 place any referendum on the ballot pursuant to section 613-A, 28 except that a school district may submit a question to the 29 voters under section 613-A if it desires to provide 30 additional residential property tax relief. 20030S0100B1789 - 11 -
1 Section 612-A. Continuity of tax. 2 An earned income and net profits tax or personal income tax 3 levied under the provisions of Subdivision (c) shall continue in 4 force on a fiscal year basis without annual reenactment except 5 in a year in which the rate of tax is increased or the tax is 6 subsequently repealed. 7 Section 613-A. Adoption of referendum. 8 (a) General rule.-- 9 (1) The following apply: 10 (i) All school districts are authorized to impose a 11 one tenth of one percent (.1%) earned income and net 12 profits tax pursuant to section 611-A(a)(1) without 13 submitting the issue to a referendum of the voters. 14 Action under this paragraph will trigger the school 15 district's eligibility to obtain a State match from the 16 fund for the sole purpose of providing for homestead or 17 farmstead property tax exclusions. Taking this action 18 shall require the school district to submit a referendum 19 to the voters requesting their approval for either the 20 imposition of an additional rate of an earned income and 21 net profits tax or a newly imposed personal income tax to 22 be used for an additional degree of homestead exclusions 23 to bring the rate of exclusion in the school district to 24 at least 50% of the amount allowed under the Constitution 25 of Pennsylvania. If the minimum local contribution, 26 together with the State match from the fund, provide 27 enough revenue to provide for 50% of the allowable 28 homestead exclusion without resorting to further local 29 tax increases, no referendum shall be required. The board 30 of school directors could choose to request permission to 20030S0100B1789 - 12 -
1 increase income taxes to be able to provide up to the 2 full homestead exclusion permitted by the Constitution of 3 Pennsylvania. If the board chooses to request permission 4 to enact a personal income tax and the voters approve the 5 referendum, then any earned income and net profits tax 6 imposed by the school district which was in existence 7 prior to the effective date of this article and the 8 earned income and net profits tax newly imposed pursuant 9 to section 611-A(a)(1) will be converted into a personal 10 income tax at the rate determined under section 621- 11 A(c)(2). 12 (ii) If a school district fails to impose the one 13 tenth of one percent (.1%) earned income and net profits 14 tax pursuant to the authorization provided for in section 15 611-A(a)(1) to allow its homeowners to share in the 16 proceeds of the fund, the county board of elections shall 17 place two questions on the ballot in the school district. 18 The first question shall seek voter approval for a one 19 tenth of one percent (.1%) increase in the earned income 20 tax in order to obtain the State matching funds for 21 homestead and farmstead property tax exclusions, and the 22 second question shall seek voter approval of an 23 additional earned income and net profits tax increase to 24 provide for a total homestead exclusion of 50% of the 25 permitted amount. 26 (iii) If a school district adopts a resolution 27 imposing the one tenth of one percent (.1%) earned income 28 and net profits tax but fails to place a referendum on 29 the ballot seeking additional income taxes for property 30 tax relief, the county board of elections shall place a 20030S0100B1789 - 13 -
1 question on the ballot in the school district seeking 2 voter approval of an additional earned income and net 3 profits tax increase to provide for a total homestead 4 exclusion of 50% of the permitted amount. 5 (2) In order to levy, in addition to the tax imposed 6 under section 611-A(a)(1), an earned income and net profits 7 tax or personal income tax under Subdivision (c), a board of 8 school directors shall use the procedures set forth in 9 subsection (b). 10 (3) If a school district does not take action to impose 11 the tax authorized under section 611-A(a)(1), the procedure 12 set forth in subsection (b)(2)(i) shall apply. 13 (4) A board of school directors after making an election 14 to levy an earned income and net profits tax or personal 15 income tax under Subdivision (c) may, after a period of at 16 least four full fiscal years, elect under the provisions of 17 subsection (f) to end participation under this subdivision. 18 If the electorate approves, at a general or municipal 19 election, a referendum to do so, the board of school 20 directors may not continue to levy an earned income and net 21 profits tax or personal income tax under Subdivision (c). 22 (b) Public referendum requirements.--Except as set forth in 23 subsection (d) the following apply: 24 (1) A board of school directors may, in addition to the 25 tax imposed under section 611-A(a)(1), levy the earned income 26 and net profits tax or personal income tax under Subdivision 27 (c) only by obtaining the approval of the electorate of the 28 affected school district in a public referendum at only the 29 municipal election preceding the fiscal year when the earned 30 income and net profits tax or personal income tax will be 20030S0100B1789 - 14 -
1 initially imposed. The county board of elections shall cause 2 the referendum question required by this section to be 3 submitted to the electors of the school district. 4 (2) Except in the case of a referendum required if a 5 school district fails to adopt the tax authorized by section 6 611-A(a)(1) or fails, after having adopted the tax, to take 7 action to place a referendum on the ballot under this 8 subsection, the referendum question shall state the initial 9 rate of the proposed earned income and net profits tax or 10 personal income tax to be levied under Subdivision (c) and 11 the reason for the tax. The referendum question shall be 12 framed in one of the following forms with the school district 13 resolution or, if necessary, action by the county board of 14 elections determining the variable percentages represented by 15 the terms "X" and "Y" in the form of the question chosen by 16 the school district or mandated by this section: 17 (i) If a school district fails to take any action, 18 the referendum questions submitted to the voters shall be 19 in the following form: 20 (A) Do you favor imposition and collection of an 21 increase in the earned income and net profits tax of 22 one tenth of one percent (.1%) in order to obtain 23 State matching funds in a multiple determined by the 24 level of proceeds in the Property Tax Relief Fund to 25 provide for residential property tax relief? 26 (B) Do you favor the imposition of an X% 27 additional earned income and net profits tax above 28 the amount required to obtain State matching funds in 29 order to provide further residential property tax 30 reductions of up to 50% of the allowable maximum 20030S0100B1789 - 15 -
1 homestead exclusion? 2 (ii) If a school district enacts by resolution a one 3 tenth of one percent (.1%) increase in the earned income 4 and net profits tax to obtain the State matching funds, a 5 referendum question shall be submitted to the voters in 6 one of the following forms: 7 (A) Do you favor the imposition of an X% earned 8 income and net profits taxes in order to provide 9 further residential property tax reductions of up to 10 Y%? 11 (B) Do you favor abolishing your current earned 12 income and net profits tax and converting it into a 13 personal income tax at X% in order to generate funds 14 to provide for residential property tax reductions of 15 Y% in addition to replacing the revenue from the 16 abolished earned income and net profits tax. 17 (iii) If a school district enacts by resolution a 18 one tenth of one percent (.1%) increase in the earned 19 income and net profits tax to obtain the State matching 20 funds but fails to take action to submit a referendum 21 question to the voters to provide for additional 22 homestead property tax relief, the following question 23 shall be submitted to the voters: 24 Do you favor the imposition of an X% earned 25 income and net profits tax in order to provide 26 further homestead property tax reductions of up to 27 50% of the allowable maximum homestead exclusion? 28 (3) A nonlegal interpretative statement shall accompany 29 the referendum question in accordance with section 201.1 of 30 the act of June 3, 1937 (P.L.1333, No.320), known as the 20030S0100B1789 - 16 -
1 Pennsylvania Election Code. 2 (c) Tax implementation and public referendum requirements 3 for the municipal election of 2003.--In addition to the 4 provisions of subsection (b), the following shall apply for the 5 municipal election of 2003: 6 (1) Not later than 30 days after the effective date of 7 this article, the board of school directors shall adopt a 8 resolution imposing the tax authorized by section 611-A(a)(1) 9 and shall determine the parameters necessary for the 10 submission of the referendum question required to be 11 submitted to the voters by this section. 12 (2) 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 (i) No later than 30 days after the effective date 16 of this subparagraph or 15 days after the Department of 17 Education certifies to the school district its initial 18 estimated property tax reduction allocation, whichever is 19 later, the board of school directors of each school 20 district shall adopt the resolution required under 21 section 626-A(a) authorizing the referendum question. The 22 resolution and the referendum question shall be based on 23 the calculation provided for under section 626-A(b). 24 (ii) If the board of school directors fails to adopt 25 the resolution required under section 626-A(a) by the 26 date specified in this paragraph, the county board of 27 elections shall prepare a referendum question pursuant to 28 subsection (b)(2)(iii) that authorizes an earned income 29 and net profits tax for the school district at the rate 30 necessary to provide for a homestead exclusion of at 20030S0100B1789 - 17 -
1 least 50% of the maximum rate permitted, based on the 2 calculation provided for under section 626-A(b). 3 (iii) The county board of elections shall cause the 4 referendum question required by this subsection to be 5 submitted to the electors of the school district 6 consistent with the provisions of this section. The 7 county may seek reasonable costs associated with the 8 preparation of the referendum question from a school 9 district located within the county which fails to adopt a 10 resolution required under this section. 11 (d) Segregated amounts.--When a majority of the electors 12 vote in favor of the referendum question submitted to them under 13 subsection (b)(2)(i)(A), the new tax rate shall be self- 14 executing and shall apply to a school district's first school 15 year commencing after December 31, 2003 and each school year 16 thereafter. Collections of the new tax shall be held in a 17 segregated account of the school district and used in 18 conjunction with its property tax reduction allocation from the 19 Commonwealth only for homestead and farmstead property tax 20 relief. No property tax reduction allocation shall be paid to 21 the school district until it ratifies the referendum by 22 resolution and passes the resolution required under subsection 23 (e). 24 (e) Resolution implementing tax provisions required.--When a 25 majority of the electors voting on a referendum question which 26 was not placed on the ballot by the affirmative action of the 27 board of school directors vote in favor of the question, the 28 school district shall, within 30 days of the certification of 29 the passage of the referendum by the county board of elections, 30 adopt a resolution implementing the tax provisions mandated by 20030S0100B1789 - 18 -
1 the voters. Failure to adopt a resolution shall suspend the 2 school district's right to receive the distribution of its 3 property tax reduction allocation under Article VI-B until a 4 resolution is adopted. The school district's allocation shall be 5 reserved by the Department of Education in a separate account 6 for payment when the school district satisfies the requirements 7 of this subsection. 8 (f) Public referendum requirements to end participation 9 under this subdivision.--Subject to the notice and public 10 hearing requirements in section 4 of the Local Tax Enabling Act, 11 a board of school directors may elect to end participation under 12 this subdivision in accordance with subsection (a)(4) by 13 obtaining the approval of the electorate of the affected school 14 district in a public referendum at a municipal election. 15 (g) Effect on certain school districts.-- 16 (1) This section shall not apply to a school district of 17 the first class. 18 (2) Except for subsection (b)(2)(i)(A), this section 19 shall not apply to a school district of the first class A or 20 a school district certified as distressed pursuant to section 21 691 or an educational empowerment school district pursuant to 22 section 1705-B or 1707-B. 23 (3) Except for subsections (b)(2)(i)(A), (h), (i), (j) 24 and (k), this section shall not apply to a school district in 25 which a referendum question under 53 Pa.C.S. § 8703 (relating 26 to adoption of referendum) has been approved and implemented. 27 (h) Election.--A school district in which a referendum 28 question under 53 Pa.C.S. § 8703 has been approved and 29 implemented may, by resolution, make an election to adopt the 30 provisions of section 611-A. The adoption of a resolution 20030S0100B1789 - 19 -
1 authorizing election under this article shall have the same 2 effect as a public referendum question under this section 3 receiving a majority vote, and the provisions of this article 4 shall apply in a manner designed to attain that outcome. If a 5 school board of directors makes an election under this 6 subsection, the school district shall no longer be required to 7 implement the provisions of 53 Pa.C.S. Ch. 87. 8 (i) Effect on tax rates and homestead and farmstead 9 exclusions.--An election under subsection (h) shall not affect 10 the current rate of earned income and net profits tax currently 11 imposed, nor shall the amount of the homestead and farmstead 12 exclusion currently enacted be changed unless the school 13 district elects to change the tax rate or homestead and 14 farmstead exclusion consistent with the provisions of this 15 article. 16 (j) Pending referendum questions to elect participation.--A 17 school district which, by resolution, has elected to place a 18 referendum question on the ballot in accordance with the 19 provisions of 53 Pa.C.S. § 8703(b) in the municipal election of 20 2003, may, by resolution, require that the referendum question 21 be removed from the ballot. If a school district elects to 22 withdraw the question for the municipal election of 2003, it 23 shall comply with this section. 24 (k) Pending referendum questions to end participation.--A 25 school district which, by resolution, has elected to end 26 participation under 53 Pa.C.S. § 8703(c) in a municipal election 27 may, by resolution, require that the referendum question be 28 removed from the ballot. If a school district elects not to 29 remove the question and the question receives a majority of the 30 vote by the electorate, then the school district shall place a 20030S0100B1789 - 20 -
1 referendum question consistent with subsection (b) on the next 2 primary election ballot immediately following the municipal 3 election. 4 Section 614-A. Public referendum requirements for increasing 5 certain taxes. 6 (a) Applicability.--This section shall apply to the board of 7 school directors of a school district if the tax under section 8 611-A(a)(1) is enacted or if a referendum under section 613-A is 9 approved. 10 (b) Prohibitions.--Except as set forth in subsection (f), 11 unless there is compliance with subsection (c), a board of 12 school directors may not do any of the following: 13 (1) Increase the rate of a tax levied for the support of 14 the public schools by more than the percentage increase in 15 the index in the preceding year. 16 (2) Levy a tax for the support of the public schools 17 which was not levied in the fiscal year in which a referendum 18 under section 613-A was approved or a tax under section 611- 19 A(a)(1) was imposed. 20 (3) Raise the rate of the earned income and net profits 21 tax, if already imposed under the authority of section 13 of 22 the Local Tax Enabling Act, except as otherwise provided for 23 under section 621-A. 24 (4) Notwithstanding any other provision of this article 25 to the contrary, the adoption of a referendum under section 26 613-A confers on the board of school directors the authority 27 to raise income taxes only to the extent contained in the 28 language of the referendum and any future, additional 29 increase of the income tax to be used for the sole purpose of 30 property tax reduction shall be required to be submitted to 20030S0100B1789 - 21 -
1 the voters at a subsequent referendum pursuant to the 2 provisions of section 613-A. 3 (c) Referendum.-- 4 (1) In order to take an action under subsection (b)(1), 5 at the primary election immediately preceding the fiscal year 6 in which the proposed tax increase would take effect: 7 (i) a referendum stating the specific rate or rates 8 of the tax increase must be submitted to the electors 9 residing in the school district; and 10 (ii) a majority of the electors voting on the 11 referendum must approve the increase. 12 (2) In order to take an action under subsection (b)(2), 13 at the primary election immediately preceding the fiscal year 14 in which the proposed tax would take effect: 15 (i) a referendum stating the specific tax and rate 16 to be levied must be submitted to the electors residing 17 in the school district; and 18 (ii) a majority of the electors voting on the 19 referendum must approve the tax. 20 (d) Failure to approve referendum.-- 21 (1) If there is no approval under subsection (c)(1)(ii), 22 the board of school directors may approve an increase in the 23 tax rate of not more than the percentage increase in the 24 index in the preceding year. 25 (2) If there is no approval under subsection (c)(2)(ii), 26 the board of school directors may not levy the tax. 27 (e) Exception to general rule.--The provisions of subsection 28 (b)(1) shall not apply to an increase in the rate of any tax 29 levied for the support of the public schools which is less than 30 or equal to the percentage increase in the index in the 20030S0100B1789 - 22 -
1 preceding year. Prior to any increase under this subsection, the 2 board of school directors shall certify to the Department of 3 Education the estimates of local tax rates under this 4 subsection. The Department of Education may, on its own motion 5 or on petition of a person having standing under subsection (j), 6 revise the estimates certified by the board of school directors 7 and reduce the allowable increase in the rate of any tax under 8 this subsection. 9 (f) Referendum exceptions.--The provisions of subsection 10 (b)(1) shall not apply to an increase in the rate of any tax 11 levied for the support of the public schools where the increase 12 is necessary to respond to one or more of the following 13 conditions: 14 (1) To respond to or recover from an emergency or 15 disaster declared pursuant to 35 Pa.C.S. § 7301 (relating to 16 general authority of Governor) or 75 Pa.C.S. § 6108 (relating 17 to power of Governor during emergency), only for the duration 18 of the emergency or disaster. 19 (2) To implement a court order or an administrative 20 order from a Federal or State agency that requires the 21 expenditure of funds that exceed current available revenues, 22 provided that the rate increase is rescinded following 23 fulfillment of the court order or administrative order. 24 (3) As follows: 25 (i) To pay interest and principal on any 26 indebtedness incurred under 53 Pa.C.S. Pt. VII Subpt. B 27 (relating to indebtedness and borrowing) prior to the 28 effective date of this section, provided that in no case 29 may the school district incur additional debt under this 30 paragraph, except for the refinancing of existing debt, 20030S0100B1789 - 23 -
1 including the payment of costs and expenses related to 2 such refinancing and the establishment or funding of 3 appropriate debt service reserves and provided further 4 that the increase is rescinded following the final 5 payment of interest and principal. 6 (ii) To pay interest and principal on any electoral 7 debt incurred under 53 Pa.C.S. Pt VII Subpt. B. 8 (iii) To pay interest and principal on any 9 indebtedness incurred for school construction projects 10 under 22 Pa. Code Ch. 21 (relating to school buildings), 11 whether such indebtedness is incurred before or after the 12 enactment of this article, when the project has received 13 Plan Con A approval by the Department of Education prior 14 to the effective date of this section and to establish 15 and fund appropriate debt service reserved, provided that 16 the increase is rescinded following final payment of 17 interest and principal. 18 (iv) The exception provided under this paragraph may 19 not be used in lieu of the referendum under subsection 20 (c)(2) to pay for costs which could not be financed by 21 the issuance of debt under 53 Pa.C.S. (relating to 22 municipalities generally). 23 (4) To respond to conditions that pose an immediate 24 threat of serious physical harm or injury to the students, 25 staff or residents of the school district, but only until the 26 conditions causing the threat have been fully resolved. 27 (5) Special purpose tax levies approved by the 28 electorate. 29 (6) To pay costs attributable to an increase in the sum 30 of selected school expenditures where such expenditures 20030S0100B1789 - 24 -
1 exceed the sum of selected State allocations as defined in 2 this paragraph. 3 (i) For the purposes of this paragraph, such 4 "selected school expenditures" shall include any increase 5 in costs associated with new, unfunded federally mandated 6 educational programs, payments made to charter schools 7 located in the district, payments made to intermediate 8 units or community colleges for vocational education 9 expenses and changes in the payments on behalf of active 10 members of the Public School Employees' Retirement System 11 as required pursuant to 24 Pa.C.S. § 8327 (relating to 12 payments by employers) between the school year prior to 13 the school year in which an exception under this 14 paragraph is sought and the school year in which an 15 exception under this paragraph is sought. 16 (ii) For the purposes of this paragraph, "selected 17 State allocations" shall include any increase or decrease 18 in payments provided through the basic education funding 19 allocation, special education funding allocation and 20 provided under sections 2502.16, 2502,30, 2541, 2542, 21 2543, 2572, 2574, 2574.1, 2574.2, 2574.3, 2575, 2575.1, 22 2575.2 and 2580 between the school year prior to the 23 school year in which an exception under this paragraph is 24 sought and the school year in which an exception under 25 this paragraph is sought. 26 (7) (i) To maintain per-student local tax revenue in 27 the school district at an amount not exceeding the amount 28 of per-student local tax revenue at the level of the 29 preceding year, adjusted for the percentage increase in 30 the index in the preceding year. 20030S0100B1789 - 25 -
1 (ii) This paragraph shall apply only if the 2 percentage growth in average daily membership in the 3 school district between the current fiscal year and the 4 third fiscal year immediately preceding the current 5 fiscal year exceeds 10%. For the purposes of this 6 paragraph, per-student local tax revenue shall be 7 determined by dividing local tax revenue by average daily 8 membership. 9 (8) To compensate for a one-year decrease of 10% or more 10 in the school district's real property tax base. For the 11 purposes of this paragraph, the decrease shall be measured by 12 the percent change in the assessed value of all taxable 13 property within the school district between the fiscal year 14 in which an exception under this paragraph is sought and the 15 fiscal year immediately preceding the fiscal year in which an 16 exception under this paragraph is sought. 17 (g) Revenue derived from increase.--Any revenue derived from 18 an increase in the rate of any tax allowed pursuant to an 19 exception under subsection (f)(3) or (5) shall not exceed the 20 anticipated dollar value of the expenditure for which the 21 exception under subsection (f) was sought. 22 (h) Limitation on rate.--The increase in the rate of any tax 23 allowed pursuant to an exception under subsection (f)(1), (2), 24 (4), (6), (7) or (8) shall not exceed the rate increase required 25 as determined by a court of common pleas pursuant to subsection 26 (i). 27 (i) Court action.--Prior to the imposition of the tax 28 increase under subsection (f)(1), (2), (4), (6), (7) or (8), 29 approval by the court of common pleas in the judicial district 30 in which the administrative office of the school district is 20030S0100B1789 - 26 -
1 located must be obtained. The board of school directors shall 2 publish in a newspaper of general circulation a notice of its 3 intent to file an action under this subsection at least one week 4 prior to the filing of the petition. The board of school 5 directors shall also publish in a newspaper of general 6 circulation notice, as soon as possible following notification 7 from the court that a hearing has been scheduled, stating the 8 date, time and place of the hearing on the petition. The 9 following shall apply to any proceedings instituted under this 10 subsection: 11 (1) The board of school directors must prove by clear 12 and convincing evidence the necessity for the tax increase. 13 (2) The board of school directors must prove by clear 14 and convincing evidence the anticipated dollar value of the 15 expenditure for which an exception under subsection (f) is 16 sought. 17 (3) The board of school directors must prove by clear 18 and convincing evidence that there are no assets or other 19 feasible alternatives available to the school district. 20 (4) The court shall determine the dollar value of the 21 expenditure for which an exception under subsection (f) is 22 sought, the rate increase required and the appropriate 23 duration of the increase. The court may retain continuing 24 jurisdiction and may, on its own motion or on petition of an 25 interested party, revoke approval for or order rescission of 26 a tax increase. 27 (j) Standing.--A person shall have standing as a party to a 28 proceeding under this section as long as the person resides 29 within or pays real property taxes to the taxing jurisdiction of 30 the board of school directors instituting the action. 20030S0100B1789 - 27 -
1 (k) Averaged index calculation.--On or about January 15 of 2 each year, the Department of Education shall calculate the 3 average of the percentage increases in the Statewide average 4 weekly wage and the percentage increase in the Employment Cost 5 Index for the previous 12-month period. The Department of 6 Education shall publish notice of this calculated average by 7 February 1 of each year in the Pennsylvania Bulletin. 8 Section 615-A. Property tax limits on reassessment. 9 After any county makes a countywide revision of assessment of 10 real property at values based upon an established predetermined 11 ratio as required by law or after any county changes its 12 established predetermined ratio, a board of school directors in 13 a school district which has adopted a resolution imposing the 14 tax under section 611-A(a)(1) or in which a referendum under 15 section 613-A has been approved, which after the effective date 16 of this section for the first time levies its real estate taxes 17 on that revised assessment or valuation, shall for the first 18 year reduce its tax rate, if necessary, for the purpose of 19 having the percentage increase in taxes levied for that year 20 against the real properties contained in the duplicate for the 21 preceding year be less than or equal to the percentage increase 22 in the average index for the preceding year notwithstanding the 23 increased valuations of such properties under the revised 24 assessment. For the purpose of determining the total amount of 25 taxes to be levied for the first year, the amount to be levied 26 on newly constructed buildings or structures or on increased 27 valuations based on new improvements made to existing houses 28 need not be considered. The tax rate shall be fixed for that 29 year at a figure which will accomplish this purpose. The 30 provisions of section 614-A shall apply to increases in the tax 20030S0100B1789 - 28 -
1 rate above the limits provided in this section. 2 (c) Earned Income and Net Profits Tax 3 or Personal Income Tax 4 Section 621-A. Authorization. 5 (a) General rule.--A board of school directors may choose to 6 levy, assess and collect a tax on earned income and net profits 7 or a personal income tax under this section. 8 (b) Earned income and net profits tax.-- 9 (1) A board of school directors may levy, assess and 10 collect a tax on earned income and net profits of resident 11 individuals of the school district at the rate and pursuant 12 to the authority provided in section 611-A(a)(1) without 13 submitting the question to the voters in a referendum under 14 section 613-A. 15 (2) A board of school directors may levy, assess and 16 collect an additional tax on the earned income and net 17 profits of resident individuals of the school district. 18 (3) The combined rate of the earned income and net 19 profits tax authorized under paragraphs (1) and (2) shall not 20 be at a rate less than the rate required to provide revenue, 21 in addition to the State match from the fund, for an 22 exclusion for farmstead property and an exclusion for 23 homestead property equal to 50% of the maximum exclusion 24 under 53 Pa.C.S. § 8586 (relating to limitations) and shall 25 not exceed the rate required to provide an exclusion for 26 farmstead property and an exclusion for homestead property 27 equal to the maximum exclusion under 53 Pa.C.S. § 8586. The 28 board of school directors shall round the rate of the earned 29 income and net profits tax levied pursuant to this section to 30 the nearest tenth of a percent. The exclusion for farmstead 20030S0100B1789 - 29 -
1 property granted under this section shall not exceed the 2 amount granted for the exclusion for homestead property. 3 (c) Personal income tax.-- 4 (1) A board of school directors may levy, assess and 5 collect a tax on the personal income of resident individuals 6 of the school district at a rate determined by the board of 7 school directors. 8 (2) The personal income tax authorized under paragraph 9 (1) shall equal the sum of the rate required to generate the 10 same amount of earned income and net profits tax revenue 11 received by the school district prior to the adoption of this 12 subsection and pursuant to section 611-A(a)(1) and to provide 13 an exclusion for farmstead property and an exclusion for 14 homestead property equal to 50% of the maximum exclusion 15 under 53 Pa.C.S. § 8586 and shall not exceed the rate 16 required to provide an exclusion for farmstead property and 17 an exclusion for homestead property equal to the maximum 18 exclusion under 53 Pa.C.S. § 8586. The board of school 19 directors shall round the rate of the personal income tax 20 pursuant to this section to the nearest tenth of a percent. 21 The exclusion for farmstead property granted under this 22 section shall not exceed the amount granted for the exclusion 23 for homestead property. 24 (3) If a board of school directors elects to impose a 25 personal income tax under this subsection, the board of 26 school directors shall not be permitted to impose the earned 27 income and net profits tax under subsection (b) or under the 28 Local Tax Enabling Act. 29 (4) A personal income tax imposed under the authority of 30 this article shall be levied and assessed on the same basis 20030S0100B1789 - 30 -
1 and administered in the same fashion as the tax imposed by 2 Article III of the Tax Reform Code, the provisions of which 3 are incorporated by reference into this article. 4 (i) Notwithstanding the provisions of section 353(f) 5 of the Tax Reform Code, the Department of Revenue may 6 permit the proper officer of a school district imposing a 7 tax pursuant to this article to inspect the tax returns 8 of any taxpayer or may furnish to the officer or an 9 authorized representative an abstract of the return of 10 income of any current or former resident of the school 11 district, or supply information concerning any item of 12 income contained in any tax return. The officer or 13 authorized agent of the school district imposing a tax 14 under this article shall be furnished the requested 15 information upon payment to the department of the cost of 16 collecting and reproducing the requested information. 17 (ii) (A) Except for official purposes or as 18 provided by law, it shall be unlawful for any 19 officer, agent or employee of a school district to do 20 any of the following: 21 (I) Disclose the amount or source of income, 22 profits, losses, expenditures or any particular 23 information concerning income, profits, losses or 24 expenditures contained in any return. 25 (II) Permit any return or copy of a return 26 or any book containing any abstract or 27 particulars to be seen or examined. 28 (III) Print or publish in any manner any 29 return or any particular information concerning 30 the return. 20030S0100B1789 - 31 -
1 (IV) Print or publish in any manner any 2 amount or source of income, profits, losses, 3 expenditures or any particular information 4 concerning income, profits, losses or 5 expenditures contained in any return. 6 (B) Any officer, agent or employee of a school 7 district that violates clause (A): 8 (I) May be fined not more than $1,000 or 9 imprisoned for not more than one year, or both. 10 (II) Shall be dismissed from office or 11 discharged from employment. 12 (d) Prohibitions.-- 13 (1) A school district that levies a local personal 14 income tax under this section shall have no power to levy, 15 assess or collect the earned income and net profits tax under 16 this section. 17 (2) Payment of any tax on income to any state other than 18 Pennsylvania or to any political subdivision located outside 19 the boundaries of this Commonwealth, by residents of a school 20 district located in Pennsylvania shall not be credited to and 21 allowed as a deduction from the liability of such person for 22 any income tax imposed by the school district of residence. 23 Section 622-A. Collections. 24 A board of school directors imposing a tax under this article 25 shall designate a tax officer under section 10 of the Local Tax 26 Enabling Act, or otherwise by law, as the collector of the 27 earned income and net profits tax or personal income tax. In the 28 performance of the tax collection duties under this subdivision, 29 the designated tax officer shall have all the same powers, 30 rights, responsibilities and duties for the collection of the 20030S0100B1789 - 32 -
1 taxes which may be imposed under the Local Tax Enabling Act, 53 2 Pa.C.S. Ch. 84 Subch. C (relating to local taxpayers bill of 3 rights) or as otherwise provided by law. 4 Section 623-A. Credits and reimbursement. 5 (a) Credit.--The provisions of section 14 of the Local Tax 6 Enabling Act shall be applied by a board of school directors to 7 determine any credits under the provisions of this subdivision 8 for a tax imposed under section 621-A. 9 (b) Reimbursement.--Notwithstanding any other provisions of 10 law to the contrary, the following apply: 11 (1) This subsection only applies to a taxpayer who is a 12 resident of this Commonwealth and not a resident of a city of 13 the first class but who is subject to the tax on salaries, 14 wages, commissions or other compensation imposed by a city of 15 the first class under the authority of the act of August 5, 16 1932 (Sp.Sess., P.L.45, No.45), referred to as the Sterling 17 Act. 18 (2) Payment of a tax on salaries, wages, commission or 19 other compensation as set forth in paragraph (1) shall be 20 credited to the school district of the taxpayer's residence 21 at an amount no greater than the rate of tax imposed on the 22 earned income and net profits of the taxpayer by the school 23 district in which the taxpayer resides. 24 (3) For fiscal years beginning after June 30, 2004, an 25 amount equal to the aggregate amount of the tax credited 26 under paragraph (2) shall be paid from the fund to the school 27 district of residence of each taxpayer under paragraph (1) 28 for the sole purpose of funding homestead and farmstead 29 exclusions in accordance with this article. The Department of 30 Education shall prescribe procedures to calculate the amount 20030S0100B1789 - 33 -
1 due to each school district qualifying under this paragraph. 2 Section 624-A. Exemption and special provisions. 3 (a) General rule.--A school district that imposes an earned 4 income and net profits tax under section 621-A may exempt from 5 the payment of that tax any person whose total income from all 6 sources is less than $10,000. 7 (b) Applicability.--The provisions of section 304 of the Tax 8 Reform Code shall apply to the local personal income tax by any 9 school district that levies a tax on personal income of 10 residents under section 621-A(c). 11 Section 625-A. Rules and regulations. 12 A school district that imposes: 13 (1) an earned income and net profits tax under section 14 621-A shall be subject to all regulations adopted under 15 section 13 of the Local Tax Enabling Act and may adopt 16 regulations for the processing of claims for credits or 17 exemptions under sections 623-A and 624-A; or 18 (2) a personal income tax under section 621-A shall be 19 subject to all regulations adopted by the Department of 20 Revenue in administering the tax due to the Commonwealth 21 under section 302 of the Tax Reform Code. 22 Section 626-A. Procedure and administration. 23 (a) Levy.--In order to levy a tax under section 621-A, the 24 board of school directors must adopt a resolution referring to 25 this subdivision prior to placing a referendum question on the 26 ballot under section 613-A. Prior to adopting a resolution 27 imposing a tax under section 621-A(b)(2) or (c), the board of 28 school directors must give public notice of its intent to adopt 29 the resolution in the manner provided by section 4 of the Local 30 Tax Enabling Act and must conduct at least one public hearing 20030S0100B1789 - 34 -
1 regarding the proposed adoption of the resolution. 2 (b) Calculation.--For the purposes of proposing a resolution 3 and referendum under section 613-A(c), the board of school 4 directors shall calculate: 5 (1) The value of homestead property in the school 6 district by dividing the total assessed value of residential 7 property in the school district in calendar year 2002, as 8 compiled by the State Tax Equalization Board, by the total 9 number of owner-occupied housing units in the school district 10 as reported by the United States Census Bureau for the 2000 11 census in Summary File 1. 12 (2) The maximum homestead exclusion by multiplying the 13 quotient from paragraph (1) by 0.50. 14 (3) The proposed homestead exclusion for the school 15 district by multiplying the product from paragraph (2) by a 16 number as determined by the board of school directors, 17 providing that such number is greater than or equal to 0.50 18 and less than or equal to 1.0. 19 (4) The proposed reduction in real property taxes for 20 the school district by multiplying the product from paragraph 21 (3) by the real property tax millage rate of the school 22 district in effect for the 2001-2002 school year. 23 (c) Conflict.--In any situation where there is a conflict 24 involving the authority conferred on a local tax collector, by 25 the provisions of the Local Tax Enabling Act and the Tax Reform 26 Code, the provisions of the Local Tax Enabling Act shall 27 control. 28 Section 627-A. Disposition of income tax revenue. 29 (a) School year of implementation.-- 30 (1) For the first school year that a tax imposed 20030S0100B1789 - 35 -
1 pursuant to section 611-A(a)(1) or a tax authorized pursuant 2 to section 613-A is implemented, an increase in revenue 3 received by a school district that is directly attributable 4 to any of the following shall be used by the school district 5 to provide for a reduction in the school district property 6 tax by means of an exclusion for farmstead property and 7 homestead property: 8 (i) Implementation of a new tax on earned income and 9 net profits. 10 (ii) Implementation of a new tax on personal income. 11 (iii) An increase in the rate of a tax on earned 12 income and net profits. 13 (iv) A conversion of a tax on personal income from a 14 tax on earned income and net profits. 15 (2) In the second school year and each school year 16 thereafter, the funds derived from the sources delineated in 17 paragraph (1) shall be used to the extent necessary to 18 continue to provide for a reduction in school district 19 property taxes at the level established in the immediately 20 prior school year. 21 (b) Subsequent rate increases or base changes.-- 22 (1) For the school year of implementation of an increase 23 in the rate of an existing tax imposed under section 621-A or 24 the conversion of a tax on personal income from a tax on 25 earned income and net profits under this article, all revenue 26 received by a school district directly attributable to the 27 increased rate or conversion shall be used to reduce the 28 school district real property tax by means of an exclusion 29 for farmstead property and homestead property pursuant to 30 section 621-A. 20030S0100B1789 - 36 -
1 (2) In the second school year after the implementation 2 of an increase referred to in paragraph (1) and each school 3 year thereafter, the funds derived from the sources 4 delineated in paragraph (1) shall be used to the extent 5 necessary to continue to provide for a reduction in school 6 district property taxes at the level established in the 7 immediately prior school year. 8 (c) School district costs.--Not more than 2% of the increase 9 in revenue calculated under subsection (a)(1) may be retained by 10 the school district to offset costs to implement this article. 11 (d) Exclusive use.--All funds received by a school district 12 from the fund in any school year pursuant to its property tax 13 reduction allocation shall be used exclusively to provide for a 14 reduction in the school district real property tax by means of 15 an exclusion from farmstead property and homestead property 16 pursuant to the provisions of subdivision (d). 17 (d) Homestead Exclusion 18 Section 691-A. Changes to the amount of the homestead 19 exclusion. 20 (a) Increases in the homestead exclusion.--A school district 21 may increase the amount of the exclusion for homestead property 22 required pursuant to section 627-A consistent with the 23 prohibitions in 53 Pa.C.S. § 8586 (relating to limitations). 24 (b) Decreases in the homestead exclusion.--A school district 25 may only reduce the exclusion for homestead property below the 26 level authorized pursuant to subsection (c), section 692-A(b) 27 and the referendum required under section 613-A, when the median 28 assessed value used in calculating the homestead exclusion 29 decreases. 30 (c) Reassessment.--After a revision of assessments by means 20030S0100B1789 - 37 -
1 of revaluing all properties, the governing body providing an 2 exclusion for homestead property under section 613-A shall 3 adjust the amount of the exclusion pursuant to 53 Pa.C.S. § 4 8583(e) (relating to exclusion for homestead property). 5 (d) Excess funding.--A school district which collects or 6 anticipates collecting revenue from taxes authorized under this 7 article, together with State funds received pursuant to Article 8 VI-B, in an amount greater than that necessary to provide for 9 homestead exclusions equal to 100% of the amount authorized 10 pursuant to the Constitution of Pennsylvania shall use those 11 excess to either: 12 (1) reduce the rate of its earned income and net profits 13 tax or its personal income tax to a level that returns to 14 those taxpayers all excess funds; or 15 (2) reduce the millage rate on all taxable real property 16 within the school district to the extent necessary to use all 17 the excess revenue for property tax relief. 18 (e) Reduction in funding.--In any year subsequent to a year 19 in which an income tax rate was reduced pursuant to subsection 20 (d), if the revenue collected or anticipated to be collected 21 under this article and Article VI-B falls below the amount 22 necessary to maintain homestead property tax exclusions at 100% 23 of the maximum, the school district may reraise the rate of the 24 income tax so reduced by the amount previously reduced without 25 complying with the referendum provisions of section 613-A or 26 614-A. 27 Section 692-A. Homestead exclusion process. 28 (a) Notification to property owners.--If the board of school 29 directors imposes a tax under section 611-A(a)(1) or if the 30 electors of a school district approve a referendum question 20030S0100B1789 - 38 -
1 pursuant to section 613-A, the board of school directors shall, 2 by first class mail, notify the owners of each parcel of 3 property within the district of the following information at a 4 minimum: 5 (1) The rate of additional earned income and net profits 6 tax or personal income tax approved pursuant to sections 611- 7 A and 613-A. 8 (2) The estimated dollar amount of property tax relief 9 realized for each qualifying homestead and farmstead property 10 as projected by section 626-A. This information shall be 11 accompanied by a statement that the actual dollar property 12 tax relief may be affected by the total number of 13 applications received and approved. 14 (3) The requirement to submit a completed application as 15 required under 53 Pa.C.S. Ch. 85 Subch. F (relating to 16 homestead property exclusion) in order to qualify for the 17 property tax reductions estimated in paragraph (2). 18 The notice required by this section shall include a copy of the 19 application required by the assessor of the county where the 20 property is located and the instructions for completing and 21 returning the application. The notice required by this 22 subsection shall be made by December 15, 2003, and again by 23 January 31, 2004. 24 (b) Revisions to the initial calculation of homestead and 25 farmstead exclusion for school districts.--If the board of 26 school directors imposes a tax under section 611-A(a)(1) or if 27 the electors of a school district approve a referendum question 28 pursuant to 613-A(c), the board of school directors shall revise 29 the calculation utilized under section 626-A(b) with information 30 derived from the supplemental report from the assessor under 20030S0100B1789 - 39 -
1 this section. Such revised calculation shall be used to provide 2 homestead and farmstead exclusions. Where the tax imposed under 3 section 621-A is insufficient to provide the homestead and 4 farmstead exclusions authorized through approval of a referendum 5 question, the exclusions may be reduced accordingly. 6 (c) Appeals.--Real property for which an application under 7 53 Pa.C.S. § 8584 (relating to administration and procedure) has 8 been filed by March 1, 2004, shall be deemed to be a homestead 9 property or farmstead property, as the case may be, for the 10 purposes of implementing a homestead or farmstead exclusion 11 under 53 Pa.C.S. § 8717 (relating to disposition of earned 12 income and net profits tax revenue) in the school district 13 fiscal year beginning July 1, 2004, unless the assessor denies 14 the application within the time provided by law and the denial 15 is unappealed or unappealable. The school district is authorized 16 to collect taxes, interest and penalties relating to a homestead 17 or farmstead exclusion that is denied after the denial is 18 unappealed or unappealable. 19 (d) Reports.--In addition to the report required under 53 20 Pa.C.S. § 8584(i), the assessor shall be required to provide a 21 supplemental report containing the information required under 53 22 Pa.C.S. § 8584(i) for applications filed by March 1, 2004. The 23 date of the supplemental report shall be set by the school 24 district, but shall not be earlier than June 1, 2004. 25 (e) Duties of assessors--The assessor shall mail to the 26 owner of each homestead property and farmstead property for 27 which an application has been submitted and approved prior to 28 the effective date of this section a notice stating the date by 29 which the owner would be required to resubmit an application to 30 maintain the property's status as homestead property or 20030S0100B1789 - 40 -
1 farmstead property under the county's schedule for review or 2 reapplication for homestead and farmstead exclusions. The notice 3 under this section shall be made by first class mail no later 4 than December 15, 2003. 5 (f) Prohibition.--A county shall not require an application 6 fee for the submission or review of applications submitted to 7 qualify for a homestead exclusion or farmstead exclusion under 8 this article or under 53 Pa.C.S. Ch. 85 Subch. F. 9 (g) Applicability.--With the exception of subsection (f), 10 this section shall apply only to school districts in which the 11 board of school directors imposes a tax under section 611- 12 A(a)(1) or which approves a referendum under section 613-A at 13 the 2003 municipal election. 14 (e) Register 15 Section 693-A. Register for taxes. 16 (a) General rule.--The Department of Community and Economic 17 Development shall maintain an official continuing register 18 supplemented annually of all earned income and net profits taxes 19 or personal income taxes levied under Subdivision (c). 20 (b) Contents of register.--The register shall list: 21 (1) The school districts levying the tax. 22 (2) The rate of tax as stated in the resolution levying 23 the tax. 24 (3) The rate on taxpayers. 25 (4) The name and address of the official responsible for 26 administering the collection of the tax and from whom 27 information, forms and copies of regulations are available. 28 Section 694-A. Information for register. 29 Information for the register shall be furnished by the school 30 district to the Department of Community and Economic Development 20030S0100B1789 - 41 -
1 as prescribed by the department. The information must be 2 received by the department no later than July 15 of each year to 3 show new tax enactments, repeals and changes. Failure to comply 4 with the filing date may result in the omission of the tax levy 5 from the register for that year. Failure of the department to 6 receive information of taxes continued without change may be 7 construed by the department to mean that the information 8 contained in the previous register remains in force. 9 Section 695-A. Availability and effective period of register. 10 The register, with such annual supplements as may be required 11 by new tax enactments, repeals or changes, shall be available 12 upon request no later than August 15 of each year. The effective 13 period for each register shall be from July 1 of the year in 14 which it is issued to June 30 of the following year. 15 Section 696-A. Effect of nonfiling. 16 Employers shall not be required by any ordinance to withhold 17 from the compensation of their employees any local earned income 18 and net profits tax or personal income tax imposed under 19 Subdivision (c) which is not listed in the register or to make 20 reports of compensation in connection with taxes not so listed. 21 If the register is not available by August 15, the register of 22 the previous year shall continue to be effective for an 23 additional period of not more than one year. 24 Section 697-A. Effect of subdivision on liability of taxpayer. 25 The provisions of this subdivision shall not be construed to 26 affect the liability of any taxpayer for taxes lawfully imposed 27 under Subdivisions (b) and (c). 28 ARTICLE VI-B 29 STATE MATCHING FUNDS FORMULA 30 Section 601-B. Scope. 20030S0100B1789 - 42 -
1 This article relates to the State matching funds formula. 2 Section 602-B. Definitions. 3 The following words and phrases when used in this article 4 shall have the meanings given to them in this section unless the 5 context clearly indicates otherwise: 6 "Property tax reduction index." A quotient equal to the sum 7 of the numerical rank of a school district's personal income 8 valuation per average daily membership, the numerical rank of 9 its market-value/income-aid ratio, the numerical rank of its 10 equalized millage and the numerical rank of its school tax 11 ratio, divided by 1,000. 12 "Residential property tax." The dollar value of real 13 property taxes paid by residential property owners in a school 14 district, determined by multiplying the real property taxes 15 collected by the school district times the percentage of the 16 total property value in the school district classified as 17 residential by the State Tax Equalization Board. 18 "School tax ratio." The dollar value of local taxes 19 collected by the school district or by a city of the first class 20 for a school district of the first class divided by the personal 21 income valuation of the school district. 22 Section 603-B. State property tax reduction allocation. 23 (a) Administration.--By August 15, 2003, the Department of 24 Education shall do all of the following: 25 (1) Array the 2001 personal income valuation divided by 26 the 2001-2002 average daily membership, the 2003-2004 market- 27 value/income-aid ratio, the 2001-2002 equalized millage and 28 the 2001-2002 school tax ratio of each school district in 29 rank order and assign each school district a discreet 30 numerical rank for its personal income valuation per average 20030S0100B1789 - 43 -
1 daily membership, its market-value/income-aid ratio, its 2 equalized millage and its school tax ratio. For the numerical 3 rank of a school district's personal income valuation per 4 average daily membership, the school district with the lowest 5 personal income valuation per average daily membership shall 6 have the highest numerical rank. For the numerical rank of a 7 school district's market-value/income-aid ratio, the school 8 district with the highest market-value/income-aid ratio shall 9 have the highest numerical rank; provided that all school 10 districts with a market-value/income-aid ratio equal to 0.15 11 shall receive a ranking of 1. For the numerical rank of a 12 school district's equalized millage, the school district with 13 the highest equalized millage shall have the highest 14 numerical rank. For the numerical rank of a school district's 15 school tax ratio, the school district with the highest school 16 tax ratio shall have the highest numerical rank. 17 (2) Assign each school district a property tax reduction 18 index. 19 (3) Calculate the property tax reduction allocation for 20 each school district by multiplying the school district's 21 estimated 2002-2003 average daily membership by the property 22 tax reduction index of the school district and multiplying 23 that product by the necessary factor in order to allocate all 24 of the funds in the fund as certified by the Secretary of 25 Education and the Department of Revenue, except as follows: 26 (i) A school district for which the allocation under 27 this paragraph is less than the product of the 2001-2002 28 residential property tax of the school district and 0.15 29 shall receive an additional amount so that the total 30 allocation under this paragraph is equal to the product 20030S0100B1789 - 44 -
1 of the residential property tax of the school district 2 and 0.15. 3 (ii) A school district for which the allocation 4 under this paragraph is greater than the product of the 5 2001-2002 residential property tax of the school district 6 and 0.50 shall receive a total allocation equal to the 7 product of the residential property tax of the school 8 district and 0.50, except as provided in subsection (d). 9 (4) Notify each school district of the amount of its 10 property tax reduction allocation by August 15, 2003, and 11 March 1 of each year thereafter. 12 (b) Payment.--For the fiscal year commencing July 1, 2004, 13 and July 1 of each fiscal year thereafter, the Commonwealth 14 shall pay to each eligible school district a property tax 15 reduction allocation under the provisions of Article VI-A equal 16 to the amount calculated under subsection (a)(3). Payments 17 required under this subsection shall be made pursuant to section 18 2517(c). 19 (c) Data.--The data elements used to determine the 20 calculations within this section shall be based on the most 21 recent data, certified by the department by August 15, 2003. 22 (d) First class school districts.--The limitation in 23 subsection (a)(3)(ii) shall not apply to the calculation of the 24 property tax reduction allocation for a school district of the 25 first class. 26 (e) Reduction of wage taxes in a city of the first class.--A 27 city council of a city of the first class shall reduce any tax 28 imposed on the wages of residents and nonresidents under the 29 authority of the act of August 5, 1932 (Sp.Sess., P.L.45, 30 No.45), referred to as the Sterling Act, in a manner consistent 20030S0100B1789 - 45 -
1 with Article VI-C and in accordance with the following: 2 (1) For residents, by an amount equal to the amount of 3 the property tax reduction allocation received from the 4 Commonwealth pursuant to subsection (b) in an amount not to 5 exceed the limitations set forth in subsection (a)(3)(ii) had 6 such limitations applied. 7 (2) For nonresidents, by any amount equal to the amount 8 of the property tax reduction allocation received from the 9 Commonwealth pursuant to subsection (b) in excess of the 10 limitations set forth in subsection (a)(3)(ii) had such 11 limitations applied. 12 ARTICLE VI-C 13 WAGE AND NET PROFITS TAX RELIEF IN CITIES 14 OF THE FIRST CLASS 15 Section 601-C. Scope. 16 This article relates to wage and net profits tax relief in 17 cities of the first class. 18 Section 602-C. Definitions. 19 (Reserved) 20 Section 603-C. Tax relief. 21 (a) Tax reduction.--A city of the first class may reduce the 22 rate of wage and net profits tax to obtain the Commonwealth 23 funding under this article. If the city elects to reduce taxes 24 pursuant to this article, funds received by a city of the first 25 class under this article from the fund shall be used to offset a 26 reduction by the city in fiscal year 2004-2005 and each fiscal 27 year thereafter in the rate of tax on wages and net profits for 28 both residents and nonresidents as provided for in subsection 29 (b) which reductions shall remain in effect for so long as such 30 funds are paid to the city in an amount equal to the cost of 20030S0100B1789 - 46 -
1 such reductions. 2 (b) Calculation of reduction.-- 3 (1) The city shall calculate the amount of the rate 4 reductions so that they equal, based on estimates certified 5 by the city's director of finance and approved by the 6 Pennsylvania Intergovernmental Cooperation Authority prior to 7 the implementation of the reductions, in combination with any 8 reduction in the rate of unearned income tax imposed by a 9 school district in the city of the first class required by 10 the act of August 9, 1963 (P.L.640, No.338), entitled "An act 11 empowering cities of the first class, coterminous with school 12 districts of the first class, to authorize the boards of 13 public education of such school districts to impose certain 14 additional taxes for school district purposes, and providing 15 for the levy, assessment and collection of such taxes," as a 16 result of the reduction in the rate of wage and net profits 17 tax, the amount paid to the city from the fund for tax 18 reductions. The city shall, each year, transfer to such 19 school district an amount equal to the cost of any reduction 20 in the rate of unearned income tax caused by the rate; and 21 such transfer shall not be subject to the provisions of 22 section 696(h). 23 (2) The tax rate reductions implemented by a city of the 24 first class pursuant to this paragraph shall be in addition 25 to the following schedule of percentages of wage and net 26 profits tax rate reductions already scheduled to occur: 27 (i) In 2005, 2.0728% for residents and 0.8402% for 28 nonresidents. 29 (ii) In 2006, 0.8581% for residents and 0.8473% for 30 nonresidents. 20030S0100B1789 - 47 -
1 (iii) In 2007, 0.8656% for residents and 0.8545% for 2 nonresidents. 3 (iv) In 2008, 0.8731% for residents and 0.8619% for 4 nonresidents. 5 (c) Exceptions.--The wage and net profits tax rates can only 6 be raised above the rates specified in subsection (b)(2) by such 7 amount that is necessary to respond to any of the following: 8 (1) A fiscal threat or condition, as certified by the 9 city's director of finance and approved by the Pennsylvania 10 Intergovernmental Cooperation Authority, that occurs to the 11 city as set forth in section 614-A(f) or an equivalent fiscal 12 threat that affects the citizens of the city. It shall be the 13 responsibility of the city's director of finance with the 14 approval of the Pennsylvania Intergovernmental Cooperation 15 Authority to insure that the additional tax revenue raised is 16 equal to the amount expended to respond to the fiscal threat 17 or condition. If the amount of revenue raised through rate 18 adjustment exceeds the amount necessary to respond, over the 19 course of the city's approved financial plan, to the fiscal 20 threat, all of the excess amount shall be used for wage tax 21 and net profits tax reduction in the immediately succeeding 22 approved financial plan, but only if the rate reduction 23 (expressed as the difference between the two rates) would 24 exceed .0002. 25 (2) A decrease of more than 2% in the amount of total 26 tax collections plus any funds provided under this article 27 from the preceding year's collections. Such a determination 28 of a decrease must be attested to by the city's director of 29 finance and agreed to by the Pennsylvania Intergovernmental 30 Cooperation Authority. 20030S0100B1789 - 48 -
1 (3) A declaration by the Pennsylvania Intergovernmental 2 Cooperation Authority that the city's five-year plan is 3 disapproved pursuant to section 209 of the act of June 5, 4 1991 (P.L.9, No.6), known as the Pennsylvania 5 Intergovernmental Cooperation Authority Act for Cities of the 6 First Class. 7 (4) Federal or State law imposes a new unfunded mandate 8 on the city that costs the city more than 1.5% of the city's 9 total general fund expenditures in any fiscal year. 10 (5) The cost to the city of an existing mandate imposed 11 by Federal or State law increases by more than 1.5% of the 12 city's total general fund expenditures in any fiscal year and 13 funds to pay for the increase are not appropriated to the 14 city by the Federal or State government. 15 (6) Existing Federal or State funding is decreased by 16 1.5% of the city's total general fund expenditures in any 17 fiscal year. 18 (d) Excess funds.--If in any fiscal year the sums received 19 by a city of the first class from the fund are in excess of the 20 value of the tax rate reductions actually made by the city 21 pursuant to subsection (a), the city shall, within 60 days 22 following the certification by the director of finance, in 23 consultation with the Secretary of the Budget and with the 24 approval of the Pennsylvania Intergovernmental Cooperation 25 Authority of the amount of the excess, do any of the following: 26 (1) repay to the fund the excess sums; or 27 (2) further reduce wage and net profits tax rates and 28 unearned income tax rates, if required, in the fiscal year 29 next following the determination of the excess, by an amount 30 that will result in total tax rate reductions required for 20030S0100B1789 - 49 -
1 the amount received from the fund. To the extent the rate 2 reduction provided for in paragraph (2), expressed as the 3 difference between the two rates, would not exceed .0002, 4 this subsection shall not apply. 5 (e) Insufficient funds.--If in any fiscal year the director 6 of finance certifies, in consultation with the Secretary of the 7 Budget and with the approval of the Pennsylvania 8 Intergovernmental Cooperation Authority, that the amount of sums 9 received by the city from the fund are less than the value of 10 the tax rate reductions actually made by the city pursuant to 11 subsection (a), the city may, in the fiscal year next following 12 the determination of the amount, increase the city's wage and 13 net profits tax rate above the rates specified in subsection 14 (b)(2) by an amount that will result in an overall tax rate 15 reduction equal to that required for the amount received by the 16 city from the fund. To the extent the rate increase provided for 17 in this subsection, expressed as the difference between the two 18 rates, would not exceed .0002, this subsection shall not apply. 19 Section 4. Section 1714-B(g) of the act, added May 10, 2000 20 (P.L.44, No.16), is amended to read: 21 Section 1714-B. Mandate Waiver Program.--* * * 22 (g) The following provisions of this act shall not be 23 subject to waiver pursuant to this section: sections 108, 110, 24 111, 321, 322, 323, 324, 325, 326, 327, 431, 436, 437, 440.1, 25 443, 510, 513, 518, 527, 701.1, 708, 736, 737, 738, 739, 740, 26 741, 752, 753, 755, 771, 776, 777, 808, 809, 810, 1303(a), 1310, 27 1317, 1317.1, 1317.2, 1318, 1327, 1327.1, 1330, 1332, 1361, 28 1366, 1501, 1502, 1513, 1517, 1518, 1521, 1523, 1546 and 1547; 29 provisions prohibiting discrimination; Articles VI, VI-A, VI-B, 30 VI-C, XI, XI-A, XII, XIII-A, XIV and XVII-A and this article. 20030S0100B1789 - 50 -
1 * * * 2 Section 5. Section 614-A(f)(6) and (8) of the act shall 3 apply to school districts in which a referendum question under 4 53 Pa.C.S. § 8703 is approved and implemented. 5 Section 6. No school district which has not already made an 6 election to adopt the provisions of 53 Pa.C.S. Ch. 87 may make 7 an election to do so after the effective date of this section. 8 Section 7. This act shall take effect immediately. 9 CHAPTER 1 <-- 10 PRELIMINARY PROVISIONS 11 SECTION 101. SHORT TITLE. 12 THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE HOMEOWNER TAX 13 RELIEF ACT. 14 SECTION 102. DEFINITIONS. 15 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ACT SHALL 16 HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE 17 CONTEXT CLEARLY INDICATES OTHERWISE: 18 "ACTUAL INSTRUCTION EXPENSE." THE TERM SHALL HAVE THE SAME 19 USAGE AS IN THE ACT OF MARCH 10, 1949 (P.L.30, NO.14), KNOWN AS 20 THE PUBLIC SCHOOL CODE OF 1949. 21 "AVERAGE DAILY MEMBERSHIP." THE TERM SHALL HAVE THE SAME 22 USAGE AS IN THE ACT OF MARCH 10, 1949 (P.L.30, NO.14), KNOWN AS 23 THE PUBLIC SCHOOL CODE OF 1949. 24 "MARKET VALUE/INCOME AID RATIO." AS DEFINED IN SECTION 25 2501(14.1) OF THE ACT OF MARCH 10, 1949 (P.L.30, NO.14), KNOWN 26 AS THE PUBLIC SCHOOL CODE OF 1949. 27 "PERSONAL INCOME VALUATION." AS DEFINED IN SECTION 2501(9.1) 28 OF THE ACT OF MARCH 10, 1949 (P.L.30, NO.14), KNOWN AS THE 29 PUBLIC SCHOOL CODE OF 1949. 30 CHAPTER 3 20030S0100B1789 - 51 -
1 TAXATION BY SCHOOL DISTRICTS 2 SUBCHAPTER A 3 GENERAL PROVISIONS 4 SECTION 301. SCOPE. 5 THIS CHAPTER RELATES TO HOMEOWNER TAX RELIEF. 6 SECTION 302. DEFINITIONS. 7 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER 8 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE 9 CONTEXT CLEARLY INDICATES OTHERWISE: 10 "ASSESSOR." AS DEFINED IN 53 PA.C.S. § 8582 (RELATING TO 11 DEFINITIONS). 12 "BOARD OF SCHOOL DIRECTORS." A BOARD OF SCHOOL DIRECTORS OF 13 A SCHOOL DISTRICT OF THE FIRST CLASS A, SECOND CLASS, THIRD 14 CLASS OR FOURTH CLASS. 15 "CONSTRUCTION COST AVERAGE ON A SQUARE-FOOT BASIS." AN 16 AMOUNT EQUAL TO $128 PER SQUARE FOOT FOR AN ELEMENTARY SCHOOL 17 BUILDING AND $133 PER SQUARE FOOT FOR A SECONDARY SCHOOL 18 BUILDING, AS ADJUSTED ANNUALLY BY THE PERCENTAGE INCREASE IN THE 19 AVERAGE OF THE STATEWIDE AVERAGE WEEKLY WAGE AND THE EMPLOYMENT 20 COST INDEX. 21 "DEPARTMENT." THE DEPARTMENT OF EDUCATION OF THE 22 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 "EARNED INCOME." AS DEFINED IN SECTION 13 OF THE ACT OF 27 DECEMBER 31, 1965 (P.L.1257, NO.511), KNOWN AS THE LOCAL TAX 28 ENABLING ACT. 29 "ELECTION OFFICIALS." THE BOARD OF ELECTIONS OF A COUNTY. 30 "EMPLOYER." AS DEFINED IN SECTION 301 OF THE ACT OF MARCH 4, 20030S0100B1789 - 52 -
1 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE OF 1971. 2 "EMPLOYMENT COST INDEX." THE MOST RECENT OFFICIAL FIGURES, 3 FOR THE PREVIOUS 12-MONTH PERIOD BEGINNING JULY 1 AND ENDING 4 JUNE 30 FOR THE EMPLOYMENT COST INDEX SERIES FOR ELEMENTARY AND 5 SECONDARY SCHOOLS, REPORTED BY THE BUREAU OF LABOR STATISTICS OF 6 THE FEDERAL DEPARTMENT OF LABOR. 7 "FARMSTEAD." AS DEFINED IN 53 PA.C.S. § 8582 (RELATING TO 8 DEFINITIONS). 9 "FARMSTEAD PROPERTY." AS DEFINED IN 53 PA.C.S. § 8582 10 (RELATING TO DEFINITIONS). 11 "FUND." THE PROPERTY TAX RELIEF FUND ESTABLISHED IN THE 12 STATE TREASURY. 13 "HOMESTEAD." AS DEFINED IN 53 PA.C.S. § 8401 (RELATING TO 14 DEFINITIONS). 15 "HOMESTEAD PROPERTY." AS DEFINED IN 53 PA.C.S § 8401 16 (RELATING TO DEFINITIONS). 17 "INCOME TAX." A TAX ON EARNED INCOME AND NET PROFITS OR A 18 TAX ON PERSONAL INCOME IMPOSED PURSUANT TO THIS CHAPTER. 19 "INDEX." AS FOLLOWS: 20 (1) EXCEPT AS SET FORTH IN PARAGRAPH (2), THE AVERAGE OF 21 THE PERCENTAGE INCREASE IN THE STATEWIDE AVERAGE WEEKLY WAGE 22 AND THE EMPLOYMENT COST INDEX. 23 (2) FOR A SCHOOL DISTRICT WITH A MARKET-VALUE/INCOME-AID 24 RATIO GREATER THAN 0.400 FOR THE SCHOOL YEAR PRIOR TO THE 25 SCHOOL YEAR FOR WHICH THE INDEX IS CALCULATED, THE VALUE 26 UNDER PARAGRAPH (1) MULTIPLIED BY THE SUM OF: 27 (I) 0.75; AND 28 (II) THE SCHOOL DISTRICT'S MARKET-VALUE/INCOME-AID 29 RATIO FOR THE SCHOOL YEAR PRIOR TO THE SCHOOL YEAR FOR 30 WHICH THE INDEX IS CALCULATED. 20030S0100B1789 - 53 -
1 "LOCAL TAX ENABLING ACT." THE ACT OF DECEMBER 31, 1965 2 (P.L.1257, NO.511), KNOWN AS THE LOCAL TAX ENABLING ACT. 3 "LOCAL TAX REVENUE." THE REVENUE FROM TAXES ACTUALLY LEVIED 4 AND ASSESSED BY A SCHOOL DISTRICT, INCLUDING DELINQUENT TAXES. 5 THE TERM DOES NOT INCLUDE INTEREST OR DIVIDEND EARNINGS, FEDERAL 6 OR STATE GRANTS, CONTRACTS OR APPROPRIATIONS, INCOME GENERATED 7 FROM OPERATIONS OR ANY OTHER SOURCE WHICH IS NOT DERIVED FROM 8 TAXES LEVIED AND ASSESSED BY A SCHOOL DISTRICT. 9 "NET PROFITS." AS DEFINED IN SECTION 13 OF THE ACT OF 10 DECEMBER 31, 1965 (P.L.1257, NO.511), KNOWN AS THE LOCAL TAX 11 ENABLING ACT. 12 "PERSONAL INCOME." INCOME ENUMERATED IN SECTION 303 OF THE 13 ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE 14 OF 1971, AS DETERMINED BY THE DEPARTMENT OF REVENUE, SUBJECT TO 15 ANY CORRECTION THEREOF FOR FRAUD, EVASION OR ERROR AS FINALLY 16 DETERMINED BY THE COMMONWEALTH. 17 "RESIDENT INDIVIDUAL." AN INDIVIDUAL WHO IS DOMICILED IN A 18 SCHOOL DISTRICT. 19 "SCHOOL DISTRICT." A SCHOOL DISTRICT OF THE FIRST CLASS A, 20 SECOND CLASS, THIRD CLASS OR FOURTH CLASS. 21 "STATEWIDE AVERAGE WEEKLY WAGE." THAT AMOUNT DETERMINED BY 22 THE DEPARTMENT OF LABOR AND INDUSTRY IN THE SAME MANNER THAT IT 23 DETERMINES THE AVERAGE WEEKLY WAGE UNDER SECTION 404(E)(2) OF 24 THE ACT OF DECEMBER 5, 1936 (2ND SP.SESS., 1937 P.L.2897, NO.1), 25 KNOWN AS THE UNEMPLOYMENT COMPENSATION LAW, EXCEPT THAT IT SHALL 26 BE CALCULATED FOR THE PRECEDING CALENDAR YEAR. 27 "TAX REFORM CODE." THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), 28 KNOWN AS THE TAX REFORM CODE OF 1971. 29 "TAXPAYER." AN INDIVIDUAL REQUIRED UNDER THIS CHAPTER TO PAY 30 A TAX. 20030S0100B1789 - 54 -
1 SECTION 303. LIMITATIONS. 2 THIS CHAPTER SHALL NOT BE CONSTRUED TO AFFECT THE POWER OF A 3 SCHOOL DISTRICT TO DO ANY OF THE FOLLOWING: 4 (1) TO ELIMINATE ITS OCCUPATION TAX PURSUANT TO THE ACT 5 OF JUNE 22, 2001 (P.L.374, NO.24), KNOWN AS THE OPTIONAL 6 OCCUPATION TAX ELIMINATION ACT. EXCEPT FOR THE MUNICIPAL 7 ELECTION OF 2007, OR FOR AN ELECTION IN WHICH A SCHOOL 8 DISTRICT SEEKS TO IMPOSE A PERSONAL INCOME TAX UNDER SECTION 9 321(C), A SCHOOL DISTRICT MAY PLACE SUCH REFERENDUM QUESTION 10 ON THE BALLOT AT THE SAME MUNICIPAL ELECTION AS A REFERENDUM 11 QUESTION PLACED ON THE BALLOT PURSUANT TO SUBCHAPTER D. IF A 12 SCHOOL DISTRICT CONVERTS ITS EARNED INCOME AND NET PROFITS 13 TAX TO A PERSONAL INCOME TAX UNDER THIS CHAPTER, THE SCHOOL 14 DISTRICT MAY NOT UTILIZE THE OPTIONAL OCCUPATION TAX 15 ELIMINATION ACT. 16 (2) TO LEVY, ASSESS OR COLLECT A TAX ON EARNED INCOME 17 AND NET PROFITS UNDER THE LOCAL TAX ENABLING ACT. 18 (3) TO IMPOSE SPECIAL PURPOSE TAX LEVIES APPROVED BY THE 19 ELECTORATE. 20 SECTION 304. CERTAIN RATES OF TAXATION LIMITED. 21 (A) MUNICIPAL RATES.--IF A MUNICIPALITY AND SCHOOL DISTRICT 22 BOTH IMPOSE AN EARNED INCOME AND NET PROFITS TAX ON THE SAME 23 INDIVIDUAL UNDER THE LOCAL TAX ENABLING ACT AND ARE LIMITED TO 24 OR HAVE AGREED UPON A DIVISION OF THE TAX RATE IN ACCORDANCE 25 WITH SECTION 8 OF THE LOCAL TAX ENABLING ACT, THE MUNICIPALITY 26 SHALL REMAIN SUBJECT TO THAT LIMITATION OR AGREEMENT IN THE 27 EVENT THAT THE SCHOOL DISTRICT OPTS TO IMPOSE OR INCREASE AN 28 EARNED INCOME AND NET PROFITS TAX AUTHORIZED UNDER SECTION 29 321(B) OR A PERSONAL INCOME TAX AUTHORIZED UNDER SECTION 321(C). 30 NOTHING IN THIS CHAPTER SHALL BE CONSTRUED TO AUTHORIZE A 20030S0100B1789 - 55 -
1 MUNICIPALITY TO RAISE THE RATE OF EARNED INCOME AND NET PROFITS 2 TAX ABOVE THE RATE IT LEVIED UNDER THE PREVIOUSLY AGREED UPON 3 DIVISION IF A SCHOOL DISTRICT IMPOSES OR INCREASES A PERSONAL 4 INCOME TAX UNDER SUBCHAPTER C. 5 (B) SCHOOL DISTRICTS.--A SCHOOL DISTRICT WHICH IMPOSES A TAX 6 UNDER THIS CHAPTER IS SUBJECT TO SECTION 688 OF THE ACT OF MARCH 7 10, 1949 (P.L.30, NO.14), KNOWN AS THE PUBLIC SCHOOL CODE OF 8 1949. 9 SUBCHAPTER B 10 SCHOOL DISTRICT BUDGETS 11 SECTION 311. ADOPTION OF PRELIMINARY BUDGET PROPOSALS. 12 (A) ADOPTION.--BEGINNING WITH THE FISCAL YEAR TO WHICH 13 SECTION 333 APPLIES, EACH BOARD OF SCHOOL DIRECTORS SHALL ADOPT 14 A PRELIMINARY BUDGET PROPOSAL FOR THE FOLLOWING FISCAL YEAR NO 15 LATER THAN 90 DAYS PRIOR TO THE DATE OF THE ELECTION IMMEDIATELY 16 PRECEDING THE FISCAL YEAR IN WHICH THE PRELIMINARY BUDGET WILL 17 TAKE EFFECT. 18 (B) CONTENTS.--THE PRELIMINARY BUDGET PROPOSAL SHALL INCLUDE 19 ESTIMATED REVENUES AND EXPENDITURES AND ANY PROPOSED TAX RATES 20 AND SHALL BE PREPARED ON A UNIFORM FORM FURNISHED BY THE 21 DEPARTMENT. 22 (C) PUBLIC INSPECTION.--THE BOARD OF SCHOOL DIRECTORS SHALL 23 PRINT THE PRELIMINARY BUDGET PROPOSAL AND MAKE IT AVAILABLE FOR 24 PUBLIC INSPECTION AT LEAST 20 DAYS PRIOR TO ITS ADOPTION. THE 25 BOARD OF SCHOOL DIRECTORS SHALL GIVE PUBLIC NOTICE OF ITS INTENT 26 TO ADOPT THE PRELIMINARY BUDGET AT LEAST TEN DAYS PRIOR TO 27 ADOPTION AND MAY HOLD A PUBLIC HEARING PRIOR TO ITS ADOPTION. 28 SECTION 312. ADOPTION OF ANNUAL BUDGETS. 29 (A) ADOPTION.--BEGINNING WITH THE FISCAL YEAR TO WHICH 30 SECTION 333 APPLIES, EACH BOARD OF SCHOOL DIRECTORS SHALL ADOPT 20030S0100B1789 - 56 -
1 ITS ANNUAL BUDGET FOR THE FOLLOWING FISCAL YEAR NO LATER THAN 2 THE LAST DAY OF THE FISCAL YEAR BEFORE THE FISCAL YEAR IN WHICH 3 THE BUDGET TAKES EFFECT. 4 (B) CONTENTS.--THE ANNUAL BUDGET SHALL INCLUDE ESTIMATED 5 REVENUES AND EXPENDITURES AND ANY PROPOSED TAX RATES AND BE 6 PREPARED ON A UNIFORM FORM FURNISHED BY THE DEPARTMENT. 7 (C) PUBLIC INSPECTION.--THE BOARD OF SCHOOL DIRECTORS SHALL 8 PRINT THE ANNUAL BUDGET AND MAKE IT AVAILABLE FOR PUBLIC 9 INSPECTION AT LEAST 20 DAYS PRIOR TO ITS ADOPTION. THE BOARD OF 10 SCHOOL DIRECTORS SHALL GIVE PUBLIC NOTICE OF ITS INTENT TO ADOPT 11 THE ANNUAL BUDGET AT LEAST TEN DAYS PRIOR TO ADOPTION AND MAY 12 HOLD A PUBLIC HEARING PRIOR TO ITS ADOPTION. 13 SECTION 313. INFORMATION TO SCHOOL DISTRICTS. 14 NO LATER THAN SEPTEMBER 30 OF THE YEAR IN WHICH A PROPERTY 15 TAX REDUCTION ALLOCATION UNDER SECTION 505 IS MADE, AND 16 SEPTEMBER 30 OF EACH YEAR THEREAFTER, THE DEPARTMENT SHALL 17 PROVIDE EACH SCHOOL DISTRICT WITH THE FOLLOWING INFORMATION: 18 (1) THE DATES BY WHICH ACTIONS REQUIRED UNDER THIS 19 CHAPTER SHALL TAKE PLACE. 20 (2) THE INDEX FOR THE APPLICABLE FISCAL YEAR. 21 SUBCHAPTER C 22 GENERAL TAX AUTHORIZATION 23 SECTION 321. GENERAL TAX AUTHORIZATION. 24 (A) GENERAL RULE.--A BOARD OF SCHOOL DIRECTORS MAY LEVY, 25 ASSESS AND COLLECT A TAX ON EARNED INCOME AND NET PROFITS OR A 26 TAX ON PERSONAL INCOME AS PROVIDED IN THIS SECTION FOR THE 27 PURPOSE OF FUNDING HOMESTEAD AND FARMSTEAD EXCLUSIONS TO REDUCE 28 SCHOOL DISTRICT PROPERTY TAXES. 29 (B) EARNED INCOME AND NET PROFITS TAX.-- 30 (1) PURSUANT TO SECTION 331, A BOARD OF SCHOOL DIRECTORS 20030S0100B1789 - 57 -
1 MAY LEVY, ASSESS AND COLLECT A TAX OF 0.1% ON EARNED INCOME 2 AND NET PROFITS OF RESIDENT INDIVIDUALS FOR PURPOSES OF 3 QUALIFYING FOR A PROPERTY TAX REDUCTION ALLOCATION UNDER 4 CHAPTER 5 TO FUND HOMESTEAD AND FARMSTEAD EXCLUSIONS. 5 (2) IN ADDITION TO THE AUTHORIZATION PROVIDED UNDER 6 PARAGRAPH (1), A SCHOOL DISTRICT MAY, IN ACCORDANCE WITH 7 SECTION 332, LEVY AN ADDITIONAL TAX ON EARNED INCOME AND NET 8 PROFITS OF RESIDENT INDIVIDUALS FOR THE PURPOSE OF FURTHER 9 FUNDING HOMESTEAD AND FARMSTEAD EXCLUSIONS. 10 (3) EXCEPT AS AUTHORIZED IN PARAGRAPH (4), THE COMBINED 11 RATE OF THE EARNED INCOME AND NET PROFITS TAX AUTHORIZED 12 UNDER PARAGRAPHS (1) AND (2) SHALL NOT EXCEED THE RATE 13 REQUIRED TO RAISE REVENUE WHICH, WHEN COMBINED WITH THE 14 SCHOOL DISTRICT'S PROPERTY TAX REDUCTION ALLOCATION UNDER 15 CHAPTER 5, ALL REVENUE RECEIVED UNDER SECTION 324 AND ALL 16 OTHER REVENUE CURRENTLY COLLECTED TO FUND HOMESTEAD AND 17 FARMSTEAD EXCLUSIONS, WILL BE SUFFICIENT TO FUND EXCLUSIONS 18 FOR HOMESTEAD PROPERTY AND FARMSTEAD PROPERTY EQUAL TO THE 19 MAXIMUM EXCLUSION UNDER 53 PA.C.S. § 8586 (RELATING TO 20 LIMITATIONS). THE BOARD OF SCHOOL DIRECTORS SHALL ROUND THE 21 RATE OF THE EARNED INCOME AND NET PROFITS TAX LEVIED PURSUANT 22 TO THIS SECTION TO THE NEAREST 0.1%. FOR PURPOSES OF 23 CALCULATING THE COMBINED TAX RATE, THE PORTION OF TAX 24 DEDICATED TO THE INCREASE IN REVENUE PERMITTED UNDER 25 PARAGRAPH (4), IF ANY, SHALL BE EXCLUDED. 26 (4) NOTWITHSTANDING SECTION 334, THE RATE OF THE EARNED 27 INCOME AND NET PROFITS TAX PROPOSED TO BE LEVIED AND ASSESSED 28 FOR THE FISCAL YEAR IMMEDIATELY FOLLOWING THE YEAR IN WHICH 29 THE TAX IS AUTHORIZED MAY PROVIDE FOR AN INCREASE IN REVENUE 30 OF NOT MORE THAN 2% OF THE ESTIMATED REVENUE FROM THE EARNED 20030S0100B1789 - 58 -
1 INCOME AND NET PROFITS TAX AUTHORIZED UNDER PARAGRAPH (2), 2 WHICH MAY BE USED FOR THE OPERATIONS OF THE SCHOOL DISTRICT. 3 (C) PERSONAL INCOME TAX.-- 4 (1) AFTER COMPLYING WITH SECTION 331, A BOARD OF SCHOOL 5 DIRECTORS MAY LEVY, ASSESS AND COLLECT A TAX ON THE PERSONAL 6 INCOME OF RESIDENT INDIVIDUALS AT A RATE DETERMINED BY THE 7 BOARD OF SCHOOL DIRECTORS. 8 (2) A SCHOOL DISTRICT WHICH SEEKS TO LEVY THE TAX 9 AUTHORIZED UNDER PARAGRAPH (1) MUST COMPLY WITH SECTION 332 10 AND THE FOLLOWING: 11 (I) THE SCHOOL DISTRICT SHALL CONVERT, IN A REVENUE- 12 NEUTRAL MANNER, ANY EXISTING EARNED INCOME AND NET 13 PROFITS TAX RATES LEVIED PURSUANT TO ANY OTHER ACT TO A 14 PERSONAL INCOME TAX RATE. 15 (II) THE 0.1% EARNED INCOME AND NET PROFITS TAX 16 IMPOSED PURSUANT TO SECTION 331 SHALL BE CONVERTED TO A 17 PERSONAL INCOME TAX RATE WHICH GENERATES THE SAME AMOUNT 18 OF TAX REVENUE AND SHALL BE USED FOR FUNDING EXCLUSIONS 19 FOR HOMESTEAD AND FARMSTEAD PROPERTY. 20 (III) A SCHOOL DISTRICT MAY, IN ACCORDANCE WITH 21 SECTION 332, LEVY AN ADDITIONAL TAX ON THE PERSONAL 22 INCOME OF RESIDENT INDIVIDUALS FOR THE PURPOSE OF FURTHER 23 FUNDING HOMESTEAD AND FARMSTEAD EXCLUSIONS. 24 (IV) FOR PURPOSES OF THE REFERENDUM QUESTION 25 REQUIRED UNDER SECTION 332, THE PERSONAL INCOME TAX 26 AUTHORIZED UNDER PARAGRAPH (1) SHALL BE LEVIED AT A RATE 27 WHICH, WHEN COMBINED WITH THE REVENUE GENERATED UNDER 28 SUBPARAGRAPH (II), THE SCHOOL DISTRICT'S PROPERTY TAX 29 REDUCTION ALLOCATION UNDER CHAPTER 5, ALL REVENUE 30 RECEIVED UNDER SECTION 324 AND ALL OTHER REVENUE 20030S0100B1789 - 59 -
1 CURRENTLY COLLECTED TO FUND HOMESTEAD AND FARMSTEAD 2 EXCLUSIONS, DOES NOT EXCEED THE TAX RATE REQUIRED TO FUND 3 EXCLUSIONS FOR HOMESTEAD AND FARMSTEAD PROPERTY EQUAL TO 4 THE MAXIMUM EXCLUSION UNDER 53 PA.C.S. § 8586. THE BOARD 5 OF SCHOOL DIRECTORS SHALL ROUND THE RATE OF THE PERSONAL 6 INCOME TAX LEVIED PURSUANT TO THIS SUBPARAGRAPH TO THE 7 NEAREST 0.1%. FOR PURPOSES OF CALCULATING THE COMBINED 8 TAX RATE, THE PORTION OF TAX DEDICATED TO THE INCREASE IN 9 REVENUE PERMITTED UNDER PARAGRAPH (6), IF ANY, SHALL BE 10 EXCLUDED. 11 (3) ALL REVENUE GENERATED BY A SCHOOL DISTRICT PURSUANT 12 TO PARAGRAPH (2)(II) AND (III) SHALL BE USED AS PROVIDED IN 13 SECTION 334 FOR THE PURPOSE OF FUNDING EXCLUSIONS FOR 14 HOMESTEAD AND FARMSTEAD PROPERTY. 15 (4) IF A BOARD OF SCHOOL DIRECTORS SEEKS TO IMPOSE A 16 PERSONAL INCOME TAX UNDER THIS SUBSECTION AND THE REFERENDUM 17 UNDER SECTION 332 IS APPROVED BY THE ELECTORATE, THE BOARD OF 18 SCHOOL DIRECTORS SHALL HAVE NO AUTHORITY TO IMPOSE AN EARNED 19 INCOME AND NET PROFITS TAX UNDER SUBSECTION (B) OR UNDER ANY 20 OTHER ACT. 21 (5) A PERSONAL INCOME TAX IMPOSED UNDER THE AUTHORITY OF 22 THIS SECTION SHALL BE LEVIED BY THE SCHOOL DISTRICT ON EACH 23 OF THE CLASSES OF INCOME SPECIFIED IN SECTION 303 OF THE TAX 24 REFORM CODE AND REGULATIONS UNDER THAT SECTION, THE 25 PROVISIONS OF WHICH ARE INCORPORATED BY REFERENCE INTO THIS 26 CHAPTER. 27 (I) NOTWITHSTANDING THE PROVISIONS OF SECTION 353(F) 28 OF THE TAX REFORM CODE, THE DEPARTMENT OF REVENUE MAY 29 PERMIT THE PROPER OFFICER OR AN AUTHORIZED AGENT OF A 30 SCHOOL DISTRICT IMPOSING A PERSONAL INCOME TAX PURSUANT 20030S0100B1789 - 60 -
1 TO THIS CHAPTER TO INSPECT THE TAX RETURNS OF ANY 2 TAXPAYER OF THE SCHOOL DISTRICT OR MAY FURNISH TO THE 3 OFFICER OR AN AUTHORIZED AGENT AN ABSTRACT OF THE RETURN 4 OF INCOME OF ANY CURRENT OR FORMER RESIDENT OF THE SCHOOL 5 DISTRICT, OR SUPPLY INFORMATION CONCERNING ANY ITEM OF 6 INCOME CONTAINED IN ANY TAX RETURN. THE OFFICER OR 7 AUTHORIZED AGENT OF THE SCHOOL DISTRICT IMPOSING A TAX 8 UNDER THIS CHAPTER SHALL BE FURNISHED THE REQUESTED 9 INFORMATION UPON PAYMENT TO THE DEPARTMENT OF REVENUE OF 10 THE ACTUAL COST OF PROVIDING THE REQUESTED INFORMATION. 11 (II) (A) EXCEPT FOR OFFICIAL PURPOSES OR AS 12 PROVIDED BY LAW, IT SHALL BE UNLAWFUL FOR ANY OFFICER 13 OR AUTHORIZED AGENT OF A SCHOOL DISTRICT TO DO ANY OF 14 THE FOLLOWING: 15 (I) DISCLOSE TO ANY OTHER INDIVIDUAL OR 16 ENTITY THE AMOUNT OR SOURCE OF INCOME, PROFITS, 17 LOSSES, EXPENDITURES OR ANY PARTICULAR 18 INFORMATION CONCERNING INCOME, PROFITS, LOSSES OR 19 EXPENDITURES CONTAINED IN ANY RETURN. 20 (II) PERMIT ANY OTHER INDIVIDUAL OR ENTITY 21 TO VIEW OR EXAMINE ANY RETURN OR COPY OF A RETURN 22 OR ANY BOOK CONTAINING ANY ABSTRACT OR 23 PARTICULARS. 24 (III) PRINT, PUBLISH OR PUBLICIZE IN ANY 25 MANNER ANY RETURN; ANY PARTICULAR INFORMATION 26 CONTAINED IN OR CONCERNING THE RETURN; ANY AMOUNT 27 OR SOURCE OF INCOME, PROFITS, LOSSES OR 28 EXPENDITURES IN OR CONCERNING THE RETURN; OR ANY 29 PARTICULAR INFORMATION CONCERNING INCOME, 30 PROFITS, LOSSES OR EXPENDITURES CONTAINED IN OR 20030S0100B1789 - 61 -
1 RELATING TO ANY RETURN. 2 (B) ANY OFFICER OR AUTHORIZED AGENT OF A SCHOOL 3 DISTRICT THAT VIOLATES CLAUSE (A): 4 (I) MAY BE FINED NOT MORE THAN $1,000 OR 5 IMPRISONED FOR NOT MORE THAN ONE YEAR, OR BOTH. 6 (II) MAY BE REMOVED FROM OFFICE OR 7 DISCHARGED FROM EMPLOYMENT. 8 (6) NOTWITHSTANDING SECTION 334, THE RATE OF THE 9 PERSONAL INCOME TAX PROPOSED TO BE LEVIED AND ASSESSED FOR 10 THE FIRST FISCAL YEAR IMMEDIATELY FOLLOWING THE YEAR IN WHICH 11 THE TAX IS AUTHORIZED MAY PROVIDE FOR AN INCREASE IN REVENUE 12 OF NOT MORE THAN 2% OF THE ESTIMATED REVENUE FROM THE 13 PERSONAL INCOME TAX AUTHORIZED UNDER PARAGRAPH (2)(III), 14 WHICH MAY BE USED FOR THE OPERATIONS OF THE SCHOOL DISTRICT. 15 (D) EXECUTION OF TAX RATE.--AN EARNED INCOME AND NET PROFITS 16 TAX RATE OR PERSONAL INCOME TAX RATE AUTHORIZED UNDER THIS 17 SECTION AND IMPOSED PURSUANT TO SECTION 331 SHALL BE SELF- 18 EXECUTING AND SHALL BE EFFECTIVE BEGINNING ON THE FIRST DAY OF 19 THE FISCAL YEAR IN WHICH A SCHOOL DISTRICT WILL RECEIVE A 20 PAYMENT UNDER SECTION 505(B). A TAX AUTHORIZED UNDER SECTION 332 21 SHALL BE SELF-EXECUTING AND SHALL BE EFFECTIVE BEGINNING ON THE 22 FIRST DAY OF THE FISCAL YEAR WHICH BEGINS AFTER THE TAX IS 23 AUTHORIZED. A TAX RATE UNDER THIS SUBSECTION SHALL CONTINUE IN 24 FORCE ON A FISCAL YEAR BASIS WITHOUT ANNUAL REENACTMENT EXCEPT 25 IN A YEAR IN WHICH THE RATE OF THE TAX IS CHANGED OR THE TAX IS 26 REPEALED. 27 SECTION 322. COLLECTIONS. 28 (A) DESIGNATION OF TAX COLLECTOR.--A BOARD OF SCHOOL 29 DIRECTORS IMPOSING AN INCOME TAX UNDER THIS CHAPTER SHALL 30 DESIGNATE A TAX OFFICER UNDER SECTION 10 OF THE LOCAL TAX 20030S0100B1789 - 62 -
1 ENABLING ACT, OR OTHERWISE BY LAW, AS THE COLLECTOR OF THE TAX. 2 IN THE PERFORMANCE OF THE TAX COLLECTION DUTIES UNDER THIS 3 SUBCHAPTER, THE DESIGNATED TAX OFFICER SHALL HAVE ALL THE SAME 4 POWERS, RIGHTS, RESPONSIBILITIES AND DUTIES FOR THE COLLECTION 5 OF THE TAXES WHICH MAY BE IMPOSED UNDER THE LOCAL TAX ENABLING 6 ACT, 53 PA.C.S. CH. 84 SUBCH. C (RELATING TO LOCAL TAXPAYERS 7 BILL OF RIGHTS) OR AS OTHERWISE PROVIDED BY LAW. 8 (B) CONFLICT.--IN ANY SITUATION WHERE THERE IS A CONFLICT 9 INVOLVING THE AUTHORITY CONFERRED ON A LOCAL TAX COLLECTOR BY 10 THE PROVISIONS OF THE LOCAL TAX ENABLING ACT AND THE TAX REFORM 11 CODE, THE PROVISIONS OF THE LOCAL TAX ENABLING ACT SHALL 12 CONTROL. 13 SECTION 323. CREDITS. 14 (A) CREDIT.--EXCEPT AS SET FORTH IN SUBSECTION (B), THE 15 PROVISIONS OF SECTION 14 OF THE LOCAL TAX ENABLING ACT SHALL BE 16 APPLIED BY A BOARD OF SCHOOL DIRECTORS TO DETERMINE ANY CREDITS 17 APPLICABLE TO A TAX IMPOSED UNDER SECTION 321. 18 (B) LIMITATION.--PAYMENT OF ANY TAX ON INCOME TO ANY STATE 19 OTHER THAN PENNSYLVANIA OR TO ANY POLITICAL SUBDIVISION LOCATED 20 OUTSIDE THE BOUNDARIES OF THIS COMMONWEALTH, BY A RESIDENT OF A 21 SCHOOL DISTRICT LOCATED IN THIS COMMONWEALTH, SHALL NOT BE 22 CREDITED TO AND ALLOWED AS A DEDUCTION FROM THE LIABILITY OF 23 SUCH PERSON FOR ANY INCOME TAX IMPOSED BY THE SCHOOL DISTRICT OF 24 RESIDENCE PURSUANT TO THIS CHAPTER. 25 SECTION 324. REIMBURSEMENT. 26 NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW TO THE CONTRARY, 27 THE FOLLOWING APPLY: 28 (1) THIS SECTION ONLY APPLIES TO A TAXPAYER WHO IS A 29 RESIDENT OF THIS COMMONWEALTH AND NOT A RESIDENT OF A CITY OF 30 THE FIRST CLASS BUT WHO IS SUBJECT TO THE TAX ON SALARIES, 20030S0100B1789 - 63 -
1 WAGES, COMMISSIONS OR OTHER COMPENSATION IMPOSED BY A CITY OF 2 THE FIRST CLASS UNDER THE AUTHORITY OF THE ACT OF AUGUST 5, 3 1932 (SP.SESS., P.L.45, NO.45), REFERRED TO AS THE STERLING 4 ACT. 5 (2) FOR TAX YEARS BEGINNING IN THE FIRST CALENDAR YEAR 6 IN WHICH A PAYMENT UNDER SECTION 505(B) IS MADE AND EACH TAX 7 YEAR THEREAFTER, PAYMENT OF A TAX ON SALARIES, WAGES, 8 COMMISSIONS OR OTHER COMPENSATION AS SET FORTH IN PARAGRAPH 9 (1) SHALL BE CREDITED TO THE SCHOOL DISTRICT OF THE 10 TAXPAYER'S RESIDENCE AT AN AMOUNT NO GREATER THAN THE TAX ON 11 SALARIES, WAGES, COMMISSIONS OR OTHER COMPENSATION AS SET 12 FORTH IN PARAGRAPH (1) IMPOSED BY THE SCHOOL DISTRICT IN 13 WHICH THE TAXPAYER RESIDES. 14 (3) EXCEPT AS SET FORTH IN PARAGRAPH (4), AN AMOUNT 15 EQUAL TO THE AGGREGATE AMOUNT OF THE TAX CREDITED UNDER 16 PARAGRAPH (2) SHALL BE PAID FROM THE FUND TO THE SCHOOL 17 DISTRICT OF RESIDENCE OF EACH TAXPAYER UNDER PARAGRAPH (1) 18 FOR THE PURPOSE OF FUNDING HOMESTEAD AND FARMSTEAD EXCLUSIONS 19 IN ACCORDANCE WITH THIS CHAPTER. THE DEPARTMENT SHALL 20 PRESCRIBE PROCEDURES TO CALCULATE THE AMOUNT DUE TO EACH 21 SCHOOL DISTRICT QUALIFYING UNDER THIS PARAGRAPH, AND SHALL 22 PUBLISH THE PROCEDURES IN THE PENNSYLVANIA BULLETIN. 23 (4) NOTWITHSTANDING PARAGRAPH (3), IF THE CERTIFICATION 24 UNDER SECTION 503(A)(1)(I) IS LESS THAN $750,000,000, EACH 25 ELIGIBLE SCHOOL DISTRICT SHALL RECEIVE A PRO RATA SHARE OF 26 THE REIMBURSEMENT CALCULATED UNDER THIS SECTION AT 27 $750,000,000. 28 SECTION 325. EXEMPTION AND SPECIAL PROVISIONS. 29 (A) EARNED INCOME AND NET PROFITS TAX.--A SCHOOL DISTRICT 30 THAT IMPOSES AN EARNED INCOME AND NET PROFITS TAX AUTHORIZED 20030S0100B1789 - 64 -
1 UNDER SECTION 321(B) MAY EXEMPT FROM THE PAYMENT OF THAT TAX ANY 2 PERSON WHOSE TOTAL INCOME FROM ALL SOURCES IS LESS THAN $10,000. 3 (B) APPLICABILITY TO PERSONAL INCOME TAX.--SECTION 304 OF 4 THE TAX REFORM CODE SHALL APPLY TO ANY PERSONAL INCOME TAX 5 LEVIED BY A SCHOOL DISTRICT UNDER SECTION 321(C). 6 SECTION 326. REGULATIONS. 7 A SCHOOL DISTRICT THAT IMPOSES: 8 (1) AN EARNED INCOME AND NET PROFITS TAX AUTHORIZED 9 UNDER SECTION 321(B) SHALL BE SUBJECT TO SECTION 13 OF THE 10 LOCAL TAX ENABLING ACT AND MAY ADOPT PROCEDURES FOR THE 11 PROCESSING OF CLAIMS FOR CREDITS OR EXEMPTIONS UNDER SECTIONS 12 323, 324 AND 325; OR 13 (2) A PERSONAL INCOME TAX AUTHORIZED UNDER SECTION 14 321(C) SHALL BE SUBJECT TO ALL REGULATIONS ADOPTED BY THE 15 DEPARTMENT OF REVENUE IN ADMINISTERING THE TAX DUE TO THE 16 COMMONWEALTH UNDER ARTICLE III OF THE TAX REFORM CODE. 17 SECTION 327. PROPERTY TAX LIMITS ON REASSESSMENT. 18 NOTWITHSTANDING ANY OTHER PROVISION OF LAW, INCLUDING THIS 19 ACT, AFTER ANY COUNTY MAKES A COUNTYWIDE REVISION OF ASSESSMENT 20 OF REAL PROPERTY AT VALUES BASED UPON AN ESTABLISHED 21 PREDETERMINED RATIO AS REQUIRED BY LAW OR AFTER ANY COUNTY 22 CHANGES ITS ESTABLISHED PREDETERMINED RATIO, A BOARD OF SCHOOL 23 DIRECTORS IN A SCHOOL DISTRICT LOCATED WITHIN THAT COUNTY THAT 24 HAS ADOPTED A RESOLUTION IMPOSING THE TAX UNDER SECTION 331 OR 25 IN WHICH A REFERENDUM UNDER SECTION 332 HAS BEEN APPROVED BY THE 26 ELECTORATE, WHICH AFTER THE EFFECTIVE DATE OF THIS SECTION, FOR 27 THE FIRST TIME LEVIES ITS REAL ESTATE TAXES ON THAT REVISED 28 ASSESSMENT OR VALUATION, SHALL FOR THE FIRST YEAR REDUCE ITS TAX 29 RATE, IF NECESSARY, FOR THE PURPOSE OF HAVING THE PERCENTAGE 30 INCREASE IN TAXES LEVIED FOR THAT YEAR AGAINST THE REAL 20030S0100B1789 - 65 -
1 PROPERTIES CONTAINED IN THE DUPLICATE FOR THE PRECEDING YEAR BE 2 LESS THAN OR EQUAL TO THE INDEX FOR THE PRECEDING YEAR 3 NOTWITHSTANDING THE INCREASED VALUATIONS OF SUCH PROPERTIES 4 UNDER THE REVISED ASSESSMENT. FOR THE PURPOSE OF DETERMINING THE 5 TOTAL AMOUNT OF TAXES TO BE LEVIED FOR THE FIRST YEAR, THE 6 AMOUNT TO BE LEVIED ON NEWLY CONSTRUCTED BUILDINGS OR STRUCTURES 7 OR ON INCREASED VALUATIONS BASED ON NEW IMPROVEMENTS MADE TO 8 EXISTING HOUSES NEED NOT BE CONSIDERED. THE TAX RATE SHALL BE 9 FIXED FOR THAT YEAR AT A FIGURE WHICH WILL ACCOMPLISH THIS 10 PURPOSE. THE PROVISIONS OF SECTION 333 SHALL APPLY TO INCREASES 11 IN THE TAX RATE ABOVE THE LIMITS PROVIDED IN THIS SECTION. 12 SUBCHAPTER D 13 SCHOOL DISTRICT PROPERTY TAX REDUCTION 14 SECTION 331. QUALIFYING CONTRIBUTION. 15 (A) GENERAL RULE.--EXCEPT AS SET FORTH IN SUBSECTION (B), A 16 SCHOOL DISTRICT SHALL, BY RESOLUTION, LEVY, ASSESS AND COLLECT 17 THE 0.1% EARNED INCOME AND NET PROFITS TAX AUTHORIZED UNDER 18 SECTION 321(B)(1) IN ORDER TO QUALIFY FOR A PROPERTY TAX 19 REDUCTION ALLOCATION UNDER SECTION 505. THE BOARD OF SCHOOL 20 DIRECTORS SHALL ADOPT THE RESOLUTION BY MAY 30 OF THE FIRST YEAR 21 IN WHICH A CERTIFICATION UNDER SECTION 503(A) IS MADE. WITHIN 22 FIVE DAYS AFTER ADOPTING THE RESOLUTION, THE BOARD OF SCHOOL 23 DIRECTORS SHALL NOTIFY THE DEPARTMENT IN A FORM AND MANNER 24 PRESCRIBED BY THE DEPARTMENT IN ORDER TO ESTABLISH THE SCHOOL 25 DISTRICT'S ELIGIBILITY TO RECEIVE A PROPERTY TAX REDUCTION 26 ALLOCATION PURSUANT TO CHAPTER 5. 27 (B) EXCEPTION.--SUBSECTION (A) SHALL NOT APPLY IF ANY OF THE 28 FOLLOWING APPLY: 29 (1) A SCHOOL DISTRICT WHICH DOES NOT, PRIOR TO MAY 30 OF 30 THE YEAR IN WHICH A SCHOOL DISTRICT WILL RECEIVE A PAYMENT 20030S0100B1789 - 66 -
1 UNDER SECTION 505(B), IMPOSE AN EARNED INCOME AND NET PROFITS 2 TAX UNDER THE LOCAL TAX ENABLING ACT OR ANY OTHER STATUTE, 3 MAY QUALIFY FOR A PROPERTY TAX REDUCTION ALLOCATION UNDER 4 CHAPTER 5 WITHOUT LEVYING THE TAX REQUIRED UNDER SUBSECTION 5 (A) IF THE SCHOOL DISTRICT PROPOSES A REFERENDUM REQUIRED 6 UNDER SECTION 332(E). THE BOARD OF SCHOOL DIRECTORS SHALL 7 ADOPT A RESOLUTION PROPOSING A REFERENDUM BY MAY 30 OF THE 8 YEAR IN WHICH A CERTIFICATION UNDER SECTION 503(A) IS MADE. 9 WITHIN FIVE DAYS AFTER ADOPTING THE RESOLUTION, THE BOARD OF 10 SCHOOL DIRECTORS SHALL NOTIFY THE DEPARTMENT IN A FORM AND 11 MANNER PRESCRIBED BY THE DEPARTMENT IN ORDER TO ESTABLISH THE 12 SCHOOL DISTRICT'S ELIGIBILITY TO RECEIVE A PROPERTY TAX 13 REDUCTION ALLOCATION PURSUANT TO CHAPTER 5. IF A REFERENDUM 14 PROPOSED UNDER SECTION 332(E) IS NOT APPROVED BY THE 15 ELECTORATE, A DISTRICT SHALL ENACT, BY RESOLUTION, THE 0.1% 16 EARNED INCOME NET PROFITS TAX AUTHORIZED UNDER SECTION 17 321(B)(1) IN ORDER TO MAINTAIN ELIGIBILITY FOR A PROPERTY TAX 18 REDUCTION ALLOCATION UNDER CHAPTER 5. 19 (2) A REFERENDUM PROPOSED UNDER SECTION 332(D.1) IS 20 APPROVED BY THE ELECTORATE. 21 SECTION 332. ADOPTION OF REFERENDUM. 22 (A) GENERAL RULE.--A BOARD OF SCHOOL DIRECTORS THAT COMPLIES 23 WITH SECTION 331 MAY LEVY, ASSESS AND COLLECT AN EARNED INCOME 24 AND NET PROFITS TAX AUTHORIZED UNDER SECTION 321(B)(2) OR A 25 PERSONAL INCOME TAX AUTHORIZED UNDER SECTION 321(C), ONLY AFTER 26 OBTAINING THE APPROVAL OF THE ELECTORATE OF THE SCHOOL DISTRICT 27 IN A PUBLIC REFERENDUM. 28 (B) SUBMITTAL OF REFERENDUM.--IN ADDITION TO THE REFERENDUM 29 QUESTION REQUIRED UNDER SUBSECTION (E): 30 (1) A BOARD OF SCHOOL DIRECTORS MAY SUBMIT, AT A 20030S0100B1789 - 67 -
1 MUNICIPAL ELECTION, A REFERENDUM QUESTION TO THE ELECTORS OF 2 THE SCHOOL DISTRICT SEEKING VOTER APPROVAL ALLOWING THE 3 SCHOOL DISTRICT TO LEVY, ASSESS AND COLLECT AN EARNED INCOME 4 AND NET PROFITS TAX OR A PERSONAL INCOME TAX FOR THE PURPOSE 5 OF ANNUALLY FUNDING HOMESTEAD AND FARMSTEAD EXCLUSIONS. PRIOR 6 TO PLACING A REFERENDUM QUESTION ON THE BALLOT, THE BOARD OF 7 SCHOOL DIRECTORS MUST ADOPT A RESOLUTION PURSUANT TO THIS 8 CHAPTER. THE BOARD OF SCHOOL DIRECTORS MUST GIVE PUBLIC 9 NOTICE OF ITS INTENT TO ADOPT THE RESOLUTION IN THE MANNER 10 PROVIDED BY SECTION 4 OF THE LOCAL TAX ENABLING ACT AND MUST 11 CONDUCT AT LEAST ONE PUBLIC HEARING ON THE RESOLUTION. 12 (2) THE BOARD OF SCHOOL DIRECTORS SHALL SUBMIT THE 13 REFERENDUM QUESTION REQUIRED UNDER THIS SECTION TO THE 14 ELECTION OFFICIALS OF EACH COUNTY IN WHICH THE SCHOOL 15 DISTRICT IS SITUATE NO LATER THAN 60 DAYS PRIOR TO A 16 MUNICIPAL ELECTION. THE ELECTION OFFICIALS SHALL CAUSE THE 17 REFERENDUM QUESTION TO BE SUBMITTED TO THE ELECTORS OF THE 18 SCHOOL DISTRICT. 19 (3) THE REFERENDUM QUESTION SHALL STATE THE RATE OF THE 20 PROPOSED EARNED INCOME AND NET PROFITS TAX OR PERSONAL INCOME 21 TAX TO BE LEVIED, THE REASON FOR THE TAX, THE ESTIMATED PER 22 HOMESTEAD TAX REDUCTION AND THE CURRENT RATE OF EARNED INCOME 23 AND NET PROFITS OR PERSONAL INCOME TAX LEVIED BY THE SCHOOL 24 DISTRICT. THE QUESTION SHALL BE CLEAR AND IN LANGUAGE THAT IS 25 READILY UNDERSTANDABLE BY A LAYPERSON AND SHALL BE FRAMED IN 26 ONE OF THE FOLLOWING FORMS WITH THE SCHOOL DISTRICT 27 RESOLUTION ENUMERATING THE VARIABLE AMOUNTS REPRESENTED BY 28 THE TERMS X, Y AND Z: 29 (I) DO YOU FAVOR IMPOSING AN ADDITIONAL X% (INSERT 30 NAME OF TAX)? THE REVENUE GENERATED FROM THE INCREASED 20030S0100B1789 - 68 -
1 TAX RATE WILL BE USED TO REDUCE TAXES ON QUALIFIED 2 RESIDENTIAL PROPERTY BY AN ESTIMATED AMOUNT OF $Y. THE 3 CURRENT (INSERT NAME OF TAX) FOR THE SCHOOL DISTRICT IS 4 Z%. 5 (II) DO YOU FAVOR CONVERTING THE SCHOOL DISTRICT'S 6 CURRENT EARNED INCOME AND NET PROFITS TAX INTO A PERSONAL 7 INCOME TAX AT X%? THE REVENUE GENERATED FROM THE PERSONAL 8 INCOME TAX WILL BE USED TO REDUCE TAXES ON QUALIFIED 9 RESIDENTIAL PROPERTY BY AN ESTIMATED AMOUNT OF $Y AND TO 10 REPLACE THE REVENUE FROM THE CURRENT SCHOOL DISTRICT'S 11 EARNED INCOME AND NET PROFITS TAX, WHICH IS NOW LEVIED AT 12 Z%. 13 (4) THE ELECTION OFFICIALS OF EACH COUNTY SHALL, IN 14 CONSULTATION WITH THE BOARD OF SCHOOL DIRECTORS, DRAFT A 15 NONLEGAL INTERPRETATIVE STATEMENT WHICH SHALL ACCOMPANY THE 16 REFERENDUM QUESTION IN ACCORDANCE WITH SECTION 201.1 OF THE 17 ACT OF JUNE 3, 1937 (P.L.1333, NO.320), KNOWN AS THE 18 PENNSYLVANIA ELECTION CODE. THE NONLEGAL INTERPRETATIVE 19 STATEMENT SHALL INFORM THE VOTERS OF: 20 (I) THE REASON FOR THE TAX; 21 (II) THE ESTIMATED INCREASE IN REVENUE WHICH THE 22 BOARD HAS INCLUDED IN THE PROPOSED TAX RATE, AS 23 AUTHORIZED UNDER SECTION 321(B)(4) OR SECTION 321(C)(6); 24 (III) THE ESTIMATED PER HOMESTEAD TAX REDUCTION; AND 25 (IV) THE CURRENT RATE OF EARNED INCOME AND NET 26 PROFITS TAX OR, IF APPLICABLE, PERSONAL INCOME TAX LEVIED 27 BY THE SCHOOL DISTRICT. 28 (C) PROPOSED TAX RATE.--THE PROPOSED RATE OF THE EARNED 29 INCOME AND NET PROFITS TAX OR PERSONAL INCOME TAX SHALL BE 30 ESTABLISHED BY THE BOARD OF SCHOOL DIRECTORS OF THE SCHOOL 20030S0100B1789 - 69 -
1 DISTRICT, IN ACCORDANCE WITH THE FOLLOWING: 2 (1) FOR THE MUNICIPAL ELECTION OF 2007, THE PROPOSED TAX 3 RATE SHALL NOT BE LESS THAN THE RATE REQUIRED TO PROVIDE AN 4 EXCLUSION FOR HOMESTEAD PROPERTY AND FARMSTEAD PROPERTY EQUAL 5 TO 50% OF THE MAXIMUM EXCLUSION UNDER 53 PA.C.S. § 8586 6 (RELATING TO LIMITATIONS). THE PROPOSED TAX RATE SHALL NOT 7 EXCEED THE RATE REQUIRED TO PROVIDE AN EXCLUSION FOR 8 HOMESTEAD PROPERTY AND FARMSTEAD PROPERTY EQUAL TO THE 9 MAXIMUM EXCLUSION UNDER 53 PA.C.S. § 8586. IN CALCULATING THE 10 PROPOSED MINIMUM TAX RATE UNDER THIS PARAGRAPH, A SCHOOL 11 DISTRICT SHALL INCLUDE: 12 (I) FUNDS GENERATED FROM THE TAX IMPOSED UNDER 13 SECTION 331; 14 (II) FUNDS RECEIVED PURSUANT TO A PROPERTY TAX 15 REDUCTION ALLOCATION UNDER CHAPTER 5; 16 (III) FUNDS RECEIVED UNDER SECTION 324(B); AND 17 (IV) ANY FUNDS CURRENTLY COLLECTED FOR THE PURPOSES 18 OF PROVIDING HOMESTEAD AND FARMSTEAD EXCLUSIONS. 19 (2) FOR SUBSEQUENT MUNICIPAL ELECTIONS, THE PROPOSED TAX 20 RATE SHALL NOT EXCEED THE RATE REQUIRED TO PROVIDE AN 21 EXCLUSION FOR HOMESTEAD PROPERTY AND FARMSTEAD PROPERTY EQUAL 22 TO THE MAXIMUM EXCLUSION UNDER 53 PA.C.S. § 8586. 23 (D) EFFECTIVE DATE.--WHERE THE REFERENDUM QUESTION UNDER 24 THIS SECTION IS APPROVED BY THE ELECTORATE, THE NEW RATE OF THE 25 EARNED INCOME AND NET PROFITS TAX OR PERSONAL INCOME TAX SHALL 26 TAKE EFFECT PURSUANT TO SECTION 321(D). 27 (D.1) MUNICIPAL ELECTION OF 2005.--IN ACCORDANCE WITH 28 SUBSECTION (B), A BOARD OF SCHOOL DIRECTORS MAY PROPOSE A 29 REFERENDUM QUESTION AT THE MUNICIPAL ELECTION OF 2005. IF A 30 REFERENDUM QUESTION UNDER THIS SUBSECTION IS APPROVED BY THE 20030S0100B1789 - 70 -
1 ELECTORATE, THE SCHOOL DISTRICT SHALL BE DEEMED TO HAVE 2 SATISFIED THE REQUIREMENTS OF SECTION 331. IF A REFERENDUM 3 QUESTION UNDER THIS SUBSECTION IS NOT APPROVED BY THE 4 ELECTORATE, ALL OF THE FOLLOWING APPLY: 5 (1) THE BOARD OF SCHOOL DIRECTORS SHALL IMPOSE THE 6 EARNED INCOME AND NET PROFITS TAX REQUIRED UNDER SECTION 331 7 ON RESIDENTS OF THE SCHOOL DISTRICT. 8 (2) THE TAX UNDER PARAGRAPH (1) SHALL TAKE EFFECT 9 BEGINNING ON THE FIRST DAY OF THE FISCAL YEAR IN WHICH THE 10 SCHOOL DISTRICT RECEIVES A PAYMENT UNDER SECTION 505(B). 11 (E) MUNICIPAL ELECTION OF 2007.--IN ACCORDANCE WITH 12 SUBSECTIONS (B) AND (C)(1), A BOARD OF SCHOOL DIRECTORS SHALL 13 PROPOSE A REFERENDUM QUESTION AT THE MUNICIPAL ELECTION OF 2007. 14 IF A BOARD OF SCHOOL DIRECTORS FAILS TO PROPOSE A REFERENDUM 15 QUESTION AT THE MUNICIPAL ELECTION OF 2007, THE SCHOOL DISTRICT 16 SHALL BE INELIGIBLE TO RECEIVE A PROPERTY TAX REDUCTION 17 ALLOCATION UNDER SECTION 505 UNTIL A REFERENDUM QUESTION 18 PURSUANT TO SUBSECTION (C)(1) IS PROPOSED IN A SUBSEQUENT 19 GENERAL OR MUNICIPAL ELECTION. 20 (F) PUBLIC REFERENDUM REQUIREMENTS TO END PARTICIPATION 21 UNDER THIS CHAPTER.--SUBJECT TO THE NOTICE AND PUBLIC HEARING 22 REQUIREMENTS IN SECTION 4 OF THE LOCAL TAX ENABLING ACT AND 23 AFTER A PERIOD OF AT LEAST FOUR FULL FISCAL YEARS OF ANY TAX 24 AUTHORIZED UNDER SECTION 321 BEING LEVIED, A BOARD OF SCHOOL 25 DIRECTORS MAY SEEK TO END PARTICIPATION UNDER THIS CHAPTER BY 26 OBTAINING THE APPROVAL OF THE ELECTORS OF THE SCHOOL DISTRICT IN 27 A PUBLIC REFERENDUM AT A MUNICIPAL ELECTION. 28 (G) EFFECT ON CERTAIN SCHOOL DISTRICTS.-- 29 THIS SECTION SHALL NOT APPLY TO: 30 (1) A SCHOOL DISTRICT OF THE FIRST CLASS. 20030S0100B1789 - 71 -
1 (2) A SCHOOL DISTRICT WHICH REACHES THE MAXIMUM 2 HOMESTEAD EXCLUSION ALLOWED UNDER 53 PA.C.S. § 8586 WHEN 3 COMBINING THE TAX IMPOSED UNDER SECTION 331, THE PROPERTY TAX 4 REDUCTION ALLOCATION RECEIVED UNDER SECTION 505, FUNDS 5 RECEIVED UNDER SECTION 324(B) AND ANY FUNDS CURRENTLY 6 COLLECTED FOR THE PURPOSE OF PROVIDING HOMESTEAD EXCLUSIONS. 7 (3) A SCHOOL DISTRICT THAT REACHES 50% OF THE MAXIMUM 8 HOMESTEAD EXCLUSION ALLOWED UNDER 53 PA.C.S. § 8586 WHEN 9 COMBINING THE TAX IMPOSED UNDER SECTION 331, THE PROPERTY TAX 10 REDUCTION ALLOCATION RECEIVED UNDER SECTION 505, FUNDS 11 RECEIVED UNDER SECTION 324(B) AND ANY FUNDS CURRENTLY 12 COLLECTED FOR THE PURPOSE OF PROVIDING HOMESTEAD EXCLUSIONS. 13 NOTHING IN THIS PARAGRAPH SHALL PROHIBIT A SCHOOL DISTRICT 14 FROM SEEKING VOTER APPROVAL TO PROVIDE FURTHER HOMESTEAD AND 15 FARMSTEAD EXCLUSIONS SHOULD IT ELECT TO DO SO UNDER 16 SUBSECTION (B). 17 (H) SCHOOL DISTRICTS OPERATING UNDER 53 PA.C.S. CH. 87.-- 18 (1) A SCHOOL DISTRICT WHICH IS SUBJECT TO 53 PA.C.S. CH. 19 87 (RELATING TO OTHER SUBJECTS OF TAXATION) MAY ADOPT THE 20 PROVISIONS OF THIS CHAPTER PURSUANT TO THIS SUBSECTION. 21 (2) A SCHOOL DISTRICT WHICH CURRENTLY LEVIES AN EARNED 22 INCOME AND NET PROFITS TAX UNDER 53 PA.C.S. § 8703 (RELATING 23 TO ADOPTION OF REFERENDUM) SHALL, BY RESOLUTION, COMPLY WITH 24 SECTION 331 IN ORDER TO ESTABLISH ELIGIBILITY TO RECEIVE A 25 PROPERTY TAX REDUCTION ALLOCATION UNDER CHAPTER 5. 26 (3) A SCHOOL DISTRICT UNDER THIS SUBSECTION SHALL 27 CONVERT ITS EARNED INCOME AND NET PROFITS TAX AUTHORIZED 28 UNDER 53 PA.C.S. § 8703 TO AN EARNED INCOME AND NET PROFITS 29 TAX AUTHORIZED UNDER THIS SUBSECTION AT THE SAME RATE AS THE 30 TAX WAS LEVIED UNDER SECTION 53 PA.C.S. 8703 ON THE DATE OF 20030S0100B1789 - 72 -
1 CONVERSION. THE TAX AUTHORIZED UNDER THIS SUBSECTION SHALL BE 2 SUBJECT TO THE PROVISIONS OF SECTIONS 323, 324, 325 AND 326. 3 (4) A SCHOOL DISTRICT UNDER THIS SUBSECTION SHALL 4 COMBINE ALL REVENUE GENERATED FOR FUNDING HOMESTEAD AND 5 FARMSTEAD EXCLUSIONS UNDER 53 PA.C.S. § 8703 WITH ANY REVENUE 6 COLLECTED FOR THE PURPOSES OF FUNDING HOMESTEAD AND FARMSTEAD 7 EXCLUSIONS UNDER THIS CHAPTER. 8 (5) UNLESS SUBSECTION (G)(3) APPLIES, A SCHOOL DISTRICT 9 UNDER THIS SUBSECTION SHALL BE REQUIRED TO PLACE A REFERENDUM 10 QUESTION ON THE BALLOT PURSUANT TO SUBSECTION (E). WHEN 11 CALCULATING THE PROPOSED RATE OF EARNED INCOME AND NET 12 PROFITS TAX OR PERSONAL INCOME TAX PURSUANT TO SUBSECTION 13 (C), THE SCHOOL DISTRICT SHALL INCLUDE ANY REVENUE COLLECTED 14 FOR THE PURPOSES OF HOMESTEAD AND FARMSTEAD EXCLUSIONS. 15 (6) A SCHOOL DISTRICT TAKING ACTION UNDER PARAGRAPH (2) 16 SHALL NO LONGER IMPLEMENT ANY PROVISIONS OF 53 PA.C.S. CH. 17 87. 18 (I) ELECTION CODE PROVISIONS.--PROCEEDINGS UNDER THIS 19 SECTION SHALL BE IN ACCORDANCE WITH THE PROVISIONS OF THE 20 PENNSYLVANIA ELECTION CODE. 21 SECTION 333. PUBLIC REFERENDUM REQUIREMENTS FOR INCREASING 22 CERTAIN TAXES. 23 (A) APPLICABILITY.-- 24 (1) THIS SECTION SHALL APPLY TO A BOARD OF SCHOOL 25 DIRECTORS OF A SCHOOL DISTRICT THAT HAS TAKEN ACTION UNDER 26 SECTION 331. 27 (2) FOR SCHOOL DISTRICTS UNDER PARAGRAPH (1), THIS 28 SECTION SHALL APPLY TO FISCAL YEARS BEGINNING WITH THE 2006- 29 2007 FISCAL YEAR. 30 (B) PROHIBITIONS.--EXCEPT AS SET FORTH IN SUBSECTION (F), 20030S0100B1789 - 73 -
1 UNLESS THERE IS COMPLIANCE WITH SUBSECTION (C), A BOARD OF 2 SCHOOL DIRECTORS MAY NOT DO ANY OF THE FOLLOWING: 3 (1) INCREASE THE RATE OF A TAX LEVIED FOR THE SUPPORT OF 4 THE PUBLIC SCHOOLS BY MORE THAN THE INDEX. FOR PURPOSES OF 5 COMPLIANCE WITH THIS PARAGRAPH, A SCHOOL DISTRICT WHICH IS 6 SITUATED IN MORE THAN ONE COUNTY AND WHICH LEVIES REAL ESTATE 7 TAXES UNDER SECTION 672.1 OF THE ACT OF MARCH 10, 1949 8 (P.L.30, NO.14), KNOWN AS THE PUBLIC SCHOOL CODE OF 1949, 9 SHALL APPLY THE INDEX TO EACH SEPARATE RATE OF REAL ESTATE 10 TAXES LEVIED. 11 (2) LEVY A TAX FOR THE SUPPORT OF THE PUBLIC SCHOOLS 12 WHICH WAS NOT LEVIED IN THE FISCAL YEAR IN WHICH A TAX UNDER 13 SECTION 321 WAS IMPOSED. 14 (3) RAISE THE RATE OF THE EARNED INCOME AND NET PROFITS 15 TAX, IF ALREADY IMPOSED UNDER THE AUTHORITY OF THE LOCAL TAX 16 ENABLING ACT, EXCEPT AS OTHERWISE PROVIDED FOR UNDER SECTION 17 332. 18 (4) NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER 19 TO THE CONTRARY, THE ADOPTION OF A REFERENDUM UNDER SECTION 20 332 CONFERS ON THE BOARD OF SCHOOL DIRECTORS THE AUTHORITY TO 21 RAISE INCOME TAXES ONLY TO THE EXTENT CONTAINED IN THE 22 LANGUAGE OF THE REFERENDUM AND ANY FUTURE INCREASE OF AN 23 INCOME TAX TO BE USED FOR THE PURPOSE OF PROPERTY TAX 24 REDUCTION SHALL BE SUBMITTED TO THE ELECTORS OF THE SCHOOL 25 DISTRICT AT A SUBSEQUENT MUNICIPAL ELECTION PURSUANT TO THE 26 PROVISIONS OF SECTION 332(C)(2). 27 (C) REFERENDUM.-- 28 (1) IN ORDER TO TAKE AN ACTION PROHIBITED UNDER 29 SUBSECTION (B)(1), AT THE ELECTION IMMEDIATELY PRECEDING THE 30 START OF THE SCHOOL DISTRICT FISCAL YEAR IN WHICH THE 20030S0100B1789 - 74 -
1 PROPOSED TAX INCREASE WOULD TAKE EFFECT, A REFERENDUM STATING 2 THE SPECIFIC RATE OR RATES OF THE TAX INCREASE MUST BE 3 SUBMITTED TO THE ELECTORS OF THE SCHOOL DISTRICT; AND A 4 MAJORITY OF THE ELECTORS VOTING ON THE QUESTION MUST APPROVE 5 THE INCREASE. 6 (2) IN ORDER TO TAKE AN ACTION UNDER SUBSECTION (B)(2), 7 AT THE ELECTION IMMEDIATELY PRECEDING THE START OF THE SCHOOL 8 DISTRICT FISCAL YEAR IN WHICH THE PROPOSED TAX WOULD TAKE 9 EFFECT, A REFERENDUM STATING THE PROPOSED TAX AND THE RATE AT 10 WHICH IT WILL BE LEVIED MUST BE SUBMITTED TO THE ELECTORS OF 11 THE SCHOOL DISTRICT; AND A MAJORITY OF THE ELECTORS VOTING ON 12 THE QUESTION MUST APPROVE THE TAX. 13 (3) EXCEPT AS SET FORTH IN SUBSECTIONS (I) AND (J), A 14 SCHOOL DISTRICT ACTING PURSUANT TO THIS SUBSECTION SHALL 15 SUBMIT THE REFERENDUM QUESTION REQUIRED UNDER THIS SECTION TO 16 THE ELECTION OFFICIALS OF EACH COUNTY IN WHICH IT IS SITUATE 17 NO LATER THAN 60 DAYS PRIOR TO THE ELECTION IMMEDIATELY 18 PRECEDING THE FISCAL YEAR IN WHICH THE TAX INCREASE WOULD 19 TAKE EFFECT. 20 (4) THE ELECTION OFFICIALS OF EACH COUNTY SHALL, IN 21 CONSULTATION WITH THE BOARD OF SCHOOL DIRECTORS, DRAFT A 22 NONLEGAL INTERPRETATIVE STATEMENT WHICH SHALL ACCOMPANY THE 23 REFERENDUM QUESTION IN ACCORDANCE WITH SECTION 201.1 OF THE 24 ACT OF JUNE 3, 1937 (P.L.1333, NO.320), KNOWN AS THE 25 PENNSYLVANIA ELECTION CODE. THE NONLEGAL INTERPRETATIVE 26 STATEMENT SHALL INCLUDE INFORMATION THAT REFERENCES THE ITEMS 27 OF EXPENDITURE FOR WHICH THE TAX INCREASE IS SOUGHT AND THE 28 CONSEQUENCE OF THE REFERENDUM BEING DISAPPROVED BY THE 29 ELECTORATE. 30 (D) FAILURE TO APPROVE REFERENDUM.-- 20030S0100B1789 - 75 -
1 (1) IF A REFERENDUM QUESTION SUBMITTED UNDER SUBSECTION 2 (C)(1) IS NOT APPROVED, THE BOARD OF SCHOOL DIRECTORS MAY 3 APPROVE AN INCREASE IN THE TAX RATE OF NOT MORE THAN THE 4 INDEX. 5 (2) IF A REFERENDUM QUESTION SUBMITTED UNDER SUBSECTION 6 (C)(2) IS NOT APPROVED, THE BOARD OF SCHOOL DIRECTORS MAY NOT 7 LEVY THE TAX. 8 (E) TAX RATE SUBMISSIONS.--A SCHOOL DISTRICT THAT HAS 9 ADOPTED A PRELIMINARY BUDGET PROPOSAL UNDER SECTION 311 THAT 10 INCLUDES AN INCREASE IN THE RATE OF ANY TAX LEVIED FOR THE 11 SUPPORT OF PUBLIC SCHOOLS SHALL SUBMIT INFORMATION ON THE 12 INCREASE TO THE DEPARTMENT ON A UNIFORM FORM PREPARED BY THE 13 DEPARTMENT. THE SCHOOL DISTRICT SHALL SUBMIT SUCH INFORMATION NO 14 LATER THAN 85 DAYS PRIOR TO THE DATE OF THE ELECTION IMMEDIATELY 15 PRECEDING THE BEGINNING OF THE SCHOOL DISTRICT'S FISCAL YEAR. 16 THE DEPARTMENT SHALL COMPARE THE PROPOSED PERCENTAGE INCREASE IN 17 THE RATE OF ANY TAX WITH THE INDEX. WITHIN TEN DAYS OF THE 18 RECEIPT OF THE INFORMATION REQUIRED UNDER THIS SUBSECTION BUT NO 19 LATER THAN 75 DAYS PRIOR TO THE DATE OF THE ELECTION IMMEDIATELY 20 PRECEDING THE BEGINNING OF THE SCHOOL DISTRICT'S FISCAL YEAR, 21 THE DEPARTMENT SHALL INFORM THE SCHOOL DISTRICT WHETHER THE 22 PROPOSED TAX RATE INCREASE IS LESS THAN OR EQUAL TO THE INDEX. 23 IF THE DEPARTMENT DETERMINES THAT THE PROPOSED PERCENTAGE 24 INCREASE IN THE RATE OF THE TAX EXCEEDS THE INDEX, THE 25 DEPARTMENT SHALL NOTIFY THE SCHOOL DISTRICT THAT: 26 (1) THE PROPOSED TAX INCREASE MUST BE REDUCED TO AN 27 AMOUNT LESS THAN OR EQUAL TO THE INDEX; 28 (2) THE PROPOSED TAX INCREASE MUST BE APPROVED BY THE 29 ELECTORATE UNDER SUBSECTION (C)(1); OR 30 (3) AN EXCEPTION MUST BE SOUGHT UNDER SUBSECTION (F). 20030S0100B1789 - 76 -
1 (F) REFERENDUM EXCEPTIONS.--A SCHOOL DISTRICT MAY, WITHOUT 2 SEEKING VOTER APPROVAL UNDER SUBSECTION (C), INCREASE THE RATE 3 OF A TAX LEVIED FOR THE SUPPORT OF THE PUBLIC SCHOOLS BY MORE 4 THAN THE INDEX IF ALL OF THE FOLLOWING APPLY: 5 (1) THE REVENUE RAISED BY THE ALLOWABLE INCREASE UNDER 6 THE INDEX IS INSUFFICIENT TO BALANCE THE PROPOSED BUDGET DUE 7 TO ONE OR MORE OF THE EXPENDITURES LISTED IN PARAGRAPH (2). 8 (2) THE REVENUE GENERATED BY INCREASING THE RATE OF A 9 TAX BY MORE THAN THE INDEX WILL BE USED TO PAY FOR ANY OF THE 10 FOLLOWING: 11 (I) COSTS INCURRED IN RESPONDING TO OR RECOVERING 12 FROM AN EMERGENCY OR DISASTER DECLARED PURSUANT TO 35 13 PA.C.S. § 7301 (RELATING TO GENERAL AUTHORITY OF 14 GOVERNOR) OR 75 PA.C.S. § 6108 (RELATING TO POWER OF 15 GOVERNOR DURING EMERGENCY). 16 (II) COSTS TO IMPLEMENT A COURT ORDER OR AN 17 ADMINISTRATIVE ORDER FROM A FEDERAL OR STATE AGENCY AS 18 LONG AS THE TAX INCREASE IS RESCINDED FOLLOWING 19 FULFILLMENT OF THE COURT ORDER OR ADMINISTRATIVE ORDER. 20 (III) COSTS ASSOCIATED WITH THE FOLLOWING: 21 (A) TO PAY INTEREST AND PRINCIPAL ON ANY 22 INDEBTEDNESS INCURRED UNDER 53 PA.C.S. PT. VII SUBPT. 23 B (RELATING TO INDEBTEDNESS AND BORROWING) PRIOR TO 24 THE EFFECTIVE DATE OF THIS SECTION. IN NO CASE MAY 25 THE SCHOOL DISTRICT INCUR ADDITIONAL DEBT UNDER THIS 26 CLAUSE EXCEPT FOR THE REFINANCING OF EXPENSES RELATED 27 TO SUCH REFINANCING AND THE ESTABLISHMENT OF FUNDING 28 OF APPROPRIATE DEBT SERVICE RESERVES. AN INCREASE 29 UNDER THIS CLAUSE SHALL BE RESCINDED FOLLOWING THE 30 FINAL PAYMENT OF INTEREST AND PRINCIPAL. 20030S0100B1789 - 77 -
1 (B) TO PAY INTEREST AND PRINCIPAL ON ANY 2 ELECTORAL DEBT INCURRED UNDER 53 PA.C.S. PT. VII 3 SUBPT. B. 4 (C) TO PAY INTEREST AND PRINCIPAL ON 5 INDEBTEDNESS FOR UP TO 60% OF THE CONSTRUCTION COST 6 AVERAGE ON A SQUARE-FOOT BASIS IF ALL OF THE 7 FOLLOWING APPLY: 8 (I) THE INDEBTEDNESS IS FOR A SCHOOL 9 CONSTRUCTION PROJECT UNDER 22 PA. CODE CH. 21 10 (RELATING TO SCHOOL BUILDINGS). 11 (II) THE INDEBTEDNESS TO FUND APPROPRIATE 12 DEBT SERVICE RESERVES FOR THE PROJECT IS INCURRED 13 AFTER THE EFFECTIVE DATE OF THIS SECTION. 14 (III) THE INCREASE SOUGHT UNDER THIS CLAUSE 15 IS RESCINDED FOLLOWING FINAL PAYMENT OF INTEREST 16 AND PRINCIPAL. 17 (IV) THE INDEBTEDNESS IS INCURRED ONLY AFTER 18 EXISTING FUND BALANCES FOR SCHOOL CONSTRUCTION 19 AND ANY UNDESIGNATED FUND BALANCES HAVE BEEN 20 FULLY COMMITTED TO FUND THE PROJECT. 21 (V) THE INDEBTEDNESS IS FOR AN ACADEMIC 22 ELEMENTARY OR ACADEMIC SECONDARY SCHOOL BUILDING. 23 FOR PURPOSES OF THIS SUBCLAUSE, THE FOLLOWING 24 SHALL NOT BE CONSIDERED TO BE AN ACADEMIC 25 ELEMENTARY OR ACADEMIC SECONDARY SCHOOL BUILDING: 26 NATATORIUM, STADIUM BLEACHERS, ATHLETIC FIELD, 27 ATHLETIC FIELD LIGHTING EQUIPMENT AND APPARATUS 28 USED TO PROMOTE AND CONDUCT INTERSCHOLASTIC 29 ATHLETICS. 30 (VI) THE PROJECT HAS BEEN APPROVED BY THE 20030S0100B1789 - 78 -
1 DEPARTMENT UNDER SECTION 731 OF THE ACT OF MARCH 2 10, 1949 (P.L.30, NO.14), KNOWN AS THE PUBLIC 3 SCHOOL CODE OF 1949. 4 (D) TO PAY INTEREST AND PRINCIPAL ON 5 INDEBTEDNESS FOR UP TO $250,000 OF THE CONSTRUCTION 6 COST OF A NONACADEMIC SCHOOL CONSTRUCTION PROJECT, AS 7 ADJUSTED ANNUALLY BY THE PERCENTAGE INCREASE IN THE 8 AVERAGE OF THE STATEWIDE AVERAGE WEEKLY WAGE AND THE 9 EMPLOYMENT COST INDEX. 10 (IV) COSTS TO RESPOND TO CONDITIONS WHICH POSE AN 11 IMMEDIATE THREAT OF SERIOUS PHYSICAL HARM OR INJURY TO 12 THE STUDENTS, STAFF OR RESIDENTS OF THE SCHOOL DISTRICT, 13 BUT ONLY UNTIL THE CONDITIONS CAUSING THE THREAT HAVE 14 BEEN FULLY RESOLVED. 15 (V) COSTS INCURRED IN PROVIDING SPECIAL EDUCATION 16 PROGRAMS AND SERVICES TO STUDENTS WITH DISABILITIES IF 17 THE INCREASE IN EXPENDITURES ON SPECIAL EDUCATION 18 PROGRAMS AND SERVICES WAS GREATER THAN 10%. THE DOLLAR 19 AMOUNT OF THIS EXCEPTION SHALL BE EQUAL TO THE PORTION OF 20 THE INCREASE THAT EXCEEDS 10%. 21 (VI) COSTS WHICH: 22 (A) WERE INCURRED IN THE IMPLEMENTATION OF A 23 SCHOOL IMPROVEMENT PLAN REQUIRED UNDER SECTION 24 1116(B) OF THE ELEMENTARY AND SECONDARY EDUCATION ACT 25 OF 1965 (PUBLIC LAW 89-10, 20 U.S.C. § 6316(B)); AND 26 (B) WERE NOT OFFSET BY A STATE ALLOCATION. 27 (VII) COSTS NECESSARY TO MAINTAIN: 28 (A) PER-STUDENT LOCAL TAX REVENUE, ADJUSTED BY 29 THE INDEX, IF THE PERCENTAGE GROWTH IN AVERAGE DAILY 30 MEMBERSHIP BETWEEN THE SCHOOL YEAR DETERMINED UNDER 20030S0100B1789 - 79 -
1 SUBSECTION (J)(4) AND THE THIRD SCHOOL YEAR PRECEDING 2 THE SCHOOL YEAR DETERMINED UNDER SUBSECTION (J)(4) 3 EXCEEDS 7.5%; OR 4 (B) ACTUAL INSTRUCTION EXPENSE PER AVERAGE DAILY 5 MEMBERSHIP, ADJUSTED BY THE INDEX, IF THE INCREASE IN 6 ACTUAL INSTRUCTION EXPENSE PER AVERAGE DAILY 7 MEMBERSHIP BETWEEN THE SCHOOL YEAR DETERMINED UNDER 8 SUBSECTION (J)(4) AND THE SCHOOL YEAR PRECEDING THE 9 SCHOOL YEAR DETERMINED UNDER SUBSECTION (J)(4) IS 10 LESS THAN THE INDEX. 11 (VIII) THE MAINTENANCE OF REVENUES DERIVED FROM REAL 12 PROPERTY TAXES, EARNED INCOME AND NET PROFITS TAXES, 13 PERSONAL INCOME TAXES, BASIC EDUCATION FUNDING 14 ALLOCATIONS AND SPECIAL EDUCATION FUNDING ALLOCATIONS, 15 ADJUSTED BY THE INDEX, FOR A SCHOOL DISTRICT WHERE THE 16 PERCENTAGE INCREASE IN REVENUES DERIVED FROM REAL 17 PROPERTY TAXES, EARNED INCOME AND NET PROFITS TAXES, 18 PERSONAL INCOME TAXES, BASIC EDUCATION FUNDING 19 ALLOCATIONS AND SPECIAL EDUCATION FUNDING ALLOCATIONS 20 BETWEEN THE SCHOOL YEAR DETERMINED UNDER SUBSECTION 21 (J)(4) AND THE SCHOOL YEAR PRECEDING THE SCHOOL YEAR 22 DETERMINED UNDER SUBSECTION (J)(4) IS LESS THAN THE 23 INDEX. 24 (IX) COSTS INCURRED FOR PROVIDING HEALTH CARE 25 RELATED BENEFITS WHICH ARE DIRECTLY ATTRIBUTABLE TO A 26 COLLECTIVE BARGAINING AGREEMENT IN EFFECT ON THE 27 EFFECTIVE DATE OF THIS SECTION BETWEEN THE SCHOOL 28 DISTRICT AND ITS EMPLOYEES' ORGANIZATION IF THE 29 ANTICIPATED INCREASE IN THE COST OF HEALTH CARE RELATED 30 BENEFITS BETWEEN THE CURRENT YEAR AND THE UPCOMING YEAR 20030S0100B1789 - 80 -
1 IS GREATER THAN THE INDEX. THE DOLLAR AMOUNT OF THIS 2 EXCEPTION SHALL BE EQUAL TO THE PORTION OF THE INCREASE 3 WHICH EXCEEDS THE INDEX. THIS SUBPARAGRAPH SHALL NOT 4 APPLY TO A COLLECTIVE BARGAINING AGREEMENT RENEWED, 5 EXTENDED OR ENTERED INTO AFTER THE EFFECTIVE DATE OF THIS 6 SECTION. 7 (G) REVENUE DERIVED FROM INCREASE.--ANY REVENUE DERIVED FROM 8 AN INCREASE IN THE RATE OF ANY TAX ALLOWED PURSUANT TO 9 SUBSECTION (F)(2)(III) SHALL NOT EXCEED THE ANTICIPATED DOLLAR 10 AMOUNT OF THE EXPENDITURE. 11 (H) LIMITATION ON TAX RATE.--THE INCREASE IN THE RATE OF ANY 12 TAX ALLOWED PURSUANT TO AN EXCEPTION UNDER SUBSECTION (F)(2)(I), 13 (II), (IV), (V), (VI), (VII), (VIII) OR (IX) OR (N) SHALL NOT 14 EXCEED THE RATE INCREASE REQUIRED AS DETERMINED BY A COURT OF 15 COMMON PLEAS OR THE DEPARTMENT PURSUANT TO SUBSECTION (I) OR 16 (J). 17 (I) COURT ACTION.-- 18 (1) PRIOR TO THE IMPOSITION OF A TAX INCREASE UNDER 19 SUBSECTION (F)(2)(I), (II) AND (IV) AND NO LATER THAN 75 DAYS 20 PRIOR TO THE ELECTION IMMEDIATELY PRECEDING THE BEGINNING OF 21 THE SCHOOL DISTRICT'S FISCAL YEAR, APPROVAL BY THE COURT OF 22 COMMON PLEAS IN THE JUDICIAL DISTRICT IN WHICH THE 23 ADMINISTRATIVE OFFICE OF THE SCHOOL DISTRICT IS LOCATED MUST 24 BE SOUGHT. THE BOARD OF SCHOOL DIRECTORS SHALL PUBLISH IN A 25 NEWSPAPER OF GENERAL CIRCULATION AND ON THE DISTRICT'S 26 PUBLICLY ACCESSIBLE WORLD WIDE WEB SITE, IF ONE IS 27 MAINTAINED, NOTICE OF ITS INTENT TO FILE A PETITION UNDER 28 THIS SUBSECTION AT LEAST ONE WEEK PRIOR TO THE FILING OF THE 29 PETITION. THE BOARD OF SCHOOL DIRECTORS SHALL ALSO PUBLISH IN 30 A NEWSPAPER OF GENERAL CIRCULATION AND ON THE DISTRICT'S 20030S0100B1789 - 81 -
1 PUBLICLY ACCESSIBLE WORLD WIDE WEB SITE, IF ONE IS 2 MAINTAINED, NOTICE, AS SOON AS POSSIBLE FOLLOWING 3 NOTIFICATION FROM THE COURT THAT A HEARING HAS BEEN 4 SCHEDULED, STATING THE DATE, TIME AND PLACE OF THE HEARING ON 5 THE PETITION. THE FOLLOWING SHALL APPLY TO ANY PROCEEDINGS 6 INSTITUTED UNDER THIS SUBSECTION: 7 (I) THE SCHOOL DISTRICT MUST PROVE BY CLEAR AND 8 CONVINCING EVIDENCE THAT IT QUALIFIES FOR EACH EXCEPTION 9 SOUGHT. 10 (II) THE SCHOOL DISTRICT MUST PROVE BY CLEAR AND 11 CONVINCING EVIDENCE THE ANTICIPATED DOLLAR AMOUNT OF THE 12 EXPENDITURE FOR EACH EXCEPTION SOUGHT. 13 (2) THE COURT SHALL RULE ON THE SCHOOL DISTRICT'S 14 PETITION AND INFORM THE SCHOOL DISTRICT OF ITS DECISION NO 15 LATER THAN 55 DAYS PRIOR TO THE DATE OF THE ELECTION 16 IMMEDIATELY PRECEDING THE BEGINNING OF THE SCHOOL DISTRICT'S 17 FISCAL YEAR. IF THE COURT APPROVES THE PETITION, THE COURT 18 SHALL ALSO DETERMINE THE DOLLAR AMOUNT OF THE EXPENDITURE FOR 19 WHICH AN EXCEPTION IS GRANTED, THE TAX RATE INCREASE REQUIRED 20 TO FUND THE EXCEPTION AND THE APPROPRIATE DURATION OF THE 21 INCREASE. IF THE COURT DENIES THE PETITION, THE SCHOOL 22 DISTRICT MAY SUBMIT A REFERENDUM QUESTION UNDER SUBSECTION 23 (C)(1). THE QUESTION MUST BE SUBMITTED TO THE ELECTION 24 OFFICIALS NO LATER THAN 50 DAYS PRIOR TO THE DATE OF THE 25 ELECTION IMMEDIATELY PRECEDING THE BEGINNING OF THE SCHOOL 26 DISTRICT'S FISCAL YEAR. 27 (J) DEPARTMENT APPROVAL.-- 28 (1) A SCHOOL DISTRICT THAT SEEKS TO INCREASE THE RATE OF 29 TAX DUE TO AN EXPENDITURE UNDER SUBSECTION (F)(2)(III), (V), 30 (VI), (VII), (VIII) OR (IX) OR (N) SHALL OBTAIN THE APPROVAL 20030S0100B1789 - 82 -
1 OF THE DEPARTMENT BEFORE IMPOSING THE TAX INCREASE. THE 2 DEPARTMENT SHALL ESTABLISH PROCEDURES FOR ADMINISTERING THE 3 PROVISIONS OF THIS SUBSECTION, WHICH MAY INCLUDE AN 4 ADMINISTRATIVE HEARING ON THE SCHOOL DISTRICT'S SUBMISSION. 5 (2) A SCHOOL DISTRICT PROCEEDING UNDER THE PROVISIONS OF 6 THIS SUBSECTION SHALL PUBLISH IN A NEWSPAPER OF GENERAL 7 CIRCULATION AND ON THE DISTRICT'S PUBLICLY ACCESSIBLE WORLD 8 WIDE WEB SITE, IF ONE IS MAINTAINED, NOTICE OF ITS INTENT TO 9 SEEK DEPARTMENT APPROVAL AT LEAST ONE WEEK PRIOR TO 10 SUBMITTING ITS REQUEST FOR APPROVAL TO THE DEPARTMENT. IF THE 11 DEPARTMENT SCHEDULES A HEARING ON THE SCHOOL DISTRICT'S 12 REQUEST, THE SCHOOL DISTRICT SHALL PUBLISH NOTICE OF THE 13 HEARING IN A NEWSPAPER OF GENERAL CIRCULATION AND ON THE 14 DISTRICT'S PUBLICLY ACCESSIBLE WORLD WIDE WEB SITE, IF ONE IS 15 MAINTAINED, IMMEDIATELY UPON RECEIVING THE INFORMATION FROM 16 THE DEPARTMENT. THE NOTICE SHALL INCLUDE THE DATE, TIME AND 17 PLACE OF THE HEARING. 18 (3) THE DEPARTMENT SHALL APPROVE A SCHOOL DISTRICT'S 19 REQUEST UNDER THIS SUBSECTION IF A REVIEW OF THE DATA UNDER 20 PARAGRAPH (4) DEMONSTRATES THAT: 21 (I) THE SCHOOL DISTRICT QUALIFIES FOR ONE OR MORE 22 EXCEPTIONS UNDER SUBSECTION (F)(2)(III), (V), (VI), 23 (VII), (VIII) OR (IX) OR (N); AND 24 (II) THE SUM OF THE DOLLAR AMOUNTS OF THE EXCEPTIONS 25 FOR WHICH THE SCHOOL DISTRICT QUALIFIES MAKES THE SCHOOL 26 DISTRICT ELIGIBLE UNDER SUBSECTION (F)(1). 27 (4) FOR THE PURPOSE OF DETERMINING THE ELIGIBILITY OF A 28 SCHOOL DISTRICT FOR AN EXCEPTION UNDER SUBSECTION (F)(2)(V), 29 (VI), (VII) OR (VIII), THE DEPARTMENT SHALL UTILIZE DATA FROM 30 THE MOST RECENT SCHOOL YEARS FOR WHICH ANNUAL FINANCIAL 20030S0100B1789 - 83 -
1 REPORT DATA REQUIRED UNDER SECTION 2553 OF THE ACT OF MARCH 2 10, 1949 (P.L.30, NO.14), KNOWN AS THE PUBLIC SCHOOL CODE OF 3 1949, HAS BEEN RECEIVED FOR ALL SCHOOL DISTRICTS. THE 4 DEPARTMENT SHALL INFORM SCHOOL DISTRICTS OF THE SCHOOL YEARS 5 DETERMINED UNDER THIS SUBSECTION NO LATER THAN 30 DAYS PRIOR 6 TO THE DATE ON WHICH PUBLIC INSPECTION OF PROPOSED SCHOOL 7 BUDGETS IS REQUIRED UNDER SECTION 311(C). 8 (5) THE DEPARTMENT SHALL RULE ON THE SCHOOL DISTRICT'S 9 REQUEST AND SHALL INFORM THE SCHOOL DISTRICT OF ITS DECISION 10 NO LATER THAN 55 DAYS PRIOR TO THE DATE OF THE ELECTION 11 IMMEDIATELY PRECEDING THE BEGINNING OF THE SCHOOL DISTRICT'S 12 FISCAL YEAR. IF THE DEPARTMENT APPROVES THE REQUEST, THE 13 DEPARTMENT SHALL DETERMINE THE DOLLAR AMOUNT OF THE 14 EXPENDITURE FOR WHICH THE EXCEPTION IS SOUGHT AND THE TAX 15 RATE INCREASE REQUIRED TO FUND THE EXCEPTION. IF THE 16 DEPARTMENT DENIES THE REQUEST, THE SCHOOL DISTRICT MAY SUBMIT 17 A REFERENDUM QUESTION UNDER SUBSECTION (C)(1). THE QUESTION 18 MUST BE SUBMITTED TO THE ELECTION OFFICIALS NO LATER THAN 50 19 DAYS PRIOR TO THE DATE OF THE ELECTION IMMEDIATELY PRECEDING 20 THE BEGINNING OF THE SCHOOL DISTRICT'S FISCAL YEAR. 21 (6) WITHIN 30 DAYS OF THE DEADLINE UNDER PARAGRAPH (5), 22 THE DEPARTMENT SHALL SUBMIT A REPORT TO THE PRESIDENT PRO 23 TEMPORE OF THE SENATE, THE MINORITY LEADER OF THE SENATE, THE 24 SPEAKER OF THE HOUSE OF REPRESENTATIVES AND THE MINORITY 25 LEADER OF THE HOUSE OF REPRESENTATIVES ENUMERATING THE SCHOOL 26 DISTRICTS WHICH SOUGHT AN EXCEPTION UNDER THIS SUBSECTION. 27 THE DEPARTMENT SHALL ALSO PUBLISH THE REPORT ON ITS PUBLICLY 28 ACCESSIBLE WORLD WIDE WEB SITE. THE REPORT SHALL INCLUDE: 29 (I) THE NAME OF EACH SCHOOL DISTRICT MAKING A 30 REQUEST UNDER THIS SUBSECTION. 20030S0100B1789 - 84 -
1 (II) THE SPECIFIC EXCEPTIONS REQUESTED BY EACH 2 SCHOOL DISTRICT AND THE DOLLAR AMOUNT OF THE EXPENDITURE 3 FOR EACH EXCEPTION. 4 (III) THE DEPARTMENT'S RULING ON THE REQUEST FOR THE 5 EXCEPTION. 6 (IV) IF THE EXCEPTION WAS APPROVED, THE DOLLAR 7 AMOUNT OF THE EXPENDITURE FOR WHICH THE EXCEPTION WAS 8 SOUGHT AND THE TAX RATE INCREASE REQUIRED TO FUND THE 9 EXCEPTION. 10 (V) A STATISTICAL SUMMARY OF THE INFORMATION IN 11 SUBPARAGRAPHS (II), (III) AND (IV). 12 (K) OBJECTIONS.--ANY PERSON THAT RESIDES WITHIN OR PAYS REAL 13 PROPERTY TAXES TO THE SCHOOL DISTRICT FILING A PETITION UNDER 14 SUBSECTION (I) MAY FILE WITH THE COURT WRITTEN OBJECTIONS TO ANY 15 PETITION FILED UNDER THIS SECTION. 16 (L) INDEX CALCULATION.--NO LATER THAN AUGUST 15, 2005, AND 17 EACH AUGUST 15 THEREAFTER, THE DEPARTMENT SHALL CALCULATE THE 18 INDEX. THE DEPARTMENT SHALL PUBLISH THE INDEX BY SEPTEMBER 1, 19 2005, AND EACH SEPTEMBER 1 THEREAFTER IN THE PENNSYLVANIA 20 BULLETIN. 21 (M) ELECTION INTERFERENCE PROHIBITED.-- 22 (1) NO PUBLIC FUNDS MAY BE USED TO URGE ANY ELECTOR TO 23 VOTE FOR OR AGAINST A REFERENDUM OR BE APPROPRIATED FOR 24 POLITICAL OR CAMPAIGN PURPOSES. 25 (2) THIS SUBSECTION SHALL NOT PROHIBIT THE USE OF PUBLIC 26 FUNDS FOR DISSEMINATION OF FACTUAL INFORMATION RELATIVE TO A 27 REFERENDUM APPEARING ON AN ELECTION BALLOT. 28 (3) AS USED IN THIS SUBSECTION, THE TERM "PUBLIC FUNDS" 29 MEANS ANY FUNDS APPROPRIATED BY THE GENERAL ASSEMBLY OR BY A 30 POLITICAL SUBDIVISION. 20030S0100B1789 - 85 -
1 (N) TREATMENT OF CERTAIN REQUIRED PAYMENTS.--THE PROVISIONS 2 OF SUBSECTIONS (F) AND (J) SHALL APPLY TO A SCHOOL DISTRICT'S 3 SHARE OF PAYMENTS TO THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT 4 SYSTEM AS REQUIRED UNDER 24 PA.C.S. § 8327 (RELATING TO PAYMENTS 5 BY EMPLOYERS) IF THE ACTUAL DOLLAR AMOUNT OF PAYMENTS BETWEEN 6 THE CURRENT YEAR AND THE UPCOMING YEAR IS GREATER THAN 7.5%. THE 7 DOLLAR AMOUNT TO WHICH SUBSECTION (F) APPLIES SHALL EQUAL THAT 8 PORTION OF THE INCREASE WHICH EXCEEDS 7.5% OF THE ACTUAL DOLLAR 9 VALUE OF PAYMENTS BETWEEN THE CURRENT YEAR AND THE UPCOMING 10 YEAR. 11 SECTION 334. DISPOSITION OF INCOME TAX REVENUE AND PROPERTY TAX 12 REDUCTION ALLOCATIONS. 13 (A) EARNED INCOME AND NET PROFITS TAX REVENUE.--ALL EARNED 14 INCOME AND NET PROFITS TAX REVENUE RECEIVED BY THE SCHOOL 15 DISTRICT PURSUANT TO THIS CHAPTER SHALL BE USED AS FOLLOWS: 16 (1) IN THE FISCAL YEAR THAT THE TAX UNDER SECTION 17 321(B)(1) IS IMPLEMENTED, ALL REVENUE RECEIVED BY A SCHOOL 18 DISTRICT THAT IS DIRECTLY ATTRIBUTABLE TO THAT TAX SHALL BE 19 USED TO FUND EXCLUSIONS FOR HOMESTEAD AND FARMSTEAD PROPERTY. 20 (2) IN THE SECOND FISCAL YEAR AND EACH FISCAL YEAR 21 THEREAFTER, THE REVENUE RECEIVED BY THE SCHOOL DISTRICT SHALL 22 BE USED TO MAINTAIN THE AMOUNT ESTABLISHED IN PARAGRAPH (1). 23 ALL REMAINING REVENUE MAY BE USED FOR THE OPERATIONS OF THE 24 SCHOOL DISTRICT. 25 (3) EXCEPT AS SET FORTH IN SECTION 321(B)(4), IN THE 26 FISCAL YEAR THAT A TAX UNDER SECTION 321(B)(2) IS IMPLEMENTED 27 OR INCREASED, ALL REVENUE RECEIVED BY A SCHOOL DISTRICT THAT 28 IS DIRECTLY ATTRIBUTABLE TO THAT TAX SHALL BE USED TO FUND 29 EXCLUSIONS FOR HOMESTEAD AND FARMSTEAD PROPERTY. 30 (4) IN THE SECOND FISCAL YEAR AND EACH FISCAL YEAR 20030S0100B1789 - 86 -
1 THEREAFTER, THE REVENUE RECEIVED BY THE SCHOOL DISTRICT SHALL 2 BE USED TO MAINTAIN THE AMOUNT ESTABLISHED IN PARAGRAPH (3). 3 ALL REMAINING REVENUE MAY BE USED FOR THE OPERATIONS OF THE 4 SCHOOL DISTRICT. 5 (B) PERSONAL INCOME TAX REVENUE.--ALL PERSONAL INCOME TAX 6 REVENUE RECEIVED BY THE SCHOOL DISTRICT PURSUANT TO THIS CHAPTER 7 SHALL BE USED AS FOLLOWS: 8 (1) EXCEPT AS SET FORTH IN SECTION 321(C)(6), IN THE 9 FISCAL YEAR THAT THE TAX UNDER SECTION 321(C) IS IMPLEMENTED 10 OR INCREASED, ALL REVENUE RECEIVED BY THE SCHOOL DISTRICT 11 PURSUANT TO SECTION 321(C)(2)(II) AND (III) SHALL BE USED TO 12 FUND EXCLUSIONS FOR HOMESTEAD AND FARMSTEAD PROPERTY. 13 (2) IN THE SECOND FISCAL YEAR AND EACH FISCAL YEAR 14 THEREAFTER, ALL REVENUE RECEIVED BY THE SCHOOL DISTRICT 15 PURSUANT TO SECTION 321(C)(2)(II) AND (III) SHALL BE USED TO 16 MAINTAIN THE AMOUNT ESTABLISHED IN PARAGRAPH (1). ALL 17 REMAINING REVENUE MAY BE USED FOR THE OPERATIONS OF THE 18 SCHOOL DISTRICT. 19 SUBCHAPTER E 20 HOMESTEAD EXCLUSION 21 SECTION 341. HOMESTEAD AND FARMSTEAD APPLICATIONS. 22 (A) INITIAL NOTIFICATION AND APPLICATION.--WITHIN 45 DAYS OF 23 THE EFFECTIVE DATE OF THIS SECTION, A BOARD OF SCHOOL DIRECTORS 24 SHALL NOTIFY, BY FIRST CLASS MAIL, THE OWNER OF EACH PARCEL OF 25 RESIDENTIAL PROPERTY WITHIN THE DISTRICT THAT THE OWNER MUST 26 SUBMIT A COMPLETED APPLICATION IN ACCORDANCE WITH 53 PA.C.S. § 27 8584(A) (RELATING TO ADMINISTRATION AND PROCEDURE). THE BOARD 28 SHALL PROVIDE A SECOND NOTICE BY FIRST CLASS MAIL NO LATER THAN 29 60 DAYS PRIOR TO THE APPLICATION DEADLINE IN SUBSECTION (C). 30 EACH NOTICE SHALL INCLUDE AN APPLICATION TO BE FILED WITH THE 20030S0100B1789 - 87 -
1 ASSESSOR OF THE COUNTY WHERE THE PROPERTY IS LOCATED, 2 INSTRUCTIONS FOR COMPLETING THE APPLICATION AND THE DEADLINE TO 3 APPLY. A SCHOOL DISTRICT MAY LIMIT THE SECOND NOTICE TO THOSE 4 OWNERS OF RESIDENTIAL PROPERTY THAT HAVE NOT RESPONDED TO THE 5 INITIAL NOTIFICATION. 6 (B) ANNUAL NOTIFICATION.--NO LATER THAN 60 DAYS PRIOR TO THE 7 APPLICATION DEADLINE IN SUBSECTION (C), A BOARD OF SCHOOL 8 DIRECTORS SHALL NOTIFY, BY FIRST CLASS MAIL, THE OWNER OF EACH 9 PARCEL OF RESIDENTIAL PROPERTY WITHIN THE DISTRICT OF THE 10 EXISTENCE OF THE SCHOOL DISTRICT'S HOMESTEAD AND FARMSTEAD 11 EXCLUSION PROGRAM, THE NEED TO FILE AN APPLICATION IN ACCORDANCE 12 WITH 53 PA.C.S. § 8584(A) IN ORDER TO QUALIFY FOR THE PROGRAM 13 AND THE APPLICATION DEADLINE. THE ANNUAL NOTICE SHALL INCLUDE 14 ALL INFORMATION REQUIRED UNDER SUBSECTION (A). A SCHOOL DISTRICT 15 MAY LIMIT THE ANNUAL NOTIFICATION TO THOSE OWNERS OF RESIDENTIAL 16 PROPERTY: 17 (1) WHO ARE NOT CURRENTLY APPROVED; OR 18 (2) WHOSE APPROVAL IS DUE TO EXPIRE. 19 (C) APPLICATION DEADLINE.--IN ACCORDANCE WITH 53 PA.C.S. § 20 8584(B), THE DEADLINE FOR FILING AN APPLICATION WITH THE 21 ASSESSOR SHALL BE MARCH 1. 22 (D) ACTION ON APPLICATION.--REAL PROPERTY FOR WHICH AN 23 APPLICATION HAS BEEN FILED BY THE APPLICATION DEADLINE SHALL BE 24 DEEMED TO BE A HOMESTEAD OR FARMSTEAD PROPERTY WHICH IS ELIGIBLE 25 FOR A HOMESTEAD OR FARMSTEAD EXCLUSION, UNLESS THE ASSESSOR 26 DENIES THE APPLICATION. DENIALS OF APPLICATION BY THE ASSESSOR 27 AND THE RIGHT TO APPEAL THAT DECISION SHALL BE IN ACCORDANCE 28 WITH 53 PA.C.S. § 8584(D) AND (E). 29 (E) APPLICATION REVIEW AND SUBMISSION.--EXCEPT AS SET FORTH 30 IN 53 PA.C.S. § 8584(J), AN ASSESSOR SHALL NOT REQUIRE THE OWNER 20030S0100B1789 - 88 -
1 OF A PREVIOUSLY APPROVED PROPERTY TO RESUBMIT AN APPLICATION 2 MORE THAN ONE TIME EVERY THREE YEARS. 3 (F) APPLICABILITY.--THE PROVISIONS OF 53 PA.C.S. § 8584(F), 4 (G), (H) AND (J) SHALL APPLY TO ANY APPLICATION FILED UNDER THIS 5 SECTION. 6 (G) DUTIES OF ASSESSORS.-- 7 (1) THE ASSESSOR SHALL MAIL TO THE OWNER OF PROPERTY FOR 8 WHICH AN APPLICATION HAS BEEN SUBMITTED AND APPROVED OR 9 DENIED UNDER THIS SECTION NOTICE OF SUCH FACT NO LATER THAN 10 30 DAYS AFTER RECEIPT OF THE APPLICATION. 11 (2) THE ASSESSOR SHALL NOTIFY THE OWNER OF ANY HOMESTEAD 12 OR FARMSTEAD PROPERTY DESIGNATED AS SUCH UNDER ANY OTHER 13 STATUTE OF THE NEED, IF ANY, TO RESUBMIT AN APPLICATION TO 14 MAINTAIN THE PROPERTY'S ELIGIBILITY AS A HOMESTEAD OR 15 FARMSTEAD PROPERTY. NOTHING IN THIS PARAGRAPH SHALL PROHIBIT 16 A COUNTY ASSESSOR FROM DESIGNATING PROPERTY PREVIOUSLY 17 DETERMINED TO BE HOMESTEAD PROPERTY UNDER ANY OTHER STATUTE 18 AS HOMESTEAD OR FARMSTEAD PROPERTY FOR PURPOSES OF THIS 19 SECTION. 20 (3) THE ASSESSOR SHALL PROVIDE EACH SCHOOL DISTRICT WITH 21 A CERTIFIED REPORT, AS PROVIDED IN 53 PA.C.S. § 8584(I), NO 22 LATER THAN MAY 1. 23 (H) UNIFORM APPLICATION AND INSTRUCTIONS.--THE APPLICATION 24 TO DESIGNATE PROPERTY AS HOMESTEAD OR FARMSTEAD PROPERTY SHALL 25 BE UNIFORM AND SHALL INCLUDE INSTRUCTIONS FOR COMPLETING THE 26 APPLICATION. THE DEPARTMENT OF COMMUNITY AND ECONOMIC 27 DEVELOPMENT SHALL DEVELOP THE UNIFORM APPLICATION AND 28 INSTRUCTIONS TO BE USED BY COUNTY ASSESSORS AND SHALL PUBLISH 29 THE UNIFORM APPLICATION AND INSTRUCTIONS NO LATER THAN 15 DAYS 30 AFTER THE EFFECTIVE DATE OF THIS CHAPTER. 20030S0100B1789 - 89 -
1 (I) PROHIBITIONS.--A COUNTY SHALL NOT REQUIRE AN APPLICATION 2 FEE FOR THE FILING OR REVIEW OF AN APPLICATION SUBMITTED UNDER 3 THIS SECTION OR UNDER 53 PA.C.S. § 8584(A). 4 SECTION 342. HOMESTEAD AND FARMSTEAD EXCLUSION PROCESS. 5 (A) HOMESTEAD AND FARMSTEAD EXCLUSIONS.--EACH FISCAL YEAR IN 6 WHICH A SCHOOL DISTRICT IMPOSES AN INCOME TAX AUTHORIZED UNDER 7 SECTION 321 AND RECEIVES A PROPERTY TAX REDUCTION ALLOCATION 8 PURSUANT TO CHAPTER 5, THE DISTRICT SHALL CALCULATE A HOMESTEAD 9 AND FARMSTEAD EXCLUSION FOR THE PURPOSE OF REDUCING SCHOOL 10 DISTRICT PROPERTY TAXES. THE SCHOOL DISTRICT SHALL ADOPT A 11 RESOLUTION IMPLEMENTING THE HOMESTEAD AND FARMSTEAD EXCLUSION NO 12 LATER THAN THE LAST DAY OF THE FISCAL YEAR IMMEDIATELY PRECEDING 13 THE FISCAL YEAR IN WHICH THE HOMESTEAD AND FARMSTEAD EXCLUSIONS 14 SHALL TAKE EFFECT. 15 (B) EXCESS FUNDING.--A SCHOOL DISTRICT WHICH COLLECTS OR 16 ANTICIPATES COLLECTING REVENUE FROM ANY SOURCE FOR THE PURPOSES 17 OF PROVIDING HOMESTEAD AND FARMSTEAD EXCLUSIONS, IN AN AMOUNT 18 GREATER THAN NECESSARY TO PROVIDE FOR HOMESTEAD EXCLUSIONS EQUAL 19 TO THE MAXIMUM AUTHORIZED UNDER 53 PA.C.S. § 8586 (RELATING TO 20 LIMITATIONS) SHALL USE SUCH EXCESS REVENUE TO REDUCE THE RATE OF 21 ITS EARNED INCOME AND NET PROFITS TAX OR ITS PERSONAL INCOME TAX 22 TO A LEVEL THAT RETURNS TO THOSE TAXPAYERS ALL EXCESS FUNDS. 23 (C) REDUCTION IN FUNDING.--IN ANY YEAR SUBSEQUENT TO A YEAR 24 IN WHICH AN INCOME TAX RATE WAS REDUCED PURSUANT TO SUBSECTION 25 (B), IF THE REVENUE COLLECTED OR ANTICIPATED TO BE COLLECTED 26 UNDER THIS CHAPTER AND CHAPTER 5 FALLS BELOW THE AMOUNT 27 NECESSARY TO MAINTAIN THE MAXIMUM HOMESTEAD PROPERTY TAX 28 EXCLUSION, THE SCHOOL DISTRICT MAY RAISE THE RATE OF THE INCOME 29 TAX LEVIED UP TO THE AMOUNT PREVIOUSLY REDUCED UNDER SUBSECTION 30 (B) WITHOUT COMPLYING WITH THE REFERENDUM PROVISIONS OF SECTION 20030S0100B1789 - 90 -
1 332. 2 SECTION 343. SCHOOL DISTRICT TAX NOTICES. 3 (A) TAX NOTICE.--SCHOOL DISTRICTS WHICH IMPLEMENT HOMESTEAD 4 AND FARMSTEAD EXCLUSIONS SHALL ITEMIZE THE HOMESTEAD AND 5 FARMSTEAD EXCLUSION ON TAX BILLS SENT TO HOMESTEAD AND FARMSTEAD 6 OWNERS, INDICATING THE ORIGINAL AMOUNT OF TAX LIABILITY, THE 7 AMOUNT OF THE EXCLUSION AND THE NET AMOUNT OF TAX DUE AFTER THE 8 EXCLUSION IS APPLIED. THE TAX BILL SHALL BE EASILY 9 UNDERSTANDABLE AND INCLUDE A NOTICE PURSUANT TO SUBSECTION (B). 10 (B) NOTICE OF PROPERTY TAX RELIEF.--SCHOOL DISTRICTS WHICH 11 IMPLEMENT HOMESTEAD AND FARMSTEAD EXCLUSIONS SHALL INCLUDE WITH 12 THE HOMESTEAD OR FARMSTEAD OWNER'S TAX BILL A NOTICE THAT THE 13 TAX BILL INCLUDES A HOMESTEAD OR FARMSTEAD EXCLUSION. THE NOTICE 14 SHALL, AT A MINIMUM, TAKE THE FOLLOWING FORM: 15 NOTICE OF PROPERTY TAX RELIEF 16 YOUR ENCLOSED TAX BILL INCLUDES A TAX REDUCTION FOR YOUR 17 HOMESTEAD AND/OR FARMSTEAD PROPERTY. AS AN ELIGIBLE HOMESTEAD 18 AND/OR FARMSTEAD PROPERTY OWNER, YOU HAVE RECEIVED TAX RELIEF 19 THROUGH A HOMESTEAD AND/OR FARMSTEAD EXCLUSION, WHICH HAS 20 BEEN PROVIDED UNDER THE HOMEOWNER TAX RELIEF ACT, A LAW 21 PASSED BY THE PENNSYLVANIA GENERAL ASSEMBLY DESIGNED TO 22 REDUCE YOUR PROPERTY TAXES. 23 SUBCHAPTER F 24 REGISTER 25 SECTION 351. REGISTER FOR TAXES. 26 (A) GENERAL RULE.--THE DEPARTMENT OF COMMUNITY AND ECONOMIC 27 DEVELOPMENT SHALL MAINTAIN A CONTINUING REGISTER UPDATED 28 ANNUALLY OF ALL EARNED INCOME AND NET PROFITS TAXES OR PERSONAL 29 INCOME TAXES LEVIED UNDER SUBCHAPTER C. 30 (B) CONTENTS OF REGISTER.--THE REGISTER SHALL LIST: 20030S0100B1789 - 91 -
1 (1) THE SCHOOL DISTRICTS LEVYING THE TAX. 2 (2) THE RATE OF TAX LEVIED UNDER THIS CHAPTER. 3 (3) THE TOTAL TAX RATE ON TAXPAYERS. 4 (4) THE NAME AND ADDRESS OF THE OFFICIAL RESPONSIBLE FOR 5 ADMINISTERING THE COLLECTION OF THE TAX AND FROM WHOM 6 INFORMATION, FORMS AND COPIES OF REGULATIONS ARE AVAILABLE. 7 SECTION 352. INFORMATION FOR REGISTER. 8 INFORMATION FOR THE REGISTER SHALL BE FURNISHED BY THE SCHOOL 9 DISTRICT TO THE DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT 10 AS PRESCRIBED BY THE DEPARTMENT OF COMMUNITY AND ECONOMIC 11 DEVELOPMENT. THE INFORMATION MUST BE RECEIVED BY THE DEPARTMENT 12 OF COMMUNITY AND ECONOMIC DEVELOPMENT NO LATER THAN JULY 15 OF 13 EACH YEAR TO SHOW NEW TAX ENACTMENTS, REPEALS AND CHANGES. 14 FAILURE TO COMPLY WITH THE FILING DATE MAY RESULT IN THE 15 OMISSION OF THE TAX LEVY FROM THE REGISTER FOR THAT YEAR. 16 FAILURE TO RECEIVE INFORMATION OF TAXES CONTINUED WITHOUT CHANGE 17 MAY BE CONSTRUED BY THE DEPARTMENT OF COMMUNITY AND ECONOMIC 18 DEVELOPMENT TO MEAN THAT THE INFORMATION CONTAINED IN THE 19 PREVIOUS REGISTER REMAINS IN FORCE. 20 SECTION 353. AVAILABILITY AND EFFECTIVE PERIOD OF REGISTER. 21 THE REGISTER, WITH SUCH ANNUAL SUPPLEMENTS AS MAY BE REQUIRED 22 BY NEW TAX ENACTMENTS, REPEALS OR CHANGES, SHALL BE AVAILABLE 23 UPON REQUEST NO LATER THAN AUGUST 15 OF EACH YEAR. THE EFFECTIVE 24 PERIOD FOR EACH REGISTER SHALL BE FROM JULY 1 OF THE YEAR IN 25 WHICH IT IS ISSUED TO JUNE 30 OF THE FOLLOWING YEAR. 26 SECTION 354. EFFECT OF NONFILING. 27 EMPLOYERS SHALL NOT BE REQUIRED BY ANY ORDINANCE TO WITHHOLD 28 FROM THE COMPENSATION OF THEIR EMPLOYEES ANY LOCAL EARNED INCOME 29 AND NET PROFITS TAX OR PERSONAL INCOME TAX IMPOSED UNDER 30 SUBCHAPTER C WHICH IS NOT LISTED IN THE REGISTER OR TO MAKE 20030S0100B1789 - 92 -
1 REPORTS OF COMPENSATION IN CONNECTION WITH TAXES NOT SO LISTED. 2 IF THE REGISTER IS NOT AVAILABLE BY AUGUST 15, THE REGISTER OF 3 THE PREVIOUS YEAR SHALL CONTINUE TO BE EFFECTIVE FOR AN 4 ADDITIONAL PERIOD OF NOT MORE THAN ONE YEAR. 5 SECTION 355. EFFECT OF SUBCHAPTER ON LIABILITY OF TAXPAYER. 6 THE PROVISIONS OF THIS SUBCHAPTER SHALL NOT BE CONSTRUED TO 7 AFFECT THE LIABILITY OF ANY TAXPAYER FOR TAXES LAWFULLY IMPOSED 8 UNDER SUBCHAPTER C AND D. 9 CHAPTER 5 10 STATE FUNDS FORMULA 11 SECTION 501. SCOPE. 12 THIS CHAPTER RELATES TO THE STATE FUNDS FORMULA. 13 SECTION 502. DEFINITIONS. 14 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER 15 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE 16 CONTEXT CLEARLY INDICATES OTHERWISE: 17 "ALLOCATION MAXIMUM." A NUMERICAL VALUE OF 0.4 PLUS THE 18 MODIFIER CALCULATED UNDER SECTION 503(C)(2). THE VALUE, 19 INCLUDING THE MAXIMUM MODIFIER, SHALL NOT EXCEED 0.6. 20 "ALLOCATION MINIMUM." A NUMERICAL VALUE OF 0.1 PLUS THE 21 MODIFIER CALCULATED UNDER SECTION 503(C)(1). THE VALUE, 22 INCLUDING THE MINIMUM MODIFIER, SHALL NOT EXCEED 0.15. 23 "DEPARTMENT." THE DEPARTMENT OF EDUCATION OF THE 24 COMMONWEALTH. 25 "FUND." AS DEFINED IN SECTION 302. 26 "INCOME TAX." A TAX ON EARNED INCOME AND NET PROFITS OR A 27 TAX ON PERSONAL INCOME PURSUANT TO CHAPTER 3. 28 "PROPERTY TAX REDUCTION INDEX." A QUOTIENT EQUAL TO THE SUM 29 OF THE NUMERICAL RANK OF A SCHOOL DISTRICT'S PERSONAL INCOME 30 VALUATION PER AVERAGE DAILY MEMBERSHIP, THE NUMERICAL RANK OF 20030S0100B1789 - 93 -
1 ITS MARKET-VALUE/INCOME-AID RATIO, THE NUMERICAL RANK OF ITS 2 EQUALIZED MILLAGE AND THE NUMERICAL RANK OF ITS SCHOOL TAX 3 RATIO, DIVIDED BY 1,000. 4 "QUALIFYING CONTRIBUTION." THE REVENUE ESTIMATED TO BE 5 COLLECTED FROM THE IMPOSITION OF THE TAX AUTHORIZED UNDER 6 SECTION 321(B)(1) IN THE FIRST FISCAL YEAR THAT THE TAX IS 7 IMPLEMENTED. 8 "RESIDENTIAL PROPERTY TAX." THE DOLLAR VALUE OF REAL 9 PROPERTY TAXES PAID BY RESIDENTIAL PROPERTY OWNERS IN A SCHOOL 10 DISTRICT, DETERMINED BY MULTIPLYING THE REAL PROPERTY TAXES 11 COLLECTED BY THE SCHOOL DISTRICT TIMES THE PERCENTAGE OF THE 12 TOTAL PROPERTY VALUE IN THE SCHOOL DISTRICT CLASSIFIED AS 13 RESIDENTIAL BY THE STATE TAX EQUALIZATION BOARD. 14 "SCHOOL TAX RATIO." THE DOLLAR VALUE OF LOCAL TAXES 15 COLLECTED BY THE SCHOOL DISTRICT OR BY A CITY OF THE FIRST CLASS 16 FOR A SCHOOL DISTRICT OF THE FIRST CLASS DIVIDED BY THE PERSONAL 17 INCOME VALUATION OF THE SCHOOL DISTRICT. 18 SECTION 503. CERTIFICATION; CALCULATION OF MINIMUM AND MAXIMUM 19 MODIFIERS. 20 (A) SECRETARY OF THE BUDGET CERTIFICATION.-- 21 (1) NO LATER THAN APRIL 15, 2005, AND APRIL 15 OF EACH 22 YEAR THEREAFTER, THE SECRETARY OF THE BUDGET SHALL CERTIFY 23 ALL OF THE FOLLOWING: 24 (I) THE TOTAL AMOUNT OF REVENUE IN THE FUND. IN 25 CALCULATING THE TOTAL AMOUNT OF REVENUE IN THE FUND, THE 26 SECRETARY SHALL TAKE INTO ACCOUNT ALL OF THE FOLLOWING: 27 (A) FOR THE CERTIFICATION TO BE COMPLETED NO 28 LATER THAN APRIL 15, 2005, REVENUE WHICH: 29 (I) HAS BEEN DEPOSITED INTO THE FUND PRIOR 30 TO THE DATE OF THE CERTIFICATION; 20030S0100B1789 - 94 -
1 (II) IS REASONABLY PROJECTED TO BE DEPOSITED 2 INTO THE FUND DURING THE SIX MONTHS FOLLOWING THE 3 DATE ON WHICH THE CERTIFICATION IS MADE; AND 4 (III) HAS BEEN APPROPRIATED UNDER SECTION 5 5002. 6 (B) FOR CERTIFICATIONS IN SUBSEQUENT FISCAL 7 YEARS: 8 (I) REVENUE WHICH HAS BEEN DEPOSITED INTO 9 THE FUND DURING THE SIX MONTHS PRIOR TO THE DATE 10 ON WHICH THE CERTIFICATION IS MADE; AND 11 (II) REVENUE ENUMERATED IN CLAUSE (A)(II). 12 (II) THE TOTAL AMOUNT OF REVENUE IN THE PROPERTY TAX 13 RELIEF RESERVE FUND ESTABLISHED UNDER SECTION 504. 14 (III) IN CERTIFYING THE AMOUNT AVAILABLE FOR 15 DISTRIBUTION UNDER SUBSECTION (E), THE SECRETARY SHALL 16 ONLY CERTIFY AN AMOUNT THAT IS SUSTAINABLE IN SUBSEQUENT 17 YEARS. 18 (2) IF THE ACTUAL REVENUE DEPOSITED INTO THE FUND DURING 19 THE SIX MONTHS FOLLOWING THE DATE ON WHICH THE CERTIFICATION 20 IS MADE EXCEEDS PROJECTIONS, ANY REVENUE IN EXCESS OF 21 PROJECTIONS SHALL REMAIN IN THE FUND AND MAY BE INCLUDED IN 22 THE CERTIFICATION FOR THE SUBSEQUENT FISCAL YEAR. 23 (B) SCHOOL DISTRICT CERTIFICATION.-- 24 (1) BY DECEMBER 15, 2004, EACH SCHOOL DISTRICT SHALL 25 CERTIFY TO THE DEPARTMENT THE ESTIMATED AMOUNT OF ITS 26 QUALIFYING CONTRIBUTION. THE CERTIFICATION SHALL BE BASED 27 UPON THE PREVIOUS YEAR'S EARNED INCOME AND NET PROFITS TAX 28 REVENUES AND CASH FLOW EXPERIENCE. A SCHOOL DISTRICT WHICH 29 DOES NOT IMPOSE AN EARNED INCOME AND NET PROFITS TAX PRIOR TO 30 THE IMPLEMENTATION OF THIS CHAPTER SHALL ESTIMATE THE AMOUNT 20030S0100B1789 - 95 -
1 OF ITS QUALIFYING CONTRIBUTION BASED UPON THE MOST RECENT 2 FINANCIAL DATA FORWARDED TO THE DEPARTMENT BY THE DEPARTMENT 3 OF REVENUE. THE DEPARTMENT SHALL PROVIDE THE DATA TO THE 4 SCHOOL DISTRICT NO LATER THAN DECEMBER 1, 2004. FOLLOWING 5 RECEIPT OF THE SCHOOL DISTRICT CERTIFICATIONS, THE DEPARTMENT 6 SHALL PROVIDE THE CERTIFICATIONS TO THE SECRETARY OF THE 7 BUDGET NO LATER THAN JANUARY 15. 8 (2) BY DECEMBER 15, 2004, AND DECEMBER 15 OF EACH YEAR 9 THEREAFTER, EACH SCHOOL DISTRICT SUBJECT TO SECTION 324 SHALL 10 CERTIFY TO THE DEPARTMENT THE TOTAL AMOUNT OF TAX CREDITS 11 UNDER SECTION 324(2). 12 (C) ALLOCATION MODIFIERS.--THE SECRETARY SHALL CALCULATE 13 MODIFIERS FOR THE ALLOCATION MAXIMUM AND THE ALLOCATION MINIMUM 14 BASED ON THE AMOUNT CERTIFIED UNDER SUBSECTION (A)(1)(I). 15 (1) IF THE AMOUNT CERTIFIED BY THE SECRETARY FOR A 16 FISCAL YEAR EXCEEDS $750,000,000, THE MINIMUM MODIFIER FOR 17 THE ALLOCATION MINIMUM SHALL BE A VALUE OF .005 PER 18 $50,000,000 IN EXCESS OF $750,000,000. THE MODIFIER FOR THE 19 ALLOCATION MINIMUM SHALL NOT EXCEED 0.05. 20 (2) IF THE AMOUNT CERTIFIED BY THE SECRETARY FOR A 21 FISCAL YEAR EXCEEDS $750,000,000, THE MINIMUM MODIFIER FOR 22 THE ALLOCATION MAXIMUM SHALL BE A VALUE OF .02 PER 23 $50,000,000 IN EXCESS OF $750,000,000. THE MODIFIER FOR THE 24 ALLOCATION MAXIMUM SHALL NOT EXCEED 0.2. 25 (D) NOTIFICATION.-- 26 (1) BY APRIL 20, 2005, AND APRIL 20 EACH YEAR 27 THEREAFTER, THE SECRETARY SHALL NOTIFY THE DEPARTMENT WHETHER 28 IT IS AUTHORIZED TO PROVIDE ELIGIBLE SCHOOL DISTRICTS WITH 29 PROPERTY TAX REDUCTION ALLOCATIONS UNDER SECTION 505. 30 (2) THE SECRETARY SHALL NOT AUTHORIZE THE DEPARTMENT TO 20030S0100B1789 - 96 -
1 PROVIDE THE FIRST PROPERTY TAX REDUCTION ALLOCATIONS UNTIL: 2 (I) THE CERTIFICATION UNDER SUBSECTION (A)(1)(II) IS 3 NO LESS THAN $400,000,000; AND 4 (II) THE CERTIFICATION UNDER SUBSECTION (A)(1)(I) IS 5 EQUAL TO OR GREATER THAN $500,000,000. 6 (3) SUBSEQUENT PROPERTY TAX REDUCTION ALLOCATIONS SHALL 7 ONLY BE AUTHORIZED WHEN THE BALANCE REQUIRED UNDER SECTION 8 504(C)(1) IS NO LESS THAN $400,000,000. 9 (E) DISTRIBUTION.--IN CALCULATING THE REVENUE AVAILABLE FOR 10 DISTRIBUTION, THE SECRETARY SHALL, FROM THE TOTAL AMOUNT 11 CERTIFIED UNDER SUBSECTION (A)(1)(I), DEDUCT ALL OF THE 12 FOLLOWING: 13 (1) AN AMOUNT SUFFICIENT TO FUND REIMBURSEMENTS TO 14 ELIGIBLE SCHOOL DISTRICTS PURSUANT TO SECTION 324. THE AMOUNT 15 DEDUCTED PURSUANT TO THIS PARAGRAPH SHALL BE CALCULATED BASED 16 ON THE INFORMATION PROVIDED BY SCHOOL DISTRICTS PURSUANT TO 17 SUBSECTION (B)(2). 18 (2) AN AMOUNT SUFFICIENT TO FUND THE PROGRAM UNDER 19 SECTION 704. 20 SECTION 504. PROPERTY TAX RELIEF RESERVE FUND. 21 (A) FUND ESTABLISHED.--THERE IS ESTABLISHED IN THE STATE 22 TREASURY A RESTRICTED RECEIPTS ACCOUNT TO BE KNOWN AS THE 23 PROPERTY TAX RELIEF RESERVE FUND. 24 (B) RECEIPTS.--THE SECRETARY IS AUTHORIZED TO TRANSFER FUNDS 25 FROM THE FUND INTO THE PROPERTY TAX RELIEF RESERVE FUND 26 NECESSARY TO COMPLY WITH THE REQUIREMENTS OF SUBSECTION (C). 27 (C) BALANCE.-- 28 (1) THE SECRETARY SHALL ENSURE THAT NO LESS THAN 29 $400,000,000 EXISTS IN THE PROPERTY TAX RELIEF RESERVE FUND 30 PRIOR TO MAKING A CERTIFICATION UNDER SECTION 503(A)(1). 20030S0100B1789 - 97 -
1 (2) IF A DISTRIBUTION WAS MADE UNDER SUBSECTION (D) IN 2 THE PRIOR YEAR, THE SECRETARY SHALL DEPOSIT FUNDS NECESSARY 3 TO ENSURE THAT $400,000,000 IS AVAILABLE IN THE PROPERTY TAX 4 RELIEF RESERVE FUND PRIOR TO MAKING CERTIFICATION UNDER 5 SECTION 503(A)(1). 6 (D) TRANSFERS.-- 7 (1) THE SECRETARY MAY AUTHORIZE A TRANSFER FROM THE 8 PROPERTY TAX RELIEF RESERVE FUND TO THE FUND IF THE 9 CERTIFICATION UNDER SECTION 503(A)(1)(I) IS LESS THAN THE 10 CERTIFICATION UNDER SECTION 503(A)(1)(I) MADE IN THE PRIOR 11 YEAR. THE AMOUNT OF THE DISTRIBUTION UNDER THIS SUBSECTION 12 SHALL BE EQUAL TO THE DIFFERENCE BETWEEN THE CERTIFICATION 13 UNDER SECTION 503(A)(1)(I) AND THE CERTIFICATION UNDER 14 SECTION 503(A)(1)(I) MADE IN THE PRIOR YEAR. 15 (2) THE SECRETARY SHALL TRANSFER ANY INTEREST THAT HAS 16 ACCRUED FROM THE REVENUE IN THE PROPERTY TAX RELIEF RESERVE 17 FUND TO THE FUND ON AN ANNUAL BASIS. 18 (E) NONLAPSE.--THE MONEY IN THE PROPERTY TAX RELIEF RESERVE 19 FUND IS CONTINUOUSLY APPROPRIATED TO THE PROPERTY TAX RELIEF 20 RESERVE FUND AND SHALL NOT LAPSE AT THE END OF ANY FISCAL YEAR. 21 SECTION 505. STATE PROPERTY TAX REDUCTION ALLOCATION. 22 (A) ADMINISTRATION.--THE DEPARTMENT SHALL DO ALL OF THE 23 FOLLOWING: 24 (1) ARRAY THE 2002 PERSONAL INCOME VALUATION DIVIDED BY 25 THE 2003-2004 AVERAGE DAILY MEMBERSHIP, THE 2004-2005 MARKET- 26 VALUE/INCOME-AID RATIO, THE 2002-2003 EQUALIZED MILLAGE AND 27 THE 2002-2003 SCHOOL TAX RATIO OF EACH SCHOOL DISTRICT IN 28 RANK ORDER AND ASSIGN EACH SCHOOL DISTRICT A DISCREET 29 NUMERICAL RANK FOR ITS PERSONAL INCOME VALUATION PER AVERAGE 30 DAILY MEMBERSHIP, ITS MARKET-VALUE/INCOME-AID RATIO, ITS 20030S0100B1789 - 98 -
1 EQUALIZED MILLAGE AND ITS SCHOOL TAX RATIO. FOR THE NUMERICAL 2 RANK OF A SCHOOL DISTRICT'S PERSONAL INCOME VALUATION PER 3 AVERAGE DAILY MEMBERSHIP, THE SCHOOL DISTRICT WITH THE LOWEST 4 PERSONAL INCOME VALUATION PER AVERAGE DAILY MEMBERSHIP SHALL 5 HAVE THE HIGHEST NUMERICAL RANK. FOR THE NUMERICAL RANK OF A 6 SCHOOL DISTRICT'S MARKET-VALUE/INCOME-AID RATIO, THE SCHOOL 7 DISTRICT WITH THE HIGHEST MARKET-VALUE/INCOME-AID RATIO SHALL 8 HAVE THE HIGHEST NUMERICAL RANK; PROVIDED THAT ALL SCHOOL 9 DISTRICTS WITH A MARKET-VALUE/INCOME-AID RATIO EQUAL TO 0.15 10 SHALL RECEIVE A RANKING OF 1. FOR THE NUMERICAL RANK OF A 11 SCHOOL DISTRICT'S EQUALIZED MILLAGE, THE SCHOOL DISTRICT WITH 12 THE HIGHEST EQUALIZED MILLAGE SHALL HAVE THE HIGHEST 13 NUMERICAL RANK. FOR THE NUMERICAL RANK OF A SCHOOL DISTRICT'S 14 SCHOOL TAX RATIO, THE SCHOOL DISTRICT WITH THE HIGHEST SCHOOL 15 TAX RATIO SHALL HAVE THE HIGHEST NUMERICAL RANK. 16 (2) ASSIGN EACH SCHOOL DISTRICT A PROPERTY TAX REDUCTION 17 INDEX. 18 (3) IF THE DEPARTMENT RECEIVES AUTHORIZATION UNDER 19 SECTION 503(D), ALLOCATE THE PROPERTY TAX REDUCTION FOR EACH 20 SCHOOL DISTRICT AS FOLLOWS: 21 (I) CALCULATE THE PROPERTY TAX REDUCTION ALLOCATION 22 AS FOLLOWS: 23 (A) MULTIPLY THE SCHOOL DISTRICT'S 2003-2004 24 AVERAGE DAILY MEMBERSHIP BY THE SCHOOL DISTRICT'S 25 PROPERTY TAX REDUCTION INDEX. 26 (B) MULTIPLY THE PRODUCT UNDER CLAUSE (A) BY THE 27 DOLLAR AMOUNT NECESSARY TO ALLOCATE ALL OF THE MONEY 28 IN THE FUND AS CERTIFIED UNDER SECTION 503(A)(1)(I). 29 IF THE CERTIFICATION UNDER SECTION 503(A)(1)(I) IS 30 LESS THAN $750,000,000, THE DOLLAR AMOUNT SHALL BE 20030S0100B1789 - 99 -
1 THE DOLLAR AMOUNT NECESSARY TO ALLOCATE $750,000,000. 2 (C) IF APPLICABLE, PROVIDE FOR THE ALLOCATION 3 MINIMUM OR ALLOCATION MAXIMUM UNDER SUBPARAGRAPH (II) 4 OR (III). 5 (II) IF THE SUM OF THE ALLOCATION UNDER THIS 6 PARAGRAPH AND THE QUALIFYING CONTRIBUTION CERTIFIED UNDER 7 SECTION 503(B) ON JANUARY 15, 2005, IS LESS THAN THE 8 PRODUCT OF THE RESIDENTIAL PROPERTY TAXES COLLECTED 9 DURING THE 2001-2002 FISCAL YEAR AND THE ALLOCATION 10 MINIMUM FOR A SCHOOL DISTRICT, THE SCHOOL DISTRICT SHALL 11 RECEIVE AN ADDITIONAL AMOUNT SO THAT THE SUM OF THE TOTAL 12 ALLOCATION UNDER THIS PARAGRAPH AND THE QUALIFYING 13 CONTRIBUTION CERTIFIED UNDER SECTION 503(B) ON JANUARY 14 15, 2005, IS EQUAL TO THE PRODUCT OF THE RESIDENTIAL 15 PROPERTY TAXES COLLECTED DURING THE 2001-2002 FISCAL YEAR 16 AND THE ALLOCATION MINIMUM. 17 (III) EXCEPT AS SET FORTH IN SUBSECTION (C), IF THE 18 SUM OF THE TOTAL ALLOCATION UNDER THIS PARAGRAPH AND THE 19 QUALIFYING CONTRIBUTION CERTIFIED UNDER SECTION 503(B) ON 20 JANUARY 15, 2005, IS GREATER THAN THE PRODUCT OF THE 21 RESIDENTIAL PROPERTY TAXES COLLECTED DURING THE 2001-2002 22 FISCAL YEAR AND THE ALLOCATION MAXIMUM FOR A SCHOOL 23 DISTRICT, THE SCHOOL DISTRICT SHALL RECEIVE A TOTAL 24 ALLOCATION SUCH THAT THE SUM OF THE TOTAL ALLOCATION AND 25 THE QUALIFYING CONTRIBUTION CERTIFIED UNDER SECTION 26 503(B) ON JANUARY 15, 2005, IS EQUAL TO THE PRODUCT OF 27 THE RESIDENTIAL PROPERTY TAXES COLLECTED DURING THE 2001- 28 2002 FISCAL YEAR AND THE ALLOCATION MAXIMUM. 29 (IV) IF THE CERTIFICATION UNDER SECTION 503(A)(1)(I) 30 IS LESS THAN $750,000,000, EACH SCHOOL DISTRICT SHALL 20030S0100B1789 - 100 -
1 RECEIVE A PRO RATA SHARE OF THE PROPERTY TAX REDUCTION 2 ALLOCATION CALCULATED UNDER THIS PARAGRAPH AT 3 $750,000,000. 4 (4) NOTIFY EACH SCHOOL DISTRICT OF THE AMOUNT OF ITS 5 PROPERTY TAX REDUCTION ALLOCATION NO LATER THAN MAY 1, 2005, 6 AND MAY 1 OF EACH YEAR THEREAFTER. 7 (B) PAYMENT.--FOR THE FISCAL YEAR COMMENCING JULY 1, 2005, 8 AND JULY 1 OF EACH FISCAL YEAR THEREAFTER, EXCEPT AS SET FORTH 9 IN SUBSECTION (C), THE DEPARTMENT SHALL PAY TO EACH ELIGIBLE 10 SCHOOL DISTRICT A PROPERTY TAX REDUCTION ALLOCATION EQUAL TO THE 11 AMOUNT CALCULATED UNDER SUBSECTION (A)(3). THE PROPERTY TAX 12 REDUCTION ALLOCATION SHALL BE DIVIDED INTO TWO EQUAL PAYMENTS, 13 WHICH SHALL BE MADE ON THE FOURTH THURSDAY OF AUGUST AND THE 14 FOURTH THURSDAY OF OCTOBER. 15 (C) FIRST CLASS SCHOOL DISTRICTS.--THE PROPERTY TAX 16 REDUCTION ALLOCATION FOR A SCHOOL DISTRICT OF THE FIRST CLASS 17 SHALL BE PAID BY THE DEPARTMENT TO A CITY OF THE FIRST CLASS. 18 THE LIMITATIONS SET FORTH IN SUBSECTION (A)(3)(III) SHALL NOT 19 APPLY TO THE CALCULATION OF THE PROPERTY TAX REDUCTION 20 ALLOCATION FOR A SCHOOL DISTRICT OF THE FIRST CLASS. 21 (D) REDUCTION OF WAGE TAXES IN A CITY OF THE FIRST CLASS.--A 22 CITY COUNCIL OF A CITY OF THE FIRST CLASS SHALL REDUCE ANY TAX 23 IMPOSED ON THE WAGES OF RESIDENTS AND NONRESIDENTS UNDER THE 24 AUTHORITY OF THE ACT OF AUGUST 5, 1932 (SP.SESS., P.L.45, 25 NO.45), REFERRED TO AS THE STERLING ACT, IN A MANNER CONSISTENT 26 WITH CHAPTER 7 AND IN ACCORDANCE WITH THE FOLLOWING: 27 (1) FOR RESIDENTS, BY AN AMOUNT EQUAL TO THE AMOUNT OF 28 THE PROPERTY TAX REDUCTION ALLOCATION RECEIVED FROM THE 29 COMMONWEALTH PURSUANT TO SUBSECTION (B) IN AN AMOUNT NOT TO 30 EXCEED THE LIMITATIONS SET FORTH IN SUBSECTION (A)(3)(III) 20030S0100B1789 - 101 -
1 HAD SUCH LIMITATIONS APPLIED. 2 (2) FOR NONRESIDENTS, BY ANY AMOUNT EQUAL TO THE AMOUNT 3 OF THE PROPERTY TAX REDUCTION ALLOCATION RECEIVED FROM THE 4 COMMONWEALTH PURSUANT TO SUBSECTION (B) IN EXCESS OF THE 5 LIMITATIONS SET FORTH IN SUBSECTION (A)(3)(III) HAD SUCH 6 LIMITATIONS APPLIED. 7 (3) IF THE CERTIFICATION UNDER SECTION 503(A)(1)(I) IS 8 LESS THAN $750,000,000, THE TAX REDUCTIONS UNDER PARAGRAPHS 9 (1) AND (2) SHALL BE A PRO RATA SHARE OF THE PROPERTY TAX 10 REDUCTION ALLOCATION TO A SCHOOL DISTRICT OF THE FIRST CLASS 11 CALCULATED UNDER SUBSECTION (A) AT $750,000,000. 12 CHAPTER 7 13 TAX RELIEF IN CITIES OF THE FIRST CLASS 14 SECTION 701. SHORT TITLE. 15 THIS CHAPTER SHALL BE KNOWN AND MAY BE CITED AS THE LOCAL TAX 16 RELIEF ACT. 17 SECTION 702. (RESERVED) 18 SECTION 703. TAX RELIEF. 19 (A) TAX RATE REDUCTION.--A CITY OF THE FIRST CLASS SHALL 20 REDUCE THE RATE OF WAGE AND NET PROFITS TAX ON RESIDENTS AND 21 NONRESIDENTS LEVIED UNDER THE ACT OF AUGUST 5, 1932 (SP.SESS., 22 P.L.45, NO.45), REFERRED TO AS THE STERLING ACT, IN ORDER TO BE 23 ELIGIBLE TO RECEIVE A PROPERTY TAX REDUCTION ALLOCATION UNDER 24 CHAPTER 5. IF THE CITY ELECTS TO REDUCE TAXES PURSUANT TO THIS 25 CHAPTER, ALL MONEY RECEIVED FROM THE FUND SHALL BE USED TO 26 OFFSET A REDUCTION BY THE CITY IN FISCAL YEAR 2005-2006 AND EACH 27 FISCAL YEAR THEREAFTER IN THE RATE OF TAX ON WAGES AND NET 28 PROFITS FOR BOTH RESIDENTS AND NONRESIDENTS AS PROVIDED FOR IN 29 SUBSECTION (B). THE REDUCTIONS SHALL REMAIN IN EFFECT FOR SO 30 LONG AS A TAX REDUCTION ALLOCATION PURSUANT TO CHAPTER 5 IS PAID 20030S0100B1789 - 102 -
1 TO THE CITY IN AN AMOUNT EQUAL TO THE COST OF SUCH REDUCTIONS. 2 (B) CALCULATION OF REDUCTION.-- 3 (1) THE CITY SHALL CALCULATE THE AMOUNT OF THE TAX RATE 4 REDUCTIONS SO THAT THEY EQUAL, BASED ON ESTIMATES CERTIFIED 5 BY THE CITY'S DIRECTOR OF FINANCE AND APPROVED BY THE 6 PENNSYLVANIA INTERGOVERNMENTAL COOPERATION AUTHORITY PRIOR TO 7 THE IMPLEMENTATION OF THE REDUCTIONS, IN COMBINATION WITH ANY 8 REDUCTION IN THE RATE OF UNEARNED INCOME TAX IMPOSED BY A 9 SCHOOL DISTRICT IN THE CITY OF THE FIRST CLASS REQUIRED BY 10 THE ACT OF AUGUST 9, 1963 (P.L.640, NO.338), ENTITLED "AN ACT 11 EMPOWERING CITIES OF THE FIRST CLASS, COTERMINOUS WITH SCHOOL 12 DISTRICTS OF THE FIRST CLASS, TO AUTHORIZE THE BOARDS OF 13 PUBLIC EDUCATION OF SUCH SCHOOL DISTRICTS TO IMPOSE CERTAIN 14 ADDITIONAL TAXES FOR SCHOOL DISTRICT PURPOSES, AND PROVIDING 15 FOR THE LEVY, ASSESSMENT AND COLLECTION OF SUCH TAXES," AS A 16 RESULT OF THE REDUCTION IN THE RATE OF WAGE AND NET PROFITS 17 TAX, THE AMOUNT PAID TO THE CITY FROM THE FUND FOR TAX 18 REDUCTIONS. THE CITY SHALL, EACH YEAR, TRANSFER TO SUCH 19 SCHOOL DISTRICT AN AMOUNT EQUAL TO THE COST OF ANY REDUCTION 20 IN THE RATE OF UNEARNED INCOME TAX; AND SUCH TRANSFER SHALL 21 NOT BE SUBJECT TO THE PROVISIONS OF SECTION 696(H) OF THE ACT 22 OF MARCH 10, 1949 (P.L.30, NO.14), KNOWN AS THE PUBLIC SCHOOL 23 CODE OF 1949. 24 (2) THE TAX RATE REDUCTIONS IMPLEMENTED BY A CITY OF THE 25 FIRST CLASS PURSUANT TO THIS SECTION SHALL BE IN ADDITION TO 26 THE FOLLOWING SCHEDULE OF PERCENTAGES OF WAGE AND NET PROFITS 27 TAX RATE REDUCTIONS: 28 (I) ON JANUARY 1, 2005, 2.9468% FOR RESIDENTS AND 29 1.5567% FOR NONRESIDENTS. 30 (II) ON JANUARY 1, 2006, 0.6927% FOR RESIDENTS AND 20030S0100B1789 - 103 -
1 1.2593% FOR NONRESIDENTS. 2 (III) ON JANUARY 1, 2007, 0.9533% FOR RESIDENTS AND 3 0.4216% FOR NONRESIDENTS. 4 (IV) ON JANUARY 1, 2008, 0.9624% FOR RESIDENTS AND 5 0.8387% FOR NONRESIDENTS. 6 (V) ON JANUARY 1, 2009, 1.1851% FOR RESIDENTS AND 7 1.0526% FOR NONRESIDENTS. 8 (C) EXCEPTIONS.--THE WAGE AND NET PROFITS TAX RATES CAN ONLY 9 BE RAISED ABOVE THE RATES SPECIFIED IN SUBSECTION (B)(2) IF ALL 10 OF THE FOLLOWING APPLY: 11 (1) THE INCREASE IS APPROVED BY AN AFFIRMATIVE VOTE OF 12 AT LEAST TEN MEMBERS OF A CITY COUNCIL OF A CITY OF THE FIRST 13 CLASS. 14 (2) THE PENNSYLVANIA INTERGOVERNMENTAL COOPERATION 15 AUTHORITY CERTIFIES THAT A CONDITION UNDER PARAGRAPH (3) 16 EXISTS. 17 (3) THE INCREASE IS NECESSARY TO RESPOND TO ANY OF THE 18 FOLLOWING: 19 (I) A FISCAL THREAT OR CONDITION, AS CERTIFIED BY 20 THE CITY'S DIRECTOR OF FINANCE, THAT OCCURS TO THE CITY 21 AS SET FORTH IN SECTION 333(F) OR AN EQUIVALENT FISCAL 22 THREAT THAT AFFECTS THE CITIZENS OF THE CITY. IT SHALL BE 23 THE RESPONSIBILITY OF THE CITY'S DIRECTOR OF FINANCE WITH 24 THE APPROVAL OF THE PENNSYLVANIA INTERGOVERNMENTAL 25 COOPERATION AUTHORITY TO ENSURE THAT ANY ADDITIONAL TAX 26 REVENUE RAISED IS EQUAL TO THE AMOUNT EXPENDED TO RESPOND 27 TO THE FISCAL THREAT OR CONDITION. IF THE AMOUNT OF 28 REVENUE RAISED THROUGH RATE ADJUSTMENT EXCEEDS THE AMOUNT 29 NECESSARY TO RESPOND, OVER THE COURSE OF THE CITY'S 30 APPROVED FINANCIAL PLAN, TO THE FISCAL THREAT, THE EXCESS 20030S0100B1789 - 104 -
1 AMOUNT SHALL BE USED FOR WAGE TAX AND NET PROFITS TAX 2 REDUCTION IN THE IMMEDIATELY SUCCEEDING APPROVED 3 FINANCIAL PLAN, BUT ONLY IF THE TAX RATE REDUCTION, 4 EXPRESSED AS THE DIFFERENCE BETWEEN THE TWO TAX RATES, 5 WOULD EXCEED .0002. 6 (II) A DECREASE OF MORE THAN 2% IN THE AMOUNT OF 7 TOTAL TAX COLLECTIONS PLUS ANY FUNDS PROVIDED UNDER THIS 8 CHAPTER FROM THE PRECEDING YEAR'S COLLECTIONS. SUCH A 9 DETERMINATION OF A DECREASE MUST BE ATTESTED TO BY THE 10 CITY'S DIRECTOR OF FINANCE. 11 (III) A DECLARATION BY THE PENNSYLVANIA 12 INTERGOVERNMENTAL COOPERATION AUTHORITY THAT THE CITY'S 13 FIVE-YEAR PLAN IS DISAPPROVED PURSUANT TO SECTION 209 OF 14 THE ACT OF JUNE 5, 1991 (P.L.9, NO.6), KNOWN AS THE 15 PENNSYLVANIA INTERGOVERNMENTAL COOPERATION AUTHORITY ACT 16 FOR CITIES OF THE FIRST CLASS. 17 (IV) FEDERAL OR STATE LAW IMPOSES A NEW UNFUNDED 18 MANDATE ON THE CITY THAT COSTS THE CITY MORE THAN 1.5% OF 19 THE CITY'S TOTAL GENERAL FUND EXPENDITURES IN ANY FISCAL 20 YEAR. 21 (V) THE COST TO THE CITY OF AN EXISTING MANDATE 22 IMPOSED BY FEDERAL OR STATE LAW INCREASES BY MORE THAN 23 1.5% OF THE CITY'S TOTAL GENERAL FUND EXPENDITURES IN ANY 24 FISCAL YEAR AND FUNDS TO PAY FOR THE INCREASE ARE NOT 25 APPROPRIATED TO THE CITY BY THE FEDERAL OR STATE 26 GOVERNMENT. 27 (VI) EXISTING FEDERAL OR STATE FUNDING IS DECREASED 28 BY 1.5% OF THE CITY'S TOTAL GENERAL FUND EXPENDITURES IN 29 ANY FISCAL YEAR. 30 (D) EXCESS FUNDS.--IF IN ANY FISCAL YEAR THE SUMS RECEIVED 20030S0100B1789 - 105 -
1 BY A CITY OF THE FIRST CLASS FROM THE FUND ARE IN EXCESS OF THE 2 VALUE OF THE TAX RATE REDUCTIONS ACTUALLY MADE BY THE CITY AND 3 THE SCHOOL DISTRICT OF THE FIRST CLASS PURSUANT TO SUBSECTION 4 (A), THE CITY SHALL, WITHIN 60 DAYS FOLLOWING THE CERTIFICATION 5 BY THE DIRECTOR OF FINANCE, IN CONSULTATION WITH THE SECRETARY 6 OF THE BUDGET AND WITH THE APPROVAL OF THE PENNSYLVANIA 7 INTERGOVERNMENTAL COOPERATION AUTHORITY OF THE AMOUNT OF THE 8 EXCESS, DO ANY OF THE FOLLOWING: 9 (1) REPAY TO THE FUND THE EXCESS SUMS; OR 10 (2) FURTHER REDUCE WAGE AND NET PROFITS TAX RATES AND 11 UNEARNED INCOME TAX RATES, IF REQUIRED, IN THE FISCAL YEAR 12 NEXT FOLLOWING THE DETERMINATION OF THE EXCESS, BY AN AMOUNT 13 THAT WILL RESULT IN TOTAL TAX RATE REDUCTIONS REQUIRED FOR 14 THE AMOUNT RECEIVED FROM THE FUND. TO THE EXTENT THE TAX RATE 15 REDUCTION PROVIDED FOR IN THIS PARAGRAPH, EXPRESSED AS THE 16 DIFFERENCE BETWEEN THE TWO TAX RATES, WOULD NOT EXCEED .0002, 17 THIS SUBSECTION SHALL NOT APPLY. 18 (E) INSUFFICIENT FUNDS.--IF IN ANY FISCAL YEAR THE DIRECTOR 19 OF FINANCE CERTIFIES, IN CONSULTATION WITH THE SECRETARY OF THE 20 BUDGET AND WITH THE APPROVAL OF THE PENNSYLVANIA 21 INTERGOVERNMENTAL COOPERATION AUTHORITY, THAT THE AMOUNT OF SUMS 22 RECEIVED BY THE CITY FROM THE FUND ARE LESS THAN THE VALUE OF 23 THE TAX RATE REDUCTIONS ACTUALLY MADE BY THE CITY AND SCHOOL 24 DISTRICT OF THE FIRST CLASS PURSUANT TO SUBSECTION (A), THE CITY 25 MAY, IN THE FISCAL YEAR NEXT FOLLOWING THE DETERMINATION OF THE 26 AMOUNT, INCREASE THE CITY'S WAGE AND NET PROFITS TAX RATE ABOVE 27 THE RATES SPECIFIED IN SUBSECTION (B)(2) BY AN AMOUNT THAT WILL 28 RESULT IN AN OVERALL TAX RATE REDUCTION EQUAL TO THAT REQUIRED 29 FOR THE AMOUNT RECEIVED BY THE CITY FROM THE FUND. TO THE EXTENT 30 THE TAX RATE INCREASE PROVIDED FOR IN THIS SUBSECTION, EXPRESSED 20030S0100B1789 - 106 -
1 AS THE DIFFERENCE BETWEEN THE TWO TAX RATES, WOULD NOT EXCEED 2 .0002, THIS SUBSECTION SHALL NOT APPLY. 3 SECTION 704. SENIOR CITIZEN HOMESTEAD PROPERTY TAX REDUCTION IN 4 CITIES OF THE FIRST CLASS. 5 (A) ELIGIBILITY.--FOR TAX YEARS BEGINNING IN THE FIRST YEAR 6 IN WHICH A PAYMENT UNDER SECTION 503(B) IS MADE, AND EACH TAX 7 YEAR THEREAFTER, THE FOLLOWING APPLY: 8 (1) EXCEPT AS PROVIDED IN PARAGRAPH (2), ANY RESIDENT OF 9 A CITY OF THE FIRST CLASS WHO IS ELIGIBLE TO RECEIVE A 10 PROPERTY TAX REBATE PURSUANT TO THE ACT OF MARCH 11, 1971 11 (P.L.104, NO.3), KNOWN AS THE SENIOR CITIZENS REBATE AND 12 ASSISTANCE ACT, SHALL BE ELIGIBLE TO RECEIVE AN ADDITIONAL 13 PROPERTY TAX REBATE EQUAL TO 50% OF THE AMOUNT THE INDIVIDUAL 14 IS ELIGIBLE TO RECEIVE UNDER THE SENIOR CITIZENS REBATE AND 15 ASSISTANCE ACT. 16 (2) AN ADDITIONAL REBATE UNDER PARAGRAPH (1) MAY NOT 17 EXCEED THE DIFFERENCE BETWEEN THE PROPERTY TAX PAID BY THE 18 ELIGIBLE RESIDENT AND THE REBATE RECEIVED BY THE ELIGIBLE 19 RESIDENT UNDER THE SENIOR CITIZENS REBATE AND ASSISTANCE ACT 20 FOR THE SAME TAX YEAR. 21 (B) TRANSFER AUTHORIZED.--BY JUNE 30 OF THE YEAR IN WHICH A 22 PAYMENT UNDER SECTION 503(B) WILL BE MADE, THE STATE TREASURER 23 SHALL TRANSFER FROM THE FUND AN AMOUNT SUFFICIENT TO FUND THE 24 PROPERTY TAX REBATES AUTHORIZED UNDER SUBSECTION (A) TO THE 25 STATE LOTTERY FUND. ALL REVENUE TRANSFERRED PURSUANT TO THIS 26 SUBSECTION SHALL BE DISTRIBUTED IN ACCORDANCE WITH THE 27 PROVISIONS OF THE SENIOR CITIZENS REBATE AND ASSISTANCE ACT. 28 (C) PROHIBITION.--THIS SECTION SHALL NOT APPLY TO A RESIDENT 29 OF A CITY OF THE FIRST CLASS WHO IS ENTITLED TO RECEIVE RENT 30 REBATE IN LIEU OF PROPERTY TAXES UNDER THE SENIOR CITIZENS 20030S0100B1789 - 107 -
1 REBATE AND ASSISTANCE ACT. 2 CHAPTER 50 3 MISCELLANEOUS PROVISIONS 4 SECTION 5001. OTHER SUBJECTS OF TAXATION. 5 NO SCHOOL DISTRICT WHICH HAS NOT ALREADY MADE AN ELECTION TO 6 ADOPT THE PROVISIONS OF 53 PA.C.S. CH. 87 (RELATING TO OTHER 7 SUBJECTS OF TAXATION) MAY MAKE AN ELECTION TO DO SO AFTER THE 8 EFFECTIVE DATE OF THIS SECTION. 9 SECTION 5002. APPROPRIATION. 10 THE SUM OF $3,000,000, OR AS MUCH THEREOF AS MAY BE 11 NECESSARY, IS HEREBY APPROPRIATED FROM THE PROPERTY TAX RELIEF 12 RESERVE FUND TO THE DEPARTMENT OF COMMUNITY AND ECONOMIC 13 DEVELOPMENT FOR THE PURPOSE OF MAKING ONE-TIME TRANSITION GRANTS 14 TO COUNTIES OTHER THAN COUNTIES OF THE FIRST CLASS FOR COSTS 15 ASSOCIATED WITH IMPLEMENTING THE HOMEOWNER TAX RELIEF ACT. 16 GRANTS SHALL BE MADE PURSUANT TO GUIDELINES ADOPTED BY THE 17 DEPARTMENT AND SHALL BE LIMITED TO FUNDS APPROPRIATED FOR THIS 18 PURPOSE. THE DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT 19 SHALL NOT DRAW A WARRANT UPON THE STATE TREASURER FOR THIS 20 APPROPRIATION UNTIL THE STATE TREASURER CERTIFIES THAT THE 21 PROPERTY TAX RELIEF RESERVE FUND HAS AT LEAST A $3,000,000 22 BALANCE. 23 SECTION 5003. EFFECTIVE DATE. 24 THIS ACT SHALL TAKE EFFECT IN 60 DAYS. B21L24DMS/20030S0100B1789 - 108 -