PRIOR PRINTER'S NO. 2672 PRINTER'S NO. 3864
No. 459 Session of 2007
INTRODUCED BY CURRY, ARGALL, BRENNAN, BUXTON, CALTAGIRONE,
CAPPELLI, CAUSER, COHEN, DePASQUALE, FAIRCHILD, FLECK,
FRANKEL, FREEMAN, HALUSKA, HORNAMAN, JAMES, JOSEPHS, KOTIK,
KULA, McILHATTAN, R. MILLER, NICKOL, PETRONE, RAPP, READSHAW,
SIPTROTH, K. SMITH, SONNEY, STURLA, WALKO, WHEATLEY,
WOJNAROSKI, YOUNGBLOOD, FABRIZIO, MOUL, HENNESSEY AND KORTZ,
OCTOBER 18, 2007
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, JUNE 4, 2008
A RESOLUTION
1 Directing the Legislative Budget and Finance Committee to study
2 the fiscal impact of tax-exempt properties on the finances of
3 municipalities and school districts; to review the policies
4 of other states in addressing the burden of limited tax bases
5 as a result of tax-exempt properties; and to make
6 recommendations on ways to assist tax authorities with a high
7 concentration of tax-exempt properties.
8 WHEREAS, Property taxes are a major source of revenue for
9 school districts and municipalities across this Commonwealth;
10 and
11 WHEREAS, Certain municipalities within this Commonwealth
12 contain a high concentration of property exempt from local
13 property taxes under the law; and
14 WHEREAS, Government buildings, STATE FOREST LANDS AND STATE <--
15 GAME LANDS, public schools and universities, hospitals, museums,
16 prisons and nonprofit organizations are examples of tax-exempt
17 properties not obligated to pay local property taxes; and
1 WHEREAS, While they are not able to generate tax revenue from
2 the tax-exempt properties, host municipalities are still
3 responsible for providing a variety of municipal services,
4 including fire and police coverage; and
5 WHEREAS, Residents of municipalities with a high
6 concentration of tax-exempt properties are burdened with higher
7 property taxes in order to compensate for the limited local tax
8 base and the inability to recoup costs from local tax-exempt
9 properties; and
10 WHEREAS, Local governments and school districts often
11 struggle to find additional revenue due to the property tax
12 exemption, but are limited in how they may generate additional
13 revenues; and
14 WHEREAS, Many states, including this THE Commonwealth, have <--
15 explored "Payment in Lieu of Tax" programs, also referred to as
16 PILOT programs, to raise revenues from tax-exempt organizations
17 AND FROM THE COMMONWEALTH, only to have mixed results; and <--
18 WHEREAS, In 2003, several cities requested that nonprofits
19 make "fair share" payments and that colleges pay a fee per
20 student in order to pay the cost of government services, but
21 unfortunately these payments were still insufficient; therefore
22 be it
23 RESOLVED, That the Legislative Budget and Finance Committee
24 conduct a study to determine the number of tax-exempt properties
25 within this Commonwealth; and be it further
26 RESOLVED, That the Legislative Budget and Finance Committee
27 identify localities with a high percentage of tax-exempt
28 properties and the impact that such a high concentration of tax-
29 exempt properties is having on the local tax base; and be it
30 further
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1 RESOLVED, THAT THE LEGISLATIVE BUDGET AND FINANCE COMMITTEE <--
2 IDENTIFY THE NUMBER OF PAYMENT IN LIEU OF TAX PROGRAMS IN THIS
3 COMMONWEALTH, THE NUMBER OF TAX-EXEMPT ENTITIES THAT PARTICIPATE
4 IN PAYMENT IN LIEU OF TAX PROGRAMS, THE TOTAL AMOUNT OF PAYMENTS
5 IN LIEU OF TAXES RECEIVED BY POLITICAL SUBDIVISIONS FROM
6 PARTICIPATING TAX-EXEMPT ENTITIES AND THE TOTAL AMOUNT OF LOCAL
7 PROPERTY TAXES THAT POLITICAL SUBDIVISIONS WOULD HAVE RECEIVED
8 IF TAX-EXEMPT ENTITIES WERE REQUIRED TO PAY LOCAL PROPERTY
9 TAXES; AND BE IT FURTHER
10 RESOLVED, THAT THE LEGISLATIVE BUDGET AND FINANCE COMMITTEE
11 IDENTIFY THE POLITICAL SUBDIVISIONS WHICH REQUESTED FAIR SHARE
12 PAYMENTS FROM NONPROFIT ENTITIES AND EDUCATIONAL INSTITUTIONS,
13 THE NUMBER OF TAX-EXEMPT ENTITIES THAT CONTRIBUTED FAIR SHARE
14 PAYMENTS TO POLITICAL SUBDIVISIONS, THE AMOUNT OF THE FAIR SHARE
15 PAYMENTS RECEIVED BY POLITICAL SUBDIVISIONS AND THE TOTAL AMOUNT
16 OF LOCAL PROPERTY TAXES POLITICAL SUBDIVISIONS WOULD HAVE
17 RECEIVED IF TAX-EXEMPT ENTITIES IN A FAIR SHARE TAX PROGRAM
18 WOULD HAVE BEEN REQUIRED TO PAY LOCAL PROPERTY TAXES; AND BE IT
19 FURTHER
20 RESOLVED, THAT THE LEGISLATIVE BUDGET AND FINANCE COMMITTEE
21 IDENTIFY THE TOTAL ACREAGE OF TAX-EXEMPT STATE FOREST LANDS AND
22 STATE GAME LANDS, THE AMOUNT OF PAYMENTS IN LIEU OF TAXES
23 RECEIVED BY POLITICAL SUBDIVISIONS FROM THE COMMONWEALTH FOR THE
24 STATE FOREST LANDS AND STATE GAME LANDS AND THE TOTAL AMOUNT OF
25 LOCAL PROPERTY TAXES POLITICAL SUBDIVISIONS WOULD HAVE RECEIVED
26 IF THE COMMONWEALTH WOULD HAVE BEEN REQUIRED TO PAY LOCAL
27 PROPERTY TAXES ON THOSE LANDS, INCLUDING LOCAL PROPERTY TAXES
28 AND PAYMENT IN LIEU OF TAXES ON NATURAL RESOURCES TAKEN FROM
29 THOSE LANDS.
30 RESOLVED, That the Legislative Budget and Finance Committee
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1 analyze the manner in which other states have tried to alleviate
2 the problems associated with tax-exempt properties; and be it
3 further
4 RESOLVED, THAT THE LEGISLATIVE BUDGET AND FINANCE COMMITTEE <--
5 ANALYZE AND INCLUDE IN ITS REPORT THE ASSESSED VALUES OF TAX-
6 EXEMPT PROPERTIES, INCLUDING AN ANALYSIS OF THE ASSESSED VALUES
7 OF TAX-EXEMPT PROPERTIES AS COMPARED TO THE ASSESSED VALUES OF
8 OTHER PROPERTIES WITHIN THE COUNTY, AS WELL AS THE UNIFORMITY OF
9 ASSESSED VALUES OF SIMILAR TAX-EXEMPT PROPERTIES WITHIN THE
10 COUNTY AND ACROSS THIS COMMONWEALTH; AND BE IT FURTHER
11 RESOLVED, That the Legislative Budget and Finance Committee
12 review the options available to this Commonwealth, both under
13 the law and through new legislative proposals that would address
14 the burden associated with tax-exempt properties; and be if, <--
15 INCLUDING THE ADEQUACY OF ANNUAL INFLATIONARY ADJUSTMENTS FOR
16 POLITICAL SUBDIVISIONS' PAYMENT IN LIEU OF TAX AGREEMENTS AS
17 POLITICAL SUBDIVISIONS' COSTS ANNUALLY INCREASE AND CURRENT
18 PAYMENT AGREEMENTS DO NOT REFLECT THE LOCAL REVENUE LOST; AND BE
19 IT further
20 RESOLVED, That the Legislative Budget and Finance Committee
21 issue a report containing its findings and recommendations to
22 the House of Representatives no later than one year from the
23 adoption of this resolution.
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