PRINTER'S NO. 3217
No. 2460 Session of 1980
INTRODUCED BY WILSON, SIEMINSKI, ZITTERMAN, DeVERTER, KUKOVICH,
D. R. WRIGHT, BURNS, CESSAR, COWELL, GRUPPO, SPENCER,
HELFRICK, PUNT, ZORD, COCHRAN, WASS, YAHNER, COLE,
CALTAGIRONE, PRATT, KOLTER, GEIST, PYLES, DAVIES, NOYE,
E. G. JOHNSON, GRIECO, HOEFFEL AND KOWALYSHYN, APRIL 9, 1980
REFERRED TO COMMITTEE ON FINANCE, APRIL 9, 1980
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," implementing school real property tax
6 relief; providing limitations on the use of such tax to
7 finance public schools; and authorizing certain taxes to be
8 levied in lieu of real property taxes.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. The act of March 10, 1949 (P.L.30, No.14), known
12 as the "Public School Code of 1949," is amended by adding
13 sections to read:
14 Section 602.1. Limitation on Real Property Taxes;
15 Exceptions; Duty of Landlords.--(a) For the school fiscal year
16 1981-1982 or, if appropriate, calendar year 1982, no school
17 district shall levy a tax on the assessed valuation of real
18 property which will produce greater revenue for the district for
19 school purposes than eighty per centum (80%) of the total local
1 taxes levied by the school district for school purposes in that
2 school fiscal or calendar year. For the school fiscal year 1982-
3 1983 or, if appropriate, calendar year 1983, no school district
4 shall levy a tax on the assessed valuation of real property
5 which will produce greater revenue for school purposes than
6 sixty-five per centum (65%) of the total local taxes levied for
7 school purposes in that school fiscal or calendar year. For the
8 school fiscal year 1983-1984 or, if appropriate, calendar year
9 1984, and each school year thereafter, no school district shall
10 levy a tax on the assessed valuation of real property which will
11 produce greater revenue for school purposes than fifty per
12 centum (50%) of the total taxes levied for school purposes in
13 that school fiscal or calendar year.
14 (b) Each year the Secretary of Education shall calculate the
15 ratio of market value of residential property to personal income
16 for each school district and shall certify to each school
17 district with a ratio greater than two (2) (when rounded to the
18 nearest tenth) that the district is exempt for the following
19 five (5) years from the limitations imposed by subsection (a).
20 In calculating the ratio the secretary shall use the market
21 value of residential property (including lots) located within
22 the district certified to him by the State Tax Equalization
23 Board and the personal income reported by the residents of the
24 district as certified to him by the Secretary of Revenue.
25 (c) Within thirty (30) days after receipt of his school real
26 property tax bill, a landlord shall disclose in writing to each
27 tenant who has occupied a rental unit for more than forty-five
28 (45) days the reduction in real property taxes, if any, under
29 this amendatory act which is attributable to that tenant's unit.
30 The amount of tax reduction attributable to each unit shall be
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1 based upon allocated square footage occupied or other reasonable
2 criteria. The rental amount specified in any subsequent lease
3 shall reflect any reduction in real property taxes required by
4 this section.
5 Section 602.2. Personal Income Tax Authorization.--(a) A
6 school district, in addition to any other taxes authorized by
7 law, may provide by ordinance or resolution for the levying of a
8 tax upon the personal income of the residents of the district.
9 For the school fiscal year 1981-1982 or, if appropriate,
10 calendar year 1982, the personal income tax may be levied at a
11 rate not to exceed one per centum (1%). For the school fiscal
12 year 1982-1983 or, if appropriate, calendar year 1983, the tax
13 may be levied at a rate not to exceed one and one-half per
14 centum (1 1/2%). For the school fiscal year 1983-1984 or, if
15 appropriate, calendar year 1984 and for each school year
16 thereafter, the tax may be levied at a rate not to exceed two
17 per centum (2%). "Personal income" shall mean the total income
18 taxed under Article III, act of March 4, 1971 (P.L.6, No.2),
19 known as the "Tax Reform Code of 1971."
20 (b) A school district levying the personal income tax
21 authorized by subsection (a) shall provide relief from the tax
22 for persons who, because of poverty, are determined to be in
23 need of special tax provisions. Such tax relief shall be in
24 accordance with the special tax provision schedule in section
25 304 of the "Tax Reform Code of 1971."
26 (c) A school district levying the personal income tax
27 authorized by subsection (a) may provide relief from the tax for
28 persons who, because of age, are determined to be in need of
29 special tax provisions. Such tax relief shall be in accordance
30 with section 4, act of March 11, 1971 (P.L.104, No.3), known as
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1 the "Senior Citizens Property Tax or Rent Rebate and Older
2 Persons Inflation Needs Act."
3 (d) Upon written notification by the school district of the
4 rate of personal income tax imposed by the school district, an
5 employer shall deduct and withhold from the compensation for
6 each payroll period of each employe who is a resident of that
7 school district, a tax computed in such manner as to result, so
8 far as practicable, in withholding from the employe's
9 compensation during each calendar year an amount substantially
10 equivalent to the tax reasonably estimated to be due for such
11 year with respect to such compensation. Subject to the
12 foregoing, the ordinance levying the tax shall provide for
13 withholding, collecting and enforcing procedures which are not
14 inconsistent with the provisions of the act of December 31, 1965
15 (P.L.1257, No.511), known as "The Local Tax Enabling Act,"
16 relating to the withholding of earned income.
17 Section 602.3. Business Use or Occupancy Tax; Definitions.--
18 (a) The following words, terms and phrases when used in this
19 section shall have the meaning ascribed to them in this
20 subsection except where the context clearly indicates a
21 different meaning:
22 (1) "Area available for use or occupancy" shall include the
23 whole portion of any real property, any structure thereon and
24 space therein exclusive of service, utility and common areas
25 controlled by the landlord.
26 (2) "Landlord" shall include in addition to the owner of
27 real property, any person who grants the right to use or occupy
28 real property or any part thereof to any lessee, sub-lessee,
29 licensee or concessionaire.
30 (3) "Taxable year" shall mean July 1 of any calendar year
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1 through June 30 of the following calendar year.
2 (4) "Taxpayer" shall mean a taxable user or occupier of real
3 property within the school district.
4 (b) A school district, in addition to any other taxes
5 authorized by law, may provide by ordinance or resolution for
6 the levying of a business use or occupancy tax on the user or
7 occupier of real property within the school district for the
8 privilege of carrying on any business, trade, occupation,
9 profession, vocation or any other commercial, industrial or
10 agricultural activity on the real property.
11 (c) This tax shall not apply to:
12 (1) The use or occupancy of real property to the extent that
13 the real property is used or occupied as the dwelling or
14 principal place of residence of the user or occupier; or
15 (2) The use or occupancy of real property for a purpose
16 which exempts it from local real property taxes.
17 (d) For the school fiscal years 1981-1982 through 1983-1984
18 or, if appropriate, calendar years 1982 through 1984, the rate
19 of tax shall be subject to section 602.7. Thereafter, no school
20 district shall levy the tax at a rate that would result in the
21 annual yield of the tax increasing at a greater rate than the
22 annual yield of the personal income tax authorized by section
23 602.2.
24 (e) Computation of tax:
25 (1) The landlord shall on or before September 1 of each
26 taxable year compute the tax which is payable for the portion of
27 the property which he uses or occupies and for the portion which
28 each tenant uses or occupies, and where he, or a tenant, is the
29 sole user or occupier of the property, pay or collect and pay
30 over, as the agent for the school district the tax due within
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1 twenty-five (25) days after the end of each quarter of the
2 taxable year.
3 (2) In the case where the total area available for use and
4 occupancy of the property is occupied by tenants and no portion
5 is used or occupied by the landlord, the tax shall be allocated
6 by the landlord among the tenants on the basis of rents
7 contracted for between the landlord and the tenants; in the case
8 where the total area available for use or occupancy is used or
9 occupied by the landlord and one or more tenants, the tax shall
10 be allocated among the users and occupiers on the basis of the
11 area used or occupied divided by the total area available for
12 use or occupancy. The tax due for each user and occupier for the
13 quarter of the taxable year shall be computed by multiplying the
14 proportion of the area used or occupied or the proportion of the
15 total rentals paid or to be paid by the user or occupier
16 multiplied by the total assessed value of the property
17 multiplied by the rate of tax multiplied by the months of actual
18 use or occupancy divided by twelve. The use or occupancy of a
19 portion of the property for any period of time during a month
20 shall be presumed to constitute the use or occupancy of the
21 portion for the entire month.
22 (3) The school district may provide for discounts not to
23 exceed ten per centum (10%) of the tax due for the annual
24 prepayment of the tax by the landlord or by him on behalf of the
25 tenants. Where the landlord prepays the tax he shall have a
26 right to collect the tax due from each tenant and shall have a
27 cause of action against any tenant who fails to pay to the
28 landlord the tax due after notice and demand.
29 Section 602.4. Amusement Tax.--A school district of the
30 second, third or fourth class, in addition to any other taxes
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1 authorized by law, may provide by ordinance or resolution for
2 the levying of a tax on sales of admission to places of
3 amusement. The rate of tax on admissions to places of amusement
4 shall not exceed five per centum (5%) of the price of admission.
5 Section 602.5. Real Estate Transfer Tax.--A school district
6 of the second, third or fourth class, in addition to any other
7 taxes authorized by law, may provide by ordinance or resolution
8 for the levying of a tax on the transfer of real property. The
9 rate of tax on the transfer of real property shall not exceed
10 one-half per centum (1/2%). Said school districts shall not have
11 authority to levy, assess and collect or provide for the
12 levying, assessment and collection of any tax on the transfer of
13 real property when the transfer is by will or mortgage or the
14 intestate laws of this Commonwealth or on a transfer by the
15 owner of previously occupied residential premises to a builder
16 of new residential premises when such previously occupied
17 residential premises is taken in trade by such builder as part
18 of the consideration from the purchaser of a new previously
19 unoccupied single-family residential premises or on a transfer
20 between corporations operating housing projects pursuant to the
21 housing and redevelopment assistance law and the shareholders
22 thereof, or on a transfer between nonprofit industrial
23 development agencies and industrial corporations purchasing from
24 them, or on transfer to nonprofit industrial development
25 agencies, or on a transfer between husband and wife, or on a
26 transfer between persons who were previously husband and wife
27 but who have since been divorced; provided such transfer is made
28 within three (3) months of the date of the granting of the final
29 decree in divorce and the property or interest therein, subject
30 to such transfer, was acquired by the husband and wife, or
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1 husband or wife, prior to the granting of the final decree in
2 divorce, or on a transfer between parent and child or the spouse
3 of such a child, or between parent and trustee for the benefit
4 of a child or the spouse of such child, by and between a
5 principal and straw party for the purpose of placing a mortgage
6 or ground rent upon the premises, or on a correctional deed
7 without consideration, or on a transfer to the United States,
8 the Commonwealth of Pennsylvania, or to any of their
9 instrumentalities, agencies or political subdivisions, by gift,
10 dedication or deed in lieu of condemnation, or deed of
11 confirmation in connection with condemnation proceedings, or
12 reconveyance of the condemning body of the property condemned to
13 the owner of record at the time of condemnation which
14 reconveyance may include property line adjustments provided said
15 reconveyance is made within one (1) year from the date of
16 condemnation, leases or on a conveyance to a trustee under a
17 recorded trust agreement for the express purpose of holding
18 title in trust as security for a debt contracted at the time of
19 the conveyance under which the trustee is not the lender and
20 requiring the trustee to make reconveyance to the grantor-
21 borrower upon the repayment of the debt, or in any sheriff sale
22 instituted by a mortgagee in which the purchaser of said sheriff
23 sale is the mortgagee who instituted said sale.
24 Section 602.6. Residential Construction Tax; Definitions.--
25 (a) The following words, terms and phrases when used in this
26 section shall have the meanings ascribed to them in this
27 subsection except where the context clearly indicates a
28 different meaning:
29 (1) "Convert" shall mean any activity whereby an
30 improvement to real property not theretofore used as a residence
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1 is changed to a residence, or whereby the number of residential
2 units within a residence are increased in number.
3 (2) "Residence" shall include any improvement to real
4 property constructed and intended as a place of residence for
5 one (1) or more persons, including single-family and multifamily
6 residences, but not including accommodations for transient
7 occupancy such as motels, hotels, tourist homes, campgrounds,
8 hospitals and convalescent homes.
9 (3) "Residential unit" shall include a group of rooms within
10 a residence for occupancy by one (1) or more persons separate
11 and independent from other groups of rooms within the same
12 residence, whether or not one (1) or more facilities, such as
13 heating, toilet, laundry and the like, are shared by the
14 occupants of two (2) or more room groups.
15 (b) A school district of the second, third or fourth class,
16 in addition to any other taxes authorized by law, may provide by
17 ordinance or resolution for the levying of a residential
18 construction tax. Every person who constructs a residence or
19 converts an improvement to real property into a residence within
20 the school district may be taxed at a rate not to exceed five
21 hundred dollars ($500) per residential unit. Housing built
22 exclusively for occupancy by limited income senior citizens
23 shall be exempt from the tax.
24 Section 602.7. Schedule for Implementation of Taxes.--A
25 school district may continue to levy any tax it levied for the
26 school fiscal year 1979-1980 or, if appropriate, calendar year
27 1980, under the authority of the act of December 31, 1965
28 (P.L.1257, No.511), known as "The Local Tax Enabling Act," but
29 in no case may the rate of tax imposed be greater than the rate
30 imposed for the school fiscal year 1979-1980 or, if appropriate,
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1 calendar year 1980. For those school districts imposing an
2 amusement tax, real estate transfer tax or residential
3 construction tax for which the rate of tax for the school fiscal
4 year 1979-1980 or, if appropriate, calendar year 1980, was more
5 than the maximum rate authorized in sections 602.4, 602.5 and
6 602.6, the tax rate for any subsequent year shall not exceed the
7 rate of tax imposed for the previous year. No school district
8 may levy any tax under the authority of "The Local Tax Enabling
9 Act," after the school fiscal year 1982-1983 or, if appropriate,
10 calendar year 1983. For the school fiscal years 1981-1982
11 through 1983-1984 and the calendar years 1982 through 1984, if
12 appropriate, no school district shall impose the personal income
13 tax authorized by section 602.2 at a rate that would yield an
14 amount greater than the budgeted amount in dollars of
15 residential property tax reduction plus the budgeted dollar
16 reduction in taxes levied under the authority of "The Local Tax
17 Enabling Act." For the school fiscal years 1981-1982 through
18 1983-1984 and the calendar years 1982 through 1984, if
19 appropriate, no school district shall impose the business use or
20 occupancy tax authorized by section 602.3 at a rate that would
21 yield an amount greater than the budgeted dollar reduction in
22 dollars of nonresidential property tax reduction. Nothing herein
23 shall prevent school districts from reducing property taxes
24 below the limitations prescribed in section 602.1.
25 Section 602.8. Collection of Taxes.--The act of December 31,
26 1965 (P.L.1257, No.511), known as "The Local Tax Enabling Act,"
27 except for sections 2 and 8, is incorporated in sections 602.2,
28 602.3, 602.4, 602.5 and 602.6 where appropriate and not
29 inconsistent.
30 Section 2. Section 679 of the act is repealed.
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1 Section 3. Except for administrative provisions and sections
2 602.4, 602.5 and 602.6 which authorize existing taxes, the
3 provisions of this act are nonseverable and if any such
4 provision is held invalid, the remaining provisions of this act
5 shall be void. This act shall be read in pari materia with the
6 companion amendments to the act of December 31, 1965 (P.L.1257,
7 No.511), known as "The Local Tax Enabling Act," implementing
8 school real property tax relief.
9 Section 4. Section 1 shall take effect immediately; section
10 2 shall take effect for the school fiscal year 1983-1984 or, if
11 appropriate, calendar year 1984.
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