PRIOR PRINTER'S NO. 3814 PRINTER'S NO. 3825
No. 2666 Session of 2000
INTRODUCED BY DeLUCA, ORIE, CAPPABIANCA, COSTA, DERMODY, GEORGE,
HORSEY, MELIO, PISTELLA, SOLOBAY, VAN HORNE AND WASHINGTON,
JULY 17, 2000
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, JULY 17, 2000
AN ACT
1 Amending Title 53 (Municipalities Generally) of the Pennsylvania
2 Consolidated Statutes, providing for revenue growth.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Title 53 of the Pennsylvania Consolidated Statutes
6 is amended by adding a chapter to read:
7 CHAPTER 90
8 REVENUE GROWTH
9 Sec.
10 9001. Short title and scope of chapter.
11 9002. Definitions.
12 9003. Local tax revenue growth.
13 9004. Real property tax rate reduction.
14 9005. Exceptions.
15 § 9001. Short title and scope of chapter.
16 (a) Short title of chapter.--This chapter shall be known and
17 may be cited as the Local Tax Revenue Growth Cap Act.
1 (b) Scope of chapter.--This chapter shall apply to all
2 taxing districts as defined in section 9002 (relating to
3 definitions), except those subject to the limitation of section
4 8704 (relating to public referendum requirements for increasing
5 property taxes previously reduced).
6 § 9002. 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 "Annual growth cap." The percent by which local tax revenue
11 may increase annually.
12 "Local tax revenue." All moneys derived from taxes levied
13 and assessed by a taxing district.
14 "Taxing district." All school districts, except school
15 districts of the first class, and all municipalities as defined
16 in 1 Pa.C.S. § 1991 (relating to definitions), including
17 municipalities which have adopted or may adopt home rule
18 charters, except cities of the first class and counties of the
19 first class.
20 § 9003. Local tax revenue growth.
21 (a) Annual growth cap.--The local tax revenue of a taxing
22 district shall be subject to an annual growth cap which shall
23 limit the revenue growth of a taxing district to a percent
24 increase, as determined in accordance with subsection (b), over
25 the taxing district's preceding year's local tax revenue.
26 (b) Calculation.--
27 (1) A taxing district's annual growth cap shall be a
28 percent increase equal to the percentage increase in the
29 Statewide average weekly wage in the most recent 12-month
30 period for which figures are officially reported, ending at
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1 least 60 days prior to the beginning of a taxing district's
2 fiscal year.
3 (2) The annual growth cap for a taxing district shall,
4 at the written request of a taxing district, be determined by
5 the Department of Community and Economic Development which
6 shall communicate its determination in writing to the taxing
7 district not more than ten days after receiving the request.
8 § 9004. Real property tax rate reduction.
9 If, in preparing its budget, a taxing district projects its
10 local tax revenues for the next fiscal year in an amount which
11 would exceed its annual growth cap, it shall, by means of a
12 reduction in its real property tax millage rate, reduce its
13 projected local tax revenues for the next fiscal year to an
14 amount which does not exceed its annual growth cap.
15 § 9005. Exceptions.
16 (a) New buildings; improvements.--The annual growth cap
17 imposed by this chapter shall not apply to local tax revenues
18 from real property taxes to be levied on newly constructed
19 buildings or structures or on increased valuations based on new
20 improvements made to existing houses. Prior to any increase
21 under this subsection, the governing body must certify to the
22 court of common pleas in the judicial district in which the
23 governing body is located the estimates of total local tax
24 revenues used in the calculation under this subsection. The
25 court may, on its own motion or on petition of a person having
26 standing under subsection (d), revise the estimates certified by
27 the governing body and reduce the allowable increase in the rate
28 of the real property tax under this subsection.
29 (b) Other exceptions.--The annual growth cap imposed by this
30 chapter shall not apply to local tax revenues levied and
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1 collected for the following purposes:
2 (1) To respond to or recover from an emergency or
3 disaster declared pursuant to 35 Pa.C.S. § 7301 (relating to
4 general authority of Governor) or 75 Pa.C.S. § 6108 (relating
5 to power of Governor during emergency), only for the duration
6 of the emergency or disaster and for the costs of the
7 recovery from the emergency or disaster.
8 (2) To implement a court order or an administrative
9 order from a Federal or State agency that requires the
10 expenditure of funds that exceed current available revenues.
11 The rate increase shall be rescinded following fulfillment of
12 the court order or administrative order.
13 (3) To pay interest and principal on any indebtedness
14 incurred under Subpart B of Part VIII (relating to
15 indebtedness and borrowing).
16 (4) To respond to conditions that pose an immediate
17 threat of serious physical harm or injuries to residents of
18 the taxing district until the circumstances causing the
19 threat have been fully resolved.
20 (5) Special purpose tax levies approved by the
21 electorate.
22 (6) To maintain, in the case of a school district, per-
23 student local tax revenue at an amount not exceeding the
24 amount of per-student local tax revenue at the level of the
25 preceding year, adjusted for the percentage increase in the
26 Statewide average weekly wage. This paragraph shall apply
27 only if the percentage growth in student enrollment in the
28 school district between the current fiscal year and the third
29 fiscal year immediately preceding the current fiscal year
30 exceeds 10%. For the purposes of this paragraph, student
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1 enrollment shall be measured by average daily membership as
2 defined by the act of March 10, 1949 (P.L.30, No.14), known
3 as the Public School Code of 1949. For the purposes of this
4 paragraph, per-student local tax revenue shall be determined
5 by dividing local tax revenue by average daily membership.
6 (c) Court action.--Prior to the imposition of the tax
7 increase under subsection (b)(1), (2), (4) or (6), approval is
8 required by the court of common pleas in the judicial district
9 in which the taxing district is located. The taxing district
10 shall publish in a newspaper of general circulation a notice of
11 its intent to file an action under this subsection at least one
12 week prior to the filing of the petition. The taxing district
13 shall also publish in a newspaper of general circulation a
14 notice, as soon as possible following notification from the
15 court that a hearing has been scheduled, stating the date, time
16 and place of the hearing on the petition. The following shall
17 apply to any proceedings instituted under this subsection:
18 (1) The taxing district must prove by clear and
19 convincing evidence the necessity for the tax increase.
20 (2) The taxing district must prove by clear and
21 convincing evidence that there are no assets or other
22 feasible alternatives available to the taxing district.
23 (3) The court shall determine the appropriate duration
24 of the increase and may retain continuing jurisdiction. The
25 court may, on its own motion or on petition of an interested
26 party, revoke approval for or order rescission of a tax
27 increase.
28 (d) Standing.--A person shall have standing as a party to a
29 proceeding under this section as long as the person resides
30 within or pays local taxes to the taxing district instituting
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1 the action.
2 Section 2. This act shall take effect January 1, 2001.
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