PRINTER'S NO. 2929
No. 2082 Session of 2007
INTRODUCED BY NICKOL, ARGALL, BOYD, CAPPELLI, CARROLL,
DePASQUALE, GEIST, GILLESPIE, GINGRICH, GODSHALL, HENNESSEY,
HERSHEY, HESS, McILVAINE SMITH, R. MILLER, MOYER, PEIFER,
PETRONE, PHILLIPS, REICHLEY, ROSS, RUBLEY, SAYLOR, SCAVELLO,
SIPTROTH, SONNEY, STEIL, TURZAI AND WATSON, DECEMBER 4, 2007
REFERRED TO COMMITTEE ON FINANCE, DECEMBER 4, 2007
AN ACT
1 Amending the act of June 27, 2006 (1st Sp.Sess., P.L.1873,
2 No.1), entitled "An act providing for taxation by school
3 districts, for the State funds formula, for tax relief in
4 first class cities, for school district choice and voter
5 participation, for other school district options and for a
6 task force on school cost reduction; making an appropriation;
7 prohibiting prior authorized taxation; providing for
8 installment payment of taxes; restricting the power of
9 certain school districts to levy, assess and collect taxes;
10 and making related repeals," further providing for State
11 property tax reduction allocation and for school district
12 choice.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Sections 505 and 903 of the act of June 27, 2006
16 (1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief
17 Act, are amended to read:
18 Section 505. State property tax reduction allocation.
19 (a) [Administration.--The] Duty of department.--The
20 department shall annually calculate a State property tax
21 reduction allocation as provided under subsections (a.1) and
1 (a.2).
2 (a.1) Initial administration.--For the purposes of applying
3 the certification made by the secretary that is required to be
4 made by April 15, 2008, under section 503(a), the department
5 shall do all of the following:
6 (1) Array the [2002] 2005 personal income valuation
7 divided by the [2003-2004] 2006-2007 average daily
8 membership, the [2004-2005] 2006-2007 market value/income aid
9 ratio, the [2002-2003] 2006-2007 equalized millage and the
10 [2002-2003] 2006-2007 school tax ratio of each school
11 district in rank order and assign each school district a
12 discreet numerical rank for its personal income valuation per
13 average daily membership, its market value/income aid ratio,
14 its equalized millage and its school tax ratio. For the
15 numerical rank of a school district's personal income
16 valuation per average daily membership, the school district
17 with the lowest personal income valuation per average daily
18 membership shall have the highest numerical rank. For the
19 numerical rank of a school district's market value/income aid
20 ratio, the school district with the highest market
21 value/income aid ratio shall have the highest numerical rank,
22 provided that all school districts with a market value/income
23 aid ratio equal to 0.15 shall receive a ranking of 1. For the
24 numerical rank of a school district's equalized millage, the
25 school district with the highest equalized millage shall have
26 the highest numerical rank. For the numerical rank of a
27 school district's school tax ratio, the school district with
28 the highest school tax ratio shall have the highest numerical
29 rank.
30 (2) Assign each school district a property tax reduction
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1 index.
2 (3) If the department receives authorization under
3 section 503(d), allocate the property tax reduction for each
4 school district as follows:
5 (i) Calculate the property tax reduction allocation
6 as follows:
7 (A) Multiply the school district's [2003-2004]
8 2006-2007 average daily membership by the school
9 district's property tax reduction index.
10 (B) Multiply the product under clause (A) by the
11 dollar amount necessary to allocate all of the money
12 available for distribution under section 503(e). If
13 the amount for distribution under section 503(e) is
14 less than $750,000,000, the dollar amount shall be
15 the dollar amount necessary to allocate $750,000,000.
16 (C) If applicable, provide for the allocation
17 minimum or allocation maximum under subparagraph (ii)
18 or (iii).
19 (ii) If the sum of the allocation under this
20 paragraph and the estimated local revenue calculation
21 certified under section 503(b) is less than the product
22 of the residential property taxes collected during the
23 [2001-2002] 2006-2007 fiscal year and the allocation
24 minimum for a school district, the school district shall
25 receive an additional amount so that the sum of the total
26 allocation under this paragraph and the estimated local
27 revenue calculation certified under section 503(b) is
28 equal to the product of the residential property taxes
29 collected during the [2001-2002] 2006-2007 fiscal year
30 and the allocation minimum.
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1 (iii) Except as set forth in subsection (c), if the
2 sum of the total allocation under this paragraph and the
3 estimated local revenue calculation certified under
4 section 503(b) is greater than the product of the
5 residential property taxes collected during the [2001-
6 2002] 2006-2007 fiscal year and the allocation maximum
7 for a school district, the school district shall receive
8 a total allocation such that the sum of the total
9 allocation and the estimated local revenue calculation
10 certified under section 503(b) is equal to the product of
11 the residential property taxes collected during the
12 [2001-2002] 2006-2007 fiscal year and the allocation
13 maximum.
14 (iv) If the amount for distribution under section
15 503(e) is less than $750,000,000, each school district
16 shall receive a pro rata share of the property tax
17 reduction allocation calculated under this paragraph at
18 $750,000,000.
19 (4) Notify each school district of the amount of its
20 property tax reduction allocation no later than May 1 of each
21 year.
22 (a.2) Subsequent annual administration.--For the purposes of
23 applying the certification made by the secretary under section
24 503(a) which is required to be made by April 15, 2009, and each
25 April 15 thereafter, the department shall do all of the
26 following:
27 (1) Array the personal income valuation for the second
28 calendar year immediately prior to the most recently ended
29 calendar year divided by the average daily membership for the
30 most recently completed fiscal year, the market value/income
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1 aid ratio for the most recently completed fiscal year, the
2 equalized millage for the most recently completed fiscal year
3 and the school tax ratio of each school district in rank
4 order and assign each school district a discrete numerical
5 rank for its personal income valuation per average daily
6 membership, its market value/income aid ratio, its equalized
7 millage and its school tax ratio. For the numerical rank of a
8 school district's personal income valuation per average daily
9 membership, the school district with the lowest personal
10 income valuation per average daily membership shall have the
11 highest numerical rank. For the numerical rank of a school
12 district's market value/income aid ratio, the school district
13 with the highest market value/income aid ratio shall have the
14 highest numerical rank, provided that all school districts
15 with a market value/income aid ratio equal to 0.15 shall
16 receive a ranking of 1. For the numerical rank of a school
17 district's equalized millage, the school district with the
18 highest equalized millage shall have the highest numerical
19 rank. For the numerical rank of a school district's school
20 tax ratio, the school district with the highest school tax
21 ratio shall have the highest numerical rank.
22 (2) Assign each school district a property tax reduction
23 index.
24 (3) If the department receives authorization under
25 section 503(d), allocate the property tax reduction for each
26 school district as follows:
27 (i) Calculate the property tax reduction allocation
28 as follows:
29 (A) Multiply the school district's average daily
30 membership for the most recently completed fiscal
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1 year by the school district's property tax reduction
2 index.
3 (B) Multiply the product under clause (A) by the
4 dollar amount necessary to allocate all of the money
5 available for distribution under section 503(e). If
6 the amount for distribution under section 503(e) is
7 less than $750,000,000, the dollar amount shall be
8 the dollar amount necessary to allocate $750,000,000.
9 (C) If applicable, provide for the allocation
10 minimum or allocation maximum under subparagraph (ii)
11 or (iii).
12 (ii) If the sum of the allocation under this
13 paragraph and the estimated local revenue calculation
14 certified under section 503(b) is less than the product
15 of the residential property taxes collected during the
16 most recently completed fiscal year and the allocation
17 minimum for a school district, the school district shall
18 receive an additional amount so that the sum of the total
19 allocation under this paragraph and the estimated local
20 revenue calculation certified under section 503(b) is
21 equal to the product of the residential property taxes
22 collected during the most recently completed fiscal year
23 and the allocation minimum.
24 (iii) Except as set forth in subsection (c), if the
25 sum of the total allocation under this paragraph and the
26 estimated local revenue calculation certified under
27 section 503(b) is greater than the product of the
28 residential property taxes collected during the most
29 recently completed fiscal year and the allocation maximum
30 for a school district, the school district shall receive
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1 a total allocation such that the sum of the total
2 allocation and the estimated local revenue calculation
3 certified under section 503(b) is equal to the product of
4 the residential property taxes collected during the most
5 recently completed fiscal year and the allocation
6 maximum.
7 (iv) If the amount of distribution under section
8 503(e) is less than $750,000,000, each school district
9 shall receive a pro rata share of the property tax
10 reduction allocation calculated under this paragraph at
11 $750,000,000.
12 (4) Notify each school district of the amount of its
13 property tax reduction allocation no later than May 1 of each
14 year.
15 (b) Payment.--For the fiscal year commencing July 1, 2006,
16 and July 1 of each fiscal year thereafter, except as set forth
17 in subsection (c), the department shall pay to each eligible
18 school district a property tax reduction allocation equal to the
19 amount calculated under subsection [(a)(3)] (a.1)(3) or
20 (a.2)(3). The property tax reduction allocation shall be divided
21 into two equal payments, which shall be made on the fourth
22 Thursday of August and the fourth Thursday of October. Each
23 school district shall be eligible to receive a property tax
24 reduction allocation under this section unless its board of
25 school directors takes action under section 903.
26 (c) First class school districts.--The property tax
27 reduction allocation for a school district of the first class
28 shall be paid by the department to a city of the first class.
29 The limitations set forth in subsection [(a)(3)(iii)]
30 (a.1)(3)(iii) or (a.2)(3)(iii) shall not apply to the
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1 calculation of the property tax reduction allocation for a
2 school district of the first class.
3 (d) Reduction of wage taxes in a city of the first class.--A
4 city council of a city of the first class shall reduce any tax
5 imposed on the wages of residents and nonresidents under the
6 authority of the act of August 5, 1932 (Sp.Sess., P.L.45,
7 No.45), referred to as the Sterling Act, in a manner consistent
8 with Chapter 7 and in accordance with the following:
9 (1) For residents, by an amount equal to the amount of
10 the property tax reduction allocation received from the
11 Commonwealth pursuant to subsection (b) in an amount not to
12 exceed the limitations set forth in subsection [(a)(3)(iii)]
13 (a.1)(3)(iii) or (a.2)(3)(iii) had such limitations applied.
14 (2) For nonresidents, by any amount equal to the amount
15 of the property tax reduction allocation received from the
16 Commonwealth pursuant to subsection (b) in excess of the
17 limitations set forth in subsection [(a)(3)(iii)]
18 (a.1)(3)(iii) or (a.2)(3)(iii) had such limitations applied.
19 (3) If the amount for distribution under section 503(e)
20 is less than $750,000,000, the tax reductions under
21 paragraphs (1) and (2) shall be a pro rata share of the
22 property tax reduction allocation to a school district of the
23 first class calculated under subsection [(a)] (a.1) or (a.2)
24 at $750,000,000.
25 Section 903. School district choice.
26 (a) General rule.--Within 30 days of receipt of the notice
27 required under section [505(a)(4)] 505(a.1) or (a.2), a board of
28 school directors of a school district, except a school district
29 of the first class, may by resolution reject the property tax
30 reduction allocation provided to the school district pursuant to
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1 Chapter 5.
2 (b) Notice to department.--Within five days after adopting
3 the resolution, the board of school directors shall notify the
4 department in a form and manner prescribed by the department.
5 (c) Effect of resolution.--A school district that adopts a
6 resolution pursuant to subsection (a) shall be ineligible to
7 receive a property tax reduction allocation pursuant to Chapter
8 5 for the upcoming fiscal year, and the school district's
9 property tax reduction allocation shall be deposited into the
10 Property Tax Relief Reserve Fund.
11 Section 2. This act shall take effect immediately.
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