PRINTER'S NO. 1862
No. 1328 Session of 2008
INTRODUCED BY FONTANA, WOZNIAK, EARLL AND WASHINGTON,
MARCH 26, 2008
REFERRED TO FINANCE, MARCH 26, 2008
AN ACT
1 Amending the act of November 26, 1997 (P.L.508, No.55), entitled
2 "An act providing for the tax exemption of institutions of
3 purely public charity; exempting real property owned by
4 State-related universities or Federal Government
5 instrumentalities from taxation; providing for unfair
6 competition; imposing penalties; and making repeals," further
7 providing for legislative findings; and providing for the
8 definition of "governing body," for other contributions and
9 for partial property tax exemption.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Section 2(a) of the act of November 26, 1997
13 (P.L.508, No.55), known as the Institutions of Purely Public
14 Charity Act, is amended by adding a paragraph to read:
15 Section 2. Legislative intent.
16 (a) Findings.--The General Assembly finds and declares as
17 follows:
18 * * *
19 (8) It is necessary and proper for local governments to
20 have the option to ensure the continued viability of certain
21 essential services it provides or causes to be provided by
1 requiring a partial contribution from tax-exempt properties
2 toward the cost of the services.
3 * * *
4 Section 2. Section 3 of the act is amended by adding a
5 definition to read:
6 Section 3. Definitions.
7 The following words and phrases when used in this act shall
8 have the meanings given to them in this section unless the
9 context clearly indicates otherwise:
10 * * *
11 "Governing body." Any city council, borough council,
12 incorporated town council, board of county commissioners or
13 their home rule successor in function, board of township
14 commissioners, board of township supervisors, governing council
15 of a home rule municipality or optional plan municipality or
16 governing council of a similar general purpose unit of
17 government which may be created by statute after the effective
18 date of this definition.
19 * * *
20 Section 3. The act is amended by adding a section to read:
21 Section 7.1. Other contributions.
22 (a) Authorization.--Notwithstanding any other provision of
23 law, in lieu of executing voluntary agreements under section 7,
24 the governing body of a municipality may, through ordinance or
25 resolution, impose the fees authorized under subsection (b) and
26 the limited real estate tax authorized under subsection (c) on
27 each property for which an exemption from real property tax is
28 claimed by an institution of purely public charity.
29 (b) Essential services fee.--The governing body of a
30 municipality may impose an essential services fee annually on
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1 each property for which an exemption from real property tax is
2 claimed by an institution of purely public charity. The fee
3 shall not exceed $100 per every 1,000 square feet of any and all
4 structures on a parcel claimed to be exempt, except that the fee
5 shall not be imposed on the first 5,000 square feet of all
6 structures, in the aggregate, on such a parcel and that the
7 governing body may, in its discretion, increase the fee on an
8 annual basis by an amount not to exceed 5%. No fee imposed on a
9 tax-exempt property under this section may exceed 50% of the
10 property's total real estate tax liability if the property was
11 subject to the municipality's real property tax based upon the
12 property's assessed value. No fee authorized under this
13 subsection shall be imposed upon property subject to the limited
14 real estate tax under subsection (c).
15 (c) Limited real estate tax.--The governing body may impose
16 a limited real estate tax on real property purchased by an
17 institution of purely public charity after December 31, 2008.
18 The tax shall be implemented as follows:
19 (1) In the first taxable year in which a real estate tax
20 is imposed, the tax shall be imposed on 10% of the assessed
21 value of the property.
22 (2) In the second taxable year in which a real estate
23 tax is imposed, the tax shall be imposed on 20% of the
24 assessed value of the property.
25 (3) In the third taxable year in which a real estate tax
26 is imposed, the tax shall be imposed on 30% of the assessed
27 value of the property.
28 (4) In the fourth taxable year in which a real estate
29 tax is imposed, the tax shall be imposed on 40% of the
30 assessed value of the property.
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1 (5) In the fifth taxable year in which a real estate tax
2 is imposed, and each taxable year thereafter, the tax shall
3 be imposed on 50% of the assessed value of the property.
4 (d) Enactment of ordinance or resolution.--
5 (1) Prior to adopting the ordinance, the governing body
6 shall adopt a proposed ordinance which shall include all of
7 the following information:
8 (i) The content of the ordinance that will be
9 enacted, including the effective date.
10 (ii) A statement that the proposed ordinance is
11 being adopted pursuant to and subject to the requirements
12 of this section.
13 (2) The governing body shall make the proposed ordinance
14 available for public inspection at least 20 days prior to its
15 adoption and shall hold at least one public hearing on the
16 proposed ordinance prior to its adoption.
17 (3) The governing body must give public notice of its
18 intent to adopt the proposed ordinance. Publication of the
19 notice shall be made by advertisement once a week for three
20 weeks in a newspaper of general circulation within the
21 municipality if there is a newspaper of general circulation
22 and, if there is not, the publication shall be made in a
23 newspaper of general circulation within the county in which
24 the advertising municipality is located.
25 (e) Administration.--
26 (1) The governing body may adopt regulations regarding
27 the application process, calculation and payment of the
28 essential services fee and the enforcement of this section.
29 (2) The governing body shall develop a uniform form and
30 instructions to be used by the municipality in imposing the
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1 essential services fee authorized under this section. The
2 form shall require the applicant to do all of the following:
3 (i) Identify all properties claimed by the applicant
4 to be tax exempt.
5 (ii) Provide the legal basis for the tax exemption
6 for each property.
7 (iii) Provide a description of each property,
8 including the total gross square footage of all
9 structures thereon.
10 (f) Prohibition.--Nothing in this section shall be construed
11 to permit a governing body to impose an essential service fee on
12 any of the following:
13 (1) Property owned by the Commonwealth.
14 (2) Property owned by a political subdivision of the
15 Commonwealth.
16 (3) Property owned by the Commonwealth and local
17 authorities.
18 (4) Property owned by police, fire, including volunteer
19 fire and relief, public works or emergency services.
20 (5) Property owned by the Federal Government.
21 (6) Property subject to partial taxation under section
22 7.2.
23 (g) Uniformity.--The essential services fee and the limited
24 real estate tax imposed under this section shall apply to all
25 institutions of purely public charity owning tax-exempt property
26 within the municipality to the extent the imposition would not
27 conflict with subsection (h).
28 (h) Existing voluntary agreements.--Nothing in this section
29 shall be construed to affect, impair, terminate or supersede any
30 contract, agreement or other arrangement in effect on or before
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1 the effective date of this section between an institution and a
2 political subdivision which authorizes or requires payment of
3 taxes, amounts in lieu of taxes or other charges or fees for the
4 services of a political subdivision.
5 Section 4. This act shall take effect in 60 days.
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