THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY SCAVELLO, CALTAGIRONE, CARROLL, GEIST, GODSHALL, GROVE, HORNAMAN AND PICKETT, JANUARY 25, 2011

REFERRED TO COMMITTEE ON FINANCE, JANUARY 25, 2011  

AN ACT

Providing for supplemental State-funded tax relief; and

establishing the Supplemental Homeowner Property Tax Relief

Fund.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

CHAPTER 1

PRELIMINARY PROVISIONS

Section 1.  Short title.

This act shall be known and may be cited as the Supplemental

Homeowner Property Tax Relief Act.

Section 102.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Allocation maximum."  A numerical value of 0.30.

"Allocation minimum."  A numerical value of 0.225.

"Average daily membership."  As used in the act of March 10,

1949 (P.L.30, No.14), known as the Public School Code of 1949.

"Department."  The Department of Education of the

Commonwealth.

"Equalized millage."  The term shall have the same usage as

defined in section 2501(9.2) of the act of March 10, 1949 (P.L.

30, No.14), known as the Public School Code of 1949.

"Farmstead."  As defined in 53 Pa.C.S. § 8582 (relating to

definitions).

"Fund."  The Supplemental Homeowner Property Tax Relief Fund.

"Homestead."  As defined in 53 Pa.C.S. § 8401 (relating to

definitions).

"Real property tax."  The total dollar value of real property

taxes paid by property owners in a school district determined by

adding the real property taxes collected by or on behalf of the

school district plus all State allocations received pursuant to

the act of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known

as the Taxpayer Relief Act.

"Real property tax liability."  The assessed value of the

real property of the taxpayer multiplied by the millage rate of

the school district.

"Residential property tax."  The dollar value of real

property taxes paid by residential property owners in a school

district, determined by multiplying:

(1)  the real property taxes collected by the school

district; by

(2)  the percentage of the total property value in the

school district classified as residential by the State Tax

Equalization Board.

"School district."  A school district of the first class,

first class A, second class, third class or fourth class.

"School district of the first class."  Includes the governing

body of a city of the first class.

"Secretary."  The Secretary of the Budget of the

Commonwealth.

"Tax Reform Code."  The act of March 4, 1971 (P.L.6, No.2),

known as the Tax Reform Code of 1971.

"Taxpayer."  A person required to pay a real property tax.

CHAPTER 3

SUPPLEMENTAL HOMEOWNER PROPERTY TAX RELIEF FUND

Section 301.  Establishment.

There is hereby established in the State Treasury a

restricted receipts account to be known as the Supplemental

Homeowner Property Tax Relief Fund.

Section 302.  Nonlapse.

The money in the fund is continuously appropriated to the

fund and shall not lapse at the end of any fiscal year.

CHAPTER 5

STATE TAXATION

Section 501.  Sales and use surtax.

In addition to the tax imposed under Article II of the Tax

Reform Code, there shall be a surtax equal to 1.0% imposed on

the purchase price of property and services subject to taxation

under Article II of the Tax Reform Code. The surtax shall be in

addition to the tax imposed under Article II of the Tax Reform

Code.

Section 502.  Construction.

The sales and use surtax imposed by this chapter shall be in

addition to any tax imposed under Article II of the Tax Reform

Code. The provisions of Article II of the Tax Reform Code shall

apply to the definitions, imposition and implementation of the

surtax.

Section 503.  Computation of sales and use tax.

Within 30 days of the effective date of this section, the

Department of Revenue shall establish a schedule for the

computation of the State sales and use tax and the State sales

and use surtax as established under this chapter. The Department

of Revenue shall publish the schedule providing for the

computation of the State sales and use tax and the State sales

and use surtax in the next succeeding publication of the

Pennsylvania Bulletin following establishment of the schedule.

Section 504.  Personal income surtax.

In addition to the tax imposed under Article III of the Tax

Reform Code, there shall be a surtax equal to 0.22% imposed on

the taxable income of resident and nonresident individuals as

provided for under Article III of the Tax Reform Code. The

surtax shall be in addition to the tax imposed under Article III

of the Tax Reform Code.

Section 505.  Construction.

The personal income surtax imposed by this chapter shall be

in addition to any tax imposed under Article III of the Tax

Reform Code. The provisions of Article III of the Tax Reform

Code shall apply to the definitions, imposition and

implementation of the surtax.

Section 506.  Notification of personal income surtax.

The Department of Revenue shall publish the personal income

tax rate along with the personal income surtax rate in the next

succeeding publication of the Pennsylvania Bulletin following

the effective date of this section.

Section 507.  Transfer to fund.

Within 30 days of the close of any calendar month, all

revenue generated in the previous month from the sales and use

surtax and personal income surtax imposed under this chapter

shall be transferred to the fund.

CHAPTER 7

FORMULA

Section 701.  Certification.

(a)  Initial.--By April 15, 2011, the secretary shall certify

the total amount of revenue that is reasonably projected to be

deposited into the fund for the period through June 30, 2012.

(b)  Annual.--Beginning by April 15, 2012, and each April 15

thereafter, the secretary shall certify the total amount of

revenue that is reasonably expected to be deposited into the

fund during the immediately following fiscal year.

(c)  Excess.--If the actual revenue deposited into the fund

in any one fiscal year exceeds the amount certified in this

section, any revenue in excess of projections shall remain in

the fund and shall be included in the certification for the

subsequent fiscal year.

(d)  Shortage.--If the actual revenue deposited into the fund

in any one fiscal year is less than the amount certified in this

section, the amount certified for the subsequent fiscal year

shall be reduced by the difference between the amount certified

and the actual revenue deposited.

Section 702.  Notification.

By April 20, 2011, and each April 20 thereafter, the

secretary shall notify the department of the amount certified

pursuant to section 701 for calculation of the allocation for

each school district under section 703.

Section 703.  State allocation.

(a)  Calculation.--The department shall calculate the State

allocation pursuant to this chapter for each school district as

follows:

(1)  For the 2011-2012 fiscal year:

(i)  Multiply the school district's 2008-2009 average

daily membership by the school district's 2008-2009

equalized millage.

(ii)  Multiply the product under subparagraph (i) by

the dollar amount necessary to allocate all of the money

in the fund as certified under section 701.

(iii)  If the allocation under this paragraph is less

than the product of the residential property taxes

collected during the 2008-2009 fiscal year and the

allocation minimum for a school district, the school

district shall receive an additional amount so that the

total allocation under this paragraph is equal to the

product of the residential property taxes collected

during the 2008-2009 fiscal year and the allocation

minimum.

(iv)  If the allocation under this paragraph is

greater than the product of the residential property

taxes collected during the 2008-2009 fiscal year and the

allocation maximum for a school district, the school

district shall receive a total allocation equal to the

product of the residential property taxes collected

during the 2008-2009 fiscal year and the allocation

maximum.

(2)  For subsequent fiscal years:

(i)  Multiply the school district's average daily

membership for the third fiscal year immediately

preceding the fiscal year for which the allocation is

being made by the school district's equalized millage for

the third fiscal year immediately preceding the fiscal

year for which the allocation is being made.

(ii)  Multiply the product under subparagraph (i) by

the dollar amount necessary to allocate all of the money

in the fund as certified under section 701.

(iii)  If the allocation under this paragraph is less

than the product of the residential property taxes

collected during the third fiscal year immediately

preceding the fiscal year for which the allocation is

being made and the allocation minimum for a school

district, the school district shall receive an additional

amount so that the total allocation under this paragraph

is equal to the product of the residential property taxes

collected during the third fiscal year immediately

preceding the fiscal year for which the allocation is

being made and the allocation minimum.

(iv)  If the allocation under this paragraph is

greater than the product of the residential property

taxes collected during the third fiscal year immediately

preceding the fiscal year for which the allocation is

being made and the allocation maximum for a school

district, the school district shall receive a total

allocation equal to the product of the residential

property taxes collected during the third fiscal year

immediately preceding the fiscal year for which the

allocation is being made and the allocation maximum.

(b)  Notice.--By May 15, 2011, and each May 15 thereafter,

the department shall notify each school district of the amount

of the State allocation it is eligible to receive.

(c)  Payment.--For each fiscal year commencing after June 30,

2011, the department shall pay from the fund to each school

district a State allocation, which shall be divided into two

payments. The first payment, which shall be equal to 80% of the

district's State allocation, shall be made on the last Thursday

of August. The second payment, which shall equal the remainder

of the State allocation, shall be made on the last Thursday of

October.

(d)  Cities of the first class.--In accordance with 53

Pa.C.S. § 8584 (relating to administration and procedure), the

State allocation for a school district of the first class shall

be paid by the department to a city of the first class for use

by the city for homestead and farmstead exclusions.

CHAPTER 9

HOMESTEAD AND FARMSTEAD EXCLUSION

Section 901.  Homestead and farmstead exclusion process.

(a)  Calculation.--Each year in which a school district

receives a local property tax reduction allocation pursuant to

this act, the school district shall calculate a homestead and

farmstead exclusion that is equal to the lesser of:

(1)  the maximum amount of homestead or farmstead

exclusion authorized by 53 Pa.C.S. § 8586 (relating to

limitations); or

(2)  the amount of State allocation the district is

eligible to receive.

(b)  Resolution.--The school district shall adopt a

resolution implementing the homestead and farmstead exclusion

calculated under subsection (a). The resolution shall state the

maximum amount of homestead or farmstead exclusion an owner of a

homestead or farmstead may receive. A resolution may not

authorize a homestead or farmstead exclusion that exceeds the

amount authorized by 53 Pa.C.S. § 8586.

Section 902.  School district tax notices.

(a)  Tax notice.--School districts shall itemize the

homestead and farmstead exclusion on tax bills sent to homestead

and farmstead owners, indicating the original amount of real

property tax liability, the amount of the exclusion and the net

amount of tax due after the exclusion is applied. The tax bill

shall be easily understandable and include a notice pursuant to

subsection (b).

(b)  Notice of property tax relief.--School districts shall

include with the homestead or farmstead owner's tax bill a

notice that the tax bill includes a homestead or farmstead

exclusion.

CHAPTER 11

DEBT

Section 1101.  Borrowing.

Tax anticipation notes may be issued under Article XVI-A of

the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal

Code, in anticipation of revenue under this act that is

authorized to be transferred to the fund under section 507.

CHAPTER 52

MISCELLANEOUS PROVISIONS

Section 5201.  Effective date.

This act shall take effect as follows:

(1)  Sections 501, 502 and 503 shall take effect June 1,

2011.

(2)  Sections 504, 505 and 506 shall take effect July 1,

2011.

(3)  The remainder of this act shall take effect

immediately.