THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY PETRI, JUNE 28, 2011

REFERRED TO COMMITTEE ON FINANCE, JUNE 28, 2011  

AN ACT

Providing for the elimination of property tax for older

Pennsylvanians, for a one-year cap on real property tax

increases for school property tax purposes and for the

elimination of authority to levy real property taxes for the

support of public schools; imposing additional duties on the

Department of Education; providing for the transfer of

certain funds; and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

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

Property Tax Elimination Act.

Section 2.  Legislative intent and purpose.

(1)  The General Assembly, in recognition of the powers

contained in section 2(b)(ii) of Article VIII of the

Constitution of Pennsylvania, which provides for the

establishment as a class or classes of subjects of taxation

on the property or privileges of persons who, because of

poverty, are determined to be in need of special tax

provisions, declares as its legislative intent and purpose to

implement that power under that constitutional provision by

establishing special tax provisions as provided under this

act.

(2)  The General Assembly, having determined that there

are persons within this Commonwealth whose ages and incomes

are such that imposition of a property tax on them would

deprive them of the bare necessities of life, deems it to be

a matter of public policy to provide special tax provisions

for that class of persons to relieve their economic burden.

(3)  The General Assembly finds and declares that a one-

year cap on school district real property taxes and the

elimination of authority to levy real property taxes for

support of the public schools is the most effective means to

promote a more equitable funding method for the support of

public education in this Commonwealth.

Section 3.  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:

"Claimant."  An individual who seeks assistance under section

5.

"Department."  The Department of Revenue of the Commonwealth.

"Household income."  All income received by a claimant and

the claimant's spouse while residing in the homestead during the

calendar year for which a rebate is claimed.

"Program."  The Property Tax Assistance Program.

"Property tax."  A tax levied by a school district on real

property.

"Taxpayer."  Any person or entity who or which is subject to

a levy assessed on real property for the support of any public

school district in this Commonwealth.

Section 4.  Administration.

The department shall have the following powers and duties in

the administration of section 6:

(1)  Implementing the program.

(2)  Prescribing an application form under section 5(c)

(1)(i).

(3)  Promulgating regulations to implement section 6(c) 

and (d).

Section 5.  Administration by Department of Education.

The Department of Education shall have the following powers

and duties:

(1)  In addition to any reports required under section

311 of the act of June 27, 2006 (1st Sp.Sess., P.L.1873,

No.1), known as the Taxpayer Relief Act, the department shall

require all school districts to report the difference between

the revenues raised under the real property tax rate cap

established under section 7(a) of this act for the fiscal

year 2009-2010 and the amount of revenues that would

otherwise be permitted to be generated under the provisions

of the Taxpayer Relief Act.

(2)  Calculate an amount of money necessary to distribute

to each school district the revenue necessary to make up the

difference between the revenues received and the revenues

that would otherwise be permitted to be generated under the

provisions of the Taxpayer Relief Act. If insufficient funds

exist to meet all the required costs, the department shall

reduce each school district allocation pro rata.

(3)  Provide for the payment of each school district's

allocation under paragraph (2).

Section 6.  Property Tax Assistance Program.

(a)  Establishment.--The department shall establish the

Property Tax Assistance Program to assist eligible claimants in

the payment of school property taxes.

(b)  Eligibility.--To be eligible to participate in the

program, a claimant must comply with all of the following:

(1)  Be over 65 years of age.

(2)  Have an annual household income of not more than

$40,000.

(c)  Application.--The following shall apply:

(1)  To participate in the program, a claimant must

submit to the department all of the following:

(i)  An application on a form prescribed by the

department establishing eligibility under subsection (b).

(ii)  The school property tax bill for which

assistance is sought.

(2)  The material under paragraph (1) must be submitted

within 45 days of the date the property tax relating to the

school property tax bill under paragraph (1)(ii) is due.

(d)  Determination.--The following shall apply:

(1)  Within 15 days of receipt of an application under

subsection (c), the department shall determine if the

claimant is eligible or ineligible and shall notify the

claimant of its determination.

(2)  Failure to comply with the time requirement under

paragraph (1) shall be deemed a determination of

ineligibility.

(3)  A determination of ineligibility under paragraph (1)

or (2) shall be subject to 2 Pa.C.S. Ch. 7 Subch. A (relating

to judicial review of Commonwealth agency action).

(e)  Payment.--For each eligible claimant, the department

shall pay the tax bill under subsection (c)(1)(ii) in whole from

the Property Tax Relief Fund. Payment shall be mailed to the

claimant and shall be made out to the school district to which

the claimant is liable for property taxes.

Section 7.  Real property tax rate cap and tax authority

elimination.

(a)  Tax rate limitation.--For the tax year for school

districts beginning after December 31, 2012, no school district

or taxing authority on behalf of a school district shall have

any authority to increase the rate of tax levied and assessed on

real property beyond the rate of tax imposed for the school tax

year beginning immediately after December 31, 2011.

(b)  Elimination of real property tax authority.--For all tax

years beginning after December 31, 2013, no school district and

no taxing authority acting on behalf of a school district shall

have any power to levy and assess any tax on real property for

the support of public education.

Section 8.  Transfers.

(a)  Annual transfer.--The State Treasurer shall transfer

$150,000,000 annually from the State Lottery Fund established by

the act of August 26, 1971 (P.L.351, No.91), known as the State

Lottery Law, to the Property Tax Relief Fund for payment of

claims under this act.

(b)  Single transfer.--On the effective date of this section,

the State Treasurer shall transfer any money in the Property Tax

Relief Reserve Fund to the Property Tax Relief Fund.

(c)  Transfer from Tax Stabilization Reserve Fund.--Effective

September 1, 2012, all moneys in the Tax Stabilization Reserve

Fund shall be transferred to the Property Tax Relief Fund and be

used solely for the purposes of payments to school districts

under section 5.

Section 9.  Repeals.

(1)  The General Assembly declares that the repeals under

paragraphs (2) and (3) are necessary to effectuate this act.

(2)  Article XVII-A of the act of April 9, 1929 (P.L.343,

No.176), known as The Fiscal Code, is repealed.

(3)  Sections 501, 502, 503(c), (d) and (e), 505, 704 and

Chapter 13 of the act of June 27, 2006 (1st Sp.Sess.,

P.L.1873, No.1), known as the Taxpayer Relief Act, are

repealed.

Section 10.  Effective date.

This act shall take effect immediately.