Regular Session 2015-2016 House Bill 0860 P.N. 1160

PRINTER'S NO. 1160

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

860

Session of

2015

INTRODUCED BY SAYLOR, GROVE, HEFFLEY, GILLESPIE, PHILLIPS-HILL,

KLUNK, REGAN, CUTLER, DIAMOND, DUNBAR, FEE, GINGRICH,

GREINER, A. HARRIS, HELM, HICKERNELL, IRVIN, MENTZER,

D. PARKER, RADER, REED, SANTORA, TALLMAN, ZIMMERMAN, GIBBONS

AND HAHN, APRIL 10, 2015

REFERRED TO COMMITTEE ON FINANCE, APRIL 10, 2015

AN ACT

Establishing the School District Millage Rate Reduction Fund and

the School District Homestead and Farmstead Relief Fund;

providing for additional taxation; and repealing provisions

of the Taxpayer Relief Act.

TABLE OF CONTENTS

Chapter 1. Preliminary Provisions

Section 101. Short title.

Section 102. Definitions.

Section 103. School District Millage Rate Reduction Fund.

Section 104. School District Homestead and Farmstead Relief

Fund.

Chapter 3. School Property Tax Reductions from Statewide

Sources

Section 301. Additional personal income tax imposed.

Section 302. Additional sales and use tax imposed.

Chapter 5. State Funds Formulae

Subchapter A. Preliminary Provisions

Section 501. Scope of chapter.

Section 502. Certifications.

Section 503. Disclosure of relief.

Section 504. Information collection and verification.

Subchapter B. State Allocation Distribution for Millage Rate

Reductions

Section 511. Scope of subchapter.

Section 512. State millage rate reduction allocation.

Section 513. Mandatory use of State millage rate reduction

allocation to reduce rate of real property tax.

Subchapter C. State Allocation Distribution to Fund for

Homestead and Farmstead Exclusions

Section 521. Scope of subchapter.

Section 523. State homestead and farmstead allocation.

Section 524. Disposition of State homestead and farmstead

exclusion allocation.

Chapter 9. Miscellaneous Provisions

Section 901. Additional provisions.

Section 902. Repeals.

Section 903. Effective date.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

CHAPTER 1

PRELIMINARY PROVISIONS

Section 101. Short title.

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

Property Tax Reform 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

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context clearly indicates otherwise:

"Average daily membership." The term as defined in section

2501 of the act of March 10, 1949 (P.L.30, No.14), known as the

Public School Code of 1949.

"Board of school directors." The term includes the

following:

(1) A board of school directors of a school district of

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

(2) A city council of a city of the first class.

"Equalized millage." The term 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).

"Farmstead property." The term as defined in 53 Pa.C.S. §

8582 (relating to definitions).

"Homestead." The term defined in 53 Pa.C.S. § 8401 (relating

to definitions).

"Homestead property." The term as defined in 53 Pa.C.S. §

8401 (relating to definitions).

"Index." The term defined in section 302 of the Taxpayer

Relief Act.

"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 State millage rate reduction

allocations, State homestead and farmstead exclusion allocations

and State property tax reduction allocations. The term does not

include an allocation under section 505(d) of the act of June

27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer

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Relief Act.

"Residential property tax." The dollar value of real

property taxes paid by residential property owners in a school

district, determined by multiplying the real property taxes

collected by the school district times the percentage of the

total property value in the school district classified as

residential by the State Tax Equalization Board for the calendar

year in which the tax year began.

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

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

"School District Homestead and Farmstead Relief Fund." The

fund established in section 104.

"School District Millage Rate Reduction Fund." The fund

established in section 103.

"Secretary." The Secretary of the Budget of the

Commonwealth.

"State homestead and farmstead exclusion allocation." The

allocation under section 523.

"State millage rate reduction allocation." The allocation

under section 512.

"State property tax reduction allocation." A payment made

under section 505 of the Taxpayer Relief Act.

"State Treasurer." The State Treasurer 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 Relief Act." The act of June 27, 2006 (1st

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

Section 103. School District Millage Rate Reduction Fund.

(a) Establishment.--The School District Millage Rate

Reduction Fund is established as a special fund in the State

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Treasury. The fund shall not lapse.

(b) Purpose.--Money in the fund shall be distributed to

school districts under section 512 and shall be used exclusively

for the purposes enumerated in this act.

under section 301 shall be deposited into the fund.

(d) Transfer from the fund.--

(1) In order to ensure that the General Fund is not

negatively impacted by the imposition of the tax under

section 301, not later than June 30, 2017, and each June 30

thereafter, an amount equal to the refund reimbursement

factor multiplied by the amount of refunds issued under

Article III of the Tax Reform Code for tax years in which the

tax imposed under section 301 is applicable shall be

transferred from the fund to the General Fund.

(2) For the purpose of this subsection, "refund

reimbursement factor" means a fraction equal to the rate of

tax imposed under section 301 divided by the sum of the rate

of tax imposed under section 301 plus the rate of tax imposed

under Article III of the Tax Reform Code.

Section 104. School District Homestead and Farmstead Relief

Fund.

(a) Establishment.--The School District Homestead and

Farmstead Relief Fund is established as a special fund in the

State Treasury. The fund shall not lapse.

(b) Purpose.--Money in the fund shall be distributed to

school districts under section 523 and shall be used exclusively

for the purposes enumerated in this act.

shall be deposited into the fund.

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(d) Transfers.--Upon authorization by the secretary in order

to comply with section 502(a)(3), the State Treasurer shall

transfer from the fund to the School District Millage Rate

Reduction Fund an amount sufficient to ensure that the total

amount of revenue in the School District Millage Rate Reduction

Fund for a fiscal year is not less than the amount distributed

from the previous fiscal year.

CHAPTER 3

SCHOOL PROPERTY TAX REDUCTIONS

FROM STATEWIDE SOURCES

Section 301. Additional personal income tax imposed.

(a) Personal income tax.--For taxable years beginning after

December 31, 2015, there is imposed an additional tax upon each

class of income as defined in Article III of the Tax Reform

Code. The tax shall be calculated, collected and paid over to

the Commonwealth in the same manner as provided in Article III

of the Tax Reform Code.

(b) Rate.--The tax imposed by subsection (a) shall be at the

rate of 0.63%.

shall deposit taxes collected under this section in the School

District Millage Rate Reduction Fund. The amount shall be the

sum of the taxes collected under this section and Article III of

the Tax Reform Code multiplied by a fraction equal to the rate

of tax under section 301 divided by the sum of the rate of tax

under section 301 and the rate of tax under section 302 of the

Tax Reform Code.

(d) Rules and regulations.--The rules and regulations of the

Department of Revenue promulgated under Article III of the Tax

Reform Code, or any other act, shall be applicable to the tax

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imposed by this section to the extent that they are applicable.

(e) Construction.--The tax imposed by this section shall be

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

Reform Code or section 321(c) of the Taxpayer Relief Act. The

provisions of Article III of the Tax Reform Code shall apply to

the tax imposed by this section.

Section 302. Additional sales and use tax imposed.

(a) Additional taxation.--The tax imposed by this section

shall be in addition to any tax imposed under Article II or II-B

of the Tax Reform Code, section 503 of the act of June 5, 1991

(P.L.9, No.6), known as the Pennsylvania Intergovernmental

Cooperation Authority Act for Cities of the First Class, or

section 3152-B of the act of July 28, 1953 (P.L.73, No.230),

known as the Second Class County Code. The provisions of Article

II of the Tax Reform Code shall apply to the tax imposed by this

section.

(b) Sales tax.--Beginning January 1, 2016, there is imposed

a tax upon each separate sale at retail of tangible personal

property or services. The tax under this subsection shall be

imposed upon the purchase price. The tax shall be collected by

the vendor from the purchaser and shall be paid over to the

Commonwealth in the same manner as provided in Article II of the

Tax Reform Code.

tax upon the use of tangible personal property purchased at

retail and on services purchased at retail. The tax under this

subsection shall be imposed upon the purchase price. The tax

shall be paid over to the Commonwealth by the person who makes

such use. The tax imposed under this subsection shall not be

paid over to the Commonwealth by any person who has paid the tax

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imposed under subsection (b) or has paid the tax imposed under

this subsection to the vendor with respect to such use.

(d) Hotel tax.--Beginning January 1, 2016, there is hereby

imposed an excise tax on the rent upon every occupancy of a room

or rooms in a hotel, as defined in Article II of the Tax Reform

Code. The tax shall be collected by the operator or owner from

the occupant and paid over to the Commonwealth.

(e) Rate.--The tax imposed by subsections (b), (c) and (d)

shall be at a rate of 1%.

(f) Tax computation.--The tax imposed under subsections (b),

(1) If the purchase price is 50¢ or less, no tax shall

be collected.

(2) If the purchase price is 51¢ or more but less than

$1.51, 1¢ shall be collected.

(3) If the purchase price is $1.51 or more but less than

$2.51, 2¢ shall be collected.

(4) If the purchase price is $2.51 or more but less than

$3.51, 3¢ shall be collected.

(5) If the purchase price is $3.51 or more but less than

$4.51, 4¢ shall be collected.

(6) If the purchase price is $4.51 or more but less than

$5.51, 5¢ shall be collected.

(7) If the purchase price is $5.51 or more but less than

$6.51, 6¢ shall be collected.

(8) If the purchase price is $6.51 or more but less than

$7.51, 7¢ shall be collected.

(9) If the purchase price is $7.51 or more but less than

$8.51, 8¢ shall be collected.

(10) If the purchase price is $8.51 or more but less

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than $9.51, 9¢ shall be collected.

(11) If the purchase price is $9.51 or more but less

than $10.01, 10¢ shall be collected.

(12) If the purchase price is more than $10, 1% of each

$10 purchase price plus the above bracket charges upon any

fractional part of a $10 increment shall be collected.

(g) Deposit of tax proceeds.--The Department of Revenue

shall deposit taxes collected under this section in the School

District Homestead and Farmstead Relief Fund. The amount shall

be one-seventh of the sum of the amount collected under this

section and Article II of the Tax Reform Code.

(h) Rules and regulations.--The rules and regulations of the

Department of Revenue which are promulgated under Article II of

the Tax Reform Code, or any other act, shall be applicable to

the tax imposed by this section to the extent that they are

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

Code.

(i) Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Purchase price." As defined in Article II of the Tax Reform

Code.

"Sale at retail." As defined in Article II of the Tax Reform

Code.

"Tangible personal property." As defined in Article II of

the Tax Reform Code.

CHAPTER 5

STATE FUNDS FORMULAE

SUBCHAPTER A

PRELIMINARY PROVISIONS

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Section 501. Scope of chapter.

This chapter relates to the allocation of State funds for the

dollar-for-dollar reduction of school district property taxes

through millage rate reductions and funding homestead property

exclusions.

Section 502. Certifications.

(a) Secretary certifications.--

(1) Not later than April 15, 2016, and April 15 of each

year thereafter, the secretary shall certify all of the

following:

(i) The total amount of revenue in the School

District Millage Rate Reduction Fund and the School

District Homestead and Farmstead Relief Fund. In

calculating the total amount of revenue in each of the

funds, the secretary shall take into account all of the

following:

(A) For the certification to be completed not

later than April 15, 2016, revenue which:

(I) has been deposited into the fund prior

to the date of the certification; and

(II) is reasonably projected to be deposited

into the fund during the six months following the

date on which the certification is made; and

(B) For certifications in subsequent fiscal

years:

(I) revenue which has been deposited into

the fund during the six months prior to the date

on which the certification is made; and

(II) revenue enumerated in clause (A)(II).

(ii) In certifying the amount available for

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distribution from each fund under subsection (c), the

secretary shall only certify an amount that is

sustainable in subsequent years.

(2) If the actual revenue deposited into each of the

funds during the six months following the date on which the

certification is made exceeds projections, any revenue in

excess of projections shall remain in that fund and may be

included in the certification for the subsequent fiscal year.

(3) The secretary may not certify an amount of revenue

in the School District Millage Rate Reduction Fund which is

less than the dollar amount certified in the previous fiscal

year.

(b) Notification of Department of Education.--By April 20,

2016, and April 20 each year thereafter, the secretary shall

notify the Department of Education whether it is authorized to

provide school districts with State millage rate reduction

allocations and State homestead and farmstead exclusion

allocations under Subchapters B and C.

(1) For fiscal year 2016-2017 and for each fiscal year

thereafter, the secretary shall authorize the Department of

Education to distribute from the School District Millage Rate

Reduction Fund the amount certified for the fund under

subsection (a)(1).

(2) For fiscal year 2016-2017 and for each fiscal year

thereafter, the secretary shall authorize the Department of

Education to distribute from the School District Homestead

and Farmstead Relief Fund the difference between the amount

certified for the fund under subsection (a)(1)(i) and the

amount sufficient to fund additional reimbursements to

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eligible school districts under section 522. The amount

deducted under this subsection shall be calculated based on

the information provided by school districts under section

503(b)(2) of the Taxpayer Relief Act.

Section 503. Disclosure of relief.

(a) Tax notice.--A school district which receives a State

property tax reduction allocation, a State homestead and

farmstead exclusion allocation or a State millage rate reduction

allocation shall itemize the total homestead and farmstead

exclusion and millage rate reductions on tax bills sent to

taxpayers. At minimum, a tax bill must show the tax liability

which was due for the property in the previous tax year, the

amount of the applicable exclusion and the amount of reduced tax

liability due to rate reductions. The tax bill shall be easily

understandable and include a notice under subsection (b).

(b) Notice of property tax relief.--

(1) For a taxpayer who is a homestead property or

farmstead property owner, the tax bill must include a notice

that the tax bill includes a homestead or farmstead exclusion

and a millage rate reduction. The notice shall, at a minimum,

be in the following form:

NOTICE OF PROPERTY TAX RELIEF

Your enclosed tax bill includes a tax reduction for your

homestead and/or farmstead property. As an eligible

homestead and/or farmstead property owner, you have

received tax relief through a homestead and/or farmstead

exclusion which has been provided under the School

Property Tax Reform Act and the Taxpayer Relief Act, two

laws passed by the Pennsylvania General Assembly designed

to reduce your property taxes. Your tax bill also

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includes a reduction in the tax rate on real property

provided through the Education Finance Reform Act.

(2) For a taxpayer that is not a homestead property or

farmstead property owner, the tax bill must include a notice

that the tax bill includes a millage rate reduction. The

notice shall, at a minimum, be in the following form:

NOTICE OF PROPERTY TAX RELIEF

Your enclosed tax bill includes a reduction in the tax

rate on real property. This reduction has been provided

under the School Property Tax Reform Act, a law passed by

the Pennsylvania General Assembly designed to reduce your

property taxes.

Section 504. Information collection and verification.

(a) Information collection.--The Department of Education

shall develop an information collection policy to gather

information which will allow the department to confirm that

State millage rate reduction allocations and State homestead and

farmstead exclusion allocations are being used for the purposes

enumerated in this act and that State property tax reduction

allocations are being used for the purposes enumerated in the

Taxpayer Relief Act. The information collection policy may

include requiring a school district to provide information in

the uniform form prepared under section 312(b) of the Taxpayer

Relief Act that would allow the Department of Education to

comply with the requirements of this section.

(b) Verification.--The Department of Education shall develop

procedures to routinely analyze the information collected under

subsection (a) to identify a school district which is not using

a State millage rate reduction allocation or State homestead and

farmstead exclusion allocation for the purposes enumerated in

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this act or is using a State property tax reduction allocation

for the purposes enumerated in the Taxpayer Relief Act.

SUBCHAPTER B

STATE ALLOCATION DISTRIBUTION

FOR MILLAGE RATE REDUCTIONS

Section 511. Scope of subchapter.

This subchapter relates to the allocation of State funds

generated by the additional tax under section 301 for the

dollar-for-dollar reduction of school district property taxes

through millage rate reductions.

Section 512. State millage rate reduction allocation.

(a) Administration.--The Department of Education shall

calculate the State millage rate reduction allocation for each

school district as follows:

(1) For the 2016-2017 fiscal year:

(i) Multiply the school district's 2012-2013

equalized millage by the dollar amount necessary to

allocate all the money in the School District Millage

Rate Reduction Fund as authorized under section 502(c).

(ii) If the allocation under this paragraph is less

than the product of the real property taxes collected

during the 2012-2013 fiscal year and a numerical value of

0.12 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 real

property taxes collected during the 2012-2013 fiscal year

and a numerical value of 0.12.

(iii) If the allocation under this paragraph is

greater than the product of the real property taxes

collected during the 2012-2013 fiscal year and a

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numerical value of 0.19 for a school district, the school

district shall receive a total allocation equal to the

product of the real property taxes collected during the

2012-2013 fiscal year and a numerical value of 0.19.

(2) For the 2017-2018 fiscal year:

(i) Multiply the school district's equalized millage

for the 2013-2014 fiscal year by the dollar amount

necessary to allocate all the money in the School

District Millage Rate Reduction Fund as authorized under

section 502(c).

(ii) If the allocation under this paragraph is less

than the product of the real property taxes collected

during the 2013-2014 fiscal year and a numerical value of

0.2 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 real

property taxes collected during the 2013-2014 fiscal year

and a numerical value of 0.2.

(iii) If the allocation under this paragraph is

greater than the product of the real property taxes

collected during the 2013-2014 fiscal year and a

numerical value of 0.3 for a school district, the school

district shall receive a total allocation equal to the

product of the real property taxes collected during the

2013-2014 fiscal year and a numerical value of 0.3.

(3) For all fiscal years beginning after the 2017-2018

fiscal year:

(i) Multiply the allocation from the previous fiscal

year by the percentage change in the amount to be

collected from the tax under section 301, except that the

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percentage calculated under this paragraph may not be

less than zero.

(ii) Add the amount in subparagraph (i) to the

allocation from the previous fiscal year.

(b) Notification.--The Department of Education shall notify

each school district of the amount of its State millage rate

reduction allocation not later than May 1 of each year.

and each fiscal year thereafter, except as set forth in

subsection (d), the Department of Education shall pay from the

School District Millage Rate Reduction Fund to each eligible

school district a State millage rate reduction allocation equal

to the amount calculated under subsection (a). The State millage

rate allocation shall be divided into two equal payments, which

shall be made on the fourth Thursday of August and the fourth

Thursday of October.

(d) First class school districts.--The State millage rate

reduction allocation for a school district of the first class

shall be paid by the Department of Education to a city of the

first class for use for a school district of the first class as

prescribed in section 513.

Section 513. Mandatory use of State millage rate reduction

allocation to reduce rate of real property tax.

(a) Reduction in first fiscal year.--For the first fiscal

year in which a school district receives a State millage rate

reduction allocation and except for a tax increase which is

approved by the electorate under section 333(c) of the Taxpayer

Relief Act, a board of school directors may not adopt a final

budget under section 312 of the Taxpayer Relief Act which

includes a tax on real property which would generate revenue

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greater than:

(1) the sum of the maximum amount of revenue which could

be raised by the allowable increase under the index and the

amount permitted under the referendum exceptions in section

333(f) or (n) of the Taxpayer Relief Act, minus;

(2) the school district's State millage rate reduction

allocation.

(b) Subsequent reductions and limitations.--For the second

fiscal year in which a school district receives a State millage

rate reduction allocation and for all fiscal years in which a

school district receives a State millage rate reduction

allocation thereafter and except for a tax increase which is

approved by the electorate under section 333(c) of the Taxpayer

Relief Act, a board of school directors may not adopt a final

budget under section 312 of the Taxpayer Relief Act which

includes a tax on real property which would generate revenue

greater than:

(1) the sum of the maximum amount of revenue which could

be raised by the allowable increase under the index and the

amount permitted under the referendum exceptions in section

333(f) or (n) of the Taxpayer Relief Act, minus;

(2) the increase in the school district's State millage

rate reduction allocation from the previous fiscal year.

otherwise subject to this section shall remain subject to the

provisions of section 333 of the Taxpayer Relief Act.

SUBCHAPTER C

STATE ALLOCATION DISTRIBUTION TO FUND

FOR HOMESTEAD AND FARMSTEAD EXCLUSIONS

Section 521. Scope of subchapter.

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This subchapter relates to the allocation of State funds

generated by the additional tax under section 302 for the

dollar-for-dollar reduction of school district property taxes

through the funding of homestead and farmstead exclusions.

Section 522. Additional reimbursement.

In addition to the amount calculated under section 523(c), a

school district shall receive a payment equal to the aggregate

amount of the tax credited under section 324(2) of the Taxpayer

Relief Act minus its reimbursement under section 324(4) of the

Taxpayer Relief Act.

Section 523. State homestead and farmstead exclusion

allocation.

(a) Administration.--The Department of Education shall

calculate the State homestead and farmstead exclusion allocation

for each school district, except the portion which is calculated

under section 522, as follows:

(1) For the 2016-2017 fiscal year:

(i) Multiply the school district's 2012-2013 average

daily membership by the school district's 2012-2013

equalized millage.

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

the dollar amount necessary to allocate all the money in

the School District Homestead and Farmstead Relief Fund

as authorized under section 502(c).

(iii) If the allocation under this paragraph is less

than the product of the residential property taxes

collected during the 2012-2013 fiscal year and a

numerical value of 0.1 for a school district, the school

district shall receive an additional amount so that the

total allocation under this paragraph is equal to the

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product of the residential property taxes collected

during the 2012-2013 fiscal year and a numerical value of

0.1.

(iv) If the allocation under this paragraph is

greater than the product of the residential property

taxes collected during the 2012-2013 fiscal year and a

numerical value of 0.16 for a school district, the school

district shall receive a total allocation equal to the

product of the residential property taxes collected

during the 2012-2013 fiscal year and a numerical value of

0.16.

(2) For subsequent fiscal years:

(i) Multiply the school district's average daily

membership for the fourth fiscal year immediately

preceding the fiscal year for which the allocation is

being made by the school district's equalized millage for

the fourth 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 the money in

the School District Homestead and Farmstead Relief Fund

as authorized under section 502(c).

(iii) If the allocation under this paragraph is less

than the product of the residential property taxes

collected during the fourth fiscal year immediately

preceding the fiscal year for which the allocation is

being made and a numerical value of 0.15 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

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collected during the fourth fiscal year immediately

preceding the fiscal year for which the allocation is

being made and a numerical value of 0.15.

(iv) If the allocation under this paragraph is

greater than the product of the residential property

taxes collected during the fourth fiscal year immediately

preceding the fiscal year for which the allocation is

being made and a numerical value of 0.25 for a school

district, the school district shall receive a total

allocation equal to the product of the residential

property taxes collected during the fourth fiscal year

immediately preceding the fiscal year for which the

allocation is being made and a numerical value of 0.25.

(b) Notification.--The Department of Education shall notify

each school district of the amount of its State homestead and

farmstead exclusion allocation not later than May 1 of each

year.

and each fiscal year thereafter, except as set forth in

subsection (d), the Department of Education shall pay to each

eligible school district a State homestead and farmstead

exclusion allocation equal to the amount calculated under

subsection (a) plus the payment as calculated under section 522.

The State homestead and farmstead exclusion allocation shall be

divided into two equal payments, which shall be made on the

fourth Thursday of August and the fourth Thursday of October.

(d) First class school districts.--The State homestead and

farmstead exclusion allocation for a school district of the

first class shall be paid by the Department of Education to a

city of the first class for use for a school district of the

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first class as prescribed in section 524.

Section 524. Disposition of State homestead and farmstead

exclusion allocation.

(a) Homestead and farmstead exclusions.--A board of school

directors for a school district which receives a State homestead

and farmstead exclusion allocation shall use the allocation to

fund exclusions for homestead and farmstead property or, if

applicable, may utilize any revenue in excess of the revenue

required to fund the maximum homestead and farmstead exclusions

authorized under 53 Pa.C.S. § 8586 (relating to limitations) to

reduce the property tax rate on all properties subject to the

property tax in the school district.

(b) Homestead and farmstead exclusion process.--Each fiscal

year in which a school district imposes a tax authorized under

section 321 of the Taxpayer Relief Act or receives a State

homestead and farmstead exclusion allocation or State property

tax reduction allocation, the board of school directors of a

school district shall calculate a homestead and farmstead

exclusion for the purpose of reducing school district property

taxes. The school district shall adopt a resolution implementing

the homestead and farmstead exclusion not later than the last

day of the fiscal year immediately preceding the fiscal year in

which the homestead and farmstead exclusions shall take effect.

CHAPTER 9

MISCELLANEOUS PROVISIONS

Section 901. Additional provisions.

(a) Other provisions.--Any school district property tax

reduction approved under Subchapter D of Chapter 3 of the

Taxpayer Relief Act shall continue in effect.

(b) Applicability.--Except as otherwise provided, a school

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district shall remain subject to the Taxpayer Relief Act.

Section 902. Repeals.

Repeals are as follows:

(1) The General Assembly declares that the repeals under

paragraph (2) are necessary to effectuate this act.

(2) Sections 342 and 343 of the Taxpayer Relief Act are

repealed.

Section 903. Effective date.

This act shall take effect immediately.

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