CORRECTIVE REPRINT
PRIOR PRINTER'S NOS. 227, 441 PRINTER'S NO. 1571
No. 2 Session of 1997
INTRODUCED BY HART, JUBELIRER, GERLACH, HELFRICK, WOZNIAK,
LEMMOND, LAVALLE, BRIGHTBILL, HECKLER, CORMAN, PICCOLA,
WENGER, THOMPSON, BELL, MURPHY, WHITE, RHOADES, DELP, O'PAKE,
ARMSTRONG AND SLOCUM, JANUARY 29, 1997
AS AMENDED ON THIRD CONSIDERATION, FEBRUARY 10, 1997
AN ACT
1 Authorizing counties to impose sales, use, occupancy, personal
2 income or earned income and net profits taxes; authorizing
3 municipalities to impose personal income, earned income and
4 net profits and municipal service taxes; empowering
5 municipalities and school districts to require county sales
6 and use taxes; authorizing school districts to impose taxes
7 on personal income, earned income and net profits; providing
8 for the levying, assessment and collection of such taxes;
9 providing for the powers and duties of the Department of
10 Community and Economic Development, the Department of Revenue
11 and the State Treasurer; providing an additional exemption
12 from the tax on intangible personal property; providing for
13 limitations on debt of school districts; exempting political
14 subdivisions from compliance with certain laws that require
15 counties, municipalities and school districts to spend funds
16 or that limit the ability of counties, municipalities and
17 school districts to raise revenue; limiting reassessments in
18 counties of the second class; restricting the taxing
19 authority of certain political subdivisions; and providing
20 for home rule school district tax charters.
21 TABLE OF CONTENTS
22 Chapter 1. General Provisions
23 Section 101. Short title.
24 Section 102. Definitions.
25 Section 103. Scope and limitations.
26 Section 104. Preemption.
1 Section 105. Home rule counties AND MUNICIPALITIES. <--
2 Section 106. Certain rates of taxation limited.
3 Section 107. Limitations on the incurring of debt by school
4 districts.
5 Chapter 3. Subjects of Taxation
6 Subchapter A. Tax Authorization
7 Section 301. General tax authorization.
8 Section 302. Continuity of tax.
9 Section 303. Election to participate under act.
10 Section 304. Public referendum requirements for increasing
11 property taxes previously reduced.
12 Section 305. Local tax study commission.
13 Subchapter B. County Sales and Use Tax
14 Section 311. Construction.
15 Section 312. Imposition.
16 Section 313. Situs.
17 Section 314. Licenses.
18 Section 315. Rules and regulations; collection costs.
19 Section 316. Procedure and administration.
20 Section 317. County sales and use tax funds.
21 Section 318. Disbursements.
22 Section 319. Adoption of municipal resolutions
23 and school district petitions.
24 Section 320. Qualified municipalities and school districts.
25 Section 320.1. Municipal and school district sales and
26 use tax initiative.
27 Subchapter C. Personal Income Tax
28 Section 321. Construction.
29 Section 322. Personal income tax. <--
30 SECTION 322. LOCAL PERSONAL INCOME TAX. <--
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1 Section 323. Collections.
2 Section 324. Rules and regulations.
3 Section 325. Procedure and administration.
4 Subchapter D. Earned Income and Net Profits Tax
5 Section 331. Earned income and net profits tax.
6 Section 332. Collections.
7 Section 333. Rules and regulations.
8 Section 334. Procedure and administration.
9 Subchapter E. Municipal Service Tax
10 Section 341. Municipal service tax.
11 Section 342. Multiple employment locations.
12 Section 343. Collection procedures.
13 Subchapters F through I (Reserved)
14 Chapter 5. Credits, Exemptions and Deferrals
15 Subchapter A. Credits and Exemptions
16 Section 501. Credits.
17 Section 502. Cities of the first class.
18 Section 503. Low-income tax provisions.
19 Section 504. Municipal service tax exemption.
20 Section 505. Regulations.
21 Subchapter B. Real Estate Tax Deferral
22 Section 511. Short title of subchapter.
23 Section 512. Findings and legislative intent.
24 Section 513. Definitions.
25 Section 514. Authority.
26 Section 515. Income eligibility.
27 Section 516. Tax deferral.
28 Section 517. Application procedure.
29 Section 518. Contents of application.
30 Section 519. Attachment and satisfaction of liens.
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1 Subchapters C through J (Reserved)
2 Chapter 7. Disposition of Tax Revenues
3 Section 701. Sales tax revenues.
4 Section 702. Income tax and municipal
5 service tax revenues.
6 Section 703. Revenue limitation exceptions.
7 Section 704. Methods of reducing real property tax.
8 Chapter 9. Register for Certain Taxes
9 Section 901. Definitions.
10 Section 902. Register for taxes under this act.
11 Section 903. Information for register.
12 Section 904. Availability and effective period of register.
13 Section 905. Effect of nonfiling.
14 Section 906. Effect of chapter on liability of taxpayer.
15 Chapter 11. Limitations on Spending
16 Section 1101. Definitions.
17 Section 1102. Political subdivisions exempt from certain
18 laws.
19 Section 1103. Statutes relating to revenue raising.
20 Section 1104. Exemptions.
21 Section 1105. Mandate review.
22 Chapter 13. Limits on Real Property Assessments
23 Section 1301. Limits on real property assessments.
24 Chapter 15. Home Rule School District Tax Charters
25 Subchapter A. Preliminary Provisions
26 Section 1501. Definitions.
27 Section 1502. Authorization.
28 Subchapter B. Procedure for Adoption of Home Rule School
29 District Tax Charter
30 Section 1511. Submission of question regarding election of
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1 commission.
2 Section 1512. Election of school district study commission
3 members.
4 Section 1513. Nomination of candidates for school district
5 study commission.
6 Section 1514. Election returns.
7 Section 1515. Oath or affirmation of commission members.
8 Section 1516. School district study commission organization.
9 Section 1517. Vacancy and appointment of school district study
10 commission.
11 Section 1518. Powers and duties of school district study
12 commission.
13 Section 1519. Compensation of school district study
14 commissioners.
15 Section 1520. Public and private hearings.
16 Section 1521. Commission report.
17 Section 1522. Discharge of commission.
18 Section 1523. Recommendation of school district study
19 commission.
20 Section 1524. Content of home rule school district tax charter.
21 Section 1525. Department assistance. <--
22 SECTION 1525. DEPARTMENTAL ASSISTANCE. <--
23 Section 1526. Form for question regarding adoption of home rule
24 school district tax charter.
25 Section 1527. Procedure for submission of question to voters.
26 Section 1528. Moratorium on adoption of resolution or filing of
27 petition.
28 Section 1529. Taking effect of proposed home rule school
29 district tax charter.
30 Section 1530. Procedure for amending home rule school district
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1 tax charter.
2 Section 1531. Initiation of referendum.
3 Section 1532. Petition for referendum on question of amending
4 home rule school district tax charter.
5 Section 1533. Procedure for submission of question.
6 Section 1534. Compliance with Pennsylvania Election Code and
7 election certificates.
8 Section 1535. Notice of election.
9 Subchapter C. General Powers and Limitations
10 Section 1551. Exercise of functions.
11 Section 1552. Recording and filing of home rule school district
12 tax charter.
13 Section 1553. Repeal of home rule school district tax charter.
14 Subchapter D. General
15 Section 1571. Application to school district of first class.
16 Section 1572. Retention of existing form of government and
17 administration.
18 Section 1573. Disapproval of plan.
19 Chapter 51. Miscellaneous Provisions
20 Section 5101. Effective date.
21 The General Assembly of the Commonwealth of Pennsylvania
22 hereby enacts as follows:
23 CHAPTER 1
24 GENERAL PROVISIONS
25 Section 101. Short title.
26 This act shall be known and may be cited as the Optional
27 Local Tax Enabling Act.
28 Section 102. Definitions.
29 The following words and phrases when used in this act shall
30 have the meanings given to them in this section unless the
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1 context clearly indicates otherwise:
2 "Association." As defined in section 301 of the act of March
3 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
4 "Board of county commissioners." Includes the successor in
5 function to the board of county commissioners in a county which
6 has adopted a home rule charter under the FORMER act of April <--
7 13, 1972 (P.L.184, No.62), known as the Home Rule Charter and
8 Optional Plans Law, OR UNDER 53 PA.C.S. PT. III SUBPT. E <--
9 (RELATING TO HOME RULE AND OPTIONAL PLAN GOVERNMENT), but does
10 not include the city council of a city of the first class.
11 "Budgeted revenue." The revenue from taxes actually levied
12 and assessed by a local government unit. The term does not
13 include revenue from:
14 (1) Delinquent taxes.
15 (2) Payments in lieu of taxes.
16 (3) The real estate transfer tax.
17 (4) The Public Utility Realty Tax, commonly known as
18 PURTA.
19 (5) Interest or dividend earnings.
20 (6) Federal or State grants, contracts or
21 appropriations.
22 (7) Income generated from operations.
23 (8) Any other source that is revenue not derived
24 directly from taxes levied and assessed by a local government
25 unit.
26 "Business." As defined in section 301 of the act of March 4,
27 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
28 "Classes of income." The classes of income set forth in <--
29 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
30 the Tax Reform Code of 1971.
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1 "Compensation." As defined in section 301 of the act of
2 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
3 1971.
4 "County." A county-level municipality within this
5 Commonwealth, regardless of classification. The term includes a
6 county which has adopted a home rule charter or optional plan of
7 government under the FORMER act of April 13, 1972 (P.L.184, <--
8 No.62), known as the Home Rule Charter and Optional Plans Law, <--
9 OR UNDER 53 PA.C.S. PT. III SUBPT. E (RELATING TO HOME RULE AND
10 OPTIONAL PLAN GOVERNMENT). The term does not include a county of
11 the first class.
12 "Current year." The calendar year or fiscal year for which
13 the tax is levied.
14 "Department." The Department of Revenue of the Commonwealth.
15 "Domicile." As defined in section 13 of the act of December
16 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
17 Act.
18 "Earned income." The classes of income defined as earned
19 income in section 13 of the act of December 31, 1965 (P.L.1257,
20 No.511), known as The Local Tax Enabling Act.
21 "Employer." As defined in section 301 of the act of March 4,
22 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
23 "Governing body." The board of county commissioners,
24 including the successor in function to the board of county
25 commissioners in a county which has adopted a home rule charter
26 under the FORMER act of April 13, 1972 (P.L.184, No.62), known <--
27 as the Home Rule Charter and Optional Plans Law, OR UNDER 53 <--
28 PA.C.S. PT. III SUBPT. E (RELATING TO HOME RULE AND OPTIONAL
29 PLAN GOVERNMENT), city council, borough council, incorporated
30 town council, board of township commissioners, board of township
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1 supervisors, a governing council of a home rule municipality or
2 optional plan municipality, a governing council of any similar
3 general purpose unit of government which may hereafter be
4 created by statute, or a board of school directors of a school
5 district. The term does not include the city council of a city
6 of the first class.
7 "Home rule municipality." A city, borough, incorporated town
8 or township which has adopted a home rule charter under the
9 FORMER act of April 13, 1972 (P.L.184, No.62), known as the Home <--
10 Rule Charter and Optional Plans Law, OR UNDER 53 PA.C.S. PT. III <--
11 SUBPT. E (RELATING TO HOME RULE AND OPTIONAL PLAN GOVERNMENT).
12 "Individual." As defined in section 301 of the act of March
13 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
14 "Inverse per capita income." A factor determined by dividing
15 the integer one by the per capita income of the municipality, as
16 determined by the most recent survey by the Department of
17 Commerce COMMUNITY AND ECONOMIC DEVELOPMENT. <--
18 "Local Tax Enabling Act." The act of December 31, 1965
19 (P.L.1257, No.511), known as The Local Tax Enabling Act.
20 "Municipal service tax." A tax upon residents and
21 nonresidents employed within a municipality.
22 "Municipality." A city of the second class, city of the
23 second class A, city of the third class, borough, incorporated
24 town, township of the first class, township of the second class,
25 home rule municipality, optional plan municipality, optional
26 form municipality or similar general purpose unit of government
27 which may hereafter be created by statute, except a city of the
28 first class.
29 "Net profits." The classes of income defined as net profits
30 in section 13 of the act of December 31, 1965 (P.L.1257,
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1 No.511), known as The Local Tax Enabling Act.
2 "Nonresident." An individual domiciled outside the
3 municipality.
4 "Optional form municipality." A city which has adopted an
5 optional form of government under the act of July 15, 1957
6 (P.L.901, No.399), known as the Optional Third Class City
7 Charter Law.
8 "Optional plan municipality." A city, borough, incorporated
9 town or township which has adopted an optional plan of
10 government under the FORMER act of April 13, 1972 (P.L.184, <--
11 No.62), known as the Home Rule Charter and Optional Plans Law, <--
12 OR UNDER 53 PA.C.S. PT. III SUBPT. E (RELATING TO HOME RULE AND
13 OPTIONAL PLAN GOVERNMENT).
14 "Ordinance." Includes a resolution.
15 "Personal income." The classes of income INCOME enumerated <--
16 in section 303 of the act of March 4, 1971 (P.L.6, No.2), known
17 as the Tax Reform Code of 1971 and upon which is imposed a <--
18 personal income tax, AS RETURNED TO AND ASCERTAINED BY THE <--
19 DEPARTMENT OF REVENUE, SUBJECT, HOWEVER, TO ANY CORRECTION
20 THEREOF FOR FRAUD, EVASION OR ERROR AS FINALLY ASCERTAINED by
21 the Commonwealth.
22 "Preceding year." The calendar year or fiscal year before
23 the current year.
24 "Register." The register provided for in Chapter 9.
25 "Relative tax effort." The total tax revenues from all
26 sources of a municipality as reported to the Department of
27 Community and Economic Development, divided by the total tax
28 revenues from all sources from all municipalities in the county.
29 "Resident individual." An individual who is domiciled in a
30 municipality or school district.
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1 "School district." A school district of the first class A,
2 second class, third class or fourth class, including any
3 independent school district.
4 "Statewide average weekly wage." That amount determined
5 annually for each calendar year by the Department of Labor and
6 Industry under section 105.1 of the act of June 2, 1915
7 (P.L.736, No.338), known as the Workers' Compensation Act.
8 "Succeeding year." The calendar year or fiscal year
9 following the current year.
10 "Tax officer." The person, public employee or private agency
11 designated by a governing body to collect and administer the
12 municipal service tax imposed under this act.
13 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
14 known as the Tax Reform Code of 1971.
15 "Taxpayer." An individual required under this act to file a
16 tax return or to pay a tax.
17 "Weighted formula." A formula dividing an allocation into
18 thirds, with one-third based on relative population, one-third
19 based on relative tax effort and one-third based on the relative
20 inverse per capita income.
21 Section 103. Scope and limitations.
22 (a) General rule.--Except as provided in subsections (b),
23 (c), (d), (e) and (f), (F) AND (G), it is the intent of this act <--
24 to confer upon each county, municipality and school district the
25 power to levy, assess and collect taxes upon the subjects of
26 taxation set forth in this act.
27 (b) Real estate transfer taxes.--This act does not affect
28 the powers of a municipality or school district to levy, assess
29 and collect a real estate transfer tax, including any real
30 estate transfer tax levied under the authority of section
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1 652.1(a)(4) of the act of March 10, 1949 (P.L.30, No.14), known
2 as the Public School Code of 1949.
3 (c) Amusement taxes.--
4 (1) Notwithstanding any other provision of this act
5 except for paragraph (2), any municipality or school district
6 which has elected to participate under section 303(a) and has
7 on or before January 1, 1997, levied, assessed or collected
8 or provided for the levying, assessment or collection of an
9 amusement tax may continue to levy, assess and collect such
10 tax on such subjects upon which the tax was imposed by the
11 municipality or school district as of January 1, 1997, at a
12 rate not to exceed the rate imposed by the municipality or
13 school district as of January 1, 1997.
14 (2) In no case may a municipality or a school district
15 levy, assess or collect:
16 (i) a tax on admission into an auto racing facility
17 with a seating capacity of more than 25,000 and a
18 continuous race area of at least one mile;
19 (ii) an amusement tax on ski facilities; or
20 (iii) a tax on admission to a ski facility.
21 The provisions of this paragraph shall apply regardless of
22 whether there is an election to participate under section
23 303(a).
24 (d) Mercantile or business privilege taxes on gross
25 receipts.--
26 (1) Nothing in this act shall, either explicitly or
27 implicitly, permit a county, municipality or school district
28 to impose or increase the rate of any mercantile or business
29 privilege tax on gross receipts not otherwise permitted prior
30 to the effective date of this act, nor shall any provision of
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1 this act affect the prohibitions on business gross receipts
2 taxes as set forth in section 2 of the Local Tax Enabling
3 Act, section 533 of the act of December 13, 1988 (P.L.1121,
4 No.145), known as the Local Tax Reform Act, the Tax Reform
5 Code and any other relevant act.
6 (2) For the purposes of assessing, levying or collecting
7 the mercantile or business privilege tax as authorized in
8 section 2 of the Local Tax Enabling Act, no county,
9 municipality or school district shall have the authority to
10 levy, assess or collect any mercantile or business privilege
11 tax on the gross receipts or parts thereof:
12 (i) Arising from retail sales as defined by the act
13 of December 22, 1983 (P.L.306, No.84), known as the Board
14 of Vehicles Act.
15 (ii) Which are from transfers of property between a
16 parent and a subsidiary or between affiliated companies
17 at the same price or cost for which the transferor
18 acquired the property.
19 (iii) Of banks, bank and trust companies, private
20 banks, savings banks or trust companies as defined in the
21 act of November 30, 1965 (P.L.847, No.356), known as the
22 Banking Code of 1965, or of any other institution or
23 entity subject to the supervision of the Department of
24 Banking under the act of May 15, 1933 (P.L.565, No.111),
25 known as the Department of Banking Code, or of any
26 national bank, or of any similar institution or entity
27 established pursuant to Federal law or the law of any
28 state.
29 (iv) Of any malt beverage distributor.
30 (e) Sign or sign privilege tax.--Any county, municipality or
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1 school district which has on or before January 1, 1996,
2 assessed, levied or collected an annual sign tax or annual sign
3 privilege tax or provided for the levying, assessment or
4 collection of such tax may continue to levy, assess and collect
5 such tax on such subjects upon which the tax was imposed by the
6 county, municipality or school district at a rate not to exceed
7 the rate imposed by the county, municipality or school district
8 as of January 1, 1997. A county, municipality or school district
9 which does not assess, levy or collect an annual sign tax or
10 annual sign privilege tax as of January 1, 1996, may not assess,
11 levy or collect such tax. This subsection shall apply regardless
12 of whether there is an election to participate under section
13 303(a).
14 (f) Cities of the first class and school districts of the
15 first class.--Nothing in this act shall, either explicitly or
16 implicitly, permit a city of the first class or a school
17 district of the first class to levy, assess or collect, and for
18 purposes of the act of August 5, 1932 (Sp.Sess., P.L.45, No.45),
19 referred to as the Sterling Act, and of the act of August 9,
20 1963 (P.L.640, No.338), entitled "An act empowering cities of
21 the first class, coterminous with school districts of the first
22 class, to authorize the boards of public education of such
23 school districts to impose certain additional taxes for school
24 district purposes, and providing for the levy, assessment and
25 collection of such taxes," no city of the first class and no
26 school district of the first class shall have the authority to
27 levy, assess or collect a tax on banks, bank and trust
28 companies, private banks, savings banks or trust companies as
29 defined in the act of November 30, 1965 (P.L.847, No.356), known
30 as the Banking Code of 1965, or of any other institution or
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1 entity subject to the supervision of the Department of Banking
2 under the act of May 15, 1933 (P.L.565, No.111), known as the
3 Department of Banking Code, or of any national bank or any
4 similar institution or entity established pursuant to Federal
5 law or the law of any state, except taxes on real estate or
6 transfers thereof or taxes otherwise expressly authorized by an
7 act of the General Assembly.
8 (g) Parking taxes.--Any city of the second class which has
9 elected to participate under section 303(a) and has on or before
10 January 1, 1997, levied, assessed or collected or provided for
11 the levying, assessment or collection of a parking tax may
12 continue to levy, assess and collect such tax.
13 (h) Effect of unconstitutionality.--Notwithstanding any
14 other provisions of the act of May 21, 1943 (P.L.349, No.162),
15 entitled "An act requiring political subdivisions to refund
16 certain taxes, license fees, penalties, fines or moneys paid
17 thereto, and providing procedure for obtaining such refunds," to
18 the contrary, if the tax imposed under the act of June 17, 1913
19 (P.L.507, No.335), referred to as the Intangible Personal
20 Property Tax Law, is held by final judgment of a court of
21 competent jurisdiction to be unconstitutional, a county of the
22 second, second class A or third through eighth class and a city
23 of the first class coterminous with a county of the first class
24 imposing that tax shall refund the moneys collected and due only
25 in the year in which the declaration of unconstitutionality was
26 made. Any taxpayer owing the tax from prior years shall continue
27 to be held liable for the tax.
28 Section 104. Preemption.
29 No act of the General Assembly will vacate or preempt any
30 ordinance adopted under this act providing for the imposition of
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1 a tax by a county, municipality or school district unless the
2 act of the General Assembly expressly vacates or preempts the
3 authority to adopt the ordinance.
4 Section 105. Home rule counties AND MUNICIPALITIES. <--
5 (a) Participation under act.--Except for the case when a
6 governing body of a home rule county elects to adopt a sales tax <--
7 under Subchapter B of Chapter 3 THE TAX AUTHORIZED UNDER SECTION <--
8 312, the governing body of a home rule county or home rule
9 municipality which desires to participate under the provisions
10 of this act shall not be subject to the public referendum
11 requirements of section 303(b). The governing body of a home
12 rule county which desires to adopt a sales tax authorized in <--
13 Subchapter B of Chapter 3 THE TAX AUTHORIZED UNDER SECTION 312 <--
14 shall be subject to the public referendum requirements of
15 section 303(b).
16 (b) Public referendum requirements for increasing property
17 taxes previously reduced.--Any governing body of a home rule
18 county or home rule municipality which elects to participate
19 under this act is not subject to the provisions of section 304.
20 (c) Ending participation under act.--The governing body of a
21 home rule county or home rule municipality which desires to end
22 participation under the provisions of this act shall not be
23 subject to the public referendum requirements of section 303.
24 (d) Rates of taxation.--A home rule county shall not have
25 the right or authority to fix the rate of taxation for the
26 subjects of taxation authorized under Chapter 3 in excess of the
27 rates fixed in Chapter 3.
28 (e) Disposition of revenues.--Home rule counties which elect
29 to participate under the provisions of this act shall be subject
30 to all the provisions of sections 701(a) and 702(d)(1),
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1 including the provision that any increase in revenues between
2 the transition year and the prior year's budgeted revenues not
3 exceed 5% or the annual increase in the Statewide average weekly
4 wage, whichever is less.
5 Section 106. Certain rates of taxation limited.
6 If a municipality and school district both impose an earned
7 income tax on the same individual under the Local Tax Enabling
8 Act and the municipality and school district are limited to, or
9 have agreed upon, a division of the tax rate in accordance with
10 section 8 of the Local Tax Enabling Act, then the municipality
11 and school district which continue to levy the income tax under
12 the Local Tax Enabling Act shall remain subject to that
13 limitation or agreement in the event that one or the other opts
14 to impose a tax under section 322 or 331.
15 Section 107. Limitations on the incurring of debt by school
16 districts.
17 (a) Limitation.--Except as provided under subsection (b) and
18 for purposes of refinancing existing debt under the act of July <--
19 12, 1972 (P.L.781, No.185), known as the Local Government Unit
20 Debt Act 53 PA.C.S. PT. VII SUBPT. B (RELATING TO INDEBTEDNESS <--
21 AND BORROWING), no school district of the first class A through
22 fourth classes shall incur any new nonelectoral debt or lease
23 rental debt, if the aggregate net principal amount of such new
24 debt together with any other net nonelectoral debt and lease
25 rental debt then outstanding, would cause the outstanding total
26 of net nonelectoral debt plus net lease rental debt of the
27 school district to exceed 150% of the school district's
28 borrowing base as defined in the Local Government Unit Debt Act
29 and 200% of the school district's total local tax revenues
30 averaged over the three full fiscal years immediately preceding
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1 the date of the incurring of nonelectoral debt or lease rental
2 debt.
3 (b) Applicability.--The provisions of subsection (a) shall
4 not apply to any school district that has elected to participate
5 under the provisions of this act in accordance with section 303
6 and which does not increase the rate of any tax imposed under
7 this act or any other act for the purpose of incurring
8 additional debt under the Local Government Unit Debt Act.
9 CHAPTER 3
10 SUBJECTS OF TAXATION
11 SUBCHAPTER A
12 TAX AUTHORIZATION
13 Section 301. General tax authorization.
14 (a) General rule.--Subject to sections 303 and 304 and
15 except as provided in subsection (b), each county, municipality
16 or school district shall have the power and may by ordinance
17 levy, assess and collect or provide for the levying, assessment
18 and collection of such taxes on the subjects specified in this
19 chapter for general revenue purposes as it shall determine on
20 any or all of the subjects of taxation set forth in this act
21 within the geographical limits of the county, municipality or
22 school district.
23 (b) Exclusions.--No county, municipality or school district
24 which levies a tax authorized by this act shall have any power
25 or authority to levy, assess or collect:
26 (1) A tax based upon a flat rate or on a millage rate on
27 an assessed valuation of a particular trade, occupation or
28 profession, commonly known as an occupation tax.
29 (2) A tax at a set or flat rate upon persons employed
30 within the taxing district, commonly known as an occupational
19970S0002B1571 - 18 -
1 privilege tax.
2 (3) A per capita, poll, residence or similar head tax.
3 (4) The earned income and net profits tax levied under
4 the Local Tax Enabling Act.
5 (5) Any other tax authorized or permitted under the
6 Local Tax Enabling Act except a mercantile or business
7 privilege tax on gross receipts, as modified by paragraph
8 (9).
9 (6) An earned income tax under the act of August 24,
10 1961 (P.L.1135, No.508), referred to as the First Class A
11 School District Earned Income Tax Act, or under the
12 additional authority in section 652.1(a)(2) of the act of
13 March 10, 1949 (P.L.30, No.14), known as the Public School
14 Code of 1949.
15 (7) Any tax under section 652.1(a)(4) of the Public
16 School Code of 1949 except as it pertains to real estate
17 transfer taxes.
18 (8) The intangible personal property tax under the act
19 of June 17, 1913 (P.L.507, No.335), referred to as the
20 Intangible Personal Property Tax Law.
21 (9) Any mercantile or business privilege tax on gross
22 receipts, as limited by section 533 of the act of December
23 13, 1988 (P.L.1121, No.145), known as the Local Tax Reform
24 Act, after one year from the date of the election to
25 participate under this act pursuant to section 303.
26 (10) ANY OTHER TAX AUTHORIZED UNDER THE LOCAL TAX <--
27 ENABLING ACT AS LIMITED BY THE PROVISIONS OF THIS ACT.
28 (C) DELINQUENT TAXES.--THE PROVISIONS OF SUBSECTION (B)
29 SHALL NOT APPLY TO COLLECTION OF DELINQUENT TAXES.
30 Section 302. Continuity of tax.
19970S0002B1571 - 19 -
1 Every tax levied under the provisions of this act shall
2 continue in force on a calendar or fiscal year basis, as the
3 case may be, without annual reenactment unless the rate of tax
4 is increased or the tax is subsequently repealed.
5 Section 303. Election to participate under act.
6 (a) General rule.--
7 (1) Any governing body which desires to participate
8 under the provisions of this act shall make that
9 determination by using the procedures set forth in subsection
10 (b).
11 (2) Any governing body after making an election to
12 participate under this act may, after a period of at least
13 three full calendar years or fiscal years of participation,
14 elect, under the provisions of subsection (b), to levy,
15 assess and collect the taxes prohibited by section 301(b) to
16 the extent otherwise provided by law. IF THE ELECTORATE <--
17 APPROVES SUCH REFERENDUM, THE GOVERNING BODY SHALL LOSE THE
18 AUTHORITY TO CONTINUE TO LEVY ANY TAX AUTHORIZED UNDER THIS
19 ACT.
20 (3) If a municipality, county or school district does
21 not act as authorized under subsection (b) within five years
22 following the effective date of this act, a referendum on the
23 question of whether a tax study commission shall be appointed
24 in accordance with the terms and conditions of this act may
25 be initiated by electors of the municipality, county or
26 school district. A petition containing a proposal for
27 referendum on the question of appointing a tax study
28 commission, signed by electors comprising 2% of the number of
29 electors voting for the office of Governor in the last
30 gubernatorial general election in the municipality, county or
19970S0002B1571 - 20 -
1 school district, may be filed with the election officials at
2 least 90 days prior to the next general election.
3 (i) The name and address of the person filing the
4 petition shall be clearly stated on the petition.
5 (ii) The election officials shall, within ten days
6 after filing, review the initiative petition as to the
7 number and qualifications of signers. If the petition
8 appears to be defective, the election officials shall
9 immediately notify the person filing the petition of the
10 defect.
11 (iii) The initiative petition as submitted to the
12 election officials along with the list of signatories
13 shall be open to public inspection in the office of the
14 election officials.
15 (iv) When the election officials find that the
16 petition as submitted is in proper order, they shall send
17 copies of the initiative petition without signatures
18 thereon to the governing body of the municipality, county
19 or school district involved.
20 (v) The procedure for the referendum shall be
21 governed by the act of June 3, 1937 (P.L.1333, No.320),
22 known as the Pennsylvania Election Code.
23 (vi) When the election officials find the initiative
24 petition as submitted by the electors meets the
25 requirements of this act, they shall place the proposal
26 on the ballot in a manner fairly representing the content
27 of the initiative petition for decision by referendum at
28 the proper election.
29 (vii) The election officials shall certify the date
30 for the referendum and shall so notify the governing body
19970S0002B1571 - 21 -
1 of the municipality, county or school district at least
2 30 days prior to such date.
3 (viii) At least 30 days' notice of the referendum
4 shall be given by proclamation of the governing body of
5 the municipality, county or school district. A copy of
6 the proclamation shall be posted at each polling place on
7 the day of the election and shall be published once in at
8 least one newspaper of general circulation in the
9 municipality, county or school district during the 30-day
10 period prior to the election.
11 (ix) Approval of a referendum shall be by a majority
12 vote of those voting in each municipality, county or
13 school district involved.
14 (x) The election officials shall certify the results
15 of the referendum to the governing body.
16 (b) Public referendum requirements to participate or end
17 participation under act.--Subject to the notice and public
18 hearing requirements of section 316(a), 325(a) or 334, whichever
19 is applicable, a governing body may elect to participate or, in
20 accordance with subsection (a)(2), may elect to end
21 participation under this act by obtaining the approval of the
22 electorate of the affected county, municipality or school
23 district in a public referendum at only the November election
24 preceding the calendar year or fiscal year when the taxes will
25 be initially imposed. The referendum question must state the
26 initial rate of the proposed tax, the reason for the tax and the
27 amount of proposed revenue growth, if any, in the fiscal year of
28 transition to the tax system authorized under this act,
29 expressed as a percent increase over the prior year's budgeted
30 revenue. Any increase in revenues between the transition year
19970S0002B1571 - 22 -
1 and the prior year's budgeted revenue shall not exceed 5% or the
2 annual percent change in the Statewide average weekly wage,
3 whichever is less. The governing body must frame the question in
4 clear language that is readily understandable by the layperson.
5 For the purpose of illustration, a referendum question could be
6 framed as follows:
7 Do you favor the imposition of an X% (name of tax) to be
8 used to replace certain existing local taxes, make
9 reductions in real property taxes and provide for a one-
10 time spending increase of X% over the preceding fiscal
11 year?
12 A governing body of a school district in a county of the second
13 class A shall, and a governing body of a school district in a
14 county of the third class may, incorporate in the referendum
15 question language seeking voter approval as to whether the
16 credit against the personal income tax in section 502 shall be
17 provided to the nonresident taxpayer in the city of the first
18 class or the school district in which the taxpayer resides for
19 the purpose of making additional property tax reductions in the
20 same manner as section 702(b). A nonlegal interpretative
21 statement must accompany the question in accordance with section
22 201.1 of the act of June 3, 1937 (P.L.1333, No.320), known as
23 the Pennsylvania Election Code, that includes the following: the
24 initial rate of the tax or taxes to be imposed and the maximum
25 allowable rate of the tax or taxes imposed under this act; the
26 estimated revenues to be derived from the initial rate of the
27 tax or taxes imposed under this act; the amount of proposed
28 revenue growth, if any, in the fiscal year of transition to the
29 tax system authorized under this act; the estimated tax savings
30 from the reduction in real property taxes and the elimination of
19970S0002B1571 - 23 -
1 certain existing taxes under this act; the identification of the
2 existing taxes to be eliminated under this act; the method or
3 methods to be used to reduce real property taxes; the class or
4 classes of real property for which real property taxes would be
5 reduced; the estimated amount of real property tax reduction by
6 class, expressed as an average percent reduction by class; and,
7 if applicable, the estimated amount of additional real property
8 tax reductions to be derived by providing the credit in section
9 502 to the school district in which the taxpayer resides. Any
10 governing body which uses the procedures under this section
11 shall not be subject to the provisions of section 304 for any
12 future increases in income tax rates. Any future real property
13 tax rate increases are subject to the provisions of section 304.
14 If there is a failed attempt to participate under the provisions
15 of this act pursuant to section 303, section 303 or 304 shall
16 not require the approval of the electorate as a prerequisite to
17 the increase in the rate of any tax which the governing body of
18 the affected county, municipality or school district is
19 authorized to levy and increase pursuant to any other act.
20 Section 304. Public referendum requirements for increasing
21 property taxes previously reduced.
22 (a) General rule.--Except as provided in subsection (c), a
23 governing body of a municipality, county or school district
24 which elects to participate under this act pursuant to section
25 303(a) may not increase the rate of real property taxes that
26 were reduced using revenue derived from an income and/or sales
27 tax imposed under this act or any other act by an amount
28 exceeding the annual percent change in the Statewide average
29 weekly wage in the preceding year without first obtaining
30 approval of the electorate of the affected county, municipality
19970S0002B1571 - 24 -
1 or school district in a public referendum at the November
2 election immediately preceding the calendar year of the proposed
3 tax increase for entities operating on a calendar year fiscal
4 basis and at the primary election for the calendar year of the
5 proposed tax increase for entities operating on a July to June
6 fiscal basis.
7 (b) Disapproval.--Whenever the electorate fails to approve
8 the proposed referendum question as required under subsection
9 (a) increasing the rates of tax, the governing body shall be
10 limited to the tax rate in effect prior to the referendum.
11 (c) Referendum exceptions.--The provisions of subsection (a)
12 shall not apply to any necessary tax increases in the following
13 cases:
14 (1) To respond to or recover from an emergency or
15 disaster declared pursuant to 35 Pa.C.S. Pt. V (relating to
16 emergency management services), for the duration of the
17 emergency or disaster or for the costs of the recovery from
18 the emergency or disaster.
19 (2) To implement a court order or an administrative
20 decision of a Federal or State agency. In instances where the
21 tax increase is necessary to respond to a court order or an
22 administrative decision of a Federal or State agency
23 requiring a temporary increase in local expenditures, the
24 rate increase shall be rescinded following fulfillment of the
25 court ORDER OR ADMINISTRATIVE decision. <--
26 (3) To pay interest and principal on any indebtedness
27 incurred under the act of July 12, 1972 (P.L.781, No.185), <--
28 known as the Local Government Unit Debt Act. 53 PA.C.S. PT. <--
29 VII SUBPT. B (RELATING TO INDEBTEDNESS AND BORROWING).
30 However, in no case may a taxing jurisdiction incur
19970S0002B1571 - 25 -
1 additional debt under this paragraph, except for the
2 refinancing of existing debt, including the payment of costs
3 and expenses related to such refinancing and the
4 establishment or funding of appropriate debt service
5 reserves.
6 (4) Taxes levied under section 607(f) of the act of
7 December 18, 1984 (P.L.1005, No.205), known as the Municipal
8 Pension Plan Funding Standard and Recovery Act, or levied to
9 pay increases in pension fund requirements which are in
10 excess of the annual average increase over the immediately
11 preceding five fiscal years.
12 (5) To increase revenues when actual and projected local
13 tax revenues, including any share of a county sales and use
14 tax, decline from the immediately preceding year but only to
15 the extent of the revenue decline.
16 (6) To respond to conditions that pose a threat of
17 immediate harm or injury to the students, staff or residents
18 of the county, municipality or school district.
19 (7) Special purpose tax levies approved by the
20 electorate.
21 (8) To respond to a Federal or State statute, regulation
22 or order adding to or significantly altering responsibilities
23 and duties or requiring expenditure of county or local funds
24 to the extent not funded by the Federal or State Government.
25 This provision shall apply only to a Federal or State
26 statute, regulation or order taking effect after the
27 effective date of this act.
28 (d) Court action.--Prior to any tax increase under
29 subsection (c)(1), (4), (5), (6) or (8), approval is required by
30 the court of common pleas in the judicial district in which the
19970S0002B1571 - 26 -
1 governing body is located. The following shall apply to any
2 proceedings instituted under this subsection:
3 (1) The governing body must prove by a preponderance of
4 evidence the necessity for the tax increase.
5 (2) The court may retain continuing jurisdiction in
6 these cases and may, on its own motion or on petition of an
7 interested party, revoke approval for a tax increase.
8 (e) Distressed municipality or county.--This section shall
9 not be construed to prohibit any municipality or county declared
10 distressed under the act of July 10, 1987 (P.L.246, No.47),
11 known as the Municipalities Financial Recovery Act, from
12 petitioning the court of common pleas for a tax increase in
13 accordance with section 123(c) of the Municipalities Financial
14 Recovery Act.
15 (f) Standing.--Any taxpayer or business shall have standing
16 as a party to a proceeding under this section as long as the
17 taxpayer or business resides within or pays real property taxes
18 to the taxing jurisdiction of the governing body instituting the
19 action.
20 Section 305. Local tax study commission.
21 (a) First-year implementation.--Before any municipality,
22 school district or county seeks referendum approval for the
23 levy, assessment or collection of any tax under the authority of
24 this act, the governing body may appoint a local tax study
25 commission in accordance with the following provisions:
26 (1) Membership.--The local tax study commission shall
27 consist of members appointed by the governing body. One
28 member of the local tax study commission may be a member of
29 the governing body, as deemed appropriate by the governing
30 body. No member of the local tax study commission shall be a
19970S0002B1571 - 27 -
1 relative, by blood or marriage, of an official or employee of
2 the municipality, school district or county. All members
3 shall be residents of the municipality, school district or
4 county. In municipalities with a population of less than
5 5,000, there shall be a minimum of three members. In
6 municipalities with a population of 5,000 or more, and in
7 counties and school districts, the local tax study commission
8 shall consist of five, seven or nine members. Representatives
9 on a local tax study commission must reasonably reflect the
10 socioeconomic, age and occupational diversity of the
11 municipality, school district or county.
12 (2) Staff and expenses.--The governing body shall
13 provide necessary and reasonable staff to support the local
14 tax study commission and shall reimburse the members of the
15 local tax study commission for necessary and reasonable
16 expenses in the discharge of their duties.
17 (3) Contents of study.--The local tax study commission
18 shall study the existing taxes levied, assessed and collected
19 by the municipality, school district or county and the effect
20 of any county or municipal taxes imposed concurrently with a
21 school district and shall determine if and how the tax
22 policies of the municipality, school district or county could
23 be strengthened or made more equitable by adopting for levy,
24 assessment and collection one or a combination of any of the
25 following taxes: LOCAL personal income tax, earned income and <--
26 net profits tax, real estate tax or realty transfer tax at
27 such levels and in such combinations on permissible subjects
28 of taxation as do not exceed the limitations in this act.
29 This study shall include, but not be limited to,
30 consideration of all of the following:
19970S0002B1571 - 28 -
1 (i) Historic rate and revenue provided by taxes
2 currently levied, assessed and collected by the
3 municipality, school district or county.
4 (ii) The percentage of total revenues provided by
5 taxes currently levied, assessed and collected.
6 (iii) The age, income, employment and property use
7 characteristics of the existing tax base.
8 (iv) The projected revenues of any taxes currently
9 levied, assessed and collected.
10 (v) The projected revenues of any taxes referred to
11 in this paragraph not currently levied, assessed and
12 collected by the municipality, school district or county.
13 (4) Recommendation.--Within 60 days of its appointment,
14 the local tax study commission shall make a nonbinding
15 recommendation to the governing body of the appropriate tax
16 or combination of taxes, identified in paragraph (3), to be
17 levied, assessed and collected commencing the next fiscal
18 year. Except as provided for in paragraph (5), if the
19 governing body appoints a commission, no tax may be levied,
20 assessed or collected for the next fiscal year until receipt
21 of the recommendation of the local tax study commission. No
22 later than 30 days prior to the commencement of the next
23 fiscal year, the governing body shall accept or reject the
24 recommendation of the local tax study commission or adopt any
25 other appropriate tax or combination of taxes for the
26 municipality, school district or county commencing the next
27 fiscal year as provided by law.
28 (5) Failure to issue recommendation.--If the local tax
29 study commission fails to make a nonbinding recommendation
30 within 60 days of its appointment, the governing body shall
19970S0002B1571 - 29 -
1 discharge the appointed local tax study commission and
2 appoint itself as the local tax study commission. No later
3 than 30 days prior to the commencement of the next fiscal
4 year, the governing body shall adopt the appropriate tax or
5 combination of taxes for the municipality, school district or
6 county commencing the next fiscal year as provided by law.
7 (6) Public distribution of report.--The local tax study
8 commission shall publish or cause to be published, within 30
9 days of making its recommendation, a final report of its
10 activities and recommendations and shall deliver the final
11 report to the secretary of the governing body who shall
12 supply copies to any interested persons upon request.
13 (7) Receipts.--Receipts are required for all
14 reimbursable expenses under paragraph (2).
15 (8) Materials.--All the records, receipts, tapes,
16 minutes of meetings and written discussions of the local tax
17 study commission shall, upon its discharge, be turned over to
18 the secretary or chief clerk of the municipality, school
19 district or county for permanent safekeeping. The secretary
20 or chief clerk shall make such materials available for public
21 inspection at any time during regular business hours.
22 (9) Discharge.--The local tax study commission shall be
23 discharged upon the filing of its final report.
24 (b) Three-year review.--Any municipality, school district or
25 county that levies, assesses and collects, or provides for the
26 levy, assessment or collection of, any tax, after having
27 received the recommendations of a local tax study commission,
28 shall continue to levy, assess and collect the same tax or
29 combination of taxes for the next three fiscal years. However,
30 nothing herein shall preclude the governing body from changing
19970S0002B1571 - 30 -
1 or altering the rates of any such tax or combination of taxes if
2 it deems necessary. Before the third fiscal year following the
3 municipality, school district or county action on the
4 recommendations of a local tax study commission, and every third
5 fiscal year thereafter, the governing body may appoint a local
6 tax study commission in the manner provided in subsection (a).
7 The local tax study commission appointed under this subsection
8 shall be charged with all of the same powers and duties provided
9 for the local tax study commission under subsection (a).
10 SUBCHAPTER B
11 COUNTY SALES AND USE TAX
12 Section 311. Construction.
13 The tax imposed by the governing body of a county under this
14 subchapter shall be in addition to any tax imposed by the
15 Commonwealth under Article II of the Tax Reform Code. Except for
16 the differing situs provisions under section 313, the provisions
17 of Article II of the Tax Reform Code shall apply to the tax.
18 Section 312. Imposition.
19 (a) Sales.--The governing body of a county, except for a
20 county of the second class, may levy and assess upon each
21 separate sale at retail of tangible personal property or
22 services, as defined in Article II of the Tax Reform Code,
23 within the boundaries of the county, a tax on the purchase
24 price. The tax shall be collected by the vendor from the
25 purchaser and shall be paid over to the Commonwealth as provided
26 in this subchapter. The sales tax shall not be paid to the
27 Commonwealth by any person who has paid the tax imposed under
28 Chapter 5 of the act of June 5, 1991 (P.L.9, No.6), known as the
29 Pennsylvania Intergovernmental Cooperation Authority Act for
30 Cities of the First Class, or subdivision (e) of Article XXXI-B
19970S0002B1571 - 31 -
1 of the act of July 28, 1953 (P.L.723, No.230), known as the
2 Second Class County Code, equal to or greater than the tax
3 imposed under this subsection.
4 (b) Use.--In any county, except for a county of the second
5 class, within which the tax authorized in subsection (a) is
6 imposed, there shall be levied, assessed and collected upon the
7 use, within the county, of tangible personal property purchased
8 at retail and on services purchased at retail, as defined in
9 Article II of the Tax Reform Code, a tax on the purchase price.
10 The tax shall be paid over to the Commonwealth by the person who
11 makes the use. The use tax imposed under this subchapter shall
12 not be paid over to the Commonwealth by any person who has paid
13 the tax imposed under:
14 (1) Subsection (a).
15 (2) This subsection to the vendor with respect to the
16 use.
17 (3) Chapter 5 of the Pennsylvania Intergovernmental
18 Cooperation Authority Act for Cities of the First Class,
19 equal to or greater than the tax imposed under either
20 subsection (a) or this subsection.
21 (4) Subdivision (e) of Article XXXI-B of the Second
22 Class County Code equal to or greater than the tax imposed
23 under either subsection (a) or this subsection.
24 (c) Occupancy.--In any county within which a tax authorized
25 by subsection (a) is imposed, there shall be levied, assessed
26 and collected an excise tax on the rent upon every occupancy of
27 a room or rooms in a hotel in the county. The tax shall be
28 collected by the operator or owner from the occupant and paid
29 over to the Commonwealth.
30 (d) Rate and uniformity.--
19970S0002B1571 - 32 -
1 (1) The tax authorized by subsections (a), (b) and (c)
2 shall be imposed at a rate of 1%.
3 (2) The tax imposed by subsections (a), (b) and (c)
4 shall be uniform.
5 (e) Computation.--The tax imposed under this section shall
6 be computed in the manner set forth in section 503(e)(2) of the
7 Pennsylvania Intergovernmental Cooperation Authority Act for
8 Cities of the First Class.
9 (f) Exception.--The optional provisions of subsections (a),
10 (b) and (c) shall be subject to the provisions of section 320.1.
11 Section 313. Situs.
12 (a) General rule.--Except as provided in subsections (b) and
13 (c), the situs of sales at retail or uses, including leases, of
14 motor vehicles, aircraft, motorcraft and utility services shall
15 be determined in the manner specified by section 504 of the act
16 of June 5, 1991 (P.L.9, No.6), known as the Pennsylvania
17 Intergovernmental Cooperation Authority Act for Cities of the
18 First Class, as well as the act of March 4, 1971 (P.L.6, No.2),
19 known as the Tax Reform Code of 1971.
20 (b) Premium cable services.--The sale or use of premium
21 cable service shall be deemed to occur at the service address in
22 the county which is the address where the customer cable
23 connection is located. This subsection shall determine the situs
24 of premium cable service for the purpose of all local sales
25 taxes, including those imposed pursuant to Chapter 5 of the
26 Pennsylvania Intergovernmental Cooperation Authority Act for
27 Cities of the First Class and pursuant to subdivision (e) of
28 Article XXXI-B of the act of July 28, 1953 (P.L.723, No.230),
29 known as the Second Class County Code.
30 (c) Telecommunications service.--The situs of
19970S0002B1571 - 33 -
1 telecommunications service under this act shall be determined in
2 accordance with regulations adopted by the department, which
3 shall be uniform among all counties, and shall be consistent
4 with regulations promulgated under Subdivision (e) of Article
5 XXXI-B of the act of July 28, 1953 (P.L.723, No.230), known as
6 the Second Class County Code, Article II of the Tax Reform Code
7 of 1971 and Chapter 5 of the act of June 5, 1991 (P.L.9, No.6),
8 known as the Pennsylvania Intergovernmental Cooperation
9 Authority Act for Cities of the First Class.
10 Section 314. Licenses.
11 A license for the collection of the tax imposed by this
12 subchapter shall be issued in the same manner as is provided for
13 in section 505 of the act of June 5, 1991 (P.L.9, No.6), known
14 as the Pennsylvania Intergovernmental Cooperation Authority Act
15 for Cities of the First Class. Licensees shall be entitled to
16 the same discount as provided in section 227 of the Tax Reform
17 Code.
18 Section 315. Rules and regulations; collection costs.
19 (a) Regulations.--Rules and regulations shall be applicable
20 to the taxes imposed under section 312 in the same manner as is
21 provided for in section 506(1) and (2) of the act of June 5,
22 1991 (P.L.9, No.6), known as the Pennsylvania Intergovernmental
23 Cooperation Authority Act for Cities of the First Class.
24 (b) Administrative costs.--The department, to cover its
25 costs of administration UNDER THIS SUBCHAPTER, shall be entitled <--
26 to retain a sum equal to the costs of administration. When the
27 annual operating budget for the department is submitted to the
28 General Assembly, the department shall also submit to the
29 chairman and minority chairman of the Appropriations Committee
30 of the Senate and to the chairman and minority chairman of the
19970S0002B1571 - 34 -
1 Appropriations Committee of the House of Representatives a
2 report of the actual sums retained for costs of collection in
3 the preceding fiscal year, together with all supporting details.
4 Section 316. Procedure and administration.
5 (a) Ordinance.--Any county desiring to impose the tax
6 authorized by section 312 shall give at least 60 days' written
7 notice to every municipality and school district located in the
8 county of its intent to impose the tax and shall adopt an
9 ordinance after the expiration of 60 days after the date of such
10 notice. The notice and an ordinance shall state the tax rate and <--
11 refer to this subchapter. The ordinance shall authorize the
12 imposition of all taxes provided for in section 312. Prior to
13 adopting an ordinance imposing the tax authorized by section
14 312, the governing body of the county shall give public notice
15 of its intent to adopt the ordinance in the manner provided by
16 section 4 of the Local Tax Enabling Act and shall conduct at
17 least one public hearing regarding the proposed adoption of the
18 ordinance.
19 (b) Notification to department.--A certified copy of the
20 county ordinance shall be delivered to the department by
21 September JUNE 1 of the year prior to the effective date <--
22 thereof. The county ordinance shall become effective on the
23 January 1 following at least four SEVEN months after the date of <--
24 enactment of the county ordinance.
25 (c) Delivery of repeal ordinance.--A certified copy of a
26 repeal ordinance shall be delivered to the department at least
27 30 120 days prior to the effective date of the repeal. <--
28 Section 317. County sales and use tax funds.
29 There is hereby created for each county levying the tax under
30 section 312 the (proper name) County Sales and Use Tax Fund. The
19970S0002B1571 - 35 -
1 State Treasurer shall be custodian of the funds which shall be
2 subject to the provisions of law applicable to funds listed in
3 section 302 of the act of April 9, 1929 (P.L.343, No.176), known
4 as The Fiscal Code. Taxes imposed under section 312 shall be
5 received by the department and paid to the State Treasurer and,
6 along with interest and penalties, less any collection costs
7 allowed under this subchapter and any refunds and credits paid,
8 shall be credited to the funds not less frequently than every
9 two weeks. During any period prior to the credit of moneys to
10 the funds, interest earned on moneys received by the department
11 and paid to the State Treasurer under this subchapter shall be
12 deposited into the funds. All moneys in the funds, including,
13 but not limited to, moneys credited to the funds under this
14 section, prior year encumbrances and the interest earned
15 thereon, shall not lapse or be transferred to any other fund,
16 but shall remain in the funds. Pending their disbursement,
17 moneys received on behalf of or deposited into the funds shall
18 be invested or reinvested as are other moneys in the custody of
19 the State Treasurer in the manner provided by law. All earnings
20 received from the investment or reinvestment of the moneys shall
21 be credited to the respective funds. The Auditor General shall
22 periodically audit the records of the department relative to its
23 duties under this section and shall furnish the results of such
24 audit to any county levying the sales and use tax under section
25 312 and to any municipality or school district qualified under
26 section 320.
27 Section 318. Disbursements.
28 (a) General rule.--On or before the tenth day of every
29 month, the State Treasurer shall make the disbursements on
30 behalf of the county imposing the tax out of the moneys which
19970S0002B1571 - 36 -
1 are, as of the last day of the previous month, contained in the
2 respective county sales and use tax fund.
3 (b) Disbursement to counties.--The State Treasurer shall
4 disburse to a county imposing the tax authorized under section
5 312 an amount of money equal to 50% of the tax collected in that
6 county and remitted to the department and deposited in the
7 respective county sales and use tax fund. The county shall
8 deposit the revenue from the respective county sales and use tax
9 fund into the county general fund for disposition as provided
10 under section 701(a).
11 (c) Disbursement to municipalities.--The State Treasurer
12 shall, at the same time, disburse to the municipalities 25% of
13 the tax collected in their respective counties as provided in
14 section 320. Each municipality's portion shall be deposited in
15 the municipal general fund for disposition as provided in
16 section 701(b).
17 (d) Disbursement to school districts.--The State Treasurer
18 shall, at the same time, disburse to the school districts 25% of
19 the tax collected in their respective counties as provided in
20 section 320. Each school district's portion shall be deposited
21 in the school district's general fund for disposition as
22 provided in section 701(b).
23 Section 319. Adoption of municipal resolutions and school
24 district petitions.
25 (a) General rule.--No municipality shall be entitled to a
26 disbursement under section 318(c) and no school district shall
27 be entitled to a disbursement under section 318(d) unless one of
28 the following applies:
29 (1) Prior to enactment of the county ordinance, it
30 adopts a municipal resolution or a school district petition
19970S0002B1571 - 37 -
1 containing the statement:
2 We strongly urge the county to enact a county sales
3 and use tax and intend to accept disbursements of the
4 sales and use taxes collected.
5 Any municipality which does not enact a resolution and any
6 school district which does not enact a petition in compliance
7 with this paragraph shall not be entitled to and shall not
8 receive any distribution from funds collected during the
9 first 24 months immediately following the initial date of
10 imposition of such tax.
11 (2) Prior to October 1 of any year after the enactment
12 of the county resolution, it adopts a municipal resolution or
13 a school district petition containing the statement:
14 We support the enactment by the county of the county
15 sales and use tax and strongly urge its continuation
16 and intend to accept disbursements of the sales and
17 use taxes collected.
18 (b) Delivery.--A certified copy of the municipal resolution
19 or the school district petition shall be delivered to the county
20 commissioners, THE DEPARTMENT and the State Treasurer on or <--
21 before the enactment of the county resolution or October 15 of
22 any year thereafter, as the case may be.
23 Section 320. Qualified municipalities and school districts.
24 (a) General rule.--The State Treasurer shall distribute, on <--
25 (A) GENERAL RULE.-- <--
26 (1) THE STATE TREASURER SHALL DISTRIBUTE, ON a weighted
27 formula basis, to each municipality that qualifies under
28 subsection (c) the appropriate percentage of revenues
29 received from the county sales and use tax. Each school <--
30 district shall receive
19970S0002B1571 - 38 -
1 (2) THE STATE TREASURER SHALL DISTRIBUTE TO EACH SCHOOL <--
2 DISTRICT THAT QUALIFIES UNDER SUBSECTION (C) a portion of the
3 total disbursement to school districts which is equal to the
4 total disbursement to school districts multiplied by the
5 ratio of average daily membership of the school district
6 divided by the sum of the average daily membership of all
7 school districts in the county. For the purposes of this
8 section, "average daily membership" shall mean "average daily
9 membership" as defined by the act of March 10, 1949 (P.L.30,
10 No.14), known as the Public School Code of 1949. For school
11 districts located in more than one county, the average daily
12 membership shall be multiplied by a factor calculated by
13 dividing the square mileage of the school district located in
14 the county by the total square mileage of the school
15 district.
16 (b) Retention by county.--If a municipality or school
17 district fails to meet the requirements of subsection (c), its
18 disbursement shall be included in the disbursement to the county
19 under section 318(b).
20 (c) Qualifications.--Municipalities and school districts
21 qualified to receive disbursements under this section are
22 municipalities and school districts located within the county
23 which adopt in a timely fashion the resolution or petition
24 required under section 319.
25 Section 320.1. Municipal and school district sales and use tax
26 initiative.
27 (a) General rule.--Whenever the governing body of a county
28 elects to impose a tax on personal income under section
29 322(c)(1) or a LOCAL tax on earned income under section 331(c), <--
30 at least a majority of the municipalities and school districts
19970S0002B1571 - 39 -
1 within that county can require the governing body of the county
2 to also impose the sales and use tax as provided in section 312.
3 (b) Procedure.--
4 (1) Whenever any municipality or school district of a
5 county determines that the governing body of that county has
6 elected not to impose a tax under section 312, that
7 municipality or school district may place before the
8 governing bodies of all the municipalities and school
9 districts of that county the following question:
10 Do you favor the imposition of a county sales and use
11 tax at the rate of 1% as provided in section 312 of
12 the Optional Local Tax Enabling Act?
13 (2) The affirmative votes of the governing bodies of
14 municipalities and school districts representing at least a
15 majority of the municipalities and school districts within
16 the county shall be required to approve the question.
17 (3) The governing body of the county, upon receipt of
18 certifications from the participating municipalities and
19 school districts indicating approval of the question shall,
20 for the next calendar year and thereafter, impose the tax
21 authorized under section 312, provided that approval of the
22 electorate is obtained pursuant to the provisions of section
23 303(b).
24 (4) Municipalities and school districts intending to
25 receive proceeds from the imposition of the tax shall also
26 meet the requirements of section 319, provided that
27 municipalities and school districts voting affirmatively
28 under this subsection shall be deemed to meet the
29 requirements of section 319 for the year of initial
30 imposition.
19970S0002B1571 - 40 -
1 SUBCHAPTER C
2 PERSONAL INCOME TAX
3 Section 321. Construction.
4 The tax imposed by the governing body of a county,
5 municipality or school district under this subchapter shall be
6 in addition to any tax imposed by the Commonwealth under Article
7 III of the Tax Reform Code. Except for the differing provisions
8 under sections 501, 502 and 503, the provisions of Article III
9 of the Tax Reform Code shall apply to the tax.
10 Section 322. Personal LOCAL PERSONAL income tax. <--
11 (a) Municipalities.--A municipality shall have the power to
12 levy, assess and collect a LOCAL tax on the personal income of <--
13 resident individuals of the municipality up to a maximum rate of
14 1%, in increments of 0.25 of 1%.
15 (b) School districts.--Each school district shall have the
16 power to levy, assess and collect a LOCAL tax on personal income <--
17 of resident individuals of the school district up to a maximum
18 rate of 2%, in increments of 0.25 of 1%.
19 (c) Counties.--
20 (1) Except as provided in paragraph (2), in lieu of
21 imposing the tax under section 312, each county shall have
22 the power and may levy, assess and collect a LOCAL tax on the <--
23 personal income of resident taxpayers of the county up to a
24 maximum rate of 0.5%, in increments of 0.25%. Any county
25 which imposes a tax under this paragraph may not impose a tax
26 under section 312.
27 (2) If the governing body of a county is required to
28 also impose a sales and use tax under section 320.1(a), in
29 addition to imposing the tax under section 312, the county
30 shall have the power and may levy, assess and collect a LOCAL <--
19970S0002B1571 - 41 -
1 tax on the personal income of resident taxpayers of the
2 county up to a maximum rate of 0.5%, in increments of 0.25%.
3 Section 323. Collections.
4 Any county, municipality or school district imposing a tax
5 under section 322(a), (b) or (c) shall designate the tax officer
6 who is appointed under section 10 of the Local Tax Enabling Act,
7 or otherwise by law, as the collector of the county,
8 municipality or school district LOCAL personal income tax. In <--
9 the performance of the tax collection duties under this
10 subchapter, the designated tax officer shall have all the same
11 powers, rights, responsibilities and duties for the collection
12 of the taxes which may be imposed under the Local Tax Enabling
13 Act or otherwise AS OTHERWISE PROVIDED by law. <--
14 Section 324. Rules and regulations.
15 Taxes imposed under section 322 will be subject to the rules
16 and regulations adopted by the department pursuant to Article
17 III of the Tax Reform Code.
18 Section 325. Procedure and administration.
19 (a) Ordinance.--The governing body of the municipality, <--
20 school district or county, in order to impose the tax authorized
21 by section 322, shall adopt an ordinance which shall refer to
22 this subchapter. Prior to adopting an ordinance imposing the tax
23 authorized by section 322, the governing body shall give public
24 notice of its intent to adopt the ordinance in the manner
25 provided by section 4 of the Local Tax Enabling Act and shall
26 conduct at least one public hearing regarding the proposed
27 adoption of the ordinance.
28 (b) Delivery.--A certified copy of the ordinance imposing <--
29 the tax shall be delivered to the department no later than 90
30 days prior to the effective date of the ordinance.
19970S0002B1571 - 42 -
1 (c) Delivery of repeal ordinance.--A certified copy of a
2 repeal ordinance shall be delivered to the department at least
3 30 days prior to the effective date of the repeal.
4 SUBCHAPTER D
5 EARNED INCOME AND NET PROFITS TAX
6 Section 331. Earned income and net profits tax.
7 (a) Municipalities.--In lieu of imposing the tax under
8 section 322, a municipality shall have the power to levy, assess
9 and collect a tax on the earned income and net profits of
10 resident individuals of the municipality up to a maximum rate of
11 1%, in increments of 0.25 of 1%. Any municipality which imposes
12 a tax under this subsection shall not impose any tax under
13 section 322.
14 (b) School districts.--In lieu of imposing the tax under
15 section 322, a school district shall have the power to levy,
16 assess and collect a tax on the earned income and net profits of
17 resident individuals of the school district up to a maximum rate
18 of 2%, in increments of 0.25 of 1%. Any school district which
19 imposes a tax under this subsection shall not impose any tax
20 under section 322.
21 (c) Counties.--In lieu of imposing the tax under section <--
22 322, a county shall have the power to levy, assess and collect a
23 tax on the earned income and net profits of resident individuals
24 of the county up to a maximum rate of 0.5%, in increments of
25 0.25 of 1%. Any county which imposes a tax under this subsection
26 shall not impose any tax under section 322.
27 (C) COUNTIES.-- <--
28 (1) EXCEPT AS PROVIDED IN PARAGRAPH (2), IN LIEU OF
29 IMPOSING THE TAX UNDER SECTION 312, EACH COUNTY SHALL HAVE
30 THE POWER AND MAY LEVY, ASSESS AND COLLECT A TAX ON THE
19970S0002B1571 - 43 -
1 EARNED INCOME AND NET PROFITS OF RESIDENT TAXPAYERS OF THE
2 COUNTY UP TO A MAXIMUM RATE OF 0.5% IN INCREMENTS OF 0.25% OF
3 1%. ANY COUNTY WHICH IMPOSES A TAX UNDER THIS PARAGRAPH MAY
4 NOT IMPOSE A TAX UNDER SECTION 322.
5 (2) IF THE GOVERNING BODY OF A COUNTY IS REQUIRED TO
6 ALSO IMPOSE A SALES AND USE TAX UNDER SECTION 320.1(A), IN
7 ADDITION TO IMPOSING A TAX UNDER SECTION 312, THE COUNTY
8 SHALL HAVE THE POWER AND MAY LEVY, ASSESS AND COLLECT A TAX
9 ON THE EARNED INCOME AND NET PROFITS OF RESIDENT TAXPAYERS OF
10 THE COUNTY UP TO A MAXIMUM RATE OF 0.5% IN INCREMENTS OF
11 0.25%.
12 Section 332. Collections.
13 Any municipality, school district or county imposing a tax
14 under section 331 shall designate the tax officer who is
15 appointed under section 10 of the Local Tax Enabling Act, or
16 otherwise by law, as the collector of the earned income and net
17 profits tax. In the performance of the tax collection duties
18 under this subchapter, the designated tax officer shall have all
19 the same powers, rights, responsibilities and duties for the
20 collection of the taxes which may be imposed under the Local Tax
21 Enabling Act or otherwise AS OTHERWISE PROVIDED by law. <--
22 Section 333. Rules and regulations.
23 Taxes imposed under section 331 will be subject to the rules
24 and regulations pursuant to section 13 of the Local Tax Enabling
25 Act.
26 Section 334. Procedure and administration.
27 The governing body of the municipality, school district or
28 county, in order to impose the tax authorized by section 331,
29 shall adopt an ordinance which shall refer to this subchapter.
30 Prior to adopting an ordinance imposing the tax authorized by
19970S0002B1571 - 44 -
1 section 331, the respective governing body shall give public
2 notice of its intent to adopt the ordinance in the manner
3 provided by section 4 of the Local Tax Enabling Act, and shall
4 conduct at least one public hearing regarding the proposed
5 adoption of the ordinance.
6 SUBCHAPTER E
7 MUNICIPAL SERVICE TAX
8 Section 341. Municipal service tax.
9 (a) General rule.--Subject to the limitations established in
10 section 342, each municipality in which a taxpayer is employed
11 may levy, assess and collect a municipal service tax.
12 (b) Amount of tax.--A municipal service tax levied by a
13 municipality under an ordinance passed under the authority of
14 this act shall not exceed $30.
15 (c) Situs for tax.--Subject to the limitations in section
16 342, the situs of a municipal service tax shall be the place of
17 employment.
18 Section 342. Multiple employment locations.
19 (a) Priority of claim.--In the event a person is engaged in
20 more than one occupation or an occupation which requires the
21 person to work in more than one municipality during the calendar
22 year, the priority of claim to collect the municipal service tax
23 shall be in the following order:
24 (1) The municipality in which a person maintains his
25 principal office or is principally employed.
26 (2) The municipality in which the person resides and
27 works if the tax is levied by that municipality.
28 (3) The municipality nearest in miles to the person's
29 home in which the person is employed if the tax is levied by
30 that municipality.
19970S0002B1571 - 45 -
1 (b) Place of employment.--The place of employment shall be
2 determined as of the day the taxpayer first becomes subject to
3 the tax during the calendar year.
4 (c) Liability.--No person shall be required to pay more than
5 $30 in any calendar year without regard to the number of
6 municipalities within which the person may be employed.
7 Section 343. Collection procedures.
8 (a) Collector.--Any municipality which imposes a tax under
9 section 341 shall designate the tax officer who is appointed
10 under section 10 of the Local Tax Enabling Act, or otherwise by
11 law, as the collector of the municipality municipal services
12 tax. In the performance of the tax collection duties under this
13 subchapter, the designated tax officer shall have all the same
14 powers, rights, responsibilities and duties for the collection
15 of the taxes which may be imposed under the Local Tax Enabling
16 Act, or otherwise by law.
17 (b) Employer withholding.--Any municipality imposing a
18 municipal service tax shall have the power and may by ordinance
19 require employers to withhold the municipal service tax from the
20 compensation of employees. Any municipality which requires
21 employer withholding shall follow the procedures pursuant to
22 section 9 of the Local Tax Enabling Act.
23 SUBCHAPTERS F THROUGH I (RESERVED)
24 CHAPTER 5
25 CREDITS, EXEMPTIONS AND DEFERRALS
26 SUBCHAPTER A
27 CREDITS AND EXEMPTIONS
28 Section 501. Credits.
29 The provisions of section 14 of the Local Tax Enabling Act
30 shall be used to determine any credits under the provisions of
19970S0002B1571 - 46 -
1 this act for any taxes imposed under section 322 on the earned
2 income portion of the personal income tax or UNDER SECTION 331. <--
3 Section 502. Cities of the first class.
4 Consistent with the policy of this act to provide for
5 fairness and equity in taxation, and to help create a tax
6 climate that is favorable to economic activity, a credit against
7 personal income tax due to the Commonwealth under section 302 of
8 the Tax Reform Code shall be granted to all nonresidents of a
9 city of the first class who are subject to a tax imposed by a
10 city of the first class pursuant to the act of August 5, 1932
11 (Sp.Sess., P.L.45, No.45), referred to as the Sterling Act. The
12 credit shall equal 0.2756% of salaries, wages, commissions,
13 compensation or other income received for work done or services
14 performed within a city of the first class. The Secretary of
15 Revenue shall promulgate such regulations and forms as are
16 necessary to implement the provisions of this section.
17 Section 503. Low-income tax provisions.
18 The provisions of section 304 of the Tax Reform Code shall be
19 applied by any municipality, school district or county which
20 levies a tax under section 322 or 331.
21 Section 504. Municipal service tax exemption.
22 Each municipality which levies a municipal service tax shall
23 have the power and may, by ordinance, exempt any person whose
24 total compensation is less than $7,500 from the municipal
25 service tax.
26 Section 505. Regulations.
27 Each county, municipality or school district may adopt
28 regulations for the processing of claims under sections 501,
29 502, 503 and 504.
30 SUBCHAPTER B
19970S0002B1571 - 47 -
1 REAL ESTATE TAX DEFERRAL
2 Section 511. Short title of subchapter.
3 This subchapter shall be known and may be cited as the Real
4 Estate Tax Deferment Program Act.
5 Section 512. Findings and legislative intent.
6 (a) Findings.--The General Assembly finds as follows:
7 (1) Many tax jurisdictions are forced into an increasing
8 reliance on the real property tax.
9 (2) The high level of real property taxes in some taxing
10 jurisdictions makes it difficult for many individuals to keep
11 a home.
12 (3) The high level of real property taxes in many taxing
13 jurisdictions creates a tremendous hardship on many
14 taxpayers, especially those on fixed incomes.
15 (4) When counties conduct countywide reassessments, many
16 taxpayers experience substantial increases in their real
17 property taxes.
18 (b) Intent.--It is the intent of the General Assembly to
19 provide relief to residential property owners from tax increases
20 caused by changes in the millage rate, or assessment rates or
21 method or by a countywide reassessment. It is the further intent
22 of the General Assembly to create a program which will allow
23 counties, municipalities and school districts to defer the
24 increased portion of real property taxes when certain conditions
25 are met.
26 Section 513. Definitions.
27 The following words and phrases when used in this subchapter
28 shall have the meanings given to them in this section unless the
29 context clearly indicates otherwise:
30 "Base payment." The amount of property tax paid by an
19970S0002B1571 - 48 -
1 applicant in the base year.
2 "Base year." The tax year preceding the first tax year for
3 which a taxing authority implements the provisions of this
4 subchapter or the tax year immediately preceding an applicant's
5 entry into the tax deferral program.
6 "Claimant." A person who qualifies as a claimant under the
7 provisions of the act of March 11, 1971 (P.L.104, No.3), known
8 as the Senior Citizens Rebate and Assistance Act, whether or not
9 a claim is filed under that act and whose household income does
10 not exceed the limit provided for in section 515.
11 "Homestead." Real property which qualifies as a homestead
12 under the provisions of the act of March 11, 1971 (P.L.104,
13 No.3), known as the Senior Citizens Rebate and Assistance Act,
14 except real property which is rented or leased to a claimant.
15 "Household income." All income as defined in the act of
16 March 11, 1971 (P.L.104, No.3), known as the Senior Citizens
17 Rebate and Assistance Act, received by the claimant and by the
18 claimant's spouse while residing in the homestead during the
19 calendar year for which a tax deferral is claimed.
20 "Increases in property taxes." An increase in the property
21 tax above the base payment, resulting from a millage increase, a
22 change in the assessment ratio or method, or any other reason.
23 "Taxing authority." A county, city, borough, town, township
24 and school district that has elected to participate under this
25 act in accordance with section 303.
26 Section 514. Authority.
27 All taxing authorities shall have the power and authority to
28 grant annual tax deferrals in the manner provided in this
29 subchapter.
30 Section 515. Income eligibility. <--
19970S0002B1571 - 49 -
1 (a) First year of enactment.--During the first calendar year
2 this subchapter takes effect, a claimant shall be eligible for a
3 tax deferral if the claimant has a household income of $15,000
4 or less.
5 (b) Subsequent years.--The amount of household income
6 provided for in subsection (a) shall be increased $500 each
7 calendar year following the calendar year this subchapter takes
8 effect.
9 SECTION 515. INCOME ELIGIBILITY. <--
10 A CLAIMANT SHALL BE ELIGIBLE FOR A TAX DEFERRAL IF THE
11 CLAIMANT HAS A HOUSEHOLD INCOME NOT EXCEEDING THE HOUSEHOLD
12 INCOME ELIGIBILITY LIMITATIONS SET FORTH IN THE ACT OF MARCH 11,
13 1971 (P.L.104, NO.3), KNOWN AS THE SENIOR CITIZENS REBATE AND
14 ASSISTANCE ACT.
15 Section 516. Tax deferral.
16 (a) Amount.--An annual real estate tax deferral granted
17 under this subchapter shall equal the increase in real property
18 taxes in excess of the claimant's base payment.
19 (b) Prohibition.--No tax deferrals shall be granted if the
20 total amount of deferred taxes, plus the total amount of all
21 other unsatisfied liens on the homestead of the claimant,
22 exceeds 85% of the market value of the homestead or if the
23 outstanding principal on any and all mortgages on the homestead
24 exceeds 70% of the market value of the homestead. Market value
25 shall equal assessed value divided by the common level ratio as
26 most recently determined by the State Tax Equalization Board for
27 the county in which the property is located.
28 Section 517. Application procedure.
29 (a) Initial application.--Any person eligible for a tax
30 deferral under this subchapter may apply annually to the taxing
19970S0002B1571 - 50 -
1 authority. In the initial year of application, the following
2 information shall be provided in the manner required by the
3 taxing authority:
4 (1) A statement of request for the tax deferral.
5 (2) A certification that the applicant or the applicant
6 and his or her spouse jointly are the owners in fee simple
7 and residents of the property upon which the real property
8 taxes are imposed.
9 (3) A certification that the applicant's residence is
10 adequately insured under a homeowner's policy to the extent
11 of all outstanding liens.
12 (4) Receipts showing timely payment of the immediately
13 preceding year's nondeferred real property tax liability.
14 (5) Proof of income eligibility under section 515.
15 (b) Subsequent years.--After the initial entry into the
16 program, a claimant shall remain eligible for tax deferral in
17 subsequent years so long as the claimant continues to meet the
18 eligibility requirements of this subchapter.
19 Section 518. Contents of application.
20 Any application for a tax deferral distributed to persons
21 shall contain the following:
22 (1) A statement that the tax deferral granted under this
23 subchapter is provided in exchange for a lien against the
24 homestead of the applicant.
25 (2) An explanation of the manner in which the deferred
26 taxes shall become due, payable and delinquent and include,
27 at a minimum, the consequences of noncompliance with the
28 provisions of this subchapter.
29 Section 519. Attachment and satisfaction of liens.
30 (a) Nature of lien.--All taxes deferred under this
19970S0002B1571 - 51 -
1 subchapter shall constitute a prior lien on the homestead of the
2 claimant in favor of the taxing authority and shall attach as of
3 the date and in the same manner as other liens for taxes REAL <--
4 ESTATE TAX LIENS. The deferred taxes shall be collected as other
5 liens for taxes REAL ESTATE TAX LIENS, but the deferred taxes <--
6 shall be due, payable and delinquent only as provided in
7 subsection (b), and no interest shall be collected on the lien.
8 (b) Payment.--
9 (1) All or part of the deferred taxes may at any time be
10 paid to the taxing authority.
11 (2) In the event that the deferred taxes are not paid by
12 the claimant or the claimant's spouse during his or her
13 lifetime or during their continued ownership of the property,
14 the deferred taxes shall be paid either:
15 (i) prior to the conveyance of the property to any
16 third party; or
17 (ii) prior to the passing of the legal or equitable
18 title, either by will or by statute, to the heirs of the
19 claimant or the claimant's spouse.
20 (3) The surviving spouse of a claimant shall not be
21 required to pay the deferred taxes by reason of his or her
22 acquisition of the property due to death of the claimant as
23 long as the surviving spouse maintains his or her residence
24 in the property. The surviving spouse may continue to
25 participate in the tax deferral program in subsequent years
26 provided he or she is eligible under the provisions of this
27 subchapter.
28 SUBCHAPTERS C THROUGH J (RESERVED)
29 CHAPTER 7
30 DISPOSITION OF TAX REVENUES
19970S0002B1571 - 52 -
1 Section 701. Sales tax revenues.
2 (a) Counties.--In the fiscal year of implementation, each
3 county that imposes a sales and use tax under this act shall use
4 all revenues from the tax first to offset any lost revenue to
5 the county from the taxes prohibited under section 301(b) in an
6 amount equal to the revenue the county collected from the
7 prohibited taxes in the immediately preceding fiscal year;
8 second, to provide for an increase in budgeted revenues over the
9 preceding fiscal year in accordance with the amount specified in
10 the referendum question approved by the voters under section 303
11 and then to reduce the county real property tax by means of:
12 (1) The universal exemption or the homestead exemption.
13 (2) A reduction in the millage rate.
14 (3) Any combination of the options under paragraphs (1)
15 and (2), in accordance with section 704.
16 The department shall provide to each county that imposes a sales
17 and use tax an estimate of the total dollar amount of revenue
18 that the county can expect to receive from the county's share of
19 the 1% county sales and use tax for the fiscal year of
20 implementation. The department may charge the county for the
21 actual costs of calculating the requested estimates. Guidelines
22 concerning the costs shall be published in the Pennsylvania
23 Bulletin. In the event the actual amount of sales and use tax
24 revenue received by a county is less than the estimate of sales
25 and use tax revenue provided by the department, the county may
26 increase its real property tax millage rate to the level
27 necessary to offset any shortfall resulting from an
28 overestimation of sales and use tax revenue, as certified by the
29 department, in the fiscal year of implementation. Such increase
30 shall not be subject to the provisions of section 304(a).
19970S0002B1571 - 53 -
1 (b) Municipalities and school districts under Chapter 3.--
2 (1) All sales and use tax revenues received by any
3 municipality or school district which has elected to
4 participate under sections 303 and 319 shall be used to
5 reduce the municipal real property tax or the school district
6 real property tax, respectively, by means of:
7 (i) The universal exemption or the homestead
8 exemption.
9 (ii) A reduction in the millage rate.
10 (iii) Any combination of the options under
11 subparagraphs (i) and (ii), in accordance with section
12 704.
13 (2) A municipality or school district which has elected
14 to proceed only under section 319 shall use the sales and use
15 tax revenues received to reduce or eliminate the real
16 property tax or any taxes prohibited under section 301(b).
17 Section 702. Income tax and municipal service tax revenues.
18 (a) Municipalities.--The disposition of revenue from an
19 income tax or municipal service tax or an increase in the rate
20 of an income tax or municipal service tax imposed by a
21 municipality under the authority of this act shall occur in the
22 following manner:
23 (1) For the fiscal year of implementation of a newly
24 imposed income tax or municipal service tax, all revenues
25 received by a municipality shall first be used to offset any
26 lost revenue to the municipality from the taxes prohibited
27 under section 301(b) in an amount equal to the revenue the
28 municipality collected from the prohibited taxes in the
29 immediately preceding fiscal year; second, to provide for an
30 increase in budgeted revenues over the preceding fiscal year
19970S0002B1571 - 54 -
1 in accordance with the amount specified in the referendum
2 question approved by the voters under section 303 and then to
3 reduce the municipal real property tax by means of:
4 (i) The universal exemption or the homestead
5 exemption.
6 (ii) A reduction in the millage rate.
7 (iii) Any combination of the options under
8 subparagraphs (i) and (ii), in accordance with section
9 704.
10 (2) For the fiscal year of implementation of an increase
11 in the rate of income tax or increase in the rate of the
12 municipal service tax, all revenues received by a
13 municipality in excess of current revenue plus the percentage
14 increase in the Statewide average weekly wage or 5%,
15 whichever is less, shall be used to reduce the municipal real
16 property tax by means of:
17 (i) The universal exemption or the homestead
18 exemption.
19 (ii) A reduction in the millage rate.
20 (iii) Any combination of the options under
21 subparagraphs (i) and (ii), in accordance with section
22 704.
23 (b) Second through fourth class school districts.--The
24 disposition of revenue from an income tax or an increase in the
25 rate of an income tax imposed by school districts of the second
26 through fourth class under the authority of this act shall occur
27 in the following manner:
28 (1) For the fiscal year of implementation of a newly
29 imposed income tax, all revenues received by a school
30 district of the second through fourth class shall first be
19970S0002B1571 - 55 -
1 used to offset any lost revenue to the school district from
2 the taxes prohibited under section 301(b) in an amount equal
3 to the revenue the school district collected from the
4 prohibited taxes in the immediately preceding fiscal year;
5 second, to provide for an increase in budgeted revenues over
6 the preceding fiscal year in accordance with the amount
7 specified in the referendum question approved by the voters
8 under section 303 and then to reduce the school district real
9 property tax by means of:
10 (i) The universal exemption or the homestead
11 exemption.
12 (ii) A reduction in the millage rate.
13 (iii) Any combination of the options under
14 subparagraphs (i) and (ii), in accordance with section
15 704.
16 (2) For the fiscal year of implementation of an increase
17 in the rate of income tax, all revenues received by a school
18 district in excess of current revenue plus the percentage
19 increase in the Statewide average weekly wage or 5%,
20 whichever is less, shall be used to reduce the school
21 district of the second through fourth class real property tax
22 by means of:
23 (i) The universal exemption or the homestead
24 exemption.
25 (ii) A reduction in the millage rate.
26 (iii) Any combination of the options under
27 subparagraphs (i) and (ii), in accordance with section
28 704.
29 (c) School district of the first class A.--The disposition
30 of revenue from an income tax imposed by a school district of
19970S0002B1571 - 56 -
1 the first class A under the authority of this act shall occur as
2 follows: for the fiscal year of implementation of a newly
3 imposed income tax, all revenues received by a school district
4 of the first class A in excess of current revenue plus the
5 percentage increase in the Statewide average weekly wage or 5%,
6 whichever is less, shall be used first to offset any lost
7 revenue to the school district from the taxes prohibited under
8 section 301(b) in an amount equal to the revenue the school
9 district collected from the prohibited taxes in the immediately
10 preceding fiscal year; be used second to offset revenues to be
11 paid to the school district by the city of the second class
12 pursuant to section 3173-B of the act of July 28, 1953 (P.L.723,
13 No.230), known as the Second Class County Code, and then to
14 reduce the school district real property tax by means of:
15 (1) The universal exemption or the homestead exemption.
16 (2) A reduction in the millage rate.
17 (3) Any combination of the options under paragraphs (1)
18 and (2), in accordance with section 704.
19 (d) Counties.--The disposition of revenue from an income tax
20 or an increase in the rate of an income tax imposed by a county
21 under the authority of this act shall occur in the following
22 manner:
23 (1) For the fiscal year of implementation of a newly
24 imposed income tax, all revenues received by a county shall
25 first be used to offset any lost revenue to the county from
26 the taxes prohibited under section 301(b) in an amount equal
27 to the revenue the county collected from the prohibited taxes
28 in the immediately preceding fiscal year; second, to provide
29 for an increase in budgeted revenues over the preceding
30 fiscal year in accordance with the amount specified in the
19970S0002B1571 - 57 -
1 referendum question approved by the voters under section 303
2 and then to reduce the county real property tax by means of:
3 (i) The universal exemption or the homestead
4 exemption.
5 (ii) A reduction in the millage rate.
6 (iii) Any combination of the options under
7 subparagraphs (i) and (ii), in accordance with section
8 704.
9 (2) For the fiscal year of implementation of an increase
10 in the rate of income tax, all revenues received by a county
11 in excess of current revenue plus the percentage increase in
12 the Statewide average weekly wage or 5%, whichever is less,
13 shall be used to reduce the county real property tax by means
14 of:
15 (i) The universal exemption or the homestead
16 exemption.
17 (ii) A reduction in the millage rate.
18 (iii) Any combination of the options under
19 subparagraphs (i) and (ii), in accordance with section
20 704.
21 (e) Revenue estimates of department.--The department shall
22 provide to each taxing jurisdiction that imposes an income tax
23 under this act an estimate of the total dollar amount of revenue
24 that the taxing jurisdiction can expect to receive from an
25 income tax for the fiscal year of implementation. The department
26 may charge the taxing jurisdiction for the actual costs of
27 calculating the requested estimates. Guidelines concerning the
28 costs shall be published in the Pennsylvania Bulletin. In the
29 event the actual dollar amount of income tax revenue received by
30 a taxing jurisdiction is less than the estimate of income tax
19970S0002B1571 - 58 -
1 revenue provided by the department, the taxing jurisdiction may
2 increase its real property tax millage rate to the level
3 necessary to offset any shortfall resulting from an
4 overestimation of income tax revenue, as certified by the
5 department, in the fiscal year of implementation. Such increase
6 shall not be subject to the provisions of section 304(a).
7 Section 703. Revenue limitation exceptions.
8 (a) Exceptions listed.--The limitations in sections 701 and
9 702 may be waived, but only to the degree necessary, in the
10 following cases:
11 (1) To respond to or recover from an emergency or
12 disaster declared pursuant to 35 Pa.C.S. Pt. V (relating to
13 emergency management services), for the duration of the
14 emergency or duration of the disaster or for the costs of the
15 recovery from the emergency or disaster.
16 (2) To implement a court order or an administrative
17 decision of a Federal or State agency. In instances where the
18 tax increase is necessary to respond to a court order or an
19 administrative decision of a Federal or State agency
20 requiring a temporary increase in local expenditures, the
21 rate increase shall be rescinded following fulfillment of the
22 court ORDER OR ADMINISTRATIVE decision. <--
23 (3) To pay interest and principal on any indebtedness
24 incurred under the act of July 12, 1972 (P.L.781, No.185), <--
25 known as the Local Government Unit Debt Act 53 PA.C.S. PT. <--
26 VII SUBPT. B (RELATING TO INDEBTEDNESS AND BORROWING).
27 However, in no case may a taxing jurisdiction incur
28 additional debt under this paragraph, except for the
29 refinancing of existing debt, including the payment of costs
30 and expenses related to such refinancing and the
19970S0002B1571 - 59 -
1 establishment or funding of appropriate debt service
2 reserves.
3 (4) Taxes levied under section 607(f) of the act of
4 December 18, 1984 (P.L.1005, No.205), known as the Municipal
5 Pension Plan Funding Standard and Recovery Act, or levied to
6 pay increases in pension fund requirements which are in
7 excess of the annual average increase over the immediately
8 preceding five fiscal years.
9 (5) To increase revenues when actual and projected local
10 tax revenues, including any share of a county sales and use
11 tax, decline from the immediately preceding year but only to
12 the extent of the revenue decline.
13 (6) To respond to conditions that pose a threat of
14 immediate harm or injury to the students, staff or residents
15 of the county, municipality or school district.
16 (7) Special purpose tax levies approved by the
17 electorate.
18 (8) To respond to a Federal or State statute, regulation
19 or order adding to or significantly altering responsibilities
20 and duties or requiring expenditure of county or local funds
21 to the extent not funded by the Federal or State Government.
22 This provision shall apply only to a Federal or State
23 statute, regulation or order taking effect after the
24 effective date of this act.
25 (b) Court action.--Prior to any waiver under subsection
26 (a)(1), (4), (5), (6) or (8), approval is required by the court
27 of common pleas in the judicial district in which the governing
28 body is located. The following shall apply to any proceedings
29 instituted under this subsection:
30 (1) The governing body must prove by a preponderance of
19970S0002B1571 - 60 -
1 evidence the necessity for the waiver.
2 (2) The court may retain continuing jurisdiction in
3 these cases and may, on its own motion or on petition of an
4 interested party, revoke approval for the waiver.
5 (c) Distressed municipality or county.--This section shall
6 not be construed to prohibit any municipality or county declared
7 distressed under the act of July 10, 1987 (P.L.246, No.47),
8 known as the Municipalities Financial Recovery Act, from
9 petitioning the court of common pleas for a tax increase in
10 accordance with section 123(c) of the Municipalities Financial
11 Recovery Act.
12 (d) Standing.--Any taxpayer or business shall have standing
13 as a party to a proceeding under this section as long as the
14 taxpayer or business resides within or pays real property taxes
15 to the taxing jurisdiction of the governing body instituting the
16 action.
17 Section 704. Methods of reducing real property tax.
18 (a) General rule.--Any taxing jurisdiction that levies or
19 receives revenue from a county sales and use tax or that levies
20 an income tax under the provisions of this act shall, and any
21 home rule municipality which has elected not to proceed under
22 the provisions of this act may, achieve any required reduction
23 of the real property tax by exercising one of the four options
24 contained in the following paragraphs:
25 (1) The taxing jurisdiction may exclude from taxation by
26 means of the homestead exemption a fixed amount of the
27 assessed value of each homestead property in the taxing
28 jurisdiction within the limits, if any, imposed by Article
29 VIII of the Constitution of Pennsylvania, as provided in
30 subsection (b). The property tax shall be levied at the same
19970S0002B1571 - 61 -
1 millage rate as levied by the taxing jurisdiction for the
2 fiscal year immediately preceding the year of implementation
3 of the sales and use tax or income tax, as appropriate,
4 imposed under this act.
5 (2) The taxing jurisdiction may exclude from taxation by
6 means of the universal exemption a fixed amount of the
7 assessed value of each property in the taxing jurisdiction
8 within the limits, if any, imposed by Article VIII of the
9 Constitution of Pennsylvania. The property tax shall be
10 levied at the same millage rate as levied by the taxing
11 jurisdiction for the fiscal year immediately preceding the
12 year of implementation of the sales and use tax or income
13 tax, as appropriate, imposed under this act.
14 (3) The taxing jurisdiction may reduce the millage rate
15 of the real property tax generally to the same rate on all
16 taxable real property. The reduction in millage rate shall be
17 calculated based on the millage rate levied by the taxing
18 jurisdiction for the fiscal year immediately preceding the
19 year of implementation of the sales and use tax or income
20 tax, as appropriate, imposed under this act.
21 (4) The taxing jurisdiction may reduce the millage rate
22 of the real property tax generally to the same rate on all
23 taxable real property in combination with either the
24 homestead exemption as provided under paragraph (1) or the
25 universal exemption as provided under paragraph (2). The
26 reduction in the real property millage rate shall be
27 calculated based on the millage rate levied by the taxing
28 jurisdiction for the fiscal year immediately preceding the
29 year of implementation of the sales and use tax or income
30 tax, as appropriate, imposed under this act.
19970S0002B1571 - 62 -
1 (b) Limitations.--
2 (1) A governing body may only reduce the real property
3 tax by means of the homestead exemption, separately, or in
4 combination with a general reduction in the taxing
5 jurisdiction's real property millage rate, as provided in
6 subsection (a), if a constitutional amendment authorizing an
7 exclusion from taxation of an amount of the assessed value of
8 homestead property is ratified. In the event the
9 constitutional amendment is not proposed or ratified, nothing
10 in this section shall preclude or prohibit any taxing
11 jurisdiction from reducing the real property tax as is
12 otherwise provided in subsection (a).
13 (2) (i) Any taxing jurisdiction which elects to reduce
14 the real property tax by means of the homestead exemption
15 shall reduce the assessed value of each homestead in the
16 taxing jurisdiction by a fixed amount established by its
17 governing body up to a maximum which shall not exceed the
18 limits contained in section 2(b) of Article VIII of the
19 Constitution of Pennsylvania.
20 (ii) After a countywide revision of assessments
21 within a county where a taxing jurisdiction which has
22 established a homestead exemption is located, the
23 governing body of the taxing jurisdiction shall adjust
24 the amount of the homestead exemption as follows:
25 (A) if the county changes its assessment base by
26 applying a change in the established predetermined
27 ratio, the homestead exemption shall be adjusted by
28 the percentage change between the existing
29 predetermined ratio and the newly established
30 predetermined ratio; or
19970S0002B1571 - 63 -
1 (B) if the county performs a countywide revision
2 of assessments by revaluing all properties and
3 applying an established predetermined ratio, the
4 homestead exemption shall be adjusted by dividing the
5 homestead exemption for the year preceding the
6 countywide revision of assessments by the common
7 level ratio and multiplying the quotient of that
8 calculation by the newly established predetermined
9 ratio.
10 (3) If after reducing the real property tax by means of
11 either the homestead exemption or the universal exemption
12 there are any revenues remaining from a sales and use tax or
13 income tax imposed under this act, the remaining revenues
14 shall be used to further reduce the real property tax by
15 means of a uniform reduction in the millage rate.
16 (c) Definitions.--As used in this section, the following
17 words and phrases shall have the meanings given to them in this
18 subsection:
19 "Common level ratio." The ratio of assessed value to current
20 market value used generally in the county as last determined by
21 the State Tax Equalization Board under the act of June 27, 1947
22 (P.L.1046, No.447), referred to as the State Tax Equalization
23 Board Law.
24 "Established predetermined ratio." The ratio of assessed
25 value to market value established by the board of county
26 commissioners and uniformly applied in determining assessed
27 value in any year.
28 "Homestead." A dwelling, and as much of the land surrounding
29 it as is reasonably necessary for the use of a dwelling as a
30 home, occupied as the principal dwelling place by the owner or
19970S0002B1571 - 64 -
1 owners thereof. The term also includes premises occupied by
2 reason of ownership by individuals as defined in section 301 of
3 the Tax Reform Code. The term also includes premises occupied by
4 reason of ownership in a cooperative housing corporation, mobile
5 homes which are assessed as realty for local property tax
6 purposes and the land, if owned by the person claiming the
7 homestead property exemption upon which the mobile home is
8 situated, and other similar living accommodations, as well as
9 part of a multidwelling or multipurpose building and a part of
10 the land on which it is built. The term also includes premises
11 occupied by reason of ownership of a dwelling located on land
12 owned by a nonprofit incorporated association of which the
13 person claiming the homestead property exemption is a member, if
14 the person is required to pay a pro rata share of the property
15 taxes levied against the association's land. As used in this
16 subsection, the term "owner" includes a person in possession
17 under a contract of sale, deed of trust, life estate, joint
18 tenancy or tenancy in common or by reason of statutes of descent
19 or distribution.
20 CHAPTER 9
21 REGISTER FOR CERTAIN TAXES
22 Section 901. Definitions.
23 The following words and phrases when used in this chapter
24 shall have the meanings given to them in this section unless the
25 context clearly indicates otherwise:
26 "Department." The Department of Community and Economic
27 Development of the Commonwealth.
28 Section 902. Register for taxes under this act.
29 (a) General rule.--It shall be the duty of the department to
30 have available an official continuing register supplemented
19970S0002B1571 - 65 -
1 annually of all sales and use, LOCAL personal income, earned <--
2 income and net profits and municipal service taxes levied under
3 this act.
4 (b) Contents of register.--The register and its supplements
5 shall list:
6 (1) The counties, municipalities or school districts
7 levying LOCAL personal income tax, earned income and net <--
8 profits tax, municipal service tax or sales and use tax.
9 (2) The rate of tax as stated in the ordinance levying
10 the tax.
11 (3) The rate on taxpayers.
12 (4) The name and address of the tax officer responsible
13 for administering the collection of the tax and from whom
14 information, forms for reporting and copies of rules and
15 regulations are available.
16 Section 903. Information for register.
17 Information for the register shall be furnished by the chief
18 clerk or secretary of each county, municipality or school
19 district to the department in such manner and on such forms as
20 the department may prescribe. The information must be received
21 by the department no later than July 15 of each year to show new
22 tax enactments, repeals and changes. Failure to comply with this
23 date for filing may result in the omission of the tax levy from
24 the register for that year. Failure of the department to receive
25 information of taxes continued without change may be construed
26 by the department to mean that the information contained in the
27 previous register remains in force.
28 Section 904. Availability and effective period of register.
29 The department shall have the register, with such annual
30 supplements as may be required by new tax enactments, repeals or
19970S0002B1571 - 66 -
1 changes, available upon request no later than August 15 of each
2 year. The effective period for each register shall be from July
3 1 of the year in which it is issued to June 30 of the following
4 year.
5 Section 905. Effect of nonfiling.
6 Employers shall not be required by any ordinance to withhold
7 from the compensation of their employees any LOCAL personal <--
8 income tax, earned income and net profits tax or municipal
9 service tax imposed under the provisions of this act which is
10 not listed in the register or to make reports of compensation in
11 connection with taxes not so listed. If the register is not
12 available by August 15, the register of the previous year shall
13 continue temporarily in effect for an additional period of not
14 more than one year.
15 Section 906. Effect of chapter on liability of taxpayer.
16 The provisions of this chapter shall not affect the liability
17 of any taxpayer for taxes lawfully imposed under this act.
18 CHAPTER 11
19 LIMITATIONS ON SPENDING
20 Section 1101. Definitions.
21 The following words and phrases when used in this chapter
22 shall have the meanings given to them in this section unless the
23 context clearly indicates otherwise:
24 "Authority." A municipal authority created under the act of
25 May 2, 1945 (P.L.382, No.164), known as the Municipality
26 Authorities Act of 1945, or a body corporate and politic created
27 by one or more political subdivisions pursuant to statute.
28 "Political subdivision." A county, city, borough,
29 incorporated town, township or school district, including a
30 county of the first class, a city of the first class and a
19970S0002B1571 - 67 -
1 school district of the first class or an authority, as defined.
2 Section 1102. Political subdivisions exempt from certain laws.
3 After the effective date of this section, a political
4 subdivision shall not be bound by any subsequent enactment of
5 the General Assembly requiring the political subdivision to
6 spend new or additional funds unless at least one of the
7 following apply:
8 (1) at the time of the enactment, there has been
9 appropriated funds estimated by the Local Government
10 Commission, created by the act of May 29, 1935 (P.L.244,
11 No.102), referred to as the Local Government Commission Law,
12 to be sufficient to fund the new or additional expenditure;
13 (2) the General Assembly authorizes the political
14 subdivision to enact a funding source which was not available
15 to the political subdivision prior to the effective date of
16 the statute requiring the expenditure of new or additional
17 funds and which can be used to generate the amount of funds
18 estimated to be sufficient to fund that expenditure;
19 (3) each house of the General Assembly passes, by a vote
20 of two-thirds of all members ELECTED TO EACH HOUSE, a <--
21 resolution explicitly exempting the Commonwealth from funding
22 a specific statute or providing a funding source for that
23 specific statute; or
24 (4) the statute requiring the political subdivision to
25 spend new or additional funds is either enacted to comply
26 with a Federal requirement or to become eligible for a
27 Federal entitlement, where the Federal requirement or
28 entitlement specifically contemplates actions by political
29 subdivisions.
30 Section 1103. Statutes relating to revenue raising.
19970S0002B1571 - 68 -
1 Except by a vote of two-thirds of all the members elected to
2 each house, the General Assembly may not enact, amend or repeal
3 any law after the effective date of this act if the anticipated
4 effect of enactment, amendment or repeal would be to reduce the
5 authority that any political subdivision has to raise revenues,
6 in the aggregate, as that authority exists on the effective date
7 of this section.
8 Section 1104. Exemptions.
9 The provisions of sections 1102 and 1103 shall not apply to:
10 (1) Any funding formula which exists on the effective
11 date of this section.
12 (2) Any funding necessary to supply any pension benefit
13 which exists on the effective date of this section.
14 (3) Any statute which relates to the enforcement of
15 criminal laws but not to the execution of judicial sentences.
16 (4) Election laws.
17 (5) General appropriation acts.
18 (6) Special appropriation acts.
19 Section 1105. Mandate review.
20 (a) Duties of Local Government Commission.--The Local
21 Government Commission shall have the following powers and
22 duties:
23 (1) To make estimates of necessary funding, where
24 required, under section 1101 1102. <--
25 (2) In consultation with the mandate advisory board
26 created in subsection (b), to make recommendations to the
27 General Assembly concerning the termination, continuation or
28 revision of existing or future mandates.
29 (3) In consultation with the Legislative Data Processing
30 Center, to create the necessary information system to perform
19970S0002B1571 - 69 -
1 the duties imposed on it under this chapter.
2 (4) To employ and supervise the personnel required to
3 perform the duties imposed on it under this chapter.
4 (b) Mandate Advisory Board.--There is hereby created a
5 Mandate Advisory Board to the Local Government Commission. The
6 Mandate Advisory Board shall consist of the following members:
7 (1) Four members of the Local Government Commission,
8 appointed by the chairperson of the Local Government
9 Commission, one of whom shall be a member of the majority
10 party of the Senate, one of whom shall be a member of the
11 minority party of the Senate, one of whom shall be a member
12 of the majority party of the House of Representatives and one
13 of whom shall be a member of the minority party of the House
14 of Representatives.
15 (2) Seven members, with one member to be appointed by
16 each of the following organizations:
17 (i) Pennsylvania League of Cities and
18 Municipalities.
19 (ii) Pennsylvania State Association of Boroughs.
20 (iii) County Commissioners Association of
21 Pennsylvania.
22 (iv) Pennsylvania State Association of Township
23 Commissioners.
24 (v) Pennsylvania State Association of Township
25 Supervisors.
26 (vi) Pennsylvania School Boards Association.
27 (vii) Pennsylvania Municipal Authorities
28 Association.
29 (3) The secretaries or acting secretaries of the
30 following seven departments or their respective designees
19970S0002B1571 - 70 -
1 shall be ex officio members:
2 (i) Department of Education.
3 (ii) Department of Environmental Protection.
4 (iii) Department of Health.
5 (iv) Department of Public Welfare.
6 (v) Department of Labor and Industry.
7 (vi) Department of Community and Economic
8 Development.
9 (vii) Department of Transportation.
10 (c) Terms and vacancies.--Members of the Mandate Advisory
11 Board, except for the ex officio members, shall be appointed for
12 a term of two years. Members may be reappointed to succeed
13 themselves. Vacancies shall be filled by the appointing
14 authority.
15 (d) Chairperson.--The Mandate Advisory Board shall elect a
16 chairperson from its membership.
17 (e) Powers and duties.--The Mandate Advisory Board shall
18 have the following powers and duties:
19 (1) With the assistance of the Local Government
20 Commission staff, to review current laws constituting
21 mandates on political subdivisions by the Commonwealth.
22 (2) With the approval of the Local Government
23 Commission, to conduct hearings, take testimony and make
24 investigations concerning the impact of mandates within this
25 Commonwealth.
26 (3) To obtain reasonably accessible information and
27 assistance from any municipal organization which appoints a
28 member to the Mandate Advisory Board.
29 (4) To recommend to the Local Government Commission
30 termination, continuation or revision of Commonwealth
19970S0002B1571 - 71 -
1 mandates on political subdivisions.
2 (f) Cooperation by Commonwealth agencies.--Commonwealth
3 agencies, as defined in 42 Pa.C.S. § 102 (relating to
4 definitions), at the request of the chairperson of the Local
5 Government Commission, are authorized and directed to supply
6 information, suggestions, estimates and statistics as requested <--
7 to assist the Local Government Commission or the Mandate
8 Advisory Board in performing their duties under this chapter.
9 (g) Report.--A preliminary report on the Mandate Advisory
10 Board's work shall be due within one year of the effective date
11 of this act. The report shall establish a timetable for a
12 complete review of all existing mandates.
13 (h) Compensation.--Members of the Mandate Advisory Board
14 shall serve without compensation but shall be reimbursed for all
15 necessary and actual expenses incurred in the performance of
16 their duties.
17 (i) Expenses.--The funds required by the Local Government
18 Commission and the Mandate Advisory Board to perform their
19 duties under this chapter, including the expenses of the Mandate
20 Advisory Board, shall be appropriated as a separate budget line
21 item to the Local Government Commission.
22 CHAPTER 13
23 LIMITS ON REAL PROPERTY ASSESSMENTS
24 Section 1301. Limits on real property assessments.
25 (a) Limits on counties of the first class.--Notwithstanding
26 any provisions of the act of June 27, 1939 (P.L.1199, No.404),
27 entitled "An act relating to the assessment of real and personal
28 property and other subjects of taxation in counties of the first
29 class; providing for the appointment of members of the board of
30 revision of taxes by the judges of the courts of common pleas;
19970S0002B1571 - 72 -
1 providing for the appointment, by the board, of personal
2 property assessors, real estate assessors and assistant real
3 estate assessors, clerks and other employes; fixing the salaries
4 of members of the board, assessors and assistant assessors, and
5 providing for the payment of salaries and expenses from the
6 county treasury; prescribing the powers and duties of the board
7 and of the assessors, the time and manner of making assessments,
8 of the revision and notice of assessments and of appeals
9 therefrom; prescribing the records of assessments; and repealing
10 existing laws," relating to the assessment of real property and
11 personal property in counties of the first class, to the
12 contrary, when a county of the first class or the board of
13 revision of taxes in a county of the first class makes its
14 annual reassessment at values based upon an established
15 predetermined ratio, as required by law, or when a county of the
16 first class or the board of revision of taxes in a county of the
17 first class changes its predetermined ratio, any political
18 subdivision within or coterminous with the county of the first
19 class, which hereafter levies its real estate taxes on that
20 revised assessment or valuation, shall for that year reduce its
21 tax rate, if necessary, for the purpose of having the total
22 amount of property tax revenue received exclusively as a result
23 of the reassessment or change in ratio not to exceed 110% of the
24 total amount of property tax revenue received in the preceding
25 year, notwithstanding the increased valuations of properties
26 under the annual reassessment system. For the purpose of
27 determining the total amount of revenue received exclusively as
28 a result of the reassessment or change in ratio for the year,
29 the amount to be levied on newly constructed buildings or
30 structures or on increased valuations based on new improvements
19970S0002B1571 - 73 -
1 made to existing structures shall not be considered. Nothing in
2 this section shall prevent a political subdivision from
3 increasing its tax rate on real property after having lowered
4 its tax rate pursuant to this section, provided that public
5 notice of the tax increase be published and information
6 concerning the estimated amount of real property tax increase by
7 class, expressed as an average percent increase by class, and
8 the estimated revenues to be derived from the tax increase be
9 available for public inspection at least twenty days prior to
10 the official enactment of the tax increase by the responsible
11 elected officials.
12 (b) Limits on counties of the second class.--Notwithstanding
13 any provisions of the act of June 21, 1939 (P.L.626, No.294),
14 referred to as the Second Class County Assessment Law, to the
15 contrary, when a county of the second class makes its annual
16 reassessment at values based upon an established predetermined
17 ratio, as required by law, or when a county of the second class
18 changes its established predetermined ratio, each political
19 subdivision, which hereafter levies its real estate taxes on
20 that revised assessment or valuation, shall for that year reduce
21 its tax rate, if necessary, for the purpose of having the total
22 amount of property tax revenue received exclusively as a result
23 of the reassessment or change in ratio not to exceed 105% of the
24 total amount of property tax revenue received in the preceding
25 year, notwithstanding the increased valuations of properties
26 under the annual reassessment system. For the purpose of
27 determining the total amount of revenue received exclusively as
28 a result of the reassessment or change in ratio for the year,
29 the amount to be levied on newly constructed buildings or
30 structures or on increased valuations based on new improvements
19970S0002B1571 - 74 -
1 made to existing structures shall not be considered. Nothing in <--
2 this section shall prevent any political subdivision within a
3 second class county from increasing its tax rate on real
4 property after having lowered its tax rate pursuant to this
5 section, provided that the governing body of the affected
6 county, school district or municipality first obtains the
7 approval of the electorate in accordance with the public
8 referendum provisions set forth in section 304(a). For purposes
9 of the referendum, sections 105(b) and 304(b) shall apply.
10 Section 304(c) shall not apply. This subsection shall apply
11 regardless of whether there is an election to participate under
12 section 303(a).
13 CHAPTER 15
14 HOME RULE SCHOOL DISTRICT TAX CHARTERS
15 SUBCHAPTER A
16 PRELIMINARY PROVISIONS
17 Section 1501. Definitions.
18 The following words and phrases when used in this chapter
19 shall have the meanings given to them in this section unless the
20 context clearly indicates otherwise:
21 "Board." The State Board of Education.
22 "County board of elections" or "county election board." The
23 county board of elections having jurisdiction over elections in
24 school districts of the first class A and of the second, third
25 or fourth class, as provided by the act of June 3, 1937
26 (P.L.1333, No.320), known as the Pennsylvania Election Code.
27 "Department." The Department of Education of the
28 Commonwealth.
29 "Election officials." The county boards of elections.
30 "Electors." The registered voters of any school district
19970S0002B1571 - 75 -
1 involved in proceedings relating to the adoption of a home rule
2 school district tax charter.
3 "Home rule school district tax charter." A written document
4 defining the powers, structure, privileges, rights and duties of
5 the school district and limitations on the school district.
6 "Nonresident." Any person or entity not a resident of the
7 school district within the meaning of this chapter.
8 "Pennsylvania Election Code." The act of June 3, 1937
9 (P.L.1333, No.320), known as the Pennsylvania Election Code.
10 "Rate of taxation." The amount of tax levied by a school
11 district on a permissible subject of taxation.
12 "Resident." Any person or any corporation, partnership,
13 association, joint stock association or other entity:
14 (1) living in or maintaining a permanent or fixed place
15 of abode in a school district; or
16 (2) conducting or engaging in a business for profit
17 within a school district.
18 "School board." The locally elected board of school
19 directors in school districts of the first class A and of the
20 second, third or fourth class.
21 "School district study commission" or "commission." The body
22 composed of electors of the school district elected under the
23 provisions of this chapter.
24 "Secretary." The Secretary of Education of the Commonwealth.
25 "Subject of taxation." Any person, business, corporation,
26 partnership, entity, real property, tangible or intangible
27 personal property, property interest, transaction, occurrence,
28 privilege, transfer, occupation or any other levy which is
29 determined to be taxable by the General Assembly. The term shall
30 not be construed to mean the rate of tax which may be imposed on
19970S0002B1571 - 76 -
1 a permissible subject of taxation.
2 Section 1502. Authorization.
3 In accordance with this chapter, a school district may adopt
4 a home rule school district tax charter under which the district
5 will operate.
6 SUBCHAPTER B
7 PROCEDURE FOR ADOPTION OF HOME RULE SCHOOL
8 DISTRICT TAX CHARTER
9 Section 1511. Submission of question regarding election of
10 commission.
11 (a) General rule.--Whenever authorized by a resolution of
12 the board of school directors or upon petition of the registered
13 voters of any school district to the county board of elections
14 in which the major number of registered electors of the school
15 district reside, an election shall be held in the school
16 district upon the following question:
17 "Shall a school district study commission of (seven, nine
18 or eleven) members be elected to study the existing
19 funding and tax structure, TAX STRUCTURE, EXPENDITURES <--
20 AND EFFICIENCY of the school district, to consider the
21 advisability of the adoption of a home rule school
22 district tax charter and, if advisable, to draft and to
23 recommend a home rule school district tax charter?"
24 The county board of elections shall prepare a nonlegal
25 interpretative statement to accompany the question in accordance
26 with section 201.1 of the Pennsylvania Election Code.
27 (b) Signatures.--The petition calling for the election shall
28 be signed by electors of the school district comprising 5% of
29 the number of electors voting for the Office of Governor in the
30 last gubernatorial general election within the school district.
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1 (c) Procedure.--Within five days after the adoption of a
2 resolution of the school board authorizing the election, the
3 secretary of the school board shall file a certified copy of the
4 resolution with the county board of elections, together with a
5 copy of the question to be submitted to the electors. At the
6 next municipal, general or primary election occurring not
7 earlier than the 13th Tuesday after the filing of the resolution
8 or the petition with the county election board, the election
9 board shall cause the question in subsection (a) to be submitted
10 to the electors of the school district as other questions are
11 submitted under the provisions of the Pennsylvania Election
12 Code.
13 (d) Time limits.--A referendum petition under this section
14 shall be filed not later than the 13th Tuesday prior to the
15 election. The petition and the proceedings shall be in the
16 manner and subject to the provisions of the election laws which
17 relate to the signing, filing and adjudication of nomination
18 petitions insofar as such provisions are applicable, except
19 that:
20 (1) no referendum petition shall be signed or circulated
21 prior to the 20th Tuesday before the election nor later than
22 the 13th Tuesday before the election;
23 (2) no candidate's nomination petition shall be signed
24 or circulated prior to the 13th Tuesday before the election
25 nor later than the 10th Tuesday before the election; and
26 (3) no candidate's nomination petition shall be filed on
27 or before the 10th Tuesday before the election.
28 (e) County jurisdiction.--If a school district is situated
29 in two or more counties, the county board of elections which has
30 received the petition of registered voters to hold an election
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1 on the question of a school district study commission or a
2 resolution of the school board authorizing the election shall
3 provide to the county election board of each other county in
4 which the school district is situated a copy of the question to
5 be submitted to the electors and the nonlegal interpretative
6 statement which must accompany the question and shall certify to
7 each election board the list of the name and address of each
8 candidate for membership on the school district study commission
9 who has filed nomination petitions under sections 1512 and 1513.
10 Each county board of elections shall cause the question to be
11 submitted to the electors of the school district, as provided
12 under subsection (a), and shall place upon the ballot containing
13 the question the name of each candidate for the office of school
14 district study commissioner under section 1512.
15 Section 1512. Election of school district study commission
16 members.
17 A school district study commission of seven, nine or eleven
18 members as designated in the question shall be elected by the
19 qualified voters at the same election the question is submitted
20 to the electors. Each candidate for the office of school
21 district study commissioner shall be nominated and placed upon
22 the ballot containing the question in the manner provided by and
23 subject to the provisions of the Pennsylvania Election Code
24 which relate to the nomination of a candidate nominated by
25 nomination papers filed for other offices elected by the voters
26 of a school district, except that each candidate shall be
27 nominated and listed without any political designation or slogan
28 and no nomination paper shall be signed or circulated prior to
29 the 13th Tuesday before the election, nor later than the 10th
30 Tuesday before the election. No signature shall be counted
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1 unless it bears a date within this period. Each voter shall be
2 instructed to vote on the question and, regardless of the manner
3 of the vote on the question, to vote for the designated number
4 of members of a school district study commission who shall serve
5 if the question is or has been determined in the affirmative. If
6 an insufficient number of nominating papers is filed to fill all
7 of the designated positions on the study commission, the
8 question of establishing a commission shall be placed on the
9 ballot; however, unless a sufficient number of study commission
10 members are elected by receiving at least as many votes as
11 signatures are required to file a nominating petition, then the
12 question of creating a study commission shall be deemed to have
13 been rejected.
14 Section 1513. Nomination of candidates for school district
15 study commission.
16 (a) Qualifications.--Candidates for the school district
17 study commission must be registered voters of the school
18 district. Each candidate shall be nominated by nomination papers
19 signed by a number of qualified electors of the school district
20 equal at least to 2% of the number of electors voting for the
21 Office of Governor in the last gubernatorial general election
22 within the school district or 200 registered voters, whichever
23 is less, and filed with elections officials at the county board
24 of elections of the county in which the major number of the
25 registered electors of the school district reside not later than
26 the 10th Tuesday prior to the date of the election.
27 (b) Nomination contents.--Each nominating paper shall set
28 forth the name, place of residence and post office address of
29 the candidate nominated; that the nomination is for the office
30 of school district study commissioner; and that the signers are
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1 legally qualified to vote for such candidate. Each elector may
2 sign nomination papers for as many candidates for school
3 district study commissioner as, and no more than, the elector
4 could vote for at the election. Every voter signing a nominating
5 paper shall add to his signature the voter's place of residence,
6 post office address and street number, if any.
7 (c) Acceptance.--Each nominating paper must, before it may
8 be filed with the county board of elections, contain under oath
9 or affirmation of the candidate an acceptance of the nomination
10 in writing, signed by the candidate nominated, upon or annexed
11 to such paper, or, if the same person is named in more than one
12 paper, upon or annexed to one of such papers. The acceptance
13 must certify that the candidate is a registered voter of the
14 school district; that the nominee consents to stand as a
15 candidate at the election; and that, if elected the nominee
16 agrees to take office and serve.
17 (d) Verification.--Each nominating paper must be verified by
18 an oath or affirmation of one or more of the signers thereof,
19 taken and subscribed before a person qualified under the laws of
20 this Commonwealth to administer an oath, to the effect that the
21 paper was signed by each of the signers thereof in the signer's
22 proper handwriting; that the signers are, to the best knowledge
23 and belief of the affiant, registered voters of the school
24 district; and that the nomination paper is prepared and filed in
25 good faith for the sole purpose of endorsing the person named in
26 the nomination paper for election as stated in the paper.
27 Section 1514. Election returns.
28 The result of the votes cast for and against the question as
29 to the election of a school district study commission shall be
30 returned by the election officers; and a canvass of such
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1 election had SHALL BE CONDUCTED, as is provided by law in the <--
2 case of other public questions put to the voters of a single
3 school district. The votes cast for members of the commission
4 shall be counted; the result thereof shall be returned by the
5 election officers; and a canvass of such election shall be had,
6 as is provided by law in the case of election of members of a
7 school board. The designated number of candidates receiving the
8 greatest number of votes shall be elected and shall constitute
9 the commission. However, if a majority of those voting on the
10 question vote against the election of a commission, none of the
11 candidates shall be elected. If two or more candidates for the
12 last seat are equal in number of votes, they shall draw lots to
13 determine which one shall be elected.
14 Section 1515. Oath or affirmation of commission members.
15 As soon as possible and in any event no later than ten days
16 after its certification of election, the members of a school
17 district study commission shall, before a judge of a court of
18 common pleas, make oath or affirmation to support the
19 Constitution of the United States and the Constitution of
20 Pennsylvania and to perform the duties of the office with
21 fidelity.
22 Section 1516. School district study commission organization.
23 As soon as possible and, in any event, no later than 15 days
24 after its certification of election, the school district study
25 commission shall organize and hold its first meeting and elect
26 one of its members as chair and another member as vice chair,
27 fix its hours and place of meeting and adopt rules for the
28 conduct of its business as it may consider necessary and
29 advisable. A majority of the members of the commission shall
30 constitute a quorum for the transaction of business, but no
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1 recommendation of the commission shall have any legal effect
2 unless adopted by a majority of the members of the commission.
3 Section 1517. Vacancy and appointment of school district study
4 commission.
5 In case of any vacancy on the school district study
6 commission, the remaining members of the commission shall fill
7 it by appointing to the commission another properly qualified
8 elector.
9 Section 1518. Powers and duties of school district study
10 commission.
11 It is the power and duty of the school district study
12 commission to study the funding and tax structure of the school <--
13 district. The commission shall determine, based on its study of
14 the school district, whether in its judgment the school children
15 and other residents of the school district would be better
16 served, or the school district made more clearly responsible or
17 accountable to the people or whether the district's operations
18 could become more economical or efficient under, TAX STRUCTURE, <--
19 EXPENDITURES AND EFFICIENCY OF THE SCHOOL DISTRICT. THE
20 COMMISSION SHALL DETERMINE, BASED ON ITS STUDY OF THE SCHOOL
21 DISTRICT, THE MEANS BY WHICH THE SCHOOL STUDENTS AND OTHER
22 RESIDENTS OF THE SCHOOL DISTRICT COULD BE BETTER SERVED, THE
23 MEANS BY WHICH THE SCHOOL DISTRICT COULD BE MADE MORE
24 RESPONSIBLE AND ACCOUNTABLE TO THE PEOPLE AND THE MEANS BY WHICH
25 THE DISTRICT'S OPERATIONS COULD BE MADE MORE ECONOMICAL OR
26 EFFICIENT. THE COMMISSION SHALL MAKE A RECOMMENDATION REGARDING
27 THE ADOPTION OF a home rule school district tax charter.
28 Section 1519. Compensation of school district study
29 commissioners.
30 Members of the school district study commission shall serve
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1 without compensation but shall be reimbursed by the school
2 district for their necessary expenses incurred in the
3 performance of their duties. The school board shall appropriate
4 money necessary for such purpose. Within the limits of such
5 appropriations and other public and privately contributed funds
6 and services as shall be made available to it, the commission
7 may appoint consultants and clerical and other assistants to
8 serve at the pleasure of the commission and may fix a reasonable
9 compensation to be paid the consultants and clerical and other
10 assistants AND PROVIDE FOR REIMBURSEMENTS FOR THEIR NECESSARY <--
11 AND REASONABLE EXPENSES INCURRED IN THE PERFORMANCE OF THEIR
12 DUTIES.
13 Section 1520. Public and private hearings.
14 The school district study commission shall hold public
15 hearings, may hold private hearings and sponsor public forums
16 and generally shall provide for the widest possible public
17 information and discussion respecting the purposes and progress
18 of its work.
19 Section 1521. Commission report.
20 (a) Report.--The school district study commission shall
21 report its findings and recommendations to the citizens of the
22 school district within nine months from the date of its election
23 except that it shall be permitted an additional nine months if
24 it elects to prepare and submit a proposed home rule school
25 district tax charter. It shall publish or cause to be published
26 sufficient copies of its final report for public study and
27 information and shall deliver to the superintendent of the
28 school district and to the board of school directors sufficient
29 copies of the report to supply it to any interested citizen upon
30 request. If the commission shall recommend the adoption of a
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1 home rule school district tax charter, the report shall contain
2 the complete plans as recommended.
3 (b) Addendum.--There shall be attached to each copy of the
4 report of the commission, as a part of the report of the
5 commission, a statement sworn to by the members of the
6 commission listing in detail the funds, goods, materials and
7 services, both public and private, used by the commission in the
8 performance of its work and the preparation and filing of the
9 report. In addition, the list shall identify specifically the
10 supplier of each item on the list.
11 (c) Filing.--A copy of the final report of the commission
12 with its findings and recommendations shall be filed with the
13 secretary.
14 (d) Availability.--All the records, reports, tapes, minutes
15 of meetings and written discussions of the school district study
16 commission shall upon its discharge be turned over to the
17 superintendent of the school district for permanent safekeeping
18 and made available for public inspection at any time during
19 regular business hours.
20 Section 1522. Discharge of commission.
21 (a) General rule.--The school district study commission
22 shall be discharged upon the filing of its report. However, if
23 the commission's recommendations require further procedure in
24 the form of a referendum on the part of the people ELECTORS of <--
25 the school district, the commission shall not be discharged
26 until the procedure has been finally concluded. At any time
27 prior to 60 days before the date of such referendum, the
28 commission may modify or change any recommendation set forth in
29 the final report by publishing an amended report.
30 (b) Effect.--Whenever a commission issues an amended report
19970S0002B1571 - 85 -
1 under subsection (a), the amended report shall supersede the
2 final report; and the final report shall cease to have any legal
3 effect under this chapter.
4 (c) Procedure.--The procedure to be taken under the amended
5 report shall be governed by all provisions of this chapter
6 applicable to the final report of a commission submitted under
7 section 1521.
8 Section 1523. Recommendation of school district study
9 commission.
10 The CONSISTENT WITH THE DUTIES SET FORTH IN THIS CHAPTER, THE <--
11 school district study commission shall report and recommend in
12 accordance with the question presented to the electorate as
13 provided in section 1511 any of the following:
14 (1) A WHETHER A referendum shall be held to submit to <--
15 the qualified voters of the school district the question of
16 adopting a home rule school district tax charter as prepared
17 by the commission and as authorized by this chapter.
18 (2) The WHETHER THE form and tax structure of the school <--
19 district shall remain unchanged.
20 (3) Other action as it may deem WHETHER OTHER ACTION <--
21 SHALL BE TAKEN AS IT MAY BE DEEMED advisable consistent with
22 its function DUTY set forth in this chapter. <--
23 Section 1524. Content of home rule school district tax charter.
24 If the school district study commission recommends the
25 adoption of a home rule school district tax charter, the
26 proposed home rule school district tax charter shall contain a
27 description of the following:
28 (1) The proposed funding and tax structure of the school
29 district.
30 (2) The tax or taxes which may be levied and assessed;
19970S0002B1571 - 86 -
1 the maximum rate of the tax or taxes or a statement that
2 there shall be no limit on the rate of taxation of the tax or
3 taxes authorized under the home rule school district tax
4 charter; the initial rate of the tax or taxes and the
5 procedure, if any, the governing body of the home rule school
6 district must follow before a tax rate may be increased or
7 any additional tax levied and assessed or any new tax which
8 has been authorized for school districts of the first class A
9 and districts of the second, third or fourth class imposed.
10 Nothing in this chapter shall preclude a school district from
11 levying a tax at a rate below the maximum rate specified in
12 the home rule school district tax charter.
13 (3) The maximum rate of nonelectoral indebtedness for
14 bond and for lease rental debt the school district may incur,
15 provided that the maximum rate of each class of debt does not
16 exceed the maximum rate provided under the act of July 12, <--
17 1972 (P.L.781, No.185), known as the Local Government Unit
18 Debt Act, 53 PA.C.S. PT. VII SUBPT. B (RELATING TO <--
19 INDEBTEDNESS AND BORROWING) or any succeeding act pertaining
20 to the indebtedness of school districts. Nothing in this
21 chapter shall prohibit a home rule school district from
22 imposing more restrictive limits on indebtedness for
23 nonelectoral or electoral debt than the limits provided under
24 the Local Government Unit Debt Act or any succeeding act
25 pertaining to the indebtedness of school districts.
26 (4) The fiscal accountability measures that will be
27 undertaken IMPLEMENTED by the home rule school district. <--
28 (5) Any other FISCAL item considered necessary by the <--
29 commission.
30 Section 1525. Department DEPARTMENTAL assistance. <--
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1 The department AND THE DEPARTMENT OF COMMUNITY AND ECONOMIC <--
2 DEVELOPMENT shall render technical assistance to the members of
3 any school district study commission requesting such assistance
4 in developing the home rule school district tax charter that
5 will be submitted to the voters of the school district for
6 approval.
7 Section 1526. Form for question regarding adoption of home rule
8 school district tax charter.
9 The question to be submitted to the voters for the adoption
10 of a home rule school district tax charter shall be submitted in
11 the following form or the part as shall be applicable:
12 "Shall the Home Rule School District Tax Charter
13 contained in the report, dated of the School
14 District Study Commission, prepared in accordance with
15 the Home Rule School District Tax Charter Law, be adopted
16 by the (insert name of school district) School District?"
17 Section 1527. Procedure for submission of question to voters.
18 (a) Certification.--If the school district study commission
19 recommends that the question of adopting a home rule school
20 district tax charter be submitted to the voters of the school
21 district, it shall be the duty of the school district's board of
22 school directors, within five days of receiving the secretary's
23 written approval of the proposed home rule school district tax
24 charter, to certify a copy of the commission's report to the
25 county board of elections. This shall cause the question of
26 adoption or rejection to be placed upon the ballot or voting
27 machines at such time as the commission specifies in its report.
28 The county board of elections shall prepare a nonlegal
29 interpretative statement to accompany the question in accordance
30 with section 201.1 of the Pennsylvania Election Code. The
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1 commission may cause the question to be submitted to the people
2 at the next primary, municipal or general election, occurring
3 not less than 60 days following the filing of a copy of the
4 commission's report with the county board of elections, at such
5 time as the commission's report directs. At the election, the
6 question of adopting the home rule school district tax charter
7 recommended by the commission shall be submitted to the voters
8 of the school district by the county board of elections in the
9 same manner as the question which was submitted to the voters of
10 the school district to establish the school district study
11 commission under the provisions of the act of March 10, 1949
12 (P.L.30, No.14), known as the Public School Code of 1949. The
13 commission shall frame the question to be placed upon the ballot
14 as provided in this chapter.
15 (b) Availability.--At least three copies of the proposed
16 home rule school district tax charter shall be made available
17 for public review in the office of each public school in the
18 district and at the district's central administrative office
19 between the date of the election order and election day. A
20 summary of the content of the proposed home rule school district
21 tax charter shall be attached to each copy of the proposed home
22 rule school district tax charter. The district's central
23 administrative office shall provide a copy of the proposed home
24 rule school district tax charter and summary to any school
25 district employee, parent, community member or member of the
26 media who requests a copy of the proposed home rule school
27 district tax charter.
28 Section 1528. Moratorium on adoption of resolution or filing of
29 petition.
30 (a) General rule.--No resolution may be adopted and no
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1 petition may be filed for the election of a school district
2 study commission under section 1511 while proceedings are
3 pending under any other petition or resolution filed or adopted
4 under the authority of this chapter nor on the same question if
5 it has been defeated within four years after an election shall
6 have been held under any such resolution or petition adopted or
7 filed.
8 (b) Start of proceedings.--For the purpose of this section,
9 proceedings shall be considered as having started:
10 (1) in the case of a resolution, upon the final vote of
11 the school board in favor of the resolution, notwithstanding
12 the fact that the resolution cannot take effect until a
13 certain number of days thereafter; or
14 (2) in the case of a petition, as soon as it is properly
15 signed by one-third of the number of registered voters
16 required for the petition and written notice thereof filed in
17 the office of the county board of elections and in the office
18 of the school district superintendent, who shall cause the
19 same to be immediately posted in a conspicuous place in the
20 office, open to public inspection.
21 Section 1529. Taking effect of proposed home rule school
22 district tax charter.
23 Whenever the legally qualified voters of any school district
24 by a majority of those voting on the question vote in favor of
25 adopting a proposed home rule school district tax charter
26 pursuant to this chapter, the form of funding and tax structure
27 proposed in the home rule school district tax charter shall take
28 effect according to the terms and the provisions of this chapter <--
29 THE CHARTER. <--
30 Section 1530. Procedure for amending home rule school district
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1 tax charter.
2 (a) General rule.--The procedure for amending a home rule
3 school district tax charter shall be through the initiative
4 procedure and referendum or resolution of the governing body as
5 provided for in this chapter.
6 (b) Conflicts.--If more than one question appears on the
7 ballot at the same election and the questions are in conflict
8 and more than one receives the approval of the voters, the
9 question which receives the largest number of affirmative votes
10 shall prevail over the others.
11 Section 1531. Initiation of referendum.
12 A referendum on the question of amending a home rule school
13 district tax charter may be initiated by electors of the school
14 district or by a resolution of the governing body of the school
15 district.
16 Section 1532. Petition for referendum on question of amending
17 home rule school district tax charter.
18 (a) Time.--A petition containing a proposal for referendum
19 on the question of amending a home rule school district tax
20 charter signed by electors comprising 10% of the number of
21 electors voting for the Office of Governor in the last
22 gubernatorial general election in the school district, or a
23 resolution adopted by the governing body of the school district
24 proposing amendment of a home rule school district tax charter
25 must be filed with the election officials of the county in which
26 the major number of electors in the school district reside not
27 later than the 13th Tuesday prior to the next primary, municipal
28 or general election. The petition and the proceedings therein
29 shall be in the manner and subject to the provisions of the
30 election laws which relate to the signing, filing and
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1 adjudication of nomination petitions insofar as such provisions
2 are applicable, except that no referendum petition shall be
3 signed or circulated prior to the 26th 20TH Tuesday before the <--
4 election nor later than the 13th Tuesday before the election.
5 The name and address of the person filing the petition must be
6 clearly stated on the petition.
7 (b) Review.--The election officials shall review the
8 initiative petition as to the number and qualifications of
9 signers. If the petition appears to be defective, the election
10 officials shall immediately notify the persons filing the
11 petition of the defect. When the election officials find that
12 the petition as submitted is in proper order, they shall send
13 copies of the initiative petition without signatures thereon to
14 the governing body of the school district and to the secretary.
15 The initiative petition as submitted to the election officials,
16 along with a list of signatories, shall be open to inspection in
17 the office of the election officials.
18 (c) Availability.--At least three copies of the proposed
19 home rule school district tax charter amendment shall be made
20 available for public review in the office of each public school
21 in the district and at the district's central administrative
22 office between the date of the election order and election day.
23 A summary of the content of the proposed home rule school
24 district tax charter amendment shall be attached to each copy of
25 the proposed amendment. The district's central administrative
26 office shall provide a copy of the proposed home rule school
27 district tax charter amendment and summary to any school
28 district employee, parent, community member or member of the
29 media who requests a copy.
30 Section 1533. Procedure for submission of question.
19970S0002B1571 - 92 -
1 A referendum on the question of the amendment of a home rule
2 school district tax charter shall be held when the election
3 officials find that the initiative petition or resolution of the
4 governing body is in proper order, and the referendum shall be
5 governed by the provisions of the Pennsylvania Election Code. If
6 a proposed home rule school district tax charter amendment
7 contains more than one subject, each subject shall be submitted
8 to the voters as a separate question. The election officials
9 shall cause the question or questions to be submitted to the
10 electors of the school district at the next primary, general or
11 municipal election occurring not earlier than the 13th Tuesday
12 following the filing of the initiative petition or resolution
13 with the election board. At the election, the question or
14 questions shall be submitted to the voters in the same manner as
15 the question to adopt a home rule school district tax charter
16 under the provisions of this chapter. The election board shall
17 frame the question or questions to be placed upon the ballot and
18 shall prepare a nonlegal interpretative statement to accompany
19 the question in accordance with section 201.1 of the
20 Pennsylvania Election Code.
21 Section 1534. Compliance with Pennsylvania Election Code and
22 election certificates.
23 All elections provided for in this chapter shall be conducted
24 by the election officials for such school district in accordance
25 with the Pennsylvania Election Code. The election officials
26 shall count the votes cast and make return thereof to the county
27 board of elections. The result of any election shall be computed
28 by the county board of elections in the same manner as is
29 provided by law for the computation of similar returns.
30 Certificates of the result of any election shall be filed by the
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1 county board of elections with the school district's governing
2 body and with the Secretary of the Commonwealth and with the
3 secretary.
4 Section 1535. Notice of election.
5 At least 30 days' notice of each election provided for in
6 this chapter must be given by the secretary of the school
7 district's governing body. A copy of the notice shall be posted
8 at each polling place of the school district on the day of the
9 election and shall be published in at least one newspaper of
10 general circulation in the school district once a week for three
11 consecutive weeks during the period of 30 days prior to the
12 election. Notice of the election for approval of a proposed home
13 rule school district tax charter or a proposed home rule school
14 district tax charter amendment shall include a statement of
15 where copies of the proposed home rule school district tax
16 charter or charter amendment may be obtained or viewed.
17 SUBCHAPTER C
18 GENERAL POWERS AND LIMITATIONS
19 Section 1551. Exercise of functions.
20 (a) General rule.--A school district which has adopted a
21 home rule school district tax charter may exercise any powers
22 and perform any function not denied by the Constitution of the
23 United States, by Federal law, by the Constitution of
24 Pennsylvania, by State statute or by its home rule school
25 district tax charter, at any time. All grants of power to school
26 districts governed by a home rule school district tax charter
27 under this chapter, whether in the form of specific enumeration
28 or general terms, shall be liberally construed in favor of the
29 school district.
30 (b) Taxation.--Unless prohibited by the Constitution of
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1 Pennsylvania, any other State statute, this chapter or its home
2 rule school district tax charter, a school district which has
3 adopted a home rule school district tax charter has the power to
4 levy and assess a tax or taxes upon any subject of taxation
5 granted by the General Assembly to the class of school district
6 of which it would be a member but for the adoption of a home
7 rule school district tax charter at any rate of taxation
8 determined by the governing body, up to the maximum rate
9 specified in the home rule school district tax charter if a
10 maximum rate of taxation has been specified. The governing body
11 of a home rule school district shall be subject to the
12 limitation on the rates of taxation specified in its home rule
13 school district tax charter unless the home rule school district
14 tax charter contains a provision specifically stating that there
15 shall be no limitation on the rate of taxation.
16 (c) Prohibitions.--No school district may do any of the
17 following:
18 (1) Exercise powers contrary to or in limitation or
19 enlargement of powers granted by acts of the General Assembly
20 which are applicable in every part of this Commonwealth.
21 (2) Determine duties, responsibilities or requirements
22 placed upon businesses, occupations and employers, including
23 the duty to withhold, remit or report taxes or penalties
24 levied or imposed upon them or upon persons in their
25 employment, except as expressly provided by acts of the
26 General Assembly, which are applicable in every part of this
27 Commonwealth or which are applicable to all school districts
28 or to a class or classes of school districts. This paragraph
29 shall not be construed as a limitation in fixing rates of
30 taxation on permissible subjects of taxation up to the
19970S0002B1571 - 95 -
1 maximum rate specified in a home rule school district tax
2 charter if a maximum rate of taxation has been specified.
3 (d) Existing powers.--Nothing contained in this chapter
4 shall limit or take away any right of a school district which
5 adopts a home rule school district tax charter from levying any
6 tax which it had the power to levy had it not adopted a home
7 rule school district tax charter and which is specified in its
8 home rule school district tax charter.
9 (e) Tax rates.--No provision of this chapter or any other
10 act of the General Assembly shall limit a school district which
11 adopts a home rule school district tax charter from establishing
12 its own rates of taxation upon all authorized subjects of
13 taxation.
14 Section 1552. Recording and filing of home rule school district
15 tax charter.
16 The secretary of the governing body of the school district
17 shall forthwith cause the new home rule school district tax
18 charter as approved by the qualified electors to be recorded in
19 the records of proceedings of the school district. The secretary
20 shall also file a certified copy thereof in the office of the
21 Secretary of the Commonwealth, with the secretary and with the
22 county board of elections.
23 Section 1553. Repeal of home rule school district tax charter.
24 The procedure for repeal of a home rule school district tax
25 charter shall be the same as for adoption of a home rule school
26 district tax charter. Whenever the electors of any school
27 district, by a majority vote of those voting on the question,
28 vote in favor of repeal of a home rule school district tax
29 charter and the establishment of a particular form of government
30 and administration, such school district shall be governed under
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1 the form of government selected by the electors from the first
2 Monday of January following the election at which the elective
3 officials of the form of government selected by the electors
4 shall have been elected. The school district study commission
5 shall provide in its report for the new form of government and
6 administration to be established. The elective officials of the
7 school district under a new form of government selected by the
8 electors shall be elected at the first municipal election held
9 after the referendum on the repeal of a home rule school
10 district tax charter or at such later date as may be specified
11 by the commission in its report.
12 SUBCHAPTER D
13 GENERAL
14 Section 1571. Application to school district of first class.
15 This chapter shall not apply to a school district of the
16 first class.
17 Section 1572. Retention of existing form of government and
18 administration.
19 Each school district which does not adopt a home rule school
20 district tax charter under this chapter shall retain its
21 existing tax structure as provided under general law or under
22 the Constitution of Pennsylvania.
23 Section 1573. Disapproval of plan.
24 In the event the electors of any school district disapprove a
25 proposal to adopt a home rule school district tax charter, the
26 school district shall retain its existing form of taxation.
27 CHAPTER 51
28 MISCELLANEOUS PROVISIONS
29 Section 5101. Effective date.
30 This act shall take effect as follows:
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1 (1) Sections 1102, 1103 and 1104 shall take effect one
2 year after the effective date of this act PARAGRAPH (2). <--
3 (2) The remainder of this act shall take effect
4 immediately JANUARY 1, 1998. <--
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