PRIOR PRINTER'S NOS. 574, 992 PRINTER'S NO. 1027
No. 100 Session of 2003
INTRODUCED BY JUBELIRER, BRIGHTBILL, PICCOLA, RHOADES, DENT,
RAFFERTY, WENGER, TOMLINSON, ROBBINS, MADIGAN, M. WHITE,
MOWERY, CONTI, WAUGH, THOMPSON, PUNT, HELFRICK, ERICKSON,
WONDERLING AND ARMSTRONG, MARCH 24, 2003
AS AMENDED ON THIRD CONSIDERATION, JUNE 24, 2003
AN ACT
1 Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
2 act relating to the public school system, including certain
3 provisions applicable as well to private and parochial
4 schools; amending, revising, consolidating and changing the
5 laws relating thereto," FURTHER PROVIDING FOR PER CAPITA <--
6 TAXES; providing for the imposition and collection of an
7 earned income and net profits tax by school districts after
8 approval by the electors; PROVIDING FOR APPLICABILITY OF <--
9 REFERENDUM EXCEPTIONS; AND FURTHER PROVIDING FOR THE MANDATE
10 WAIVER PROGRAM.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. The act of March 10, 1949 (P.L.30, No.14), known <--
14 as the Public School Code of 1949, is amended by adding an
15 article to read:
16 SECTION 1. SECTION 679 OF THE ACT OF MARCH 10, 1949 (P.L.30, <--
17 NO.14), KNOWN AS THE PUBLIC SCHOOL CODE OF 1949, AMENDED
18 NOVEMBER 26, 1982 (P.L.760, NO.215), IS AMENDED TO READ:
19 SECTION 679. PER CAPITA TAXES.--EACH RESIDENT OR INHABITANT,
20 OVER EIGHTEEN YEARS OF AGE, IN EVERY SCHOOL DISTRICT OF THE
21 SECOND, THIRD, AND FOURTH CLASS, WHICH SHALL LEVY SUCH TAX,
1 SHALL ANNUALLY PAY, FOR THE USE OF THE SCHOOL DISTRICT IN WHICH
2 HE OR SHE IS A RESIDENT OR INHABITANT, A PER CAPITA TAX OF NOT
3 LESS THAN ONE DOLLAR NOR MORE THAN FIVE DOLLARS, AS MAY BE
4 ASSESSED BY THE LOCAL SCHOOL DISTRICT. THE TAX COLLECTOR SHALL
5 NOT PROCEED AGAINST A SPOUSE OR HIS EMPLOYER UNTIL HE HAS
6 PURSUED REMEDIES AGAINST THE DELINQUENT TAXPAYER AND THE
7 TAXPAYER'S EMPLOYER UNDER THIS SECTION.
8 EACH SCHOOL DISTRICT MAY EXEMPT ANY PERSON WHOSE TOTAL INCOME
9 FROM ALL SOURCES IS LESS THAN [FIVE THOUSAND DOLLARS] TEN
10 THOUSAND DOLLARS PER ANNUM FROM ITS PER CAPITA TAX OR ANY
11 PORTION THEREOF. THE SCHOOL DISTRICT MAY ADOPT AND EMPLOY
12 REGULATIONS FOR THE PROCESSING OF CLAIMS FOR THE EXEMPTION.
13 SECTION 2. THE ACT IS AMENDED BY ADDING AN ARTICLE TO READ:
14 ARTICLE VI-A
15 TAXATION BY SCHOOL DISTRICTS
16 (a) General Provisions
17 Section 601-A. Short title of article.
18 This article shall be known and may be cited as the Taxpayer
19 Choice Act.
20 Section 602-A. Definitions.
21 The following words and phrases when used in this article
22 shall have the meanings given to them in this section unless the
23 context clearly indicates otherwise:
24 "Board of school directors." A board of school directors of
25 a school district of the second class, third class or fourth
26 class.
27 "Budgeted revenue." Local tax revenue. The term shall not
28 include revenue from any of the following:
29 (1) Delinquent taxes.
30 (2) Payments in lieu of taxes.
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1 (3) The real estate transfer tax.
2 (4) The distribution of the public utility realty tax
3 imposed under Article XI-A of the act of March 4, 1971
4 (P.L.6, No.2), known as the Tax Reform Code of 1971.
5 (5) A mercantile or business privilege tax on gross
6 receipts.
7 (6) An amusement or admissions tax.
8 "Business." As defined in section 301 of the act of March 4,
9 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
10 "CONSUMER PRICE INDEX." THE CONSUMER PRICE INDEX FOR ALL <--
11 URBAN CONSUMERS (CPI-U) FOR THE PENNSYLVANIA, NEW JERSEY,
12 DELAWARE AND MARYLAND AREA FOR THE MOST RECENT 12-MONTH PERIOD
13 FOR WHICH FIGURES HAVE BEEN OFFICIALLY REPORTED BY THE UNITED
14 STATES DEPARTMENT OF LABOR, BUREAU OF LABOR STATISTICS,
15 IMMEDIATELY PRIOR TO THE DATE OF THE PRIMARY ELECTION AT WHICH
16 THE REFERENDUM WILL BE SUBMITTED TO THE VOTERS.
17 "Current year." The fiscal year for which a tax is levied.
18 "Department." The Department of Community and Economic
19 Development of the Commonwealth.
20 "Domicile." As defined in section 13 of the act of December
21 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
22 Act.
23 "Dwelling." A structure used as a place of habitation by a
24 natural person.
25 "Earned income." All of the classes of income defined as
26 earned income in section 13 of the act of December 31, 1965
27 (P.L.1257, No.511), known as The Local Tax Enabling Act.
28 "Election officials." The county board of elections of a
29 county.
30 "Employer." As defined in section 301 of the act of March 4,
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1 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
2 "Farmstead." All buildings and structures on a farm not less
3 than ten contiguous acres in area, not otherwise exempt from
4 real property taxation or qualified for any other abatement or
5 exclusion pursuant to any other law, that are used primarily:
6 (1) to produce or store any farm product produced on the
7 farm for purposes of commercial agricultural production;
8 (2) to house or confine any animal raised or maintained
9 on the farm for the purpose of commercial agricultural
10 production;
11 (3) to store any agricultural supply to be used on the
12 farm in commercial agricultural production; or
13 (4) to store any machinery or equipment used on the farm
14 in commercial agricultural production.
15 This term shall only apply to farms used as the domicile of an
16 owner.
17 "Farmstead property." A farmstead for which an application
18 has been submitted and approved under 53 Pa.C.S. § 8584
19 (relating to administration and procedure).
20 "Homestead." A dwelling, including the parcel of land on
21 which the dwelling is located and the other improvements located
22 on the parcel for which any of the following apply:
23 (1) The dwelling is primarily used as the domicile of an
24 owner who is a natural person. The homestead for real
25 property qualifying under this paragraph shall not include
26 the land on which the dwelling is located if the land is not
27 owned by a person who owns the dwelling.
28 (2) The dwelling is a unit in a condominium as the term
29 is defined in 68 Pa.C.S. § 3103 (relating to definitions) and
30 the unit is primarily used as the domicile of a natural
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1 person who is an owner of the unit; or the dwelling is a unit
2 in a cooperative as the term is defined in 68 Pa.C.S. § 4103
3 (relating to definitions) and the unit is primarily used as
4 the domicile of a natural person who is an owner of the unit.
5 The homestead for a unit in a condominium or a cooperative
6 shall be limited to the assessed value of the unit, which
7 shall be determined in a manner consistent with the
8 assessment of real property taxes on those units under 68
9 Pa.C.S. (relating to real and personal property) or as
10 otherwise provided by law. If the unit is not separately
11 assessed for real property taxes, the homestead shall be a
12 pro rata share of the real property.
13 (3) The dwelling does not qualify under paragraphs (1)
14 and (2) and a portion of the dwelling is used as the domicile
15 of an owner who is a natural person. The homestead for real
16 property qualifying under this paragraph shall be the portion
17 of the real property that is equal to the portion of the
18 dwelling that is used as the domicile of an owner.
19 "Homestead property." A homestead for which an application
20 has been submitted and approved under 53 Pa.C.S. § 8584
21 (relating to administration and procedure).
22 "Local Tax Enabling Act." The act of December 31, 1965
23 (P.L.1257, No.511), known as The Local Tax Enabling Act.
24 "Local tax revenue." The revenue from taxes actually levied
25 and assessed by a school district. The term does not include
26 interest or dividend earnings, Federal or State grants,
27 contracts or appropriations, income generated from operations or
28 any other source that is not derived from taxes levied and
29 assessed by a school district.
30 "Municipality." As defined in 1 Pa.C.S. § 1991 (relating to
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1 definitions).
2 "Net profits." All of the classes of income defined as net
3 profits in section 13 of the act of December 31, 1965 (P.L.1257,
4 No.511), known as The Local Tax Enabling Act.
5 "Owner." Includes any of the following:
6 (1) A joint tenant or tenant in common.
7 (2) A person who is a purchaser of real property under a
8 contract.
9 (3) A partial owner.
10 (4) A person who owns real property as a result of being
11 a beneficiary of a will or trust or as a result of intestate
12 succession.
13 (5) A person who owns or purchases a dwelling on leased
14 land.
15 (6) A person who holds a life lease in real property
16 previously sold or transferred to another.
17 (7) A person in possession under a life estate.
18 (8) A grantor who has placed the real property in a
19 revocable trust.
20 (9) A member of a cooperative as defined in 68 Pa.C.S. §
21 4103 (relating to definitions).
22 (10) A unit owner of a condominium as defined in 68
23 Pa.C.S. § 3103 (relating to definitions).
24 (11) A partner of a family farm partnership or a
25 shareholder of a family farm corporation as the terms are
26 defined in section 1101-C of the act of March 4, 1971 (P.L.6,
27 No.2), known as the Tax Reform Code of 1971.
28 "Political subdivision." As defined in 1 Pa.C.S. § 1991
29 (relating to definitions).
30 "Preceding year." The fiscal year before the current year.
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1 "Primarily used." Usage of at least 51% of the square
2 footage of a dwelling.
3 "Resident individual." An individual who is domiciled in a
4 school district.
5 "School district." A school district of the second class,
6 third class or fourth class.
7 "Statewide average weekly wage." That amount determined
8 annually for each calendar year by the Department of Labor and
9 Industry under section 105.1 of the act of June 2, 1915
10 (P.L.736, No.338), known as the Workers' Compensation Act.
11 "Succeeding year." The fiscal year following the current
12 year.
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 article to
16 file a tax return or to pay a tax.
17 Section 603-A. Scope and limitations.
18 (a) General rule.--Except as provided in subsection (b) and
19 section 605-A, it is the intent of this article to confer upon
20 each school district the power to levy, assess and collect an
21 earned income and net profits tax as set forth in subdivision
22 (c).
23 (b) Real estate transfer taxes.--This article shall not be
24 construed to affect the power of a school district to levy,
25 assess and collect a real estate transfer tax.
26 (c) Occupation tax.--This article shall not be construed to
27 affect the power of a school district to do any of the
28 following:
29 (1) To elect to place a referendum question on the
30 ballot pursuant to the act of June 22, 2001 (P.L.374, No.24),
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1 known as the Optional Occupation Tax Elimination Act. A
2 school district may place such referendum question on the
3 ballot at the same municipal election as a referendum
4 question placed on the ballot pursuant to subdivision (b).
5 (2) To eliminate its occupation tax pursuant to the
6 Optional Occupation Tax Elimination Act.
7 Section 604-A. Preemption.
8 No act of the General Assembly shall be construed to vacate
9 or preempt any resolution adopted under this article providing
10 for the imposition of a tax by a school district unless the act
11 of the General Assembly expressly vacates or preempts the
12 authority to adopt the resolution.
13 Section 605-A. Certain rates of taxation limited.
14 If a municipality and school district both impose an earned
15 income and net profits tax on the same individual under the
16 Local Tax Enabling Act and the municipality and school district
17 are limited to or have agreed upon a division of the tax rate in
18 accordance with section 8 of the Local Tax Enabling Act, then
19 the municipality that continues to levy the earned income and
20 net profits tax under the Local Tax Enabling Act shall remain
21 subject to that limitation or agreement in the event that the
22 school district opts to impose an earned income and net profits
23 tax under section 621-A.
24 (b) Tax Authorization
25 Section 611-A. General tax authorization.
26 Subject to sections 613-A and 614-A, each school district OR <--
27 COUNTY may by resolution levy, assess and collect or provide for
28 the levying, assessment and collection of an earned income and
29 net profits tax under subdivision (c).
30 SECTION 611.1-A. SECOND CLASS A COUNTY OPTIONAL IMPOSITION OF <--
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1 TAX.
2 IF A COUNTY WHICH IS A COUNTY OF THE SECOND CLASS A WHICH IS
3 GOVERNED BY A HOME RULE CHARTER ELECTS TO IMPOSE THE TAX
4 AUTHORIZED UNDER SECTION 611-A:
5 (1) THE COUNTY SHALL MAKE THE ELECTION 30 DAYS PRIOR TO
6 THE SCHOOL DISTRICT'S DECISION DEADLINE. IF THE COUNTY DOES
7 NOT ELECT TO IMPOSE THE TAX EACH SCHOOL DISTRICT SHALL STILL
8 HAVE THE OPTION OF IMPOSING THE TAX IN ACCORDANCE WITH THIS
9 ACT.
10 (2) SECTION 613-A(E)(4) DOES NOT APPLY.
11 (3) NO SCHOOL DISTRICT WHICH IS WHOLLY WITHIN THAT
12 COUNTY SHALL IMPOSE THE TAX, UNLESS THE COUNTY BALLOT
13 QUESTION FAILS. IF THE COUNTY BALLOT QUESTION FAILS, THE
14 SCHOOL DISTRICT MAY IMPOSE THE TAX IN ACCORDANCE WITH THIS
15 ACT AT A LATER DATE.
16 (4) IF THE TAX IS IMPOSED, THE COUNTY MAY RETAIN AN
17 AMOUNT OF MONEY TO COVER THE COSTS OF COLLECTING,
18 DISTRIBUTING AND ADMINISTRATING THE TAX BUT THAT AMOUNT SHALL
19 NOT EXCEED 1% OF THE TOTAL AMOUNT COLLECTED.
20 (5) IN A SCHOOL DISTRICT THAT CROSSES COUNTY LINES, THE
21 RESIDENTS OF THAT SCHOOL DISTRICT WOULD HAVE TWO BALLOT
22 QUESTIONS. IF BOTH BALLOT QUESTIONS PASS, THE TAX IS PAID
23 FIRST TO THE SCHOOL DISTRICT AND USED AS A CREDIT AGAINST THE
24 COUNTY TAX. THE COUNTY WILL REDUCE THE AMOUNT PAYABLE TO THE
25 SCHOOL DISTRICT TO THE SAME PROPORTION OF ACTUAL MONEY PAID
26 TO THE COUNTY FROM RESIDENTS OF THAT SCHOOL DISTRICT IN THAT
27 COUNTY AFTER REDUCING THE CREDIT AMOUNT PAID TO THE SCHOOL
28 DISTRICT.
29 (6) IF THE COUNTY BALLOT QUESTION IS PASSED, THE COUNTY
30 WOULD GIVE EACH SCHOOL DISTRICT AN AMOUNT EQUAL TO THE
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1 HOMESTEAD/FARMSTEAD AMOUNT UP TO ONE-HALF OF THE COUNTY
2 MEDIAN SCHOOL PROPERTY TAX UNDER 53 PA.C.S. CH. 85 SUBCH. F
3 (RELATING TO HOMESTEAD PROPERTY EXCLUSION), WHICH THE SCHOOL
4 DISTRICT WOULD THEN CREDIT AGAINST THE SCHOOL TAXES OF THE
5 RESIDENTIAL PROPERTIES THAT ARE IN BOTH THAT SCHOOL DISTRICT
6 AND COUNTY. THE CREDIT SHALL NOT EXCEED 100% OF THE PROPERTY
7 TAXES OF ANY RESIDENTIAL PROPERTY. ANY AMOUNT IN EXCESS OF
8 THE 100% LIMITATION MUST BE USED BY THE SCHOOL DISTRICT TO
9 FURTHER REDUCE MILLAGE.
10 Section 612-A. Continuity of tax.
11 An earned income and net profits tax levied under the
12 provisions of subdivision (c) shall continue in force on a
13 fiscal year basis without annual reenactment unless the rate of
14 tax is increased or the tax is subsequently repealed.
15 Section 613-A. Adoption of referendum.
16 (a) General rule.--
17 (1) In order to levy an earned income and net profits
18 tax under subdivision (c), a board of school directors shall
19 use the procedures set forth in subsection (b).
20 (2) A board of school directors after making an election
21 to levy an earned income and net profits tax under
22 subdivision (c) may, after a period of at least five full
23 fiscal years, elect under the provisions of subsection (c) to
24 end participation under this subdivision. If the electorate
25 approves a referendum to do so, the board of school directors
26 may not continue to levy an earned income and net profits tax
27 under subdivision (c).
28 (b) Public referendum requirements.--Except as set forth in
29 subsection (d) the following apply:
30 (1) Subject to the notice and hearing requirements of
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1 section 626-A, a board of school directors may levy the
2 earned income and net profits tax under subdivision (c) only
3 by obtaining the approval of the electorate of the affected
4 school district in a public referendum at only the municipal
5 election preceding the fiscal year when the earned income and
6 net profits tax will be initially imposed. The county board
7 of elections shall cause the referendum question required by
8 this section to be submitted to the electors of the school
9 district.
10 (2) The referendum question shall state the initial rate
11 of the proposed earned income and net profits tax to be
12 levied under subdivision (c), the reason for the tax and the
13 amount of proposed budgeted revenue growth, if any, in the
14 first fiscal year following adoption of the referendum,
15 expressed as a percent increase over the prior year's
16 budgeted revenue. Any increase in budgeted revenue between
17 the first fiscal year following adoption of the referendum
18 and the prior year's budgeted revenue shall not exceed 2%.
19 The question shall be in clear language that is readily
20 understandable by a layperson. For the purpose of
21 illustration, a referendum question may be framed as follows:
22 Do you favor the imposition of an earned income and net
23 profits tax of X% to be used in order to reduce
24 residential real property taxes by X% and provide for a
25 one-time revenue increase of X% over the preceding fiscal
26 year?
27 A nonlegal interpretative statement shall accompany the
28 referendum question in accordance with section 201.1 of the act
29 of June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
30 Election Code. A board of school directors of a school district
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1 in which a referendum under this section has been approved shall
2 not be subject to the provisions of section 614-A for any future
3 increases in the earned income and net profits tax rates
4 authorized under subdivision (c). If the referendum question
5 fails to receive a majority vote pursuant to this section,
6 approval of the electorate under section 614-A shall not be
7 required to levy any tax or increase the rate of any tax which
8 the board of school directors of the affected school district is
9 authorized to levy and increase pursuant to any other act.
10 (c) Public referendum requirements for the municipal
11 election of 2003.--In addition to the provisions of subsection
12 (b), the following shall apply for the municipal election of
13 2003:
14 (1) The referendum question required by this section
15 shall be submitted to the electors of each school district
16 for the municipal election of 2003.
17 (2) No later than August 5, 2003, the board of school
18 directors of each school district shall adopt the resolution
19 required under section 626-A authorizing the referendum
20 question. The resolution and the referendum question shall be
21 based on the calculation provided for under section 626-A(b).
22 (3) If the board of school directors fails to adopt the
23 resolution required under section 626-A by August 5, 2003,
24 the county board of elections shall prepare a referendum
25 question that authorizes an earned income and net profits tax
26 for the school district at the maximum rate permitted, based
27 on the calculation provided for under section 626-A(b).
28 (4) The county board of elections shall cause the
29 referendum question required by this subsection to be
30 submitted to the electors of the school district consistent
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1 with the provisions of this section.
2 (d) Public referendum requirements to end participation
3 under this subdivision.--Subject to the notice and public
4 hearing requirements in section 4 of the Local Tax Enabling Act,
5 a board of school directors may elect to end participation under
6 this subdivision in accordance with subsection (a)(2) by
7 obtaining the approval of the electorate of the affected school
8 district in a public referendum at a municipal election.
9 (e) Nonapplicability.--This section shall not apply to any
10 of the following:
11 (1) A school district in which a referendum question
12 under 53 Pa.C.S. § 8703 (relating to adoption of referendum)
13 has been approved and implemented.
14 (2) A school district of the first class.
15 (3) A school district of the first class A.
16 (4) A school district certified as distressed pursuant
17 to section 691 or an education empowerment district pursuant
18 to section 1705-B or 1707-B.
19 Section 614-A. Public referendum requirements for increasing
20 certain taxes.
21 (a) Applicability.--This section shall apply to the board of
22 school directors of a school district in which a referendum
23 under section 613-A is approved.
24 (b) Prohibitions.--Except as set forth in subsection (f),
25 unless there is compliance with subsection (c), a board of
26 school directors may not do any of the following:
27 (1) Increase the rate of a tax levied for the support of
28 the public schools by more than the percentage increase in
29 the Statewide average weekly wage in the preceding year OR IN <--
30 THE PERCENTAGE INCREASE IN THE CONSUMER PRICE INDEX,
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1 WHICHEVER IS GREATER.
2 (2) Levy a tax for the support of the public schools
3 which was not levied in the fiscal year in which a referendum
4 under section 613-A was approved.
5 (3) Raise the rate of the earned income and net profits
6 tax, if already imposed under the authority of section 13 of
7 the Local Tax Enabling Act, except as otherwise provided for
8 under section 621-A.
9 (c) Referendum.--
10 (1) In order to take an action under subsection (b)(1),
11 at the primary election immediately preceding the fiscal year
12 in which the proposed tax increase would take effect:
13 (i) a referendum stating the specific rate or rates
14 of the tax increase must be submitted to the electors
15 residing in the school district; and
16 (ii) a majority of the electors voting on the
17 referendum must approve the increase.
18 (2) In order to take an action under subsection (b)(2),
19 at the primary election immediately preceding the fiscal year
20 in which the proposed tax would take effect:
21 (i) a referendum stating the specific tax and rate
22 to be levied must be submitted to the electors residing
23 in the school district; and
24 (ii) a majority of the electors voting on the
25 referendum must approve the tax.
26 (d) Failure to approve referendum.--
27 (1) If there is no approval under subsection (c)(1)(ii),
28 the board of school directors may approve an increase in the
29 tax rate of not more than the percentage increase in the
30 Statewide average weekly wage in the preceding year OR THE <--
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1 PERCENTAGE INCREASE IN THE CONSUMER PRICE INDEX, WHICHEVER IS
2 GREATER.
3 (2) If there is no approval under subsection (c)(2)(ii),
4 the board of school directors may not levy the tax.
5 (e) Exception to general rule.--The provisions of subsection
6 (b)(1) shall not apply to an increase in the rate of any tax
7 levied for the support of the public schools which is less than
8 or equal to the percentage increase in the Statewide average
9 weekly wage in the preceding year OR THE PERCENTAGE INCREASE IN <--
10 THE CONSUMER PRICE INDEX, WHICHEVER IS GREATER. Prior to any
11 increase under this subsection, the board of school directors
12 shall certify to the Department of Education the estimates of
13 local tax rates under this subsection. The Department of
14 Education may, on its own motion or on petition of a person
15 having standing under subsection (j), revise the estimates
16 certified by the board of school directors and reduce the
17 allowable increase in the rate of any tax under this subsection.
18 (f) Referendum exceptions.--The provisions of subsection
19 (b)(1) shall not apply to an increase in the rate of any tax
20 levied for the support of the public schools where the increase
21 is necessary to respond to one or more of the following
22 conditions:
23 (1) To respond to or recover from an emergency or
24 disaster declared pursuant to 35 Pa.C.S. § 7301 (relating to
25 general authority of Governor) or 75 Pa.C.S. § 6108 (relating
26 to power of Governor during emergency), only for the duration
27 of the emergency or disaster.
28 (2) To implement a court order or an administrative
29 order from a Federal or State agency that requires the
30 expenditure of funds that exceed current available revenues,
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1 provided that the rate increase is rescinded following
2 fulfillment of the court order or administrative order.
3 (3) (i) To pay interest and principal on any
4 indebtedness incurred under 53 Pa.C.S. Pt. VII Subpt. B
5 (relating to indebtedness and borrowing) prior to the
6 effective date of this section, provided that in no case
7 may the school district incur additional debt under this
8 paragraph, except for the refinancing of existing debt,
9 including the payment of costs and expenses related to
10 such refinancing and the establishment or funding of
11 appropriate debt service reserves and provided further
12 that the increase is rescinded following the final
13 payment of interest and principal.
14 (ii) The exception provided under this paragraph may
15 not be used in lieu of the referendum under subsection
16 (c)(2) to pay for costs which could not be financed by
17 the issuance of debt under 53 Pa.C.S. (relating to
18 municipalities generally).
19 (4) To respond to conditions that pose an immediate
20 threat of serious physical harm or injury to the students,
21 staff or residents of the school district, but only until the
22 conditions causing the threat have been fully resolved.
23 (5) Special purpose tax levies approved by the
24 electorate.
25 (6) THE BASIC EDUCATION FUNDING ALLOCATION AND SPECIAL <--
26 EDUCATION FUNDING ALLOCATION TO THE SCHOOL DISTRICT FROM THE
27 COMMONWEALTH FOR THE YEAR IN WHICH THE TAX RATE INCREASE
28 WOULD TAKE EFFECT IS EQUAL TO OR LESS THAN THE BASIC
29 EDUCATION FUNDING ALLOCATION AND SPECIAL EDUCATION FUNDING
30 ALLOCATION TO THE SCHOOL DISTRICT FOR THE PRECEDING FISCAL
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1 YEAR.
2 (6) (7) (i) To maintain per-student local tax revenue <--
3 in the school district at an amount not exceeding the
4 amount of per-student local tax revenue at the level of
5 the preceding year, adjusted for the percentage increase
6 in the Statewide average weekly wage OR THE PERCENTAGE <--
7 INCREASE IN THE CONSUMER PRICE INDEX, WHICHEVER IS
8 GREATER.
9 (ii) This paragraph shall apply only if the
10 percentage growth in average daily membership in the
11 school district between the current fiscal year and the
12 third fiscal year immediately preceding the current
13 fiscal year exceeds 10%. For the purposes of this
14 paragraph, per-student local tax revenue shall be
15 determined by dividing local tax revenue by average daily
16 membership.
17 (8) TO MAKE PAYMENTS ON BEHALF OF ACTIVE MEMBERS OF THE <--
18 PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM AS REQUIRED
19 PURSUANT TO 24 PA.C.S § 8327 (RELATING TO PAYMENTS BY
20 EMPLOYERS), WHERE THE INCREASE IN THE EMPLOYER CONTRIBUTION
21 RATE ON BEHALF OF ACTIVE MEMBERS AS CALCULATED UNDER 24
22 PA.C.S. § 8328 (RELATING TO ACTUARIAL COST METHOD) FOR THE
23 SCHOOL YEAR FOR WHICH PAYMENTS ARE REQUIRED IS EQUAL TO OR
24 GREATER THAN 200% OF THE EMPLOYER CONTRIBUTION RATE ON BEHALF
25 OF ACTIVE MEMBERS IN EFFECT FOR THE SCHOOL YEAR PRIOR TO THE
26 SCHOOL YEAR FOR WHICH AN EXCEPTION UNDER THIS PARAGRAPH IS
27 SOUGHT.
28 (9) TO PAY EXTRAORDINARY EXPENSES INCURRED IN PROVIDING
29 SPECIAL EDUCATION PROGRAMS AND SERVICES TO STUDENTS WITH
30 DISABILITIES WHERE THE ANTICIPATED INCREASE IN EXPENDITURES
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1 ON SPECIAL EDUCATION PROGRAMS AND SERVICES IS GREATER THAN
2 10% OF THE SCHOOL DISTRICT'S TOTAL EXPENDITURES ON SPECIAL
3 EDUCATION PROGRAMS AND SERVICES FOR THE SCHOOL YEAR PRIOR TO
4 THE SCHOOL YEAR FOR WHICH AN EXCEPTION UNDER THIS PARAGRAPH
5 IS SOUGHT.
6 (10) TO COMPENSATE FOR A ONE-YEAR DECREASE OF 10% OR
7 MORE IN THE SCHOOL DISTRICT'S REAL PROPERTY TAX BASE. FOR THE
8 PURPOSES OF THIS PARAGRAPH, THE DECREASE SHALL BE MEASURED BY
9 THE PERCENT CHANGE IN THE ASSESSED VALUE OF ALL TAXABLE
10 PROPERTY WITHIN THE SCHOOL DISTRICT BETWEEN THE FISCAL YEAR
11 IN WHICH AN EXCEPTION UNDER THIS PARAGRAPH IS SOUGHT AND THE
12 FISCAL YEAR IMMEDIATELY PRECEDING THE FISCAL YEAR IN WHICH AN
13 EXCEPTION UNDER THIS PARAGRAPH IS SOUGHT.
14 (11) TO PAY COSTS ASSOCIATED WITH IMPLEMENTING NEW
15 UNFUNDED FEDERALLY MANDATED EDUCATIONAL PROGRAMS.
16 (g) Revenue derived from increase.--Any revenue derived from
17 an increase in the rate of any tax allowed pursuant to an
18 exception under subsection (f)(3) or (5) shall not exceed the
19 anticipated dollar value of the expenditure for which the
20 exception under subsection (f) was sought.
21 (h) Limitation on rate.--The increase in the rate of any tax
22 allowed pursuant to an exception under subsection (f)(1), (2),
23 (4) or (6) (4), (6), (7), (8), (9), (10) OR (11) shall not <--
24 exceed the rate increase required as determined by a court of
25 common pleas pursuant to subsection (i).
26 (i) Court action.--Prior to the imposition of the tax
27 increase under subsection (f)(1), (2), (4) or (6) (4), (6), (7), <--
28 (8), (9), (10) OR (11), approval by the court of common pleas in
29 the judicial district in which the administrative office of the
30 school district is located must be obtained. The board of school
20030S0100B1027 - 18 -
1 directors shall publish in a newspaper of general circulation a
2 notice of its intent to file an action under this subsection at
3 least one week prior to the filing of the petition. The board of
4 school directors shall also publish in a newspaper of general
5 circulation notice, as soon as possible following notification
6 from the court that a hearing has been scheduled, stating the
7 date, time and place of the hearing on the petition. The
8 following shall apply to any proceedings instituted under this
9 subsection:
10 (1) The board of school directors must prove by clear
11 and convincing evidence the necessity for the tax increase.
12 (2) The board of school directors must prove by clear
13 and convincing evidence the anticipated dollar value of the
14 expenditure for which an exception under subsection (f) is
15 sought.
16 (3) The board of school directors must prove by clear
17 and convincing evidence that there are no assets or other
18 feasible alternatives available to the school district.
19 (4) The court shall determine the dollar value of the
20 expenditure for which an exception under subsection (f) is
21 sought, the rate increase required and the appropriate
22 duration of the increase. The court may retain continuing
23 jurisdiction and may, on its own motion or on petition of an
24 interested party, revoke approval for or order rescission of
25 a tax increase.
26 (j) Standing.--A person shall have standing as a party to a
27 proceeding under this section as long as the person resides
28 within or pays real property taxes to the taxing jurisdiction of
29 the board of school directors instituting the action.
30 Section 615-A. Property tax limits on reassessment.
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1 After any county makes a countywide revision of assessment of
2 real property at values based upon an established predetermined
3 ratio as required by law or after any county changes its
4 established predetermined ratio, a board of school directors in
5 a school district in which a referendum under section 613-A has
6 been approved, which after the effective date of this section
7 for the first time levies its real estate taxes on that revised
8 assessment or valuation, shall for the first year reduce its tax
9 rate, if necessary, for the purpose of having the percentage
10 increase in taxes levied for that year against the real
11 properties contained in the duplicate for the preceding year be
12 less than or equal to the percentage increase in the Statewide
13 average weekly wage for the preceding year notwithstanding the
14 increased valuations of such properties under the revised
15 assessment. For the purpose of determining the total amount of
16 taxes to be levied for the first year, the amount to be levied
17 on newly constructed buildings or structures or on increased
18 valuations based on new improvements made to existing houses
19 need not be considered. The tax rate shall be fixed for that
20 year at a figure which will accomplish this purpose. The
21 provisions of section 614-A shall apply to increases in the tax
22 rate above the limits provided in this section.
23 (c) Earned Income and Net Profits Tax
24 Section 621-A. Authorization.
25 (a) Earned income and net profits tax authorized.--A board
26 of school directors may levy, assess and collect a tax on the
27 earned income and net profits of resident individuals of the
28 school district at a rate determined by the board of school
29 directors.
30 (b) Tax rates determined.--The earned income and net profits
20030S0100B1027 - 20 -
1 tax authorized under subsection (a) shall not be less than the
2 rate required to provide an exclusion for farmstead property and
3 an exclusion for homestead property equal to 50% of the maximum
4 exclusion under 53 Pa.C.S. § 8586 (relating to limitations) and
5 shall not exceed the rate required to provide an exclusion for
6 farmstead property and an exclusion for homestead property equal
7 to the maximum exclusion under 53 Pa.C.S. § 8586. The board of
8 school directors shall round the rate of the earned income and
9 net profits tax levied pursuant to this section to the nearest
10 tenth of a percent. The exclusion for farmstead property granted
11 under this section shall not exceed the amount granted for the
12 exclusion for homestead property.
13 Section 622-A. Collections.
14 A board of school directors imposing a tax under section 621-
15 A shall designate the tax officer who is appointed under section
16 10 of the Local Tax Enabling Act, or otherwise by law, as the
17 collector of the earned income and net profits tax. In the
18 performance of the tax collection duties under this subdivision,
19 the designated tax officer shall have all the same powers,
20 rights, responsibilities and duties for the collection of the
21 taxes which may be imposed under the Local Tax Enabling Act, 53
22 Pa.C.S. Ch. 84, Subch. C (relating to local taxpayers bill of
23 rights) or as otherwise provided by law.
24 Section 623-A. Credits.
25 (a) General rule.--The provisions of section 14 of the Local
26 Tax Enabling Act shall be applied by a board of school directors
27 to determine any credits under the provisions of this
28 subdivision for a tax imposed under section 621-A.
29 (b) Tax credit.--Notwithstanding any other provisions of law
30 to the contrary, payment of a tax on salaries, wages,
20030S0100B1027 - 21 -
1 commissions or other compensation to a school district by
2 residents of the school district shall be credited and paid to
3 the school district of residence and allowed as a deduction from
4 THE LIABILITY OF THE TAXPAYER FOR PERSONAL INCOME TAX DUE TO THE <--
5 COMMONWEALTH UNDER SECTION 302 OF THE TAX REFORM CODE. THE
6 DEDUCTION SHALL NOT EXCEED the liability of the taxpayer for any
7 other tax on salaries, wages, commissions or other compensation
8 imposed by a city of the first class under the authority of the
9 act of August 5, 1932 (Sp.Sess., P.L.45, No.45), referred to as
10 the Sterling Act.
11 Section 624-A. Earned income and net profits tax exemption.
12 A school district that imposes a tax under section 621-A may
13 exempt from the payment of that tax any person whose total
14 income from all sources is less than $10,000.
15 Section 625-A. Rules and regulations.
16 A tax imposed under section 621-A shall be subject to all
17 regulations adopted under section 13 of the Local Tax Enabling
18 Act. A school district may adopt regulations for the processing
19 of claims for credits or exemptions under sections 623-A and
20 624-A.
21 Section 626-A. Procedure and administration.
22 (a) Levy.--In order to levy a tax under section 621-A, the
23 board of school directors shall adopt a resolution which shall
24 refer to this subdivision prior to placing a referendum question
25 on the ballot under section 613-A. Prior to adopting a
26 resolution imposing a tax under section 621-A, the board of
27 school directors shall give public notice of its intent to adopt
28 the resolution in the manner provided by section 4 of the Local
29 Tax Enabling Act and shall conduct at least one public hearing
30 regarding the proposed adoption of the resolution.
20030S0100B1027 - 22 -
1 (b) Calculation.--For the purposes of proposing a resolution
2 and referendum under section 613-A(c), the board of school
3 directors shall calculate:
4 (1) The value of homestead property in the school
5 district by dividing the total assessed value of residential
6 property in the school district in calendar year 2002, as
7 compiled by the State Tax Equalization Board, by the total
8 number of owner-occupied housing units in the school district
9 as reported by the United States Census Bureau for the 2000
10 census in Summary File 1.
11 (2) The maximum homestead exclusion by multiplying the
12 quotient from paragraph (1) by 0.50.
13 (3) The proposed homestead exclusion for the school
14 district by multiplying the product from paragraph (2) by a
15 number as determined by the board of school directors,
16 providing that such number is greater than or equal to 0.50
17 and less than or equal to 1.0.
18 (4) The proposed reduction in real property taxes for
19 the school district by multiplying the product from paragraph
20 (3) by the real property tax millage rate of the school
21 district in effect for the 2001-2002 school year.
22 Section 627-A. Disposition of earned income and net profits tax
23 revenue.
24 The disposition of revenue from a tax or an increase in the
25 rate of a tax imposed by school districts under section 621-A
26 shall occur in the following manner:
27 (1) For the fiscal year of implementation of a newly
28 imposed income tax, all earned income and net profits tax
29 revenue received by a school district shall be used to
30 provide for an amount equal to the earned income and net
20030S0100B1027 - 23 -
1 profits tax revenue over the preceding fiscal year; an
2 increase in budgeted revenues over the preceding fiscal year
3 in accordance with the amount specified in the referendum
4 question approved by the voters under section 613-A; and a
5 reduction in the school district real property tax by means
6 of an exclusion for farmstead property and homestead property
7 pursuant to section 621-A.
8 (2) For the fiscal year of implementation of an increase
9 in the rate of the existing tax imposed under section 621-A,
10 all revenue received by a school district directly
11 attributable to the increased rate shall be used to reduce
12 the school district real property tax by means of an
13 exclusion for farmstead property and homestead property
14 pursuant to section 621-A.
15 (d) Homestead Exclusion
16 Section 691-A. Changes to the amount of the homestead
17 exclusion.
18 (a) Increases in the homestead exclusion.--A school district
19 may increase the amount of the exclusion for homestead property
20 required pursuant to section 627-A consistent with the
21 prohibitions in 53 Pa.C.S. § 8586 (relating to limitations).
22 (b) Decreases in the homestead exclusion.--A school district
23 may only reduce the exclusion for homestead property below the
24 level authorized pursuant to the referendum required under
25 section 613-A, subsection (c) and section 692-A(d) when the
26 median assessed value used in calculating the homestead
27 exclusion decreases.
28 (c) Reassessment.--After a revision of assessments by means
29 of revaluing all properties, the governing body providing an
30 exclusion for homestead property under section 613-A shall
20030S0100B1027 - 24 -
1 adjust the amount of the exclusion pursuant to 53 Pa.C.S. §
2 8583(e) (relating to exclusion for homestead property).
3 Section 692-A. Homestead exclusion process.
4 (a) Listing required.--Not later than September 1, 2003, and
5 not later than September 1 of each year thereafter, the board of
6 school directors of each school district shall compile a listing
7 of all real property within the school district that it believes
8 to be qualified as a homestead or a farmstead as those terms are
9 defined under 53 Pa.C.S § 8401 (relating to definitions) or 8582
10 (relating to definitions). The school district shall use
11 information or statements from the owners or residents of the
12 property and shall consult with the assessor of the county in
13 compiling the list. This listing may be compiled at the same
14 time as the enumeration of school children is performed pursuant
15 to section 1351.
16 (b) Notification to homestead owners.--If the electors of a
17 school district approve a referendum question pursuant to
18 section 613-A, the board of school directors shall, by first
19 class mail, notify the owners of each homestead and each
20 farmstead on the listing required by this section that
21 submitting an application is required under 53 Pa.C.S. Ch. 85
22 Subch. F (relating to homestead property exclusion) prior to the
23 property being qualified for any homestead or farmstead
24 exclusion authorized by law. The notice required by this section
25 shall include a copy of the application required by the assessor
26 of the county where the property is located and the instructions
27 for completing and returning the application.
28 (c) Calculation of the homestead and farmstead exclusion.--
29 The listing of homesteads and farmsteads required to be compiled
30 under this section shall be used by the school district in
20030S0100B1027 - 25 -
1 estimating the amount of the homestead exclusion and farmstead
2 exclusion for purposes of a referendum question under section
3 613-A(b).
4 (d) Revisions to the initial calculation of homestead and
5 farmstead exclusion for school districts.--If the electors of a
6 school district approve a referendum question pursuant to 613-
7 A(c), the board of school directors shall revise the calculation
8 utilized under section 626-A(b) with information derived from
9 the listing required under subsection (a) no later than March 1,
10 2004. Such revised calculation shall be used to provide
11 homestead and farmstead exclusions. Where the tax imposed under
12 section 621-A is insufficient to provide the homestead and
13 farmstead exclusions authorized through approval of a referendum
14 question, the exclusions may be reduced accordingly.
15 (e) Appeals.--Real property for which an application under
16 53 Pa.C.S. § 8584 (relating to administration and procedure) has
17 been filed by March 1, 2004, shall be deemed to be a homestead
18 property or farmstead property, as the case may be, for the
19 purposes of implementing a homestead or farmstead exclusion
20 under 53 Pa.C.S. § 8717 (relating to disposition of earned
21 income and net profits tax revenue) in the school district
22 fiscal year beginning July 1, 2004, unless the assessor denies
23 the application within the time provided by law and the denial
24 is unappealed or unappealable. The school district is authorized
25 to collect taxes, interest and penalties relating to a homestead
26 or farmstead exclusion that is denied after the denial is
27 unappealed or unappealable.
28 (f) Reports.--In addition to the report required under 53
29 Pa.C.S. § 8584(i), the assessor shall be required to provide a
30 supplemental report containing the information required under 53
20030S0100B1027 - 26 -
1 Pa.C.S. § 8584(i) for applications filed by March 1, 2004. The
2 date of the supplemental report shall be set by the school
3 district, but shall not be earlier than June 1, 2004.
4 (g) Applicability.--Subsections (b), (c), (d), (e), (f) and
5 (g) shall apply only to school districts that approve a
6 referendum under section 613-A at the 2003 municipal election.
7 (e) Register
8 Section 693-A. Register for taxes.
9 (a) General rule.--The department shall maintain an official
10 continuing register supplemented annually of all earned income
11 and net profits taxes levied under subdivision (c).
12 (b) Contents of register.--The register shall list:
13 (1) The school districts levying the tax.
14 (2) The rate of tax as stated in the resolution levying
15 the tax.
16 (3) The rate on taxpayers.
17 (4) The name and address of the official responsible for
18 administering the collection of the tax and from whom
19 information, forms and copies of regulations are available.
20 Section 694-A. Information for register.
21 Information for the register shall be furnished by the school
22 district to the department as prescribed by the department. The
23 information must be received by the department no later than
24 July 15 of each year to show new tax enactments, repeals and
25 changes. Failure to comply with the filing date may result in
26 the omission of the tax levy from the register for that year.
27 Failure of the department to receive information of taxes
28 continued without change may be construed by the department to
29 mean that the information contained in the previous register
30 remains in force.
20030S0100B1027 - 27 -
1 Section 695-A. Availability and effective period of register.
2 The register, with such annual supplements as may be required
3 by new tax enactments, repeals or changes, shall be available
4 upon request no later than August 15 of each year. The effective
5 period for each register shall be from July 1 of the year in
6 which it is issued to June 30 of the following year.
7 Section 696-A. Effect of nonfiling.
8 Employers shall not be required by any ordinance to withhold
9 from the compensation of their employees any local earned income
10 and net profits tax imposed under subdivision (c) which is not
11 listed in the register or to make reports of compensation in
12 connection with taxes not so listed. If the register is not
13 available by August 15, the register of the previous year shall
14 continue to be effective for an additional period of not more
15 than one year.
16 Section 697-A. Effect of subdivision on liability of taxpayer.
17 The provisions of this subdivision shall not be construed to
18 affect the liability of any taxpayer for taxes lawfully imposed
19 under subdivisions (b) and (c).
20 Section 2. This act shall take effect immediately. <--
21 SECTION 3. SECTION 1714-B(G) OF THE ACT, ADDED MAY 10, 2000 <--
22 (P.L.44, NO.16), IS AMENDED TO READ:
23 SECTION 1714-B. MANDATE WAIVER PROGRAM.--* * *
24 (G) THE FOLLOWING PROVISIONS OF THIS ACT SHALL NOT BE
25 SUBJECT TO WAIVER PURSUANT TO THIS SECTION: SECTIONS 108, 110,
26 111, 321, 322, 323, 324, 325, 326, 327, 431, 436, 437, 440.1,
27 443, 510, 513, 518, 527, 701.1, 708, 736, 737, 738, 739, 740,
28 741, 752, 753, 755, 771, 776, 777, 808, 809, 810, 1303(A), 1310,
29 1317, 1317.1, 1317.2, 1318, 1327, 1327.1, 1330, 1332, 1361,
30 1366, 1501, 1502, 1513, 1517, 1518, 1521, 1523, 1546 AND 1547;
20030S0100B1027 - 28 -
1 PROVISIONS PROHIBITING DISCRIMINATION; ARTICLES VI, VI-A, XI,
2 XI-A, XII, XIII-A, XIV AND XVII-A AND THIS ARTICLE.
3 * * *
4 SECTION 4. THE ADDITION OF SECTION 614-A(F)(6), (8), (9) AND
5 (10) OF THE ACT SHALL APPLY TO SCHOOL DISTRICTS IN WHICH A
6 REFERENDUM QUESTION UNDER 53 PA.C.S. § 8703 HAS BEEN APPROVED
7 AND IMPLEMENTED.
8 SECTION 5. THIS ACT SHALL TAKE EFFECT IMMEDIATELY.
B21L24DMS/20030S0100B1027 - 29 -