HOUSE AMENDED
PRIOR PRINTER'S NOS. 574, 992, 1027, PRINTER'S NO. 1075
1039
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 REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, JULY 8, 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 OR PERSONAL INCOME TAX by <--
8 school districts after approval by the electors; providing
9 for applicability of referendum exceptions; and further
10 providing for the mandate waiver program.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 679 of the act of March 10, 1949 (P.L.30,
14 No.14), known as the Public School Code of 1949, amended
15 November 26, 1982 (P.L.760, No.215), is amended to read:
16 Section 679. Per Capita Taxes.--Each resident or inhabitant,
17 over eighteen years of age, in every school district of the
18 second, third, and fourth class, which shall levy such tax,
19 shall annually pay, for the use of the school district in which
1 he or she is a resident or inhabitant, a per capita tax of not
2 less than one dollar nor more than five dollars, as may be
3 assessed by the local school district. The tax collector shall
4 not proceed against a spouse or his employer until he has
5 pursued remedies against the delinquent taxpayer and the
6 taxpayer's employer under this section.
7 Each school district may exempt any person whose total income
8 from all sources is less than [five thousand dollars] ten
9 thousand dollars per annum from its per capita tax or any
10 portion thereof. The school district may adopt and employ
11 regulations for the processing of claims for the exemption.
12 Section 2. The act is amended by adding an article to read:
13 ARTICLE VI-A
14 TAXATION BY SCHOOL DISTRICTS
15 (a) General Provisions
16 Section 601-A. Short title of article.
17 This article shall be known and may be cited as the Taxpayer
18 Choice Act.
19 Section 602-A. Definitions.
20 The following words and phrases when used in this article
21 shall have the meanings given to them in this section unless the
22 context clearly indicates otherwise:
23 "Board of school directors." A board of school directors of
24 a school district of the second class, third class or fourth
25 class.
26 "Budgeted revenue." Local tax revenue. The term shall not
27 include revenue from any of the following:
28 (1) Delinquent taxes.
29 (2) Payments in lieu of taxes.
30 (3) The real estate transfer tax.
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1 (4) The distribution of the public utility realty tax
2 imposed under Article XI-A of the act of March 4, 1971
3 (P.L.6, No.2), known as the Tax Reform Code of 1971.
4 (5) A mercantile or business privilege tax on gross
5 receipts.
6 (6) An amusement or admissions tax.
7 "Business." As defined in section 301 of the act of March 4,
8 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
9 "Consumer Price Index." The Consumer Price Index for All
10 Urban Consumers (CPI-U) for the Pennsylvania, New Jersey,
11 Delaware and Maryland area for the most recent 12-month period
12 for which figures have been officially reported by the United
13 States Department of Labor, Bureau of Labor Statistics,
14 immediately prior to the date of the primary election at which
15 the referendum will be submitted to the voters.
16 "Current year." The fiscal year for which a tax is levied.
17 "Department." The Department of Community and Economic
18 Development of the Commonwealth.
19 "Domicile." As defined in section 13 of the act of December
20 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
21 Act.
22 "Dwelling." A structure used as a place of habitation by a
23 natural person.
24 "Earned income." All of the classes of income defined as
25 earned income in section 13 of the act of December 31, 1965
26 (P.L.1257, No.511), known as The Local Tax Enabling Act.
27 "Election officials." The county board of elections of a
28 county.
29 "Employer." As defined in section 301 of the act of March 4,
30 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
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1 "Farmstead." All buildings and structures on a farm not less
2 than ten contiguous acres in area, not otherwise exempt from
3 real property taxation or qualified for any other abatement or
4 exclusion pursuant to any other law, that are used primarily:
5 (1) to produce or store any farm product produced on the
6 farm for purposes of commercial agricultural production;
7 (2) to house or confine any animal raised or maintained
8 on the farm for the purpose of commercial agricultural
9 production;
10 (3) to store any agricultural supply to be used on the
11 farm in commercial agricultural production; or
12 (4) to store any machinery or equipment used on the farm
13 in commercial agricultural production.
14 This term shall only apply to farms used as the domicile of an
15 owner.
16 "Farmstead property." A farmstead for which an application
17 has been submitted and approved under 53 Pa.C.S. § 8584
18 (relating to administration and procedure).
19 "Homestead." A dwelling, including the parcel of land on
20 which the dwelling is located and the other improvements located
21 on the parcel for which any of the following apply:
22 (1) The dwelling is primarily used as the domicile of an
23 owner who is a natural person. The homestead for real
24 property qualifying under this paragraph shall not include
25 the land on which the dwelling is located if the land is not
26 owned by a person who owns the dwelling.
27 (2) The dwelling is a unit in a condominium as the term
28 is defined in 68 Pa.C.S. § 3103 (relating to definitions) and
29 the unit is primarily used as the domicile of a natural
30 person who is an owner of the unit; or the dwelling is a unit
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1 in a cooperative as the term is defined in 68 Pa.C.S. § 4103
2 (relating to definitions) and the unit is primarily used as
3 the domicile of a natural person who is an owner of the unit.
4 The homestead for a unit in a condominium or a cooperative
5 shall be limited to the assessed value of the unit, which
6 shall be determined in a manner consistent with the
7 assessment of real property taxes on those units under 68
8 Pa.C.S. (relating to real and personal property) or as
9 otherwise provided by law. If the unit is not separately
10 assessed for real property taxes, the homestead shall be a
11 pro rata share of the real property.
12 (3) The dwelling does not qualify under paragraphs (1)
13 and (2) and a portion of the dwelling is used as the domicile
14 of an owner who is a natural person. The homestead for real
15 property qualifying under this paragraph shall be the portion
16 of the real property that is equal to the portion of the
17 dwelling that is used as the domicile of an owner.
18 "Homestead property." A homestead for which an application
19 has been submitted and approved under 53 Pa.C.S. § 8584
20 (relating to administration and procedure).
21 "Local Tax Enabling Act." The act of December 31, 1965
22 (P.L.1257, No.511), known as The Local Tax Enabling Act.
23 "Local tax revenue." The revenue from taxes actually levied
24 and assessed by a school district. The term does not include
25 interest or dividend earnings, Federal or State grants,
26 contracts or appropriations, income generated from operations or
27 any other source that is not derived from taxes levied and
28 assessed by a school district.
29 "Municipality." As defined in 1 Pa.C.S. § 1991 (relating to
30 definitions).
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1 "Net profits." All of the classes of income defined as net
2 profits in section 13 of the act of December 31, 1965 (P.L.1257,
3 No.511), known as The Local Tax Enabling Act.
4 "Owner." Includes any of the following:
5 (1) A joint tenant or tenant in common.
6 (2) A person who is a purchaser of real property under a
7 contract.
8 (3) A partial owner.
9 (4) A person who owns real property as a result of being
10 a beneficiary of a will or trust or as a result of intestate
11 succession.
12 (5) A person who owns or purchases a dwelling on leased
13 land.
14 (6) A person who holds a life lease in real property
15 previously sold or transferred to another.
16 (7) A person in possession under a life estate.
17 (8) A grantor who has placed the real property in a
18 revocable trust.
19 (9) A member of a cooperative as defined in 68 Pa.C.S. §
20 4103 (relating to definitions).
21 (10) A unit owner of a condominium as defined in 68
22 Pa.C.S. § 3103 (relating to definitions).
23 (11) A partner of a family farm partnership or a
24 shareholder of a family farm corporation as the terms are
25 defined in section 1101-C of the act of March 4, 1971 (P.L.6,
26 No.2), known as the Tax Reform Code of 1971.
27 "PERSONAL INCOME." INCOME ENUMERATED IN SECTION 303 OF THE <--
28 ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE
29 OF 1971, AS RETURNED TO AND ASCERTAINED BY THE DEPARTMENT OF
30 REVENUE, SUBJECT, HOWEVER, TO ANY CORRECTION THEREOF FOR FRAUD,
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1 EVASION OR ERROR AS FINALLY DETERMINED BY THE COMMONWEALTH.
2 "Political subdivision." As defined in 1 Pa.C.S. § 1991
3 (relating to definitions).
4 "Preceding year." The fiscal year before the current year.
5 "Primarily used." Usage of at least 51% of the square
6 footage of a dwelling.
7 "Resident individual." An individual who is domiciled in a
8 school district.
9 "School district." A school district of the second class,
10 third class or fourth class.
11 "Statewide average weekly wage." That amount determined
12 annually for each calendar year by the Department of Labor and
13 Industry under section 105.1 of the act of June 2, 1915
14 (P.L.736, No.338), known as the Workers' Compensation Act.
15 "Succeeding year." The fiscal year following the current
16 year.
17 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
18 known as the Tax Reform Code of 1971.
19 "Taxpayer." An individual required under this article to
20 file a tax return or to pay a tax.
21 Section 603-A. Scope and limitations.
22 (a) General rule.--Except as provided in subsection (b) and
23 section 605-A, it is the intent of this article to confer upon
24 each school district the power to levy, assess and collect an
25 earned income and net profits tax OR PERSONAL INCOME TAX as set <--
26 forth in subdivision (c).
27 (b) Real estate transfer taxes.--This article shall not be
28 construed to affect the power of a school district to levy,
29 assess and collect a real estate transfer tax.
30 (c) Occupation tax.--This article shall not be construed to
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1 affect the power of a school district to do any of the
2 following:
3 (1) To elect to place a referendum question on the
4 ballot pursuant to the act of June 22, 2001 (P.L.374, No.24),
5 known as the Optional Occupation Tax Elimination Act. A
6 school district may place such referendum question on the
7 ballot at the same municipal election as a referendum
8 question placed on the ballot pursuant to subdivision (b).
9 (2) To eliminate its occupation tax pursuant to the
10 Optional Occupation Tax Elimination Act.
11 Section 604-A. Preemption.
12 No act of the General Assembly shall be construed to vacate
13 or preempt any resolution adopted under this article providing
14 for the imposition of a tax by a school district unless the act
15 of the General Assembly expressly vacates or preempts the
16 authority to adopt the resolution.
17 Section 605-A. Certain rates of taxation limited.
18 If a municipality and school district both impose an earned
19 income and net profits tax on the same individual under the
20 Local Tax Enabling Act and the municipality and school district
21 are limited to or have agreed upon a division of the tax rate in
22 accordance with section 8 of the Local Tax Enabling Act, then
23 the municipality that continues to levy the earned income and
24 net profits tax under the Local Tax Enabling Act shall remain
25 subject to that limitation or agreement in the event that the
26 school district opts to impose an earned income and net profits
27 tax under section 621-A.
28 (b) Tax Authorization
29 Section 611-A. General tax authorization.
30 Subject to sections 613-A and 614-A, each school district or
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1 second class A county governed by a home rule charter may by
2 resolution levy, assess and collect or provide for the levying,
3 assessment and collection of an earned income and net profits
4 tax OR PERSONAL INCOME TAX under subdivision (c). <--
5 Section 611.1-A. Second Class A county optional imposition of
6 tax.
7 If a county which is a county of the second class A which is
8 governed by a home rule charter elects to impose the tax
9 authorized under section 611-A:
10 (1) The county shall make the election 30 days prior to
11 the school district's decision deadline. If the county does
12 not elect to impose the tax each school district shall still
13 have the option of imposing the tax in accordance with this
14 act.
15 (2) Section 613-A(e)(4) does not apply.
16 (3) No school district which is wholly within that
17 county shall impose the tax, unless the county ballot
18 question fails. If the county ballot question fails, the
19 school district may impose the tax in accordance with this
20 act at a later date.
21 (4) If the tax is imposed, the county may retain an
22 amount of money to cover the costs of collecting,
23 distributing and administrating the tax but that amount shall
24 not exceed 1% of the total amount collected.
25 (5) In a school district that crosses county lines, the
26 residents of that school district would have two ballot
27 questions. If both ballot questions pass, the tax is paid
28 first to the school district and used as a credit against the
29 county tax. The county will reduce the amount payable to the
30 school district to the same proportion of actual money paid
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1 to the county from residents of that school district in that
2 county after reducing the credit amount paid to the school
3 district.
4 (6) If the county ballot question is passed, the county
5 would give each school district an amount equal to the
6 homestead/farmstead amount up to one-half of the county
7 median school property tax under 53 Pa.C.S. Ch. 85 Subch. F
8 (relating to homestead property exclusion), which the school
9 district would then credit against the school taxes of the
10 residential properties that are in both that school district
11 and county. The credit shall not exceed 100% of the property
12 taxes of any residential property. Any amount in excess of
13 the 100% limitation must be used by the school district to
14 further reduce millage.
15 Section 612-A. Continuity of tax.
16 An earned income and net profits tax OR PERSONAL INCOME TAX <--
17 levied under the provisions of subdivision (c) shall continue in
18 force on a fiscal year basis without annual reenactment unless
19 the rate of tax is increased or the tax is subsequently
20 repealed.
21 Section 613-A. Adoption of referendum.
22 (a) General rule.--
23 (1) In order to levy an earned income and net profits
24 tax OR PERSONAL INCOME TAX under subdivision (c), a board of <--
25 school directors shall use the procedures set forth in
26 subsection (b).
27 (2) A board of school directors after making an election
28 to levy an earned income and net profits tax OR PERSONAL <--
29 INCOME TAX under subdivision (c) may, after a period of at
30 least five full fiscal years, elect under the provisions of
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1 subsection (c) to end participation under this subdivision.
2 If the electorate approves a referendum to do so, the board
3 of school directors may not continue to levy an earned income
4 and net profits tax OR PERSONAL INCOME TAX under subdivision <--
5 (c).
6 (b) Public referendum requirements.--Except as set forth in
7 subsection (d) the following apply:
8 (1) Subject to the notice and hearing requirements of
9 section 626-A, a board of school directors may levy the
10 earned income and net profits tax OR PERSONAL INCOME TAX <--
11 under subdivision (c) only by obtaining the approval of the
12 electorate of the affected school district in a public
13 referendum at only the municipal election preceding the
14 fiscal year when the earned income and net profits tax OR <--
15 PERSONAL INCOME TAX will be initially imposed. The county
16 board of elections shall cause the referendum question
17 required by this section to be submitted to the electors of
18 the school district.
19 (2) The referendum question shall state the initial rate
20 of the proposed earned income and net profits tax OR PERSONAL <--
21 INCOME TAX to be levied under subdivision (c), the reason for
22 the tax and the amount of proposed budgeted revenue growth,
23 if any, in the first fiscal year following adoption of the
24 referendum, expressed as a percent increase over the prior
25 year's budgeted revenue. Any increase in budgeted revenue
26 between the first fiscal year following adoption of the
27 referendum and the prior year's budgeted revenue shall not
28 exceed 2%. The question shall be in clear language that is
29 readily understandable by a layperson. For the purpose of
30 illustration, a referendum question may be framed as follows:
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1 Do you favor the imposition of an earned income and net <--
2 profits tax of X% X% (NAME OF TAX) to be used in order to <--
3 reduce residential real property taxes by X% and provide
4 for a one-time revenue increase of X% over the preceding
5 fiscal year?
6 A nonlegal interpretative statement shall accompany the
7 referendum question in accordance with section 201.1 of the act
8 of June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
9 Election Code. A board of school directors of a school district
10 in which a referendum under this section has been approved shall
11 not be subject to the provisions of section 614-A for any future
12 increases in the earned income and net profits tax OR PERSONAL <--
13 INCOME TAX rates authorized under subdivision (c). If the
14 referendum question fails to receive a majority vote pursuant to
15 this section, approval of the electorate under section 614-A
16 shall not be required to levy any tax or increase the rate of
17 any tax which the board of school directors of the affected
18 school district is authorized to levy and increase pursuant to
19 any other act.
20 (c) Public referendum requirements for the municipal
21 election of 2003.--In addition to the provisions of subsection
22 (b), the following shall apply for the municipal election of
23 2003:
24 (1) The referendum question required by this section
25 shall be submitted to the electors of each school district
26 for the municipal election of 2003.
27 (2) No later than August 5, 2003, the board of school
28 directors of each school district shall adopt the resolution
29 required under section 626-A authorizing the referendum
30 question. The resolution and the referendum question shall be
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1 based on the calculation provided for under section 626-A(b).
2 (3) If the board of school directors fails to adopt the
3 resolution required under section 626-A by August 5, 2003,
4 the county board of elections shall prepare a referendum
5 question that authorizes an earned income and net profits tax
6 for the school district at the maximum rate permitted, based
7 on the calculation provided for under section 626-A(b).
8 (4) The county board of elections shall cause the
9 referendum question required by this subsection to be
10 submitted to the electors of the school district consistent
11 with the provisions of this section.
12 (d) Public referendum requirements to end participation
13 under this subdivision.--Subject to the notice and public
14 hearing requirements in section 4 of the Local Tax Enabling Act,
15 a board of school directors may elect to end participation under
16 this subdivision in accordance with subsection (a)(2) by
17 obtaining the approval of the electorate of the affected school
18 district in a public referendum at a municipal election.
19 (e) Nonapplicability.--This section shall not apply to any
20 of the following:
21 (1) A school district in which a referendum question
22 under 53 Pa.C.S. § 8703 (relating to adoption of referendum)
23 has been approved and implemented.
24 (2) A school district of the first class.
25 (3) A school district of the first class A.
26 (4) A school district certified as distressed pursuant
27 to section 691 or an education empowerment district pursuant
28 to section 1705-B or 1707-B.
29 Section 614-A. Public referendum requirements for increasing
30 certain taxes.
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1 (a) Applicability.--This section shall apply to the board of
2 school directors of a school district in which a referendum
3 under section 613-A is approved.
4 (b) Prohibitions.--Except as set forth in subsection (f),
5 unless there is compliance with subsection (c), a board of
6 school directors may not do any of the following:
7 (1) Increase the rate of a tax levied for the support of
8 the public schools by more than the percentage increase in
9 the Statewide average weekly wage in the preceding year or in
10 the percentage increase in the Consumer Price Index,
11 whichever is greater.
12 (2) Levy a tax for the support of the public schools
13 which was not levied in the fiscal year in which a referendum
14 under section 613-A was approved.
15 (3) Raise the rate of the earned income and net profits
16 tax, if already imposed under the authority of section 13 of
17 the Local Tax Enabling Act, except as otherwise provided for
18 under section 621-A.
19 (c) Referendum.--
20 (1) In order to take an action under subsection (b)(1),
21 at the primary election immediately preceding the fiscal year
22 in which the proposed tax increase would take effect:
23 (i) a referendum stating the specific rate or rates
24 of the tax increase must be submitted to the electors
25 residing in the school district; and
26 (ii) a majority of the electors voting on the
27 referendum must approve the increase.
28 (2) In order to take an action under subsection (b)(2),
29 at the primary election immediately preceding the fiscal year
30 in which the proposed tax would take effect:
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1 (i) a referendum stating the specific tax and rate
2 to be levied must be submitted to the electors residing
3 in the school district; and
4 (ii) a majority of the electors voting on the
5 referendum must approve the tax.
6 (d) Failure to approve referendum.--
7 (1) If there is no approval under subsection (c)(1)(ii),
8 the board of school directors may approve an increase in the
9 tax rate of not more than the percentage increase in the
10 Statewide average weekly wage in the preceding year or the
11 percentage increase in the Consumer Price Index, whichever is
12 greater.
13 (2) If there is no approval under subsection (c)(2)(ii),
14 the board of school directors may not levy the tax.
15 (e) Exception to general rule.--The provisions of subsection
16 (b)(1) shall not apply to an increase in the rate of any tax
17 levied for the support of the public schools which is less than
18 or equal to the percentage increase in the Statewide average
19 weekly wage in the preceding year or the percentage increase in
20 the Consumer Price Index, whichever is greater. Prior to any
21 increase under this subsection, the board of school directors
22 shall certify to the Department of Education the estimates of
23 local tax rates under this subsection. The Department of
24 Education may, on its own motion or on petition of a person
25 having standing under subsection (j), revise the estimates
26 certified by the board of school directors and reduce the
27 allowable increase in the rate of any tax under this subsection.
28 (f) Referendum exceptions.--The provisions of subsection
29 (b)(1) shall not apply to an increase in the rate of any tax
30 levied for the support of the public schools where the increase
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1 is necessary to respond to one or more of the following
2 conditions:
3 (1) To respond to or recover from an emergency or
4 disaster declared pursuant to 35 Pa.C.S. § 7301 (relating to
5 general authority of Governor) or 75 Pa.C.S. § 6108 (relating
6 to power of Governor during emergency), only for the duration
7 of the emergency or disaster.
8 (2) To implement a court order or an administrative
9 order from a Federal or State agency that requires the
10 expenditure of funds that exceed current available revenues,
11 provided that the rate increase is rescinded following
12 fulfillment of the court order or administrative order.
13 (3) (i) To pay interest and principal on any
14 indebtedness incurred under 53 Pa.C.S. Pt. VII Subpt. B
15 (relating to indebtedness and borrowing) prior to the
16 effective date of this section, provided that in no case
17 may the school district incur additional debt under this
18 paragraph, except for the refinancing of existing debt,
19 including the payment of costs and expenses related to
20 such refinancing and the establishment or funding of
21 appropriate debt service reserves and provided further
22 that the increase is rescinded following the final
23 payment of interest and principal.
24 (ii) The exception provided under this paragraph may
25 not be used in lieu of the referendum under subsection
26 (c)(2) to pay for costs which could not be financed by
27 the issuance of debt under 53 Pa.C.S. (relating to
28 municipalities generally).
29 (4) To respond to conditions that pose an immediate
30 threat of serious physical harm or injury to the students,
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1 staff or residents of the school district, but only until the
2 conditions causing the threat have been fully resolved.
3 (5) Special purpose tax levies approved by the
4 electorate.
5 (6) The basic education funding allocation and special
6 education funding allocation to the school district from the
7 Commonwealth for the year in which the tax rate increase
8 would take effect is equal to or less than the basic
9 education funding allocation and special education funding
10 allocation to the school district for the preceding fiscal
11 year.
12 (7) (i) To maintain per-student local tax revenue in
13 the school district at an amount not exceeding the amount
14 of per-student local tax revenue at the level of the
15 preceding year, adjusted for the percentage increase in
16 the Statewide average weekly wage or the percentage
17 increase in the Consumer Price Index, whichever is
18 greater.
19 (ii) This paragraph shall apply only if the
20 percentage growth in average daily membership in the
21 school district between the current fiscal year and the
22 third fiscal year immediately preceding the current
23 fiscal year exceeds 10%. For the purposes of this
24 paragraph, per-student local tax revenue shall be
25 determined by dividing local tax revenue by average daily
26 membership.
27 (8) To make payments on behalf of active members of the
28 Public School Employees' Retirement System as required
29 pursuant to 24 Pa.C.S § 8327 (relating to payments by
30 employers), where the increase in the employer contribution
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1 rate on behalf of active members as calculated under 24
2 Pa.C.S. § 8328 (relating to actuarial cost method) for the
3 school year for which payments are required is equal to or
4 greater than 200% of the employer contribution rate on behalf
5 of active members in effect for the school year prior to the
6 school year for which an exception under this paragraph is
7 sought.
8 (9) To pay extraordinary expenses incurred in providing
9 special education programs and services to students with
10 disabilities where the anticipated increase in expenditures
11 on special education programs and services is greater than
12 10% of the school district's total expenditures on special
13 education programs and services for the school year prior to
14 the school year for which an exception under this paragraph
15 is sought.
16 (10) To compensate for a one-year decrease of 10% or
17 more in the school district's real property tax base. For the
18 purposes of this paragraph, the decrease shall be measured by
19 the percent change in the assessed value of all taxable
20 property within the school district between the fiscal year
21 in which an exception under this paragraph is sought and the
22 fiscal year immediately preceding the fiscal year in which an
23 exception under this paragraph is sought.
24 (11) To pay costs associated with implementing new
25 unfunded federally mandated educational programs.
26 (g) Revenue derived from increase.--Any revenue derived from
27 an increase in the rate of any tax allowed pursuant to an
28 exception under subsection (f)(3) or (5) shall not exceed the
29 anticipated dollar value of the expenditure for which the
30 exception under subsection (f) was sought.
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1 (h) Limitation on rate.--The increase in the rate of any tax
2 allowed pursuant to an exception under subsection (f)(1), (2),
3 (4), (6), (7), (8), (9), (10) or (11) shall not exceed the rate
4 increase required as determined by a court of common pleas
5 pursuant to subsection (i).
6 (i) Court action.--Prior to the imposition of the tax
7 increase under subsection (f)(1), (2), (4), (6), (7), (8), (9),
8 (10) or (11), approval by the court of common pleas in the
9 judicial district in which the administrative office of the
10 school district is located must be obtained. The board of school
11 directors shall publish in a newspaper of general circulation a
12 notice of its intent to file an action under this subsection at
13 least one week prior to the filing of the petition. The board of
14 school directors shall also publish in a newspaper of general
15 circulation notice, as soon as possible following notification
16 from the court that a hearing has been scheduled, stating the
17 date, time and place of the hearing on the petition. The
18 following shall apply to any proceedings instituted under this
19 subsection:
20 (1) The board of school directors must prove by clear
21 and convincing evidence the necessity for the tax increase.
22 (2) The board of school directors must prove by clear
23 and convincing evidence the anticipated dollar value of the
24 expenditure for which an exception under subsection (f) is
25 sought.
26 (3) The board of school directors must prove by clear
27 and convincing evidence that there are no assets or other
28 feasible alternatives available to the school district.
29 (4) The court shall determine the dollar value of the
30 expenditure for which an exception under subsection (f) is
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1 sought, the rate increase required and the appropriate
2 duration of the increase. The court may retain continuing
3 jurisdiction and may, on its own motion or on petition of an
4 interested party, revoke approval for or order rescission of
5 a tax increase.
6 (j) Standing.--A person shall have standing as a party to a
7 proceeding under this section as long as the person resides
8 within or pays real property taxes to the taxing jurisdiction of
9 the board of school directors instituting the action.
10 Section 615-A. Property tax limits on reassessment.
11 After any county makes a countywide revision of assessment of
12 real property at values based upon an established predetermined
13 ratio as required by law or after any county changes its
14 established predetermined ratio, a board of school directors in
15 a school district in which a referendum under section 613-A has
16 been approved, which after the effective date of this section
17 for the first time levies its real estate taxes on that revised
18 assessment or valuation, shall for the first year reduce its tax
19 rate, if necessary, for the purpose of having the percentage
20 increase in taxes levied for that year against the real
21 properties contained in the duplicate for the preceding year be
22 less than or equal to the percentage increase in the Statewide
23 average weekly wage for the preceding year notwithstanding the
24 increased valuations of such properties under the revised
25 assessment. For the purpose of determining the total amount of
26 taxes to be levied for the first year, the amount to be levied
27 on newly constructed buildings or structures or on increased
28 valuations based on new improvements made to existing houses
29 need not be considered. The tax rate shall be fixed for that
30 year at a figure which will accomplish this purpose. The
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1 provisions of section 614-A shall apply to increases in the tax
2 rate above the limits provided in this section.
3 (c) Earned Income and Net Profits Tax <--
4 (C) EARNED INCOME AND NET PROFITS TAX OR PERSONAL INCOME TAX <--
5 Section 621-A. Authorization.
6 (a) Earned income and net profits tax authorized.--A board <--
7 (A) GENERAL RULE.--A BOARD OF SCHOOL DIRECTORS MAY CHOOSE TO <--
8 LEVY, ASSESS AND COLLECT A TAX ON EARNED INCOME AND NET PROFITS
9 OR A PERSONAL INCOME TAX UNDER THIS SECTION.
10 (B) EARNED INCOME AND NET PROFITS TAX.--
11 (1) A BOARD of school directors may levy, assess and
12 collect a tax on the earned income and net profits of
13 resident individuals of the school district at a rate
14 determined by the board of school directors.
15 (b) Tax rates determined.--The earned income and net profits <--
16 (2) THE EARNED INCOME AND NET PROFITS tax authorized <--
17 under subsection (a) PARAGRAPH (1) shall not be less than the <--
18 rate required to provide an exclusion for farmstead property
19 and an exclusion for homestead property equal to 50% of the
20 maximum exclusion under 53 Pa.C.S. § 8586 (relating to
21 limitations) and shall not exceed the rate required to
22 provide an exclusion for farmstead property and an exclusion
23 for homestead property equal to the maximum exclusion under
24 53 Pa.C.S. § 8586. The board of school directors shall round
25 the rate of the earned income and net profits tax OR PERSONAL <--
26 INCOME TAX levied pursuant to this section to the nearest
27 tenth of a percent. The exclusion for farmstead property
28 granted under this section shall not exceed the amount
29 granted for the exclusion for homestead property.
30 (C) PERSONAL INCOME TAX.-- <--
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1 (1) A BOARD OF SCHOOL DIRECTORS MAY LEVY, ASSESS AND
2 COLLECT A TAX ON THE PERSONAL INCOME OF RESIDENT INDIVIDUALS
3 OF THE SCHOOL DISTRICT AT A RATE DETERMINED BY THE BOARD OF
4 SCHOOL DIRECTORS.
5 (2) THE PERSONAL INCOME TAX AUTHORIZED UNDER SUBSECTION
6 (B)(1) SHALL EQUAL THE SUM OF THE RATE REQUIRED TO GENERATE
7 THE SAME AMOUNT OF EARNED INCOME AND NET PROFITS IMPOSED BY
8 THE SCHOOL DISTRICT PRIOR TO THE ADOPTION OF THIS SUBSECTION
9 AND TO PROVIDE AN EXCLUSION FOR FARMSTEAD PROPERTY AND AN
10 EXCLUSION FOR HOMESTEAD PROPERTY EQUAL TO 50% OF THE MAXIMUM
11 EXCLUSION UNDER 53 PA.C.S. § 8586 (RELATING TO LIMITATIONS)
12 AND SHALL NOT EXCEED THE RATE REQUIRED TO PROVIDE AN
13 EXCLUSION FOR FARMSTEAD PROPERTY AND AN EXCLUSION FOR
14 HOMESTEAD PROPERTY EQUAL TO THE MAXIMUM EXCLUSION UNDER 53
15 PA.C.S. § 8586. THE BOARD OF SCHOOL DIRECTORS SHALL ROUND THE
16 RATE OF THE PERSONAL INCOME TAX PURSUANT TO THIS SECTION TO
17 THE NEAREST TENTH OF A PERCENT. THE EXCLUSION FOR FARMSTEAD
18 PROPERTY GRANTED UNDER THIS SECTION SHALL NOT EXCEED THE
19 AMOUNT GRANTED FOR THE EXCLUSION FOR HOMESTEAD PROPERTY.
20 (3) IF A BOARD OF SCHOOL DIRECTORS ELECTS TO IMPOSE A
21 PERSONAL INCOME TAX UNDER THIS SUBSECTION, THE BOARD OF
22 SCHOOL DIRECTORS SHALL NOT BE PERMITTED TO IMPOSE THE EARNED
23 INCOME AND NET PROFITS TAX UNDER SUBSECTION (A) OR UNDER THE
24 ACT OF DECEMBER 31, 1965 (P.L.1257, NO.511), KNOWN AS THE
25 LOCAL TAX ENABLING ACT.
26 (D) PROHIBITIONS.--A SCHOOL DISTRICT THAT LEVIES A LOCAL
27 PERSONAL INCOME TAX UNDER THIS SECTION SHALL HAVE NO POWER TO
28 LEVY, ASSESS OR COLLECT THE EARNED INCOME AND NET PROFITS TAX
29 UNDER THIS SECTION.
30 Section 622-A. Collections.
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1 A (A) GENERAL RULE.--EXCEPT AS OTHERWISE PROVIDED IN <--
2 SUBSECTION (B), A board of school directors imposing a tax under
3 section 621-A shall designate the tax officer who is appointed
4 under section 10 of the Local Tax Enabling Act, or otherwise by
5 law, as the collector of the earned income and net profits tax
6 OR PERSONAL INCOME TAX. In the performance of the tax collection <--
7 duties under this subdivision, the designated tax officer shall
8 have all the same powers, rights, responsibilities and duties
9 for the collection of the taxes which may be imposed under the
10 Local Tax Enabling Act, 53 Pa.C.S. Ch. 84, Subch. C (relating to
11 local taxpayers bill of rights) or as otherwise provided by law.
12 (B) ALTERNATIVE TAX COLLECTOR APPOINTED.--ANY SCHOOL <--
13 DISTRICT IMPOSING A TAX UPON PERSONAL INCOME UNDER THE AUTHORITY
14 OF SECTION 621-A MAY ENTER INTO AN AGREEMENT WITH THE DEPARTMENT
15 OF REVENUE FOR THE COLLECTION OF THAT TAX BY THE DEPARTMENT OF
16 REVENUE IN CONJUNCTION WITH THE COLLECTION OF ANY TAX ON
17 PERSONAL INCOME IMPOSED BY THE COMMONWEALTH UNDER THE AUTHORITY
18 OF THE TAX REFORM CODE. THE AGREEMENT AUTHORIZED BY THIS
19 SUBSECTION SHALL CONTAIN A PROVISION APPOINTING THE DEPARTMENT
20 OF REVENUE AS THE TAX OFFICER WITHIN THE MEANING OF THIS
21 SECTION. THE DEPARTMENT OF REVENUE, BY REGULATION, SHALL
22 ESTABLISH THE PROCEDURES FOR COLLECTING THAT TAX AND PAYING THE
23 FULL AMOUNT COLLECTED OVER TO THE SCHOOL DISTRICT.
24 (C) COLLECTION AND REMITTANCE AGREEMENT.--IF THE BOARD OF
25 SCHOOL DIRECTORS CHOOSES TO IMPOSE THE PERSONAL INCOME TAX UNDER
26 THIS SECTION, THE BOARD OF SCHOOL DIRECTORS MAY CONTRACT WITH
27 THE DEPARTMENT OF REVENUE TO COLLECT THE TAX AND REMIT IT TO THE
28 SCHOOL DISTRICT ON A REGULAR BASIS.
29 Section 623-A. Credits.
30 (a) General rule.--The provisions of section 14 of the Local
20030S0100B1075 - 23 -
1 Tax Enabling Act shall be applied by a board of school directors
2 to determine any credits under the provisions of this
3 subdivision for a tax imposed under section 621-A.
4 (b) Tax credit.--Notwithstanding any other provisions of law
5 to the contrary, the following apply:
6 (1) This subsection only applies to a taxpayer who is
7 not a resident of a city of the first class but who is
8 subject to the tax on salaries, wages, commissions or other
9 compensation imposed by a city of the first class under the
10 authority of the act of August 5, 1932 (Sp.Sess., P.L.45,
11 No.45), referred to as the Sterling Act.
12 (2) Payment of a tax on salaries, wages, commissions or
13 other compensation to a school district by residents of the
14 school district shall be credited and paid to the school
15 district of residence and allowed as a deduction from the
16 liability of the taxpayer for personal income tax due to the
17 Commonwealth under section 302 of the Tax Reform Code. The
18 deduction shall not exceed the liability of the taxpayer for
19 any other tax on salaries, wages, commissions or other
20 compensation imposed by a city of the first class under the
21 authority of the Sterling Act.
22 Section 624-A. Earned income and net profits tax exemption.
23 A school district that imposes a tax under section 621-A may <--
24 (A) GENERAL RULE.--A SCHOOL DISTRICT THAT IMPOSES AN EARNED <--
25 INCOME AND NET PROFITS TAX UNDER SECTION 621-A MAY exempt from
26 the payment of that tax any person whose total income from all
27 sources is less than $10,000.
28 (B) APPLICABILITY.--THE PROVISIONS OF SECTION 304 OF THE TAX <--
29 REFORM CODE SHALL APPLY TO THE LOCAL PERSONAL INCOME TAX BY ANY
30 SCHOOL DISTRICT THAT LEVIES A TAX ON PERSONAL INCOME OF
20030S0100B1075 - 24 -
1 RESIDENTS UNDER SECTION 621-A(B).
2 Section 625-A. Rules and regulations.
3 A tax imposed under section 621-A shall be subject to all <--
4 regulations adopted under section 13 of the Local Tax Enabling
5 Act. A school district A SCHOOL DISTRICT THAT IMPOSES: <--
6 (1) AN EARNED INCOME AND NET PROFITS TAX UNDER SECTION
7 621-A SHALL BE SUBJECT TO ALL REGULATIONS ADOPTED UNDER
8 SECTION 13 OF THE LOCAL TAX ENABLING ACT AND may adopt
9 regulations for the processing of claims for credits or
10 exemptions under sections 623-A and 624-A; OR <--
11 (2) A PERSONAL INCOME TAX UNDER SECTION 621-A SHALL BE
12 SUBJECT TO ALL REGULATIONS ADOPTED BY THE DEPARTMENT OF
13 REVENUE IN ADMINISTERING THE TAX DUE TO THE COMMONWEALTH
14 UNDER SECTION 302 OF THE TAX REFORM CODE.
15 Section 626-A. Procedure and administration.
16 (a) Levy.--In order to levy a tax under section 621-A, the
17 board of school directors shall adopt a resolution which shall
18 refer to this subdivision prior to placing a referendum question
19 on the ballot under section 613-A. Prior to adopting a
20 resolution imposing a tax under section 621-A, the board of
21 school directors shall give public notice of its intent to adopt
22 the resolution in the manner provided by section 4 of the Local
23 Tax Enabling Act and shall conduct at least one public hearing
24 regarding the proposed adoption of the resolution.
25 (b) Calculation.--For the purposes of proposing a resolution
26 and referendum under section 613-A(c), the board of school
27 directors shall calculate:
28 (1) The value of homestead property in the school
29 district by dividing the total assessed value of residential
30 property in the school district in calendar year 2002, as
20030S0100B1075 - 25 -
1 compiled by the State Tax Equalization Board, by the total
2 number of owner-occupied housing units in the school district
3 as reported by the United States Census Bureau for the 2000
4 census in Summary File 1.
5 (2) The maximum homestead exclusion by multiplying the
6 quotient from paragraph (1) by 0.50.
7 (3) The proposed homestead exclusion for the school
8 district by multiplying the product from paragraph (2) by a
9 number as determined by the board of school directors,
10 providing that such number is greater than or equal to 0.50
11 and less than or equal to 1.0.
12 (4) The proposed reduction in real property taxes for
13 the school district by multiplying the product from paragraph
14 (3) by the real property tax millage rate of the school
15 district in effect for the 2001-2002 school year.
16 Section 627-A. Disposition of earned income and net profits tax
17 OR PERSONAL INCOME TAX revenue. <--
18 The disposition of revenue from a tax or an increase in the
19 rate of a tax imposed by school districts under section 621-A
20 shall occur in the following manner:
21 (1) For the fiscal year of implementation of a newly
22 imposed income tax, all earned income and net profits tax <--
23 revenue REVENUE FROM A NEWLY IMPOSED INCOME TAX received by a <--
24 school district shall be used to provide for an amount equal
25 to the earned income and net profits tax revenue over the
26 preceding fiscal year; an increase in budgeted revenues over
27 the preceding fiscal year in accordance with the amount
28 specified in the referendum question approved by the voters
29 under section 613-A; and a reduction in the school district
30 real property tax by means of an exclusion for farmstead
20030S0100B1075 - 26 -
1 property and homestead property pursuant to section 621-A.
2 (2) For the fiscal year of implementation of an increase
3 in the rate of the existing tax imposed under section 621-A,
4 all revenue received by a school district directly
5 attributable to the increased rate shall be used to reduce
6 the school district real property tax by means of an
7 exclusion for farmstead property and homestead property
8 pursuant to section 621-A.
9 (d) Homestead Exclusion
10 Section 691-A. Changes to the amount of the homestead
11 exclusion.
12 (a) Increases in the homestead exclusion.--A school district
13 may increase the amount of the exclusion for homestead property
14 required pursuant to section 627-A consistent with the
15 prohibitions in 53 Pa.C.S. § 8586 (relating to limitations).
16 (b) Decreases in the homestead exclusion.--A school district
17 may only reduce the exclusion for homestead property below the
18 level authorized pursuant to the referendum required under
19 section 613-A, subsection (c) and section 692-A(d) when the
20 median assessed value used in calculating the homestead
21 exclusion decreases.
22 (c) Reassessment.--After a revision of assessments by means
23 of revaluing all properties, the governing body providing an
24 exclusion for homestead property under section 613-A shall
25 adjust the amount of the exclusion pursuant to 53 Pa.C.S. §
26 8583(e) (relating to exclusion for homestead property).
27 Section 692-A. Homestead exclusion process.
28 (a) Listing required.--Not later than September 1, 2003, and
29 not later than September 1 of each year thereafter, the board of
30 school directors of each school district shall compile a listing
20030S0100B1075 - 27 -
1 of all real property within the school district that it believes
2 to be qualified as a homestead or a farmstead as those terms are
3 defined under 53 Pa.C.S § 8401 (relating to definitions) or 8582
4 (relating to definitions). The school district shall use
5 information or statements from the owners or residents of the
6 property and shall consult with the assessor of the county in
7 compiling the list. This listing may be compiled at the same
8 time as the enumeration of school children is performed pursuant
9 to section 1351.
10 (b) Notification to homestead owners.--If the electors of a
11 school district approve a referendum question pursuant to
12 section 613-A, the board of school directors shall, by first
13 class mail, notify the owners of each homestead and each
14 farmstead on the listing required by this section that
15 submitting an application is required under 53 Pa.C.S. Ch. 85
16 Subch. F (relating to homestead property exclusion) prior to the
17 property being qualified for any homestead or farmstead
18 exclusion authorized by law. The notice required by this section
19 shall include a copy of the application required by the assessor
20 of the county where the property is located and the instructions
21 for completing and returning the application.
22 (c) Calculation of the homestead and farmstead exclusion.--
23 The listing of homesteads and farmsteads required to be compiled
24 under this section shall be used by the school district in
25 estimating the amount of the homestead exclusion and farmstead
26 exclusion for purposes of a referendum question under section
27 613-A(b).
28 (d) Revisions to the initial calculation of homestead and
29 farmstead exclusion for school districts.--If the electors of a
30 school district approve a referendum question pursuant to 613-
20030S0100B1075 - 28 -
1 A(c), the board of school directors shall revise the calculation
2 utilized under section 626-A(b) with information derived from
3 the listing required under subsection (a) no later than March 1,
4 2004. Such revised calculation shall be used to provide
5 homestead and farmstead exclusions. Where the tax imposed under
6 section 621-A is insufficient to provide the homestead and
7 farmstead exclusions authorized through approval of a referendum
8 question, the exclusions may be reduced accordingly.
9 (e) Appeals.--Real property for which an application under
10 53 Pa.C.S. § 8584 (relating to administration and procedure) has
11 been filed by March 1, 2004, shall be deemed to be a homestead
12 property or farmstead property, as the case may be, for the
13 purposes of implementing a homestead or farmstead exclusion
14 under 53 Pa.C.S. § 8717 (relating to disposition of earned
15 income and net profits tax revenue) in the school district
16 fiscal year beginning July 1, 2004, unless the assessor denies
17 the application within the time provided by law and the denial
18 is unappealed or unappealable. The school district is authorized
19 to collect taxes, interest and penalties relating to a homestead
20 or farmstead exclusion that is denied after the denial is
21 unappealed or unappealable.
22 (f) Reports.--In addition to the report required under 53
23 Pa.C.S. § 8584(i), the assessor shall be required to provide a
24 supplemental report containing the information required under 53
25 Pa.C.S. § 8584(i) for applications filed by March 1, 2004. The
26 date of the supplemental report shall be set by the school
27 district, but shall not be earlier than June 1, 2004.
28 (g) Applicability.--Subsections (b), (c), (d), (e), (f) and
29 (g) shall apply only to school districts that approve a
30 referendum under section 613-A at the 2003 municipal election.
20030S0100B1075 - 29 -
1 (e) Register
2 Section 693-A. Register for taxes.
3 (a) General rule.--The department shall maintain an official
4 continuing register supplemented annually of all earned income
5 and net profits taxes OR PERSONAL INCOME TAXES levied under <--
6 subdivision (c).
7 (b) Contents of register.--The register shall list:
8 (1) The school districts levying the tax.
9 (2) The rate of tax as stated in the resolution levying
10 the tax.
11 (3) The rate on taxpayers.
12 (4) The name and address of the official responsible for
13 administering the collection of the tax and from whom
14 information, forms and copies of regulations are available.
15 Section 694-A. Information for register.
16 Information for the register shall be furnished by the school
17 district to the department as prescribed by the department. The
18 information must be received by the department no later than
19 July 15 of each year to show new tax enactments, repeals and
20 changes. Failure to comply with the filing date may result in
21 the omission of the tax levy from the register for that year.
22 Failure of the department to receive information of taxes
23 continued without change may be construed by the department to
24 mean that the information contained in the previous register
25 remains in force.
26 Section 695-A. Availability and effective period of register.
27 The register, with such annual supplements as may be required
28 by new tax enactments, repeals or changes, shall be available
29 upon request no later than August 15 of each year. The effective
30 period for each register shall be from July 1 of the year in
20030S0100B1075 - 30 -
1 which it is issued to June 30 of the following year.
2 Section 696-A. Effect of nonfiling.
3 Employers shall not be required by any ordinance to withhold
4 from the compensation of their employees any local earned income
5 and net profits tax OR PERSONAL INCOME TAX imposed under <--
6 subdivision (c) which is not listed in the register or to make
7 reports of compensation in connection with taxes not so listed.
8 If the register is not available by August 15, the register of
9 the previous year shall continue to be effective for an
10 additional period of not more than one year.
11 Section 697-A. Effect of subdivision on liability of taxpayer.
12 The provisions of this subdivision shall not be construed to
13 affect the liability of any taxpayer for taxes lawfully imposed
14 under subdivisions (b) and (c).
15 Section 3. Section 1714-B(g) of the act, added May 10, 2000
16 (P.L.44, No.16), is amended to read:
17 Section 1714-B. Mandate Waiver Program.--* * *
18 (g) The following provisions of this act shall not be
19 subject to waiver pursuant to this section: sections 108, 110,
20 111, 321, 322, 323, 324, 325, 326, 327, 431, 436, 437, 440.1,
21 443, 510, 513, 518, 527, 701.1, 708, 736, 737, 738, 739, 740,
22 741, 752, 753, 755, 771, 776, 777, 808, 809, 810, 1303(a), 1310,
23 1317, 1317.1, 1317.2, 1318, 1327, 1327.1, 1330, 1332, 1361,
24 1366, 1501, 1502, 1513, 1517, 1518, 1521, 1523, 1546 and 1547;
25 provisions prohibiting discrimination; Articles VI, VI-A, XI,
26 XI-A, XII, XIII-A, XIV and XVII-A and this article.
27 * * *
28 Section 4. The addition of section 614-A(f)(6), (8), (9),
29 (10) and (11) of the act shall apply to school districts in
30 which a referendum question under 53 Pa.C.S. § 8703 has been
20030S0100B1075 - 31 -
1 approved and implemented.
2 Section 5. This act shall take effect immediately.
B21L24DMS/20030S0100B1075 - 32 -