PRINTER'S NO. 151
No. 136 Session of 2003
INTRODUCED BY SOLOBAY, BAKER, BEBKO-JONES, BELARDI, BELFANTI,
CAPPELLI, COSTA, CURRY, DeWEESE, FRANKEL, GEORGE, HARHAI,
HERMAN, KIRKLAND, LAUGHLIN, MANN, McNAUGHTON, PISTELLA,
ROEBUCK, SCRIMENTI, R. STEVENSON, STURLA, TIGUE, WALKO,
BROWNE, CAWLEY, CRAHALLA, DALEY, FAIRCHILD, FREEMAN, GRUCELA,
HENNESSEY, HORSEY, KOTIK, MANDERINO, McILHATTAN, PALLONE,
PRESTON, SANTONI, SHANER, T. STEVENSON, THOMAS, TRAVAGLIO AND
WASHINGTON, FEBRUARY 6, 2003
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 6, 2003
AN ACT
1 Providing for an annual grant program for counties and school
2 districts relating to tax-exempt real property; establishing
3 a special fund in the State Treasury; and imposing powers and
4 duties on the Department of Community and Economic
5 Development.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Short title.
9 This act shall be known and may be cited as the County and
10 School District Tax-Exempt Property Grant Act.
11 Section 2. Definitions.
12 The following words and phrases when used in this act shall
13 have the meanings given to them in this section unless the
14 context clearly indicates otherwise:
15 "Common level ratio." The ratio of assessed value to current
16 market value used generally in the county as last determined by
1 the State Tax Equalization Board under the act of June 27, 1947
2 (P.L.1046, No.447), referred to as the State Tax Equalization
3 Board Law.
4 "Department." The Department of Community and Economic
5 Development of the Commonwealth.
6 "Fund." The Local Tax-Exempt Property Fund established under
7 section 4.
8 "Millage rate." The rate of real property tax levied by a
9 school district. In the event that a school district levies
10 differing millage rates on land and improvements, then any
11 reference in this act to the millage rate shall be deemed to
12 refer to a single combined millage rate for both land and
13 improvements which shall result in the collection of the same
14 amount of tax.
15 "Qualified tax-exempt property." Real property which is
16 exempt from local real property taxes and which is owned by one
17 of the following:
18 (1) the Federal Government or an instrumentality of the
19 Federal Government;
20 (2) the Commonwealth or an instrumentality of the
21 Commonwealth;
22 (3) a political subdivision, except:
23 (i) real property owned by the school district in
24 which the property is located; and
25 (ii) real property owned by any authority,
26 corporation or other entity owned or controlled by the
27 school district in which the property is located; or
28 (4) an entity which has obtained the exemption from real
29 property taxation pursuant to the authority granted to the
30 General Assembly under section 2(a)(i), (ii), (iv) or (v) of
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1 Article VIII of the Constitution of Pennsylvania.
2 The term shall not include real property for which a Federal or
3 State program provides any reimbursement to a county or school
4 district for that tax-exempt real property.
5 "School district." A school district of the first class,
6 first class A, second class, third class or fourth class,
7 including any independent school district.
8 Section 3. Tax-exempt property compilation.
9 (a) Annual report.--Beginning in calendar year 2004 every
10 county shall submit to the department an annual report providing
11 the information required in subsection (b) and such additional
12 information as required by the department to administer this
13 act. The report required under this section shall be filed on or
14 before June 30 of each year.
15 (b) Contents.--The report required under subsection (a)
16 shall be a compilation of all property located within the county
17 that is exempt from the real property tax as of January 1 in the
18 year the report is required to be filed. The report shall also
19 contain the following:
20 (1) The owner of each tax-exempt property.
21 (2) The provisions under which the property is tax-
22 exempt, differentiating between qualified tax-exempt property
23 and other property which is tax-exempt.
24 (3) The location of the property, including mailing
25 address, name of the school district where the property is
26 located and the block and lot designation.
27 (4) The assessed value of the property.
28 (5) The estimated market value of the property, which
29 shall be determined by dividing the assessed value of the
30 property by the common level ratio.
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1 (6) An indication whether payment in lieu of tax or
2 other funding is received under any Federal or State program
3 based on that property.
4 (7) The millage rate for the tax on real property in
5 effect in the school district where the property is located
6 as of January 1 of the year in which the report is required
7 to be filed.
8 (8) The assessed value of all property in each school
9 district in the county.
10 (9) The market value of all property in each school
11 district in the county.
12 (c) Failure to file reports.--
13 (1) Any county that fails to provide to the department
14 the report required under this section by June 30 shall be
15 penalized 25% of the distribution computed under section 6,
16 the amount of the penalty shall be redistributed among the
17 school districts within that county.
18 (2) Notwithstanding any other provision of this act, any
19 county that fails to provide to the department the report
20 required under this section by July 31 shall, together with
21 all school districts within that county, forfeit the right to
22 share in the next following distribution required to be made
23 pursuant to this act.
24 Section 4. Local Tax-Exempt Property Fund.
25 (a) Establishment.--There is hereby established in the State
26 Treasury a fund to be known as the Local Tax-Exempt Property
27 Fund. The money deposited in this fund shall be used exclusively
28 for the purpose of making annual grants pursuant to this act.
29 (b) Funds for base grant program.--Revenues received by the
30 Commonwealth shall be transferred to the fund as provided in
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1 this section.
2 (1) For fiscal year 2003-2004 and fiscal year 2004-2005,
3 $25,000,000 shall be transferred to the fund.
4 (2) For fiscal year 2005-2006, $30,000,000 shall be
5 transferred to the fund.
6 (3) For fiscal year 2006-2007, and each fiscal year
7 thereafter, the amount to be transferred to the fund under
8 this subsection shall be the product of the amount computed
9 under paragraph (2) and the quotient of the Consumer Price
10 Index for All Urban Consumers for December of the year prior
11 to the year in which the transfer is required divided by the
12 Consumer Price Index for All Urban Consumers for December
13 2003.
14 (4) Funds transferred under this subsection shall be
15 distributed as provided in sections 6 and 7(a).
16 (c) Funds for supplemental grant program.--
17 (1) In addition to the transfer required by subsection
18 (b), for fiscal year 2003-2004 and 2004-2005, $10,000,000 of
19 the revenues received by the Commonwealth from imposition of
20 the realty transfer tax shall be transferred to the fund.
21 (2) For fiscal year 2005-2006 and each fiscal year
22 thereafter, the amount to be transferred to the fund under
23 this subsection shall be the product of the amount computed
24 under paragraph (1) and the quotient of the Consumer Price
25 Index for All Urban Consumers for December of the year prior
26 to the year in which the transfer is required divided by the
27 Consumer Price Index for All Urban Consumers for December
28 2005.
29 (3) Funds transferred under this subsection shall be
30 distributed as provided in section 7(b).
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1 (d) Timing of transfers.--Revenues required to be
2 transferred under this section shall be transferred by the
3 Secretary of Revenue in five equal installments before the last
4 day of February, March, April, May and June of each fiscal year
5 in which a transfer is required.
6 (e) Appropriation.--All moneys in the fund are hereby
7 appropriated to the department for purposes of making
8 distributions pursuant to this act. These funds shall be a
9 continuing appropriation and the funds shall not lapse at the
10 end of the fiscal year.
11 (f) Definition.--As used in this section, the term "Consumer
12 Price Index for All Urban Consumers" shall be the Consumer Price
13 Index for All Urban Consumers computed by the United States
14 Department of Labor, Bureau of Labor Statistics.
15 Section 5. Allocation of funds and requirement to make grants.
16 (a) Base grant funds.--Five percent of the moneys in the
17 fund transferred under section 4(b) shall be set aside for
18 annual distribution to the various counties under section 6.
19 Ninety-five percent of the moneys in the fund transferred under
20 section 4(b) shall be set aside for annual distribution to the
21 various school districts under section 7(a).
22 (b) Supplemental grant funds.--All the moneys in the fund
23 transferred under section 4(c) shall be set aside for annual
24 distribution to the various school districts under section 7(b).
25 (c) Mandatory grants.--Subject to the allocations made under
26 this section, all moneys in the fund at the end of a fiscal year
27 shall be distributed by the department on or before the
28 September 15 next following the end of the fiscal year in the
29 manner required under sections 6 and 7.
30 Section 6. County cost reimbursement.
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1 The annual distribution to each county shall be equal to the
2 product of the total amount of moneys set aside for distribution
3 to all counties in section 5(a) and the percentage determined by
4 dividing the market value of all qualified tax-exempt property
5 in the county by the market value of all qualified tax-exempt
6 property in all counties reporting.
7 Section 7. School district tax-exempt property grants.
8 (a) School district base grants.--The annual base grant to
9 each eligible school district shall be the amount calculated in
10 paragraphs (1) through (3).
11 (1) The market value of the eligible school district's
12 qualified tax-exempt property shall be reduced, but not below
13 zero, by the amount which is equal to 10% of the total of the
14 market value of all property in the school district.
15 (2) The result of paragraph (1) shall be divided by the
16 sum of the values computed under paragraph (1) for all
17 eligible school districts.
18 (3) The result of paragraph (2) shall be multiplied by
19 the amount available for distribution to school districts
20 computed under section 5(a).
21 (b) School district supplemental grants.--The annual
22 supplemental grant to each eligible school district shall be the
23 amount calculated in paragraphs (1) through (3).
24 (1) The market value of the eligible school district's
25 qualified tax-exempt property shall be reduced, but not below
26 zero, by the amount which is equal to 25% of the total of the
27 market value of all property in the school district.
28 (2) The result of paragraph (1) shall be divided by the
29 sum of the values computed under paragraph (1) for all
30 eligible school districts.
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1 (3) The result of paragraph (2) shall be multiplied by
2 the amount available for distribution to school districts
3 computed under section 5(b).
4 (c) Maximum grants.--Notwithstanding any other provision of
5 this act, the annual base and supplemental grants for a school
6 district computed under subsections (a) and (b) shall not exceed
7 33.3% of the school district real property tax which would be
8 otherwise due in that calendar year, but for the tax exemption,
9 on the amount calculated in subsection (a)(1).
10 (d) Definition.--As used in this section, the term "eligible
11 school district" means a school district for which the county
12 has made a report under section 3.
13 Section 8. Regulations.
14 The department shall promulgate the rules and regulations
15 necessary to implement this act.
16 Section 9. Effective date.
17 This act shall take effect in 60 days.
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