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                              PRIOR PASSAGE - NONE
                                                      PRINTER'S NO. 1566

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 1165 Session of 2007


        INTRODUCED BY O'PAKE, COSTA, STOUT, BOSCOLA, WASHINGTON,
           KASUNIC, C. WILLIAMS, LAVALLE AND KITCHEN, NOVEMBER 19, 2007

        REFERRED TO FINANCE, NOVEMBER 19, 2007

                               A JOINT RESOLUTION

     1  Proposing integrated amendments to the Constitution of the
     2     Commonwealth of Pennsylvania, further providing for
     3     uniformity of taxation and for tax exemptions and special tax
     4     provisions.

     5     The General Assembly of the Commonwealth of Pennsylvania
     6  hereby resolves as follows:
     7     Section 1.  The General Assembly finds and declares as
     8  follows:
     9         (1)  The system of funding public education in this
    10     Commonwealth is broken, relying too heavily on the real
    11     property tax, which does not accurately reflect an
    12     individual's ability to pay.
    13         (2)  Many senior citizens and others living on fixed to
    14     moderate incomes are being taxed out of their homes, while
    15     many young families just starting out are prevented from
    16     purchasing a first home and attaining the American dream of
    17     homeownership because of the additional financial burden of
    18     real property taxes.


     1         (3)  Of all the real property taxes imposed by political
     2     subdivisions, the homeowner school property tax represents
     3     the greatest burden and an extreme financial hardship for too
     4     many of our citizens.
     5         (4)  The Constitution currently prohibits the General
     6     Assembly from eliminating property taxes on homestead
     7     property only and from imposing a graduated personal income
     8     tax.
     9         (5)  This constitutional amendment is intended to seek
    10     voter approval to eliminate the ability of school districts
    11     to impose real estate taxes on homestead property and to
    12     replace that revenue with funds derived from other sources.
    13     These sources include the imposition of a graduated income
    14     tax to be used solely to fund homestead property tax
    15     elimination.
    16         (6)  The Commonwealth is in the midst of a property tax
    17     crisis that needs to be addressed. The citizens of this
    18     Commonwealth, especially the children, deserve quality
    19     schools that provide quality educations. However, these needs
    20     must be funded through an equitable system of taxation which
    21     does not rely on the taxing of homestead property.
    22     Section 2.  The following integrated amendments to the
    23  Constitution of Pennsylvania are proposed in accordance with
    24  Article XI:
    25     (1)  That section 1 of Article VIII be amended to read:
    26  § 1.  Uniformity of taxation.
    27     [All] (a)  Except as provided in subsection (b), all taxes
    28  shall be uniform, upon the same class of subjects, within the
    29  territorial limits of the authority levying the tax, and shall
    30  be levied and collected under general laws.
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     1     (b)  Any school district levying a tax on real property shall
     2  be prohibited from levying the tax on homestead property for
     3  taxable years beginning after the last day of the fiscal year in
     4  which this subsection is ratified.
     5     (2)  That section 2(b) of Article VIII be amended to read:
     6  § 2.  Exemptions and special provisions.
     7     * * *
     8     (b)  The General Assembly may, by law:
     9     (i)  Establish standards and qualifications for private
    10  forest reserves, agricultural reserves, and land actively
    11  devoted to agricultural use, and make special provision for the
    12  taxation thereof;
    13     (ii)  Establish as a class or classes of subjects of taxation
    14  the property or privileges of persons who, because of age,
    15  disability, infirmity or poverty are determined to be in need of
    16  tax exemption or of special tax provisions, and for any such
    17  class or classes, uniform standards and qualifications. The
    18  Commonwealth, or any other taxing authority, may adopt or employ
    19  such class or classes and standards and qualifications, and
    20  except as herein provided may impose taxes, grant exemptions, or
    21  make special tax provisions in accordance therewith. No
    22  exemption or special provision shall be made under this clause
    23  with respect to taxes upon the sale or use of personal property,
    24  and no exemption from any tax upon real property shall be
    25  granted by the General Assembly under this clause unless the
    26  General Assembly shall provide for the reimbursement of local
    27  taxing authorities by or through the Commonwealth for revenue
    28  losses occasioned by such exemption;
    29     (iii)  Establish standards and qualifications by which local
    30  taxing authorities may make uniform special tax provisions
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     1  applicable to a taxpayer for a limited period of time to
     2  encourage improvement of deteriorating property or areas by an
     3  individual, association or corporation, or to encourage
     4  industrial development by a non-profit corporation; and
     5     (iv)  Make special tax provisions on any increase in value of
     6  real estate resulting from residential construction. Such
     7  special tax provisions shall be applicable for a period not to
     8  exceed two years.
     9     (v)  Establish standards and qualifications by which local
    10  taxing authorities in counties of the first and second class may
    11  make uniform special real property tax provisions applicable to
    12  taxpayers who are longtime owner-occupants as shall be defined
    13  by the General Assembly of residences in areas where real
    14  property values have risen markedly as a consequence of the
    15  refurbishing or renovating of other deteriorating residences or
    16  the construction of new residences.
    17     (vi)  Authorize local taxing authorities to exclude from
    18  taxation an amount based on the assessed value of homestead
    19  property. The exclusions authorized by this clause shall not
    20  exceed one-half of the median assessed value of all homestead
    21  property within a local taxing jurisdiction. A local taxing
    22  authority may not increase the millage rate of its tax on real
    23  property to pay for these exclusions.
    24     (vii)  For purposes of funding the elimination of school
    25  district real estate taxes on homestead property, establish
    26  nonuniform rates of taxation for any tax levied on personal
    27  income, increasing in proportion to the level of personal
    28  income.
    29     * * *
    30     Section 3.  (a)  Upon the first passage by the General
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     1  Assembly of these proposed constitutional amendments, the
     2  Secretary of the Commonwealth shall proceed immediately to
     3  comply with the advertising requirements of section 1 of Article
     4  XI of the Constitution of Pennsylvania and shall transmit the
     5  required advertisements to two newspapers in every county in
     6  which such newspapers are published in sufficient time after
     7  passage of these proposed constitutional amendments.
     8     (b)  Upon the second passage by the General Assembly of these
     9  proposed constitutional amendments, the Secretary of the
    10  Commonwealth shall proceed immediately to comply with the
    11  advertising requirements of section 1 of Article XI of the
    12  Constitution of Pennsylvania and shall transmit the required
    13  advertisements to two newspapers in every county in which such
    14  newspapers are published in sufficient time after passage of
    15  these proposed constitutional amendments. The Secretary of the
    16  Commonwealth shall submit the proposed constitutional amendments
    17  under section 1 to the qualified electors of this Commonwealth
    18  as a single ballot question at the first primary, general or
    19  municipal election which meets the requirements of and is in
    20  conformance with section 1 of Article XI of the Constitution of
    21  Pennsylvania and which occurs at least three months after the
    22  proposed constitutional amendments are passed by the General
    23  Assembly.





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