HOUSE AMENDED

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY YAW, BAKER, WAUGH, KITCHEN, SCARNATI, M. WHITE, ORIE, D. WHITE, WONDERLING, RAFFERTY, GORDNER, BROWNE, FOLMER, ALLOWAY AND VANCE, MARCH 5, 2009

AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, OCTOBER 5, 2010   

AN ACT

Amending the act of December 19, 1974 (P.L.973, No.319),

entitled "An act prescribing the procedure under which an

owner may have land devoted to agricultural use, agricultural

reserve use, or forest reserve use, valued for tax purposes

at the value it has for such uses, and providing for

reassessment and certain interest payments when such land is

applied to other uses and making editorial changes," further

providing for definitions, for general responsibilities of

county assessors, for split-off, separation or transfer and

for roll-back taxes and special circumstances; and providing

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for removal of land from preferential assessment.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definitions of "agricultural reserve,"

"agricultural use" and "forest reserve" in section 2 of the act

of December 19, 1974 (P.L.973, No.319), known as the

Pennsylvania Farmland and Forest Land Assessment Act of 1974,

amended December 21, 1998 (P.L.1225, No.156) and December 8,

2004 (P.L.1785, No.235), are amended and the section is amended

by adding definitions to read:

Section 2.  Definitions.--As used in this act, the following

words and phrases shall have the meanings ascribed to them in

this section unless the context obviously otherwise requires:

* * *

"Agricultural reserve."  Noncommercial open space lands used

for outdoor recreation or the enjoyment of scenic or natural

beauty and open to the public for such use, without charge or

fee, on a nondiscriminatory basis. The term includes any land

devoted to the development and operation of an alternative

energy system, if a majority of the energy annually generated is

utilized on the tract.

"Agricultural use."  Land which is used for the purpose of

producing an agricultural commodity or is devoted to and meets

the requirements and qualifications for payments or other

compensation pursuant to a soil conservation program under an

agreement with an agency of the Federal Government. The term

includes:

(1)  any farmstead land on the tract[. The term includes];

(2)  a woodlot [and];

(3)  any land which is rented to another person and used for

the purpose of producing an agricultural commodity; and

(4)  any land devoted to the development and operation of an

alternative energy system, if a majority of the energy annually

generated is utilized on the tract.

* * *

"Alternative energy."  Electricity, heat or other usable form

of energy generated from a Tier I energy source.

"Alternative energy system."  A facility or energy system

that utilizes a Tier I energy source to generate alternative

energy. The term includes a facility or system that generates

alternative energy for utilization onsite or for delivery of the

energy generated to an energy distribution company or to an

energy transmission system operated by a regional transmission

organization.

* * *

"Forest reserve."  Land, ten acres or more, stocked by forest

trees of any size and capable of producing timber or other wood

products. The term includes any land devoted to the development

and operation of an alternative energy system, if a majority of

the energy annually generated is utilized on the tract.

* * *

"Tier I energy source."  A Tier I alternative energy source,

as defined in section 2 of the act of November 30, 2004 (P.L.

1672, No.213), known as the "Alternative Energy Portfolio

Standards Act."

* * *

Section 1.1.  Section 5 of the act, amended December 8, 2004

(P.L.1785, No.235), is amended to read:

Section 5.  Responsibilities of the County Assessor in

General.--(a)  In addition to keeping such records as are now or

hereafter required by law, it shall be the duty of the county

assessor:

(1)  To indicate on property record cards, assessment rolls,

and any other appropriate records, the fair market value, the

normal assessed value, the land use category and the number of

acres enrolled in each land use category, the use value under

section 4.2 and the preferentially assessed value of each parcel

granted preferential use assessments under this act; and

annually, to record on such records all changes, if any, in the

fair market value, the normal assessed value, the land use

category and the number of acres enrolled in each land use

category, the use value under section 4.2 and the preferentially

assessed value of such properties.

(2)  To notify in writing the appropriate taxing bodies and

landowner of any preferential assessments granted or terminated

for each parcel, including the land use category and the number

of acres enrolled in each land use category, within their taxing

jurisdiction and of the reason for termination within five days

of such change. There shall be a right of appeal as provided by

section 9.

(3)  To notify in writing the owner of a property that is

preferentially assessed under this act, and the taxing bodies of

the district in which such property is situated, of any changes

in the fair market value, the normal assessed value, the land

use category and the number of acres enrolled in each land use

category, the use value under section 4.2 or the preferentially

assessed value within five days of such change. There shall be a

right of appeal as provided for in section 9.

(4)  To maintain a permanent record of the tax rates, in

mills, levied by each of the taxing authorities in the county

for each tax year.

(5)  By January 31 of each year, to report to the department

for the previous year the number of acres enrolled in each land

use category, the number of acres terminated in each land use

category, the dollar amount received as roll-back taxes and the

dollar amount received as interest on roll-back taxes.

(b)  It shall be the duty of the county assessor, as set

forth under section 8(c), to calculate roll-back taxes, give

notice of the amounts due to landowners and interested parties

and to file liens for unpaid roll-back taxes.

(b.1)  With respect to the development of an alternative

energy system which continues to meet the definition of

agricultural use, agricultural reserve or forest reserve, the

land devoted to that development and operation shall retain the

same land use category for preferential assessment as was

approved for the land before the devotion took place.

(c)  The preferential use assessments granted under this act

shall be considered by the State Tax Equalization Board in

determining the market value of taxable real property for school

subsidy purposes. The State Tax Equalization Board shall not

reflect the individual school district market value decrease, as

it relates to agricultural land, when certifying the Statewide

market value to the Department of Education.

Section 2.  Section 6 heading and (a.1) of the act, amended

December 21, 1998 (P.L.1225, No.156), are amended and the

section is amended by adding subsections to read:

Section 6.  Split-off, Separation or Transfer; Leasing for

Wireless Service; Utilization of Land or Conveyance of Rights

for Exploration or Extraction of Gas, Oil or Coal Bed Methane;

Utilization of Land for Commercial Alternative Energy

Generation; Death of Landowner; Temporary Leases.--(a.1)  (1)  

The split-off of a part of land which is subject to preferential

assessment under this act shall subject the land so split off

and the entire tract from which the land was split off to roll-

back taxes as set forth in section 5.1, except as provided in

this subsection. [The landowner changing the use of the land to

one inconsistent with this act] The landowner who conducts the

split-off shall be liable for payment of roll-back taxes. [The

landowner of land which continues to be eligible for

preferential assessment shall not be liable for any roll-back

taxes triggered as a result of a change to an ineligible use by

the owner of the split-off tract. Roll-back] If one of the

following provisions apply, roll-back taxes under section 5.1

shall [not] only be due [if one of the following provisions

applies] as provided in this subsection:

(i)  The tract or tracts split off [does] do not exceed two

acres annually, except that a maximum of the minimum residential

lot size requirement annually may be split off if the property

is situated in a local government unit which requires a minimum

residential lot size of two to three acres; the tract or tracts 

split off [is] are used only for agricultural use, agricultural

reserve or forest reserve or for the construction of a

residential dwelling to be occupied by the person to whom the

land is conveyed; and the total tract or tracts so split off do

not exceed the lesser of ten acres or ten percent (10%) of the

entire tract subject to preferential assessment.

(ii)  The split-off occurs through a condemnation.

(2)  Each tract which has been split off under and meets the

provisions of paragraph (1)(i) shall be subject to roll-back

taxes for such a period of time as provided in section 5.1. The

landowner [changing the use of the land] who conducts the split-

off shall be liable for payment of roll-back taxes, which shall

only be due with respect to the split-off portion of land. If

the owner of the tract which has been split off under paragraph

(1)(i) subsequently changes the use of that land to an

ineligible use, the owner of the original tract which continues

to be eligible for preferential assessment shall not be liable

for any roll-back taxes triggered as a result.

(2.1)  No roll-back taxes shall be due for split-offs a

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split-off described in paragraph (1)(ii).

(3)  The split-off of a tract of land which meets the

provisions of paragraph (1) shall not invalidate the

preferential assessment on any land retained by the landowner

which continues to meet the provisions of section 3.

(4)  Payment of roll-back taxes by the liable landowner shall

not invalidate the preferential assessment on any land which

continues to meet the provisions of section 3.

(5)  Any person may bring an action in equity to enjoin use

of the land inconsistent with the use provided in this

subsection.

(6)  Land which has been split off shall be deemed to be used

for residential use, agricultural use, agricultural reserve or

forest reserve unless it is demonstrated that the owner of the

split-off parcel is actively using the tract in a manner which

is inconsistent with residential use, agricultural use,

agricultural reserve or forest reserve.

* * *

(c.1)  The following apply:

(1)  Land subject to preferential assessment may be leased or

otherwise devoted to the exploration for and removal of gas and

oil, including the extraction of coal bed methane, and the

development of appurtenant facilities, including new roads and

bridges, pipelines and other buildings or structures, related to

exploration for and removal of gas and oil and the extraction of

coal bed methane.

(2)  Portions of land subject to preferential assessment may

be used for exploration for and removal of gas and oil,

including the extraction of coal bed methane, and the

development of appurtenant facilities, including new roads and

bridges, pipelines and other buildings or structures, related to

those activities.

(3)  Roll-back taxes shall be imposed upon those portions of

land actually devoted to activities set forth in paragraph (2),

excluding land devoted to subsurface transmission or gathering

lines, which shall not be subject to roll-back tax. The portion

of land subject to roll-back tax shall be the restored well site

and land which is incapable of being immediately used for the

agricultural use, agricultural reserve or forest reserve

activities required under section 3, as measured from the well

site restoration report as approved by the Department of

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Environmental Protection as required by 25 Pa. Code 78.65

(relating to site restoration) or its subsequent version. A copy

of this report shall be submitted by the Department of

Environmental Protection to the county assessor within ten days

of its approval. The fair market value of the restored well site

and land which is incapable of being immediately used for the

agricultural use, agricultural reserve or forest reserve

activities required under section 3 shall be adjusted

retroactively to the date the a permit was approved under

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section 201 of the act of December 19, 1984 (P.L.1140, No.223),

known as the "Oil and Gas Act." Roll-back taxes shall become due

upon the filing of the approved well site restoration report

with the county assessor. The utilization of a portion of land

for activities set forth in paragraph (2) shall not invalidate

the preferential assessment of the land which is not so utilized

and the land shall continue to receive preferential assessment

if it continues to meet the requirements of section 3.

(4)  Notwithstanding paragraph (3), no roll-back tax shall be

imposed upon a landowner for activities related to the

exploration for or removal of oil or gas, including the

extraction of coal bed methane, conducted by parties other than

the landowner that hold the rights to conduct such activities

pursuant to an instrument, conveyance or other vesting of the

rights if the transfer of the rights occurred:

(i)  before the land was enrolled for preferential assessment

under this act; and

(ii)  before the effective date of this section.

(c.2)  The following apply:

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(1)  Portions of land subject to preferential assessment may

be leased or otherwise devoted to a wind power generation

system.

(2)  Roll-back taxes for a wind power generation system shall

be imposed upon the portion of land where the foundation of the

wind turbine is located and upon the area of surface covered by

appurtenant structures, including new roads, bridges,

transmission lines, substations and other buildings and

structures related to the system. The fair market value of the

portion of land for which roll-back taxes have been assessed

under this subsection shall be adjusted accordingly. The

utilization of a portion of the land for a wind power generation

system shall not invalidate the preferential assessment of land

which is not so utilized, and such land shall continue to

receive preferential assessment if it continues to meet the

requirements of section 3. An owner who is subject to roll-back

taxes under this subsection shall submit a notice of the

installation of a wind power generation system to the county

assessor no later than 30 days following the commencement of

electricity generation at the wind power generation system 

(Reserved).

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(c.3)  The owner of property subject to preferential

assessment may temporarily lease a portion of the land for pipe

storage yards, provided, however, that roll-back taxes shall be

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imposed upon those portions of land subject to preferential

assessment that are temporarily leased or otherwise devoted for

pipe storage yards, and the fair market value of those portions

of land shall be adjusted accordingly. The imposition of roll-

back taxes on portions of land temporarily leased or devoted for

pipe storage yards shall not invalidate the preferential

assessment of land which is not so leased or devoted, and that

land shall continue to be eligible for preferential assessment

if it continues to meet the requirements of section 3. Only one

lease is permitted to the owner under this subsection is

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permitted to a landowner, and a copy of the lease shall be

provided to the county assessor within ten days of its signing

by the landowner. The lease may shall not exceed two years and

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shall not be extended or renewed. Following the expiration of

the lease, the land shall be restored to the original use which

qualified it for preferential assessment.

(c.4)  The following apply:

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(1)  The owner of property subject to preferential assessment

may lease or otherwise devote land subject to preferential

assessment to small noncoal surface mining, as provided for

under the act of December 19, 1984 (P.L.1093, No.219), known as

the "Noncoal Surface Mining Conservation and Reclamation Act."

(2)  Roll-back taxes shall be imposed upon those portions of

land leased or otherwise devoted to small noncoal surface

mining, and the fair market value of those portions of the land

shall be adjusted accordingly. Roll-back taxes on those portions

of the land shall not invalidate the preferential assessment of

the land which is not so leased or devoted, and the land shall

continue to be eligible for preferential assessment if it

continues to meet the requirements of section 3.

(3)  Only one small noncoal surface mining permit may be

active at any one time on land subject to a single application

for preferential assessment.

* * *

Section 3.  Section 8(b) of the act, amended December 21,

1998 (P.L.1225, No.156), is amended to read:

Section 8.  Roll-Back Taxes; Special Circumstances.--

(b)  Unpaid roll-back taxes shall be a lien upon the property

collectible in the manner provided by law for the collection of

delinquent taxes. Roll-back taxes shall become due on the date

of change of use or on the date a well site restoration report

is filed with the county assessor under section 6(c.1)(3) or,

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with regard to a wind power generation system under section

6(c.2)(2), on the date the notice of the installation of the

system is received by the county assessor, or any other

termination of preferential assessment and shall be paid by the

owner of the land at the time of change in use, or any other

termination of preferential assessment, to the county treasurer

or to the tax claim bureau, as the case may be, whose

responsibility it shall be to make proper distribution of the

taxes to the taxing bodies wherein the property is located.

Nothing in this section shall be construed to require the taxing

body of a taxing district in which land enrolled in preferential

use is situated to accept the roll-back taxes due and payable to

that taxing district if the use of the land is changed for the

purpose of granting or donating such land to:

(1)  a school district;

(2)  a municipality;

(3)  a county;

(4)  a volunteer fire company;

(5)  a volunteer ambulance service;

(6)  a not-for-profit corporation, tax exempt under section

501(c)(3) of the Internal Revenue Code of 1954 (68A Stat. 3, 26

U.S.C. § 501(c)(3)), provided that, prior to accepting ownership

of the land, such corporation enters into an agreement with the

municipality wherein the subject land is located guaranteeing

that it will be used exclusively for recreational purposes, all

of which shall be available to the general public free of

charge. In the event the corporation changes the use of all or a

portion of the land or charges admission or any other fee for

the use or enjoyment of the facilities, the corporation shall

immediately become liable for all roll-back taxes and accrued

interest previously forgiven pursuant hereto; or

(7)  a religious organization for construction or regular use

as a church, synagogue or other place of worship, including

meeting facilities, parking facilities, housing facilities and

other facilities which further the religious purposes of the

organization.

* * *

Section 3.1.  The act is amended by adding a section to read:

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Section 8.1.  Removal of Land From Preferential Assessment.—-

(a)  A landowner receiving preferential assessment under this

act may remove land from preferential assessment if:

(1)  the landowner notifies in writing the county assessor by

June 1 of the year immediately preceding the tax year for which

the removal is requested;

(2)  the entire tract or tracts enrolled on a single

application for preferential assessment are removed from

preferential assessment; and

(3)  the landowner pays roll-back taxes on the entire tract

or tracts as provided for in section 5.1.

(b)  Land removed from preferential assessment under this

section shall not be eligible to be subsequently reenrolled in

preferential assessment by the same landowner.

(c)  Nothing in this section shall be construed to prohibit a

landowner whose land was terminated from preferential assessment

under other sections of this act from reenrolling the land in

preferential assessment.

Section 4.  This act shall take effect in 60 days.