THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY FONTANA, EARLL AND FERLO, JANUARY 5, 2010

REFERRED TO FINANCE, JANUARY 5, 2010  

AN ACT

Amending the act of November 26, 1997 (P.L.508, No.55), entitled

"An act providing for the tax exemption of institutions of

purely public charity; exempting real property owned by

State-related universities or Federal Government

instrumentalities from taxation; providing for unfair

competition; imposing penalties; and making repeals," further

providing for legislative findings; and providing for the

definition of "governing body," for other contributions and

for partial property tax exemption.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2(a) of the act of November 26, 1997

(P.L.508, No.55), known as the Institutions of Purely Public

Charity Act, is amended by adding a paragraph to read:

Section 2.  Legislative intent.

(a)  Findings.--The General Assembly finds and declares as

follows:

* * *

(8)  It is necessary and proper for local governments to

have the option to ensure the continued viability of certain

essential services it provides or causes to be provided by

requiring a partial contribution from tax-exempt properties

toward the cost of the services.

* * *

Section 2.  Section 3 of the act is amended by adding a

definition to read:

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Governing body."  Any city council, borough council,

incorporated town council, board of county commissioners or

their home rule successor in function, board of township

commissioners, board of township supervisors, governing council

of a home rule municipality or optional plan municipality or

governing council of a similar general purpose unit of

government which may be created by statute after the effective

date of this definition.

* * *

Section 3.  The act is amended by adding a section to read:

Section 7.1.  Other contributions.

(a)  Authorization.--Notwithstanding any other provision of

law, in lieu of executing voluntary agreements under section 7,

the governing body of a municipality may, through ordinance or

resolution, impose the fees authorized under subsection (b) and

the limited real estate tax authorized under subsection (c) on

each property for which an exemption from real property tax is

claimed by an institution of purely public charity.

(b)  Essential services fee.--The governing body of a

municipality may impose an essential services fee annually on

each property for which an exemption from real property tax is

claimed by an institution of purely public charity. The fee

shall not exceed $100 per every 1,000 square feet of any and all

structures on a parcel claimed to be exempt, except that the fee

shall not be imposed on the first 5,000 square feet of all

structures, in the aggregate, on such a parcel and that the

governing body may, in its discretion, increase the fee on an

annual basis by an amount not to exceed 5%. No fee imposed on a

tax-exempt property under this section may exceed 50% of the

property's total real estate tax liability if the property was

subject to the municipality's real property tax based upon the

property's assessed value. No fee authorized under this

subsection shall be imposed upon property subject to the limited

real estate tax under subsection (c).

(c)  Limited real estate tax.--The governing body may impose

a limited real estate tax on real property purchased by an

institution of purely public charity after December 31, 2009.

The tax shall be implemented as follows:

(1)  In the first taxable year in which a real estate tax

is imposed, the tax shall be imposed on 10% of the assessed

value of the property.

(2)  In the second taxable year in which a real estate

tax is imposed, the tax shall be imposed on 20% of the

assessed value of the property.

(3)  In the third taxable year in which a real estate tax

is imposed, the tax shall be imposed on 30% of the assessed

value of the property.

(4)  In the fourth taxable year in which a real estate

tax is imposed, the tax shall be imposed on 40% of the

assessed value of the property.

(5)  In the fifth taxable year in which a real estate tax

is imposed, and each taxable year thereafter, the tax shall

be imposed on 50% of the assessed value of the property.

(d)  Enactment of ordinance or resolution.--

(1)  Prior to adopting the ordinance, the governing body

shall adopt a proposed ordinance which shall include all of

the following information:

(i)  The content of the ordinance that will be

enacted, including the effective date.

(ii)  A statement that the proposed ordinance is

being adopted pursuant to and subject to the requirements

of this section.

(2)  The governing body shall make the proposed ordinance

available for public inspection at least 20 days prior to its

adoption and shall hold at least one public hearing on the

proposed ordinance prior to its adoption.

(3)  The governing body must give public notice of its

intent to adopt the proposed ordinance. Publication of the

notice shall be made by advertisement once a week for three

weeks in a newspaper of general circulation within the

municipality if there is a newspaper of general circulation

and, if there is not, the publication shall be made in a

newspaper of general circulation within the county in which

the advertising municipality is located.

(e)  Administration.--

(1)  The governing body may adopt regulations regarding

the application process, calculation and payment of the

essential services fee and the enforcement of this section.

(2)  The governing body shall develop a uniform form and

instructions to be used by the municipality in imposing the

essential services fee authorized under this section. The

form shall require the applicant to do all of the following:

(i)  Identify all properties claimed by the applicant

to be tax exempt.

(ii)  Provide the legal basis for the tax exemption

for each property.

(iii)  Provide a description of each property,

including the total gross square footage of all

structures thereon.

(f)  Prohibition.--Nothing in this section shall be construed

to permit a governing body to impose an essential service fee on

any of the following:

(1)  Property owned by the Commonwealth.

(2)  Property owned by a political subdivision of the

Commonwealth.

(3)  Property owned by the Commonwealth and local

authorities.

(4)  Property owned by police, fire, including volunteer

fire and relief, public works or emergency services.

(5)  Property owned by the Federal Government.

(6)  Property subject to partial taxation under section

7.2.

(g)  Uniformity.--The essential services fee and the limited

real estate tax imposed under this section shall apply to all

institutions of purely public charity owning tax-exempt property

within the municipality to the extent the imposition would not

conflict with subsection (h).

(h)  Existing voluntary agreements.--Nothing in this section

shall be construed to affect, impair, terminate or supersede any

contract, agreement or other arrangement in effect on or before

the effective date of this section between an institution and a

political subdivision which authorizes or requires payment of

taxes, amounts in lieu of taxes or other charges or fees for the

services of a political subdivision.

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