THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY GINGRICH, ROSS, CREIGHTON, FREEMAN, SANTARSIERO AND HENNESSEY, FEBRUARY 29, 2012

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, JUNE 4, 2012   

AN ACT

Amending the act of January 19, 1967 (1968 P.L.992, No.442),

entitled, as amended, "An act authorizing the Commonwealth of

Pennsylvania and the local government units thereof to

preserve, acquire or hold land for open space uses," further

providing for local taxing options.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 7.1 of the act of January 19, 1967 (1968

P.L.992, No.442), entitled "An act authorizing the Commonwealth

of Pennsylvania and the local government units thereof to

preserve, acquire or hold land for open space uses," amended

February 2, 2006 (P.L.15, No.4) and November 29, 2006 (P.L.1418,

No.154), is amended to read:

Section 7.1.  Local Taxing Options.--(a)  A local government

unit, excluding counties and county authorities, may by

ordinance impose, in addition to the statutory rate limits on

real estate taxes set forth in the municipal code of that local

government unit, a tax on real property not exceeding the

millage authorized by referendum under [this subsection]

subsection (a.1). In the alternative, a local government unit,

excluding counties and county authorities, may by ordinance

impose, in addition to the earned income tax rate limit set

forth in the act of December 31, 1965 (P.L.1257, No.511), known

as "The Local Tax Enabling Act," a tax on the earned income of

the residents of that local government unit not exceeding the

rate authorized by referendum under [this subsection] subsection

(a.1). Revenue from the levy [shall be used] may only be used

for the following:

(1)  to retire the indebtedness incurred in purchasing

interests in real property or in making additional acquisitions

of real property for the purpose of securing an open space

benefit or benefits under the provisions of this act or the act

of June 30, 1981 (P.L.128, No.43), known as the "Agricultural

Area Security Law[." Revenue from the levy may also be used]";

(2)  for transactional fees that are incidental to

acquisitions made in accordance with this act, including, but

not limited to, costs of appraisals, legal services, title

searches, document preparation, title insurance, closing fees

and survey costs[.]; or

(3)  in an amount up to twenty-five percent of the annual

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revenue annually, up to 25% of the accumulated balance of the

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fund from the levy authorized by referendum, to maintain

property acquired pursuant to this act for an open space benefit

or benefits, or alternatively, for purposes of allocation, the

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local government unit may create a maintenance fund into which

the local government unit may deposit in an amount up to 25% of

the annual revenue from the levy authorized by referendum, to

maintain property acquired pursuant to this act for an open

space benefit or benefits. In no event, however, shall any

revenue in a particular year be used to maintain the property

acquired unless the annual debt service under clause (1) or

acquisition fees under clause (2) will be satisfied. The

acquisition fees shall be paid in their entirety at the time of

acquisition.

(a.1)  The local taxing option authorized by [this]

subsection (a) shall not be exercised unless the governing body

of the local government unit shall by ordinance first provide

for a referendum on the question of the imposition at a specific

rate of the additional tax to be imposed and a majority of those

voting on the referendum question vote in favor of the

imposition of the tax. The referendum question shall provide the

electors a choice of the method by which the additional tax, if

authorized by the referendum, may be repealed. The additional

tax, however, shall not be repealed any sooner than five years

after the imposition of the tax or when any indebtedness

incurred for payment of the property or properties acquired has

been repaid, whichever is later. The ordinance of the governing

board of the local government unit providing for a referendum on

the question shall be filed with the county board of elections.

The referendum shall be governed by the provisions of the act of

June 3, 1937 (P.L.1333, No.320), known as the "Pennsylvania

Election Code." The election official shall cause the question

to be submitted to the electors of the local government unit at

the next primary, general or municipal election occurring not

less than the thirteenth Tuesday following the filing of the

ordinance with the county board of elections. At such election,

the question shall be submitted to the voters in the same manner

as other questions are submitted under the provisions of the

"Pennsylvania Election Code." The question to be placed upon the

ballot shall be framed in the following two-part form:

Do you favor the imposition of a (describe tax in millage

or earned income tax rate) by (local government unit) to

be used to (purpose)?

If the tax is imposed, by which method do you prefer that

the tax be repealed, which may be no sooner than five

years after the imposition of the tax or when any

indebtedness incurred for payment of the property(ies)

acquired has been repaid, whichever is later:

☐    By ordinance at the discretion of the governing

body.

☐    By referendum.

(a.2)  For those local government units that have imposed the

local taxing option on or before the effective date of this

subsection, the governing body of the local government unit may,

no sooner than five years after the imposition of the tax or

when any indebtedness incurred for payment of the property or

properties acquired has been repaid, whichever is later, choose

to repeal the additional tax by ordinance.

(a.3)  For those local government units whose electors voted

in a referendum pursuant to subsection (a.1) to impose the

higher rate of tax, after the effective date of this subsection,

that the method of repeal of the local taxing option shall be by

referendum, the procedures for the filing of the ordinance and

the conduct of the referendum shall be as set forth in

subsection (a.1), except the question to be placed upon the

ballot shall be framed in the following form:

Do you favor the continued imposition of the (describe

tax in millage or earned income tax rate) by (local

government unit) to be used to (purpose)?

If the referendum question passes, then the local option tax

shall continue to be imposed at the rate described in the

question. If the referendum question fails, then the increase in

the rate limit of the real estate or the earned income tax

provided for by this section shall be repealed effective in the

fiscal year following the referendum. Regardless of whether the

referendum question fails or passes, a referendum on either the

reimposition of the local option tax pursuant to subsection

(a.1) or the continued imposition of the local option tax

pursuant to this subsection shall not be held any sooner than

three years after the approval or disapproval of the referendum

question.

(a.4)  For those local government units whose electors voted

in a referendum pursuant to subsection (a.1) to impose the

higher rate of tax, after the effective date of this subsection,

that the method of repeal of the local taxing option shall be by

ordinance, the governing body of a local government unit that

imposed the local taxing option may repeal the ordinance that

provided, pursuant to subsection (a), an addition to the rate

limits on real estate taxes or earned income taxes. The effect

of the repealed ordinance will be to repeal the increase in the

rate limits on real estate taxes or earned income taxes

effective in the fiscal year following the enactment of the

repealing ordinance. An ordinance enacted pursuant to this

subsection shall not be required to be approved by referendum.

(b)  (1)  Any of the following categories of real property

may be exempted from further millage increases:

(i)  Real property in which the open space property interests

have been acquired by a local government unit in accordance with

this act.

(ii)  Real property that is subject to an easement acquired

in accordance with the act of June 30, 1981 (P.L.128, No.43),

known as the "Agricultural Area Security Law."

(iii)  Real property from which TDRs have been transferred

and retired by a local government unit without their development

potential having occurred on other lands.

(2)  The exemption from further millage increases authorized

by clause (1) shall become effective only if the governing body

of each taxing district that imposes a tax on the real property

approves the exemption either by ordinance in the case of a

county or municipal corporation or by resolution in the case of

a school district.

(3)  The exemption from further millage increases for real

property as provided for in this subsection shall be authorized

only for real property qualifying for such exemption under the

provisions of section 2(b)(1) of Article VIII of the

Constitution of Pennsylvania.

(4)  If the governing body of each taxing district so

resolves, the millage freeze authorized herein shall apply to

all eligible real property, whether the real property met the

criteria of this subsection prior to or subsequent to the date

of the ordinances and resolution imposing the millage freeze.

For prior acquisitions, the date on which the millage rate shall

be frozen is the date that the last of the required ordinances

or resolution becomes effective. For subsequent acquisitions,

the date on which the millage rate shall be frozen is the date

the local government unit completes the acquisition. The

governing body of each taxing district shall give prompt notice

to the appropriate tax collection agent of the exact amount of

the millage, the date it was frozen and each parcel to which the

freeze applies.

(5)  The exemptions granted under this act shall not be

considered by the State Tax Equalization Board in deriving the

market value of school district real property so as to reduce

the subsidy to that school district or to increase the subsidy

to any other school district.

Section 2.  This act shall take effect immediately.