THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY PILEGGI, BROWNE, VOGEL, TARTAGLIONE, FONTANA, BAKER, BOSCOLA, RAFFERTY, ERICKSON, ARGALL, SOLOBAY, SCHWANK, WAUGH, FOLMER, YUDICHAK, TOMLINSON AND MENSCH, AUGUST 3, 2011

REFERRED TO FINANCE, AUGUST 3, 2011  

AN ACT

Amending the act of June 27, 2006 (1st Sp.Sess., P.L.1873,

No.1), entitled "An act providing for taxation by school

districts, for the State funds formula, for tax relief in

first class cities, for school district choice and voter

participation, for other school district options and for a

task force on school cost reduction; making an appropriation;

prohibiting prior authorized taxation; providing for

installment payment of taxes; restricting the power of

certain school districts to levy, assess and collect taxes;

and making related repeals," further providing for

certification and calculation of minimum and maximum

modifiers and for the Property Tax Relief Reserve Fund;

providing for senior citizen tax relief; and further

providing for State property tax reduction allocation.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 503(e)(2) introductory paragraph of the

act of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as

the Taxpayer Relief Act, is amended and the subsection is

amended by adding a paragraph to read:

Section 503.  Certification; calculation of minimum and maximum

modifiers.

* * *

(e)  Distribution.--

* * *

(2)  For fiscal year 2009-2010 [and each fiscal year

thereafter], the secretary shall distribute the difference

between the amount certified under subsection (a)(1)(i) and

the sum of all of the following:

* * *

(3)  For fiscal year 2012-2013 and each fiscal year

thereafter, the secretary shall distribute the difference

between the amount certified under subsection (a)(1)(i) and

the sum of all of the following:

(i)  The difference between the sum of:

(A)  the amount of approved claims to be paid in

the next fiscal year under section 1304(a)(2)(i) and

(3); and

(B) the amount of approved claims paid in the

2006-2007 fiscal year under section 1304(a)(1).

(ii)  The sum of all of the following:

(A)  The amount sufficient to fund reimbursements

to eligible school districts pursuant to section 324.

The amount deducted under this clause shall be

calculated based on the information provided by

school districts under subsection (b)(2).

(B)  The amount of approved claims under section

704.

(C)  The amount of approved claims under section

1304(a)(2)(ii).

(D)  The amount of payments to school districts

under section 504.1.

Section 2.  Section 504(d)(1) of the act is amended to read:

Section 504.  Property Tax Relief Reserve Fund.

* * *

(d)  Transfers.--

(1)  The secretary may authorize a transfer from the

Property Tax Relief Reserve Fund to the fund if the amount

for distribution under section 503(e) in 2013 is less than

the amount for distribution under section 503(e) [made in the

prior year] in 2012 or any year thereafter. [The] Beginning

in 2014 and each year thereafter, the amount of the transfer

under this subsection shall be equal to the difference

between the amount for distribution under section 503(e) and

the amount for distribution under section 503(e) made in the

prior year.

* * *

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

Section 504.1.  Senior citizen tax relief.

(a)  Tax freeze.--Notwithstanding any other law, an eligible

claimant shall be entitled to a freeze of school property taxes

imposed by a school district on the person's homestead and shall

not be required to pay any increases in those school property

taxes in excess of the claimant's base payment.

(b)  Application.--An eligible claimant must apply for the

tax freeze under subsection (a) by filing the following with the

school district imposing the school property tax on a form

prescribed by the department:

(1)  A request for the tax freeze and a copy of the most

recent school property tax bill.

(2)  Certification that the claimant or the claimant's

spouse is the owner of the homestead upon which the school

property taxes are imposed.

(3)  Receipts showing prompt payment of the current

year's school property tax liability.

(c)  Timing.--

(1)  The application under subsection (b) must be filed

within 45 days of the date the school property tax under

subsection (b)(1) is due.

(2)  Within 15 days of receipt of an application, the

school district shall determine the claimant to be eligible

or ineligible. A determination of ineligibility under this

paragraph is subject to 2 Pa.C.S. Ch. 7 Subch. B (relating to

judicial review of local agency action).

(d)  Termination.--

(1)  Subject to paragraph (2), the tax rate on and the

assessment of school property tax shall become current on the

sale or transfer of the real property subject to the tax,

including any transfer under a recorded real property sales

contract.

(2)  A tax freeze under this section shall remain in

effect upon the transfer of the affected real property to a

surviving spouse if, at the time of the death of the

claimant, the surviving spouse is at least 65 years of age or

will be 65 years of age within six months of the date of

death of the claimant.

(e)  Commonwealth payment.--

(1)  Beginning April 2012 and each April thereafter, the

secretary shall pay school districts, from the fund, the

amount of each eligible claimant's increase in school

property taxes in excess of the claimant's base payment.

Payments under this section shall be made prior to any

distribution of funds under subsection 504(c).

(2)  The school district shall provide notification and

documentation to the department of the total balance due to

the local taxing authorities for increases in school property

tax for eligible claimants.

(3)  The department shall certify the total amount due to

increase in school property tax for each school district.

(f)  Definitions.--The following words and phrases when used

in this section shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Base payment."

(1)  Except as set forth in paragraph (2), the amount of

school property tax paid by the eligible claimant either in

the tax year beginning January 1, 2011, or in the first tax

year during which the claimant first becomes eligible,

whichever occurs later, on the principal residence in which

the claimant has maintained continuous occupancy and

ownership since either January 1, 2011, or the date the

claimant first becomes eligible.

(2)  If the claimant purchases a principal residence

after January 1, 2011, or after the date upon which the

claimant first becomes eligible, the amount of school

property tax paid during the tax year in which the purchase

was made.

"Base year."  The tax year under paragraph (1) or (2) of the

definition of "base payment."

"Eligible claimant."  An individual who meets all of the

following for the base year and each succeeding year up to and

including the year for which the freeze is sought:

(1)  Was at least 65 years of age or whose spouse, if a

member of the household, was at least 65 years of age during

the base year.

(2)  Has held a homestead exemption for the previous five

years.

(3)  Has paid the full amount of property taxes due for

each succeeding year up to and including the year for which

the freeze is sought.

"Homestead."  As defined in section 302.

"School property tax."  The property tax levied by a school

district on the homestead of an eligible claimant. The term does

not include a penalty, interest or a payment made in lieu of

tax.

"School property tax increase."  The increase in school

property tax levied in a calendar year over school property tax

levied in the base year.

Section 4.  Section 505(a) of the act is amended by adding a

paragraph and the section is amended by adding a subsection to

read:

Section 505.  State property tax reduction allocation.

(a)  Administration.--The department shall do all of the

following:

* * *

(2.1)  Prior to calculating the property tax reduction

under paragraph (3), the department shall calculate the

amount due to school districts under section 504.1.

* * *

(a.1)  Initial payment.--For the fiscal year commencing July

1, 2012, and July 1 of each year thereafter, prior to making a

payment under subsection (b), the department shall pay to each

school district the amount due under section 504.1(e).

* * *

Section 5.  This act shall take effect immediately.