Regular Session 2019-2020 House Bill 1677 P.N. 3205

PRIOR PRINTER'S NO. 2261

PRINTER'S NO. 3205

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1677

Session of

2019

INTRODUCED BY FREEMAN, MOUL, LONGIETTI, KIM, MURT, SCHLOSSBERG,

DEASY, SAINATO, CIRESI, HILL-EVANS, DeLUCA, STURLA, KORTZ,

McNEILL, RADER, WEBSTER, COMITTA, SAMUELSON, MERSKI AND LEE,

JUNE 26, 2019

AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF

REPRESENTATIVES, AS AMENDED, JANUARY 22, 2020

AN ACT

Providing for an annual revenue sharing program for

municipalities relating to tax-exempt real property;

establishing the Tax-exempt Property Municipal Assistance

Fund; imposing powers and duties on the Department of

Community and Economic Development; and making an

inconsistent repeal.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Tax-exempt

Property Municipal Assistance Act.

Section 2. 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:

"Common level ratio." The ratio of assessed value to current

market value used generally in the county as last determined by

the State Tax Equalization Board under the act of June 27, 1996

(P.L.403, No.58), known as the Community and Economic

Development Enhancement Act.

"Department." The Department of Community and Economic

Development of the Commonwealth.

"Eligible municipality." A municipality that imposes a tax

on real property determined eligible under section 6(a).

"Fund." The Tax-exempt Property Municipal Assistance Fund

established under section 4.

"Liquor tax." The tax imposed and assessed upon the net

price of all liquors sold by the Pennsylvania Liquor Control

Board under the act of June 9, 1936 (1st Sp.Sess., P.L.13,

No.4), entitled "An act imposing an emergency State tax on

liquor, as herein defined, sold by the Pennsylvania Liquor

Control Board; providing for the collection and payment of such

tax; and imposing duties upon the Department of Revenue and the

Pennsylvania Liquor Control Board."

"Market value." The value of property as calculated by the

State Tax Equalization Board on an annual basis utilizing the

common level ratio.

"Market value of tax-exempt property." The quotient of the

base year market value of a property and the common level ratio

as calculated by the State Tax Equalization Board.

"Municipality." Any of the following:

(1) A city, borough, incorporated town or township.

(2) A home rule municipality which is a city, borough,

incorporated town or township.

"Qualified tax-exempt property." Real property which is

exempt from local real property taxes and which is owned by one

of the following:

(1) The Federal Government or an instrumentality of the

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Federal Government.

(2) The Commonwealth or an instrumentality of the

Commonwealth.

(3) A political subdivision, except real property owned

by the municipality in which the property is located.

(4) An entity which has obtained the exemption from real

property taxation under the authority granted to the General

Assembly under section 2(a)(i), (ii), (iv) or (v) of Article

VIII of the Constitution of Pennsylvania.

(5) A local authority as defined in 1 Pa.C.S. § 1991

(relating to definitions).

Section 3. Tax-exempt property compilation.

(a) Compilation.--Each county shall annually compile a list

identifying the market value of tax-exempt property within the

county.

(b) Annual report.--Beginning in calendar year 2020, each

county assessment office shall submit to the department an

annual report providing the information required in subsection

administer this act. The report shall be filed by June 30.

shall be a compilation of all property located within the county

which is exempt from real property tax as of January 1 in the

year the report is required to be filed. The report shall

contain the following:

(1) The owner of each tax-exempt property.

(2) The location of the property, including mailing

address, name of the municipality where the property is

located and the uniform parcel identifier.

(3) The assessed value of the property.

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(4) Payments in lieu of tax or other funding received

under a Federal or State program based on the tax-exempt

status of the property. The amounts of the payments shall be

reported by the municipality to the county assessment office.

If the municipality fails to timely report this information

to the county assessment office, the county is not required

to include the information in the report, and the

municipality shall report the information directly to the

department.

(5) The millage rate for the tax on real property in

effect in the municipality where the property is located as

of January 1 of the year in which the report is required to

be filed.

(6) The assessed value of all property in each

municipality in the county.

(7) The market value of all property in each

municipality in the county.

(d) Failure to file reports.--Notwithstanding any other

provision of this act, a county which fails to provide to the

department the report required under this section by July 31

shall cause all municipalities within that county to forfeit the

right to share in the distribution of funding for the year in

which the information was required to be reported. A

municipality located within a county that has failed to provide

the department with the required report shall have the right to

petition the court of common pleas to issue a writ of mandamus

ordering the county to collect the data and file the report with

the department.

Section 4. Fund.

(a) Establishment.--There is established in the State

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Treasury a special restricted account to be known as the Tax-

exempt Property Municipal Assistance Fund. The money deposited

in the fund shall be used exclusively for the purpose of making

annual distributions to eligible municipalities under section 6.

(b) Funds for revenue sharing program.--All revenues

received by the Commonwealth from imposition of the liquor tax

shall be transferred to the fund. All funds transferred under

this subsection shall be distributed as provided in section 6.

under this section shall be transferred by the State Treasurer

in five equal installments before the last day of February,

March, April, May and June of each fiscal year in which a

transfer is required.

(d) Appropriation.--Money in the fund is appropriated on a

continuing basis to the department for purposes of making

distributions under this act and shall not lapse at the end of

any fiscal year.

Section 5. Funds available for distribution.

Money in the fund at the end of a fiscal year shall be

distributed by the department by September 15 next following the

end of the OF THE FOLLOWING fiscal year IN WHICH THEY WERE

COLLECTED in the manner required under section 6.

Section 6. Tax-exempt properties assistance.

(a) Eligibility.--A municipality is eligible to receive

distributions under this section if it is determined by the

department that the municipality's total market value of tax-

exempt property equals or exceeds 15% of the total market value

of assessed property within the municipality.

(b) Revenue.--The department shall annually distribute funds

available under section 5 to each eligible municipality based

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upon the following:

(1) Each municipality's total market value of qualified

tax-exempt properties shall be divided by the total market

value of qualified tax-exempt property in all eligible

municipalities with the quotient expressed as a percentage.

(2) The percentage under paragraph (1) shall be

multiplied by the funds available to determine the payment

due to each municipality.

(3) No municipality shall receive more than 10% of the

funds available. The following apply:

(i) Subject to subparagraph (ii), if a

municipality's allocation as calculated exceeds the 10%

limit, the municipality shall receive 10% of the funds

available.

(ii) If it is determined that more than one

municipality's allocation as calculated exceeds the 10%

limit, the allocation to each municipality subject to the

limit shall be calculated against the total amount of

money in the fund at the end of the fiscal year.

(iii) For the remaining municipalities, the

department shall recalculate the payment amounts using

the formula in paragraphs (1) and (2), except that the

recalculation shall exclude:

(A) a municipality whose allocation exceeds the

10% limit; and

(B) the amount equivalent to the municipality's

10% allocation.

(4) No municipality shall receive an amount exceeding

$100 per person based upon the population of the municipality

as of the last Federal decennial census. The following apply:

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(i) If it is determined that a municipality's

allocation exceeds the per-person limit, the municipality

shall receive a $100 per-person allocation from the funds

available.

(ii) If it is determined that more than one

municipality's allocation as calculated exceeds the $100

per-person limit, the allocation to each municipality

subject to the per-person limit shall be calculated

against the total amount of money in the fund at the end

of the fiscal year.

(iii) For the remaining municipalities, the

department shall recalculate the payment amounts using

the formula in paragraphs (1) and (2), except that the

recalculation shall exclude:

(A) a municipality whose allocation exceeds the

$100 per-person limit; and

(B) the amount equivalent to the municipality's

$100 per-person limit.

(5) If the total allocations as calculated result in

$1,000,000 or less remaining in the fund, the money shall be

retained in the fund for allocation in the next fiscal year.

(6) If the total allocations as calculated result in

$1,000,000 or more THAN $1,000,000 remaining in the fund, the

department shall recalculate the allocation amounts for the

remaining eligible municipalities that are not subject to an

allocation limitation under this subsection. The department

shall use the formula under this subsection, except that the

recalculation shall exclude a municipality subject to an

allocation limitation and the amount equivalent to the

municipality's limited allocation. If the recalculation

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results in money remaining in the fund, the money shall be

retained in the fund for allocation in the next fiscal year.

(7) The amount of any payment under section 3(c)(4)

shall be deducted from the final payment to a municipality,

and the money deducted shall be returned to the department

and deposited into the fund for disbursement in the next

fiscal year. If a municipality receives a payment from a

government agency under section 3(c)(4) after it receives a

payment under this section, the municipality shall reimburse

the fund the amount of the payment made under this section.

In no case shall a municipality receive a payment under this

act and a payment from a government agency for the same

parcel of tax-exempt property in the same fiscal year.

Section 7. Regulations.

Within 180 days after the effective date of this section, the

department shall promulgate regulations necessary to implement

DEVELOP WRITTEN GUIDELINES FOR THE IMPLEMENTATION OF THE

PROVISIONS OF this act. The department shall submit proposed

regulations THE GUIDELINES to the Local Government Committee of

the Senate and the Local Government Committee of the House of

Representatives for comment UPON COMPLETION.

Section 8. Repeal.

Section 2 of the act of June 9, 1936 (1st Sp.Sess., P.L.13,

No.4) is repealed insofar as it requires funds to be credited to

the General Fund.

Section 9. Effective date.

This act shall take effect in 60 days.

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