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PRINTER'S NO. 1112
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
805
Session of
2019
INTRODUCED BY SCAVELLO, BOSCOLA, STEFANO, BREWSTER AND YUDICHAK,
AUGUST 7, 2019
REFERRED TO FINANCE, AUGUST 7, 2019
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," providing for a 100% homestead
and farmstead exclusion and establishing the 100% Homestead
and Farmstead Exclusion Account.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of June 27, 2006 (1st Sp.Sess., P.L.1873,
No.1), known as the Taxpayer Relief Act, is amended by adding a
chapter to read:
CHAPTER 19
100% HOMESTEAD AND FARMSTEAD EXCLUSION
SUBCHAPTER A
GENERAL PROVISIONS
Section 1901. Definitions.
The following words and phrases when used in this chapter
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shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account." The 100% Homestead and Farmstead Exclusion
Account established in section 1932.
"Assessor." As defined in 53 Pa.C.S. § 8582 (relating to
definitions).
"Board of school directors." The term includes the
following:
(1) A board of school directors of a school district of
the first class A, second class, third class or fourth class.
(2) A city council of a city of the first class.
"Department." The Department of Revenue of the Commonwealth.
"Earned income." As defined in section 501 of the Local Tax
Enabling Act.
"Farmstead." As defined in 53 Pa.C.S. § 8582.
"Farmstead property." As defined in 53 Pa.C.S. § 8582.
"Homestead." As defined in 53 Pa.C.S. § 8401 (relating to
definitions).
"Homestead property." As defined in 53 Pa.C.S. § 8401.
"Index." The term as defined in section 302.
"Local Tax Enabling Act." The act of December 31, 1965
(P.L.1257, No.511), known as The Local Tax Enabling Act.
"Personal income." Income enumerated in section 303 of the
Tax Reform Code, as determined by the department, subject to any
correction for fraud, evasion or error as finally
determined by the Commonwealth.
"School district." A school district of the first class,
first class A, second class, third class or fourth class.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
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known as the Tax Reform Code of 1971.
SUBCHAPTER B
PUBLIC EDUCATION TAX
Section 1911. Scope of subchapter.
This subchapter imposes an additional tax on personal income
for the purpose of funding 100% homestead and farmstead
exclusions to provide property tax relief.
Section 1912. Additional tax imposed.
(a) Personal income tax.--For taxable years beginning after
December 31, 2019, an additional tax upon personal income shall
be imposed. The tax shall be calculated, collected and paid to
the Commonwealth in the same manner as provided under Article
III of the Tax Reform Code.
(b) Rate.--The tax imposed under subsection (a) shall be at
the rate of 1.8%.
(c) Deposit of tax proceeds.--The department shall deposit
taxes collected under this section into the account.
(d) Combination of tax forms.--The department shall
incorporate the taxpayer reporting requirement for the
implementation of this section into the forms utilized by the
department under Article III of the Tax Reform Code.
(e) Definitions.--The words and phrases used in this section
shall have the same meanings given to them in Article III of the
Tax Reform Code.
SUBCHAPTER C
ESTABLISHMENT AND PROCEDURE
Section 1921. Implementation.
A school district that chooses to provide a 100% homestead
and farmstead exclusion shall adopt a resolution implementing a
100% homestead and farmstead exclusion program no later than the
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last day of the fiscal year immediately preceding the fiscal
year in which the 100% homestead and farmstead exclusion shall
take effect.
Section 1922. Application and procedure.
The 100% homestead and farmstead exclusion shall be
incorporated into the homestead and farmstead exclusion
application provided for under Chapter 3 and follow the same
procedure and approval requirements provided for under Chapter
3.
Section 1923. School district certification.
No later than July 20, 2020, and each July 20 thereafter, a
school district shall certify to the Department of Education the
dollar value of the real property taxes levied on homesteads and
farmsteads within the school district for the school year in
which the certification falls, which shall be calculated by
multiplying the sum of the assessed value of homesteads and
farmsteads in the school district by the millage rate for the
school year. The certification shall include the number of
approved homesteads and farmsteads, the assessed value of the
approved homesteads and farmsteads and the school district
millage rate.
Section 1924. Notification.
Following adoption of a 100% homestead and farmstead
exclusion, and no later than 60 days prior to the application
deadline provided for under Chapter 3, a board of school
directors shall notify by first class mail the owner of each
parcel of residential property within the district of the
existence of the school district's homestead and farmstead
exclusion program, the need to file an application to qualify
for the 100% homestead and farmstead exclusion and the
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application deadline.
SUBCHAPTER D
100% HOMESTEAD AND FARMSTEAD EXCLUSION ACCOUNT
Section 1931. Definitions.
The following words and phrases when used in this subchapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Real property tax." The total dollar value of real property
taxes owed by homestead and farmstead properties in a school
district determined prior to the addition of any discount or
penalty.
Section 1932. 100% Homestead and Farmstead Exclusion Account.
(a) Establishment.--The 100% Homestead and Farmstead
Exclusion Account is established as a restricted account within
the General Fund.
(b) Use.--The Department of Education shall use the account
to make disbursements under section 1934.
(c) Continuing appropriation.--The money of the account is
continuously appropriated to the Department of Education as
provided for under this chapter and shall not lapse.
Section 1933. Sources and transfers.
(a) Deposit.--The following shall be deposited into the
account:
(1) Money collected by the department under section
1912.
(2) Appropriations.
(3) Accrued interest in the account.
(b) Transfer.--The Secretary of the Budget, in consultation
with the secretary, shall compute the amount of tax refund
payments that result from the imposition of the tax under
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section 1912 and that are payable from the General Fund. The
Secretary of the Budget shall transfer that amount of funding
from the account to the General Fund no later than June 5 of
each year. The Secretary of the Budget shall provide 10 days'
prior notification of the amount to be transferred to the
chairperson and minority chairperson of the Appropriations
Committee of the Senate and the chairperson and minority
chairperson of the Appropriations Committee of the House of
Representatives.
Section 1934. Standard disbursements to school districts.
(a) General rule.--In fiscal year 2020-2021 and each fiscal
year thereafter, the Department of Education shall disburse to
each school district that implements a 100% homestead and
farmstead exclusion an amount equal to the amount of real
property taxes owed to the school district from homestead
properties less any amount disbursed to the school district
under section 503(e).
(b) Distributions.--Distributions under subsection (a) shall
be made during each school year as follows:
(1) Twenty-five percent of the amount to be distributed
shall be paid on the fourth Thursday in July.
(2) The balance of the amount to be distributed shall be
paid in nine equal installments on the fourth Thursday of
August, September, October, November, December, January,
February, March and April.
SUBCHAPTER E
MISCELLANEOUS PROVISIONS
Section 1941. Regulations.
(a) Department of Education.--Except as provided under
subsection (b), the Department of Education shall have
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jurisdiction over and shall promulgate regulations necessary for
the proper administration of this chapter.
(b) Department of Revenue.--The department shall have
jurisdiction over and shall promulgate regulations as necessary
for the proper administration of Subchapter B.
Section 2. This act shall take effect in 60 days.
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