Amendment 1564 to House Bill 504 P.N. 561, Regular Session 2015-2016

H0504B0561A01564 KMK:JMT 05/11/15 #90 A01564

AMENDMENTS TO HOUSE BILL NO. 504

Sponsor: REPRESENTATIVE SAYLOR

Printer's No. 561

Amend Bill, page 1, line 11, by striking out the period after

"timbering" and inserting

; establishing the School District Millage Rate Reduction Fund

and the School District Homestead and Farmstead Relief Fund;

providing for additional taxation and for senior citizens

property tax and rent rebate assistance; and repealing

provisions of the Taxpayer Relief Act.

Amend Bill, page 1, lines 14 through 17, by striking out all

of said lines and inserting

Section 1. The title of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971, is amended to read:

AN ACT

Relating to tax reform and State taxation by codifying and

enumerating certain subjects of taxation and imposing taxes

thereon; providing procedures for the payment, collection,

administration and enforcement thereof; providing for

property tax relief and for tax credits in certain cases;

conferring powers and imposing duties upon the Department of

Revenue, certain employers, fiduciaries, individuals,

persons, corporations and other entities; prescribing crimes,

offenses and penalties.

Section 2. Section 201(k)(8) and (o)(4)(B) of the act,

amended April 23, 1998 (P.L.239, No.45), are amended to read:

Amend Bill, page 7, by inserting between lines 9 and 10

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

ARTICLE XVI

SCHOOL PROPERTY TAX REFORM

PART I

PRELIMINARY PROVISIONS

Section 1601. Short title of article.

This article shall be known and may be cited as the School

Property Tax Reform Act.

Section 1602. Definitions.

The following words and phrases when used in this article

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

2015/90KMK/HB0504A01564 - 1 -

context clearly indicates otherwise:

"Average daily membership." The term as defined in section

2501 of the act of March 10, 1949 (P.L.30, No.14), known as the

Public School Code of 1949.

"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.

"Equalized millage." The term as defined in section

2501(9.2) of the act of March 10, 1949 (P.L.30, No.14), known as

the Public School Code of 1949.

"Farmstead." As defined in 53 Pa.C.S. § 8582 (relating to

definitions).

"Farmstead property." The term as defined in 53 Pa.C.S. §

8582 (relating to definitions).

"Homestead." The term defined in 53 Pa.C.S. § 8401 (relating

to definitions).

"Homestead property." The term as defined in 53 Pa.C.S. §

8401 (relating to definitions).

"Index." The term defined in section 302 of the Taxpayer

Relief Act.

"Real property tax." The total dollar value of real property

taxes paid by property owners in a school district determined by

adding the real property taxes collected by, or on behalf of,

the school district plus State millage rate reduction

allocations, State homestead and farmstead exclusion allocations

and State property tax reduction allocations. The term does not

include an allocation under section 505(d) of the Taxpayer

Relief Act.

"Residential property tax." The dollar value of real

property taxes paid by residential property owners in a school

district, determined by multiplying the real property taxes

collected by the school district times the percentage of the

total property value in the school district classified as

residential by the State Tax Equalization Board for the calendar

year in which the tax year began.

"School district." A school district of the first class,

first class A, second class, third class or fourth class.

"School District Homestead and Farmstead Relief Fund." The

fund established in section 1604.

"School District Millage Rate Reduction Fund." The fund

established in section 1603.

"Secretary." The Secretary of the Budget of the

Commonwealth.

"State homestead and farmstead exclusion allocation." The

allocation under section 1643.

"State millage rate reduction allocation." The allocation

under section 1632.

"State property tax reduction allocation." A payment made

2015/90KMK/HB0504A01564 - 2 -

under section 505 of the Taxpayer Relief Act.

"State Treasurer." The State Treasurer of the Commonwealth.

"Taxpayer Relief Act." The act of June 27, 2006 (1st

Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act.

Section 1603. School District Millage Rate Reduction Fund.

(a) Establishment.--The School District Millage Rate

Reduction Fund is established as a special fund in the State

Treasury. The fund shall not lapse.

(b) Purpose.--Money in the fund shall be distributed to

school districts under section 1632 and shall be used

exclusively for the purposes enumerated in this article.

under section 1611 shall be deposited into the fund.

(d) Transfer from the fund.--

(1) In order to ensure that the General Fund is not

negatively impacted by the imposition of the tax under

section 1611, not later than June 30, 2017, and each June 30

thereafter, an amount equal to the refund reimbursement

factor multiplied by the amount of refunds issued under

Article III for tax years in which the tax imposed under

section 1611 is applicable shall be transferred from the fund

to the General Fund.

(2) For the purpose of this subsection, "refund

reimbursement factor" means a fraction equal to the rate of

tax imposed under section 1611 divided by the sum of the rate

of tax imposed under section 1611 plus the rate of tax

imposed under Article III.

Section 1604. School District Homestead and Farmstead Relief

Fund.

(a) Establishment.--The School District Homestead and

Farmstead Relief Fund is established as a special fund in the

State Treasury. The fund shall not lapse.

(b) Purpose.--Except as provided under section 2908-G(c),

money in the fund shall be distributed to school districts under

section 1643 and shall be used exclusively for the purposes

enumerated in this article.

shall be deposited into the fund.

(d) Transfers.--Upon authorization by the secretary in order

to comply with section 1622(a)(3), the State Treasurer shall

transfer from the fund to the School District Millage Rate

Reduction Fund an amount sufficient to ensure that the total

amount of revenue in the School District Millage Rate Reduction

Fund for a fiscal year is not less than the amount distributed

from the previous fiscal year.

PART II

SCHOOL PROPERTY TAX REDUCTIONS

FROM STATEWIDE SOURCES

Section 1611. Additional personal income tax imposed.

(a) Personal income tax.--For taxable years beginning after

December 31, 2015, there is imposed an additional tax upon each

2015/90KMK/HB0504A01564 - 3 -

class of income as defined in Article III. The tax shall be

calculated, collected and paid over to the Commonwealth in the

same manner as provided in Article III.

(b) Rate.--The tax imposed by subsection (a) shall be at the

rate of 0.63%.

taxes collected under this section in the School District

Millage Rate Reduction Fund. The amount shall be the sum of the

taxes collected under this section and Article III multiplied by

a fraction equal to the rate of tax under this section divided

by the sum of the rate of tax under this section and the rate of

tax under section 302.

(d) Rules and regulations.--The rules and regulations of the

department promulgated under this act or any other act, shall be

applicable to the tax imposed by this section to the extent that

they are applicable to the tax imposed under Article III.

(e) Construction.--The tax imposed by this section shall be

in addition to any tax imposed under Article III or section

321(c) of the Taxpayer Relief Act. The provisions of Article III

shall apply to the tax imposed by this section.

Section 1612. Additional sales and use tax imposed.

(a) Additional taxation.--The tax imposed by this section

shall be in addition to any tax imposed under Article II or II-

B, section 503 of the act of June 5, 1991 (P.L.9, No.6), known

as the Pennsylvania Intergovernmental Cooperation Authority Act

for Cities of the First Class, or section 3152-B of the act of

July 28, 1953 (P.L.73, No.230), known as the Second Class County

Code. The provisions of Article II shall apply to the tax

imposed by this section.

(b) Sales tax.--Beginning January 1, 2016, there is imposed

a tax upon each separate sale at retail of tangible personal

property or services. The tax under this subsection shall be

imposed upon the purchase price. The tax shall be collected by

the vendor from the purchaser and shall be paid over to the

Commonwealth in the same manner as provided in Article II.

tax upon the use of tangible personal property purchased at

retail and on services purchased at retail. The tax under this

subsection shall be imposed upon the purchase price. The tax

shall be paid over to the Commonwealth by the person who makes

such use. The tax imposed under this subsection shall not be

paid over to the Commonwealth by any person who has paid the tax

imposed under subsection (b) or has paid the tax imposed under

this subsection to the vendor with respect to such use.

(d) Hotel tax.--Beginning January 1, 2016, there is hereby

imposed an excise tax on the rent upon every occupancy of a room

or rooms in a hotel, as defined in Article II. The tax shall be

collected by the operator or owner from the occupant and paid

over to the Commonwealth.

(e) Rate.--The tax imposed by subsections (b), (c) and (d)

shall be at a rate of 1%.

2015/90KMK/HB0504A01564 - 4 -

(f) Tax computation.--The tax imposed under subsections (b),

(1) If the purchase price is 50¢ or less, no tax shall

be collected.

(2) If the purchase price is 51¢ or more but less than

$1.51, 1¢ shall be collected.

(3) If the purchase price is $1.51 or more but less than

$2.51, 2¢ shall be collected.

(4) If the purchase price is $2.51 or more but less than

$3.51, 3¢ shall be collected.

(5) If the purchase price is $3.51 or more but less than

$4.51, 4¢ shall be collected.

(6) If the purchase price is $4.51 or more but less than

$5.51, 5¢ shall be collected.

(7) If the purchase price is $5.51 or more but less than

$6.51, 6¢ shall be collected.

(8) If the purchase price is $6.51 or more but less than

$7.51, 7¢ shall be collected.

(9) If the purchase price is $7.51 or more but less than

$8.51, 8¢ shall be collected.

(10) If the purchase price is $8.51 or more but less

than $9.51, 9¢ shall be collected.

(11) If the purchase price is $9.51 or more but less

than $10.01, 10¢ shall be collected.

(12) If the purchase price is more than $10, 1% of each

$10 purchase price plus the above bracket charges upon any

fractional part of a $10 increment shall be collected.

(g) Deposit of tax proceeds.--The department shall deposit

taxes collected under this section in the School District

Homestead and Farmstead Relief Fund. The amount shall be one-

seventh of the sum of the amount collected under this section

and Article II. The tax collected under this section shall be

subject to the transfers under section 281.2 and 74 Pa.C.S. §

1506(c)(1) and (3.4) in the same way as the tax imposed under

Article II.

(h) Rules and regulations.--The rules and regulations of the

department which are promulgated under this act or any other

act, shall be applicable to the tax imposed by this section to

the extent that they are applicable to the tax imposed under

Article II.

(i) Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Purchase price." As defined in Article II.

"Sale at retail." As defined in Article II.

"Tangible personal property." As defined in Article II.

PART III

STATE FUNDS FORMULAE

SUBPART A

PRELIMINARY PROVISIONS

Section 1621. Scope of part.

2015/90KMK/HB0504A01564 - 5 -

This part relates to the allocation of State funds for the

dollar-for-dollar reduction of school district property taxes

through millage rate reductions and funding homestead property

exclusions.

Section 1622. Certifications.

(a) Secretary certifications.--

(1) Not later than April 15, 2016, and April 15 of each

year thereafter, the secretary shall certify all of the

following:

(i) The total amount of revenue in the School

District Millage Rate Reduction Fund and the School

District Homestead and Farmstead Relief Fund. In

calculating the total amount of revenue in each of the

funds, the secretary shall take into account all of the

following:

(A) For the certification to be completed not

later than April 15, 2016, revenue which:

(I) has been deposited into the fund prior

to the date of the certification; and

(II) is reasonably projected to be deposited

into the fund during the six months following the

date on which the certification is made; and

(B) For certifications in subsequent fiscal

years:

(I) revenue which has been deposited into

the fund during the six months prior to the date

on which the certification is made; and

(II) revenue enumerated in clause (A)(II).

(ii) In certifying the amount available for

distribution from each fund under subsection (c), the

secretary shall only certify an amount that is

sustainable in subsequent years.

(2) If the actual revenue deposited into each of the

funds during the six months following the date on which the

certification is made exceeds projections, any revenue in

excess of projections shall remain in that fund and may be

included in the certification for the subsequent fiscal year.

(3) The secretary may not certify an amount of revenue

in the School District Millage Rate Reduction Fund which is

less than the dollar amount certified in the previous fiscal

year.

(b) Notification of Department of Education.--By April 20,

2016, and April 20 each year thereafter, the secretary shall

notify the Department of Education whether it is authorized to

provide school districts with State millage rate reduction

allocations and State homestead and farmstead exclusion

allocations under Subparts B and C.

(1) For fiscal year 2016-2017 and for each fiscal year

thereafter, the secretary shall authorize the Department of

Education to distribute from the School District Millage Rate

2015/90KMK/HB0504A01564 - 6 -

Reduction Fund the amount certified for the fund under

subsection (a)(1).

(2) For fiscal year 2016-2017 and for each fiscal year

thereafter, the secretary shall authorize the Department of

Education to distribute from the School District Homestead

and Farmstead Relief Fund the difference between the amount

certified for the fund under subsection (a)(1) and the sum of

all of the following:

(i) the amount sufficient to fund additional

reimbursements to eligible school districts under section

1642; and

(ii) the amount under 2908-G(c).

The amount deducted under this subsection for additional

reimbursements under section 1642 shall be calculated based on

the information provided by school districts under section

503(b)(2) of the Taxpayer Relief Act.

Section 1623. Disclosure of relief.

(a) Tax notice.--A school district which receives a State

property tax reduction allocation, a State homestead and

farmstead exclusion allocation or a State millage rate reduction

allocation shall itemize the total homestead and farmstead

exclusion and millage rate reductions on tax bills sent to

taxpayers. At minimum, a tax bill must show the tax liability

which was due for the property in the previous tax year, the

amount of the applicable exclusion and the amount of reduced tax

liability due to rate reductions. The tax bill shall be easily

understandable and include a notice under subsection (b).

(b) Notice of property tax relief.--

(1) For a taxpayer who is a homestead property or

farmstead property owner, the tax bill must include a notice

that the tax bill includes a homestead or farmstead exclusion

and a millage rate reduction. The notice shall, at a minimum,

be in the following form:

NOTICE OF PROPERTY TAX RELIEF

Your enclosed tax bill includes a tax reduction for your

homestead and/or farmstead property. As an eligible

homestead and/or farmstead property owner, you have

received tax relief through a homestead and/or farmstead

exclusion which has been provided under the School

Property Tax Reform Act and the Taxpayer Relief Act, two

laws passed by the Pennsylvania General Assembly designed

to reduce your property taxes. Your tax bill also

includes a reduction in the tax rate on real property

provided through the Education Finance Reform Act.

(2) For a taxpayer that is not a homestead property or

farmstead property owner, the tax bill must include a notice

that the tax bill includes a millage rate reduction. The

notice shall, at a minimum, be in the following form:

NOTICE OF PROPERTY TAX RELIEF

Your enclosed tax bill includes a reduction in the tax

rate on real property. This reduction has been provided

2015/90KMK/HB0504A01564 - 7 -

under the School Property Tax Reform Act, a law passed by

the Pennsylvania General Assembly designed to reduce your

property taxes.

Section 1624. Information collection and verification.

(a) Information collection.--The Department of Education

shall develop an information collection policy to gather

information which will allow the department to confirm that

State millage rate reduction allocations and State homestead and

farmstead exclusion allocations are being used for the purposes

enumerated in this article and that State property tax reduction

allocations are being used for the purposes enumerated in the

Taxpayer Relief Act. The information collection policy may

include requiring a school district to provide information in

the uniform form prepared under section 312(b) of the Taxpayer

Relief Act that would allow the Department of Education to

comply with the requirements of this section.

(b) Verification.--The Department of Education shall develop

procedures to routinely analyze the information collected under

subsection (a) to identify a school district which is not using

a State millage rate reduction allocation or State homestead and

farmstead exclusion allocation for the purposes enumerated in

this article or is using a State property tax reduction

allocation for the purposes enumerated in the Taxpayer Relief

Act.

SUBPART B

STATE ALLOCATION DISTRIBUTION

FOR MILLAGE RATE REDUCTIONS

Section 1631. Scope of subpart.

This subpart relates to the allocation of State funds

generated by the additional tax under section 1611 for the

dollar-for-dollar reduction of school district property taxes

through millage rate reductions.

Section 1632. State millage rate reduction allocation.

(a) Administration.--The Department of Education shall

calculate the State millage rate reduction allocation for each

school district as follows:

(1) For the 2016-2017 fiscal year all of the following

apply:

(i) Multiply the school district's 2012-2013

equalized millage by the dollar amount necessary to

allocate all the money in the School District Millage

Rate Reduction Fund as authorized under section 1622(c).

(ii) If the allocation under this paragraph is less

than the product of the real property taxes collected

during the 2012-2013 fiscal year and a numerical value of

0.12 for a school district, the school district shall

receive an additional amount so that the total allocation

under this paragraph is equal to the product of the real

property taxes collected during the 2012-2013 fiscal year

and a numerical value of 0.12.

(iii) If the allocation under this paragraph is

2015/90KMK/HB0504A01564 - 8 -

greater than the product of the real property taxes

collected during the 2012-2013 fiscal year and a

numerical value of 0.19 for a school district, the school

district shall receive a total allocation equal to the

product of the real property taxes collected during the

2012-2013 fiscal year and a numerical value of 0.19.

(2) For the 2017-2018 fiscal year all of the following

apply:

(i) Multiply the school district's equalized millage

for the 2013-2014 fiscal year by the dollar amount

necessary to allocate all the money in the School

District Millage Rate Reduction Fund as authorized under

section 1622(c).

(ii) If the allocation under this paragraph is less

than the product of the real property taxes collected

during the 2013-2014 fiscal year and a numerical value of

0.2 for a school district, the school district shall

receive an additional amount so that the total allocation

under this paragraph is equal to the product of the real

property taxes collected during the 2013-2014 fiscal year

and a numerical value of 0.2.

(iii) If the allocation under this paragraph is

greater than the product of the real property taxes

collected during the 2013-2014 fiscal year and a

numerical value of 0.3 for a school district, the school

district shall receive a total allocation equal to the

product of the real property taxes collected during the

2013-2014 fiscal year and a numerical value of 0.3.

(3) For all fiscal years beginning after the 2017-2018

fiscal year:

(i) Multiply the allocation from the previous fiscal

year by the percentage change in the amount to be

collected from the tax under section 1611, except that

the percentage change under this paragraph may not be

less than zero.

(ii) Add the amount in subparagraph (i) to the

allocation from the previous fiscal year.

(b) Notification.--The Department of Education shall notify

each school district of the amount of its State millage rate

reduction allocation not later than May 1 of each year.

and each fiscal year thereafter, except as set forth in

subsection (d), the Department of Education shall pay from the

School District Millage Rate Reduction Fund to each eligible

school district a State millage rate reduction allocation equal

to the amount calculated under subsection (a). The State millage

rate allocation shall be divided into two equal payments, which

shall be made on the fourth Thursday of August and the fourth

Thursday of October.

(d) First class school districts.--The State millage rate

reduction allocation for a school district of the first class

2015/90KMK/HB0504A01564 - 9 -

shall be paid by the Department of Education to a city of the

first class for use for a school district of the first class as

prescribed in section 1633.

Section 1633. Mandatory use of State millage rate reduction

allocation to reduce rate of real property tax.

(a) Reduction in first fiscal year.--For the first fiscal

year in which a school district receives a State millage rate

reduction allocation and except for a tax increase which is

approved by the electorate under section 333(c) of the Taxpayer

Relief Act, a board of school directors may not adopt a final

budget, including a final budget under section 312 of the

Taxpayer Relief Act, which includes a tax on real property which

would generate revenue greater than:

(1) the sum of the maximum amount of revenue which could

be raised by the allowable increase under the index and the

amount permitted under the referendum exceptions in section

333(f) or (n) of the Taxpayer Relief Act, minus;

(2) the school district's State millage rate reduction

allocation.

(b) Subsequent reductions and limitations.--For the second

fiscal year in which a school district receives a State millage

rate reduction allocation and for all fiscal years in which a

school district receives a State millage rate reduction

allocation thereafter and except for a tax increase which is

approved by the electorate under section 333(c) of the Taxpayer

Relief Act, a board of school directors may not adopt a final

budget, including a final budget under section 312 of the

Taxpayer Relief Act, which includes a tax on real property which

would generate revenue greater than:

(1) the sum of the maximum amount of revenue which could

be raised by the allowable increase under the index and the

amount permitted under the referendum exceptions in section

333(f) or (n) of the Taxpayer Relief Act, minus;

(2) the increase in the school district's State millage

rate reduction allocation from the previous fiscal year.

otherwise subject to this section shall remain subject to the

provisions of section 333 of the Taxpayer Relief Act.

(d) Applicable tax rate for first class school district.--

This section and section 333, except section 333(b)(2), of the

Taxpayer Relief Act shall apply to a tax on real property levied

by a city of the first class for the benefit of a school

district of the first class.

SUBPART C

STATE ALLOCATION DISTRIBUTION TO FUND

FOR HOMESTEAD AND FARMSTEAD EXCLUSIONS

Section 1641. Scope of subpart.

This subpart relates to the allocation of State funds

generated by the additional tax under section 1612 for the

dollar-for-dollar reduction of school district property taxes

through the funding of homestead and farmstead exclusions.

2015/90KMK/HB0504A01564 - 10 -

Section 1642. Additional reimbursement.

A school district shall receive a payment equal to the

aggregate amount of the tax credited under section 324(2) of the

Taxpayer Relief Act minus its reimbursement under section 324(4)

of the Taxpayer Relief Act.

Section 1643. State homestead and farmstead exclusion

allocation.

(a) Administration.--The Department of Education shall

calculate the State homestead and farmstead exclusion allocation

for each school district, except the portion which is calculated

under section 1642, as follows:

(1) For the 2016-2017 fiscal year all of the following

apply:

(i) Multiply the school district's 2012-2013 average

daily membership by the school district's 2012-2013

equalized millage.

(ii) Multiply the product under subparagraph (i) by

the dollar amount necessary to allocate all the money in

the School District Homestead and Farmstead Relief Fund

as authorized under section 1622(c).

(iii) If the allocation under this paragraph is less

than the product of the residential property taxes

collected during the 2012-2013 fiscal year and a

numerical value of 0.1 for a school district, the school

district shall receive an additional amount so that the

total allocation under this paragraph is equal to the

product of the residential property taxes collected

during the 2012-2013 fiscal year and a numerical value of

0.1.

(iv) If the allocation under this paragraph is

greater than the product of the residential property

taxes collected during the 2012-2013 fiscal year and a

numerical value of 0.16 for a school district, the school

district shall receive a total allocation equal to the

product of the residential property taxes collected

during the 2012-2013 fiscal year and a numerical value of

0.16.

(2) For all fiscal years beginning after the 2016-2017

fiscal year all of the following apply:

(i) Multiply the school district's average daily

membership for the fourth fiscal year immediately

preceding the fiscal year for which the allocation is

being made by the school district's equalized millage for

the fourth fiscal year immediately preceding the fiscal

year for which the allocation is being made.

(ii) Multiply the product under subparagraph (i) by

the dollar amount necessary to allocate all the money in

the School District Homestead and Farmstead Relief Fund

as authorized under section 1622(c).

(iii) If the allocation under this paragraph is less

than the product of the residential property taxes

2015/90KMK/HB0504A01564 - 11 -

collected during the fourth fiscal year immediately

preceding the fiscal year for which the allocation is

being made and a numerical value of 0.14 for a school

district, the school district shall receive an additional

amount so that the total allocation under this paragraph

is equal to the product of the residential property taxes

collected during the fourth fiscal year immediately

preceding the fiscal year for which the allocation is

being made and a numerical value of 0.14.

(iv) If the allocation under this paragraph is

greater than the product of the residential property

taxes collected during the fourth fiscal year immediately

preceding the fiscal year for which the allocation is

being made and a numerical value of 0.23 for a school

district, the school district shall receive a total

allocation equal to the product of the residential

property taxes collected during the fourth fiscal year

immediately preceding the fiscal year for which the

allocation is being made and a numerical value of 0.23.

(b) Notification.--The Department of Education shall notify

each school district of the amount of its State homestead and

farmstead exclusion allocation not later than May 1 of each

year.

and each fiscal year thereafter, except as set forth in

subsection (d), the Department of Education shall pay to each

eligible school district a State homestead and farmstead

exclusion allocation equal to the amount calculated under

subsection (a) plus the payment as calculated under section

1642. The State homestead and farmstead exclusion allocation

shall be divided into two equal payments, which shall be made on

the fourth Thursday of August and the fourth Thursday of

October.

(d) First class school districts.--The State homestead and

farmstead exclusion allocation for a school district of the

first class shall be paid by the Department of Education to a

city of the first class for use for a school district of the

first class as prescribed in section 1644.

Section 1644. Disposition of State homestead and farmstead

exclusion allocation.

(a) Homestead and farmstead exclusions.--A board of school

directors for a school district which receives a State homestead

and farmstead exclusion allocation shall use the allocation to

fund exclusions for homestead and farmstead property or, if

applicable, may utilize any revenue in excess of the revenue

required to fund the maximum homestead and farmstead exclusions

authorized under 53 Pa.C.S. § 8586 (relating to limitations) to

reduce the property tax rate on all properties subject to the

property tax in the school district.

(b) Homestead and farmstead exclusion process.--Each fiscal

year in which a school district imposes a tax authorized under

2015/90KMK/HB0504A01564 - 12 -

section 321 of the Taxpayer Relief Act or receives a State

homestead and farmstead exclusion allocation or State property

tax reduction allocation, the board of school directors of a

school district shall calculate a homestead and farmstead

exclusion for the purpose of reducing school district property

taxes. The school district shall adopt a resolution implementing

the homestead and farmstead exclusion not later than the last

day of the fiscal year immediately preceding the fiscal year in

which the homestead and farmstead exclusions shall take effect.

PART IV

MISCELLANEOUS PROVISIONS

Section 1691. Additional provisions.

(a) Other provisions.--Any school district property tax

reduction approved under Subchapter D of Chapter 3 of the

Taxpayer Relief Act shall continue in effect.

(b) Applicability.--Except as otherwise provided, a school

district shall remain subject to the Taxpayer Relief Act.

ARTICLE XXIX-G

SENIOR CITIZENS PROPERTY TAX AND

RENT REBATE ASSISTANCE

Section 2901-G. Scope of article.

This article provides senior citizens with assistance in the

form of property tax and rent rebates.

Section 2902-G. (Reserved).

Section 2903-G. Definitions.

The following words and phrases when used in this article

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

context clearly indicates otherwise:

"Board." The Board of Finance and Revenue of the

Commonwealth.

"Claimant." A person who files a claim for property tax

rebate or rent rebate in lieu of property taxes and:

(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

a calendar year in which real property taxes or rent were due

and payable;

(2) was a widow or widower and was at least 50 years of

age during a calendar year or part thereof in which real

property taxes or rent were due and payable; or

(3) was a permanently disabled person 18 years of age or

older during a calendar year or part thereof in which the

real property taxes or rent were due and payable.

"Department." The Department of Revenue of the Commonwealth.

"Homestead." A dwelling, whether owned or rented, and so

much of the land surrounding it, as is reasonably necessary for

the use of the dwelling as a home, occupied by a claimant. The

term includes, but is not limited to:

(1) Premises occupied by reason of ownership or lease in

a cooperative housing corporation.

(2) Mobile homes which are assessed as realty for local

property tax purposes and the land, if owned or rented by the

2015/90KMK/HB0504A01564 - 13 -

claimant, upon which the mobile home is situated, and other

similar living accommodations.

(3) A part of a multidwelling or multipurpose building

and a part of the land upon which it is built.

(4) Premises occupied by reason of the claimant's

ownership or rental of a dwelling located on land owned by a

nonprofit incorporated association, of which the claimant is

a member, if the claimant is required to pay a pro rata share

of the property taxes levied against the association's land.

(5) Premises occupied by a claimant if the claimant is

required by law to pay a property tax by reason of the

claimant's ownership or rental, including a possessory

interest, in the dwelling, the land or both. An owner

includes a person in possession under a contract of sale,

deed of trust, life estate, joint tenancy or tenancy in

common or by reason of statutes of descent and distribution.

"Household income." All income received by a claimant and

the claimant's spouse while residing in the homestead during the

calendar year for which a rebate is claimed.

"Income." All income from whatever source derived,

including, but not limited to:

(1) Salaries, wages, bonuses, commissions, income from

self-employment, alimony, support money, cash public

assistance and relief.

(2) The gross amount of any pensions or annuities,

including railroad retirement benefits for calendar years

prior to 1999 and 50% of railroad retirement benefits for

calendar years 1999 and thereafter.

(3) (i) All benefits received under the Social Security

Act ( 49 Stat. 620, 42 U.S.C. § 301 et seq.), except

Medicare benefits, for calendar years prior to 1999, and

50% of all benefits received under the Social Security

Act, except Medicare benefits, for calendar years 1999

and thereafter.

(ii) Notwithstanding any other provision of this act

to the contrary, persons who, as of December 31, 2012,

are eligible for the property tax or rent rebate shall

remain eligible if the household income limit is exceeded

due solely to a Social Security cost-of-living

adjustment.

(iii) Eligibility in the property tax and rent

rebate program pursuant to subparagraph (ii) shall expire

on December 31, 2016.

(4) All benefits received under State unemployment

insurance laws and veterans' disability payments.

(5) All interest received from the Federal or any state

government or any instrumentality or political subdivision

thereof.

(6) Realized capital gains and rentals.

(7) Workers' compensation.

(8) The gross amount of loss of time insurance benefits,

2015/90KMK/HB0504A01564 - 14 -

life insurance benefits and proceeds, except the first $5,000

of the total of death benefit payments.

(9) Gifts of cash or property, other than transfers by

gift between members of a household, in excess of a total

value of $300.

The term does not include surplus food or other relief in kind

supplied by a governmental agency, property tax or rent rebate

or inflation dividend.

"Permanently disabled person." A person who is unable to

engage in any substantial gainful activity by reason of any

medically determinable physical or mental impairment which can

be expected to continue indefinitely, except as provided in

section 2904-G(b)(3) and (c).

"Real property taxes." All taxes on a homestead, exclusive

of municipal assessments, delinquent charges and interest, due

and payable during a calendar year.

"Rent rebate in lieu of property taxes." Twenty percent of

the gross amount actually paid in cash or its equivalent in any

calendar year to a landlord in connection with the occupancy of

a homestead by a claimant, irrespective of whether such amount

constitutes payment solely for the right of occupancy or

otherwise.

"Secretary." The Secretary of Revenue of the Commonwealth.

"Widow" or "widower." The surviving wife or the surviving

husband, as the case may be, of a deceased individual and who

has not remarried except as provided in section 2904-G(b)(3) and

(c).

Section 2904-G. Property tax; and rent rebate.

(a) Schedule of rebates.--

(1) The amount of any claim for property tax rebate or

rent rebate in lieu of property taxes for real property taxes

or rent due and payable during calendar years 1985 through

2005 shall be determined in accordance with the following

schedule:

Household Income

Percentage of Real Property Taxes or

Rent Rebate in Lieu of

Property Taxes Allowed as Rebate

$ 0 - $ 4,999 100%

5,000 - 5,499 100

5,500 - 5,999 90

6,000 - 6,499 80

6,500 - 6,999 70

7,000 - 7,499 60

7,500 - 7,999 50

8,000 - 8,499 40

8,500 - 8,999 35

9,000 - 9,999 25

10,000 - 11,999 20

12,000 - 12,999 15

13,000 - 15,000 10

(2) The following apply:

2015/90KMK/HB0504A01564 - 15 -

(i) The base amount of any claim for property tax

rebate for real property taxes due and payable during:

(A) Except as provided under clause (B),

calendar year 2006 and thereafter shall be determined

in accordance with the following schedule:

Household Income

Amount of Real Property Taxes

Allowed as Rebate

$ 0 - $ 8,000 $650

8,001 - 15,000 500

15,001 - 18,000 300

18,001 - 35,000 250

(B) For calendar year 2016 and thereafter, a

claimant shall be eligible for an additional base

amount in addition to the base amount under clause

(A) in accordance with the following schedule:

Household Income

Additional Amount of Real

Property Taxes

Allowed as Rebate

$ 0 - $ 8,000 $200

8,001 - 15,000 200

15,001 - 18,000 200

18,001 - 35,000 200

(ii) The supplemental amount for a claimant with a

household income equal to or less than $30,000 and an

eligible claim for property tax rebate for real property

taxes due and payable during the calendar year preceding

the first year in which a payment under section 505(b) of

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

known as the Taxpayer Relief Act, is made and each year

thereafter and whose real property taxes exceed 15% of

the claimant's household income shall be equal to 50% of

the base amount determined under subparagraph (i). A

claimant who is a resident of a city of the first class,

a city of the second class A or a school district of the

first class A shall be ineligible for the supplemental

amount under this subparagraph.

(3) The amount of any claim for rent rebate in lieu of

property taxes for rent due and payable during:

(i) Except as provided in subparagraph (ii),

calendar year 2006 and thereafter shall be determined in

accordance with the following:

Household Income

Amount of Rent Rebate in

Lieu of Property Taxes

Allowed as Rebate

$ 0 - $ 8,000 $650

8,001 - 15,000 500

15,001 – 18,000 0

18,001 - 35,000 0

(ii) For calendar year 2016 and thereafter, a

claimant shall be eligible for an additional base amount

in addition to the base amount under subparagraph (i) in

2015/90KMK/HB0504A01564 - 16 -

accordance with the following schedule:

Household Income

Additional Amount of Real

Property Taxes

Allowed as Rebate

$ 0 - $ 8,000 $200

8,001 - 15,000 200

15,001 - 18,000 200

18,001 – 35,000 200

(b) Limitations on claims.--

(1) No claim through calendar year 2005 shall be allowed

if the amount of property tax or rent rebate computed in

accordance with this section is less than $10, and the

maximum amount of property tax or rent rebate payable shall

not exceed $500.

(2) For calendar year 2006 and thereafter, the maximum

amount of property tax or rent rebate in lieu of property

taxes payable shall not exceed the lesser of:

(i) the amount of a claim under subsection (a)(2) or

(3);

(ii) the amount of real property taxes actually

paid; or

(iii) 20% of gross rent actually paid.

(3) No claim shall be allowed if the claimant is a

tenant of an owner of real property exempt from real property

taxes.

(1) If any of the following exist relating to a claim:

(i) a homestead is owned or rented and occupied for

only a portion of a year or is owned or rented in part by

a person who does not meet the qualifications for a

claimant, exclusive of any interest owned or leased by a

claimant's spouse;

(ii) the claimant is a widow or widower who

remarries; or

(iii) the claimant is a formerly disabled person who

is no longer disabled,

the department shall apportion the real property taxes or

rent in accordance with the period or degree of ownership or

leasehold or eligibility of the claimant in determining the

amount of rebate for which a claimant is eligible.

(2) A claimant who receives public assistance from the

Department of Public Welfare shall not be eligible for rent

rebate in lieu of property taxes during those months within

which the claimant receives public assistance.

(d) Government subsidies.--Rent shall not include subsidies

provided by or through a governmental agency.

Section 2905-G. Filing of claim.

(a) General rule.--Except as otherwise provided in

subsection (b), a claim for property tax or rent rebate shall be

filed with the department on or before the 30th day of June of

the year next succeeding the end of the calendar year in which

2015/90KMK/HB0504A01564 - 17 -

real property taxes or rent was due and payable.

(b) Exception.--A claim filed after the June 30 deadline

until December 31 of such calendar year shall be accepted by the

secretary as long as funds are available to pay the benefits to

the late filing claimant.

claim shall be made from the State Lottery Fund earlier than the

day following the 30th day of June provided in this article on

which that claim may be filed with the department.

(d) Eligibility of claimants.--

(1) Only one claimant from a homestead each year shall

be entitled to the property tax or rent rebate.

(2) If two or more persons are able to meet the

qualifications for a claimant, they may determine who the

claimant shall be.

(3) If they are unable to agree, the department shall

determine to whom the rebate is to be paid.

Section 2906-G. Proof of claim.

(a) Contents.--Each claim shall include:

(1) Reasonable proof of household income.

(2) The size and nature of the property claimed as a

homestead.

(3) The rent, tax receipt or other proof that the real

property taxes on the homestead have been paid or rent in

connection with the occupancy of a homestead has been paid.

(4) If the claimant is a widow or widower, a declaration

of such status in such manner as prescribed by the secretary.

(b) Proof of disability.--

(1) Proof that a claimant is eligible to receive

disability benefits under the Social Security Act (49 Stat.

620, 42 U.S.C. § 301 et seq.) shall constitute proof of

disability under this article.

(2) No person who has been found not to be disabled by

the Social Security Administration shall be granted a rebate

under this article.

(3) A claimant not covered under the Social Security Act

shall be examined by a physician designated by the department

and such status determined using the same standards used by

the Social Security Administration.

not be necessary that such taxes or rent were paid directly by

the claimant if the rent or taxes have been paid when the claim

is filed.

(d) Proof of age on first claim.--The first claim filed

shall include proof that the claimant or the claimant's spouse

was at least 65 years of age, or at least 50 years of age in the

case of a widow or widower during the calendar year in which

real property taxes or rent were due and payable.

Section 2907-G. Incorrect claim.

Whenever on audit of a claim the department finds the claim

to have been incorrectly determined, it shall redetermine the

2015/90KMK/HB0504A01564 - 18 -

correct amount of the claim and notify the claimant of the

reason for the redetermination and the amount of the corrected

claim.

Section 2908-G. Funds for payment of claims.

(a) Payment.--Approved claims shall be paid from the State

Lottery Fund established by the act of August 26, 1971 (P.L.351,

No.91), known as the State Lottery Law.

(b) Transfers.--The Secretary of the Budget shall transfer

the following amounts from the Property Tax Relief Fund to the

State Lottery:

(1) Notwithstanding any other provision of law, an

amount equal to $100,000,000 of the total slot machine

license fees paid by successful applicants for a Category 1

slot machine license under 4 Pa.C.S. § 1209 (relating to slot

machine license fee). The transfer under this paragraph shall

occur upon deposit in the Property Tax Relief Fund of moneys

derived from the fee from the fourth successful applicant for

a Category 1 slot machine license.

(2) Notwithstanding any other provision of law, an

amount equal to $100,000,000 of the total slot machine

license fees paid by successful applicants for a Category 2

slot machine license under 4 Pa.C.S. § 1209. The transfer

under this paragraph shall occur upon deposit in the Property

Tax Relief Fund of moneys derived from the fee from the third

successful applicant for a Category 2 slot machine license.

(3) For fiscal years 2007-2008 and 2008-2009, an amount

equal to the sum of approved claims to be paid in each of

those fiscal years under sections 704 of the act of June 27,

2006 (1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer

Relief Act, and 2904-G(a)(2)(ii) of this act, if any.

(4) For fiscal year 2009-2010 and each fiscal year

thereafter, the sum of all of the following, minus the amount

under subsection (c):

(i) The difference between the sum of the amount of

approved claims to be paid in the next fiscal year under

section 2904-G(a)(2)(i) and (3) and the amount of

approved claims paid in fiscal year 2006-2007 under

section 2904-G(a)(1).

(ii) The sum of the amount of approved claims to be

paid in the next fiscal year under section 704 of the

Taxpayer Relief Act and 2904-G(a)(2)(ii) of this act, if

any.

(5) Beginning in fiscal year 2009-2010 and until the

difference between the sum of subparagraphs (i) and (ii) and

$200,000,000 is paid, an amount of not less than $40,000,000

annually or the amount of the difference, whichever is less.

All transfers under this paragraph shall be completed no

later than four years after the transfer required by

paragraph (2).

(i) The difference between the sum of the amount of

approved claims to be paid in fiscal year 2007-2008 under

2015/90KMK/HB0504A01564 - 19 -

section 2904-G(a)(2)(i) and (3) and the amount of

approved claims paid in fiscal year 2006-2007 under

section 2904-G(a)(1).

(ii) The difference between the sum of the amount of

approved claims to be paid in fiscal year 2008-2009 under

section 2904-G(a)(2)(i) and (3) and the amount of

approved claims paid in fiscal year 2006-2007 under

section 2904-G(a)(1).

thereafter, the Secretary of the Budget shall transfer from the

School District Homestead and Farmstead Relief Fund to the State

Lottery an amount sufficient to provide the following:

(i) The additional base amounts in section 2904-G(a)

(2)(i)(B).

(ii) The additional amounts in section 2904-G(a)(3)

(ii).

(iii) The increased supplemental amounts under

section 2904-G(a)(2)(ii) as the result of the additional

base amounts under section 2904-G(a)(2)(i)(B).

(iv) The increased supplemental amounts under

section 704 of the Taxpayer Relief Act as the result of

the additional base amounts under section 2904-G(a)(2)(i)

(B).

Section 2909-G. Claim forms and rules and regulations.

(a) General rule.--Necessary rules and regulations shall be

prescribed by a committee consisting of the Secretary of Aging,

the Secretary of Revenue and the Secretary of Community and

Economic Development. The Secretary of Aging shall serve as the

chairman of the committee. The department shall receive all

applications, determine the eligibility of claimants, hear

appeals, disburse payments and make available suitable forms for

the filing of claims.

(b) Report to General Assembly.--In addition to any rules

and regulations prescribed under subsection (a), the department

shall collect the following information and issue a report

including such information to the chairman and minority chairman

of the Appropriations Committee of the Senate and the chairman

and minority chairman of the Appropriations Committee of the

House of Representatives by September 30, 2006, and September 30

of each year thereafter:

(1) The total number of claims which will be paid in the

fiscal year in which the report is issued with the

information provided by school district, by county and for

each household income level under section 2904-G(a)(2)(i).

(2) The total amount of rebates paid in the fiscal year

in which the report is issued with the information provided

by school district, by county and for each household income

level under section 2904-G(a)(2)(i).

Section 2910-G. Fraudulent claims and conveyances to obtain

benefits.

(a) Civil penalty.--In any case in which a claim is

2015/90KMK/HB0504A01564 - 20 -

excessive and was filed with fraudulent intent, the claim shall

be disallowed in full, and a penalty of 25% of the amount

claimed shall be imposed. The penalty and the amount of the

disallowed claim, if the claim has been paid, shall bear

interest at the rate of 1.5% per month from the date of the

claim until repaid.

(b) Criminal penalty.--The claimant and any person who

assisted in the preparation or filing of a fraudulent claim

commits a misdemeanor of the third degree and, upon conviction

thereof, shall be sentenced to pay a fine not exceeding $1,000

or to imprisonment not exceeding one year, or both.

disallowed if the claimant received title to the homestead

primarily for the purpose of receiving property tax rebate.

Section 2911-G. Petition for redetermination.

(a) Right to file.--A claimant whose claim is either denied,

corrected or otherwise adversely affected by the department may

file with the department a petition for redetermination on forms

supplied by the department within 90 days after the date of

mailing of written notice by the department of such action.

(b) Contents.--The petition shall set forth the grounds upon

which the claimant alleges that such departmental action is

erroneous or unlawful, in whole or part, and shall contain an

affidavit or affirmation that the facts contained in the

petition are true and correct.

(1) An extension of time for filing the petition may be

allowed for cause but may not exceed 120 days.

(2) The department shall hold such hearings as may be

necessary for the purpose of redetermination, and each

claimant who has duly filed such petition for redetermination

shall be notified by the department of the time when and the

place where such hearing in the claimant's case will be held.

(d) Time period for decision.--The department shall, within

six months after receiving a filed petition for redetermination,

dispose of the matters raised by such petition and shall mail

notice of the department's decision to the claimant.

Section 2912-G. Review by Board of Finance and Revenue.

(a) Right to review.--Within 90 days after the date of

official receipt by the claimant of notice mailed by the

department of its decision on a petition for redetermination

filed with it, the claimant who is adversely affected by the

decision may by petition request the board to review such

action.

(b) Effect of no decision from department.--The failure of

the department to officially notify the claimant of a decision

within the six-month period provided for by section 2911-G shall

act as a denial of the petition, and a petition for review may

be filed with the board within 120 days after written notice is

officially received by the claimant that the department has

failed to dispose of the petition within the six-month period.

2015/90KMK/HB0504A01564 - 21 -

for redetermination filed shall state the reasons upon which the

claimant relies or shall incorporate by reference the petition

for redetermination in which such reasons were stated. The

petition shall be supported by affidavit that the facts set

forth therein are correct and true.

(d) Time period for decision.--The board shall act in

disposition of petitions filed with it within six months after

they have been received, and, in the event of failure of the

board to dispose of any petition within six months, the action

taken by the department upon the petition for redetermination

shall be deemed sustained.

(e) Relief authorized by board.--The board may sustain the

action taken by the department on the petition for

redetermination or it may take such other action as it shall

deem necessary and consistent with provisions of this article.

(f) Form of notice.--Notice of the action of the board shall

be given by mail to the department and to the claimant.

Section 2913-G. Appeal.

A claimant aggrieved by a decision of the board may appeal

from the decision of the board in the manner provided by law for

appeals from decisions of the board in tax cases.

Section 4. Any reference in an act or part of an act to the

former Chapter 13 of the act of June 27, 2006 (1st Sp.Sess.

P.L.1873, No.1), known as the Taxpayer Relief Act, shall be

deemed a reference to the addition of Article XXIX-G of the act.

Section 5. Repeals are as follows:

(1) The General Assembly declares that the repeals under

paragraph (2) are necessary to effectuate the addition of

Articles XVI and XXIX-G of the act.

(2) Sections 342 and 343 and Chapter 13 of the act of

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

Taxpayer Relief Act, are repealed.

Amend Bill, page 7, line 10, by striking out "2" and

inserting

Amend Bill, page 7, line 10, by striking out "in 60 days."

and inserting

as follows:

(1) The amendment of section 201(k)(8) and (o)(4)(B) of

the act shall take effect in 60 days.

(2) The remainder of this act shall take effect

immediately.

2015/90KMK/HB0504A01564 - 22 -