PRINTER'S NO. 1022
No. 841 Session of 2003
INTRODUCED BY BOSCOLA, JUNE 24, 2003
REFERRED TO FINANCE, JUNE 24, 2003
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," providing for property tax relief credits.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
14 the Tax Reform Code of 1971, is amended by adding an article to
15 read:
16 ARTICLE XXIX-C
17 PROPERTY TAX RELIEF ACT
18 Section 2901-C. Short title.
19 This article shall be known and may be cited as the Property
20 Tax Relief Act.
21 Section 2902-C. Definitions.
1 The following words, terms and phrases, when used in this
2 article, shall have the meanings ascribed to them in this
3 section, except where the context clearly indicates a different
4 meaning:
5 "Assessor." The chief assessor of a county, the equivalent
6 position in a home rule county or the equivalent position in a
7 city of the third class that performs its own assessments of
8 real property.
9 "Credit." For each school district, the maximum amount of
10 the credit shall be the amount available to the school district
11 pursuant to section 2502.41 of the act of March 10, 1949
12 (P.L.30, No.14), known as the Public School Code of 1949, less
13 the amount paid to the school district by the Commonwealth
14 pursuant to section 2502.40 of the Public School Code of 1949,
15 divided by the number of homesteads and farmsteads in the school
16 district. The amount credited to an owner shall not exceed the
17 real property tax paid on the assessed value of the homestead or
18 farmstead to the school district for the tax year.
19 "Department." The Department of Revenue of the Commonwealth
20 or its designee.
21 "Farmstead." All buildings and structures on a farm not less
22 than ten contiguous acres in area located in this Commonwealth
23 that are used primarily to produce or store any farm product
24 produced on the farm for purposes of commercial agricultural
25 production, to house or confine any animal raised or maintained
26 on the farm for the purpose of commercial agricultural
27 production, to store any agricultural supply to be used on the
28 farm in commercial agricultural production or to store any
29 machinery or equipment used on the farm in commercial
30 agricultural production. This term shall only apply to farms
20030S0841B1022 - 2 -
1 used as the principal residence and domicile of an owner.
2 "Homestead." A dwelling located in this Commonwealth, the
3 parcel of land on which the dwelling is located and the other
4 improvements located on the parcel, other than any improvements
5 included in a farmstead, for which any of the following apply:
6 (1) The dwelling is primarily used as the principal
7 residence and domicile of an owner who is a natural person.
8 The homestead for real property qualifying under this
9 paragraph shall not include the land on which the dwelling is
10 located if the land is not owned by a person who owns the
11 dwelling.
12 (2) The dwelling is a unit in a condominium as the term
13 is defined in 68 Pa.C.S. § 3103 (relating to definitions) and
14 the unit is primarily used as the principal residence and
15 domicile of a natural person who is an owner of the unit or
16 the dwelling is a unit in a cooperative as the term is
17 defined in 68 Pa.C.S. § 4103 (relating to definitions) and
18 the unit is primarily used as the principal residence and
19 domicile of a natural person who is an owner of the unit. The
20 homestead for a unit in a condominium or a cooperative shall
21 be limited to the assessed value of the unit, which shall be
22 determined in a manner consistent with the assessment of real
23 property taxes on those units under 68 Pa.C.S. (relating to
24 real and personal property) or as otherwise provided by law.
25 If the unit is not separately assessed for real property
26 taxes, the homestead shall be a pro rata share of the real
27 property.
28 (3) The dwelling does not qualify under paragraphs (1)
29 or (2) and a portion of the dwelling is used as the principal
30 residence and domicile of an owner who is a natural person.
20030S0841B1022 - 3 -
1 The homestead for real property qualifying under this
2 paragraph shall be the portion of the real property that is
3 equal to the portion of the dwelling that is used as the
4 principal residence and domicile of an owner.
5 "Owner." Any owner of a homestead or farmstead who is:
6 (1) a natural person domiciled in this Commonwealth;
7 (2) a grantor who has placed the homestead or farmstead
8 in a revocable trust, provided that the grantor is a natural
9 person domiciled in this Commonwealth; or
10 (3) a partner of a family farm partnership or a
11 shareholder of a family farm corporation as the terms are
12 defined in section 1101-C, provided that the partner or
13 shareholder is a natural person domiciled in this
14 Commonwealth.
15 "Real property tax." The total real property tax imposed by
16 a school district on a homestead or farmstead for the tax year.
17 The term does not include payments made in lieu of taxes or any
18 penalties or interest paid in connection with the tax.
19 "School district." A school district of the first class A,
20 second class, third class or fourth class, including any
21 independent school district.
22 "Tax year." The school district's fiscal year 2003-2004 or
23 calendar year 2003 during which real property tax is due and
24 payable.
25 Section 2903-C. Credit qualifications.
26 Subject to section 2904-C, a credit shall be provided on
27 account of school real property taxes for a homestead or
28 farmstead if all of the following apply:
29 (1) The owner occupied the homestead during the tax year
30 or owned the farmstead, if applicable, during the tax year.
20030S0841B1022 - 4 -
1 (2) The owner has paid school district taxes on real
2 property owed on the homestead or farmstead for the tax year.
3 (3) The owner is the owner of record as of July 1, 2003.
4 (4) The owner applies for a rebate in the manner
5 prescribed by the department.
6 (5) The owner has paid by December 31, 2003, the school
7 district taxes for the tax year associated with the 2003-2004
8 school year and any overdue real estate taxes in full.
9 Section 2904-C. Eligibility of homestead property owners.
10 (a) Applications; determinations.--Any owner or owners of
11 real property not delinquent in payment of any local property
12 taxes seeking to have property approved as homestead property
13 shall file an application with the assessor. Determinations with
14 respect to the qualification of all or part of a parcel of real
15 property as homestead property shall be made by the assessor.
16 The assessor may use the application form developed by the
17 Department of Community and Economic Development under 53
18 Pa.C.S. § 8587 (relating to uniform application) in
19 administering this act.
20 (b) Filing deadlines; renewal of application.--Applications
21 shall be filed with the assessor not later than October 31,
22 2003. The governing body of a county may adopt a schedule for
23 review or reapplication for real property previously approved as
24 homestead property pursuant to any other act.
25 (c) Notice of applications and deadlines.--Within ten days
26 of the effective date of this section, the assessor shall
27 provide sufficient notice to the public regarding the
28 availability of applications to designate real property as
29 homestead property and all filing deadlines. The assessor shall
30 make applications available at least 60 days before the filing
20030S0841B1022 - 5 -
1 deadline.
2 (d) Denial of application.--The assessor shall provide to
3 each property owner whose application for approval as homestead
4 property is being denied, in whole or in part, a written notice
5 of the denial by first class mail not later than 30 days after
6 the filing deadline. The notice shall include all reasons for
7 denial. Failure by the assessor to provide notice under this
8 subsection shall be deemed to be approval of the application.
9 (e) Appeals of assessor's decision.--Within ten days after
10 receiving a written notice of denial under subsection (d), an
11 owner aggrieved by the decision of the assessor may appeal to
12 the board for a review of the decision in a manner consistent
13 with the provisions for appeal of assessments under the
14 applicable assessment law. Appeals under this subsection shall
15 be limited to whether any of the following apply:
16 (1) The application meets the requirements of
17 subsections (a) and (b).
18 (2) The parcel for which the appeal is made meets the
19 definition of homestead property.
20 (3) The owner or owners of the homestead property are
21 delinquent in the payment of property taxes.
22 Section 2905-C. Duties of assessors.
23 (a) Report to Department of Revenue.--No later than January
24 15, 2004, each county assessor shall provide to the department a
25 report:
26 (1) Certifying the number of eligible homesteads within
27 each school district, listing the parcel number of each
28 parcel within that school district which was approved, in
29 whole or in part, as homestead property.
30 (2) Identifying all owners of homestead property who
20030S0841B1022 - 6 -
1 have not paid their school district property taxes associated
2 with the 2003-2004 school year or have other outstanding real
3 property taxes as of December 31, 2003.
4 Section 2906-C. Duties of Department of Education.
5 By September 30, 2003, the Department of Education shall
6 certify to the department the amount of revenue the department
7 may allocate in each school district to provide property tax
8 credits to eligible homeowners within that district.
9 Section 2907-C. Duties of State Treasurer and school districts.
10 (a) Calculation.--After receiving the reports from the
11 Department of Education pursuant to section 2906-C, the State
12 Treasurer shall calculate the amount of the property tax credit
13 that each homestead within the school district is entitled to
14 receive by dividing the amount of money available to the school
15 district by the number of eligible homesteads within the
16 district.
17 (b) Notification to school districts.--Upon calculating the
18 amount that each homestead owner is entitled to receive under
19 subsection (a), the State Treasurer shall, not later than March
20 31, 2003, notify each school district of the total revenue to be
21 credited to eligible homestead owners within that district and
22 the amount of the property tax credit that each eligible
23 homeowner will receive.
24 (c) Duties of school districts.--Upon receiving notification
25 under subsection (b), each school district shall adopt a
26 homestead exclusion for the 2003-2004 tax year, which shall be
27 retroactive to the first day of the tax year. The homestead
28 exclusion shall be funded as prescribed in section 2908-C(b).
29 Section 2908-C. Disbursements to school districts.
30 (a) Payment.--The State Treasurer shall, not later than July
20030S0841B1022 - 7 -
1 1, 2004, mail a check to each school district in the amount that
2 the school district is entitled to receive for purposes of
3 providing property tax credits.
4 (b) Use of revenue.--Each school district shall use the
5 funds received under subsection (a) to provide tax credits to
6 eligible homestead owners on 2004-2005 property tax bills. The
7 credit shall be considered reimbursement for overpayment of
8 2003-2004 property taxes due to the adoption of the 2003-2004
9 homestead exclusion by the school district pursuant to section
10 2907-C(c).
11 (c) Homestead exclusion preserved.--The offering of a tax
12 credit on 2004-2005 property tax bills for purposes of funding
13 the 2003-2004 homestead exclusion adopted under section 2907-
14 C(c) shall in no way be construed to prohibit a school district
15 from implementing a homestead exclusion for the 2004-2005 tax
16 year and thereafter.
17 Section 2909-C. Petitions for review.
18 An owner whose credit is denied, corrected or otherwise
19 adversely affected by either the school district or the assessor
20 may petition for administrative review in the manner prescribed
21 by the school district.
22 Section 2910-C. Penalties.
23 Any owner who receives a credit through false or misleading
24 information or who otherwise improperly receives a credit may be
25 required to do the following:
26 (1) refund to the school district the amount of credit
27 received;
28 (2) pay a civil penalty of $100 to the school district;
29 or
30 (3) both paragraphs (1) and (2).
20030S0841B1022 - 8 -
1 Section 2911-C. Erroneous credits.
2 (a) Redetermination of credits.--If the school district
3 determines or finds a credit to have been incorrectly or
4 erroneously paid, it shall redetermine the correct amount of the
5 credit, if any, and notify the homeowner of the reason for the
6 correction and the amount of the credit.
7 (b) Recovery of credit.--If a credit has been issued in
8 error, the owner shall repay the amount of the credit upon the
9 school district's request.
10 Section 2912-C. Expiration.
11 This article shall expire June 30, 2006.
12 Section 2. The addition of Article XXIX-C of the act shall
13 apply to taxable years beginning on or after December 31, 2002.
14 Section 3. This act shall take effect July 1, 2003, or
15 immediately, whichever is later.
E13L72MSP/20030S0841B1022 - 9 -