Regular Session 2015-2016 Senate Bill 1010 P.N. 1270

PRINTER'S NO. 1270

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1010

Session of

2015

INTRODUCED BY TEPLITZ, SCHWANK, BOSCOLA, TARTAGLIONE, BREWSTER,

RAFFERTY, YUDICHAK AND BROWNE, SEPTEMBER 25, 2015

REFERRED TO FINANCE, SEPTEMBER 25, 2015

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," in taxation by school districts,

further providing for reimbursement, for homestead and

farmstead applications and for school district tax notices,

and providing for duties of the Department of Revenue; in

State funds formula, further providing for definitions and

for State property tax reduction allocation; in school

district choice and voter participation, further providing

for definitions and for school district choice; and, in

miscellaneous provisions, further providing for regulations.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 324(3) of the act of June 27, 2006 (1st

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

amended to read:

Section 324. Reimbursement.

Notwithstanding any other provisions of law to the contrary,

the following apply:

* * *

(3) Except as set forth in paragraph (4), an amount

equal to the aggregate amount of the tax credited under

paragraph (2) shall be paid from the fund to the school

district of residence of each taxpayer under paragraph (1)

for the purpose of funding homestead and farmstead exclusions

in accordance with this chapter. The Department of Revenue,

in consultation with the department, shall prescribe

procedures to calculate the amount due to each school

district qualifying under this paragraph and shall publish

the procedures in the Pennsylvania Bulletin.

* * *

Section 2. Section 341 of the act is amended to read:

Section 341. Homestead and farmstead applications.

(a) [(Reserved).] Notification by Department of Revenue.--No

later than 90 days prior to the application deadline in

subsection (c), the Department of Revenue shall notify by first

class mail the owner of each parcel of residential property

within each school district of the existence of the school

district's homestead and farmstead exclusion program, the need

to file an application in accordance with 53 Pa.C.S. § 8584(a)

(relating to administration and procedure) in order to qualify

for the program and the application deadline. The Department of

Revenue may limit the annual notification to owners of

residential property:

(1) who are not currently approved; or

(2) whose approval is due to expire.

[(b) Annual notification.--No later than 60 days prior to

the application deadline in subsection (c), a board of school

directors shall notify by first class mail the owner of each

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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 in accordance

with 53 Pa.C.S. § 8584(a) (relating to administration and

procedure) in order to qualify for the program and the

application deadline. A school district may limit the annual

notification to owners of residential property:

(1) who are not currently approved; or

(2) whose approval is due to expire.]

8584(b), the deadline for filing an application with the

assessor shall be March 1.

(d) Action on application.--Real property for which an

application has been filed by the application deadline shall be

deemed to be a homestead or farmstead property which is eligible

for a homestead or farmstead exclusion unless the assessor

denies the application. Denials of application by the assessor

and the right to appeal that decision shall be in accordance

with 53 Pa.C.S. § 8584(d) and (e).

(e) Application review and submission.--Except as set forth

in 53 Pa.C.S. § 8584(j), an assessor shall not require the owner

of a previously approved property to resubmit an application

more than one time every [three] 10 years.

(f) Applicability.--The provisions of 53 Pa.C.S. § 8584(f),

(g)[,] and (h) [and (j)] shall apply to any application filed

under this section.

(f.1) Notification on change of use.--

(1) In addition to any notification required under 53

Pa.C.S. § 8584(j), an owner whose property is approved as

homestead or farmstead property and which property no longer

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qualifies as homestead or farmstead property shall notify the

Department of Revenue within 45 days of the date the property

no longer qualifies as homestead or farmstead property.

Failure to notify the Department of Revenue as required by

this subsection shall be treated in the same manner as a

false application under 53 Pa.C.S. § 8584(g).

(2) The recorder of deeds shall periodically provide to

the Department of Revenue a list of real property conveyance

documents which have been presented for recording. The list

shall include the name of the grantor and the address of the

property. For the purposes of this paragraph, the word

"document" shall have the meaning ascribed to it in section

1101-C of the Tax Reform Code.

(g) Duties of assessors.--

(1) The assessor shall mail to the owner of property for

which an application has been submitted and approved or

denied under this section notice of such fact no later than

30 days after receipt of the application.

(2) (i) The assessor shall notify the owner of any

homestead or farmstead property designated as such under

any other statute of the need, if any, to resubmit an

application to maintain the property's eligibility as a

homestead or farmstead property.

(ii) Nothing in this paragraph shall be construed to

prohibit a county assessor from designating property

previously determined to be homestead property under any

other statute as homestead or farmstead property for

purposes of this section.

(3) The assessor shall provide the Department of Revenue

and each school district with a certified report, as provided

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in 53 Pa.C.S. § 8584(i), no later than May 1. The Department

of Revenue may assess a civil penalty of up to $1,000 per

week upon a county for failure of the assessor of the county

to file the certified report.

(h) Uniform application and instructions.--The application

to designate property as homestead or farmstead property shall

be uniform and shall include instructions for completing the

application. The Department of [Community and Economic

Development] Revenue shall develop a uniform application and

instructions to be used by county assessors and shall publish

the uniform application and instructions [no later than 15 days

after the effective date of this section. Nothing in this

subsection shall be construed to require the department to

develop and publish the uniform allocation and instructions if

the department did so during calendar year 2004.]. The

Department of Revenue shall:

(1) Clearly state on the application the source of the

property tax relief for which an owner may be eligible,

including moneys from casino revenues.

(2) Post the application and instructions on its

publicly accessible Internet website such that an owner may

complete and submit the application online to the appropriate

assessor's office.

(3) Post county-specific information for owners on its

Internet website.

(4) Establish a toll-free number for owners to obtain

information relating to property tax relief through school

districts' homestead and farmstead exclusion programs.

(i) Prohibitions.--[A] Neither the Department of Revenue nor

a county shall [not] require an application fee for the filing

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or review of an application submitted under this section or

under 53 Pa.C.S. § 8584(a).

(j) Applications previously filed.--An application filed

between September 3, 2004, and the effective date of this

section shall be used to qualify an applicant for the program.

Section 3. Section 343 of the act is amended to read:

Section 343. [School district tax notices] Notice of property

tax relief.

(a) [Tax notice] School district itemization of property tax

relief.--A school district that implements homestead and

farmstead exclusions shall itemize the homestead and farmstead

exclusion on tax bills sent to homestead and farmstead owners,

indicating the original amount of tax liability, the amount of

the exclusion and the net amount of tax due after the exclusion

is applied. The tax bill shall be easily understandable and

include a notice pursuant to subsection (b).

(b) [Notice of property tax relief.--A school district that

implements homestead and farmstead exclusions shall include with

the homestead or farmstead owner's tax bill a notice that the

tax bill includes a homestead or farmstead exclusion. The notice

shall at a minimum take the following form:] Department of

Revenue notice of property tax relief.--No later than July 15 of

each year, the Department of Revenue shall notify by mail, in an

envelope the front of which prominently communicates the subject

of the letter as property tax relief, all homestead and

farmstead owners of the property tax relief they are to receive

for the current fiscal year. At a minimum, the notice shall

include the following:

(1) The amount of property tax relief due to the

property owner.

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(2) The property for which the property relief is to be

applied and the owner or owners of the property.

(3) The year for which the property relief is to be

applied.

(4) That a property owner whose property is approved as

homestead property or farmstead property and which property

no longer qualifies as homestead property or farmstead

property must notify the Department of Revenue within 45 days

of the date the property no longer qualifies as homestead

property or farmstead property and the penalties associated

with failure of the owner to provide notice as required.

(5) The following statement:

NOTICE OF PROPERTY TAX RELIEF

Your [enclosed] tax bill this year 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 Pennsylvania Taxpayer

Relief Act, a law passed by the Pennsylvania General Assembly

designed to reduce your property taxes.

Section 4. The act is amended by adding a section to read:

Section 344. Duties of Department of Revenue.

(a) Oversight.--The Department of Revenue shall oversee the

administration of homestead and farmstead exclusions under this

act. The Department of Revenue shall coordinate the homestead

and farmstead exclusion process among Commonwealth agencies,

assessors and school districts as necessary to achieve maximum

efficiency and homestead and farmstead owner participation.

(b) Clearinghouse.--The Department of Revenue shall serve as

a clearinghouse for information about the homestead and

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farmstead exclusion process.

periodically review the administration of homestead and

farmstead exclusions by assessors, tax collectors and school

districts to ensure compliance with this act. Upon

recommendation by the department, an assessor, tax collector or

school district shall modify its administration of homestead and

farmstead exclusions.

(d) State tax return.--

(1) The Department of Revenue shall provide information

concerning homestead and farmstead property tax exclusion

eligibility in its instructions which accompany State

individual income tax return forms, including the following:

(i) Potential benefits to Pennsylvania taxpayers.

(ii) An explanation of the process for obtaining an

exclusion.

(iii) An explanation of how the exclusion is applied

to reduce property tax.

(iv) Notification that a property owner whose

property is approved as homestead property or farmstead

property and which property no longer qualifies as

homestead property or farmstead property must notify the

Department of Revenue within 45 days of the date the

property no longer qualifies as homestead property or

farmstead property and the penalties associated with

failure of the owner to provide notice as required.

(2) The Department of Revenue shall provide a

questionnaire as part of the State individual income tax

return form on which a taxpayer shall indicate the following:

(i) Whether the taxpayer is an owner of homestead or

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farmstead property.

(ii) Whether the taxpayer applied for and was

granted a homestead or farmstead exclusion.

(iii) Whether the status of the taxpayer's property

under subparagraph (ii) changed during the preceding tax

year and, if so, the address of the property and the

nature of the change.

(3) The Department of Revenue shall analyze the

information from the questionnaires and use its analysis to

further the efficient administration of this act. The

Department of Revenue shall:

(i) Notify, in accordance with section 341(a), a

taxpayer who indicates that the taxpayer owns homestead

or farmstead property and has not received a homestead or

farmstead exclusion.

(ii) For a taxpayer who indicates that the status of

the taxpayer's property has changed such that it no

longer qualifies for a homestead or farmstead exclusion,

confirm the change in status with the assessor and the

recorder of deeds and update its list of homestead or

farmstead exclusion properties accordingly.

(e) Report.--The Department of Revenue shall prepare and

submit a report to the General Assembly on the department's

duties relating to the administration of homestead and farmstead

exclusions. The report shall be submitted by November 1, 2020,

and shall contain the following information:

(1) Summary data by county and school district, which

includes, but is not limited to, information provided by

assessors to the department under section 341(g)(3).

(2) The percentage of homesteads and farmsteads by

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county and school district that are eligible for and

receiving property tax relief under this act.

(3) The percentage of homesteads and farmsteads by

county and school district that are eligible for, but are not

receiving, property tax relief under this act.

(4) A description of outreach efforts to inform owners

about the homestead and farmstead exclusion process and

increase participation.

(5) Any recommendation for legislation to improve

effectiveness in the administration of homestead and

farmstead exclusions.

(f) Report update.--The Department of Revenue shall review

and update the report under subsection (e) at five-year

intervals.

(g) Cooperation.--Assessors, tax collectors and school

districts shall cooperate in providing the necessary information

as requested by the Department of Revenue in connection with the

department's duties under this section.

Section 5. The definition of "department" in section 502 of

the act is amended to read:

Section 502. Definitions.

The following words and phrases when used in this chapter

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

context clearly indicates otherwise:

* * *

"Department." The Department of [Education] Revenue of the

Commonwealth.

* * *

Section 6. Sections 505, 902, 903(a) and 5004.1 of the act

are amended to read:

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Section 505. State property tax reduction allocation.

(a) [Administration.--The department] Duties of Department

of Education.--The Department of Education shall do all of the

following:

(1) Array the 2002 personal income valuation divided by

the 2003-2004 average daily membership, the 2004-2005 market

value/income aid ratio, the 2002-2003 equalized millage and

the 2002-2003 school tax ratio of each school district in

rank order and assign each school district a discreet

numerical rank for its personal income valuation per average

daily membership, its market value/income aid ratio, its

equalized millage and its school tax ratio. For the numerical

rank of a school district's personal income valuation per

average daily membership, the school district with the lowest

personal income valuation per average daily membership shall

have the highest numerical rank. For the numerical rank of a

school district's market value/income aid ratio, the school

district with the highest market value/income aid ratio shall

have the highest numerical rank, provided that all school

districts with a market value/income aid ratio equal to 0.15

shall receive a ranking of 1. For the numerical rank of a

school district's equalized millage, the school district with

the highest equalized millage shall have the highest

numerical rank. For the numerical rank of a school district's

school tax ratio, the school district with the highest school

tax ratio shall have the highest numerical rank.

(2) Assign each school district a property tax reduction

index.

(3) Provide a report to the department detailing its

calculations under this subsection.

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(a.1) Calculation of allocation.--If the department receives

authorization under section 503(d), the department shall

allocate the property tax reduction for each school district as

follows:

[(i)] (1) Calculate the property tax reduction

allocation as follows:

[(A)] (i) Multiply the school district's 2003-2004

average daily membership by the school district's

property tax reduction index.

[(B)] (ii) Multiply the product under [clause (A)]

subparagraph (i) by the dollar amount necessary to

allocate all of the money available for distribution

under section 503(e). If the amount for distribution

under section 503(e) is less than $750,000,000, the

dollar amount shall be the dollar amount necessary to

allocate $750,000,000.

[(C)] (iii) If applicable, provide for the allocation

minimum or allocation maximum under [subparagraph (ii) or

(iii)] paragraph (2) or (3).

[(ii)] (2) If the sum of the allocation under this

[paragraph] subsection and the estimated local revenue

calculation certified under section 503(b) is less than the

product of the residential property taxes collected during

the 2001-2002 fiscal year and the allocation minimum for a

school district, the school district shall receive an

additional amount so that the sum of the total allocation

under this [paragraph] subsection and the estimated local

revenue calculation certified under section 503(b) is equal

to the product of the residential property taxes collected

during the 2001-2002 fiscal year and the allocation minimum.

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[(iii)] (3) Except as set forth in subsection (c), if

the sum of the total allocation under this [paragraph]

subsection and the estimated local revenue calculation

certified under section 503(b) is greater than the product of

the residential property taxes collected during the 2001-2002

fiscal year and the allocation maximum for a school district,

the school district shall receive a total allocation such

that the sum of the total allocation and the estimated local

revenue calculation certified under section 503(b) is equal

to the product of the residential property taxes collected

during the 2001-2002 fiscal year and the allocation maximum.

[(iv)] (4) If the amount for distribution under section

503(e) is less than $750,000,000, each school district shall

receive a pro rata share of the property tax reduction

allocation calculated under this [paragraph] subsection at

$750,000,000.

[(4) Notify] (a.2) Verification and notification.--The

department shall:

(1) Verify the calculations made by the Department of

Education under this section.

(2) Make any necessary adjustments to the calculations

in consultation with the Department of Education.

(3) Notify each school district of the amount of its

property tax reduction allocation no later than May 1 of each

year.

(b) Payment.--For the fiscal year commencing July 1, 2006,

and July 1 of each fiscal year thereafter, except as set forth

in subsection (c), the department shall pay to each eligible

school district a property tax reduction allocation equal to the

amount calculated under subsection [(a)(3)] (a.1). The property

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tax reduction allocation shall be divided into two equal

payments, which shall be made on the fourth Thursday of August

and the fourth Thursday of October. Each school district shall

be eligible to receive a property tax reduction allocation under

this section unless its board of school directors takes action

under section 903.

reduction allocation for a school district of the first class

shall be paid by the department to a city of the first class.

The limitations set forth in subsection [(a)(3)(iii)] (a.1)(3)

shall not apply to the calculation of the property tax reduction

allocation for a school district of the first class.

(d) Reduction of wage taxes in a city of the first class.--A

city council of a city of the first class shall reduce any tax

imposed on the wages of residents and nonresidents under the

authority of the act of August 5, 1932 (Sp.Sess., P.L.45,

No.45), referred to as the Sterling Act, in a manner consistent

with Chapter 7 and in accordance with the following:

(1) For residents, by an amount equal to the amount of

the property tax reduction allocation received from the

Commonwealth pursuant to subsection (b) in an amount not to

exceed the limitations set forth in subsection [(a)(3)(iii)]

(a.1)(3) had such limitations applied.

(2) For nonresidents, by any amount equal to the amount

of the property tax reduction allocation received from the

Commonwealth pursuant to subsection (b) in excess of the

limitations set forth in subsection [(a)(3)(iii)] (a.1)(3)

had such limitations applied.

(3) If the amount for distribution under section 503(e)

is less than $750,000,000, the tax reductions under

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paragraphs (1) and (2) shall be a pro rata share of the

property tax reduction allocation to a school district of the

first class calculated under [subsection (a)] subsections (a)

and (a.1) at $750,000,000.

Section 902. [(Reserved).] Definitions.

The following words and phrases when used in this chapter

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

context clearly indicates otherwise:

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

Section 903. School district choice.

(a) General rule.--Within 30 days of receipt of the notice

required under section [505(a)(4)] 505(a.2), a board of school

directors of a school district, except a school district of the

first class, may by resolution reject the property tax reduction

allocation provided to the school district pursuant to Chapter

* * *

Section 5004.1. Regulations.

(a) General rule.--The Department of Revenue may promulgate

regulations to implement and enforce the requirements of this

act.

(b) Required regulations.--The Department of Revenue shall

promulgate regulations which are necessary for implementation of

a local personal income tax. Proposed rulemaking shall be

omitted under section 204 of the act of July 31, 1968 (P.L.769,

No.240), referred to as the Commonwealth Documents Law. The

regulations shall be consistent with the act of March 4, 1971

(P.L.6, No.2), known as the Tax Reform Code of 1971, and shall

be submitted as final-omit regulations under section 5(a) of the

act of June 25, 1982 (P.L.633, No.181), known as the Regulatory

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Review Act.

Section 7. This act shall take effect in 60 days.

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