Regular Session 2021-2022 House Bill 0835 P.N. 0817

PRINTER'S NO. 817

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

835

Session of

2021

INTRODUCED BY R. BROWN, SNYDER, SCHLEGEL CULVER, HILL-EVANS,

STRUZZI, ZABEL, SAYLOR, T. DAVIS, MALONEY, O'MARA, HENNESSEY,

MENTZER, ZIMMERMAN, PENNYCUICK, MADDEN, WHEELAND AND GILLEN,

MARCH 8, 2021

REFERRED TO COMMITTEE ON FINANCE, MARCH 8, 2021

AN ACT

Amending the act of June 27, 2006 (1st Sp.Sess., P.L.1873,

No.1), entitled "An act providing for taxation by school

districts, for the State funds formula, for tax relief in

first class cities, for school district choice and voter

participation, for other school district options and for a

task force on school cost reduction; making an appropriation;

prohibiting prior authorized taxation; providing for

installment payment of taxes; restricting the power of

certain school districts to levy, assess and collect taxes;

and making related repeals," providing for 100% homestead and

farmstead exclusion and establishing the 100% Homestead and

Farmstead Exclusion Account.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of June 27, 2006 (1st Sp.Sess., P.L.1873,

No.1), known as the Taxpayer Relief Act, is amended by adding a

chapter to read:

CHAPTER 21

100% HOMESTEAD AND FARMSTEAD EXCLUSION

SUBCHAPTER A

GENERAL PROVISIONS

Section 2101. 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:

"Account." The 100% Homestead and Farmstead Exclusion

Account established in section 2132.

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

definitions).

"Board of school directors." The term includes the

following:

(1) A board of school directors of a school district of

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

(2) A city council of a city of the first class.

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

"Earned income." As defined in section 501 of the Local Tax

Enabling Act.

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

"Farmstead property." As defined in 53 Pa.C.S. § 8582.

"Homestead." As defined in 53 Pa.C.S. § 8401 (relating to

definitions).

"Homestead property." As defined in 53 Pa.C.S. § 8401.

"Index." The term as defined in section 302.

"Local Tax Enabling Act." The act of December 31, 1965

(P.L.1257, No.511), known as The Local Tax Enabling Act.

"Personal income." Income enumerated in section 303 of the

Tax Reform Code, as determined by the department, subject to any

correction for fraud, evasion or error as finally determined by

the Commonwealth.

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

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

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

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"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),

known as the Tax Reform Code of 1971.

SUBCHAPTER B

PUBLIC EDUCATION TAX

Section 2111. Scope of subchapter.

This subchapter imposes an additional tax on personal income

for the purpose of funding 100% homestead and farmstead

exclusions to provide property tax relief.

Section 2112. Additional tax imposed.

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

December 31, 2021, an additional tax upon personal income shall

be imposed. The tax shall be calculated, collected and paid to

the Commonwealth in the same manner as provided under Article

III of the Tax Reform Code.

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

the rate of 1.9%.

taxes collected under this section into the account.

(d) Combination of tax forms.--The department shall

incorporate the taxpayer reporting requirement for the

implementation of this section into the forms utilized by the

department under Article III of the Tax Reform Code.

(e) Definitions.--The words and phrases used in this section

shall have the same meanings given to them in Article III of the

Tax Reform Code.

SUBCHAPTER C

ESTABLISHMENT AND PROCEDURE

Section 2121. Implementation.

A school district that chooses to provide a 100% homestead

and farmstead exclusion shall adopt a resolution implementing a

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100% homestead and farmstead exclusion program no later than the

last day of the fiscal year immediately preceding the fiscal

year in which the 100% homestead and farmstead exclusion shall

take effect.

Section 2122. Application and procedure.

The 100% homestead and farmstead exclusion shall be

incorporated into the homestead and farmstead exclusion

application provided for under Chapter 3 and follow the same

procedure and approval requirements provided for under Chapter

Section 2123. School district certification.

No later than July 20, 2022, and each July 20 thereafter, a

school district shall certify to the Department of Education the

dollar value of the real property taxes levied on homesteads and

farmsteads within the school district for the school year in

which the certification falls, which shall be calculated by

multiplying the sum of the assessed value of homesteads and

farmsteads in the school district by the millage rate for the

school year. The certification shall include the number of

approved homesteads and farmsteads, the assessed value of the

approved homesteads and farmsteads and the school district

millage rate.

Section 2124. Notification.

Following adoption of a 100% homestead and farmstead

exclusion, and no later than 60 days prior to the application

deadline provided for under Chapter 3, a board of school

directors shall notify by first class mail the owner of each

parcel of residential property within the district of the

existence of the school district's homestead and farmstead

exclusion program, the need to file an application to qualify

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for the 100% homestead and farmstead exclusion and the

application deadline.

SUBCHAPTER D

100% HOMESTEAD AND FARMSTEAD EXCLUSION ACCOUNT

Section 2131. Definitions.

The following words and phrases when used in this subchapter

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

context clearly indicates otherwise:

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

taxes owed by homestead and farmstead properties in a school

district determined prior to the addition of any discount or

penalty.

Section 2132. 100% Homestead and Farmstead Exclusion Account.

(a) Establishment.--The 100% Homestead and Farmstead

Exclusion Account is established as a restricted account within

the General Fund.

(b) Use.--The Department of Education shall use the account

to make disbursements under section 2134.

continuously appropriated to the Department of Education as

provided for under this chapter and shall not lapse.

Section 2133. Sources and transfers.

(a) Deposit.--The following shall be deposited into the

account:

(1) Money collected by the department under section

2112.

(2) Appropriations.

(3) Accrued interest in the account.

(b) Transfer.--The Secretary of the Budget, in consultation

with the secretary, shall compute the amount of tax refund

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payments that result from the imposition of the tax under

section 2112 and that are payable from the General Fund. The

Secretary of the Budget shall transfer that amount of funding

from the account to the General Fund no later than June 5 of

each year. The Secretary of the Budget shall provide 10 days'

prior notification of the amount to be transferred to the

chairperson and minority chairperson of the Appropriations

Committee of the Senate and the chairperson and minority

chairperson of the Appropriations Committee of the House of

Representatives.

Section 2134. Standard disbursements to school districts.

(a) General rule.--In fiscal year 2022-2023 and each fiscal

year thereafter, the Department of Education shall disburse to

each school district that implements a 100% homestead and

farmstead exclusion an amount equal to the amount of real

property taxes owed to the school district from homestead

properties less any amount disbursed to the school district

under section 503(e).

(b) Distributions.--Distributions under subsection (a) shall

be made during each school year as follows:

(1) Twenty-five percent of the amount to be distributed

shall be paid on the fourth Thursday in July.

(2) The balance of the amount to be distributed shall be

paid in nine equal installments on the fourth Thursday of

August, September, October, November, December, January,

February, March and April.

SUBCHAPTER E

MISCELLANEOUS PROVISIONS

Section 2141. Regulations.

(a) Department of Education.--Except as provided under

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subsection (b), the Department of Education shall have

jurisdiction over and shall promulgate regulations necessary for

the proper administration of this chapter.

(b) Department of Revenue.--The department shall have

jurisdiction over and shall promulgate regulations as necessary

for the proper administration of Subchapter B.

Section 2. This act shall take effect immediately.

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