act-1998-0-50•Pennsylvania Act 1998-50 — GENERAL LOCAL GOVERNMENT CODE (53 PA.C.S.) - OMNIBUS AMENDMENTS
Pennsylvania Act 1998-50 — GENERAL LOCAL GOVERNMENT CODE (53 PA.C.S.) - OMNIBUS AMENDMENTS
act-1998-0-501998 Pa. Act 50Law
Act text part 1
GENERAL LOCAL GOVERNMENT CODE (53 PA.C.S.) - OMNIBUS AMENDMENT
Act of May 5, 1998, P.L. 301, No. 50 Cl. 53
Session of 1998
No. 1998-50
SB 669
AN ACT
Amending Title 53 (Municipalities Generally) of the Pennsylvania
Consolidated Statutes, further providing for automatic
certification, for definitions, for applicability, for
ordinances on lease rental debt, for small borrowing for
capital purposes and for management of funds; authorizing
school districts to impose an earned income and net profits
tax; providing for the levying, assessment and collection of
an amusement or admissions tax, a sign tax, a motor vehicle
transfer tax and a mercantile tax; providing for the
utilization of earned income and net profits tax revenues;
authorizing political subdivisions to exclude from taxation a
portion of the assessed value of homestead property and
farmstead property; providing limitations on exclusions for
homestead and farmstead property; establishing a process for
administering exclusions for homestead and farmstead
property; providing for the rights and privileges of
taxpayers with respect to certain taxes levied by political
subdivisions; making an appropriation; making repeals; and
making editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 1385(a), 2163(a)(1)(ii), 2168(b) and
(c), 2328, 2329, 2515, 2522(b), 2536, 2543, 2921(c), 2943(b),
2951, 2965, 2972 and 2984(b) of Title 53 of the Pennsylvania
Consolidated Statutes are amended to read:
§ 1385. Local Government Records Committee.
(a) Establishment.--There shall be established under the
commission the Local Government Records Committee which shall
consist of the Auditor General, the State Treasurer, the General
Counsel, the Executive Director of the Historical and Museum
Commission, the Secretary of Community [Affairs] and Economic
Development and five other members to be appointed by the
Governor to represent each of the following municipal
associations: the League of Cities, the State Association of
Boroughs, the State Association of Township Commissioners, the
State Association of Township Supervisors and the Municipal
Authorities' Association. Each ex officio member of the
committee may designate in writing a representative to act in
place of the member. The Secretary of Community [Affairs] and
Economic Development shall serve as chairman and the executive
director of the commission shall serve as secretary. Meetings of
the committee shall be at the call of the chairman.
* * *
§ 2163. Commission members.
(a) Selection.--The commission shall be composed of 20
members as follows:
(1) The following members shall serve by virtue of their
office:
* * *
(ii) The Secretary of Community [Affairs] and
Economic Development.
* * *
§ 2168. Automatic certification.
* * *
(b) Campus or university police.--Any campus or university
police officer who, as of [the effective date of this
subsection] August 27, 1993, has successfully completed a basic
training course similar to that required under this subchapter
shall, after review by the commission, be certified as having
met the basic training requirements of this subchapter. Any
campus or university police officer who, as of [the effective
date of this subsection] August 27, 1993, has not successfully
completed a basic training course similar to that required under
this subchapter which qualifies the police officer for
certification under this subsection shall be able to perform the
duties of a campus or university police officer until certified
by the commission, but no [longer] later than [one year from the
effective date of this subsection] August 29, 1994.
(c) Deputy sheriffs in counties of the second class.--Deputy
sheriffs in counties of the second class who have successfully
completed the basic training course under this subchapter prior
to [the effective date of this subsection] February 6, 1995,
shall be assigned a certification number under this subchapter.
§ 2328. Assistance from [Department of Environmental
Resources] State Conservation Commission.
The State Conservation Commission [in the Department of
Environmental Resources] shall establish a program of assistance
to environmental advisory councils that may include educational
services, exchange of information, assignment of technical
personnel for natural resources planning assistance and the
coordination of State and local conservation activities.
§ 2329. Assistance from Department of Community [Affairs] and
Economic Development.
The Department of Community [Affairs] and Economic
Development shall establish a program of assistance to
environmental advisory councils in planning for the management,
use and development of open space and recreation areas.
§ 2515. Distribution of petition.
When the election officials find that the petition as
submitted is in proper order, they shall send copies of the
initiative petition without signatures thereon to the governing
body of the municipalities involved and to the Department of
Community [Affairs] and Economic Development.
§ 2522. Filing of referendum ordinance.
* * *
(b) Department of Community [Affairs] and Economic
Development.--When the ordinances are filed with the election
officials, copies of the referendum ordinance shall be
immediately filed with the Department of Community [Affairs] and
Economic Development.
§ 2536. Results of election.
The election officials shall certify the results of the
referendum to the governing bodies and the Department of
Community [Affairs] and Economic Development.
§ 2543. Election returns.
The result of the votes cast for members of the board at the
municipal election shall be returned by the election officials
to the governing bodies of municipalities involved and to the
Department of Community [Affairs] and Economic Development.
§ 2921. Report of findings and recommendations.
* * *
(c) Filing copy with Department of Community [Affairs] and
Economic Development.--A copy of the final report of the
commission with its findings and recommendations shall be filed
with the Department of Community [Affairs] and Economic
Development.
* * *
§ 2943. Petition for referendum or ordinance proposing
amendment.
* * *
(b) Review and disposition of petition.--The election
officials shall review the initiative petition as to the number
and qualifications of signers. If the petition appears to be
defective, the election officials shall immediately notify the
persons filing the petition of the defect. When the election
officials find that the petition as submitted is in proper
order, they shall send copies of the initiative petition without
signatures thereon to the governing body and to the Department
of Community [Affairs] and Economic Development. The initiative
petition as submitted to the election officials, along with a
list of signatories, shall be open to inspection in the office
of the election officials.
§ 2951. Conduct and results of election.
All elections provided for in this subpart shall be conducted
by the election officials for such municipality in accordance
with the act of June 3, 1937 (P.L.1333, No.320), known as the
Pennsylvania Election Code. The election officials shall count
the votes cast and make return thereof to the county board of
elections. The results of the election shall be computed by the
county board of elections in the same manner as is provided by
law for the computation of similar returns. Certificates of the
results of the election shall be filed by the county board of
elections with the municipal council or board, the Department of
State and the Department of Community [Affairs] and Economic
Development.
§ 2965. Recording and filing of charter.
The municipal clerk or secretary shall have the new charter
as approved by the qualified electors recorded in the ordinance
books and shall also file a certified copy of the charter with
the Department of State, the Department of Community [Affairs]
and Economic Development and the county board of elections.
§ 2972. Recording and filing of plan.
The municipal clerk or secretary shall immediately cause the
new plan of government as adopted to be recorded in the
ordinance book of the municipality and shall also file a
certified copy thereof with the Department of State, the
Secretary of Community [Affairs] and Economic Development and
the county board of elections.
§ 2984. Assumption of functions previously assumed by other
municipality.
* * *
(b) Procedure for adjustment and apportionment.--The
adjustment and apportionment shall be reduced to a written
agreement which shall be filed with the court of common pleas of
the county and the Department of Community [Affairs] and
Economic Development.
* * *
Section 2. Section 5402 of Title 53 is amended by adding a
definition to read:
§ 5402. 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:
* * *
"Municipal corporation." Any city, borough or incorporated
town.
Section 3. Section 8001(c) of Title 53 is amended to read:
§ 8001. Short title, scope and applicability of subpart.
* * *
(c) Exemption of bonds and notes from taxation in this
Commonwealth.--[All] This section is the Commonwealth's pledge
to and agreement with a person, firm, corporation or Federal
agency subscribing to or acquiring any bonds or notes, including
tax anticipation notes issued by any local government unit under
this subpart [or], the act of June 25, 1941 (P.L.159, No.87),
known as the Municipal Borrowing Law, or the act of July 12,
1972 (P.L.781, No.185), known as the Local Government Unit Debt
Act, that the bonds or notes, their transfer and the income
therefrom, including any profits made on [the] their sale
[thereof], shall be free from taxation for State and local
purposes within this Commonwealth. This exemption does not apply
to gift, inheritance [and], succession or estate taxes [under
Article XXI of the act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971,] or any other taxes not levied
directly on the bonds or notes, [the] their transfer, the income
therefrom or the realization of profits on [the] their sale. The
exemption under this subsection of profits made on the sale of
bonds or notes does not apply to bonds or notes issued on or
after February 1, 1994 (the effective date of section 2901 of
the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
Code of 1971).
* * *
Section 4. The definitions of "bond or note" and
"department" in section 8002(c) of Title 53 are amended to read:
§ 8002. Definitions.
* * *
(c) Other definitions.--Subject to additional definitions
contained in subsequent provisions of this subpart which are
applicable to specific provisions of this subpart, the following
words and phrases when used in this subpart shall have the
meanings given to them in this section unless the context
clearly indicates otherwise:
* * *
"Bond or note." Any instrument issued by a local government
unit imposing an obligation for the repayment of money borrowed,
but not including a guaranty endorsed on an instrument issued by
an authority. Unless otherwise indicated, the term does not
include tax anticipation notes. A bond or a note which is a
security as defined in 13 Pa.C.S. Div. 8 (relating to investment
securities) shall be governed by 13 Pa.C.S. Div. 8, and every
other bond or note shall be governed by [Subchapter C] 13
Pa.C.S. Div. 3 (relating to [procedure for securing approval of
electors] negotiable instruments), except in each case as
otherwise provided in this subchapter.
* * *
"Department." The Department of Community [Affairs] and
Economic Development of the Commonwealth.
* * *
Section 5. Section 8022 of Title 53 is amended by adding a
subsection to read:
§ 8022. Limitations on incurring of other debt.
* * *
(f) Limitations on incurring of debt by school districts.--
Except for purposes of refinancing existing debt under this
subpart and notwithstanding the other provisions of this
section, no school district of the first class A through fourth
classes shall incur any new nonelectoral debt or lease rental
debt if the aggregate net principal amount of such new debt
together with any other net nonelectoral debt and lease rental
debt then outstanding would cause the outstanding total of net
nonelectoral debt plus net lease rental debt of the school
district to exceed 225% of the school district's borrowing base
as defined in section 8002 (relating to definitions). This
section shall apply regardless of whether there is an election
by the school district under section 8703 (relating to adoption
of referendum).
Section 6. Sections 8101, 8103 heading and (a)(4), 8105
introductory paragraph, 8107 and 8109(a)(1) of Title 53 are
amended to read:
§ 8101. Combining projects for financing or series of bonds or
notes for sale.
The governing body of a local government unit may by
ordinance take any of the following actions in connection with
the issuance of bonds or notes or the authorization of the
instrument creating lease rental debt:
(1) In lieu of combining two or more items or elements
permitted to be combined under the definition of "project" in
section 8002 (relating to definitions) as a single project,
designate any one or more of the items or elements as a
project and combine the projects for financing purposes by
one series of bonds or notes. If the series of bonds or notes
are revenue bonds or notes, all projects so combined shall be
revenue-producing projects, all or a portion of the rates,
rentals, receipts, tolls and charges may be combined, common
reserve funds may be created and common or cross covenants
may be made in respect of each project.
(2) Offer for simultaneous sale under separate or
combined bids any two or more series of bonds or notes of any
type.
(3) Provide for the financing of a project or projects
by the issuance, either simultaneously or in succession, of
any combination of instruments evidencing debt applicable to
the project or projects and authorized by this subpart.
Any ordinance required by this section may be included in any
authorizing ordinance required by section 8103 (relating to
ordinance authorizing issuance of [documents] bonds or notes or
instruments evidencing lease rental debt).
§ 8103. Ordinance authorizing issuance of [documents] bonds or
notes or instruments evidencing lease rental debt.
(a) General rule.--The ordinance or ordinances or, in the
case of notes issued under section 8109 (relating to small
borrowing for capital purposes), the resolution authorizing the
issuance of bonds or notes or the execution of a lease,
guaranty, subsidy contract or other agreement evidencing lease
rental debt by a local government unit shall contain, in
substance:
* * *
(4) In the case of revenue or guaranteed revenue bonds
or notes, [the inclusion of] there may be included the
matters set forth in sections 8105 (relating to additional
provisions in ordinance authorizing issuance of revenue or
guaranteed revenue bonds or notes), 8147 (relating to pledge
of revenues) and 8148 (relating to deeds of trust and other
agreements with bondholders and noteholders).
* * *
§ 8105. Additional provisions in ordinance authorizing
issuance of revenue or guaranteed revenue bonds or
notes.
In addition to the provisions required or permitted by
sections 8103 (relating to ordinance authorizing issuance of
[documents] bonds or notes or instruments evidencing lease
rental debt), 8147 (relating to pledge of revenues) and 8148
(relating to deeds of trust and other agreements with
bondholders and noteholders), the ordinance authorizing the
issuance of revenue bonds or notes or guaranteed revenue bonds
or notes may also contain the following:
* * *
§ 8107. Award of bonds or notes.
When an acceptable proposal for the purchase of the bonds or
notes, or any part thereof offered separately, has been received
and is in conformity with the terms of the official invitation
for proposals or is an acceptable proposal at a negotiated or
invited sale, and is in compliance with the provisions of this
subpart, it may be accepted by resolution or by ordinance. If
the acceptance is made by resolution, the acceptance shall be
conditional upon compliance with section 8103 (relating to
ordinance authorizing issuance of [documents] bonds or notes or
instruments evidencing lease rental debt). If the acceptance is
made by ordinance, the ordinance shall also fix any details of
the series of bonds or notes being sold, not fixed by prior
ordinance, and award the bonds or notes, or those which have
been sold, to specified purchasers at prices specified in the
ordinance. These provisions may be included in the ordinance
adopted pursuant to section 8103. Notwithstanding any other
provision of this subpart or of any other statute, as between
the local government unit and the purchasers, an awarding
resolution or ordinance shall be effective upon its final
adoption or enactment by the governing body. The advertisement
of the ordinance prior to enactment shall be sufficient if it
describes the items to be completed from the proposal.
§ 8109. Small borrowing for capital purposes.
(a) General rule.--Any local government unit may incur debt
by resolution rather than by ordinance to be evidenced by notes
to provide funds for a project as defined in this subpart
without complying with the requirements of Subchapter A of
Chapter 82 (relating to Department of Community [Affairs] and
Economic Development) if:
(1) The aggregate amount of the debt outstanding at any
one time shall not exceed the lesser of [$100,000] $125,000
or 30% of the [borrowing base] nonelectoral debt limit as
authorized in section 8022(a) (relating to limitations on
incurring of other debt).
* * *
Section 7. Chapter 82 Subchapter A heading of Title 53 is
amended to read:
SUBCHAPTER A
DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC DEVELOPMENT
Section 8. Section 8225 of Title 53 is amended by adding a
paragraph to read:
§ 8225. Management of sinking and other funds.
The management and control of sinking and other funds and
investments thereof subject to the provisions of this subpart
shall be vested in the governing body of the local government
unit except:
* * *
(1.1) To the extent otherwise provided by this subpart.
* * *
Section 9. Part VII of Title 53 is amended by adding a
subpart to read:
SUBPART C
TAXATION AND ASSESSMENTS
Chapter
84. General Provisions
85. Assessments of Persons and Property
86. (Reserved)
87. Other Subjects of Taxation
89. Payment and Collection of Taxes
CHAPTER 84
GENERAL PROVISIONS
Subchapter
A. Preliminary Provisions
B. (Reserved)
C. Local Taxpayers Bill of Rights
SUBCHAPTER A
PRELIMINARY PROVISIONS
Sec.
8401. Definitions.
8402. Scope and limitations.
8403. Preemption.
8404. Certain rates of taxation limited.
8405. Applicability.
§ 8401. Definitions.
The following words and phrases when used in this subpart
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Budgeted revenue." Local tax revenue, except the term does
not include revenue from:
(1) Delinquent taxes.
(2) Payments in lieu of taxes.
(3) The real estate transfer tax.
(4) The distribution of the Public Utility Realty Tax,
commonly known as PURTA.
(5) A mercantile or business privilege tax on gross
receipts.
(6) An amusement or admissions tax.
"Business." As defined in section 301 of the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
"Current year." The fiscal year for which the tax is levied.
"Domicile." As defined in section 13 of the act of December
31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
Act.
"Dwelling." A structure used as a place of habitation by a
natural person.
"Earned income." The classes of income defined as earned
income in section 13 of the act of December 31, 1965 (P.L.1257,
No.511), known as The Local Tax Enabling Act.
"Election officials." The county board of elections of each
county.
"Employer." As defined in section 301 of the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
"Governing body." A board of school directors of a school
district.
"Homestead." A dwelling, including the parcel of land on
which the dwelling is located and the other improvements located
on the parcel for which any of the following apply:
(1) The dwelling is primarily used as the domicile of an
owner who is a natural person. The homestead for real
property qualifying under this paragraph shall not include
the land on which the dwelling is located if the land is not
owned by a person who owns the dwelling.
(2) The dwelling is a unit in a condominium as the term
is defined in 68 Pa.C.S. § 3103 (relating to definitions) and
the unit is primarily used as the domicile of a natural
person who is an owner of the unit; or the dwelling is a unit
in a cooperative as the term is defined in 68 Pa.C.S. § 4103
(relating to definitions) and the unit is primarily used as
the domicile of a natural person who is an owner of the unit.
The homestead for a unit in a condominium or a cooperative
shall be limited to the assessed value of the unit, which
shall be determined in a manner consistent with the
assessment of real property taxes on those units under 68
Pa.C.S. (relating to real and personal property) or as
otherwise provided by law. If the unit is not separately
assessed for real property taxes, the homestead shall be a
pro rata share of the real property.
(3) The dwelling does not qualify under paragraphs (1)
and (2) and a portion of the dwelling is used as the domicile
of an owner who is a natural person. The homestead for real
property qualifying under this paragraph shall be the portion
of the real property that is equal to the portion of the
dwelling that is used as the domicile of an owner.
"Homestead property." A homestead for which an application
has been submitted and approved under section 8584 (relating to
administration and procedure).
"Local Tax Enabling Act." The act of December 31, 1965
(P.L.1257, No.511), known as The Local Tax Enabling Act.
"Local tax revenue." The revenue from taxes actually levied
and assessed by a school district. The term does not include
interest or dividend earnings, Federal or State grants,
contracts or appropriations, income generated from operations or
any other source that is revenue not derived from taxes levied
and assessed by a school district.
"Municipality." As defined in 1 Pa.C.S. § 1991 (relating to
definitions).
"Net profits." The classes of income defined as net profits
in section 13 of the act of December 31, 1965 (P.L.1257,
No.511), known as The Local Tax Enabling Act.
"Owner." Includes any of the following:
(1) A joint tenant or tenant in common.
(2) A person who is purchasing real property under a
contract.
(3) A partial owner.
(4) A person who owns real property as a result of being
a beneficiary of a will or trust or as a result of intestate
succession.
(5) A person who owns or is purchasing a dwelling on
leased land.
(6) A person holding a life lease in real property
previously sold or transferred to another.
(7) A person in possession under a life estate.
(8) A grantor who has placed the real property in a
revocable trust.
(9) A member of a cooperative as defined in 68 Pa.C.S. §
4103 (relating to definitions).
(10) A unit owner of a condominium as defined in 68
Pa.C.S. § 3103 (relating to definitions).
(11) A partner of a family farm partnership or a
shareholder of a family farm corporation as the terms are
defined in section 1101-C of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
"Political subdivision." As defined in 1 Pa.C.S. § 1991
(relating to definitions).
"Preceding year." The fiscal year before the current year.
"Primarily used." Usage of at least 51% of the square
footage of a dwelling.
"Resident individual." An individual who is domiciled in a
school district.
"School district." A school district of the first class A,
second class, third class or fourth class, including any
independent school district.
"Statewide average weekly wage." That amount determined
annually for each calendar year by the Department of Labor and
Industry under section 105.1 of the act of June 2, 1915
(P.L.736, No.338), known as the Workers' Compensation Act.
"Succeeding year." The fiscal year following the current
year.
"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
"Taxpayer." An individual required under this subpart to
file a tax return or to pay a tax.
§ 8402. Scope and limitations.
(a) General rule.--Except as provided in subsections (b),
(c), (d), (e) and (f) and section 8405 (relating to
applicability), it is the intent of this subpart to confer upon
each school district the power to levy, assess and collect an
earned income and net profits tax as set forth in this subpart.
(b) Real estate transfer taxes.--This subpart does not
affect the powers of a school district to levy, assess and
collect a real estate transfer tax, including any real estate
transfer tax levied under the authority of section 652.1(a)(4)
of the act of March 10, 1949 (P.L.30, No.14), known as the
Public School Code of 1949.
(c) Amusement and admissions taxes.--
(1) Any school district which has on or before June 30,
1997, levied, assessed or collected or provided for the
levying, assessment or collection of an amusement or
admissions tax may continue to levy, assess and collect the
tax on such subjects upon which the tax was imposed as of
June 30, 1997. Neither the rate imposed nor amount collected
shall exceed the rate imposed or amount collected by the
school district for the fiscal year ending in 1997. A school
district which did not assess, levy or collect an amusement
or admissions tax as of June 30, 1997, may not assess, levy
or collect the tax. The provisions as set forth in section
8(6), (9), (10) and (11) of the Local Tax Enabling Act shall
remain in effect, other than the limitations as set forth in
this paragraph. This paragraph shall apply regardless of
whether there is an election by the school district under
section 8703(a) (relating to adoption of referendum).
(2) Any municipality which has on or before December 31,
1997, levied, assessed or collected or provided for the
levying, assessment or collection of an amusement or
admissions tax under the Local Tax Enabling Act may continue
to levy, assess and collect the tax on such subjects upon
which the tax was imposed by the municipality as of December
31, 1997, at a rate not to exceed the effective rate as
collected by the municipality as of December 31, 1997, or 5%,
whichever is greater. A municipality which did not assess,
levy or collect an amusement or admissions tax as of December
31, 1997, may not assess, levy or collect the tax at a rate
higher than 5%. The provisions as set forth in section 8(6),
(9), (10) and (11) of the Local Tax Enabling Act shall remain
in effect, other than the reduction in rate as set forth in
this paragraph.
(d) Mercantile tax.--Nothing in this subpart shall limit or
modify any mercantile or business privilege tax on gross
receipts as limited by section 533 of the act of December 13,
1988 (P.L.1121, No.145), known as the Local Tax Reform Act.
(e) Sign or sign privilege tax.--Any political subdivision
which has on or before December 31, 1997, assessed, levied or
collected an annual sign tax or annual sign privilege tax or
provided for the levying, assessment or collection of such tax
may continue to levy, assess and collect such tax on such
subjects upon which the tax was imposed at a rate not to exceed
that imposed by the political subdivision as of December 31,
1997. A political subdivision which did not assess, levy or
collect an annual sign tax or annual sign privilege tax as of
December 31, 1997, may not assess, levy or collect such tax.
This subsection shall apply regardless of whether there is an
election under section 8703(a).
(f) Motor vehicle transfer tax.--Any political subdivision
that did not assess, levy or collect a tax on the transfer of
motor vehicles or on the privilege of transferring motor
vehicles as of December 31, 1997, shall not assess, levy or
collect such tax. This subsection shall apply regardless of
whether there is an election under section 8703(a). This
subsection shall neither apply to nor affect any mercantile or
business privilege tax on gross receipts as limited by section
533 of the Local Tax Reform Act.
§ 8403. Preemption.
No act of the General Assembly will vacate or preempt any
resolution adopted under this subpart providing for the
imposition of a tax by a school district unless the act of the
General Assembly expressly vacates or preempts the authority to
adopt the resolution.
§ 8404. Certain rates of taxation limited.
If a municipality and school district both impose an earned
income and net profits tax on the same individual under the
Local Tax Enabling Act and the municipality and school district
are limited to or have agreed upon a division of the tax rate in
accordance with section 8 of the Local Tax Enabling Act, then
the municipality that continues to levy the earned income and
net profits tax under the Local Tax Enabling Act shall remain
subject to that limitation or agreement in the event that the
school district opts to impose an earned income and net profits
tax under section 8711 (relating to earned income and net
profits tax).
§ 8405. Applicability.
It is the intent of the General Assembly that no provision of
this subpart shall apply to any city of the first class, a
county of the first class coterminous with a city of the first
class and any school district of the first class located within
a city of the first class.
SUBCHAPTER B
(Reserved)
SUBCHAPTER C
LOCAL TAXPAYERS BILL OF RIGHTS
Sec.
8421. Short title of subchapter.
8422. Definitions.
8423. Disclosure statement.
8424. Requirements for requests.
8425. Refunds of overpayments.
8426. Interest on overpayment.
8427. Notice of basis of underpayment.
8428. Abatement of certain interest and penalty.
8429. Application of payments.
8430. Administrative appeals.
8431. Petitions.
8432. Practice and procedure.
8433. Decisions.
8434. Appeals.
8435. Equitable and legal principles to apply.
8436. Installment agreements.
8437. Confidentiality of tax information.
8438. Taxes on real property.
§ 8421. Short title of subchapter.
This subchapter shall be known and may be cited as the Local
Taxpayers Bill of Rights Act.
§ 8422. 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:
"Assessment." The determination by a local taxing authority
of the amount of underpayment by a taxpayer.
"Board." A board of local tax appeals established under
section 8430 (relating to administrative appeals).
"Eligible tax." Any of the following, including interest and
penalty provided by law, when levied by a political subdivision:
(1) Any tax authorized or permitted under the act of
December 31, 1965 (P.L.1257, No.511), known as The Local Tax
Enabling Act.
(2) Any per capita tax levied under any act.
(3) Any occupation, occupation assessment or occupation
privilege tax levied under any act.
(4) Any tax on income levied under any act.
(5) Any tax measured by gross receipts levied under any
act.
(6) Any tax on a privilege levied under any act.
(7) Any tax on amusements or admissions levied under any
act.
(8) Any tax on earned income and net profits.
"Governing body." A city council, borough council,
incorporated town council, board of township commissioners,
board of township supervisors, a governing council of a home
rule municipality or optional plan municipality, a governing
council of any similar general purpose unit of government which
may hereafter be created by statute or a board of school
directors of a school district.
"Local taxing authority." A political subdivision levying an
eligible tax. The term shall include any officer, agent, agency,
clerk, income tax officer, collector, employee or other person
to whom the governing body has assigned responsibility for the
audit, assessment, determination or administration of an
eligible tax. The term shall not include a tax collector or
collection agency who has no authority to audit a taxpayer or
determine the amount of an eligible tax or whose only
responsibility is to collect an eligible tax on behalf of the
governing body.
"Overpayment." Any payment of tax which is determined in the
manner provided by law not to be legally due.
"Taxpayer." An individual, partnership, association,
corporation, limited liability company, estate, trust, trustee,
fiduciary or any other entity subject to or claiming exemption
from any eligible tax or under a duty to perform an act for
itself or for another under or pursuant to the authority of an
act providing for an eligible tax.
"Underpayment." The amount or portion of any tax determined
to be legally due in the manner provided by law for which
payment or remittance has not been made.
"Voluntary payment." A payment of an eligible tax made
pursuant to the free will of the taxpayer. The term does not
include a payment made as a result of distraint or levy or
pursuant to a legal proceeding in which the local taxing
authority is seeking to collect its delinquent taxes or file a
claim therefor.
§ 8423. Disclosure statement.
(a) Contents.--The local taxing authority shall prepare a
statement which sets forth the following in simple and
nontechnical terms:
(1) The rights of a taxpayer and the obligation of the
local taxing authority during an audit or an administrative
review of the taxpayer's books or records.
(2) The administrative and judicial procedures by which
a taxpayer may appeal or seek review of any adverse decision
of the local taxing authority.
(3) The procedure for filing and processing refund
claims and taxpayer complaints.
(4) The enforcement procedures.
(b) Distribution.--The local taxing authority shall notify
any taxpayer contacted regarding the assessment, audit,
determination, review or collection of an eligible tax of the
availability of the statement under subsection (a). The local
taxing authority shall make copies of the statement available to
taxpayers upon request at no charge to the taxpayer, including
mailing costs. The notification shall be stated as follows:
You are entitled to receive a written explanation of your
rights with regard to the audit, appeal, enforcement,
refund and collection of local taxes by calling (name of
local taxing authority) at (telephone number) during the
hours of (hours of operation).
§ 8424. Requirements for requests.
(a) Minimum time periods for taxpayer response.--
(1) The taxpayer shall have at least 30 calendar days
from the mailing date to respond to requests for information
by a local taxing authority. The local taxing authority shall
grant additional reasonable extensions upon application for
good cause.
(2) The local taxing authority shall notify the taxpayer
of the procedures to obtain an extension in its initial
request.
(3) A local taxing authority shall take no lawful action
against a taxpayer for the tax year in question until the
expiration of the applicable response period, including
extensions.
(b) Requests for prior year returns.--
(1) Except as provided in paragraph (2), an initial
inquiry by a local taxing authority regarding a taxpayer's
compliance with any eligible tax may include taxes required
to be paid or tax returns required to be filed no more than
three years prior to the mailing date of the notice.
(2) A local taxing authority may make a subsequent
request for a tax return or supporting information if, after
the initial request, the local taxing authority determines
that the taxpayer failed to file a tax return, underreported
income or failed to pay a tax for one or more of the tax
periods covered by the initial request.
This subsection shall not apply if the local taxing authority
has sufficient information to indicate that the taxpayer failed
to file a required return or pay an eligible tax which was due
more than three years prior to the date of the notice.
(c) Use of Federal tax information.--A local taxing
authority may require a taxpayer to provide copies of the
taxpayer's Federal individual income tax return if the local
taxing authority can demonstrate that the Federal tax
information is reasonably necessary for the enforcement or
collection of an eligible tax and the information is not
available from other available sources or the Department of
Revenue.
§ 8425. Refunds of overpayments.
(a) General rule.--A taxpayer who has paid an eligible tax
to a local taxing authority may file a written request with the
local taxing authority for refund or credit of the eligible tax.
A request for refund shall be made within three years of the due
date for filing the report as extended or one year after actual
payment of the eligible tax, whichever is later. If no report is
required, the request shall be made within three years after the
due date for payment of the eligible tax or within one year
after actual payment of the eligible tax, whichever is later.
(1) For purposes of this section, a tax return filed by
the taxpayer with the local taxing authority showing an
overpayment of tax shall be deemed to be a written request
for a cash refund unless otherwise indicated on the tax
return.
(2) A request for refund under this section shall not be
considered a petition under section 8430 (relating to
administrative appeals) and shall not preclude a taxpayer
from submitting a petition under section 8431 (relating to
petitions).
(b) Notice of underpayment.--For amounts paid as a result of
a notice asserting or informing a taxpayer of an underpayment, a
written request for refund shall be filed with the local taxing
authority within one year of the date of the payment.
§ 8426. Interest on overpayment.
(a) General rule.--All overpayments of tax due a local
taxing authority, including taxes on real property, shall bear
simple interest from the date of overpayment until the date of
resolution.
(b) Interest rate.--Interest on overpayments shall be
allowed and paid at the same rate as the Commonwealth is
required to pay pursuant to section 806.1 of the act of April 9,
1929 (P.L.343, No.176), known as The Fiscal Code.
(c) Exceptions.--
(1) No interest shall be allowed if an overpayment is
refunded or applied against any other tax, interest or
penalty due the local taxing authority within 75 days after
the last date prescribed for filing the report of the tax
liability or within 75 days after the date the return or
report of the liability due is filed, whichever is later.
(2) Overpayments of interest or penalty shall not bear
any interest.
(d) Acceptance of refund check.--The taxpayer's acceptance
of the local taxing authority's check shall not prejudice any
right of the taxpayer to claim any additional overpayment and
interest thereon. Tender of a refund check by the local taxing
authority shall be deemed to be acceptance of the check by the
taxpayer for purposes of this section.
(e) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection:
"Date of overpayment." The later of the date paid or the
date tax is deemed to have been overpaid as follows:
(1) Any tax actually deducted and withheld at the source
shall be deemed to have been overpaid on the last day for
filing the report for the tax period, determined without
regard to any extension of time for filing.
(2) Any amount overpaid as estimated tax for the tax
period shall be deemed to have been overpaid on the last day
for filing the final report for the tax period, determined
without regard to any extension of time for filing.
(3) An overpayment made before the last day prescribed
for payment shall be deemed to have been paid on the last
day.
(4) Any amount claimed to be overpaid with respect to
which a lawful administrative review or appellate procedure
is initiated shall be deemed to have been overpaid 60 days
following the date of initiation of the review or procedure.
(5) Any amount shown not to be due on an amended income
or earned income and net profits tax return shall be deemed
to have been overpaid 60 days following the date of filing of
the amended income tax return.
"Date of resolution." The date the overpayment is refunded
or credited as follows:
(1) For a cash refund, a date preceding the date of the
local taxing authority's refund check by not more than 30
days.
(2) For a credit for an overpayment:
(i) the date of the local taxing authority's notice
to the taxpayer of the determination of the credit; or
(ii) the due date for payment of the tax against
which the credit is applied, whichever first occurs. For
a cash refund of a previously determined credit, interest
shall be paid on the amount of the credit from a date 90
days after the filing of a request to convert the credit
to a cash refund to a date preceding the date of the
refund check by not more than 30 days whether or not the
refund check is accepted by the taxpayer after tender.
§ 8427. Notice of basis of underpayment.
A local taxing authority shall notify the taxpayer in writing
of the basis for any underpayment that the local taxing
authority has determined to exist. The notification shall
include:
(1) The tax period or periods for which the underpayment
is asserted.
(2) The amount of the underpayment detailed by tax
period.
(3) The legal basis upon which the local taxing
authority has relied to determine that an underpayment
exists.
(4) An itemization of the revisions made by the local
taxing authority to a return or report filed by the taxpayer
that results in the determination that an underpayment
exists.
§ 8428. Abatement of certain interest and penalty.
(a) Errors and delays.--In the case of any underpayment, the
local taxing authority may abate all or any part of interest for
any period for the following:
(1) Any underpayment or tax finally determined to be due
attributable in whole or in part to any error or delay by the
local taxing authority in the performance of a ministerial
act. For purposes of this paragraph, an error or delay shall
be taken into account only if no significant aspect of the
error or delay can be attributed to the taxpayer and after
the local taxing authority has contacted the taxpayer in
writing with respect to the underpayment of tax finally
determined to be due or payable.
(2) Any payment of a tax to the extent that any error or
delay in the payment is attributable to an officer, employee
or agent of the local taxing authority being erroneous or
dilatory in performance of a ministerial act. The local
taxing authority shall determine what constitutes timely
performance of ministerial acts performed under this
subchapter.
(b) Abatement due to erroneous written advice by local
taxing authority.--
(1) The local taxing authority shall abate any portion
of any penalty or excess interest attributable to erroneous
advice furnished to the taxpayer in writing by an officer,
employee or agent of the local taxing authority acting in the
officer's, employee's or agent's official capacity if:
(i) the written advice was reasonably relied upon by
the taxpayer and was in response to specific written
request of the taxpayer; and
(ii) the portion of the penalty or addition to tax
or excess interest did not result from a failure by the
taxpayer to provide adequate or accurate information.
(2) This subsection shall not be construed to require
the local taxing authority to provide written advice to
taxpayers.
§ 8429. Application of payments.
Unless otherwise specified by the taxpayer, all voluntary
payments of an eligible tax shall be prioritized by the local
taxing authority as follows:
(1) Tax.
(2) Interest.
(3) Penalty.
(4) Any other fees or charges.
§ 8430. Administrative appeals.
A political subdivision levying an eligible tax shall
establish an administrative process to receive and make
determinations on petitions from taxpayers relating to the
assessment, determination or refund of an eligible tax. The
administrative process shall consist of any one of the
following:
(1) Review and decision or hearing and decision by a
local tax appeals board appointed by the governing body. The
board shall consist of at least three but not more than seven
members. Qualifications for service on the board and
compensation, if any, of the members shall be determined by
the governing body. The governing body may enter into
agreements with other political subdivisions to establish a
joint local tax appeals board.
(2) Review and decision by the governing body in
executive session.
(3) A hearing and decision by a hearing officer
appointed by the governing body. The governing body shall
determine the qualifications and compensation, if any, of the
hearing officer.
(4) An administrative review or appeal process existing
on the effective date of this chapter that is substantially
similar to the procedures in paragraph (1), (2) or (3).
§ 8431. Petitions.
(a) Filing.--A petition is timely filed if the letter
transmitting the petition is postmarked by the United States
Postal Service on or before the final day on which the petition
is required to be filed. Deadlines for filing petitions are as
follows:
(1) Refund petitions shall be filed within three years
after the due date for filing the report as extended or one
year after actual payment of an eligible tax, whichever is
later. If no report is required, the petition shall be filed
within three years after the due date for payment of an
eligible tax or within one year after actual payment,
whichever is later.
(2) Petitions for reassessment of an eligible tax shall
be filed within 90 days of the date of the assessment notice.
(b) Contents.--The governing body shall adopt regulations
specifying the form and content of petitions, including the
process and deadlines.
§ 8432. Practice and procedure.
Practice and procedure under this subchapter shall not be
governed by 2 Pa.C.S. Chs. 5 Subch. B (relating to practice and
procedure of local agencies) and 7 Subch. B (relating to
judicial review of local agency action). The governing body
shall adopt regulations governing practice and procedure under
this subchapter.
§ 8433. Decisions.
Decisions on petitions submitted under this subchapter shall
be issued within 60 days of the date a complete and accurate
petition is received. Failure to act within 60 days shall result
in the petition being deemed approved.
§ 8434. Appeals.
Any person aggrieved by a decision under this chapter who has
a direct interest in the decision shall have the right to appeal
to the court vested with the jurisdiction of local tax appeals
by or pursuant to 42 Pa.C.S. (relating to judiciary and judicial
procedure).
§ 8435. Equitable and legal principles to apply.
Decisions under this chapter may be made according to
principles of law and equity.
§ 8436. Installment agreements.
(a) Authorization.--A local taxing authority may enter into
written agreements with any taxpayer under which the taxpayer is
allowed to satisfy liability for any eligible tax in installment
payments if the local taxing authority determines that the
agreement will facilitate collection.
(b) Extent to which agreements remain in effect.--
(1) Except as otherwise provided in this subsection, any
agreement entered into by the local taxing authority under
subsection (a) shall remain in effect for the term of the
agreement.
(2) The local taxing authority may terminate any prior
agreement entered into under subsection (a) if:
(i) information which the taxpayer provided to the
local taxing authority prior to the date of the agreement
was inaccurate or incomplete; or
(ii) the local taxing authority believes that
collection of any eligible tax under the agreement is in
jeopardy.
(3) If the local taxing authority finds that the
financial condition of the taxpayer has significantly
changed, the local taxing authority may alter, modify or
terminate the agreement, but only if:
(i) notice of the local taxing authority's finding
is provided to the taxpayer no later than 30 days prior
to the date of such action; and
(ii) the notice contains the reasons why the local
taxing authority believes a significant change has
occurred.
(4) The local taxing authority may alter, modify or
terminate an agreement entered into by the local taxing
authority under subsection (a) if the taxpayer fails to do
any of the following:
(i) Pay any installment at the time the installment
is due under such agreement.
(ii) Pay any other tax liability at the time the
liability is due.
(iii) Provide a financial condition update as
requested by the local taxing authority.
(c) Prepayment permitted.--Nothing in this section shall
prevent a taxpayer from prepaying in whole or in part any
eligible tax under any agreement with the local taxing
authority.
§ 8437. Confidentiality of tax information.
Any information gained by a local taxing authority as a
result of any audit, return, report, investigation, hearing or
verification shall be confidential tax information. It shall be
unlawful, except for official purposes or as provided by law,
for any local taxing authority to:
(1) Divulge or make known in any manner any confidential
information gained in any return, investigation, hearing or
verification to any person.
(2) Permit confidential tax information or any book
containing any abstract or particulars thereof to be seen or
examined by any person.
(3) Print, publish or make known in any manner any
confidential tax information.
An offense under this section is a misdemeanor of the third
degree, and, upon conviction thereof, a fine of not more than
$2,500 and costs, or a term of imprisonment for not more than
one year, or both, may be imposed. If the offender is an officer
or employee of the local taxing authority, the officer or
employee shall be dismissed from office or discharged from
employment.
§ 8438. Taxes on real property.
Except as provided in section 8426 (relating to interest on
overpayment), this subchapter shall not apply to any tax on real
property.
CHAPTER 85
ASSESSMENTS OF PERSONS AND PROPERTY
Subchapter
A. (Reserved)
B. (Reserved)
C. (Reserved)
D. (Reserved)
E. Real Estate Tax Deferral
F. Homestead Property Exclusion
SUBCHAPTERS A THROUGH D
(Reserved)
SUBCHAPTER E
REAL ESTATE TAX DEFERRAL
Sec.
8571. Short title of subchapter.
8572. Definitions.
8573. Authority.
8574. Income eligibility.
8575. Tax deferral.
8576. Application procedure.
8577. Contents of application.
8578. Attachment and satisfaction of liens.
§ 8571. Short title of subchapter.
This subchapter shall be known and may be cited as the Real
Estate Tax Deferment Program Act.
§ 8572. 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:
"Base payment." The amount of property tax paid by an
applicant in the base year.
"Base year." The tax year preceding the first tax year for
which a taxing authority implements the provisions of this
subchapter or the tax year immediately preceding an applicant's
entry into the tax deferral program.
"Claimant." A person whose household income does not exceed
the limit provided for in section 8574 (relating to income
eligibility).
"Household income." All income as defined in the act of
March 11, 1971 (P.L.104, No.3), known as the Senior Citizens
Rebate and Assistance Act, received by the claimant and by the
claimant's spouse during the calendar year for which a tax
deferral is claimed.
"Increase in real property taxes." An increase in the
property taxes above the base payment resulting from a millage
increase, a change in the assessment ratio or method or by a
revaluing of all properties.
§ 8573. Authority.
All political subdivisions shall have the power and authority
to grant annual tax deferrals in the manner provided in this
subchapter.
§ 8574. Income eligibility.
A claimant shall be eligible for a tax deferral if the
claimant and the claimant's spouse have a household income not
exceeding the maximum household income eligibility limitations
set forth in the act of March 11, 1971 (P.L.104, No.3), known as
the Senior Citizens Rebate and Assistance Act.
§ 8575. Tax deferral.
(a) Amount.--An annual real estate tax deferral granted
under this subchapter shall equal the increase in real property
taxes upon the homestead of the claimant.
(b) Prohibition.--No tax deferrals shall be granted if the
total amount of deferred taxes plus the total amount of all
other unsatisfied liens on the homestead of the claimant plus
the outstanding principal on any and all mortgages on the
homestead exceeds 85% of the market value of the homestead or if
the outstanding principal on any and all mortgages on the
homestead exceeds 70% of the market value of the homestead.
Market value shall equal assessed value divided by the common
level ratio as most recently determined by the State Tax
Equalization Board for the county in which the property is
located.
§ 8576. Application procedure.
(a) Initial application.--Any person eligible for a tax
deferral under this subchapter may apply annually to the
political subdivision. In the initial year of application, the
following information shall be provided in the manner required
by the political subdivision:
(1) A statement of request for the tax deferral.
(2) A certification that the applicant or the applicant
and his or her spouse jointly are the owners in fee simple of
the homestead upon which the real property taxes are imposed.
(3) A certification that the applicant's homestead is
adequately insured under a homeowner's policy to the extent
of all outstanding liens.
(4) Receipts showing timely payment of the immediately
preceding year's nondeferred real property tax liability.
(5) Proof of income eligibility under section 8574
(relating to income eligibility).
(6) Any other information required by the political
subdivision.
(b) Subsequent years.--After the initial entry into the
program, a claimant shall remain eligible for tax deferral in
subsequent years so long as the claimant continues to meet the
eligibility requirements of this subchapter.
§ 8577. Contents of application.
Any application for a tax deferral distributed to persons
shall contain the following:
(1) A statement that the tax deferral granted under this
subchapter is provided in exchange for a lien against the
homestead of the applicant.
(2) An explanation of the manner in which the deferred
taxes shall become due, payable and delinquent and include,
at a minimum, the consequences of noncompliance with the
provisions of this subchapter.
§ 8578. Attachment and satisfaction of liens.
(a) Nature of lien.--All taxes deferred under this
subchapter shall constitute a prior lien on the homestead of the
claimant in favor of the political subdivision and shall attach
as of the date and in the same manner as other real estate tax
liens. The deferred taxes shall be collected as other real
estate tax liens, but the deferred taxes shall be due, payable
and delinquent only as provided in subsection (b).
(b) Payment.--
(1) All or part of the deferred taxes may at any time be
paid to the political subdivision.
(2) In the event that the deferred taxes are not paid by
the claimant or the claimant's spouse during his or her
lifetime or during their continued ownership of the
homestead, the deferred taxes shall be paid either:
(i) prior to the conveyance of the homestead to any
third party; or
(ii) prior to the passing of the legal or equitable
title, either by will or by statute, to the heirs of the
claimant or the claimant's spouse.
(3) The surviving spouse of a claimant shall not be
required to pay the deferred taxes by reason of his or her
acquisition of the homestead due to death of the claimant as
long as the surviving spouse maintains his or her domicile in
the property. The surviving spouse may continue to
participate in the tax deferral program in subsequent years
provided he or she is eligible under the provisions of this
subchapter.
SUBCHAPTER F
HOMESTEAD PROPERTY EXCLUSION
Sec.
8581. Short title of subchapter.
8582. Definitions.
8583. Exclusion for homestead property.
8584. Administration and procedure.
8585. Exclusion for farmstead property.
8586. Limitations.
8587. Uniform application.
§ 8581. Short title of subchapter.
This subchapter shall be known and may be cited as the
Homestead Property Exclusion Program Act.
§ 8582. 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:
"Assessor." The chief assessor of the county, the equivalent
position in a home rule county or the equivalent position in a
city of the third class that performs its own assessments of
real property.
"Board." Any of the following:
(1) "Board." As defined in the act of June 26, 1931,
(P.L.1379, No.348), referred to as the Third Class County
Assessment Board Law.
(2) "Board." As defined in the act of May 21, 1943
(P.L.571, No.254), known as The Fourth to Eighth Class County
Assessment Law.
(3) "Board of Property Assessment, Appeals and Review."
The Board of Property Assessment, Appeals and Review in a
county of the second class under the act of June 21, 1939
(P.L.626, No.294), referred to as the Second Class County
Assessment Law.
(4) "Board of Revision of Tax and Appeals." The board
of revision of taxes and appeals in cities of the third
class.
"Common level ratio." The ratio of assessed value to current
market value used generally in the county as last determined by
the State Tax Equalization Board under the act of June 27, 1947
(P.L.1046, No.447), referred to as the State Tax Equalization
Board Law.
"Established predetermined ratio." The ratio of assessed
value to market value established by the board of county
commissioners and uniformly applied in determining assessed
value in any year.
"Farmstead." All buildings and structures on a farm not less
than ten contiguous acres in area, not otherwise exempt from
real property taxation or qualified for any other abatement or
exclusion pursuant to any other law, that are used primarily to
produce or store any farm product produced on the farm for
purposes of commercial agricultural production, to house or
confine any animal raised or maintained on the farm for the
purpose of commercial agricultural production, to store any
agricultural supply to be used on the farm in commercial
agricultural production or to store any machinery or equipment
used on the farm in commercial agricultural production. This
term shall only apply to farms used as the domicile of an owner.
"Farmstead property." A farmstead for which an application
has been submitted and approved under section 8584 (relating to
administration and procedure).
"Governing body." The board of county commissioners,
including the successor in function to the board of county
commissioners in a county which has adopted a home rule charter
under the former act of April 13, 1972 (P.L.184, No.62), known
as the Home Rule Charter and Optional Plans Law, under Subpart E
of Part III (relating to home rule and optional plan government)
or under Article XXXI-C of the act of July 28, 1953 (P.L.723,
No.230), known as the Second Class County Code, city council,
borough council, incorporated town council, board of township
commissioners, board of township supervisors, a governing
council of a home rule municipality or optional plan
municipality, a governing council of any similar general purpose
unit of government which may hereafter be created by statute or
a board of school directors of a school district.
"Median assessed value." The value which is the middle point
in the sequential distribution of assessed values, above and
below which exist an equal number of assessed values.
§ 8583. Exclusion for homestead property.
(a) General rule.--The governing body of a political
subdivision may exclude from taxation a fixed dollar amount of
the assessed value of each homestead property in the political
subdivision consistent with section 8586 (relating to
limitations).
(b) Jurisdictions crossing county lines.--If a political
subdivision is located in more than one county, the exclusion
established under subsection (a) for each county portion of the
political subdivision shall be uniform after adjustment for the
common level ratios in the respective counties.
(c) Split rate taxes.--In political subdivisions where
different millage rates are applied to land and the improvements
upon land, the exclusion established under subsection (a) shall
be applied first to the value of the improvements, and the
remainder of the exclusion, if any, shall be applied to the
value of the land.
(d) New construction.--The exclusion authorized under
subsection (a) for a dwelling constructed during the taxable
year and used as homestead property shall be prorated in a
manner consistent with the assessment of real property taxes on
that dwelling.
(e) Reassessment.--After a revision of assessments by means
of revaluing all properties, the governing body of the political
subdivision providing an exclusion under this section shall
adjust the amount of the exclusion for homestead property as
follows:
(1) if the assessment base is revised by applying a
change in the established predetermined ratio, the exclusion
for homestead property shall be adjusted by the percentage
change between the existing predetermined ratio and the newly
established predetermined ratio; or
(2) if the assessor performs a revision of assessments
by revaluing all properties and applying an established
predetermined ratio, the exclusion for homestead property
shall be adjusted by dividing the exclusion for homestead
property for the year preceding the revision of assessments
by the common level ratio and multiplying the quotient of
that calculation by the newly established predetermined
ratio.
§ 8584. Administration and procedure.
(a) Application; determinations.--The owner or owners of
real property seeking to have property approved as homestead
property or farmstead property shall file an application with
the assessor on the form developed under section 8587 (relating
to uniform application). Determinations with respect to the
qualification of all or a part of a parcel of real property as
homestead property or farmstead property shall be made by the
assessor.
(b) Filing deadlines; renewal of application.--Applications
shall be filed with the assessor not later than March 1 of each
year. The governing body of a county may adopt a schedule for
review or reapplication for real property previously approved as
homestead property or farmstead property.
(c) Notice of applications and deadlines.--The assessor
shall provide sufficient notice to the public regarding the
availability of applications to designate real property as
homestead property or farmstead property and all filing
deadlines. The assessor shall make applications available at
least 75 days before the filing deadline.
(d) Denial of application.--The assessor shall provide to
each property owner whose application for approval as homestead
property or farmstead property is being denied in whole or in
part a written notice of denial by first class mail not later
than 120 days after the filing deadline. The notice shall
include all reasons for denial. Failure by the assessor to
provide notice under this subsection shall be deemed to be
approval of the application.
(e) Appeals of assessor's decision.--An owner aggrieved by
the decision of the assessor may appeal to the board for a
review of the decision in a manner consistent with the
provisions for appeal of assessments under the applicable
assessment law. Appeals under this subsection shall be limited
to whether the application meets the requirements of subsections
(a) and (b) or whether the parcel for which the appeal is made
meets the definition of "farmstead property" or "homestead
property."
(f) Other appeals.--Appeals regarding the assessed value of
real property under the applicable assessment law shall be based
on the assessed value of the real property before application of
the exclusions for homestead property or farmstead property. The
issue of qualification as homestead property or farmstead
property shall not be raised in an appeal except as provided in
subsection (e).
(g) False or fraudulent applications.--The assessor may
select, randomly or otherwise, applications filed under
subsection (a) to review for false or fraudulent information.
(h) Penalties.--Any person who files an application under
subsection (a) which is false as to any material matter shall:
(1) pay any taxes which would have been due but for the
false application, plus simple interest computed at the rate
provided in section 806 of the act of April 9, 1929 (P.L.343,
No.176), known as The Fiscal Code;
(2) pay a penalty equal to 10% of the unpaid taxes
computed under paragraph (1); and
(3) upon conviction for filing an application under
subsection (a) which a person knows to be fraudulent, be
guilty of a misdemeanor of the third degree and be sentenced
to pay a fine not exceeding $2,500.
(i) Reports.--At the same time as the assessor certifies the
tax duplicate, the assessor shall provide to the governing
bodies of the county and each political subdivision within the
county upon request and at no charge a certified report listing
at least all of the following information:
(1) The parcel number of each parcel which is approved,
in whole or in part, as homestead property.
(2) The assessed value of each parcel which is approved,
in whole or in part, as homestead property.
(3) The portion of the assessed value of each parcel
listed under paragraph (2) which is approved as homestead
property.
(4) The median assessed value of the homestead property
listed in paragraph (3).
(5) The parcel number of each parcel which is approved,
in whole or in part, as farmstead property.
(6) The assessed value of each parcel which is approved,
in whole or in part, as farmstead property.
(7) The portion of the assessed value of each parcel
listed under paragraph (6) which is approved as farmstead
property.
The governing body of the county may set reasonable fees for
providing customized reports or services not otherwise required
under this chapter or other applicable law to political
subdivisions.
(j) Notification on change of use.--
(1) 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 shall notify the assessor within 45 days of the date
the property no longer qualifies as homestead property or
farmstead property. Failure to notify the assessor as
required by this subsection shall be treated in the same
manner as a false application under subsection (g).
(2) The recorder of deeds shall periodically provide to
the assessor 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 of 1971.
§ 8585. Exclusion for farmstead property.
(a) Authorization.--The exclusion for farmstead property
shall be authorized pursuant to section 2(b)(i) of Article VIII
of the Constitution of Pennsylvania. This exclusion shall apply
uniformly to each farmstead property within the taxing
jurisdiction.
(b) General rule.--Any governing body that excludes a
portion of the value of homestead property under section 8583
(relating to exclusion for homestead property) shall exclude a
portion of the assessed value of each farmstead property in the
political subdivision by a fixed dollar amount established by
its governing body, not to exceed the amount of the exclusion
for homestead property under section 8583. The exclusion for
farmstead property shall be in addition to any exclusion for
homestead property for which the dwelling on the farm may
qualify.
(c) Farmstead crossing county lines.--If a political
subdivision is located in more than one county, the exclusion
for farmstead property computed under subsection (a) for each
county portion of the political subdivision shall be uniform
after adjustment for the common level ratios in the respective
counties.
(d) New construction.--The exclusion allowed under
subsection (b) for a building constructed during the taxable
year and used as farmstead property shall be prorated in a
manner consistent with the assessment of real property taxes on
that building.
(e) Reassessment.--After a revision of assessments by means
of revaluing all properties, the governing body of the political
subdivision providing an evaluation under this section shall
adjust the amount of the exclusion for farmstead property as
follows:
(1) if the assessment base is revised by applying a
change in the established predetermined ratio, the exclusion
for farmstead property shall be adjusted by the percentage
change between the existing predetermined ratio and the newly
established predetermined ratio; or
(2) if performing a revision of assessments by revaluing
all properties and applying an established predetermined
ratio, the exclusion for farmstead property shall be adjusted
by dividing the exclusion for farmstead property for the year
preceding the revision of assessments by the common level
ratio and multiplying the quotient of that calculation by the
newly established predetermined ratio.
§ 8586. Limitations.
(a) Limit on exclusion.--
(1) In accordance with the limits established on the
exclusion for homestead property in Article VIII of the
Constitution of Pennsylvania, no governing body of a
political subdivision shall authorize an exclusion for
homestead property in excess of the amount which is one-half
of the median assessed value of homestead property in the
political subdivision. The median assessed value of homestead
property shall be determined by the information provided to
the governing body under section 8584(i) (relating to
administration and procedure).
(2) For the purposes of calculating the limit on the
exclusion under paragraph (1), a political subdivision that
is located in more than one county shall determine the median
assessed value of homestead property for the entire political
subdivision after dividing the assessed value of each
homestead property by the common level ratio of the county in
which the homestead property is located.
(b) Prohibition.--The governing body of the political
subdivision may not increase the millage rate of its tax on real
property to pay for the exclusions authorized by sections 8583
(relating to exclusion for homestead property) and 8585
(relating to exclusion for farmstead property).
§ 8587. Uniform application.
An application form for use by assessors under section
8584(a) (relating to administration and procedure) shall be
developed by the Department of Community and Economic
Development and published in the Pennsylvania Bulletin by
September 30, 1998.
CHAPTER 86
(Reserved)
CHAPTER 87
OTHER SUBJECTS OF TAXATION
Subchapter
A. Tax Authorization and Referendum Requirements
B. Earned Income and Net Profits Tax
SUBCHAPTER A
TAX AUTHORIZATION AND REFERENDUM REQUIREMENTS
Sec.
8701. General tax authorization.
8702. Continuity of tax.
8703. Adoption of referendum.
8704. Public referendum requirements for increasing property
taxes previously reduced.
8705. Local tax study commission.
8706. Property tax limits on reassessment.
§ 8701. General tax authorization.
(a) General rule.--Subject to sections 8703 (relating to
adoption of referendum) and 8704 (relating to public referendum
requirements for increasing property taxes previously reduced)
and except as provided in subsection (b), each school district
shall have the power and may by resolution levy, assess and
collect or provide for the levying, assessment and collection of
the earned income and net profits tax under this chapter.
(b) Exclusions.--No school district which levies an earned
income and net profits tax authorized by this chapter shall have
any power or authority to levy, assess or collect:
(1) A tax based upon a flat rate or on a millage rate on
an assessed valuation of a particular trade, occupation or
profession, commonly known as an occupation tax.
(2) A tax at a set or flat rate upon persons employed
within the taxing district, commonly known as an occupational
privilege tax.
(3) A per capita, poll, residence or similar head tax.
(4) The earned income and net profits tax levied under
the Local Tax Enabling Act.
(5) An earned income tax under the act of August 24,
1961 (P.L.1135, No.508), referred to as the First Class A
School District Earned Income Tax Act, or under the
additional authority in section 652.1(a)(2) of the act of
March 10, 1949 (P.L.30, No.14), known as the Public School
Code of 1949.
(6) Any tax under section 652.1(a)(4) of the Public
School Code of 1949 except as it pertains to real estate
transfer taxes.
(7) Except for taxes permitted under section 8402(b)
(relating to scope and limitations), (c), (d), (e) and (f),
any other tax authorized or permitted under the Local Tax
Enabling Act.
(c) Delinquent taxes.--The provisions of subsection (b)
shall not apply to collection of delinquent taxes.
§ 8702. Continuity of tax.
The earned income and net profits tax levied under the
provisions of this chapter shall continue in force on a fiscal
year basis without annual reenactment unless the rate of tax is
increased or the tax is subsequently repealed.
§ 8703. Adoption of referendum.
(a) General rule.--
(1) In order to levy an earned income and net profits
tax under this chapter, a governing body shall use the
procedures set forth in subsection (b).
(2) Any governing body after making an election to levy
an earned income and net profits tax under this chapter may,
after a period of at least three full fiscal years, elect
under the provisions of subsection (c) to levy, assess and
collect the taxes prohibited by section 8701(b) (relating to
general tax authorization) to the extent otherwise provided
by law. If the electorate approves such referendum, the
governing body shall lose the authority to continue to levy
an earned income and net profits tax authorized under this
chapter.
(b) Public referendum requirements.--Subject to the notice
and public hearing requirements of section 8716 (relating to
procedure and administration), a governing body may levy the
earned income and net profits tax under this chapter only by
obtaining the approval of the electorate of the affected school
district in a public referendum at only the municipal election
preceding the fiscal year when the earned income and net profits
tax will be initially imposed. The referendum question must
state the initial rate of the proposed earned income and net
profits tax, the reason for the tax and the amount of proposed
budgeted revenue growth, if any, in the first fiscal year
following adoption of the referendum, expressed as a percent
increase over the prior year's budgeted revenue. Any increase in
budgeted revenue between the first fiscal year following
adoption of the referendum and the prior year's budgeted revenue
shall not exceed the annual percent change in the Statewide
average weekly wage. The question shall be in clear language
that is readily understandable by a layperson. For the purpose
of illustration, a referendum question may be framed as follows:
Do you favor the imposition of an earned income and net
profits tax of X% to be used to replace (names of local
taxes to be repealed), reduce real property taxes by X%
by means of a homestead exclusion and provide for a one-
time revenue increase of X% over the preceding fiscal
year?
A nonlegal interpretative statement must accompany the question
in accordance with section 201.1 of the act of June 3, 1937
(P.L.1333, No.320), known as the Pennsylvania Election Code,
that includes the following: the initial rate of the earned
income and net profits tax and the maximum allowable rate of the
earned income and net profits tax imposed under this chapter;
the estimated revenues to be derived from the initial rate of
the earned income and net profits tax imposed under this
chapter; the amount of proposed revenue growth, if any, in the
first fiscal year following adoption of the referendum; the
estimated reduction in real property taxes and the elimination
of certain existing taxes under this chapter; the identification
of the existing taxes to be eliminated under this chapter; the
method to be used to reduce real property taxes; the class or
classes of real property for which real property taxes would be
reduced; and the estimated amount of real property tax reduction
by class, expressed as an average percent reduction by class.
Any governing body which uses the procedures under this section
shall not be subject to the provisions of section 8704 (relating
to public referendum requirements for increasing property taxes
previously reduced) for any future increases in the earned
income and net profits tax rates authorized under this chapter.
Any future real property tax rate increases are subject to the
provisions of section 8704. If the ballot question fails to
receive a majority vote pursuant to this section, approval of
the electorate under section 8704 shall not be required to
increase the rate of any tax which the governing body of the
affected school district is authorized to levy and increase
pursuant to any other act.
(c) Public referendum requirements to end participation
under this chapter.--Subject to the notice and public hearing
requirements in section 4 of the Local Tax Enabling Act, a
governing body may elect to end participation under this chapter
in accordance with subsection (a)(2) by obtaining the approval
of the electorate of the affected school district in a public
referendum at a municipal election.
(d) Public requirements to initiate referendum.--
(1) If the governing body of a school district fails to
place a referendum question on the ballot within two years
after the effective date of this chapter, the electors of the
school district may:
(i) Circulate a petition which, if signed by
electors comprising 2% of the number of electors voting
for the office of Governor in the last gubernatorial
election in the school district and filed with the
election officials and submitted to the governing body
thereof, shall require the governing body to establish a
local tax study commission. The provisions under
paragraph (2)(v), (vi), (vii), (viii) (ix) and (x) shall
not apply to this subparagraph.
(ii) If the local tax study commission makes a
recommendation to levy the earned income and net profits
tax under this chapter and the governing body fails to
place the recommendation or other alternative of the
governing body authorized under this chapter on the
ballot in accordance with this chapter at the next
municipal election occurring at least 90 days after the
submission of the recommendation to the governing body, a
petition under this paragraph may be circulated. If the
petition is signed by the electors comprising 5% of the
number of electors voting for the office of Governor in
the last gubernatorial election in the school district
and filed with election officials at least 90 days prior
to the next municipal election, the petition shall compel
the election officials to place the recommendation upon
the ballot at the next municipal election occurring at
least 90 days after the filing of the petition.
(2) The following requirements shall apply to the
process under paragraph (1):
(i) The name and street address of each elector
signing the petition and of the person filing the
petition shall be clearly stated on the petition. The
petition shall include an affidavit of the circulator
that he or she is a qualified elector of the school
district referred to in the petition; that the signers
signed with full knowledge of the contents of the
petition; that the signers' residences are correctly
stated; and that, to the best of the circulator's
knowledge and belief, the signers are qualified electors.
(ii) The election officials shall, within ten days
after filing, review the petition as to the number and
qualifications of signers. If the petition appears to be
defective, the election officials shall immediately
notify the person filing the petition of the defect and
may reject the petition if warranted.
(iii) The petition as submitted to the election
officials, along with the list of signatories, shall be
open to public inspection in the office of the election
officials.
(iv) If the election officials find that the
petition as submitted is in proper order, they shall send
copies of the petition without signatures thereon to the
governing body involved.
(v) The procedure for the referendum shall be
governed by the act of June 3, 1937 (P.L.1333, No.320),
known as the Pennsylvania Election Code.
(vi) If the election officials find the petition
meets the requirements of this chapter, they shall place
the proposal on the ballot in a manner fairly
representing the content of the petition for decision by
referendum at the proper election.
(vii) The election officials shall certify the date
for the referendum and shall notify the governing body at
least 30 days prior to such date.
(viii) At least 30 days' notice of the referendum
shall be given by proclamation of the governing body. A
copy of the proclamation shall be posted at each polling
place on the day of the election and shall be published
once in at least one newspaper of general circulation
which is distributed within the school district during
the 30-day period prior to the election.
(ix) Approval of a referendum shall be by majority
vote of those voting in the school district involved.
(x) The election officials shall certify the results
of the referendum to the governing body.
(e) School districts located in more than one county.--
(1) In the event a school district is located in more
than one county, petitions under this section shall be filed
with the election officials of the county wherein the
administrative offices of the school district are located.
(2) The election officials receiving a petition shall be
responsible for all administrative functions in reviewing and
certifying the validity of the petition and for making all
necessary communications with the school district.
(3) If the election officials of the county receiving
the petition certify that it is sufficient under this subpart
and determine that a question should be placed upon the
ballot, such decision shall be communicated to election
officials in any other county in which the school district is
also located. Election officials in the other county or
counties shall cooperate with election officials of the
county receiving the petition to insure that an identical
question is placed on the ballot at the same election
throughout the entire school district.
(4) Election officials from each county involved shall
independently certify the results from their county to the
governing body.
§ 8704. Public referendum requirements for increasing property
taxes previously reduced.
(a) General rule.--Except as provided in subsections (c) and
(d), a governing body that elects to levy an earned income and
net profits tax under this chapter pursuant to section 8703(a)
(relating to adoption of referendum) shall not increase the rate
of its tax on real property without first obtaining the approval
of the electorate of the affected school district in a
referendum at the primary election immediately preceding the
fiscal year of the proposed tax increase.
(b) Disapproval.--Whenever the electorate fails to approve
the proposed referendum question to increase the rate of tax on
real property under subsection (a), the governing body shall be
limited to the rate of tax in effect prior to the referendum.
(c) Exception to general rule.--The provisions of subsection
(a) shall not apply to an increase in the rate of the real
property tax that does not cause local tax revenue, excluding
real property taxes to be levied on newly constructed buildings
or structures or on increased valuations based on new
improvements made to existing houses, to increase by more than
the percentage increase in the Statewide average weekly wage in
the preceding year. Prior to any increase under this subsection,
the governing body must certify to the court of common pleas in
the judicial district in which the governing body is located the
estimates of total local tax revenues used in the calculation
under this subsection. The court may, on its own motion or on
petition of a person having standing under subsection (f),
revise the estimates certified by the governing body and reduce
the allowable increase in the rate of the real property tax
under this subsection.
(d) Referendum exceptions.--The provisions of subsection (a)
shall not apply to increases in the rate of tax on real property
in this subsection only if the exception to the general rule
under subsection (c) has been utilized, if applicable, to the
maximum amount allowed:
(1) To respond to or recover from an emergency or
disaster declared pursuant to 35 Pa.C.S. § 7301 (relating to
general authority of Governor) or 75 Pa.C.S. § 6108 (relating
to power of Governor during emergency), only for the duration
of the emergency or disaster and for the costs of the
recovery from the emergency or disaster.
(2) To implement a court order or an administrative
order from a Federal or State agency that requires the
expenditure of funds that exceed current available revenues.
The rate increase shall be rescinded following fulfillment of
the court order or administrative order.
(3) To pay interest and principal on any indebtedness
incurred under Subpart B (relating to indebtedness and
borrowing). However, in no case may a school district incur
Act text part 2
additional debt under this paragraph, except for the
refinancing of existing debt, including the payment of costs
and expenses related to such refinancing and the
establishment or funding of appropriate debt service
reserves. The increase shall be rescinded following the final
payment of interest and principal. The exception provided
under this paragraph shall not be used to avoid referendum
requirements to pay for costs which could not be financed by
the issuance of debt under Subpart B.
(4) To respond to conditions that pose an immediate
threat of serious physical harm or injury to the students,
staff or residents of the school district until the
circumstances causing the threat have been fully resolved.
(5) Special purpose tax levies approved by the
electorate.
(6) To maintain per-student local tax revenue in the
school district at an amount not exceeding the amount of per-
student local tax revenue at the level of the preceding year,
adjusted for the percentage increase in the Statewide average
weekly wage. This paragraph shall apply only if the
percentage growth in student enrollment in the school
district between the current fiscal year and the third fiscal
year immediately preceding the current fiscal year exceeds
10%. For the purposes of this paragraph, student enrollment
shall be measured by average daily membership as defined by
the act of March 10, 1949 (P.L.30, No.14), known as the
Public School Code of 1949. For the purposes of this
paragraph, per-student local tax revenue shall be determined
by dividing local tax revenue by average daily membership.
(e) Court action.--Prior to the imposition of the tax
increase under subsection (d)(1), (2), (4) or (6), approval is
required by the court of common pleas in the judicial district
in which the governing body is located. The governing body shall
publish in a newspaper of general circulation a notice of its
intent to file an action under this subsection at least one week
prior to the filing of the petition. The governing body shall
also publish in a newspaper of general circulation notice, as
soon as possible following notification from the court that a
hearing has been scheduled, stating the date, time and place of
the hearing on the petition. The following shall apply to any
proceedings instituted under this subsection:
(1) The governing body must prove by clear and
convincing evidence the necessity for the tax increase.
(2) The governing body must prove by clear and
convincing evidence that there are no assets or other
feasible alternatives available to the school district.
(3) The court shall determine the appropriate duration
of the increase and may retain continuing jurisdiction. The
court may, on its own motion or on petition of an interested
party, revoke approval for or order rescission of a tax
increase.
(f) Standing.--A person shall have standing as a party to a
proceeding under this section as long as the person resides
within or pays real property taxes to the taxing jurisdiction of
the governing body instituting the action.
§ 8705. Local tax study commission.
(a) Appointment.--A governing body may appoint a local tax
study commission.
(b) Membership.--The local tax study commission shall
consist of five members who are resident individuals or
taxpayers of the school district and shall reflect the
socioeconomic, age and occupational diversity of the school
district to the extent possible.
(1) Except for paragraph (2), no member shall be an
official or employee, or a relative thereof, of the school
district.
(2) One member may be a member of the governing body.
(c) Staff and expenses.--The governing body shall provide
necessary and reasonable support staff and shall reimburse the
members of the local tax study commission for necessary and
reasonable expenses in the discharge of their duties.
(d) Contents of study.--The local tax study commission shall
study the existing taxes levied, assessed and collected by the
school district and their effect. The local tax study commission
shall determine how the tax policies of the school district
could be improved by the levy, assessment and collection of the
taxes authorized pursuant to this chapter. The study shall
include, but not be limited to, consideration of all of the
following:
(1) Historic and present rates of and revenue from taxes
currently levied, assessed and collected.
(2) The age, income, employment and property use
characteristics of the existing tax base.
(3) Projected revenues of taxes currently levied,
assessed and collected, including taxes authorized and taxes
not levied under this chapter.
(e) Recommendation.--Within 90 days of its appointment, the
local tax study commission shall make a nonbinding
recommendation to the governing body regarding the imposition of
an earned income and net profits tax to be levied, assessed and
collected commencing the next fiscal year. Except as provided in
subsection (f), if the governing body appoints a commission, the
earned income and net profits tax authorized under this chapter
may not be levied, assessed or collected until receipt of the
recommendation. No later than 90 days prior to the next
municipal election occurring at least 150 days after the
submission of the recommendation, the governing body shall
accept or reject the recommendation of the local tax study
commission or adopt an alternative proposal authorized under
this chapter.
(f) Failure to issue a recommendation.--If the local tax
study commission fails to make a recommendation under subsection
(e), the governing body may adopt a proposal authorized under
this chapter.
(g) Public distribution of report.--The local tax study
commission shall publish a final report of its findings and
recommendation and deliver the report to the governing body. The
governing body shall supply copies to any interested persons
upon request.
(h) Materials.--All records of the local tax study
commission shall be available for public inspection during the
regular business hours of the school district.
§ 8706. Property tax limits on reassessment.
After any county makes a countywide revision of assessment of
real property at values based upon an established predetermined
ratio as required by law or after any county changes its
established predetermined ratio, each school district that has
made an election under section 8703 (relating to adoption of
referendum), which hereafter for the first time levies its real
estate taxes on that revised assessment or valuation, shall for
the first year reduce its tax rate, if necessary, for the
purpose of having the percentage increase in taxes levied for
that year against the real properties contained in the duplicate
for the preceding year be less than or equal to the percentage
increase in the Statewide average weekly wage for the preceding
year notwithstanding the increased valuations of such properties
under the revised assessment. For the purpose of determining the
total amount of taxes to be levied for the first year, the
amount to be levied on newly constructed buildings or structures
or on increased valuations based on new improvements made to
existing houses need not be considered. The tax rate shall be
fixed for that year at a figure which will accomplish this
purpose. The provisions of section 8704 (relating to public
referendum requirements for increasing property taxes previously
reduced) shall apply to increases in the tax rate above the
limits provided in this section.
SUBCHAPTER B
EARNED INCOME AND NET PROFITS TAX
Sec.
8711. Earned income and net profits tax.
8712. Collections.
8713. Credits.
8714. Earned income and net profits tax exemption.
8715. Rules and regulations.
8716. Procedure and administration.
8717. Disposition of earned income and net profits tax
revenue.
§ 8711. Earned income and net profits tax.
A school district shall have the power to levy, assess and
collect a tax on the earned income and net profits of resident
individuals of the school district up to a maximum rate of 1.5%.
The earned income and net profits tax may be levied by the
school district at a rate of 1.0%, 1.25% or 1.5%.
§ 8712. Collections.
Any school district imposing a tax under section 8711
(relating to earned income and net profits tax) shall designate
the tax officer who is appointed under section 10 of the Local
Tax Enabling Act, or otherwise by law, as the collector of the
earned income and net profits tax. In the performance of the tax
collection duties under this subchapter, the designated tax
officer shall have all the same powers, rights, responsibilities
and duties for the collection of the taxes which may be imposed
under the Local Tax Enabling Act, Subchapter C of Chapter 84
(relating to local taxpayers bill of rights) or as otherwise
provided by law.
§ 8713. Credits.
(a) General rule.--The provisions of section 14 of the Local
Tax Enabling Act shall be used to determine any credits under
the provisions of this chapter for any taxes imposed under
section 8711 (relating to earned income and net profits tax).
(b) State tax credit.--A credit against personal income tax
due to the Commonwealth under section 302 of the Tax Reform Code
shall be granted to all nonresidents of a city of the first
class who are subject to a tax imposed by a city of the first
class pursuant to the act of August 5, 1932 (Sp.Sess., P.L.45,
No.45), referred to as the Sterling Act. The credit shall equal
0.2756% of salaries, wages, commissions, compensation or other
income received for work done or services performed within a
city of the first class. The Secretary of Revenue shall
promulgate such regulations and forms as are necessary to
implement the provisions of this subsection. This section shall
only apply to residents of school districts which impose the tax
under this subchapter. A governing body of a school district in
a county of the second class A shall, and a governing body of a
school district in a county of the third class may, include in
the referendum question under section 8703 (relating to adoption
of referendum) language asking whether the credit against the
personal income tax in this subsection should be provided to the
nonresident taxpayer in the city of the first class or the
school district in which the taxpayer resides for the purpose of
making additional tax reductions in the same manner as section
8717 (relating to disposition of earned income and net profits
tax revenue). Should any court of competent jurisdiction
determine that this subsection is unconstitutional, the
provisions of this subsection shall be void and no credit shall
be expanded or extended in any way by any court.
§ 8714. Earned income and net profits tax exemption.
A school district that imposes an earned income and net
profits tax under this chapter may exempt from the payment of
that tax any person whose total income from all sources is less
than $7,500.
§ 8715. Rules and regulations.
Taxes imposed under section 8711 (relating to earned income
and net profits tax) will be subject to all regulations adopted
under section 13 of the Local Tax Enabling Act. A school
district may adopt regulations for the processing of claims for
credits or exemptions under sections 8713 (relating to credits)
and 8714 (relating to earned income and net profits tax
exemption).
§ 8716. Procedure and administration.
In order to levy the tax under section 8711 (relating to
earned income and net profits tax), the governing body shall
adopt a resolution which shall refer to this subchapter prior to
placing a question on the ballot under section 8703 (relating to
adoption of referendum). Prior to adopting a resolution imposing
the tax authorized by section 8711, the governing body shall
give public notice of its intent to adopt the resolution in the
manner provided by section 4 of the Local Tax Enabling Act and
shall conduct at least one public hearing regarding the proposed
adoption of the resolution.
§ 8717. Disposition of earned income and net profits tax
revenue.
The disposition of revenue from an earned income and net
profits tax or an increase in the rate of an earned income and
net profits tax imposed by school districts under the authority
of this chapter shall occur in the following manner:
(1) For the fiscal year of implementation of a newly
imposed income tax, all earned income and net profits tax
revenue received by a school district shall be used first to
offset any lost revenue to the school district from the taxes
prohibited under section 8701(b) (relating to general tax
authorization) in an amount equal to the revenue collected
from the prohibited taxes in section 8701(b) in the preceding
fiscal year; second, to provide for an increase in budgeted
revenues over the preceding fiscal year in accordance with
the amount specified in the referendum question approved by
the voters under section 8703 (relating to adoption of
referendum); and third, to reduce the school district real
property tax in the following order:
(i) By means of an exclusion for homestead property
pursuant to section 8583 (relating to exclusion for
homestead property).
(ii) By means of a reduction in the millage rate
after the limit on the exclusion for homestead property
has been reached under section 8586 (relating to
limitations).
(2) For the fiscal year of implementation of an increase
in the rate of the existing earned income and net profits tax
imposed under this chapter, all revenue received by a school
district directly attributable to the increased rate shall be
used to reduce the school district real property tax in the
following order:
(i) By means of an exclusion for homestead property
pursuant to section 8583.
(ii) By means of a reduction in the millage rate
after the limit on the exclusion for homestead property
has been reached under section 8586.
CHAPTER 89
PAYMENT AND COLLECTION OF TAXES
Subchapter
A. (Reserved)
B. Register for Certain Taxes
SUBCHAPTER A
(Reserved)
SUBCHAPTER B
REGISTER FOR CERTAIN TAXES
Sec.
8911. Definitions.
8912. Register for taxes.
8913. Information for register.
8914. Availability and effective period of register.
8915. Effect of nonfiling.
8916. Effect of subchapter on liability of taxpayer.
§ 8911. 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:
"Department." The Department of Community and Economic
Development of the Commonwealth.
§ 8912. Register for taxes.
(a) General rule.--The department shall maintain an official
continuing register supplemented annually of all local earned
income and net profits taxes levied under Chapter 87 (relating
to other subjects of taxation).
(b) Contents of register.--The register shall list:
(1) The school districts levying local earned income and
net profits tax.
(2) The rate of tax as stated in the resolution levying
the tax.
(3) The rate on taxpayers.
(4) The name and address of the official responsible for
administering the collection of the tax and from whom
information, forms and copies of regulations are available.
§ 8913. Information for register.
Information for the register shall be furnished by the school
district to the department as prescribed by the department. The
information must be received by the department no later than
July 15 of each year to show new tax enactments, repeals and
changes. Failure to comply with the filing date may result in
the omission of the tax levy from the register for that year.
Failure of the department to receive information of taxes
continued without change may be construed by the department to
mean that the information contained in the previous register
remains in force.
§ 8914. Availability and effective period of register.
The register, with such annual supplements as may be required
by new tax enactments, repeals or changes, shall be available
upon request no later than August 15 of each year. The effective
period for each register shall be from July 1 of the year in
which it is issued to June 30 of the following year.
§ 8915. Effect of nonfiling.
Employers shall not be required by any ordinance to withhold
from the compensation of their employees any local earned income
and net profits tax imposed under Chapter 87 (relating to other
subjects of taxation) which is not listed in the register or to
make reports of compensation in connection with taxes not so
listed. If the register is not available by August 15, the
register of the previous year shall continue to be effective for
an additional period of not more than one year.
§ 8916. Effect of subchapter on liability of taxpayer.
The provisions of this subchapter shall not affect the
liability of any taxpayer for taxes lawfully imposed under
Chapter 87 (relating to other subjects of taxation).
Section 10. The sum of $6,000,000, or as much thereof as may
be necessary, is hereby appropriated to the Department of
Community and Economic Development for the fiscal year July 1,
1998, to June 30, 1999, for the purpose of making one-time
transition grants to counties for costs associated with
implementing the Homestead Property Exclusion. Grants shall be
made pursuant to guidelines adopted by the department and shall
be limited to funds appropriated for this purpose.
Section 11. The following acts and parts of acts are
repealed to the extent specified:
Section 409(a) of the act of July 12, 1972 (P.L.781, No.185),
known as the Local Government Unit Debt Act, as amended October
16, 1996 (P.L.710, No.125), is repealed.
Except for sections 533 and 1301(b), the act of December 13,
1988 (P.L.1121, No.145), known as the Local Tax Reform Act, is
repealed.
Section 12. This act shall take effect as follows:
(1) The addition of 53 Pa.C.S. § 8402(c), (e) and (f)
shall take effect immediately.
(2) The addition of 53 Pa.C.S. Ch. 85 Subch. F shall
take effect July 1, 1998.
(3) The remainder of 53 Pa.C.S. Pt. VII Subpt. C shall
take effect January 1, 1999.
(4) Section 10 of this act shall take effect
immediately.
(5) This section shall take effect immediately.
(6) The remainder of this act shall take effect in 60
days.
APPROVED--The 5th day of May, A. D. 1998.
THOMAS J. RIDGE
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