Header:
PENNSYLVANIA STATUTES
TITLE 53. MUNICIPAL AND QUASI-MUNICIPAL CORPORATIONS
PART I. GENERAL MUNICIPAL LAW
CHAPTER 24B-1. TAXPAYER RELIEF ACT
CHAPTER 3. TAXATION BY SCHOOL DISTRICTS
SUBCHAPTER D. SCHOOL DISTRICT PROPERTY TAX REDUCTION
Date:
08/31/2009
Document:
§ 6926.333. Public referendum requirements for increasing certain taxes
(a) APPLICABILITY.-- The following provisions shall apply to this section:
(1) For the 2006-2007 fiscal year, the tax increase proposed by any
board of school directors shall not exceed the index unless an
exception under subsection (f) or (n) is approved pursuant to
subsection (i) or (j), provided that a board of school directors that
did not elect to participate in the former act of July 5, 2004 (P.L.
654, No. 72), known as the Homeowner Tax Relief Act, shall have the
authority to petition the court of common pleas for an additional tax
rate increase if the tax rate increase allowed by the index and any
exception approved pursuant to subsection (i) or (j) is insufficient to
balance the proposed budget. No later than July 15, 2006, the court
shall grant the school district's request for the tax rate increase
upon good cause shown if the school district proves by clear and
convincing evidence that the tax rate increase authorized under this
paragraph is insufficient to balance the proposed budget. For a board
of school directors subject to this paragraph, the dates by which the
board of school directors, the department and the court of common pleas
shall be required to comply with section 311 and subsections (e), (i)
and (j) shall be 92 days after the dates set forth in those provisions,
except that the date by which the board of school directors shall be
required to comply with all of the provisions of section 311(c) shall
be ten days prior to the date by which the board of school directors is
required to adopt a preliminary budget. Any exceptions granted to a
board of school directors under section 333 of the former Homeowner Tax
Relief Act shall remain in full force and effect. Notwithstanding the
provisions of this paragraph, a board of school directors that sought
and was granted approval for one or more exceptions under section 333
of the former Homeowner Tax Relief Act may apply for any exception
under subsections (f)(v) and (ix) and (n), where the dollar amount of
an exception approved by the department under the former Homeowner Tax
Relief Act is less than the dollar amount of the exception for which
the school district is eligible under this act.
(2) This section shall apply to each board of school directors
beginning with any proposed tax increase that takes effect in the
2007-2008 fiscal year and each fiscal year thereafter.
(b) PROHIBITIONS.-- Except as set forth in subsection (i) and (j), unless there is compliance with subsection (c), a board of school directors may not do any of the following:
(1) Increase the rate of a tax levied for the support of the public
schools by more than the index. For purposes of compliance with this
paragraph, a school district which is situated in more than one county
and which levies real estate taxes under section 672.1 of the act of
March 10, 1949 (P.L. 30, No. 14), known as the Public School Code of
1949, shall apply the index to each separate rate of real estate taxes
levied.
(2) Levy a tax for the support of the public schools which was not
levied in the 2005-2006 fiscal year.
(3) Raise the rate of the earned income and net profits tax if already
imposed under the authority of the Local Tax Enabling Act except as
otherwise provided for under section 331.2 or 332
(4) Notwithstanding any other provision of this chapter to the
contrary, the adoption of a referendum under section 331.2 or 332
confers on the board of school directors the authority to raise income
taxes only to the extent contained in the language of the referendum,
and any future increase of an income tax to be used for the purpose of
property tax reduction shall be submitted to the electors of the school
district at a subsequent municipal election pursuant to the provisions
of section 332.
(c) REFERENDUM.--
(1) In order to take an action prohibited under subsection (b)(1), at
the election immediately preceding the start of the school district
fiscal year in which the proposed tax increase would take effect, a
referendum stating the specific rate or rates of the tax increase must
be submitted to the electors of the school district, and a majority of
the electors voting on the question must approve the increase.
(2) In order to take an action under subsection (b)(2), at the election
immediately preceding the start of the school district fiscal year in
which the proposed tax would take effect, a referendum stating the
proposed tax and the rate at which it will be levied must be submitted
to the electors of the school district, and a majority of the electors
voting on the question must approve the tax.
(3) Except as set forth in subsections (i) and (j), a school district
acting pursuant to this subsection shall submit the referendum question
required under this section to the election officials of each county in
which it is situate no later than 60 days prior to the election
immediately preceding the fiscal year in which the tax increase would
take effect.
(4) The election officials of each county shall, in consultation with
the board of school directors, draft a nonlegal interpretative
statement which shall accompany the referendum 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. The nonlegal interpretative
statement shall include information that references the items of
expenditure for which the tax increase is sought and the consequence of
the referendum being disapproved by the electorate.
(d) FAILURE TO APPROVE REFERENDUM.--
(1) If a referendum question submitted under subsection (c)(1) is not
approved, the board of school directors may approve an increase in the
tax rate of not more than the index.
(2) If a referendum question submitted under subsection (c)(2) is not
approved, the board of school directors may not levy the tax.
(e) TAX RATE SUBMISSIONS.-- A school district that has adopted a preliminary budget proposal under section 311 that includes an increase in the rate of any tax levied for the support of public schools shall submit information on the increase to the department on a uniform form prepared by the department. The school district shall submit such information no later than 85 days prior to the date of the election immediately preceding the beginning of the school district's fiscal year. The department shall compare the proposed percentage increase in the rate of any tax with the index. Within ten days of the receipt of the information required under this subsection but no later than 75 days prior to the date of the election immediately preceding the beginning of the school district's fiscal year, the department shall inform the school district whether the proposed tax rate increase is less than or equal to the index. If the department determines that the proposed percentage increase in the rate of the tax exceeds the index, the department shall notify the school district that:
(1) the proposed tax increase must be reduced to an amount less than or
equal to the index;
(2) the proposed tax increase must be approved by the electorate under
subsection (c)(1); or
(3) an exception must be sought under subsections (i) and (j).
(f) REFERENDUM EXCEPTIONS.-- A school district may, without seeking voter approval under subsection (c), increase the rate of a tax levied for the support of the public schools by more than the index if all of the following apply:
(1) The revenue raised by the allowable increase under the index is
insufficient to balance the proposed budget due to one or more of the
expenditures listed in paragraph (2).
(2) The revenue generated by increasing the rate of a tax by more than
the index will be used to pay for any of the following:
(i) Costs incurred in responding to or recovering 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).
(ii) Costs to implement a court order or an administrative order from
a Federal or State agency as long as the tax increase is rescinded
following fulfillment of the court order or administrative order.
(iii) Costs associated with the following:
(A) For a board of school directors that elected to participate in
the former act of July 5, 2004 (P.L. 654, No. 72), known as the
Homeowner Tax Relief Act, to pay interest and principal on any
indebtedness incurred under 53 Pa.C.S. Pt. VII Subpt. B (relating
to indebtedness and borrowing) prior to September 4, 2004. In no
case may the school district incur additional debt under this
clause except for the refinancing of existing debt, including the
payment of costs and expenses related to such refinancing and the
establishment of funding of appropriate debt service reserves. An
increase under this clause shall be rescinded following the final
payment of interest and principal.
(A.1) For a board of school directors that did not elect to
participate in the former act of July 5, 2004 (P.L. 654, No. 72),
known as the Homeowner Tax Relief Act, to pay interest and
principal on any indebtedness incurred under 53 Pa.C.S. Pt. VII
Subpt. B prior to the effective date of this act. In no case may
the school district incur additional debt under this clause except
for the refinancing of existing debt, including the payment of
costs and expenses related to such refinancing and the
establishment of funding of appropriate debt service reserves. An
increase under this clause shall be rescinded following the final
payment of interest and principal.
(B) To pay interest and principal on any electoral debt incurred
under 53 Pa.C.S. Pt. VII Subpt. B. An increase under this clause
shall be rescinded following the final payment of interest and
principal.
(C) To pay interest and principal on indebtedness for up to 60% of
the construction cost average on a square-foot basis if all of the
following apply:
(I) The indebtedness is for a school construction project under
22 Pa. Code Ch. 21 (relating to school buildings).
(II) For a board of school directors that elected to participate
in the former Homeowner Tax Relief Act, the indebtedness to fund
appropriate debt service reserves for the project is incurred
after September 3, 2004.
(II.1) For a board of school directors that did not elect to
participate in the former Homeowner Tax Relief Act, the
indebtedness to fund appropriate debt service reserves for the
project is incurred on or after the effective date of this act.
(III) The increase sought under this clause is rescinded
following final payment of interest and principal.
(IV) The indebtedness is incurred only after existing fund
balances for school construction and any undesignated fund
balances have been fully committed to fund the project.
(V) The indebtedness is for an academic elementary or academic
secondary school building. For purposes of this subclause, the
following shall not be considered to be an academic elementary or
academic secondary school building: natatorium, stadium
bleachers, athletic field, athletic field lighting equipment and
apparatus used to promote and conduct interscholastic athletics.
(VI) For school districts of the second, third and fourth class,
the project has been approved by the department under section 731
of the act of March 10, 1949 (P.L. 30, No. 14), known as the
Public School Code of 1949. For nonreimbursable projects in
school districts of the first class A, the plans and
specifications have been approved by the board of school
directors. For reimbursable projects in school districts of the
first class A, the plans and specifications have been approved by
the department pursuant to 22 Pa. Code Ch. 21.
(D) To pay interest and principal on indebtedness for up to $
250,000 of the construction cost of a nonacademic school
construction project, as adjusted annually by the percentage
increase in the average of the Statewide average weekly wage and
the employment cost index. An increase under this clause shall be
rescinded following the final payment of interest and principal.
(E) For purposes of this subparagraph, electoral debt includes the
refunding or refinancing of electoral debt for which an exception
is permitted under clause (B) as long as the refunding or
refinancing incurs no additional debt other than for:
(I) costs and expenses related to the refunding or refinancing;
and
(II) funding of appropriate debt service reserves.
(F) For purposes of this subparagraph, indebtedness includes the
refunding or refinancing of indebtedness for which an exception is
permitted under clauses (A), (A.1), (C) and (D) as long as the
refunding or refinancing incurs no additional debt other than for:
(I) costs and expenses related to the refunding or refinancing;
and
(II) funding of appropriate debt service reserves.
(iv) Costs to respond to conditions which pose an immediate threat of
serious physical harm or injury to the students, staff or residents
of the school district but only until the conditions causing the
threat have been fully resolved.
(v) Costs incurred in providing special education programs and
services to students with disabilities if the increase in
expenditures on special education programs and services was greater
than the index. The dollar amount of this exception shall be equal
to the portion of the increase that exceeds the index.
(vi) Costs which:
(A) were incurred in the implementation of a school improvement
plan required under section 1116(b) of the Elementary and Secondary
Education Act of 1965 (Public Law 89-10, 20 U.S.C. § 6316(b)); and
(B) were not offset by a State allocation.
(vii) Costs necessary to maintain:
(A) per-student local tax revenue, adjusted by the index, if the
percentage growth in average daily membership between the school
year determined under subsection (j)(4) and the third school year
preceding the school year determined under subsection (j)(4)
exceeds 7.5%; or
(B) actual instruction expense per average daily membership,
adjusted by the index, if the increase in actual instruction
expense per average daily membership between the school year
determined under subsection (j)(4) and the school year preceding
the school year determined under subsection (j)(4) is less than the
index.
(viii) The maintenance of revenues derived from real property taxes,
earned income and net profits taxes, personal income taxes, basic
education funding allocations and special education funding
allocations, adjusted by the index, for a school district where the
percentage increase in revenues derived from real property taxes,
earned income and net profits taxes, personal income taxes, basic
education funding allocations and special education funding
allocations between the school year determined under subsection
(j)(4) and the school year preceding the school year determined under
subsection (j)(4) is less than the index.
(ix) Costs incurred for providing health care-related benefits which
are directly attributable to a collective bargaining agreement in
effect on January 1, 2006, between the school district and its
employees' organization if the anticipated increase in the cost of
health care-related benefits between the current year and the
upcoming year is greater than the index. The dollar amount of this
exception shall be equal to the portion of the increase which exceeds
the index. This subparagraph shall not apply to a collective
bargaining agreement renewed, extended or entered into after January
1, 2006.
(g) REVENUE DERIVED FROM INCREASE.-- Any revenue derived from an increase in the rate of any tax allowed pursuant to subsection (f)(2)(iii) shall not exceed the anticipated dollar amount of the expenditure.
(h) LIMITATION ON TAX RATE.-- The increase in the rate of any tax allowed pursuant to an exception under subsection (f)(2)(i), (ii), (iv), (v), (vi), (vii), (viii) or (ix) or (n) shall not exceed the rate increase required as determined by a court of common pleas or the department pursuant to subsection (i) or (j).
(i) COURT ACTION.--
(1) Prior to the imposition of a tax increase under subsection
(f)(2)(i), (ii) and (iv) and no later than 75 days prior to the
election immediately preceding the beginning of the school district's
fiscal year, approval by the court of common pleas in the judicial
district in which the administrative office of the school district is
located must be sought. The board of school directors shall publish in
a newspaper of general circulation and on the district's publicly
accessible Internet site, if one is maintained, notice of its intent to
file a petition under this subsection at least one week prior to the
filing of the petition. The board of school directors shall also
publish in a newspaper of general circulation and on the district's
publicly accessible Internet site, if one is maintained, 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:
(i) The school district must prove by clear and convincing evidence
that it qualifies for each exception sought.
(ii) The school district must prove by clear and convincing evidence
the anticipated dollar amount of the expenditure for each exception
sought.
(2) The court shall rule on the school district's petition and inform
the school district of its decision no later than 55 days prior to the
date of the election immediately preceding the beginning of the school
district's fiscal year. If the court approves the petition, the court
shall also determine the dollar amount of the expenditure for which an
exception is granted, the tax rate increase required to fund the
exception and the appropriate duration of the increase. If the court
denies the petition, the school district may submit a referendum
question under subsection (c)(1). The question must be submitted to
the election officials no later than 50 days prior to the date of the
election immediately preceding the beginning of the school district's
fiscal year.
(j) DEPARTMENT APPROVAL.--
(1) A school district that seeks to increase the rate of tax due to an
expenditure under subsection (f)(2)(iii), (v), (vi), (vii), (viii) or
(ix) or (n) shall obtain the approval of the department before imposing
the tax increase. The department shall establish procedures for
administering the provisions of this subsection, which may include an
administrative hearing on the school district's submission.
(2) A school district proceeding under the provisions of this
subsection shall publish in a newspaper of general circulation and on
the district's publicly accessible Internet site, if one is maintained,
notice of its intent to seek department approval at least one week
prior to submitting its request for approval to the department. If the
department schedules a hearing on the school district's request, the
school district shall publish notice of the hearing in a newspaper of
general circulation and on the district's publicly accessible Internet
site, if one is maintained, immediately upon receiving the information
from the department. The notice shall include the date, time and place
of the hearing.
(3) The department shall approve a school district's request under this
subsection if a review of the data under paragraph (4) demonstrates
that:
(i) the school district qualifies for one or more exceptions under
subsection (f)(2)(iii), (v), (vi), (vii), (viii) or (ix) or (n); and
(ii) the sum of the dollar amounts of the exceptions for which the
school district qualifies makes the school district eligible under
subsection (f)(1).
(4) For the purpose of determining the eligibility of a school district
for an exception under subsection (f)(2)(v), (vi), (vii) or (viii), the
department shall utilize data from the most recent school years for
which annual financial report data required under section 2553 of the
Public School Code of 1949 has been received. The department shall
inform school districts of the school years determined under this
subsection no later than 30 days prior to the date on which public
inspection of proposed school budgets is required under section 311(c).
(5) (i) The department shall rule on the school district's request
and shall inform the school district of its decision no later than 55
days prior to the date of the election immediately preceding the
beginning of the school district's fiscal year.
(ii) If the department approves the request, the department shall
determine the dollar amount of the expenditure for which the
exception is sought and the tax rate increase required to fund the
exception.
(iii) If the department denies the request, the school district may
submit a referendum question under subsection (c)(1). The question
must be submitted to the election officials no later than 50 days
prior to the date of the election immediately preceding the beginning
of the school district's fiscal year.
(6) Within 30 days of the deadline under paragraph (5)(i), the
department shall submit a report to the President pro tempore of the
Senate, the Minority Leader of the Senate, the Speaker of the House of
Representatives and the Minority Leader of the House of Representatives
enumerating the school districts which sought an exception under this
subsection. The department shall also publish the report on its
publicly accessible Internet site. The report shall include:
(i) The name of each school district making a request under this
subsection.
(ii) The specific exceptions requested by each school district and
the dollar amount of the expenditure for each exception.
(iii) The department's ruling on the request for the exception.
(iv) If the exception was approved, the dollar amount of the
expenditure for which the exception was sought and the tax rate
increase required to fund the exception.
(v) A statistical summary of the information in subparagraphs (ii),
(iii) and (iv).
(k) OBJECTIONS.-- Any person who resides within or pays real property taxes to the school district filing a petition under subsection (i) may file with the court written objections to any petition filed under this section.
(l) INDEX CALCULATION.-- No later than August 15, 2005, and each August 15 thereafter, the department shall calculate the index. The department shall publish the index by September 1, 2005, and each September 1 thereafter in the Pennsylvania Bulletin.
(m) ELECTION INTERFERENCE PROHIBITED.--
(1) No public funds may be used to urge any elector to vote for or
against a referendum or be appropriated for political or campaign
purposes.
(2) This subsection shall not be construed to prohibit the use of
public funds for dissemination of factual information relative to a
referendum appearing on an election ballot.
(3) As used in this subsection, the term "public funds" means any funds
appropriated by the General Assembly or by a political subdivision.
(n) TREATMENT OF CERTAIN REQUIRED PAYMENTS.-- The provisions of subsections (f) and (j) shall apply to a school district's share of payments to the Public School Employees' Retirement System as required under 24 Pa.C.S. § 8327 (relating to payments by employers) if the increase in the actual dollar amount of estimated payments between the current year and the upcoming year is greater than the index. The dollar amount to which subsection (f) applies shall equal that portion of the increase which exceeds the product of the index and the actual dollar value of payments for the current year.
|