Bill Text: PA HB947 | 2009-2010 | Regular Session | Introduced

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Bill Title: Establishing the Regional Efficiency Aid Program; providing for powers and duties of the Department of Community and Economic Development and the Department of Revenue; and establishing the Regional Efficiency Aid Program Fund.

Spectrum: Slight Partisan Bill (Democrat 14-6)

Status: (Introduced - Dead) 2009-03-17 - Referred to COMMERCE [HB947 Detail]

Download: Pennsylvania-2009-HB947-Introduced.html

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PRINTER'S NO. 1085
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 947 Session of2009
INTRODUCED BY YUDICHAK, BOYD, BRENNAN, BUXTON, CALTAGIRONE, CARROLL, FAIRCHILD, FLECK, FRANKEL, FREEMAN, GIBBONS, GRUCELA, K. SMITH, MANN, PALLONE, SCAVELLO, SIPTROTH, SOLOBAY, STABACK AND VULAKOVICH, MARCH 17, 2009
REFERRED TO COMMITTEE ON COMMERCE, MARCH 17, 2009
AN ACT
Establishing the Regional Efficiency Aid Program; providing for
powers and duties of the Department of Community and Economic
Development and the Department of Revenue; and establishing
the Regional Efficiency Aid Program Fund.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Regional
Efficiency Aid Program Act.
Section 2. Declaration of policy.
The General Assembly finds and declares as follows:
(1) One of the most effective ways to reduce property
taxes is through the regionalization, consolidation or
sharing of services by political subdivisions.
(2) Because of institutional and financial limitations
on political subdivisions, regionalized, consolidated and
shared alternatives have not been widely adopted, resulting
in duplication of services and excess costs for taxpayers.
(3) A program of providing State aid to political
subdivisions that successfully implement strategies to
regionalize, consolidate and share services is an innovative
and important means of providing a financial incentive to
overcome the institutional limitations on political
subdivisions.
(4) To overcome these institutional limitations and to
ensure property tax relief, the Commonwealth should provide
State aid to political subdivisions that realize budgetary
savings from shared, regionalized or consolidated services
and pass these savings on to taxpayers through a reduction in
property tax obligations.
(5) Combining State-funded property tax relief with
fiscal assistance for the planning and start-up costs
associated with entering into new shared, regionalized or
consolidated service agreements will serve as additional
incentives for political subdivisions to take advantage of
potential savings provided by way of such agreements.
Section 3. Definitions.
The following words and phrases when used in this act 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.
"Political subdivision." A county, city, borough,
incorporated town, township, school district, vocational school
district and county institution district.
"Program" or "REAP." The Regional Efficiency Aid Program
established under section 4.
"REAP aid." State aid provided to political subdivisions
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under the Regional Efficiency Aid Program established in section
4.
"Regional service agreement." An agreement entered into by a
political subdivision in accordance with 53 Pa.C.S. Pt. III
Subpt. D (relating to area government and intergovernmental
cooperation) or any other agreement between political
subdivisions that is permitted by law.
"Residential property." A "homestead" as defined in 53
Pa.C.S. § 8401 (relating to definitions).
"Secretary." The Secretary of Community and Economic
Development of the Commonwealth.
Section 4. Regional Efficiency Aid Program.
The Regional Efficiency Aid Program is established in the
department. A political subdivision that enters into a regional
service agreement, either as a provider or receiver of services,
may apply for State aid for the purpose of providing tax
exclusions for residential property within the political
subdivision. State aid shall be granted for each calendar year
during which a regional service agreement is in effect.
Section 5. Formula for calculation of REAP aid.
(a) General rule.--The annual amount of State aid a
political subdivision is eligible to receive under the program
shall be the total of the number of points accumulated for the
regional service agreements of the political subdivision
multiplied by $1 per point, multiplied by the latest population
of the political subdivision using the most recent State
population estimates provided by the United States Bureau of the
Census and multiplied by the weighting factor of fiscal stress
of the political subdivision.
(b) Determination of variables.--A system for determining
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the number of points and weighting of fiscal stress used in the
formula for allocating State aid shall be determined by the
department within six months of the effective date of this
section. The system shall include:
(1) A schedule of the number of points for each type of
regional service agreement.
(2) The assignment of the number of points based on the
percentage of the cost of the regional service in the current
budget of the political subdivision, a relative value scale
of the importance of the regional service, a combination of
the two or such other criteria as designated by the
department to provide incentives deemed necessary or
appropriate.
(3) An increase in the number of points by an amount not
to exceed 25% of the number provided to the recipient, to be
granted to the provider of the regional service.
(4) A formula for weighting points based on a political
subdivision's degree of fiscal stress.
(c) Program administration.--The secretary shall consult
with the Secretary of Education with regard to school districts
and vocational school districts in the administration of the
program.
Section 6. Application and award process.
(a) General rule.--The department shall establish procedures
for the administration of REAP aid and provide for an
application and award process that:
(1) Is consistent with the timetable and process of
fixing property tax rates.
(2) Ensures that a political subdivision provides or
receives bona fide regional services.
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(3) Ensures that to qualify for the receipt of REAP aid,
a regional service agreement results in:
(i) savings of the cost of services, including any
new capital expenditures, reflected as current or future
budget reductions;
(ii) limits on future costs increases;
(iii) minimizing the costs of a new service; or
(iv) other criteria as the department may deem
relevant.
(4) Provides for monitoring, oversight and enforcement.
(b) Department review.--Each year the department shall
review applications and determine the amount of REAP aid for
which each political subdivision is eligible. The department
shall allocate aid to ensure that school districts and
vocational school districts receive their share of aid based on
proportion of taxes or other appropriate measure.
Section 7. Exemption from certain limitations.
Political subdivision appropriations for regional services
for which REAP aid is provided shall be exempt from the
limitations on appropriations under any law limiting political
subdivision expenditures.
Section 8. Duties of county tax assessment offices.
(a) General rule.--The county assessment office in which a
political subdivision or subdivisions have applied to receive
REAP aid shall identify property that qualifies as residential
property.
(b) Information and certification provided by taxpayers.--
(1) As a condition of eligibility under the program,
taxpayers may be required to provide information and certify
that the property for which an exclusion is sought is
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residential property. The information and certification shall
be in a form to be adopted by the Department of Revenue.
(2) County assessment offices may use any other
informational resources to determine whether a parcel
qualifies as residential property.
(3) The determination of the county assessment office as
to whether a parcel qualifies as residential property may be
appealed to a court of common pleas.
(c) Explanation.--Each county assessment office shall
provide to political subdivisions within the county an
explanation of the manner in which residential properties shall
be identified. The explanation shall be included in the
application.
(d) List to department.--By March 31 of each year, the
county assessment office shall provide to the department a list
of those properties identified as residential property, together
with a certification that the county assessment office has made
a good faith effort in identifying the properties.
Section 9. Exclusion from taxation.
(a) General rule.--A political subdivision shall exclude
from taxation a portion of the assessed value of residential
property identified under section 8 as follows:
(1) The department shall certify to each board of county
commissioners, the Local Government Commission, the
Department of Revenue, the Majority Leader and the Minority
Leader of the Senate and the Majority Leader and the Minority
Leader of the House of Representatives, by April 30 of each
year, the amount of REAP aid due to each political
subdivision for that tax year.
(2) The department shall calculate a tax exclusion rate
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by dividing total REAP aid by the total taxable value of
residential property in qualifying political subdivisions.
(3) The tax exclusion rate shall be multiplied by the
taxable value for each residential property, the product of
which shall be deducted from the total taxes due, before
deductions, on each residential property for the tax year.
The tax exclusion rate and amount of the exclusion shall be
displayed on a taxpayer's tax bill.
(b) Limitations.--The tax exclusions provided under
subsection (a) shall not exceed one-half of the median assessed
value of all homestead property within a local taxing
jurisdiction. A local taxing authority may not increase the
millage rate of its tax on real property to pay for these
exclusions.
Section 10. Payment of REAP aid.
The total amount of REAP aid shall be paid by the State
Treasurer as State aid to each political subdivision in two
equal installments payable on August 1 and November 1 of each
year.
Section 11. Administration.
The department shall establish a procedure for providing
information to taxpayers about the REAP aid program and the
amount of REAP aid for which each taxing district is eligible.
Section 12. Duties of Department of Revenue.
(a) General rule.--The Department of Revenue shall assist in
identifying residential properties and may make any additions to
notices of assessments or to other forms or notices as the
Department of Revenue deems appropriate.
(b) Sharing of information.--Notwithstanding any other
provision of law to the contrary, the Department of Revenue may
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provide such information as it deems necessary to the department
or to the county assessment offices in order to implement this
act.
(c) Regulations.--The Department of Revenue may promulgate
rules to effectuate the purposes of this act, including
regulations for the identification of residential property and a
requirement that taxpayers timely complete certifications or
applications in order to be eligible for a tax exclusion under
this act.
Section 13. Regional Efficiency Aid Program Fund.
(a) Establishment.--The Regional Efficiency Aid Program Fund
is established within the State Treasury and shall be a
nonlapsing revolving account. The fund shall receive
appropriations and repayments of loans as may be determined
necessary by the State Treasurer.
(b) Administration.--Upon request of the Governor, the
General Assembly shall appropriate the necessary funds to the
fund for purposes of the program. The fund shall be administered
by the department.
Section 14. Effective date.
This act shall take effect in 60 days.
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