PRINTER'S NO. 1368
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.1220
Session of
2025
INTRODUCED BY GROVE AND PICKETT, APRIL 15, 2025
REFERRED TO COMMITTEE ON EDUCATION, APRIL 15, 2025
AN ACT
Amending the act of June 27, 2006 (1st Sp.Sess., P.L.1873,
No.1), entitled "An act providing for taxation by school
districts, for the State funds formula, for tax relief in
first class cities, for school district choice and voter
participation, for other school district options and for a
task force on school cost reduction; making an appropriation;
prohibiting prior authorized taxation; providing for
installment payment of taxes; restricting the power of
certain school districts to levy, assess and collect taxes;
and making related repeals," in taxation by school districts,
repealing provisions relating to local tax study commission
and to adoption of further referendum.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 331 and 332 of the act of June 27, 2006
(1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief
Act, are repealed:
[Section 331. Local tax study commission.
(a) Appointment.--A board of school directors shall appoint
a local tax study commission prior to adopting a resolution
under section 331.2(b) or 332(b)(1). The local tax study
commission shall be appointed no later than 180 days prior to
the date on which the board of school directors is required to
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23 adopt a resolution under section 331.2(b) or 332(b)(1).
(b) Membership.--The local tax study commission shall
consist of five, seven or nine 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, except that one member
of the local tax study commission may be a member of the board
of school directors and no member shall be an official or
employee or a relative thereof of the school district.
(c) Staff and expenses.--The school district 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. Receipts
shall be required for all reimbursable expenses under this
subsection.
(d) Contents of study.--The local tax study commission shall
study the existing taxes levied, assessed and collected by the
school district and the effect of any county or municipal taxes
imposed concurrently with the school district. 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 under section 321. The study
shall include consideration of all of the following:
(1) Historic and present rates of and revenue from taxes
currently levied, assessed and collected.
(2) The percentage of total revenues provided by taxes
currently levied, assessed and collected.
(3) The age, income, employment and property use
characteristics of the existing tax base.
(4) Projected revenues of taxes currently levied,
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30 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 board of school directors regarding the
imposition of the taxes authorized under section 321, commencing
in the subsequent fiscal year. Prior to making its
recommendation, the local tax study commission shall hold at
least one public hearing. The recommendation of the local tax
study commission shall be presented at a public meeting of the
board of school directors. The board of school directors shall
make such recommendation available to interested persons upon
request.
(f) Failure to issue a recommendation.--If the local tax
study commission fails to make a recommendation under subsection
(e), the board of school directors shall discharge the local tax
study commission.
(g) Adoption of recommendation.--The board of school
directors shall accept or reject the recommendation of the local
tax study commission prior to adopting a resolution under
section 331.2(b) or section 332(b)(1).
(h) Materials.--All records of the local tax study
commission, including receipts, tapes, minutes of meetings and
written communications, for public inspection during the regular
business hours of the school district.
Section 332. Adoption of further referendum.
(a) General rule.--In addition to the provisions of section
331.2, a board of school directors may:
(1) Levy, assess and collect an earned income and net
profits tax authorized under section 321(b)(2) only after
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30 obtaining the approval of the electorate of the school
district in a public referendum at a municipal election. The
first such public referendum must be conducted no earlier
than the municipal election of 2009.
(2) Levy, assess and collect a personal income tax
authorized under section 321(c) only after obtaining the
approval of the electorate of the school district in a public
referendum at a municipal election. The first such public
referendum must be conducted no earlier than the municipal
election of 2009, and no such public referendum may be
conducted until the Department of Revenue receives final
approval of regulations governing the collection of a
personal income tax.
(b) Submittal of referendum.--
(1) A board of school directors may submit, at a
municipal election, a referendum question to the electors of
the school district seeking voter approval allowing the
school district to levy, assess and collect an earned income
and net profits tax or a personal income tax for the purpose
of annually funding homestead and farmstead exclusions or
millage reductions in certain circumstances. Prior to placing
a referendum question on the ballot, the board of school
directors must adopt a resolution pursuant to this section.
The board of school directors must give public notice of its
intent to adopt the resolution in the manner provided by
section 306 of the Local Tax Enabling Act and must conduct at
least one public hearing on the resolution.
(2) The board of school directors shall submit the
referendum question required under this section to the
election officials of each county in which the school
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30 district is situate no later than 60 days prior to a
municipal election. The election officials shall cause the
referendum question to be submitted to the electors of the
school district.
(3) The referendum question shall state the rate of the
proposed earned income and net profits tax or personal income
tax to be levied, the reason for the tax, the estimated per
homestead tax reduction and the current rate of earned income
and net profits or personal income tax levied by the school
district. The question shall be clear and in language that is
readily understandable by a layperson and shall be framed in
one of the following forms with the school district
resolution enumerating the variable amounts represented by
the terms X, Y and Z:
(i) Do you favor imposing an additional X% (insert
name of tax)? The revenue generated from the increased
tax rate will be used to reduce taxes on qualified
residential property by an estimated amount of $Y. The
current (insert name of tax) rate for the school district
is Z%.
(ii) Do you favor imposing a personal income tax at
X%? The revenue generated from the tax will be used to
reduce taxes on qualified residential properties by
(insert amount of reduction).
(iii) Do you favor converting the school district's
current earned income and net profits tax into a personal
income tax at X%? The revenue generated from the personal
income tax will be used to reduce taxes on qualified
residential property by an estimated amount of (insert
amount of reduction) and to replace the revenue from the
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30 current school district's earned income tax. The current
earned income tax rate is Z%.
(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 inform the voters of:
(i) the reason for the tax;
(ii) the estimated increase in revenue which the
board of school directors has included in the proposed
tax rate as authorized under section 321(b)(4) or section
321(c)(6);
(iii) the estimated per homestead tax reduction; and
(iv) the current rate of earned income and net
profits tax or, if applicable, personal income tax levied
by the school district.
(c) Proposed tax rate.--The proposed rate of the earned
income and net profits tax or personal income tax shall be
established by the board of school directors of the school
district and shall not exceed the rate, when combined with the
tax rate authorized under section 331.2, required to provide an
exclusion for homestead property and farmstead property equal to
the maximum exclusion under 53 Pa.C.S. § 8586 (relating to
limitations).
(d) Effective date.--If the referendum question under this
section is approved, the new rate of the earned income and net
profits tax or personal income tax shall take effect pursuant to
section 321(d).
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30 (e) Majority approval.--Approval of the referendum required
under this subsection shall be by a majority of the electors
voting on the question in the school district.
(f) (Reserved).
(g) Effect on certain school districts.--This section shall
not apply to a school district of the first class.
(h) School districts operating under 53 Pa.C.S. Ch. 87.--
(1) (Reserved).
(2) (Reserved).
(2.1) This subsection shall apply to a school district
which is subject to 53 Pa.C.S. Ch. 87 (relating to other
subjects of taxation).
(3) A school district under this subsection shall
convert its earned income and net profits tax authorized
under 53 Pa.C.S. § 8703 (relating to adoption of referendum)
to an earned income and net profits tax authorized under this
subsection at the same rate as the tax was levied under 53
Pa.C.S. § 8703 on the date of conversion. The tax authorized
under this subsection shall be subject to the provisions of
sections 323, 324, 325 and 326.
(4) A school district under this subsection shall
combine all revenue generated for funding homestead and
farmstead exclusions under 53 Pa.C.S. § 8703 with any revenue
collected for the purposes of funding homestead and farmstead
exclusions under this chapter.
(i) Pennsylvania Election Code provisions.--Proceedings
under this section shall be in accordance with the provisions of
the Pennsylvania Election Code. ]
Section 2. This act shall take effect in 60 days.
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