2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 53 - MUNICIPALITIES GENERALLY › Chapter 87 - Other Subjects of Taxation › Section 8704 - Public referendum requirements for increasing property taxes previously reduced

§ 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 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.
Cross References.
Section 8704 is referred to in sections 8701, 8703, 8706 of this title.