HB 329 — An Act amending the act of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act, in State funds formula, further providing for certification and calculation of minimum and maximum modifiers and for Property Tax Relief Reserve Fund, providing for senior citizen tax relief and further providing for State property tax reduction allocation.

PRINTER'S NO.    284

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 329
                                               Session of
                                                 2025

     INTRODUCED BY D. WILLIAMS, KHAN, McNEILL, HILL-EVANS, GIRAL,
        BURGOS, HADDOCK, CERRATO, KAZEEM, CIRESI, CEPEDA-FREYTIZ,
        PIELLI, SANCHEZ, MENTZER, STEELE, GREEN, GUENST, KENYATTA,
        INGLIS, BOROWSKI, MALAGARI, WARREN, HANBIDGE, T. DAVIS,
        SHUSTERMAN AND BOYD, JANUARY 27, 2025

     REFERRED TO COMMITTEE ON FINANCE, JANUARY 27, 2025


                                    AN ACT
 1   Amending the act of June 27, 2006 (1st Sp.Sess., P.L.1873,
 2      No.1), entitled "An act providing for taxation by school
 3      districts, for the State funds formula, for tax relief in
 4      first class cities, for school district choice and voter
 5      participation, for other school district options and for a
 6      task force on school cost reduction; making an appropriation;
 7      prohibiting prior authorized taxation; providing for
 8      installment payment of taxes; restricting the power of
 9      certain school districts to levy, assess and collect taxes;
10      and making related repeals," in State funds formula, further
11      providing for certification and calculation of minimum and
12      maximum modifiers and for Property Tax Relief Reserve Fund,
13      providing for senior citizen tax relief and further providing
14      for State property tax reduction allocation.
15      The General Assembly of the Commonwealth of Pennsylvania
16   hereby enacts as follows:
17      Section 1.    Section 503(e)(2) introductory paragraph of the
18   act of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as
19   the Taxpayer Relief Act, is amended and the subsection is
20   amended by adding a paragraph to read:
21   Section 503.    Certification; calculation of minimum and maximum
22              modifiers.
 1    * * *
 2    (e)   Distribution.--
 3          * * *
 4          (2)   For fiscal year 2009-2010 [and each fiscal year
 5    thereafter] through fiscal year 2024-2025, the secretary
 6    shall distribute the difference between the amount certified
 7    under subsection (a)(1)(i) and the sum of all of the
 8    following:
 9                * * *
10          (3)   For fiscal year 2025-2026 and each fiscal year
11    thereafter, the secretary shall distribute the difference
12    between the amount certified under subsection (a)(1)(i) and
13    the sum of all of the following:
14                (i)    The difference between the sum of:
15                       (A)   the amount of approved claims to be paid in
16                the next fiscal year under section 1304(a)(2)(i) and
17                (3); and
18                       (B) the amount of approved claims paid in the
19                2010-2011 fiscal year under section 1304(a)(1).
20                (ii)    The sum of all of the following:
21                       (A)   The amount sufficient to fund reimbursements
22                to eligible school districts under section 324. The
23                amount deducted under this clause shall be calculated
24                based on the information provided by school districts
25                under subsection (b)(2).
26                       (B)   The amount of approved claims under section
27                704.
28                       (C)   The amount of approved claims under section
29                1304(a)(2)(ii).
30                       (D)   The amount of payments to school districts

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 1                  under section 504.1.
 2      Section 2.     Section 504(d)(1) of the act is amended to read:
 3   Section 504.     Property Tax Relief Reserve Fund.
 4      * * *
 5      (d)     Transfers.--
 6            (1)   The secretary may authorize a transfer from the
 7      Property Tax Relief Reserve Fund to the fund if the amount
 8      for distribution under section 503(e) in 2026 is less than
 9      the amount for distribution under section 503(e) [made in the
10      prior year] in 2025 or any year thereafter. [The] Beginning
11      in 2027 and each year thereafter, the amount of the transfer
12      under this subsection shall be equal to the difference
13      between the amount for distribution under section 503(e) and
14      the amount for distribution under section 503(e) made in the
15      prior year.
16            * * *
17      Section 3.     The act is amended by adding a section to read:
18   Section 504.1.     Senior citizen tax relief.
19      (a)     Tax freeze.--An eligible claimant shall be entitled to a
20   freeze of school property taxes imposed by a school district on
21   the person's homestead and shall not be required to pay any
22   school property tax increases in excess of the claimant's base
23   payment.
24      (b)     Application.--An eligible claimant must apply for the
25   tax freeze under subsection (a) by filing the following with the
26   school district imposing the school property tax on a form
27   prescribed by the department:
28            (1)   A request for the tax freeze and a copy of the most
29      recent school property tax bill.
30            (2)   Certification that the claimant or the claimant's

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 1    spouse is the owner of the homestead upon which the school
 2    property taxes are imposed.
 3          (3)   Receipts showing prompt payment of the current
 4    year's school property tax liability.
 5    (c)   Timing.--
 6          (1)   The application under subsection (b) must be filed
 7    within 45 days of the date the school property tax under
 8    subsection (b)(1) is due.
 9          (2)   Within 15 days of receipt of an application, the
10    school district shall determine the claimant to be eligible
11    or ineligible. A determination of ineligibility under this
12    paragraph is subject to 2 Pa.C.S. Ch. 7 Subch. B (relating to
13    judicial review of local agency action).
14    (d)   Termination.--
15          (1)   Subject to paragraph (2), the tax rate on and the
16    assessment of school property tax shall become current on the
17    sale or transfer of the real property subject to the tax,
18    including a transfer under a recorded real property sales
19    contract.
20          (2)   A tax freeze under this section shall remain in
21    effect upon the transfer of the affected real property to a
22    surviving spouse if, at the time of the death of the
23    claimant, the surviving spouse is at least 65 years of age or
24    will be 65 years of age within six months of the date of
25    death of the claimant.
26    (e)   Commonwealth payment.--
27          (1)   Beginning April 2025 and each April thereafter, the
28    secretary shall pay school districts, from the fund, the
29    amount of each eligible claimant's school property tax
30    increase in excess of the claimant's base payment. Payments

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 1      under this section shall be made prior to any distribution of
 2      funds under section 504(c).
 3            (2)   The school district shall provide notification and
 4      documentation to the department of the total balance due to
 5      the local taxing authorities for school property tax
 6      increases for eligible claimants.
 7            (3)   The department shall certify the total amount due to
 8      school property tax increases for each school district.
 9      (f)   Definitions.--As used in this section, the following
10   words and phrases shall have the meanings given to them in this
11   subsection unless the context clearly indicates otherwise:
12      "Base payment."
13            (1)   Except as provided in paragraph (2), the amount of
14      school property tax paid by the eligible claimant either in
15      the tax year beginning January 1, 2025, or in the first tax
16      year during which the claimant first becomes eligible,
17      whichever occurs later, on the principal residence in which
18      the claimant has maintained continuous occupancy and
19      ownership since either January 1, 2025, or the date the
20      claimant first becomes eligible.
21            (2)   If the claimant purchases a principal residence
22      after January 1, 2025, or after the date on which the
23      claimant first becomes eligible, the amount of school
24      property tax paid during the tax year in which the purchase
25      was made.
26      "Base year."    The tax year under paragraph (1) or (2) of the
27   definition of "base payment."
28      "Eligible claimant."    An individual who meets all of the
29   following for the base year and each succeeding year up to and
30   including the year for which the freeze is sought:

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 1            (1)   Was at least 65 years of age or whose spouse, if a
 2      member of the household, was at least 65 years of age during
 3      the base year.
 4            (2)   Has held a homestead exemption for the previous five
 5      years.
 6            (3)   Has paid the full amount of property taxes due for
 7      each succeeding year up to and including the year for which
 8      the freeze is sought.
 9      "Homestead."     As defined in section 302.
10      "School property tax."     The property tax levied by a school
11   district on the homestead of an eligible claimant. The term does
12   not include a penalty, interest or a payment made in lieu of
13   tax.
14      "School property tax increase."      The increase in school
15   property tax levied in a calendar year over school property tax
16   levied in the base year.
17      Section 4.     Section 505(a) of the act is amended by adding a
18   paragraph and the section is amended by adding a subsection to
19   read:
20   Section 505.     State property tax reduction allocation.
21      (a)   Administration.--The department shall do all of the
22   following:
23            * * *
24            (2.1)   Prior to calculating the property tax reduction
25      under paragraph (3), the department shall calculate the
26      amount due to school districts under section 504.1.
27            * * *
28      (a.1)     Initial payment.--For the fiscal year commencing July
29   1, 2025, and July 1 of each year thereafter, prior to making a
30   payment under subsection (b), the department shall pay to each

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1   school district the amount due under section 504.1(e).
2      * * *
3      Section 5.   This act shall take effect immediately.




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