Assessment Law Update

Recently, Governor Tom Corbett signed into law Senate Bill 66 which relates exclusively to the functioning of the State Tax Equalization Bureau.   The State Tax Equalization Bureau (“STEB”) was previously created in 1947 with the passage of the State Tax Equalization Board Law (The Act of June 27, 1947 P.L. 1046, N0. 447).

The basic function of STEB according to the State Tax Equalization Board Law historically has been to conduct statistical analysis of market values of real property within each county in Pennsylvania based on actual sales of property and to publish what is known as the common level ratio for each county.  The common level ratio or “CLR” is the estimated average ratio of assessment to fair market value of property within each county based on actual assessments and actual recent sale prices.  The determinations of STEB which relate to the market value of real estate within individual school districts have been used historically to determine the availability of Commonwealth subsidies and special aid available to individual school districts.

A side by side comparison of the State Tax Equalization Board Law and Senate Bill 66 suggests that the basic functions of STEB appear to be unchanged as a result of the passing of Senate Bill 66 and the Bill specifically provides that it is a continuation of the State Tax Equalization Board Law.   STEB will continue to have the power and duty to determine the total market value of taxable real property within school districts and to certify to the Department of Education and to boards of school directors lists showing the market value of all real estate, the assessed values, and changes in these amounts from prior years.  Pursuant to Bill 66, STEB will continue to use statistically acceptable methodologies which are to be made publically available to calculate CLRs for each county.  Importantly, the Bill states that nothing shall be construed to change or affect the validity of the assessed valuation of any real property for the purpose of levying taxes by any political subdivision.

Perhaps the most notable change to the STEB Law is that STEB itself will be moved from an independent board to a division within the Pennsylvania Department of Community and Economic Development (“DCED”).    While the former STEB law is for the most part unchanged, some minor additional duties of STEB will now include:  1) the creation of an operations manual to be utilized by counties when completing a county-wide reassessment;  2) the creation of a standardized statewide database for all counties to use to report property values to STEB;  3) the development and maintenance of training programs for all persons involved in the valuation of property in counties (assessors); and 4) to develop standards on contracting for assessment services.   Senate Bill 66 does not appear to impose any additional duties on school districts.

Senate Bill 66 was reported in the PSBA Legislative Report dated April 18, 2013.  The Bill is effective immediately.  Please call Alfred Maiello if you have any questions at 412.242.4400.

 

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