A special legislative session set to begin today will determine the fate of a property tax relief proposal for State College residents.

The proposed bill, presented to state leaders by Gov. Ed Rendell, will require the 501 Pennsylvania school districts to participate in a property tax relief funded by gaming revenue if passed, said House Democratic spokeswoman Victoria Stanish.

Under the current Homeowner Tax Relief Act (Act 72), school districts are given the option to participate in the tax relief, but a majority of Pennsylvania's schools have not accepted the offer, Stanish said.

Rendell's new plan would abolish the 0.1 percent income tax increase currently under Act 72 but still lower property tax, as mandated by the act.

According to a resolution adopted by the State College Area School District (SCASD) school board, any residents who rent out their properties would not receive any tax relief and would face increased income taxes. If the income tax increase remains intact after the special session, students could face higher rental costs to compensate for the increased taxes.

Representatives from the real estate agency GN Associates, 119 S. Burrowes St., would not comment on the possible tax increase. Representatives from The Apartment Store, 444 E. College Ave., and Associated Realty Property Management, 456 E. Beaver Ave., could not be reached for comment on the issue by deadline yesterday.

SCASD was one of the schools to decline the option originally in a unanimous vote by the school board. Should Rendell's bill pass, SCASD would be required to implement the tax relief.

Dennis Younkin, SCASD business administrator, said the school district declined the option originally because it was unclear how much money would be distributed, how it would be spread out and when the money would be available.

"Speaking personally, as a grandfather of kids in the district, I'd hate to see the state take control away from the school board," Younkin said. "I'm disappointed in this attempt to control local education."

State Rep. Kerry Benninghoff, R-Centre/Mifflin, said he opposes the proposal and doesn't believe Rendell can get the support needed to pass it.

"I don't understand how [Rendell] thinks he's going to get an overwhelming majority to vote against the school boards, most of who rejected Act 72 originally," Benninghoff said.

He also said the proposal would fail to produce the relief it promises. "The economics don't add up to what it says, and there's no money in it until 2007 or 2008 anyway," he said. "It's not what people expect."

State Rep. Mike Hanna, D-Centre/Clinton, said he supports this session and Rendell's bill.

"It's not fair to taxpayers for us to get this far and then fall short of the goal," he said.

Hanna said schools rejected the original Act 72 because it offered voters the chance to restrict tax increases higher than the rate of inflation, which would also be changed by Rendell's proposal. "If schools wanted to raise taxes to build a new gymnasium, they might need to raise taxes higher than the rate of inflation," Stanish said. "If this is the case, the raise will be voted on before enacted."