PRINTER'S NO. 1342
No. 1225 Session of 1993
INTRODUCED BY FLEAGLE, TULLI, BROWN, CESSAR, ADOLPH, ARGALL,
ARMSTRONG, BAKER, BARLEY, BUNT, BUSH, CLARK, CLYMER, CORNELL,
DEMPSEY, DRUCE, DURHAM, EGOLF, FAIRCHILD, FARMER, FLICK,
GANNON, GEIST, GERLACH, GLADECK, GODSHALL, HECKLER, HERMAN,
HUTCHINSON, KING, LAUB, LEH, MARSICO, MICOZZIE, MILLER,
NICKOL, NYCE, O'BRIEN, PERZEL, PETTIT, PHILLIPS, PICCOLA,
PITTS, RAYMOND, ROHRER, RUBLEY, RYAN, SAURMAN, SCHULER,
SEMMEL, SERAFINI, B. SMITH, D. W. SNYDER, STRITTMATTER,
E. Z. TAYLOR, J. TAYLOR, TOMLINSON AND VANCE, APRIL 19, 1993
REFERRED TO COMMITTEE ON FINANCE, APRIL 19, 1993
AN ACT
1 Providing for the establishment of a commission to evaluate the
2 structure and system of taxation in Pennsylvania, for the
3 appointment of members, for the powers and duties of the
4 commission and for cooperation by other Commonwealth
5 entities; and imposing powers and duties on the Department of
6 Revenue.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Short title.
10 This act shall be known and may be cited as the Tax Systems
11 Analysis Commission Act.
12 Section 2. Purpose.
13 The General Assembly hereby finds and declares that the
14 Commonwealth should have a tax system which is:
15 (1) Acceptable to the citizens of this Commonwealth.
16 (2) Understandable to the citizens of this Commonwealth.
1 (3) Accountable to the citizens of this Commonwealth.
2 (4) Fair and equitable to the citizens of this
3 Commonwealth.
4 (5) Designed to allow efficient compliance by taxpayers,
5 and provides predictability and stability for the citizens of
6 this Commonwealth.
7 (6) Economically neutral allowing legitimate private
8 markets to operate in the most efficient manner.
9 Section 3. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Commission." The Tax Systems Analysis Commission.
14 "Department." The Department of Revenue of the Commonwealth.
15 "Director." The Executive Director of Staff of the Tax
16 Systems Analysis Commission appointed under section 5(d).
17 Section 4. Creation of commission.
18 The Tax Systems Analysis Commission is hereby established to:
19 (1) Gather the best available advice, recommendations
20 and data on tax policy.
21 (2) Make a comprehensive assessment of the
22 Commonwealth's tax system.
23 (3) Make proposals for changes that will further the
24 principles outlined in section 2.
25 (4) Make assessments of the impact of tax changes on the
26 freedom and well-being of citizens of this Commonwealth.
27 (5) Propose an analytical framework for evaluating
28 future tax legislation.
29 Section 5. Membership.
30 (a) General rule.--The commission shall consist of 15
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1 members, one of whom shall be designated by the Governor as
2 chairman of the commission. The members of the commission shall
3 include the Secretary of the Budget, the Secretary of Revenue,
4 Majority Leader of the Senate, Minority Leader of the Senate,
5 Majority Leader of the House of Representatives, Minority Leader
6 of the House of Representatives and nine individuals to be
7 appointed under subsection (b). No appointed member of the
8 commission shall serve as an elected official or party officer
9 at the Federal, State or local levels of government.
10 (b) Appointments.--The following appointments to the
11 commission shall take place within 15 days of the effective date
12 of this act:
13 (1) One member of the commission shall be appointed by
14 the Governor to represent the citizenry of this Commonwealth
15 and who shall be a taxpayer who does not hold an elected
16 position and who does not represent a lobbying or special
17 interest group.
18 (2) Eight members of the commission shall be appointed,
19 two each respectively, by the Majority Leader and the
20 Minority Leader of the Senate and the Majority Leader and the
21 Minority Leader of the House of Representatives.
22 (c) Chairperson.--The Governor shall designate one of the
23 public members of the commission to be the chairperson of the
24 commission.
25 (d) Executive director.--The Governor shall appoint a
26 qualified person to be the executive director of the commission.
27 The executive director shall be responsible to facilitate and
28 coordinate the activities and deliberations of the commission.
29 Section 6. Powers and duties of commission.
30 (a) Meetings.--The commission shall meet as frequently as it
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1 deems appropriate, but at least once during each month preceding
2 the date in which it releases a final report to the Governor and
3 the General Assembly as provided by subsection (d). The chairman
4 shall be responsible for calling meetings of the commission and
5 shall set a date, time and place of the meetings. The chair
6 shall set a date, time and place for the initial organizational
7 meeting of the commission to take place within 30 days of the
8 effective date of this act.
9 (b) Task forces.--The commission shall be assisted in its
10 deliberations by the formation and deliberation of those task
11 forces as it shall deem appropriate. These task forces shall be
12 appointed by the chairman of the commission and shall report to
13 the commission on problems, proposals and alternatives regarding
14 the following matters:
15 (1) The impact of State corporate net income tax rates
16 and the capital franchise tax rates and bases on economic
17 development within this Commonwealth.
18 (2) The effect of tax rates and bases on business entity
19 structural decisions.
20 (3) The impact of the Commonwealth's open economy on the
21 ability of taxpayers to shift purchasing decisions,
22 operations and assets to outside the State in response to
23 State and local government taxing decisions.
24 (4) The fairness and efficiency of administration and
25 enforcement of the tax laws on the citizens of this
26 Commonwealth.
27 (5) The effect of taxes and fees collected by the
28 Commonwealth and its political subdivisions on the ability of
29 private citizens to protect and allocate real resources
30 toward investment and saving for education of their children
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1 and their own retirements.
2 (6) The effectiveness and fairness of tax credit
3 programs existing within this Commonwealth.
4 (7) The distribution of final tax burdens for taxes
5 levied on business entities.
6 (8) Whether arbitrary, retroactive or frequent changes
7 in tax policy create economic loss for citizens of this
8 Commonwealth.
9 (9) Any changes to the structure of State and local
10 taxes which would improve the ability of citizens to
11 understand and make trade-offs between public expenditures,
12 government-imposed taxes and fees and private control of
13 resources.
14 (10) The distribution of property tax burdens.
15 (11) The effects of applying a two-tier property tax
16 rate structure by school districts on economic growth,
17 property improvements and preservation of open space.
18 (12) The overall mix of taxes at the Federal, State and
19 local level on individuals and the incentives provided to
20 stay in the work force.
21 (13) The economic impact of the act of August 4, 1991
22 (P.L.97, No.22), entitled "An act amending the act of March
23 4, 1971 (P.L.6, No.2), entitled 'An act relating to tax
24 reform and State taxation by codifying and enumerating
25 certain subjects of taxation and imposing taxes thereon;
26 providing procedures for the payment, collection,
27 administration and enforcement thereof; providing for tax
28 credits in certain cases; conferring powers and imposing
29 duties upon the Department of Revenue, certain employers,
30 fiduciaries, individuals, persons, corporations and other
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1 entities; prescribing crimes, offenses and penalties,'
2 further providing for the imposition of sales and use tax on
3 certain services and for the reissuance of sales and use tax
4 licenses; providing for the increase of personal income tax,
5 for poverty exemptions to the tax, for notice of certain
6 sales and transfers and for the withholding of certain tax on
7 shares; further providing for the imposition, rate and
8 collection of corporate net income tax and capital stock and
9 franchise tax; further providing for the collection of bank
10 shares tax, insurance premiums tax, and title insurance and
11 trust companies tax; extending the utilities gross receipts
12 tax; further providing for the collection of the public
13 utility realty tax; increasing the rate of the cigarette tax;
14 imposing a cigarette floor tax; further providing for
15 commissions for cigarette tax agents, and dedicating a
16 portion of the revenues for agricultural farmland
17 preservation and children's health care; further providing
18 for imposition, collection and administration of tax on
19 property passing upon death; further providing for the
20 reports and payments of certain estimated taxes; and making
21 repeals," the act of August 5, 1991 (P.L.238, No.26),
22 entitled "An act amending Titles 74 (Transportation) and 75
23 (Vehicles) of the Pennsylvania Consolidated Statutes,
24 codifying provisions relating to public transportation;
25 imposing certain fees and taxes; further providing for
26 certain Pennsylvania Turnpike projects; defining 'farm
27 equipment'; further providing for the responsibilities of
28 vehicle transferees, for exemptions from registration and
29 certificates of title and for the use of dealer plates,
30 multipurpose dealer plates and farm equipment plates; further
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1 providing for funeral processions; further providing for a
2 restricted receipts fund and for registration for snowmobiles
3 and ATV's; establishing the Snowmobile Trail Advisory
4 Committee; further providing for the highway maintenance and
5 construction tax; and making repeals," and the act of
6 December 13, 1991 (P.L.373, No.40), entitled "An act amending
7 the act of March 4, 1971 (P.L.6, No.2), entitled 'An act
8 relating to tax reform and State taxation by codifying and
9 enumerating certain subjects of taxation and imposing taxes
10 thereon; providing procedures for the payment, collection,
11 administration and enforcement thereof; providing for tax
12 credits in certain cases; conferring powers and imposing
13 duties upon the Department of Revenue, certain employers,
14 fiduciaries, individuals, persons, corporations and other
15 entities; prescribing crimes, offenses and penalties,'
16 further providing for the scope of sales and use tax, for the
17 definitions of "claimant," "dependent," "household income,"
18 "total household income" and "poverty income" and for special
19 tax provisions for poverty, for transfers to the Hazardous
20 Sites Cleanup Fund and the Public Transportation Assistance
21 Fund; further providing for reports by mutual thrift
22 institutions; and making repeals," on the Commonwealth.
23 (c) Hearing.--The commission and its task forces shall
24 conduct public hearings as appropriate to gather advice,
25 recommendations and data relevant to discharging its duties. All
26 meetings and public hearings of the commission and its task
27 forces shall be in accordance with the act of July 3, 1986
28 (P.L.388, No.84), known as the Sunshine Act.
29 (d) Report.--The commission shall issue to the Governor and
30 the General Assembly a final report containing its evaluation of
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1 the system of taxation in this Commonwealth, including
2 recommendations for improvement and for an analytical framework
3 for judging future tax legislation. The initial report shall be
4 due no later than January 31, 1994 and on the 31st day of each
5 January thereafter.
6 (e) Procedures.--The commission may establish rules of
7 procedure for conducting meetings of the commission and any
8 appointed task force.
9 Section 7. Operational costs and support.
10 (a) Compensation.--The members of the commission shall
11 receive no compensation for their services.
12 (b) Expenses.--The actual and necessary expenses of the
13 members of the commission incurred in the performance of their
14 duties under this act shall be reimbursed in accordance with
15 rules and regulations of the Office of Administration.
16 (c) Support.--The Commonwealth may, through its various
17 agencies, contract for research, analysis and editorial work,
18 and shall provide reasonable and necessary clerical, research
19 and administrative support for the commission and its task
20 forces.
21 (d) Staff.--The commission may use space, staff and
22 resources of the Department of Revenue, any other agencies of
23 the Executive Branch and the General Assembly as it deems
24 necessary.
25 Section 8. Effective date.
26 This act shall take effect in 60 days.
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