THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY M. O'BRIEN, YOUNGBLOOD, ROEBUCK, CRUZ, BISHOP, B. BOYLE, K. BOYLE, V. BROWN, BROWNLEE, CALTAGIRONE, COHEN, CONKLIN, P. COSTA, CURRY, DeLUCA, DONATUCCI, FABRIZIO, FLECK, HARKINS, JOSEPHS, KIRKLAND, McGEEHAN, MYERS, PAYTON, SABATINA, SCAVELLO, THOMAS, VITALI AND WATERS, MAY 9, 2012

REFERRED TO COMMITTEE ON FINANCE, MAY 9, 2012  

AN ACT

Amending the act of June 27, 2006 (1st Sp.Sess., P.L.1873,

No.1), entitled "An act providing for taxation by school

districts, for the State funds formula, for tax relief in

first class cities, for school district choice and voter

participation, for other school district options and for a

task force on school cost reduction; making an appropriation;

prohibiting prior authorized taxation; providing for

installment payment of taxes; restricting the power of

certain school districts to levy, assess and collect taxes;

and making related repeals," further providing for tax relief

in first class cities.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 703(b) of the act of June 27, 2006 (1st

Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act, is

amended to read:

Section 703.  Tax relief.

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(b)  Calculation of reduction.--

(1)  The city shall calculate the amount of the tax rate

reductions so that they equal, based on estimates certified

by the city's director of finance and approved by the

Pennsylvania Intergovernmental Cooperation Authority prior to

the implementation of the reductions, in combination with any

reduction in the rate of unearned income tax imposed by a

school district in the city of the first class required by

the act of August 9, 1963 (P.L.640, No.338), entitled "An act

empowering cities of the first class, coterminous with school

districts of the first class, to authorize the boards of

public education of such school districts to impose certain

additional taxes for school district purposes, and providing

for the levy, assessment and collection of such taxes," as a

result of the reduction in the rate of wage and net profits

tax, the amount paid to the city from the fund for tax

reductions. The city shall do the following:

(i)  Except as set forth in subparagraph (ii), each

year transfer to the school district an amount equal to

the cost of any reduction in the rate of unearned income

tax[,]; and the transfer shall not be subject to the

provisions of section 696(h) of the Public School Code.

(ii)  Notwithstanding 4 Pa.C.S. § 1409(b) (relating

to Property Tax Relief Fund), each year transfer to the

school district the entire amount paid to the city from

the fund for tax reductions; and the transfer shall not

be subject to the provisions of section 696(h) of the

Public School Code. This subparagraph shall expire on

the earlier of:

(A)  July 1, 2017; or

(B)  the date of publication in the Pennsylvania

Bulletin of a notice by the Department of Revenue

certifying that the city has revised its property

valuation and millage to stabilize the financial

operation of the school district.

(2)  The tax rate reductions implemented by a city of the

first class pursuant to this section shall be in addition to

the following schedule of percentages of wage and net profits

tax rate reductions:

(i)  On January 1, 2005, 2.9468% for residents and

1.5567% for nonresidents.

(ii)  On January 1, 2006, 0.6927% for residents and

1.2593% for nonresidents.

(iii)  On January 1, 2007, 0.9533% for residents and

0.4216% for nonresidents.

(iv)  On January 1, 2008, 0.9624% for residents and

0.8387% for nonresidents.

(v)  On January 1, 2009, 1.1851% for residents and

1.0526% for nonresidents.

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Section 2.  This act shall take effect July 1, 2012, or

immediately, whichever is later.