PRINTER'S NO. 444
No. 412 Session of 1993
INTRODUCED BY LaGROTTA, DeWEESE, ITKIN, EVANS, VEON, MUNDY,
COLAFELLA, STEELMAN, DALEY, GORDNER, CARONE, NAILOR, GEIST,
COLAIZZO, STEIGHNER, TRICH, McCALL, YEWCIC, ROBINSON, ADOLPH,
HANNA, CURRY, GODSHALL, SAYLOR, BATTISTO, CAPPABIANCA,
ROBERTS, HASAY, LAUGHLIN, FLICK, SURRA, B. SMITH, MELIO,
JADLOWIEC, SCHULER, ARMSTRONG, BAKER, DENT, PRESTON, PESCI,
VAN HORNE, BUSH, FAIRCHILD, JAROLIN, TIGUE, CESSAR, REBER,
FARGO, SCRIMENTI, HERMAN, SERAFINI, M. N. WRIGHT, RAYMOND AND
SAURMAN, FEBRUARY 10, 1993
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 10, 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 Pennsylvania
11 Tax Review Commission Act.
12 Section 2. Purpose.
13 The General Assembly hereby finds and declares that changing
14 economic conditions, as well as actions by the Federal
15 Government and decisions by the courts, significantly impact the
16 system of taxation in this Commonwealth. The General Assembly
1 further recognizes the continued need for public services which
2 insure the economic and social well-being for individuals and
3 businesses in this Commonwealth. Moreover, the General Assembly
4 seeks a system of taxation which is straightforward, fair,
5 efficient and reliable for funding the programs which the
6 citizens of this Commonwealth demand.
7 Section 3. Definitions.
8 The following words and phrases when used in this act shall
9 have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 "Commission." The Pennsylvania Tax Review Commission.
12 "Department." The Department of Revenue of the Commonwealth.
13 "Director." The Director of Staff of the Pennsylvania Tax
14 Review Commission appointed under section 7(c)(2).
15 Section 4. Creation of commission.
16 The Pennsylvania Tax Review Commission is hereby established
17 to evaluate the structure and system of taxation in this
18 Commonwealth and to develop an unbiased analytical framework for
19 judging future tax legislation.
20 Section 5. Membership.
21 (a) General rule.--The commission shall consist of 15
22 members, one of whom shall be designated by the Governor as
23 chairman of the commission. The members of the commission shall
24 include the Secretary of the Budget, the Secretary of Revenue
25 and 13 individuals to be appointed under subsection (b). No
26 member of the commission shall serve as an elected official or
27 party officer at the Federal, State or local levels of
28 government.
29 (b) Appointments.--The following appointments to the
30 commission shall take place within 15 days of the effective date
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1 of this act:
2 (1) Five members of the commission shall be appointed by
3 the Governor, with one representative from each of the
4 following: labor, business, local government, academia and
5 the citizenry of this Commonwealth. The person appointed to
6 represent the citizenry of this Commonwealth shall be a
7 taxpayer who does not hold an elected position and who does
8 not represent a lobbying or special interest group.
9 (2) Eight members of the commission shall be appointed,
10 two each respectively, by the Majority Leader and the
11 Minority Leader of the Senate and the Majority Leader and the
12 Minority Leader of the House of Representatives.
13 Section 6. Powers and duties of commission.
14 (a) Meetings.--The commission shall meet as frequently as it
15 deems appropriate, but at least once during each month preceding
16 the date in which it releases a final report to the Governor and
17 the General Assembly as provided by subsection (d). The chairman
18 shall be responsible for calling meetings of the commission and
19 shall set a date, time and place of the meetings. The chair
20 shall set a date, time and place for the initial organizational
21 meeting of the commission to take place within 30 days of the
22 effective date of this act.
23 (b) Resources.--The commission may use the space, staff and
24 resources of the Department of Revenue as it deems necessary to
25 perform its duties. In order to carry out its research and
26 analytical responsibilities, the commission may also utilize the
27 staff and resources of the General Assembly, any Commonwealth
28 agencies and any public or private institutions which receive
29 Commonwealth funds. The General Assembly, Commonwealth agencies
30 and public or private institutions receiving Commonwealth funds
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1 shall provide staff and resources as requested at no cost to the
2 commission.
3 (c) Objectives.--The commission shall evaluate the current
4 structure and system of State and local taxation in this
5 Commonwealth and develop an analytical framework for judging
6 future tax legislation. In so doing, the commission shall take
7 into consideration all of the following:
8 (1) The simplicity of the taxes and the ability of
9 individual taxpayers to easily understand and comply with
10 them.
11 (2) The overall mix of taxes.
12 (3) Whether the tax burden is distributed fairly among
13 taxpayers in terms of ability to pay and the relationship
14 between benefits received and taxes paid.
15 (4) The need to eliminate subjective interpretation of
16 the tax.
17 (5) The reliability of taxes and whether their basis
18 yield automatic growth and cyclical stability in revenues
19 generated.
20 (6) The collection and enforcement costs associated with
21 the various taxes and the ability to easily administer the
22 taxes.
23 (7) Whether the taxes create incentives for individuals
24 and firms to alter their behavior in order to minimize their
25 tax burden by not reporting all of their income.
26 (8) The system of taxation within various jurisdictions
27 and the incentives for households to move and firms to
28 relocate activities to jurisdictions which provide more
29 favorable tax treatment.
30 (d) Task forces.--The commission shall be assisted in its
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1 deliberations by the formation and deliberation of those task
2 forces as it shall deem appropriate. These task forces shall be
3 appointed by the chairman of the commission and shall report to
4 the commission on problems, proposals and alternatives regarding
5 the following matters:
6 (1) Local tax reform.
7 (2) State corporate net income, and capital stock and
8 franchise tax.
9 (3) State taxation of utilities, financial institutions
10 and insurance companies.
11 (4) Transportation taxes.
12 (5) Personal income, inheritance, estate, fiduciary and
13 personal property taxes.
14 (6) Sales, cigarette and alcohol taxes.
15 (7) The administration and enforcement of tax laws.
16 (8) The impact of the tax system on economic
17 development, community conservation and energy conservation
18 and development.
19 (9) The economic impact of the act of August 4, 1991
20 (P.L.97, No.22), entitled "An act amending the act of March
21 4, 1971 (P.L.6, No.2), entitled 'An act relating to tax
22 reform and State taxation by codifying and enumerating
23 certain subjects of taxation and imposing taxes thereon;
24 providing procedures for the payment, collection,
25 administration and enforcement thereof; providing for tax
26 credits in certain cases; conferring powers and imposing
27 duties upon the Department of Revenue, certain employers,
28 fiduciaries, individuals, persons, corporations and other
29 entities; prescribing crimes, offenses and penalties,'
30 further providing for the imposition of sales and use tax on
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1 certain services and for the reissuance of sales and use tax
2 licenses; providing for the increase of personal income tax,
3 for poverty exemptions to the tax, for notice of certain
4 sales and transfers and for the withholding of certain tax on
5 shares; further providing for the imposition, rate and
6 collection of corporate net income tax and capital stock and
7 franchise tax; further providing for the collection of bank
8 shares tax, insurance premiums tax, and title insurance and
9 trust companies tax; extending the utilities gross receipts
10 tax; further providing for the collection of the public
11 utility realty tax; increasing the rate of the cigarette tax;
12 imposing a cigarette floor tax; further providing for
13 commissions for cigarette tax agents, and dedicating a
14 portion of the revenues for agricultural farmland
15 preservation and children's health care; further providing
16 for imposition, collection and administration of tax on
17 property passing upon death; further providing for the
18 reports and payments of certain estimated taxes; and making
19 repeals," and the act of August 5, 1991 (P.L.238, No.26),
20 entitled "An act amending Titles 74 (Transportation) and 75
21 (Vehicles) of the Pennsylvania Consolidated Statutes,
22 codifying provisions relating to public transportation;
23 imposing certain fees and taxes; further providing for
24 certain Pennsylvania Turnpike projects; defining 'farm
25 equipment'; further providing for the responsibilities of
26 vehicle transferees, for exemptions from registration and
27 certificates of title and for the use of dealer plates,
28 multipurpose dealer plates and farm equipment plates; further
29 providing for funeral processions; further providing for a
30 restricted receipts fund and for registration for snowmobiles
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1 and ATV's; establishing the Snowmobile Trail Advisory
2 Committee; further providing for the highway maintenance and
3 construction tax; and making repeals," on the Commonwealth.
4 (10) Innovative tax legislation and procedures of other
5 states which should be adopted by the Commonwealth.
6 (e) Report.--The commission shall issue to the Governor and
7 the General Assembly a final report containing its evaluation of
8 the system of taxation in this Commonwealth, including
9 recommendations for improvement and for an analytical framework
10 for judging future tax legislation. The report shall be due no
11 later than March 31, 1994. After the release of the final
12 report, the commission shall serve in an advisory capacity for
13 the Governor and the General Assembly, as the respective
14 majority chairman and minority chairman of the Appropriations
15 Committee of the Senate, the majority chairman and the minority
16 chairman of the Finance Committee of the Senate, the majority
17 chairman and minority chairman of the Appropriations Committee
18 of the House of Representatives and the majority chairman and
19 the minority chairman of the Finance Committee of the House of
20 Representatives deem appropriate, until the close of the fiscal
21 year ending 1994.
22 (f) Hearing.--The commission and its task forces shall
23 conduct public hearings as appropriate to gather advice,
24 recommendations and data relevant to discharging its duties. All
25 meetings and public hearings of the commission and its task
26 forces shall be in accordance with the act of July 3, 1986
27 (P.L.388, No.84), known as the Sunshine Act.
28 Section 7. Organizational and technical staffing.
29 (a) Determination.--The commission, at its initial meeting,
30 shall determine the additional staff resources it deems
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1 necessary to fulfill its duties.
2 (b) Individual staff.--Each commissioner shall have an
3 opportunity to nominate two staff members with the technical and
4 administrative skills needed by the commission. The nomination
5 shall come from the staff resources described in section 6(b)
6 and, in the case of the Governor's appointees, may additionally
7 come from any person's volunteered or donated services.
8 (c) General staff.--
9 (1) The commission shall select a commission staff,
10 consisting of at least seven, but not more than 11
11 individuals from the compiled list of staff resources
12 compiled under section 6(b).
13 (2) After the staff has been chosen, the commission
14 shall choose a director of staff, who shall be responsible to
15 the commission for coordinating the staff activities.
16 (3) The staff shall, at a minimum, assist the commission
17 in the following:
18 (i) Coordinate the deliberations of the commission
19 as well as providing an agenda for each commission
20 meeting.
21 (ii) Provide administrative and clerical support for
22 public hearings that the commission deems appropriate to
23 gather advice, recommendations and data relevant to
24 discharging its responsibilities.
25 (iii) Ensure that the commission meetings comply
26 with the act of July 3, 1986 (P.L.388, No.84), known as
27 the Sunshine Act.
28 (iv) Gather information, data and any other material
29 the commission deems necessary to the discharge of its
30 duties.
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1 (v) Draft the final report, subject to commission
2 approval, required to be submitted under section 6(e).
3 Section 8. Operational costs.
4 (a) Compensation.--The members of the commission shall
5 receive no compensation for their services.
6 (b) Expenses.--The actual and necessary expenses of the
7 members of the commission incurred in the performance of their
8 duties under this act shall be submitted to the Secretary of
9 Revenue and shall be paid out of the general government
10 operations appropriation to the department in accordance with
11 section 1501 of the act of April 9, 1929 (P.L.343, No.176),
12 known as The Fiscal Code.
13 (c) Supplies.--Office supplies needed by the commission
14 shall be provided by the department or by any other
15 administrative agency with the capacity to voluntarily provide
16 the supplies.
17 Section 9. Expiration.
18 This act shall expire June 30, 1994.
19 Section 10. Effective date.
20 This act shall take effect immediately.
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