PRINTER'S NO. 826
No. 698 Session of 2003
INTRODUCED BY FRANKEL, D. EVANS, BEBKO-JONES, BELFANTI, BUXTON,
CAPPELLI, CAWLEY, COSTA, DALEY, EACHUS, HARHAI, JAMES,
LAUGHLIN, LEDERER, PALLONE, PETRARCA, PETRONE, PISTELLA,
SHANER, TANGRETTI, THOMAS, WANSACZ, WASHINGTON AND
YOUNGBLOOD, MARCH 6, 2003
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, MARCH 6, 2003
AN ACT
1 Amending the act of December 18, 1984 (P.L.1005, No.205),
2 entitled "An act mandating actuarial funding standards for
3 all municipal pension systems; establishing a recovery
4 program for municipal pension systems determined to be
5 financially distressed; providing for the distribution of the
6 tax on the premiums of foreign fire insurance companies; and
7 making repeals," further providing for allocation of general
8 municipal pension system State aid.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Section 402(e) of the act of December 18, 1984
12 (P.L.1005, No.205), known as the Municipal Pension Plan Funding
13 Standard and Recovery Act, amended July 11, 1990 (P.L.505,
14 No.119), is amended to read:
15 Section 402. Revision of financing from State revenue sources;
16 General Municipal Pension System State Aid
17 Program.
18 * * *
19 (e) Allocation of general municipal pension system State
1 aid.--
2 (1) General municipal pension system State aid shall be
3 distributed annually to each eligible recipient municipality
4 no later than the first business day occurring in the month
5 of October. For the period ending with the distribution made
6 during calendar year 1995, the allocation of aid for
7 distribution shall be pursuant to paragraph (4). For the
8 period commencing with the distribution made during calendar
9 [year] years 1996, 2008 and each calendar year after 2008,
10 the allocation of aid for distribution shall be pursuant to
11 paragraph (5). For the period commencing with the
12 distribution made during calendar year 2003 and ending with
13 the distribution made during calendar year 2007, the
14 allocation of aid for distribution shall be pursuant to
15 paragraph (8). Any allocation of aid per unit shall be based
16 on the number of units pursuant to paragraph (2) as certified
17 by the applicable eligible municipalities. Any allocation of
18 aid shall be pursuant to the maximums specified in subsection
19 (f).
20 (2) The applicable number of units shall be attributable
21 to each active employee who was employed on a full-time basis
22 for a minimum of six consecutive months prior to December 31
23 preceding the date of certification and who was participating
24 in a pension plan maintained by that municipality, provided
25 that the municipality maintains a generally applicable
26 pension plan for that type of employee which was either
27 established on or prior to December 31, 1984, or, if
28 established after December 31, 1984, has been maintained by
29 that municipality for at least three plan years. The
30 applicable number of units per employee attributable to each
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1 eligible recipient county of the second class shall be two
2 units for each police officer. The applicable number of units
3 attributable to each eligible recipient city, borough,
4 incorporated town and township shall be as follows:
5 (i) Police officer - two units.
6 (ii) Firefighter - two units.
7 (iii) Employee other than police officer or
8 firefighter - one unit.
9 (3) [The] (i) For the period ending with the
10 distribution made during calendar years 2003, 2009 and
11 each calendar year after 2009, the amount of general
12 municipal pension system State aid per unit shall be
13 initially determined by dividing the total amount of the
14 general municipal pension system State aid available by
15 the total number of units certified by all eligible
16 municipalities. If the maximum specified in subsection
17 (f)(1) is applicable, the amount of general municipal
18 pension system State aid per unit applicable to all
19 municipalities other than the municipality or
20 municipalities subject to the maximum aid amount
21 specified in subsection (f)(1) shall be adjusted. The
22 adjusted amount of general municipal pension system State
23 aid per unit attributable to municipalities unaffected by
24 the aid maximum specified in subsection (f)(1) shall be
25 determined by dividing the total amount of the general
26 municipal pension system State aid available, after
27 excluding 25% of the total for each municipality to which
28 the maximum aid amount is applicable, by the total number
29 of units certified by all eligible municipalities
30 unaffected by the aid maximum specified in subsection
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1 (f)(1).
2 (ii) For the period commencing with the distribution
3 made during calendar year 2004 and ending with the
4 distribution made during calendar year 2008, the amount
5 of general municipal pension system State aid per unit
6 shall be initially determined by dividing the total
7 amount of the general municipal pension system State aid
8 available during calendar year 2003 by the total number
9 of units certified by all eligible municipalities. If the
10 maximum specified in subsection (f)(1) is applicable, the
11 amount of general municipal pension system State aid per
12 unit applicable to all municipalities other than the
13 municipality or municipalities subject to the maximum aid
14 amount specified in subsection (f)(1) shall be adjusted.
15 The adjusted amount of general municipal pension system
16 State aid per unit attributable to municipalities
17 unaffected by the aid maximum specified in subsection
18 (f)(1) shall be determined by dividing the total amount
19 of the general municipal pension system State aid
20 available, after excluding 25% of the total for each
21 municipality to which the maximum aid amount is
22 applicable, by the total number of units certified by all
23 eligible municipalities unaffected by the aid maximum
24 specified in subsection (f)(1).
25 (4) For the period ending with the distribution made
26 during calendar year 1995, each eligible municipality shall
27 be entitled to receive as general municipal pension system
28 State aid the greater of the following amounts:
29 (i) The adjusted amount of general municipal pension
30 system State aid per unit multiplied by the number of
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1 units certified by that municipality and an additional
2 amount necessary for the total to equal the lesser of the
3 total amount of any foreign casualty insurance premium
4 tax allocation and any foreign fire insurance premium tax
5 allocation attributable to paid firefighters which the
6 municipality was entitled to receive during the regular
7 allocation occurring in calendar year 1982, or the
8 aggregate actual financial requirement of any police or
9 paid fire pension plans maintained by the municipality
10 less the amount of aggregate annual member or employee
11 contributions during the plan year as reported in the
12 most recent complete actuarial report filed with the
13 commission.
14 (ii) The revised amount of general municipal pension
15 system State aid per unit multiplied by the number of
16 units certified by that municipality, which revised
17 amount shall be determined pursuant to paragraph (6).
18 (5) For the period commencing with the distribution made
19 during calendar [year] years 1996, 2008 and each calendar
20 year after 2008, each eligible municipality shall be entitled
21 to receive as general municipal pension system State aid the
22 greater of the following amounts:
23 (i) the adjusted amount of general municipal pension
24 system State aid per unit multiplied by the number of
25 units certified by that municipality less any amount by
26 which the adjusted amount exceeds the maximum aid amount
27 applicable to the municipality pursuant to subsection
28 (f)(2); or
29 (ii) the revised amount of general municipal pension
30 system State aid per unit multiplied by the number of
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1 units certified by that municipality, which revised
2 amount shall be determined pursuant to paragraph (6).
3 (6) The revised amount of general municipal pension
4 system State aid per unit shall be determined by the
5 following procedure:
6 (i) The amount of the total distribution made
7 pursuant to paragraph (4)(i) or (5)(i), whichever is
8 applicable, the amount of the general municipal pension
9 system State aid payable to any municipality or
10 municipalities to which the limitation provided in
11 subsection (f)(1) is applicable and the amount of the
12 total potential distribution pursuant to paragraph (7)
13 shall be totaled.
14 (ii) The total calculated pursuant to subparagraph
15 (i) shall be subtracted from the total amount of the
16 general municipal pension system State aid available.
17 (iii) The number of units attributable to the
18 municipalities which are entitled to receive an aid
19 amount calculated pursuant to paragraph (4)(i) or (5)(i),
20 whichever is applicable, the number of units attributable
21 to the municipalities or municipality to which the
22 limitation provided in subsection (f)(1) applies and the
23 number of units attributable to the municipalities
24 included in the potential distribution pursuant to
25 paragraph (7) shall be totaled.
26 (iv) The total calculated pursuant to subparagraph
27 (iii) shall be subtracted from the total number of units
28 certified by all eligible municipalities.
29 (v) The number resulting from the calculation
30 pursuant to subparagraph (ii) shall be divided by the
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1 number resulting from the calculation pursuant to
2 subparagraph (iv), which shall be the revised amount of
3 general municipal pension system State aid per unit.
4 (7) Any municipality which has not filed with the
5 commission on a timely basis, pursuant to the applicable
6 municipal pension plan actuarial reporting law, an actuarial
7 report for each of the municipal pension plans which it has
8 established or maintains shall be entitled to receive as
9 general municipal pension system State aid, at such time as
10 compliance with the actuarial reporting requirement occurs,
11 the adjusted amount of general municipal pension system State
12 aid per unit pursuant to paragraph (3) multiplied by the
13 number of units certified by that municipality, but not to
14 exceed the maximum aid amount applicable to the municipality
15 pursuant to subsection (f). The amount of any difference
16 between the adjusted amount of general municipal pension
17 system State aid per unit multiplied by the number of units
18 certified by a municipality and the maximum aid amount
19 applicable to the municipality pursuant to subsection (f) for
20 that municipality shall be added to the amount of the general
21 municipal pension system State aid available for distribution
22 in the succeeding calendar year.
23 (8) For the period commencing with the distribution made
24 during calendar year 2003 and ending with the distribution
25 made during calendar year 2007, notwithstanding any sum
26 distributed to an eligible municipality pursuant to paragraph
27 (9), each eligible municipality shall be entitled to receive,
28 as general municipal pension system State aid the greater of
29 the following amounts:
30 (i) the adjusted amount of general municipal pension
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1 system State aid per unit multiplied by the number of
2 units certified by that municipality less any amount by
3 which the adjusted amount exceeds the maximum aid amount
4 applicable to the municipality pursuant to subsection
5 (f)(2); or
6 (ii) the revised amount of general municipal pension
7 system State aid per unit multiplied by the number of
8 units certified by that municipality, which revised
9 amount shall be determined pursuant to paragraph (6).
10 (9) For the period commencing with the distribution made
11 during calendar year 2001 and ending during calendar year
12 2005, any general municipal pension system State aid
13 remaining after the distribution pursuant to paragraph (8)
14 shall be distributed to each of the municipal pension plans
15 established by an eligible municipality that has an unfunded
16 actuarial accrued liability according to the most recent
17 actuarial valuation report. The per-unit rate of funds
18 distributed under this paragraph shall be determined by
19 dividing the total amount of general municipal pension State
20 aid remaining by the total number of units certified by all
21 municipal pension plans with an unfunded actuarial accrued
22 liability. The amount to be distributed to each municipal
23 pension plan shall equal the per-unit rate multiplied by the
24 number of units certified by that municipal pension plan.
25 * * *
26 Section 2. This act shall take effect immediately.
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