THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY MARSICO, BAKER, BARRAR, BOYD, D. COSTA, J. EVANS, GINGRICH, GOODMAN, GROVE, HARHART, HARRIS, HICKERNELL, HORNAMAN, HUTCHINSON, KAUFFMAN, KILLION, KNOWLES, KORTZ, MAJOR, METCALFE, METZGAR, MILLARD, O'NEILL, PYLE, RAPP, SCHRODER, STEVENSON, SWANGER, TALLMAN, PICKETT, GEIST, B. BOYLE, GABLER AND M.K. KELLER, JANUARY 24, 2011

REFERRED TO COMMITTEE ON FINANCE, JANUARY 24, 2011  

AN ACT

Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An

act empowering the Department of Community Affairs to declare

certain municipalities as financially distressed; providing

for the restructuring of debt of financially distressed

municipalities; limiting the ability of financially

distressed municipalities to obtain government funding;

authorizing municipalities to participate in Federal debt

adjustment actions and bankruptcy actions under certain

circumstances; and providing for consolidation or merger of

contiguous municipalities to relieve financial distress,"

further providing for powers and duties of municipalities and

for jurisdiction of court of common pleas.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 123(c) of the act of July 10, 1987

(P.L.246, No.47), known as the Municipalities Financial Recovery

Act, is amended to read:

Section 123.  Powers and duties of municipalities.

* * *

(c)  Right to petition court for tax increase.--

(1)  After a municipality has adopted a plan under

Subchapter C of Chapter 2, it may petition the court of

common pleas of the county in which the municipality is

located to increase its rates of taxation for earned income,

real property, or both, beyond maximum rates provided by law.

(2)  If a tax increase above existing limits is granted

by the courts, the increase shall be effective for a period

of one year. The one-year increase shall run from the date

specified in the petition filed with the court or, if no such

date is specified, from the beginning of the current fiscal

year of the municipality. Subsequent increases in rates of

taxation may be granted by the court upon annual petition of

the municipality. The additional amount of taxes resulting

from the petition shall not be subject to sharing with a

school district.

(3)  A petition filed by a city of the second class A

under this subsection may not include an increase in a tax on

nonresident income unless the municipality certifies to the

court, with regard to those provisions of the plan having a

measurable fiscal impact, that:

(i)  the municipality has substantially implemented

the provisions which are within the authority of the

chief executive officer or governing body, including, but

not limited to, provisions of the plan that call for

increasing existing tax rates levied on residents and

increasing fees charged by the municipality;

(ii)  the municipality has taken those actions

required to obtain the approval of other parties for

those provisions which may not be implemented without

such approval, including, but not limited to, the

approval of a court, local electors or any collective

bargaining unit; and

(iii)  the additional income from the aforementioned

actions is insufficient to balance the municipal budget,

necessitating additional revenue from an increase in the

tax on nonresident income.

(4)  A petition filed under this subsection by a city of

the third class that has opted under the act of July 15, 1957

(P.L.901, No.399), known as the Optional Third Class City

Charter Law, or 53 Pa.C.S. Pt. III Subpt. E (relating to home

rule and optional plan government) to be governed by a mayor-

council form of government and which has a population in

excess of 45,000 but less than 50,000 may not include an

increase in a tax on nonresident income.

Section 2.  The addition of section 123(c)(4) of the act

shall apply to petitions to increase rates of taxation that

relate to tax years beginning after December 31, 2011.

Section 3.  This act shall take effect immediately.