PRINTER'S NO. 4139
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2557
Session of
2018
INTRODUCED BY ROTHMAN, KIM, KLUNK, TOBASH, RYAN, MILLARD, HELM,
A. HARRIS, DIAMOND, GROVE, COMITTA, DERMODY, FRANKEL,
FREEMAN, SCHLOSSBERG, SCHWEYER, PHILLIPS-HILL AND KAUFFMAN,
OCTOBER 2, 2018
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, OCTOBER 2, 2018
AN ACT
Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An
act empowering the Department of Community and Economic
Development to assist municipalities in avoiding financial
distress; 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; authorizing certain taxes; and providing for
the disincorporation of municipalities and the establishment
of unincorporated service districts," in receivership in
municipalities, providing for tax levy.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of July 10, 1987 (P.L.246, No.47), known
as the Municipalities Financial Recovery Act, is amended by
adding a section to read:
Section 710.2. Tax levy.
(a) Continuation.--As of the date of the termination of
distressed status occurring after the termination of
receivership status under this act, a municipality that is
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levying, or had been authorized to levy within the previous
three fiscal years, a local services tax in excess of $52, a
judicially approved increase of a residential income tax rate,
or both, may, upon the termination of distressed status, without
court approval, levy the local services tax at a rate which does
not exceed $150 per year, the residential income tax at a rate
that does not exceed a judicially approved rate levied in the
course of receivership or both, for any year wherein the
currently available actuarially reported net other
postemployment benefits obligation of the municipality exceeded,
by at least 17%, the year-end balance of any other
postemployment benefits trust created by or for the municipality
as part of a recovery plan approved in this act. In the event
that a levy is made in excess of $52 for the local services tax,
a levy made in excess of 1% for residential income tax, or both,
the municipality shall solely apply local service taxes in
excess of $52 and a portion of residential income taxes in
excess of 1% in an amount that equals nonresident income taxes
paid for the year immediately preceding receivership, if any, to
defray current year other postemployment benefit obligations and
other postemployment benefit trust contributions or both, until
the other postemployment benefit trust ceases or the actuarial
audited other postemployment benefit trust balance equals or
exceeds 85% of the actuarially reported net other postemployment
benefit obligation of the municipality.
(b) Report.--The following shall apply:
(1) For each fiscal year that a municipality levies a
local services tax, residential income tax or both at a rate
as authorized in subsection (a), the municipality shall,
within 60 days following the end of that fiscal year, prepare
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a report setting forth:
(i) The total local services tax, residential income
tax or both collected.
(ii) The currently available actuarially reported
net other postemployment benefits obligations of the
municipality.
(iii) The year-end balance of any other
postemployment benefits trust.
(iv) The amount of local services tax, residential
income tax or both applied solely to defray current year
other postemployment benefit trust obligations, other
postemployment benefit contributions or both.
(2) The report required by paragraph (1) shall be
submitted to:
(i) The Secretary of Community and Economic
Development.
(ii) The President pro tempore of the Senate.
(iii) The Speaker of the House of Representatives.
(iv) The Minority Leader of the Senate.
(v) The Minority Leader of the House of
Representatives.
(vi) The chair and minority chair of the Local
Government Committee of the Senate.
(vii) The chair and minority chair of the Local
Government Committee of the House of Representatives.
(3) A review committee, comprised of the individuals set
forth in paragraph (2), the mayor and three members of the
local business community designated by the mayor, shall meet
annually within 60 days following submission of the report as
provided in paragraph (2) to review the report. Within 60
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days following the fifth annual meeting, the committee shall
prepare and submit final recommendations to the General
Assembly and the city regarding taxation authorized by this
section. The individuals set forth in paragraph (2) and the
mayor may appoint a designee.
(c) Prohibition on commuter tax.--A city of the third class
with a population of between 40,000 and 50,000 as of the 2010
decennial census which is located in a county of the third class
with a population of between 240,000 and 275,000 as of the 2010
decennial census that opts to levy rates of taxation authorized
by this section shall be subject to the prohibition on imposing
a tax or fee on the earned income of nonresidents provided in
chapter 6.
Section 2. This act shall take effect in 60 days.
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