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 20030H0698B0826 - 2 -
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 20030H0698B0826 - 3 -
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 20030H0698B0826 - 4 -
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 20030H0698B0826 - 5 -
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 20030H0698B0826 - 6 -
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 20030H0698B0826 - 7 -
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. A21L72JS/20030H0698B0826 - 8 -