PRINTER'S NO. 840
No. 791 Session of 1999
INTRODUCED BY BATTISTO, THOMAS, LUCYK, CIVERA, ARGALL, COY,
GIGLIOTTI, PESCI, GEORGE, SANTONI, TIGUE, STURLA, LAUGHLIN,
SHANER, HALUSKA, MANDERINO, WALKO, CAPPABIANCA, MUNDY, MELIO,
CURRY, SAINATO, STABACK, TRELLO, HARHAI, CLARK, TANGRETTI,
ROBERTS, JOSEPHS, SURRA, GRUCELA, COLAFELLA, DALEY, PETRARCA,
BELFANTI, McCALL, FRANKEL, STEELMAN, DALLY, DERMODY,
M. COHEN, FREEMAN, COSTA, STETLER AND MICHLOVIC,
MARCH 9, 1999
REFERRED TO COMMITTEE ON FINANCE, MARCH 9, 1999
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further providing for imposition of personal
11 income tax; establishing the Property Tax Reduction Fund; and
12 providing for reimbursement to school districts for real
13 property tax reduction.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Section 302 of the act of March 4, 1971 (P.L.6,
17 No.2), known as the Tax Reform Code of 1971, added August 4,
18 1991 (P.L.97, No.22), is amended to read:
19 Section 302. Imposition of Tax.--(a) Every resident
20 individual, estate or trust shall be subject to, and shall pay
1 for the privilege of receiving each of the classes of income
2 hereinafter enumerated in section 303, a tax upon each dollar of
3 income received by that resident during that resident's taxable
4 year at the following rates:
5 (1) Two and one-tenth per cent for taxable years commencing
6 with or within calendar year 1987 through the first half of the
7 taxable year commencing with or within calendar year 1991.
8 (2) Two and eight-tenths per cent for the second half of the
9 taxable year commencing with or within calendar year 1991 [and
10 each taxable year thereafter.] through the first half of the
11 taxable year commencing with or within calendar year 1999.
12 (2.1) Two and seven-tenths per cent for the second half of
13 the taxable year commencing with or within calendar year 1999
14 and each taxable year thereafter.
15 (2.2) In addition to the tax imposed under paragraph (2.1),
16 an additional one-tenth of one per cent for the second half of
17 the taxable year commencing with or within calendar year 1999
18 and each taxable year thereafter. Tax collected under this
19 paragraph shall be deposited into the Property Tax Reduction
20 Fund established under Part X-A and used solely for the purposes
21 of the fund.
22 (3) A temporary assessment equal to an additional three-
23 tenths per cent for the second half of the taxable year
24 commencing with or within calendar year 1991 through the first
25 half of the taxable year commencing with or within calendar year
26 1992.
27 (b) Every nonresident individual, estate or trust shall be
28 subject to, and shall pay for the privilege of receiving each of
29 the classes of income hereinafter enumerated in section 303 from
30 sources within this Commonwealth, a tax upon each dollar of
19990H0791B0840 - 2 -
1 income received by that nonresident during that nonresident's
2 taxable year at the following rates:
3 (1) Two and one-tenth per cent for taxable years commencing
4 with or within calendar year 1987 through the first half of the
5 taxable year commencing with or within calendar year 1991.
6 (2) Two and eight-tenths per cent for the second half of the
7 taxable year commencing with or within calendar year 1991 [and
8 each taxable year thereafter.] through the first half of the
9 taxable year commencing with or within calendar year 1999.
10 (2.1) Two and seven-tenths per cent for the second half of
11 the taxable year commencing with or within calendar year 1999
12 and each taxable year thereafter.
13 (2.2) In addition to the tax imposed under paragraph (2.1),
14 an additional one-tenth of one per cent for the second half of
15 the taxable year commencing with or within calendar year 1999
16 and each taxable year thereafter. Tax collected under this
17 paragraph shall be deposited into the Property Tax Reduction
18 Fund established under Part X-A and used solely for the purposes
19 of the fund.
20 (3) A temporary assessment equal to an additional three-
21 tenths per cent for the second half of the taxable year
22 commencing with or within calendar year 1991 through the first
23 half of the taxable year commencing with or within calendar year
24 1992.
25 Section 2. The act is amended by adding a part to read:
26 PART X-A
27 PROPERTY TAX REDUCTION FUND
28 Section 357.1. Definitions.--The following words and phrases
29 when used in this part shall have the meanings given to them in
30 this section unless the context clearly indicates otherwise:
19990H0791B0840 - 3 -
1 "Fund." The Property Tax Reduction Fund established in
2 section 357.2.
3 Section 357.2. Establishment and Funding of Fund.--There is
4 hereby established a restricted account in the General Fund to
5 be known as the Property Tax Reduction Fund, to be funded by the
6 tax levied under section 302(a)(2.2).
7 Section 357.3. Purpose of Fund.--The Department of Revenue
8 is authorized to make grants to school districts to reimburse
9 losses in revenue caused by reductions in real property taxes.
10 Section 357.4. Procedure.--(a) By May 15 of each year the
11 Department of Revenue shall inform the Department of Education
12 of the amount estimated to be available from collection of
13 personal income tax in the current tax year for reimbursements
14 to school districts in their next fiscal year.
15 (b) By May 31 of each year, the Department of Education
16 shall inform each school district of the amount estimated to be
17 available to reimburse the school district in its next fiscal
18 year if it reduces its real property tax by that amount.
19 Distribution of the fund shall be based on the weighted average
20 daily membership, as defined in section 2501 of the act of March
21 10, 1949 (P.L.30, No.14), known as "The Public School Code of
22 1949."
23 (c) (1) If a school district reduces its real property tax
24 in its next fiscal year, the district will be reimbursed the
25 amount of the reduction, or the amount which it was informed
26 would be available, whichever is the lesser.
27 (2) If a lesser amount than the estimated amount is actually
28 available for reimbursement in the fiscal year, the lesser
29 amount will be reimbursed in the current fiscal year and the
30 difference will be reimbursed in the following fiscal year.
19990H0791B0840 - 4 -
1 (3) Money remaining in the fund because of a school
2 district's reduction of its real property tax in an amount less
3 than the amount available to the school district, or the
4 district's failure to reduce its real property tax, shall remain
5 in the fund and be used, first, to make up any difference
6 between the amount estimated by the Department of Revenue to be
7 available for the fiscal year and the actual amount available,
8 with the balance to be available for reimbursements to school
9 districts in the following fiscal year.
10 Section 3. The addition of Part X-A of the act shall be
11 retroactive to January 1, 1999.
12 Section 4. This act shall take effect immediately.
B10L72MRD/19990H0791B0840 - 5 -