PRINTER'S NO. 977
No. 920 Session of 2007
INTRODUCED BY TURZAI, KOTIK, BARRAR, BELFANTI, CAPPELLI, CLYMER,
CREIGHTON, FAIRCHILD, HARHART, HORNAMAN, HUTCHINSON,
METCALFE, MICOZZIE, MUSTIO, PHILLIPS, PICKETT, RAPP, ROHRER,
SAYLOR AND VULAKOVICH, MARCH 19, 2007
REFERRED TO COMMITTEE ON FINANCE, MARCH 19, 2007
AN ACT
1 Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An
2 act empowering the Department of Community Affairs to declare
3 certain municipalities as financially distressed; providing
4 for the restructuring of debt of financially distressed
5 municipalities; limiting the ability of financially
6 distressed municipalities to obtain government funding;
7 authorizing municipalities to participate in Federal debt
8 adjustment actions and bankruptcy actions under certain
9 circumstances; and providing for consolidation or merger of
10 contiguous municipalities to relieve financial distress,"
11 further providing for powers and duties of municipalities;
12 and prohibiting the taxation of earned income of
13 nonresidents.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Section 123(c)(3) of the act of July 10, 1987
17 (P.L.246, No.47), known as the Municipalities Financial Recovery
18 Act, amended July 11, 1996 (P.L.645, No.108), is amended to
19 read:
20 Section 123. Powers and duties of municipalities.
21 * * *
22 (c) Right to petition court for tax increase.--
1 * * *
2 [(3) A petition filed by a city of the second class A
3 under this subsection may not include an increase in a tax on
4 nonresident income unless the municipality certifies to the
5 court, with regard to those provisions of the plan having a
6 measurable fiscal impact, that:
7 (i) the municipality has substantially implemented
8 the provisions which are within the authority of the
9 chief executive officer or governing body, including, but
10 not limited to, provisions of the plan that call for
11 increasing existing tax rates levied on residents and
12 increasing fees charged by the municipality;
13 (ii) the municipality has taken those actions
14 required to obtain the approval of other parties for
15 those provisions which may not be implemented without
16 such approval, including, but not limited to, the
17 approval of a court, local electors or any collective
18 bargaining unit; and
19 (iii) the additional income from the aforementioned
20 actions is insufficient to balance the municipal budget,
21 necessitating additional revenue from an increase in the
22 tax on nonresident income.]
23 Section 2. The act is amended by adding a section to read:
24 Section 124. Prohibition on taxing earned income of
25 nonresidents.
26 (a) General rule.--Except as otherwise provided under
27 subsection (b), no municipality, court or other entity may
28 impose an earned income tax on a nonresident of a municipality
29 under this act.
30 (b) Phase-out of existing tax.--Any earned income tax
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1 imposed pursuant to the provisions of this act on a nonresident
2 of a municipality prior to the effective date of this section
3 shall be discontinued and shall have no force or effect 90 days
4 after the effective date of this section.
5 Section 3. This act shall take effect in 60 days.
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