Bill Text: PA SB718 | 2009-2010 | Regular Session | Introduced

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Bill Title: Providing for prohibition of levy or collection of tax on homestead property, for the Homestead Property Tax Elimination Fund, for imposition of sales and use tax, for increase in personal income tax and for the Property Tax Relief Fund; and making a related repeal.

Spectrum: Strong Partisan Bill (Democrat 10-1)

Status: (Introduced - Dead) 2009-06-11 - Referred to FINANCE [SB718 Detail]

Download: Pennsylvania-2009-SB718-Introduced.html

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PRINTER'S NO. 1152
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 718 Session of2009
INTRODUCED BY LOGAN, ORIE, O'PAKE, MUSTO, BOSCOLA, FONTANA, FERLO, LEACH, KASUNIC AND WOZNIAK, JUNE 11, 2009
REFERRED TO FINANCE, JUNE 11, 2009
AN ACT
Providing for prohibition of levy or collection of tax on
homestead property, for the Homestead Property Tax
Elimination Fund, for imposition of sales and use tax, for
increase in personal income tax and for the Property Tax
Relief Fund; and making a related repeal.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Homestead
Property Tax Elimination Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Fund." The Homestead Property Tax Elimination Fund
established under section 4.
"Homestead property." The owner-occupied, primary residences
and the parcel of land within this Commonwealth on which the
residence is located and other improvements located on the
parcel. If a portion of the structure is used for a
nonresidential purpose, the homestead is equal to that portion
of the property used as the primary residence of the owner-
occupant. The term "homestead" shall have no effect, evidentiary
or otherwise, concerning the issue of whether property
constitutes a homestead or homestead property under any other
act. The term "homestead" shall include the owner-occupied
primary residence on a farmstead as defined in 53 Pa.C.S. § 8582
(relating to definitions) but shall not include any other real
property on a farmstead.
"Political subdivision." Any county, city, borough,
incorporated town, township, school district, vocational school
district and county institution district.
Section 3. Property tax prohibition.
(a) Levy.--Notwithstanding any other provision of law to the
contrary, no political subdivision may levy or collect any tax
on homestead property for any purpose in any taxable year which
begins after June 30, 2010.
(b) Collection.--Nothing in this act shall be construed to
prohibit a political subdivision from collecting delinquent
taxes on homestead property levied in any fiscal year preceding
the fiscal year in which the prohibition under subsection (a)
applies.
Section 4. Homestead Property Tax Elimination Fund.
(a) Establishment.--There is hereby established in the
Treasury Department a special fund to be known as the Homestead
Property Tax Elimination Fund.
(b) Custodian.--The State Treasurer shall be the custodian
of the fund, which shall be subject to the provisions of law
applicable to funds listed in section 302 of the act of April 9,
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1929 (P.L.343, No.176), known as The Fiscal Code.
(c) Roles of Department of Revenue and State Treasurer.--
Taxes imposed under sections 5 and 6 shall be received by the
Department of Revenue and paid to the State Treasurer and, along
with interest and penalties and any refunds and credits paid,
shall be credited to the fund no less frequently than quarterly.
(d) Interest.--During any period prior to the credit of
moneys to the fund, interest earned on moneys received by the
Department of Revenue and paid to the State Treasurer under this
act shall be deposited into the fund.
(e) Money in the fund.--All money in the fund, including,
but not limited to, money credited to the fund under this
section, prior year encumbrances and interest earned thereon
shall not lapse or be transferred to any other fund but shall
remain in the fund and be used exclusively as provided in this
act.
(f) Investment of funds.--Pending disbursement, money
received on behalf of or deposited into the fund shall be
invested or reinvested as are other funds in the custody of the
State Treasurer in the manner provided by law. All earnings
received from the investment or deposit of such funds shall be
credited to the fund.
(g) Borrowing of funds.--The State Treasurer shall be
authorized to borrow money from the General Fund in the event
the money in the fund is insufficient to make the distribution
required under section 8. Such borrowing shall be repaid with
interest to the General Fund at the earliest practicable date.
(h) Use of funds.--The Department of Revenue and the State
Treasurer may use a portion of the revenues in the fund for
costs associated with administering this act.
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Section 5. Sales and use tax.
(a) Tangible personal property or services.--In addition to
any other tax currently levied by the Commonwealth under Article
II of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, there shall be imposed upon each separate
sale at retail of tangible personal property or services as
defined in Article II of the Tax Reform Code of 1971 a tax on
the purchase price of 1%.
(b) Purchases at retail.--In addition to any other tax
currently levied by the Commonwealth under Article II of the Tax
Reform Code of 1971, there shall be imposed upon the use of
tangible personal property purchased at retail and on services
purchased at retail as defined in Article II of the Tax Reform
Code of 1971, a tax on the purchase price of 1%. The use tax
imposed under this subsection shall not be paid over to the
Commonwealth by any person who has paid the tax imposed under
subsection (a) or has paid the tax imposed under this subsection
to the vendor with respect to the use.
(c) Applicability.--The provisions of Article II of the Tax
Reform Code of 1971 shall apply to the sales and use tax levied
under this act.
(d) Deposit of Revenue.--The revenue generated through the
tax levied pursuant to this section shall be deposited into the
fund established under section 4 for purposes of replacing
revenues lost by all political subdivisions based on the
property tax prohibition set forth in section 3.
Section 6. Personal income tax.
(a) Additional income tax.--In addition to any other tax
currently levied by the Commonwealth under section 302 of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
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of 1971, there is levied a tax on each class of income as
defined in Article III of the Tax Reform Code of 1971 as
follows:
(1) For income greater than $100,000 but not greater
than $150,000, 1%.
(2) For income greater than $150,000 but not greater
than $200,000, 1.25%.
(3) For income greater than $200,000 but not greater
than $250,000, 1.6%.
(4) For income greater than $250,000 but not greater
than $300,000, 2%.
(5) For income greater than $300,000 but not greater
than $350,000, 2.75%.
(6) For income greater than $350,000 but not greater
than $400,000, 3.5%.
(7) For income greater than $400,000, 4%.
(b) Applicability.--The provisions of Article III of the Tax
Reform Code of 1971 shall apply to the personal income tax
levied pursuant to this section.
(c) Deposit of revenue.--The revenue generated through the
tax levied under this section shall be deposited into the fund
established under section 4 for purposes of replacing the
revenues lost by all political subdivisions based on the
property tax prohibition set forth in section 3.
Section 7. Slot machine gaming revenue.
Annually, all revenue deposited in the Property Tax Relief
Fund pursuant to 4 Pa.C.S. § 1409 (relating to Property Tax
Relief Fund) shall be transferred to the fund for purposes of
replacing revenue lost by all political subdivisions based on
the property tax prohibition set forth in section 3.
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Section 8. Disbursements from fund.
(a) Certifications by political subdivisions.--By June 30,
2010, each political subdivision shall calculate the amount of
revenue the political subdivision will lose in the upcoming
fiscal year based on the homestead property tax prohibition
under section 3 and certify the amount to the State Treasurer.
The calculation shall be based on the homestead property tax
levied as of the date the certification is made.
(b) Duties of State Treasurer.--
(1) Each year the State Treasurer shall adjust the
calculation originally certified under subsection (a) by the
percentage change in the Statewide average weekly wage as
calculated by the Department of Labor and Industry under
section 404(e)(2) of the act of December 5, 1936 (2nd
Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment
Compensation Law.
(2) The Treasury Department shall reimburse each
political subdivision for the total amount of revenue lost by
the political subdivision based on the property tax
prohibition under section 3.
(i) For a political subdivision with a fiscal year
concurrent with the calendar year, in two installments to
be paid on February 1 and April 1.
(ii) For any other political subdivision, in two
installments to be paid on the fourth Thursday of August
and the fourth Thursday of October.
Section 9. Notice.
If a constitutional amendment prohibiting any political
subdivision from levying a tax on homestead real property and
authorizing a graduated income tax is ratified by the
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electorate, the Secretary of the Commonwealth shall transmit
notice of the ratification to the Legislative Reference Bureau
for publication in the Pennsylvania Bulletin.
Section 19. Repeals.
(a) Specific.--Repeals are as follows:
(1) The General Assembly declares that the repeals under
paragraph (2) are necessary to effectuate section 3.
(2) The act of June 27, 2006 (1st Sp.Sess., P.L.1873,
No.1), known as the Taxpayer Relief Act, is repealed as
follows:
(i) Chapters 3, 5, 7, 9 and 15 are repealed
absolutely.
(ii) Chapter 13 is repealed to the extent that it
authorizes property tax rebates for taxes timely paid
after June 30, 2010.
(b) Inconsistent.--All acts and parts of acts are repealed
insofar as they are inconsistent with this act.
Section 20. Effective date.
This act shall take effect as follows:
(1) The following provisions shall take effect
immediately:
(i) Section 1.
(ii) Section 9.
(iii) This section.
(2) The remainder of this act shall take effect upon
publication of the notice under section 9.
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