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