Pennsylvania Act 1996-108 — MUNICIPALITIES FINANCIAL RECOVERY ACT - AMEND

Act text

MUNICIPALITIES FINANCIAL RECOVERY ACT - AMEND
                 Act of Jul. 11, 1996, P.L. 645, No. 108              Cl. 53
                             Session of 1996
                               No. 1996-108

     HB 950

                                  AN ACT

     Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An
        act empowering the Department of Community Affairs to declare
        certain municipalities as financially distressed; providing
        for the restructuring of debt of financially distressed
        municipalities; limiting the ability of financially
        distressed municipalities to obtain government funding;
        authorizing municipalities to participate in Federal debt
        adjustment actions and bankruptcy actions under certain
        circumstances; and providing for consolidation or merger of
        contiguous municipalities to relieve financial distress,"
        imposing a limitation on the right of a municipality to
        petition the court for an increase in the rate of taxation.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Sections 123(c) and 141 of the act of July 10,
     1987 (P.L.246, No.47), known as the Municipalities Financial
     Recovery Act, are amended to read:
      Section 123.  Powers and duties of municipalities.
        * * *
        (c)  Right to petition court for tax increase.--
            (1)  After a municipality has adopted a plan under
        Subchapter C of Chapter 2, it may petition the court of
        common pleas of the county in which the municipality is
        located to increase its rates of taxation for earned income,
        real property, or both, beyond maximum rates provided by law.
            (2)  If a tax increase above existing limits is granted
        by the courts, the increase shall be effective for a period
        of one year. [from the date a final plan is adopted by the
        governing body pursuant to section 245.] The one-year
        increase shall run from the date specified in the petition
        filed with the court or, if no such date is specified, from
        the beginning of the current fiscal year of the municipality.
        Subsequent increases in rates of taxation may be granted by
        the court upon annual petition of the municipality. The
        additional amount of taxes resulting from the petition shall
        not be subject to sharing with a school district.
            (3)  A petition filed by a city of the second class A
     under this subsection may not include an increase in a tax on
     nonresident income unless the municipality certifies to the
     court, with regard to those provisions of the plan having a
     measurable fiscal impact, that:
                (i)  the municipality has substantially implemented
            the provisions which are within the authority of the
            chief executive officer or governing body, including, but
            not limited to, provisions of the plan that call for
            increasing existing tax rates levied on residents and
            increasing fees charged by the municipality;
                (ii)  the municipality has taken those actions
            required to obtain the approval of other parties for
            those provisions which may not be implemented without
            such approval, including, but not limited to, the
            approval of a court, local electors or any collective
            bargaining unit; and
                (iii)  the additional income from the aforementioned
            actions is insufficient to balance the municipal budget,
            necessitating additional revenue from an increase in the
            tax on nonresident income.
      Section 141.  Jurisdiction of court of common pleas.
        (a)  Increases in tax rates.--The court of common pleas of
     each county shall have jurisdiction to hear a petition filed by
     a municipality which has adopted a final plan pursuant to
     Subchapter C of Chapter 2 to increase rates of taxation for
     earned income, real property, or both, beyond maximum rates
     provided by law. The court may extend annually the increased
     taxing powers of the municipality until the termination date of
     the plan adopted by the municipality pursuant to Chapter 2.
        (b)  Involuntary compromises of delinquent taxes.--The court
     of common pleas of each county may hear a petition filed by at
     least two taxing authorities having taxing power over the
     properties within a municipality which has adopted a final plan
     pursuant to Subchapter C of Chapter 2 if the petition requests a
     compromise of delinquent taxes due on a property in that
     municipality. The court may order the property to be sold at a
     sheriff's sale and the proceeds to be divided among all
     authorities which are owed taxes for the property sold. If the
     property is sold at sheriff's sale and if the proceeds are
     insufficient to satisfy tax liens on the property, the court
     shall order a proration of the sale proceeds among the taxing
     authorities which fixed the liens.
        Section 2.  This act shall apply to petitions to increase
     rates of taxation that relate to tax years beginning after the
     effective date of this act.
        Section 3.  This act shall take effect in 60 days.

     APPROVED--The 11th day of July, A. D. 1996.

     THOMAS J. RIDGE