Juniata County Tax Collection Committee

Act 32

Act 32

• New law which overhauls earned income tax in Pennsylvania – signed into law on July 2, 2008

• Will affect taxpayers, employers, school districts, townships, boroughs, tax collectors

• Applies to every county except Philadelphia• Reduces number of collectors from 560+ to 69• One tax collector per each Tax Collection District

Juniata County Tax Collection District (TCD)

• All of Juniata County except Greenwood Twp. (which is in the Perry County TCD)

• 17 members of TCC

• 1 School District; 16 municipalities

• All members currently have their earned income tax self-collected through the school district

New Government Entity – TCC • Juniata County TCC is a new government entity• TCC governs and oversees how earned income

taxes are collected in Juniata County TCD• Requires immediate school district and

municipality attention – now; not later!• TCC process

TCC first stage: 2+ years – 2009-11 – TCC organization and basic tax collection decisions

TCC second stage: forever – oversight of ongoing tax collection

TCC Advance Planning

NOW• Taxing authorities should begin advance

planning for TCC – now: Form planning group Collect/summarize tax

facts Governance/first meeting/chairperson

selection/other initial decisions• Taxing authorities should appoint TCC voting

delegates and alternates – now – Delegate need not be elected official and need not be appointed official – this must be done by 9/15/09 – must convey this information to County Commissioners

• Every PSD must select one delegate to TCC but more than one PSD can have same delegate (this will reduce number of delegates on TCC

and will increase efficiency)

TCC initial meeting Must take place by November 15, 2009 – but can be before It is the responsibility of the county commissioners to organize

the time, place and location of the first meeting – must notify PSDs by 9/15/09 of when first meeting will occur and must give public notice 21 days before first meeting

County commissioners run the first meeting until a TCC chairperson is elected; this should be your first vote

Once chairperson is elected; county commissioners role is finished; chairperson now runs the meeting

Weighted vote is default vote First vote should be to determine chairperson and this should

be discussed early (50% based on population; 50% based on revenue – this will be distributed by DCED by 9/1/09)

TCC First StageTCC First Stage – Year #1 – 2009/2010October/November 2009(November 15 deadline for first meeting)

• TCC first meeting County Commissioner Chair or

designee convene meeting – no official further County role after officer election

Must elect Chairperson, Vice Chairperson, Secretary, Open Records Officer (and possibly other officers)

Should appoint legal counsel Should advertise Adopt bylaws – if possible based on

advance planning –

TCC First StageAfter officer election and bylaw adoption/ before tax collector appointment

• TCC takes the following steps: TCC management structure decisions Collection method

Independent third party For Profit collectors Tax collection bureau

Create a Juniata County Tax Collection Bureau

Multi County Collection Independent third party Tax collection bureau

TCC finance decisionsTCC auditorTCC bankTCC budget – operating costs TCC

operating cost financing mechanism – TCC tax collection cost allocation plan –

TCC First StageJune 1, 2010Deadline to appoint tax appeal board

Appoint new tax appeal board – made up of 3 or more TCC delegates

Appoint mediator Adopt mandatory and other policies

Right-to-Know records policy – appoint Open Records Officer (priority 2009)

Investment policyTax records policyTax collector investment income

distribution policyTax collector unidentified funds rulesRegulations, policies, and procedures for

tax administration

TCC First StageSept 15, 2010Deadline to appoint new Act 32 tax collectorcritical date

If tax will be collected by independent third party tax collector, prepare tax collector RFP and conduct RFP process Formal written Act 32 Tax Collection

Agreement provisions are very important and should be included in RFP

Decision on whether to accelerate new tax collector appointment and universal non-resident withholding requirement to 01/01/11 instead of 01/01/12

Duties of TCC

• Maintain a record of all votes and actions taken by the TCC. • Appoint and oversee the Tax Officer. • Set the compensation of the Tax Officer. • Require, set, hold and review the tax officer’s bond. • Establish the method of financing for the TCC. • Adopt, amend, and repeal bylaws for the management of its affairs. • Adopt, amend, and repeal policies and procedures consistent with

regulations under the Act. • This is the same thing that the CTCB board does now

Applicable Statutes

• Act 32

• Ethics Act

• State Adverse Interest Act

• Sunshine Law

• Right-to-Know Law

TCC Finance – Operating Costs No TCC expense payments until budget adopted (unless

paid by one or more taxing authorities, or County – with expectation of TCC reimbursement)

TCC will have operating costs – separate from EIT collection cost

Estimates from DCED: $125-$150K Who pays for this: You do! Such operating costs to be shared by the SD and munis

within the TCD in proportion to EIT revenue (different from weighted voting – population not considered); therefore, Juniata County School District will shoulder the bulk of the expenses

TCC Second StageTCC Second Stage – 2012 and Future YearsJanuary 1, 2012

• Act 32 county-wide collection begins (unless accelerated)

• Act 32 income tax law changes effective

• Second stage of TCC responsibilities begins, involving oversight of county-wide tax collection arrangements and periodic decisionmaking on continuing or changing arrangements

• TCC = oversight organization (or bureau)

Juniata County Act 32 Tax Planning Committee

TCC Planning Group Steps

• Who is the leader? How get started?

• Members of planning group?SD officials or business administratorsLocal municipal officials or managersIdentify other interested parties

• Sunshine Law/Right-to-Know Law?

TCC Planning Group Steps• How proceed?

Organization meetingPlanning group compositionTCC Legal Overview and Timeline Resources needed

Subsequent meetingsAuthorize letter to taxing authorities

– Act 32 required steps– Urge delegate appointment

TCC Planning Group StepsCounty dialogue, including establishing time and place for

TCC first meetingDevelop proposed TCC meeting agendas Set planning group meetings to address TCC issuesPrioritize TCC issues/assign responsibility Develop proposed TCC bylaws Develop proposed TCC budgetLegal counsel Funding mechanism for costs incurred before TCC first

meetingDevelop proposed TCC Right-to-Know Law Request PolicyConduct outreach programs – taxing authorities and

business community

TCC Bylaws

TCC Bylaws• Bylaws = critical document – address ASAP

– CTCB has Act 32 bylaws ready to go and will provide them free of charge

• Governing body – representatives of every school district and municipality within TCC that levies EIT

• Mini United Nations – 17 Delegates– 1 SD/16 munis = 17 possible delegates – Could also be 17 possible alternate delegates

• Weighted voting – based 50% on EIT revenue and 50% on population

• Option to change statutory default rules

TCC Bylaws• Major decisions first; then drafting and details• Major bylaw decisions:

Overarching – how to streamline governance?Delegate number: How many voting delegates

should there be? Should number of delegates be reduced to streamline governance? Note: TCC first meeting requires delegate appointed separately by every TA (but multiple TAs may appoint same person).

Vote weight: Should there be weighted voting based on tax revenues and population? Alternatively, should each delegate have just one vote? Note: TCC must use weighted voting until bylaws adopted.

TCC Structure

Management committee: Should TCC have a management committee? If so, what duties should be delegated to the management committee?

Employees: Will TCC have Executive Director or other employees?

Vote required for action: What vote is required for decisions? Simple majority of those present? Majority of all delegates? Supermajority for certain major decisions?

Many other decisions

CTCB role in Juniata County TCC

• We already collect for 100% of Perry County• Historically, our rate has been between 0.5 and

0.6%• If the TCC votes to adopt CTCB, the bureau

could absorb the costs of the TCC• We already have bylaws, solicitor, auditors,

director• This can save the TCC unnecessary expenses

CTCB role in Juniata County TCC - Technology

• CTCB prints all of its forms in house

• CTCB offers online filing for taxpayers

• In 2010, CTCB will offer online filing for employers

• New website – tax forms available online

• New mailing and emailing software to reduce costs

• Experienced staff in place and ready to go

CTCB role in Juniata County TCC – Other services

• Act 32 only applies to Earned Income Tax• CTCB can also collect Local Services Tax (LST),

real estate tax (both for school district and for county), OAT, OPT, personal tax

• Can also collect bills (trash, sewer, utility, etc.)• Can print forms for members at cost• Can be a one stop shop for all taxes in Juniata

County (similar to Lancaster Bureau)

CTCB Role in Juniata County

• The longer it takes for TCC to decide collector, the more expensive it is for you!

• If you elect CTCB to be the collector at your first meeting, CTCB then absorbs all the costs associated with CTCB because TCC becomes the Board of Directors of CTCB