Gov. Ed Rendell yesterday signed Senate Bill 1063, which will consolidate earned income tax collection in Pennsylvania.

"This fixes what is now, probably, the most complex and confusing local taxing environment in the nation, with more local earned income tax collectors -- 560 -- and more local taxing jurisdictions -- nearly 2,900 -- than all other states combined,'' said Mr. Rendell.

Under the bill, 65 counties will have one earned income tax collector, while Allegheny County will have four. Philadelphia isn't covered by the new bill because it has its own system.

The bill creates county-specific "tax collection committees,'' with representation from schools and municipalities, that would appoint a tax collector and oversee collections. Businesses will be required to withhold local earned income taxes from their employees' paychecks, as they now withhold federal and state income taxes.

According to the Pennsylvania Economy League, Pennsylvania's "fractured and inefficient system'' of collection has left an estimated $237 million uncollected each year.

The new system will be phased in starting in 2010 and should be fully operational by 2012. It's not taking effect immediately because some current tax collectors have contracts that must expire first.