1Authorizing counties to impose sales, use and occupancy taxes;
2providing for the levying, assessment and collection of taxes
3and for the powers and duties of the Department of Community
4and Economic Development, the Department of Revenue and the
5State Treasurer; and establishing the County Sales, Use and
6Occupancy Tax Fund.

7TABLE OF CONTENTS

8Chapter 1.  General Provisions

9Section 101.  Short title.

10Section 102.  Definitions.

11Section 103.  Scope.

12Section 104.  Preemption.

13Section 105.  Rates of taxation in home rule counties.

14Chapter 3.  Subjects of Taxation

15Subchapter A.  Tax Authorization

16Section 301.  General tax authorization.

17Section 302.  Continuity of tax.

18Section 303.  Election to participate under act.

19Section 304.  (Reserved).

1Section 305.  Municipal qualification and initiative.

2Subchapter B.  County Sales, Use and Occupancy Tax

3Section 311.  Construction.

4Section 312.  Imposition of tax.

5Section 313.  Situs.

6Section 314.  Licenses.

7Section 315.  Rules and regulations; collection costs.

8Section 316.  Procedure.

9Section 317.  County Sales, Use and Occupancy Tax Fund.

10Section 318.  Disbursements.

11Section 319.  (Reserved).

12Section 320.  Allocations.

13Chapter 5.  Disposition of Tax Revenues

14Section 501.  Sales, use and occupancy tax revenues.

15Chapter 21.  Miscellaneous Provisions

16Section 2101.  Effective date.

17The General Assembly of the Commonwealth of Pennsylvania
18hereby enacts as follows:

19CHAPTER 1

20GENERAL PROVISIONS

21Section 101.  Short title.

22This act shall be known and may be cited as the Optional 
23Sales Tax for School Property Tax Relief and County and 
24Municipal Assistance Act.

25Section 102.  Definitions.

26The following words and phrases when used in this act shall
27have the meanings given to them in this section unless the
28context clearly indicates otherwise:

29"Board of county commissioners."  Includes the successor in
30function to the board of county commissioners in a county which

1has adopted a home rule charter under the provisions 53 Pa.C.S.
2Pt. III Subpt. E (relating to home rule and optional plan
3government), but does not include the city council of a city of
4the first class or the county council of a county of the second
5class.

6"County."  A county-level municipality within this
7Commonwealth. The term includes a county which has adopted a
8home rule charter or optional plan of government under the
9provisions of 53 Pa.C.S. Pt. III Subpt. E (relating to home rule
10and optional plan government). The term does not include a
11county of the first class or a county of the second class.

12"Department."  The Department of Revenue of the Commonwealth.

13"Fund."  The County Sales, Use and Occupancy Tax Fund.

14"Homestead."  As defined in 53 Pa.C.S. § 8401 (relating to
15definitions).

16"Local Tax Enabling Act."  The act of December 31, 1965
17(P.L.1257, No.511), known as The Local Tax Enabling Act.

18"Municipality."  A city of the second class A, city of the
19third class, borough, incorporated town, township of the first
20class, township of the second class, home rule municipality,
21optional plan municipality, optional form municipality or
22similar general purpose unit of government which may after the
23effective date of this section be established by statute. Unless
24the context clearly indicates otherwise, for the purposes of
25this act, a municipality located in a county shall include
26municipalities that are located entirely or partially in the
27county. The term shall not include a city of the first class, a
28city of the second class or a municipality located in a county
29of the second class.

30"Nonqualified municipality."  A municipality that is not

1qualified under section 305 to receive disbursements under
2section 318.

3"PICAA."  The act of June 5, 1991 (P.L.9, No.6), known as the
4Pennsylvania Intergovernmental Cooperation Authority Act for
5Cities of the First Class.

6"Population."  The number of individuals residing in an area
7as determined in the most recent Federal decennial census.

8"Qualified municipality."  A municipality that is qualified
9under section 305 to receive disbursements under section 318.

10"Tax Reform Code."  The act of March 4, 1971 (P.L.6, No.2),
11known as the Tax Reform Code of 1971.

12Section 103.  Scope.

13It is the intent of this act to confer upon each county the
14power to levy, assess and collect taxes upon the subjects of
15taxation specified in this act.

16Section 104.  Preemption.

17No act of the General Assembly in effect prior to or after
18the effective date of this section shall be deemed to vacate or
19preempt any ordinance passed or adopted under the authority of
20this act or any other act providing authority for the imposition
21of a tax by a county, unless the act of the General Assembly
22expressly vacates or preempts the authority to pass or adopt the
23ordinance.

24Section 105.  Rates of taxation in home rule counties.

25A county which has adopted a home rule charter or optional
26plan of government under the provisions of 53 Pa.C.S. Pt. III
27Subpt. E (relating to home rule and optional plan government)
28may not fix the rate of taxation for the subjects of taxation
29authorized under Chapter 3 in excess of the rates fixed in
30Chapter 3.

1CHAPTER 3

2SUBJECTS OF TAXATION

3SUBCHAPTER A

4TAX AUTHORIZATION

5Section 301.  General tax authorization.

6A county shall have the power and may by ordinance levy and
7assess or provide for the levying and assessment of taxes on the
8sale or use of tangible personal property and services and the
9occupancy of a hotel room at a rate of 1% within the
10geographical limits of the county, subject to the provisions of
11this act.

12Section 302.  Continuity of tax.

13A tax levied under the provisions of this act shall continue
14in force on a fiscal year basis without annual reenactment until
15the tax is subsequently repealed.

16Section 303.  Election to participate under act.

17A board of county commissioners may elect to participate
18under this act by adopting an ordinance imposing the tax under
19the procedures set forth in section 316.

20Section 304.  (Reserved).

21Section 305.  Municipal qualification and initiative.

22(a)  Initial year of implementation.--

23(1)  The governing body of a municipality desiring to
24qualify for disbursements under section 318 beginning in the
25first fiscal year following the effective date of this
26section shall, on or before November 30, 2017, do all of the
27following:

28(i)  Adopt a resolution containing the following
29statement:

30We strongly urge the county to enact a county sales,

1use and occupancy tax and intend to accept
2disbursements of the sales, use and occupancy tax
3collected.

4(ii)  Deliver a certified copy of the resolution to
5the board of county commissioners for the county in which
6the municipality is located. If the municipality is
7located in more than one county, the governing body shall
8deliver a certified copy to the board of county
9commissioners for each county where the municipality is
10located.

11(2)  Within 30 days following receipt of certified
12resolutions from municipalities whose combined population
13represents more than 60% of the population of the county, the
14board of county commissioners of the county shall commence
15the procedures under section 316 for imposing the tax under
16section 312; however, the written notice to municipalities
17under section 316(a) must be made 15 days prior to adoption
18of the ordinance. The population of a municipality that is
19located in more than one county shall be determined
20separately for each county where the municipality is located
21on the basis of the municipality's population within each
22county.

23(3)  The tax shall be imposed as of the date occurring 90
24days following the adoption of the ordinance.

25(4)  A municipality located in a county where the tax is
26imposed during the first fiscal year following the effective
27date of this section whose governing body does not adopt and
28deliver to the board of county commissioners a resolution
29under paragraph (1) shall not be qualified to receive
30disbursements under section 318 for the first three fiscal

1years following the effective date of this section.

2(b)  Implementation in subsequent years.--

3(1)  A municipality located in a county where the tax is
4not imposed in the first fiscal year following the effective
5date of this section desiring to qualify for disbursements
6under section 318 shall follow the procedures under
7subsection (a), except with respect to adoption by November
830, 2012, prior to the enactment by the county of an
9ordinance under section 316 in any subsequent fiscal year. In
10that event, the municipality shall be qualified to receive
11disbursements under section 318 for all subsequent fiscal
12years that the tax is in effect. The requirements of
13subsection (a)(1) must be met by June 30 for the imposition
14of the tax by the county for the subsequent fiscal year.

15(2)  A municipality located in a county where the tax has
16been imposed and that has not followed the procedures under
17subsection (a)(1) or (b)(1) may only qualify for
18disbursements under section 318 in the fourth or any
19subsequent fiscal year following imposition of the tax, and
20for all fiscal years thereafter, if it does all of the
21following by September 1 of the fiscal year prior to the
22first fiscal year in which the municipality will be qualified
23to receive disbursement:

24(i)  Adopts a resolution containing the following
25statement:

26We support the enactment by the county of the county
27sales, use and occupancy tax, strongly urge its
28continuation and intend to accept disbursements of
29the sales, use and occupancy tax collected.

30(ii)  Delivers a certified copy of the resolution to

1the board of county commissioners for the county in which
2the municipality is located. If the municipality is
3located in more than one county, the governing body shall
4deliver a certified copy to the board of county
5commissioners for each county where the municipality is
6located.

7(c)  No limitation on counties.--Nothing in this section
8shall prohibit the board of commissioners of a county from
9electing to participate under this act under the procedures set
10forth in section 316 without having received certified
11resolutions from municipalities under subsection (a) or (b).

12SUBCHAPTER B

13COUNTY SALES, USE AND OCCUPANCY TAX

14Section 311.  Construction.

15The tax imposed by the board of county commissioners under
16this subchapter shall be in addition to any tax imposed by the
17Commonwealth under Article II of the Tax Reform Code. Except for
18the differing situs provisions under section 313, the provisions
19of Article II of the Tax Reform Code shall apply to the tax.

20Section 312.  Imposition of tax.

21(a)  Sales.--

22(1)  The board of county commissioners may levy and
23assess upon each separate sale at retail of tangible personal
24property or services, as defined in Article II of the Tax
25Reform Code, within the boundaries of the county, a tax on
26the purchase price.

27(2)  The tax shall be collected by the vendor from the
28purchaser and shall be paid over to the Commonwealth as
29provided in this subchapter.

30(b)  Use.--

1(1)  In any county within which the tax authorized in
2subsection (a) is imposed, there shall be levied, assessed
3and collected upon the use, within the county, of tangible
4personal property purchased at retail and on services
5purchased at retail, as defined in Article II of the Tax
6Reform Code, a tax on the purchase price.

7(2)  The tax shall be paid over to the Commonwealth by
8the person who makes the use.

9(3)  The use tax imposed under this subchapter shall not
10be paid over to the Commonwealth by any person who has paid
11the tax imposed by subsection (a) or has paid the tax imposed
12by this subsection to the vendor with respect to the use.

13(c)  Occupancy.--

14(1)  In any county within which a tax authorized by
15subsection (a) is imposed, there shall be levied, assessed
16and collected an excise tax on the rent upon every occupancy
17of a room or rooms in a hotel in the county.

18(2)  The tax shall be collected by the operator or owner
19from the occupant and paid over to the Commonwealth.

20(d)  Rate and uniformity.--The tax authorized by subsections
21(a), (b) and (c) shall be imposed at a rate of 1% and shall be
22uniform.

23(e)  Computation.--The tax imposed under this section shall
24be computed in the manner set forth in section 503(e)(2) of
25PICAA.

26Section 313.  Situs.

27The situs of sales at retail or uses shall be determined in
28the manner specified by section 504 of PICAA and by Article II-A
29of the Tax Reform Code.

30Section 314.  Licenses.

1The license issued pursuant to Article II of the Tax Reform
2Code or a separate license for the collection of the tax imposed
3by this subchapter may be issued by the department in the same
4manner as is provided for in section 505 of PICAA. Licensees
5shall be entitled to the same discount as provided in section
6227 of the Tax Reform Code.

7Section 315.  Rules and regulations; collection costs.

8(a)  Regulations.--The rules and regulations promulgated
9under section 270 of the Tax Reform Code shall be applicable to
10the taxes imposed under section 312 insofar as such rules and
11regulations are consistent with section 312.

12(b)  Administration and costs.--

13(1)  The department shall administer and enforce the
14provisions of this subchapter. The department may promulgate
15and enforce regulations consistent with the provisions of
16this subchapter relating to anything pertaining to the
17administration and enforcement of this subchapter. The
18department may prescribe the extent to which a regulation
19shall be applied without retroactive effect.

20(2)  To cover their respective costs of administration,
21the department and the Treasury Department shall be entitled
22to retain a sum equal to costs of collection, but no more
23than 1% and 0.5%, respectively, of the revenues collected
24under this subchapter. The department shall inform the
25counties participating under this act in writing monthly of
26the sum retained and the costs of collection reimbursed. When
27the annual operating budgets for the department and the
28Treasury Department are submitted to the General Assembly,
29each agency shall also submit to the chairman and minority
30chairman of the Appropriations Committee of the Senate and to

1the chairman and minority chairman of the Appropriations
2Committee of the House of Representatives the actual sums
3retained for costs of collection in the preceding fiscal
4year, together with all supporting details.

5Section 316.  Procedure.

6(a)  Ordinance.--

7(1)  A county desiring to impose the tax authorized by
8section 312 shall give at least 45 days' written notice to
9each municipality in the county of its intent to impose the
10tax. The notice and ordinance shall state the tax rate and
11refer to this subchapter. The ordinance shall authorize the
12imposition of the tax on all subjects provided for in section
13312.

14(2)  Prior to adopting an ordinance imposing the tax
15under section 312, the board of county commissioners shall
16give public notice of its intent to adopt the ordinance in
17the manner provided by section 306 of the Local Tax Enabling
18Act and shall conduct at least one public hearing regarding
19the proposed adoption of the ordinance.

20(3)  The board of county commissioners may waive the
21requirement for a public hearing if the ordinance will be
22adopted pursuant to the provisions of section 305.

23(4)  Except as provided in paragraph (5), an ordinance
24adopted under this section shall be adopted by September 1
25and the tax shall be imposed as of January 1 of the following
26fiscal year.

27(5)  Notwithstanding paragraph (4), a county desiring to
28impose the tax in the first fiscal year following the
29effective date of this section may adopt an ordinance under
30this section by November 30, 2012. If this paragraph applies,

1the tax shall be imposed as of the date occurring 90 days
2following the adoption of the ordinance.

3(b)  Notification to department.--Certified copies of the
4county ordinance shall be delivered to the department and the
5municipalities within 15 days following adoption of the
6ordinance.

7(c)  Repeal.--

8(1)  No earlier than the end of the fifth fiscal year
9following imposition of the tax authorized by section 312, a
10county may repeal the tax. In that event, the county shall
11give at least 30 days' written notice to every municipality
12located in the county of its intent to repeal the tax. The
13ordinance shall authorize the repeal of the tax on all
14subjects provided for in section 312.

15(2)  Prior to adopting an ordinance repealing the tax
16imposed under section 312, the board of county commissioners
17shall give public notice of its intent to repeal the
18ordinance in the manner provided by section 306 of the Local
19Tax Enabling Act for the adoption of ordinances and shall
20conduct at least one public hearing regarding the proposed
21repeal of the ordinance.

22(d)  Delivery of repeal ordinance.--The board of county
23commissioners shall deliver certified copies of a repeal
24ordinance to the department and the municipalities within the
25county by September 1 of the year prior to the effective date of
26the repeal.

27Section 317.  County Sales, Use and Occupancy Tax Fund.

28(a)  Fund established in State Treasury.--There is hereby
29established in the State Treasury a County Sales, Use and
30Occupancy Tax Fund. The State Treasurer shall be custodian of

1the fund which shall be subject to the provisions of law
2applicable to funds listed in section 302 of the act of April 9,
31929 (P.L.343, No.176), known as The Fiscal Code. Subaccounts
4shall be established within the fund for each county
5participating under this act.

6(b)  Deposits into fund.--

7(1)  The tax imposed under section 312 shall be received
8by the department and paid to the State Treasurer and, along
9with interest and penalties, less any collection costs
10allowed under this subchapter and any refunds and credits
11paid, shall be credited to the respective counties'
12subaccounts not less frequently than every two weeks.

13(2)  During any period prior to the credit of money to
14each such subaccount, interest earned on money received by
15the department and paid to the State Treasurer under this
16subchapter shall be credited to the respective subaccount.

17(c)  Lapsing and interfund transfers prohibited.--All money
18in the fund and credited to the subaccounts, including, but not
19limited to, money credited to the subaccounts under this
20section, prior year encumbrances and the interest earned
21thereon, shall not lapse or be transferred to any other fund or
22subaccount, but shall remain in the fund and credited to the
23respective subaccounts as provided in this chapter.

24(d)  Investment.--Pending their disbursement, money received
25on behalf of or deposited into the fund shall be invested or
26reinvested as are other money in the custody of the State
27Treasurer in the manner provided by law. All earnings received
28from the investment or reinvestment of the money shall be
29credited to the fund.

30Section 318.  Disbursements.

1(a)  General rule.--On or before the tenth business day
2following receipt from the department of the necessary
3calculations, the State Treasurer shall make disbursements as
4provided in this section.

5(b)  Disbursement to counties.--

6(1)  The State Treasurer shall disburse to a county
7imposing the tax under section 312 an amount of money equal
8to 25% of the tax deposited in the fund credited to the
9county's subaccount. The money shall be deposited into the
10county general fund for disposition as provided under section
11501(a).

12(2)  The State Treasurer shall disburse to a county, in
13addition to its share under paragraph (1), an amount of money
14equal to the amount allocated under section 320 to all of the
15nonqualified municipalities. The money shall be deposited
16into the county general fund for disposition as provided
17under section 501(a).

18(c)  Disbursement to municipalities.--Twenty-five percent of
19the tax deposited into the fund shall be disbursed to each
20qualified municipality in the amounts allocated under section
21320(a). The money disbursed shall be deposited into the
22municipal general fund for disposition as provided in section
23501(b).

24(d)  Disbursement to school districts.--The remaining 50% of
25the tax deposited into the fund shall be disbursed to each
26school district in the amounts allocated under section 320(c).
27The money disbursed shall be deposited into the school district
28general fund for disposition as provided in section 501(c).

29Section 319.  (Reserved).

30Section 320.  Allocations.

1(a)  Allocations to municipalities.--The department shall
2compute allocations of the sums to be disbursed to
3municipalities under section 318(c) in the following manner:

4(1)  Fifty percent shall be allocated pro rata based on
5the weighted tax revenues for each municipality located in
6the county as a percentage of the total weighted tax revenues
7of all municipalities located in the county. For
8municipalities located in more than one county, the weighted
9tax revenues for the county shall be prorated based upon the
10population of the municipality in each county divided by the
11total population of the municipality.

12(2)  Fifty percent shall be allocated pro rata based on
13the population of each municipality located in the county as
14a percentage of the sum of the population of all
15municipalities located in the county. For municipalities
16located in more than one county, the population of the county
17shall be determined separately for each county where the
18municipality is located on the basis of the municipality's
19population within each county.

20(b)  Calculation of weighted tax revenues.--Calculations of
21weighted tax revenues shall be made by the Department of
22Community and Economic Development and certified to the
23department based upon information reported to the Department of
24Community and Economic Development, subject to review,
25verification and approval by the Department of Community and
26Economic Development.

27(c)  Allocations to school districts.--The department shall
28compute allocations of the sums to be disbursed to school
29districts under section 318(d) by a pro rata allocation based on
30the average daily membership for each school district located in

1the county as a percentage of the total average daily membership
2of all school districts located in the county. For school
3districts located in more than one county, the average daily
4memberships for the county shall be prorated based upon the
5population of the school district in each county divided by the
6total population of the school district.

7(d)  Calculation of average daily memberships.--Calculations
8of average daily memberships shall be made by the Department of
9Education and certified to the department based upon information
10reported to the Department of Education, subject to review,
11verification and approval by the Department of Education.

12(e)  Definitions.--As used in this section, the following
13words and phrases shall have the meanings given to them in this
14subsection:

15"Average daily membership."  As defined in the act of March
1610, 1949 (P.L.30, No.14), known as the Public School Code of
171949.

18"Per capita market value."  The total market value of all
19real property divided by population as determined by the most
20recent decennial census.

21"Total tax revenues."  Real property tax revenues, revenues
22received by levy of a tax under the Local Tax Enabling Act,
23revenues received by levy of a tax under this act and revenues
24received by levy of a tax under the act of June 23, 1931
25(P.L.932, No.317), known as The Third Class City Code, the act
26of February 1, 1966 (1965 P.L.1656, No.581), known as The
27Borough Code, the act of June 24, 1931 (P.L.1206, No.331), known
28as The First Class Township Code, and the act of May 1, 1933
29(P.L.103, No.69), known as The Second Class Township Code, as
30applicable to the municipality.

1"Weighted tax revenues."  Total tax revenues of a
2municipality from all sources divided by the per capita market
3value of the municipality.

4CHAPTER 5

5DISPOSITION OF TAX REVENUES

6Section 501.  Sales, use and occupancy tax revenues.

7(a)  Counties.--All of the revenues estimated to be received
8by a county from the tax in a fiscal year shall be expended by
9the county to maintain core services.

10(b)  Municipalities.--All of the revenues estimated to be
11received by a qualified municipality from the tax in a fiscal
12year must be expended by the municipality as follows:

13(1)  When a municipality's pension plan is a moderately
14or severely distressed municipal pension system pursuant to
15the act of December 18, 1984 (P.L.1005, No.205), known as the
16Municipal Pension Plan Funding Standard and Recovery Act,
17revenues received in a fiscal year shall first be used to pay
18in full the municipality's minimum municipal obligation
19pursuant to the Municipal Pension Plan Funding Standard and
20Recovery Act. Any remaining revenues received shall be used
21to maintain core services.

22(2)  When a qualified municipality's pension plan is a
23minimally distressed municipal pension system pursuant to the
24Municipal Pension Plan Funding Standard and Recovery Act,
25revenues received in a fiscal year shall be used to maintain
26core services.

27(3)  When a municipality does not have a minimally, 
28moderately or severely distressed pension system pursuant to 
29the Municipal Pension Plan Funding Standard and Recovery Act, 
30revenues received by a qualified municipality shall be used 

1to maintain core services.

2(c)  School districts.--All of the revenues estimated to be
3received by a school district from the tax in a fiscal year
4shall be used to reduce, or maintain the reduction of, the
5school district real property tax, first by means of a homestead
6exclusion and then, if the maximum homestead exclusion has been
7attained, by means of reduction in the property tax millage
8rate.

9(d)  Definition.--As used in this section, the term "core
10services" includes:

11(1)  Police services.

12(2)  Fire services.

13(3)  Public works.

14(4)  Public health and welfare services, including
15county-owned or county-operated nursing homes.

16(5)  Administrative and clerical services.

17(6)  Judicial administration and justice-related
18services.

19(7)  Corrections services.

20(8)  Election services.

21CHAPTER 21

22MISCELLANEOUS PROVISIONS

23Section 2101.  Effective date.

24This act shall take effect immediately.