PRINTER'S NO. 354
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY FONTANA, FERLO, WARD, TARTAGLIONE AND COSTA, FEBRUARY 5, 2013
REFERRED TO FINANCE, FEBRUARY 5, 2013
1Amending the act of July 28, 1953 (P.L.723, No.230), entitled,
2as amended, "An act relating to counties of the second class
3and second class A; amending, revising, consolidating and
4changing the laws relating thereto," providing for second
5class county real property assessment and tax elimination;
6and imposing duties on the Department of Revenue.
13SECOND CLASS COUNTY REAL PROPERTY
14ASSESSMENT AND TAX ELIMINATION
15(a) Preliminary Provisions
16Section 1901-C. Definitions.
20"Business." An enterprise, activity, profession or any other
8"County." A county of the second class.
9"Department." The Department of Revenue of the Commonwealth.
10"Earned income." Compensation as determined under section
11303 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
12Reform Code of 1971, and by regulations in 61 Pa. Code Pt. I
13Subpt. B Art. V (relating to personal income tax), not
14including, however, wages or compensation paid to individuals on
15active military service. Employee business expenses are
16allowable deductions as determined under Article III of the Tax
17Reform Code of 1971. The amount of a housing allowance provided
18to a member of the clergy may not be taxable as earned income.
22(1) The county council of a county.
23(2) A city council, borough council, incorporated town
24council, board of township commissioners, board of township
25supervisors, governing council of a home rule municipality or
26optional plan municipality or governing council of a similar
27general purpose unit of government which may be created by
28statute after the effective date of this definition and
29located within a county.
30(3) A board of school directors of a school district
1located within a county.
6"Net profits." The net income from the operation of a
7business, profession or other activity, except corporations,
8determined under section 303 of the act of March 4, 1971 (P.L.6,
9No.2), known as the Tax Reform Code of 1971, and regulations in
1061 Pa. Code Pt. I Subpt. B Art. V (relating to personal income
11tax). The term does not include income which is not paid for
12services provided and which is in the nature of earnings from an
13investment. For taxpayers engaged in the business, profession or
14activity of farming, the term does not include:
17(2) Gain on the sale of farm machinery.
28(4) sewer; or
29(5) a similar utility.
30"Personal income." Income enumerated in section 303 of the
1act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
2of 1971, as determined by the Department of Revenue, subject to
3correction for fraud, evasion or error as finally determined by
17(b) Procedure for Eliminating Real
18Property Assessments and Real Property Taxes
19Section 1911-C. Elimination of real property assessments.
20Notwithstanding any other provision of law, the governing
21body of a county may elect to eliminate its real property
22assessment system for the purpose of levying property taxes
23within the county by enacting an ordinance in accordance with
25Section 1912-C. Procedure.
26(a) Deadline for passage.--A county that elects to pass the
27ordinance authorized under section 1911-C shall enact the
28ordinance by June 30 of the year prior to the year the
29elimination of the property tax assessment system will take
1(a.1) Advertisement of intention to adopt tax ordinance or
2resolution.--Prior to the passage of any ordinance eliminating
3the use of property tax assessments in the county pursuant to
4section 1911-C, the governing body shall give notice of the
5intention to pass the ordinance. The notice shall be given in
6addition to all other notices required by law to be given and
7shall set forth the substantial nature of the proposed ordinance
8or resolution and the reason which, in the judgment of the
9governing body of the county, necessitates the passage of the
10ordinance. Publication of the notice shall be made by
11advertisement once a week for three consecutive weeks in a
12newspaper of general circulation within the county.
13(b) Public hearings.--Prior to adopting an ordinance under
14section 1911-C, the governing body shall hold at least three
15public hearings on the proposal. The date, time and location of
16the hearing shall be advertised in accordance with 65 Pa.C.S. §
17709 (relating to public notice), and public participation in the
18hearing shall be permitted in accordance with 65 Pa.C.S. § 710.1
19(relating to public participation).
23(d) Content of ordinance.--The ordinance eliminating the use
24of real property assessments within the county shall be clear
25and in language that is readily understandable by a layperson
26and shall be in the following form:
27Under the provisions of Article XIX-C of the Second Class
28County Code relating to second class county property tax
29elimination, the county of (insert name) hereby elects to
30prohibit the use of real property assessments for purposes of
4Section 1913-C. Alternative procedure.
5(a) Referendum.--If the governing body elects not to adopt
6the ordinance authorized under section 1911-C in the manner
7prescribed in section 1912-C, the governing body or the voters
8of the county may propose the ordinance by petition for
9consideration of the voters of the county through a public
10referendum in the manner prescribed by the county home rule
12(b) Submittal of referendum.--
13(1) If the governing body or the voters of the county
14petition for a referendum under subsection (a), the governing
15body of the county shall submit, at the next municipal
16election, a referendum question to the electors of the county
17school district seeking voter approval directing the county
18to prohibit the use of real property assessments for purposes
19of valuing real estate for taxation purposes within the
21(2) The governing body shall submit the referendum
22question to the election officials of the county no later
23than 60 days prior to the municipal election. The election
24officials shall cause the referendum question to be submitted
25to the electors of the county in the manner prescribed by
27(3) The referendum question shall state the nature of
28the question and advise the voter of the effect of passage of
29the question. The question shall be clear and in language
30that is readily understandable by a layperson and shall be in
1the following form:
2Do you favor eliminating real property taxes in the
3County of (insert name) and all political subdivisions
4within the county by prohibiting the use of property
5assessments to value real estate for taxation purposes?
6(4) The election officials of the county shall, in
7consultation with the governing body of the county, draft a
8nonlegal interpretative statement which shall accompany the
9referendum question in accordance with section 201.1 of the
10act of June 3, 1937 (P.L.1333, No.320), known as the
11Pennsylvania Election Code. The nonlegal interpretative
12statement shall inform the voters that:
13(i) Approving the referendum will result in the
14elimination of the assessment of real property and the
15imposition of real estate taxes within the county and
16each political subdivision within the county.
17(ii) The county and each political subdivision
18within the county will be authorized to impose the taxes
19or fees authorized under section 201.1 of the
20Pennsylvania Election Code to replace the revenue lost by
21eliminating real estate taxes.
25(d) Effective date.--If the referendum question is approved,
26the governing body of the county and each political subdivision
27within the county shall be prohibited from levying, assessing
28and collecting real estate taxes beginning in the county's or
29political subdivision's upcoming fiscal year.
30(e) Election Code provisions.--Proceedings under this
14(b) Construction.--Nothing under this section shall be
15construed to prohibit a county or a political subdivision from
16continuing to levy and collect a realty transfer tax in the
17manner provided by law.
18(c) Taxation and Other Revenue Sources
20ALTERNATIVE REVENUE SOURCES
21Section 1921-C. Alternative revenue sources.
22(a) Authorization.--If the governing body of a county
23eliminates its real property tax assessment system under section
241912-C or 1913-C, the governing body of the county and the
25governing body of each political subdivision within the county
26shall be authorized to levy, assess and collect any of the
27following within the taxing jurisdiction for purposes of
28replacing lost revenue as a result of the elimination of real
29estate taxes under section 1914-C:
30(1) An earned income and net profits tax.
1(2) A personal income tax.
2(3) A sales and use tax.
3(4) A fee per square foot on real property.
4(5) Any tax authorized under the Local Tax Enabling Act.
5(b) Initial limitation.--Notwithstanding any other provision
6of law, the governing body of a county or a political
7subdivision that for the first time levies any of the taxes or
8fees authorized under subsection (a) shall be prohibited from
9levying the taxes or fees at rates that in the aggregate exceed
10100% of the amount of revenue raised from the imposition of real
11estate taxes within the county or political subdivision in the
12year in which the prohibition on levying property taxes was
17(d) Execution.--A tax or fee imposed under this section
18shall take effect beginning on the first day of the fiscal year
19which begins after the tax or fee is authorized. A tax or fee
20imposed under this section shall continue in force on a fiscal
21year basis without annual reenactment except in a year in which
22the rate of the tax or fee is changed or the tax or fee is
24(e) Application.--The rate of any tax imposed by a county or
25political subdivision under subsection (a)(1), (2), (3) or (5)
26shall be in addition to any rate imposed by the county or
27political subdivision on the effective date of this section.
5Section 1922-C. Income tax authorization.
9Section 1923-C. Earned income and net profits tax.
10(a) Authorization.--Subject to section 1921-C(b) and (c), a
11governing body or political subdivision may levy or increase a
12tax on earned income and net profits of a resident individual at
13a rate determined by the governing body or political
18Section 1924-C. Personal income tax.
19(a) Authorization.--Subject to section 1921-C(b) and (c), a
20governing body or political subdivision may levy, assess and
21collect a tax on the personal income of a resident individual at
22a rate determined by the governing body or political
27(1) In a revenue-neutral manner, the governing body or
28political subdivision shall convert existing earned income
29and net profits tax rates levied pursuant to any other act to
30a personal income tax rate.
4(c) Limitation.--If a governing body or political
5subdivision imposes the personal income tax, the governing body
6or political subdivision may not impose an earned income and net
7profits tax under section 1923-C or under any other act.
11(e) Inspection.--Notwithstanding the provisions of the Tax
12Reform Code, the department may permit a proper officer or an
13authorized agent of a county imposing the personal income tax
14to inspect the tax return of a resident individual. The
15department may provide the officer or authorized agent with an
16abstract of a tax return of a current or former resident
17individual or supply information concerning an item of income
18contained in the tax return. The officer or authorized agent
19shall be provided with the requested information upon payment to
20the department of the actual cost of providing the requested
1abstract or particulars.
10(2) Removal from office or discharge from employment.
11Section 1925-C. Tax collector.
12(a) Designation.--A county imposing an income tax under this
13chapter shall use the tax officer designated under the Local Tax
14Enabling Act as the tax collector. The tax collector shall have
15all the same powers, rights, responsibilities and duties for the
16collection of the taxes that may be imposed under the Local Tax
17Enabling Act, 53 Pa.C.S. Ch. 84 Subch. C (relating to local
18taxpayers bill of rights) or as otherwise provided by law.
19(b) Conflict.--In a conflict involving the authority
20conferred on the tax collector by the provisions of the Local
21Tax Enabling Act and the Tax Reform Code of 1971, the provisions
22of the Local Tax Enabling Act shall control.
23Section 1926-C. Credits, exemptions and special provisions.
24(a) Earned income and net profits tax.--
5Section 1927-C. Regulations.
6(a) Earned income and net profits.--A county or political
7subdivision which imposes an earned income and net profits tax
8under section 1923-C shall be subject to section 301.1 of the
9Local Tax Enabling Act and may adopt procedures for the
10processing of claims for credits or exemptions under section
111926-C(a)(1) or (2).
12(b) Personal income.--A county or political subdivision
13which imposes a personal income tax under section 1924-C shall
14be subject to all regulations adopted under Article III of the
15Tax Reform Code of 1971.
17SALES AND USE TAX
20Subject to section 1921-C(b) and (c), a county or political
21subdivision may, by ordinance, levy and assess tax on the sale
22or use of tangible personal property and services and the
23occupancy of a hotel room at a rate determined by the governing
25Section 1929-C. Construction.
28(1) Article XXXI-B; or
29(2) Article II of the Tax Reform Code of 1971.
30Section 1930-C. Imposition.
2(1) The governing body of county or political
3subdivision may levy and assess upon each separate sale at
4retail of tangible personal property or services, as defined
5in Article II of the Tax Reform Code of 1971, within the
6boundaries of the county or political subdivision, a tax on
7the purchase price.
12(1) In a county or political subdivision within which
13the tax authorized in subsection (a) is imposed, there shall
14be levied and assessed upon the use, within the county or
15political subdivision, of tangible personal property
16purchased at retail and on services purchased at retail, as
17defined in Article II of the Tax Reform Code of 1971, a tax
18on the purchase price.
22(3) Paragraph (2) shall apply to a person that:
23(i) paid the tax imposed by subsection (a); or
27(1) In a county or political subdivision within which a
28tax authorized by subsection (a) is imposed, there shall be
29levied and assessed an excise tax on the rent upon every
30occupancy of a room or rooms in a hotel in the county.
7(1) section 504 of PICAA; and
8(2) Article II-A of the Tax Reform Code of 1971.
10(1) The license issued under Article II of the Tax
11Reform Code of 1971 or a separate license for the collection
12of the tax imposed by this chapter may be issued by the
13department in the same manner as is provided for in section
14505 of PICAA.
17(g) Regulations and collection costs.--
18(1) The department shall administer and enforce the
19provisions of this chapter. Regulations promulgated under
20section 270 of the Tax Reform Code of 1971 shall be
21applicable to the taxes imposed under this section insofar as
22the regulations are consistent with this section.
27(3) To cover their respective costs of administration,
28the department and the Treasury Department shall be entitled
29to retain a sum equal to costs of collection, but not more
30than 1% and 0.5%, respectively, of the revenues collected
1under this chapter. The department shall inform the counties
2participating under this article monthly in writing of the
3sum retained and the costs of collection reimbursed. When the
4annual operating budgets for the department and the Treasury
5Department are submitted to the General Assembly, each agency
6shall also submit to the chairman and minority chairman of
7the Appropriations Committee of the Senate and to the
8chairman and minority chairman of the Appropriations
9Committee of the House of Representatives the actual sums
10retained for costs of collection in the preceding fiscal
11year, together with all supporting details.
13(1) The following apply to ordinances:
14(i) A county or political subdivision desiring to
15impose the tax authorized by this chapter must give at
16least 45 days' written notice to each political
17subdivision within the county of its intent to impose the
18tax. The notice and ordinance must state the tax rate and
19refer to this chapter. The ordinance must authorize the
20imposition of the tax on all subjects provided for in
21subsections (a), (b) and (c).
22(ii) Prior to adopting an ordinance under
23subparagraph (i), the governing body of a county or
24political subdivision must give public notice of its
25intent to adopt the ordinance in the manner provided by
26section 306 of the Local Tax Enabling Act and must
27conduct at least one public hearing regarding the
28proposed adoption of the ordinance.
10SECOND CLASS COUNTY
11SALES, USE AND OCCUPANCY TAX FUND
14(a) Establishment.--There is established in the State
15Treasury the Second Class County Sales, Use and Occupancy Tax
16Fund. Accounts shall be established within the fund for each
17county or political subdivision levying a sales, use and
18occupancy tax under this article.
1at the end of any fiscal year.
2Section 1932-C. Disbursements.
3Not later than the tenth business day following receipt from
4the department of the necessary calculations, the State
5Treasurer shall disburse to a county or political subdivision
6imposing the tax under section 1923-C an amount of money equal
7to 100% of the tax, minus allowable administrative costs,
8deposited in the fund and credited to the county's or political
9subdivision's account established under section 1931-C.
11FEE ON REAL PROPERTY SQUARE FOOTAGE
12Section 1933-C. Fee on square footage.
13(a) Authorization.--Subject to section 1921-C(b), the
14governing body of a county or political subdivision may, through
15ordinance or resolution, impose a fee on the total square
16footage of real property and improvements on the real property
17within the county or political subdivision.
18(b) Determination of rate.--A county or political
19subdivision shall determine the rate of a fee on square footage
20by the following computation: The total area of all real estate
21parcels in the county as measured in square footage, excluding
22those parcels provided in subsection (d), shall be added to the
23total square footage of all permanent improvements located on
24each parcel of real property, and the sum of those two divided
25by the average of all taxes paid on the value of that property
26for the immediately preceding three-year period in the county.
27(c) Enactment of ordinance or resolution.--
8(2) The governing body of a county or political
9subdivision shall make the proposed ordinance or resolution
10available for public inspection at least 20 days prior to its
11adoption and shall hold at least one public hearing on the
12proposed ordinance or resolution prior to its adoption.
13(3) The governing body of a county or political
14subdivision shall give public notice of its intent to adopt
15the proposed ordinance or resolution. Publication of the
16notice shall be made by advertisement once a week for three
17weeks in a newspaper of general circulation within the county
18or political subdivision if there is a newspaper of general
19circulation and, if there is not, the publication shall be
20made in a newspaper of general circulation within the county
21in which the advertising or political subdivision is located.
26(i) Property owned by the Commonwealth.
4(v) Property owned by the Federal Government.
5(2) An ordinance authorizing a levy under this section
6shall exempt from the fee the first $200,000 of any levy on
7property owned by an institution of purely public charity
8unless otherwise adjusted by the governing body.
12(d) Special Provisions Relating
13to School Districts
14Section 1941-C. Taxpayer Relief Act.
15(a) Applicability.--Chapter 3 of the Taxpayer Relief Act
16shall not apply to a school district located in a county of the
17second class that is prohibited from levying a tax on real
18estate under this article.
19(b) State property tax reduction allocation.--A school
20district located in a county of the second class that received a
21State property tax reduction allocation under Chapter 5 of the
22Taxpayer Relief Act shall continue to receive a State property
23tax reduction allocation in each subsequent year in an amount
24equal to the amount received in the year prior to the year in
25which the school district is prohibited from levying a tax on
26real estate under this article. The governing body of the school
27district shall include the revenue received under Chapter 5 of
28the Taxpayer Relief Act in calculating the amount of revenues
29needed by the school district to replace revenue lost by the
30school district through eliminating real estate taxes as
1required under section 1914-C.
2Section 2. This act shall take effect in 60 days.