THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY STURLA, BRENNAN, BUXTON, CALTAGIRONE, CARROLL, DALEY, HORNAMAN, MAHONEY, MIRABITO, MUNDY, MURPHY, SANTONI, SCAVELLO, THOMAS, WATERS AND YOUNGBLOOD, DECEMBER 1, 2011

REFERRED TO COMMITTEE ON APPROPRIATIONS, DECEMBER 1, 2011  

AN ACT

Authorizing counties to impose sales, use and occupancy taxes;

and providing for an optional sales and use tax for first

class cities, for the levying, assessment and collection of

taxes and for the powers and duties of the Department of

Community and Economic Development or any successor agency,

the Department of Revenue and the State Treasurer.

TABLE OF CONTENTS

Chapter 1.  General Provisions

Section 101.  Short title.

Section 102.  Definitions.

Section 103.  Scope.

Section 104.  Preemption.

Section 105.  Rates of taxation in home rule counties.

Chapter 3.  Subjects of Taxation

Subchapter A.  Tax Authorization

Section 301.  General tax authorization.

Section 302.  Continuity of tax.

Section 303.  Election to participate under act.

Section 304.  Local tax study commission.

Section 305.  Municipal sales, use and occupancy tax initiative.

Subchapter B.  County Sales, Use and Occupancy Tax

Section 311.  Construction.

Section 312.  Imposition of tax.

Section 313.  Situs.

Section 314.  Licenses.

Section 315.  Rules and regulations; collection costs.

Section 316.  Procedure and administration.

Section 317.  County sales, use and occupancy tax funds.

Section 318.  Disbursements.

Section 319.  Adoption of municipal ordinances.

Section 320.  Allocations.

Chapter 5.  Disposition of Tax Revenues

Section 501.  Sales, use and occupancy tax revenues.

Section 502.  Municipal collaborative efforts fund.

Section 503.  Supplemental appropriations for collaborative

services.

Section 504.  Revenue limitation exceptions.

Chapter 7.  Optional Sales and Use Tax for Cities of the First

Class

Section 701.  Definitions.

Section 702.  Construction.

Section 703.  Imposition.

Section 704.  Situs for imposition of tax.

Section 705.  Licenses.

Section 706.  Department.

Section 707.  Dedication and disbursement.

Section 708.  Municipal action.

Section 709.  Expiration.

Chapter 21.  Miscellaneous Provisions

Section 2101.  (Reserved).

Section 2102.  Effective date.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

CHAPTER 1

GENERAL PROVISIONS

Section 101.  Short title.

This act shall be known and may be cited as the County and

Municipal Property Tax Relief and Collaborative Services Act.

Section 102.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Board of county commissioners."  Includes the successor in

function to the board of county commissioners in a county which

has adopted a home rule charter under the provisions 53 Pa.C.S.

Pt. III Subpt. E (relating to home rule and optional plan

government), but does not include the city council of a city of

the first class or the county council of a county of the second

class.

"County."  A county-level municipality within this

Commonwealth. The term includes a county which has adopted a

home rule charter or optional plan of government under the

provisions of 53 Pa.C.S. Pt. III Subpt. E (relating to home rule

and optional plan government). The term does not include a

county of the first class or a county of the second class.

"Current year."  The calendar year or fiscal year for which a

tax is levied.

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

"Domicile."  As defined in section 501 of the act of December

31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling

Act.

"Homestead."  As defined in 53 Pa.C.S. § 8401 (relating to

definitions).

"Local Tax Enabling Act."  The act of December 31, 1965

(P.L.1257, No.511), known as The Local Tax Enabling Act.

"Municipality."  A city of the second class A, city of the

third class, borough, incorporated town, township of the first

class, township of the second class, home rule municipality,

optional plan municipality, optional form municipality or

similar general purpose unit of government which may after the

effective date of this section be established by statute, except

a city of the first class or a city of the second class. Unless

the context clearly indicates otherwise, for the purposes of

this act, a municipality located in a county shall include

municipalities that are located entirely or partially in the

county.

"Nonqualified municipality."  A municipality that is not a

qualified municipality under this act.

"Nonresident."  An individual domiciled outside a

municipality.

"Ordinance."  Includes a resolution.

"Population."  The number of individuals residing in an area

as determined in the most recent Federal decennial census.

"Preceding year."  The calendar year or fiscal year before

the current year. 

"Qualified municipality."  A municipality that qualifies in

accordance with section 305(b) or 319.

"Succeeding year."  The calendar year or fiscal year

following the current year.

"Tax Reform Code."  The act of March 4, 1971 (P.L.6, No.2),

known as the Tax Reform Code of 1971.

"Taxpayer."  An individual required under this act to file a

tax return or to pay a tax.

Section 103.  Scope.

It is the intent of this act to confer upon each county the

power to levy, assess and collect taxes upon the subjects of

taxation specified in this act.

Section 104.  Preemption.

No act of the General Assembly in effect prior to or after

the effective date of this section shall vacate or preempt any

ordinance passed or adopted under the authority of this act or

any other act providing authority for the imposition of a tax by

a county, unless the act of the General Assembly expressly

vacates or preempts the authority to pass or adopt the

ordinance.

Section 105.  Rates of taxation in home rule counties.

A county which has adopted a home rule charter or optional

plan of government under the provisions of 53 Pa.C.S. Pt. III

Subpt. E (relating to home rule and optional plan government)

may not fix the rate of taxation for the subjects of taxation

authorized under Chapter 3 in excess of the rates fixed in

Chapter 3.

CHAPTER 3

SUBJECTS OF TAXATION

SUBCHAPTER A

TAX AUTHORIZATION

Section 301.  General tax authorization.

(a)  General rule.--Subject to section 303 and except as

provided in subsection (b), a county shall have the power and

may by ordinance levy and assess or provide for the levying and

assessment of taxes on the sale or use of tangible personal

property and services and the occupancy of a hotel room at a

rate of 1% for general revenue purposes as it shall determine on

any or all of the subjects of taxation set forth in this act

within the geographical limits of the county.

(b)  Exclusions.--No county which levies a tax authorized by

this act shall have any power or authority to levy, assess or

collect:

(1)  A tax based upon a flat rate or on a millage rate on

an assessed valuation of a particular trade, occupation or

profession, commonly known as an occupation tax.

(2)  A per capita, poll, residence or similar head tax.

(3)  The intangible personal property tax under the act

of June 17, 1913 (P.L.507, No.335), referred to as the

Intangible Personal Property Tax Law.

Section 302.  Continuity of tax.

A tax levied under the provisions of this act shall continue

in force on a calendar year basis without annual reenactment

unless the tax is subsequently repealed.

Section 303.  Election to participate under act.

(a)  General rule.--A board of county commissioners which

elects to participate under the provisions of this act shall do

so by using the procedures specified in subsection (b) and in

accordance with the following provisions:

(1)  An election to participate under this act shall

remain in effect for a period of at least three full calendar

years.

(2)  A board of county commissioners after making an

election to participate under this act may, after a period of

at least three full calendar years of participation, elect

under the provisions of subsection (c) to cease participation

under this act and levy, assess and collect the taxes

prohibited by section 301(b) to the extent otherwise provided

by law.

(b)  Ordinance.--Subject to the notice and public hearing

requirements of section 316(a), a board of county commissioners

may elect to participate under this act by adopting an ordinance

imposing the tax. The ordinance must be adopted no later than

September 1 preceding the calendar year when the tax will be

initially imposed.

(c)  Repeal.--Subject to the notice and public hearing

requirements of section 316(c), a board of county commissioners

may elect to cease participation under this act by adopting an

ordinance repealing the tax. The ordinance must be adopted no

later than September 1 preceding the calendar year when the tax

will be repealed.

Section 304.  Local tax study commission.

(a)  First-year implementation.--In considering whether to

levy, assess, collect or provide for the levy, assessment or

collection of any tax under this act, a board of county

commissioners may, by February 1 of the year preceding the

calendar year for which any such tax shall be levied, appoint a

local tax study commission in accordance with the following

provisions:

(1)  The local tax study commission shall consist of

five, seven or nine members appointed by the board of county

commissioners. One member of the local tax study commission

may be a member of the board of county commissioners. No

member of the local tax study commission may be a relative,

by blood or marriage, of an official or employee of the

county. All members must be residents of the county.

Representatives on a local tax study commission should

reasonably reflect the socioeconomic, age and occupational

diversity of the county.

(2)  The board of county commissioners shall provide

necessary and reasonable staff to support the local tax study

commission.

(3)  The members of the local tax study commission shall

receive reimbursement only for necessary and reasonable

expenses in the discharge of their duties.

(4)  The local tax study commission shall study the

existing taxes levied, assessed and collected by the county

and determine if and how the tax policies of the county may

be strengthened or made more equitable by adopting for levy,

assessment and collection of a sales, use and occupancy tax

as provided for in this act. This study shall include, but

not be limited to, consideration of all of the following:

(i)  Historic rate and revenue provided by taxes

currently levied, assessed and collected by the county.

(ii)  The percentage of total revenues provided by

taxes currently levied, assessed and collected.

(iii)  The age, income, employment and property use

characteristics of the existing tax base.

(iv)  The projected revenues of any taxes currently

levied, assessed and collected.

(v)  The projected revenues of any taxes referred to

in this paragraph not currently levied, assessed and

collected by the county.

(5)  Within 120 days of its appointment, the local tax

study commission shall make a nonbinding recommendation to

the board of county commissioners of the appropriate tax or

combination of taxes, identified in paragraph (4), to be

levied, assessed and collected commencing the next fiscal

year.

(6)  Upon appointment of the commission and except as

provided for in paragraph (8), no tax may be levied, assessed

or collected for the next fiscal year until receipt of the

recommendation of the local tax study commission.

(7)  No later than September 1 prior to the commencement

of the next fiscal year, the board of county commissioners

shall accept or reject the recommendation of the local tax

study commission or adopt any other appropriate tax or

combination of taxes for the county commencing the next

fiscal year as provided by this act and other applicable law.

(8)  If the local tax study commission fails to make a

nonbinding recommendation within 120 days of its appointment,

the board of county commissioners shall discharge the

appointed local tax study commission and appoint itself as

the local tax study commission. No later than September 1

prior to the commencement of the next fiscal year, the board

of county commissioners shall adopt the appropriate tax or

combination of taxes for the county commencing the next

fiscal year as provided by this act and other applicable law.

(9)  The local tax study commission shall publish or

cause to be published, within 30 days of making its

recommendation, a final report of its activities and

recommendations and shall deliver the final report to the

chief clerk of the county who shall supply copies to

interested persons at their request.

(10)  Receipts are required for all reimbursable

expenses.

(11)  All the records, receipts, minutes of meetings and

written discussions of the local tax study commission shall,

upon its discharge, be turned over to the chief clerk of the

county for permanent safekeeping. The chief clerk shall make

such materials available for public inspection at any time

during regular business hours.

(12)  The local tax study commission shall be discharged

on the filing of its final report.

(b)  Effect.--A county that levies, assesses and collects or

provides for the levy, assessment or collection of any tax,

after having received the recommendations of a local tax study

commission and acted, shall continue to levy, assess and collect

the same tax or combination of taxes for a minimum of the next

three fiscal years.

(c)  Periodic review.--Beginning at least three fiscal years

after action by a board of county commissioners on the

recommendation of a tax study commission under this section, and

no more frequently than every three fiscal years thereafter, the

board of commissioners may appoint a local tax study commission

in the manner provided in subsection (a). The local tax study

commission appointed under this subsection shall be charged with

all of the same powers and duties provided for a local tax study

commission under subsection (a).

(d)  Construction.--Nothing in this section shall be

construed to preclude the board of county commissioners from

changing or altering the rates of any such tax or combination of

taxes if it deems necessary to the extent otherwise permitted by

law.

Section 305.  Municipal sales, use and occupancy tax initiative.

(a)  General rule.—-After the first January 1 occurring at

least six months following the effective date of this section,

if the board of county commissioners of a county has not elected

to participate under this act, municipalities located in that

county may require, as provided in this section, the board of

county commissioners of the county to impose the sales, use and

occupancy tax as provided in section 312.

(b)  Procedure.--

(1)  If the board of county commissioners of a county has

not elected to participate under this act by the first

January 1 occurring at least six months following the

effective date of this section, the governing body of a

municipality located in that county may place before the

governing bodies of all the municipalities located in that

county the following question:

Do you favor the imposition of a county sales, use and

occupancy tax at the rate of 1% as provided in section

312 of the County and Municipal Property Tax Relief and

Collaborative Services Act?

(2)  Circulation of the question may begin no earlier

than January 1 of the year prior to the proposed year of

implementation, and the vote by the governing bodies of the

municipalities must conclude no later than June 1 of the year

prior to the proposed year of implementation.

(3)  Each governing body of a municipality voting in the

affirmative on the question shall certify its vote on the

question to the board of county commissioners. The governing

body of a municipality that is located in more than one

county shall certify its vote on the question to the board of

county commissioners for each county where the municipality

is located.

(4)  The affirmative votes of the governing bodies of

municipalities whose combined population represents more than

60% of the population within the county shall be necessary

for the board of county commissioners to elect participation

under this act. The population of a municipality that is

located in more than one county shall be determined

separately for each county where the municipality is located

on the basis of the municipality’s population within each

county.

(5)  Upon receipt of certifications from municipalities

indicating approval of the question by municipalities whose

combined population represents more than 60% of the

population of the county, the board of county commissioners

of the county shall, for the next calendar year, elect to

participate under this act, pursuant to the procedures of

section 303.

(6)  A municipality is qualified to receive a

disbursement under section 318 if the municipality:

(i)  votes in the affirmative on the question under

this section; or

(ii)  qualifies in accordance with the provisions of

section 319.

SUBCHAPTER B

COUNTY SALES, USE AND OCCUPANCY TAX

Section 311.  Construction.

The tax imposed by the board of county commissioners under

this subchapter shall be in addition to any tax imposed by the

Commonwealth under Article II of the Tax Reform Code. Except for

the differing situs provisions under section 313, the provisions

of Article II of the Tax Reform Code shall apply to the tax.

Section 312.  Imposition of tax.

(a)  Sales.--

(1)  The board of county commissioners may levy and

assess upon each separate sale at retail of tangible personal

property or services, as defined in Article II of the Tax

Reform Code, within the boundaries of the county, a tax on

the purchase price.

(2)  The tax shall be collected by the vendor from the

purchaser and shall be paid over to the Commonwealth as

provided in this subchapter.

(b)  Use.--

(1)  In any county within which the tax authorized in

subsection (a) is imposed, there shall be levied, assessed

and collected upon the use, within the county, of tangible

personal property purchased at retail and on services

purchased at retail, as defined in Article II of the Tax

Reform Code, a tax on the purchase price.

(2)  The tax shall be paid over to the Commonwealth by

the person who makes the use.

(3)  The use tax imposed under this subchapter shall not

be paid over to the Commonwealth by any person who has paid

the tax imposed by subsection (a) or has paid the tax imposed

by this subsection to the vendor with respect to the use.

(c)  Occupancy.--

(1)  In any county within which a tax authorized by

subsection (a) is imposed, there shall be levied, assessed

and collected an excise tax on the rent upon every occupancy

of a room or rooms in a hotel in the county.

(2)  The tax shall be collected by the operator or owner

from the occupant and paid over to the Commonwealth.

(d)  Rate and uniformity.--The tax authorized by subsections

(a), (b) and (c) shall be imposed at a rate of 1% and shall be

uniform.

(e)  Computation.--The tax imposed under this section shall

be computed in the manner set forth in section 503(e)(2) of the

act of June 5, 1991 (P.L.9, No.6), known as the Pennsylvania

Intergovernmental Cooperation Authority Act for Cities of the

First Class.

Section 313.  Situs.

The situs of sales at retail or uses of motor vehicles,

aircraft, motorcraft and utility services shall be determined in

the manner specified by section 504 of the act of June 5, 1991

(P.L.9, No.6), known as the Pennsylvania Intergovernmental

Cooperation Authority Act for Cities of the First Class and by

Article II-A of the Tax Reform Code.

Section 314.  Licenses.

A license for the collection of the tax imposed by this

subchapter shall be issued in the same manner as is provided for

in section 505 of the act of June 5, 1991 (P.L.9, No.6), known

as the Pennsylvania Intergovernmental Cooperation Authority Act

for Cities of the First Class. Licensees shall be entitled to

the same discount as provided in section 227 of the Tax Reform

Code.

Section 315.  Rules and regulations; collection costs.

(a)  Regulations.--Rules and regulations shall be applicable

to the taxes imposed under section 312 in the same manner as is

provided for in section 506(1) and (2) of the act of June 5,

1991 (P.L.9, No.6), known as the Pennsylvania Intergovernmental

Cooperation Authority Act for Cities of the First Class.

(b)  Administrative costs.--

(1)  The department may retain a sum equal to 1% of the

revenues collected under this subchapter for its

administrative costs.

(2)  When the annual operating budget for the department

is submitted to the General Assembly, the department shall

also submit to the chairman and minority chairman of the

Appropriations Committee of the Senate and to the chairman

and minority chairman of the Appropriations Committee of the

House of Representatives the actual sums retained for costs

of collection in the preceding fiscal year, together with all

supporting details.

Section 316.  Procedure and administration.

(a)  Ordinance.--

(1)  A county desiring to impose the tax authorized by

section 312 shall give at least 60 days' written notice to

each municipality in the county of its intent to impose the

tax and shall adopt an ordinance after the expiration of 60

days after the date of the notice. The notice and ordinance

shall state the tax rate and refer to this subchapter. The

ordinance shall authorize the imposition of the tax on all

subjects provided for in section 312.

(2)  Prior to adopting an ordinance imposing the tax

under section 312, the board of county commissioners shall

give public notice of its intent to adopt the ordinance in

the manner provided by section 306 of the Local Tax Enabling

Act and shall conduct at least one public hearing regarding

the proposed adoption of the ordinance.

(3)  The board of county commissioners may waive the

requirement for a public hearing if the ordinance will be

adopted pursuant to the provisions of section 305.

(b)  Notification to department.--A certified copy of the

county ordinance shall be delivered to the department by

September 1 of the year prior to the effective date of the

ordinance. The county ordinance shall become effective on the

January 1 following delivery of the certified copy to the

department.

(c)  Repeal.--

(1)  A county, having enacted the tax authorized by

section 312 and desiring to repeal the tax, shall give at

least 60 days' written notice to every municipality located

in the county of its intent to repeal the tax and shall adopt

an ordinance after the expiration of 60 days after the date

of the notice. The ordinance shall authorize the repeal of

the tax on all subject under section 312.

(2)  Prior to adopting an ordinance repealing the tax

imposed under section 312, the board of county commissioners

shall give public notice of its intent to repeal the

ordinance in the manner provided by section 506 of the Local

Tax Enabling Act and shall conduct at least one public

hearing regarding the proposed repeal of the ordinance.

(d)  Delivery of repeal ordinance.--The board of county

commissioners shall deliver a certified copy of a repeal

ordinance to the department by September 1 of the year prior to

the effective date of the repeal.

Section 317.  County sales, use and occupancy tax funds.

(a)  Funds established in State Treasury.--There is hereby

established in the State Treasury for each county imposing the

tax under section 312 a county sales, use and occupancy tax fund

in the name of each county. The State Treasurer shall be

custodian of the funds which shall be subject to the provisions

of law applicable to funds listed in section 302 of the act of

April 9, 1929 (P.L.343, No.176), known as The Fiscal Code.

(b)  Deposits into funds.--

(1)  The tax imposed under section 312 shall be received

by the department and paid to the State Treasurer and, along

with interest and penalties, less any collection costs

allowed under this subchapter and any refunds and credits

paid, shall be credited to the respective fund not less

frequently than every two weeks.

(2)  During any period prior to the credit of moneys to

each such fund, interest earned on moneys received by the

department and paid to the State Treasurer under this

subchapter shall be deposited into the respective fund. 

(c)  Lapsing and interfund transfers prohibited.--All moneys

in each respective fund, including, but not limited to, moneys

credited to the fund under this section, prior year encumbrances

and the interest earned thereon, shall not lapse or be

transferred to any other fund, but shall remain in the

respective fund.

(d)  Investment.--Pending their disbursement, moneys received

on behalf of or deposited into each respective fund shall be

invested or reinvested as are other moneys in the custody of the

State Treasurer in the manner provided by law. All earnings

received from the investment or reinvestment of the moneys shall

be credited to the respective fund.

Section 318.  Disbursements.

(a)  General rule.--On or before the tenth day of every

month, the State Treasurer shall make disbursements as provided

in this section.

(b)  Disbursement to counties.--

(1)  The State Treasurer shall disburse to a county

imposing the tax under section 312 an amount of money equal

to 50% of the tax deposited in the respective county sales,

use and occupancy tax fund for deposit into the county

general fund for disposition as provided under section

501(a).

(2)  The State Treasurer shall disburse to a county, in

addition to its share under paragraph (1), an amount of money

equal to the amount allocated to all of the nonqualified

municipalities as provided in this section.

(c)  Allocation to municipalities.--The State Treasurer shall

allocate to the municipalities located in the county an amount

of money equal to 40% of the tax deposited in the respective

county sales, use and occupancy tax fund, which shall be

apportioned to all of the municipalities located in that county

as computed under section 320(a).

(d)  Disbursement to municipalities.--

(1)  The amount apportioned to each qualified

municipality shall be disbursed to the qualified municipality

for deposit into the municipal general fund for disposition

as provided in section 501(b).

(2)  The amount apportioned to each nonqualified

municipality shall be disbursed to the county as provided in

subsection (b)(2) for deposit into the county general fund

for disposition as provided under section 501(a).

(e)  Disbursement to municipal collaborative efforts fund.--

The State Treasurer shall disburse to the municipal

collaborative efforts fund established by the county under

section 502 an amount of money equal to 10% of the tax deposited

in the respective county sales, use and occupancy tax fund.

(f)  Penalty.--If disbursements are not made on or before the

tenth day of each month, a 5% penalty shall be added thereto

plus an additional 1% late charge per month delayed, along with

interest and penalties accruing under section 317. Payment of

penalties and late charges under this subsection shall be made

from the General Fund of the Commonwealth into the county sales,

use and occupancy tax fund established under section 317.

Section 319.  Adoption of municipal ordinances.

(a)  Initial year qualification.--A municipality is qualified

to receive a disbursement under section 318 if, prior to

enactment of the county ordinance, the municipality:

(1)  Adopts a municipal ordinance containing the

statement:

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

and occupancy tax and intend to accept disbursements of

the sales, use and occupancy tax collected.

(2)  Delivers a certified copy of the municipal ordinance

to the board of county commissioners on or before the

enactment of the county ordinance. A municipality that is

located in more than one county shall deliver a certified

copy to the board of county commissioners for each county

where the municipality is located.

(b)  Subsequent year qualification.--A municipality is

qualified to receive a disbursement under section 318 if, prior

to October 1 of any year after the year of initial imposition of

the tax by a county, the municipality meets the following

requirements:

(1)  Adopts a municipal ordinance containing the

statement:

We support the enactment by the county of the county

sales, use and occupancy tax and strongly urge its

continuation and intend to accept disbursements of the

sales, use and occupancy tax collected.

(2)  Delivers a certified copy of the municipal ordinance

to the board of county commissioners on or before the

enactment of the county ordinance by October 15 of the year

in which the ordinance is enacted. A municipality that is

located in more than one county shall deliver a certified

copy to the board of county commissioners for each county

where the municipality is located.

(c)  Nonqualification.--Notwithstanding the provisions of

subsection (b), a municipality shall not qualify to receive a

disbursement under section 318 earlier than 36 months after the

initial date of imposition of the tax unless the municipality:

(1)  enacts an ordinance in accordance with the

provisions of subsection (a); or

(2)  votes in the affirmative to the question in

accordance with the provisions of section 305.

Section 320.  Allocations.

(a)  Allocations to municipalities.--The State Treasurer

shall compute allocations to municipalities in the following

manner:

(1)  Fifty percent of the money allocated to

municipalities in the county shall be distributed pro rata

based on the weighted tax revenues for each municipality

located in the county as a percentage of the total weighted

tax revenues of all municipalities located in the county. For

municipalities located in more than one county, the weighted

tax revenues for the county shall be prorated based upon the

population of the municipality in each county divided by the

total population of the municipality.

(2)  Fifty percent of the money allocated to

municipalities in the county shall be distributed pro rata

based on the population of each municipality located in the

county as a percentage of the sum of the population of all

municipalities located in the county. For municipalities

located in more than one county, the population of the county

shall be determined separately for each county where the

municipality is located on the basis of the municipality’s

population within each county.

(b)  Calculation of weighted tax revenues.--Calculations of

weighted tax revenues shall be made by the Department of

Community and Economic Development or any successor agency and

certified to the State Treasurer based upon information reported

to the Department of Community and Economic Development or any

successor agency, subject to review, verification and approval

by the Department of Community and Economic Development or any

successor agency.

(c)  Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection:

"Per capita market value."  The total market value of all

real property divided by population as determined by the most

recent decennial census.

"Total tax revenues."  Real property tax revenues, revenues

received by levy of a tax under the Local Tax Enabling Act,

revenues received by levy of a tax under this act and revenues

received by levy of a tax under the act of August 9, 1955

(P.L.323, No.130), known as The County Code, the act of June 23,

1931 (P.L.932, No.317), known as The Third Class City Code, the

act of February 1, 1966 (1965 P.L.1656, No.581), known as The

Borough Code, the act of June 24, 1931 (P.L.1206, No.331), known

as the First Class Township Code, and the act of May 1, 1933

(P.L.103, No.69), known as The Second Class Township Code, as

applicable to the municipality.

"Weighted tax revenues."  Total tax revenues from all sources

of a municipality divided by the per capita market value of the

municipality.

CHAPTER 5

DISPOSITION OF TAX REVENUES

Section 501.  Sales, use and occupancy tax revenues.

(a)  Counties.--

(1)  In the first year of implementation of the tax under

section 312, no less than 60% of any additional revenues

received by a county from the tax shall be used to offset the

revenues lost as a result of the prohibition against

imposition of the taxes enumerated in section 301(b) and then

to reduce the county real property tax, first by means of a

homestead exclusion and then, if the maximum homestead

exclusion has been attained, by means of reduction in the

property tax millage rate.

(2)  Revenues received and retained by a county from the

tax under section 312 shall be expended for public purposes

authorized by statutes governing counties.

(b)  Municipalities.--

(1)  In the first year of implementation of the taxes

under section 312, no less than 60% of any additional

revenues received by a qualified municipality from the tax

shall be used for the following, separately or in

combination:

(i)  To offset the municipal real property tax, first

by means of a homestead exclusion and then, if the

maximum homestead exclusion has been attained, by means

of reduction in the property tax millage rate.

(ii)  To offset lost municipal revenue based on the

value of real property in the municipality that has been

exempted from real property taxation pursuant to law.

(2)  If, in the first year of implementation, 60% of the

amount of revenues received by a qualified municipality

exceeds the sum of the amount of offsets available under

paragraph (1) for that year, then that excess revenue shall

be used for the following, separately or in combination:

(i)  To offset any other municipal tax or fee.

(ii)  To make a supplemental appropriation in

accordance with section 503.

(3)  Revenues received and retained by a qualified

municipality from the taxes under section 312 shall be

expended for public purposes of health, safety and welfare as

provided in the municipality’s governing statutes.

Section 502.  Municipal collaborative efforts fund.

(a)  Fund established.--There is hereby established in each

county levying the tax under section 312 a municipal

collaborative efforts fund.

(b)  Deposits.--Payments received under section 318(e) shall

be deposited in the municipal collaborative efforts fund of the

county for use as specified in this section.

(c)  Municipal collaborative efforts board.--

(1)  Upon levy of the taxes under section 312 by a

county, a municipal collaborative efforts board will be

established within the county.

(2)  The municipal collaborative efforts board shall

award grants for the provision of municipal collaborative

efforts within the county that meet criteria established by

the municipal collaborative efforts board.

(3)  All of the members of the municipal collaborative

efforts board must be elected officials from qualified

municipalities in the county.

(4)  The municipal collaborative efforts board shall be

comprised of no fewer than three voting members and one

nonvoting member, and no more than seven voting members and

one nonvoting member. The municipal collaborative efforts

board shall include at least one representative from each

class of municipality located in the county; provided that

the class of municipality consists of at least one qualified

municipality. The number of representatives from each class

of municipality located in the county shall be in reasonable

proportion to the number of municipalities within each class

of municipality in the county.

(5)  The board of county commissioners shall appoint

members to the municipal collaborative efforts board from

nominations made by resolution of the qualified

municipalities in the county. Prior to appointment, the board

of county commissioners shall submit the nominees to councils

of governments and county associations of municipalities

existing in the county, if any, for review and comment.

(6)  Members shall serve a two-year term and may be

nominated for successive terms. Vacancies shall be filled by

the board of county commissioners for the balance of the

unexpired term, and any appointment made shall be from the

same class of qualified municipality. Initial appointments

shall be made within 60 days of a county levying the taxes

under section 312, and vacancies shall be filled within 60

days of their occurrence from nominees submitted by

municipalities of the class for which the vacancy exists.

(7)  Within 30 days of appointment, and on the first

Monday after the first day of January of each year following,

the municipal collaborative efforts board shall organize.

(8)  No more than 10% of the annual payments received

under section 318(e) may be used by the municipal

collaborative efforts board for administrative purposes.

(9)  The municipal collaborative efforts board shall

adopt standard rules of parliamentary procedure and shall

adopt such other rules and regulations necessary for conduct

of the business of the municipal collaborative efforts board.

The Department of Community and Economic Development shall

develop sample rules and regulations and other guidance

materials.

(d)  Disbursements.--

(1)  Disbursement of funds shall be made to one or more

qualified municipalities or groups of qualified

municipalities organized under 53 Pa.C.S. Ch. 23 Subch. A

(relating to intergovernmental cooperation) or operating

under other contractual agreement, for the purpose of

providing municipal collaborative efforts.

(2)  Nonqualified municipalities shall be ineligible for

funds under this section unless the funding is pursuant to an

agreement under 53 Pa.C.S. Ch. 23 Subch. A in which the

majority of participating municipalities are qualified

municipalities or pursuant to other contractual agreement in

which the majority of participating municipalities are

qualified municipalities.

(e)  Audit.--Following the close of the fiscal year, the

municipal collaborative efforts board shall provide for an

examination of its financial records and the financial records

of its fund by a certified public accountant in accordance with

generally accepted government auditing standards. The municipal

collaborative efforts board may require any recipient of funds

under this section to provide to the municipal collaborative

efforts board an audit of the use of those funds in accordance

with generally accepted government auditing standards.

(f)  Definition.--For the purposes of this section, the term

"qualified municipality" shall have the same meaning given in

section 102, except that for municipal collaborative efforts

provided by agreement for municipalities in more than one

county, the term shall include municipalities qualified in

another county.

Section 503.  Supplemental appropriations for collaborative

services.

A county or municipality may appropriate and transfer by

contract a portion of its receipts of disbursements under this

act to one or more other counties or municipalities or groups of

municipalities organized under 53 Pa.C.S. Ch. 23 Subch. A

(relating to intergovernmental cooperation), for the purpose of

providing governmental services on behalf of that county or

municipality.

Section 504.  Revenue limitation exceptions.

(a)  Waiver.--A board of county commissioners or the

governing body of a municipality may waive the limitations

relating to the reduction or elimination of taxes in sections

501, but only to the degree necessary, in the following cases:

(1)  If an increase in local expenditures is necessary to

respond to or recover from an emergency or disaster declared

by the Governor.

(2)  If the political subdivision is required to

implement a court decision.

(3)  To pay interest and principal on any indebtedness

incurred under the provisions of 53 Pa.C.S. Pt. VII Subpt. B

(relating to indebtedness and borrowing).

(4)  To pay increases in pension fund requirements which

are in excess of the annual average increase over the

immediately preceding five fiscal years.

(5)  To respond to a county or municipality declared to

be distressed under the act of July 10, 1987 (P.L.246,

No.47), known as the Municipalities Financial Recovery Act.

(6)  To increase revenues when actual revenues decline

from the immediately preceding year, but only to the extent

of the revenue decline.

(7)  If the increase does not exceed the limitations on

millage rates for real property under the act of August 9,

1955 (P.L.323, No.130), known as The County Code, the act of

June 23, 1931 (P.L.932, No.317), known as The Third Class

City Code, the act of February 1, 1966 (1965 P.L.1656,

No.581), known as The Borough Code, the act of June 24, 1931

(P.L.1206, No.331), known as the First Class Township Code,

and the act of May 1, 1933 (P.L.103, No.69), known as The

Second Class Township Code.

(8)  (i)  To respond to a Federal or State statute,

regulation or order adding to or significantly altering

responsibilities and duties or requiring expenditure of

funds to the extent not funded by the Federal Government

or State government.

(ii)  This paragraph shall apply only to a Federal or

State statute, regulation or order taking effect after

the effective date of this section.

(9)  To increase revenue equal to the percentage increase

in the Statewide average weekly wage from the immediately

preceding year or 5%, whichever is less.

(b)  Appeal.--

(1)  A person aggrieved by a waiver of limitations

pursuant to this section may appeal to the court of common

pleas in the judicial district in which the county or

municipality is located.

(2)  The following shall apply to any proceedings

instituted under this subsection:

(i)  The county or municipality that is subject of

the appeal must show by clear and convincing evidence the

necessity to claim the waiver of limitations.

(ii)  The county or municipality must show by clear

and convincing evidence that there are no assets or other

feasible alternatives available to the county or

municipality.

(iii)  A person shall have standing as a party to a

proceeding under this subsection as long as the person

resides within or pays real property taxes to the taxing

jurisdiction of the county or municipality that is

subject of the appeal.

CHAPTER 7

OPTIONAL SALES AND USE TAX

FOR CITIES OF THE FIRST CLASS

Section 701.  Definitions.

(a)  Article II of Tax Reform Code.--The definitions in

section 201 of the act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, apply to this chapter.

(b)  Specific.--The following words and phrases when used in

this chapter shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"City."  A city of the first class.

"Fund."  The Local Sales and Use Tax Fund.

Section 702.  Construction.

(a)  Additional tax.--The tax imposed by a city under this

chapter shall be in addition to any tax imposed:

(1)  by the Commonwealth under Article II of the act of

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

1971; or

(2)  by a city under the act of June 5, 1991 (P.L.9,

No.6), known as the Pennsylvania Intergovernmental

Cooperation Authority Act for Cities of the First Class.

(b)  Article II of Tax Reform Code.--Except for the differing

situs provisions under section 704, section 202-A and Article II

of the Tax Reform Code of 1971 applies to this chapter.

Section 703.  Imposition.

(a)  Sales.--

(1)  The governing body of a city may levy, assess and

collect, upon each separate sale at retail of tangible

personal property or services within the city, a tax on the

purchase price.

(2)  The tax shall be collected by the vendor from the

purchaser and shall be paid over to the Commonwealth as

provided in this chapter.

(b)  Use.--

(1)  If a city imposes the tax under subsection (a), the

governing body of the city shall levy, assess and collect,

upon the use within the city of tangible personal property

purchased at retail and of services purchased at retail, a

tax on the purchase price.

(2)  Except as set forth in paragraph (3), the tax shall

be paid over to the Commonwealth by the person that makes the

use.

(3)  The tax shall not be paid over to the Commonwealth

by a person that, with respect to the same taxable subject:

(i)  has paid the tax under subsection (a); or

(ii)  has paid the tax imposed by this subsection to

the vendor.

(c)  Rate and uniformity.--The rate of the tax authorized by

this section shall be 1%.

(d)  Computation.--The tax under this section shall be

computed as follows:

(1)  If the purchase price is 50¢ or less, no tax shall

be collected.

(2)  If the purchase price is 51¢ or more but less than

$1.51, 1¢ shall be collected.

(3)  If the purchase price is $1.51 or more but less than

$2.51, 2¢ shall be collected.

(4)  If the purchase price is $2.51 or more but less than

$3.51, 3¢ shall be collected.

(5)  If the purchase price is $3.51 or more but less than

$4.51, 4¢ shall be collected.

(6)  If the purchase price is $4.51 or more but less than

$5.51, 5¢ shall be collected.

(7)  If the purchase price is $5.51 or more but less than

$6.51, 6¢ shall be collected.

(8)  If the purchase price is $6.51 or more but less than

$7.51, 7¢ shall be collected.

(9)  If the purchase price is $7.51 or more but less than

$8.51, 8¢ shall be collected.

(10)  If the purchase price is $8.51 or more but less

than $9.51, 9¢ shall be collected.

(11)  If the purchase price is $9.51 or more but less

than $10.01, 10¢ shall be collected.

(12)  If the purchase price is more than $10, 1% of each

$10 purchase price plus the above bracket charges upon any

fractional part of a $10 increment shall be collected.

Section 704.  Situs for imposition of tax.

(a)  Situs for retail sales.--Except as otherwise set forth

in this section, a sale at retail shall be deemed to be

consummated at the place of business of the retailer. If a

retailer has more than one place of business in this

Commonwealth which participates in the sale, the sale shall be

deemed to be consummated at the place of business of the

retailer where the initial order for the tangible personal

property is taken, even though the order must be forwarded

elsewhere for acceptance, approval of credit, shipment or

billing. A sale by a retailer's employee shall be deemed to be

consummated at the place of business from which that employee

works.

(b)  Out-of-State delivery.--Subsection (a) does not apply if

the tangible personal property sold is delivered by the retailer

to:

(1)  an out-of-State destination;

(2)  a common carrier for delivery to an out-of-State

destination; or

(3)  the United States Post Office for delivery to an

out-of-State destination.

(c)  Situs for vehicle, aircraft and motorcraft sales.--

(1)  This subsection applies to all of the following:

(i)  A mobile home, motor vehicle, semitrailer or

trailer, as defined in 75 Pa.C.S. § 102 (relating to

definitions).

(ii)  Any aircraft, motorboat or similar item of

tangible personal property required under either Federal

or state law to be registered or licensed.

(2)  The sale at retail or use of an item listed in

paragraph (1) shall be deemed to have been completed or used

at the address of the purchaser or user.

(3)  The tax due on an item listed in paragraph (1) shall

be paid by the purchaser or user:

(i)  to the Department of Transportation at the time

of making application for the issuance of a certificate

of title; or

(ii)  if licensing by the Department of

Transportation is not required or obtained, to the

department.

(d)  Situs for utility services.--

(1)  The sale or use of steam, natural and manufactured

gas and electricity shall be deemed to occur at the service

address in the city where the meter which registers the

service is located, without regard to where the services are

rendered.

(2)  The sale or use of telephone service shall be deemed

to occur at the address where the telephone equipment is

located and to which the telephone number is assigned.

(3)  The sale or use of telegraph services shall be

deemed to occur where the telegraph originated.

Section 705.  Licenses.

(a)  Issuance and renewal.--

(1)  The license issued under Article II of act of March

4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,

or a separate license may be issued by the department for the

collection and reporting of the taxes imposed by section 703.

(2)  The license is subject to renewal periodically as

required by the department in regulations but in no event

more frequently than once within a five-year period.

(3)  No fee shall be charged for either a license or any

renewal.

(b)  Assignment.--The license shall be nonassignable.

(c)  Liability.--Failure of a person to obtain a license

shall not relieve the person of liability to pay the taxes

imposed by this chapter.

Section 706.  Department.

(a)  Administration.--The department has the following powers

and duties to administer this chapter:

(1)  Promulgate regulations.

(2)  Enforce this chapter and regulations under this

chapter and subsection (b).

(b)  Existing regulations.--The regulations promulgated under

section 270 of the act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, shall be applicable to the taxes

imposed by section 703 insofar as the regulations are consistent

with section 703.

(c)  Administrative costs.--The department shall use the

money to cover cost of administration of the tax under Chapter 5

of the act of June 5, 1991 (P.L.9, No.6), known as the

Pennsylvania Intergovernmental Cooperation Authority Act for

Cities of the First Class, to cover the cost of administration

of the tax authorized by this chapter; and the department shall

not retain any additional amounts for the costs of collection of

the tax authorized by this chapter.

Section 707.  Dedication and disbursement.

(a)  Fund.--

(1)  At least every two weeks, the department shall pay

to the State Treasurer the money from the tax, interest and

penalties, minus refunds and credits, under this chapter.

(2)  The State Treasurer shall credit the money under

paragraph (1) to the fund. During any period prior to the

credit of money, interest earned on money shall be deposited

into the fund.

(3)  Money in the fund under paragraph (2) shall be the

property of the city and shall be distributed as provided in

this section.

(4)  Pending disbursement to the city, money in the fund

under paragraph (2) shall be invested as is other money in

the custody of the State Treasurer in the manner provided by

law. All earnings received from the investment or deposit of

the money shall be credited to the fund.

(5)  Money in the fund under paragraph (2):

(i)  shall not lapse at the end of any fiscal year;

(ii)  shall not be transferred to any other fund; and

(iii)  shall be used exclusively as provided in this

section.

(b)  Disbursement.--By the 10th day of the month, the State

Treasurer shall disburse to the city the total amount of money

which is, as of the last day of the previous month, contained in

the fund under subsection (a)(2).

Section 708.  Municipal action.

(a)  Adoption of ordinance.--If a city desires to impose the

tax under section 703, the governing body of the city must adopt

an ordinance stating the tax rate. The effective date of the

ordinance must be:

(1)  at least 30 days after adoption; and

(2)  on the first day of a month.

(b)  Notification to department.--A certified copy of a city

ordinance imposing the tax authorized by section 703 shall be

delivered to the department within ten days after the adoption

of the ordinance.

(c)  Copy of repeal ordinance.--A certified copy of a repeal

ordinance shall be delivered to the department at least 30 days

prior to the effective date of the repeal.

Section 709.  Expiration.

This chapter shall expire July 1, 2016. Notwithstanding the

expiration of this chapter, tax imposed under section 703 on

sales or uses occurring before July 1, 2016, shall be subject to

section 707.

CHAPTER 21

MISCELLANEOUS PROVISIONS

Section 2101.  (Reserved).

Section 2102.  Effective date.

This act shall take effect immediately.