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PRINTER'S NO. 1718
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1391
Session of
2019
INTRODUCED BY STURLA, HILL-EVANS, SCHLOSSBERG, CALTAGIRONE AND
STRUZZI, MAY 6, 2019
REFERRED TO COMMITTEE ON FINANCE, MAY 6, 2019
AN ACT
Authorizing counties to impose sales, use and occupancy taxes;
providing for the levying, assessment and collection of taxes
and for the powers and duties of the Department of Community
and Economic Development, the Department of Revenue and the
State Treasurer; and establishing the County Sales, Use and
Occupancy Tax Fund.
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. Municipal qualification and initiative.
Subchapter B. County Sales, Use and Occupancy Tax
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Section 311. Construction.
Section 312. Imposition of tax.
Section 313. Situs.
Section 314. Licenses.
Section 315. Rules and regulations and collection costs.
Section 316. Procedure.
Section 317. County Sales, Use and Occupancy Tax Fund.
Section 318. Disbursements.
Section 319. Allocations.
Chapter 5. Disposition of Tax Revenues
Section 501. Sales, use and occupancy tax revenues.
Chapter 21. Miscellaneous Provisions
Section 2101. 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 Optional
Sales Tax for School Property Tax Relief and County and
Municipal Assistance 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 that
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
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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 that has adopted a home
rule charter or optional plan of government under the provisions
of 53 Pa.C.S. Pt. III Subpt. E. The term does not include a
county of the first class or a county of the second class.
"Department." The Department of Revenue of the Commonwealth.
"Fund." The County Sales, Use and Occupancy Tax Fund.
"Homestead." As defined in 53 Pa.C.S. ยง 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 that may after the
effective date of this section be established by statute. 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. The term shall not include a city of the first class, a
city of the second class or a municipality located in a county
of the second class.
"Nonqualified municipality." A municipality that is not
qualified under section 304 to receive disbursements under
section 318.
"PICAA." The act of June 5, 1991 (P.L.9, No.6), known as the
Pennsylvania Intergovernmental Cooperation Authority Act for
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Cities of the First Class.
"Population." The number of individuals residing in an area
as determined in the most recent Federal decennial census.
"Qualified municipality." A municipality that is qualified
under section 304 to receive disbursements under section 318.
"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
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 may be deemed to 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 that 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
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Section 301. General tax authorization.
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% within the
geographical limits of the county, subject to the provisions of
this act.
Section 302. Continuity of tax.
A tax levied under the provisions of this act shall continue
in force on a fiscal year basis without annual reenactment until
the tax is subsequently repealed.
Section 303. Election to participate under act.
A board of county commissioners may elect to participate
under this act by adopting an ordinance imposing the tax under
the procedures set forth in section 316.
Section 304. Municipal qualification and initiative.
(a) Initial year of implementation.--
(1) The governing body of a municipality desiring to
qualify for disbursements under section 318 beginning in the
first fiscal year following the effective date of this
section shall, on or before November 30, 2021, do all of the
following:
(i) Adopt a resolution containing the following
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.
(ii) Deliver a certified copy of the resolution to
the board of county commissioners for the county in which
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the municipality is located. If the municipality is
located in more than one county, the governing body shall
deliver a certified copy to the board of county
commissioners for each county where the municipality is
located.
(2) Within 30 days following receipt of certified
resolutions from municipalities whose combined population
represents more than 67% of the population of the county, the
board of county commissioners of the county shall commence
the procedures under section 316 for imposing the tax under
section 312. The written notice to municipalities under
section 316(a) must be made 15 days prior to adoption of the
ordinance. 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.
(3) The tax shall be imposed as of the date occurring 90
days following the adoption of the ordinance.
(4) A municipality located in a county where the tax is
imposed during the first fiscal year following the effective
date of this section whose governing body does not adopt and
deliver to the board of county commissioners a resolution
under paragraph (1) shall not be qualified to receive
disbursements under section 318 for the first three fiscal
years following the effective date of this section.
(b) Implementation in subsequent years.--
(1) A municipality located in a county where the tax is
not imposed in the first fiscal year following the effective
date of this section desiring to qualify for disbursements
under section 318 shall follow the procedures under
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subsection (a), except with respect to adoption by November
30, 2019, prior to the enactment by the county of an
ordinance under section 316 in any subsequent fiscal year. In
that event, the municipality shall be qualified to receive
disbursements under section 318 for all subsequent fiscal
years that the tax is in effect. The requirements of
subsection (a)(1) must be met by June 30 for the imposition
of the tax by the county for the subsequent fiscal year.
(2) A municipality located in a county where the tax has
been imposed and that has not followed the procedures under
subsection (a)(1) or paragraph (1) may only qualify for
disbursements under section 318 in the fourth or any
subsequent fiscal year following imposition of the tax, and
for all fiscal years thereafter, if it does all of the
following by September 1 of the fiscal year prior to the
first fiscal year in which the municipality will be qualified
to receive disbursement:
(i) Adopts a resolution containing the following
statement:
We support the enactment by the county of the county
sales, use and occupancy tax, strongly urge its
continuation and intend to accept disbursements of
the sales, use and occupancy tax collected.
(ii) Delivers a certified copy of the resolution to
the board of county commissioners for the county in which
the municipality is located. If the municipality is
located in more than one county, the governing body shall
deliver a certified copy to the board of county
commissioners for each county where the municipality is
located.
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(c) No limitation on counties.--Nothing in this section may
prohibit the board of county commissioners of a county from
electing to participate under this act under the procedures set
forth in section 316 without having received certified
resolutions from municipalities under subsection (a) or (b).
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, subject to tax imposed under section
202 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 and on services purchased at retail, as
subject to tax imposed under section 202 of the Tax Reform
Code, a tax on the purchase price.
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(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 under 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 under
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 under
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
PICAA.
Section 313. Situs.
The situs of sales at retail or uses shall be determined in
the manner specified by section 504 of PICAA and by Article II-A
of the Tax Reform Code.
Section 314. Licenses.
The license issued under Article II of the Tax Reform Code or
a separate license for the collection of the tax imposed by this
subchapter may be issued by the department in the same manner as
is provided for in section 505 of PICAA. Licensees shall be
entitled to the same discount as provided in section 227 of the
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Tax Reform Code.
Section 315. Rules and regulations and collection costs.
(a) Regulations.--The rules and regulations promulgated
under section 270 of the Tax Reform Code shall apply to the
taxes imposed under section 312 as those rules and regulations
are consistent with section 312.
(b) Administration and costs.--
(1) The department shall administer and enforce the
provisions of this subchapter and may promulgate and enforce
regulations consistent with the provisions of this
subchapter. The department may prescribe the extent to which
a regulation shall be applied without retroactive effect.
(2) To cover costs of administration, the department and
the Treasury Department shall be entitled to retain a sum
equal to costs of collection, but no more than 1% and 0.5%,
respectively, of the revenues collected under this
subchapter. The department shall inform the counties
participating under this act in writing monthly of the sum
retained and the costs of collection reimbursed. When the
annual operating budgets for the department and the Treasury
Department are submitted to the General Assembly, each agency
shall also submit to the chairperson and minority chairperson
of the Appropriations Committee of the Senate and to the
chairperson and minority chairperson 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.
(a) Ordinance.--
(1) A county desiring to impose the tax authorized by
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section 312 shall give at least 45 days' written notice to
each municipality in the county of its intent to impose the
tax. 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 in 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 304.
(4) Except as provided in paragraph (5), an ordinance
adopted under this section shall be adopted by September 1
and the tax shall be imposed as of January 1 of the following
fiscal year.
(5) Notwithstanding paragraph (4), a county desiring to
impose the tax in the first fiscal year following the
effective date of this section may adopt an ordinance under
this section by November 30, 2019. If this paragraph applies,
the tax shall be imposed as of the date occurring 90 days
following the adoption of the ordinance.
(b) Notification to department.--Certified copies of the
county ordinance shall be delivered to the department and the
municipalities within 15 days following adoption of the
ordinance.
(c) Repeal.--
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(1) Not earlier than the end of the fifth fiscal year
following imposition of the tax authorized under section 312,
a county may repeal the tax. In that event, the county shall
give at least 30 days' written notice to every municipality
located in the county of its intent to repeal the tax. The
ordinance shall authorize the repeal of the tax on all
subjects provided for in 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 in section 306 of the Local
Tax Enabling Act for the adoption of ordinances 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 certified copies of a repeal
ordinance to the department and the municipalities within the
county by September 1 of the year prior to the effective date of
the repeal.
Section 317. County Sales, Use and Occupancy Tax Fund.
(a) Fund established in State Treasury.--There is
established in the State Treasury a County Sales, Use and
Occupancy Tax Fund. The State Treasurer shall be custodian of
the fund 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. Subaccounts
shall be established within the fund for each county
participating under this act.
(b) Deposits into fund.--
(1) The tax imposed under section 312 shall be received
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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 counties'
subaccounts not less frequently than every two weeks.
(2) During any period prior to the credit of money to
each subaccount, interest earned on money received by the
department and paid to the State Treasurer under this
subchapter shall be credited to the respective subaccount.
(c) Lapsing and interfund transfers prohibited.--All money
in the fund and credited to the subaccounts, including, but not
limited to, money credited to the subaccounts under this
section, prior year encumbrances and the interest earned
thereon, shall not lapse nor be transferred to any other fund or
subaccount, but shall remain in the fund and be credited to the
respective subaccounts as provided under this chapter.
(d) Investment.--Pending their disbursement, money received
on behalf of or deposited into the fund shall be invested or
reinvested as is other money in the custody of the State
Treasurer in the manner provided by law. All earnings received
from the investment or reinvestment of the money shall be
credited to the fund.
Section 318. Disbursements.
(a) General rule.--On or before the 10th business day
following receipt from the department of the necessary
calculations, the State Treasurer shall make disbursements as
provided under this section.
(b) Disbursement to counties.--The State Treasurer shall
disburse to a county an amount of money equal to the amount
allocated under section 319 to all of the nonqualified
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municipalities. The money shall be deposited into the county
general fund for disposition as provided under section 501(a).
(c) Disbursement to municipalities.--Thirty percent of the
tax deposited into the fund shall be disbursed to each qualified
municipality in the amounts allocated under section 319(a). The
money disbursed shall be deposited into the municipal general
fund for disposition as provided under section 501(b).
(d) Disbursement to school districts.--The remaining 70% of
the tax deposited into the fund shall be disbursed to each
school district in the amounts allocated under section 319(c).
The money disbursed shall be deposited into the school district
general fund for disposition as provided under section 501(c).
Section 319. Allocations.
(a) Allocations to municipalities.--The department shall
compute allocations of the sums to be disbursed to
municipalities under section 318(c) in the following manner:
(1) Fifty percent shall be allocated 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 shall be allocated 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
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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 and certified to the
department based upon information reported to the Department of
Community and Economic Development, subject to review,
verification and approval by the Department of Community and
Economic Development.
(c) Allocations to school districts.--The department shall
compute allocations of the sums to be disbursed to school
districts under section 318(d) by a pro rata allocation based
upon the average daily membership for each school district
located in the county as a percentage of the total average daily
membership of all school districts located in the county. For
school districts located in more than one county, the average
daily memberships for the county shall be prorated based upon
the population of the school district in each county divided by
the total population of the school district.
(d) Calculation of average daily memberships.--Calculations
of average daily memberships shall be made by the Department of
Education and certified to the department based upon information
reported to the Department of Education, subject to review,
verification and approval by the Department of Education.
(e) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Average daily membership." As defined under section 2501 of
the act of March 10, 1949 (P.L.30, No.14), known as the Public
School Code of 1949.
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"Per capita market value." The total market value of all
real property divided by population as determined by the most
recent Federal 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 June 24, 1931
(P.L.1206, No.331), known as The First Class Township Code, the
act of May 1, 1933 (P.L.103, No.69), known as The Second Class
Township Code, as applicable to the municipality, Title 8
(relating to boroughs and incorporated towns) and 11 Pa.C.S. Pt.
V (relating to third class cities).
"Weighted tax revenues." Total tax revenues of a
municipality from all sources 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.--All of the revenues estimated to be received
by a county from the tax in a fiscal year shall be expended by
the county to maintain core services.
(b) Municipalities.--All of the revenues estimated to be
received by a qualified municipality from the tax in a fiscal
year must be expended by the municipality as follows:
(1) When a municipality's pension plan is a moderately
or severely distressed municipal pension system under the act
of December 18, 1984 (P.L.1005, No.205), known as the
Municipal Pension Plan Funding Standard and Recovery Act,
revenues received in a fiscal year shall first be used to pay
in full the municipality's minimum municipal obligation under
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the Municipal Pension Plan Funding Standard and Recovery Act.
Any remaining revenues received shall be used to maintain
core services.
(2) When a qualified municipality's pension plan is a
minimally distressed municipal pension system under the
Municipal Pension Plan Funding Standard and Recovery Act,
revenues received in a fiscal year shall be used to maintain
core services.
(3) When a municipality does not have a minimally,
moderately or severely distressed pension system under the
Municipal Pension Plan Funding Standard and Recovery Act,
revenues received by a qualified municipality shall be used
to maintain core services.
(c) School districts.--All of the revenues estimated to be
received by a school district from the tax in a fiscal year
shall be used to reduce, or maintain the reduction of, the
school district's 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.
(d) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Core services." Includes:
(1) Police services.
(2) Fire services.
(3) Public works.
(4) Public health and welfare services, including
county-owned or county-operated nursing homes.
(5) Administrative and clerical services.
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(6) Judicial administration and justice-related
services.
(7) Corrections services.
(8) Election services.
CHAPTER 21
MISCELLANEOUS PROVISIONS
Section 2101. Effective date.
This act shall take effect immediately.
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