An Act amending Title 16 (Counties) of the Pennsylvania Consolidated Statutes, in hotel tax, further providing for hotel room rental tax in second class and second class A counties.

PRINTER'S NO. 1850
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1391
Session of
2026
INTRODUCED BY FONTANA, JUNE 26, 2026
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
JUNE 26, 2026
AN ACT
Amending Title 16 (Counties) of the Pennsylvania Consolidated
Statutes, in hotel tax, further providing for hotel room
rental tax in second class and second class A counties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 17509(b), (d)(1) introductory paragraph
and (2) and (f)(1)(i) of Title 16 of the Pennsylvania
Consolidated Statutes are amended, subsection (d)(1) is amended
by adding a subparagraph and the section is amended by adding a
subsection to read:
§ 17509. Hotel room rental tax in second class and second class
A counties.
* * *
[(b) Collection, deposit and distribution for county of the
second class.--The treasurer of each county of the second class
electing to impose the tax authorized under this section is
directed to collect the tax and to deposit the revenue received
from the tax in a special fund. The revenues shall be
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distributed by the county commissioners as follows:
(1) Except as set forth in paragraph (5), two-fifths of
the revenue received by the county from the excise tax shall
be distributed to a tourist promotion agency pursuant to
section 2199.14 of the act of July 28, 1953 (P.L.723,
No.230), known as the Second Class County Code.
(2) Except as set forth in paragraph (5), one-third of
the tax collected by hotels within a municipality where a
convention center or exhibition hall is located, less the
cost of collecting the tax shall, at the request of that
municipality, be returned to that municipality for deposit in
that municipality's special fund established solely for
purposes of paying for promotional programs implemented by a
nonprofit organization which are designed to stimulate and
increase the volume of conventions and visitors within the
municipality or as provided in paragraph (7), subject to the
following requirements:
(i) An audited report on the income and expenditures
incurred by the municipality receiving funds from the
excise tax on hotel room rentals shall be made annually
to the county.
(ii) The members of the board of directors or other
governing body of the nonprofit organization utilized by
the municipality to provide the promotional programs
shall be appointed by the governing body of the
municipality.
(3) Except as set forth in paragraph (5), a 5% fee shall
be paid to the county for collecting the tax.
(4) Except as set forth in paragraph (5), all remaining
revenue from the tax received by the county, after paying the
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amounts set forth in paragraphs (1), (2) and (3), shall be
used for operational and maintenance expenditures of the
convention center or exhibition hall as provided in
subsection (d) and for regional tourist promotion activities.
(5) Subject to paragraph (6), if bonds are issued by the
public authority to provide permanent financing or
refinancing of the expansion of and capital improvements to
the convention center or exhibition hall, the revenue
received from the tax and deposited in the special fund shall
not be distributed as set forth in paragraphs (1), (2), (3)
and (4) but shall be distributed by the county commissioners
in the order of priority as follows:
(i) First, to the payment of all amounts set forth
in paragraph (2).
(ii) Second:
(A) to the trustee for the bonds in accordance
with the provisions of the indenture pursuant to
which the bonds are issued, to be used for the
payment of debt service on the bonds; and
(B) to the payment of all amounts set forth in
paragraph (3):
(I) in full; or
(II) if the revenues are insufficient to
make the payment in full, pro rata.
(iii) Third, to the payment of all amounts set forth
in paragraph (1).
(iv) Fourth, as set forth in paragraph (4).
(6) Paragraph (5) shall not apply to bonds issued
subsequent to the permanent financing for purposes of
completion or subsequent expansions or capital improvements.
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(7) If a convention center or exhibition hall
discontinues operation in a municipality in which a
convention center or exhibition hall is located, the
municipality shall continue to collect and receive the tax,
which shall be deposited by the municipality and used for the
purposes as provided in paragraph (2).]
(b.1) Collection, deposit and distribution for county of the
second class.--The treasurer of each county of the second class
electing to impose the tax authorized under this section is
directed to collect the tax and to deposit the revenue received
from the tax into a special fund. The revenues shall be
distributed by the county commissioners as follows:
(1) One-third of the tax collected by hotels within a
municipality where a convention center or exhibition hall is
located, less the cost of collecting the tax, shall, at the
request of that municipality, be returned to that
municipality for deposit into that municipality's special
fund established solely for purposes of paying for
promotional programs implemented by a nonprofit organization
which are designed to stimulate and increase the volume of
conventions and visitors within the municipality or as
provided in paragraph (6), subject to the following
requirements:
(i) An audited report on the income and expenditures
incurred by the municipality receiving funds from the
excise tax on hotel room rentals shall be made annually
to the county.
(ii) The members of the board of directors or other
governing body of the nonprofit organization utilized by
the municipality to provide the promotional programs
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shall be appointed by the governing body of the
municipality.
(2) (i) To the trustee for any bonds issued by an
authority created pursuant to the act of July 29, 1953
(P.L.1034, No.270), known as the Public Auditorium
Authorities Law, in accordance with the provisions of the
indenture or indentures pursuant to which the bonds are
issued, to be used for the payment of debt service on the
bonds and other amounts payable in connection with the
bonds.
(ii) To the payment of all amounts under paragraph
(4):
(A) in full; or
(B) if the revenues are insufficient to make the
payment in full, pro rata.
(3) To the extent that no bonds are outstanding under
paragraph (2)(i), 45% of the revenue received by the county
from the excise tax shall be allocated to an authority
created pursuant to the Public Auditorium Authorities Law
for:
(i) expanding and improving the convention center or
exhibition hall and realty appurtenant to the premises as
provided in subsection (d); and
(ii) operational and maintenance expenditures of the
convention center or exhibition hall as provided in
subsection (d), and allocated on parity with the payment
of all amounts under paragraph (4):
(A) in full; or
(B) if the revenues are insufficient to make the
payment in full, pro rata.
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(4) A 5% fee shall be paid to the county for collecting
the tax.
(5) Two-fifths of the revenue received by the county
from the excise tax shall be distributed to a tourist
promotion agency pursuant to section 2199.14 of the act of
July 28, 1953 (P.L.723, No.230), known as the Second Class
County Code.
(6) All remaining revenue from the tax received by the
county, after paying the amounts under paragraphs (1), (2),
(4) and (5), shall be used for operational and maintenance
expenditures of the convention center or exhibition hall as
provided in subsection (d) and for regional tourist promotion
activities.
(7) If a convention center or exhibition hall
discontinues operation in a municipality in which a
convention center or exhibition hall is located, the
municipality shall continue to collect and receive the tax,
which shall be deposited by the municipality and used for the
purposes as provided in paragraph (1).
* * *
(d) Limitation on use of fund for counties of the second
class.--The following shall apply:
(1) In counties of the second class, expenditures from
the fund established under subsection [(b)] (b.1) shall be
used for all purposes which a public authority may determine
to be reasonably necessary to the support, operation and
maintenance of a convention center or exhibition hall,
including the following:
* * *
(ix) Expanding and improving the convention center
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or exhibition hall and realty appurtenant to the
premises.
(2) It is the intention of this subsection that the
receipts from any tax imposed under this section after
payment of the distributions under subsection [(b)(1), (2),
(3), (4) and (5)] (b.1)(1), (2), (4), (5) and (6) be used in
the county to offset the entire operating deficit, if any, of
any convention center or exhibition hall, including equally,
shares of any cooperating political subdivision or agency of
government incurred pursuant to any agreement. The operating
deficit shall be determined by the public authority which is
the designated operating agency of the convention center or
exhibition hall.
* * *
(f) Duration of section.--The following shall apply:
(1) The provisions of this section relating to counties
of the second class shall remain in force from year to year.
The following apply:
(i) Revenue in excess of amounts needed to pay the
distributions under subsection [(b)(1), (2), (3) and (4)]
(b.1)(1), (2), (4), (5) and (6) and to offset operating
deficits under subsections [(b)(3)] (b.1)(4) and (d)
shall be determined by the public authority and may be
accumulated.
* * *
Section 2. This act shall take effect in 60 days.
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