Section 11701.123 - Powers and duties of municipalities(a)File completed survey.--On or before March 15 of each year, every municipality shall return to the department a completed Survey of Financial Conditions referred to in section 121(a). No municipality shall receive its allotted payments pursuant to the act of June 1, 1956 (1955 P.L. 1944, No. 655), referred to as the Liquid Fuels Tax Municipal Allocation Law, unless it complies with the provisions of this section, notwithstanding a provision of law to the contrary, including any provisions which require payment prior to March 15, and the Department of Transportation may not disburse funds to a municipality pursuant to the Liquid Fuels Tax Municipal Allocation Law until notified by the department that the municipality has complied with the provisions of this section.(b)File applications for grants and loans.--A financially distressed municipality may apply to the secretary for emergency financial aid in the form of a grant or loan pursuant to Chapter 3.(c)Right to petition court for tax increase.--(1) After a municipality has adopted a plan under Subchapters C and C.1 of Chapter 2, it may petition the court of common pleas of the county in which the municipality is located to increase its rates of taxation on the earned income, real property, or both, beyond maximum rates provided by law. No increase in the rate of taxation on nonresidents shall be authorized unless an equal or greater increase in the rate of taxation on resident income over the highest rate levied in the previous fiscal year is authorized in the same tax year.(1.1) A municipality may petition the court to levy a payroll preparation tax as provided in subsection (d)(2).(1.2) A municipality may petition the court for an increase in the municipality's rate of taxation for earned income under paragraph (1) or may petition the court for an increase of the local services tax as provided under subsection (d)(1) or (1.1).(2) If a tax increase above existing limits is granted by the courts or a tax is approved as provided in subsection (d), the increase shall be effective for a period of one year. The one-year increase shall run from the date specified in the petition filed with the court or, if no such date is specified, from the beginning of the current fiscal year of the municipality. Subsequent increases in rates of taxation or the imposition of a tax under subsection (d) may be granted by the court upon annual petition of the municipality until the termination date of the plan adopted by the municipality under Chapter 2. The additional amount of taxes resulting from the petition shall not be subject to sharing with a school district.(3) No increase in the rate of taxation on the income of nonresidents shall be authorized in a city of the second class A, or a home rule municipality that was previously a city of the second class A, unless an equal or greater increase in the rate of taxation on resident income over the highest rate levied in the previous fiscal year is authorized in the same tax year. In addition, a petition shall not include an increase in a rate of taxation on nonresident income unless the municipality certifies to the court, with regard to those provisions of the plan having a measurable fiscal impact, that:(i) the municipality has substantially implemented the provisions which are within the authority of the chief executive officer or governing body, including, but not limited to, provisions of the plan that call for increasing existing tax rates levied on residents and increasing fees charged by the municipality;(ii) the municipality has taken those actions required to obtain the approval of other parties for those provisions which may not be implemented without such approval, including, but not limited to, the approval of a court, local electors or any collective bargaining unit; and(iii) the additional income from the aforementioned actions is insufficient to balance the municipal budget, necessitating additional revenue from an increase in the tax on nonresident income.(d)Additional tax options and limitations.--After a municipality has adopted a plan under Subchapter C or C.1 of Chapter 2 and with the approval of the court, it may adopt an ordinance imposing the following:(1) A local services tax pursuant to Chapter 3 of the act of December 31, 1965 (P.L. 1257, No. 511), known as The Local Tax Enabling Act, at a rate not to exceed $156. A municipality adopting an ordinance under this paragraph shall be prohibited from imposing any additional tax on earned income pursuant to subsection (c). A municipality levying the local services tax at a rate in excess of $52 shall, by ordinance, exempt any person from the local services tax whose total earned income and net profits from all sources within the municipality is less than $15,600 for the calendar year in which the local services tax is levied. This paragraph does not apply to a municipality which, on the effective date of this subsection, is not authorized to petition the court of common pleas for the imposition of an earned income tax on nonresidents.(1.1) In the case of a financially distressed municipality that has also received a determination that it has a level II or level III financially distressed pension system under Chapter 6 of the act of December 18, 1984 (P.L. 1005, No. 205), known as the Municipal Pension Plan Funding Standard and Recovery Act, a petition for a local services tax under paragraph (1) shall not be authorized at a rate in excess of $104 in any fiscal year during which the municipality levies a tax under section 607(f) of the Municipal Pension Plan Funding Standard and Recovery Act on earned income.(2) A payroll preparation tax pursuant to section 303 of The Local Tax Enabling Act. A municipality imposing a tax under this paragraph may levy a tax at a rate as provided in this section and as certified by the coordinator and approved by the court. When imposing a tax under this paragraph, the municipality may impose the tax not to exceed a rate that is sufficient to produce revenues equal to revenues collected as a result of a business privilege tax and a mercantile tax under Chapter 3 of The Local Tax Enabling Act in the preceding fiscal year. After approval by the court of the tax at the rate as provided in this section, the municipality may levy the tax in any subsequent year without additional court approval, including any year after the termination of the municipality's distressed status, at a rate not to exceed that initially approved by the court. A municipality adopting a payroll preparation tax under this paragraph may not levy a business privilege tax or mercantile tax. The authority provided by this paragraph is limited to those municipalities levying a business privilege or mercantile tax, on a flat-rate or millage basis, in the year of the filing of a petition as provided in subsection (c). 1987, July 10, P.L. 246, No. 47, § 123, effective in 60 days. Amended 1996, July 11, P.L. 645, No. 108, § 1, effective in 60 days; 2014, Oct. 31, P.L. 2983, No. 199, § 6, effective in 60 days [Dec. 30, 2014].