(a) General rule.--
(1) In order to levy an earned income and net profits tax under this chapter, a governing body shall use the procedures set forth in subsection (b).
(2) Any governing body after making an election to levy an earned income and net profits tax under this chapter may, after a period of at least three full fiscal years, elect under the provisions of subsection (c) to levy, assess and collect the taxes prohibited by section 8701(b) (relating to general tax authorization) to the extent otherwise provided by law. If the electorate approves such referendum, the governing body shall lose the authority to continue to levy an earned income and net profits tax authorized under this chapter.
(b) Public referendum requirements.--Subject to the notice and public hearing requirements of section 8716 (relating to procedure and administration), a governing body may levy the earned income and net profits tax under this chapter only by obtaining the approval of the electorate of the affected school district in a public referendum at only the municipal election preceding the fiscal year when the earned income and net profits tax will be initially imposed. The referendum question must state the initial rate of the proposed earned income and net profits tax, the reason for the tax and the amount of proposed budgeted revenue growth, if any, in the first fiscal year following adoption of the referendum, expressed as a percent increase over the prior year's budgeted revenue. Any increase in budgeted revenue between the first fiscal year following adoption of the referendum and the prior year's budgeted revenue shall not exceed the annual percent change in the Statewide average weekly wage. The question shall be in clear language that is readily understandable by a layperson. For the purpose of illustration, a referendum question may be framed as follows:
Do you favor the imposition of an earned income and net profits tax of X% to be used to replace (names of local taxes to be repealed), reduce real property taxes by X% by means of a homestead exclusion and provide for a one-time revenue increase of X% over the preceding fiscal year?
A nonlegal interpretative statement must accompany the question in accordance with section 201.1 of the act of June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania Election Code, that includes the following: the initial rate of the earned income and net profits tax and the maximum allowable rate of the earned income and net profits tax imposed under this chapter; the estimated revenues to be derived from the initial rate of the earned income and net profits tax imposed under this chapter; the amount of proposed revenue growth, if any, in the first fiscal year following adoption of the referendum; the estimated reduction in real property taxes and the elimination of certain existing taxes under this chapter; the identification of the existing taxes to be eliminated under this chapter; the method to be used to reduce real property taxes; the class or classes of real property for which real property taxes would be reduced; and the estimated amount of real property tax reduction by class, expressed as an average percent reduction by class. Any governing body which uses the procedures under this section shall not be subject to the provisions of section 8704 (relating to public referendum requirements for increasing property taxes previously reduced) for any future increases in the earned income and net profits tax rates authorized under this chapter. Any future real property tax rate increases are subject to the provisions of section 8704. If the ballot question fails to receive a majority vote pursuant to this section, approval of the electorate under section 8704 shall not be required to increase the rate of any tax which the governing body of the affected school district is authorized to levy and increase pursuant to any other act.
(c) Public referendum requirements to end participation under this chapter.--Subject to the notice and public hearing requirements in section 4 of the Local Tax Enabling Act, a governing body may elect to end participation under this chapter in accordance with subsection (a)(2) by obtaining the approval of the electorate of the affected school district in a public referendum at a municipal election.
(d) Public requirements to initiate referendum.--
(1) If the governing body of a school district fails to place a referendum question on the ballot within two years after the effective date of this chapter, the electors of the school district may:
(i) Circulate a petition which, if signed by electors comprising 2% of the number of electors voting for the office of Governor in the last gubernatorial election in the school district and filed with the election officials and submitted to the governing body thereof, shall require the governing body to establish a local tax study commission. The provisions under paragraph (2)(v), (vi), (vii), (viii) (ix) and (x) shall not apply to this subparagraph.
(ii) If the local tax study commission makes a recommendation to levy the earned income and net profits tax under this chapter and the governing body fails to place the recommendation or other alternative of the governing body authorized under this chapter on the ballot in accordance with this chapter at the next municipal election occurring at least 90 days after the submission of the recommendation to the governing body, a petition under this paragraph may be circulated. If the petition is signed by the electors comprising 5% of the number of electors voting for the office of Governor in the last gubernatorial election in the school district and filed with election officials at least 90 days prior to the next municipal election, the petition shall compel the election officials to place the recommendation upon the ballot at the next municipal election occurring at least 90 days after the filing of the petition.
(2) The following requirements shall apply to the process under paragraph (1):
(i) The name and street address of each elector signing the petition and of the person filing the petition shall be clearly stated on the petition. The petition shall include an affidavit of the circulator that he or she is a qualified elector of the school district referred to in the petition; that the signers signed with full knowledge of the contents of the petition; that the signers' residences are correctly stated; and that, to the best of the circulator's knowledge and belief, the signers are qualified electors.
(ii) The election officials shall, within ten days after filing, review the petition as to the number and qualifications of signers. If the petition appears to be defective, the election officials shall immediately notify the person filing the petition of the defect and may reject the petition if warranted.
(iii) The petition as submitted to the election officials, along with the list of signatories, shall be open to public inspection in the office of the election officials.
(iv) If the election officials find that the petition as submitted is in proper order, they shall send copies of the petition without signatures thereon to the governing body involved.
(v) The procedure for the referendum shall be governed by the act of June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania Election Code.
(vi) If the election officials find the petition meets the requirements of this chapter, they shall place the proposal on the ballot in a manner fairly representing the content of the petition for decision by referendum at the proper election.
(vii) The election officials shall certify the date for the referendum and shall notify the governing body at least 30 days prior to such date.
(viii) At least 30 days' notice of the referendum shall be given by proclamation of the governing body. A copy of the proclamation shall be posted at each polling place on the day of the election and shall be published once in at least one newspaper of general circulation which is distributed within the school district during the 30-day period prior to the election.
(ix) Approval of a referendum shall be by majority vote of those voting in the school district involved.
(x) The election officials shall certify the results of the referendum to the governing body.
(e) School districts located in more than one county.--
(1) In the event a school district is located in more than one county, petitions under this section shall be filed with the election officials of the county wherein the administrative offices of the school district are located.
(2) The election officials receiving a petition shall be responsible for all administrative functions in reviewing and certifying the validity of the petition and for making all necessary communications with the school district.
(3) If the election officials of the county receiving the petition certify that it is sufficient under this subpart and determine that a question should be placed upon the ballot, such decision shall be communicated to election officials in any other county in which the school district is also located. Election officials in the other county or counties shall cooperate with election officials of the county receiving the petition to insure that an identical question is placed on the ballot at the same election throughout the entire school district.
(4) Election officials from each county involved shall independently certify the results from their county to the governing body.