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SB 1391

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.

2025-2026 Regular Session Introduced by Jay Costa and 1 co-sponsor

Restructure hotel tax revenues in select PA counties to fund convention centers, debt service, and regional tourism, with defined distributions and annual reporting.

Referred to Community, Economic & Recreational Development
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WeVote Research Nonpartisan
Bill Summary · SB 1391

Overview

SB 1391, introduced in the Pennsylvania Senate (Session 2025-2026), would amend Title 16 (Counties) to modify how hotel room rental taxes are collected and distributed in second class and second class A counties. The bill focuses on funding, distribution, and governance related to convention centers or exhibition halls, with specific provisions for municipal and regional tourism promotion, debt service, and operating deficits.

Main purpose and intent

  • Reform the collection and post-collection use of hotel room rental tax proceeds in certain counties to support convention centers/exhibition halls, regional tourism, and related promotional activities.
  • Create and clarify how revenues are allocated among municipalities, County authorities, nonprofit promotional organizations, and debt service for convention center improvements and operations.
  • Establish procedures for annual reporting, fiduciary governance, and priority of bond-related payments.

Key provisions and changes

  • Tax base and collection

    • The bill maintains the hotel room rental tax in second class and second class A counties and prescribes how revenues are deposited into a county special fund.

  • Revenue distribution (core structure, with differences by subsection)

    • A 5% collection fee remains for the county (administrative cost).
    • A substantial portion is allocated to a tourist promotion agency (two-fifths of revenue in some configurations; see below for differences between existing and new language).
    • A portion may be returned to the municipality where a convention center/exhibition hall is located to fund promotional programs via a nonprofit organization (subject to annual audited reporting and governance requirements).
    • The remaining revenue supports operational and maintenance expenditures of the convention center or hall and regional tourism promotion.

  • Municipal and nonprofit funding requirements

    • For municipalities housing a convention center/hall, up to one-third of tax revenue (less collection costs) can be redirected to a municipal special fund for nonprofit promotion programs (with annual audited income/expenditure reports and board appointments by the municipality).

  • Debt service and bond ordering (priority scenarios)

    • If bonds are issued by a public authority for permanent financing, refinancing, or capital improvements:
    • Revenue distributions are prioritized to debt service and bond-related payables before other uses.
    • A defined order of priority governs debt service, then the 5% collection fee, then other distributions, and finally remaining operating funds.
    • A similar structure applies for bonds issued under the Public Auditorium Authorities Law (with specific provisions for trustee payments and pro rata allocations if revenues are insufficient).

  • General and local use

    • Remaining funds (after the above distributions) are to be used for convention center/exhibition hall operations and regional tourism promotion.

  • Discontinuation of a convention center

    • If a convention center/discussion hall ceases operation in a municipality, the municipality would continue to collect and use the tax for purposes outlined in the applicable subsection.

  • Section-specific limitations and duration

    • Expenditures from the fund in counties of the second class may cover a broad range of needs to support operations and maintenance of the convention center or exhibition hall, including expansion or improvement of facilities.
    • The act clarifies that receipts can be used to offset operating deficits of the convention center/exhibition hall, including sharing responsibilities with cooperating sub-jurisdictions.

  • Duration and continuation

    • Provisions relating to second-class counties are designed to operate on a year-to-year basis, with revenue in excess of distributions and operating deficit offsets capable of accumulation by the designated public authority.

Who is affected

  • Counties classified as second class and second class A in Pennsylvania that elect to impose the hotel room rental tax under this section.
  • Municipalities hosting convention centers or exhibition halls within these counties.
  • Municipalities and nonprofits responsible for tourism promotion programs funded by the tax.
  • Public authorities and bond trustees financing convention centers or related facilities.
  • Residents and visitors in affected counties who pay the hotel room rental tax, as the funds are redirected to convention centers, debt service, and tourism promotions.

Procedural and timeline aspects

  • Effective date: 60 days after enactment.
  • Administrative requirements:
    • Annual audited reports on income/expenditures by municipalities receiving funds.
    • Board appointments to nonprofits providing promotional programs are to be made by the municipality.
  • Debt and priority mechanics:
    • The bill specifies a detailed priority order for distributions when bonds are issued for convention center expansion or renovation.
    • Provisions address how funds are allocated in scenarios where bonds are outstanding or when revenue is insufficient to cover debt service.

Summary

SB 1391 aims to restructure the hotel room rental tax revenues in certain Pennsylvania counties to bolster convention centers, exhibition halls, and regional tourism promotion. It reallocates funds to municipal promotional programs, debt service for bonds tied to facilities, and general operating and maintenance costs, while preserving a 5% county collection fee and ensuring annual reporting and governance safeguards. The measure also provides for continuation of tax collection and use if a facility ceases operation and establishes a year-to-year framework with potential revenue accumulation for debt-related purposes.

Compiled from official sources — confirm details with the bill’s official record.

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