Westlaw's "Editor's and Revisor's Notes" explain that we swapped Lincoln and Washington's birthdays for President's Day and MLK Day in 1978:
The 1978 amendment substituted “the fifteenth day of January, known as Dr. Martin Luther King, Jr. Day, the third Monday of February, known as Presidents' Day” for “the twelfth day of February, known as Lincoln's Birthday, the third Monday of February, known as Washington's Birthday”.We moved MLK day from January 15th to the third Monday in January in 1985.
Pennsylvania also recognizes MLK Day in its banking provisions as a "fixed" holiday that covered institutions "shall" observe. 7 Pa. Stat. Ann. § 113.
Fun fact: MLK is not the only individual with a holiday in Pennsylvania. We also celebrate (I use the term loosely) Commodore John Barry Day, Hubert H. Humphrey Jr. Day, Columbus Day, William Penn's Birthday, Rosa Parks Remembrance Day . . . and, of course, who could forget Rachel Carson Day in celebration of the "Mother of the Age of Ecology?" (May 27th - mark your calendars!).
For more history, check out my 2012 post on MLK Day (featuring a great Public Enemy video).