Log In | About PICPA | Contact | FAQs

Legislative Update

Week Ending April 7, 2006

• Week in Review
• Political News & Notes
• Charitable Organizations Bill Clears House
• Property Tax Relief Debated
• House Adopts PICPA Financial Literacy Resolution
• Senate Confirms Two PICPA Members to State Accountancy Board
• Task Forces to Study Professional Licensure Bill Package
• Tax Delinquents Now Listed on the Internet
• Wal-Mart Bill Introduced
• Minimum Wage Increase Approved by House

Week in Review

The state House passed a "draft" version of a 2006-07 state budget on April 4 by a vote of 184-14. House Bill 2499 calls for expenditures of $25.3 billion and includes a "wish list" of projects  proposed by individual Members of both parties. The legislation now heads to the Senate where it will be altered even more and eventually wind up in a conference committee where the final proposal will be crafted.

Also this week, the state House passed legislation raising the state's minimum wage to $6.25 on July 1 of this year and then kicking it up to $7.15 an hour in July of next year. The current minimum wage in Pennsylvania is $5.15 an hour. Gov. Rendell praised the action in the House.

The Conference Committee on Property Tax Reform met this week to attempt to negotiate a plan that can make its way to the Governor's desk. Senate Republicans and Democrats have their feet set in concrete for their plan while House Republicans are equally adamant for their proposal.

Political News & Notes

Sabatina Sworn into first term in House... Newly elected John Sabatina Jr., a Democrat from Philadelphia, was sworn into office on Monday. Rep. Sabatina had served as an assistant district attorney in Philadelphia before his election to the state House last month. There remains one vacancy in the House, which will be filled next Tuesday, April 11, as Republican Mike Dolan faces Democrat Shawn Flaherty for the western Pennsylvania House seat vacated by Jeff Habay.

Another Day, Another Poll... A new Quinnipiac University poll has Gov. Rendell leading his Republican challenger Lynn Swann by a 47 - 37 margin. Just last week, a survey for the Pew Charitable Trusts showed Swann with a 35 - 29 lead over Rendell. In the Quinnipiac survey, Rendell leads Swann 74 -15 percent among Democrats and 50 - 28 percent among independent voters. Swann leads 63 - 21 percent among Republicans. Rendell has a 46 - 37 percent approval rating among Pennsylvania voters.

Charitable Organizations Bill Clears House 

Legislation designed to save charitable organizations money was approved in the state House on April 3. Through the efforts of Rep. John Maher, CPA, the bill was amended to apply to all charitable organizations.

Under current law, veterans' organizations, firemen's organizations, ambulance associations and rescue squads are required to have an annual professional audit of their financial reports when they receive annual contributions of more than $125,000.

Under House Bill 632, the contribution threshold for all charitable organizations would be increased to $300,000 before an audit is required. As originally drafted, the bill's new audit threshold would have applied only to certain charitable organizations.

In addition, under the bill as amended, every charitable organization that receives annual contributions of at least $50,000, but less than $300,000, would still be required to have a compilation, review or audit of their financial statements.

House Bill 632 was approved in the House by a vote of 178-17 and now goes to the state Senate for consideration.

Property Tax Relief Debated

Twice this week, Senate and House representatives met to discuss bringing property tax relief to Pennsylvania. The committee consists of three House and three Senate members: Rep. Lynn Herman, chairman, Rep. David Steil, Rep. Mike Veon, Sen. David Brightbill, Sen. Ted Erickson and Sen. Bob Mellow.

The House and Senate have long debated their individual plans for reducing property taxes. Monday's meeting, however, ended with House members abruptly leaving the hearing room without the anticipated vote on Senate-amended House Bill 39 - a plan that would give the largest property tax cuts to low-income homeowners who are 65 or older starting this year, and would mean that other homeowners would have to wait until 2007 to vote on whether school districts should reduce property taxes in exchange for increasing local earned-income taxes or enacting a local personal-income tax.

House members waited until after the following meeting on Wednesday to unveil their own plan, one that would increase sales tax and drive an estimated $517 million toward property tax relief for seniors.

Unlike the earlier proposed expansion of the sales tax base, this House Republican plan would only increase sales tax on existing items by one-half of 1 percent and drive that money toward an estimated 700,000 homeowners over the age of 65 with yearly incomes of less than $30,000.

Eligible senior homeowners would be guaranteed $500 a year in property tax reductions, and would pay no more than 10 percent of their income on property taxes, according to the plan.

The sales tax increase would last for three years, to be replaced with the gambling proceeds that will become available once slot casinos open. Meanwhile, everyone else, including seniors, could vote as early as this November on whether wage taxes should be used to offset the amount of property taxes equivalent to 50 percent of the median assessed value of a home in their district, with wage taxes. That amount would vary by district.

House Adopts PICPA Financial Literacy Resolution

The state House on April 4 unanimously adopted a resolution sponsored by Rep. John Maher, CPA, designating April 2006 as "Financial Literacy Month" in Pennsylvania. The proposal had nearly 80 cosponsors.

Financial literacy is critically needed to achieve personal financial goals which allow all  Pennsylvanians to attain the highest quality of life available in this good Commonwealth. The Maher Resolution acknowledges that many young people fail in the management of their first consumer credit experience, establish bad financial management habits and stumble financially, learning by trial and error.

The Pennsylvania Jump$tart Coalition, of which the PICPA is a member, was established by Gov. Rendell to provide for youth financial literacy and seeks to improve the personal financial literacy of Pennsylvania youths by promoting the teaching of personal finance in kindergarten through 12th grade.

To learn more about the PICPA's financial literacy efforts, go to www.picpa.org.

Senate Confirms Two PICPA Members to State Accountancy Board

On Monday, April 3, the state Senate unanimously confirmed two long-standing PICPA members to the State Board of Accountancy. Michael Menear and Patrick Dugan were confirmed to replace James Keasey and Joseph Alu, whose terms expired.

Mr. Menear, a partner with Boyer & Ritter, has provided traditional accounting and auditing services to an array of clients for the past 31 years. A member of the PICPA since 1973, Mr. Menear has been active in the peer review process and served as an AICPA peer review team captain.

Mr. Dugan is a senior manager, accounting and auditing, with Asher &. Company, Ltd., in Philadelphia. He is a team leader of electronic audit software implementation and a member of the firm's practice development committee. He has been a member of the PICPA since 1988.

Task Forces to Study Professional Licensure Bill Package

The state House Professional Licensure Committee on April 5 announced the formation of three task forces to begin an in-depth study of a bipartisan, 10-bill package to enhance the accountability of individuals licensed by the Department of State's Bureau of Professional and Occupational Affairs.

This 10-bill package, titled "Increasing Public Safety and Accountability of Licensees," was developed last year to crack down on unlicensed practice and to enhance the integrity of the licensure system established by the Pennsylvania Department of State.

The task forces will be led by a member of the House Professional Licensure Committee and will comprise eight or nine current committee members. Hearings will be held on the bills throughout the summer with recommendations to be presented to the committee in September.

The bills to be studied by the Victim Rights Task Force will be House Bill 1201 and House Bill 1202. That legislation was developed to create a victim's compensation fund and establish a victim advocate to represent the interests of victims in disciplinary proceedings. Another proposal, House Bill 2103, which makes it a crime to intimidate a witness or victim in a disciplinary proceeding, will be studied by this task force.

The Patient Safety Task Force will study the following proposals: House Bills 1275 and 1276, which allows the State Board of Nursing to discipline a registered nurse or licensed practical nurse who holds a temporary practice permit; House Bill 2106, which makes it a crime to impersonate a holder of a professional or occupational license; and House Bill 2107, which creates the offense of sexual assault by a health care practitioner.

The Enforcement and Investigation Task Force will examine House Bill 2104, which requires cases to be referred to a district attorney if, during an investigation, the investigator for the Department of State uncovers facts and circumstances he reasonably believes violates a provision of the Pennsylvania Crimes Code or another criminal statute. House Bill 2105 would call for the voluntary surrender of a license when a licensee is being sentenced by the court for an offense graded as a third degree misdemeanor or higher. House Bill 2108, which would add holders of professional and occupational licenses to the list of persons/officers protected by the aggravated assault statute, is the final bill to undergo study by this task force.

Those affected by the legislation include CPAs, engineers, architects, realtors, and health care professionals such as physicians, nurses, psychologists, professional counselors, dentists, chiropractors and podiatrists.

Tax Delinquents Now Listed on the Internet  

In a new effort to collect unpaid state taxes, the state Department of Revenue this week released the names of 75 people and businesses that are delinquent in sales and use taxes. People and businesses that fail to pay state taxes may now find their names on the Revenue Department's Web site, Secretary of Revenue Greg Fajt said.

Fajt said Revenue Department collections personnel have been telling delinquent taxpayers about the inaugural Pennsylvania tax delinquent list for several months. He said the prospect of appearing on the list has helped convince delinquent taxpayers to pay $3.9 million and enter into deferred payment plans for an additional $4.3 million in previously unpaid taxes.

The businesses and individuals currently listed on the Web site were recently contacted by the department and given one final chance to make payment arrangements before appearing on the list, either by paying the taxes due in full or entering into a payment plan agreement.

The state Revenue Department is starting with recently liened sales and use tax accounts and is working to add more tax types and more delinquent taxpayers to the list. The Web site will be updated monthly. Delinquent taxpayers who resolve their tax liabilities will be removed from the site at that time.  

The complete PA Tax Delinquent List is available at www.revenue.state.pa.us. 

Wal-Mart Bill Introduced  

The Wal-Mart debate is coming to Pennsylvania. Legislation similar to a proposal that was recently enacted in Maryland and is being considered in several other states was introduced Monday in the state House. The proposal would force large corporations in Pennsylvania to pay their fair share of health-care expenses for employees and their families.

House Bill 2495 would create the Health Care Accessibility/Insurance Responsibility Act to ensure that working Pennsylvanians have adequate health-care coverage. Under the bill, for-profit businesses that employ 10,000 or more people would be required to invest at least 9 percent of payroll funds into health-care coverage for employees. Nonprofits employing 10,000 or more people would have to invest at least 7 percent.

Employers who do not comply would be required to reimburse the state for any of the amount not covered.

These reimbursements would be put into a "Fair Share Health Care Fund" and used to subsidize the state's Medical Assistance, Children's Health Insurance Program, and adultBasic insurance programs.

Minimum Wage Increase Approved by House

The state House on April 5 approved a bill, by a vote of 146 - 50, that would increase the state's minimum wage. Under House Bill 257, the state's minimum wage would be increased to $6.25 an hour as of July 2006 and increased to $7.15 an hour as of July 2007.

The last time Pennsylvania's General Assembly increased the minimum wage was in 1988. According to the U.S. Bureau of Labor Statistics, approximately 423,000 Pennsylvanians currently earn between $5.15 and $7.14 statewide.

The proposal now goes to the Senate for consideration.