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Legislative Update

Week Ending June 29, 2007

• Another Late Budget Likely
• Bill Would Streamline Fragmented Tax Collection Process
• Property Tax/Rent Rebate Program Deadline Extended to End of the Year
• Funding Fix for Roads, Bridges and Transit Passes House
• Biomedical Proposal Approved by House
• Grant Program for Volunteer Fire, Ambulance Companies Signed Into Law
• Committee Approves Another “Blues Merger Oversight"
• Board Proposes Special Education Rulemaking
• House Passes License Enforcement Legislation

Another Late Budget Likely

Gov. Ed Rendell and lawmakers will likely miss yet another June 30 state budget deadline, the fifth straight year a budget has not been in place before the July 1 start of the Commonwealth’s new fiscal year.

Missing the deadline does not seem to faze the governor.

“I missed four budget deadlines and got re-elected with 61 percent of the vote,” Rendell noted to reporters on Thursday. “The people who care most about whether this gets done by June 30 are the people who inhabit this building.”

According to sources, negotiations have come down to a difference of about $300 million—the difference between Gov. Rendell’s original $27.3 billion spending plan he unveiled in February versus the $27 billion proposal approved by the State Senate last week in the form of House Bill 1286.

Even if the parties could reach an agreement by Saturday’s deadline, the mechanics of printing the dozen or so pieces of legislation that comprise the budget, as well as procedural requirements for voting the legislation, means a finished product will likely not come up for a vote  until sometime in that first week of July…maybe!

Stay tuned.

Bill Would Streamline Fragmented Tax Collection Process

House Finance Committee chairman Rep. David Levdansky has introduced House Bill 1550, legislation that would require local wage taxes to be collected by county-wide earned income tax collection districts. These tax collection districts would not be a function of county government.

“Municipalities and school districts lose an estimated $237 million of uncollected earned income tax revenue each year because of complex and cumbersome practices and a lack of statewide standards,” Levdansky said. “That is not being fiscally responsible and it is unfair to taxpayers.”

The legislation would consolidate the current earned income tax collection system into a more modernized, productive and streamlined system that consists of 66 county-wide earned income tax collection districts. Each earned income tax collection district would operate under uniform standards and adhere to uniform withholding and remittance requirements.

State Reps. Jennifer Mann and Gordon Denlinger, CPA, have introduced legislation—House Bill 1458—on behalf of PICPA that proposes similar administrative reforms to those contained in the Levdansky bill. The Mann-Denlinger-PICPA bill proposes consolidation of tax collectors at the school district level, however.

Both bills are pending in the House Finance Committee.

Property Tax/Rent Rebate Program Deadline Extended to End of the Year

The deadline to apply for Pennsylvania's recently-expanded Property Tax/Rent Rebate program has been extended from June 30 to Dec. 31.

The rebate program benefits eligible Pennsylvanians age 65 and older, widows and widowers age 50 and older, and people with disabilities age 18 and older. Last year, Gov. Ed Rendell signed a law expanding the rebate program by increasing the income limit from $15,000 to $35,000 for homeowners and raising the maximum rebate for both homeowners and renters from $500 to $650.

The expanded household income limits and rebate amounts are:

• $0 - $8,000: $650 rebate
• $8,001 - $15,000: $500 rebate
• $15,001 - $18,000: $300 rebate
• $18,001 - $35,000: $250 rebate

For more information go to www.revenue.state.pa.us or call 1-888-222-9190.

The Property Tax/Rent Rebate Program is one of four programs supported by the Pennsylvania Lottery. Since the program's 1971 inception, $3.76 billion has been paid to qualified applicants.

Funding Fix for Roads, Bridges and Transit Passes House

The State House approved a comprehensive transportation funding bill this week by a vote of 105-96. The plan, which now goes to the Senate for consideration, sets up a permanent funding solution to repair roads and bridges as well as fund mass transit systems of all sizes across the state.

House Bill 1590 proposes issuing bonds against the value of the Pennsylvania Turnpike to raise more than $4 billion in revenue and placing a toll on Interstate 80 to capture revenue from the out-of-state traffic.

The Turnpike Commission will manage the I-80 toll road and return funding to the Pennsylvania Department of Transportation in the following manner:

• $700 million in 2007-2008;
• $750 million in 2008-2009;
• $800 million in 2009-2010;
• $800 million, plus 2.5 percent annual increase from 2011-2057, plus the revenue from the I-80 tolls (estimated at $500 million/year by 2013).

The plan also provides $35 million per year to counties and municipalities to repair and maintain roads and bridges not owned by the state. The local taxing options would include allowing counties to impose a sales, use and hotel occupancy tax of either 0.25 percent or 0.5 percent; a room rental tax of up to 1 percent; and a car rental tax of up to $2 per day. Municipalities would also be given the authority to enact an earned income tax of either 0.25 percent or 0.5 percent, and to impose the $2-per-day car rental tax.

Biomedical Proposal Approved by House

Pennsylvania’s biomedical industry stands to take a leap forward thanks to a proposal passed by the state House on June 25. The proposal is part of Gov. Rendell’s budget plan.

House Bill 1142 proposes to establish and fund the Jonas Salk Legacy Fund, which would enhance the state’s biomedical capacity with a major infusion of funding into research, commercialization and health-venture investments in Pennsylvania.

Salk grants would target capital investments in facilities and research infrastructure, as well as provide specialized equipment for newly recruited faculty to convert and upgrade research facilities in universities and colleges in Pennsylvania.

The bill now goes before the Senate for consideration.

Grant Program for Volunteer Fire, Ambulance Companies Signed Into Law

On June 28, Gov. Ed Rendell signed legislation into law to extend a state volunteer fire and ambulance grant program another five years.

Under House Bill 906, volunteer fire companies and ambulance services will be able to submit one application for grants from the 2006-07 and 2007-08 fiscal years, with payments being made on or after Dec. 14 (for 2006-07) and Jan. 15 (for 2007-08).

Since the enactment of the Volunteer Fire Company and Volunteer Ambulance Service Grant Act in 2000, volunteer fire companies have been able to apply for grants of up to $15,000 to help pay for equipment, facilities and debt service; ambulance companies have been eligible to receive grants of up to $10,000. However, the program was set to sunset on June 30.

Committee Approves Another “Blues Merger Oversight”

The Senate Banking and Insurance Committee this week approved yet another bill intended to provide state oversight of proposed mergers involving non-profit health insurance companies.

A key provision within House Bill 966, as with the previous versions, is the requirement that any merger involving the “Blues” be subject to approval by the Department of Insurance.

Two additions to the latest bill include a requirement that the board make its recommendations no later than Aug. 31, 2008, and a sunset provision that would disband the board 90 days after the Department of Insurance ruling on the merger.

In response to concerns by Banking and Insurance Committee members about the previous bill, the amended version of HB 966 drops a requirement that the Department of Insurance develop a written determination that the merger or consolidation will result in a “sustained reduction in health care premiums.” Instead, the Department must determine the merger will provide “sustained benefits.”

Finally, the legislation removes the requirement for a retroactive review of the total amount the non-profit organizations dedicate to social mission.

Board Proposes Special Education Rulemaking

The State Board of Education has proposed amendments relating to special education services and programs, designed to align the chapter with the Federal Individuals with Disabilities Education Act (IDEA).

This proposed rulemaking establishes procedures for the identification of students who are disabled and in need of special education services and programs. This proposed rulemaking sets forth requirements and procedures for the delivery of those services and programs. As provided in the code, Chapter 14 does not apply to public charter schools or cyber charter schools. Instead these schools must follow the regulations of the Department of Education in Chapter 711 (relating to charter school services and programs for children with disabilities).

The proposal was published in the June 30 Pennsylvania Bulletin. There is a 30 day public comment period.

House Passes License Enforcement Legislation

On June 26, the State House unanimously passed House Bill 1120, legislation imposing criminal penalties on individuals impersonating licensed professionals.

The bill would make such fraud a second-degree misdemeanor, carrying a maximum prison term of two years. Those impersonating licensees with the intention of causing harm could be charged with a third-degree felony and serve up to seven years in prison.

The HB 1120 will now move to the Senate Consumer Protection and Professional Licensure Committee for its consideration.