Log In | About PICPA | Contact | FAQs

Legislative Update

Week Ending Sept. 14, 2007

• EIT Reforms, CPA Mobility Top PICPA Fall Agenda
  
• PICPA Urges Lawmakers to Adopt CPA License Mobility
  
• Legislation Aims to Save Local Government, Taxpayers Money
  
• PICPA-DOR Q&As Now Available
• Professional Issues Updates: Hear What You’re Missing
• Revenue Department Releases August Collections
• State Banking Dept. Calls for New Rules on Mortgage Companies

EIT Reforms, CPA Mobility Top PICPA Fall Agenda

With summer recess over, state lawmakers are preparing to return to Harrisburg for the start of the fall legislative session. Gov. Ed Rendell’s proposed energy initiatives will take center stage in a special session beginning Sept. 17, 2007, but other issues like the governor’s health care reform plan and funding for the Jonas Salk research program continue to be top priorities for the administration.  

PICPA’s fall legislative agenda for lawmakers to consider include the passage of CPA license mobility legislation and earned income tax collection reforms.

Senate Bill 838, legislation amending the CPA Law, sponsored by Sen. Jake Corman, would permit comparably seamless interstate mobility for Pa. licensees, require 150-hours of education, and increase the non-licensee ownership in CPA firms from one-third to 49 percent. PICPA has been working with key lawmakers and staff on these important changes to the profession, emphasizing the need for Pennsylvania CPAs to stay competitive with their colleagues in other states. (See “PICPA Urges Lawmakers to Adopt CPA License Mobility” below.) The bill is currently pending in the Senate Appropriations Committee.

Legislation reforming the earned income tax collection system has been introduced in both the House and Senate. PICPA’s House Bill 1458, sponsored by Reps. Jennifer Mann and PICPA member Gordon Denlinger, CPA, proposes the consolidation of EIT collection at the school district level; establishes uniform withholding, remittance, and distribution requirements; requires the state to issue one set of rules and regulations that apply to all collectors, taxpayers, and employers; and requires the Department of Community and Economic Development (DCED) to develop uniform forms. HB 1458 is currently pending in the House Finance Committee.

Two other proposals—House Bill 1550 and Senate Bill 1063—would consolidate collection at the county level, in addition to the administrative changes contained in HB 1458.

During the summer recess, the House Finance Committee held a series of hearings on this issue, which they will continue in to the fall session.

PICPA encourages you to contact your local legislators to voice your support of House Bill 1458 and Senate Bill 838, as well as other PICPA-endorsed initiatives. For help in identifying and contacting your state Representative or Senator, please go to the PICPA Key Person Web site for additional information.

Watch for complete coverage in your PICPA Legislative Update.

PICPA Urges Lawmakers to Adopt CPA License Mobility

State lawmakers heard once again this week from PICPA regarding the increased importance of license mobility for Pennsylvania CPAs. PICPA Vice President Susan Jarvis, CPA, CVA, and PICPA member Steve Geisenberger, CPA, CVA, presented testimony before the House Professional Licensure Committee urging the adoption of a system of mobility that allows licensed CPAs to provide services across state lines without unnecessary burdens.

“The current system for gaining practice privileges in another state is time consuming, costly, and inefficient. It simply is not working,” Jarvis told members of the committee at a Sept. 12 hearing in Philadelphia. “The implementation of a truly seamless system of mobility, particularly one that does not require notification, would benefit the profession while maintaining our stringent commitment to protect the public interest.”

So far in 2007, eight states have adopted the “no notification” provision to their CPA statutes: Illinois, Missouri, Indiana, Maine, Rhode Island, Tennessee, Texas and Wisconsin. Ohio and Virginia have had “no notification” statutes for several years—decades in Ohio’s case.

Another amendment to the CPA statute that PICPA urged lawmakers to consider is an increase in the education requirement to 150 credit hours. Geisenberger admitted to legislators that his thinking on the subject has “changed 180 degrees” since his initial doubtful view of this national trend.

“Currently, 48 of 55 CPA licensing jurisdictions mandate that candidates for certification must have 150-hours of education to receive a CPA certificate and license. Among them are New York, Ohio, West Virginia, Maryland, and New Jersey—all states surrounding Pennsylvania,” according to Geisenberger.

“If I were an accounting student today, I would seriously have to weigh whether attending a Pennsylvania college or university would be in my personal best interest in terms of my long-term career goals. This is no reflection of the quality of education in the state—it is simply a matter of the limits that would then be placed upon the mobility of my license and professional opportunities. I do not think I would be alone in this way of thinking, and the last thing that we want is to drive away quality student from our campuses.” 

Listen to a Podcast or read PICPA’s testimony.

Legislation Aims to Save Local Government, Taxpayers Money

In an effort to provide local governments flexibility from state mandates and save taxpayers money, a bipartisan package of 16 bills has been introduced. The proposed legislation would raise the levels at which municipalities must go through the formal bidding process when purchasing products or contracting for services.

Currently, any time a municipality plans to purchase an item above $10,000, it must go through the bidding process by advertising twice in a newspaper, receiving sealed bids by vendors, and voting at a public meeting on the lowest bid.

Senate Bills 1071 to 1086 would amend the various local government codes—including those for counties, cities, townships, boroughs and school districts—by raising from $10,000 to $25,000 the level at which local governments must go through the bidding process. The bills also increases the range requiring written or telephonic quotes from $4,000 to $10,000 to $7,000 to $25,000.

Additionally, the bid limit thresholds would annually be adjusted by the Department of Labor and Industry based upon the Consumer Price Index for all Urban Consumers (CPI-U)—thus negating the need to regularly address this issue.

The Senate Local Government Committee plans to meet on Sept. 26 to discuss the legislation and its impact on the Commonwealth.

PICPA-DOR Q&As Now Available

Your PICPA Committees on State Taxation and Federal Taxation meet annually with representatives of the Pennsylvania Department of Revenue to discuss issues of importance to practitioners and their clients. A written summary of Revenue's responses to PICPA members' questions from our June 2007 Question and Answer Session has been added to our Web site.

PICPA would like to thank Revenue Secretary Tom Wolf and his senior staff for their cooperation and assistance with this and many other projects.

Professional Issues Updates: Hear What You’re Missing

Join us for the 2007 Professional Issues Update series in which PICPA President Denise Devine and CEO Bert Trexler travel across Pennsylvania to talk about the issues that that affect your professional success: tax patents, the CPA statute, local tax collection, peer review standards, CPA image, private company financial reporting, student recruitment, emerging CPAs and more.

Visit http://www.picpa.org/update, for location and time of an Issues Update near you.

Revenue Department Releases August Collections 

According to the Department of Revenue, the Commonwealth collected $1.7 billion in General Fund revenue in August, which was $6.5 million, or 0.4 percent, more than anticipated. Fiscal year-to-date General Fund collections total $3.5 billion, which is $17.4 million, or 0.5 percent, above estimate.

Sales tax receipts totaled $693.7 million for August, which was $11.4 million above estimate.

Sales tax collections, year-to-date, total $1.5 billion, which is $11.5 million above estimate, or 0.8 percent, more than anticipated.

Personal Income Tax (PIT) revenue in August was $651.4 million, which was $16.9 million below estimate. This brings year-to-date PIT collections to $1.3 billion, which is $16.8 million, or 1.3 percent, below estimate.

August corporation tax revenue of $62.3 million was $2.6 million below estimate. Year-to-date corporation tax collections total $160.2 million, which is $0.9 million, or 0.6 percent, below estimate.

Other General Fund revenue figures for the month included $73.0 million in inheritance tax, which was $8.3 million above estimate, bringing the year-to-date total to $151.7 million, which is $8.3 million above estimate.

Realty transfer tax was $53.1 million for August, bringing the total to $107.0 million for the year, which is $13.2 million more than anticipated.

Other General Fund revenue, including the cigarette, malt beverage and liquor tax, totaled $119.6 million for the month, $6.9 million below estimate, bringing the year-to-date total to $243.8 million, which is $2.2 million above estimate.

In addition to the General Fund collections, the Motor License Fund received $182.8 million for the month, $17.4 million below estimate. Fiscal year-to-date collections for the fund total $375.7 million, which is $17.4 million, or 4.4 percent, below estimate.

The Gaming Fund received $88.6 million in unrestricted revenues for August. Fiscal year-to-date collections for the fund total $222.9 million. Gaming Fund receipts include taxes, fees and interest. Of the total for the month, $37.9 million was collected in state taxes for property tax relief, bringing the year-to-date total to $71.9 million.  

Other gaming-related revenues collected for August included $4.5 million for the local share assessment, for a total of $8.9 million for the year; $5.6 million for the Economic Development and Tourism Fund, for a year-to-date total of $10.6 million; and $13.4 million for the Race Horse Development Fund, bringing the total for the year to $25.4 million.

State Banking Dept. Calls for New Rules on Mortgage Companies

The Department of Banking has proposed regulatory changes that would require mortgage lenders and brokers to clearly disclose key loan features, such as the presence of a prepayment penalty, balloon payment or an adjustable interest rate. It would also require companies to evaluate the borrower’s ability to pay back his or her loan.

The proposal is part of a broader, ongoing effort by the Department of Banking to protect consumers in the mortgage marketplace. In December, the agency issued a statement of policy to clearly define dishonest, fraudulent, illegal, unfair, unethical, negligent or incompetent conduct for mortgage companies under existing laws. The Department is also supporting a package of six bills in the General Assembly that is aimed at curbing abusive lending practices.

The first hearing to consider pieces of this package will be held by the Senate Banking and Insurance Committee on Tuesday, Sept. 18, at which time four bills—all sponsored by PICPA member and Senate Finance Chair, Sen. Pat Browne, CPA—will be discussed.