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Legislative Update

Week Ending Oct. 19, 2007

• PICPA, Former Gov. Dick Thornburgh to Call for Civil Justice Reforms
• House Votes on Sales Tax Expansion Likely
• Panel Endorses Bill to Speed up Delinquent Collections
  
• Unemployment Compensation Reform Package Announced
• Committee Advances Alternative Energy Investment Act
• Bills Encouraging Intergovernmental Cooperation Approved
  

PICPA, Former Gov. Dick Thornburgh to Call for Civil Justice Reforms

On Monday, Oct. 22, PICPA members, along with a variety of Pennsylvania’s leading business organizations, will appear with former U.S. Attorney General and Governor Dick Thornburgh at a Capitol Hill press conference.

The purpose of the press conference is to urge state lawmakers to pass much needed reforms of Pennsylvania’s civil justice system. Prior to the press conference, Thornburgh will testify before the House Republican Policy Committee on the same issue.

Meaningful legislative reform proposals that PICPA supports have been filed in both the state House and Senate this session in the forms of Senate Bill 435, introduced by Sen. Jake Corman, and House Bill 850, introduced by House Republican Policy Chair, Rep. Mike Turzai. Both pieces of legislation largely resemble Senate Bill 435 of last session, also sponsored by Sen. Corman. Gov. Rendell vetoed that legislation, despite having campaigned on the promise of enacting limits on joint and several liability.

Under the rule of joint and several liability, a plaintiff may recover all or part of his or her damages from any defendant, regardless of that defendant’s proven proportion of fault. SB 435 and HB 850, if enacted, would replace this system with one of “proportionate liability,” also known as the Fair Share Act, in which parties are held responsible only for the harm they cause.

Without proportionate liability, employers and individuals can—and often have—become targets of plaintiffs who are looking for “deep pockets” when filing civil lawsuits. In such a legal environment as this, parties found only marginally responsible are unfairly forced to pay an entire award simply because of their ability to pay.

PICPA considers civil justice reform as one of its key legislative priorities, and one that is imperative to the overall economic vitality of the state.

House Votes on Sales Tax Expansion Likely

The state House has tentatively scheduled a floor vote on new property tax relief legislation for some time during the week of Oct. 29. Legislators and staffers with knowledge of the proposal have told PICPA that it will likely include a sales tax base expansion to include professional services.

On Wednesday, Oct. 24, the House Finance Committee has scheduled a meeting to consider several bills amending the Tax Reform Code, including House Bills 1489 and 1600. Under the scenario being discussed, a “gut and replace” amendment with the expanded sales tax language will be offered in committee to one of the bills on the agenda. The bill, as amended, would then go to the House floor for a vote the following week.

PICPA continues to strongly oppose an expansion of the sales tax base. PICPA recently signed onto a letter to all House members from the Pennsylvania Coalition Opposed to an expanded Sales Tax, or PennCOST. The letter argues that “an expanded sales tax would diminish the competitiveness of Pennsylvania’s goods and services and place Pennsylvania businesses at a competitive disadvantage, which will negatively impact our business climate.” 

Your legislator needs to hear from you, as a constituent and a CPA, about the impact this issue will have on you and your clients. PICPA members are urged to contact their local state representative immediately to voice their opposition to this proposal.

Contact your PICPA Government Relations Team with questions.

Panel Endorses Bill to Speed up Delinquent Collections

The Senate Finance Committee approved three bills at its Oct. 15 meeting including one that expedites the process by which governing bodies can collect delinquent taxes and fees, according to committee chairman and PICPA member Sen. Pat Browne, CPA.   

Senate Bill 777, sponsored by Browne, would amend current state laws to help school districts, cities, townships and boroughs more efficiently collect delinquent real estate taxes and municipal fees. The bill also refines and improves the process by which municipalities hire third party collection firms, improves the public information requirements set by statute, and clarifies ambiguities in the current law.

Senate Bill 65 would extend the authorization of Keystone Opportunity Zone and Keystone Opportunity Expansion Zone programs from 2010 to 2028. Companies setting up operations in a KOEZ or KOZ receive various forms of regulatory relief as well as tax abatements, credits, deductions and exemptions. These areas may also receive other benefits including lower interest rates and priority consideration for state assistance under state and community economic development and community building initiatives.

House Bill 169 amends the Local Option Small Games of Chance Act to expand the definition of daily drawing and increases prize limits for small games of chance conducted by charitable organizations.

Unemployment Compensation Reform Package Announced

On Tuesday, Oct. 16, a group of House lawmakers introduced a set of proposals aimed at reforming Pennsylvania's unemployment compensation system.

The package consists of the following reforms:

• Refining the law's current benefit ineligibility for employees voluntarily leaving work without a case of a necessitous and compelling nature.
• Clarifying that a claimant is ineligible for benefits if his or her unemployment is due to "willful misconduct."
• Changing the tax rate and benefit eligibility guidelines to define "average working wage" and "suitable work," clarify determination of contribution rate and experience rating, and provide for the qualifications required to secure compensation and for the rate and amount of compensation.
• Requiring that the last employer and the separating employer be furnished a copy of any written statement provided by the claimant relating to his/her separation from employment, if the employer makes such a request in writing; the claimant would have the same right to any written statement provided by an employer.

The bills have been referred to the House Labor Relations Committee for consideration. For more information, please contact your PICPA Government Relations Team.

Committee Advances Alternative Energy Investment Act

The Senate Special Session Committee on Energy Policies this week advanced legislation to invest $530 million over the next seven years in consumer energy programs, energy conservation, and the development of alternative and renewable energy.

The Alternative Energy Investment Act, introduced by Sen. Mary Jo White and Sen. Robert Tomlinson, provides funding for grants and loans to projects geared toward improving energy supply and efficiency, improved conservation and reduced demand for energy—with no tax increases. It was reported out of committee by a vote of 13-1.

Special Session Senate Bill 1 now moves to the full Senate for consideration. 

Bills Encouraging Intergovernmental Cooperation Approved

The Senate Local Government Committee this week unanimously approved legislation, which would allow local governments to work together, as well as with non-profit corporations, on recreation facilities and programs.

The Committee approved a three-bill package, consisting of Senate Bills 1002, 1003 and 1004, that would allow boroughs and townships to partner with counties, cities, townships, boroughs, towns, school districts, or non-profits to acquire property for, create, or operate recreational facilities, such as a swimming pools and ballparks.

The bills now head to the full Senate for further consideration.