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Legislative Update

Week Ending Feb. 15, 2008

• PICPA, Lawmakers Discuss EIT Reform Legislation
• Save the Date -- 2008 PICPA Day on the Hill
• Finance Committee OKs Statewide Police Pension Plan
  
• Tax Rebates, Redevelopment Funding Approved by House Committee
• Open Records Bill Signed into Law by Governor
• Mortgage Reform Package Moving in Both House and Senate
• IRS Changes Address for Pennsylvania Filers
  

PICPA, Lawmakers Discuss EIT Reform Legislation

PICPA joined Department of Community and Economic Development Sec. Dennis Yablonsky, Sen. Jane Earll (R-Erie), and Rep. David Levdansky (D-Allegheny) at a news conference Feb. 12 in the state Capitol Rotunda to discuss legislation aimed at reforming the earned income tax (EIT) collection system. The purpose of the measure is to capture the loss of local income tax revenues and to ease the burden of local tax withholding on Pennsylvania employers.

Senate Bill 1063 would establish much needed reforms in relation to the collection of the earned income tax that would modernize and introduce uniformity to an archaic and inefficient system. The bill also would consolidate the number of collectors from 560 to 66, or one per county.

Speaking at the news conference, PICPA’s EIT Task Force chair, Cheri Freeh, CPA, stated, “I can’t emphasize enough how desperately this legislation is needed.” She asserted that the positive aspects of the legislation will make Pennsylvania “a more user-friendly place for individuals, companies and local governments.”

On Feb. 11, the Senate Appropriations Committee voted to reconsider SB 1063. A committee vote could occur when the legislative session resumes in March. PICPA members are strongly urged to contact their senators and ask them to support SB 1063.

Save the Date -- 2008 PICPA Day on the Hill

Members, mark your calendars for Wednesday, June 11, to attend PICPA’s 2008 Day on the Hill program in Harrisburg. At that time, you will receive legislative briefings from some of the General Assembly’s most prominent figures, learn about issues important to the CPA profession, and meet with legislators to address your local and state concerns.

Finance Committee OKs Statewide Police Pension Plan

On Feb. 11, the Senate Finance Committee approved legislation that would provide for a centrally-administered, statewide retirement system for all local government police employees.

Senate Bill 596, introduced by Senator Jane Orie (R-Allegheny), would allow municipal police officers to enroll in the current State Employees Retirement System, which, under the bill, would be renamed as the "Government Employees Retirement System."

In a related matter, the committee also approved Senate Bill 1093, also introduced by Senator Orie, which would close an unintentional gap in the survivor benefit coverage provided in Act 30 of 2006 for a small number of surviving spouses of police officers who retired before the act’s  effective date, and died after the act's effective date.

Tax Rebates, Redevelopment Funding Approved by House Committee

The House Appropriations Committee Feb. 11 approved the centerpiece of Gov. Ed Rendell’s Protecting Pennsylvania’s Progress budget plan—one-time $400 rebates aimed to stimulate the state economy. The committee reported the bill to the full House by a vote of 21-14.

House Bill 2230 would provide these rebates to about 476,000 Pennsylvania workers who have children and meet certain income levels. The rebates would equal $200 for single-parent households and $400 for couples with children.

The committee also approved House Bill 2231, which would authorize new borrowing of $750 million for the Redevelopment and Capital Assistance Program, known as RACP.

The House Appropriations Committee begins its budget hearings for the proposed 2008-09 state budget next week. The Senate Appropriations Committee will start its budget hearings Feb. 25. Your PICPA Government Relations Team will continue to keep you apprised of budget news and developments as we head toward June 30th and a new fiscal year for the Commonwealth.

Open Records Bill Signed into Law by Governor

Gov. Ed Rendell signed into law amendments to Pennsylvania’s Open Records Feb. 14. Senate Bill 1, now Act 3 of 2008, would give Pennsylvania residents more access to state and local government records, and creates an agency to help the public access those records.

The new open records law would exempt far fewer documents from public scrutiny, and impose stricter open records enforcement, making it much stronger than the current law. It also would place a presumption in state law that the records of all branches of government at the state and local level—including the state legislature—are public, unless specifically exempted in other state or federal law. Currently in Pennsylvania, the burden is on the requester to establish that a particular record is "public."

The law also would create an Office of Open Records in the Department of Community and Economic Development to help residents of Pennsylvania access public records and establish a uniform appeals process for residents who are denied access to records. 

Mortgage Reform Package Moving in Both House and Senate

A six-bill package of reforms targeting predatory and other questionable mortgage lending practices in Pennsylvania is on the move in both the House and Senate. The core of the package is the new requirement for all mortgage originators to be licensed by the state.

One of the measures would amend the Loan Interest and Protection Law of 1974 to increase the monetary cap in the act from $50,000 to $200,000, while a second bill would permit the state Department of Banking to publicly release information on pending enforcement actions and fines levied against non-depository licensees.

A third measure would amend the Real Estate Appraisers Certification Act regarding board membership, disciplinary measures, and penalties. Another would require lenders to send copies of foreclosure notices to the Pennsylvania Housing Finance Agency so that mortgage foreclosures can be monitored on a statewide basis.

The package also creates a new licensing category for individual mortgage originators who deal directly with the consumer by soliciting, accepting, or offering to accept mortgage loan applications or negotiating mortgage loan terms.

Similarly, the final piece of the mortgage reform package would create a new licensing category for individual mortgage originators who deal directly with the consumer by soliciting, accepting or offering to accept secondary mortgage loan applications or negotiating secondary mortgage loan terms.

For more information, contact your PICPA government relations team.

IRS Changes Address for Pennsylvania Filers  

Pennsylvania taxpayers and preparers take note:  the IRS has changed where you file returns. Those who received a tax instruction booklet from the IRS in the mail and used the labels included with the booklet can be assured that their tax returns will go to the correct address.

Returns from Pennsylvania and West Virginia will now be sent to the IRS center in Kansas City, Missouri. Returns from Iowa, Kansas, Oklahoma and Wisconsin go to the IRS center in Fresno, California. And Kentucky returns will be sent to the IRS center in Austin, Texas.

Taxpayers who e-file are not be affected by these changes.