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Legislative Update

Week Ending March 14, 2008

• Health Insurance Plan Poised for Final House Passage
• House Approves Energy Initiative
• Charitable Organization Registration Reminder
  
• Senate Approves Mortgage Reform Bills
• Lawmakers Unveil Tax-Free, Toll-Free Plan to Fix Roads and Bridges
• Senate Confirms Two to State Board
• Revenue Department Releases February Collections
• Smoking Ban Conference Committee Hears From Bar, Casino Owners
• Fumo Will Retire at End of Term
• Meet with Lawmakers at PICPA’s Day on the Hill
  

Health Insurance Plan Poised for Final House Passage

By a vote of 114-81, the state House on March 12 adopted an amendment introduced by the Democratic Caucus to expand state-subsidized health care to small business employees and middle- and lower-income families. The measure is now poised for a vote on final passage on March 17.

The plan, known as Pennsylvania Access to Basic Care, or “Pennsylvania ABC”, has some similarities to Governor Rendell’s Cover All Pennsylvanians, but, unlike the governor’s plan, the House proposal would subsidize coverage for people earning up to 200 percent of the federal poverty level, or about $35,200 a year for a three-person family.

Sponsored by the House Democratic Policy Chairman, Rep. Todd Eachus, the plan builds on the state’s adultBasic program by extending subsidized coverage to about 80,000 Pennsylvanians now on the adultBasic waiting list. Under the plan, small businesses could participate, and adults who did not qualify for subsidies could buy into the program.

Individuals with incomes of less than 200 percent of the poverty level would pay monthly premiums up to $50, according the initiative’s proponents. Employees above that income level would split the cost of premiums with their employers.

Employer and individual contributions, and a transfer from the MCARE fund, which was set up to assist doctors to pay their medical malpractice premiums, would be the key funding sources for the plan. 

House Approves Energy Initiative

Special Session House Bill 1, sponsored by state Rep. Eugene DePasquale (D-York), passed the state House on March 11. The bill would establish an $850 million bond fund paid for by tapping into existing Gross Receipts Tax on electric bills to create a Clean Energy Program.

The legislation would invest in the Commonwealth through:

• $106 million in venture capital – matched dollar-for-dollar by private funds – to attract cutting-edge energy firms to the state;
• $500 million to improve infrastructures and attract private investment in alternative energy generation and energy conservation;
• $244 million in rebates and loans for Energy Star certified home improvements and Energy Star certified efficient appliance purchases, as well as “Sunshine Grants” to promote the use of solar power.

The bill now heads to the Senate for consideration.

Charitable Organization Registration Reminder

It's leap year again.  Do you know when you charitable organization’s due date is? The registration for calendar year-end charities is due to be filed with the Bureau of Charitable Organizations 135 days after the year ends.  This year, 2008, it means the registrations are due May 14th, NOT May 15th as with the IRS filings on Form 990. 

The due date is statutory and the Department of State is not free to waive the $25 penalty.

Senate Approves Mortgage Reform Bills

On March 11, the state Senate approved six bills targeting predatory and other questionable mortgage lending practices in Pennsylvania. The bills were introduced by PICPA member Sen. Pat Browne, CPA, following the release of findings of a mortgage industry study, which examined trends in foreclosures and residential lending practices that are harmful to consumers.

Senate Bill 483 would amend the Loan Interest and Protection Law of 1974 to increase the monetary cap in the Act from $50,000 to $200,000.

Senate Bill 484 would permit the Department of Banking to publicly release information on pending enforcement actions and fines levied against non-depository licensees. 

Senate Bill 485 would amend the Real Estate Appraisers Certification Act regarding board membership, disciplinary measures and penalties.

Senate Bill 486 would amend the Housing Finance Agency Law to 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.

Senate Bill 487 would amend the Mortgage Bankers and Brokers and Consumer Equity Protection Act to create 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. 

Senate Bill 488 would amend the Secondary Mortgage Loan Act to create a new licensing category for individual mortgage originators who deal directly with the consumer by soliciting, accepting or offering to accept secondary mortgage loans (home equity) applications or negotiating secondary mortgage loan terms. 

The bills have now been referred to the House Commerce Committee for its consideration.

Lawmakers Unveil Tax-Free, Toll-Free Plan to Fix Roads and Bridges

This week, a bipartisan group of House lawmakers announced new legislation that would provide $2.75 billion over the next 10 years and $500 million each year after to pay for road and bridge repairs across Pennsylvania. Their legislation would include no new taxes and no new tolls on Pennsylvania highways.

House Bill 2309 would phase out over a period of 10 years the practice of providing funding for the state police out of the Motor License Fund. Currently, the state uses nearly $500 million from the Motor License Fund to pay for state police services. Under the lawmakers' plan, this money would go toward road and bridge repairs and the state police funding would be supplied through the state's general operating budget.

In 2006, the Transportation Funding and Reform Commission reported that 23 percent of the 25,313 bridges on the state-maintained system are structurally deficient and Pennsylvania's state-owned bridges are, on average, 50 years old.

Senate Confirms Two to State Board 

The State Senate recently confirmed by unanimous vote Rev. Albert Davis Jr. and Maria Mengel as public members to the State Board of Accountancy. The confirmations bring the Board to it full compliment of 15 members, including nine CPAs.

Both Reverend Davis and Ms. Mengel were confirmed to serve a term of four years.

Revenue Department Releases February Collections

On Feb. 29, Secretary of Revenue Tom Wolf reported that Pennsylvania collected $1.8 billion in General Fund revenue in February, $90.9 million, or 5.4 percent, more than anticipated.  Fiscal year-to-date General Fund collections total $15.8 billion, which is $290.3 million, or 1.9 percent, above estimate.  Year-to-date collections include two large corporate tax settlements totaling nearly $48 million.

Sales tax receipts totaled $612.5 million for February, which was $8.5 million above estimate.  Sales tax collections year-to-date total $5.7 billion, which is $19.7 million, or 0.3 percent, above estimate.    

Personal Income Tax (PIT) revenue in February was $798.5 million, which was $17.5 million below estimate.  This brings year-to-date PIT collections to $6.4 billion, which is still $56.3 million, or 0.9 percent, above estimate.       

February corporation tax revenue of $172.2 million was $91.7 million above estimate, including $80 million in unanticipated payments.  Year-to-date corporation tax collections total $1.9 billion, which is $208.4 million, or 12.7 percent, above estimate.

Smoking Ban Conference Committee Hears From Bar, Casino Owners

For months, bar and casino owners, and others from the hospitality and leisure industry, have been advocating for a looser smoking ban, and on March 13, some of them told a House-Senate conference committee, created to deliberate this issue, that a stricter smoking ban would hurt their bottom line.

Anti-smoking advocates, however, told lawmakers that employees should not have to be exposed to secondhand smoke in the workplace. They are pushing for a stricter ban, with fewer exceptions. Conference committee chairman Sen. Stewart Greenleaf (R-Montgomery) said the panel will start final deliberations on a smoking ban compromise at a public meeting scheduled for April 1.

Fumo Will Retire at End of Term

State Sen. Vincent Fumo, one of the state's biggest political powerbrokers, has decided to withdraw from the April 22 primary election in which he faced three opponents for the Democratic nomination. 

First elected in a special election in 1978, Fumo took the Democrat reins of the Appropriations Committee in 1984, but relinquished them in 2007 upon being indicted.

Meet with Lawmakers at PICPA’s Day on the Hill

Mark your calendar and plan to join your colleagues on June 11 for PICPA’s Day on the Hill at the Harrisburg Hilton. Here you will meet to discuss current issues affecting the profession and to interact with your legislators. Senate Majority Leader Dominic Pileggi, Democratic Floor Leader Sen. Robert Mellow, and Rep. Joshua Shapiro will be among those present to discuss their caucus’s legislative agenda and give a political outlook. Gov. Ed Rendell has been invited, as well. Register now.