Week Ending June 7, 2019

by PICPA Government Relations | Jun 07, 2019

 


PTIN Legislation Introduced in State House

State Rep. Mike Peifer (R-Pike), chair of the House Finance Committee, introduced legislation to protect taxpayers from unscrupulous paid tax preparers. House Bill 1583 would require any paid tax preparer to include his or her preparer tax identification number (PTIN) on state income tax returns filed on behalf of another taxpayer.

“The IRS currently requires the inclusion of a preparer's PTIN on federal returns. However, there is no such requirement for Pennsylvania personal income tax (PIT) returns,” Peifer said. “My legislation strikes a balance in that it provides the ability for the state to identify a pattern of fraudulent returns filed by a preparer, while circumventing an onerous mandate on tax preparers.”

House Bill 1583 exempts CPAs, enrolled agents, and attorneys from its requirements. The Finance Committee has scheduled a vote on the bill for June 11.

While PICPA is neutral on the legislation, we do question its need. Current law already gives the Pennsylvania Department of Revenue the authority to implement and enforce many of the provisions in the legislation. 

 

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EITC, Tax Proposals on the Move

Several bills potentially connected to the state budget were recently reported from committees. With the June 30 budget deadline fast approaching, the PICPA government relations team is maintaining an active presence in the state Capitol, monitoring the back-and-forth of legislative activity.

The Senate Education Committee reported legislation that makes changes to the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs concerning definitions and limitations. House Bill 800, sponsored by House Speaker Mike Turzai (R-Allegheny), would increase the total aggregate amount available to provide tax credits for contributions from business firms to scholarship organizations by $100 million, to a total of $210 million.

The House Finance Committee reported three bills. House Bill 1549, sponsored by Rep. Natalie Mihalek (R-Allegheny), clarifies the assessment of sales and use tax on the purchase price of malt or brewed beverage sold on the premises of a brewery. The committee also reported House Bill 1502 (transparency portal) and Senate Bill 613 (compliance with IRS security requirements).

The Senate Finance Committee approved two bills: Senate Bills 116 and 712. Senate Bill 116, sponsored by Sen. Camera Bartolotta (R-Washington), would amend the state constitution and limit increases in government spending to the percentage changes of inflation, plus population. Senate Bill 712, sponsored by Sen. Dave Argall (R-Schuylkill), extends the authority of the state treasurer to invest funds in the treasury according to the prudent person investment standard until 2024.

 

 

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Pa. Senate Passes G.I. Bill for Families

The Military Family Education Program (MFEP), or “Pennsylvania G.I. Bill,” passed unanimously out of the state Senate this week.

Co-sponsored by Sens. Mike Regan (R-Cumberland, York) and Lindsey Williams (D-Allegheny), Senate Bill 589 will allow Pennsylvania National Guard members to earn educational benefits for their spouse and/or children upon committing to serve an additional term of six years. Every year, the Pennsylvania National Guard needs to enlist or reenlist 2,300 members to maintain its current standard of excellence; the MFEP is aimed at retaining current members to help meet that goal. This will be the first program of its kind in the country.

Gov. Tom Wolf proposed the MFEP in his 2019-2020 budget. Senate Bill 589 now heads to the House for further consideration.

 

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PICPA Member Frank Ryan Appointed to PSERS Board

PICPA member Rep. Frank Ryan (R-Lebanon) was named the majority member to the board of the Public School Employees' Retirement System (PSERS) by House Speaker Mike Turzai (R-Allegheny) for the 2019-2020 legislative session.

The PSERS board, consisting of 15 members, has a fiduciary duty to the members of the Pennsylvania PSERS regarding investments and disbursements. The members of the board, as trustees of the retirement fund, have exclusive control and management of the fund and full power to invest.

Ryan is in his second term in the state House. He serves on the House Veterans and Emergency Preparedness, Aging and Older Adult Services, Finance, Liquor Control, and State Government committees.

 

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House Committee OKs Bills to Grow Pa. Agriculture

The state House Agriculture and Rural Affairs Committee gave overwhelming bipartisan approval to a series of bills to help Pennsylvania farmers.

The bills approved by the committee include the following:

  • House Bill 1348 (Rep. Barbara Gleim, R-Cumberland): Protects agritourism business from lawsuits where no party is at fault for injuries or damages. The measure helps operators stay in business by further diversifying their farms.
  • House Bill 1514 (Rep. John Hershey, R-Juniata/Franklin/Mifflin): Revises and reestablishes the existing Healthy Farms Healthy Schools program into the PA Farm-to-School Program to provide grants for improving childhood nutrition while increasing exposure to agriculture for children through the fifth grade.
  • House Bill 1516 (Rep. Martin Causer, R-Cameron, McKean, Potter): Creates the Pennsylvania Rapid Response Disaster Readiness Account. The General Assembly would allocate funding to the Department of Agriculture to facilitate a quick response to agricultural disasters, including using animal or plant health officials to contain an outbreak or threat, or providing an immediate response to a foodborne illness.
  • House Bill 1517 (Rep. David Zimmerman, R-Lancaster): Provides the State Conservation Commission with the authority to prioritize projects and provide technical assistance and funding through a mix of grants, low-interest loans, and tax credits to help farmers and landowners implement conservation best management practices.
  • House Bill 1518 (Rep. Pam DeLissio, D-Philadelphia/Montgomery): Reestablishes the former Agriculture and Rural Youth Development Program into a new grant program to fund youth organizations that promote development in agriculture, community leadership, vocational training, and peer fellowship.
  • House Bill 1519 (Rep. Chris Rabb, D-Philadelphia): Establishes a state-level Specialty Crop Block Grant Program to invest in and encourage farming of crops such as hemp, hops, and hardwoods that are not eligible for the federal grants.
  • House Bill 1520 (Rep. Pam Snyder, D-Greene/Fayette/Washington): Creates a grant program to reimburse federal meat inspection costs for small or new processors.
  • House Bill 1521 (Rep. Eddie Day Pashinski, D-Luzerne): Amends the existing PA Preferred agricultural commodities marketing program to bolster enrollment in the veteran farmer Homegrown by Heroes program.
  • House Bill 1523 (Rep. Russ Diamond, R-Lebanon): Establishes the Pennsylvania Agricultural Business Development Center within the Department of Agriculture to serve as a resource to help farmers create a business plan, transition plan, or succession plan. This will help ensure farm operations continue to thrive through ownership changes.
  • House Bill 1526 (Rep. Rich Irvin, R-Huntingdon/Centre/Mifflin): Reestablishes a low-interest loan program administered by the State Conservation Commission in conjunction with lending institutions for the implementation of agricultural and conservation best management practices.

The measures now go to the full House for consideration.

 

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May 2019 State Revenue Collections

Pennsylvania collected $2.6 billion in General Fund revenue in May, which was $14.9 million, or 0.6%, less than anticipated. Fiscal year-to-date General Fund collections total $31.8 billion, which is $813.3 million, or 2.6%, above estimate. Since the start of the 2018-2019 fiscal year, overall tax revenue is $2 billion, or 6.8%, more than was collected in the same period of the last fiscal year.

Sales tax receipts totaled $944.8 million for May, $46.7 million above estimate. Year-to-date sales tax collections total $10.1 billion, which is $320.6 million, or 3.3%, more than anticipated.

Personal income tax (PIT) revenue in May was $966 million, $42.2 million below estimate. This brings year-to-date PIT collections to $12.9 billion, which is $82.8 million, or 0.6%, below estimate.

May corporation tax revenue of $344.7 million was $47.3 million above estimate. Year-to-date corporation tax collections total $4.9 billion, which is $590.6 million, or 13.6%, above estimate.

Inheritance tax revenue for the month was $101.9 million, $2.8 million below estimate. This brings the year-to-date total to $957.2 million, which is $27 million, or 2.7%, below estimate.

Other General Fund tax revenue, including cigarette, malt beverage, liquor and gaming taxes, totaled $178.2 million for the month, $2.5 million below estimate. The year-to-date total is $1.6 billion, which is $1.6 million, or 0.1%, below estimate.

Nontax revenue totaled $33.9 million for the month, $54.3 million below estimate. The year-to-date total is $802.6 million, which is $41.7 million, or 5.5%, above estimate.

 

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Restore Pennsylvania Introduced

Legislation to implement Gov. Tom Wolf’s Restore Pennsylvania proposal was introduced in both the House and Senate. House Bill 1585, sponsored by Reps. Jake Wheatley (D-Allegheny) and Thomas Murt (R-Montgomery), and Senate Bill 725, sponsored by Sens. John Yudichak (D-Luzerne) and Tom Killion (R-Delaware), have been referred to committee for consideration.

Restore Pennsylvania will invest $4.5 billion over the next four years in significant, high-impact projects throughout the state. Restore Pennsylvania will provide resources to communities that disproportionately receive impact fee funding, allowing all municipalities to complete infrastructure projects.

Encompassing new and expanded programs to address priority infrastructure areas, Restore Pennsylvania projects will be driven by local input about local needs. Projects identified by local stakeholders will be evaluated through a competitive process to ensure that high-impact projects are funded and needs across Pennsylvania are met.

 

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Senator to Introduce Cap and Invest Bill for Pennsylvania

Senate Democratic Leader Jay Costa is circulating a memo asking for cosponsors for a bill that creates a “cap and invest” program for the state’s electric power sector.

The legislation will instruct the Environmental Quality Board to reduce carbon pollution emissions from the electric power sector – the largest source of emissions in Pennsylvania – by at least 90% by 2040 relative to baseline emissions. The board can develop a market-based carbon pollution limit, which ensures a technology neutral, flexible approach that incentivizes the most cost-effective emission reductions and generates revenue for investments in economic development, workforce training, energy efficiency, renewable energy, and energy affordability.

The legislation also enables the board to facilitate deployment of zero-emissions technologies; measures that provide for ongoing assessment of emission sources in the electric power sector that adversely affect disadvantaged communities; and reductions in harmful air pollution affecting the communities, protect against emissions leakage, and join one or more multijurisdictional programs for the reduction of greenhouse gas emissions.

Further, the bill provides that revenue generated from the program be directed toward programs that promote clean air, mitigate utility bill impacts and protect low-income consumers, increase energy efficiency, and assist workers and communities impacted by the closure of power plants or mines.

Once formally introduced the bill will be referred to a standing committee.

 

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Mustello Sworn in to Serve 11th Legislative District

Marci Mustello (R-Butler) was officially sworn into office at the state Capitol as representative for residents of the 11th Legislative District. This is Mustello’s first term in the Pennsylvania House of Representatives, having won a May 2019 special election.

Prior to her election, Mustello most recently worked as a staffer for U.S. Rep. Mike Kelly (R-16). Also, she served as president of the board of directors for the Butler County Humane Society, where she was responsible for overseeing the administration, programs, day-to-day operations, and strategic plan of the organization.

 

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About PICPA

The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest and fourth-largest state CPA organization in the United States.

Learn more about how you can become involved in the legislative process, through PICPA's Key Contact Program and CPA-PAC.

Contact the Government Relations Team at governmentrelations@picpa.org or (717) 232-1821.

Address:
500 N. 3rd St., Ste. 600A 
Harrisburg, PA 17101