Week Ending June 26, 2020

by PICPA Government Relations | Jun 29, 2020


Cutler New Speaker, House Republicans Elect Leadership Team

Rep. Bryan Cutler of Lancaster was unanimously elected the 141st Speaker of the Pennsylvania House of Representatives. He replaces Rep. Mike Turzai (R-Allegheny) who resigned June 15. Cutler, 45, who was most recently House Majority Leader, is the third speaker to be elected from Lancaster.

“My entire mission in public service has been to give back to the community that gave so much to me and my family,” Cutler said. “Carrying the voices of the 100th district has been the honor of my life, and I will continue to carry the values and lessons my community gave to me in my new role.”

To replace Cutler, House Republicans elected Kerry Benninghoff (R-Centre) to be majority leader. Most recently the majority whip, Benninghoff has held several leadership positions within the state House, including two terms as Majority Policy Committee chair and chair of the House Finance and State Government committees.

Members also elected Rep. Donna Oberlander (R-Clarion/Armstrong/Forest) to serve as whip and Rep. Martin Causer (R-Mckean/Cameron/Potter) to be Republican Policy Committee chair. Oberlander previously served as caucus secretary and Majority Policy Committee chair, while Causer is a new addition to the leadership team.

Stan Saylor (R-York), Appropriations Committee chair, retains his position, as does caucus chair Marcy Toepel (R-Montgomery), caucus secretary Mike Reese (R-Westmoreland/Somerset), and caucus administrator Kurt Masser (R-Northumberland/Columbia/Montour).

 

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Occupational Licensing Reform Legislation Heads to Governor

Legislation making sweeping changes to Pennsylvania’s occupational licensing process is on its way to the governor’s desk. Senate Bill 637, introduced by Sens. John DiSanto (R-Dauphin/Perry) and Judy Schwank (D-Berks), updates Pennsylvania’s occupational licensing laws that deny many qualified residents the right to work because of an old or irrelevant criminal record requiring the Department of State’s 29 licensing boards and commissions to complete individualized reviews to determine if an applicant’s criminal conviction is a disqualification for licensure.

Under the bill, licensing entities must consider whether crimes are directly related to the occupation and weigh rehabilitative factors and whether issuing a license creates a substantial risk to the public. In addition, boards and commissions are prohibited from denying individuals the right to practice on the grounds of vague phrases such as “moral turpitude” and “moral character.” Senate Bill 637 also provides prospective applicants guidance and the opportunity to petition licensing entities for preliminary decisions on how their criminal history affects their ability to practice before investing time and money in professional training and education.

Gov. Tom Wolf is expected the sign the bill into law.

 

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Sweeping Reforms to Ensure Sustainability of Pennsylvania System of Higher Education

State lawmakers sent Gov. Wolf a set of broad reforms to protect the future of Pennsylvania’s State System of Higher Education (PASSHE) and ensure the system has the tools to achieve its mission for years to come.

House Bill 2171, sponsored by Rep. Curt Sonney (R-Erie), would give the PASSHE board of governors the power to create, expand, consolidate, transfer, or affiliate member schools and require the chancellor of PASSHE to conduct a thorough review of an institution and prepare a detailed implementation plan for any changes to system schools. The bill would also require shared services among all member universities when the system can show savings and efficiencies, unless member schools opt out by a two-thirds vote of the council of trustees.

Many PASSHE schools had been facing financial and enrollment pressures even before the COVID-19 pandemic, and these problems have been made worse by the temporary closing of all 14 system schools due to concerns about student health.

Wolf is expected to sign the legislation.

 

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Police Reform Proposals Advance in House and Senate

In response to calls to reform law enforcement, state House and Senate lawmakers approved multiple bills dealing with the vetting and training of police officers.

The Senate approved two bills. Senate Bill 459 would provide law enforcement agencies with record-keeping and reporting requirements regarding the use of force and deadly force by law enforcement officers, while Senate Bill 1205 would prohibit the use of chokeholds except in situations when the use of deadly force is permitted, as well as require law enforcement agencies to adopt a use-of-force policy and to train officers on procedures allowed under the policy.

The House approved House Bill 1841, which would require a thorough background investigation on an applicant for employment as a law enforcement officer, including a review of the applicant’s employment information and separation records from prior law enforcement employment, before the applicant may be employed. It also approved House Bill 1910, which requires the training of officers on interacting with individuals of diverse racial, ethnic, and economic backgrounds; implicit bias training; recognizing and reporting child abuse; and annual training on the use of appropriate force. In addition, the bill would establish better access to mental health evaluations for law enforcement officers.

The Senate bills are pending in the House, and the House bills in the Senate.

 

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House Combats Wasteful and Fraudulent Medicaid Spending

House lawmakers approved a series of bills to make reforms to the state’s Medicaid program. The measures are aimed at stopping fraud and preventing improper payments and implement the findings of a grand jury report on Medicaid fraud, and efforts to enact laws that mirror federal statutes that have helped reduce fraud and recoup tax dollars.

The bills would increase penalties for making false claims against Medicaid (House Bill 2351); require state agencies to assess their program expenditures to determine how susceptible they are to improper payment (House Bill 2353); create a state-level “Do Not Pay” system to stop improper payments before they are made (House Bill 2354); and establish requirements for contracts with Medicaid Managed Care Organizations (House Bill 2355).

All are pending in the Senate. 

 

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Measures to Help Local Governments Moving in General Assembly

State lawmakers are working on a number of bills to help local governments in Pennsylvania.

Senate Bill 352 creates the Tax Exemption and Mixed-Use Incentive Program Act, a stand-alone act authorizing local taxing entities to provide for tax exemption incentives for certain deteriorated industrial, commercial, business, and residential property, and for new construction in deteriorated areas. Senate Bill 352, which has passed the House, is pending in the Senate for a final vote.

Senate Bill 1188 amends the calculation of local tax limitations under the Local Tax Enabling Act (LTEA). According to the Senate Appropriations Committee’s Fiscal Note, current law generally provides that total revenues received by a political subdivision from all taxes imposed under the LTEA are limited to an amount equal to the market valuation of real estate in the political subdivision as determined by the State Tax Equalization Board (STEB), multiplied by 12 mills. In a recent decision by the Lackawanna County Court of Common Pleas, the court ruled that the aggregate amount of taxes collected by the City of Scranton during the years 2015, 2016, and 2017 exceeded, in the aggregate, the limitation imposed by the LTEA. Senate Bill 1188 passed the Senate unanimously and is now in the House.

House Bill 2536 bridges the tax gap necessitated by COVID-19 by authorizing local governments to borrow money for two years, rather than just one year, so they can maintain operations. The bill was unanimously approved by the House, and now moves to the Senate for consideration.

 

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IFO Releases Revenue Estimate for Fiscal Year 2020-2021

The Independent Fiscal Office (IFO) released its official estimate for fiscal year (FY) 2020-2021.

“The mitigation efforts triggered in response to the COVID-19 virus will have a dramatic impact on economic growth for calendar years (CY) 2020 and 2021,” notes IFO in its report.

All is not dire, however. “Overall, the IFO forecast assumes a relatively quick recovery from the significant contraction imposed on the state economy in 2020 Q2 due to mitigation efforts. For Q3 and Q4, the state recovery ramps up and coincides with business reopenings. In CY 2021, the partial recovery is largely achieved, and growth reverts to rates closer to nonrecessionary historical averages.”

According to IFO, FY 2019-2020 will end with $32.0 billion in revenue, which is better than IFO projected last month. As for FY 2020-2021, the official IFO revenue estimate is $35.9 billion, compared with the $36.1 billion it projected in May 2020.

 

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AICPA Urges Congress to Pass Remote and Mobile Worker Relief Act

The COVID-19 pandemic has caused many companies to mandate that their employees work remotely, which is creating complicated state tax issues for many. The American Institute of CPAs (AICPA) recognizes these challenges and expressed in a letter of support for the bipartisan federal Remote and Mobile Worker Relief Act of 2020 (S. 3995), sponsored by U.S. Sens. John Thune (R-SD) and Sherrod Brown (D-OH).

Nonresident state and local income taxation, withholding, and filing requirements differ from jurisdiction to jurisdiction, creating administrative burdens for both taxpayers and businesses. Varying state and local income tax withholding laws and de minimis exceptions make state and local income tax compliance extremely difficult. The bill provides relief from inconsistent state and local income tax and withholding rules that impact employers and employees. It also seeks to create a uniform national standard to simplify and enhance compliance with various state and local tax laws and reduce these burdens.

“You have reached a reasonable balance between the states’ rights to tax income from work performed within their borders and the needs of individuals and businesses, and especially small businesses, to operate efficiently in this economic climate,” the letter to Thune states.

The Remote and Mobile Worker Relief Act provides uniformity for nonresident state and local income tax withholding and a reasonable de minimis exception from the assessment of state and local income tax in a jurisdiction in which an employee does not reside.

 

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About PICPA

The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premier 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

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