Week Ending April 26, 2019

Apr 26, 2019


State Lawmakers Return to Harrisburg

House and Senate lawmakers return to session on Monday, April 29, after a brief spring break. Lawmakers will be busy with committee meetings and public hearings moving legislation, but there is little discussion about the budget.

The Senate this week will welcome Pam Iovino (D-Allegheny) to its ranks. Iovino won a special election on April 2, bringing the Democratic caucus to 22 members (there are 26 Republicans and two vacancies). Senators may also vote to confirm Dan Hassell to the post of Secretary of the Department of Revenue this week. Hassell was nominated by Gov. Tom Wolf at the start of his second term in January.

Both the House and Senate Finance Committees are scheduled to have voting meetings this week. The House Finance Committee scheduled a vote on House Bill 17 (statute of limitations), which is sponsored by PICPA member Rep. Frank Ryan (R-Lebanon). The Senate committee will meet to consider Senate Bill 478 (Farmer Tax Credit) and Senate Bill 568 (clarifies sales and use tax for financial institutions and information services).

The House Education Committee will consider House Speaker Rep. Mike Turzai’s (R-Allegheny) House Bill 800, which increases the amount of tax credits available under the Educational Improvement Tax Credit (EITC) program by $100 million (to $210 million).

The House Judiciary Committee will hold a voting meeting on House Bill 111 (sponsored by Rep. Paul Schemel), a joint resolution proposing amendments to the Constitution of the Commonwealth of Pennsylvania that change and add provisions relating to the selection of justices and judges, as well as on House Bill 196 (sponsored by Rep. Russ Diamond), a joint resolution proposing amendments to the state constitution that organize the judiciary into representative districts and further provide for residency requirements.

The state Senate and House Democratic Policy committees will hold a joint public hearing on legalizing recreational marijuana for adults.

The Senate Majority Policy Committee will take a closer look at the effects of out-migration, or “brain drain,” from Pennsylvania during a public workshop discussion.


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Your Voice Matters: Attend PICPA’s Day on the Hill

With tax season in the rearview mirror, now is the time to register for PICPA’s Day on the Hill. Every June, CPAs from across Pennsylvania come together in Harrisburg for PICPA’s premier legislative event. This year, with nearly 50 new legislators, having the profession’s voice heard in the halls of the state capitol is more critical than ever.

Event highlights include an insider's perspective on the 2019-2020 Pennsylvania budget cycle, the latest on tax proposals from state legislators, valuable interactions with PICPA committee representatives and the PICPA government relations team, and a presentation from the Pennsylvania Department of Revenue.

For additional information, check out this Q&A blog with PICPA member R. Charles Waring, CPA, who is a member of the CPA-PAC Board. In this blog, Waring provides first-hand insight on the event and his perspective on why you should consider attending.

A draft agenda for this year’s Day on the Hill, which will be held on Tuesday, June 11, is available here. Event participants will earn three CPE credits. Register to attend today. 


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Uniformity Clause Repeal Introduced in State House

State Rep. Elizabeth Fiedler (D-Philadelphia) introduced a joint resolution proposing an amendment to the state constitution that repeals the Uniformity Clause.

“Pennsylvania has the seventh most unfair state and local tax system in the nation, according to the Institute on Taxation and Economic Policy,” Fiedler says. “Unfortunately, the Uniformity Clause of the Pennsylvania Constitution prohibits our commonwealth from adopting a more progressive personal income tax,” argues the freshman lawmaker.

House Bill 1299 has been referred to the House Finance Committee. A constitutional amendment must pass two consecutive legislative sessions before it can be submitted for a referendum.


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Property Tax Freeze for Seniors in the Works

At a recent senior expo event, Reps. Wendi Thomas (R-Bucks) and Frank Farry (R-Bucks) announced their soon-to-be-introduced legislation to freeze property taxes for eligible homeowners who are age 65 years of age or older.

The bill would require the homeowner to have an established residency within the state, have paid property taxes for more than five years prior to filing for the freeze, and have a combined household income under $65,000 per year. The legislation would also allow senior residents whose income exceeds $65,000 to qualify if their property tax liability is 10 percent or more of their total income.

The lawmakers said their legislation is garnering support among members of the House, and will be officially introduced in the coming weeks.


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Lawmaker Proposes Financial Reform Package for Schools

State Rep. Tony Deluca (D-Allegheny) will introduce a six-bill package to address school board and administration financial reform. The package of reforms stems from a grand jury investigation of a school district in the representative’s district.

Deluca’s proposals would require a referendum for any borrowing by a school district that would amount to 50 percent or more of its borrowing base limit; make sure that both revenues and expenses are included when determining a school district’s borrowing base limit; allow the state Department of Education to review the most recent audit of the school district to certify that it is capable of fulfilling its financial obligations before borrowing funds, and would make the audit available to the public at the Act 34 hearing required by current law; allow investigations within five years of a discovery, rather than the date it originally took place; allow the Department of Education to review construction plans and total costs to see if a referendum is required under current law; and hold school district and school board officials accountable if they make false communications to the Department of Education regarding construction plans or costs.

Once introduced and given bill numbers, the legislation will be referred to a House committee for further study.


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Legislation Would Establish Family and Medical Leave Program

State Sens. Dan Laughlin (R-Erie) and Maria Collett (D-Montgomery/Bucks) introduced “The Family Care Act” to establish a statewide family and medical leave insurance program.

Under the lawmakers’ proposal, all working individuals would make small contributions from their weekly earnings to the leave program, which would be administered by the Department of Labor & Industry. Workers can then use the fund when they need it to care for themselves or a close family member in the event of a serious health condition, to care for a new child, or to care for a member of the military in qualifying circumstances. Leave benefits will be calculated on a graduated scale to make sure the program is accessible to all workers, regardless of how much they earn.

The bill will be assigned to a committee upon introduction.


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New Brewery Tax Policy Concerns Heard at Public Hearing

The state House Liquor Control Committee hosted a public hearing at Spoonwood Brewery to discuss a new taproom tax set to take effect July 1.

Representatives from the Pennsylvania Department of Revenue, Brewers of PA, the Pennsylvania Restaurant and Lodging Association, and the Pennsylvania Licensed Beverage and Tavern Association were present to testify before the committee.

Of concern to brewers is the recent state tax bulletin indicating that breweries that bypass wholesalers and sell beer directly to consumers in their tasting rooms and retail storefronts would be required to issue the 6 percent state sales tax at the point of sale. In general, brewery owners argue the tax should be applied at the wholesale level instead.


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