Week Ending March 13, 2020

Mar 13, 2020

General Assembly Set to Convene Amidst COVID-19 Disruption

The state Capitol will be eerily quiet next week despite the fact that lawmakers will be back in session for the first time since the start of three weeks of hearings on Gov. Tom Wolf’s proposed $36 billion spending plan. The session is scheduled to start up again on March 16, but no one will be watching.

In response to COVID-19, the Department of General Services announced that effective Friday, March 13, 2020, all public events in the Capitol Complex and governor’s residence will be canceled until further notice. All operations of the governor’s office and General Assembly will continue, but access to the Capitol Complex will be limited to employees and people with badge keycard credentials.

“Our top priority is the health and safety of the public,” said Curt Topper, secretary of the Department of General Services. “This protective measure to limit social distances is being made in consultation with the Department of Health and is in keeping with the CDC’s guidelines. The Department of General Services appreciates the partnership with the General Assembly as we take this necessary step regarding the spread of the COVID-19 virus.”

The cancelation of events applies to all interior and exterior venues in the Capitol Complex and will affect public gatherings such as rallies, school or group tours, choir performances, and receptions.

The Capitol Complex includes the Main Capitol Rotunda, East Wing Rotunda, Keystone Building Atrium, Forum Auditorium, and The State Museum of Pennsylvania.

House and Senate standing committees have hearings and meetings scheduled for the week, but we are seeing cancellations amid this health crisis.


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Wolf Highlights Need for Access to Care During Outbreak

Gov. Wolf announced that the Pennsylvania Insurance Department, in collaboration with the Department of Health, is submitting for publication a notice to the Pennsylvania Bulletin outlining proactive steps and recommendations for consumers and major health insurers to help mitigate the potential impact of COVID-19 in Pennsylvania.

Notice Regarding Coronavirus (COVID-19) Insurance Coverage provides several recommendations for health insurers, including the following:

  • Provide access to accurate information, inform insureds of available benefits, and quickly respond to inquiries about coverage.
  • Provide telehealth delivery of services instead of in-person health care services and be prepared to meet any increased demand for that means of delivery.
  • Verify provider networks are adequate to handle a potential increase in the need for health care services related to COVID-19.
  • Ease preauthorization requirements so that they are not a barrier to access necessary treatment for COVID-19, and be prepared to expedite utilization review and appeal processes for services related to COVID-19.
  • Ease access to prescription drugs, make expedited formulary exceptions, and permit the temporary use of out-of-network pharmacies (at in-network cost-sharing) in the event of medication shortages at in-network pharmacies.

Major health insurers in Pennsylvania have announced they are taking the necessary steps to cover medically appropriate COVID-19 diagnostic testing and associated treatment for consumers, and have committed to waive any cost-sharing for the testing. This increased access to testing is especially critical as multiple commercial medical labs are in the process of implementing testing capabilities and some have begun to perform tests.

The Insurance Department, in partnership with the Departments of Health and Human Services, developed a Frequently Asked Questions webpage that provides information and answers to common questions related to insurance coverage and COVID-19.

For up-to-date information on COVID-19 in Pennsylvania, visit the Pennsylvania Department of Health’s dedicated coronavirus webpage that is updated daily.  Information on how the PICPA is responding to the crisis for its members and staff can be found this CPA Now blog by Mike Colgan, PICPA CEO and executive director. Additionally, for more on the potential economic impact to Pennsylvania check out PICPA member Rep. Frank Ryan’s podcast.


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Auto-IRA Proposal Introduced

State Reps. Mike Peifer (R-Pike) and Mike Driscoll (D-Philadelphia) introduced legislation to establish a voluntary auto-IRA program. The bill expands access to private retirement savings plans to more than 2 million Pennsylvanians who currently do not have access through an employer-sponsored retirement plan. House Bill 2021, which the PICPA supports, is pending in the House Finance Committee, which Peifer chairs.

As highlighted by the state treasurer’s Private Sector Task Force project, of which the PICPA was a member, a vast number of Pennsylvania residents are seriously unprepared for the financial challenges of retirement. Projections indicate that between 2015 and 2030, financially unprepared retirees will cost the state an additional $14 billion in social services. Reduced consumer spending activity by this group over the same timeframe will depress tax collections by roughly $1.4 billion, further straining the Pennsylvania’s resources.

A companion bill, Senate Bill 862, has been introduced in the Senate by Sens. Art Haywood (D-Montgomery, Philadelphia) and Pat Browne, CPA (R-Lehigh).


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Ryan Named to Key PSERS Committee

PICPA member state Rep. Frank Ryan (R-Lebanon) has been appointed chair of the Public School Employees’ Retirement System (PSERS) audit and compliance committee, a key committee as PSERS prepares for its annual audit and moves to address its $44 billion unfunded pension liability.

“I am honored to have been named to the PSERS audit and compliance committee,” Ryan said. “Our committee provides critical oversight of the board’s corporate governance and accounting controls, which will be vital as we implement much-needed fiscal reforms and track our progress toward solvency.”

Ryan, a member of the PSERS board of trustees since June, has extensive experience in public and private companies, nonprofit organizations, and government agencies, and has earned a reputation as a detail-oriented fiscal hawk. Ryan says he is intent on working with the entire board and management team in reinforcing the soundness of the systems of internal control so that financial and operational risks are monitored and controlled to assure future retirees that the pension they earned will be paid.

An expert in corporate restructurings and management, Ryan has led many efforts to refinance debt, saving Pennsylvania taxpayers hundreds of millions of dollars.


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Groups Clash Over Tax Credit Legislation

Environmental and business groups clashed in competing press conferences this week over a bill that would create a new tax credit to draw petrochemical development into the northeastern portion of the state. House Bill 1100, sponsored by Rep. Aaron Kaufer (R-Luzerne), passed the House by a vote of 157-35 and the Senate, 39-11, but faces the threat of a gubernatorial veto.

The dueling press conferences where held March 9 at the state Capitol. On one side of the Rotunda was a coalition of more than 30 groups led by PennFuture slamming the legislation as ill-advised economic policy that will wreak havoc on Pennsylvania’s environmental landscape. A few steps away, proponents of the legislation, including Republican and Democratic lawmakers and trade unions, championed the benefits of the proposal. They point to the petrochemical plant now under construction in Beaver County as proof that this type of legislation works.

House Bill 1100 would offer a credit of 47 cents per thousand cubic feet of methane used by a business that has made a capital investment of at least $450 million to construct and put into operation the facility using the methane, and created at least a combined 800 full-time-equivalent jobs during the construction phase and permanent jobs to construct and operate the facility.

The bill must be signed in the Senate before being transmitted to the governor, but Gov. Wolf has said that he will veto the legislation if it gets to his desk.


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Causer, Dunbar Proposal to Boost Rural Broadband Access

Working to bring broadband services to the state’s rural communities, Reps. Martin Causer (R-Cameron/McKean/Potter) and George Dunbar (R-Westmoreland) introduced the Unserved High-Speed Broadband Funding Program.

House Bill 2348 seeks to repeal the Mobile Telecommunications Broadband Investment Tax Credit. This credit is limited to $5 million per year and is available to mobile telecommunication providers to invest in broadband equipment in Pennsylvania. The $5 million would instead be directed toward a grant program.

Under the bill, the grant program would be administered by the Commonwealth Financing Authority. Along with the $5 million appropriation called for in the bill, additional state and federal funding could be directed to the account and used for grant awards.

Entities eligible for grants would include nongovernmental entities with the technical, managerial, and financial expertise to design, build, and operate high-speed broadband service infrastructure within the state and rural electric cooperatives or local development districts. Any nongovernmental entity that qualifies for a grant would have to invest from its own funds at least 25% of the project cost.

Preference would be given to projects in the most unserved areas of the state as defined by the Federal Communications Commission’s minimum speed requirements and to projects that already have federal funding allocated to them.


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State Lawmaker Proposes Estimated Payment Legislation

State Rep. Barbara Gleim (R-Cumberland) plans to introduce legislation that will require the Pennsylvania Department of Revenue (DOR) to issue a refund, upon election by a taxpayer, for instances of estimated tax overpayment.

According to Gleim, a significant number of Pennsylvania taxpayers take advantage of the ability to remit estimated quarterly tax payments for personal income tax liabilities, as it not only enables them to gain a better sense of their cash flow, but also helps avoid potential unforeseen surprises and unaccounted for penalties. For most taxpayers, this process works efficiently and is regarded as a benefit. However, it was recently brought to the representative’s attention that, due to an existing DOR regulation, if a taxpayer remits an overpayment of their estimated tax liability, the DOR holds the excess amount and applies it as a credit to the taxpayer’s future tax liability.

Gleim’s legislation will provide each taxpayer the ability to decide what happens with a determined overpayment, in effect negating the current regulation that allows the DOR to apply the overpayment as a credit towards future tax liabilities. Additionally, Gleim’s bill will clarify that an amount withheld and not returned to the taxpayer may be subject to interest.


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