Week Ending July 17, 2020

Jul 20, 2020

State Lawmakers Approve Two Proposed Constitutional Amendments

State lawmakers approved two proposed amendments to the Pennsylvania Constitution. Because the bills would amend the state Constitution, they do not need to be approved by the governor. However, both measures must be approved by the General Assembly in two consecutive legislative sessions and then approved by voters via referendum.

Senate Bill 1166 would amend the Pennsylvania Constitution to limit future emergency declarations by the governor and require legislative approval of any declaration lasting more than 21 days. The bill would create three separate ballot questions: one to limit emergency declarations, another to clarify the General Assembly’s authority to terminate or extend a disaster declaration without the governor’s approval, and a third to ensure equality under the law and prevent discrimination based on race or ethnicity.

House Bill 196 would reform the process of electing appellate court justices. The bill would divide the Supreme Court, Superior Court, and Commonwealth Court into judicial districts to ensure a broader range of regional interests are represented on Pennsylvania’s highest courts. Since judges are currently elected on a statewide basis, the majority come from the state’s two most populous counties, resulting in most of the state being underrepresented on the state’s highest courts.

The legislature also sent a COVID-19-related bill to Gov. Tom Wolf’s desk, House Bill 2463. Under this bill, a state agency could only deny a request for records for the reasons already authorized under the state’s Right-to-Know Law. The bill is retroactive to Wolf’s March 6 disaster declaration.


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PICPA Offers Unique Opportunity to Connect with Legislators

Please join us for PICPA’s virtual Legislator Town Hall Series to hear from elected officials in your area in an informal setting. This is a great opportunity to connect with your political leaders and ask them questions. Federal- and state-level elected officials have been invited.

Registrants will receive Zoom login information the morning of the respective town hall from PICPA’s Jen Howard. Participants are encouraged to come prepared with topics for discussion and questions.

The schedule of town halls is as follows:

  • Erie Chapter | July 23 | 3:00 p.m.
  • Lehigh Valley Chapter | July 23 | 8:30 a.m.
  • Reading Chapter | July 24 | 8:30 a.m.
  • Northeastern Chapter | July 24 | 3:00 p.m.
  • Central Chapter | July 30 | 3:00 p.m.
  • Pittsburgh Chapter | July 30 | 8:30 a.m.
  • Greater Philadelphia Chapter | July 31 | 8:30 a.m.
  • South Central Chapter | July 31 | 3:00 p.m.
  • North Central Chapter | Aug. 6 | 8:30 a.m.
  • Southwestern Chapter | Aug. 6 | 3:00 p.m.
  • Northwestern Chapter | Aug. 7 | 8:30 a.m.

You can register for your town hall here


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Bill to Extend Emergency Relief for Local Taxpayers with Governor

Legislation to help local taxpayers benefit from school property tax discounts and extended payment deadlines is on the governor’s desk awaiting his signature.

Senate Bill 1125, sponsored by Sen. Scott Martin (R-Lancaster), would give each school district the option to extend property tax discount periods and remove penalties for late payments through June 30, 2021. The bill would give school districts the power to help more taxpayers who are struggling financially in the wake of the COVID-19 public health emergency, Martin says.

Martin authored a similar law that allows counties and municipalities to provide property tax relief to taxpayers affected by the COVID-19 pandemic. The law gives county and municipal governments the option to extend deadlines for property tax discount rates to any date up until Aug. 31 and waive any fee or penalty for late payments of property taxes if paid in full by the end of the year.


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Energy Tax Credit Program Gains Bipartisan Support

House and Senate lawmakers in bipartisan fashion sent a bill to Gov. Wolf to attract private investment in the construction and operation of Pennsylvania manufacturing facilities that use dry natural gas to produce fertilizer and other petrochemical products.

House Bill 732, sponsored by Rep. Aaron Kaufer (R-Luzerne), would create the Local Resource Manufacturing Tax Credit Program to incentivize manufacturers to invest in Pennsylvania communities. The program would be available to facilities that use dry natural gas to produce fertilizer and other petrochemical products. Under the program, a business would be required to invest more than $400 million in a Pennsylvania facility and create at least 800 jobs to qualify for a tax credit.

The bill also requires companies to make a good faith effort to recruit and employ local workers in Pennsylvania. A company would not be eligible for the tax credit until the jobs have been created. The program is capped at $6.6 million per facility, and the number of facilities that can receive tax credits is limited to four projects for a maximum total fiscal impact of $26.7 million per year.

Established in 2012, the Pennsylvania Resource Manufacturing tax credit led to the location of the Shell Pennsylvania Petrochemicals Complex in Beaver County. Construction of that plant is projected to have a long-term economic impact of $6 billion.

Wolf is expected to sign House Bill 732 into law.


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Legislative Proposal to Assist Scranton, Other Municipalities

Legislation authored by Sen. John Blake (D-Lackawanna) to help the City of Scranton and other struggling municipalities is a step away from becoming law. The remedy stems from a recent decision by the Lackawanna County Court of Common Pleas that ruled the taxes collected by Scranton during the years 2015, 2016, and 2017 exceeded, in the aggregate, the limitation imposed by the Local Tax Enabling Act (LTEA). Should an appellate court uphold the ruling, it will require Scranton to repay tens of millions of previously collected Act 511 taxes and create serious financial distress.

Senate Bill 1188 would clarify the intent and interpretation of certain aspects of the LTEA dealing with the calculation of the aggregate amount of all taxes imposed. The bill was approved by the General Assembly and now awaits Gov. Wolf’s signature. This clarification of LTEA levies will offer important safeguards to municipalities with similar tax structures against legal challenges that could ultimately result in the bankruptcy of many municipalities around the state.

Blake notes that, in addition to Scranton, others that will benefit from Senate Bill 1188 include Beaver Falls, Carbondale, Coatesville, Easton, Farrell, Harrisburg, Mahanoy, McKeesport, New Castle, Reading, Shamokin, Sharon, Warren, Washington, Wilkes-Barre, and the boroughs of Cassandra, Rankin, Youngsville, and Upland. 


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New State Laws Support Redevelopment of Blighted Properties

Gov. Wolf signed into law legislation giving municipalities new tools to transform blighted properties into thriving parts of the community.

Senate Bill 352, now Act 61 of 2020, sponsored by Sen. Judy Ward (R-Blair, Cumberland, Franklin, Fulton, Huntingdon), allows local taxing authorities to provide a tax exemption for up to 10 years for any improvements and new construction on blighted properties in deteriorated areas. The bill focuses on mixed-use redevelopment (residential and nonresidential uses) to support the growth of more vibrant communities. Projects will only be eligible for the tax abatement if all zoning ordinances are observed, all code violations are cleared, and the value of the property increases by at least 25%. In addition, the property owner must pay any delinquent taxes related to the subject property.

Wolf also signed into law House Bill 1860, which allows smaller municipalities and boroughs the right to create their own redevelopment authorities by removing a size restriction of having a population of 10,000 or more. Now Act 58 of 2020, sponsored by Rep. Mark Longietti (D-Mercer), will eliminate the arbitrary size restriction that prohibited smaller towns and boroughs from implementing their own redevelopment authorities.

A third bill, Senate Bill 940, sponsored by Sen. John DiSanto (R-Dauphin), allows municipal officials to issue condemnation orders on properties that are unfit for human occupation and pose a danger to neighbors, passed by unanimous vote. It is pending in the House.


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Requirement for Accelerated Sales Tax Prepayments Resume

Businesses that are required to make accelerated sales tax (AST) prepayments should resume these prepayments by July 20, 2020 (the July due date for monthly filers with a prepayment obligation). The Department of Revenue (DOR) had previously announced that taxpayers would not have to make AST prepayments in March, April, May, and June to provide relief to business taxpayers during the height of the COVID-19 pandemic.

During the four-month waiver period, the DOR said businesses that normally had a monthly prepayment requirement would not be charged penalties for missing prepayment deadlines. The DOR asked businesses to only remit the sales tax that they collected during the prior month. That allowance changes the resumption of the prepayment requirement.

The AST prepayment requirement applies to business taxpayers with an actual tax liability of more than $25,000 during the third quarter of the preceding year. Visit the DOR’s page on Accelerated Sales Tax Prepayments for more information on how to calculate prepayments.

All businesses are encouraged to remit online using e-TIDES, the DOR’s online tax system for businesses. Find the REV-819 on the DOR’s website for a schedule of return and prepayment due dates. You can also visit the DOR’s Online Customer Service Center to find answers to common tax questions or submit a question to the DOR.


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New Public School Opening Guidelines Issued

Pennsylvania’s Health and Education departments announced updated guidance to help Pre-K to grade 12 schools prepare to reopen and safely educate students for in-person learning. Each school entity will determine if classes resume in person at school buildings, remotely, or a combination of both.

The best practice recommendations outlined by the departments of Health and Education include the following:

  • Masks must be worn by students and staff at school and on the bus. Masks can be removed to eat or drink.
  • Students or caregivers should do a daily symptom screening before leaving for school.
  • Students, teachers, and other staff are strongly encouraged to follow social distancing throughout the day, with 6 feet of separation between desks and other seating.
  • If possible, hold classes in gyms, auditoriums, other large spaces or outdoors so physical distancing can be maintained.
  • Student seating should be facing in the same direction.
  • Limit student interactions by staggering class times, creating one-way walking patterns in hallways, and, when feasible, keeping students in a classroom and rotating teachers instead.
  • For breakfast and lunch, consider serving individually packaged meals in classrooms and avoid across-the-table seating. If meals are served in a cafeteria, sit students at least 6 feet apart.
  • Limit the number of students on playgrounds at one time and encourage social distancing.
  • Encourage the use of virtual gatherings, events, and extracurricular activities.

The guidance provides a list of best practices for schools to consider before the start of in-person classes. It builds on the Pennsylvania Department of Education’s preliminary guidance issued June 3 outlining steps schools must take before they may resume in-person instruction.

The preliminary guidance requires school districts, charter schools, regional charter schools, cyber charter schools, career and technical centers, and intermediate units to develop a health and safety plan. The plans must be approved by the school’s governing body and made available on the school’s public website before bringing students and staff back to campus. Nonpublic schools are strongly encouraged to create plans tailored to their unique needs and post them on their websites.

The guidance for school sports is unchanged. Coaches, athletes, and spectators must wear masks unless they can maintain 6 feet of separation outdoors. Athletes can remove masks during a workout or competition.


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