Week Ending Nov. 13, 2020

Nov 13, 2020

State Lawmakers to Close Out 2019-2020 Session

With virtually all state legislative race results tallied and leadership elections completed (see below), House and Senate lawmakers return to Harrisburg for the final week of the 2019-2020 legislative session.

Lawmakers will look to finalize the fiscal year 2020-2021 state budget. A $25.8 billion spending plan was approved in May, but the stopgap budget provided funding for public education, higher education, debt service, and pensions for a full 12 months, while most other state agencies and departments were funded for approximately the five months ending Nov. 30, 2020. Revenue projections for the fiscal year through the end of October are running ahead of estimates, but lawmakers still must grapple with a projected $5 billion deficit.  

The PICPA continues to try to finalize approval for legislation that clarifies the treatment of Paycheck Protection Program (PPP) loan forgiveness under the Pennsylvania personal income tax law. House Bill 2497, sponsored by Rep. George Dunbar (R-Westmoreland), has already passed the House and is pending in the Senate.

A bill that the PICPA is watching is House Bill 64. This legislation would permit the carryover of continuing education credits. House Bill 64 needs one final vote in the Senate before it can go to the governor’s desk.

The 2019-2020 legislative session ends at midnight on Nov. 30. All legislation still considered a priority and not acted upon must be reintroduced in the new session that begins in January.

PICPA’s Legislative Update webinar on Dec. 16 will provide a complete recap of the session and detail what the PICPA will be working on in Harrisburg in 2021.


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DOR Issues COVID-19 Telework Guidance

The Department of Revenue issued temporary guidance relating to telework and the related tax implications. This guidance will be in effect until the earlier of June 30, 2021, or 90 days after the Proclamation of Disaster Emergency in Pennsylvania is lifted. Once the proclamation is lifted, the guidance is rescinded and all prior tax rules are applicable.

In summary, if an employee is working from home temporarily due to the COVID-19 pandemic, the DOR does not consider that as a change to the sourcing of the employee’s compensation. Similarly, for nonresidents who were working in Pennsylvania before the pandemic, their compensation would remain Pennsylvania-sourced income for all tax purposes.

For Pennsylvania employers with nonresident employees temporarily working from home due to the COVID-19 pandemic in a state that doesn’t have a reciprocity agreement with Pennsylvania, the DOR advises that the employees’ compensation remains Pennsylvania-sourced, and the employer is required to withhold on the compensation.

As a result of the COVID-19 pandemic causing people to temporarily work from home, the DOR will not seek to impose corporate net income tax (CNIT) nexus or sales and use tax (SUT) nexus solely on the basis of this temporary activity. 


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McClinton First Black Woman Elected to Lead House Democrats

The 90 members of the House Democratic Caucus who won election last week to serve during the 2021-2022 session chose their caucus leaders.

Rep. Joanna McClinton (D-Philadelphia) made Pennsylvania history by becoming the first woman elected to serve as minority leader in either the House or Senate.

“Being the first woman and the first woman of color to be selected as the Democratic Leader here in the Commonwealth brings with it a sense of pride and accomplishment. Not just for myself, but for everyone who has strived and struggled to break through previously unbroken barriers,” said McClinton after her election.

McClinton has been a member of the House since 2015 and represents the 191st District encompassing parts of Philadelphia and Delaware County. She served as caucus chair in the current session.

Democratic Whip Jordan Harris continues in his role. He first won election to the House in 2012 and represents the 186th District in Philadelphia.

Democratic Appropriations Chair Matt Bradford continues in his role as Appropriations Committee chair. Bradford first won election to the House in 2008 and represents the 70th District in Montgomery County.

Caucus Chair Dan Miller is new to the leadership team. Miller has been a member of the House since 2013 and represents the 42nd District in Allegheny County. He chaired the Allegheny County Delegation in the current session.

Rep. Tina Davis is the new caucus secretary. Davis has been a member of the House since 2010 and represents the 141st District in Bucks County.

Rep. Mike Schlossberg joins the leadership team as caucus administrator. Schlossberg represents the 132nd District centered on the city of Allentown in Lehigh County and has served in the House since 2012.

Democratic Policy Chair Ryan Bizzarro, a member of the House since 2012, represents the 3rd District in Erie County. Bizzarro had served as chief deputy whip in the current session. 


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Corman, Ward Top New Senate Republican Leadership Team

Sen. Jake Corman and Sen. Kim Ward will lead the newly elected Senate Republican leadership team for the 2021-2022 legislative session. Ward is the first woman to serve as majority leader. The newly elected leadership team will begin serving in their roles on Dec. 1, 2020.

Corman (R-Centre) has been nominated to serve as Senate President Pro Tempore. The full Senate will vote on his nomination when it reconvenes in January. He has served as Majority Leader of the Senate since 2015 and will replace Senate President Pro Tempore Joe Scarnati (R-Jefferson), who is retiring.

Ward’s (R-Westmoreland) duties include overseeing the legislative agenda, developing policies and strategies for the Senate Republican Caucus, chairing the Senate Rules and Executive Nominations Committee, and playing a key role in floor debates. She will also have a major role in negotiating issues with the administration and the House of Representatives and supervising action on the Senate floor.

PICPA member and CPA Sen. Pat Browne (R-Lehigh) will continue to chair the Senate Appropriations Committee, one of the most influential of the standing committees. The committee reviews all legislation for its fiscal impact and plays a crucial role in developing the state budget.

Sen. John Gordner (R-Columbia) will remain Majority Whip. His duties include acting as assistant floor leader, working to gain support for legislation, and ensuring that Republican policies and strategies are maintained through the cooperative efforts of the majority caucus.

Sen. Bob Mensch (R-Montgomery) will remain Majority Caucus Chair. He will preside over Republican caucus meetings to discuss bills and amendments and to develop caucus strategy.

As Senate Majority Caucus Secretary, Sen. Ryan Aument (R-Lancaster) will oversee all executive nominations submitted to the Senate for confirmation.


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House Republican Caucus Elects 2021-2022 Leadership

The Pennsylvania House Republican Caucus elected its legislative leaders for the 2021-2022 session. Republicans will return in January with a 113-90 majority.

Rep. Bryan Cutler (R-Lancaster) was nominated to return to his current role as Speaker of the House for the upcoming session. Cutler was first sworn in to represent the 100th District in Lancaster County in 2007 and was elected speaker of the House in June 2020.

“Carrying the voices of the 100th District has been the honor of my life,” Cutler said. “And I will never waver in my commitment to promoting the values and issues that are important to the people I represent.”

Other members of the leadership team include the following:

  • Majority Leader – Kerry Benninghoff (R-Centre/Mifflin)
  • Majority Whip – Donna Oberlander (R-Clarion/Armstrong/Forest)
  • Majority Appropriations Committee Chair – Stan Saylor (R-York)
  • Majority Policy Committee Chair – Marty Causer (R-Cameron/McKean/Potter)
  • Majority Caucus Chair – Mike Reese (R-Westmoreland/Somerset)
  • Majority Caucus Secretary – Martina White (R-Philadelphia)
  • Majority Caucus Administrator – Kurt Masser (R-Northumberland/Columbia/Montour)

Election of the House speaker will be decided by the full House when the new session convenes Jan. 4, 2021.


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Republicans Announce Review of Election Results

House and Senate Republican lawmakers announced that they will convene public hearings to examine Pennsylvania’s 2020 election results. Hearings will be conducted by the chambers’ State Government committees.

“As the process for finalizing election results continues in Pennsylvania, [we] will immediately undertake a thorough review of the state’s election in order to instill confidence in the results. We will continue our fight to uphold Pennsylvania law and the Constitution to ensure that faith in our election system is restored,” noted Sen. John DiSanto (R-Dauphin), chair of the Senate State Government Committee.


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Wolf to Nominate New Head of Department of Labor and Industry

Jennifer Berrier will be nominated by Gov. Tom Wolf as secretary of the Department of Labor and Industry.

As the current deputy secretary for safety and labor-management relations, Berrier oversees four bureaus that help vulnerable workers, certify the safety of buildings and other building components, ensure that individuals with disabilities who are unable to work receive Social Security benefits, and facilitate resolutions in labor mediations and arbitrations. Berrier is a graduate of York College and earned her juris doctor from Widener University.

Berrier will assume the role of acting secretary when Secretary W. Gerard “Jerry” Oleksiak retires on Dec. 4, 2020. Oleksiak has led Labor and Industry Sept. 5, 2017. 


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