Week Ending May 7, 2021

May 07, 2021


Bill Amending CPA Law Introduced in Pa. House

PICPA-backed legislation amending the Pennsylvania CPA Law has been introduced by Rep. Keith Greiner, CPA (R-Lancaster), in the state House. The law, which governs the practice of public accounting in the state, was last amended by the General Assembly in 2016. Greiner’s bill seeks to modernize and update the law to reflect the dynamic and rapidly changing nature of the profession.

House Bill 1328 proposes a number of updates, including expanding the scope of courses students can take toward earning an accounting degree. Under the bill, economics and technology will be added to the list of qualified classes.

The bill also fully adopts the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. The AICPA code is a set of principles, rules, and interpretations that guide CPAs in the performance of their professional responsibilities.

House Bill 1328 will make much needed changes to the CPA Law’s peer review provision. Section 8.9 of the law, for example, needs modernization; it has not been updated since 1997 and includes outdated references. Revisions to the statute are based on the current Uniform Accountancy Act (the UAA) and UAA Model Rules that provide consistency across all states. Some current requirements conflict with AICPA’s Standards for Performing and Reporting on Peer Review.

Though not currently in the bill, the PICPA will seek an amendment to the legislation allowing CPA candidates without a degree but with 120 credit hours to sit for the CPA Exam. The PICPA believes this change will mitigate the move of accounting students from taking the exam is surrounding states.

The bill has been referred to the House Professional Licensure Committee.

 

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PICPA Legislative Update Webinar

The PICPA government relations team is hosting a Legislative Update webinar on Thursday, May 20, at 9:00 a.m.

Join Peter Calcara, PICPA vice president, government relations, for this 50-minute session as he provides updates on negotiations surrounding the fiscal year 2021-2022 state budget, an overview of newly introduced tax and other legislative proposals, a recap of the May primary elections, and a discussion of PICPA’s legislative agenda.

Register today.

 

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More than Municipal Primaries: The Constitution and Courts on the Ballot

On Tuesday, May 18, 2021, Pennsylvanians go to the polls to nominate statewide and local judges, and to draw up the slate for numerous county and local offices. Municipal elections are typically low-key, but they can be as important as the more high-profile elections.

This year’s primary election, however, has added significance. Voters will have a say in the partisan battles that played out in Harrisburg between the Wolf administration and Republicans in the General Assembly over the handling of the COVID-19 pandemic. Potential constitutional amendments will determine how such disaster proclamations will be handled in the future.

To help PICPA members navigate this critical election, the government relations team provides a closer look at the proposed constitutional amendments and a ballot initiative in this CPA Now blog.  

 

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Finance Committee Holds Hearing on Tax Credit Reform

The state House Finance Committee this week held an informational hearing on tax credit reform legislation. House Bill 1303, legislation sponsored by Rep. Jason Ortitay (R-Allegheny), aims to address issues that were brought to light in a 2019 grand jury report that investigated a sophisticated scam to steal $10 million in tax credits.

The bill addresses weaknesses identified in the tax credit and tax benefit programs. Specifically, the legislation gives the Department of Revenue (DOR) the "tools they need" to properly review and vet applications. Additionally, HB 1303 requires credit brokers to register with the DOR and sign tax credit sale forms, and provides a process for an applicant to appeal a decision the agency has made. Lastly, this bill would require tax credit recipients to file more reports, such as how much they received, if it has been sold, and how much it was sold for.

Daniel Hassell, DOR secretary, testified and reported that his agency supports the bill, and that he believes it would be beneficial to those administering the tax credit programs.

There were several questions and concerns brought to light by House Finance Committee members during the hearing. It was agreed that the legislation needs to be cleaned up, but the premise is good and common ground can be found in the process.

The bill remains pending before the committee. 

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State House Advances Regulatory and Unemployment Legislation

The Pennsylvania House advanced several pieces of legislation this week. House lawmakers gave final approval to several contentious proposals, while it positioned another bill helping small businesses.

Two bills are related to the state's regulatory review process. House bill 288 would require each agency to designate an employee as the agency’s regulatory compliance officer. This officer would be accessible to the regulated community and work with them to explain regulations and resolve noncompliance issues before imposing penalties. Additionally, this legislation contains a safe harbor provision allowing an individual or business to request an advisory opinion from the compliance officer regarding the requester’s duties under a regulation. This measure passed by a vote of 105-95.

House Bill 950 ensures greater checks-and-balances in the regulatory process by giving the General Assembly the authority to initiate a repeal of any regulation in effect by concurrent resolution. Both the House and the Senate would need to approve the resolution, as well as the governor. Under current law, the General Assembly has the authority to block implementation of a regulation before it takes effect. This legislation extends this process to regulations that are already in effect. This measure passed by a vote of 109-92.

House Bill 129, would modify the state’s unemployment compensation system. This legislation seeks to have the state’s Unemployment Compensation Board of Review (UCBR) transition from in-person and telephone hearings to hearings by video conference no later than three years after the effective date of the legislation, as well as require the UCBR to review and revise its rules regarding the methods by which unemployment compensation appeal hearings are held. This measure passed by a 102-99 vote.

These measures will now go to the senate for consideration.

The House Commerce Committee unanimously reported legislation from state Reps. Joe Ciresi (D-Montgomery) and Pam Snyder (D-Greene, Fayette, Washington) that would establish a grant program for local businesses. House Bill 537 would create a grant program for the commonwealth’s smallest businesses – those that make no more than $1.5 million in gross annual receipts or employ up to 10 full-time employees. Eligible businesses would include retail or personal service businesses that were negatively impacted by the COVID-19 pandemic.

This bill is now before the full House for consideration.

 

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April General Fund Revenues Exceed Estimates

The Pennsylvania Department of Revenue collected $4.0 billion in General Fund revenue in April, which was $28.2 million, or 0.7%, more than anticipated. Fiscal year-to-date General Fund collections totaled $32.7 billion, which is $1.3 billion, or 4.2%, above estimate.

The Independent Fiscal Office (IFO) April Monthly Revenue Update shows that actual collections were $277.2 million below IFO projections. The report also compares collections to the prior year. April 2021 General Fund revenues of $3.96 billion reflect an increase of $1.78 billion (81.7%) compared to the same month in the prior year.

The department notes in its press release that personal income tax (PIT) revenue in April was $1.7 billion, $571.8 million below estimate, which is a direct result of extending the deadline for filing 2020 personal income tax returns and making final 2020 income tax payments. Despite this shift, stronger-than-expected collections in April from the other two primary revenue sources – corporation tax and sales tax – largely offset the PIT shortfall.

Nontax revenue totaled $226.3 million for the month, or $39.9 million below estimate, bringing the year-to-date total to $1.1 billion, which is $2.8 million, or 0.3%, below estimate. Overall, revenue collections are trending positively when compared to this time last year.

 

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Nordenberg to Chair Reapportionment Commission

Former University of Pittsburgh Chancellor Mark Nordenberg will chair the Legislative Reapportionment Commission. The decision was announced this week by Supreme Court Chief Justice Max Baer in a letter to the four legislative leaders. The court acted quickly after legislators could not agree on the commission’s fifth member and chair.

The commission is tasked with drawing new legislative district maps for Pennsylvania’s 203-member House and 50-member Senate based on the data collected by the 2020 Census.

Nordenberg serves as chair of the University of Pittsburgh’s Institute of Politics and director of its Dick Thornburgh Forum for Law and Public Policy. 

 

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