State Budget Work Continues as Deadline Approaches
Pennsylvania lawmakers spent a busy week in Harrisburg readying for the rush to finalize the state spending plan for the new fiscal year that begins in less than two weeks. As negotiations continued on the budget and related bills, lawmakers positioned several legislative vehicles in anticipation of an agreement. Lawmakers continue to grapple with how to spend, or not to spend, a growing budget surplus, which at the end of May was nearly $3 billion, and an influx of $7.3 billion from the federal American Rescue Plan. The 2021-2022 fiscal year begins July 1.
Several CPA legislators attended PICPA’s 124th annual meeting on June 11 for a town hall with members. Listen to the panel discussion, which included talk on the budget.
Last week, lawmakers approved a concurrent resolution that ordered an end to Gov. Tom Wolf’s 2020 pandemic emergency declaration. The legislature was given this power in this year’s primary election via ballot initiative.
The Senate approved (35-15) a bill that would require legislative approval of the governor’s proposal to have Pennsylvania join the Regional Greenhouse Gas Initiative (RGGI). Senate Bill 119, which creates the Pennsylvania Carbon Dioxide Cap and Trade Authorization Act, specifically prohibits the Department of Environmental Protection (DEP) from joining RGGI without legislative approval. The bill now goes to the House for consideration.
The Pennsylvania House approved an amendment to the Tax Reform Code. House Bill 1006 provides that a person receiving crop insurance proceeds may elect to include such crop insurance proceeds as income in the taxable year following the taxable year in which the crop insurance proceeds were received, providing the person establishes that the income from the crops for which the proceeds were received would have been reported in the following taxable year. The bill is pending before the Senate Finance Committee.
Both the House and Senate will be in session the week of June 21.
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Remote Work Tax Guidance Issued by Pa. Revenue Department
The Pennsylvania Department of Revenue (DOR) issued updated guidance relating to remote work and the related tax implications. The prior guidance issued during the COVID-19 pandemic is effective until June 30, 2021. After June 30, the temporary guidance will no longer be applicable and existing tax law will govern.
In a related move, the DOR issued similar guidance relative to incentives, credits, and other programs as well as credits for entity-level tax paid by pass-through entities.
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Bills Advance on Like-Kind Exchanges, CNI Tax Rate Decrease, Data Center Credit
The Pennsylvania Senate Finance Committee approved tax proposals that will likely be part of the broader budget discussion. The following bills will all go before the full Senate for a vote:
- Senate Bill 347, sponsored by Sen. John DiSanto (R-Dauphin), would set Pennsylvania law to mirror the Internal Revenue Code’s like-kind exchange provision.
- Senate Bill 447, introduced by Sen. Michele Brooks (R-Crawford, Erie, Mercer, Warren) would reduce Pennsylvania’s corporate net income tax by 0.5% every year over a period of six years until it reaches 6.99%.
- House Bill 952, introduced by Rep. Donna Oberlander (R-Clarion, Armstrong, Forest), converts the current Computer Data Center Equipment Incentive Program from a sales and use tax refund program to a sales and use tax exemption.
- Senate Bill 586, introduced by Sen. David Argall (R-Berks, Schuylkill) addresses eligibility for the Historic Preservation Tax Credit Program.
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Committee OKs Grant Program to Help Human Service Agencies
The Senate Community, Economic, and Recreational Development Committee acted on a bill that would help Pennsylvania’s community-based nonprofit organizations recover from the effects of the COVID-19 pandemic.
Introduced by Sen. Judy Ward (R-Blair), Senate Bill 594 aims to create a statewide competitive grant program for negatively impacted human service organizations. Eligible organizations would include childcare centers, health clinics, substance abuse treatment facilities, domestic violence operations, food banks, workforce training centers, among other entities.
The bill would create a Nonprofit Economic Emergency Delivery System (NEEDS) Grant program, supplemented with federal funding.
Senate Bill 594 is before the full Senate for consideration.
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Charitable Gift Annuities Legislation Advances
Legislation that provides protections for annuitants who are donors to a charity that provides for charitable gift annuities was reported from committees in the Senate and House.
Senate Bill 731, sponsored by Sen. Bob Mensch (R-Montgomery), and House Bill 520, sponsored by Rep. Ryan Mackenzie (R-Lehigh), would amend the Charitable Gift Annuity Exemption Act to allow charities to transfer their risk to a commercial insurance company, which will match substantially all future payments of the charity arising from a charitable gift annuity contract obligation.
Charitable gift annuities provide donors an opportunity to support a charitable organization while receiving fixed annuity payments. The terms of the arrangement are set forth in a contract signed by the nonprofit and the donor. The arrangement terminates on the death of the annuitant, at which point the nonprofit would retain the remaining funds for its mission.
The bills are before their respective chambers for consideration.
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Financial Exploitation of Older Adults Task Force Report
Members of Pennsylvania’s Financial Exploitation of Older Adults Task Force this week provided an overview of its work and announced a series of recommendations to help prevent the financial exploitation of older adults and to effectively respond to incidents of financial exploitation.
Led by the Pennsylvania Department of Aging, the task force includes PICPA among representatives from state government, the legal and financial sectors, and aging, law enforcement, and health care stakeholders. The task force met from December 2020 to April 2021 and developed strategies covering four categories: education, training, operations and procedures, and legislation.
Some of the recommendations include developing a training program for financial services providers on reporting financial exploitation, creating an online toolbox to help law enforcement investigate cases of financial exploitation, and updating Pennsylvania’s Older Adults Protective Services Act (OAPSA).
The task force will reconvene later this year to review and discuss the progress made on each recommendation.
In related news, House members approved this package of elder protection bills:
- House Bill 1428, sponsored by Rep. Kurt Masser (R-Columbia, Montour, Northumberland), would amend the Health Care Facilities Act to allow residents or legal guardian of a resident to place electronic monitoring devices in a resident’s room with appropriate notices and consent of the facility and other residents.
- House Bill 1429, sponsored by Rep. Lynda Schlegel Culver (R-Northumberland, Synder), would amend Title 18 to give the attorney general’s office concurrent jurisdiction to investigate individuals who use a position of trust to financially exploit older adults and care-dependent people.
- House Bill 1430, sponsored by Rep. Gary Day (R-Lehigh, Berks), would amend the Older Adult Protective Services Act to add a definition of financial exploitation and establish a private right of action for certain financial crimes, and adds a $100 surcharge that goes to the Pennsylvania Lottery.
- House Bill 1431, sponsored by Rep. Kate Klunk (R-York), amends Title 18 to establish an abuse of social media by employees who post pictures of care dependent individuals without permission, categorizing the crime as a misdemeanor.
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Pa. House, Senate Committees Split on Election Legislation
In a party line vote (15-10), the Pennsylvania House State Government Committee advanced new election legislation. House Bill 1300, sponsored by Rep. Seth Grove (R-York), would give legislative authority over elections, establish a Bureau of Election Audits, and provide for special standing in challenges to the Election Code, among other provisions. House Bill 1300 goes to the full House for consideration.
The Senate State Government Committee reported, by a vote of 7-4, Senate Bill 735. The bill asks voters to amend the Pennsylvania Constitution to require voter ID every time they vote. Existing state law requires voters show an ID only for the first time they vote at a polling site.
In addition, the Senate’s Special Committee on Election Integrity and Reform released its report detailing recommendations to strengthen Pennsylvania’s election system. Among the recommendations of the bipartisan committee were precanvassing of mail-in ballots at least three days before Election Day and not later than 8 a.m. on Election Day; changing the mail-in ballot application deadline to two weeks prior to Election Day rather than the current one-week deadline; establishing a real-time reporting system of deceased individuals to respective county election offices; requiring the training of election workers; among other proposals.
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