While the General Assembly is in summer recess Legislative Update will be on hiatus. However, we will cover any major developments and share them with you should they occur.
U.S. Sen. Toomey Urged to Support PPP Loan Forgiveness Clarification
The PICPA expressed concern to U.S. Sen. Pat Toomey (R) that the Senate Republicans’ HEALS Act lacks clarifying language about the deductibility of expenses covered by Paycheck Protection Program (PPP) loan forgiveness. Led by the AICPA, the profession is working to restore Congress’s intent to make the expenses deductible after the IRS issued its notice that the funds would not be deductible.
In its letter to Toomey, the PICPA wrote, “We were extremely disappointed to learn that language ensuring that PPP expenses related to loan forgiveness are, in fact, deductible did not make it into the Senate Republican HEALS Act. With our consultation and support, the American Institute of CPAs (AICPA) has repeatedly and strongly recommended that receipt and forgiveness of coronavirus assistance through the PPP should not affect the deductibility of ordinary business expenses. Indeed, Congress has clearly indicated that the intent of the original bill was to allow deductibility. The accounting profession has been doing a significant amount of work with small business PPP borrowers, so we know that PPP recipients – many of whom are still struggling - cannot afford a surprise tax bill on their PPP loan expenses.”
Both Senate Finance Committee Chair Charles Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) support the legislation, PICPA noted in its letter. House Democrats already passed relevant language in the HEROES Act. This provision has widespread bipartisan and bicameral support. PICPA urged Toomey to press Senate leadership and Treasury Secretary Steven Mnuchin to include this important provision in any final package.
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Government Transparency Bill Becomes Law Without Wolf’s Signature
After threatening a veto, Gov. Tom Wolf allowed House Bill 2463 to become law without his signature. The bill, which passed unanimously in both the House and Senate, was sponsored by Rep. Seth Grove (R-York).
Now Act 77 of 2020, the law requires state agencies to answer the public’s questions submitted through Right-to-Know (RTK) requests, as prescribed by law, during state of emergency declarations. The law prevents a governor from ordering state agencies to ignore requests for public records and information during an emergency declaration or suspending responses unless additional time is necessary. If an agency fails to respond to a request for records, the requestor can petition Commonwealth Court to compel the agency to respond.
“House Bill 2463 has a simple goal: To ensure the public has a route to hold its government accountable, even in times when a state of emergency declaration has been declared. A crisis is no reason for elected officials to ignore questions from the public,” noted Grove after the bill became law. “This bill becoming law could not have happened without the support of all those who raised their voices in defense of an open government and the freedom of the press.”
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PICPA Joins Call for Federal Relief to States and Local Governments
The PICPA and 27 other state societies sent a letter to Congressional leadership urging them to pass legislation that would help close a projected collective budget gap of $555 billion that state and local governments face this fiscal year and the following two years.
“The PICPA is proud to work with our partners to make an impact with elected officials,” said Michael Colgan, CAE, CEO and executive director. “We are hopeful that funding for state and local governments will be included in the next round of federal relief assistance.”
The request stems from the impact COVID-19 has left on states and municipalities across the United States who are dealing with crippling budget shortfalls to close this fiscal year and limited resources to craft 2021 budgets. State CPA society leaders came together to support this effort and work to find a solution so state and local governments will not have to resort to tax increases and cuts to important state programs. Together, the group represents nearly 280,000 CPAs from across the country.
The state CPA society CEOs noted that without the promise of federal relief, tax increases on already burdened taxpayers and cuts to critical state and local programs are inevitable.
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Bill to Help Restaurants, Bars, Taverns Introduced
To help restaurants, bars, and taverns impacted by the COVID-19 pandemic, state Rep. Jake Wheatley (D-Allegheny) announced that he will soon introduce legislation that would eliminate penalties and fees for delayed sales tax payments and provide a grace period for paying the 6% liquor sales tax for these businesses.
“It’s imperative that restaurants, bars, and taverns be given a financial break for being responsible and doing their part during the state’s emergency declaration,” Wheatley said. “With many of these businesses beginning the process of reopening, removing these additional fees would give them some additional breathing room and go a long way to help them recover from their losses and get back on their feet.”
Sen. Lisa Boscola (D-Northampton) proposed legislation to use federal CARES Act funds to establish the Independent Tavern, Restaurant, and Club Stabilization Fund, which would provide short and long term financial relief through grants to our state’s bars, restaurants, clubs, and public venue/performing arts licensees. This bill has not yet been introduced for consideration.
Owners of the state’s restaurants, bars, and taverns told members of the House Majority Policy Committee this week that the industry cannot survive the COVID-19 restrictions on indoor dining and bar seating. You can watch the hearing here.
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Costa to Introduce Cap and Invest Bill for Pennsylvania
State Senate Democratic Leader Jay Costa (D-Allegheny) introduced legislation creating a “Cap and Invest” program for the state’s electric power sector. The measure already has 17 co-sponsors.
Senate Bill 15 will instruct the Environmental Quality Board to reduce carbon pollution emissions from the electric power sector by at least 90% by 2040 relative to baseline emissions. The legislation also enables the board to adopt mechanisms that facilitate deployment of zero-emission technologies and to join one or more multijurisdictional programs for the reduction of greenhouse gas emissions, such as the Regional Greenhouse Gas Initiative.
Further, the bill provides that revenue generated from the program be directed toward programs that promote clean air, mitigate utility bill impacts, protect low-income consumers, increase energy efficiency, and assist workers and communities impacted by the closure of power plants or mines.
Senate Bill 15 has not been formally introduced.
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Bill Would Create a State Nonprofit Grant Program
Rep. Natalie Mihalek (R-Allegheny/Washington) introduced legislation to establish a grant program to support Pennsylvania’s human services system.
House Bill 2740 would establish the Nonprofit Economic Emergency Delivery System Grants Program that will focus on the more than 8,500 nonprofit organizations that provide critical services for Pennsylvania’s most vulnerable population.
Under Mihalek’s proposal, $200 million in the COVID-19 Response Restricted Account would be transferred to the Commonwealth Financing Authority to provide grants to these nonprofit organizations. The maximum grant would be $500,000 per eligible nonprofit organization.
Mihalek noted that nearly 80% of nonprofit revenue comes from government grants or contracts and fees for service. “Many nonprofit organizations are struggling financially due to COVID-19, with fundraising events being canceled and donor, foundation, and government support drying up,” Mihalek explained.
House Bill 2740 has yet to be assigned to a committee.
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Senate Committee Hearing Explores 2020 Election Issues
New voting machines, mail-in ballots, changes in polling locations, and late rule changes by the Wolf administration created numerous issues during the 2020 Pennsylvania primary election, including confusion among voters and long delays in reporting election results.
The Senate State Government Committee held a hearing on these and other issues to ensure similar problems do not create chaos during the general election in November. The hearing included testimony from state and county election officials, as well as recommendations on possible actions the General Assembly could take to ensure future elections are efficient, accurate, and fair.
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