PICPA Members Advocate for the Profession at Day on the Hill
The PICPA hosted its 17th annual Day on the Hill event in Harrisburg on June 12. Seventy-six CPAs from across Pennsylvania came to the capital to meet with elected officials and key policymakers, and to advocate for PICPA’s legislative agenda.
Following a welcome by PICPA president Stephen Christian and a legislative briefing by PICPA’s government relations team, members heard from a panel of CPA legislators, including Sen. Pat Browne (R-Lehigh), Rep. John Maher (R-Allegheny), Rep. Keith Greiner (R-Lancaster), and Rep. Frank Ryan (R-Lebanon). Updates were provided on the 2018-2019 state budget deliberations and other topics pending before the General Assembly.
PICPA members then fanned out through the state capitol and participated in 136 meetings with state legislators. Members asked their lawmakers to support bonus depreciation legislation (House Bill 2017 and Senate Bill 1056) and 1099-MISC nonresident withholding legislation (House Bill 2413). Members also educated legislators on combined reporting, a position on which PICPA is neutral, and thanked them for their support for our legislation amending the local earned income tax collection law (Act 32), which went into effect earlier this spring as Act 18.
In the afternoon, members received an economic and revenue update from Matthew Knittel, director of the Independent Fiscal Office, and participated in a panel discussion with the Pennsylvania Department of Revenue.
If you missed Day on the Hill this year, the sessions were recorded and can be streamed via Facebook.
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The Week Ahead in the Pennsylvania General Assembly
State lawmakers will be busy the week of June 18 with committee meetings and other legislative activity as 2018-2019 budget discussions continue. By all accounts, the talks have been positive, yet an agreement on a spending plan remains elusive. A General Appropriations Act proposal (House Bill 2121) could be voted on by the state House this week.
On June 18, the House Finance Subcommittee on Tax Modernization and Reform convenes a public hearing on local tax assessment reform, the Senate Urban Affairs and Housing and Senate Republican Policy committees hold a joint workshop on historic preservation tax credits, and the House Consumer Affairs Committee has a public hearing on competitive energy supplier sales and marketing practices.
The House Finance Committee meets twice on June 19: an informational hearing on House Bill 1289 (employee stock ownership plans), and then later to consider House Bill 2312 (property tax rent rebate/social security COLA moratoriums) and Senate Bill 1056 (depreciation), a bill that the PICPA supports. The Senate Local Government Committee also meets for a public hearing on Senate Bill 1099 (reforming property tax collection through local option).
On June 20, the House Finance Committee will consider House Bill 406 (property tax/rent rebate available to family members of deceased), House Bill 968 (property tax /rent rebates for annuitants of the federal Civil Service Retirement System), and House Bill 2303 (income tax reporting for estates and revocable trusts), a measure PICPA supports. The House Commerce Committee will meet to consider House Bill 1360 (solicitation of funds for charitable purposes) and House Bill 2429 (updating Credit Services Act).
For a complete list of committee meetings for the week, visit www.legis.state.pa.us.
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Department Proposes Changes to Local Earned Income Tax Regulations
The Department of Community and Economic Development proposed changes to local earned income tax regulations. The PICPA submitted comments on the initial proposal, which were published in the July 30, 2016, Pennsylvania Bulletin.
The proposal addresses the following areas:
- The filing of adjusted declarations of estimated net profits
- The criteria under which the tax officer may waive the quarterly return and payment of income tax
- The procedures for mandatory and voluntary mediation
- The establishment of new county tax collection committees when political subdivisions have withdrawn from an established tax collection committee
- The establishment of tax officer qualifications and requirements, including continuing education
- The creation of standardized forms, reports, notices, returns, and schedules in consultation with the Department of Revenue
The Independent Regulatory Reform Commission has scheduled a vote on the changes for July 19.
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Proposal to Update State’s Minimum Wage Rules
A proposal released this week by the Pennsylvania Department of Labor and Industry updates the executive, administrative, and professional (EAP) exemptions from the minimum wage and overtime requirements of the Minimum Wage Act of 1968. The proposed regulation is before the Independent Regulatory Review Commission.
The proposal allows incentive pay to count toward 10 percent of the salary threshold, and to include a mechanism for the salary threshold to be updated on a triennial basis. Finally, the proposed regulation updates the duties for each EAP exemption to be consistent with federal regulations interpreting the Fair Labor Standards Act (FLSA), which amended the duties for the EAP in 2004.
The proposed amendments are not mandated by any federal or state law, court order, or federal regulation. However, Pennsylvania’s current regulations defining EAP employees (who are exempt from the Minimum Wage Act’s minimum wage and overtime pay requirements) have not been updated since their original promulgation in 1977.
The PICPA is part of a broad-based coalition that is taking a close look at the proposed amendments and evaluating the impact. Public comments are due July 23, 2018.
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Wolf Proposes Occupational Licensing Reforms
Gov. Tom Wolf is calling for reforms to several job licensing boards and licensing requirements in order to remove barriers to employment. He expects the reforms will help skilled workers enter the careers of their choice, strengthen the workforce, and grow the economy.
Last year, Wolf signed an executive order directing the Bureau of Professional and Occupational Affairs within the Department of State to conduct a review of job licensing to compare Pennsylvania with other states in our region. The governor’s proposals are the result of the final report.
Wolf is calling for the repeal of 13 job licenses and replacing them with less restrictive requirements that will still protect the public. Those jobs are as follows:
- Auctioneers – only require registration and bonding.
- Barbers – only require certification from a licensed barber school, passage of examination, minimum hours of training, and registration with the State Board of Barber Examiners.
- Cemetery Broker/Cemetery Salesperson – only require passage of relevant examination, 60 hours of instruction and registration.
- Campground Membership Salesperson – only require registration with the State Real Estate Commission.
- Natural Hair Braiding License – eliminate this license.
- Orthotic Fitter/Orthotist/Pedorthist/Prosthetist – only require credentialing, passage of an education program, training, and minimum hours of training.
- Practitioner of Oriental Medicine – maintain existing, but separate acupuncturist licensing requirement to protect public health and safety.
- Rental Listing Referral Agent – only require registration with the State Real Estate Commission.
- Vehicle Factory Representative – only require registration with the State Board of Vehicle Manufacturers, Dealers, and Salespersons.
The plan also calls for streamlining the process for military spouses by allowing licensing boards to seek reciprocity agreements with other states and grant licensure through endorsement; balancing education and training requirements; repealing the automatic 10-year ban on licensing for anyone convicted of a drug felony; and speeding up the occupational licensing process.
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Browne Proposes to Conform PIT to New Federal Opportunity Zones Program
In response to the federal Tax Cuts and Jobs Act, PICPA member Sen. Pat Browne, CPA (R-Lehigh) introduced legislation that will conform Pennsylvania’s personal income tax to the new federal Opportunity Zones Program.
Under the program, the governor of each state is authorized to designate a certain number of Opportunity Zones into which private investment can flow through Opportunity Funds. Investors in the Opportunity Funds are eligible to receive federal tax deferrals/eliminations and other tax benefits on unrealized capital gains associated with these investments.
In turn, Opportunity Funds are authorized to invest in Opportunity Zone Property, such as stock in a domestic corporation, capital or profits interest in a domestic partnership, and tangible property used in a trade or business of the Opportunity Fund that substantially improves the property located in designated Opportunity Zones.
Senate Bill 1197 will ensure Pennsylvania maximizes the impact of this federal program. By conforming the state’s personal income tax to the federal rules that allow for the tax deferral/elimination of only those capital gains associated with the Opportunity Zones Program, Browne believes the state can use its tax code to direct private investment where it is needed most while being fiscally responsible at the same time.
The bill is pending in the Senate Finance Committee.
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Panel Approves Lean State Government Measure
Under a bill proposed by PICPA member Rep. Frank Ryan, CPA (R-Lebanon), all state agencies would be subject to an initial performance audit. To achieve this objective, says Ryan, state agencies need a clear and unbiased view of their current operations so they can improve and focus attention and resources on processes that help achieve an agency’s mission, and remove resources from processes that do not.
Ryan’s House Bill 2209, which was reported by the House State Government Committee, establishes The Lean State Government Act. It would require performance audits of all state agencies conducted by experienced performance auditors contracted by the Auditor General. It also requires agencies that may benefit from further scrutiny be subject to additional audits every three years. All state agencies must respond to their audit and implement the lean process principles to analyze and improve their operations.
The bill now goes before the full House for a vote.
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State Senate Approves Changes to Redistricting Process
By a vote of 35-14, the state Senate passed legislation that changes Pennsylvania’s redistricting process.
Senate Bill 22, sponsored by Sen. Lisa Boscola (D-Lehigh, Northampton), creates the Independent Redistricting Commission that would be made up of 11 Pennsylvania citizens who would be responsible for drawing the boundaries of Pennsylvania’s legislative and U.S. Congressional districts. Elected officials, candidates for public office, lobbyists, and legislative staff would be prohibited from serving on the commission.
The bill also changes the way that appellate court judges are elected. In current practice, members of the state Supreme Court, Superior Court, and Commonwealth Court are elected via a statewide vote. SB 22 allows the Independent Redistricting Commission to divide the state into judicial districts to ensure a broader range of regional interests are represented on Pennsylvania’s highest courts.
Because the legislation would amend the Pennsylvania Constitution, it must be approved in two consecutive legislative sessions and then approved by voters in a statewide referendum.
The bill now goes to the House for consideration.
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IFO Lays Out New Website
To make it easier for users to find reports and presentations, the Independent Fiscal Office (IFO) has reorganized its website. Going forward, all IFO releases will be assigned to one of the following categories: Revenue Estimates, Monthly Trends Reports, Performance Budgeting, Natural Gas, Pension Analysis, Property Tax, Wage Contracts, Tax Credit Review, and News Stand & Other.
Any report or presentation that does not fit into one of the first eight categories will be placed in the News Stand & Other category.
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