Wolf Vetoes Republican Budget Package, Including Liquor Privatization; House and Senate Begin Work on Plan B
The Republican-controlled General Assembly made good on a promise to pass a no tax increase budget by the June 30 deadline, then Gov. Tom Wolf made good on his promise to veto it. House and Senate Republicans were essentially the only votes for the spending plan, which Democrats in both chambers panned as unrealistic and unbalanced, among other things. They also passed a related education bill, which provided for a newly approved funding formula and other changes to the Public School Code, a wide-ranging Fiscal Code amendment, which would have implemented the various parts of the budget bill, and a modified liquor privatization plan that House Speaker Mike Turzai had insisted on, and the budget accounted for. All of these bills were rejected by the Governor. In the beginning of the month of June the House unanimously voted down a tax bill proposed in March by the Governor, setting up the showdown the vetoes at the end of the month.
The Governor issued the following press release to explain his decisions.
“The Governor vetoed House Bill 466, House Bill 762, and Senate Bill 655. In veto messages to the General Assembly, Governor Wolf spoke to why he vetoed these bills, which failed to adequately and responsibly address the pressing issues facing Pennsylvanians.
Regarding House Bill 466: “This legislation falls short of a responsible means to reform our state liquor system and to maximize revenues to benefit our citizen,” Governor Wolf said. “It makes bad business sense for the Commonwealth and consumers to sell off an asset, especially before maximizing its value. During consideration of this legislation, it became abundantly clear that this plan would result in higher prices for consumers. In the most recent case of another state that pursued the outright privatization of liquor sales, consumers saw higher prices and less selection.”
“Modernization of our state liquor system would provide additional revenues to the Commonwealth and save important, family-sustaining jobs. We can support and bolster consumer convenience without selling an asset and risking higher prices and less selection for consumers. I am open to options for expanding the availability of wine and beer in more locations, including supermarkets.  I have also put other compromises on the table, including variable pricing, direct shipment of wine and expanding state store hours.”
On House Bill 762, the School Code: “This bill contains many laudable items which I support,” including the Basic Education Funding Commission formula, Governor Wolf said. “Unfortunately, this bill fails to restore the harmful education cuts imposed on each school district over the last four years, nor does it provide adequate funding to ensure Pennsylvanians have schools that teach our children. This bill only distributes an additional $8 million into K-12 education, which is not adequate classroom support for the children of this Commonwealth. Simply stated, it fails to meet our constitutionally required obligation of providing a thorough and efficient system of education.”
Senate Bill 655, the Fiscal Code, “fails to adequately pay our bills,” Governor Wolf said. “It relies on over $1.5 billion in one-time revenues, payment delays into the next fiscal year, and fund transfers. It is not a balanced budget and it will lead to a $3 billion deficit and credit downgrades for the Commonwealth.”
“This bill creates an additional $10 million tax credit designed to benefit private foundations, while the General Appropriations bill only provides an additional $8 million in basic and special education funding for our public schools, which is clearly not adequate funding to ensure Pennsylvanians have schools that teach our students.”
The House and Senate leaders sent their members home while they work on a new package of budget bills, which perhaps Democrats and the Governor may find more agreeable. It is not clear when they will return, but best guesses are mid-July at this point.
In the meantime, several questions arise about the impact of a potentially protracted budget impasse. How will the budget impasse affect highway construction projects? Construction can proceed for all work and payments funded from prior year appropriations. Examples of programs with available prior year funding include: Maintenance, Construction, Welcome Centers, Re-investment in Facilities, Aviation Operations, and Safety Administration. Vendor payments for goods or services incurred in FY 2015-16 will not be made until a budget is approved. Will Commonwealth agencies process invoices from vendors? Yes. Vendors with state contracts who continue to provide goods and services to commonwealth agencies can submit invoices and Commonwealth agencies will process all invoices received. All invoices held during the budget impasse will be sent promptly to the State Treasury for processing after the FY15-16 budget is enacted. How will the budget impasse affect existing contracts? Most state contracts include language addressing this situation, which states that the commonwealth’s obligation to make payments shall be subject to the availability and appropriation of funds and that contractors may not stop work or refuse to make delivery because of non-payment. If the Commonwealth’s untimely payment results in a default situation, the contractor may pursue the remedies set forth in the contract. Can Commonwealth agencies enter into new contracts for 2015-16? Agencies may enter into new contracts for FY 2015-16. The contracts will clearly state that payment is subject to appropriation.
Legislative Activity
The General Assembly acted on the following bills of interest to PSPE in the past month.
BIDDING / CONTRACTING: NONE
BUDGET RELATED BILLS
HB 928   RE: RACP Limits (by Rep. Steven Mentzer, et al)
Amends the Capital Facilities Debt Enabling Act, in capital facilities, further providing for appropriation for and limitation on redevelopment assistance capital projects by adding that beginning July 1, 2018, and each July 1 thereafter until the sum of the outstanding obligations for redevelopment assistance capital projects equals $2,950,000,000, the sum of the maximum amount of outstanding obligations for redevelopment assistance projects shall be decreased by $50,000,000.
Reported as committed from House Finance Committee, read first time, and Rereferred to House Rules Committee, 6/23/2015
HB 1192  RE: General Appropriation Act of 2015 (by Rep. Bill Adolph, et al)
Provides from the General Fund for the expenses of the Executive and Judicial Departments, the State Government Support Agencies and the General Assembly of the Commonwealth, the public debt and the public schools for the fiscal year July 1, 2015, to June 30, 2016, for certain institutions and organizations, and for the payment of bills incurred and remaining unpaid at the close of the fiscal year ending June 30, 2015. This bill is the House Republican Budget, not like the Governor’s proposal.
Amended on House floor, read second time, and Rereferred to House Appropriations Committee, 6/1/2015 Reported as amended from House Appropriations Committee, read third time, and passed House, 6/27/2015 (112-77)
Received in the Senate and referred to Senate Appropriations Committee, 6/28/2015
Reported as committed from Senate Appropriations Committee, and read first time, 6/28/2015
Read second time, 6/29/2015
Read third time and passed Senate, 6/30/2015  (30-19)
Signed in the House and Senate, 6/30/2015
Vetoed by the Governor, 6/30/2015 
SB 655  RE: Fiscal Code Amendments (by Sen. Pat Browne, et al)
Amends The Fiscal Code establishing the Non-narcotic Medication Assisted Substance Abuse Treatment Grant Pilot Program; in special funds, further providing for funding, for State Workers’ Insurance Board and for expiration; in the Tobacco Settlement Fund, further providing for use; in the Pennsylvania Race Horse Development Fund, further providing for distribution; in general budget implementation, further providing for the Department of Community and Economic Development, for the Department of Public Welfare, for the Pennsylvania State Police and for the Environmental Quality Board; providing for 2015-2016 budget implementation, for 2015-2016 restrictions on appropriations for funds and accounts and for required lapses of money in funds and accounts; and making related repeals.
Reported as committed from Senate Appropriations Committee, read second time, and Rereferred to Senate Appropriations Committee, 6/3/2015
Reported as committed from Senate Appropriations Committee, read third time, and passed Senate, 6/22/2015 (49-0)
Received in the House and referred to House Appropriations Committee, 6/24/2015
Reported as committed from House Appropriations Committee, read first time, and laid on the table, 6/26/2015
Removed from the table, 6/27/2015
Read Second time, Rereferred to House Appropriations Committee, and reported as amended from House Appropriations Committee, 6/28/2015
Read third time, and passed House, 6/29/2015 (107-87)
Received as amended in Senate and referred to Senate Rules and Executive Nominations Committee, re-reported on concurrence as committed from Senate Rules and Executive Nominations Committee, and Senate
Signed in the Senate and the House, 6/30/2015
Vetoed by Governor Wolf, 7/2/2015
ENVIRONMENTAL BUILDING STANDARDS
HB 48  RE: Water Well Construction Standards (by Rep. Bob Godshall, et al)
Amends Title 27 (Environmental Resources) providing for the adoption of National Groundwater Association standards. Provides for water well construction standards; decommissioning of abandoned wells; water well completion reports; and inspections. Also provides for the powers and duties of the Environmental Quality Board and Department of Environmental Protection under this new chapter and for penalties for violations of this new chapter. Certain sections shall take effect after the adoption of regulations and the remainder shall take effect in 30 days.
Reported as amended from House Consumer Affairs Committee, read first time, and rereferred to House Rules Committee, 6/24/2014
HB 1325   RE: Fees For Storm Water Management Activities (by Rep. Mark Mustio, et al)
Amends the Second Class Township Code, authorizing a township to assess reasonable and uniform fees for storm water management activities and facilities without the need to establish a municipal authority. Also authorizes the enactment and enforcement of ordinances to govern and regulate the planning, management, implementation, construction and maintenance of storm water facilities.
Introduced and referred to House Local Government Committee, 6/12/2015
HB 1424  RE: Sewage Disposal (by Rep. Sandra Major, et al)
Amends the Pennsylvania Sewage Facilities Act requiring official plans to provide for the use of a holding tank, whether permanent or temporary, to which sewage is conveyed by a water carrying system and which is designed and constructed to facilitate ultimate disposal of the sewage at another site, for new construction on a lot that is less than one acre and was created prior to May 15, 1972, when another sewage treatment option is not available.
Introduced and referred to House Environmental Resources and Energy Committee, 6/28/2015
LOCAL/STATE GOVERNMENT/REGULATIONS
HB 903   RE: UCC Application to Townships (by Rep. Mauree Gingrich, et al)
Amends the Second Class Township Code adding a new article providing the Uniform Construction Code shall apply to the construction, alteration, repair and occupancy of all buildings and structures within a second class township. Further provides that notwithstanding the primacy of the Uniform Construction Code, the township supervisors may enact a property maintenance ordinance and may incorporate a standard or nationally recognized property maintenance code, or a variation or change or part of the code, published and printed in book form without incorporating the text of the code in the ordinance. Also allows the supervisors to enact a standard or nationally recognized property maintenance code or a change or variation or part as the ordinance. A violation of the Uniform Construction Code or an ordinance that equals or exceeds the Code shall be subject to the provisions for the Pennsylvania Construction Code Act and the regulations adopted there under by the Department of Labor and Industry relating to enforcement for noncompliance. Further provides for appointment of code enforcement officers; legal actions; and reserved powers.
Reported as committed from House Local Government Committee, read first time, and rereferred to House Rules Committee, 6/3/2015
Reported as committed from House Rules Committee, 6/15/2015
Amended on House Floor, read second time, and Rereferred to House Appropriations Committee, 6/16/2015
Reported as committed from House Appropriations Committee, read third time, and passed House, 6/17/2015 (189-0)
Received in the Senate and referred to Senate Local Government Committee, 6/19/2015 
HB 904  RE: UCC Application to Townships (by Rep. Mauree Gingrich, et al)
Amends the First Class Township Code adding a new article providing the Uniform Construction Code shall apply to the construction, alteration, repair and occupancy of all buildings and structures within a first class township. Allows the township commissioners to enact an ordinance to equal or exceed the minimum requirements of the Uniform Construction Code. Further provides that notwithstanding the primacy of the Uniform Construction Code, the commissioners may enact a property maintenance ordinance and may incorporated a standard or nationally recognized property maintenance code, or a variation or change or part of the code, published and printed in book form without incorporating the text of the code in the ordinance. Also allows the commissioners to enact a standard or nationally recognized property maintenance code or a change or variation or part as the ordinance. Further provides for appointment of property maintenance inspectors; legal actions; and reserved powers.
Reported as committed from House Local Government Committee, read first time, and rereferred to House Rules Committee, 6/3/2015
Reported as committed from House Rules Committee, 6/15/2015
Amended on House Floor, read second time, and Rereferred to House Appropriations Committee, 6/16/2015
Reported as committed from House Appropriations Committee, read third time, and passed House, 6/17/2015 (189-0)
Received in the Senate and referred to Senate Local Government Committee, 6/19/2015
HB 1409  RE: Code Administrator (by Rep. Kathy Rapp, et al)
Amends the Pennsylvania Construction Code Act, in adoption and enforcement by municipalities, further providing for administration and enforcement by adding that in the case of a change of code administrator with jurisdiction over work on a project, every subsequent code administrator shall be subject to decisions previously rendered on the project by the board of appeals.
Introduced and referred to House Local Government Committee, 6/28/2015
SB 792  RE: Codes in First Class Townships (by Sen. John Wozniak, et al)
Amends the First Class Township Code, in corporate powers, further providing for powers of the board of township commissioners as to building and housing regulations and inspectors; and providing for Uniform Construction Code, property maintenance code and reserved powers. The bill adds a section providing for Uniform Construction Code, Property Maintenance Code, and reserved powers. The Pennsylvania Construction Code Act and the Uniform Construction Code shall apply to the construction, alteration, repair and occupancy of the buildings and structures within a township.
Reported as committed from Senate Local Government and read first time, 6/10/2015
Read Second time, 6/17/2015
Read third time and passed Senate, 6/25/2015 (49- 0)
Received in the House and referred to House Local Government Committee, 6/26/2015
SB 793   RE: Codes in Second Class Townships (By Sen. Scott Hutchinson, et al)
Amends the Second Class Township Code, in corporate powers, further providing for building and housing regulations and repealing provisions relating to building and housing inspectors; and providing for Uniform Construction Code, property maintenance code and reserved powers. The bill adds a section providing for Uniform Construction Code, Property Maintenance Code, and reserved powers. The Pennsylvania Construction Code Act and the Uniform Construction Code shall apply to the construction, alteration, repair and occupancy of the buildings and structures within a township.
Reported as amended from Senate Local Government and read first time, 6/10/2015
Read Second time, 6/17/2015
Read third time and passed Senate, 6/25/2015 (49- 0)
Received in the House and referred to House Local Government Committee, 6/26/2015
LIABILITY: NONE
LICENSURE
HB 157   RE: Military Service Waiver (by Rep. Doyle Heffley, et al)
Amends Title 51 (Military Affairs), in professional and occupational licenses, providing that military service and other related factors may be taken into consideration to determine whether a licensing or certification requirement has been met by or can otherwise be waived by reason of that military service, education, training or experience. A veteran shall only be required to meet a licensing or certification requirement which has not been met by or waived. Defines “veteran” as an individual who has served in the United States armed forces, including a reserve component and National Guard who has been discharged or released from service under conditions other than dishonorable.
Read second time, 6/3/2015
Laid on the table, 6/15/2015
Removed from the table, 6/29/2015
Read third time and passed Senate, 6/30/2015 (49-0)
Signed in the House and Senate, 6/30/2015
In the hands of the Governor, 6/30/2015. Last day for Governor’s action, 7/10/2015
HB 1421   RE: Home Inspector Licensing Act (by Rep. Susan Helm, et al)
Regulates home inspectors; provides for funds, for licensure, for disciplinary action, for remedies and for penalties; and repeals provisions relating to home inspections. Portions are effective immediately, portions are effective in two years, and the remainder is effective in 60 days.
Introduced and referred to House Professional Licensure Committee, 6/28/2015
SB 538  RE: Expungement (by Sen. Tommy Tomlinson, et al)
Amends the act entitled “An act empowering the General Counsel or his designee to issue subpoenas for certain licensing board activities; providing for hearing examiners in the Bureau of Professional and Occupational Affairs; providing additional powers to the Commissioner of Professional and Occupational Affairs; and further providing for civil penalties and license suspension,” further providing for definitions; requiring licensees to post notice of disciplinary actions taken against a licensee; providing for temporary suspension under circumstances determined to be an immediate and clear danger to the public health, safety or welfare; providing for automatic suspension; and further providing for civil penalties. Also adds language providing a definition for “expunge” or “expungement” and providing the Commissioner of the Bureau of Professional and Occupational Affairs the power to expunge a record based upon certain conditions.
Read third time, and passed Senate, 6/9/2015 (49-0)
Received in the House and referred to House Professional Licensure Committee, 6/11/2015
Reported as amended from House Professional Licensure Committee, read first time, and laid on the table, 6/24/2015
Removed from the table, 6/26/2015
Amended on House floor, read second time, and Rereferred to House Appropriations Committee, 6/27/2015
Reported as committed from House Appropriations Committee, read third time, and passed House, 6/28/2015 (192-0)
Received as amended in Senate and rereferred Senate Rules and Executive Nominations Committee, 6/29/2015
LOCAL/PROPERTY TAX REFORM
HB 1256  RE: Maximum Local Tax Rates (by Rep. Kurt Masser, et al)
Amends the Local Tax Enabling Act adding language providing the maximum income tax rate for a school district that levied an occupation tax for the fiscal year ending in 2015 and a municipality that levied an occupation tax for the calendar year ending December 31, 2014, shall be determined by taking the sum of the rates calculated under the legislation. Further provides the determined tax rate shall be rounded off to the nearest increment of 0.1 percent.
Reported as committed from House Finance Committee, read first time, and rereferred to House Rules Committee, 6/9/2015
Reported as committed from House Rules Committee, read second time, and Rereferred to House Appropriations Committee, 6/15/2015
Reported as committed from House Appropriations Committee, read third time, and passed House, 6/16/2015 (193-0)
Received in the Senate and referred to Senate Finance Committee, 6/18/2015
SB 76   RE: Property Tax Independence Act (by Sen. Dave Argall, et al)
Authorizes school districts to levy, assess, and collect a tax on personal income or a tax on earned income and net profits as a means of abolishing property taxation by the school district; authorizes the imposition of a personal income tax or an earned income tax by a school district at a rate determined by the district, subject to voter approval; provides an exception for low income persons. Broadens the Sales and Use Tax and increases its rate from six to seven percent. Increases the Personal Income Tax from 3.07 percent to 4.34 percent. Increases the Hotel Occupancy Tax from six to seven percent. Allocates existing revenue dedicated to property tax relief from casino to eliminate school property taxes. Provides for severability and makes repeals. Chapters 3 and 4 shall take effect June 30, 2016, and the remainder of the act shall take effect immediately.
Introduced and referred to Senate Finance Committee, 6/18/2015
MANDATE WAIVERS: NONE
MECHANIC’S LIEN: NONE
MINIMUM WAGE: NONE 
ORGANIZATIONAL STATUS
HB 1398   RE: Partnerships (by Rep. Adam Harris, et al)
Amends Titles 15 (Corporations) and 54 (Names) providing for the comprehensive modernization of laws governing limited liability partnerships, general partnerships, limited partnerships and limited liability companies.
Introduced and referred to House Commerce Committee, 6/29/2015
SCHOOL CONSTRUCTION
SB 694   RE: Scholl Building Costs (by Sen. John Eichelberger, et al)
Amends the Public School Code, in grounds and buildings, further providing for approval by Department of Education of plans of buildings and exceptions; providing for accountability and reducing costs in construction process; further providing for limitation on new applications for Department of Education approval of school building projects; and, in reimbursements by Commonwealth and between school districts, further providing for definitions, for approved reimbursable rental for leases hereafter approved and approved reimbursable sinking fund charges on indebtedness, for payments on account of leases hereafter approved and on account of sinking fund charges on indebtedness for school buildings hereafter constructed and for payments on account of building costs; and providing for lump sum reimbursement for construction or reconstruction.
Reported as committed from Senate Education Committee and read first time, 6/3/2015
Rereferred to Senate Appropriations Committee, 6/22/2015
TRANSPORTATION: NONE
WORKER’S COMP: NONE