PSPE Urges Budget Makers to Stop Siphoning Transportation Funds
Act 89 of 2013 greatly increased transportation funding for Pennsylvania’s transportation network.  But not all of the funds actually end up in roads, bridges, public transportation and other transportation related projects.  Even before the passage of the new funding bill, roughly a half a billion dollars a year was diverted to the State Police.  The State Police are to be funded through the Commonwealth’s general fund, not transportation funds.  But in recent years, tighter budgets and an unwillingness to raise taxes that support the general fund has led to a generous interpretation of what is “transportation related”.  This creative accounting started years ago but has now grown into a major drain on dollars that were to be spent on rebuilding Pennsylvania’s deteriorating roads and bridges.  In this year’s proposed budget, the Motor Vehicle License Fund dollars redirected to the State Police adds up to more than three quarters of a billion dollars, an all time high.
PSPE is urging legislators to stop the bleeding so to speak.  By freezing the money diverted to the State Police many more transportation projects can be started.  And that was the purpose of Act 89.  For more detailed information on this issue and to take action to help with it, visit www.pspe.org and click on the Legislative Action Center in the upper right hand corner of the home page.
GA Bill Sent to Governor, Revenue Package Still Under Debate
It started out so well. All spring the House and Senate leaders, and Gov. Wolf, had talked about leaving the past behind, and working together to get an on-time, commonsense budget passed. Well, they got the spending part done, but when it came to paying for, the “wheels fell off”. On June 30, the Senate voted 47 to 3 and the House voted 144 to 54 to approve the 2016-17 General Appropriations (GA) bill, SB1073. The total for the overall spending plan for SB1073 is $31.62 billion, which is actually an increase following a move by the Senate to transfer $88.81 million from the Commonwealth Financing Authority. A breakdown of budget line items passed by the General Assembly can be found in this document.
Despite this budget agreement, many of the remaining ancillary “Code” bills, outlining spending directions for education (the centerpiece of the budget agreement), and amendments to the tax and fiscal codes to provide for new revenues, have yet to be passed. Governor Wolf has stated that he will not sign the budget bill until he also receives the legislation that includes a revenue plan. The House and Senate recessed to the call of their chairs, until agreement is reached. The Governor must sign, veto (in whole or “blueline”) or allow the bill to become law by July 11. The Budget Secretary is required to certify that the spending plan can be paid for from existing revenues before the Governor can sign it, and estimates are that without new revenues or other accounting gymnastics, revenues will fall about a billion dollars short by the end of June, 2017.
House Finance Committee Moves Bill to Phase Out NOL Cap
The committee met to June 30 to consider HB 1416 , sponsored by Rep. Eli Evankovich, which amends the Tax Reform Code, eliminating the Net Operating Loss cap incrementally over a six-year period ending December 31, 2020. The bill was unanimously reported as amended. The amendment, offered by Rep. Evankovich, strikes out changes to the carry forward provisions in out years and changes the cap for carrying forward operating losses from $5 million or 30 percent to 44 percent. The amendment was unanimously adopted.
Rep. Eli Evankovich (R-Westmoreland) described the amendment, saying current Pennsylvania law allows companies to carry forward operating losses at a cap of $5 million or 30 percent, whichever is greater. He said there is a pending case in the Supreme Court regarding the constitutionality of the $5 million cap, and described that the amendment would eliminate the $5 million cap and move the 30 percent cap up to 44 percent. “According to estimates by the Department of Revenue, it gets us nearest to revenue neutral as we can,” he concluded.
This bill, among others, could become a “vehicle” for further amendments to the tax code, providing additional revenues to the state to balance the budget passed on June 30. Obviously a “revenue neutral” bill does little to help in that direction, but would be supported by the business community.
Legislative Activity
The General Assembly acted on the following bills of interest to PSPE in the past month.
BIDDING / CONTRACTING
HB 726  RE: Retainage (by Rep. Mike Tobash, et al)
Amends the Contractor & Subcontractor Payment Act adding a language providing the provisions of the Act cannot be waived in any contract. Increases from 1 percent to 1.5 percent the monthly interest rate for an outstanding payment. Also adds a provision allowing for posting of security in lieu of retainage. Increases the penalty from 1 percent per month to 1.5 percent per month in cases where an arbitrator or litigation determines that payment was wrongly withheld.
Passed over in House Commerce Committee, 6/7/2016
HB 902  RE: No Bids Received (by Rep. Chris Ross, et al)
Amends Act entitled “An act authorizing political subdivisions, municipality authorities and transportation authorities to enter into contracts for the purchase of goods and property,” adding language providing for contracts for services setting up a procedure to be followed when a political subdivision, municipality authority or transportation authority is required to advertise for bids in order to enter into a contract for services and no bids are received.
Laid on the table (Pursuant to Senate Rule 9), 6/15/2016
HB 1600  RE: Veteran-Owned Small Business Fee Exemptions (by Rep. Ryan Mackenzie, et al)
Amends Titles 51 (Military Affairs), in veteran-owned small businesses, further providing for definitions, for regulations, for participation goal, and providing for business fee exemption. Further provides a veteran-owned small business shall be exempt from the payment of a business fee, which is defined as a fee required to be paid to the Commonwealth or an instrumentality of the Commonwealth for starting or opening a business within this Commonwealth.
Reported as amended from Senate Veterans Affairs & Emergency Preparedness Committee, and read first time, 6/14/2016
Rereferred to Senate Appropriations Committee, 6/15/2016
HB 1653  RE: Diverse and Disadvantaged Businesses (by Rep. Donna Oberlander, et al)
Amends Title 62 (Procurement) adding a chapter providing for diverse and disadvantaged businesses. “Diverse and disadvantaged businesses” is defined as a minority-owned business, a woman-owned business, or a veteran-owned business. The department shall establish a process to verify a diverse or disadvantaged business as Pennsylvania home state-certified for the purpose of other state of national disadvantaged business programs. The department shall also verify a business that has been certified as a diverse or disadvantaged business by a third party organization. Requires the department to compile, maintain and make available source lists of businesses verified by the department as a diverse or disadvantaged business for the purpose of encouraging procurement from those businesses.
Laid on the table, removed from the table, 6/15/2016
HB 2166  RE: Disadvantaged Businesses (by Rep. Jason Dawkins, et al)
Amends Title 62 (Procurement), in small and disadvantaged businesses, further providing for definitions, for duties of department, for bonding and progress payments and for report to General Assembly; providing for disadvantaged businesses; and imposing penalties. The definition of and references to “disadvantaged business” are removed and a new chapter providing for disadvantaged businesses is added. The provisions shall apply on and after July 1, 2018.
Introduced and referred to House State Government Committee, 6/15/2016
SB 1313  RE: Energy Conservation Measure Cost Savings (by Sen. Don White, et al)
Amends Title 62 (Procurement), in contract clauses and preference provisions, further providing for definitions and adding that grants, subsidies or other payments from the Commonwealth to a governmental unit shall not be reduced as a result of energy conservation measure cost savings obtained as a result of a guaranteed energy savings contract during the life of the contract. Requires the contract to expressly state the financial obligations that an energy savings company will require users to pay upon a declaration of savings.
Introduced and referred to Senate State Government Committee, 6/14/2016
Reported as amended from Senate State Government Committee, and read first time, 6/28/2016
Rereferred to Senate Appropriations Committee, 6/30/2016
BUDGET RELATED BILLS
HB 1416 RE: NOL Phaseout (by Rep. Eli Evankovich, et al)
Amends Tax Reform Code eliminating the Net Operating Loss cap incrementally over a six-year period ending December 31, 2020.
Reported as amended from House Finance Committee, read first time, and rereferred to House Rules Committee, 6/3/2016
HB 1605   RE: Heritage Area Program Act (by Rep. Lee James, et al)
Establishes the Heritage Area Program within the Department of Conservation and Natural Resources to identify, protect, develop, enhance, and promote the historic, recreational, natural, cultural, and scenic resources of the Commonwealth. The department will adopt guidelines and policies for the implementation of the program. The department will also allocate appropriate funds to run the program. The bill provides for the use and eligibility of the heritage area.
Reported as committed from Senate Environmental Resources and Energy Committee, and read first time, 6/14/2016
Rereferred to Senate Appropriations Committee, 6/22/2016
Reported as amended from Senate Appropriations Committee, read second time, and recommitted to Senate Appropriations Committee, 6/30/2016
Passed over in Senate Appropriations Committee, 7/1/2016
HB 2013 RE: Development in State Parks (by Rep. Brian Ellis, et al)
Amends the Conservation and Natural Resources Act, in Department of Conservation and National Resources, providing for development of recreational, lodging and ancillary facilities; and providing for Public-Private State Park Partnership Board. The department is authorized to enter into a contract with a third party for the development, financing, construction and operation of additional recreational, lodging and ancillary facilities in State parks. A contract may authorize both direct and subsidiary investment arrangements. Such a contract may not exceed 25 years, at which time the full title to the additional recreational, lodging and ancillary facilities shall vest with the Commonwealth, except as otherwise provided by the board. The Public-Private State Park Partnership Board is established in the department, which shall adopt guidelines establishing the procedure by which a third party may submit a plan for additional recreational, lodging or ancillary facilities at State parks; conduct an inventory of existing State park assets and issuing recommendations where additional recreational, lodging and ancillary facilities in State parks can be developed to the benefit of the general public; solicit from third parties the submission of offers or plans for additional recreational, lodging and ancillary facilities in State parks; evaluate and approve the offers or plans by adopting a resolution; and submit an annual report to the General Assembly.
Reported as amended from House Tourism and Recreational Development Committee, read third time, and rereferred to House Rules Committee, 6/21/2016
Reported as committed from House Rules Committee, amended on the House floor, read second time, and Rereferred to House Appropriations Committee, 6/27/2016
Reported as committed from House Appropriations Committee, read third time, and DEFEATED in House, 6/28/2016 (123-77)
HB 2181   RE: Capital Budget Act of 2016-2017 (By Rep. Joe Markosek, et al)
Provides for the capital budget for the fiscal year 2016-2017. A total of $1,110,000,000 is appropriated. Effective July 1, 2016, or immediately, whichever is later.
Introduced and referred to House Appropriations Committee, 6/20/2016
HB 2223   RE: Municipal Waste Tipping Fees (by Rep. Mike Hanna, et al)
Amends Titles 27 (Environmental Resources) and 58 (Oil and Gas), in environmental stewardship & watershed protection, raising statewide municipal waste tipping fees from $6.25 to $8.00 per ton. Revenues from the increase would be deposited into the Environmental Stewardship Fund.
Introduced and referred to House Environmental Resources and Energy Committee, 6/28/2016
SB 1073  RE: General Appropriation Act of 2016 (By Sen. Pat Browne, 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, 2016, to June 30, 2017, 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, 2016; to provide appropriations from the State Lottery Fund, the Tobacco Settlement Fund, the Aviation Restricted Account, the Hazardous Material Response Fund, The State Stores Fund, the Milk Marketing Fund, the Home Investment Trust Fund, the Emergency Medical Services Operating Fund, the Tuition Account Guaranteed Savings Program Fund, the Banking Fund, the Firearm Records Check Fund, the Ben Franklin Technology Development Authority Fund, the Home Improvement Account, the Cigarette Fire Safety and Firefighter Protection Act Enforcement Fund, the Insurance Regulation and Oversight Fund, the Pennsylvania Racehorse Development Restricted Receipt Account, the Justice Reinvestment Fund, the Multimodal Transportation Fund, the State Racing Fund and the ABLE Savings Program Fund to the Executive Department; to provide appropriations from the Judicial Computer System Augmentation Account to the Judicial Department for the fiscal year July 1, 2016, to June 30, 2017; to provide appropriations from the Motor License Fund for the fiscal year July 1, 2016, to June 30, 2017, for the proper operation of several departments of the Commonwealth and the Pennsylvania State Police authorized to spend Motor License Fund money; to provide for the appropriation of Federal funds to the Executive and Judicial Departments of the Commonwealth and for the payment of bills remaining unpaid at the close of the fiscal year ending June 30, 2016; and to provide for the additional appropriation of Federal and State funds from the General Fund, the State Lottery Fund and the Tobacco Settlement Fund for the Executive and Legislative Departments of the Commonwealth for the fiscal year July 1, 2015, to June 30, 2016, and for the payment of bills incurred and remaining unpaid at the close of the fiscal year ending June 30, 2015. Effective July 1, 2016, or immediately, whichever is later.
Reported as amended from House Appropriations Committee, read third time, and passed House, 6/28/2016 (132-68)
Received as amended in Senate and rereferred Senate Rules and Executive Nominations Committee, rereported as amended from Senate Rules & Executive Nominations Committee, and Senate concurred in House amendments, with amendments, 6/29/2016 (47-3)
Received as amended in Senate and rereferred Senate Rules and Executive Nominations Committee, Re-reported on concurrence as amended from Senate Rules and Executive Nominations Committee, and concurred in House amendments, with further amendments, 6/29/2016
Received as amended in House and rereferred House Rules Committee, 6/29/2016
Re-reported on concurrence as committed from House Rules Committee, and House concurred in Senate amendments to House amendments, 6/30/2016
Signed in the Senate and House, 7/1/2016
In the hands of the Governor, 7/1/2016. Last day for Governor’s action, 7/11/2016
SB 1292  RE: Capital Budget Act of 2016-2017 (by Sen. Pat Browne, et al)
Provides for the capital budget for the fiscal year 2016-2017 with a total appropriation of $1,110,000,000. Effective October 1, 2016, or immediately, whichever is later.
Introduced and referred to Senate Appropriations Committee, 6/3/2016
Reported as amended from Senate Appropriations Committee, and read first time, 6/22/2016
Read second time, 6/23/2016
Read third time, and passed Senate, 6/29/2016 (50-0)
Received in the House and referred to House Appropriations Committee, 7/1/2016
ENVIRONMENTAL BUILDING STANDARDS
HB 1325  RE: Storm Water Management Fees (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. Provides for any of the assessment to be collected by the treasurer and requires the municipalities to specify in the ordinance the frequency of the payments. A township shall consider providing exemptions and credits for properties that have already installed and are maintaining storm water facilities. Restricts storm water fees assessed by a township to the amount necessary to meet the necessary requirements of the Federal Water Pollution Control Act and requires townships to consider and provide appropriate exemptions or credits for properties which have installed and are maintaining storm water facilities that meet best management practices and are approved or inspected by the township.
Laid on the table, Removed from the table, 6/8/2016
Read second time, 6/13/2016
Read third time and passed Senate, 6/15/2016 (48-1)
Received as amended in House and rereferred to House Rules Committee, 6/15/2016
Re-reported on concurrence as committed from House Rules Committee, and House concurred in Senate amendments, 6/21/2016 H (136- 59)
Approved by the Governor 7/1/2016 (Act No. 62 of 2016 )
HB 1394  RE: Storm Water Facilities (by Rep. Mark Mustio, et al)
Amends Title 8 (Boroughs & Incorporated Towns) authorizing a borough 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. regulate the planning, management, implementation, construction and maintenance of storm water facilities. Provides for any of the assessment to be collected by the treasurer and requires the municipalities to specify in the ordinance the frequency of the payments. A borough shall consider providing exemptions and credits for properties that have already installed and are maintaining storm water facilities. Restricts storm water fees assessed by a borough to the amount necessary to meet the necessary requirements of the Federal Water Pollution Control Act and requires boroughs to consider and provide appropriate exemptions or credits for properties which have installed and are maintaining storm water facilities that meet best management practices and are approved or inspected by the borough.
Laid on the table, removed from the table, 6/15/2016
HB 1661 RE: Storm Water Management Plans (by Rep. Mark Mustio, et al)
Amends the First Class Township Code adding an article providing for storm water management plans and facilities. The board of commissioners is authorized to plan, design, construct, assemble, install and alter facilities to manage surface water runoff. Provides for any of the assessment to be collected by the treasurer and requires the municipalities to specify in the ordinance the frequency of the payments. A township shall consider providing exemptions and credits for properties that have already installed and are maintaining storm water facilities. Restricts storm water fees assessed by a township to the amount necessary to meet the necessary requirements of the Federal Water Pollution Control Act and requires townships to consider and provide appropriate exemptions or credits for properties which have installed and are maintaining storm water facilities that meet best management practices and are approved or inspected by the township.
Laid on the table, removed from the table, 6/8/2016
Read second time, 6/28/2016
Laid on the table (Pursuant to Senate Rule 9), 7/1/2016
SB 289  RE: Sewage Disposal Systems (by Sen. Wayne Fontana, et al)
Amends the act entitled “An act to provide for and regulate the accumulation, investment, and expenditure of funds by cities, boroughs, incorporated towns and townships for preparing plans for sewage disposal systems, and for the construction, improvement or replacement of sewage disposal systems for which plans have been approved by the Sanitary Water Board of the Commonwealth,” further providing for definitions, for creation of a Sewage Disposal System Fund and for expenditure of fund; providing for expenditure of public funds for private lateral sewer lines; and further providing for grants of moneys. A municipality or municipal authority may use public funds for the improvement, extension, repair or rehabilitation of private lateral sewer lines connected to sewage disposal systems, where the municipality or municipal authority determines that those activities will benefit the sewage disposal system or the public health, or will prevent damages to public property. Before using public funds, the municipality or municipal authority shall consider the available public funds, equipment, personnel and facilities and the competing demands of the municipality for the public funds, equipment, personnel and facilities. No municipality or municipal authority that has completed the improvement, extension, repair or rehabilitation of private sewer lines shall be deemed to be the owner of the private lateral sewer lines, or to have any further responsibility to conduct those activities, unless the municipality or municipal authority makes an affirmative determination to accept such obligations.
Laid on the table, removed from the table, 6/22/2016
Read second time, 6/29/2016
Read third time and passed Senate, 6/30/2016 (50-0)
Received in the House and referred to House Environmental Resources and Energy Committee, 7/1/2016
SB 1325  RE: Erosion and Sediment Control Act (by Sen. Camera Bartolotta, et al)
Provides for erosion and sediment control requirements. The bill requires an erosion and sediment control permit for a person seeking to commence a project involving oil and gas activities that will cause five acres or more of earth disturbance shall. A permit application shall be accompanied by a $500 administrative filing fee, plus an additional $100 for each disturbed acre.
Introduced and referred to Senate Environmental Resources and Energy Committee, 6/17/2016
SR 385  RE: Environmental Laws and Regulations Study (by Sen. Michele Brooks, et al)
A Resolution directing the Joint State Government Commission to conduct a study to analyze and identify which environmental laws and regulations of this Commonwealth have more stringent standards than Federal law requires.
Introduced and referred to Senate Environmental Resources and Energy Committee, 6/6/2016
LOCAL/STATE GOVERNMENT/REGULATIONS
HB 568  RE: RAC Reviews (by Rep. Eli Evankovich, et al)
Amends the Pennsylvania Construction Code Act revising the procedures for review of the International Construction Code by the Uniform Construction Code Review and Advisory Council (RAC). Clarifies the RAC process shall be put in place for review of updated sections of the International Construction Code every three years. Adds two members to the RAC, increases the members’ terms from two to three years, and provides for the reimbursement of RAC members for expenses. Further provides for the creation of technical advisory committees and creates an accelerated process for re-review of 2015 terms. Also provides for delay in future code adoption processes following any new additions to the International Construction Code and for an expedited process for unopposed sections. In addition, changes are made to building permit fees. The amendment of section 902 (c) relating to uncertified buildings over which the department does not have jurisdiction is effective in 60 days and the remainder is effective immediately.
Reported as amended from Senate Labor and Industry Committee, and read first time, 6/23/2016
Rereferred to Senate Appropriations Committee, 6/27/2016
Reported as amended from Senate Appropriations Committee, and read second time, 7/1/2016
HB 1409  RE: Change of 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 a project, subsequent code administrators shall be subject to decisions previously rendered on the project by the board of appeals.
Reported as committed from House Appropriations Committee, 6/6/2016
Read third time, and passed House, 6/7/2016 (186-0)
Received in the Senate and referred to Senate Labor and Industry Committee, 6/10/2016
HB 1543  RE: Uniform Construction Code (by Rep. David Maloney, et al)
Amends the Pennsylvania Construction Code Act, in Uniform Construction Code, further providing for revised or successor codes; and, in training and certification of inspectors, further providing for education and training programs. The bill adds that the department may contract with the ICC to establish and publish code manuals that contain the standards of the Uniform Construction Code. The department shall require in any such contract that the standards be made available on the department’s website.
Removed from the table, Laid on the table, 6/15/2016
SB 1195  RE: Gas Reg Review (by Sen. Don White, et al)
Amends the Pennsylvania Greenhouse Gas Regulation Implementation Act further providing for submission of State plan providing for referral of the State plan to the standing committee in each legislative chamber and to be considered within ten legislative days and then sent to the full chamber for consideration, per existing law. The bill provides for an extension request. If either chamber of the General Assembly disapproves the resolution the department shall review and consider the reasons for disapproval and modify the State plan, open a public comment period of at least 180 days, and then resubmit the plan to the legislature. The bill provides for default approval and timing relative to federal litigation.
Amended on Senate floor, 6/7/2016
Read third time, and passed Senate, 6/8/2016 (41-9)
Received in the House and referred to House Environmental Resources and Energy Committee, 6/9/2016
Reported as committed from House Environmental Resources and Energy Committee, read first time, laid on the table and removed from the table, 6/13/2016
Amended on House floor, read second time, rereferred to House Appropriations Committee, and rereported as committed from House Appropriations Committee, 6/14/2016
Read third time and passed House, 6/15/2016 (147-41)
Received as amended in Senate and rereferred Senate Rules and Executive Nominations Committee, re-reported on concurrence as committed from Senate Rules and Executive Nominations Committee, and Senate concurred in House amendments, 6/15/2016 (38-11)
Signed in the House and Senate, 6/15/2016
Approved by the Governor, 6/23/2016 (Act No. 57 of 2016)
SB 1235  RE: One Call System (by Sen. Lisa Baker, et al)
Amends the Underground Utility Line Law further providing for definitions, for duties of facility owners, for duties of the One Call System, for duties of excavators, for duties of designers, for duties of project owners and for penalties; providing for enforcement, for underground utility line protection fund and for compliance; and further providing for One Call System authority and for expiration. Expiration of the act is extended through 2021. Portions of the bill are effective immediately and the remainder is effective in 180 days.
Reported as amended from Senate Consumer Protection & Prof. Licensure Committee, and read first time, 6/7/2016
Read second time and rereferred to Senate Appropriations Committee, 6/14/2016
WORKER’S COMP
HB 1800  RE: Workers Compensation Treatments (by Rep. Ryan Mackenzie, et al)
Amends the Workers Compensation Act to require that all reasonable and necessary treatments, services, products, or accommodations be consistent with treatment guidelines selected by the Department of Labor and Industry. Provides for a panel of medical providers, selected by the L&I Secretary, to review and propose amendments to adopted guidelines. Provides for appeals. Effective in 60 days.
Laid on table in House Labor and Industry Committee, 6/14/2016