With state budget negotiations reportedly still underway, the state House of Representatives was in session in Harrisburg last week, advancing proposals related to AI and economic regulation, sales taxes, data centers, and debt collection.

Here’s a recap of last week’s legislative action most relevant to employers.

 

AI Disclosure Mandate (H.B. 95; Pielli)

The House voted 124-78 to pass HB 95 last Wednesday.

The bill regulates the use of artificial intelligence in advertising by requiring disclosures for certain AI-generated or synthetic content. While the bill was improved through committee amendments, it continues to expose businesses to significant litigation risk by allowing a private right of action through Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL). As a result, employers could still face costly lawsuits, legal uncertainty, and increased compliance burdens for ordinary AI uses.

The bill could increase compliance costs for businesses that use AI tools in marketing, advertising, and customer communications by requiring additional review, disclosure, and recordkeeping processes. By allowing private lawsuits under the UTPCPL, the bill also creates litigation exposure that may discourage businesses from adopting or utilizing beneficial AI technologies, even in low-risk applications.

We opposed this legislation (CLICK HERE for our memo), which now moves to the Senate for consideration.

 

Capping ROE and Discouraging Energy Infrastructure Development (H.B. 2224; Fiedler)

The House Rules Committee voted 18-15 along party lines last Tuesday to advance HB 2224. The House then advanced the bill on second consideration.

House Bill 2224 would statutorily cap return on equity (ROE) for all Pennsylvania utility companies.

This legislation would discourage energy infrastructure investment in Pennsylvania, reduce employment, and ultimately raise costs on residential, commercial and industrial ratepayers.

We opposed this legislation (CLICK HERE for our memo), which may be considered for final consideration in the House this week.

 

Data Center Non-Disclosure Agreement Ban and Sales Tax Exemption Requirements (H.B. 2359; Ciresi)

The House Energy Committee voted 23-3 to advance HB 2359 last Wednesday.

This bill would prohibit state and local government agencies from entering into nondisclosure agreements (NDAs) related to the construction, development, or location of data centers.

The committee also adopted an amendment that would impose significant new conditions on eligibility for the sales and use tax exemption for computer equipment by adding additional certification, disclosure, and reporting requirements for qualifying projects, along with new ongoing compliance obligations.

Developers frequently require confidentiality while evaluating potential sites, negotiating infrastructure needs, and assessing project feasibility. Nondisclosure agreements during these preliminary discussions are a common and widely accepted practice in economic development projects. Restricting the use of NDAs may discourage companies from engaging with local governments until later in the process or could lead some projects to be directed toward states that provide greater flexibility for confidential business negotiations.

Additionally, we oppose repealing or conditioning sales tax exemptions, just as we would oppose any comparable legislative bait-and-switch that creates a perception of Pennsylvania’s business climate as unreliable and unpredictable.

We opposed this legislation (CLICK HERE for our memo), which now moves to the House floor.

 

Risks to Credit Access, Increased Costs for Consumers (H.B. 1731; Guzman)

The House Judiciary Committee voted 14-12 to advance HB 1731 last Wednesday.

HB 1731 establishes new documentation requirements at the time of filing lawsuits, reduces the statute of limitations for debt collection actions to three years, and adds additional procedural steps for obtaining default judgments far beyond current standards.

These changes would increase compliance complexity and legal costs, making it more difficult and time-consuming for businesses to recover legitimate debts. The added burden could lead to tighter credit standards, reduced access to financing, and higher costs that are ultimately passed on to consumers.

We opposed this legislation (CLICK HERE for our memo), which now advances to the full House.

 

Creating Strict, Enforceable Controls on Data Center Development in Pennsylvania (HB 2650; Webster)

The House Finance Committee voted 15-11 to advance HB 2650 last Wednesday.

H.B. 2650 would establish the Governor’s Responsible Infrastructure Development (GRID) program and create a new framework governing the development of data center projects in Pennsylvania. Among other provisions, the legislation would require projects to satisfy new certification, reporting, energy, and compliance requirements to access expedited permitting and qualify for a sales tax exemption previously passed by the legislature.

This legislation also adds new conditions for employers to qualify for an existing sales and use tax exemption for the purchase of data center equipment. We are concerned with proposals to repeal this sales tax exemption for data center equipment or impose onerous new conditions to qualify. This exemption passed with bipartisan support in 2021 specifically to attract investment, and it is clearly performing as intended. We oppose repealing or conditioning this exemption, just as we would oppose any comparable legislative bait-and-switch that creates a perception of Pennsylvania’s business climate as unreliable and unpredictable.

We opposed this legislation (CLICK HERE for our memo), which now moves to the House floor.