With state budget negotiations reportedly still in full swing, the state House of Representatives and Senate were in session last week, advancing a number of proposals relevant to the business community, including those related to tax policy, AI regulation, and noncompete agreements.

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

 

Prison Industry Enhancement Authority (H.B. 2154; Briggs)

The House considered on second consideration HB 2154 last Wednesday, positioning the bill for potential final consideration.

House Bill 2154 would establish the Prison Industry Enhancement Authority to facilitate joint ventures between correctional facilities and private industry.

This legislation has potential to benefit both incarcerated individuals and employers; however, we have expressed concerns with several aspects of the bill including the employment status of participating individuals and liability on employers, among other areas.

We support amending this legislation (CLICK HERE for our memo).

 

Prohibiting Noncompete Agreements in Broadcasting (H.B. 2558; Waxman)

The House voted 103-99 to pass HB 2588 last Wednesday.

House Bill 2558 would prohibit noncompete agreements in the broadcasting industry.

This bill provides for legislative intervention between two private parties voluntarily agreeing to a noncompete agreement. Restrictive covenants may be particularly relevant for the broadcasting industry, where employers often invest considerably to recruit employees and provide the operational support, marketing, and public recognition usually necessary for broadcasting professionals to establish their career.

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

 

Conditioning Sales Tax Exemption (H.B. 2359; Ciresi)

The House voted 171-31 to pass HB 2359 last Tuesday.

House Bill 2359 would condition eligibility for the computer equipment sales tax exemption for data centers on a host of new requirements, including prohibiting state and local government agencies from entering into non-disclosure agreements (NDAs) related to the construction, development, or location of data centers. It would also impose additional certification, disclosure, reporting, and other compliance requirements on qualifying projects.

Developers frequently require confidentiality while evaluating potential sites, negotiating infrastructure needs, and assessing project feasibility. NDAs are a common and widely accepted practice during preliminary discussions in economic development projects. Prohibiting NDAs may discourage companies from engaging with local governments until later in the process and could lead to some projects being directed toward states that provide greater flexibility for confidential business negotiations. We oppose repealing or conditioning this existing sales tax 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 advances to the Senate.

 

AI in Healthcare (H.B. 1925; Venkat)

The House Communications and Technology Committee voted 19-7 to advance HB 1925.

House Bill 1925 would establish a broad new regulatory framework governing how artificial intelligence (AI) is used by hospitals, insurers, and other parts of Pennsylvania’s healthcare ecosystem.

While we appreciate the positive amendments made to H.B. 1925, we remain concerned that establishing a sector-specific AI framework for healthcare could create unnecessary complexity, while duplicative reporting requirements and penalties may increase costs and compliance burdens.

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