This week, committees in the Pennsylvania Senate will meet to consider proposals that the PA Chamber has identified as top priorities for the current legislative session.
On Monday, the Senate Committee on Intergovernmental Operations will consider S.B. 350 – legislation introduced by Sen. Kristin Phillips-Hill, R-York, that would address several of the business community’s top concerns regarding Pennsylvania’s antiquated permitting process.
The state’s current process has long been criticized as overly burdensome and punitive, often leading to unreasonable delays and uncertainty for permit seekers. This proposed legislation aims to increase transparency throughout the permitting process.
If passed, the bill will require agencies that issue permits to post information about the permits they grant on their website, create an accessible tracking system for applicants to check on the status of their applications, and clearly state the legal authority on which the agencies rely when rejecting a permit application.
The tracking system will include processing time, dates of each permit, completeness review, technical review, elevated review, and an estimated time remaining for each incomplete phase of the permit approval process. Moreover, the bill establishes a timeframe in which permits must be reviewed and issued – or otherwise be “deemed approved.”
These reforms will provide greater transparency and give applicants greater assurance that their request will be processed fairly and expediently by the relevant agency.
On Wednesday, the Senate Environmental Resources and Energy Committee will meet to consider S.B. 198, legislation introduced by Sen. Camera Bartolotta, R-Washington, that aims to streamline the appeal process for permit denials.
For further information on the PA Chamber’s proposed solutions to improve PA’s permitting processes, visit the the On the Hill section of our website.
Net Operating Losses (NOLs)
On Tuesday, the Senate Finance Committee will consider S.B. 346 – legislation introduced by Sen. Greg Rothman, R-Cumberland. This bill deals with the treatment of Net Operating Losses in the state Tax Code – i.e., an employer’s ability to deduct past losses from current year’s profits.
Pennsylvania is currently at an economic disadvantage as one of only two states in the nation that does not allow businesses to deduct NOLs consistent with the federal limit. Instead, state law currently caps the proportion of eligible deductions at 40 percent – exactly half the federal rate.
This policy has been widely criticized as a de facto tax on emerging businesses and has been shown to negatively impact our state’s job creators while turning away businesses that might otherwise choose to locate in the Commonwealth. Senate Bill 346 would gradually increase the NOL carryover limit, squaring it with the federal limit of 80 percent over a period of four years.
Improving the treatment of Net Operating Losses remains a top priority for the PA Chamber, as it continues to affect a significant proportion of our membership as well as the Commonwealth’s broader economic prospects.
Accelerating the CNI phasedown
The Senate Finance Committee will also consider S.B. 345 – legislation introduced by Senate Majority Whip Ryan Aument, R-Lancaster that seeks to build on last session’s historic, bipartisan reduction of the Corporate Net Income Tax rate.
Prior to the passage of Act 53 last year, Pennsylvania had the second highest CNI in the nation – a huge deterrent for businesses looking to invest in the Keystone State. Thanks to the efforts of bipartisan lawmakers, Pennsylvania’s CNI is currently at 8.99 percent (down from 9.99 percent) and will decrease by 0.5 percent annually over the next eight years until it reaches 4.99 in 2031.
Senate Bill 345 would accelerate this phasedown, including an immediate drop to 7.99 percent and a full percentage-point reduction each year until it reaches 4.99 percent in 2026, five years sooner than the timeline established by the enactment of Act 53.
The PA Chamber understands that a more competitive business tax code will help attract greater investment in our state while conferring several “downstream” benefits including greater GDP, higher wages, and increased home values. Together, these benefits will enable Pennsylvania employers to create more family-sustaining jobs while helping them recruit and retain talent.