The final week of the 2023-24 Fiscal Year concluded yesterday with Pennsylvania state lawmakers not yet reaching an agreement on a spending plan for the new fiscal year that begins today.
As negotiations are ongoing, voting session days have been scheduled today through and including Wednesday, July 3. Lawmakers have expressed optimism that the 2024-25 state budget, accompanying code bills, and other key public policy priorities could be finalized this week.
Lawmakers are also taking action on a range of bills, unrelated to the state budget, relevant to the employer community. Below is a rundown on legislative action that was taken by House and Senate lawmakers in session and committee meetings last week:
Prevailing Wage Expansion (H.B. 2153)
The House of Representatives voted 125-77 to pass House Bill 2152 last Monday.
This legislation would expand the PA Prevailing Wage Act to include custom fabrication and prohibit the practice of split rates.
The PA Prevailing Wage Act requires pre-determined wages to be paid on public construction projects, which can substantially increase project costs. This legislation would expand this requirement to custom fabrication work—which will raise costs on taxpayers and potentially divert projects to out-of-state competitors—and also prohibit the practice of paying “split rates,” which companies utilize to promote efficiency on a worksite. Both changes will increase costs and create administrative challenges for employers.
We opposed the legislation (CLICK HERE for our memo). House Bill 2153 now heads to the Senate for committee consideration.
Increasing the Vendor Discount in Sales Tax Collection (S.B. 1225)
The Senate Finance Committee voted 8-3 to pass Senate Bill 1225 last Tuesday.
This legislation would increase the vendor discount for businesses that collect sales tax to one percent on the first million dollars in sales tax collected and one-quarter percent for any sales tax revenue collected after that.
Businesses in Pennsylvania used to be able to keep one percent of the total sales tax they collected to cover their administrative costs of collecting the tax on behalf of the state. The vendor discount was capped at $300 per year in 2016. This legislation would provide relief for businesses by compensating them more for the costs associated with collecting sales tax on behalf of the state.
This bill is now being reviewed by the Senate Appropriations Committee.
Direct Deposit for Workers’ Compensation Payments (S.B. 1232)
The Senate Appropriations committee voted 24-0 to pass Senate Bill 1232 last Monday.
This legislation would allow employers to require payment of benefits by direct deposit and allow workers’ compensation claimants to request payment of benefits by direct deposit.
The bill will modernize the Workers’ Compensation Act by establishing a regulatory framework allowing employers to transition to all electronic payment of worker’s compensation benefits, streamlining the process. These reforms were unanimously recommended by the Workers’ Compensation Advisory Council.
This bill is now pending before the full Senate.
Work Schedule Mandates (H.B. 2356)
The House Labor and Industry Committee voted 14-11 to pass House Bill 2356 last Tuesday.
This legislation would require all employers to provide employees at least 30 minutes of paid time off after five hours of work.
This bill prompts concerns from multiple perspectives. For example, employers with “exempt” employees (i.e. not subject to overtime requirements) are concerned this mandate would require them to initiate new systems and force their salaried employees to begin tracking their hours and breaks.
Employers who serve vulnerable populations or aging services providers have expressed concerns with a new unfunded mandate that could exacerbate existing funding and workforce crises as they work to ensure access to care. Even employers who already provide similar or more generous break times have urged opposition based on the removal of flexibility, which is often necessary (e.g. when coworkers are late or unexpected circumstances arise), and the harsh penalties that could amount to thousands of dollars per day.
The PA Chamber voiced opposition to H.B. 2356 (CLICK HERE to view our memo).
This bill awaits further action by the House Rules Committee.
Verification of Construction Contractors (H.B. 2360)
The House Labor and Industry Committee voted 14-11 to pass House Bill 2360 last Tuesday. This legislation would require employers in the construction industry to complete additional verification forms.
The PA Chamber appreciates the intent of this bill, but it includes vague language, creates new private rights of action, and adds new administrative challenges to employers already burdened with significant bureaucratic requirements. Accordingly, the PA Chamber opposed this bill. (CLICK HERE to view our memo).
This bill awaits further action by the House Rules Committee.
Carbon Dioxide Capture, Utilization, and Sequestration (S.B. 831)
The House Consumer Protection, Technology and Utilities Committee voted 25-0 to pass Senate Bill 831 last Tuesday.
This legislation would establish a legal and regulatory framework for carbon dioxide capture, utilization, and sequestration.
Establishing a comprehensive regulatory framework for the deployment of carbon capture technology is vital to ensuring the deployment of billions of dollars in private capital, as well as potentially leveraging federal infrastructure funding, to innovate in low-carbon manufacturing, agricultural, and energy production projects. Carbon capture holds great potential to be added to Pennsylvania’s diverse energy portfolio, which has helped the Commonwealth lead the nation through every major energy transition in its history.
This bill is now pending before the full House of Representatives.
Ready-to-Drink Products (S.B. 688)
The House Liquor Control Committee voted 14-11 to pass Senate Bill 688 last Tuesday.
This legislation would authorize the private sector to sell “Ready to Drink” adult beverages.
Currently, “Ready to Drink” adult beverage products can only be purchased through state stores. It is simply unfair to deny local convenience stores and supermarkets the ability to respond to their customers and sell these products.
This bill is now pending before the full House of Representatives.
Consolidation Feasibility Studies (H.B. 2386)
The House Education Committee voted 25-0 to pass House Bill 2386 last Monday.
This legislation would expand the resources available to school districts for administrative partnerships, ensuring that they encompass instructional programming partnerships and consolidation feasibility studies.
School district consolidation feasibility studies and shared administrative services are beneficial as they provide potential cost savings, improved resource allocation, and enhanced educational opportunities. Encouraging school districts to evaluate possible shared services and consolidations allows stakeholders to make informed decisions that can lead to more efficient operations.
This bill awaits further action by the House Rules Committee.
Lowering the Commercial Driver’s License Age (S.R. 258)
The Senate adopted S.R. 258 last week, which urges Congress to pass legislation allowing individuals under the age of 21 with a Commercial Driver’s License (CDL) to drive across state lines and participate in interstate commerce.
The PA Chamber supports this legislation. As expressed in a memo to Senate lawmakers, workforce shortages reported by trucking companies create a challenge for their industry and the many businesses and customers that rely on the movement of goods to market. Currently, individuals can obtain a CDL in Pennsylvania at the age of 19. However, federal law prohibits drivers from crossing state lines under the age of 21. This exacerbates workforce challenges, and limits opportunities for CDL drivers at an early stage of their careers.
Similar legislation (H.R. 322) was recently reported from the House Transportation Committee, and is pending consideration before the full House.