Last week, the state House and Senate returned to Harrisburg for the final week of legislative session before the 2026 General Election, with lawmakers facing a limited window to advance legislation before Election Day.

Notably, lawmakers failed to reach agreement on a handful of high-profile issues, such as skill game legalization, further data center regulation, and various legal and criminal justice reforms. Party leaders indicated several of these issues are likely to reemerge next session.

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

 

Increasing Costs on Taxpayers (S.B. 908)

The House of Representatives voted 128-75 to pass Senate Bill 908 last Monday.

This legislation will expand the PA Prevailing Wage Act to include certain custom fabrication work performed off-site. The bill was amended to remove a prohibition on “split-rates” and to exempt from prevailing wage certain residential projects and school security projects under $50,000.

Despite these positive amendments, we continued to have concerns from both a taxpayer perspective, as significant cost increases on school districts and local governments can lead to property tax hikes; and on behalf of custom fabrication companies, who have expressed concerns that this legislation would drive work to out-of-state competitors and negatively impact their workplace.

We opposed this legislation (CLICK HERE for our memo), which the governor signed into law as Act 101 of 2026.

The law is scheduled to go into effect on Dec. 21 but is expected to face a legal challenge.

 

Worker Cooperatives (H.B. 135)

The Senate voted unanimously to pass House Bill 135 last Monday.

This legislation would lower the number of workers required to register for a workers’ cooperative in Pennsylvania from five to three.

A worker cooperative is a model in which the business is owned and operated by the employees, who may qualify for tax benefits. Smaller groups have expressed interest in creating a cooperative, and we support individuals pursuing a business model they believe is in their best interest.

We supported this legislation (CLICK HERE for our memo), which was signed into law as Act 63 of 2026.

Energy Tax on Businesses (H.B. 1667)

The House of Representatives voted 193-10 to pass House Bill 1667 last Monday.

This legislation is a package of tax provisions that includes a new electric consumption fee on businesses intended to underwrite annual rebates for households. House Bill 1667 also seeks to overhaul the effectively dormant EDGE economic development tax credit by repealing the local resource manufacturing tax credit, in addition to revising terms for three other existing tax credits.

As amended, the most significant concern is with the creation of a new energy tax on Pennsylvania businesses. House Bill 1667 would establish a new tax on electric users who consume more than 25 megawatts of energy at peak demand. The legislation lacks clarity and definitions, and it could create instability in Pennsylvania’s business climate and slow investment.

We opposed this legislation (CLICK HERE for our memo), which has now been re-referred to the Senate Rules and Executive Nominations Committee, where additional action is unlikely before this session concludes.

 

Enhanced Flexibility for Local Bridge Investments (S.B. 205)

The House also voted unanimously to pass Senate Bill 205 last Wednesday.

This legislation would clarify that funding distributed to counties under Act 89’s County Bridge Program may also be used for the repair and maintenance of municipal-owned bridges, expanding the number of local bridge projects eligible for state infrastructure investment.

Pennsylvania businesses depend on safe, reliable transportation networks to move goods, services, and employees. By allowing existing bridge funding to be used more flexibly, S.B. 205 will help address local infrastructure needs, improve connectivity, and support the efficient movement of commerce across the Commonwealth. S.B. 205 would broaden the impact of existing transportation funding, provide greater flexibility for local governments, and help ensure critical bridge projects can move forward regardless of whether a bridge is county- or municipally-owned.

We supported this legislation (CLICK HERE for our memo), which is now Act 91 of 2026.