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PA Chamber Statement on Senate Passage of S.B. 350

HARRISBURG – Today, Pennsylvania Chamber of Business and Industry President and CEO Luke Bernstein released the following statement after the Pennsylvania Senate voted to pass S.B. 350, legislation that would enact meaningful and necessary reforms to the state’s permitting system:

“We have a generational opportunity within our grasp to advance a significant permitting reform bill that would lead to more jobs, greater transparency, and ultimately, a stronger economy. Senate Bill 350 takes a giant step forward propelling our state to become more competitive.  By building on the governor’s efforts to improve permitting, this measure further helps to modernize, streamline, and add much needed transparency to the permitting process. The PA Chamber is proud to support Senate Bill 350 and be part of the solution that will help Pennsylvania become more competitive. From crafting this bill to ushering it through committee and ultimately the entire Senate, I want to thank Senators Kristin Phillips-Hill and Greg Rothman for their leadership and tireless dedication on this issue.”

Earlier this week, the PA Chamber led a coalition of 68 leading industry associations and chambers of commerce in urging the governor and legislature to enact meaningful permitting reform this session. Moreover, Senate Bill 350’s provisions are consistent with the PA Chamber’s permitting reform plan, an approach endorsed by the Pennsylvania Building and Construction Trades Council in a joint op-ed written by the leaders of both organizations which was published in various outlets this spring.

PA Chamber Leads Coalition in Calling on Lawmakers to Enact Permitting Reform

HARRISBURG – Today, the Pennsylvania Chamber of Business and Industry spearheaded a group of 68 leading business associations and local chambers of commerce in sending a letter to Governor Josh Shapiro and members of the Pennsylvania state legislature, urging them to take decisive action in reforming the state’s “dysfunctional and unpredictable permitting system.”

The coalition, which represents several of Pennsylvania’s top industries and professions, detailed in its letter how challenges surrounding the current permitting process – including excessive wait times, burdensome costs, and a general lack of transparency – disadvantage Pennsylvania when it comes to attracting new business investment.

“The Commonwealth has too often lost out on investment to other states, and our inadequate permitting system is one key factor,” the letter reads. “The current process takes too long, lacks transparency, and costs businesses money and good-paying jobs for our state’s workers.”

The letter also outlined support for recent executive actions taken by the Shapiro administration to enact durable and lasting reforms to the state’s permitting process. Moreover, the coalition called for continued cooperation between the governor and members of the General Assembly in order to unlock the benefits of these reforms, including a more modern public infrastructure system, increased manufacturing, and additional economic opportunities for Pennsylvanians.

“Reform should be built upon the tenets of predictability, transparency, efficiency, and durability,” the letter continues. “Now is the time to coalesce around meaningful reforms that will allow our state to truly compete and lead. Doing so will build upon bipartisan momentum at the federal level to streamline permitting and unlock American investment.”

The coalition also reaffirmed its readiness to work with state leaders to improve Pennsylvania’s economic trajectory and capitalize on “a generational opportunity” unlock the state’s potential.

Full text of the letter is available here.

Background:  

This letter is the latest of several steps the PA Chamber has taken to promote permitting reform.

  • Pennsylvania Chamber President and CEO Luke Bernstein published an op-ed explaining how permitting reform will make Pennsylvania competitive on the national and world stage, and co-authored an op-ed with Pennsylvania State Building & Construction Trades Council President Rob Bair calling on state lawmakers to enact permitting reform.
  • In March, Pennsylvania Chamber Director of Government Affairs Kevin Sunday testified at a House Republican Policy Committee hearing, highlighting investments Pennsylvania lost in recent years due to a dysfunctional state permitting process. The Chamber’s testimony identified a comprehensive solution to the permitting process that addresses state agency resources, permit deadlines, and reforms to the permit appeals process.
  • Also in March, the Pennsylvania Chamber joined the national “Permit America to Build” coalition and sent a letter to Congress urging federal lawmakers to enact legislation that will modernize permitting processes.

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A Look Ahead for the Week of May 8, 2023

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.

 

Permitting reform

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.