Last week, the Pennsylvania Senate voted to pass a comprehensive permitting reform bill that addresses several of the business community’s top concerns regarding the current process, while two committees advanced a suite of proposals to improve Pennsylvania’s tax competitiveness and enhance the permit appeals process, respectively.
Here are the highlights from last week’s session:
The PA Chamber coordinated a broad coalition of chambers of commerce and other statewide employer associations in sending a letter to Gov. Shapiro and state lawmakers last Monday calling for reforms to Pennsylvania’s system of issuing state permits for construction and other projects. Two days later, a bipartisan majority of senators voted to pass Chamber-supported legislation, Senate Bill 350, sponsored by Sen. Kristin Phillips-Hill (R-York).
Senate Bill 350 would require state 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. Moreover, the bill establishes a timeframe in which permits must be reviewed and issued – or otherwise be “deemed approved,” and provides for expanded use of authorized third-party contractors to review applications.
The PA Chamber sent a memo to Senate lawmakers last Wednesday, urging their support for this critical legislation. Senate Bill 350 later passed by a bipartisan vote of 29-19.
In a statement, PA Chamber President Luke Bernstein hailed the bill’s passage as a “generational opportunity” to enact reforms that “would lead to more jobs, greater transparency, and ultimately, a stronger economy.” To read the Chamber’s full statement on Senate Bill 350, click here.
Additionally, Bernstein joined Sen. Phillips-Hill on an episode of her podcast, Kristin’s Corner, prior to the vote to discuss the positive impacts this legislation would have on Pennsylvania’s economy. To listen to their conversation, click here.
The Senate Environmental Resources and Energy Committee separately voted on Wednesday to advance Senate Bill 198. Sponsored by Sen. Camera Bartolotta (R-Washington), the bill aims to improve the state’s permit appeals process. The PA Chamber sent a memo to committee members ahead of its consideration to express support for the proposal, which later passed by a vote of 7-4.
Business Tax Reform
The PA Chamber coordinated a separate letter from employer and industry associations to the governor and legislators last Monday urging them to build on the historic, bipartisan tax reforms accomplished last session to further improve Pennsylvania’s business tax competitiveness. On Wednesday, the Senate Finance Committee advanced proposals to expedite the reduction of Pennsylvania’s corporate net income tax (CNIT) and improve the treatment of net operating losses (NOLs) in the state tax code.
Senate Bill 345, sponsored by Senate Majority Whip Ryan Aument (R-Lancaster), would accelerate the CNIT phasedown, immediately reducing the tax rate to to 7.99 percent and enacting a full percentage-point annual reduction until it reaches 4.99 percent in 2026, five years sooner than the timeline established by the enactment of Act 53. The bill passed with bipartisan support.
Senate Bill 346, sponsored by Senator Greg Rothman (R-Cumberland), would increase the limit on previous years’ business NOLs that employers can carry forward and deduct from its profits in a given tax year. Pennsylvania is currently one of the only states whose treatment of NOLs is not at least consistent with the federal tax code. This unfortunate distinction makes Pennsylvania less competitive and unattractive to investment, particularly from start-up companies that frequently suffer losses in their early years. S.B. 346 would raise the cap on NOL deductions (currently 40 percent of taxable income) by ten percent annually until it reaches the federal limit of 80 percent in 2027. The bill passed committee with unanimous support.
The PA Chamber robustly supports Senate Bill 346, which would put Pennsylvania on par with 48 other states and federal tax laws – helping us attract new and additional business investment into the Commonwealth.
Both bills will be eligible for consideration by the full Senate when lawmakers return in June.