SENATE DEMOCRATIC WRAP-UP FOR THE WEEK OF
July 16, 2007

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Following a lengthy and contentious negotiation process that stretched into mid-July, the Senate voted 46-2 in favor of the conference committee report on House Bill 1286 – the state’s fiscal 2007-08 spending plan.

While lawmakers expressed disappointment over the $27.2 billion budget being 16 days late, most lauded the new spending plan for holding the line on taxes, keeping increased spending to a conservative 3.2 percent, and making key investments in education, transportation, health care, and alternative energy.

Highlighting the budget was a $567 million increase in education spending, which includes $75 million for the governor’s “Pre-K Counts” funding; $90 million to upgrade high school classrooms with laptop computers; and $75 million to the state's Educational Improvement Tax Credit program. In all, 70 percent of the state’s increased spending went to education.

Buoyed by a $650 million budget surplus from 2006-07, lawmakers were also able to cut numerous business taxes and bring the state’s “Rainy Day Fund” up to $715 million – its highest level since 2001-02.

 The Cover All Kids health insurance program will receive $12.2 million. Combined with $20 million in federal funding, this program will allow coverage for an additional 21,000 children.

The budget also provided sizable increases for mental retardation programs, autism support services, $56.8 million for “Keystone Stars” child care providers’ initiative, an additional $74 million to provide child care assistance to low-income families, and an extra $18.9 million to help communities provide support services for the mentally ill.

The Governor signed the bill into law as Act 8A of 2007.

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            By a vote of 30-19, the Senate approved House Bill 1590, which will provide a continuing and dependable revenue source to fix the state’s roads and bridges and fund mass transit. 

In 2006, the governor’s blue ribbon commission examined transportation funding in Pennsylvania. The commission found that the state had more than twice as many structurally deficient bridges than the national average; 35 percent of the state’s secondary roads were rated “poor;” and highway and bridge construction costs had increased 35 percent over the past two years. In addition, the latest federal reauthorization bill had given Pennsylvania the lowest percentage increase in highway and bridge funding among all 50 states.

On the mass transit front, the commission found that stagnant state funding and lost federal dollars had led to operating shortfalls of at least $240 million for Pennsylvania’s public transit agencies. Rising fuel prices, as well as escalating health care costs, had compounded the funding problem and forced many transit agencies to cut service and hike fares, even as ridership has increased.

All of these factors combined to create a crisis situation, which this legislation goes a long way toward solving.

Under the legislation, the Pennsylvania Turnpike will borrow against future Turnpike tolls and the eventual tolling of Interstate 80 to raise $750 million in the first year, and up to $900 million by 2010-11.

The Turnpike Commission will install 10 gantries in an open tolling system, utilizing electronic toll collections. As envisioned currently, local residents would largely be unaffected by the new tolls on Interstate 80.

In total, $250 million in new state funding will go toward day-to-day operations for mass transit, which runs in all 67 counties in Pennsylvania, provides one million Pennsylvanians with transportation on a daily basis, and employs more than 15,000 men and women directly. Transit authorities will also receive new capital funding, and initiatives like the Persons with Disabilities rural transit program would be expanded statewide.

This legislation will replace the current hodgepodge of funding that goes toward transit with a dedicated, inflation-sensitive revenue source.

In addition to funding mass transit, this plan will provide $450 million in additional funding for roads and bridges, with local governments receiving an additional $35 million for roads and bridges that they maintain.

The governor signed the bill into law as Act 44 of 2007.

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The Senate voted 31-17 in support of legislation that would authorize economic development projects – including the new arena in Pittsburgh – to be funded from a 5 percent tax on casino revenues.

Under Act 71 of 2004, each licensed gaming entity is required to pay 5 percent of daily gross terminal revenue into the Pennsylvania Gaming Economic Development and Tourism Fund. The governor’s budget office estimates that, by the end of the 2007-08 fiscal year, approximately $55 million will be available for economic development projects.

House Bill 1631 would allocate up to $7.5 million annually over the next 30 years for the new arena, which will be home to the Pittsburgh Penguins. It would also allocate up to $64 million annually for debt service and operations for the Pennsylvania Convention Center in Philadelphia and at least $12.4 million over the next 10 years for expansion at the Pittsburgh International Airport.

The legislation also authorizes other key projects in Allegheny County including debt service and development at the Pittsburgh International Airport as well as funds for the David Lawrence Convention Center, the Urban Redevelopment Authority and a countywide development fund. Authorization for funding also goes to the convention center in Philadelphia.

This bill awaits the governor’s signature.

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            The Senate unanimously approved House Bill 1295, which amended the state’s fiscal code.

            Under the measure, the Governor is permitted to transfer up to $20 million to respond to disaster emergencies.  The measure also allocates $19.9 million from the Keystone Fund to the State System of Higher Education for deferred maintenance projects per a 2006-07 budget agreement. The new law also establishes an Insurance Restructuring Restricted Receipt Account for funds from the Blues merger that are to be used for health care-related programs.

            The law also redirects $107.8 million in Tobacco Settlement funds; and loans the Gaming Board $22.5 million from the Property Tax Relief Reserve Fund. The loan would have no impact on the amount or timing of anticipated property tax relief.

            The bill was signed into law as Act 42 of 2007.

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The Senate passed the conference committee report on House Bill 842 by a vote of 41-7.  This bill is the Education Code and appropriates the following funds for the 2007-08 fiscal year:

Small District Assistance $2.4 million - - 108 districts with average daily membership of 1,500 or less and an aid ratio of .6000 or greater

Basic Education Funding for 2007-08 School Year - - $4,951,505,537 – The legislation calls for a $166,684,974 or 3.48% increase in the Basic Education Funding.

            Included in the Basic Education Funding are:

Hold Harmless ($4,784,820,563)  -- Each school district will receive the same amount it did the previous year.

Base Supplement ($48,695,000) – Every school district receives this amount.

Poverty Supplement ($25,999,999) - - shared between189 school districts

Foundation Supplement - - $58 million - - shared between 169 school districts

Tax Burden Supplement $3.5 million - - shared between 35 school districts

Growth Supplement - - $2.5 million - - shared between 46 school districts

            Payments on Account of Limited English Proficiency Supplement - - $2.7 million

            Inflation Index Supplement $14.3 million - - if needed, split per district

            Minimum 2 Percent Increase $4.6 million - - increases Basic Education subsidy

            Special Education Funding - - 3 percent increase from $29.4 million

            Charter School Reimbursements -- $161.3 million

            Pennsylvania Accountability Grants - - $275 million

            In addition, the bill also has provisions that will provide transfers to other school districts for students displaced by the closing of Duquesne High School. The measure also implements Governor Rendell’s $75 million Pre-K Counts initiative to expand education opportunities for children ages 3 and 4.

            The governor signed the bill into law as Act 45 of 2007.

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The Senate unanimously passed House Bill 1203, which clarifies parts of the Alternative Energy Portfolio Standards Act that permit the Pennsylvania Public Utility Commission to determine whether or not the market place of energy suppliers has enough alternative energy supplies to meet its requirements. In addition, the PUC will be responsible for making sure companies bank and seek out alternative energy credits.

The bill also provides definitions for “alternative energy credit” and “customer-generator,” as well as clarifies the requirements for attaining alternative energy sources outside of Pennsylvania.

            The Governor signed the bill into law as Act 35 of 2007. 

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The Senate unanimously passed House Bill 1530, which regulates electrical distribution companies. Currently, electricity companies operate under rate caps, restricting the amount they may charge for service.

Under the bill, alternative electricity suppliers may provide service once the rate caps have ended in an effort to induce competition as a means for lowering prices.

The bill also clarifies policy that electric distribution companies may authorize long-term contracts, to acquire electric energy, to large customers.

The companies would be subject to review by the PUC.

The Governor signed the bill into law as Act 36 of 2007.

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            The Senate unanimously passed Senate Bill 116, which will help counties expand the size and diversity of their jury pools.

Under the bill, county jury commissions could expand the substance and diversity of their jury pools by contacting the state Administrative Office of the Pennsylvania Courts (AOPC) and requesting a list of prospective jurors for the county.

The list would be compiled by the AOPC from information submitted by the state Departments of Public Welfare, Revenue, State, and Transportation.

The Governor signed the bill into law as Act 37 of 2007.

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The Senate passed Senate Bill 97 by a vote of 45-3.  The bill allows banks and trust companies to disregard “goodwill” taxes that would be paid from June 30, 2001 to March 18, 2008. Goodwill is defined as the excess amount above fair market value that is paid during an acquisition or merger. Other states have passed similar legislation, which encourages future mergers.

After amendments, the bill excludes stock shares earned from acquisition as nontaxable.

The bill also changes minor tax issues in the fields of the Sales and Use Tax, the Personal Income tax, tax credits, and the corporate net income tax/capitol stock and franchise tax.

The bill is now on the Governor’s desk.

* * *

The Senate concurred in House amendments to Senate Bill 413 by a vote of 46-2. The bill prohibits counties of the second class from assessing signs or sign structures for the purposes of a real estate tax.

The signs and sign structures are now no longer considered property, and the bill would apply retroactively back to January 1, 2005. This affects property taxes, which may have been inaccurately assessed if sign structures were included.

The Governor signed the bill into law as Act 38 of 2007.

* * *

            The Senate unanimously passed Senate Bill 623, which authorizes a corrections officer to use whatever force is necessary to defend himself or another from bodily harm during the pursuit of an escaped person.

            The bill also authorizes a corrections officer to use deadly force when the officer believers that such force is necessary to prevent death or serious bodily injury to himself or another, or when the officer believes that deadly force is necessary to overcome resistance and capture the escaped persons, and when person being pursued has been convicted of a forcible felony, possesses a deadly weapon or otherwise indicate that he will endanger others unless apprehended without delay.

            Finally the bill requires local law enforcement to use whatever means exist to trace the commerce path of a firearm found to be illegally possessed by persons under 21.

            The Governor signed the bill into law as Act 41 of 2007.

* * *

The Senate unanimously approved legislation that would create the Pennsylvania Long Term Care Partnership (LTCP).

Senate Bill 548 encourages the purchase of LTCP insurance policies, increase guaranty fund coverage for long-term care insurance, and allows consumers to exchange their Long Term Care (LTC) insurance policies for LTCP insurance policies.

The governor signed the bill into law as Act 40 of 2007.

* * *

The Senate voted unanimously in favor of House Bill 1656.  This Act would transfer land in Skippack Township, Montgomery County in exchange for lands in Evansburg State Park; the sale of land in Winslow Township, Jefferson County to Jefferson County and land to Mansfield Borough, Tioga County.  The bill also authorizes the Department of General Services to sell the Pittsburgh and Philadelphia State Office Buildings.

Skippack Township would get .5709 acres and give Evansburg State Park .5418 acres. 

One acre of land in Winslow Township would be given to Jefferson County for $750.  This property would be used for an emergency communications tower.

Tioga County would receive 1.23 acres of land from Mansfield Borough.  Proceeds from this sale will be deposited in the State Treasury Armory Fund.

The price for the sale of the Pittsburgh and Philadelphia State Office Buildings would be determined through a public solicitation.

The bill is in the House.

* * *

The Senate unanimously concurred in House amendments to Senate Bill 466, which exempts temporary structures - such as festival or fairground tents and pole barns - from the state’s Uniform Construction Code. 

The bill was signed into law as Act 39 of 2007.

* * *

On concurrence, the Senate approved the following amended non-preferred appropriations bills for fiscal 2007-08  (percentage change in parenthesis). All of the bills are now in the Governor’s hands:

The vote on the following bills was 46-2

Senate Bill 929 – Penn State University -- $334.2 million (1.9 percent)

Senate Bill 930 – University of Pittsburgh – $168.1 million (2.1)

Senate Bill 934 -- University of Pennsylvania and Museum $49.4 million (0.5)

Senate Bill 947 -- Lancaster Cleft Palate Clinic -- $150,000 (154.2)

The vote on the following bills was 40-8

Senate Bill 953 -- Carnegie Museums -- $508,000 (0)

Senate Bill 954 -- Franklin Institute -- $769,000 (0)

Senate Bill 955 -- Philadelphia Academy of Natural Sciences -- $471,000 (0)

Senate Bill 956 -- African--American Museum -- $359,000 (0)

Senate Bill 957 -- Everhart Museum -- $46,000 (0)

Senate Bill 958 -- Mercer Museum -- $196,000 (0)

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