Budget and Finance

            ***1986-87 General Fund Budget -- The commonwealth's general fund budget for 1986-87 was approved as a conference committee report on SB 1416 by a Senate vote of 49-1 July 1. On the same day it was signed into Act 5A by the governor. 

Enactment of the $9.3 billion spending plan missed the fiscal year-end deadline by one day, threatening to delay welfare checks and otherwise bring state services to a halt.

However, the late signing was mollified by praise from leaders of both sides of the aisle who noted the budget was accompanied by personal and business income tax cuts (see tax story) while providing needed funds for economic development and increased spending for education.

The general fund budget was also accompanied by the passage of 42 separate bills of non-preferred appropriations for various educational and health institutions, bringing total state general
fund spending for the new fiscal year to $9,689,413,000, or $311,446,000 more than the $9,377,967,000 spent this past year.

Democrats lauded the inclusion in the new budget of a first time appropriation of $5 million to assist bankrupt or near bankrupt communities regain their feet. Another Democratic initiative led to an agreement to use more than $38 million in surplus funds for supplemental school subsidies, with a distribution formula that will ensure that a large portion will go to distressed school districts.

Another first-time feature in the budget is a $7 million appropriation for a women, infants and children (WIC) nutritional aid program. Until this year, the program was totally federally funded. But with federal cutbacks, Democrats favored state spending to pick up the slack on the program.
Democrats were also responsible for restoring an $8 million food bank program to take care of the state's hungry. The governor had proposed only a $1.5 million appropriation.

For the second year in a row, the general fund budget appropriates $25 million for a "Sunny Day Fund" to attract businesses to Pennsylvania, and $25 million for a "Rainy Day Fund" to stabilize Pennsylvania's taxes.

The budget bill also contains appropriations from a special Pennsylvania Economic Revitalization Fund (PERF) for some 11 revised economic development programs (see community and economic development). When PERF was established two years ago, it was to be funded by $190 million in bond sales. However, largely because of last year's budget surplus, $117 million of general fund revenues was transferred to PERF so that funding for such diverse programs as business incubator loans and a conservation corps employing young people could get underway. Much of this money remains in the current budget, with programs revamped to become more effective. Other programs were added to target aid to hardship communities such as $1 million to revitalize the Shanango Valley, $2 million for the Mon Valley and $1 million for the Beaver Valley.

One of the largest items in the budget is the $2.17 billion state subsidy for basic education, an increase of $125.4 million over 1985-86 (see education). After prompting by Democratic legislators, $38.6 million was added in the budget to supplement the school subsidies.

Of the $38.6 million school subsidy supplement, $4.6 million will be distributed to distressed school districts.

Separate appropriations of $7 million and $28 million were also included as state school aid to improve the quality of education.

In the area of higher education, state colleges will receive $283,987,000 under the new budget, compared with $268,156,000 for 1985-86.

A Human Services Development Fund, which last year contained $18 million in state and federal funds, was given a $10 million increase in state money. Language in the budget bill provided
that checks from the $28 million fund could not be distributed around the state, with the usual self-serving publicity that has become a trademark of the current administration, until after Dec. 1, 1986, when the forthcoming gubernatorial election would be over.

However, the controlling language itself became a political football when the Republican gubernatorial candidate, with cooperation from the current administration, interpreted it to mean that aid to the counties was threatened. This distortion alarmed counties to such an extent, that the legislature was recalled from its summer break to remove the restrictive language. Democratic legislators, deriding the hypocrisy of the Republicans' false tears for the poor, used the occasion of the special session to add $7.2 million to the budget for various drug and alcohol programs, child abuse prevention, and community legal services.

The additional funds and the repeal of the distribution language for the human services fund were inserted in SB 900, which passed the Senate unanimously. The $7.2 million was then
stripped from the bill when the governor signed it, fulfilling Democratic predictions that Republican concern for the needy would ultimately prove false.

The new budget also incorporates Democratic initiatives unveiled earlier this year in project PREPARE to target money for effective job training programs. A new state appropriation of $7
million is contained in the budget for this purpose. Also, a $3 million state appropriation is earmarked specifically for "job training for welfare recipients dropped from the rolls.

***Non-Preferred Appropriations -- A package of more than 40  non-preferred appropriations bills totaling $476,184,000 was approved in separate bills (HBs 2509-2550, now Acts l2A-52A) for various educational, health and charitable institutions.

These bills, which are non-binding appropriations that require a two-thirds approval of the legislature, bring total general fund spending for 1986-87 to about $9.7 billion.

Spending on the non-preferreds compares to about $450 million enacted last year.

The largest portion of the non-preferred appropriations, more than $400 million, goes to the four state related universities. These appropriations, with the amount of increase over 1985-86 in parentheses, are:
            HB 2509, Penn State, $181,924,000 ($10,286,000);
            HB 2510, University of Pittsburgh, $100,324,000 ($5,668,000);
            HB 2511, Temple University, $110,283,000 ($6,090,000); and
            HB 2512, Lincoln University, $7,563,000 ($541,000).

The largest non-state related school appropriation of $31,224,000 was approved for the University of Pennsylvania under HB 2513, an increase of $2,685,000 over 1985-86."
 

Some other schools receiving appropriations, with the increases in parentheses, are:
            Western Psychiatric Institute, $6,848,000 ($326,000);
            Drexel University, $4,934,000 ($279,000);
            Hahnemann Hospital, $4,849,000 ($511,000);
            Philadelphia College of Osteopathic Medicine, $4,730,000($268,000);
            Medical College of Pennsylvania, $3,427,000 ($194,000);
            Pennsylvania College of Optometry, $1,402,000 ($179,000); and
            Pennsylvania College of podiatric Medicine, $987,000 ($150,000).

*** Tax Cuts -- With a fiscal 1985-86 year-end revenue surplus of nearly a quarter of a billion dollars, the General Assembly -- as part of its action on a tax and spending plan for fiscal 1986-87 -- approved $165 million in tax cuts for citizens and businesses.

On a vote of 46-4 in the Senate and 198-0 in the House, the legislature adopted a conference committee report on legislation (SB 560, Act 77/l986) that was to reduce the state's personal income tax (PIT) rate from 2.2 percent to 2.1 percent and cut the corporate net income (CNI) tax rate from 9.5 percent to 8.5 percent.

The cut in the PIT rate was to become effective September 1, 1986 while the reduction in the CNI tax was made effective January 1, 1987.

In an effort to provide additional tax relief to small businesses, the legislation exempts the first $50,000 of a business's valuation from the state's capital stock and franchise tax and reduces the prepayment of tentative capital stock and franchise tax from 85 to 80 percent.

Other provisions of Act 77 will grant persons 55 years of age and older a one-time exclusion from the payment of the state income tax on the net profit from the sale of their homes, close
so-called "loopholes" in the state's Realty Transfer Tax, and increase the threshold level for an individual's filing of a declaration of estimated tax on income for which no tax has been withheld from $1,000 to $2,500.

The one-time tax break for older Pennsylvanians who sell their homes represented the original provisions of Senate Bill 560 when it first passed the Senate last year. As enacted, the
exclusion will apply to homes sold after July 1, 1987. After that date, persons 55 years of age or older who sell their homes will not have to pay state income tax on up to $100,000 of net gain resulting from the sale. Married couples filing separate returns will be entitled to a maximum tax exclusion on $50,000 of net gain from the sale of their home. The one-time state tax exclusion on home sale profit for senior citizens is similar to one already permitted by federal tax law.
 

The provisions of Act 77 relating to the state's Realty Transfer Tax are intended to actually raise revenue for the state, local school districts and municipalities. Specifically, the provisions seek to prevent the current avoidance of the transfer tax by commercial entities which transfer real estate
ownership of shopping malls, office buildings and apartment complexes (via sale of stock, transfer of partnership shares, or other transaction) without transfer of a deed.

In the prior fiscal year, the General Assembly had enacted a measure (HB 136, Act 29/1985) reducing the state's personal income tax (PIT) rate from 2.35 percent to 2.2 percent effective January 1, 1986. That legislation also provided for various forms of business tax relief and created a three-year $25 million investment tax credit program to benefit businesses, such as the
steel industry, which suffered substantial losses during the 1982 economic recession.

*** "All Weather" Funds -- Enacted was legislation (HB 285, Act 32/1985) creating so-called "sunny day" and "rainy day" accounts for the purpose of attracting businesses to Pennsylvania and stabilizing taxes during economic downturns. The fiscal 1985-86 and 1986-87 state budgets authorized annual appropriations of $25 million for each fund.

The "rainy day" fund, defined as the Tax Stabilization Reserve Fund, was to be used "to minimize future revenue shortfalls and deficits, provide greater continuity and predictability in funding of vital government services and minimize the need to increase taxes to balance the budget of the
Commonwealth during periods of economic distress." In other words, the fund would provide a revenue cushion to be used for "rainy days."

The "sunny day" fund was intended to bolster Pennsylvania's economy and to attract industrial, manufacturing or research and development enterprises to the commonwealth.

The legislation specified that the governor would first determine when and if either fund would be used. His recommendations would be made to the chairmen of both the Senate and House Appropriations committees. Specific appropriations from either fund would require a two thirds vote of approval in both the Senate and House.

*** Business Tax Credit for New Jobs Created -- As part of its fiscal 1986-87 tax cut package, the General Assembly passed and the governor approved legislation (HB 2596, Act 79/1986) to provide tax credits to businesses that create new jobs over the next three years.

Specifically, an employer's state tax obligations will be reduced by an amount equal to the increased federal unemployment compensation "excise tax" contribution of the employer for each
new job created. The tax credit would amount to $140 for each new employee in 1986, $161 for each new employee in 1987, and $168 for each new employee in 1988.

***Capital Budget and Redevelopment -- A $1.6 billion capital budget contained in HB 383 was approved as a conference committee report by the Senate 49-1, following approval in the
House, and then was pared in half by the governor when he subsequently signed it into Act 118.\

This capital budget, which is actually an extension of the 1984-85 capital budget, is considered unique in that it authorizes redevelopment assistant projects as well as the more
traditional improvement projects on state-owned property.

The governor's veto of line items reduced the $1.6 billion capital budget to about $790 million. Of this total, $400.7 million will be for so-called redevelopment assistance, and $388.9 million is for public improvement projects.

The debt created by the sale of bonds is usually retired by unrestricted general fund revenues. However, in this case, the debt created for redevelopment projects is to be retired by a
special Redevelopment Assistance Sinking Fund (see story on HB 1676).

Among the redevelopment projects is an authorization of $141 million for Philadelphia's proposed $450 million convention center. Legislation establishing a joint state-city authority to
oversee construction of the center has already been enacted (see story on SB 655).

The proposed Philadelphia convention center was placed in the redevelopment assistance category because it is expected to generate new economic activity. The project will also receive
local funding.

Other redevelopment projects authorized for funding include $85 million for the Midfield Terminal at Greater Pittsburgh International Airport; $20 million for Carnegie-Mellon University's proposed National Center for Advanced Manufacturing and Software Engineering; $13.8 million for Pittsburgh's Buhl Science Center; $23.8 million for Philadelphia's St. Christopher's Hospital; $10 million for development of the Horner Research Laboratory at Bethlehem; $5 million for a Lancaster
County Convention Center; $11.9 million for the Scranton Civic Arena; and $4 million for a Scranton sports stadium.

***Philadelphia Convention Center Authority -- By a vote of 39-9, the Senate adopted a conference committee report on SB 655, creating a nine-member authority to oversee construction of the proposed $450 million Philadelphia Convention Center. After first voting against the legislation, the House finally adopted the report which was signed into Act 70 by the governor June 27.

The joint state-city authority will have members appointed by the governor, the state legislature, the mayor of Philadelphia and city council. The ninth member -- and authority chairman -will be selected by the other eight members.

The legislation had stalled in the House when a coalition of city legislators, concerned about what they considered weak affirmative action language, joined with suburban legislators,
seeking leverage to reduce the city wage tax on commuters, to oppose the measure. When funding for the convention center was included in a capital budget, the measure establishing the joint
authority was finally approved.

The legislation authorizes city council to enact a hotel room rental tax to pay for tourist promotion and the city's share of the project. The hotel tax and the state sales tax combined may not exceed 12 percent.

***Capital Budget 1985-86 -- A $235 million capital budget for 1985-86 was approved unanimously by the Senate in HB 1014 and then signed by the governor Jan. 23 into Act 1.

The legislation authorizes the sale of $165 million worth of bonds to finance General Services Department construction projects around the state and $70 million for Transportation
Department projects.

Originally, this capital budget was contained in SB 655 which also included $50 million for the proposed Philadelphia Convention Center. The capital budget provisions, minus funds for the convention center, were then inserted into HB 1014, a Boat and Fish Funds measure that was gutted. SB 655 then became legislation to establish a convention center authority, and the
convention project was authorized in HB 383 (see previous stories).

***Capital Budget 1986-87 -- The capital budget for 1986-87 was set at $601.5 million in SB 1556 which was adopted unanimously by the Senate as a conference committee report and
signed by the governor July 10 into Act 124.

About $500 million of the debt authorization is for public improvement and transportation projects to be repaid from General Fund and Motor License Fund proceeds.

The remaining $100 million bond authorization will finance partially the redevelopment projects authorized in HB 383 (see previous story). Financing from previous bond sale authorizations will cover remaining project costs, and the entire redevelopment debt is to be retired from the special sinking fund (see HB 1676).

Of the $100 million for redevelopment assistance in SB 1556, $30 million is expected to be used for the Pittsburgh airport's Midfield Terminal, $10 will go for other Pittsburgh area "Strategy 21" projects, and $60 million will be used for the Philadelphia Convention Center. The state's share of the convention center project is limited to $185 million.

*** Sinking Fund to Help Finance Projects -- Without opposition in either chamber, the legislature adopted a conference committee report on legislation (HB 1676, Act 115/1986) creating a so-called Redevelopment Assistance Sinking Fund for the purpose of making principal and interest payments on state bonds issued for projects such as the Philadelphia Convention Center, the development of a new midfield terminal at the Greater Pittsburgh International Airport, and Lehigh
University's purchase and development of Bethlehem Steel's Homer Research Labs in the Lehigh Valley.

Up to $30 million in revenues generated by the state's Realty Transfer Tax will be deposited in the sinking fund on an annual basis for payment of the debt service requirement on the
redevelopment assistance bonds.

***Motor License Fund Budget -- A $1.4 billion highway budget for 1986-87 contained in a conference committee report on SB 1447 was unanimously approved by the Senate and signed by the governor July 2 into Act l0A.

The new budget is only about $26 million more than the 1985- 86 road spending plan. The current level of gas and oil taxes and registration fees, which support the Motor License Fund
budget, will remain the same for the new fiscal year.

SB 1447 allocates $548,638,000 for highway maintenance, or about $500,000 more than in 1985-86. Additionally, the new budget sets aside $10.9 million to assure that counties earmarked
for less maintenance aid under the state's distribution formula will actually receive the same amount of aid as the previous fiscal year.

The new highway budget also includes a $165 million expenditure for debt interest payments, about the same as in 1985-86. An additional $2.1 million is included for interest
payments on bonds sold to advance money for interstate construction that is 90 percent reimbursable from the federal government.

Other major outlays include: $147 million for payments to municipalities for road maintenance and construction; $149.7 million for the state police; and $9.5 million for aviation
operations and airport construction and development.

The Motor License Fund also contains a $20 million appropriation to provide a one-time payment to county maintenance districts for highway maintenance.

***PUC Budget -- The Public Utility Commission budget of $24.8 million for 1986-87 was approved 49-1 by the Senate in HB 2090 and signed by the governor July 1 into Act 6A.

This compares with a $24.3 million PUC budget for the previous fiscal year.

The House had originally proposed a $26.3 million budget for the PUC, but the Senate recommended $24.5 million. A compromise led to an agreement to a $24.8 million budget.

The PUC budget is funded by assessments against the state's utilities, not tax revenues.

***Consumer Advocate Budget -- The Office of Consumer Advocate received a budget of nearly $2.5 million for 1986-87 when HB 2089, approved unanimously in the Senate, was signed by
the governor June 6 into Act 3A.

The consumer advocate's new budget of $2,476,000 is about $150,000 more than the previous fiscal year's budget of $2,322,000. It is supported solely by assessments on the state's
utilities, not by general fund tax revenues.

***Oil Overcharge Refund -- Some $96.8 million awarded to Pennsylvania as its share of a $2 billion judgment against the petroleum industry for violating federal price regulations in the
1970's will be used to help low-income people weatherize their - - homes and partially offset heating costs under SB 1277, which was unanimously approved as a conference committee report by the
Senate. On July 10, the governor signed the legislation into Act 122.

The legislation creates an Energy Conservation and Assistance Fund into which the oil overcharge refunds will be deposited.

For 1986-87, SB 1277 appropriates $40 million from this special fund as follows: $20 million for the weatherization of homes of low income persons; $10 million for energy assistance
payments under the Low Income Heating and Energy Assistance Program (LIHEAP); $5 million to the Pennsylvania Solid Waste Resource Recovery Development Fund and $5 million for energy
conservation projects at schools, hospitals and other public facilities.

***Radon Detection -- The relatively newly discovered threat of radon, a cancer-causing gas formed by the deterioration of uranium deposits, is addressed in HB 1934 which was approved
unanimously by the Senate and signed by the governor May 16 into Act 62.

The legislation appropriates $1 million to the Department of Environmental Resources to work with industry and the federal government in developing methods to reduce unsafe levels of radon gas found in homes. It also triggers a $3 million low-interest loan program for homes to install devices to prevent-or alleviate the infiltration of dangerous levels of gas.

This $1 million appropriation is in addition to some $1.4 million included in the 1986-87 budget for radon testing.

The $3 million loan program to combat radon infiltration was established in 1985 in the Pennsylvania Housing and Finance Agency. However, no loans were made because PHFA feared
liability suits by homeowners if devices installed failed to curb their radon problems. Immunity to such suits is granted to PHFA under HB 1934.

***Avian Flu Payments -- Poultry farmers whose flocks were destroyed earlier this year to eradicate avian flu will be indemnified from a $1.2 million appropriation approved unanimously by the Senate in HB 440 and signed by the governor April 22 into Act 1A.

The legislation appropriates the money to the Department of Agriculture to pay poultry men for some 307,000 birds killed to stop an avian flu outbreak in four central Pennsylvania counties.

The bill also provides ~se of the appropriation for incentive payments to swine owners who slaughter their breeding swine to help eradicate pseudorabies.

***Supplemental Budget for 1985-86 -- A measure (HB 1880) to spend an additional $74 million in state funds for the 1985-86 fiscal year was signed by the governor May 8 into Act 2A. Most of the supplemental money was for welfare programs.

The legislation included spending about an additional $52 million for the state's medical assistance program and $13 million more for the state's cash grants program for welfare recipients. The remainder is for tort claims in the highway budget, judicial costs and some health programs such as renal dialysis treatment. Besides the $74 million state funding supplement, HB 1880 authorized an additional expenditure of $103.5 million in federal funds for a number of programs.

***State Retirement Board Expenses -- A total of $4,882_,000 was appropriated from the State Employees Retirement Fund to the State Employees Retirement Board for administrative expenses for 1986-87 under HB 2551 which passed the Senate unanimously and was signed by the governor July 1 into Act 7A.

***School Retirement Board Expenses -- The Senate unanimously approved HB 2552, appropriating $10,362,000 from the Public School Employees Retirement Fund to the Public School
Employees Retirement Board for administrative expenses for 1986- 87. The bill was signed by the governor July 1 into Act 8A.

***Pennhurst Conversion To Veterans' Home -- Approval by the Senate of legislation (HB 1013) to convert the Pennhurst Center in Chester County into a third state-run veterans' home was followed by the governor's enactment of the measure February 14 into Act 7.

In signing the bill, the governor reduced the bond authorization for the project from $6.17 million, approved by the legislature, to $2.16 million which will cover only part of the conversion cost.

The Pennhurst Center for the Mentally Retarded, the subject of much litigation in recent years over cases of patient abuse, was slated to cease operations by mid-1986. When converted, it
will become the first veterans' home in the Philadelphia area.

The state now operates veterans' homes in Erie and Altoona.

The bill also includes its original authorization of $1,398,000 for capital improvement projects by the Game Commission in Bedford, Cambria, Somerset, Lackawanna, Lehigh and
Schuylkill counties.

Boat and Fish Funds capital improvement projects totaling $550,000, originally contained in and then deleted from HB 1014, were also inserted into HB 1013.

*New Non-Preferred Appropriation -- Not included in the package of non-preferred appropriation bills enacted as part of the 1986-87 general fund budget was SB 1338 which was approved 40-9 in the Senate and then referred to the House Appropriations Committee before the summer recess.

The bill, which represents a new non-preferred appropriation and had difficulty gaining the necessary two-thirds votes for Senate passage, would appropriate $80,000 to the Pennsylvania
Nutrition Adjustment Center to study nutrition and food sensitivity in developmentally disabled children.

***Licensure Budget -- House Bill 2554, approved unanimously by the Senate and signed into Act 9A by the governor July 1, appropriates $8,753,000 from the Professional Licensure
Augmentation Account for use by the Department of State's Bureau of Professional and Occupational Affairs for 1986-87. Of this total, $105,000 is restricted to fill ten new staff positions.

The bill also appropriates $1,212,000 to the State Board of Medicine; $238,000 to the State Board of Osteopathic Medicine; and $107,000 to the State Board of Podiatry.

*** Beer Industry Tax Credit -- The General Assembly adopted a conference committee report on legislation (SB 370, Act 26/1986) extending and boosting special state tax credits to the
malt or brewed beverage industry in Pennsylvania for three years.

Since 1974, Pennsylvania brewers have been entitled to a tax credit of up to $100,000 annually for the purchase of plant, machinery or other equipment.

The conference committee report on Senate Bill 370 not only extended the tax credit until 1989 but increased it to $150,000 annually.

*** Rail Tax Credit Extended -- The General Assembly passed and the governor signed into law (Act 123/1986) a bill (SB 1422) reauthorizing a gross receipts tax credit granted railroad
companies for maintenance and improvements to "rights of way" including expenditures for ties, rails, signals, etc.

The credit, which equals 25 percent of the amount spent in Pennsylvania in the previous year, would be extended through the tax year of 1992. Each year's expenditure for which a credit is
taken must be at least twice the previous year's credit.

*** Interest Payments to Taxpayers -- The General Assembly approved a measure (HB 2001, Act 127/1916) that requires the state to pay interest on tax overpayments that are not refunded to the taxpayer within 75 days after tax returns are due or within 75 days after the return is filed if .it is filed after the deadline.

Previously, the state had six months to make tax refund payments before interest was applied.

*** Employer DC Tax Reduction -- The General Assembly enacted a measure (HB 1042, Act 30/1985) providing Pennsylvania businesses with a $189 million reduction in 1986 on the amount of tax they otherwise would have had to pay to cover interest on Pennsylvania's Unemployment Compensation Fund debt to the federal government.

The legislation reduced the special tax from a previously scheduled 1986 levy of 1 percent to 0.3 percent on the first $8,000 of an employee's salary. As a result, each employer was to save $56 per employee in 1986.

The legislation also marked an attempt to end a dispute involving the governor's initial refusal to appoint an Unemployment Compensation Advisory Council which was mandated by law in 1983. The legislation expanded .the membership of the council from 13 to 19 members to allow the governor to make six additional appointments from the business and labor sectors.

Additionally, the legislation limited eligibility for unemployment compensation to seasonal workers employed by fruit and vegetable food processing operations in Pennsylvania.

Such seasonal workers will be denied unemployment compensation between seasons. However, if a seasonal worker's job does not materialize at the beginning of the following season, the unemployed worker could receive benefits retroactively to the end of the prior season.

* Philly Wage Tax Dispute -- Senators representing the suburban communities surrounding Philadelphia succeeded in forcing Senate action on legislation that would reduce the
controversial wage tax imposed by the city on their constituents.

The measure, dubbed by its sponsors as the "Spirit of '86" (SPIRIT is an acronym for Southeastern Pennsylvania Initiative for Reform in Taxation), was amended into an unrelated House passed bill (HB 361) on the Senate floor. The original language of the House bill was gutted.

Under the proposal, which passed the Senate (30-18) after stormy debate, the wage tax paid by suburban residents who work in the city would be reduced from the current rate of 4.31
percent to 3.5 percent over the next five years.

The bill also provides for a token three-tenths of one percent wage tax reduction for city residents by 1991. It would drop from the current level of 4.96 percent to 4.66 percent over the next five years.

Estimates on how much revenue Philadelphia would lose as a result of the legislatively mandated reduction in the wage tax varied widely among supporters and opponents of the legislation.

City officials estimated the annual revenue loss at $108 million by fiscal 1991-92.

The bill, however, would give Philadelphia several new taxing alternatives for replacing lost revenues -- even though the new tax options would directly impact only on Philadelphia.

Specifically, the city would be granted the authority to impose one or more of the following:
            -- a one percent city surcharge on the state's six-percent sales tax;
            -- a city sales tax of up to six percent on professional services;
            -- a city personal income tax on individual earned and. unearned income; and
            -- a city commercial rent tax.

In addition to the legislation's scheduled non-resident wage tax reduction, language in the bill specifies that suburban residents would never pay more than 75 percent of the wage tax paid by city residents. Therefore, if the wage tax imposed on city residents was ever drastically reduced by the city, suburban residents would be guaranteed a further reduction.

House Bill 361 as gutted and amended in the Senate was committed to the House Appropriations Committee soon after its return to the House for concurrence in Senate amendments.

*** Tax Credit For Hiring Welfare Recipients -- A bill (HB 567) continuing a program of tax credits to businesses that hire welfare recipients as well as individuals who receive Aid to
Families with Dependent Children (AFDC) was enacted (Act 102/1985).

Without the legislation -- extending the program until January 1, 1989 -- the program would have gone out of existence December 31, 1985.

Specifically, the program entitles businesses to a tax credit of $3,600 for each cash assistance or AFDC recipient they employ over a three year period. The credit amounts to 30 percent, 20 percent and 10 percent of the first $6,000 in wages paid to such an employee during the first, second and third year respectively.

Prior to Senate passage of HB 567, and based primarily on concerns that the program was not effectively utilized or promoted by the Thornburgh administration during its initial years, amendments were approved requiring the Department of Public Welfare to conduct a program of "employer education" to inform employers of the availability of the tax credits and to make periodic reports to the General Assembly on the program's effectiveness and utilization.

Meanwhile, another provision of the legislation created a new, two component system for the imposition of the state's Capital Stock and Franchise Tax on regulated investment companies
(RIC's) in Pennsylvania. The one component requires that RIC's pay a $75 fee per $1 million of net asset value. The other component taxes an RIC's undistributed taxable gross income at the rate of the state's personal income tax. Proponents of the revision contended the change was necessary to prevent a loss of revenues resulting from RIC conversions from corporation to trust formats in order to avoid paying the state Capital Stock and Franchise Tax. Additionally, they argued that the state's
previous tax policy represented a disincentive for corporate RIC's to locate in Pennsylvania.

House Bill 567 also provided a Realty Transfer Tax exemption to farms transferring from sole ownership to a family farm corporation. The exemption was expected to result in an annual
state revenue loss of about $410,000.

* PURTA Reports -- The Senate passed a bill (SB 1132) which would allow counties to file Public Utility Realty Tax Act (PURTA) reports on behalf of municipalities within their jurisdictions and to receive .25 percent of the PURTA disbursement to those municipalities as an expense for preparation of the reports. Counties would be entitled to a minimum reimbursement of $2,000.

* Municipal Pension Law Update -- Passed by the Senate was a 25-bill package (SB's 1299-1323) designed to conform various state laws governing municipal pension plans with a municipal pension reform law approved by the General Assembly in 1984.

The bills were recommended by the Public Employee Retirement Study Commission which identified 85 sections in 25 state laws that needed to be brought into conformity with Act 205 of 1984.

For the most part, the package of bills standardizes guidelines for pension plan funding and actuarial reporting.

The 1984 law was designed to help restore actuarial soundness to municipal pension plans with unfunded liabilities.

In part, the law authorized state funding of $35 million annually for 15 years beginning in 1987.

Additionally, the 1984 law established procedures to determine financial distress of municipal pension plans and authorized a recovery program which outlined "self-help" remedies.

* Volunteer Firefighter Pensions -- On a vote of 48-0, the Senate passed a bill (SB 1047) which would allow volunteer fire companies to establish pension plans for their members. Each
individual company, or relief association, could establish its own retirement benefit plan within certain actuarial guidelines.

Proponents of the measure contend that the financial incentive provided by such a retirement benefit would help to attract and maintain an active level of volunteer firefighters. House action was still pending.

* "Police Powers" for Revenue Agents -- Passing the Senate was a bill (SB 1194) that would grant enforcement agents of the state Department of Revenue general police powers to stop and conduct investigations of liquid fuel carriers.

Failure to comply with provisions of the state's Liquid Fuels Tax Act or Fuel Use Tax Act would result in penalties, including the impoundment of vehicles found in violation of the law.

*** Escheat Law Update -- Legislation was enacted (HB 1196, Act 60/1986) expanding upon provisions for the disposition of unclaimed or escheated property. The new law permits
municipalities to dispose of unclaimed bicycles after a 90 day waiting period. Municipalities were also given the authority to donate unclaimed bicycles to charitable organizations or to sell
unclaimed bicycles at public auctions with the proceeds from such sales being retained by the municipality.

Other provisions of the legislation allow the state Secretary of Revenue to donate unclaimed property for use by the commonwealth or any of its political subdivisions.

*** Treasurer Reports -- Passed was a bill (HB 1672, Act 35/1986) changing the dates of the state Treasurer's submission of fiscal year quarterly reports to the Auditor General on the
status and amount of all Commonwealth funds.

Instead of the reports being due on the last business day of May, August, November and February, the reports are now due on the last business day of June, September, December and March.

*** Audits Reduced -- Enacted was a bill (HB 1670, Act 31/1986) eliminating a requirement that the Auditor General audit bonds, stocks, mortgages or other securities deposited with the
state Treasurer twice annually. The measure reduced the requirement of such audits to only once a year.

* Audit Standards -- Legislation (SB 1350) amending the Administrative Code to require that all fiscal records of the state be audited "in conformity with generally accepted accounting principles" cleared the Senate. House action was still pending.

*** State Investments -- The General Assembly passed a measure (HB 1671, Act 45/1986) which expands upon the so-called "prudent man rule" regarding the investment of state funds. The
legislation provides new criteria to assure that state funds are held in safe but maximum return investments.

The legislation also allows the governor to authorize the issuance of replacement checks from the state treasury, allows the state Treasurer to issue replacement bonds or certificates
when old ones are lost or destroyed, and permits the state Treasurer to determine the method of making public assistance payments as long as the method of payment is a commercially accepted method.

*** Philadelphia Finances-- Two bills (SB 826; SB 1082) affecting finances in the city of Philadelphia were passed and signed into law (Act 85/1985; Act 83/1985).

Senate Bill 826, its original language gutted in the House, was amended to allow Philadelphia to refinance bonds in an effort to save the city money on long-term debt.

Senate Bill 1082, also stripped of its original intent, was amended in the House to permit the continuance of Philadelphia's excise tax on hotel room rentals in the city until December 7,
1988. Without the extent ion legislation, authorization for the tax would have expired on December 31, 1985.

*** Pittsburgh Transfer Tax Waiver -- Enacted was a bill (HB 696, Act 115/1985) providing for a waiver of the state realty transfer tax on the sale of Three Rivers Stadium in Pittsburgh to private interests.

The waiver was designed to facilitate Pittsburgh Mayor Richard Caliguiri's multi-faceted plan to keep the Pittsburgh Pirates in Pittsburgh. Without the waiver, the state would have received approximately $1,250,000 from the stadium's sale.

Meanwhile, another provision of the legislation requires that employers issue W-2 forms to employees for income tax purposes no later than January 31 of each year.

*** Sales Tax Exemption -- Legislation (HB 1100) was passed (Act 100/1985) to exclude from the imposition of the state sales tax any materials used for memorials to commemorate historic events, provided that such materials are purchased by non-profit organizations and that the memorial will-be publicly owned.

The legislation was expected to result in a refund of $5,000 in state sales tax paid on materials used in the construction of a Vietnam War -memorial in Doylestown, Bucks .County.

*** Retirement System Changes -- Members of both the state employees' and public school employees' retirement systems who become eligible or are required to withdraw their contributions to either system are now allowed to withdraw their contributions in installments instead of in a "lump sum" payment under legislation (SB 244) passed by the General Assembly and signed into Act 19/1985 by the governor.

Specifically, the legislation gave vested and retiring members as well as non-vested members who are leaving state or public school service the option of receiving their contributions
plus interest in installments instead of all at once.

Previously, vested and retiring members who elected to withdraw their contributions were required to withdraw in one lump sum. Non-vested members who leave state or public school
employment have no choice but to withdraw their contributions and were also required to do so in one lump sum upon termination of employment with the state or public school system.

Because members' contributions as of 1982 became "sheltered" from federal tax withholding, the intent of Senate Bill 244 was to prevent retiring state or public school employees from having to face the full federal tax liability on their "tax sheltered" contributions and interest in the year they make the withdrawal.

The new law permits the eligible member to receive his contributions plus interest in four or fewer installments over a four year period instead of a lump sum payment.

*** Registration Exemption -- Approved was a measure (SB 423, Act 13/1985) exempting handcraft artists from provisions of a law enacted last session requiring so-called "gypsy" or
transient vendors to register annually with the state Department of Revenue and to post a bond to ensure compliance with the state's tax sales law.

In addition to the exemption, the new legislation provided for the licensing of "promoters" of flea markets, antique shows, or other similar shows which offer items for sale. The promoters are required to keep records of show participants for a period of three years - records which will be subject to inspection by the Department of Revenue.

* Reciprocal Tax Agreements -- Passing the Senate (50-0) was a bill (SB 246) to permit the state Department of Revenue to enter into reciprocal agreements with other states governing the
payment of state income taxes when a citizen doesn't live in the state where he works.

Under the proposal, which was still facing final House action, an individual would pay income tax to the state of his residence.

* Farm Income Tax Payments -- The Senate passed (49-0) a bill (SB 1058) that would enable farmers with two-thirds of their gross income derived through farming to file an estimated tax any time on or before January 15 of the succeeding year or file a final return and pay the entire tax by March 1.

Current law as it relates to the filing of an estimated tax on farm income applies only to individuals with a net income, rather than a gross income, which is two-thirds derived through
farming.

House action on SB 1058 was still pending.

* Financial Disclosure Statements -- Legislation (SB 95'2) cleared the Senate (49-0) that would require financial disclosure statements filed by public officials and public employees to
include an acknowledgement that they understand that under state law any conviction of criminal conduct in connection with public office will result in forfeiture of pension benefits. House action was still pending.

*** Cancelled Bonds -- Enacted was a bill (HB 694, Act 21/1985) providing for the destruction of cancelled or unused Commonwealth bonds by the appropriate transfer agents. The
measure removed the requirement that officials from the offices of the governor, the state treasurer, and auditor general be present during the destruction of these bonds.

Judiciary

*** Death Penalty Law Expansion -- For the first time since its reenactment in 1978, Pennsylvania's death penalty statute has been changed by a measure (HB 1644) which was signed into law by the governor as Act 87 of 1986.

Specifically, the new law adds a prior third degree murder conviction and prior voluntary manslaughter conviction to the list of aggravating circumstances that a jury must consider --
along with mitigating circumstances -- when weighing its decision on whether to impose the death penalty for a person convicted of first degree murder.

The expansion of the death penalty statute came in response to a 1985 state Supreme Court ruling (Commonwealth v. Goins) which overturned the death sentence for a two-time killer on the grounds that the first murder offense was not an aggravating circumstance.

*** Private Prison Moratorium -- The General Assembly enacted a measure (HB 307, Act 19/1986) imposing a moratorium until June 30, 1987 -- on the opening and operation of new private prisons in Pennsylvania.

In the interim, a bipartisan task force created within the Joint State Government Commission and consisting of three members of the Senate and three members of the House was authorized to study and hold public hearings on the need for and community impact of private prisons. Questions surrounding liability, security and other issues as they relate to private prisons were to be addressed by the task force which was to issue a report on its findings and recommendations to the General Assembly by March 31, 1987.

The ban on the operation of private prisons did not apply to private corrections facilities which began operations in Pennsylvania in 1985. The bill, however, required that such facilities only incarcerate inmates convicted of drunken driving or minor summary offenses. The facilities are also prohibited from accepting federal prisoners or inmates from prisons in other states.

Another provision of the legislation allows county and state owned jails and prisons to hire private security personnel "serving in the capacity of correction officers."

*** Videotaping of Child Testimony -- Becoming law (Act 14/1986) was a measure (SB 176) providing for the videotaping of court testimony from children who are the victims of sexual or
other abuse.

By permitting the videotaping of such testimony, the legislature hoped to prevent the victims of child abuse from being "victimized again" by having to undergo repetitious and sometimes "torturous" appearances before a full courtroom and in the presence of the defendant.

Other provisions would allow the court to take a child's testimony via closed-circuit TV, provide for the use of "anatomically correct dolls" to assist child victims with their testimony in sexual offense cases, permit the courts to appoint "child advocates" in cases of sexual or child abuse, and prohibit public disclosure of the identity of child victims unless ordered by the court.

The legislation also requires district attorneys to notify the appropriate state licensing board when a health care professional has been convicted of a felony.

*** Domestic Violence Arrests -- Enacted was a measure (HB 350, Ac: 10/1986) permitting police officers to make "probable cause" arrests or arrests without a warrant of suspected domestic violence offenders.

Previously, such arrests were only permitted in cases involving a felony.

Specifically, the legislation permits "probable cause" arrests when a police officer observes "recent physical injury to the victim or other corroborative evidence" indicating that a crime such as recklessly endangering another, simple assault, aggravated assault, or involuntary manslaughter has occurred.

Such immediate on-the-spot arrests of domestic violence suspects -- without the need for the initial filing of a formal complaint by the victim -- is intended to guard against or prevent the further abuse of an already abused child or spouse.

Additionally, the legislation provides that a domestic violence offender's release on bail following arrest could include the condition that the suspect refrain from returning to "the residence or household of the victim and the victim's place of employment."

The legislation also requires police to seize any weapons that were used in the commission of a domestic violence offense and to provide the victims of domestic violence with detailed oral or written notification of the availability of domestic violence shelters and related services in the community as well as a listing of their rights to obtain court relief under the state's Protection From Abuse statute.

"V" Crime Victims Compensation/Agency Shop -- What started out as a measure (SB 180) dealing solely with crime victims compensation claims by child abuse victims was amended to include "agency shop" provisions affecting state and school district employees and ended up being vetoed by the governor. The final draft of the bill had cleared the Senate by the slimmest of
margins (26-23).

The proposal would have allowed unions representing state or school district employees to negotiate agreements with public employers to require non-union members to pay a "fair share fee"
to the union for costs associated with the union's representation of non-members in contract bargaining.

Additionally, the legislation contained numerous provisions expanding the state's Crime Victims Compensation program. Among those provisions, the bill would have:
            -- allowed a victim of child abuse to file a claim for compensation, regardless of when the crime occurred, up until one year after reaching the age of 18;
            -- allowed victims of drunk driving to receive compensation;
            -- clarified that mental injuries are compensable;
            -- allowed compensation for loss of railroad retirement and support payments as a result of a crime;
            -- allowed recovery of lost earning power in addition to earnings actually lost because of a crime;
            -- allowed residents of all states to be compensated for crimes committed in Pennsylvania;
            -- allowed certain relatives of a deceased victim of crime to be compensated for psychological counseling;
            -- repealed a $100 minimum claim requirement; and
            -- eliminated consideration of victim compensation awards in determining eligibility for other assistance programs.

* Tort Reform -- The Senate passed a bill (SB 1428), still awaiting action in the House, that would limit punitive damage awards in civil liability actions.

Under the proposal, punitive damages (damages awarded to a plaintiff for the sole purpose of punishing a defendant) could only be awarded if the plaintiff proves the need for compensatory
damages (damages awarded for the purpose of correcting a wrong  that was committed.)

The amount of punitive damages would have to bear a "reasonable relationship" to the amount of compensatory damages.

Punitive damages could only be awarded for "outrageous conduct" which is defined as conduct produced by an "evil motive" or "reckless indifference" to the rights of others.

*** Little League Coach Liability -- The General Assembly passed and the governor signed into law a bill (HB 1625, Act 57/1986) limiting the liability of Little League baseball coaches
and other community athletic and non-profit event volunteers.

The measure grants a degree of civil immunity to volunteer supervisors and officials of youth activities, functions for the handicapped and non-profit events, and is intended to prevent frivolous lawsuits for essentially blameless accidents.

Negligence could only be proved if a volunteer's or association's actions fell below standards generally practiced and accepted by similar volunteers and similar associations" and when the volunteer or association knew their actions "created a substantial risk of actual harm" to an injured party.

The limited negligence standard does not apply, however, to transportation to or from a game, event or practice or when an action is brought involving the care and maintenance of real
estate not associated with a practice or playing field.

* Judicial Reform -- On a vote of 47-2, the Senate passed a bill (SB 1) proposing several amendments to the state constitution in an attempt to reform the state's judiciary. When House action on Senate Bill 1 was delayed, the Senate Republican leadership gutted a House-passed bill (HB 260) and inserted the provisions of Senate Bill 1 into it. House Bill 260, as amended, then passed the Senate on a vote of 47-1 and was returned to the House for concurrence in Senate amendments.

As yet, no action has been taken on either bill in the House.

One key provision of the judicial reform proposal would eliminate the judiciary's existing exclusion from having to reveal their personal finances. Under the proposed constitutional change, all justices, judges and judicial employees would be required to adhere to financial disclosure
requirements "no less" stringent than those that apply to other public officials in Pennsylvania.

The proposed constitutional amendment would also restructure and enhance the disciplinary powers of the existing nine-member Judicial Inquiry and Review Board. Under the proposal, the board would be expanded to 11 members and renamed the Judicial Conduct Board.

The new board would be empowered to order suspension, removal, discipline, censure or retirement of a justice or judge.

Currently, the Judicial Inquiry and Review Board can only recommend action which may be imposed or rejected by the Supreme Court.

The new board would have only three judges and two lawyers rather than the current five judges and two lawyers. The new board would be dominated by six lay persons instead of just two
under current law. Also, legislative leaders would make six out of the eleven appointments to the board. Currently, all appointments are made by the governor (four) and the Supreme Court (five).

Additionally, the board's findings and conclusions would become public documents once filed with the Supreme Court.

The Supreme Court would be required to submit detailed budgets to the General Assembly and its financial affairs would be subject to audit as specified by law.

If approved by the House, the measure would still have to be approved again in the next session of the General Assembly before it could be submitted to the voters for final approval in the
form of a voter referendum.

* Appellate Court Election by Region -- Narrowly passing the Senate (26-23) was a proposed constitutional amendment (SB 601) to permit the election of the state's Supreme, Superior and Commonwealth Court justices and judges from judicial districts or "regions."

Appellate court judges are now elected on a statewide basis.

Under the proposal, the state would "be divided into seven judicial districts for the Supreme Court, 15 judicial districts for the Superior Court, and a number to be fixed by law for Commonwealth Court. Currently, there are nine Commonwealth Court judges.

The boundaries of the judicial districts for each court would be fixed by the General Assembly at a later date, but the proposed constitutional amendment requires that each district be
nearly equal in population.

If passed by the House in this session, the regional election-of-appellate-court-judges constitutional amendment would still have to pass both houses of the General Assembly next
session before going to the voters for approval in a referendum.

* Auditing the Judiciary -- The Senate passed (49-0) a bill (SB 1485) that would require the state Auditor General to make annual audits of the state's judicial system. Currently, audits
are performed by an accountant retained by the state's Supreme, Superior, and Commonwealth Courts. House action is pending.

* Senate Confirmation of Judicial Appointments -- On a vote split along party lines, Senate Republicans passed (26-23) a bill (SB 620) that would eliminate minority party participation in the Senate confirmation process for judicial appointments.

The proposed constitutional amendment would allow gubernatorial nominations to fill vacancies on the state's common pleas and appellate courts to win Senate confirmation by a simple
majority vote (26) instead of by the existing two-thirds majority vote (34) requirement.

The bill was labeled by Senate Democrats as nothing more than a self-serving "political power grab" by the Republicans a move that would virtually assure court vacancies would be filled based on an appointee's political partisanship rather than on an appointee's qualifications for the position. The Democratic controlled House has not yet acted on the measure.

* Grading of Attempted Murder -- The Senate passed (49-0) a bill (SB 1093) changing the grading of attempt, solicitation or conspiracy to commit murder from a second degree felony to a
first degree felony. House action is pending.

"C" Mandatory Minimum Jail Sentence for Rape -- Lodged in a House-Senate conference committee was a measure (HB 1498) containing numerous provisions including one mandating a jail term of at least five years for anyone convicted of rape.

*** Child Support/Wage Attachment -- Legislation (HB 98) requiring employers to deduct child support payments from an employee's wages when the employee is 30 days late in making
support payments cleared both the Senate and House and was signed into law (Act 66/1985).

The 53-page measure, which also codified previous laws relating to child custody and visitation rights, was intended primarily to meet federally mandated provisions covering child and spousal support so that the state could retain eligibility for Aid to Families with Dependent Children (AFDC).

The automatic attachment of an employee's wages to make delinquent child support payments was the key feature of the legislation.

Employers who fail to deduct late child support payments from an employee's pay face penalties ranging from employer payment of an employee's delinquent child support payments to
imprisonment.

Related features of the legislation allow the courts to order that the attachment of an employee's wages for child support include a penalty of up to 10 percent of any amount 30 days or more in arrears. Employers were also given the authority to impose an additional two percent penalty to cover their costs in complying with a wage attachment order.

Other provisions extended the previous six-year statute of limitations for paternity actions seeking child support to 18 years and allowed the courts -- without regard to the actual physical custody of a child -- to order either parent to provide health insurance coverage for the child and other parent when such coverage is available as a benefit of employment or at a reasonable additional cost.

The legislation also provided for a series of additional penalties for contempt of court orders requiring court appearances, support payments and visitation. They include fines, probation and imprisonment.

*** Missing Children -- Legislation (SB 184) requiring state and local police to investigate immediately all reports of missing children upon receipt of such reports was enacted (Act
14/1985).

Under the measure, law enforcement agencies are prohibited from imposing arbitrary waiting periods before launching an investigation or search for a child that is reported missing.  The law defines a child as anyone under the age of 18.

All relevant information pertaining to the child and the circumstances of his/her disappearance must be recorded by the law enforcement agency receiving the report. The agency is also required to enter the missing child's name into the missing persons file of the Commonwealth Law Enforcement Assistance Network (CLEAN) upon receipt of sufficient identification information.

*** Background Checks -- The General Assembly passed and the governor signed into law a two-bill package (HB 1138, Act 33/1985; HB 1139, Act 34/1985) which expanded upon and delayed the effective date of a law enacted in the previous biennial session (SB 1505, Act 244/1984) requiring background checks on applicants for teaching positions, persons interested in becoming
foster or adoptive parents, and on others seeking employment in the field of child care.

Under Act 244 of 1984, the background checks for prospective child care employees were to have been required as of July 1, 1985. The new legislation delayed the effective date until
January 1, 1986.

Unlike the 1984 law (which required only that the background checks be performed to make employers aware of a job applicant's past history in an effort to discourage the hiring of child abusers for child care positions), the updated version actually prohibits the hiring of persons who within the past five years have been convicted of crimes related to the following:
            -- criminal homicide, aggravated assault, kidnapping, unlawful restraint, rape, statutory rape, involuntary deviate sexual intercourse, indecent assault, indecent exposure, concealing death of child born out of wedlock, the selling of infant children, endangering welfare of children, prostitution,
obscene materials, corruption of minors, and sexual abuse of children.

The prohibition against employment of persons convicted of the crimes mentioned above applies to anyone who, if hired, would be in direct contact with children.

And, with the exception of prospective public and private school employees, those seeking employment in day care or other child care positions are barred from such employment whenever a
background check reveals a "founded" report of child abuse within the past five years.

The background check on prospective teachers, foster and adoptive parents, and others involved in child care includes reports from the state police or the FBI if the applicant is not a resident of Pennsylvania and (with the exception of school employees) the state Welfare Department.

Information contained in the reports on prospective employees cannot be more than one year old.

The background checks also cover "volunteer" child care workers.

*** Child Abuse Complaints -- Securing overwhelming legislative approval and the governor's pen was a measure (SB 183, Act 49/1985) suspending the statute of limitations in civil
and criminal statutes to allow child abuse victims to file actions anytime before they reach the age of 18 or within two years after turning 18. Under previous law, such actions were required to be brought within two years of the occurrence of abuse.

The legislation also contained a provision removing a previous requirement that county governments furnish state appellate court judges local chamber facilities. Instead, the law now requires the administrative office of the state courts to provide chamber facilities for appellate judges from funds appropriated annually by the General Assembly.

* Bullet Proof Vests -- Awaiting House action is a Senate passed bill (SB 947) that would make "bullet-proof vests" an "instrument of crime" if possessed "under circumstances not
manifestly appropriate for lawful uses." Also, an attack on a police officer would be considered an "aggravated assault" if the assault on the officer occurred during the course of his/her lawful duties. Under current law, the police officer must be attempting to make an arrest for an assault to be considered an "aggravated assault."

*** Firearm Licenses -- Legislation (HB 583) was enacted (Act 28/1986) that will make licenses to carry firearms in Pennsylvania valid for five years instead of the existing one year period and increase the license fee from 50¢ to $2.50. The new five year license will be issued after January 1, 1987. The legislation also requires that any notice of revocation of such a license shall state the reasons for revocation.

* Trust for Charitable Solicitations -- The Senate passed (48-0) a bill (SB 622) that would require the establishment of a trust when a public solicitation for a charitable purpose and named beneficiary results in contributions of more than $5,000.

Persons who contribute would have the right to petition the county court where the trust is located for an accounting of all contributions made. House action is pending.

* Coroner; Eye Bank Immunity -- The Senate passed (50-0) a bill (SB 1008) that would eliminate the need for next of kin consent for the donation of a deceased family member's eyes when the deceased individual had validly executed an eye donor card.

Coroners, deputy coroners, medical examiners and authorized eye banks would be immune from any civil action brought by next of kin when the removal of a donor's eyes was in compliance with a validly executed donor card.

* Career-Criminals; Philadelphia Courts -- The Senate passed (49-0) a bill (SB 703) that would provide longer jail sentences for so-called career criminals. Under the measure, career
criminals -- defined as "dangerous special offenders" -- could be sentenced to jail terms of up to 25 years.

The category of dangerous special offender would apply to:
            -- A person who has been convicted twice before for crimes carrying jail terms of more than one year, and the new crime has occurred within five years of the convict's last prison confinement;
            --A person who has committed a felony as part of a pattern of criminal conduct which resulted in substantial income and in which he had a special criminal skill;
            --A person who led a conspiracy of three or more individuals or used force or bribes to further the conspiracy; and
            --A person who sold "hard" drugs such as heroin, cocaine, PCP, or "speed" as part of a pattern of criminal conduct which resulted in substantial income.

Additionally, the legislation would restructure Philadelphia's court system so that all cases involving juvenile offenders will be heard by the Family Division of Philadelphia Common Pleas Court. Currently, summary offenses and violations of city ordinances by juveniles are heard by Philadelphia
Municipal Court. According to proponents of the change, Municipal Court lacks the authority to impose and enforce penalties on juvenile offenders while the Family Division of Common Pleas Court has the ability to mete out a wide range of penalties and enforce them.

* Juvenile Crime -- Passed by the Senate (50-0) was a bill (SB 838) that would establish a system of fingerprinting, photographing and record keeping of "dangerous juvenile offenders." A "dangerous juvenile offender" is described as a juvenile over the age of 15 who has committed two or more violent offenses. Information on such offenders could be disseminated to law enforcement agencies throughout the state and nation when the crime committed by the juvenile was a felony or involved the use of a firearm.

* Out of Court Statements by Child Victims -- The Senate voted (43-6) to pass a measure (SB 1505) that would allow out-of-court statements by child victims of sexual abuse to be
admissible in criminal court proceedings under certain circumstances.

Such an exception to the so-called hearsay rule would apply when the out-of-court statement was made by a child under 12 years of age, when the court determines that the evidence is "necessary" and the statement provides sufficient "reliability," and the child testifies at the proceeding "or is unavailable as a witness if there is corroborative evidence of the act."

** Dependent Children; Firefighter Liability -- Facing a House vote on concurrence in Senate amendments is a bill (HB 1160) that would require the courts to conduct periodic
"disposition review hearings" of cases involving dependent children who have been placed in the legal custody of persons other than the child's natural parents or guardian. The hearings, which would be required to be conducted every six months for the first year-and-a-half and every 12 months thereafter, would be for the purpose of determining whether the temporary placement continues to be in the best interests of· the child.

Prior to Senate passage, the bill was amended to grant civil immunity to volunteer firefighters during the normal course of their official duties. Negligence could only be proved if a volunteer firefighter's conduct fell "substantially below" standards generally practiced and accepted by persons performing the same or similar duties.

* Desecration of Facilities; Videotape Drunk Drivers -- The Senate passed a bill (SB 372) that would make the "desecration" of a church, synagogue, cemetery, school or other such facility a felony of the third degree regardless of the amount of damage caused.

Currently, damage must exceed $5,000 for the crime to be considered a felony of the third degree (punishable by a jail term of up to 7 years and/or a fine of up to $15,000).

Desecration is defined as defacing or otherwise damaging a facility "in a way that the actor knows will outrage the sensibilities of persons likely to observe or discover the action."

Prior to final Senate passage, the bill was amended to include a provision that would permit police to videotape suspected drunken drivers either before or after an arrest.

* Statute of Repose on Land Survey Defects -- Awaiting House action is a Senate-passed bill (SB 1341) requiring that civil suits against land surveyors or landscape architects for faulty surveys or workmanship be filed within 21 years from the time the surveyor work was performed.

Currently, such suits can be filed upon the discovery of a faulty surveyor landscape problem regardless of when the survey or work was performed.

*** Marriage License Application -- Enacted was a measure (HB 2093, Act 73/1986) requiring a full "given" name on an application for a marriage license instead of the previous
requirement of a full "Christian" name.