The Lay of the Land – July 2014


While the governor has the general appropriations bill on his desk and is considering his options for signature or veto, the General Assembly is still working out the details on this year’s Fiscal Code bill. The Fiscal Code, best described as the instruction manual for the budget (see: What’s all the fuss about the fiscal code: CLICK HERE), has been through four iterations as of this writing, and we can’t tell you there won’t be a few more.  Introduced by Rep. Matt Baker (R-Bradford), H.B. 278, the bill has been amended three times so far—once as recently as last evening—and is poised to be voted on concurrence in the House today.  When—or maybe if—that happens, the bill will still have to return to the Senate for another, and hopefully final, vote before the bill lands on the governor’s desk.

A good part of what’s usually contained in the fiscal code bill isn’t typically very interesting. It’s filled with fund transfers and some direction on how to spend or divvy up money divvied out by the general appropriations bill. In recent years, however, the fiscal code has become the place to tuck in provisions more related to raising money than spending it. This year’s bill is no exception.

As amended by the Senate on Monday, House Bill 238 contained language providing for the recalculation of the state’s bank shares tax.  It also contained a provision allowing the Department of Conservation and Natural Resources to enter into leases for the extraction of natural gas on state lands. Revenue from both of these provisions is currently calculated into the revenue estimate for the 2014-2015 fiscal year. The bill also authorized additional city revitalization improvement zones (CRIZ), and would allow the Liquor Control Board to reduce the price a tavern must pay to offer small games of chance. The Senate passed the bill by a vote of 26-24 and sent it back to the House for concurrence, where it must first make a pass through the Rules Committee before being considered by the whole House.

Tuesday night, however, in a continually delayed and then much heated Rules Committee meeting, the House removed several of the provisions—notably the provision related to the bank shares tax and the provision related to additional CRIZ. The bill was sent to the floor just before the eleven o’clock adjournment deadline, and it is primed for consideration today. The House is expected to come back into session at 3:30 p.m.

Even if passed, the story won’t end there. Because the bill was amended in the House, it will return yet again to the Senate for consideration.  If the Senate Rules Committee agrees to the amendments inserted by the House, the bill will be sent to the floor to be voted, where it may either fail or pass and be sent to the governor for his signature. If the Senate insists on its own amendments, as sent to the House, they can force a conference committee. Aside from the question of what the Senate will do, there’s the question of when they will do it.  As of now, the Senate stands in recess until September 15, unless sooner recalled to session by the President Pro Tempore.

Adding to these circumstances, just moments ago at a Reception Room news conference, the governor repeated his comments from Monday that he is considering not signing the budget without a pension reform bill to go with it, “All options are on the table,” the governor said in response to a question about the fiscal code.

There’s no crystal ball to give us a hint as to how all of this gets resolved, but no worries we are on top of it for our clients with obvious interest in the final outcome and budget buffs, one and all!


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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