From Second and State: Session Preview

by Buchanan Ingersoll & Rooney PC
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After a three-week break for the primary election and the Memorial Day holiday, the House and Senate will reconvene on Monday and continue with session days on Tuesday and Wednesday next week. With less than a month to go before the budget’s June 30 deadline, both chambers will be in session over the next several weeks with a great deal of attention and focus on the 2014-2015 budget negotiations.

It’s important to note, however, that while the legislative leadership and the governor’s office are going back and forth with one another on revenue adjustments and budget figures, the general membership will be working on moving along other pieces of legislation as this legislative session enters its final six months. This legislative session, which ends this calendar year, has a frame that could grow even shorter if no lame duck session is called after the November election, as has been the case in recent years. Any legislation that isn’t passed by the end of this legislative session must be reintroduced and would start from scratch in the new legislative session.

Budget Brief:

Next week (beginning June 2) kicks off the final weeks of the 2014 budget season. The legislature has already scheduled 18 session days for the month of June in anticipation of the work that has to be done in order to pass a General Appropriations (GA) bill by the constitutionally mandated June 30 deadline. We can expect to be put on notice of the introduction of the GA bill sooner rather than later in the coming weeks and plan on long nights, plenty of amendments and additional Appropriations Committee meetings.

In addition to the General Appropriations bill, expect action on substantive legislation to enact some of the programs and proposals put forth in the governor’s budget address. As of now, the governor’s education plan is seeing the most action. In his budget address[HCM1] , the governor stressed the importance of making higher education more affordable to middle class students. To that end, Rep. Marguerite Quinn (R-Bucks) and Sen. Kim Ward (R-Westmoreland) have both introduced legislation to enact the governor’s “Ready to Succeed” scholarship program to help with financial aid for post-secondary education. The governor has also proposed increased funding for special education students. While the details have yet to be ironed out, we can expect bills introduced by Sen. Pat Browne and Rep. Bernie O’Neill to be in play in the coming weeks.

Legislation may also be needed to raise the revenue necessary to enact a balanced budget. One such revenue-raiser proposed by the governor is to allow horizontal drilling for natural gas beneath the state parks, raising $75 million toward the estimated billion-dollar hole in the budget. However, Democrats in the House and Senate would rather support a tax on natural gas extraction, which would require legislative action. The governor has also suggested pension reform and privatization of liquor stores as ways to balance the budget, which could put various bills addressing those issues in play. Pension related legislation could include a hybrid pension plan bill sponsored by Rep. Mike Tobash (R-Berks/Schuylkill) and possibly Rep. Glen Grell’s (R-Cumberland) House Bill 1651. If privatization of liquor stores gets any action, Rep. Gene DiGirolamo’s (R-Bucks) House Bill 2184 could end up in the mix.

On the Floor

This week we are keeping an eye on legislation that would apply Good Samaritan civil immunity to school bus drivers who administer epinephrine auto-injectors or “Epi-Pens” to students. The bill, H.B. 2049 (Simmons, R-Lancaster), is marked for third consideration in the House on Monday. The bill provides that the school bus driver complies with employer and school district policy and that the drivers complete training in order to enjoy the benefit of immunity.

In Committee

As usual, committee hearings will touch on a broad range of issues. This week, that scope goes from oil and gas leases and extraction to legislation prohibiting employers from discriminating against workers based on marital or familial status. In addition, casinos and gaming, liquor licensing, economic development loans and union dues will be addressed in their respective committees next week.

On Monday, the House Democratic Policy Committee will hold a hearing on the governor’s plan to lease state parks and forests for natural gas extraction. Last week, Gov. Corbett issued an executive order to allow for the leases, as long as the extraction does not cause long-term disturbance on those lands. The gas is to be extracted horizontally through wells located on adjacent private lands or previously leased state forestlands. The state expects to generate $75 million in new revenues from additional leases of those state-owned mineral rights. In a related matter, the Commonwealth Court on Monday will resume a hearing that began on Wednesday, May 29th in which the Pennsylvania Environmental Defense Foundation is asking for an injunction against further leasing of state lands for natural gas and the governor’s proposed use of $117 million in oil and gas lease funds for the general operation of the Department of Conservation and Natural Resources.

On Tuesday, the Senate Community, Economic and Recreational Development Committee will hold a public hearing to discuss the current state of Pennsylvania’s casino industry, its potential for growth and the potential impact of new revenue sources. Slot machines at newly licensed casinos first became legal in Pennsylvania in 2004. Then in 2010, table games were added.  Now, with a looming budget deficit, proposals to add state-sanctioned and taxed internet-poker and other games are being considered as a way to fill the gap. Last month a report released by the Joint Legislative Budget and Finance Committee on the current condition and viability of the gaming industry suggested that online gaming or igaming could be a potential new revenue source and forecasted gaming revenues for this industry would be $180 million in the first year and approximately $300 million after that should Pennsylvania pursue that option.

The Senate State Government Committee will meet on Tuesday to consider two bills to reduce the size of the legislature. The number of senators and state representatives is established in the Pennsylvania Constitution, so both bills are proposed constitutional amendments. S.B. Bill 324, sponsored by Sen. (R-Beaver), would drop the number of state senators from 50 to 30, and the number of state representatives from 203 to 121. H.B. 1234, sponsored by Rep. Sam Smith (R-Indiana), would drop the state house to 153 members, with no change in the membership of the Senate. Proposed constitutional amendments must be passed by the state legislature in two consecutive sessions and then be approved by the voters. Neither of these bills passed last session, so even if approved this year, they would still need to pass both chambers again in the 2015-2016 session. Were the stars to align, the soonest they would appear on the ballot would be for the 2015 municipal election.

Also on Tuesday, the House Liquor Control Committee will consider “mug club” legislation with H.B. 2069 (Masser, R-Montour). This bill would allow liquor licensees to offer discounts on food and malt or brewed beverages to patrons who are part of a bona fide club or group program that the licensee offers. Currently, the Liquor Code prohibits such discounts being offered. The committee will also consider H.B. 1521 (O’Neill, R-Bucks) to allow the Pennsylvania State Police Bureau of Liquor Control Enforcement (BLCE) to do compliance checks in State Stores to determine whether or not the employees are selling to minors. 

Rep. Duane Milne’s (R-Chester) H.B. 1550 will be considered during Wednesday’s House Commerce Committee Meeting. This bill would streamline the application process for certain economic development loan programs, including MELF, Small Business Frist and the PA Industrial Development Authority (PIDA). Currently, application for these programs may be made to a number of different state or local economic development agencies, which can be confusing and time consuming. Milne’s aim is to create a “one-stop-shop” for businesses to apply for funding under these programs.

The House Environmental Resources and Energy Committee takes up three Senate bills Wednesday dealing with natural gas royalties. The bills, all proposed by Sen. Gene Yaw (R-Lycoming) have already passed the upper chamber and would amendment current legislation or offer new proposals relating to oil and gas leases within the Commonwealth:

  • S.B. 1236 would require certain payment information to be given to an interest owner when a payment is made for oil or gas production. In addition, unless otherwise provided by contract, proceeds from production of oil and gas shall be paid within 60 days of production. The bill would also allow a lessor to inspect the supporting documentation of a lessee for the payment information.
  • S.B. 1237, The Natural Gas Lease Anti-Retaliation Act, protects a lessor of natural gas rights that reports a violation or suspected violation of a contractual agreement. No lessee would be able to retaliate by terminating development or production. Also, a lessee could not take other reprisals against a lessor that takes a good faith action. The bill also provides for remedies and enforcement.
  • S.B. 1238, The Oil and Gas Lease Surrender Act, states that oil and gas leases shall be surrendered by the recording office of the applicable county. Furthermore, along with the surrender document, sufficient information shall be given that can validate the original oil and gas lease already in public record. The surrender document should be submitted within 30 days of the expiration, termination or forfeiture of the oil and gas lease. Then the document would discharge, defeat and release a lessee’s interest in the lease once sufficiently recorded.

Finally, the collection of union dues will be the topic of Thursday’s House State Government Committee hearing when it considers H.B. 1507 (Cutler, R-Lancaster) to eliminate the ability of public employers and representative unions to negotiate clauses in collective bargaining agreements, which requires the deduction of union dues or political contributions from paychecks. Also on Thursday, the House Labor and Industry Committee will hold a public hearing on H.B. 2271 (Snyder, D-Greene), which amends the Pennsylvania Human Relations Act to prohibit employers, employment agencies and labor organizations from discriminating against workers based on marital or familial status.

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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