From Second and State: Capitol Wrap – Week of June 9

by Buchanan Ingersoll & Rooney PC

The House and Senate will reconvene on Monday, June 16, 2014. Here is what happened in Harrisburg this week:

In Focus: Government Reform

While budget negotiations continue to take center stage this month, some state legislators elsewhere throughout the Capitol are making moves to change the size of state government and the rules by which elected officials and public employees must live and work by. Currently, we are tracking several pieces of legislation that are gaining the public’s attention and, in some cases, potential legislative steam.

More Transparency and Lower Thresholds for Gifts and Hospitality

The House State Government Committee held a public hearing this week on H.B. 1872 (Dunbar, R-Westmoreland). This bill would amend the State Ethics Act to change the reporting requirements for gifts and hospitality that public officials and public employees receive. Under current law, all public officials and employees are required to submit an annual statement of financial interest (SFI) to the State Ethics Commission. The SFI must disclose any gift received in an amount over $250 dollars and any “hospitality” (lodging, transportation and the like) in an amount over $650. Dunbar’s proposal would require disclosure of gifts over $50 and hospitality over $100. The bill is touted as a government reform measure. Its goal, according to a sponsorship memo, is to “make changes in the way state government does business to provide transparency to residents.”

This week, Dunbar’s bill was the subject of a non-voting public hearing. Given the focus on the budget and the limited amount of session days left before the legislature breaks for summer, it would be  hard for the bill to make it to the governor’s desk before the end of June. Nevertheless, this bill could be attached as an amendment to another bill, S. B. 1327 (Baker, R-Luzerne), which is currently in the House State Government Committee and, therefore, further along in the process. Procedurally speaking, Baker’s bill, which would ban cash gifts to public officials and employees, needs considerably fewer days to go the distance, even if it were amended with Dunbar’s language. We will be keeping a close eye on this one and the changes it would bring.

Reducing the Size of Government

A government reform bill that would amend the state constitution to reduce the size of the legislature and the Supreme Court, as well as reorganize executive functions, has seen some recent action. S.B. 324 (Vogel, R-Beaver) was reported from the Senate State Government Committee last week, given first consideration on the Senate Calendar and reported from the Appropriations Committee this week. This bill, if enacted, would make significant changes in each branch of state government, including reducing the State Senate from 50 to 45 members, reducing the Supreme Court from seven to five justices and capping the Superior Court at 11 judges. Additionally, the bill would eliminate the Office of Lieutenant Governor. The proposal goes much farther than similar bills sponsored by Rep. Sam Smith (R-Jefferson) and Sen. Judy Schwank (D-Berks), which would only reduce the size of the Pennsylvania House and Senate.

While Vogel’s bill seems to have momentum, the final enactment of such a proposal still has a way to go. As a constitutional amendment, it must pass both chambers in two consecutive sessions and then be ratified at the following first primary, municipal or general election. Right now, we are tracking if the Senate will pass it in the remaining weeks of the spring session.

Merit Selection for Statewide Judges?

Rep. Bryan Culter (R-Lancaster) introduced H.B. 1848 this session, and while the bill was slated to be reported from the House Judiciary Committee on Tuesday, the vote was delayed and the bill did not move. Cutler’s bill would amend the constitution to change the way Pennsylvania’s statewide appellate judges on the Commonwealth, Superior and Supreme Court are selected for office. Right now, Pennsylvania’s judges and justices are required to run for a 10-year term. At the conclusion of that term, they may stand for a retention – a simple yes or no – vote. Under this new proposal, these judges and justices would be selected by an Appellate Court Nominating Commission, which would submit a list of names of potential judges to the governor. The governor would make his or her selection, which would be subject to confirmation by the state Senate. The judge or justice would be required to run in a non-partisan re-election to maintain his or her place on the bench.

The bill would not affect county-level judges, which also run in partisan elections, nor would it affect magisterial district justices.

Like Vogel’s bill, Cutler’s legislation is a proposed constitutional amendment. It will need to pass both legislative chambers in two consecutive sessions and then be put to the voters for ratification.

Budget Update: Some Movement

The General Appropriation (GA) bill was introduced in the House of Representatives late last week and was moved out of the House Appropriations Committee on Wednesday, June 11, along with several other appropriations and budget-related bills. The GA bill, all 200 some-odd pages of it, does not have the actual substance of the 2014-15 budget inserted as of yet, but this week’s move positions the bill to have amendments filed and voted on before the constitutional deadline for the budget’s enactment, which is June 30.

Because of its size and importance, the GA bill is governed by a special House Rule, which says that the budget must be on the House Calendar for approximately 10 days before any debate can begin. The time is intended to give members and staff the opportunity to review the bill and prepare amendments for consideration on the floor. By that timeline, the earliest the bill could be voted on in the House is June 23.

So what happens next? Throughout the coming days and perhaps weeks, the leadership in both chambers and the governor will negotiate the contents of what will become the final budget. The GA bill is a living document; the amount of each appropriation is likely to be fine-tuned as the end of June approaches and as final revenue numbers for the end of the 2013-2014 fiscal year are calculated.

While the numbers are being negotiated and finalized, the bill is treated like any other. Once it passes the House of Representatives, it must be sent to the Senate for consideration. It will be referred to the Senate Appropriations Committee and must be considered on the floor on three session days. The Senate will also have an opportunity to amend the bill.

If amended by the Senate, the GA bill will be returned to the House for concurrence. If the House agrees to the amendments made by the Senate, it will be sent to the governor for action. If not, the bill could be sent to a Conference Committee, made up of members from each chamber, in order to reconcile differences between the House and Senate versions. Once the Conference Committee agrees on the content of the bill, it will be presented to the membership on the floor as a “Conference Committee Report.” A Conference Committee report is not subject to further amendments but rather receives either a “yay” or “nay” vote.

Once enacted by the legislature, the GA bill is presented to the governor for his signature. The governor must approve or veto the bill within 10 days, just like any other bill. However, what sets the GA bill apart from other bills is that the Governor may execute his authority to line-item veto any particular appropriation made in the bill.

Beyond the GA bill, we can expect to see the enactment of non-preferred appropriation bills, special fund bills and substantive legislation necessary for full enactment of the state’s budget.

Non-preferred Appropriations

Each year at budget time, the PA legislature typically introduces and enacts a number of “non-preferred appropriations” bills. These bills are appropriations made to charitable or educational institutions that are not under the control of the Commonwealth, and they require a two- thirds vote in each chamber. In years past, we have seen non-preferred appropriations made to medical institutions, like Fox Chase Institute for Cancer Research and the Philadelphia Burn Foundation; museums, like the Whitaker Center and the Everhart Museum; and private schools, such as Salus University or Johnson Technical Institute.

Recently, however, the trend has changed. Given the fact that revenue is barely holding steady, let alone increasing, introduction and passage of non-preferred appropriations bills has significantly decreased. Over the last few years, the only benefactors of non-preferred appropriations are what are known as the “state-related colleges and universities,” those that are partially though not completely under control of the Commonwealth. Those schools include the University of Pittsburgh, Penn State University, Lincoln University and Temple University.

Special Fund Bills

Other pieces of the total budget package are the “special fund bills,” which are also sometimes called the “housekeeping bills.” These bills are basically earmarked revenue for those agencies and offices that are supported by their own funding stream, generated by that agency or office. The purpose of the special fund bills, then, is to simply send the money raised by the agency back to it. For example, the Bureau of Professional and Occupational Affairs (BPOA) is a division of the Department of State. However, BPOA raises its own money from annual fees paid by licensed professionals and any fines imposed on them for a violation of their license. That money is placed in a special fund and will ultimately go directly back to BPOA. Special fund bills are used to finance SERS, PSERS, BPOA, the Office of Small Business Advocate, the Office Consumer Advocate, PUC, Gaming Control Board and the Philadelphia Parking Authority, as well as to implement the Occupational Disease Act in the Department of Labor and Industry.

McGinty Returns to challenge Burns for Democratic State Chair

The leadership of the Pennsylvania Democratic Party may have a different look after the weekend of June 20. With the backing of Tom Wolf, the Democratic nominee for Governor, Katie McGinty will seek to become the newly elected State Party Chair at the Democratic State Committee meeting. In addition to McGinty, State Rep. Jake Wheatley will run for Vice Chair.

Describing the former DEP Secretary, Tom Wolf stated that, “Katie will bring endless enthusiasm to counties throughout Pennsylvania.” Wolf continued by describing McGinty as “an energetic and compassionate voice who will fight for middle class families.”

The current State Chairman Jim Burn responded to the news stating that he is “ready to continue the course…and make history this year by unseating the least popular Governor in America.”

What Didn’t Happen…

Despite moving the budget bills forward, the General Assembly did not take a whole lot of action otherwise toward enactment of the remainder of the budget package.

Each year, the state enacts a budget to establish how much money each department and branch of government will receive; how that money is to be spent is typically dictated by a companion substantive bill. For example, funding to the Department of Education for school districts is driven out by a process established in the Public School Code. Similarly, money for public assistance programs, hospitals, health care facilities and the like is distributed under the provisions of the Public Welfare Code. Any unusual strings attached to appropriations are provided yearly in the Fiscal Code. Very little action has been seen on any of such bills.

Additionally, enacting the budget is dependent on raising enough revenue so it is balanced. Two of the governor’s proposals to raise money – liquor reform and pension reform – got false starts this week. H.B. 790 (Turzai, R-Allegheny), which is believed to be the vehicle for any reforms to the Liquor Code, such as privatization, direct shipment and packaging reform, was slated for a vote in the Senate Appropriations Committee this week but was pulled from the agenda at the last minute. Similarly, a much publicized “hybrid pension reform” bill by Rep. Mike Tobash (R-Schuylkill) was drafted as an amendment to a bill on the House voting schedule, but the House never took up the bill.

In Other News:

  • H.B. 112 (Vereb, R-Mongomery), which strengthens current child abuse laws singling out youth sports coaches who would harm children, passed both chambers and is now on the governor’s desk. A spokesman told reporters Gov. Corbett is expected to sign the bill.
  • H.B. 2009 (Culver, R-Northumberland) a comprehensive reform to the Credit Union Code, was unanimously passed by the Senate and is expected to head to the governor for signature.
  • H.B. 2124 (Grove, R-York), which  would reform the state’s school construction reimbursement process, passed the House. The bill has not yet been delivered to the Senate.
  • The Senate Law and Justice Committee heard testimony regarding S.B. 1182 (Folmer, R-Lebanon) and  the compassionate use of medical marijuana.

In Case You Missed It:


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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