July 2011 - BIPAC

July 2011 

Budget Energy Environment Health Care Infrastructure Labor Legal Tax Workforce 

The Pennsylvania Business Council (PBC) envisions a 

Commonwealth in which residents enjoy a very high quality 

of life in sustainable communities, where those seeking 

employment find high quality jobs with good compensation, 

and where those who invest their capital and hard 

work can grow firms that flourish and are profitable. 

In order to create and renew this vision of Pennsylvania, 

PBC is working aggressively with more than 30 business 

associations in a partnership to define key long-term 

policy strategies and solutions that make the Commonwealth 

more competitive; and elect candidates for office 

who offer the best capacity to create and sustain a better 

Pennsylvania. 

keepingSCORE lays out the public policy goals of a unified 

business community, the current “score” of efforts to 

achieve those aims, and the grassroots actions that support 

these public policy goals. 

A 

n odyssey to improve Pennsylvania’s legal climate that has spanned a generation, just met its first major 

success. But more work and a lengthy journey still lie ahead, say some of the Commonwealth’s preeminent 

business leaders. 

On Monday, June 27, the Pennsylvania House of Representatives adopted by a 116-83 vote, the Fair Share Act sending 

the joint and several reform measure to Governor Tom Corbett for his signature. Governor Corbett signed the Act the next 

day in the Capitol Rotunda stating that it was a symbolic location because of the unified efforts of both chambers. 

“This is an important win for making Pennsylvania more competitive,” said Pennsylvania Business Council Chairman Denis 

O’Brien, President and CEO of PECO. “But it’s just the first step in comprehensive legal reform.” 

The Fair Share Act, says Thomas L. VanKirk, Chairman of Buchanan Ingersoll & Rooney, and a PBC Policy Roundtable 

member, will make civil lawsuits fair and more predictable. “The legislation says that, from now on, liability shall be 

several – but not joint – where the defendant's liability for the damage or loss is less than 60 percent of the total liability of 

all defendants, except under four exempted circumstances,” explained VanKirk. “This means that a defendant who bears 

the preponderance of responsibility can still be held jointly liable, but parties who bear little or only partial responsibility for 

an injury or loss could be held to pay no more than their proportional share of the judgment.” VanKirk commented that 

defendants are often inclined to settle a lawsuit rather than litigate even if they played little role in the case because they 

fear the random, lottery-like nature of the civil court system that might hold them to pay all or most of the judgment. “Even 

if they win, a defendant can spend huge sums on legal fees defending themselves” said VanKirk, “so they are apt to settle 

as the lower cost alternative.” 

Chair 

Denis P. O’Brien 

PECO 

Secretary 

Gretchen R. Haggerty 

United States Steel 

Treasurer 

Kathy Pape 

Pennsylvania American Water 

Education Foundation Chair 

T. William Boxx 

McKenna Foundation 

PEG PAC Chair 

Gary Veshecco 

Erie Insurance 

President & CEO 

David W. Patti 

Dir of Admin & Member Services 

Suzie Barbush 

Political & Grassroots Director 

Christopher Nicholas 

Issue Manager 

Carl A. Marrara 

Event Manager 

Ashley L. Parsells 

Consultants 

Earl M. Baker, PhD 

Michael E. Greenberg, PhD 

Kathleen Woolever 

John T. Tighe, III, founder and CEO of TMG Health said joint and several reform benefits a wide range of Pennsylvania 

interests. “Small and large businesses alike have identified Pennsylvania’s legal climate as a hindrance for starting and 

growing an enterprise in the Commonwealth,” said Tighe. “But the inherent unfairness of joint liability has hurt our 

doctors, hospitals, nursing homes, colleges, universities, and 

municipal governments. Passage of the Fair Share Act 

benefits everyone and ultimately saves tax dollars.” 

O’Brien said that PBC, other business associations, medical 

professionals and health care providers, non-profits and local 

government organizations will continue to press for other legal 

reforms that make Pennsylvania more competitive. “There 

was a lot of hard work through a coalition of interests,” said 

O’Brien. “And we benefitted from the strong leadership of 

House Majority Leader Mike Turzai, Senate Majority Leader 

Dominic Pileggi, and Governor Tom Corbett – all of whom 

made passage of the Fair Share Act a top 2011 priority.” 

Read more about the Fair Share Act and other legal reform 

legislation on page 7. 

Pennsylvania Business Council 116 Pine Street, Suite 201 Harrisburg, Pennsylvania 17101 717-232-8700 www.pabusinesscouncil.org


DEFINING SUCCESS 

Oppose increasing taxes on the job creators. Oppose increasing 

the Personal Income Tax rate and the Sales & Use Tax. 

Oppose “Combined Reporting.” 

Cut spending. 

Empower a “Grace Commission” to address costs. 

Limit General Fund spending growth. 

Limit irresponsible debt. 

Change the budgeting process. 

Reinstate “sunset” review and termination. 

Conduct performance audits. 

GETTING IN THE GAME 

Click here to be directed to the Pennsylvania Office of the 

Budget website and explore the FY 2011-2012 budget. 

For the first time in eight years, Pennsylvania had an on-time budget. In addition, the 2011-12 total operating 

budget represented the first reduction in spending in more than 40 years. Negotiations went down to the 

wire as Governor Corbett signed the budget with just 13 minutes left in the fiscal year. This budget included 

no new taxes, no tax increases, and no fee increases. 

One of the largest cuts was seen in the state operated and state related higher education institutions. Originally, 

Governor Tom Corbett proposed a total 50 percent funding cut of Pennsylvania State System of Higher 

Education (PASSHE) schools and state related institutions: Penn State, Temple, Pittsburgh, and Lincoln. 

Higher education fared well in budget debates and saw more than half of those funds restored, but they still 

did suffer an 18 percent cut. 

The Department of Public Welfare, a department often pointed for “waste, fraud, and abuse,” due to recent 

audits by Auditor General Jack Wagner, saw a mere .04 percent cut from current expenditures. And 

lastly, Pennsylvania ended the 2010-11 fiscal year with a $785 million revenue surplus, thanks to betterthan-expected 

tax collections. That money will most likely be used to pay back $850 million to the Mcare 

Fund that was raided two years ago by then, Governor Edward G. Rendell. The ruling on whether the state 

will be responsible for paying those funds back is currently in the court system but should be ruled on in the 

coming months. 

SB 105 introduced by Senator Patrick Browne (R-Lehigh), would establish the Pennsylvania Web Accountability, 

Transparency, and Contract Hub (PennWATCH) Act. The Independent Fiscal Office would develop, 

implement and maintain a single, searchable, public website containing annual appropriation information 

and funding action or expenditure information of commonwealth agencies. The searchable budget databasedriven 

website would detail information concerning taxpayer expenditures and investments. For example, by 

August 31 of each year, the source tax and amount for each agency appropriation must be provided along 

with employment information concerning the agency and links to each agency website. By February 15, 

2012, employee compensation for each agency shall be listed on the website. The website will be developed 

by December 2011. Thirteen states have a system in place similar to PennWATCH including: Hawaii, Indiana, 

Louisiana, Minnesota, Mississippi, Missouri, Nevada, Oklahoma, South Carolina, Texas, Utah, Virginia, and 

Washington. The bill passed the Senate in late April and moved out of the House Appropriations Committee 

shortly thereafter. The bill now awaits passage in the House. 




To be competitive, Pennsylvania businesses must be able to 

procure plentiful, reliable, and affordable energy. This requires 

the infrastructure and regulatory climate that fosters generation, 

transmission, and distribution systems throughout the 

Commonwealth. Specifics: 

Develop and exploit all energy sources and technologies allowing 

market forces to determine eventual “winners and losers” 

without government favoritism or sanction. 

Facilitate the development of Marcellus Shale natural gas 

reserves. 

Oppose severance tax until the industry is successfully rooted 

in the Commonwealth and then consider only in light of competitiveness 

with other states. 


Looking for educational programs on energy related topics Go 

to the Energy Utility Consultants Inc. website that has a list of 

over 100 webcasts available for purchase. Click here for more 

information. 

FYI 

No topic may be getting more media attention in Pennsylvania than Marcellus Shale and the possibility of an 

“Impact Fee.” Senate Bill 1100, sponsored by Senator Joseph Scarnatti (R-Jefferson), amends Title 58 (Oil 

and Gas) by imposing an impact fee on drillers of natural gas in the Marcellus Shale formation. Provisions of 

the legislation would not allow any money obtained from the impact fee to be directed to the Commonwealth's 

General Fund. The fee would be structured in a way that would charge well operators to pay 

$40,000 in the first year of production; $30,000 in the second year of production; $20,000 in the third year 

of production; and $10,000 in the fourth through tenth years of production. Sixty percent of the funds shall 

be deposited into a shale gas impact account. This amount is to be distributed as follows: 36 percent to 

counties with producing wells; 37 percent for municipalities with producing wells; and 27 percent to all other 

municipalities. Portions of the impact fee revenue will be used to address statewide infrastructure and environmental 

impacts. However, any municipality zoning natural gas drilling out of their region will not reap any 

benefits of the impact fees. The bill is currently still in the Senate Appropriations Committee. 

Many heralded Pennsylvania as a leader in natural gas production with the discovery of the gas in the Marcellus 

Shale formation. Now there may be no questioning Pennsylvania’s force as a leader in the natural gas 

sector. Another underground strip of shale in Pennsylvania, much deeper than the Marcellus formation, is 

thought to hold rich and abundant gas. Utica Shale stretches far beyond the edges of the Marcellus, covering 

most of Pennsylvania, New York and West Virginia, along with eastern Ohio. Currently, eastern Ohio is being 

developed the most but Range Resources Corp. is exploring the Utica formation in Southwestern, Pennsylvania. 

In an interview with the Pittsburgh Tribune-Review, Dr. Terry Engelder, Professor of Geosciences at 

Penn State University said, “A number of companies are taking a careful look at this shale, and in eastern 

Ohio there's been a fair amount of leasing.” The article goes on to state, “The Marcellus shale formation that 

sparked a rush of drillers to Pennsylvania and other Appalachian states averages 7,000 feet deep, and the 

older, thicker Utica layer runs 2,000 or more feet below that. The black Utica shale, 500 feet thick in places, 

dates 440 million to 460 million years.” 




Any state legislative or regulatory policy to reduce greenhouse 

gas emissions must stem from federal legislative authority; 

be based on sound science; recognize that a diverse 

fuel source is a necessary component of Pennsylvania’s 

economy; rely on market driven solutions to identify technologies; 

and provide sufficient time to bring enabling energy 

technologies to market. 

As the state moves to finalize a state water plan, and works 

to consider and implement regulatory programs from the 

variety of basin commissions and compacts involved in managing 

water in the Commonwealth, it must be done in a manner 

that does not advantage one sector of the economy to 

the detriment of another. 

Governor Tom Corbett reversed one of former-Governor Edward G. Rendell's final acts as governor by 

rescinding an effective moratorium on natural gas drilling on state lands. The reason cited by Governor 

Rendell for the moratorium was so the state could complete environmental impact assessments being 

conducted by the Department of Conservation and National Resources. The moratorium was significant 

because, sixty state parks are located above the gas-rich Marcellus Shale formation. The Pennsylvania 

Bulletin published on Saturday, February 19, 2011, stated, “This document, which was not subject to 

advanced public comment or review, is being rescinded as unnecessary and redundant of existing practice. 

The Department is implementing Section 205(c) and will continue to do so. The Department will 

continue to consider the input of all applicable parties with respect to public resources outlined in Section 

205(c).” 


Watch a recording of PBC’s Mandatory Monday Morning Briefing 

featuring Drew Crompton and Terry Bossert discussing Marcellus 

Shale policy issues. Click below to view: 




Adopt basic health plans. 

Allow association health plans. 

Oppose health care mandates. 

Promote Health Savings Accounts. 

Balance access to innovative therapy with cost-effectiveness. 

Require fair health care provider contracting. 

Adopt quality measures. 

Expand health information technology. 

Utilize best practices. 

Enact malpractice reform. 

Retire the MCARE Fund. 

Increase physicians in underserved areas. 

Encourage careers in science. 


Check out the Pennsylvania Health Care Containment Council’s 

2010 Annual Report that was released this spring. Click here to 

access the report. 

FYI 

FYI 

This past winter, adultBasic ran out of time and out of money. Pennsylvania’s adultBasic program was one of only 

a few entirely state-funded health plans to provide coverage to low-income adults who do not qualify for Medicaid. 

Created in 2001, by Governor Tom Ridge, adultBasic is paid for through a combination of money from the state's 

tobacco settlement and the remainder was made up of donations from the state's four BlueCross and Blue Shield 

insurance companies. The cost of the program in 2010 was $166 million. With tobacco money decreasing and 

health care costs increasing, the state was not able to identify other funds to make up the deficit. The deal with the 

insurers was set to expire this past December, but they agreed to contribute $51 million to extend the program to 

the end of February. Shortly after taking office in January, Governor Corbett announced that the program was depleted 

of money and as such, coverage for all participants ended February 28. The state reached an agreement 

with Blue Cross to allow adultBasic subscribers to join another program for low-income citizens, called Special 

Care. The policy is not subsidized by the state and can cost up to $192 a month, opposed to adultBasic’s $36. 

Special Care also provides fewer benefits. 

Representative John Hornaman (D-Erie) and Senator Edwin Erickson (R-Chester) have both introduced legislation in 

their respective chambers that would establish the Physician Retention Loan Forgiveness Program in the Pennsylvania 

Higher Education Assistance Agency. In Rep. Hornaman’s plan, the Physician Retention Loan Forgiveness 

Program is established in PHEAA, which provides for up to 100% loan forgiveness for eligible physicians. US citizens 

licensed to practice medicine specializing in internal medicine, family medicine, pediatrics, or obstetrics and 

gynecology are eligible for the program. By accepting the program, the physician is mandated to practice in Pennsylvania 

for at least 10 years. Similarly, Senator Erickson’s plan would be based on demonstrated need, willingness 

to continue practicing as a physician in Pennsylvania after completing the program, and eligibility. The bill provides 

for the amount of loan forgiveness. A physician accepted into the program practicing full time may be reimbursed 

an amount up to 100% of the total loan for physician training up to $75,000, based upon a repayment assistance 

schedule. At large, the business community supports Physician Retention Loan Forgiveness Programs. Pennsylvania 

must retain more doctors and ensure coverage in rural and inner-city Pennsylvania. Insufficient numbers of 

doctors reduces access to health care and can increase the cost of health care. Pennsylvania ought to offer incentives 

to encourage physicians to practice in the state’s medically underserved areas. Loan Forgiveness programs 

that include stipulations based on need are one way to make Pennsylvania an attractive state in which to practice. 

Both pieces of legislation are in the respective chamber’s Education Committee. 

The Health Choices Act, sponsored by Representative Michael Peifer (R-Pike) would provide mandatory managed 

health care to recipients in specified areas of the Commonwealth through contracts with managed care organizations. 

House Bill 1480 was introduced in early April but has not received any attention until just recently. The Department 

of Public Welfare would administer and implement the program. In a recent hearing on the bill, Rep. 

Peifer said, "the issue really has to do with access to quality health care and the cost containment of this health 

care." He emphasized that with the expansion of managed care, hundreds of thousands of people could possibly 

be included on the Medicaid rolls. The bill is still in the House Health Committee. 




We must increase infrastructure replacement, development, and 

funding. Among the goals: 

Maintenance of current roads and bridges. 

Maintenance of mass transit systems. 

Maintenance and expansion of water and sewer systems. 

Expansion of energy transmission systems. 

Expanded rail systems and intermodal operations. 


Please attend the September 12, 2011 edition of the Mandatory 

Monday Morning Briefing featuring PennDot Secretary Barry 

Schoch. Look for more information on this coming soon! 

Representative Richard Geist (R-Blair) introduced HB 3, a bill that would provide for public-private partnerships 

(P3s) regarding transportation infrastructure. The business community encourages greater private 

investment in improvements to our infrastructure systems by removing regulatory hurdles and providing long 

-term regulatory certainty. Enacting legislation for P3s – especially for adding additional capacity to current 

systems, will benefit Pennsylvania. However the bill was amended to include problematic language that applies 

prevailing wage in all P3 transportation projects. The business community supports HB 3, so long as 

the amendment including prevailing wage is stricken. The bill is currently in the House Transportation Committee. 

Pennsylvania’s infrastructure is crumbling and there is a lack of funds in this year’s budget to address the 

problem. Thousands of bridges have been rated “structurally deficient” by engineers because of their age 

and heavy use. In addition, Pennsylvania’s businesses and industries rely on our transportation network to 

move people and goods. The business community has been in favor of increasing vehicle registration fees, 

license fees, and even an increase in the gas tax. However, due to Governor Corbett’s no tax pledge these 

options are considered, off the table. Current PennDot Secretary, Barry Schoch, has been on record as saying 

the budget shortfall for transportation infrastructure is $3 billion. 




Limit UC to temporary, partial benefits based on actual earnings 

with eligibility restricted to persons unemployed through 

no fault of their own. 

Fairly compute employer UC contributions through an experience 

rating calculation. 

Compel those applying for UC benefits to register for employment 

search services, counseling and re-training through Pa 

CareerLink; and to accept work if it is offered. 

Adjust and limit Pennsylvania UC benefits to account for other 

benefits such as employer-paid severance benefits. 

Create a fair Workers’ Compensation Law that aims to return 

employees to productive, gainful employment, while providing 

adequate but not excessive benefits for work-related occupational 

injuries and illnesses. 

Eliminate Project Labor Agreements (PLAs) for Public Projects 

Reform prevailing wage law to reflect market realities and with 

modern thresholds. 

End compulsory unionism. 


Pennsylvania Business Council Education Foundation Employment 

Law and Labor Policy Series: 

-Harrisburg, September 7 

-Pittsburgh, September 15 

-Philadelphia, September 22 

On June 17, the Governor signed Act 6 into law codifying the Legislature’s efforts on Senate Bill 1030, an 

Unemployment Compensation bill sponsored by Senator Gordner (R-Columbia). Besides providing some 

reform measures to Unemployment Compensation Law, SB 1030 also ensured the continuation of a federally 

funded 13-week extension of Unemployment Compensation benefits to about 45,000 Pennsylvanians 

who qualify. SB 1030 amends the Unemployment Compensation Law to provide circumstances for which 

an employer may be relieved of paying Unemployment Compensation benefits. For example, if work was 

lost due to willful misconduct connected to that work by the employee, the employer would not have to 

compensate that individual. SB 1030 also defines the definition of the term “credit week” to read, “any 

week in which the employee is paid not less than $100 (to expire December 31, 2014) and starting in 

2015 the definition is 16 times the minimum hourly wage required by the Minimum Wage Act.” The Act 

also forces those receiving unemployment benefits to actively search for a new job by posting resumes and 

responding to “help wanted ads” on the State’s CareerLink website. This legislation will slow the growth of 

the Unemployment Compensation fund; saving an average of $133 million per year over the next four 

years. However, the business community knows, and the Governor agrees – more needs to be done. "This 

legislation is a good and important step toward reforming our Unemployment Compensation Law. While 

these reforms will benefit employers and the workforce, there remains more to do, in the long-term, to restore 

the trust fund's solvency and repay our federal loans." 

The Pennsylvania Business Council will be hosting an Employment Law and Labor Policy Summit Series in 

September. The first summit will be hosted in Harrisburg on September 7, followed by a summit in Pittsburgh 

on September 15, and the rubber match will be in Philadelphia on September 22. All three summits 

will feature panels of expert attorneys, lawmakers, administration staff, and association executives. Check 

out the “Getting in the Game” section of this page for more information. 

Click here fore more information. 




Enact the “Fair Share Act” to reform joint and several liability. 

Implement reforms to reduce frivolous lawsuits. 

Provide meaningful product liability reform including a statue 

of repose for product liability actions. 

Enact reasonable protections for retailers who unknowingly 

sell a defective product. 

Apply to all tort actions the same “venue shopping” reforms 

that have reduced medical malpractice claims. 

Balance legal liability from the sale of food products against 

customers’ choices to over-indulge in these products. 

Work to ensure access to competitive and affordable medical 

malpractice insurance. 

Amend the Constitution to empower the Legislature to consider 

limits on damages. 

Amend the constitution to use merit selection, rather than 

popular election, for the appointment of state appellate 

judges. 


Click here to send a letter to your legislator urging them to support 

“comprehensive legal reform.” 

Joint and Several Liability has been a focus of both the Legislature and Governor Tom Corbett early in the 2011-2012 legislative 

session. HB 1, sponsored by Representative Curt Schroder (D-Chester) and SB 2, from Senator Jacob Corman (R- 

Centre) are bills that would make Pennsylvania a modified Joint and Several state. Prior to the recent passage of the Fair 

Share Act, Pennsylvania law allowed a defendant who was marginally responsible for injury or harm to pay 100 percent of 

the damages. That means, even if the defendant was found one percent liable for potential damages, the plaintiff can 

pursue the one percent actor for 100 percent of the monetary award. The Fair Share Act changes this. The Act would more 

fairly represent the defendant by making them eligible to pay 100 percent of the damages only when they are found to be 

60 percent or more liable for said damages. If the defendant is found less than 60 percent liable, they are only responsible 

to pay the percent of damage that they caused. HB 1 passed the House in May, but was held up in the Senate Judiciary 

Committee along with SB 2 by Senator Steward Greenleaf (R-Montgomery). Eventually, Senator Greenleaf introduced his 

own version of “reform” by introducing SB 1131, but provision in the legislation kept the bill from being a true Joint and 

Several reform. The bill was amended on the floor of the Senate by Senator Corman to mirror the original language put 

forth in HB 1 and SB 2. The bill passed in the Senate and was quickly moved to the House for their vote. The Governor 

signed the Fair Share Act into law on June 28, 2011. 

Legal Reform Does Not End With the Fair Share Act: Look for Support From the Business Community on the Following 

Pieces of Legislation: 

Representative Gordon Denlinger (R-Lancaster) introduced HB 304 on January 27, 2010 that would provide for a statute of 

repose. Similarly, in the Senate, Senator Lisa Baker (R-Pike/Wayne/Wyoming/Luzerne/Monroe/Susquehanna) recently 

introduced legislation in the form of SB 384. Statute of repose states that any person bringing a suit against a person or 

business must prove the product was defective and is not more than 15 years old. As technology and science change, 

products over 15 years of age do not have the “best practices” as those produced today. Both bills are in their respective 

Judiciary Committees. 

HB 388, sponsored by Representative Scott W. Boyd (R-Lancaster) would enact legal reform commonly referred to as Innocent 

Seller Provisions. In a product liability action against a product seller, the product seller may file an affidavit certifying 

the correct identity of the manufacturer of the product which allegedly caused the injury, death or damage. If the product 

was deemed safe at the time of the sale, the seller would not be found responsible for any damages caused. Senator Lisa 

Baker (R-Monroe) introduced SB 383 that also protects innocent sellers. SB 383 is currently in the Senate Judiciary Committee. 

Representative Robert W. Godshall (R-Montgomery) is attempting to place caps on non-economic damages in medical 

lawsuits with the introduction of his bill, HB 299. The legislation would not apply to a health care provider if the act or omission 

to act in the rendering of professional services was not in good faith and in a manner amounting to gross negligence 

or recklessness. If passed, the bill would require a constitutional referendum to become fully enacted. The bill is currently 

in the House Judiciary Committee. 

HB 495, sponsored by Representative Keith Gillespie (R-York), would allow for a benevolent gesture or admission by health 

care provider. Also known as the “Apology Act” HB 495 would allow for an apology by health care provider, assisted living 

residence, or personal care home and not have it used against them as an admission of guilt in court. The medical community 

and business community have been advocates of this legislation for years because several studies have found that it 

could lower the number of malpractice suits. Many doctors are trained in medical schools and by their lawyers to avoid 

apologizing for anything unfortunate that might happen to a patient. The bill is currently in the House Judiciary Committee. 




Maintain the phase-out of the Capital Stock & Franchise Tax. 

Adopt the Single Sales Factor for the apportionment of corporate 

revenue subject to PA’s corporate net income tax. 

Eliminate the cap on the deductibility of net operating losses. 

Oppose the implementation of “Combined Reporting.” 


Watch a recording of PBC’s Mandatory Monday Morning Briefing 

featuring Senator Bob Mensch discussing his package of tax 

reduction bills. Click below to view: 

After a heated debate in the House and Senate, Governor Tom Corbett signed Senate Bill 330, a school property 

tax reform. The most significant reform in SB 330 forces the local school boards and school districts to 

receive voter approval for any property tax increase for school districts over the rate of inflation. In addition, SB 

330 amends the Taxpayer Relief Act to require the school directors in school districts of the second, third, and 

fourth classes to adopt a resolution allowing the payment of property taxes by small businesses (>50 employees) 

to be made in installments. 

Senator Robert Mensch (R-Montgomery) put together a comprehensive package of bills that would lower the 

business tax burden in Pennsylvania. Currently Pennsylvania ranks 47 th in the nation in new job creation, has 

the third-highest unemployment compensation claims in the nation, and has the highest flat Corporate Net Income 

Tax in the country - second highest in the world. SB 204, SB 205, SB 206, SB 207, and SB 208 are targeted 

at correcting these statistics. All five bills were introduced to the Senate Finance Committee in January. 

SB 204 reduces the amount of each paycheck the Commonwealth takes through the state Personal Income 

Tax (PIT). The PIT would be reduced from 3.07 percent to 2.99 percent for not only individuals, but also 

for the small businesses for whom the PIT is their primary business tax. 

SB 205 implements a "Single Sales Factor" which is an apportionment formula for taxes that is based 

solely upon sales, rather than a formula that takes into account property, payroll and sales as we currently do in 

Pennsylvania. Apportionment formulas determine how much of a company's income will be taxable. If a multistate 

company is looking to grow, it will look at states that use the single sales factor rather than the threefactor 

apportionment formula. Unlike Pennsylvania, most states use the single-sales factor. 

SB 206 reduces the Corporate Net Income (CNI) tax to 6.99% by 2014. The CNI rate is currently at 9.99%. 

Senator Mench’s legislation would decrease this amount by 1% each year starting in 2012 and maintain a 

6.99% rate from 2014 thereafter. When a company is looking to begin operations or relocate somewhere, the 

CNI is one of the first things that it looks at in order to determine how expensive it will be to do business there. 

Pennsylvania currently has the highest flat-rated CNI in the country and the second highest in the world. 

SB 207 would help companies such as start-up biotechnology companies who create great paying jobs but 

don't generate income for the many years it takes to get just one of their products to market. Pennsylvania is 

one of only six states that does not allow a business to deduct 100 percent of its Net Operating Losses (NOLs) 

on its taxes. 

SB 208 would help with a big expense for many businesses in Pennsylvania – job training – by creating a 

Career Development Tax Credit. A skilled workforce is vital to the successful operation of any company. Broadbased 

education and training can only go so far in preparing workers and attracting companies who need specialized 

skill-sets. Giving employers a tax credit by using already existing state workforce development money 

that would target limited state resources directly to where the jobs actually are. 




Support the Center for Advanced Manufacturing Careers and 

similar efforts to provide a trained workforce for Pennsylvania’s 

manufacturing sector. 

Produce more science, technology, engineering and mathematics 

(STEM) graduates. 

Improve interagency cooperation and state/local coordination 

of workforce development policymaking and programs. 

Ensure education accountability through common curriculum. 

Educate parents, teachers and students about opportunities 

in skilled careers. 

Increase Career and Technology Education. 

Maintain and Fund Industry Partnerships. 

Strengthen our community colleges and mandate articulation 

with four-year state universities. 


Learn more about Industry Partnerships by checking out the 

Pennsylvania Workforce Development’s website. Click here for 

the page specific to Industry Partnerships. 

Senate Bill 552, introduced by Senator Michael Brubaker (R-Lancaster) amends the Workforce Development 

Act by adding a chapter that would codify Industry Partnerships. Unfortunately, Pennsylvania’s current workforce 

has a severe shortage of skilled labor and is unable to meet the needs of the Commonwealth’s employers. 

Industry Partnerships are an important tool in our workforce development portfolio that can help to bridge 

this gap. Industry Partnerships have a successful track record. The initiative began in the Schweiker Administration 

and was expanded during the Rendell Administration. Since the inception of the initiative, more than 

6,300 employers have been involved and more than 73,000 workers have been trained. The business community 

has long been a supporter of Industry Partnerships and hopes to see legislation enacted soon. SB 552 

unanimously passed the Senate and the House and was signed by Governor Tom Corbett on July 7, 2011. 

In April, Representative Thomas Quigley (R-Montgomery) introduced HB 1330, a bill that would expand the 

Educational Improvement Tax Credit program (EITC). EITC’s are tax credits to eligible businesses for contributing 

to a scholarship organization, an educational improvement organization, and/or a pre-kindergarten scholarship 

organization. The purpose of the tax credit program is to enhance the educational opportunities available 

to all students in this Commonwealth. HB 1330 would increase the maximum annual contribution rate. Currently, 

contributions made to scholarship organizations and educational improvement organizations are 

capped at $300,000 per year. Under HB 1330, this limit would be extended to 400,000 annually in FS 2011- 

2012 and expand the program to $750,000 in FS 2012-2013 and years thereafter. Additionally, contributions 

to pre-kindergarten scholarship organizations are limited to $150,000 per year whereas; HB 1330 increases 

the amount to $200,00 in FS 2011-2012 and $250,000 in FS 2012-2013 and years thereafter. The bill stipulates 

that not more than $60 million shall be used to provide tax credits for contributions to educational improvement 

organizations, and not more than $20 million shall be used to provide tax credits for contributions 

to pre-kindergarten scholarship organizations. The bill passed the House in a bi-partisan effort of 190-7 in early 

May. HB 1330 is now in the Senate Education Committee but no action will be taken on this bill until the fall. 

“School Choice” were the buzz words surrounding education policy for the first part of the 2011 legislative 

year. Unfortunately, SB 1, introduced by Senator Jeffery Piccola (R-Dauphin), that promoted school choice 

failed to gain traction despite pressure from the Governor’s office. Representative Jim Chrisitiana (R-Beaver) 

and Representative Curt Schroder (R-Chester) also attempted to push legislation on the topic but never saw 

their bills make the floor for a vote. Many feel the topic will come back to the forefront in the fall. The business 

community supports school choice and has been advocating for passage of SB 1 since its introduction.

July 2011 - BIPAC

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