LEG REG REVIEW 2014, 20th Issue July 21, 2014

LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol.  It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities.  It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU).  Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 or e-mail to xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from or added to this list.



Now that the new fiscal year has begun, a review of the past FY might be in order.  First, revenue projections were off.  Despite June collections coming in at a greater rate than anticipated, the net result for the FY was almost ½ billion dollars short of projections.  Second, PA’s new budget projects $29.6 billion in revenue representing over one billion more than was collected in FY 2013-14, an increase of 3.5%.  Despite the shortfall in revenues, actual collections were up in FY 2013-14 over the preceding fiscal year, although be it by only $30.9 million. (+ 0.1%)


Tax                                          2013-14 Actual           2012-13 Actual           Percentage Change


Sales                                        9.13 billion                  8.893 billion                + 2.7%

Personal Income Tax               11.437 billion              11.371 billion              + 0.6%

Corporate Taxes                      4.898 billion                5.189 billion                – 5.6%

Inheritance Tax                       877.4 million               845.259 million           + 3.8%

Realty Transfer Tax                375.4 million               338.746 million           + 10.8%

Other Taxes                             1.379 billion                1.428 billion                – 3.4%

(Cigarette, Malt Beverage, Liquor, Table Games)

Chart courtesy PA Budget & Finance Center updated July 3, 2014



On July 10, Governor Corbett signed the new State Budget into law but expressed dismay in that the General Assembly did not pass pension reform, something he said had to be done.  To send a message, he vetoed $65 million in monies out of the funds allocated to the General Assembly.  What was not as well reported by the media were the other items vetoed, including:

–          Dept. Environmental Protection $150,000 (environmental program management)

–          Dept. Environmental Protection $700,000 (sewage facilities planning grants)

–          Treasury Department $45,000 (general gov’t operations)

–          Dept. Community & Economic Development $250,000 (financial institution grants)

–          Dept. Community & Economic Development $300,000 (Intergov’tal Cooperation Authority)

–          Dept. Conservation & Natural Resources $$500,000 (parks)

–          Labor & Industry $250,000 (general gov’t operations)

–          Civil Air Patrol $100,000

–          Dept. General Services $5 million (rental, relocation and municipal charges)

–          Reduce Machinery & Equipment Loan Fund from $100 million to $85 million

–          Small Business First Loan Fund (for agriculture, tourism, manufacturing) from $100 to $95 million


RIDE-SHARING (Continued)

More ride-sharing legislation was introduced by Senator Wayne Fontana (D-Allegheny) urging the Public Utility Commission (PUC) to investigate transportation needs and approve experimental licenses for mobile-based ridesharing services in the city of Pittsburgh. Senate Resolution 427 was referred to the Senate Consumer Protection & Professional Licensure Committee on July 17.


READER COMMENT ON RIDE-SHARING: A southeast PA reader contacted Leg Reg Review stating that the following sentence from last week was incorrect: The ride share companies require that accident claims go through the driver’s personal auto policy first.  Research into Lyft and Uber House Insurance Committee testimony supported Leg Reg’s report but the testimony was about ride-sharing in Pittsburgh.  Anybody have any insight as to how they do it in Philadelphia?  Do they require that an accident claim go through the driver’s passenger auto first and then to the ride-sharing company’s insurer after a claim is initially declined?



  • House Bill 1436 (Truitt-R-Chester) passed the House 203-0 to mandate health insurance coverage for amino acid based elemental medical formula for children.  Language was deleted from the bill expanding its purview to other food disorders.
  • Also passing the House (202-0) was House Bill 2340 (Kampf-R-Chester), a measure governing how reciprocal insurance exchanges may convert to a stock company.  These reciprocals filled the breach a decade ago when the medical malpractice market in PA virtually collapsed.  Currently there are 18 reciprocal insurance exchanges domiciled in the Commonwealth with most providing medical malpractice insurance to members.  It was referred to the Senate Banking & Insurance Committee.
  • The House reconvenes August 4 to finish some of the summer’s work, e.g. passage of legislation increasing Philadelphia cigarette taxes to fund its schools.  There are several other items on the House calendar which could also see action:

–          Senate Bill 1267 (Vance-R-Cumberland) to reauthorize the PA Health Care Cost Containment Council (PHC4) until June 30, 2017.  Technically, PHC4 authority ended June 30, 2014.

–          Senate Bill 990 (Browne-R-Lehigh) governs licensure of acupuncturists and requires a $1,000,000 liability insurance policy.

–          House Resolution 778 (Curtis-D-Phila.) directs the Joint State Government Committee to study the Commonwealth’s efforts to protect Pennsylvanians’ confidential information from cyber threats.

–          House Resolution 241 (Cox-R-Berks) directs the Legislative and Budget Committee to undertake a study reviewing PA’s Medicaid program to see if there are impediments to family care-giving and to identify the extent to which family members serve as caregivers.



National Flood Insurance Program (NFIP) announced another 24/7 web educational program, The ‘New’ Theory of Elevation Rating includes elevated and non-elevated AE zone buildings, elevated VE zone buildings and elevation rating procedures.  NFIP stresses that this course is advanced and that insurance producers should take the ‘EC Made Easy’ online course first.  Details: nfip-online@h2opartnersusa.com


CELEBRATE SHARK WEEK (with thanks to Hannah Bender www.PropertyCasualty360.com)

It’s time for Science Fiction Channel’s Sharknado series July 30 and the Discovery Channel’s SHARK WEEK in August.  Hannah debunks the shark mythos.  From 1837 to 2013, here are the top ten states in the US by number of unprovoked shark attacks compared to the number of persons killed by lightning 1959-2010.

  1. Florida                         687 attacks      9 shark fatalities          459 lightning fatalities
  2. Hawaii                         129                  6                                  0
  3. California                    110                  7                                  30
  4. South Carolina            77                    0                                  98
  5. North Carolina            48                    1                                  193
  6. Texas                           38                    1                                  213
  7. Oregon                                    27                    1                                  8
  8. New Jersey                  15                    0                                  68
  9. Georgia                       12                    0                                  110
  10. Alabama (tie)              8                      0                                  109

10. New York (tie)            8                      0                                  139

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