LEG REG REVIEW
2017, 9th Issue *** February 20, 2017
BUDGET HEARINGS BEGIN
House and Senate Appropriations Committees kick off the annual gauntlet of legislative hearings on the State Budget proposed by Governor Tom Wolf. Most hearings will be covered by PCN. PA Cable Network’s schedule may be found at https://pcntv.com/schedule/. A selected list of hearings follows. Note that PCN program times may differ depending on their broadcast schedule.
Neither House nor Senate has scheduled a hearing for the PA Insurance Department.
Department of Agriculture: Feb. 27. Senate – March 1. House
Dept. of Environmental Protection: Feb. 27 House – March 9. Senate
Labor & Industry (think Workers’ Compensation): Feb. 22 House – Feb. 28 Senate
Transportation: Feb. 22 House – Feb. 27 Senate
Education: March 6 House – March 7 Senate
Dept. Conservation & Natural resources: Feb. 27 House – March 1 Senate
Dept. Community & Economic Development: March 2 House – March 6 Senate
Governor’s Budget Office: March 9 House – March 10 Senate
Regarding the Governor’s proposal to combine four separate Cabinet departments into one to be called Dept. of Health & Human Services, the House and Senate Appropriations Committees are taking different approaches. The Senate Appropriations Committee will hold its hearing March 8 with a combined presentation of the four existing department heads. The House is breaking it down by Department: Aging Feb. 27; Health Dept. and Dept. of Drug & Alcohol Programs February 28; Dept. Human Services March 7.
HOUSE COMMITTEE REVIEWS PA WORKERS’ COMPENSATION
On February 15, the House Labor & Industry Committee convened a hearing with presentations from the Dept. of Labor & Industry, State Workers Insurance Fund (SWIF), and the PA Compensation Rating Bureau. While much of the hearing was simply informational (what does PCRB do or numbers of certified worker safety committees are there in the Commonwealth), the SWIF session raised an issue possibly needing to be addressed legislatively. This issue centers on employers who owe SWIF premiums simply re-filing to get a new EIN. With a new EIN, SWIF said that it is compelled to issue a Workers’ Compensation policy as the insurer of last resort despite the previous default. Another area zeroed in on by legislators was where SWIF testified that it had limited internal ability to combat insurance fraud. Regarding debt collection, SWIF reported that stepped up collections resulted in recovery of $2.3 million since 2015 but was prevented from charging higher fees to policyholders if there is a bad debt. SWIF is the state’s largest Workers’ Compensation insurer accounting for eight-percent of the total Workers’ Compensation market.
BUDGET (Continued)
Following is a partial list of where Governor Wolf plans to raise $1 billion in additional revenues for the FY 2017-18 State Budget. He is not calling for a broad-based tax increase in the rates of the Sales Tax or Personal Income Tax.
– Imposing a tax on Marcellus natural gas extraction
– Increasing the minimum wage to $12/hour (In addition to helping the employee, it means greater Personal Income Tax revenue to the state.)
– A loan to the General Fund from the Workers’ Compensation Security Fund
– Imposing a $25 per capita payment by municipalities who rely on the PA State Police to handle their law enforcement needs
– Eliminating the premium tax exemption now held by certain health insurers (Thanks to Highmark and others for the heads-up.)
– Incrementally increasing the reach of the Sales Tax to previously exempt areas
REAL ID COMPLIANCE NEARS
The Senate Transportation Committee moved Pennsylvania closer to compliance with Federal identity standards (called REAL ID) by reporting out Senate Bill 133 (Ward-R-Westmoreland) on February 8. If PA does not act by the end of June, Pennsylvanians would not be able to use their PA Driver’s License as ID when entering a Federal facility (besides the US Postal Service) and in 2018 on commercial airline flights.
OTHER LEGISLATIVE ITEMS OF NOTE
• Reported out of the Senate Consumer Protection Professional Licensure Committee February 8 was Senate Bill 274 (Gordner-R-Columbia) to license certified nurse anesthetists. Of interest to insurance agents is a provision mandating that they carry medical malpractice insurance.
• Senate Bill 181 (Mensch-R-Montgomery/Berks/Bucks) which establishes a performance-based budgeting process passed the Senate 49-0 on February 6. This means that instead of just building on a previous budget, agencies would have to justify their budgets beginning at dollar one. Senator Mensch’s sponsorship memo says that “Pennsylvania continues to add new programs and continue funding existing programs without critical checks or balances that could determine the efficacy of a particular program…Performance-based budgeting will call on our legislators to make some tough decisions politically but we have to stop increasing the size and scope of our government operation without justification.”
• The House Labor & Industry Committee reported out a bill allowing PA to contract with the International Codes Council to provide an on-line read-only Pennsylvania-specific resource that reflects changes from the ICC Codes to the PA Uniform Construction Code.
SPARKS UNDERTAKES NEW DIRECTION IN 2017
At its February 17 meeting, the SPARKS Club opted for a different educational direction for 2017. It will sponsor underwriting clinics offered by the Mutual Inspection Bureau (MIB) which are geared to upgrading the effectiveness of Mutual Insurance Company employees. According to SPARKS, this will also enhance company-agency communication.
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