Social Impact Bonds: A Public-Private Solution to Social Problems

What are social impact bonds (SIBs)?  They are a relatively new tool in the field of social finance–public private partnerships that have been established in the United States and throughout the world to address recurring problems associated with all kinds of social issues, including, but certainly not limited to, low-income students’ access to early childhood education, juvenile delinquency, unemployment, homelessness, and prison recidivism.  The goal of SIBs, sometimes referred to as “pay-for-success” financing, is to transition from government-funded remedial activities to government-funded preventive activities in the delivery of social and educational services. SIBs cannot be used to address every social ill, but they provide a results-driven, data-based approach to solving social problems that government has struggled to solve on its own.

The following is a brief step-by-step explanation of how SIBs work in practice, provided by McKinsey & Company:

  1. A governmental entity contracts with an intermediary to broker a SIB.
  2. The intermediary raises capital from private investors.
  3. After raising the necessary capital, the intermediary transfers funding to one or more non-profit service providers.
  4. The non-profits then provide their preventative services targeting a specific social problem in a larger population.
  5. Throughout the process, an evaluation advisor monitors the progress of the intermediary and non-profit service providers and recommends adjustments that may need to be made.
  6. At the end of the process, an independent assessor determines whether agreed-upon performance measures have been met and how much the governmental entity needs to repay the private investors, who are repaid only if the SIB meets its performance targets.*

Since 2010, when England launched the world’s first official SIB aimed at reducing recidivism among nonviolent, short-term prisoners, SIBs have become increasingly popular at all levels of government in the United States.  According to Social Finance, a leading organization in SIB development, the following social impact bonds are being considered or are currently underway in the United States:

  • In Pennsylvania, the City of Philadelphia in July of 2014 released a request-for-proposal for a feasibility study to explore a pay-for-success initiative to reduce recidivism and support at-risk youth.  During the 2013-2014 legislative session, state legislators introduced, or proposed to introduce, legislation dealing with SIBs–ranging from the establishment of social public private partnerships to a study on SIBs by the Legislative Budget and Finance Committee to the utilization of state funds for a SIB pilot program and study. This legislation will probably be re-introduced during the next legislative session (beginning in January of 2015), as well as additional social impact bond legislation.
  • In California, Santa Barbara County approved a feasibility study on the potential use of pay-for-success financing to reduce prison recidivism; and Santa Clara County is looking to use SIBs to address homelessness and acute mental illness.
  • In Colorado, Denver is pursuing a SIB to provide housing and case management to chronically homeless persons who struggle with mental health and substance abuse issues.
  • Connecticut has a pay-for-success initiative designed to help families involved in the Department of Children and Families that have a history of adult substance abuse.
  • Illinois state government is pursuing a SIB aimed at increasing support for at-risk youth involved in the child welfare and juvenile justice systems.
  • Massachusetts is engaged in a $50 million SIB designed to reduce recidivism among justice-involved youth and to house chronically homeless persons.
  • In New York State, New York City in 2012 became the first jurisdiction in the United States to undertake a SIB project, which allocated $9.6 million to reduce recidivism among young men exiting the Rikers Island prison facility. New York State has also appropriated $30 million for SIBs over five years, and it recently announced four pay-for-success projects for the Nurse-Family Partnership, Montefiore Medical Center/Children’s Aid Society, Hillside Children’s Center, and the Primary Care Development Corporation and its partners.
  • In Ohio, Cuyahoga County has recently launched a pilot SIB project to help homeless mothers with children in foster care.
  • Oklahoma has established a pay-for-success revolving fund to provide payment to social service providers for the delivery of predefined criminal justice outcomes.
  • South Carolina is engaged in a SIB that will serve up to 4,000 mothers to improve birth, health, and self-sufficiency outcomes.
  • Utah has launched a SIB to improve early childhood education outcomes, and the governor recently signed legislation creating the Utah School Readiness Initiative, which allows the state to pay for outcomes.
  • Washington, DC is developing the nation’s first SIB designed to reduce teen pregnancy and increase educational attainment for high school-aged youth.**

Most recently, the City of Chicago announced it will engage in a $17 million SIB over the next four years to provide pre-K learning to 2,620 children.***

In addition, at the federal level, President Obama has included $300 million in his 2014-2015 budget to incentivize the use of SIBs at the state and local level; and Representatives Todd Young (R-Indiana) and John Delaney (D-Maryland) have introduced H.R. 4885—bipartisan legislation that would “direct $300 million in federal funds to SIB feasibility studies, evaluation, and outcomes payments on contracts executed with state and local governments.”**** Senators Bennet (D-Colorado) and Hatch (R-Utah) have introduced similar legislation (S. 2691) in the Senate. Both pieces of legislation await consideration before the United States Congress.

*“An introduction to Social Impact Bonds.” McKinsey & Company, May 15, 2012, https://www.youtube.com/watch?v=E6GrQtCh83w

**The United States, State and Local Activity: A Snapshot, Social Finance, November 19, 2014, http://www.socialfinanceus.org/social-impact-financing/social-impact-bonds/history-sib-market/united-states.

***Elizabeth Campbell, “Chicago Will Use $17 Million in Social-Impact Bonds for Pre-K,” Bloomberg, October 8, 2014, http://www.bloomberg.com/news/2014-10-08/chicago-will-use-17-million-in-social-impact-bonds-for-pre-k.html.

****The United States, State and Local Activity:  A Snapshot, Social Finance.

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Two C&G Attorneys Named to Govenor-Elect Tom Wolf’s Transitition Team

Congratulations to two members of our Public Affairs Team, Cliff Levine (Transportation) and Morgan Hanson (State), who have been named to the Transition Committee of Pennsylvania Governor-Elect Tom Wolf.  A current list of all transition committee members is located on Governor-Elect Wolf’s Transition website:  http://www.wolftransitionpa.com/sections/blog/wolf-announces-transition-review-teams

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Podcast – C&G’s “The Public Forum” on KQV 1410 – December 8, 2014

In case you missed it, here is the Podcast from our December 8, 2014 show.

Hosts were Rob Vescio and Nello Giorgetti from C&G and the guests were Michelle Figlar, Executive Director of the Pittsburgh Association for the Education of Young Children (“PAEYC”) and Vince Gastgeb, Assistant Vice President Corporate & Government Affairs for the Allegheny County Airport Authority.

Our next show will air on Monday, January 19, 2015 at 7:30 PM. The guest will be Rich Fitzgerald, Allegheny County Executive.

Hope you will join us!

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Will we finally have State and Municipal Pension Reform in 2015?

One of the unfinished items from the Tom Corbett era as Governor of Pennsylvania was an attempt to bring fiscal sanity to the underfunded state employees and teachers’ pension funds.

Because of a variety of reasons—some out of Governor Corbett’s control no action was taken, leaving this financial mess for incoming Governor Tom Wolf to deal with.

And mess it is. Both funds are severely underfunded, because of the 2008 great recession and because, in the teachers’ pension fund, the Commonwealth of Pennsylvania decided that the market was going so well that it gave itself and local school boards a pass in putting in their shares in the aforementioned fund.

Now we are billions in unfunded liabilities.

This is without counting local municipal pension fund problems. Pennsylvania suffers from a multiplicity of funds—almost 25 percent of local municipal pension funds are located in our fair state. Unfortunately a vast majority of these funds are deep in the red.

The City of York has announced that they will no longer have a police force or a paid fire department because the yearly payment it has to put into its pensions make these public safety employees a luxury it can no longer afford.

Speaker Elect Mike Turzai did try to deal with state pension reform last year, coming up a few votes short. All indications are that he wants to fix this problem once and for all in the coming New Year.

The State Senate did pass a bi-partisan municipal pension reform bill 5 years ago only to see it die in the then Democratic controlled House.

With a new Governor, with a fiscal pension mess and a revenue shortfall perhaps the impetus for a solution might be at hand.

To paraphrase an old saying, “Never let a good crisis go to waste.”

by Nello Giorgetti

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Nello Giorgetti talks Budget with KDKA’s Jon Delano

On Thursday, December 5, 2014, Governor-Elect Tom Wolf was in town to support Allegheny County Executive Rich Fitzgerald’s bid for re-election.  During Wolf’s visit he made it clear that there was a $2 billion hole in the State’s budget.  Jon Delano sat down with Nello for his opinion on the State’s budget and what options there possibly could be to fix this problem.  See link from CBSLocal:  http://pittsburgh.cbslocal.com/video/10917943-gov-elect-wolf-visits-allegheny-co/

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Tonight on “The Public Forum” on KQV Radio 1410

The Public Forum is a monthly KQV Radio Talk Show where hosts from our Cohen & Grigsby Public Affairs Team and various guests discuss current topics impacting Harrisburg and D.C. and the business community.

Our Hosts for tonight’s show are Rob Vescio and Nello Giorgetti with guests, Michelle Figlar, Executive Director of the Pittsburgh Association for Education of Young Children (“PAEYC”) and Vince Gastgeb, Assistant Vice President of Corporate and Government Affairs for the Allegheny County Airport Authority.

We hope you will listen tonight at 8:00 PM at 1410 AM, KQV.

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Podcast – C&G’s “The Public Forum” on KQV 1410 – November 24, 2014

In case you missed it, here is the Podcast from our November 24, 2014 inaugural show.

Hosts were Rob Vescio and Nello Giorgetti from C&G and the guests were the next Speaker of the House, Mike Turzai and Senate Democratic Leader, Jay Costa.

Our next show will air on Monday, December 8, 2014 at 7:00 PM.  Guests will include Michelle Figlar, Executive Director of the Pittsburgh Association for the Education of Young Children and Vince Gastgeb, Assistant Vice President Corporate & Government Affairs for the Allegheny County Airport Authority.

Hope you will join us!

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

C&G’s Public Affairs Team Launches “The Public Forum” on KQV Radio 1410

The Public Forum is a monthly KQV Radio Talk Show where hosts from our Cohen & Grigsby Public Affairs Team and various guests discuss current topics impacting Harrisburg and D.C. and the business community.

We hope you will listen tonight at 7:00 PM at 1410 AM, KQV.

Our Hosts for tonight’s show are Rob Vescio and Nello Giorgetti with guests, the next Speaker of The House Mike Turzai and Senate Democratic Leader Jay Costa.

If you miss tonight’s airing we will post a podcast to this site soon.

Sun Air Express to Expand Service in Pittsburgh

Cohen & Grigsby’s Public Affairs worked with the Allegheny County Airport Authority to add commuter air service carrier Sun Air Express to the Pittsburgh International Airport. Sun Air Express will launch direct commuter flights from Pittsburgh International Airport to Pennsylvania regional airports in Lancaster, Bradford, Franklin, and Altoona. In addition, service to markets outside of Pennsylvania, including Jamestown Airport in New York, will be announced shortly. Lancaster service will begin in November, 2014. The Cohen & Grigsby team worked closely with County Executive Rich Fitzgerald, Airport Authority officials, and our State and Federal Elected Officials. Everyone was on hand to announce the project October 22nd.  http://triblive.com/news/adminpage/7011094-74/pittsburgh-routes-airport

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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

September 2014 – From the Governor’s Office

The state legislature passed legislation (HB 1177) that authorizes the City of Philadelphia to levy a cigarette tax to generate additional revenue for the Philadelphia School District. This legislation also authorizes the Allegheny County Airport Authority to invest in commercial paper. Governor Corbett signed this legislation into law as Act 131 on September 24th.

The Governor also signed into law (Act 137 of 2014) legislation creating the Aggregate Advisory Board to assist the Pennsylvania Department of Environmental Protection (DEP) to expend funds for the purposes provided in the Noncoal Surface Mining Conservation and Reclamation Act and to advise the secretary of the DEP on all matters pertaining to surface mining.

He also signed into law (Act 132 of 2014) legislation that changes the name of the Department of Public Welfare to the Department of Human Services.

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If you have questions about the budget or any introduced legislation, please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Cohen & Grigsby Public Affairs is a specialized practice group made up of public affairs professionals and attorneys who know how to navigate where government and business intersect. Members have served at all levels of local and state government and are from all sides of the political spectrum.

Key Topics – Property Taxes

On September 16th, the Senate Finance Committee approved legislation that proposes to eliminate school property taxes by expanding and increasing the state sales and use tax, increasing the state personal income tax, and imposing a hotel occupancy tax. Some advocacy groups believe that this legislation is a viable solution to the ongoing problem of escalating property taxes; other groups believe that the legislation is simply tax shifting without addressing the causes of school property tax increases. This legislation awaits consideration before the entire state Senate.

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If you have questions about the budget or any introduced legislation, please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Cohen & Grigsby Public Affairs is a specialized practice group made up of public affairs professionals and attorneys who know how to navigate where government and business intersect. Members have served at all levels of local and state government and are from all sides of the political spectrum.

Legislation Considered – September 2014

 Environmental

  • Rep. Hahn (R-Northampton County) sponsored a bill that amends the Clean Streams Law to allow riparian buffers and riparian forest buffers to be used as an option among best management practices designed to protect water quality in cases of earth or land disturbance from construction or reconstruction. (House Bill 1565)

Economic Development

  • Rep. Benninghoff (R-Centre County) sponsored a bill that amends the Capital Facilities Debt Enabling Act to reduce the borrowing capacity for Redevelopment Assistance Capital Program (RACP) projects by cutting annual borrowing capacity by $50 million beginning in fiscal year 2018-2019 until the debt limit reaches $2.95 billion. (House Bill 2420)
  • Sen. Pileggi (R-Delaware County) sponsored a bill that would amend the Transit Revitalization Investment District Act to modernize the act and to provide an additional way of funding Transit Revitalization Investments Districts, also known as TRIDs. (Senate Bill 1210)

Elder Abuse

  • In response to reports of elder abuse, Rep. Knowles (R-Schuylkill County) has introduced legislation directing the Legislative Budget and Finance Committee to review the existing elder abuse task forces and to develop a profile of each existing task force model. (House Resolution 929)

Health Care

  • Sen. Folmer (R-Lebanon County) sponsored a bill that would establish the Medical Cannibas Act, which allows health care providers to recommend the use of marijuana for medical purposes. (Senate Bill 1182)

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If you have questions about the budget or any introduced legislation, please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Cohen & Grigsby Public Affairs is a specialized practice group made up of public affairs professionals and attorneys who know how to navigate where government and business intersect. Members have served at all levels of local and state government and are from all sides of the political spectrum.

New Legislation Introduced – September 2014

Government Reform

  • Senator Baker (R-Luzerne County) is introducing legislation providing for a comprehensive gift ban, prohibiting elected officials and other public employees from accepting cash gifts and non-cash gifts–including meals, travel, lodging, and entertainment (with exceptions)–from individuals and entities trying to influence government action.

Environmental

  • Sen. Solobay (D-Washington County) has introduced legislation calling upon the Environmental Protection Agency (EPA) to respect the primacy of state government in developing guidelines for regulating carbon dioxide emissions from existing power plants and to rely on state regulators to develop performance standards for carbon dioxide emissions that consider the unique economic, resource, and energy needs and issues of Pennsylvania. (Sen. Resolution 438)
  • Senate Resolution 439 also sponsored by Sen. Solobay calls upon the EPA to schedule public hearings on the proposed Clean Power Plan rule in coalfield communities and to withdraw the proposed rule or revise it to eliminate the economic shock that will occur to coalfield communities in the state. Representative Snyder (D-Greene County) is introducing companion legislation in the House of Representatives.

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If you have questions about the budget or any introduced legislation, please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

Cohen & Grigsby Public Affairs is a specialized practice group made up of public affairs professionals and attorneys who know how to navigate where government and business intersect. Members have served at all levels of local and state government and are from all sides of the political spectrum.

New Legislation Introduced – August 2014

Transportation

  • Rep. Mustio (R-Allegheny County) sponsored a bill that would require transportation network companies, such as Uber and Lyft, to be licensed by the Public Utility Commission (PUC) and to meet certain insurance and safety requirements.  (House Bill 2453).  Rep. DeLuca (D-Allegheny County) sponsored a similar bill.  (House Bill 2446).
  • Rep. Killion (R-Delaware County) sponsored a bill that would place certain limitations on transportation network companies, such as Uber and Lyft, including, but not limited to, a requirement to obtain commercial liability insurance as primary coverage, obtain a certificate of public convenience, and file criminal background checks on the drivers of these companies.  (House Bill 2445).

Immigration

  • Rep. Metcalfe (R-Butler County) sponsored a bill that would require all employers in the state, including governmental employers, to enroll in the Employment Eligibility Verification Program (E-Verify); it would also allow municipal governments to adopt ordinances denying business licenses to employers of unauthorized aliens.  (House Bill 2430).

Municipal (Vacant & Blighted Property)

  • Rep. Day (R-Berks County) will be introducing legislation that would establish the Vacant Property Registration and Assessment Act, which is intended to address problems associated with vacant and blighted property by shifting the responsibility of helping to solve those problems on owners of properties that are vacant and/or blighted.

Taxation

  • Rep. Thomas (D-Philadelphia County) will be introducing legislation calling upon the Legislative Budget and Finance Committee to conduct a study on transitioning from a flat personal income tax to a graduated personal income tax system.

Economic Development

  • Rep. Benninghoff (R-Centre County) sponsored a bill that would reduce the Redevelopment Assistance Capital Program (RACP) debt ceiling (the outstanding obligations for redevelopment assistance projects) by $50 million increments until the debt ceiling reaches $2.95 billion (on July 1, 2027).  (House Bill 2420).

Rep. Turzai (R-Allegheny County) sponsored a bill that would establish annual spending limits on all project types that come under the Capital Facilities Debt Enabling Act, including redevelopment assistance projects.  (House Bill 2419).

 

If you have questions about the budget or any introduced legislation, please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.

 

Key Topics – Pension Reform

The Public Employees Retirement Commission (PERC) recently issued an actuarial note on Rep. Grell’s (R-Cumberland County) pension reform legislation that would place new members of the State Employees’ Retirement System (SERS) and the Public School Employees’ Retirement System (PSERS) in a “cash balance” retirement plan beginning in 2015.  A cash balance plan is defined as a type of traditional defined benefit plan with a defined contribution portability component.  Cash balance plans shift some of the risk of a defined benefit plan from the employer (in this case—state government and school districts) to the employees who receive benefits.

Under this legislation, employees would be given cash balance savings accounts to which employees and employers would make contributions and to which interest would be applied.  Also, this legislation proposes a $9 billion pension obligation bond to reduce some of the approximately $50 billion of unfunded liability in SERS and PSERS.  The state legislature may consider public pension reform legislation in the fall.

August 2014 – From the Governor’s Office

On August 6, Governor Corbett announced that he would make an advance payment of $265 million to the Philadelphia School District.  The City of Philadelphia has been lobbying for a cigarette tax to provide new revenues for the Philadelphia School District.  The Senate and House could not reach an agreement on legislation authorizing this tax before the state legislature recessed in July.  The state legislature may consider this legislation when it returns in September.

Also on August 14, Governor Corbett announced funding from multiple state agencies for the redevelopment of a brownfield site at the Pittsburgh International Airport.  The funding will help establish the new Pittsburgh International Airport World Trade Center, which includes sites for more than one million square feet of office space, 90,000 square feet for research and development, a 400-room hotel with convention space, and space for up to six corporate hangers.

New legislation introduced – June & July

New legislation  introduced in June and early July includes the following:

  • House Bill 2292 sponsored by Rep. Grove (R-York County) creates the Delinquent Tax Intercept Authority that would provide a one-stop clearing house for local governments and state government to place their outstanding and delinquent tax payments.
  • House Bill 2400 sponsored by Rep. Dunbar (R-Westmoreland County) would amend the Tax Reform Code by increasing the maximum amount a taxpayer may elect to expense for Section 179 assets to $100,000 per taxable year. Senate Bill 1418 sponsored by Sen. Hutchinson (R-Venango County) is companion legislation in the Senate.
  • House Bill 2401 sponsored by Rep. Grove (R-York County) would amend the Tax Reform Code by allowing small businesses to use the net operating loss deduction in state tax law. Senate Bill 1417 sponsored by Sen. Brubaker (R-Lancaster County) is companion legislation in the Senate.
  • House Bill 2402 sponsored by Rep. Bloom (R-Cumberland County) would amend the Tax Reform Code by allowing for in-kind exchanges in Pennsylvania that mirror Internal Revenue Code Section 1031 provisions that allow for tax-deferral when property is exchanged for similar property. Senate Bill 1416 sponsored by Sen. Folmer (R-Lebanon County) is companion legislation in the Senate.
  • Senate Bill 1421 sponsored by Sen. Greenleaf (R-Montgomery County) would permit the Department of Community and Economic Development to establish and administer a program to encourage employee stock ownership plans and other forms of employee ownership in existing and start-up businesses.
  • Senator Fontana (D-Allegheny County) will be introducing legislation that would amend current law to allow ridesharing services, such as those already offered by Lyft and Uber, to operate legally in Pennsylvania. Also, House Resolution 947 introduced by Rep. Molchany (DAllegheny County) urges the Public Utility Commission to investigate consumer transportation needs and approve experimental licenses for ridesharing services in the city of Pittsburgh.

If you have questions about the budget or any introduced legislation, please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work. Cohen & Grigsby Public Affairs is a specialized practice group made up of public affairs professionals and attorneys who know how to navigate where government and business intersect. Members have served at all levels of local and state government and are from all sides of the political spectrum.

Public Policies Considered for Legislation – June & July 2014

During the months of June and early July, the state legislature considered legislation pertaining to a variety of public policies. Here are some examples:

  • House Bill 2302 sponsored by Rep. Harhai (D-Westmoreland County) would authorize the Department of Community and Economic Development to issue grants to municipalities to eradicate and prevent blighted property conditions through a property maintenance code enforcement program.
  • House Bill 1550 sponsored by Rep. Milne (R-Chester County) would consolidate business loan programs under the Pennsylvania Industrial Development Authority (PIDA). The programs to be consolidated include the following: Small Business First and its affiliated programs, Machinery and Equipment Loan Fund, and Industrial Development Program.
  • House Bill 1699 sponsored by Rep. Ross (R-Chester County) would establish the Reciprocal Internal Combustion Engine Act to regulate standby emergency generators that are compensated for their participation in PJM (the electric grid) demand response programs.
  • House Bill 2354 sponsored by Rep. Snyder (D-Greene County) establishes the Pennsylvania Greenhouse Gas Regulation Implementation Act that would require the Department of Environmental Protection to obtain approval from the state legislature for a State plan designed to regulate carbon dioxide emissions from existing power plants before submitting such a plan to the U.S. Environmental Protection Agency for approval.
  • House Bill 2239 sponsored by Rep. Evankovich (R-Westmoreland County) would establish guidelines for public private partnerships for local governmental buildings or facilities used for public water supply or treatment, storm water treatment and disposal, and waste water treatment and disposal.
  • Senate Bill 1409 sponsored by Sen. Rafferty (R-Montgomery County) would amend the Board of Vehicles Act to allow a manufacturer of electric cars (such as Tesla) to sell directly to the consumer through up to five manufacture-owned dealerships. Senate Bill 1409 has been signed into law as Act 125 of 2014.
  • Senate Bill 1096 sponsored by Sen. White (R-Indiana County) would amend Title 26 (Eminent Domain) by clarifying that a property owner whose property is taken via eminent domain shall be reimbursed up to $4,000 per property for appraisal, attorney, and engineering fees (regardless of right, title, or interest). Senate Bill 1096 has been signed into law as Act 120 of 2014.
  • Senate Bill 1422 sponsored by Sen. Tomlinson (R-Bucks County) amends Title 42 (Judiciary) by limiting successor liability for asbestos-related claims. Senate Bill 1422 was signed into law as Act 112 of 2014.
  • House Bill 118 sponsored by Rep. Ellis (R-Butler County) would extend whistleblower protections to employees of for-profit and non-profit corporations that receive money from a governmental entity to perform work or services. House Bill 118 has been signed into law by Governor Corbett as Act 87 of 2014.

Governor Corbett approves budget for Pennsylvania’s 2014-2015 fiscal year

On July 10, 2014, Governor Corbett approved the budget for Pennsylvania’s 2014-2015 fiscal year after announcing that he had decided to line item veto certain funding for the state legislature. The budget provides for $29.1 billion in state spending for this new fiscal year. Budget highlights include:

  • No increases in broad-based state taxes (e.g., Personal Income Tax, Sales and Use Tax).
  • No severance tax on the extraction and production of natural gas in the Marcellus Shale.
  • The continuation of economic development tax credits, including the Film Production Tax Credit.
  • The continued phase out of the Capital Stock and Franchise Tax.
  • $10.5 billion for K-12 education.
  • A $20 million increase in special education.
  • A $10 million increase for PlanCon, a process whereby a school district seeks reimbursement from state government for a major construction project undertaken by the school district.
  • $327.69 million in funding for early childhood education, including a $10 million increase for Pre-K Counts.
  • A $3.5 million increase in funding for community colleges.
  • $5 million for the newly established Ready-to-Succeed Scholarship, which provides merit-based scholarships to students who demonstrate academic achievement and come from families with household income of less than $110,000.
  • $100 million for the newly created Ready-to-Learn Block Grants to support academic achievement with flexible uses that include the following: uses allowable under the Accountability Block Grant; establishing, expanding, and maintaining kindergarten and Pre-K programs; hybrid learning; and curriculum alignment.
  • Requirement that the Environmental Quality Board regulations differentiate between conventional oil and gas wells and unconventional gas wells.
  • Elimination of the state’s pension reimbursement payments to charter and cyber charter schools.
  • No public pension reform. However, pension reform may be taken up by the state legislature in the fall.
  • No liquor store privatization or modernization.