LEG REG REVIEW
2017, 35th Issue *** November 6, 2017

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 Pennsylvania legislation and regulations impacting the Insurance and Business Communities. Subscriptions are $100 per year and further information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 or e-mail at 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. Whether you need help meeting your CE or have a particular problem/question, please go to our web site to explore how PHILLIPS ASSOCIATES may be of service to you, your employees, and your clients. www.vphillipsassoc.com

OK, NOW THE BUDGET GAUNTLET ENDS
For folks keeping track, here are the bill numbers and Act numbers for the recent spate of budget bills that finally went to the Governor and which he signed into law October 30. A separate bill dealing with the School Code became law without his signature (House Bill 178).

Act 42 (House Bill 271) expands gambling in hopes of raising $200 million.
Act 43 (House Bill 542) initiates taxes on fireworks and adds a bond requirement for public displays.
Act 43 also takes out a loan against $1.5 billion in future payments to Pennsylvania as part of the Master Tobacco Settlement Agreement.
Act 52 (House Bill 651) is a bricks and mortar wish list –Capital Budget Project Itemization Act – an authorization list only.
Act 45 (House Bill 785 known as the Capital Facilities Debt Enabling Act) specifies indebtedness levels for the Commonwealth.
Act 44 (House Bill 674) takes $200 million from the Joint Underwriting Association (JUA). It is not a loan. Rather, it simply requisitions this amount from JUA reserves. JUA is the insurer of last resort for medical malpractice insurance.
Act 44 also relinquishes the General Assembly’s authority to decide where monies are to come to the Governor for $300 million coming out of dedicated funds. The Governor gets to choose which funds are tapped. NOTE: The Insurance Oversight and Regulation Fund which supplies general government operations money to the PA Insurance Department is one of these funds.

OTHER LEGISLATIVE ACTIONS BY GOVERNOR WOLF
The Governor’s pen was also busy in signing other bills into law:

House Bill 118 (numerous Labor & Industry inspection fees) is now Act 40 of 2017.
House Bill 176 is now Act 35 of 2017. It exempts farmer roadside stands and some cattle feed operations from building standards of the Uniform Construction Code. NOTE: Lessened construction standards may affect underwriter valuation.
Senate Bill 181 is now Act 48 of 2017. It forces agencies to change their budgeting requests from incrementally adding to existing budgets to performance-based budgeting where there is no safe haven for existing budget questions and possible cuts.

Governor Wolf did veto House Bill 59 which would have added a work search requirement for able-bodied Medicaid recipients.

UCC REVIEW OF INTERNATIONAL CODES CHANGE
On October 25, Governor Wolf signed House Bill 409 into law as Act 36 of 2017. This addresses the question as to if and how PA will adopt changes in international building code standards. It allows for consensus approval by the Review Advisory Council if an international change is not disputed and retains a 2/3 vote if there is opposition.
WC PREMIUM INCREASE DELAYED
Last LEG REG Review reported that a 6.06%increase in Workers’ Compensation premiums would take effect November 1. Since then, there has been a delay reported by the October 30 Central Penn Business Journal that a challenge from the PA Association for Justice (trial lawyers) had been given prompting a delay in review by the Insurance Department. The details were not released by the Insurance Department but the following was given in response to a LEG REG Review query:
Pennsylvania Compensation Rating Bureau (PCRB) Filing No. C-369 was received by the Insurance Department on August 15, 2017. As submitted, it proposes an overall 6.06% increase in workers compensation loss costs effective November 1, 2017.Notice of the filing was published in the Pennsylvania Bulletin on August 26, 2017 and public comments were requested within 30 days of this publication (i.e. by September 25, 2017.) While the PCRB proposed a November 1, 2017 effective date in the filing, the Department can use up to 180 days to review the filing in accordance with Article VII of the Workers Compensation Act. While we don’t anticipate needing the full 180 days contemplated by the law, we have not yet completed our review and the filing remains pending with the Insurance Department at this time. If the filing is ultimately approved, we would first require an amended (prospective) effective date as we are now past the November 1, 2017 effective date proposed by the PCRB and cannot approve rates retroactively.

POLITICS

There is a vacancy in PA’s 35th House District (Allegheny County) due to the resignation of Democrat Marc Gergely after a guilty plea was entered for misdemeanors in campaign finance violations. Speaker of the House Turzai must announce a special election date by November 16.
The special election to replace resigned U.S. Representative Republican Tim Murphy will take place March 13, 2018 per announcement by Governor Wolf. Murphy resigned after allegations surfaced about his extra-marital relationship.
PA Rep. Rick Saccone (R-Allegheny/Washington) has suspended his campaign for U.S. Senate in order to pivot to a candidacy to replace former Rep. Murphy.
The national Cook Political Report changed the status of Republican U.S. Rep. Pat Meehan’s re-election from ‘Likely Republican’ to ‘leans Republican’. This is good fund-raising news for PA Senator Daylin Leach (D-Montgomery/Delaware) who is running for the Democratic nomination.

SEVERAL UPDATES…House Bill 1388 (Irvin-R-Centre/Huntington/Mifflin) which reauthorizes the Children’s Health Insurance Program (CHIP) until December 31, 2019, has been referred to the House Rules Committee. It contains a controversial provision to ban CHIP dollars to be spend on transgender surgery although it does allow counseling coverage….House Bill 1335 (Pickett-R-Bradford) has been referred to the Senate Banking & Insurance Committee. Under this legislation, the Insurance Department would list vendors it has selected to perform market and financial exams and provide information as to how much those costs are. This is of particular interest to the insurance industry and especially the PA Association of Mutual Insurance Companies (PAMIC) which is concerned about lack of transparency and no apparent limit to insurer-paid costs of these exams…Senate Resolution 209 (Rafferty-R-Montgomery/Berks/Chester) was reported out by the Senate Transportation Committee October 25. If adopted, it would direct the Joint State Government Commission to study the feasibility of a merger between the PA Department of Transportation and the Turnpike Commission.

GOP TAX REFORM SECTION BY SECTION summary was provided by U.S. Rep. Lloyd Smucker (R-16) from Lancaster County. https://smucker.house.gov/sites/smucker.house.gov/files/wysiwyg_uploaded/Tax%20Reform%20Section-By-Section%20Summary_0.pdf

SYMPATHIES to family and friends of the late Fred Anton, former longstanding head of the PA Manufacturers’ Association (PMA) and business and Republican icon in Pennsylvania for many decades. His death was announced by PMA on November 3.