End Stalemate, Move Pro-Business Legislation

A Senate-approved initiative that would help prevent a repeat of the regulatory abuse Pennsylvania experienced under Gov. Tom Wolf, is now stuck in the House, as it awaits the results of three special elections before organizing for the 2023-24 session.

The proposed constitutional amendment, Senate Bill 1, contains a provision that would allow an executive agency regulation to be overturned by a simple majority vote in the House and Senate, without the need for the governor’s signature.

Currently, the House and the Senate can pass concurrent resolutions to challenge a regulation. However, whomever the governor is would surely veto such a move as it the regulation would have been created under their authority. Once vetoed, the resolution would be sent back to the legislature for a veto override process – a two-thirds majority in each chamber.

Regulatory authority has been a major issue at the state and national level. Bureaucratic authorities, under the direction of the executive branch, have grown in power and have become a quasi-fourth branch of government. But it’s clear, via the Pennsylvania Constitution, that lawmaking authority falls solely on the legislative branch and the proposed amendment in Senate Bill 1 would reenforce this truth.

Senate Bill 1 contains other important constitutional amendments, and if not voted soon, the voters will not get to affirm or deny these issues. One is to create a one-time retroactive window for survivors of childhood sexual abuse to file in civil court. This exact provision passed in the previous two legislative sessions, but the Wolf Administration botched the process when Department failed to properly advertise the proposed amendment, leading to the dismissal of then-Secretary Kathy Boockvar (Read more HERE). The third amendment included in Senate Bill 1 is a provision requiring proof of identification to participate in Pennsylvania elections.

Newly elected House Republican Whip and pro-business lawmaker Tim O’Neal (R-Washington) predicts the proposed constitutional amendment will not be presented to the voters until May 2024: he cites the delay in organizing and some disagreement among House members over whether the other provisions in Senate Bill 1 should be approved as a package or separately.

He and his colleagues are ready to go to work, “eager to vote on the entire package,” O’Neal says. Other pro-growth priorities include supporting energy development in Pennsylvania citing “what it has meant on every scale in Washington County” and construction.

He also favors accelerating the phase-down of the Corporate Net Income Tax and calls for predictability in the permitting process, which he notes is a top priority for employers. He’s optimistic about one of new Gov. Josh Shapiro’s first moves: signing an executive order that created the Office of Transformation and Opportunity, with one of its stated goals being to accelerate the permitting process in the commonwealth.

We’ll know more about the make-up of the House after Tuesday’s (February 7) three special elections, all in the Pittsburgh area. In November, the Democrats won 102 seats to the Republicans’ 101, but one re-elected Democrat Tony DeLuca died in October, and two other Democrats resigned to assume higher offices. The special election results will likely take two weeks to certify. Now, an additional vacant seat on the Republican side of the isle will likely be filled in the May 2023 primary as Representative Lynda Schlegel Culver just successful won election to the PA Senate to fill the seat previously held by Senator John Gordner (R-Columbia).

PA Republicans in the House have been assembling to host policy hearings while awaiting the call of the newly elected Speaker Mark Rozzi (D-Berks). The merits of Senate Bill 1 were examined, and PMA’s President & CEO David N. Taylor testified before the House Republican Policy Committee about how ruinous Wolf’s go-it-alone regulatory initiatives have been to commonwealth’s economy.

“The role of the executive branch in creating regulations is to implement the laws passed by the General Assembly,” Taylor said early in his remarks. “But all too often, regulatory overreach occurs when unelected bureaucrats’ regulatory actions extend beyond the intent of passed legislation; entirely bypassing the General Assembly’s legislative process.”

Most egregious was the Wolf Administration’s abuse of emergency powers at the onset of the pandemic to shut down businesses it deemed “non-essential.” The result was confusion, anger, panic, and massive unnecessary job losses that Pennsylvania may never recover from.

“From the initial ‘essential’ versus ‘nonessential’ business closure orders to the 139 pages of rules to be enforced or suspended as per the Governor’s office,” Taylor noted, “most if not all orders came without consultation or cooperation of the General Assembly, or those Pennsylvanians directly affected by the shutdown.”

“While most of these rules were passed under the authority given via emergency powers,” he continued, “and this process was fixed via constitutional amendment in May of 2021, these examples provide insight into the power of the executive branch in creating laws with no approval or oversight by the branch of government assigned with making law.”

Another example was Wolf, defying not only the General Assembly but three of his own advisory boards, to enter Pennsylvania into a compact of Mid-Atlantic and Northeastern states, the Regional Greenhouse Gas Initiative (RGGI). This pact imposes a carbon tax, killing thousands of high-paying jobs with minimal environmental benefits. Critics say the play was to appease a few far-left environmental allies intent on completely eliminating the fossil-fuel industry.

“The rulemaking was challenged by the General Assembly, both in terms of its impact of PA’s energy policy but also in terms of its blatant unconstitutionality as the rulemaking imposes a tax (as we do believe we will soon be adjudicated in the PA Courts), and in entering our commonwealth into a multi-state accord,” Taylor noted. “Neither action is an implied power of the Executive Branch, and every multi-state accord Pennsylvania has ever participated in has been authorized by the General Assembly.”

State lawmakers tried to at least suspend the rulemaking, but the initiative, a joint resolution, was vetoed by the governor. An override fell one vote short in the PA Senate. It is now tied up in the courts.

It has created “massive levels of uncertainty for business investment all while spending an untold and unnecessary amount of taxpayer dollars in legal costs,” Taylor said.

Finally, in late December 2017, the Department of Revenue issued rules completely altering the treatment of bonus depreciation and the depreciation of capital assets. This was done only because a department spokesperson cited the need to “spare the General Fund from lower collections.” The rulemaking was corrected by the General Assembly six months later with the passage of Senate Bill 1056.

The federal Tax Cuts and Jobs Act of 2017 lowered the U.S. corporate tax rate, accelerated the depreciation of capital assets to encourage purchase of new production equipment, and eliminated the penalty for U.S. companies to bring their overseas earnings back to America. During this uniquely critical moment in time, as companies considered where to reinvest as much as $2 Trillion, the Department of Revenue made Pennsylvania the only state in the country to say, “we don’t want you to come here.”

“Most galling, Governor Wolf held a bill signing ceremony for Senate Bill 1056 later in the summer of 2018 – celebrating the bill to fix the problem his administration created,” Taylor said.

O’Neal hopes that the legislature can return to normal business soon and that these very pressing issues can be legislated and put before the voters of Pennsylvania via constitutional amendment in time for the May 2023 primary, but time is running out.