Number 26

December 21, 2018

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LEGISLATIVE BULLETIN
An e-newsletter of the
County Commissioners 
Association of Pennsylvania

 

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COUNTY CODE REWRITE EFFECTIVE DEC. 24          
Act 154 of 2018, which combines the County Code and Second Class County Code into a single, comprehensive statute, takes effect on Dec. 24. The underlying legislation, SB 1005 , was introduced by former Sen. and former CCAP member John Eichelberger (R-Blair) and was a multi-year project to bring counties' core statutes governing county operations, enacted in the 1950s, up to date with current need and practice. Although most changes are of a technical or conforming nature, it also makes substantive changes as needed to incorporate case law or to delete obsolete language.
The Local Government Commission has created a summary, a detailed analysis of the act's provisions, and disposition and derivation tables to enable comparison of the old law to the new, which are available on the Commission's website and at www.pacounties.org by selecting Legislative Action Center under the Government Relations tab.
BUDGET SECRETARY OFFERS MID-YEAR BUDGET BRIEFING   
Budget Secretary Randy Albright shared his mid-year budget briefing on Dec. 11, offering a more optimistic outlook than that suggested by the state's Independent Fiscal Office (IFO) just a few weeks earlier. Albright said tax collections for FY 2018-2019 are about $264 million above estimates through the end of November, owing largely to stronger-than-expected growth in the corporate net income, sales and personal income taxes. However, he also noted that at least some of that revenue will need to go to supplemental appropriations, driven by higher Medical Assistance costs for human services and long-term care programs, as well as overtime costs in the Department of Corrections. The General Assembly must approve any requests for supplemental appropriations.
While the IFO in its recent five-year outlook had projected the state could face a potential $1.5 billion budget shortfall in FY 2019-2020, Albright indicated that the administration is more optimistic, relying on higher revenue forecasts and ongoing cost containment efforts. He also acknowledged speculation about a pending recession in the next several years, but believed it would not directly impact either the current year or FY 2019-2020 budgets. For the upcoming FY 2019-2020 budget, Albright shared that Gov. Wolf's priorities include creating a fairer state business tax climate, and that additional details will be included in the Governor's Feb. 5 budget address.
In a press release on Dec. 17, House Appropriations chair Rep. Stan Saylor (R-York) also offered his caucus's view that the IFO projections of a budget imbalance are high, because they presume a higher level of spending in FY 2019-2020 than he believes there will be votes for. Saylor also said in his release that House Republicans would be focusing on economic growth and job creation, without relying on new taxes.
FEDERAL JUDGE BLOCKS $200M TRANSFER    
Complicating the state's FY 2018-2019 revenue picture, a federal judge ruled on Dec. 18 that the state cannot transfer $200 million from the nonprofit Pennsylvania Professional Liability Joint Underwriting Association (JUA), finding it cannot "legislatively recapture" the organization to take its assets. The move makes permanent a temporary injunction that had been issued in July. The decision will affect revenue estimates for the current year, which the state's Independent Fiscal Office had estimated to be $300 million higher than anticipated prior to the federal court ruling.
Pennsylvania has attempted twice previously to transfer the JUA's funds to balance the state budget; the 2016 case was still in court while the U.S. Middle District ruled in May that requiring the transfer as part of the FY 2017-2018 budget was an unconstitutional taking of private property.
ALBRIGHT STEPPING DOWN AS BUDGET SECRETARY 
During his mid-year budget briefing, Budget Secretary Randy Albright also shared that he would be stepping down as budget secretary, and that Jen Swails has been named as his successor. Swails previously worked with the Senate Democratic Appropriations Committee, and most recently was fiscal management director of the newly created Shared Services Budget Office, which oversees the budgets for the departments of Aging, Health, Human Services and Drug and Alcohol Programs.
NEW WATERS OF THE U.S. RULE RELEASED   
The federal Environmental Protection Agency (EPA) and Army Corps of Engineers have released a new proposed definition of "Waters of the U.S.," a key phrase used in the federal Clean Water Act to determine what waters fall under federal oversight as opposed to state oversight. The definition would replace a controversial 2015 rule, which had been challenged in several federal courts, and which President Trump had ordered EPA and the Corps to review and reconsider under a February 2017 executive order.
The newly proposed definition would create six categories of regulated waters, including traditional navigable waters, tributaries, certain ditches, certain lakes and ponds, impoundments and adjacent wetlands. The proposal also clarifies that waters such as groundwater, features that are only wet during rainfall events, and storm water control features do not fit under the definition either, which had not been clearly understood under the 2015 rule.
The EPA will accept public comments for 60 days once the definition is officially published in the Federal Register. In the meantime, the proposed rule, fact sheets, an economic analysis and other resources are available at www.epa.gov/wotus-rule.
FEDERAL COUNCIL ON OPPORTUNITY ZONES TO BE CREATED   
President Trump signed an executive order on Dec. 12 to create the White House Opportunity and Revitalization Council, a panel to be chaired by Housing and Urban Development Secretary Ben Carson to streamline resources across 13 federal agencies for areas eligible for the Opportunity Zone program including grant funding, loan guarantees for investors and infrastructure spending. The Council will also convene state and local stakeholders to better identify federal resources and coordinate economic development strategies for Opportunity Zones and other struggling communities.
Opportunity Zones were established under the 2017 federal Tax Cut and Jobs Act, and provide tax incentives for investors to put their unrealized capital gains into an Opportunity Fund that is dedicated for investing in the designated Opportunity Zones, with a 10-year commitment. A public comment period also remains open until Dec. 28 for proposed regulations issued by the U.S. Treasury and IRS to clarify what gains qualify for deferral, which taxpayers and investments are eligible, the parameters for Opportunity Funds, and other guidance to aid taxpayers in participating. The proposal can be found at www.regulations.gov by searching REG-115420-18.
Pennsylvania's 300 designated tracts were approved by the Treasury Department in June, and additional information can be found at dced.pa.gov, by selecting Qualified Opportunity Zones under the Programs & Funding tab.
CONGRESS APPROVES FIVE-YEAR FARM BILL AUTHORIZATION   
Congress has approved a five-year Farm Bill reauthorization to send to the President's desk that includes several provisions important to counties.
In the area of rural development, the Farm Bill reinstates the Undersecretary for Rural Development, and codifies the interagency Council on Rural Community Innovation and Economic Development. It further includes funding to speed rural high-speed broadband buildouts, including USDA funding for middle-mile projects, a use that is prohibited under current law. The legislation also creates a rural broadband integration working group to assess and determine possible action and opportunities for broadband deployment. Rural broadband expansion is a CCAP priority for 2019.
Several important conservation provisions are included as well, including $300 million for the Regional Conservation Partnership Program, with the percentage of funding for critical areas like the Chesapeake Bay increasing from 35 to 50 percent. The Farm Bill also maintains the Small Watershed Rehabilitation Program at $85 million through FY 2023, increases the acreage limit of the Conservation Reserve Program and creates a new Grassland Conservation Initiative. Additional provisions include changes to provide relief to small dairy farmers and encourage expanding milk-related products and trade promotion.
NACo has provided a more detailed analysis of the Farm Bill at www.naco.org.
FINAL 2018 COUNTY PRIORITIES STATUS REPORT   
In January 2018, CCAP members identified seven priority issues for the year, including human services system reform and funding, preventing substance abuse and drug overdose, maintaining the shale gas impact fee, increasing forensic bed access for county inmates with mental illness, supporting veterans services, funding for voting systems, and mandate reform. A final report on the status of these priorities is available at www.pacounties.org by clicking Priorities under the Government Relations tab.
2019 JUDICIAL SALARIES   
The Administrative Office of Pennsylvania Courts has published the judicial salaries that will take effect on January 1, 2019, in the December 15, 2018, issue of the Pennsylvania Bulletin. The listing sets the annual salary of a judge of the court of common pleas, against whose pay the district attorney salary is also established, at $183,184. The full listing of judicial salaries is available at https://www.pabulletin.com/secure/data/vol48/48-50/1921.html.