Dear  

In an effort to extend the useful life of Pennsylvania's bridges in the face of continuing funding shortfalls, PennDOT Secretary Barry Schoch has changed the methodology for determination of load capacity. The changes, which are consistent with American Association of State Highway and Transportation Officials (AASHTO) guidelines, will result in new or increased weight restrictions to 1,000 structurally deficient bridges statewide. Of the newly posted and restricted bridges, approximately 470 are municipal- or county-owned; 1,685 local bridges have been previously posted with weight restrictions.

Schoch had indicated earlier the step would be necessary if the General Assembly failed to act on a transportation funding package prior to the summer recess. Still, at the August 22 media event announcing the change, he indicated the methodology would remain in place even if funding is ultimately authorized, until the Department can evaluate and determine allocations among bridge repair and replacement, highway repair, and capacity building.

PennDOT district offices began notification of local officials the week of Aug. 19. The Department will give reasonable time to accomplish the postings, and may post on municipals' behalf. The list of bridges with new or lowered weight restrictions can be viewed at www.dot.state.pa.us by clicking on "Bridge Information." More information on CCAP's priority for funding and modernization solutions for transportation and infrastructure is available at www.pacounties.org under 2013 Legislative Priorities.

The House Labor and Industry Committee began a series of hearings on Aug. 22 on prevailing wage reform, a 2013 CCAP priority, in State College. At the hearing Clinton County commissioner Pete Smeltz told the committee that costs on many projects can be estimated as much as 20 percent higher due to prevailing wage requirements. If his county could save this funding, he noted, it could bid additional projects and add to job opportunities and economic growth, while still at a competitive wage. He also noted that local small businesses often will not bid for prevailing wage projects, but that the prevailing wage-exempt projects they have completed have been as high quality of work as the county gets when it must pay the higher prevailing wage rate. Smeltz suggested increasing the 1960s-based $25,000 threshold to $190,000 to account for inflation, and further tying any new threshold to an inflationary index going forward. His full remarks are available on the CCAP Government Relations web page under Testimony and Advocacy.

The committee will hold additional hearings in Stroud Township (Monroe County), Williamsport and Johnstown in the coming weeks.

The House Finance Committee held a hearing recently on Act 55 of 1997, the Purely Public Charities Act, to gather stakeholder input regarding suggested changes to the statute.

Dauphin County Board of Assessment solicitor Jeff Engle provided an overview of how tax exemptions for purely public charities are determined, explaining the HUP Test, a five-prong test promulgated by the state Supreme Court in the 1985 case Hospital Utilization Project v Commonwealth as guidance to meet constitutional requirements, and Act 55, which was developed to bring additional definition and clarity to the HUP concepts. Engle went on to describe the challenges counties face as the entity responsible in the first instance for determination of taxability using the HUP Test and Act 55, including the amount of legal and site investigation needed to make determinations under each.

While qualified charitable institutions relieve government entities of the need for taxpayer-funded services, CCAP comments that the trade-off in value for the taxes foregone needs to be appropriate and defensible. Further, as a matter of fairness and equity to the general class of property tax payers, CCAP would resist any efforts to make charitable exemptions more broadly available or easier to attain.    

The House Veterans Affairs and Emergency Preparedness Committee continues its series of hearings around the state focusing on the rewrite of the 911 Public Safety Emergency Telephone Act. Maintaining and improving 911 services is an ongoing CCAP priority.

At the committee's Aug. 13 meeting in Lewistown, Blair County commissioner Diane Meling, Cumberland County commissioner Barbara Cross, and Snyder County commissioner Malcolm Derk highlighted increasing 911 operational costs that have far outpaced state funding provided to counties under the more than 20-year-old law. In addition, they pointed out that recurring advancements in technology such as increased cellular phone use, Voice over Internet Protocol (VoIP) phone systems, Phase II technology, computer-aided dispatch, Next Generation 911, and others were not anticipated when the law was written. An improved funding stream is necessary to accommodate this reality.

They also illustrated the need to simplify the 911 funding formula, administrative structure, and planning processes to reduce county administrative overhead, facilitate operational consolidations, and provide cost savings.  

The commissioners' testimony can be found on the CCAP Government Relations web page under Testimony and Advocacy. The final hearing on the issue is scheduled for Sept. 18 in Allegheny County.  

Although Congress is in recess until Sept. 9, efforts to move a tax reform bill are continuing, including discussions on removing the tax exemption for interest on municipal bonds. Local officials have argued against the proposal, indicating that if the exemption were removed, the resulting increases in costs for municipal borrowing would have a detrimental impact on local governments' ability to invest in critical infrastructure projects.

House Ways and Means Committee Chairman Dave Camp (R-MI) has announced plans to move a tax reform bill before November, with a release of overall principles for tax reform expected after Labor Day and draft legislation intended to be ready for markup in October.

In the Senate, the Finance Committee leadership recently engaged in a "blank slate" exercise, essentially removing all exemption provisions in the tax code, including the exemption for municipal bonds, and asking senators to make the case for specific provisions to be included in the tax code moving forward, measured against clear evidence that the provisions grow the economy, make the tax code fairer, or promote other important policy objectives.

NACo estimates indicate that, between 2003 and 2012, Pennsylvania local governments would have paid anywhere from $8 to $23 billion additional on projects for which state and local governments used tax exempt bonds, had the various proposals currently before Congress been in place over the same time period. While federal legislators are home during the summer recess, counties are encouraged to schedule appointments and project tours with members and their staff to demonstrate how critical it is to maintain the exemption in any tax reform code bill.

More information on the issue can be found on NACo's website, and a sample resolution supporting efforts to maintain tax-exempt municipal bonds is available on CCAP's Legislative Action Center.

Regulatory changes proposed by the state Department of Agriculture regarding the Clean and Green program, which offers preferential assessment of land held in agricultural use, agricultural reserve or forest reserve, are now open for public comment. The changes proposed by the Department reflect several recent statutory amendments, including changes allowing gas, oil and coal bed methane exploration and extraction on enrolled land, lease or use of a portion of land for small non-coal surface mining, and development and operation of alternative energy systems.

A 30-day comment period for the proposed regulation is open until Sept. 3; the regulations can be downloaded at www.pabulletin.com by searching for the Aug. 3, 2013, issue and scrolling to the entries for the Department of Agriculture. Comments should be submitted to the Department of Agriculture, Bureau of Farmland Preservation, 2301 North Cameron Street, Harrisburg, PA 17110-9408, attention Douglas M. Wolfgang, Director.  

The House Tourism and Recreational Development Committee held a hearing on July 31 to gather input on several bills related to the county hotel tax, and the report in the Aug. 9 edition of the Legislative Bulletin has resulted in some questions from CCAP members.

The Bulletin article reported that in the hearing the Association expressed support for state collection of the tax. In context, state collection has been discussed with the travel and hotel industry as one of several options to improve and equalize hotel tax collections. Under current law, the tax is collected by county treasurers, who generally lack audit and other enforcement tools. By piggybacking on state collections and remitting back to the county of origin, the tax would be uniformly applied statewide, with consistency in covered entities, enforcement and audit practices.

However, both CCAP and the tourism industry emphasized that if the county hotel tax were to be collected at the state level, local control must be maintained. CCAP opposes any state role in determining use of the funds and, except where a county and its local tourism industry have asked for specific statutory language, believes there should be no further qualifications in statute on how the funds could be spent.

The testimony and a link to the video of the hearing are on the CCAP Government Relations web page under Testimony and Advocacy.