MH/MR Support Bill Approved by Senate

Tax stimulus package advanced by Committee

Final Senate approval of a bill to support community mental health and mental retardation services and committee approval of a tax stimulus package were the highlights of the Senate session week of June 2, according to Senator Bob Robbins (R-50).

Senate Bill 1373, the Mental Health and Mental Retardation Maintenance of Community Services Act, will establish a funding mechanism that consistently supports community-based services for individuals with mental retardation or mental illness receiving services in Pennsylvania.

In an effort to stabilize the community-based system and insure the health and safety of individuals with mental retardation and mental illness, the Mental Health and Mental Retardation Maintenance of Community Services Act will require the Secretary of the Budget to allocate the appropriate funding level for existing and new services, as well as require the allocation of a cost-of-living adjustment for that funding level every year, according to Senator Robbins, a cosponsor of the measure.

"We recognize the important role these services play in our communities," Senator Robbins said. "This bill, if enacted, would provide an important safety net for mental health and mental retardation services by protecting their funding and taking it off the table during each year's budget negotiations."

The Senate also approved Senate Bill 1369, a bill sponsored by Senator Robbins, legislation to insure representation of Clerks of Orphans' Courts on the statewide County Records Committee. The County Records Committee is a 15-member panel whose members are appointed for a four-year term by the Governor and are vested with the power to promulgate guidelines for the disposal of defined "county records" in 2nd - 8th class counties.

Committee Roundup

The Senate Finance Committee approved a four-bill stimulus package that would provide nearly $96 million in tax relief in the upcoming fiscal year for lower-income working Pennsylvanians, small businesses looking to expand, as well as major employers and job creators.

Senate Bill 1385 would expand the cap on the Net Operating Loss provision of the Corporate Net Income Tax to $5 million or 20 percent of taxable income. The NOL cap is currently set at $3 million or 12.5 percent of taxable income. If enacted, the effective date of the increase would be January 1, 2009.

The NOL expansion is projected to save Pennsylvania employers $21.5 million in Fiscal Year 2008-09, $68.4 million in Fiscal Year 2009-10, and $78.2 million in Fiscal Year 2010-11.

Senate Bill 1386 would increase the eligibility limits for special tax forgiveness for low-income Pennsylvanians. The bill would increase claimant income eligibility limits by a total of $2,000 over three years and the dependent allowance by $500 over the same period.

Currently, a family of four with a combined income of less than $32,000 pays no state income tax. Under SB 1386, families earning $37,000 or less would be exempt. That increase is projected to provide $74.6 million annually in savings to low-income working Pennsylvanians.

Senate Bill 1387 would double the amount that small businesses may deduct as Section 179 expenses on their income tax filings. Section 179 of the federal Internal Revenue Code provides for the deduction of all or part of the costs of machinery and equipment used for business purposes.

SB 1387 would increase the maximum annual deduction to $50,000, which is projected to provide $6.6 million in savings to Pennsylvania's small businesses.

Senate Bill 1388 would amend Pennsylvania's Corporate Net Income Tax to expand the sales factor to 85 percent. Most corporations that conduct business in more than one state are required to use a three-factor apportionment in order to apportion their business income among the states where they have activity.

The three-factor apportionment formula consists of property, payroll and sales factors. As things stand, Pennsylvania companies continue to be penalized by increased taxes when they hire new employees or make capital investments in the Commonwealth. Currently, the sales factor accounts for 70 percent of the apportionment formula, and the property and payroll factors each account for 15 percent.

An amended smoking ban bill (Senate Bill 246) was reported from a joint Senate-House Conference Committee on Tuesday. The full Senate rejected the Conference Committee Report on Wednesday, but subsequently reconsidered the vote and went over the measure. Further Senate consideration of the Conference Report is expected next week.

Contact:

Michael Hengst
(717) 787-1322