UPDATE
Pennsylvania Affairs of State
A PUBLICATION OF KIRKPATRICK & LOCKHART LLP’S GOVERNMENT AFFAIRS PRACTICE
NOVEMBER 11, 2002
Legislative Alert Rendell Transition and Lame Duck (“Sine Die”) Session
MESSAGE FROM THE EDITOR
Pennsylvania state government is in the midst of a momentous political and constitutional transition. For 8
years, Governors Ridge and Schweiker, along with their “Senior Staff” and hundreds of their political appointees, have managed the Commonwealth’s Executive Branch of government. Now, nearly a decade later, Governorelect Ed Rendell and a team of loyal supporters are poised to assume control of the Executive Branch.
In the midst of this monumental transition, led by the Rendell transition team (many of whom are identified below), the General Assembly and Governor Schweiker will be occupied largely with the remaining legislative agenda
for the 2001-02 Legislative Session during the infamous Pennsylvania lame duck (or “Sine Die”) session.
While there most certainly will be a dramatic change in the personnel and personalities in the Governor’s Office and throughout the executive levels of all administrative agencies, there will be no such transition in the
General Assembly. In fact, the Republican Leaders in both chambers of the legislature have solidified their political majorities and, thus, assured themselves a pivotal role in the development of state public policy in the
months and years ahead. In fact, with the power of confirmation over key Rendell appointees, Republican influence over public policy may extend, at least indirectly, over personnel matters, as well.
As a result of the Republicans’ continued dominance in the legislature and a guarantee of their continued influence,
the remaining days of the November Sine Die session may not be as lively as they would have been had the Democrats captured political control of either chamber of the legislature. Interestingly, perhaps as an example of their
confidence in their continued influence, of the 11 session days originally scheduled for the lame duck session, the
House Republican Leaders have already dropped 3 days and their colleagues in the Senate have dropped a day.
Notwithstanding the potential for a relatively more “modest” Sine Die session, there is still a great deal of legislative
activity anticipated over the course of the next 3 weeks that could have a profound effect on most every sector of
the economy. While this Legislative Alert highlights many of the potential legislative matters likely to be considered by the General Assembly during November, it by no means can cover everything on the radar screen.
In an effort to inform K&L attorneys, clients and other interested parties of recent developments in Pennsylvania
state government and provide insights into public policy changes on the horizon, this Legislative Alert will cover 3
general topics: (1) Election Day Wrap-Up / Balance of Power; (2) Lame Duck Session (a.k.a. “Sine Die”); and (3)
Rendell Transition Activities.
The next Legislative Alert in December will preview the legislative agenda for the 2003-04 legislative session, including major developments affecting the budget and the budget process. The December Alert will also analyze the
Rendell legislative agenda in the context of declining Commonwealth revenues and competing interests of the Republican Legislative Leaders. And, of particular interest to our readers, that Alert will provide an update on Governor-elect Rendell’s transition activities.
Kirkpatrick & Lockhart LLP
Election Day Wrap-Up / Balance of Power
PA GOVERNOR
(Democrat Ed Rendell wins 53 to 44 percent)
While the race for Governor may have been a bit
closer than pre-election pollsters predicted, the final
outcome was widely anticipated. Democrat Ed
Rendell defeated Republican Mike Fisher by 53
percent to 44 percent, with each of the minor party
candidates getting 1 percent. In the end, the historically
large democratic vote in Philadelphia combined with the
unprecedented support for a democratic statewide
candidate in suburban Philadelphia was too much to
overcome, notwithstanding Mike Fisher’s comfortable
margins in Central Pennsylvania and other Republican
strongholds. The Rendell formula – a Democrat with
immense popularity in the Philadelphia suburbs – is
something Republicans hope not to encounter in the
future.
PA HOUSE
(Republicans increase margin
from 105 to 98, to 109 to 94)
The Pennsylvania House Republicans increased their
majority in the State House by 4 votes, from 105 to 98,
to 109 to 94. This is a major triumph for John Perzel,
House Republican Leader from NE Philadelphia (who,
as an aside, won reelection with 87 percent of the vote
this cycle, compared to a mere 200 vote margin last
election). Two Democratic incumbents were defeated
— John Lawless (Montgomery County) and Sara
Steelman (Indiana County). In spite of the pre-election
concerns regarding the “Rendell effect” (i.e., coattails),
only one Republican incumbent was defeated — Wally
Brooks (Montgomery County). The Republicans won
all 3 of the newly created seats that arose from
redistricting negotiations.
PA SENATE
(Republicans maintain margin - 28/29 to 21)
On paper, the Pennsylvania Senate Republicans,
essentially, maintained their majority of 29 to 21. In
reality, however, the Republican successes in the
races identified below, when combined with the Fall
special election victory by Republican Domenic
Pileggi to fill the vacancy created by Sen. Bell’s
2
death, have all but guaranteed continued Republican
control over the state Senate for years to come
(perhaps during the entire Rendell Administration).
In early 2003, the Republican majority will be 28 to 21,
pending the scheduling and outcome of a special
election to fill the vacancy created by Sen. Tim
Murphy’s election to Congress (most expect that
Sen. Murphy’s successor will be a Republican due to
the Republican voter registration edge in that
district). There were 3 races to watch on Election
Day: (1) in the 6th District (Bucks County),
incumbent Republican Senator Tommy Tomlinson
squared off against Democrat former Congressman
and EPA Regional Administrator, Pete Kostmayer, and
won by 53 percent to 47 percent; (2) in the 24th
District (Montgomery County), an “open” seat as a
result of the retirement of Sen. Holl, Republican Rob
Wonderling defeated Democrat Jim Maza by 55
percent to 45 percent; and (3) in the 44th District,
open as a result of Sen. Gerlach’s retirement to run
for Congress, Republican John Rafferty defeated
Democrat Rick Jacobs by 59 percent to 41 percent.
This is a huge victory for the Senate Republicans,
considering all of the concerns surrounding the
potential “Rendell effect” leading up to Election Day.
PA CONGRESS
(Republicans increase margin
from 11 to 10, to 12 to 7)
The PA Congressional delegation is now comprised
of 12 Republicans and 7 Democrats. There were,
essentially, 3 races to watch: (1) 6th District, newly
created from redistricting, was won by Republican
Jim Gerlach over Dan Wofford in a “nailbiter,” 51
percent to 49 percent; (2) the 13th District, which had
incumbent Democrat Joe Hoeffel defeat fiesty
Republican challenger, Melissa Brown, by 51 percent
to 47 percent; and (3) the 17th District, which was
merged with the former 6th District, pitted two
incumbent Congressmen against each other, and
Democrat Tim Holden defeated Republican George
Gekas, by 51 percent to 49 percent.
PENNSYLVANIA AFFAIRS OF STATE
Lame Duck Session (a.k.a. “Sine Die”)
SCHEDULE
(House – 8 days; Senate – 10 days)
COMMONWEALTH PROCUREMENT CODE,
OMNIBUS AMENDMENTS
The House is expected to be in Session on the
following days in November:
(1) Tuesday the 12th
(2) Wednesday the 13th
(3) Monday the 18th
(4) Tuesday the 19th
(5) Wednesday the 20th
(6) Monday the 25th
(7) Tuesday the 26th
(8) Wednesday the 27th
The House will be in “token” session (i.e., no votes)
on Thursday the 14th and Thursday the 21st.
The Senate is poised to act on HB 2674 (Steil), which
contains omnibus reforms to Act 57 of 1998, including:
the clarification of the use of online auction for the
procurement of supplies and services; the legislative
“reversal” of a recent Commonwealth Court opinion
that required administrative agencies to conduct formal
administrative hearings upon the filing of a bid protest;
and a variety of technical drafting improvements
intended to improve the application of Act 57 by the
Department of General Services (DGS) and
administrative agencies. The text of HB 2674 may be
found by accessing the following internet link:
The Senate is expected to be in Session on the
following days in November:
(1) Tuesday the 12th
(2) Wednesday the 13th
(3) Thursday the 14th
(4) Monday the 18th
(5) Tuesday the 19th
(6) Wednesday the 20th
(7) Thursday the 21st
(8) Monday the 25th
(9) Tuesday the 26th
(10) Wednesday the 27th
Of course, these dates are subject to change at the
discretion of the House and/or Senate Leaders.
TOP LEGISLATIVE ISSUES
CHARITABLE TRUST (A.K.A. Hershey Trust) “FIX”
While the Governor reluctantly agreed to sign HB
2060 (Lewis), he did so with the caveat that the
General Assembly agree to “fix” a number of its
provisions, including terminology believed to cover
transactions not intended to be covered by Act 133
of 2002. House and Senate Leaders were already
contemplating this effort, in part as a result of
concerns raised by other charitable trusts and
financial institutions. The text of Act 133 may be
accessed from the following internet link:
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
HB2060P4466.HTM
NOVEMBER 12, 2002
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
HB2674P3936.HTM
JOB ENHANCEMENT ACT
SB 1370 (Punt) would make a host of substantive
changes to many of the Department of Community
and Economic Development’s (DCED) economic
development programs. It is pending consideration
in the Senate Rules Committee and is one day away
from the Governor’s desk. The text of SB 1370 may
be read by accessing the following internet link:
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
SB1370P2174.HTM
GROSS RECEIPTS TAX/PUBLIC UTILITY REALTY
TAX ACT (PURTA) “FIX”
Discussions are still underway between the Governor’s
Office and utility representatives regarding alternatives
to Act 89 of 2002’s “PURTA surcharge” on the Gross
Receipts Tax. That surcharge would be triggered in the
event the Commonwealth loses pending PURTA
litigation. The hang-up appears to be whether utilities
should be able to pass the surcharge along to
consumers without any formal action by the Public
Utility Commission (PUC). The Administration, during
budget negotiations, agreed to consider “revenue
neutral alternatives” to the Act 89 language in return for
the legislature’s agreement to enact the current
language. The text of Act 89 may be found at the
following internet link:
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
HB1848P4197.HTM
Kirkpatrick & Lockhart LLP
HOMELAND SECURITY/BIO-TERRORISM
One of the Governor’s top legislative priorities for the
Sine Die session is the enactment of Homeland
Security/Bio-Terrorism legislation that codifies
certain provisions of the Governor’s Homeland
Security Task Force recommendations, including:
establishing the Pennsylvania Emergency
Management Agency as “lead” agency for counterterrorism matters, generally; creation of regional
counter-terrorism task forces and response teams;
and provisions for public health emergencies and
quarantines. The Governor’s proposal has been
introduced in each chamber as SB 1569 (Tomlinson)
and HB 2928 (Semmel) and may be read by accessing
the following internet links:
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
SB1569P2336.HTM
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
HB2928P4500.HTM
KEYSTONE OPPORTUNITY ZONES (KOZ)
EXPANSION
There is still a great deal of interest on the part of key
rank-and-file legislators, not to mention land
developers interested in improving the marketability
of property in the wake of more attractive incentive
programs from neighboring states, to expand the
KOZ Act to allow for a brief window of opportunity
for local governments to expand the current KOZ
boundaries. The Senate is poised to consider SB
1478 (White, D.) in the near future. In its current
form, there are several provisions in that proposal,
and other similar proposals, that are opposed by the
Governor’s Office. The text of SB 1478 may be found
by accessing the following internet link:
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
SB1478P2094.HTM
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ballot for the voters to approve/disapprove. The House
may take this or, possibly, other Act 50 “tweaks” during
the Sine Die session. SB 374 may be accessed via the
following internet link:
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
SB0374P2305.HTM
PRESCRIPTION DRUG COVERAGE/
PHARMACEUTICAL ASSISTANCE CONTRACT
FOR THE ELDERLY (PACE) EXPANSION
There is intense political pressure to expand PACE
benefits to continue coverage to those senior citizens
who, as a result of the annual Social Security cost of
living increase would otherwise become ineligible for
PACE. On an annual basis, this would cost
approximately $15 million. The irony is that, in the
midst of these calls to expand PACE eligibility, the
PACE Program will run out of money to pay benefits
in 2003. There are, literally, dozens of proposals that
would expand PACE eligibility, both respect to the
Social Security COLA matter, as well as a host of
other proposed expansions (e.g., income eligibility,
definition of “income,” etc.).
PRODUCER LICENSING
The House is expected to act on another Governor’s
Office priority that would eliminate the distinction
between insurance brokers and agents and classify
them as “insurance producers.” This is part of a
broader national effort to maintain reciprocity
between Pennsylvania and other states, a vast
majority of which have already enacted this
legislation. The language is contained in SB 1416
(Mowery) and can be read by accessing the
following internet link:
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
SB1416P2322.HTM
LOCAL PROPERTY TAX REFORM
RENTAL CAR TAX FOR ALLEGHENY COUNTY
It does not appear likely that anything monumental
will be enacted during Sine Die in terms of property
tax relief. There remains a distinct possibility,
however, that the General Assembly may enact an
enhancement to Act 50 that will require local
governments to put the income/property tax “swap”
on the ballot. To this end, the Senate recently passed
SB 374 (Wenger) with an amendment that would require
local governments to place the “swap” proposal on the
A host of state and local elected officials are pressing
for the General Assembly to allow Allegheny County
to increase the rental car tax to increase available
resources for regional projects in Allegheny County.
TRANSPORTATION SAFETY/OMNIBUS TITLE 75
The House is expected to advance a Title 75
(Transportation) bill, supported by the Governor’s
Office, that includes a host of proposals to improve
PENNSYLVANIA AFFAIRS OF STATE
transportation safety, including: increased penalties
for work zone violations; primary enforcement for
child safety seats; mandating headlights in work zones;
expanding PENNDOT’s motor carrier enforcement
coverage; and increased penalties for operating on an
expired or suspended inspection sticker.
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
HB2410P4453.HTM
WATER RESOURCES
The Governor’s Office continues to support the
enactment of comprehensive water resources legislation
that would update the state’s decades-old water plan
and provide for the monitoring of water availability.
Meetings/negotiations between the Governor’s Office,
a coalition of business and industry representatives,
local governments and environmentalists occurred
throughout the Summer and Fall and may produce an
outcome during the Sine Die session. The Department
of Environmental Protection’s original proposal – SB
1230 and HB – along with an earlier version of the
industry proposal, SB 998 (Madigan), can be found by
accessing the following internet links:
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
SB1230P1656.HTM
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
HB2230P3163.HTM
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
SB0998P1208.HTM
WIRELESS SURCHARGE
The potential for a wireless surcharge may arise in
two possible instances. First, the Governor’s Office
and the General Assembly are considering the
NOVEMBER 12, 2002
enactment of a wireless Enhanced-911 system (or “E911) in Pennsylvania, implementing an FCC order on
wireless carriers. While there is dissension between
industry and 911 coordinators in terms of the amount
of the surcharge, it is unanimously agreed that one
will become part of the legislation. To date, proposed
wireless surcharges for E-911 have ranged between
$0.50 and $1.50, with the industry pushing for the
lower surcharge and 911 coordinators lobbying for
higher amounts. The second possible wireless
surcharge may come from the enactment of a
volunteer emergency services grant program
contemplated by the legislature and the Governor’s
Office, and as enacted in Act 89 of 2002. The text of one
of the proposals being considered – SB 884 (Conti) —
can be found at the following internet links:
http://www.legis.state.pa.us/2001%5F0/
sb0884p1025.htm
WORKFORCE DEVELOPMENT
This is also one of the Governor’s top legislative
priorities. The proposal would require job-trainers to
retrain employees at their own expense in the initial
training is deemed inadequate. Additionally, it would
reimburse community colleges full reimbursement, as
opposed to the current 70 percent reimbursement, for
workforce development classes. Also, this proposal,
if enacted, would allow the Governor to apply for a
host of federal waivers that would give the state more
discretion over the use of federal job-training dollars.
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
HB2778P4516.HTM
http://www.legis.state.pa.us/WU01/LI/BI/BT/2001/0/
SB1555P2327.HTM
Kirkpatrick & Lockhart LLP
Rendell Transition Activities
TRANSITION TEAM APPOINTMENTS
On Sunday, November 10th, Governor-elect Rendell announced the structure and several appointments to his
transition team. The transition team will be structured as follows:
■
■
■
General Chairman
— Executive Director
- Deputy Executive Directors
— General Counsel
- Deputy General Counsel
Co-Chairpersons (6) to lead the transition effort, generally
Executive Committee to coordinate Transition Committees
— Chairman
— Transition Committees (by subject areas)
Appointments to the transition team made to date are as follows:
6
David L. Cohen
General Chairman
Executive Vice President of Comcast, former Chief of
Staff to Mayor Rendell, former Chairman of Ballard Spahr
David Sweet
Executive Director
Rendell Campaign Manager, former State Representative
(Westmoreland County)
Joe Brimmeier
Deputy Executive Director
Senior Consultant to the Rendell campaign for Western
PA, former Chief of Staff to Congressman Klink
Sheila E. Dow-Ford Deputy Executive Director
Executive Vice President and General Counsel to the PA
Higher Education Assistance Agency (PHEAA)
David Myers
Deputy Executive Director
Policy Analyst for the House Democratic Caucus
Leslie Ann Miller
General Counsel
President of the Kimmel Center, former President of the
PA Bar Association
Kenneth Trujillo
Deputy General Counsel
Former City Solicitor under Mayor Street
Steven Frobouck
Co-Chair
President of Anderson Group (generally desribed as a
W. PA telecommunications executive)
John Fry
Co-Chair
President of Franklin & Marshall College, former
Executive Vice President of the University of
Pennsylvania, expects to assist with economic
development matters
Barbara Hafer
Co-Chair
Pennsylvania State Treasurer, expects to review
potential budget cuts
Arthur Makadon
Co-Chair
Chairman of Ballard Spahr
Sam Staten
Co-Chair
Business Manager of Laborers Union Local 332 in
Philadelphia
Paul Tufano
Co-Chair
Executive Vice President and Chief Counsel to
Independence Blue Cross, former General Counsel to
Governor Ridge
Mark Singel
Chairman, Transition
Executive Committee
Former Lt. Governor of Pennsylvania under Gov. Casey
Transition Committees
TO BE NAMED WITHIN 2 WEEKS
PENNSYLVANIA AFFAIRS OF STATE
Also, expect the following to have prominent roles
during the transition effort: Dick Hayden (former
State Rep. and Rendell environmental advisor); Alan
Kukovich (Chairman of Democratic State Committee
and State Senator); Mike Veon (House Democratic
Whip and early Rendell supporter); T.J. Rooney
(State Rep. and early Rendell supporter); Jennifer
Mann (State Rep. and early Rendell supporter); Tom
Murphy (Pittsburgh Mayor); Frank Mascara (former
Congressman); Bob Borski (former Congressman);
Bill Robinson (former State Rep.); John Estey (former
Deputy mayor under Mayor Rendell, Philadelphia
attorney); Estelle Richman (former Philadelphia
Social Services Director/Health Commissioner); John
White (former Secretary for the state Department of
Public Welfare); Joan Reeves (former Philadelphia
Social Services Commissioner); Jim Eisenhower
(Philadelphia attorney); Don Cuningham (Bethlehem
Mayor); Tom Goldsmith (Easton Mayor); Vicki
Phillips (Lancaster School District Superintendent,
former assistant to Philadelphia Superintendent,
Hornbeck); Ron Cowell (former State Rep. and
Democratic Chairman of the House Education
Committee); and Tim Potts (school reform advocate
and former House staffer).
NOVEMBER 12, 2002
RENDELL ADMINISTRATION
APPOINTMENTS/STAFF HIRES
Governor-elect Rendell also made several staff
appointments to serve in his Administration.
LESLIE ANN MILLER will serve as the Governor ’s
General Counsel. This is one of the most important
appointments Governor-elect Rendell will make in the
weeks and months ahead. The Governor’s Office of
General Counsel (OGC) has oversight for all legal
activities throughout the entire Administration,
including the chief counsel’s offices in each agency
and over 500 attorneys throughout state government.
ED MANN will serve as the State Fire Commissioner.
Mann was appointed Fire Commissioner by Governor
Ridge and would be the first Ridge/Schweiker
“holdover” to serve in the Rendell Administration.
NOLAN REICHL will serve as the Governor’s
Director of Advance and Scheduling. Reichl served
as Rendell’s Advance Coordinator during the
gubernatorial campaign and, prior to that, was
Deputy Director of Convention Operations for Al
Gore’s 2000 presidential campaign effort.
Our Practice
The scope of services provided by the government affairs practice of Kirkpatrick & Lockhart LLP includes:
LEGISLATIVE AND REGULATORY MONITORING
GOVERNMENT PROCUREMENT
■
Review all bill introductions, legislative
amendments and proposed regulations.
■
Monitor and identify procurement opportunities
throughout state and federal government.
■
Monitor the procedural and substantive
evolution of specific bills, amendments and
regulations, including committee activity,
consideration of the legislative and regulatory
calendars.
■
Communicate client capabilities to relevant
agencies and advocate for the establishment of
public-private partnerships between state,
agencies and our clients.
■
■
Analyze relevant media and political
developments affecting client legislative and
regulatory interests at both the federal and state
levels, including the White House, Governor’s
Office and agency positions and activity.
Prepare procurement proposals and responses to
state government requests for proposal (RFPs),
and negotiate contract terms.
■
Assess the significance of proposed legislation or
regulations and advise, where possible, on the
likely outcome on any given measure.
GENERAL FUND AND CAPITOL
BUDGET APPROPRIATIONS
■
Advocate for increased or new state and federal
appropriations for specific projects and programs.
■
Advise clients on the Capitol Budget/
Redevelopment Assistance Program and develop
a strategy to obtain specific Redevelopment
Assistance authorizations and appropriations.
LEGISLATIVE AND REGULATORY ADVOCACY
■
■
■
■
Develop and implement a comprehensive
legislative and/or regulatory strategy to ensure
the most effective advocacy on a particular
matter.
Identify and provide access to the “players” in
the legislative and regulatory process, including
the legislative leaders, committee chairpersons,
key House and Senate staff, the White House,
the Governor’s Office, and administrative agency
decision makers.
Assist in the development of grass roots
campaigns and coalition formation among
similarly situated groups and organizations to
create the necessary momentum in support of or
against a particular matter.
Research and draft legislation, regulations and
testimony before legislative and administrative
bodies.
ADMINISTRATIVE AGENCY
ADVOCACY/GRANTS AND LOANS
■
Represent clients before state and federal
government agencies on a wide range of
administrative decisions, including licensing,
permitting, and enforcement actions.
■
Assist clients in identifying and qualifying for
existing state and federal grant and low-interest
loan programs.
POLITICAL AND CAMPAIGN FINANCE ADVICE
■
Advise clients on the developing political
landscape, including regular updates on
“targeted” federal, state and local races and
other campaign-related information.
■
Advise clients on the political and legal
implications of Political Action Committee (PAC)
or other political contributions.
®
Kirkpatrick & Lockhart LLP
Challenge us. ®
www.kl.com
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MIAMI
■
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■
NEW YORK
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PITTSBURGH
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SAN FRANCISCO
■
WASHINGTON
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This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein
should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.
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PENNSYLVANIA AFFAIRS OF STATE
© 2002 KIRKPATRICK & LOCKHART LLP.
ALL RIGHTS RESERVED.