A Look Back at the 2017-18 Legislative Session and Its Impact on Municipalities

Timothy J. Horstmann of McNees Wallace & Nurick.

With the Pennsylvania General Assembly officially starting its new legislative session this January, now is a good time to take stock of the legislative proposals affecting municipalities that were approved by the Assembly and signed into law by Gov. Tom Wolf during the 2017-2018 session. In the last two years close to 250 bills were signed into law by the governor; this article will examine 13 of them.

The bill that likely kept some municipal officials and employees up at night was Act 43 of 2017—but not in a way the Assembly would have foreseen. Act 43 amended numerous provisions of the state’s Tax Reform Code, including the laws regulating and taxing the sale of fireworks. Intended principally as a revenue raiser, Act 43 expanded the classes of consumer fireworks that could be sold to Pennsylvania residents, and taxed such sales at a new, higher 12 percent rate. Under prior law fireworks retailers were only permitted to sell those more powerful classes of fireworks to residents of other states. Act 43 legalized the sale of those products to Pennsylvania residents, and permitted sales in temporary structures (tents) during the “peak” season around Independence Day and New Year’s Eve.

Apparently, many Pennsylvanians took full advantage of their new freedom to legally purchase more powerful fireworks, as there were anecdotal reports last year of municipalities being inundated with complaints about noise and improper fireworks discharges as Independence Day and Memorial Day became Independence Week and Memorial Week. The complaints even reached the General Assembly, leading Rep. Bernard O’Neill to introduce House Bill 2620 last September, calling for the repeal of Act 43’s expansion of fireworks sales, in response.

No action was taken by the Assembly on House Bill 2620 before the end of the 2017-2018 session. However, municipal employees manning the complaint hotline may see fewer calls this July, as the Commonwealth Court, in Phantom Fireworks Showrooms v. Wolf, No. 21 M.D. 2018, 2018 Pa. Commw. LEXIS 698, 2018 WL 6314015 (Dec. 4, 2018), recently declared unconstitutional the portion of Act 43 which authorized expanded sales of consumer fireworks in temporary structures.

In striking down those portions of Act 43 permitting the use of temporary structures to sell the expanded classes of fireworks, the court explained that the Assembly had improperly delegated its legislative authority when it defined “temporary structure” by reference to an industry safety standard. The reference to the industry standard failed to include any of the limiting parameters required by the Pennsylvania Constitution to pass muster. Thus, absent a legislative fix to Act 43, Pennsylvania residents will have to travel to an existing brick-and-mortar establishment located on Pennsylvania’s borders to purchase the same types of fireworks previously available for sale to out-of-state residents.

While perhaps not as exciting as exploding fireworks, the 2017-2018 session also saw the passage of a number of other bills that will affect how municipal governments serve their constituents. For example, a series of Acts (Act 21 of 2017, and Acts 150, 151 and 152 of 2018) passed during the session raised the public bidding threshold for sales of personal property by most municipalities from $1,000 to $2,000, the first such increase in decades; prior laws did not permit increases to account for inflation, and the Assembly determined not to authorize an inflationary factor as part of the new laws. With this increase, the threshold for sales of personal property is actually higher than the threshold for sales of real property, which remains at $1,500.

The Assembly also took steps to broaden the scope of purchases by most municipalities for which competitive bidding is not required. First, a series of acts passed in 2018 (Acts 140 through 143) will allow municipalities to purchase used equipment, vehicles and other personal property from volunteer emergency service organizations. Previously such used equipment purchases could only be effectuated without competitive bidding if the seller was another governmental entity.

Another new law, Act 99 of 2018, extended to Pennsylvania boroughs the ability to enter into contracts for emergency services, and make similar purchases of equipment and other personal property during emergencies. Act 99 generally places boroughs on the same footing as third class cities and second class townships with respect to such actions. Interestingly, it does not appear that an “emergency” exception exists for first class townships.

The Assembly apparently had emergency services on its mind when it also passed Act 156 of 2018, which amends the Sunshine Act to add a new exemption to the general rule that a municipality’s official actions and deliberations may occur only at a meeting open to the public. Act 156 authorizes municipalities to hold executive sessions closed to the public to discuss, plan or review matters and records that are deemed necessary for emergency preparedness, protection of public safety and security of all property in a manner that, if disclosed, would be reasonably likely to jeopardize or threaten public safety or preparedness or public protection.

The 2017-2018 session also saw laws passed that affect municipal authorities established by municipalities, although many broad-based proposals did not make the cut. One such proposal that made it through to passage was Act 65 of 2017, which amended the Public Utility Code to place a single municipal authority, the Pittsburgh Water and Sewer Authority, under the jurisdiction of the Pennsylvania Public Utility Commission. Interestingly, a proposal to place all such municipal authorities that provide water and wastewater service under PUC jurisdiction – House Bill 798, introduced by Rep. Tina Davis, failed to gain traction in the 2017-2018 session, although the House Consumer Affairs Committee did hold a hearing on the proposal on Sept. 25, 2017. It seems likely we have not heard the end of this idea.

Another proposal that made its way through to passage was Act 148 of 2018, which amended the Housing Authorities Law to authorize housing authorities to relocate tenants in public housing that are the victims of domestic or sexual violence. Act 148 was introduced as part of a package of bills intended to strengthen Pennsylvania’s laws on domestic violence and is the last bill from that package to be enacted into law. Under Act 148 a tenant may request relocation to another public housing unit if the tenant reasonably believes that the tenant or an affiliated individual of the tenant is threatened with imminent harm of domestic or sexual violence if they remain on the premises. Upon receipt of a request the housing authority is obligated to make a good faith effort to relocate the tenant to another public housing unit.

Numerous other bills affecting municipal governments were introduced in the 2017-2018 session but failed to reach final passage. We expect that many of these bills will be resurrected in the new legislative session. Only time will tell whether their prospects for passage will improve in 2019 and beyond.

Timothy J. Horstmann is a public sector attorney with the law firm of McNees Wallace & Nurick and practices in the firm’s public finance and government services practice group. Contact him at thorstmann@mcneeslaw.com.