Last Week in the Legislature – 6/10/26

Source: PA Chamber The Sentinel

With state budget negotiations underway, the House of Representatives and Senate returned to session in Harrisburg last week, advancing proposals related to housing, taxes, healthcare, and Pennsylvania’s prevailing wage requirements.

Here’s a recap of last week’s legislative action most relevant to employers.

 

Pre-Approved Housing Plans (S.B. 1281; Rothman)

The Senate voted 50-0 to pass Senate Bill 1281 last Wednesday.

This legislation aims to boost housing supply by reducing regulatory barriers and requiring municipalities to expedite approval of certain higher-density residential developments, while also streamlining local processes and allowing tools like pre-approved plans to speed construction.

Developers and builders often report that lengthy, unpredictable local approval processes delay projects and increase costs; this bill aims to provide clearer, faster pathways for approval so projects can move forward more efficiently. By reducing regulatory delays, it could help lower development risk and encourage more housing investment

We supported this legislation (CLICK HERE for our memo), which now moves to the House.

Housing Regulatory Compliance Officer (S.B. 1279; Phillips-Hill)

The Senate voted 30-20 to pass Senate Bill 1279 last Wednesday.

This legislation aims to accelerate housing development in Pennsylvania by streamlining state permitting processes, requiring agencies to establish timelines, digitize applications, coordinate reviews, and allow the use of qualified third-party reviewers. The bill also creates a Commonwealth Housing Regulatory Compliance Officer to help navigate permitting requirements and identify barriers to housing construction. Most significantly, it imposes firm permit review deadlines and provides that housing permits are automatically approved if agencies fail to act within the required timeframe.

This bill aims to address Pennsylvania’s housing shortage by reducing permitting delays and providing greater certainty for developers, builders, and investors. Faster housing construction can support workforce attraction and retention by increasing housing availability and affordability.

We supported this legislation (CLICK HERE for our memo), which now moves to the House.

 

Increasing Housing Opportunities (H.B. 2186; Inglis and H.B. 2109; Khan)

The House of Representatives passed two bills last week to increase housing opportunities.

Accessory Dwelling Units (ADUs)

House lawmakers voted 139-62 to pass House Bill 2186 last Monday.

This legislation removes barriers to the creation of accessory dwelling units by updating local zoning rules and streamlining approvals so homeowners can more easily add in law suites or garage apartments.

Golden Girls Act

Separately, the House voted 145-56 to pass House Bill 2109 last Tuesday.

This legislation, known as the Golden Girls Act, allows greater flexibility for shared housing by permitting unrelated adults, particularly older individuals, to live together under local occupancy and zoning regulations.

Pennsylvania’s housing shortage is making it harder for employers to attract and retain workers, particularly as affordability challenges limit options near job centers. By expanding attainable housing, the reforms included in House Bill 2186 and House Bill 2109 help strengthen the workforce pipeline and support business growth.

We supported both bills (CLICK HERE for our memo), which now go to the Senate.

 

Mutual Thrift Institutions Tax Reduction (S.B. 576; Robinson)

The Senate Finance Committee voted 10-1 to advance Senate Bill 576 last Wednesday.

This legislation would phase down the Mutual Thrift Institutions Tax (MTIT) from its current rate of 11.5 percent to mirror the current phasedown of the Corporate Net Income Tax (CNIT), reaching 4.99 percent in 2031. It would also extend the current Net Operating Loss carryforward limit under the MTIT from three years to 10 years.

This legislation will benefit Pennsylvania banking institutions that currently pay the MTIT. The tax currently applies to the institution’s total of net earnings received or accrued from all sources during the tax year. Reducing the tax rate will free up more dollars for lending, such as affordable home mortgages or small-business loans. It will also create greater tax parity with the CNIT.

We supported this legislation (CLICK HERE for our memo), which now advances to the full Senate.

 

Prevailing Wage Expansion (S.B. 908; Farry)

The Senate Labor & Industry Committee voted 11-0 to advance Senate Bill 908 last Tuesday.

This legislation would expand the PA Prevailing Wage Act to include custom fabrication and prohibit the practice of split-rates.

The PA Prevailing Wage Act requires pre-determined wages to be paid on public construction projects and can substantially increase project costs. This legislation would expand this requirement to custom fabrication work separate from the jobsite – which will raise costs on taxpayers and potentially divert projects to out-of-state competitors. The legislation would also prohibit the practice of paying “split rates,” which companies utilize to promote efficiency on a worksite. Both changes will increase costs and create administrative challenges for employers.

We opposed this legislation (CLICK HERE for our memo), which now advances to the full Senate.

 

Prohibiting Noncompete Agreements (S.B. 142; Bartolotta)

The Senate Labor and Industry Committee voted 10-1 to advance Senate Bill 142 last Tuesday.

This legislation would prohibit noncompete agreements in the broadcasting industry.

Restrictive covenants may be particularly relevant for the broadcasting industry, where employers often invest considerably to recruit employees and provide the operational support, marketing and base of public recognition usually necessary for broadcasting professionals to establish their career.

Employers, employees and potential hires should not be prohibited from pursuing an agreement in which the individual commits, for a relatively short period of time, to refrain from leaving and working for a competitor after the employer has made this investment to help facilitate the employee’s success.  Noncompete agreements do have limits and may be deemed unenforceable if found to be unduly restrictive.

We opposed this legislation (CLICK HERE for our memo), which now advances to the full Senate.

 

 

Digital Advertising Tax (H.B. 1678; Fiedler)

The House Finance Committee voted 14-12 along party lines to advance House Bill 1678 last Wednesday.

This legislation would apply the state’s 5 percent gross receipts tax to digital advertisements purchased in Pennsylvania.

The digital advertising tax will raise costs for Pennsylvania businesses that rely on digital pla

tforms to market their goods and services – costs that will ultimately be passed on to consumers through higher prices. At a time when affordability remains a top concern for Pennsylvanians, this tax risks making everyday goods and services more expensive. It also violates sound tax policy by taxing a business input, despite revenue from digital advertising already being subject to the Corporate Net Income Tax (CNIT) under Pennsylvania’s market sourcing rules. Finally, if enacted, it would likely face costly litigation as it conflicts with the federal Internet Tax Freedom Act.

We opposed this bill (CLICK HERE for our memo), which now advances to the full House.

 

ICHRA Tax Credits (H.B. 2550; Mazzocco)

The House Finance Committee voted 14-12 along party lines to advance House Bill 2550 last Wednesday.

This legislation

would provide a tax credit to Pennsylvania small businesses who contribute to employees’ Individual Coverage Health Reimbursement Arrangements (ICHRAs), and the funds are used to purchase individual health insurance coverage through the Pennsylvania Insurance Exchange (Pennie) exchange.

Providing an additional tax incentive for ICHRAs may benefit some small businesses. As currently drafted, the tax credits would only apply if individual coverage is purchased through Pennie, leaving out other individual coverage options that can be purchased off-market. This would limit individual consumers’ options when shopping for health insurance. The PA Chamber believes the legislation should be amended to allow any individual health insurance plan.

We recommended that the bill be amended to allow any individual health insurance plan (CLICK HERE for our memo). The bill now advances to the full House.

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