PA House Finance — 2026-06-30

Here. Abney. On leave. Cepeda Freytis. Here on line. Fleming. On leave. Gallagher. Gogenauer. Harris. Krajewski. On leave. Mazzacco. Leave. Rabb. Leave. Scott. Here. Venkett. Here. Waxman. On leave. Webster.

That's correct, Chairman. Thank you.

Good morning, and thank you. I have spent much of the past two years trying to assist the congregation, the church, Jesus Dwelling Place in North Braddock, Pennsylvania, to meet the requirements of a $75,000 nonprofit security grant from the state. Pastor Germany is going to be one of our testifiers today. His church was the target of an attack two years ago in May of 2024, where a gunman came in during services, stepped into the center aisle, and fired his weapon at the pastor. through the grace of god or accident or whatever you believe in the gun jammed and he lowered the weapon to clear the jam and when he lifted it again to fire once again at the pastor he was tackled by a deacon at the church uh 9-1-1 was called uh not every municipality is fortunate to have full-time police officers, and so there was no one on duty locally who could come. Someone from the state police had to come so they had to hold him down for 25 minutes waiting for the state police to come The individual the attempted shooter had previously murdered another member of his family that morning before he came to the church and it is my belief that he intended to commit a mass shooting at the church that morning. So as a Jew who lives in the Pittsburgh area, I am no stranger to the non-profit security grant program. It is very commonly used by houses of worship. You know, we are all familiar with the Tree of Life shooting that happened and took the lives of members of my community, of my Jewish community in the Pittsburgh area. And I believe that this program was conceived in good faith, that it was meant to protect houses of worship as well as other nonprofit organizations from these types of incidents by providing for grant money so that they could obtain funding. However, because of the many hurdles that have been put in place, it is borderline impossible for low-income organizations to access these funds. So when I had a member of the security team, former FBI agent from who works now for the Jewish Federation in Pittsburgh, come and do a security analysis, she determined that this church in North Braddock needed about $100,000 worth of improvements to get them where they needed to go in terms of having after-school programs with kids and that sort of thing, as well as regular church services. This church is a pillar of the community. They provide backpacks and school supplies for kids, even do the hair and provide clothes for kids before they go back to school, as well as many other services. And so the way that the program works, you would apply for a $75,000 grant, and you're required statutorily to match that by a third. So you have to raise $25,000. This church really only brings in an average of maybe 60 grand a year. So we knew this was going to be a hurdle. So we got the $75,000 grant approved, then you have to raise the $25,000. I told them I would raise the $25,000, so that took about 18 months, but we just recently raised the $25,000. We got the last of that raised. Then the grant is cost reimbursable, so you have to go to a bank. It took me going to two different banks and working with their government relations team to get a loan to cover the cost reimbursable portion of the $75,000 because this church did not have any kind of a credit rating or credit history. So what I want to do is remove that match requirement for organizations that bring in under $250,000 a year. Because when I go to synagogue services, I go to, I'm going to go ahead and say a more affluent synagogue where they bring in an excess of millions a year and it is very easy for them to get the loan it is very easy for them to make the match but in north braddock where jesus dwelling place is the median household income is twenty nine thousand dollars a year it is not easy for them to make this happen but there is no good reason why i deserve when i go to pray to be safe because my synagogue can afford the match and can afford the security, but someone who's going to Jesus' dwelling place in North Braddock cannot feel safe while they praying The only reason that that is the reason is because of socioeconomic differences and because of this statute that makes it very very hard for low organizations to access this funding. So I've asked Pastor Germany to come today. I've also asked Rabbi Davidson to come today and speak with us. And so I'll turn it over to them to give you more firsthand experience of what it is like for a lower-income organization to try to access this funding. Thank you.

the security grant. We're going to talk about the legislative proposal to make a change that would make it easier for nonprofits and places of faith to access this money. Right now, I'd like to call on Pastor Germany. It's Glenn A. Germany, the pastor of Jesus Dwelling Place Congregation. Pastor Germany. Yes. Hello. Thank you. First and foremost, I want to thank you for this opportunity to speak before you today and thank our state Abigail for all the assistance and help that she's done for our community as well as our church. As you know, the incident that took place at our church is still, you know, threatens me and still with me today. It's hard to remove that type of memory once a thing like that happens to you. But I was very appreciative to know and be made aware that there was a grant available, a state grant available that can help support, you know, churches in need who are in vulnerable communities who are in communities that are violent as also Wells having hate crimes against it. But what takes place is that when you add the matching part of the grant to this, you know, for those who, when the grant was given, it was given for those who have this problem who are in these communities where this violent takes place, and that made them applicant to receive the funding. But when you add the matching part to it, it kind of, and I know the intention of it wasn't to discriminate at all. I don't like using that word discriminate, but it really sets apart those who are financially situated and those who are financially challenged. For us, it was a challenge for us to try to raise that type of money in the community that we're in. As she said, our community is a poor community that actually the average income is $29,000 to $30,000 a year. And although this incident brought more awareness to the church and the work that we're doing, the community, instead of it bringing more support, the community that we're in is financially challenged. So it brought more need that people will come in or people who have more need, more than they can offer support. And the programs that we offer there, and she mentioned some of them, but we have re-entry feeding programs. We have women counseling groups there, AA groups. We have so many different things that we offer in the community on a smaller level because of the funding that we're able to have and the lack of volunteers. You know, when we want to do other things, like we need wheelchair ramps, removing buildings that are around us that are condemned as an assort for the community, as well as our church we lacking just the operate we really operating at the level of need And so therefore when we have these other things that are as well as needed as well it really brings challenges to us because we don have the correct administration that we need. We don't have the correct paperwork that is needed in order for us to go into the banks and get financial support. And so more than it helps us, it actually puts more of a financial strain on us. But nevertheless, it doesn't remove the fact that we still are vulnerable, that we still need help with security in the place that we're in. And so it would be a great—it would be all the world to us if the removal of the matching grant, based upon our funding that we have, was removed and we can get the assistance that we don't feel that we're vulnerable. Every Sunday that I preach, I still look at the doors to see who comes in, who comes out. And we just need more help. But at the same token, we lack the finances that is needed in order for us to do extra. We're operating right at the aspect of need. And we don't have the abundance of finances, nor do we have the professional people to assist us. And our outreach only goes into our community. It doesn't go outside our community. And our community is financially challenged. And so, therefore, you wouldn't believe the burden it puts on us going from bank to bank trying to get the support that we cannot get. Thank you, Pastor German, and thank you for all of the work that you do in the community. We are all so sorry for what you have been through personally. And we also are trying to address some of the financial challenges to make it more efficient. so that a congregation like yours could get this funding in a timely manner to make the security improvements that are needed. But thank you very much. I'm going to open it up to questions if you can stay with us, but I also want to call on another testifier. We have Baruch Davidson, the rabbi of Shoal Community, and Shabad on the main line. Rabbi Davidson? I'm here. Good morning. So, thank you for inviting me to speak this morning. I want to talk about our specific challenge and how I feel that this suggested change could be a benefit for us. So I'm the rabbi of a small grassroots synagogue just outside of Philadelphia. And just for reference, our revenue so far this year has been only $75,000. We definitely need to raise more just to be able to pay one and a half salaries. And to add on to all of that, in the last couple of years, with the uptick of threats to religious institutions, there's been a big demand from our community to please increase our security. People are afraid to come on Saturday morning if there's no armed security guard outside. People are concerned that the doors aren't secured to a degree that could really prevent somebody who wants to do harm, and nor are the windows, nor are there enough cameras, et cetera, the things that would really protect us. We're very grateful to the opportunity, and we hope to apply this year for the nonprofit security grant from the state. but we are aware also that the threshold of getting that grant for the amount that we need, which, like the pastor said, is more than what we've raised so far this year, is it would require us to raise a matching amount of 33%, which would make it virtually impossible. So we, on the one hand, in order to be able to keep operating and to keep welcoming people to our synagogue, which is a pillar of our country's religious freedom. We need to make those security improvements. We need to hire those security guards. And on the other hand, we won't be able to match whatever it is to be able to meet the improvements that we need to do. So I personally think that by allowing some leeway for organizations that are – I would say the threshold should even be closer to $350,000, not $250,000 a year. Because if you do the math, it doesn't really leave much breathing room there to be able to pay a salary plus make the security grants, plus pay a security guard and pay your rent. But my point being that I feel that if there was some leeway allowed for smaller organizations to be able to take advantage of this great gift from the state in a way that won't make it impossible, that would be of great help for us. We live in a very diverse area. We've had incidents of congregants calling me and saying they saw unfamiliar people taking pictures of our building, unfamiliar cars parked outside, and people are really afraid. And we need to make these improvements, but we also need to find a way to be able to do it without breaking the bank in ways that we're not able to. Thank you very much, Rabbi Davidson. I do want to open it up to the committee for questions. I do want to note that we have information which is on the website of the Pennsylvania Commission on Crime and Delinquency, which administers these grants, and this is for the 25-26 fiscal year. There's about 200 communities of faith and nonprofits that have received these grants. First of all, there are three categories. If somebody's receiving a grant for under $25,000 or under, there is no match. The current practice is that grants between $25,000 and $1 and $75,000, those are the organizations that have to provide the 33% match. An organization receiving a larger match above $75,000, there is currently a 50% match. So Representative Salisbury's legislation addresses those grants in the middle. Those between $25,000 and $75,000 would no longer have to provide the match. It would apply to organizations with annual revenues of under $250,000. On the chart, it shows that there's about $10 million of these grants that were distributed around the state. about 120 of them were in the smaller category under $25,000 no match. There are 38 organizations in the current fiscal year that would fall under this legislation. 38 grants between 25 and 75. And there's also 45 grants that are larger above 75,000. So this information we have on the website we will distribute a link to the committee members It broken down by county and you can see all of the organizations that did receive this in the current fiscal year I know I have a question from Representative Jones online, and then I'll take any other questions. I also want to note for the record, Representative Rossi is present, Representative Abney is present, and Representative Kephart is present. start with Representative Jones and then any other and then Representative Abney for a question Representative Jones yeah thank you thank you Chairman Samuelson thank you Rabbi Davidson and Pastor Germany for sharing your stories and taking the time here thanks to Rep Salisbury this certainly sounds like something I could support I do have Chairman my question probably pertains more to the existing grant criteria. But before I get to that, this is, so if I may have, I guess, technically two questions. To Rabbi Davidson's sort of comments, oftentimes grants are not used, are not, the eligibility is such that you can't use them for staffing. You could use them typically for physical improvements or construction or similar. Is that the case here, chairman or can these grants be used to staff a security guard in this case uh so in the bill analysis we do uh list the current criteria for the grants it's for security enhancements planning equipment technology locks lighting surveillance equipment safety and security training, threat awareness, threat assessments, any other safety and security improvements. So I do not believe from the current criteria it includes staffing, but we're going to confirm that with PCCD. But the bill analysis that we have that's attached to this bill has the list of what is permitted. We'll check on whether or not some of those other training, well, obviously the training could involve personnel, but we will check on that, Representative Jones. No, I appreciate that. And I just wanted to, since the rabbi alluded to that, it's just sort of a sidebar. Your best approach there would probably to find maybe a volunteer within your congregation who could then maybe use grant money for training, but that's kind of an aside. I just wanted to point that out. I apologize, Chair, I didn't have that analysis in front of me, but I was pretty confident you couldn't use it for staffing. Okay, with that said, and again, this may speak more to the underlying grant, the existing grant criteria. In some cases, I agree completely with what Rep Salisbury said, and it sounds like that's the case with Pastor Germany's church based on just how many different things you're doing. I assume that implies a fairly sizable congregation, certainly a significant community presence. And I don't think that the average income of a parishioner should dictate who does and doesn't get a grant. So I agree completely with that, to be crystal clear. I also agree that all lives need to be protected. And certainly I think that In the case of the Jewish community tragically not only are we we have income on the one hand with Pastor Germany church we have I think it just a sad reality a tragic reality that certain groups our Jewish friends probably at the top of that list are higher propensity targets for violence So, with that said, I do think in some instances the income, the revenue brought in by a church or synagogue would be relevant if it speaks to the size of the congregation. So, for example, I'll just use an extreme example, if you'll humor me. A very old church building, large, many entrances, maybe outdated types of infrastructure that has only 10 or 20 congregants. That is not to downplay the importance of those 10 or 20 lives. But we also only have so much money in the grant fund. So if I can spend $50,000 and protect 250 congregants, that's a better use of the funds, all things being equal, than spending $100,000 on a church that may only have 10 or 15 people. I don't want to be misrepresented in what I'm saying here, but I do think there are certain instances where if the income of the church is driven by lower income parishioners, I agree that that should not keep them from qualifying. If the reason there's very little income is because there's very few people and we only have limited funds, that would have to at least be considered. Obviously, if we had infinite money, we would give it to everybody. And I am totally in support of getting rid of the match. My question is, does the grant, and this is why I say I think it's probably existing criteria, does it take into account the size of the congregation in determining who will and won't be awarded since there's a finite amount of money to go around? I guess that would be maybe chairman for you or staff. And if you want to get back to me on it, that's fine. Yes, thank you very much. We will confirm that with the staff of PCCD that administers these grants. The list that's online and that I'm going to email you shows all of the organizations around the state, the size of the grants. Some are as low as $7,000. There's one that's a couple that are $150,000. So as I said, this legislation is addressing those 38 grants that are in the middle, the $25,000 to $75,000. I appreciate your comments. My intention is to have this bill come up before the committee next week so we would have some time the next few days to work on amendments. And I appreciate your first comment. It's just a shame that we're talking about security grants for congregation. I have a synagogue in my community in the Lehigh Valley that has had threats against the members of the synagogue. And every weekend, they have to build into their budget hiring a security guard. So this is a reality that's being faced by congregations around the state. These grants do help, but it can be a significant portion of the budget. Just imagine you're one of these organizations that has a budget of $250,000 and you're required to do a $25,000 match. Well, that's 10% of your budget just to match to get a grant. So I appreciate Representative Salisbury bringing this legislation forward. I have a question from Representative Abney. Thank you Mr Chairman and I apologize for my tardiness I want to thank the testifiers who shared their stories their experiences with us today I want to thank Representative Salisbury for her leadership on this I know this is a topic that is near and dear to her, so I appreciate all of your work, and I definitely appreciate this bill coming forward. I'm looking forward to supporting it. My question, Representative Jones kind of touched on my question a little bit. It was more so focused around using the the resources for staff and for security. If we aren't able to do that, I'm assuming that the money that is being used for the hard cost of technology and locks and things of that nature would free up other revenue to be used for security, right? My question to the testifiers, because this is something thinking about not just for a one-year grant opportunity, but for sustainability and long-term and being able to maintain the funds to hire staff and security. I would hate for us to give a grant that frees up money for one year to hire a staff, and then maybe if you don't get the grant again the next year or if you don't have any other resources in future years, then you have to let that person go, and it brings down your security, right? So what are you all's vision or opportunities for long-term sort of financial sustainability for hiring and maintaining physical individuals to do security at your spaces? Thank you. Would either of our testifiers or Representative Salisbury like to respond? I can respond. Pastor Germany, yes. It's Rabbi David. Oh, I'm sorry. Online. There you are. Okay. These are all very valid points. So I want to make the point about the personnel. There's two parts to our security plan. The most obvious one, which people always come to me, the first thing is they say we need to hire a security guard. And I understand that there are limits to this grant and it doesn't include personnel. I did appreciate what one of the reps said before about getting volunteers and utilizing the grant for training. I think I hadn't thought of that before, and I think that that's a very valuable way of going about this. But there's another element to it, which just came up at our synagogue the other week, which is we have to raise funds each week. We ask people who would like to sponsor the security. I know that sounds terrible, but we call it the anti-Semitism tax. you know um and and we have to have a every week there's a sponsor who's going to pay for that security guard but it's only one person he walks away from the door he has to go you know use the men's room or whatever else he has to do so they came to me a couple weeks ago and said can we put on new locks on the front door that'll be you know padlocks that even if the security guard isn't there those who belong to the synagogue will know the code and be able to get in instead of the requiring the security guard to leave the door unlocked, which is an obvious reality. So there was a cost of $600. We put on a new lock. That's hardware. The security cameras is obviously a huge deterrent and a way of ensuring keeping vigilance about who's around our building during all the time. So that's why the hardware is important. But the last question about the plan going forward is that at the current moment, we have a system of, like I said, we ask for sponsors on a weekly basis. Maybe one day we're going to put together a team of people within the Sengag who take upon themselves to raise those funds for the individual, the personnel, on an ongoing basis. But the need... for how many personnel we'll have to have is obviously affected by the hardware that we're able to put into place. So putting up a fence around the building, putting up, I forget what those cement things are called, maybe bollards in front of the building, all that decreases the amount that we have to spend on personnel. So on the one hand, it's not just about fungible income, it's about like actually putting into place things that will reduce the amount that we have the spend on personnel. That's my case. Thank you. And as I said, the analysis of the bill includes a list of a lot of the hardware and capital items that are included in most of these grants. I do have a couple more questions. We have Representative Rossi, Chair Greiner, and then we also have a second bill that we want to receive testimony on today. But any other members who'd like to speak, I'm going to call on Representative Rossi. Thank you, Mr. Chairman. I just had a question. I know that you had mentioned about smaller congregations, and that's becoming very popular. And I know in my district, they were having services in a park, which was a beautiful thing. And then the park suggested, you know, hey, we're not happy with this. It's a park where children are playing and you can't be here. So then they were looking for a place to congregate, and so they had to lease a property. So then the question of security came up again with how do we do that on a lease property versus being the owner? So when they apply for this grant, how does that affect with the landlord saying, okay, because if you get these funds and then you put things on the doors and you make changes to the building, And then since you're new, your congregation could go, as in this case, where it was 12 people to 75 and they needed a new space in a year, put all this money into it. And the landlord said, you're not touching this. You left. You changed and altered my doors and everything. And it has to stay. Then the church lost that. That's very hard to come up with. So I wanted to know in the build, is it addressed versus a leased or owned property as the church grows? Thank you. The bill itself does not address that right now. We will once again check with PCCD. This program was established in 2019. So as I said, it's about 200 organizations this year, and cumulatively over the six and a half years of this program, it's 580 organizations that have received the grants. I will check if they're all properties that are owned or whether these grants have actually been used in some cases for leased property. I'll have to get you that answer. Thank you. Chair Greiner. Thank you, Mr. Chairman. Yeah, I think macro, this is macro. This is a, I think this is a very good bill. I think obviously we got a lot of issues at some of these not-for-profits, specifically the people of Jewish faith here, and I think this is a good bill. I think the one thing I do have a question, so over $250,000, just to confirm, nothing's changed. If your revenue is over $250,000, the bill, let me just ask, you know, because I do think the people on the lower end of the revenue scale deserve this safety as well. I don't know how the problem divvies, I don't know how the program divvies out the money. So the one thing I guess I do have a question is this may have been a deterrent for smaller congregations smaller not to apply Now are we going to have a groundswell of I don know that I just don't know that. And then I don't know how high the kitty, I call it a kitty, how high the kitty goes. I know it's around $10 million, $10.5 million. And then I worry about how do you pick and choose who gets them. Maybe that's going on now. I just wonder about that because everybody, I would think, a lot of most, not everybody would be deserving of those monies. But are we going to see something like all of a sudden we have – because we do have a lot of smaller congregations. I think specifically about churches. I know there's probably some other not-for-profits. I see like in Lancaster County, the YWCA and what have you. There is some other organizations that would have a need. I just didn't know whether – maybe that's rhetorical. I don't know, and maybe you know how high the program – because I don't know what the maximum can get out. I'm quite interested in that question as well. I will also be checking with DCED – I'm sorry, PCCD on how many applicants they have. What is the demand for this program? I do know that the 120 that got the grants of $25,000 and under, there is no match and there hasn't been a match. So I wonder how many they got in that category where there is no match. Representative Salisbury's bill would address about 38 or 40 a year that are in that middle category. And they could give us some statistics on – I really like the bill. I just worry about are we going to have to reduce the grants where you have X dollars and then maybe instead of getting 25, they get 20 or they get 18 so that everybody receives something. I just was kind of curious how that made. Gotcha. Thank you, Mr. Chairman. We will gather some more information. We also have a quick question from Representative Harris, and I do know I have one other bill to get to in the next 20 minutes. I'm representing Salisbury for our vision in this, because I see the obstacles, you know, trying to raise matching funds in my district. I've experienced that. I think Representative Abney raised a very good question about the sustainability of getting this extra personnel or security. I think we can work that out how long does this grant how many years or months that you can pay your security with a single grant and that was an interesting point and also just I think that's not to be redundant Pastor Germany raised other activities they do at these institutions like NA groups and such so So maybe I know this grant maybe can, and this is my question, and the grant, not to make it redundant, can it free up other activities so you don't have to spend money on security and you can continue to do other advocacies in these institutions? Thank you, Representative Harrison. We will be considering all of those questions. I note that some of the items, many of the items, are for the one-time upgrades, a single-year grant that can be used for things like upgrades to the structure, surveillance equipment, metal detectors, protective lighting, lock sets. So one of the questions we be getting into with PCCD is are any of these recipients of the grant using it for any ongoing staffing expenses I know there some one training one threat assessments but that's a good good questions good information we'll try to bring back to the to the committee on on the use of these grants and since the program started in 2019 well I appreciate the testimony today from Representative Salisbury and Rabbi Davidson, and we have a closing comment from Pastor Germany. Yes. Yes, thank you once again. I won't be long, and I really appreciate your time. But to my understanding, we ran a forum at our church, which had over 100 community leaders as well as different representatives from the state. And the question that I was opposing is that I got feedback from many of them. I know that it said that with the $75,000 is a matching aspect. But with the $25,000, I was told that many of them who were receiving the $25,000, even though it's not said to be a match, it really is a match because it's not like you get the $25,000 and able to do what needs to be done. It's that you have to first raise $25,000 and then you do the work and then you get reimbursed. So in some aspect, it is still for those smaller churches, it is still a burden because they have to raise $25,000 to get the work done before they can actually get reimbursed. And so that is a question that needs to also be asked. Thank you. Thank you. Very important point that this is a – the upfront money is something that any congregation or nonprofit would have to put forward in order to do the work. So that's something for us to consider. I appreciate your testimony, Pastor Germany, Rabbi Davidson, and I'm thankful to represent Salisbury for bringing this issue to the committee's attention. It's my intention to bring this bill up next week. I always do like to have discussion in our committees hearing the week before, and we've had several great questions today. So my intention is to vote this on a meeting on Tuesday, July 7th, 10 in the morning, which if we're able to do that, the amendment deadline would be on Monday, July 6th. Thank you, and thank you, Representative Salisbury. The next item on the agenda, we have a bill, House Bill 2675, sponsored by Representative Scott, concerning rollovers of money invested in 529 programs. Representative Scott. Well, good morning, Chair Samuelson and Chair Greiner and fellow members of the Finance Committee. My legislation is House Bill 2675. It really shouldn't be controversial, and I'm thankful to my colleagues last session for helping me advance this bill. I think we all appreciate the benefit of 529 savings accounts. Done right, parents and families get a tax benefit for contributing to our children's savings for future education. When they're ready to pursue their educational goals, they use the money in an account that's tax-free. I started one for my children, and I always encourage my constituents to do the same. That said, we know that life happens. Things change over two decades. What if your daughter has a brilliant idea and starts her own business out of high school? What if your son is a student athlete and gets a full scholarship? What if your twins decide they want to become pipefitters and electricians so they go directly to a trade for a living I don have twins by the way expertise and help us understand the mechanics of these accounts and what he's experiencing on the ground. After that, I look forward to seeing this clarification in House Bill 2675 put into law. Thank you so much. You could turn your mic on, Alex, for me. There you go. Mr. Reber, welcome. Thank you for the introduction, Representative Scott, Chair Samuelson, Chair Griner, and members of the Pennsylvania House Finance Committee. Thank you. Is it still not on? Okay. All right. Sorry about that. So my name is Alex Reber. I am a certified public accountant and managing partner of Miller, Dixon, Drake. We're a CPA firm here just down the street on Second Street. I work with a lot of individuals and families who try to plan for retirement, their tax issues, and of course, educational savings, which is what this bill is about. My comments are there to provide some insight around that. I know that you've received my testimony in written form, so I'll just try to highlight a few things instead of reading it for you. House Bill 2675, as he said, would make Pennsylvania follow the federal treatment of certain rollovers from qualified tuition programs, as known as 529s, to a Roth. This would create a lot of clarity in legislation for practitioners such as myself and for families who are trying to figure out how to navigate educational savings. We do have many clients who come to us and they want to do tax planning around retirement or education, and we talk a lot about 529 plans. And I personally hear often from folks, well, what about if my kid starts a business or gets into a military academy or any of their full scholarship, and what would happen with those funds? And currently, as we know, that they would have to take them out in other ways and pay tax on that, on the gains in the funds, not the original contributions, which were made, of course, tax-free. So I think it is important to have clear and consistent tax laws and to clarify these sorts of things. The federal law, as presented, does have several safeguards. So in order to be able to do this, the 529 account must have been maintained for at least 15 years. I know there may be some fears around if someone would be trying to put money in last minute and then try to convert it into a Roth. So that safeguard is in place. Contributions also made within the last five years are excluded from this eligibility. Annual rollover amounts are limited by the amount you can contribute each year to a Roth IRA, and lifetime rollovers are capped at $35,000. So these statutory limitations severely restrict the circumstances in which this rollover could be used, and it's a narrowly tailored provision. From a tax planning perspective, this bill would provide taxpayers with an additional option for 529 funds if they were not expended for educational purposes. From another perspective, obviously this would impact, you know, state revenue, right? As you consider this legislation, just making sure you're clear about that, you know, in fact, some of these funds could be moved from a tax-advantaged account, educational account into a tax-free retirement account without ever being subject to federal and Pennsylvania state income tax. However, that impact is likely constrained by the federal eligibility requirement. as discussed previously, and the relatively modest lifetime cap of the $35,000. So at this point, I would be happy to take any questions that you have. Thank you very much. And I appreciate you talking about the safeguards that are here, that with an annual limit, we're not talking about somebody putting in a large amount of money and then trying to roll it over immediately. What the annual limit for contributions to a 529 plan that is currently? You can annually put $19,000 per beneficiary. Gotcha. And the limit on the rollover is also? So a limit on the rollover is based on your max. You can contribute to a Roth per year, which is $7,500 per year if you're under 50. If you're over 50, it goes up to $8,600. And these numbers are indexed for inflation generally on an annual basis.

Thank you, Mr. Chairman, and thank you for being here to be a good informational witness for us. I'm glad that the CPA is included in tax decisions. This probably should happen more often. They sent you guys as a practitioner. So thank you for coming. I know last year I think we voted on this, and I remember on the floor, I think I was one of three no votes, and I think maybe the Republican chairman on this committee was another one. And I think a friend of ours that's no longer here, Appropriations Chairman Seth Grove was another one. And I remember it vividly because I remember people asking me after, like, why are you voting against this? And I said, well, it's a tax loophole. one of the things I was concerned about was I don't think you would ever pay tax on the money then. So because if it's going to a 529, you don't pay tax going into the 529. And then when you move it to the Roth, you don't pay tax whenever you take it out. All the growth and everything. And I'm a big fan of Roth IRAs. I think they're great. And I saw articles that Gen Z is investing in them more than ever. And that's great. I'm all for them. But what my point was is if you knew how to if you a tax attorney you a CPA or you a politician who actually reads the bills you would know about this loophole But I don know if the average person would know about it and I all for simplifying the tax code to the complete nth degree That was one of my am I right in that assumption that you would never pay tax on that money

Thank you. Well, thank you for being here and testifying. I appreciate it. And I want to call on Chair Greiner, who also is a CPA in his other life.

I know Representative Scott is trying to provide some clarity on the rollover provisions with this bill. I believe I have two more comments. I have Representative Jones online, and I apologize. We only have four minutes. Representative Jones.

You would be.

You would still be eligible even if you outside of the cap for this provision Okay So for this oh well that good to know that I glad I asked So that one area where it not subject to the existing Roth

This is the federal law for the SECURE Act. I'm assuming that's why it's being proposed that way.

Thank you, Representative Jones. And thank you to all the committee members for attending today's hearing. We do have a meeting of this committee scheduled on Tuesday, July 7th. It's my intention to bring up both bills we talked about today, Representative Salisbury's legislation, Representative Scott's legislation. We have a third bill concerning the Department of Agriculture, House Bill 2521. One, I believe what I would like to do is re-refer that to the Agriculture Committee rather than the Finance Committee. And also, we have some testimony on a topic. I know Representative Abney has a company. We want to hear some testimony from a homegrown Pennsylvania company, Astrobotic, which is in the Pittsburgh area. We have a co-sponsor memo out from two members of our committee, Representative Abney and Representative Zach Mako, on legislation to provide possible tax incentives to help grow similar countries, similar companies. So that would be testimony received next Tuesday morning. With no further business, this meeting is adjourned. Thank you.