PA House Finance — 2026-06-16

Thank you Good morning and welcome to this voting and informational meeting of the House Finance committee. I'm going to start with our legislative assistant, Cassandra, calling the roll.

Chairman Greiner. Here.

Fritz. Vote by designation.

Jones. Vote by designation, but online as well.

Here.

Vote by designation.

Rossi?

Vote by designation.

Here.

Here.

This bill would establish a Deere processor tax credit.

The amendment makes several technical changes to align this tax credit with other tax credits in the Reform Code, carry-forward period, the ability to issue guidelines, removing an erroneous mention of the capital stock and franchise tax, provisions related to past rentities, and changing the application date.

And our senior executive director, Mark Foreman, will read a summary of the bill. Thank you. This modernizes the Department of Revenue's tax liens process by creating an electronic lien filing system and centralized repository.

The amendment would just align the applicable date with the effective date for the year 2028.

Like I said, I appreciate this bill being brought forward. I know my members have talked, and I know I spoke to a couple different outside interested parties. I know all Republicans are going to be no on this bill at this point. I do know there's continued discussions of revenue with PICPA. I know the chamber also wants to be engaged and has some questions as well. It's my understanding, too, just to kind of let you know through talking with them, they're not against the bill. I know there's some talk that they're against it. They're not against the bill. They just want clarification on some of the questions. The other thing that I do that I know that I had brought up was we still haven't heard from the prothonotaries either. And I do think I would have rather liked to see this bill be fully vetted and going through the process and all the questions with the PICPA, with the chamber, with the prothonotaries before we voted upon this. So I think until we get those answers and have clarification and feel comfortable with them, we're all going to be a no at this point. And hopefully by the time it gets to the floor, we'll get answers that are satisfactory for all of us. Thank you.

I appreciate Representative Fleming bringing this bill up. I co-sponsored it with him, and I believe this would be a more efficient process and have some savings for taxpayers and reduce costs overall.

Good morning, and thank you, Chairman, and the other members of the committee who are here for this discussion. I really appreciate it. We'll hear from testifiers in a moment, but we have just had a real issue with a plethora of smoke shops that have opened throughout my district. As many people know, I have the smallest and most condensed district in the entire state. And so when we have three or four of these shops on a block in close proximity to a school, to a daycare, somewhere where young people are regularly gathering, it is a major, major concern. We originally brought this issue from civic associations in our district and have been a little bit surprised, pleasantly surprised at the number of members who have reported that they have similar concerns and similar issues in their areas and different parts of the state. So, again, really appreciate the chair taking this up for a conversation and looking forward to the discussion.

Okay. Good morning. Everybody hear me? Okay. Good morning. Thank you for giving me the opportunity to speak today about an issue that is plaguing communities across Philadelphia and the entire Commonwealth. As head of the Queenville neighbors association one of the most frequent complaints that i get from constituents is about the proliferation of smoke shops in the area just on south street our main commercial corridor there are 15 smoke shops across nine blocks that doesn't include the smoke shops elsewhere in the neighborhood 15 smoke shops on one street is that because 12 or 13 or 14 smoke shops aren't enough to support my neighborhood smoke shop demand? Of course not. It's because these shops are often a front for illegal activity, including the unapologetic sale of tobacco products to children. Unfortunately, state law currently preempts our ability to do almost anything about it. A friend told me about a smoke shop that knowingly sells tobacco products to children. She discovered this when she found dozens of vape pens in her 12-year-old daughter's backpack that she was planning to sell to other children as young as seven. A minor who is unable to drive in any U.S. state was planning on selling tobacco products to first graders. That's not on her. It's on the store owner who only cares about making the sale. This store is located within a block of a park, which is not currently eligible for a tobacco-free school zone in Philly. This bill would change that. Another friend told me about a smoke shop that is known among high school students as a place where they can buy tobacco products underage. She discovered this when she found her 15-year-old son and his friends vaping in their basement. She had him drug tested and found that what they were smoking was laced with benzodiazepines, which can be addictive and deadly. This shop is located within a block of a preschool, which is not currently eligible for a tobacco-free school zone in Philly. This bill would change that. Another friend told me about a smoke shop that sold tobacco products to two teenage girls that were laced with something that put them both in the hospital. That shop is located within a block of two different playgrounds, neither of which is currently eligible for tobacco-free zone in Philly. This bill would change that. Someone else told me about his experience visiting yet another smoke shop. He has a medical marijuana card and went to South Street to buy a bong to replace the one his husband broke. Bongs are considered drug paraphernalia, so they're illegal to sell in most parts of the city, but he still tried. After he was turned away by three different stores, he decided to try one more and was initially told the same thing, that selling bongs is prohibited. As he turned to leave, the salesperson changed her mind, handed him something, and told him to go through the curtain behind the counter, which revealed a secret basement full of people and all sorts of products that were illegal to sell upstairs. He decided that whatever that was wasn't worth it and left, but he did figure out how that place pays its rent when they never appear to have customers. The store was raided by the state shortly afterwards, but remains open. I'm not 100% sure why, but I'm 100% sure that it shouldn't be. And yes, this store is located within a block of a playground, which is not currently eligible for a tobacco-free zone in Philly. This bill would change that. Getting enforcement against nuisance businesses is a challenge. Another smoke shop that is located within 500 feet of two other smoke shops was operating illegally without zoning or a certificate of occupancy, racked up multiple quality of life violations, and made pro-Holocaust jokes on social media. And even with a coordinated effort between police, licenses and inspection, city council, and the community, it took almost two years to shut it down. So our only real chance at stopping this proliferation is by preventing smoke shops from opening in the first place. This bill marks a reasonable expansion to protect places frequented by children, which is critical. Time and again, these stores have demonstrated that they willingly put profits ahead of everything, including the health and safety of our children I applaud Rep Waxman for his leadership on this issue and hope that the rest of the committee supports Bill 2295 Thank you Thank you And if you could stay there

Yes. Okay. Sorry about that. I was having some. Issues with my audio. As we just heard, my name is Kristen Jemison. I am the regional advocacy director for the Mid-Atlantic for the campaign for tobacco-free kids. The campaign is the nation's leading advocacy organization working to reduce tobacco use and its deadly consequences across the country and across the world. I'm here today to support House Bill 2295 and policies that strengthen tobacco retail regulation, reduce use access to tobacco products, and improve enforcement of existing tobacco laws. I'm going to briefly share just some current data and trends related to tobacco use in Pennsylvania around youth. We know that this legislation would help reduce tobacco retailer density, and we support policies that do this as part of a comprehensive strategy to prevent youth tobacco use and strengthen compliance with current tobacco laws. Reducing the number of locations that sell addictive tobacco and nicotine products, especially in areas where youth gather, is a proven intervention to reduce youth access. We know that despite decades of progress in reducing youth smoking rates, young people in Pennsylvania continue to access and use nicotine products. As you just heard from the last speaker, it is definitely a problem. And we know approximately 16% of Pennsylvania high school students report using e-cigarettes. We also know that youth are using products containing extremely high levels of nicotine, and they quickly are becoming addicted. At the same time, companies continue to target a new generation of potential customers, spending more than $343 million annually marketing products in Pennsylvania. Nearly 90% of youth e-cigarette users are also using flavored products, and too many young people are able to purchase these products, despite laws currently prohibiting sales to anyone underage. Many of these products have high nicotine concentrations, have candy and fruit flavors, and bright packaging, along with interactive digital features, and many of them are not authorized for sale by the U.S. Food and Drug Administration. But we know without strong enforcement and meaningful retailer licensing guardrails, it remains too easy for underage youth to obtain products, including e-cigarettes designed to appeal directly to them. We also know that the consequences of youth nicotine addiction and access to these products are significant. Nicotine harms adolescent brain development impairs attention and learning and increases the likelihood of lifelong addiction Tobacco use also continues to impose a huge toll on Pennsylvania health and economy More than 22 Pennsylvanians die every year from smoking diseases and smoking-related health care costs in PA exceeds $7.4 billion annually. Pennsylvania has an opportunity to better protect youth and reduce the burden of tobacco-related disease. We believe strong regulations, including policies that reduce retailer density, represent essential tools that can help prevent youth access and addiction to tobacco and nicotine products. Thank you for your time, and we respectfully urge the committee to support this legislation.

Good morning. Good morning, Chairman and members of the committee. Thank you for the opportunity to speak today on House Bill 2295. As stated, my name is Tim McKinney. I represent NATO, the National Association of Tobacco Outlets, the National Trade Association of over 66,000 retail stores, more than 2,000 of which are located across Pennsylvania. We respectfully urge the committee to oppose House Bill 2295 as currently drafted, or at a minimum, amend the legislation to clearly grandfather existing licensed retailers. Our members understand the goal of preventing youth access to tobacco products. Pennsylvania retailers are already subject to extensive state and federal age verification requirements, licensing obligations, compliance inspections, and significant penalties for violations. However, HB 2295 goes far beyond youth access prevention and creates a substantial uncertainty for law-abiding businesses that have invested in their communities and operated in their communities with compliance under Pennsylvania law. The most troubling aspect of HB 2295 is that it appears to apply the new 500-foot distance requirements not only to new licensed applicants, but also to retailers seeking to renew existing licenses after January 1, 2027. As drafted, the bill provides that applicants for a retail license or renewal thereof must satisfy the new location restrictions. This language raises a serious question. What happens to a retailer that has held a valid license for years but happens to be located within 500 feet of another licensed retailer or a recreational facility or another newly defined protected location? Many Pennsylvania retailers established their businesses in reliance on existing law. They signed long-term leases, purchased property, hired employees, and invested substantial capital with the expectation that they could continue operating so long as they complied with state requirements. HB 2295 creates the possibility that these businesses could be denied renewal of their licenses through no fault of their own. This concern is particularly acute because the bill establishes a 500-foot separation requirement between licensed cigarette retailers. In many commercial areas, downtown districts, neighborhood shopping centers, and convenience retail markets, retailers are commonly located within 500 feet of one another. A retailer that has operated responsibly for decades could suddenly find its ability to continue doing business called into question simply because another licensed retailer is nearby The bill also creates uncertainty regarding future changes in surrounding land uses. A retailer that lawfully obtained a license years ago could potentially become noncompliant if a new recreational facility or a use center or a protected use is established nearby. businesses should not face the prospect of losing their licenses because of circumstances entirely outside their control. The economic consequences could be significant. For many convenience stores, gas stations, and neighborhood retailers, tobacco sales remain an important driver of customer traffic. Customers who buy tobacco products frequently purchase fuel and beverage, food, lottery products, and other merchandise during that same visit. Restricting retailers' ability to maintain their licenses can therefore affect far more than tobacco sales. It can reduce overall store revenue, threaten jobs, weaken local businesses, and diminish economic activity in communities across Pennsylvania. If the committee wishes to establish new location standards for future retail licenses, that should do so in a manner that protects existing businesses that have operated lawfully under current law. At a minimum, HB 2295 should be amended to expressly provide that any retailer holding a valid cigarette license before the effective date may continue to renew and operate at its existing location, notwithstanding the new distance requirements. Without such protections, HB 2295 creates uncertainty for thousands of existing Pennsylvania retailers and risks unintended consequences that extend far beyond the bill's stated purpose. Thank you for your time and consideration. We respectfully request that the committee amend 2295 to provide a clear grand filing protections for existing licensed retailers or decline to advance the bill in its current form. Thank you, and I would be happy to answer any questions.

Well, I think that you hit on the key word there, enforcement. It sounds like an enforcement issue to me, the first presenter talking about all the shops you cited in the Philadelphia area. That also sounds like an enforcement issue. My folks are responsible retailers. They are very aware of what the law is about age sales under 21, not allowed, obviously, at the federal level or the state level. And I think if you've got shops that are doing that, you need to call on local law enforcement if that's appropriate and find out who the bad actors are and do something about that particular location or locations. I'm sure there's probably more than one as cited by one of the previous testifiers. But it's really an enforcement issue as far as I understand it, the way it was explained here and what you just said, Chairman. So I've got to think that that's where the resources ought to go, the enforcement.

well if I may interject on just a thought on that first of all I've never seen Dunkin Donuts with a vape shop in it so that's a come to Bethlehem Pennsylvania I also as customer of Dunkin Donuts at other locations that sell only donuts and coffee. There's one about halfway to Harrisburg that's a great place. But this Dunkin' Donuts in Bethlehem, Pennsylvania is marketing themselves as a vape shop.

I just have a question.

Representative Waxman?

Okay. Thank you. But I was just wondering because you mentioned 15 shops on a street. they couldn't all be within 500 feet. So just wouldn't the ones closest to the school or playground be shut down? It wouldn't really address that issue. So my thoughts are, wouldn't that be more local government that you would go to and say, okay, we need an ordinance where you can't have so many within a range or something? I think that's more local than state that you had brought up. Sure.

But did you start at your local level and go to their meetings and try to get a handle on it immediately? Because they have more control.

And it sounds like you're looking for a quick solution, and I think that would be locally.

Okay, and I sort of have some concern with this only because of the grandfather thing. I went to Derry High School. There's a gas station right across the street. It's been there since I was a kid, and I'm not young. So I would hate to see that be affected. That business is thriving, and I don't see the kids walking over there. The school has rules about that. They have cameras. I think you get a stiff penalty with the school if you're a student and you go over there. So, you know, I'm just worried about that grandfather clause not being in.

Yeah, I just wanted to address, I think that sometimes people who are not from Philadelphia are not really fully kind of understand the city of the first class and the density of our neighborhoods and the tremendous amount of work that our public safety agencies, our L&I, the police department, I mean, there are a lot of demands on their time. And so the enforcement, you know, conversation moves quickly to a conversation about is there anything that can be done, you know, in the law, specifically because it's just we don't have the resources locally to do that with all the other challenges and all the other things that people are facing. and all the other issues that we have, public safety issues that we have, some of which were unfortunately on display over the weekend. So I think that that's really what has driven people to be looking for solutions, both from city council and from the legislature, that will in fact give us the tools to regulate these things and prohibit them from being in places that they shouldn't. I will also just add that I am not unsympathetic to the General Lady's point about long-time established realtors that do a lot of different kinds of business, not just tobacco, gas stations, your wah-wahs, your sheets, things like that. So we do want to be sensitive to that, and we are hearing that feedback. And so I think that we're open to conversations around how do we make sure that this is capturing the bad actors first and foremost and the folks who are kind of strangling our commercial corridors and then also provides a space for some of these other retailers. I will say that retailers also could just choose not to sell tobacco. If they have a lot of products and services that they're selling from where they are, they could just choose not to sell tobacco. But, you know, I understand that there are concerns about that, and so we're willing to talk to folks about that. Thank you.

Hi. I just wanted to briefly speak to the questions from kind of a model policy area. I work on this policy across the mid from Pennsylvania down to South Carolina and also in Tennessee Kentucky and West Virginia So these questions are not unique to your state but the specific locality needs are unique to every locality. What I can say is we always recommend kind of looking at enforcement, but also looking at retailer density as things that can work together in concert. We have some model policy suggestions that we can make. And if that's something that we can help with. We're happy to do that as you're working on this legislation. We have some models that are working both with limiting the number of retailers and also structuring enforcement, the way you pay for enforcement, and then making sure you are enforcing to really weed out the bad actors that are retailers and not punish the ones that are following the law, that are not doing anything to get products in the hands of kids that really legally should not have them. And so that's something we're happy to help whomever would like to discuss it with. But it is something that we talk about. Enforcement always comes up when we talk about retail or density. And we do often talk about them together because they do kind of go hand in hand. If you limit the number of stores that you have to enforce, it becomes easier for everyone. But that is a conversation that we have frequently in many states and many localities. And I'm happy to work with the the bill sponsoring anyone else to talk about what some options are.

related to retailer density. And I have a number of other states that are working. We have several states in the mid-Atlantic who have no retail enforcement. We have several that have, like Pennsylvania, they have a license, they have an enforcement structure, they have retailer density, but it really isn't up to date and it isn't meeting the needs of the state. So, you know, I'm working on that with Tennessee, with Kentucky. We just did some in West Virginia. and every state is a little bit different in terms of what they need. But, you know, I can say that this is something that the proliferation of retailers, especially near youth, is something that's coming up in places. And we are looking at different solutions depending, as was mentioned before, on what's preempted and what's not in a state. There are different alternatives. So, yeah, so definitely we are seeing some things that are working really well. And some states are coming to us just like this and saying, hey, what can we do? And we're happy to help figure out what the best solution is. But the provisions in this bill are definitely something that's always part of the conversation. Because if you reduce the number of retailers, it becomes easier to figure out who the bad actors

Yeah, no, I appreciate, obviously, it's a problem with our young people, but I do think there's three or four things that, I mean, it kind of stood out. I was a former township supervisor in Lancaster County. This would never happen, and this would never happen with me being a township supervisor. This, and we actually, we did nip in the bud something similar with what you call, you know, no, no, no, no. It was any time like sin, sin, sin businesses or whatever. And we dealt with that. I do. I do think it's we are a commonwealth. I do think we're different than other states around us. I do think we have a lot of local control. I do think it's a zoning issue. And to begin with, and the second, I think it's an enforcement issue to kind of think about that. The other thing that I guess I am concerned about is I don't know. I mean, we need an amendment. I guess we've got to figure out how to bail out. Who's going to pay the businesses that – I mean, we've got to come up with a way to compensate the businesses that are legitimate. I mean, we've got to pay them. If they're fairly licensed and they've been here for a lot of years, we've got to find a methodology here to pay them for taking them out of business. And I'd like to know maybe how we're going to do that. I mean, that to me is important that we need to do that. But then fourth, I mean, it's interesting, and the gentleman, the maker of the bill probably has a good point. And Philadelphia is a different animal than a lot of other counties and municipalities. And I do think, and I'm sitting with the former executive director of local government for many years, I do think that if the problem is aspirated in Philadelphia, that maybe we should put an amendment on this bill to say this bill applies to the cities of the first class. if it's that serious in Philadelphia. That might be something to think about. But I do think for all the other reasons, I do think, and the gentleman probably doesn't understand Lancaster County. He might not understand Philly. He might not understand Lancaster County either. So I'm just saying that, but I do think, I just know out in the rest of the state, we're working to make sure this stuff doesn't happen. And anyway, I don't know how we shut down an honest business. I have a real problem with that as part of this as well. And I understand the problem with the schools and the kids. I mean, it's a problem. We just voted on a bill yesterday about, you know, they're doing this gas station heroin. You know, it's a problem. So I get it. I get it. But I also get to we have rules and regulations and standards in place to protect our businesses, too. And it's unfair when a legitimate business has to be shut down. I'm just just saying. But maybe there needs to be consideration of when he brought up that the problem is really bad in the city of the first class then maybe that what we need to do And I certainly have no problem with a business

Thank you, Chair. I'll be short. I just wanted to comment because I know members of the committee have been talking about how this may be a Philadelphia issue. But in fact, Chair Griner, you actually just mentioned that we recently passed a bill to regulate the sale of gas station heroin, which is sold in a lot of smoke shops like the ones we're talking about, not just in Philadelphia. I mean, we've talked about regulating Kratom, K2, all these synthetic substances that are in a lot of businesses like the ones we're talking about, not just in Philadelphia. So I know we're talking about a particular Philadelphia issue in terms of testimony, but I think we actually have a track record in the legislature of trying to address these kinds of regulatory issues where these smoke shops are abusing the fact that some of these substances are not regulated currently to skirt the rules. So I do think it's appropriate for this to be a statewide piece of legislation because it's a statewide problem, and we actually have a history of addressing some of the same substances that are part of the conversation. So I just wanted to add that to the discussion.

I don't disagree with that, but then that's what I'm saying. Let's target the product. Let's not target 500 feet that's already taken care of by zoning in most of the Commonwealth and by existing businesses that are already here. I mean, so I'm not disagreeing. We don't have a problem, but I don't know whether this to me isn't the solution. I'm just going to be up front with you, but thank you.

representative Mako thank you mr chairman and I guess this is for the maker of the bill I am not familiar with this but how does this stack up with the marijuana dispensaries in Pennsylvania I am a heavy machinery operator, so I'm not trying to lose my license, so I don't partake in that. But Johanny and I were just looking this up. It's $21 to buy tobacco in Pennsylvania, but it's $18. You can get your medical marijuana card, and let's be real. You go into any city anywhere in this country, and it smells like weed. How does this stack up with medical marijuana dispensaries?

The only reason why I brought it up is because you can be 18 with a medical marijuana cart and not saying that everyone's abusing it but there could be abuses and it could you know what i mean if the point is to get this away from high schools that that was my intent um that's like i said it's not a gotcha question i'm just i don't know the answer and and also i would just point out that the regulations that exist for medical dispensaries are pretty strict and are there's a lot of regulation over them when we did that here in the general assembly it was prior to my time, but there's just so many overlays of regulations that exist that do not exist for tobacco retailers in any way. And I think that level of control, I mean, there are some places in Philly that just don't have any dispensaries because local officials didn't want to put them there. So, gotcha. Thank you. This is my first state hearing, so I'm not sure if I'm supposed to be weighing in or not on anything.

Okay So to answer your question medical marijuana dispensaries are outlined in the Philadelphia Zoning Code That one area that we can regulate We've tried on multiple occasions to get regulations into the zoning code for tobacco sales. And this is one area that we've been told time and again that we're not allowed to add into the zoning code because state law preempts it. So for whatever reason, if the state has a different opinion on that and they're going to allow any city to control the zoning of it, but every time that we've asked, we've been told no because state law for tobacco is preempted. So medical marijuana dispensaries are a category in the Philadelphia Zoning Code. We absolutely have been told that we're not allowed to add in tobacco sales.