Pennsylvania Restaurant & Lodging Matters

FALL/WINTER 2016

The

Legislative Issue

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PRLA 2016 Officers CHAIRMAN John Graf Priory Hospitality Group Western Chapter VICE CHAIRMAN Stephen Musciano Aramark at PNC Park Western Chapter TREASURER James Gratton Marriott International Philadelphia Chapter IMMEDIATE PAST CHAIRMAN Jeff Cohen Smallman Street Deli/Weiss Provision Company Western Chapter PRLA STAFF PRESIDENT & CEO John Longstreet | jlongstreet@prla.org

inside this issue

OPERATIONS MANAGER Eric Adams | eadams@prla.org EXECUTIVE ASSISTANT Vicki Zeppa | vzeppa@prla.org DIRECTOR OF MEMBERSHIP DEVELOPMENT—EAST Brenda Mendte | bmendte@prla.org DIRECTOR OF MEMBERSHIP DEVELOPMENT—WEST Tom King | tking@prla.org director of Membership development—CENTRAL Joseph Ambrosio | jambrosio@prla.org Member Services Manager Christine Preuss | cpreuss@prla.org

4

Industry Outlook

5

Legislative Champions of the Hospitality Industry

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2015/2016 Legislative Session Review

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ServSafe Schedule

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Political Action Committee Contributions

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Supporters of the Hospitality & Tourism Industries

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Legislative Corner

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Member Milestones

20

Legal Docket

21

Welcome New Members

Membership Engagement Coordinator Gisela Kibler | gkibler@prla.org Director of Finance & Human Resources Diane Sherwood, CPA | dsherwood@prla.org Vice President of Government Affairs Melissa Bova | mbova@prla.org Government Affairs Specialist Mary Yoder | myoder@prla.org director of education Hope Sterner | hsterner@prla.org DIRECTOR OF EVENTS & ENGAGEMENT Heidi Howard, CMP | hhoward@prla.org DIRECTOR OF COMMUNICATIONS Stephanie Otterson | sotterson@prla.org ACCOUNTING MANAGER Paula Judd | pjudd@prla.org Professional Services Provided by GENERAL COUNSEL Shumaker Williams, P.C. Keith Clark GOVERNMENT AFFAIRS Pugliese Associates, Harrisburg Lou Biacchi Frank DiCicco Associates, Philadelphia Andrew Zalenski Accountant and Independent Auditors Brown, Schultz, Sheridan & Fritz John Bonawitz, CPA investment advisors Conrad Siegel Tara Mashack-Behney Pennsylvania Restaurant & Lodging Matters is a publication of the Pennsylvania Restaurant & LODGING Association 100 State Street, Harrisburg, PA 800-345-5353 | www.prla.org | info@prla.org Sarah DiCello, Publications Manager 717-238-5751 x118 sarah@thinkgraphtech.com For Advertising Information: Alexis Kierce, Account Manager 717-238-5751 x119 alexis@thinkgraphtech.com

Pennsylvania Restaurant & Lodging Matters is published quarterly by the Pennsylvania Restaurant & Lodging Association, 100 State Street, Harrisburg, PA 17101, tel 800-345-5353, and is a benefit of membership in the association. Articles do not necessarily reflect the view or position of the Pennsylvania Restaurant & Lodging Association. Editorial coverage or permission to advertise does not constitute endorsement of the company covered or of an advertiser’s products or services, nor does Pennsylvania Restaurant & Lodging Matters make any claims or guarantees as to the accuracy or validity of the advertiser’s offer. ©2015 All rights reserved. No part of this publication may be reproduced in print or electronically without the express written permission of the Pennsylvania Restaurant & Lodging Association.

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FALL/WINTER 2016

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Pennsylvania Restaurant & Lodging matters

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INDUSTRY outlook Welcome to the Legislative Issue.

Legislative advocacy is one of the biggest, if not THE biggest, services we offer to you. With the conclusion of the 2015/16 state legislative session and (finally) the November elections, it’s appropriate we close out the year with this issue—a review of what we accomplished in Harrisburg and beyond.

This issue focuses on where we stand with our association’s legislative priorities, how the legislature voted on our issues and who emerged through the rhetoric as champions of our industry.

The Presidential election is over, now what? In our chapter meeting updates over the last six months we have pointed out that one of the biggest issues facing the industry has been economic uncertainty, almost immediately after the results were announced restaurant stocks shot up. We hope that the unit level business follows these trends and that we see a rebound in for the industry.

Per Align Public Strategies, “…[we] experienced our very own American version of the “Brexit Effect. President-elect Trump’s victory was a vote against Washington, against politics as usual and against the ‘system.’”

So, as the nation processes what a President-elect Trump presidency may mean for individuals and business, let’s look at eight issues that impact our industries. Our sources include Align Public Strategies, the National Restaurant Association and Hotel News Now, and a little bit of conjecture on our part.

1. Minimum wage President-elect Trump has mentioned a $10 minimum wage but appears to favor leaving this decision to the states so we don’t expect the federal minimum wage to change.

2. Overtime regulations Given Presi­dent-elect Trump’s background in the hospitality industry, we may see relief in labor regulations. The federal district court for the Eastern District of Texas granted an emergency request to put a hold on the December 1, 2016, effective date for the new federal overtime rule.

Track how this unfolds in our weekly Legislative Update.

3. Paid leave While President-elect Trump hasn’t taken a position on paid leave, he has detailed a parental leave policy that included six weeks of paid leave and an earned income tax credit for dependent care.

4. Affordable Care Act President-elect Trump campaigned extensively on repealing and replacing the Affordable Care Act. It is expected that he will hand off healthcare policy to House Speaker Paul Ryan and that the House of Representatives have some alternative plans in the waiting 5. Tax His proposed corporate-tax reductions could benefit businesses. He’s also proposing to reduce spending. Congress, regardless of party control, rarely reduces spending so many economists are predicting a significant increase in the deficit.

John Graf

As the nation processes what a President-elect trump presidency may mean for individuals and business, we look at issues that impact our industries: minimum wage, overtime regulations, paid leave, affordable care act, tax, trade, immigration and other concerns.

8. Other Washington DC will be closed to labor unions so look for labor groups to refocus their efforts to an even greater degree on the cities. Also, how will international tourism be affected, not just by the rhetoric but by policies that could influence ease of access through visa regulations or restrictions? The hotel industry is anticipating a slowdown or decline in foreign travel to the U.S. Thank you for your continued support. With members, we can do anything!

6. Trade President-elect Trump pledges to rip up old deals and introduce tough trade measures, especially against China.

Specifically, he has indicated that he is not anti-trade but the deals must be “good.”

Warm regards,

7. Immigration An estimated 10 percent of the restaurant industry work force are immigrants, including undocumented workers. President-elect Trump’s policies could potentially create some worker shortages for employers who depend on migrant labor and visa workers. It would also be logical to expect greater enforcement regarding the hiring of undocumented workers.

John Graf Chairman of the Board

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John Longstreet

John Longstreet President & CEO

Legislative Champions of the Hospitality Industry Now that the 2015/16 legislative session has wrapped up, PRLA would like to take this opportunity to thank those legislators who have fought for and helped protect our industry during the session. While many legislators have supported our industry and our priorities in various ways, the following individuals stood out among the rest:

Two-time winner

Rising star

Retiree of the Session

Sen. Guy Reschenthaler

Rep. Seth Grove

Rep. Paul Costa

(R—Westmoreland)

(R—York)

(D—Allegheny)

(R—Allegheny)

(R—Chester)

Upon taking over as Chairwoman of the Senate Community, Economic and Recreational Development Committee, Sen. Kim Ward brought the Senate’s attention back to the importance of the tourism industry in Pennsylvania. The Senator was a key leader in passing Act 18, hotel tax reform, for her efforts in ensuring that piecemeal hotel tax increases would end and the funds be used properly.

You name any issue the hospitality and tourism industries face and Rep. Grove is ready to either fight for or defend the industry. Some of his key accomplishments include:

In a legislature that seems more partisan than ever, Rep. Paul Costa is an elected official who is willing to sit down with everyone and listen to their point of view, be helpful, and ensure that common sense legislation makes it across the finish line. Rep. Costa, as the minority chair of the House Liquor Control Committee, was key in garnering the bipartisan support needed to pass Act 39. In addition, he is a proud supporter of the restaurant industry and continues to support PRLA’s alcoholrelated priorities of ensuring real wholesale pricing for licensees, a level playing field and consumer convenience—while preserving the value of licenses.

It’s rare to see a freshman legislator willing to take on key issues of the industry.

Sen. Reschenthaler has done exactly this through the power of his vote this session.

In addition to voting in line with PRLA’s priorities, he has expressed his desire to close the online travel company loophole and bring spirits into the conversation as the next step in consumer convenience. PRLA is excited to work with the Senator on these and other issues in the next session.

The original plan was to retire after the 2013/14 legislative session.

Things changed. Rep. Chris Ross ended up staying for another two years, taking on the never easy chairmanship of the House Liquor Control Committee. Under his leadership, and for the first time in years, there was a hearing on the issues that licensees face in the current system. Rep. Ross made it his priority to pass legislation that would truly help licensees.

PRLA is grateful to him for bringing long overdue attention to the struggles our members have faced and for fighting for us during his time as chairman.

Sen. Kim Ward

• He once again was the prime sponsor of PRLA’s paid leave preemption legislation.

• Was a key advocate for the industry in passing Act 18— hotel tax reform.

• Filed a “right to know” request for the agreement Airbnb made with the Department of Revenue.

• Immediately moved to file legislation that would bring back the uncapped vendors allowance to businesses.

Rep. Chris Ross

• Vocal opponent of any broad-based tax increases as a solution to balancing the budget until all current budget revenues are accounted for.

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2015/2016

Legislative Session Review No budget  budget  unbalanced budget This two-year legislative session has not been a good one for statewide budgets.

With the House’s Republican party fractured into three factions, a Governor who thought that just because what he thinks is right should be right for everyone, and a pension deficit in the tens of millions, June 30, 2015, came and went with no budget in sight. January 1, 2016, came and went with no 15/16 budget in sight. It wasn’t until March 2016, when the Governor and legislature threw in the towel, that a bare minimum budget was passed just so elected officials could say they did their jobs.

The 2016/17 budget’s timing was much better than the previous year’s attempt, but not so much in terms of being balanced. The full budget package was passed by mid-July. There was the small hiccup of the budget’s funding mechanisms either weren’t passed or are bringing in less revenue than anticipated.

The state will likely be out of money come March.

Paid leave preemption Despite passage of SB 333 in the Senate with a vote of 37-12, the House failed to pass the legislation that would preempt local municipalities from mandating paid leave requirements on business. The Governor also threatened to veto the bill if it ever made it to his desk.

Taxes Vendors allowance The business industry took a hit when the legislature decided in the 2016/17 budget to cap the 1 percent vendors allowance for businesses who remitted sales tax on time. The allowance, which was previously uncapped, was capped at $25/month.

Broad based taxes No broad-based tax increases were passed in the two-year legislative session.

Alcohol-related items SLO acceptance In January 2015, the PLCB stopped accepting special liquor order (SLO)

applications, citing understaffing. Because of PRLA’s strong relationship with the Board, the PLCB reversed this decision within 24 hours.

PLCB regulatory changes Over the course of two years, the PLCB permitted licensees to deliver beer and for beer distributors to sell 12-packs.

No privatization of the PLCB… Privatization of the PLCB was passed by the House and Senate in 2015—and promptly vetoed by the Governor.

Airbnb In June, Airbnb signed a confidential agreement with the Pennsylvania Department of Revenue. The agreement stated Airbnb would remit the state occupancy tax on behalf of their listings, but would not be required to be audited to ensure they are remitting the correct amount. The agreement also did not require them the remit the county occupancy tax.

Local politics

…but, we got Act 39

Mandated paid leave

The most comprehensive alcohol reform bill since prohibition was passed by the legislature in June 2016, which included important priorities such as wine-togo, SLO relief and bringing additional R licenses into the marketplace.

The past two years brought a paid leave mandate in Philadelphia, an attempted paid leave mandate in Harrisburg that never moved and a paid leave mandate in Pittsburgh that PRLA stopped via a lawsuit.

Hotel taxes/tourism funding

Allegheny County Executive Rich Fitzgerald filed legislation that would have required all restaurants to post an A, B or C letter grade correlating to their inspection results on the front of their business. Through the efforts of PRLA and the Western Chapter, this legislation was voted down by a vote of 13-1.

Act 18 Through the efforts of PRLA’s members, particularly our newly added destination marketing organizations, Act 18 was passed in April 2016. The Act enables 57 counties to increase their local hotel tax to five percent and tightens the definitions to make sure the funds are used for their intended purpose of tourism promotion— putting heads in beds.

Statewide tourism funding With financial support from a variety of PRLA members, we commissioned a study that finally showed the negative impact the lack of statewide tourism funding has had on the hospitality industry. We spent a good portion of 2016 educating legislators on the return on investment the state would see if they increased the funding for statewide tourism promotion.

Pennsylvania—Pursue Your Happiness The state tourism office revealed a new motto for the Commonwealth of Pennsylvania—Pursue Your Happiness.

This is to replace the ever-changing mottos of the state’s past. An increase in statewide tourism funding would help in promoting this new motto, which quite eloquently says Pennsylvania has it all.

6 • Pennsylvania Restaurant & Lodging matters • FALL/WINTER 2016

Restaurant grading

Cameras at licensees Philadelphia City Councilman Curtis Jones filed legislation that would have required all licensees to install a camera at the door of the premise. After PRLA explained some of the logistical impossibilities, he decided not to pursue the legislation.

Wage theft The City of Philadelphia created a wage theft advisory board that would investigate incidents of wage theft in the City.

Sugary drink tax Philadelphia passed a sugary drink tax, which is more accurately known as the non-alcoholic beverage tax, that will assess 1.5 cents per ounce on each non-alcoholic beverage sold in the City.

The law, which is scheduled to take effect January 1, 2017, is currently being challenged.

Political Action Committee Contributions The chart starting on page 9 lists what campaigns PRLA contributed to via our PAC, and how the recipients of those contributions voted on PRLA’s major policy issues (X supported PRLA’s position, O opposed PRLA’s position and – were not applicable). This list also does not reflect committee votes, where numerous legislators supported PRLA policies with their committee votes.

The votes for the following PRLA priorities are reflected in the following pages. Please reference the number listed with each priority to the corresponding column in the chart.

Priority 1: Paid leave preemption (SB 333) Priority 2: Privatization of wine and spirit sales (HB 1690) Priority 3: Liquor Reform (Senate/House on concurrence) Priority 4: Hotel tax reform (HB 794) Priority 5: Tax code (HB 1198)

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Campaign Amount Priority Priority Priority Priority Other votes/notes of interest

1 3 4 5 Sen. Jake Corman (R)

$3,000

X

X

X

O

Majority Leader in Senate

Sen. Joe Scarnati (R)

$3,500

X

X

X

O

President Pro Tempore

Sen. Pat Stefano (R)

$500

X

X

X

X

Sen. Kim Ward (R)

$500

X

X

X

X

Sen. Tom McGarrigle (R)

$500

X

X

X

X

Sen. Lisa Baker (R)

$500

X

X

X

O

Sen. Lisa Boscola (D)

$250

X

O

X

O

$1,000

—

X

X

X

Sen. Camera Bartolotta (R)

$500

X

X

X

X

John DiSanto (R)

$500

—

—

—

—

Scott Martin (R)

$500

—

—

—

—

Sen. Larry Farnese (D)

$500

O

O

X

O

Sen. Jim Brewster (D)

$500

X

O

X

O

Sen. Guy Reschenthaler (R)

$500

—

X

X

X

Sen. Tom Killion (R)

Chair, Tourism Committee

Chair, Labor & Industry Committee

Minority Chair, Tourism Committee

Campaign Amount Priority Priority Priority Priority Other votes/notes of interest

2 3 4 5 Rep. Seth Grove (R)

$1,000

X

X

X

X

Rep. Frank Farry (R)

$300

O

X

X

—

Anthony Pugliese (R)

$250

—

—

—

—

Rep. Karen Boback (R)

$300

X

X

X

X

$3,500

X

X

O

X

Rep. Dave Hickernell (R)

$400

X

X

X

X

Rep. Craig Staats (R)

$250

X

X

X

X

Rep. Mike Turzai (R)

$2,500

X

X

X

O

Rep. Doyle Heffley (R)

$300

X

X

X

X

Rep. Mindy Fee (R)

$250

X

X

X

X

Rep. Warren Kampf (R)

$600

X

X

X

O

Rep. Paul Costa (D)

$500

O

X

X

O

Minority Chair, Liquor Committee

Rep. Jaret Gibbons (D)

$500

O

X

X

X

Minority Chair, Tourism Committee

Rep. Russ Diamond (R)

$250

X

X

X

X

Rep. John Maher (R)

Prime sponsor of preemption in House

Champion of tourism

Chair, Tourism Committee

Speaker of the House

KEY X • Supported PRLA’s Position O • Opposed PRLA’s Position — • Not applicable

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Supporters of the Hospitality & Tourism Industries The chart below lists all of Pennsylvania’s legislators and how they voted on PRLA’s major policy issues. This is not a definitive list of industry supporters since many legislators support PRLA policies that just did not see any action this year. This list also does not reflect committee votes, where numerous legislators supported PRLA policies with their committee votes.

The votes for the following PRLA priorities are reflected in the following pages. Please reference the number listed with each priority to the corresponding column in the chart.

Priority 1: Paid leave preemption (SB 333) Priority 2: Privatization of wine and spirit sales (HB 1690) Priority 3: Liquor Reform (Senate/House on concurrence) Priority 4: Hotel tax reform (HB 794) Priority 5: Tax code (HB 1198)

Members of the Party District Priority 2 Priority 3 Priority 4 Priority 5 House of PRLA PRLA PRLA PRLA Representatives Supported Supported Supported Opposed Rep. Acosta Rep. Adolph Rep. Baker Rep. Barbin Rep. Barrar Rep. Benninghoff Rep. Bizzarro Rep. Bloom Rep. Boback Rep. Boyle Rep. Bradford Rep. Briggs Rep. Brown R. Rep. Brown V. Rep. Bullock Rep. Burns Rep. Caltagirone Rep. Carroll Rep. Causer Rep. Christiana Rep. Cohen Rep. Conklin Rep. Cook-Artis Rep. Corbin Rep. Costa D. Rep. Costa P. Rep. Cox Rep. Cruz Rep. Culver Rep. Cutler Rep. Daley M.J. Rep. Daley P. Rep. Davidson Rep. Davis Rep. Dawkins Rep. Day Rep. Dean Rep. Deasy Rep. DeLissio Rep. Delozier Rep. DeLuca Rep. Dermody Rep. Diamond

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D R R D R R D R R D D D R D D D D D R R D D D R D D R D R R D D D D D R D D D R D D R

197 165 68 71 160 171 3 199 117 172 70 149 189 190 195 72 127 118 67 15 202 77 200 155 21 34 129 180 108 100 148 49 164 141 179 187 153 27 194 88 32 33 102

Pennsylvania Restaurant & Lodging matters

X Y Y N Y Y N Y Y N N N Y N N N N N Y Y N N X Y N N Y N Y Y N N N N N Y N N N Y X N Y

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N Y Y Y Y Y Y Y Y N Y Y Y N N Y N Y Y Y Y N N Y Y Y Y X Y Y Y X N Y N Y Y Y Y Y X Y Y

Y Y N Y Y Y Y N Y Y Y Y Y X Y N Y Y Y N Y Y Y Y Y Y N Y N Y Y Y Y Y Y N Y Y Y Y Y Y Y

Y Y N Y Y Y N N N Y Y Y Y Y Y N Y Y Y N Y N Y Y Y Y N Y N Y Y X Y N Y N Y Y Y N X Y N

Members of the Party District Priority 2 Priority 3 Priority 4 Priority 5 House of PRLA PRLA PRLA PRLA Representatives Supported Supported Supported Opposed Rep. DiGirolamo Rep. Donatucci Rep. Driscoll Rep. Dunbar Rep. Dush Rep. Ellis Rep. Emrick Rep. English Rep. Evankovich Rep. Evans Rep. Everett Rep. Fabrizio Rep. Farina Rep. Farry Rep. Fee Rep. Flynn Rep. Frankel Rep. Freeman Rep. Gabler Rep. Gainey Rep. Galloway Rep. Gergely Rep. Gibbons Rep. Gillen Rep. Gillespie Rep. Gingrich Rep. Godshall Rep. Goodman Rep. Greiner Rep. Grove Rep. Hahn Rep. Hanna Rep. Harhai Rep. Harhart Rep. Harkins Rep. Harper Rep. Harris A. Rep. Harris J. Rep. Heffley Rep. Helm Rep. Hennessey Rep. Hickernell Rep. Hill Rep. Irvin Rep. James Rep. Jozwiak Rep. Kampf Rep. Kaufer Rep. Kauffman Rep. Kavulich Rep. Keller F. Rep. Keller M. Rep. Keller W. Rep. Kim Rep. Kinsey Rep. Kirkland Rep. Klunk Rep. Knowles Rep. Kortz Rep. Kotik Rep. Krueger-Brankey Rep. Lawrence Rep. Lewis Rep. Longietti Rep. Mackenzie Rep. Maher Rep. Mahoney Rep. Major Rep. Maloney Rep. Markosek Rep. Marshall Rep. Marsico Rep. Masser

R D D R R R R R R D R D D R R D D D R D D D D R R R R D R R R D D R D R R D R R R R R R R R R R R D R R D D D D R R D D D R R D R R D R R D R R R

18 185 173 56 66 11 137 30 54 203 84 2 112 142 37 113 23 136 75 24 140 35 10 128 47 101 53 123 43 196 138 76 58 183 1 61 82 186 122 104 26 98 93 81 64 5 157 120 89 114 85 86 184 103 201 159 169 124 38 45 161 13 74 7 134 40 51 111 130 25 14 105 107

N N N Y Y Y Y Y Y N Y N N N Y N N N Y N N N N N Y Y Y N Y Y Y N N Y N Y Y N Y Y Y Y Y Y Y Y Y Y Y N Y X N N N N Y Y N N N Y Y N Y X N Y Y N Y Y Y

N N N Y Y Y Y Y Y X Y Y N Y Y N Y X Y N Y N Y N Y X Y Y Y Y Y Y Y Y Y Y Y X Y Y Y Y Y Y Y Y Y Y Y Y Y Y N Y N N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y

X Y Y N N N N Y N X Y Y Y Y Y Y Y Y N Y Y Y Y N Y N Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y Y Y Y N Y N N Y N N Y Y Y Y Y Y Y Y X N N Y N N Y Y N Y N Y N

Y Y Y Y N Y N Y N Y Y Y Y X N Y Y Y Y Y Y Y N N N X Y Y N N N Y Y N Y Y Y Y N Y Y N N N Y Y Y N N Y N N Y Y Y Y N N Y N N N Y Y N N N Y N Y Y N N Continued on page 14

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Members of the Party District Priority 2 Priority 3 Priority 4 Priority 5 House of PRLA PRLA PRLA PRLA Representatives Supported Supported Supported Opposed Rep. Matzie Rep. McCarter Rep. McClinton Rep. McGinnis Rep. McNeill Rep. Mentzer Rep. Metcalfe Rep. Metzgar Rep. Miccarelli Rep. Millard Rep. Miller B. Rep. Miller D. Rep. Milne Rep. Moul Rep. Mullery Rep. Murt Rep. Mustio Rep. Neilson Rep. Nelson Rep. Nesbit Rep. Neuman Rep. Oberlander Rep. O’Brien Rep. O’Neill Rep. Ortitay Rep. Parker Rep. Pashinski Rep. Payne Rep. Peifer Rep. Petrarca Rep. Petri Rep. Pickett Rep. Pyle Rep. Quigley Rep. Quinn C. Rep. Quinn M. Rep. Rader Rep. Rapp Rep. Ravenstahl Rep. Readshaw Rep. Reed Rep. Reese Rep. Regan Rep. Roae Rep. Roebuck Rep. Ross Rep. Rothman Rep. Rozzi Rep. Saccone Rep. Sainato Rep. Samuelson Rep. Sankey Rep. Santarsiero Rep. Santora Rep. Savage Rep. Saylor Rep. Schemel Rep. Schlossberg Rep. Schreiber Rep. Schweyer Rep. Simmons Rep. Sims Rep. Snyder Rep. Sonney Rep. Staats Rep. Stephens Rep. Sturla Rep. Tallman Rep. Taylor Rep. Thomas Rep. Tobash Rep. Toepel Rep. Toohil Rep. Topper

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D 16 N Y Y X D 154 X N Y Y D 191 N N Y Y R 79 Y Y N X D 133 N X Y Y R 97 Y Y Y N R 12 Y Y N N R 69 Y Y N N R 162 Y Y Y Y R 109 Y Y Y N R 41 Y Y N N D 42 X N Y Y R 167 Y Y N N R 91 Y Y Y N D 119 N Y N Y R 152 N N Y Y R 44 X Y Y Y D 174 N N Y Y R 57 X Y N X R 8 Y Y Y Y D 48 N Y Y N R 63 Y Y Y Y D 175 N N Y Y R 29 Y Y N Y R 46 Y Y N N R 115 Y Y Y Y D 121 N N Y Y R 106 Y Y Y Y R 139 Y Y X N D 55 N Y N N R 178 Y X Y Y R 110 Y Y N N R 60 Y Y X Y R 146 Y Y N Y R 168 X X X X R 143 Y Y Y Y R 176 Y Y Y Y R 65 Y Y N N D 20 N Y Y Y D 36 N Y Y Y R 62 Y Y Y Y R 59 Y Y N N R 92 Y Y Y N R 6 Y Y N N D 188 N X Y Y R 158 Y Y Y Y R 87 Y Y N N D 126 N Y Y Y R 39 Y X N N D 9 N Y Y N D 135 N N Y Y R 73 Y Y N N D 31 N X Y X R 163 Y Y N Y D 192 X X X Y R 94 Y Y Y N R 90 Y Y N N D 132 N Y Y Y D 95 N Y Y Y D 22 N Y Y Y R 131 Y X Y N D 182 N N Y Y D 50 N Y Y X R 4 Y Y Y X R 145 Y Y Y N R 151 Y Y N Y D 96 N Y Y Y R 193 Y Y Y N R 177 Y Y Y Y D 181 N N X Y R 125 Y Y Y Y R 147 Y Y N Y R 116 N Y N Y R 78 Y Y N N

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Members of the Party District Priority 2 Priority 3 Priority 4 Priority 5 House of PRLA PRLA PRLA PRLA Representatives Supported Supported Supported Opposed Rep. Truitt Rep. Turzai Rep. Vereb Rep. Vitali Rep. Ward Rep. Warner Rep. Watson Rep. Wentling Rep. Wheatley Rep. Wheeland Rep. White Rep. Youngblood Rep. Zimmerman

R 156 Y Y N N R 28 Y Y Y Y R 150 Y Y N Y D 166 N Y N Y R 80 Y Y Y N R 52 Y Y N N R 144 Y Y Y X R 17 Y Y Y N D 19 N Y Y Y R 83 Y Y N N R 170 N Y Y Y D 198 N N Y Y R 99 Y Y Y N

Members Party District Priority 1 Priority 3 Priority 4 Priority 5 of the PRLA PRLA PRLA PRLA Senate Supported Supported Supported Opposed Sen. Alloway Sen. Argall Sen. Aument Sen. Baker Sen. Bartolotta Sen. Blake Sen. Boscola Sen. Brewster Sen. Brooks Sen. Browne Sen. Corman Sen. Costa Sen. Dinniman Sen. Eichelberger Sen. Farnese Sen. Folmer Sen. Fontana Sen. Gordner Sen. Greenleaf Sen. Haywood Sen. Hughes Sen. Hutchinson Sen. Killion Sen. Kitchen Sen. Leach Sen. McGarrigle Sen. McIlhinney Sen. Mensch Sen. Rafferty Sen. Reschenthaler Sen. Sabatina Sen. Scarnati Sen. Scavello Sen. Schwank Sen. Smucker Sen. Stefano Sen. Tartaglione Sen. Teplitz Sen. Tomlinson Sen. Vance Sen. Vogel Sen. Vulakovich Sen. Wagner Sen. Ward Sen. White Sen. Wiley Sen. Williams Sen. Wozniak Sen. Yaw Sen. Yudichak

R R R R R D D D R R R D D R D R D R R D D R R D D R R R R R D R R D R R D D R R R R R R R D D D R D

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FALL/WINTER 2016

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Pennsylvania Restaurant & Lodging matters

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legislative corner

STATE FEDERAL LOCAL State Items

New House Liquor Committee chairman announced

Session ends for the year The full legislature worked into the night to wrap up the legislative session before heading home for the November 8 election.

Pension reform came within four votes of being passed but, at the end of the day, the House could not garner the support—which has been the problem with every pension bill considered over the past few years. While leadership elections will occur before the end of the year, the legislature is not expected to return to consider any other legislation before the next session begins.

After weeks of TV ads, mailers and everything in between—the election is over and the results are in: • Donald Trump, in an upset that no one predicted, won the Presidency.

• Pat Toomey (R) was reelected to the U.S. Senate, defeating Katie McGinty (D).

• No surprises in the Congressional races as all incumbents won reelection, while Dwight Evans (D) was elected to replace Chaka Fattah (D) in the Philadelphia seat, Lloyd Smucker (R) was elected to replace Joe Pitts (R) in Lancaster and Brian Fitzpatrick (R) was elected to replace his brother in the southeast.

• The Republicans have kept control of the U.S. House and U.S. Senate.

• Josh Shapiro (D) defeated John Rafferty (R) in the race for Attorney General.

• Eugene Depasquale (D) won reelection for Auditor General.

• Joe Torsella (D) won the PA state treasurer seat, defeating Otto Voit (R).

• The Republicans picked up three seats in the state Senate and will return with a veto-proof majority of 34-16. Incumbents that were defeated: Sean Wiley (D—Erie) and Rob Teplitz (D— Dauphin), Republicans also gained the seat vacated by John Wozniak (D—Cambria).

• The Republicans picked up three seats in the state House, as well, and will return with a majority of 122-81. Incumbents that were defeated: Jaret Gibbons (D—Lawrence), Tim Mahoney (D— Fayette) and Dave Parker (R—Monroe).

Pennsylvania Restaurant & Lodging matters

The “not a fix it, fix it bill” Legislation that would allow beer distributors to sell malt and brewed beverages in any size package and a few other changes to the liquor code passed the House (133-59) and the Senate (44-4).

It is on the Governor’s desk and he is expected to sign the bill. The bill also includes the following changes: • Tap handles do not need to be labeled.

Election results

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Rep. Adam Harris (R—Juniata) has been appointed the new majority chairman of the House Liquor Control Committee. He is expected to keep the position in the 2016/17 session.

• FALL/WINTER 2016

• Licensees may open at 9 a.m. on a Sunday.

• Pennsylvania brewers, distilleries, and wineries sales must be 50 percent of their own product if they are selling another Pennsylvania product.

PLCB Auction The PLCB released the winning bids for the licenses that were auctioned off on October 31.

• 37 out of 40 licenses were awarded.

• The highest license went to Cumberland County for $566,000.

• The average license cost was $212,000.

Gov. Wolf opposes statewide paid leave preemption Gov. Wolf participated in a White House press call to discuss ways to “bolster the middle class” where he stated that government should not deny municipalities the right to pass paid leave mandates. He also stated his opposition to SB 333, PRLA’s legislation that would preempt local municipalities from passing paid leave mandates. We continue to maintain our position that it is not the role of government to pass cookie-cutter mandates that do not take into consideration the difference between small, medium and large businesses. These are decisions that need to be made by the business owner not mandated by government.

Session Ends for the Year: Pension reform close to being passed Threat of Swipe Fee Increase Growing: Swipe fees may nearly double if bill passes Court of Common Pleas to Make Ruling on Sugary Drink Tax Lawsuit

Federal items Threat of swipe fee increase growing The U.S. House Financial Services Committee has approved a bill that would repeal the 2010 Dodd-Frank Law and the swipe-fee reforms that were included in the law. If the bill passes, current swipe fees will nearly double to previous rates that were in effect before Dodd-Frank was passed.

Oral arguments scheduled for November 16 The Commonwealth Court will hear oral arguments regarding the paid leave mandate in Pittsburgh on November 16. This is the appeal that was filed by the City of Pittsburgh and SEIU because the Court of Common Pleas ruled in PRLA’s favor by stating that Pittsburgh does not have the ability to pass a mandate on private businesses. Normally a panel of three usually review cases; however, the full Commonwealth Court will consider this case.

Drive-by lawsuits S. 3446 the ADA Education and Reform Act was recently filed by Sen. Jeff Flake (R—AZ) and Roger Wicker (R—MS), which would add a provision to the American with Disabilities Act that would provide businesses with a defined period of time to correct an alleged ADA violation before legal action can be taken. This bill is a companion bill to House legislation that was recently passed out of the House Judiciary Committee.

Don’t ignore “no-match” notices from IRS The IRS has mailed thousands of “no-match” notices to employers flagging errors in reports filed earlier this year under the Affordable Care Act. Please do not ignore these notices.

According to the IRS guidance, they will waive penalties if employers make a good-faith effort to correct the errors by December 31, 2016.

SERVING THE NEEDS OF

U.S. House passes overtime-delay bill

THE RESTAURANT AND HOTEL INDUSTRY

The U.S. House of Representatives, with a vote of 246-177, passed a bill that would move the overtime rule’s implementation date from December 1, 2016, to June 1, 2017. There is now a push to pass a similar bill in the Senate. While this is a promising vote, we expect any measure that gets to the President will be vetoed.

With this expectation in mind, please move forward with your plans to ensure compliance by December 1, 2016.

Acquisition, sale and financing of restaurants and hotels • Liquor license acquisition and sale • Defense of liquor license citations and enforcement actions • Dram shop liability • Structuring to limit liability • Employment law and wage & hour issues • Litigation, mediation and dispute resolution • Intellectual property protection including trademarks, copyrights and trade secrets • Tax, business and estate planning

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Local items Court of Common Pleas to make ruling on sugary drink tax lawsuit before year’s end The Court of Common Pleas has announced that it will make a ruling on the lawsuit filed against the sugary drink tax before the end of the year. The Supreme Court could also hear the case before the end of the year, but the Court of Common Pleas will at least determine if the law can take effect on January 1, 2017.

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MEMBER MILESTONES BUCKS-MONT CHAPTER

LANCASTER Chapter

The Fuge in Warminster hosted the inaugural Taste of BucksMont, an event highlighting the community’s best food, wine, beer and spirits while raising money for PRLAEF Scholarship Fund and the American Culinary Federation (ACF) Philadelphia Chapter, on November 17. The evening was full of food, music, libations, tastings, raffles and a silent auction.

BRANDYWINE CHAPTER

Nearly 100 golfers came out to support Lancaster Chapter’s annual golf outing, Gala for the Greens at Foxchase Golf Club in August.

Students from the Pennsylvania School of Culinary Arts provided snacks on the course, while host Foxchase presented dinner.

Thank you to the Tournament Committee, sponsors and purveyors for making this year’s event a success! northWEStern Chapter

Victory Brewing Company’s Bill Covaleski recently returned from a trip to Germany to brew Saison du Buff (the Stone, Victory and Dogfish collaboration brew created by Brewers Unite for Freedom of Flavor in 2003). Victory also recently launched Selene Saison and introduced a fun, exciting campaign for its biggest selling brand—Golden Monkey.

PJW Restaurant Group celebrated a 10-year collaboration with Victory Brewing Company honoring PJ Whelihan’s Copper Lager with a month long “Pour Ten More” festivities.

Melissa Bova, PRLA’s vice president of Government Affairs, provided an in-depth legislative update at the most recent Northwestern Chapter. Members and guests learned more about how their businesses will be affected by the state budget and liquor reforms as well as the federal overtime regulations which are effective December 1, 2016.

PHILADELPHIA CHAPTER

In October, Women in Hospitality-Philadelphia explored the world’s largest outdoor gallery and got to know Philadelphia’s stunning mural collection on a small group guided tour. Guests also enjoyed lunch at Fogo de Chao Brazilian Steakhouse.

Happy 20th Anniversary to Visit Philadelphia! What began as a three-year experiment to promote Philadelphia as a competitive leisure destination (originally known as the Greater Philadelphia Tourism Marketing Corporation), Visit Philadelphia has built the brand of the region that welcomed 41 million people to the region in 2015—a 54 percent increase over 1997. Visit Philadelphia has many initiatives on the horizon for 2017 and thanks to a generous grant the Pew Charitable Trusts, it also plans to increase promotional efforts around Historic Philadelphia over the next two years.

Victory Brewing Company’s Bill Covaleski and Ron Barchet (center), join PJW Restaurant Group’s Jim Fris and Bob Platzer in a toast to their 10-year collaboration.

CENTRAL CHAPTER

The Central Chapter held its 25th Annual Golf Outing on October 17 to benefit the PRLA Central Chapter Scholarship Fund and the Pennsylvania State Police South Central Club Cadet Camp, a free camp for youth, ages 13-15. A record 280 golfers enjoyed a spectacular, warm fall day at the Hershey Country Club’s East and West Courses. Thank you all the Golf Tournament Committee, event sponsors and purveyors for helping to make this year’s outing a success!

WESTERN CHAPTER

Aramark employees engaged in the company’s annual day of service to inspire families worldwide to make healthy food, nutrition and lifestyle choices. Aramark Building Community Day (ABC Day), takes place each September. This year’s efforts supported the company’s Health for Life 20 by 20 commitment to improve the health of American by 20 percent by 2020 in Continued on page 22

Congratulations to Randy Grassmyer on the opening of the Walnut Grove Smorgasbord in Harrisburg. Randy previously worked for Performance Good Group. The new restaurant is in the former Country Oven Restaurant which has been closed since 2007.

Keystone Chapter

The Quality Inn Milesburg hosted the November 17 chapter meeting, which featured a presentation by Choice Hotels on the Fair Labor Standards Act regulatory changes.

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Pennsylvania Restaurant & Lodging matters

• FALL/WINTER 2016

Aramark employees deliver their ABC Day donations to the Northside Common Ministries.

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LEGAL DOCKET

ask

The Attorney

Keith A. Clark, Esquire SHUMAKER WILLIAMS, P.C. General Counsel, Pennsylvania Restaurant & Lodging Association

Ruminations re: Act 18-2016 – Amendment of Enabling Legislation for 57 Counties – Part I

Keith A. Clark

This column represents some of our thoughts about Act 18 because of the substantial number of questions and issues raised since its effective date on April 20, 2016. It is not intended to be an outline of all the provisions. It is being published in two parts, of which this is Part I. The Act amended and consolidated language from two sections of the County Code (Section 1770.2 and Section 1770.6).

Section 1770.2 applied to 57 counties and has been replaced by Section 1770.10, which applies to the same 57 counties.

To the best of our knowledge, without substantial additional research, there have been no cases in Pennsylvania interpreting either the old Section 1770.2 or the new Section 1770.10.

Language which remains the same in both Section 1770.2 and Section 1770.10 includes: (a) the mandatory language in the old Section 1770.2(c) and the new Section 1770.10(c) which state in part: “the county shall distribute to the recognized tourism promotion agency all revenues received from the tax not later than 60 days after receipt of the tax revenues.”; and (b) the language in the old 1770.2(c) and the new 1770.10(d) requiring that the revenues from the special funds shall be used by the recognized tourism promotion agency … for any of the following purposes.” Pursuant to existing rulings regarding legal and legislative interpretation, the word “shall” is presumed to be mandatory language under the law.

In addition, the repetitious use of similar language in both the old and the new law, in our opinion, can be interpreted as a reinforcement by the legislature of its original intent under the old Section 1770.2 and the new Section 1770.10 that 20 •

all tax monies (less the allowed collection percent to the county) are to be transmitted to the tourism promotion agency, and the tourism promotion agency has the responsibility to assure that the funds are to be spent only for the allowed purposes designated by the Act. A TPA’s board of directors has the fiduciary responsibility to assure that the money is spent in accordance with the law. This was true under the old Act, as well as the new Act (but was frequently violated under the old Act by some counties).

One of the new provisions in Section 1770.10 is Section 1770.10(d)(4) which provides for certain rules that specifically apply to grants “that are directly and substantially related to tourism, or a business, convention or meeting travel destination within the county, augment and do not compete with private sector tourism or travel efforts, and improve and expand the county as a destination market as deemed necessary by the recognized tourist promotion agency. The following shall apply to grants awarded under this paragraph: (i) Grants require a cash or in-kind local match of at least 25 percent. (ii) Grants may not be used for signage that promotes a specific private entity on the situs of that entity, except where the signage also carries the logo of a recognized tourist promotion agency.”

Pennsylvania Restaurant & Lodging matters

• FALL/WINTER 2016

No piece of legislation is perfect nor can you secure all the answers to the issues raised by a piece of legislation.

Neither the terms “grant” nor “private sector” are defined in the Act. Thus, where there are ambiguous terms, the TPA should interpret such terms (such as “grants”) in a manner in which a “reasonable person” would interpret same.

The “reasonable man (person)” standard is generally a fiduciary standard applied by courts in reviewing a governance process by a board of directors. Generally, in our opinion, a “grant” is where money is provided to an entity by the TPA, versus a TPA expenditure directly to the ultimate purveyor who is providing services in accordance with Act 18.

When the TPA provides funds directly to a purveyor, as part of its check issuance process, it should be performing its due diligence to confirm that the expenditure is in accordance with Act 18.

We will continue our discussion of “grants” and other Act 18 issues in the next issue of Pennsylvania Restaurant & Lodging Matters.

Meanwhile, if you have any questions concerning this or other legal issues, please contact Keith A. Clark (717.909.1612 or kclark@shumakerwilliams.com) at Shumaker Williams, P.C., PRLA’s General Counsel.

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Candlewood Suites Grove City–Outlet Center Mercer

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Comfort Suites–Manheim/ Lancaster Manheim Crowne Plaza Harrisburg Harrisburg Great Wolf Lodge Scotrun

Clinton County Economic Partnership Lock Haven Mountaintop Lodge At Lake Naomi Pocono Pines Pennsylvania State Snowmobile Association Erie

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Warren County Visitors Bureau Warren

Smoothie King Pittsburgh

Hampton Inn & Suites Grove City Mercer

Streets on Carson Pittsburgh

Hilton Garden Inn Gettysburg Gettysburg

Center for Arts & Tech Brandywine Coatesville

The Forklift Cafe Dingmans Ferry

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City of Lancaster Office of Promotions Lancaster

Holiday Inn Express Grove City Mercer

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Vogel Holdings Inc. Mars

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MEMBER MILESTONES continued partnership with the American Heart Association. Steve Musciano volunteered as a project leader for the Aramark STAR Team of Pittsburgh. This year, Steve worked closely with each line of business on a food drive, producing a truck full of canned food for the local community. Way to go Aramark and Steve!

The Fairmont Pittsburgh is partnering with Children’s Hospital of Pittsburgh Foundation this holiday season. Several events are planned, including a happy hour event and overnight package both of which will benefit the Free Care Fund, a program that ensures every child in the region receives care regardless of their families’ insurance or ability to pay. To find out more about the holiday events to benefit the children’s foundation at Fairmont Pittsburgh, visit Fairmont.com/ Pittsburgh/promotions/special events.

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Contact: Bill Sturges, 717-439-8044 or Jim Brady, 717-580-5100 22 •

Pennsylvania Restaurant & Lodging matters

• FALL/WINTER 2016

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