HOUSE AMENDED
PRIOR PRINTER'S NOS. 1346, 1924 PRINTER'S NO. 1948
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1051
Session of
2024
INTRODUCED BY HUTCHINSON, DUSH, ARGALL, AUMENT, PENNYCUICK,
GEBHARD, YAW, BAKER, J. WARD, BROOKS, ROTHMAN, BROWN AND
CULVER, JANUARY 29, 2024
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
OCTOBER 8, 2024
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An <--
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," in procedure and administration, further
11 providing for review by board and providing for settlement
12 conference process.
13 AMENDING THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), ENTITLED "AN <--
14 ACT RELATING TO TAX REFORM AND STATE TAXATION BY CODIFYING
15 AND ENUMERATING CERTAIN SUBJECTS OF TAXATION AND IMPOSING
16 TAXES THEREON; PROVIDING PROCEDURES FOR THE PAYMENT,
17 COLLECTION, ADMINISTRATION AND ENFORCEMENT THEREOF; PROVIDING
18 FOR TAX CREDITS IN CERTAIN CASES; CONFERRING POWERS AND
19 IMPOSING DUTIES UPON THE DEPARTMENT OF REVENUE, CERTAIN
20 EMPLOYERS, FIDUCIARIES, INDIVIDUALS, PERSONS, CORPORATIONS
21 AND OTHER ENTITIES; PRESCRIBING CRIMES, OFFENSES AND
22 PENALTIES," IN CORPORATE NET INCOME TAX, FURTHER PROVIDING
23 FOR DEFINITIONS; IN PROCEDURE AND ADMINISTRATION, FURTHER
24 PROVIDING FOR PETITION FOR REASSESSMENT AND FOR REVIEW BY
25 BOARD AND PROVIDING FOR SETTLEMENT CONFERENCE PROCESS, FOR
26 CLOSING AGREEMENTS AND FOR REPORT TO GENERAL ASSEMBLY; AND,
27 IN GENERAL PROVISIONS, FURTHER PROVIDING FOR TIMELY FILING.
28 The General Assembly of the Commonwealth of Pennsylvania
 1 hereby enacts as follows:
2 Section 1. Section 2704(d.7) of the act of March 4, 1971 <--
3 (P.L.6, No.2), known as the Tax Reform Code of 1971, is amended
4 and the section is amended by adding a subsection to read:
5 Section 2704. Review by board.
6 * * *
7 (a.1) Extension for filing petition.--Notwithstanding any
8 provision to the contrary, the date for filing a petition
9 required under this article with the board may be extended by
10 the board upon:
11 (1) written application for good cause shown; and
12 (2) a finding that granting the application will not
13 prejudice the other party.
14 * * *
15 [(d.7) Compromise settlement.--The board shall establish
16 procedures to facilitate the compromise settlement of issues on
17 appeal. A compromise settlement shall be ordered by the board
18 only with the agreement of both the petitioner and the
19 department. The provisions of section 2707(c) shall be
20 applicable to compromise settlements under this section.]
21 * * *
22 Section 2. The act is amended by adding a section to read:
23 Section 2704.1. Settlement conference process.
24 (a) Settlement officer.--The board shall appoint one or more
25 individuals to serve as a settlement officer for a settlement
26 conference initiated under subsection (b), to whom the following
27 shall apply:
28 (1) A settlement officer may be either an employee of
29 the board or a third-party contractor retained by the board.
30 (2) A settlement officer:
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 1 (i) must be a citizen of the United States;
2 (ii) must be an attorney in good standing before the
3 Supreme Court of Pennsylvania or a certified public
4 accountant in good standing before the State Board of
5 Accountancy;
6 (iii) must have significant experience in a position
7 requiring substantial knowledge of Pennsylvania tax law;
8 and
9 (iv) may not be employed by the department, board or
10 the State Treasurer, other than in the capacity as a
11 settlement officer.
12 (3) A settlement officer shall:
13 (i) be fair and impartial and is not permitted to
14 preside over a settlement conference if the settlement
15 officer cannot conduct it in an impartial manner; and
16 (ii) disclose, as soon as practicable, all actual
17 and potential conflicts of interest that are reasonably
18 known to the settlement officer and could reasonably be
19 seen as raising a question about the officer's interest
20 in the outcome unless the petitioner and the department
21 consent in writing.
22 (4) The board may remove a settlement officer at its
23 sole discretion.
24 (5) The State Treasurer shall set the compensation for a
25 settlement officer.
26 (b) Request for settlement conference.--Notwithstanding
27 section 2704(f)(1), either party may submit a request for, or
28 the board may direct, a settlement conference to settle a
29 petition for review of a decision and order under the board's
30 jurisdiction. The request for a settlement conference shall be
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 1 submitted to the board, unless the settlement conference is
2 directed by the board, by filing a written request with the
3 petition or within 30 days of the petition being filed. The
4 board may allow settlement conferences after the deadline in the
5 exercise of discretion or upon application for good cause. The
6 following shall apply:
7 (1) The board may defer consideration of the petition
8 until after either party declines to participate in a
9 settlement conference or the settlement conference is deemed
10 terminated under subsection (e). If the board defers
11 consideration of the petition, the board shall issue a
12 decision and order disposing of the petition within six
13 months of the party's refusal to participate in a settlement
14 conference or termination.
15 (2) The party requesting a settlement conference shall
16 simultaneously notify the other party or parties and the
17 board of the request, unless the board initiated the
18 settlement conference.
19 (3) A request for settlement must provide a brief
20 description of the dispute and the relief requested. The
21 nonrequesting party or parties must file a written response
22 with the board and provide a copy to the requesting party in
23 support of or opposition to the settlement conference within
24 10 business days of the requestor's submission.
25 (4) The board, within five business days of receipt of
26 the response in support of or opposition to the settlement
27 conference, shall notify the parties in writing whether the
28 board will refer an appeal to a settlement conference.
29 (5) A petitioner may decline to participate in a
30 settlement conference upon providing the board with written
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 1 notice of its intent not to participate within five business
2 days of receipt of notice of the referral.
3 (c) Settlement conference.--The following shall apply to a
4 settlement conference requested under subsection (b):
5 (1) A settlement conference shall be held no later than
6 60 days from the date the board refers a case for settlement
7 conference.
8 (2) The settlement officer shall set the date, time and
9 place for each conference. The parties shall respond to
10 requests for conference dates in a timely manner, be
11 cooperative in scheduling the earliest practicable date and
12 adhere to the established conference schedule. The settlement
13 officer, in the exercise of discretion or upon application
14 for good cause, may reschedule a conference. The settlement
15 officer shall provide notice of the conference to the parties
16 in advance of the conference date.
17 (3) A settlement conference and related settlement
18 conference communications are private proceedings. A
19 representative of each party must attend each settlement
20 conference. A party is not required to attend each settlement
21 conference unless the party does not have representation.
22 Other individuals may attend a settlement conference only
23 with the permission of the parties and with the consent of
24 the settlement officer.
25 (4) A settlement conference may be conducted virtually
26 or in person.
27 (5) A settlement conference may not be recorded
28 electronically or in any other manner, regardless of the
29 consent of the parties.
30 (6) The following shall apply to representation at a
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 1 settlement conference:
2 (i) A party is not required to retain representation
3 for a settlement conference.
4 (ii) If a party retains representation, the party
5 may be represented at a settlement conference by any
6 individual of the party's choosing.
7 (iii) Each party must have a representative attend a
8 settlement conference who has the authority to consummate
9 a settlement, which shall include each party who has not
10 retained representation.
11 (7) The settlement officer shall conduct the settlement
12 conference in an informal manner with the purpose of
13 facilitating a settlement between the petitioner and the
14 department. The settlement officer is authorized to conduct
15 separate or ex parte meetings and other communications with
16 the parties, and any representatives of the parties, before,
17 during and after any scheduled settlement conference.
18 (8) Prior to and during the scheduled settlement
19 conference the parties and their representatives shall, as
20 appropriate to each party's circumstances, exercise best
21 efforts to prepare for and engage in a meaningful and
22 productive settlement conference.
23 (9) The parties are encouraged to exchange all documents
24 pertinent to the relief requested. The settlement officer may
25 request the exchange of memoranda on issues, including the
26 underlying interests and the history of the parties'
27 negotiations. Information that a party wishes to keep
28 confidential may be sent to the settlement officer, as
29 necessary, in a separate communication with the settlement
30 officer.
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 1 (10) Confidential information disclosed to a settlement
2 officer by a party in the course of a settlement conference
3 shall not be divulged by the settlement officer. The
4 settlement officer shall maintain the confidentiality of all
5 information obtained in the settlement conference, and all
6 records, reports or other documents received by the
7 settlement officer while serving in that capacity shall be
8 confidential. The settlement officer shall be subject to the
9 provisions and penalties of section 731 of the act of April
10 9, 1929 (P.L.343, No.176), known as The Fiscal Code.
11 (11) The settlement officer must return to each
12 respective party all documents containing confidential
13 information presented at the settlement conference within 30
14 days after the earlier of the date that the board accepts a
15 settlement, or the board mails its order deciding the case.
16 (12) A party must submit to the board any documents
17 intended to be used in support of the party's appeal. The
18 documents must be submitted in accordance with the rules and
19 procedures of the board for submitting additional evidence.
20 (13) The settlement officer shall not be compelled to
21 divulge confidential records or to testify in regard to the
22 settlement conference in any administrative, judicial or
23 other proceeding.
24 (14) A confidential or privileged document or other
25 record presented or included in a settlement conference is
26 exempt from access under the act of February 14, 2008 (P.L.6,
27 No.3), known as the Right-to-Know-Law.
28 (15) Each party to a settlement conference shall
29 maintain the confidentiality of the settlement conference and
30 shall not rely on or introduce as evidence in any
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 1 administrative, judicial or other proceeding the following,
2 unless agreed to by the parties or required by applicable
3 law:
4 (i) Views expressed or suggestions made by a party
5 or other participant with respect to a possible
6 settlement of the dispute.
7 (ii) Admissions made by a party or other participant
8 in the course of the settlement conference.
9 (iii) Proposals made or views expressed by the
10 settlement officer.
11 (iv) The fact that a party had or had not indicated
12 willingness to accept a proposal for settlement made by
13 the settlement officer.
14 (16) A settlement officer is not a legal representative
15 of any party and has no fiduciary duty to any party.
16 (d) Post-settlement conference procedures.--
17 (1) The settlement officer shall evaluate the merits of
18 a dispute during the settlement conference. The evaluations
19 shall be communicated to each party privately or, if the
20 parties agree, to all parties jointly. Unless parties agree
21 otherwise, evaluations shall be communicated orally.
22 (2) The settlement officer does not have the authority
23 to impose a settlement on the parties. Subject to the
24 discretion of the settlement officer, the officer may make
25 oral or written recommendations for settlement to a party
26 privately or, if the parties agree, to all parties jointly.
27 (3) In the event a settlement of all or some of the
28 issues in dispute is not achieved within the scheduled
29 settlement conference, the settlement officer may continue to
30 communicate with the parties for a period of time not to
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 1 exceed 30 days from the date of the settlement conference,
2 during which time the parties agree to negotiate in earnest
3 in an ongoing effort to facilitate a complete settlement.
4 (4) If the parties to a settlement conference come to an
5 agreement, the parties shall present the terms of the
6 settlement to the board for approval in writing signed by all
7 parties within 10 business days after reaching the
8 settlement. The settlement agreement shall be approved by the
9 board if the board determines the agreement is not contrary
10 to law.
11 (5) If the parties to a settlement conference cannot
12 reach a settlement of any or all of the issues, the board
13 shall proceed in accordance with the procedure specified in
14 this act and regulations.
15 (6) A settlement agreement shall not be considered as
16 precedent and cannot be appealed.
17 (e) Termination of a settlement conference.--The settlement
18 conference shall be terminated:
19 (1) by the board approving a settlement agreement by the
20 parties;
21 (2) by a written declaration by the settlement officer
22 that further efforts at a settlement conference would not
23 contribute to a resolution of the parties' dispute;
24 (3) by a written declaration of all parties that the
25 settlement conference is terminated; or
26 (4) when the settlement officer has represented in
27 writing to the board that there has been no communication
28 between the settlement officer and any party or party's
29 representative for 21 days following the conclusion of the
30 settlement conference.
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 1 (f) Exclusion of liability.--A settlement officer is not a
2 necessary or proper party in administrative, judicial or other
3 proceedings relating to the settlement conference.
4 Notwithstanding any provision of law to the contrary, parties to
5 a settlement conference under this section shall be deemed to
6 have consented that the settlement officer shall not be liable
7 to any party for any error, act or omission in connection with
8 any settlement conference conducted under this section. Parties
9 to a settlement conference under this section may not call a
10 settlement officer as a witness in litigation or any other
11 proceeding relating to the settlement conference. The settlement
12 officer is not competent to testify as a witness in any
13 proceeding related to the settlement conference.
14 (g) Rules and regulations.--The board may adopt rules and
15 regulations necessary to effectuate this section.
16 (h) Laws n