An ordinance amending Chapter 19-1300 of The Philadelphia Code, entitled "Real Estate Taxes," by clarifying definitions and process regarding qualification for Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING certain tax abatements based on tax delinquency.
The Chair recognizes Councilwoman Quinones-Sanchez -- I'm sorry; Henon, Councilman Henon. It's coming in a little show. The Chair recognizes Councilman Henon.
Thank you, Council President. I hope everybody has a little patience with me here, because this is an important issue that deserves some clarity. So members of the Finance Committee will remember that we had in that committee a very lively conversation about this bill, and I'm seeking final passage here today on this legislation. This bill simply says that someone who is reaping the benefit of a tax abatement needs to ensure that they remitted all taxes that they are owed to the City, including wage taxes. If an applicant is found to Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING have misclassified any workers and, therefore, is found to have failed to remit all wage taxes, which means that they are delinquent in not paying their taxes, they will not be able to collect the benefit of a very lucrative tax abatement. As I said in the Committee, misclassification of workers is an unlawful practice. It is already against the law on the local, state, and federal level, but it is happening in Philadelphia all the time. It occurs in the construction sector, but it is most common in ride-sharing services, healthcare, childcare, and domestic work. Simply put, the misclassification of workers is an unlawful practice of labeling a worker as an independent contractor instead of an employee. These are not arbitrary terms. These are defined through the Fair Labor Standards Act, the Economic Realities Test, and years of caselaw. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING In order to be classified as an independent contractor, the person performing the work must have the right to control and direct the work that they have and how it is done. If a worker is under the direction, supervision or control of another person or entity, they are an employee, not an independent contractor. I want to reiterate why this matters. It matters for a lot of reasons, because there are two issues I want to address today especially. One, when working people are misclassified, the City absolutely loses tax revenues that are due. So, in turn, it generates revenue. We don't collect it. Especially in the times that we are seeing right now through the pandemic, we have a major loss of revenue, and it affects every part of our city, every household and every person in our city. That lack of revenue cuts short our schools, small business programs, Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING programs in rent assist, affordable housing, and programs of the like. Number two, when working people are misclassified, they are not entitled to the protections afforded to an employee. These protections include everything from workmen's compensation to unemployment benefits to (inaudible) our laws, which we will pass in this body and now sits in our Department of Labor in the Mayor's Office. This City Council has made it abundantly clear that these (inaudible) protections for working people through countless pieces of legislation just this year alone. We care about working people. We cannot overlook what is staring us right in the face. Thousands of people who are taking advantage of it are (inaudible) because they are misclassified by companies who are trying to cut costs. Because this bill applies the Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING requirements that wage tax be remitted before property tax abatement is issued, this bill applies to construction sites, construction sites only with the tax abatement. And in other construction sites, the only people on the construction site who can lawfully be classified as an independent contractor are those who own, operate, and are licensed specific contractors. If a construction worker is working at the direction of a supervisor for a construction company, he must be classified, again, as an employee.
For those who want to be a part of the conversation or who were part of the conversation in the Committee, you know that I am committed to having a conversation with the Administration, which I had, specifically Department of Revenue, about how can we ensure that this legislation does not negatively impact undocumented workers. First, I want to make clear Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING that undocumented workers can and do have ways to pay taxes that are owed. In fact, nationally undocumented workers contribute billions of dollars in taxes every single year. As many as 75 percent of undocumented workers are regularly remitting taxes. They are able to do so because immigration status does not prohibit a resident from paying taxes. They obtain an ITIN. That's an individual taxpayer ID number. A worker who has an ITIN who is remitting taxes owed is considered tax compliant regardless of the decision of an employer to misclassify them. Secondly, the misclassification of workers is a violation of law perpetrated by employers, not the employees. I'm going to say that again. It's perpetrated by the employers, not the employees, meaning the workers. So any enforcement actions that will be taken will be against the employers only. Finally, in response to the Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING conversation I had with Revenue, the Commissioner has committed to launching a pilot program in response to the passage of this legislation. And typically regulations are formed after a piece of legislation is passed, and that has been the standard since the 1950s. The pilot program will focus specifically on the property tax abatement and the enforcement of requirements related to the wage tax. The Commissioner is committed to designing this pilot program that aims to protect workers and will be in communication with Councilmember Sanchez and myself about the design and implementation of that pilot. The Commissioner is clear that the pilot needs to be designed in a way that is congruent with our collective concerns about undocumented workers and our desire to focus in on tax collections, that's revenue, for the programs that help and support that our Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING citizens need. So I hope this resolves any of the outstanding concerns raised by my colleagues in the Committee, and I appreciate the decision around these issues and respectfully ask my colleagues to support me on this legislation. Thank you, Council President.
Thank you, Councilman. The Chair recognizes Councilwoman Quinones-Sanchez.
Thank you, Mr. President. I want to thank the bill sponsor for acknowledging some of the challenges with the nuances through this process. From the initial hearing of this bill back in February, I've always made it clear, as I have in the 13 years that I've worked in Council, that the exploitation of workers, of any workers, around public safety and construction sites, I have always been in the Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING forefront of that and willing to work with folks. And since the bill sponsor makes several different declarations, I just want to for the record continue to be consistent in my position around this. We have many times piloted and the Revenue Department has piloted situations to go after these unscrupulous contractors and has the ability to do so without this piece of legislation. In the context of a federal government that has systematically pursued undocumented folks and has used the law, as the bill sponsor's does, it is illegal for someone who is not an employee to be on the work site, but he also acknowledges that the pathway there is complicated, and over the last four years even more complicated, for folks to be able to do what they want to do, which is pay taxes, so that when a pathway to immigration is provided, they have a record for serving and showing that they are contributing citizens. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING I support a pilot that demonstrates that the target is the contractors, because this work is being done across the country. What I don't support is a bill where we have had many public discussions on without draft regulations. And, yes, normally regulations are drafted afterwards, but as was stated in the Council hearing, the bill sponsor told all of us, and it's in the script, regulations will be drafted before he calls for a final vote, and then the following week, the final vote is called. I don't think we're saying different things. If there are bad actors who are contractors, then they should not be allowed to exploit workers, but when the legislation specifically outlines them and the misclassification in an issue that they have no other bearing on, they become the unintended consequences. This is the same language that Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING Trump uses when he says he could put kids in cages because their parents are illegal in the United States. The nuances and the lack of federal guidance creates a space where cities -- and cities have rejected language that puts immigrant and non-documented workers in harm's way. So I support the intent of collecting any money and limiting any exploitation and making sure that job sites are safe, and I believe the Revenue Department can demonstrate this through a pilot without us getting in a space that we've rejected time and time again through our sanctuary status and what we say and what we've done. Just today we're approving a package of bills that affirms and confirms our commitment to workers, the most vulnerable workers. So I will continue to disagree. I will -- and I will ask everyone to look and monitor as this gets rolled out and ensure -- that I will make sure that if Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING anybody, right, non-union contractors who work with undocumented, if anybody uses this bill to weaponize a department against vulnerable communities, I'm going to shout it out, and I'm going to remain firm in my position that this is a space we don't need to be in. Thank you so much, Council President.
Thank you, Councilwoman. The Chair recognizes Councilman Henon.
Councilmember Sanchez, I appreciate your work on these issues, not just your 13 years here in City Council but your entire life. You go up in neighborhoods and you see it firsthand. So I look forward to working with you and the Revenue Department to make sure that nobody gets exploited and nobody takes advantage or weaponizes undocumented workers, because that's not Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING who we are as the City of Philadelphia, and look forward to ongoing conversation as we can hopefully, hopefully come to a common ground with our departments to make sure that our spirit and our intent and what we do here in City Council reflects all those same values. So thank you.
Thank you, Councilman. The Chair recognizes Councilwoman Bass.
Thank you, Mr. President. I just really wanted to weigh in for a brief minute here. I intend to vote for the bill today, but I am -- I do want to make it absolutely clear that I understand Councilwoman Maria Quinones-Sanchez's concerns and I am absolutely prepared to revisit this bill if it has the unintended consequence of disenfranchising workers who are undocumented. So I have every intention to do Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING what we do as members of Council, which is to pay attention to the bills once we pass them and make sure that folks are not being hurt by something that we're doing that has some sort of unintended consequence. So I just wanted to be on the record for that, that I will be voting for the bill but also am prepared to revisit this matter in the future. So thank you very much, Mr. President.
Thank you, Councilwoman. The Chair recognizes Councilman Domb.
Thank you, Council President. I just wanted to chime in here, because I did ask to see if we could compromise this back in the Finance Committee, and I'm going to vote yes on the bill today, but I wanted to just make sure that I put out there that I share the concerns expressed by Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING Councilmember Quinones-Sanchez in our Committee hearing and here today. After speaking with the Revenue Department and understanding the intent to go after the lead contractors or developers applying for tax abatements, I'm going to lean on them to make sure these guidelines are really followed, because it's clear to me that we will not put our undocumented workers, with already limited access to jobs in the country, at risk. I would have preferred that these regulations were attached to the bill, but by the same token, I just want to let you know I will vote yes, but I'm going to be watching this very carefully, because I don't want anyone to get hurt from this legislation. Thank you.
Thank you. Just for the record, the bill will not be returned to Council either Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING approved or disapproved by the Mayor until we come off of recess in January. So that will give the Department time, along with members of Council, to start the process of working on regulations. So hopefully if we want to expedite this process, we can have that done in a meaningful way before the bill actually comes back to Council with either the Mayor's signature or not. So there's some time for us before it's actually ingrained in stone with the legislation.
Yeah. This is for either Councilmembers Henon or Domb. In your conversations with the Revenue Commissioner, did he give you some context in reference to the pilot in reference to a timeframe when they'd be moving forward with implementation? Also, with the new Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING administration coming in, I'm not sure if there's any other connections at the federal level that we may need some additional guidance, because I know Councilwoman Sanchez raised that both in today's points as well as in the Finance Committee hearing.
I could answer that, Council President. This is Councilman Bobby Henon. Councilmember Green, in the several conversations with the Revenue Department, as other members have also, and I appreciate their interest in making sure that there are no unintended consequences, as soon as the bill is signed and becomes law, they are eager to work on this and not wait to have regulations in place. So I think now they are on their end looking at what they could do as a pilot. They haven't indicated what that is yet, but they will be certainly looking into that right now during the month of December as we Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING approach our new year and get into 2021.
Thank you. Councilmember Green, let me share with you an e-mail I received from the Revenue Department on this issue, because we all are concerned. It just said, To follow up on your question, we received the opinion from the Law Department that we can hold up an abatement approval at the subcontractor level. However, this doesn't mean we wouldn't investigate a subcontractor if we felt there was a reason to dig deeper.
Thank you. We will move ahead. Bill No. 200573, this bill having been read on two different days, the question now is shall Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING the bill pass finally. Mr. Decker, can you please call the roll.
Aye. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING
Council President Clarke. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING
Aye. The ayes are 13 [sic]; the nays are four. A majority of members present voting in the affirmative, the bill passes. Mr. Decker, please read the title of 200620.
An ordinance authorizing transfers in appropriations for Fiscal Year 2021 from the General Fund, certain or all City officers, departments, boards and commissions, the Grants Revenue Fund, certain or all City offices, departments, boards and commissions, the Aviation Fund, certain or all City offices, departments, boards and commissions, the Community Development Fund, certain or all City offices, departments, boards and commissions, and the Housing Trust Fund, certain or all City offices, departments, boards and commissions, to the General Fund, certain or all City offices, departments, boards and commissions, the Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING Water Residual Fund, certain or all City offices, departments, boards and commissions, the Aviation Fund, certain or all City offices, departments, boards and commissions, the Grants Revenue Fund, certain or all City offices, departments, boards and commissions, the Community Development Fund, certain or all City offices, departments, boards and commissions, and the Housing Trust Fund, certain or all City offices, departments, boards and commissions.
This bill having -- the Chair recognizes Councilmember Johnson.
Yeah. Madam Leader, Council President, I need to recuse myself for potential conflicts of interest on Bill No. 200620.
Thank you, Councilmember Johnson. That will be noted for the record. This bill having been read on two different days, the question now is Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING shall the bill pass finally. The Chief Clerk will call the roll.
Councilman Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING Johnson is abstaining. Councilman Jones.
Council President Clarke has indicated that he will be voting aye. So the ayes are 16 Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING and there's one abstention, and the bill passes finally. The Clerk will please read the title of Bill No. 200622.
An ordinance authorizing transfers in appropriations for Fiscal Year 2020 from the General Fund, certain or all City offices, departments, boards and commissions, the Grants Revenue Fund, certain or all City offices, departments, boards and commissions, and the Water Fund, certain or all City offices, departments, boards and commissions, to the General Fund, certain or all City offices, departments, boards and commissions, and the Water Fund, certain or all City offices, departments, boards and commissions.
This bill having been read on two different days, Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING the question now is shall the bill pass finally. The Chief Clerk will call the roll.
The Chair recognizes Councilwoman Gilmore Richardson.
Yes. I wish to be recognized briefly before 200621 is voted on, but I just wanted to be very clear that my vote is a vote to ensure that we continue to meet our contractual obligations to pay any Class 100 funds that we are obligated to pay, particularly to the Police Department under the terms of the most recent contract, which is a one-year extension. Because this bill is tied to our fiscal responsibility and if voted down could put us in jeopardy of litigation, which will cost the City more revenue during a time when we are strapped fiscally and Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING will be for some time, I'm voting yes, knowing that we are continuing the important work we started earlier this year to have a laser-beam focus on police reform and public safety in the City of Philadelphia. Thank you, Madam Majority Leader, for that opportunity.
Thank you, Councilwoman. Will the Chief Clerk call the roll. This bill having been read on two different days, the question now is shall the bill pass finally. Will the Chief Clerk please call the roll. (Pause.)
I think, Mr. Decker, you are muted. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING
Councilman Jones. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING
The nays are four; the ayes are 13. The majority of members having voted in the affirmative, the bill passes.
Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING Thank you. Thank you, Councilwoman Parker. I had to step away briefly. I believe I missed maybe one or two votes. Let the record reflect I'm voting aye on Bill 620. I may have missed one other while I was away. Okay. Mr. Decker, please read the title of Bill No. 200622.
An ordinance amending Bill No. 200285 (approved June 26, 2020), entitled "An ordinance to adopt a Capital Program for the six Fiscal Years 2021 through 2026 inclusive."
This bill having been read on two different days, the question is shall the bill pass finally. Mr. Decker, call the roll.
Councilwoman Brooks. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING
Councilman O'Neill. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING
Aye. The ayes are 17; the nays are zero. A majority of all members having voted in the affirmative, the bill passes. Mr. Decker, please read the title of Bill No. 200623.
An ordinance amending Bill No. 200286 (approved June 26, 2020), entitled "An ordinance to adopt a Fiscal 2021 Capital Budget." Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING
This bill having been read on two different days, the question now is shall the bill pass finally. Mr. Decker, call the roll.
Councilman Henon. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING
Aye. Stated Meeting December 10, 2020 12/10/20 - STATED - 2ND READING The ayes are 17; the nays are zero. A majority of all members having voted in the affirmative, the bill passes. Mr. Decker, please read the title of Bill No. 200557.