Good morning. If you remember anything about Opportunity Zones -- the federal tax-incentive program designed to encourage investment in distressed areas -- it might be that the opportunity doesn't last forever. In fact, investors have a Dec. 31 deadline to quality for an extra break under the program, which runs through 2026.
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Leave tipped-wage rules to lawmakers, restaurants say

Lawmakers, not regulators, should decide whether and how to change the payment rules for waiters and other workers who rely heavily on tips to make ends meet.
  • That’s the message from the Pennsylvania Restaurant & Lodging Association, which weighed in this week on a Wolf administration proposal designed to protect wages for tipped workers.
  • The trade group said it doesn’t necessarily oppose the proposal, which was advanced last month as a draft regulation by the Department of Labor & Industry.
  • In fact, many restaurants abide by the standards laid out in the proposal, the group noted.
  • “What we do oppose, and we feel is important to note, is making such sweeping and significant changes unilaterally through the Executive branch,” said a letter signed by association chairman Bill Covaleski and its president and CEO, John Longstreet. 

Who asked: A state panel that is reviewing the draft regulation. The restaurant group joined several hundred others in filing comments with the panel -- the Independent Regulatory Review Commission -- by the deadline this week of Dec. 20.
  • Critics argue that the rules would burden small businesses with new costs at a time when they are still struggling.
  • “These proposed regulators are more mandates that will not help us survive,” read a form letter submitted in opposition to the changes.
  • The Pennsylvania Chamber of Business and Industry also blasted the proposed rules -- and the 30-day window to comment on them.
  • The chamber and other groups had asked for more time, but L&I demurred.
  • The chamber described the move as a "disappointing decision we fear all but guarantees L&I and the Independent Regulatory Review Commission will lack sufficient industry input necessary to render informed decisions on how best to proceed."

Are there any fans: Yes. Supportive comments came via dozens of form letters from self-described restaurant workers, restaurant patrons and former restaurant workers.
  • “It is not fair to the workers that restaurants can legally take a portion of their employees' tips to pay credit card fees and tipped workers should not have to endure hours of side work that does not result in earning tips without being paid a full wage,” read the typical letter.

What are the changes: State regulators have proposed updates to the definition of tipped workers to reflect the impact of inflation and fluctuations in federal law, as well as other steps to shield tipped workers from practices that could ding their wages.
  • The rules would not change the hourly minimum wage for tipped workers, which is set at $2.83.
  • But among other things, it would raise the minimum amount in tips that workers must earn per month before they can be paid $2.83 per hour.
  • And it would limit how much non-tipped work a tipped employee can perform before they must be paid a higher minimum wage.
  • The proposal also adjusts the formula for calculating overtime pay for salaried workers whose work weeks fluctuate in length. The upshot is that sch workers stand to earn slightly more than they do under current law.

What’s next: The regulatory review commission will sift through the comments and make its own recommendations early next year.
  • L&I officials will account for those recommendations -- as well as the comments -- as they work to finalize the proposed regulation.
  • The restaurant association, however, is suggesting that lawmakers should step in.
  • “Going through the legislative process allows for broader and more reliable input from stakeholders across the state,” wrote Covaleski and Longstreet, adding: "Pennsylvanians have relationships with their local legislators, and they look at their State Representatives and Senators to help navigate potential changes like the ones being considered on this subject. Such changes ought to be left to a legislative body that accurately represents the public."

The bottom line: The restaurant group's argument reflects what has become a running battle in Harrisburg over the use of executive power.
  • The battle is likely to flare up during the 2022 campaign for Pennsylvania governor.
  • But so are debates over wages -- and the government's role in setting rules.

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Quick takes

WHO'S BUYING: Brown Golf. Based in Hampden Township, Cumberland County, the golf course operator has purchased Carolina National Golf Club in Bolivia, North Carolina. Terms of the deal were not disclosed. 
  • Sitting roughly halfway between Wilmington, North Carolina, and Myrtle Beach, South Carolina, Carolina National is a 27-hole course designed by pro golfer Fred Couples.
  • With the acquisition, Brown Golf operates 22 golf courses in eight states.

WHAT'S CLOSING: Rite Aid stores. The Cumberland County pharmacy chain said it is targeting 63 stores for closure as part of its effort to shore up profits. The closures began in November and could affect even more stores. The move is expected to generate a $25 million benefit for the company's earnings before interest, taxes, depreciation and amortization. Affected employees are being offered opportunities to transfer, Rite Aid said in an earnings release.
  • The company reported a net loss of $36.1 million for the 13 weeks ending Nov. 27, down from a gain of $4.3 million for the same period last year.
  • The store closings follow the company's announcement earlier this year that it is relocating its main office to Philadelphia, where it will occupy a smaller but newer space than it does on the West Shore.
  • A Rite Aid spokesperson declined to identify where the closing stores are located. 
  • The company had 2,488 stores as of Nov. 27.

WHO'S BUILDING: Black Buffalo 3D Corp. The New York-based company plans to erect a 150,000 square-foot facility in East Stroudsburg that will assemble 3D construction printers. The company currently is working with local officials on zoning and permitting for the plant, which will occupy part of a 106-acre site in the Stroudsburg Poconos-Airpark, according to Black Buffalo spokesperson Peter Cooperman. He did not share a timeline for construction and said it was too early to estimate the number of new jobs.
  • The new Pennsylvania plant will complement existing Black Buffalo operations in Elizabeth, New Jersey, and South Korea.
  • The facility also is expected to attract other businesses interested in researching and developing new construction technologies, such as building materials derived from hemp and other environmentally friendly products.
  • In addition, Black Buffalo aims to use its printers to develop affordable housing for the region.

What's a construction printer: Large-scale printers used on construction sites to make features like walls.


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Compiled and written by Joel Berg

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