PRIOR PRINTER'S NO. 154 PRINTER'S NO. 1039
No. 141 Session of 1977
INTRODUCED BY MESSRS. PIEVSKY, FINEMAN, IRVIS, MANDERINO,
GOODMAN, KOLTER, JOHNSON, WARGO, BARBER, ITKIN, DOMBROWSKI,
PETRARCA, FEE, RAPPAPORT, WANSACZ, MRS. GILLETTE, MESSRS.
KOWALYSHYN, MUSTO, COLE, ENGLEHART, PRENDERGAST, RITTER,
BRUNNER, SHUPNIK, COWELL, MRS. KERNICK AND MR. DOYLE,
FEBRUARY 8, 1977
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, APRIL 18, 1977
AN ACT
1 Relating to Commonwealth budget procedures.
2 The General Assembly of the Commonwealth of Pennsylvania
3 hereby enacts as follows:
4 Section 1. Short title.
5 This act shall be known and may be cited as the "Budget
6 Code."
7 Section 2. Office of the Budget.
8 (a) The Office of the Budget is hereby established as an
9 administrative agency within the Governor's Office. The Office
10 of the Budget shall continue to exercise the powers and perform
11 the duties vested in and imposed upon the Budget Secretary OF <--
12 THE BUDGET and shall be centrally concerned with the development
13 of the budget request of the Governor and with the decisions
14 necessary to allocate revenues among the various Commonwealth
15 programs.
1 (b) The Governor shall appoint a Secretary of the Budget to
2 serve during the pleasure of the Governor.
3 (c) The annual salary of the Secretary of the Budget shall
4 be $44,000.
5 Section 3. Preparation of budget.
6 (a) The Secretary of the Budget shall, in each year obtain
7 and prepare financial and program information necessary for the
8 preparation of a State budget for the budget year beginning July
9 1 and for the preparation of financial and program projections
10 FOR THE BUDGET YEAR AND for FOUR succeeding years. He shall, not <--
11 later than August 15 of such year distribute to the Governor, to
12 the Lieutenant Governor, TO THE AUDITOR GENERAL, TO THE STATE <--
13 TREASURER, to each administrative department, to each
14 independent administrative board and commission, to the Chief
15 Clerk of the Senate, to the Chief Clerk of the House of
16 Representatives, to the State court administrator, and to all
17 institutions or other agencies which desire State appropriations
18 to be made to them, the proper instructions and blanks necessary
19 to the preparation of the budget estimates with a request that <--
20 such blanks be OF THE BUDGET REQUESTS WITH A NOTICE THAT SUCH <--
21 BLANKS SHALL BE returned with the information desired, not later
22 than November 1 of the same year. Such blanks shall be in such
23 form as shall be prescribed by the secretary, to procure any or
24 all information pertaining to the purposes of all programs to be
25 funded in the budget, the revenues, expenditures, program
26 activities and accomplishments for the preceding fiscal year,
27 for the current fiscal year, and for the budget year and FOR <--
28 FOUR succeeding years, the appropriations made for the preceding
29 fiscal year, the expenditures therefrom, encumbrances thereon,
30 the amount unencumbered and unexpended, an itemized estimate of
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1 the revenues and expenditures of the current fiscal year, for
2 the budget year and succeeding years, and an estimate of the
3 revenue amounts needed and program activity and accomplishment
4 levels for the respective departments, boards, commissions, for
5 expenses of the General Assembly, for the Judicial Department,
6 and for any and all institutions, or other agencies to which
7 appropriations are likely to be made by the General Assembly for
8 the budget year and ensuing years. Such blanks shall also
9 request REQUIRE the person returning them to accompany them with <--
10 a statement in writing, giving the purposes of each program to
11 be funded, the expected levels of activity of the programs, the
12 expected levels of accomplishments and the measures to be used
13 to determine to what extent the programs have achieved the
14 stated purposes. In addition such blanks shall request REQUIRE <--
15 the person returning them to accompany them with a statement in
16 writing giving the facts, and an explanation of the methods and
17 reasons for arriving at the estimates of receipts and
18 expenditures for the budget year and FOR FOUR succeeding years. <--
19 It shall be the duty of each administrative department, and each
20 independent administrative board and commission to comply, not
21 later than November 1, with any and all requests made by the
22 Secretary of the Budget in connection with the budget.
23 (b) The Secretary of the Budget may, under the direction of
24 the Governor, make further inquiries and investigations as to
25 the financial needs, expenditures, estimates of levels of
26 program activities and accomplishments, or revenues, of any
27 department, board, commission, authority, political subdivision,
28 institution or other agency receiving money from the State
29 Treasury. The Governor may, after giving to each department,
30 board or commission an opportunity to be heard, approve,
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1 disapprove or alter the estimates. BUDGET REQUESTS. The <--
2 Secretary of the Budget shall, on or before January 1 next
3 succeeding, submit to the Governor, in writing, the above
4 information, and any additional requested by the Governor, as
5 the basis for the Governor's estimates REQUESTS for <--
6 appropriations for the next succeeding year.
7 Section 4. Program evaluation.
8 The Secretary of the Budget shall have the power and it shall
9 be his duty to initiate and conduct, under the direction of the
10 Governor, evaluations of the effectiveness and management
11 efficiency of programs supported by any agency under the
12 Governor's jurisdiction; including Federally funded as well as
13 State funded programs, and to direct, coordinate, assist and/or
14 advise any agency under the Governor's jurisdiction in the
15 conduct of evaluations of its programs or of programs which it
16 supports. It shall also be the duty of the Secretary of the
17 Budget to prepare reports detailing the results of program
18 evaluation conducted by the secretary for distribution to the
19 Governor, the General Assembly, interested agencies, and the
20 public.
21 Section 5. Fiscal notes.
22 The Office of the Budget shall prepare a fiscal note for
23 regulatory actions and administrative procedures of the
24 administrative departments, boards, commissions, OR authorities, <--
25 political subdivisions, institutions, or other agencies <--
26 receiving money from the State Treasury. which cause THE FISCAL <--
27 NOTE SHALL STATE WHETHER THE PROPOSED ACTION OR PROCEDURE CAUSES
28 a loss of revenue or an increase in the cost of programs to the
29 Commonwealth or its political subdivisions. Any such regulatory
30 action or administrative procedure which warrants REQUIRES a <--
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1 fiscal note shall be published in the Pennsylvania Bulletin. The
2 fiscal note shall be published in the Pennsylvania Bulletin at
3 the same time the proposed change is advertised. The fiscal note
4 shall provide the following information:
5 (1) The designation of the fund out of which the
6 appropriation providing for expenditures under the action or
7 procedure shall be made.
8 (2) The probable cost for the fiscal year the program is
9 implemented.
10 (3) A projected cost estimate of the program for each of
11 the five succeeding fiscal years.
12 (4) The fiscal history of the program for which
13 expenditures are to be made.
14 (5) The probable loss of revenue for the fiscal year of
15 its implementation.
16 (6) A projected loss of revenue from the program for
17 each of the five succeeding fiscal years.
18 (7) The line item, if any, of the General Appropriation
19 Act OR OTHER APPROPRIATION ACT out of which expenditures or <--
20 losses of Commonwealth funds shall occur as a result of the
21 action or procedures.
22 (8) The recommendation, if any, of the Secretary of the
23 Budget and the reasons therefor.
24 Section 6. Submission of budget to General Assembly.
25 As soon as possible after the organization of the General
26 Assembly, but not later than the first full week in February of
27 each year, except in the case where a Governor has been elected
28 for his first term of office and then no later than the first
29 full week in March, the Governor shall submit to the General
30 Assembly copies of agency budget requests and a State budget and
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1 program and financial plan embracing:
2 (1) A balanced operating budget for the ensuing fiscal
3 year setting forth in detail:
4 (i) The amounts recommended by him to be
5 appropriated to the General Assembly, the Judicial
6 Department, the Governor, and the several administrative
7 departments, boards, and commissions of the State
8 Government, and to institutions within the State, and for
9 all public purposes, classified by department or agency
10 and by program.
11 (ii) The estimated revenues or receipts from any and
12 all sources, and an estimated amount to be raised by
13 taxation or otherwise, including proposals for new
14 revenues and receipts.
15 (iii) A capital budget for the ensuing fiscal year
16 setting forth capital projects to be financed from the
17 proceeds of obligations of the Commonwealth or of its
18 agencies or authorities or from operating funds.
19 (2) A program and financial plan for not less than the
20 prior FISCAL YEAR, THE current FISCAL YEAR, THIS budget YEAR <--
21 and THE FOUR succeeding fiscal years, which plan shall <--
22 include for each such fiscal year:
23 (i) Actual or estimated operating expenditures
24 classified by department or agency and by program, in
25 reasonable detail, and actual or estimated revenue by
26 major categories from existing and additional sources.
27 (ii) Clearly stated purposes of each program in
28 terms of desired accomplishments.
29 (iii) Measures used to determine to what extent such
30 program has achieved its stated purposes.
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1 (iv) Actual or estimated levels of accomplishment
2 for each program and actual or estimated levels of
3 program activities and their associated costs.
4 (v) Clearly stated purposes for each recommended new
5 or revised program, measures to be used to determine
6 whether each new or revised program has achieved its
7 purpose, estimated levels of additional or new
8 accomplishment of each new or revised program, estimated
9 levels of additional activities for each such program,
10 and their associated costs.
11 (vi) When Budget THE Secretary OF THE BUDGET <--
12 identifies a new or expanded program by criteria used in
13 the budget instructions, the new or expanded program
14 shall be displayed and justified as a separate item in
15 the Governor's budget request. A new or expanded program <--
16 shall not be considered to be enacted by the General
17 Assembly in its first year unless it is specifically
18 referred to or displayed as a line item in an
19 appropriation bill.
20 Section 7. List of employees to be furnished to certain State
21 officers.
22 (a) All administrative departments, boards, and commissions
23 shall, on July 15 of each year, transmit to the Auditor General,
24 the State Treasurer, and the Secretary of the Budget a complete
25 list, and to the Legislative Data Processing Center a computer
26 take TAPE of such list, as of July 1 preceding, of the names of <--
27 all persons, except day-laborers, entitled to receive
28 compensation from the Commonwealth for services rendered in or
29 to the department, board, or commission, as the case may be.
30 Such list shall show the position occupied by each such person,
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1 the date of birth and voting residence of such person, the
2 salary at which or other basis upon which such person is
3 entitled to be paid, the date when such person entered the
4 service of the Commonwealth, whether such person has been
5 continuously employed by the Commonwealth since that date, and
6 all periods of service and positions held as an employee of the
7 Commonwealth, or such part of such information as the Governor
8 may prescribe.
9 (b) Each month thereafter, the heads of the several
10 administrative departments, and the several independent
11 administrative boards and commissions, shall certify to the
12 Auditor General, the State Treasurer, and the Secretary of the
13 Budget any changes in the annual list of employees last
14 transmitted to them which shall have occurred during the
15 preceding month.
16 (c) The information received by the Auditor General, the
17 State Treasurer, and the Secretary of the Budget, under this
18 section, shall be public information.
19 Section 8. Estimates of current expenditures by departments,
20 boards, and commissions.
21 (a) Each administrative department, board, and commission,
22 except the departments of which the Auditor General and the
23 State Treasurer are respectively the heads, shall from time to
24 time, as requested by the Governor, prepare and submit to the
25 Secretary of the Budget, for approval or disapproval, an
26 estimate of the amount of money required and the levels of
27 activity and accomplishment for each program carried on by each
28 department, board or commission, during the ensuing month,
29 quarter, or such other period as the Governor shall prescribe.
30 All available Federal funds and funds from other sources shall
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1 be characterized as such and shall be included in the estimated
2 expenditures which must be submitted to the Secretary of the
3 Budget before any expenditures therefrom may be made. If such
4 estimates do not meet with the approval of the Secretary of the
5 Budget, it shall be revised as necessary and resubmitted for
6 approval. The Secretary of the Budget may establish an
7 authorized personnel complement level in conjunction with the
8 approved expenditure estimate.
9 (b) After the approval of any such estimate, it shall be
10 unlawful for the department, board, or commission to expend any
11 appropriation, Federal funds or funds from other sources or part
12 thereof, except in accordance with such estimate and the
13 authorized complement level, unless the same be revised with the
14 approval of the Secretary of the Budget and within the limits
15 appropriated by the General Assembly.
16 (c) If any department, board, or commission, to which this
17 section applies, shall fail or refuse to submit to the Secretary
18 of the Budget estimates of expenditures, in accordance with the
19 Governor's request, the Governor may notify the State Treasurer,
20 in writing, of such failure or refusal, and, after receipt of
21 such notice, the State Treasurer shall not draw any warrant in
22 favor of such department, board, or commission, until the
23 Governor shall have notified the State Treasurer, in writing,
24 that the delinquent department, board, or commission has
25 furnished him with, and he has approved, the estimate as
26 required in this section.
27 Section 9. Estimates of current expenditures by elective
28 officers.
29 The Auditor General and State Treasurer shall, from time to
30 time, as requested by the Governor, prepare and submit to the
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1 Secretary of the Budget estimates of the amounts of money
2 required for each activity or function to be carried on by their
3 respective departments during the ensuing month, quarter, or
4 such other period as the Governor shall prescribe.
5 Section 10. Fiscal period.
6 (a) All books and accounts kept by the Auditor General and
7 the State Treasurer and every department, board and commission
8 shall be kept as of the fiscal year or period. The fiscal year
9 shall be the period beginning on July 1 of each calendar year
10 and ending on June 30 of the calendar year next succeeding.
11 (b) The Auditor General and the Department of the Auditor
12 General shall submit to any accountants appointed by the
13 Governor for the purpose of making an audit of the affairs of
14 the Auditor General and the Department of the Auditor General
15 all books, papers and records in any way pertaining to such
16 affairs.
17 Section 11. Revenue estimates.
18 (a) The Department of Revenue in conjunction with the
19 Secretary of the Budget shall make revenue estimates for the use
20 of the Governor in preparing the budget with periodic revisions
21 until the final estimate is signed by the Governor at NOT LATER <--
22 THAN the time he signs the general appropriation bill. The
23 revenue estimates used to sign any appropriation bill shall show
24 separately State revenues, Federal funds, and, if specifically
25 appropriated, funds from other sources. The Governor shall item
26 veto any part of any appropriation bill that causes total
27 appropriations to exceed the official estimate plus any
28 unappropriated surplus. No changes in the revenue estimates
29 shall be made thereafter unless changes in statutes affecting
30 revenues and receipts are enacted.
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1 (b) The revenue estimates shall be prepared in a way that
2 they are subject to complete and thorough oversight by the
3 Appropriations Committees of the Senate and the House of
4 Representatives with full knowledge of all data, assumptions,
5 and econometric models which were used to develop the
6 projections AND ANY SUBSEQUENT REVISIONS OF THESE PROJECTIONS. <--
7 (C) A COMMITTEE CONSISTING OF THE GOVERNOR, THE SECRETARY OF <--
8 THE BUDGET, THE SECRETARY OF REVENUE AND THE CHAIRPERSONS OF THE
9 APPROPRIATIONS COMMITTEES OF THE SENATE AND THE HOUSE OF
10 REPRESENTATIVES IS HEREBY ESTABLISHED TO OVERSEE THE
11 DEVELOPMENT, MAINTENANCE AND USE OF AN ECONOMETRIC MODEL WHICH
12 SHALL BE DEVELOPED TO ASSIST IN THE FORECASTING OF STATE
13 REVENUES. THE MODEL SHALL BE DEVELOPED IN ACCORDANCE WITH A
14 CONTRACT BETWEEN THE COMMONWEALTH AND THE PERSONS DESIGNATED BY
15 THE COMMITTEE TO PERFORM THIS FUNCTION. THE GOVERNOR'S OFFICE
16 SHALL MAINTAIN AND UPDATE THE MODEL OR APPOINT AN APPROPRIATE
17 AGENCY OR AGENCIES TO PERFORM THIS RESPONSIBILITY. THE
18 GOVERNOR'S OFFICE SHALL INFORM THE OVERSIGHT COMMITTEE OF ANY
19 CHANGES TO BE MADE TO THE MODEL TO KEEP IT UPDATED. THE
20 EQUATIONS OF THE MODEL AND ANY HISTORIC DATA BASES RELATED
21 THERETO SHALL BE AVAILABLE TO ANY MEMBER OF THE OVERSIGHT
22 COMMITTEE OR TO THE MINORITY CHAIRPERSON OF THE APPROPRIATIONS
23 COMMITTEE OF THE SENATE OR HOUSE OF REPRESENTATIVES UPON REQUEST
24 AT ANY TIME FOR ANY REASON. MEMBERS OF THE OVERSIGHT COMMITTEE
25 OR THE MINORITY CHAIRPERSON OF THE APPROPRIATIONS COMMITTEE OF
26 THE SENATE OR THE HOUSE OF REPRESENTATIVES MAY REQUEST THE
27 GOVERNOR'S OFFICE OR THE APPROPRIATE AGENCY TO RUN THE MODEL FOR
28 ANY PURPOSE INCLUDING THE TESTING OF NEW EQUATIONS AND TO
29 PRODUCE FORECASTS. FORECASTS PRODUCED BY THE MODEL AND ANY
30 FORECASTED DATA BASES RELATED THERETO SHALL BE KEPT CONFIDENTIAL
19770H0141B1039 - 11 -
1 BY THE GOVERNOR'S OFFICE AND THE APPROPRIATE AGENCY OR AGENCIES
2 PRODUCING THESE FORECASTS UNTIL OR UNLESS THE INDIVIDUAL
3 REQUESTING SUCH FORECAST SHALL RELEASE THEM FROM THIS
4 REQUIREMENT. IN NO WAY SHALL THIS CONFIDENTIALITY PROVISION BE
5 CONSTRUED TO PREVENT ACCESS BY THE APPROPRIATIONS COMMITTEES OF
6 THE SENATE OR HOUSE OF REPRESENTATIVES TO FORECASTS USED IN THE
7 PREPARATION OF THE GOVERNOR'S REVENUE ESTIMATES AFTER THE
8 PRESENTATION OF THE BUDGET AS REQUIRED IN SECTION 12(B).
9 Section 12. Transmission of budget information to the General
10 Assembly.
11 (a) In December of each year, the Governor shall meet with
12 the Majority and Minority Chairmen of the Appropriations
13 Committees and the officers of the General Assembly to brief the
14 legislative leadership on the issues he can foresee as being
15 imminent in the budget for the next fiscal year and exchange
16 views with them on issues on the budget before it is formally
17 submitted to the General Assembly. The Governor's briefing shall
18 include:
19 (1) Major anticipated increases or decreases in
20 programs.
21 (2) The results or anticipated results of employee union
22 negotiations for salaries, wages and other benefits.
23 (3) The statistics involved in preliminary forecasts of
24 the major programs mandated by statute such as education
25 subsidies, public assistance, debt service and forecasts of
26 revenue.
27 (4) Other appropriate budget information.
28 The legislative officers shall also inform the Governor of
29 financial matters which should be considered in the budget.
30 (b) In the year the Governor is inaugurated, the Governor
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1 shall present the budget to the General Assembly no later than
2 the first full week in March and in other years, no later than
3 the first full week in February.
4 (c) The budget shall include the results of any program
5 evaluation report completed by the Budget Office in the fiscal
6 year preceding the year in which the budget request is made. The
7 results of the evaluation report and its recommendations shall
8 be summarized and included in the budget documentation.
9 (d) The Governor and each department or agency of the
10 Commonwealth, upon request of the Appropriations Committees of
11 the Senate and the House of Representatives, shall provide
12 documentation of any budget request, including revenue estimates
13 upon which the Governor's budget estimate is based.
14 Section 13. Budget implementation data.
15 (a) The Governor shall make quarterly expenditure reports to
16 the Majority and Minority Chairmen of the Appropriations
17 Committees of the Senate and the House of Representatives.
18 Quarterly reports shall be made within 15 days after the end of
19 the quarter. These quarterly reports shall be prepared in such a
20 way that the fourth quarter report is a summary inclusive of the
21 preceding three quarters and be usable to establish a history of
22 expenditures file. The reports shall be categorized by fund and
23 by appropriation and shall include:
24 (1) number of filled personnel positions and their
25 costs;
26 (2) itemized personnel vacancies and their costs;
27 (3) new positions created and their costs;
28 (4) wage and overtime costs;
29 (5) benefit factors being used in the calculation of
30 personnel costs;
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1 (6) costs attributed to salary increases;
2 (7) allotments and expenditures for operating expenses;
3 (8) allotments and expenditures for fixed assets;
4 (9) any changes in the use or rate of usage of Federal
5 augmentations or nonFederal augmentations;
6 (10) the rate of expenditures in appropriations for
7 major subsidies and grant programs during that quarter; and
8 (11) any other information requested by the
9 Appropriations Committees of the Senate and House of
10 Representatives.
11 (b) The Governor shall make monthly revenue reports to the
12 Majority and Minority Chairmen of the Senate and House of
13 Representatives Appropriations Committees. The revenue reports
14 shall show the actual collection of revenue from each source and
15 a comparison of the actual collections with estimated
16 collections for each month. The comparison shall be accompanied
17 by an analysis which would indicate any change in collection
18 patterns which will cause a shortfall or overrun on the annual
19 estimates of more than 1%.
20 Section 14. Repeals.
21 Sections 601, 602, 603, 604, 605, 606 and 608, act of April
22 9, 1929 (P.L.177, No.175), known as "The Administrative Code of
23 1929," are repealed.
24 Section 15. Effective date.
25 This act shall take effect July 1, 1977 and shall apply to
26 the 1977-1978 fiscal year and to each fiscal year thereafter.
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