See other bills
under the
same topic
        PRIOR PRINTER'S NO. 293                       PRINTER'S NO. 2772

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 261 Session of 2007


        INTRODUCED BY D. EVANS, CALTAGIRONE, CAPPELLI, CURRY,
           DePASQUALE, FREEMAN, GALLOWAY, HARHAI, HARPER, JAMES,
           JOSEPHS, W. KELLER, KING, LEACH, MARSHALL, PARKER, PASHINSKI,
           SHAPIRO, SOLOBAY, STURLA, THOMAS, WANSACZ, WHEATLEY,
           YOUNGBLOOD, SAYLOR, BELFANTI, FRANKEL, DALEY, DENLINGER,
           PAYTON, WALKO AND GRELL, FEBRUARY 6, 2007

        AS REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
           REPRESENTATIVES, AS AMENDED, OCTOBER 29, 2007

                                     AN ACT

     1  Amending the act of April 9, 1929 (P.L.177, No.175), entitled
     2     "An act providing for and reorganizing the conduct of the
     3     executive and administrative work of the Commonwealth by the
     4     Executive Department thereof and the administrative
     5     departments, boards, commissions, and officers thereof,
     6     including the boards of trustees of State Normal Schools, or
     7     Teachers Colleges; abolishing, creating, reorganizing or
     8     authorizing the reorganization of certain administrative
     9     departments, boards, and commissions; defining the powers and
    10     duties of the Governor and other executive and administrative
    11     officers, and of the several administrative departments,
    12     boards, commissions, and officers; fixing the salaries of the
    13     Governor, Lieutenant Governor, and certain other executive
    14     and administrative officers; providing for the appointment of
    15     certain administrative officers, and of all deputies and
    16     other assistants and employes in certain departments, boards,
    17     and commissions; and prescribing the manner in which the
    18     number and compensation of the deputies and all other
    19     assistants and employes of certain departments, boards and
    20     commissions shall be determined," further providing, in
    21     budget procedures, for revenue estimates, for transmission of
    22     budget information to legislature, for budget implementation
    23     data and for electronic access to information; and
    24     establishing the Independent Fiscal Review Board.

    25     The General Assembly of the Commonwealth of Pennsylvania
    26  hereby enacts as follows:


     1     Section 1.  Sections 618 and 619 of the act of April 9, 1929
     2  (P.L.177, No.175), known as The Administrative Code of 1929,
     3  added September 27, 1978 (P.L.775, No.149), are amended to read:
     4     Section 618.  Revenue Estimates.--(a)  The Department of
     5  Revenue in conjunction with the Secretary of the Budget shall
     6  make revenue estimates for the use of the Governor in preparing
     7  the budget with periodic revisions until the final estimate is
     8  signed by the Governor not later than the time he signs the
     9  general appropriation bill. The revenue estimates used to sign
    10  any appropriation bill shall show separately State revenues,
    11  Federal funds, and, if specifically appropriated, funds from
    12  other sources. The Governor shall item veto any part of any
    13  appropriation bill that causes total appropriations to exceed
    14  the official estimate plus any unappropriated surplus. No
    15  changes in the revenue estimates shall be made thereafter unless
    16  changes in statutes affecting revenues and receipts are enacted.
    17     (b)  The revenue estimates shall be prepared in a way that
    18  they are subject to complete and thorough oversight by the
    19  Appropriations Committees of the Senate and the House of
    20  Representatives and the Independent Fiscal Review Board with
    21  full knowledge of all data, assumptions, and econometric models
    22  which were used to develop the projections and any subsequent
    23  revisions of these projections.
    24     (c)  A committee consisting of the Governor, the Secretary of
    25  the Budget, the Secretary of Revenue [and the Chairmen], the
    26  Chairs of the Appropriations Committees of the Senate and the
    27  House of Representatives and the Chair of the Independent Fiscal
    28  Review Board is hereby established to oversee the development,
    29  maintenance and/or use of econometric models which may be
    30  applied in the forecasting of State revenues. A model or models
    20070H0261B2772                  - 2 -     

     1  shall be developed for this purpose in the event that one does
     2  not currently exist. The Governor's Office shall maintain and
     3  update the model or models or appoint an appropriate agency or
     4  agencies to perform this responsibility. The Governor's Office
     5  shall inform the Oversight Committee of any changes to be made
     6  to the model or models to keep it updated. The equations of the
     7  model or models and any historic data bases related thereto
     8  shall be available to any member of the Oversight Committee or
     9  to the Minority [Chairman] Chair of the Appropriations Committee
    10  of the Senate or House of Representatives upon request at any
    11  time for any reason. Members of the Oversight Committee or the
    12  Minority [Chairman] Chair of the Appropriations Committee of the
    13  Senate or the House of Representatives may request the
    14  Governor's Office or the appropriate agency to run the model or
    15  models for any purpose including the testing of new equations
    16  and to produce forecasts. Forecasts produced by the model or
    17  models and any forecasted data bases related thereto shall be
    18  kept confidential by the Governor's Office and the appropriate
    19  agency or agencies producing these forecasts until or unless the
    20  individual requesting such forecast shall release them from this
    21  requirement. In no way shall this confidentiality provision be
    22  construed to prevent access by the Appropriations Committees of
    23  the Senate or House of Representatives or the Independent Fiscal
    24  Review Board to forecasts used in the preparation of the
    25  Governor's revenue estimates after the presentation of the
    26  budget as required in section 619(b).
    27     Section 619.  Transmission of Budget Information to the
    28  General Assembly.--(a)  In December of each year, the Governor
    29  shall meet with the Majority and Minority [Chairmen] Chairs of
    30  the Appropriations Committees and the officers of the General
    20070H0261B2772                  - 3 -     

     1  Assembly to brief the legislative leadership on the issues he
     2  can foresee as being imminent in the budget for the next fiscal
     3  year and exchange views with them on issues on the budget before
     4  it is formally submitted to the General Assembly. The Governor's
     5  briefing shall include:
     6     (1)  Major anticipated increases or decreases in programs.
     7     (2)  The results or anticipated results of employee union
     8  negotiations for salaries, wages and other benefits.
     9     (3)  The statistics involved in preliminary forecasts of the
    10  major programs mandated by statute such as education subsidies,
    11  all public assistance programs, debt service and forecasts of
    12  revenue.
    13     (4)  Other appropriate budget information.
    14  The legislative officers shall also inform the Governor of
    15  financial matters which should be considered in the budget.
    16     (a.1)  At the same time that the Governor presents the budget
    17  to the General Assembly, the Governor shall, as provided in
    18  section 2810-D 2809-D, present a documented revenue forecast as   <--
    19  defined in section 2802-D.
    20     (b)  In the year the Governor is inaugurated, the Governor
    21  shall present the budget to the General Assembly no later than
    22  the first full week in March and in other years, no later than
    23  the first full week in February.
    24     (c)  The budget shall include the results of any program
    25  evaluation report completed by the Budget Office in the fiscal
    26  year preceding the year in which the budget request is made. The
    27  results of the evaluation report and its recommendations shall
    28  be summarized and included in the budget documentation.
    29     (d)  The Governor and each department or agency of the
    30  Commonwealth, upon request of the [Chairman] Chair of the
    20070H0261B2772                  - 4 -     

     1  Appropriations Committees of either the Senate or the House of
     2  Representatives, shall provide documentation of any budget
     3  request, including revenue estimates upon which the Governor's
     4  budget estimate is based.
     5     Section 2.  Section 620 of the act, amended November 26, 1997
     6  (P.L.530, No.57), is amended to read:
     7     Section 620.  Budget Implementation Data.--(a)  The Governor
     8  shall make monthly expenditure data available to the Majority
     9  and Minority [Chairmen] Chairs of the Appropriations Committees
    10  of the Senate and the House of Representatives. Monthly data
    11  shall be provided within fifteen (15) days after the end of each
    12  month. The monthly data shall be prepared in such a way that the
    13  last monthly submission is a summary inclusive of the preceding
    14  months of the fiscal year and shall be usable to establish a
    15  history of expenditure file. This data, at the discretion of the
    16  Majority and Minority [Chairmen] Chairs of the Appropriations
    17  Committees of the Senate and the House of Representatives may be
    18  provided either in finished reports or on computer tapes. The
    19  data shall be provided by fund, by appropriation, by department
    20  and by organization within each department and shall include:
    21     (1)  Number of filled personnel positions and their cost.
    22     (2)  Itemized personnel vacancies and their cost.
    23     (3)  New positions created and their cost.
    24     (4)  Wage and overtime costs.
    25     (5)  Allotments and expenditures for itemized personnel
    26  expenses.
    27     (6)  Allotments and expenditures for itemized operating
    28  expenses.
    29     (7)  Allotments and expenditures for itemized fixed assets.
    30     (8)  The rate of expenditures in appropriations for major
    20070H0261B2772                  - 5 -     

     1  subsidy and grant programs during the month.
     2  In addition to the above specified budgetary data, the Governor
     3  shall make available any other budgetary data as may be
     4  requested from time to time by the Majority and Minority
     5  [Chairmen] Chairs of the Appropriations Committees of the Senate
     6  and the House of Representatives.
     7     (b)  The Governor shall make monthly revenue reports to the
     8  Majority and Minority [Chairmen] Chairs of the Appropriations
     9  Committees of the Senate and the House of Representatives and
    10  the Independent Fiscal Review Board. The revenue reports shall
    11  show the actual collection of revenue itemized by source and a
    12  comparison of the actual collections with estimated collections
    13  for each month. The comparison shall be accompanied by an
    14  analysis which would indicate any change in collection patterns
    15  which will cause a shortfall or overrun on the annual estimates
    16  of more than one per centum (1%).
    17     (c)  The Governor shall cause to be prepared any other
    18  revenue data as may be requested from time to time by the
    19  Majority or Minority [Chairmen] Chairs of the Appropriations
    20  Committees of the Senate or the House of Representatives and to
    21  the Chair of the Independent Fiscal Review Board.
    22     Section 3.  Section 620.1 of the act, added August 14, 1991
    23  (P.L.331, No.35), is amended to read:
    24     Section 620.1.  Electronic Access [of] to Information.--
    25  Except for confidential information, the Majority and Minority
    26  [Chairmen] Chairs of the Appropriations Committees of the Senate
    27  and House of Representatives and the Chair of the Independent
    28  Fiscal Review Board shall have access to all information
    29  available on inquiry-only screens through the Integrated Central
    30  System.
    20070H0261B2772                  - 6 -     

     1     Section 4.  The act is amended by adding an article to read:
     2                          ARTICLE XXVIII-D
     3            POWERS AND DUTIES OF THE INDEPENDENT FISCAL
     4                            REVIEW BOARD
     5  Section 2801-D.  Legislative purpose.
     6     The General Assembly recognizes the continued need for public
     7  services which ensure the economic and social well-being of
     8  individuals and businesses in this Commonwealth.
     9         (1)  To that end, the General Assembly finds and declares
    10     that the Commonwealth should establish an independent entity
    11     to do all of the following:
    12             (i)  Recommend changes which will modernize and        <--
    13         reform the Commonwealth and local revenue systems which
    14         supports these public services.
    15             (ii)  Continually monitor this system.
    16             (I)  CONTINUALLY MONITOR THE STATE AND LOCAL REVENUE   <--
    17         SYSTEM.
    18             (iii) (II)  Encourage discussion in a public forum of  <--
    19         issues and concerns related to this system.
    20             (iv) (III)  Particularly focus on revenue forecasts    <--
    21         and legislation affecting the General Fund.
    22         (2)  The General Assembly further recognizes that the
    23     Commonwealth should establish an independent entity which is
    24     composed of professionals who are experts in their fields and
    25     who can encourage debate on whether the Commonwealth revenue
    26     system equitably distributes the burden of payment, promotes
    27     economic efficiency and growth, provides appropriate and
    28     timely revenues, is easy to understand and easy to administer
    29     and ensures accountability.
    30  Section 2802-D.  Definitions.
    20070H0261B2772                  - 7 -     

     1     The following words and phrases when used in this article
     2  shall have the meanings given to them in this section unless the
     3  context clearly indicates otherwise:
     4     "Board."  The Independent Fiscal Review Board established in
     5  section 2803-D.
     6     "Chairs of the Appropriations Committees."  The Majority
     7  Chair and the Minority Chair of the Appropriations Committee of
     8  the Senate and the Majority Chair and the Minority Chair of the
     9  Appropriations Committee of the House of Representatives.
    10     "Council."  The Economic Advisory Council established in
    11  section 2809-D 2808-D.                                            <--
    12     "Documented revenue forecast."  General Fund revenue
    13  estimates for the current and succeeding two fiscal years
    14  accompanied by supporting documentation which is sufficient for
    15  an individual to independently replicate and verify the
    16  forecast. Supporting documentation includes:
    17         (1)  All reference and data sources used to prepare the
    18     forecast.
    19         (2)  Economic growth assumptions accompanied with
    20     supporting rationale.
    21         (3)  All historical and forecast data used, including the
    22     effective rate of taxes.
    23         (4)  All adjustments to historical and forecast data
    24     accompanied with supporting rationale. The rationale includes
    25     a discussion of adjustments due to statutory changes,
    26     litigation and administrative practices.
    27         (5)  All models used, including econometric, structural
    28     and cash flow models.
    29         (6)  All formulas and calculations used to be accompanied
    30     with supporting rationale.
    20070H0261B2772                  - 8 -     

     1     "General Fund revenue."  The income sources for the General
     2  Fund.
     3     "Official estimate."  The official estimate as required under
     4  section 618(a) for General Fund revenue.
     5     "Revenue system."  The taxes levied by the various taxing
     6  jurisdictions in this Commonwealth.
     7  Section 2803-D.  Board.
     8     The Independent Fiscal Review Board is established as an
     9  independent advisory board.
    10  Section 2804-D.  Purpose.
    11     The board shall prepare periodic advisory General Fund
    12  revenue estimates and reports; monitor Commonwealth and local
    13  revenue systems; and act as an advisor to the Governor, the
    14  General Assembly and the public concerning the following:
    15         (1)  General Fund revenue forecasts.
    16         (2)  Economic conditions in this Commonwealth.
    17         (3)  Trends and developments relevant to revenue systems
    18     in this Commonwealth.
    19         (4)  Other information or analysis related to
    20     Commonwealth and local revenue systems which the Governor or
    21     the Chairs of the Appropriations Committees may request or as
    22     may be required by law.
    23  Section 2805-D.  Membership.
    24     (a)  Members.--
    25         (1)  The board shall consist of nine members.
    26         (2)  The Governor shall appoint one member, and each of
    27     the Chairs of the Appropriations Committees shall appoint one
    28     member. The appointments under this paragraph shall be made
    29     within 30 days of the effective date of this section.
    30         (3)  The five members under paragraph (2) shall appoint
    20070H0261B2772                  - 9 -     

     1     four additional members to the board. The five board members
     2     under paragraph (2) must unanimously approve each of the four
     3     additional members. The members under this paragraph shall be
     4     appointed within 60 days of the effective date of this
     5     section.
     6         (4)  The board shall by a vote of six of the nine members
     7     elect one of the four members under paragraph (3) to serve as
     8     chair of the board.
     9         (5)  If a vacancy occurs on the board, the vacancy shall
    10     be filled within 60 days. A successor shall be appointed by
    11     the same appointing authority as the member being replaced.
    12     (b)  Requirements.--
    13         (1)  Each member must be skilled and knowledgeable in tax
    14     policy, and have at least five years' experience in public
    15     finance, economics or accounting. At least three members must
    16     have a minimum of five years' professional economic
    17     forecasting experience. At least one member must have a
    18     minimum of five years of corporate tax accounting experience.
    19         (2)  A member may not be a lobbyist, as defined in 65
    20     Pa.C.S. § 13A03 (relating to definitions).
    21         (3)  A board member must not be an employee of the
    22     executive, legislative or judicial branch of State
    23     government.
    24         (4)  A member may not seek or hold a position as any
    25     other public official within this Commonwealth or as a party
    26     officer during the member's term. A member may not seek
    27     election as a public official or party officer for one year
    28     after service with the board. A member may serve as an
    29     appointed public official any time after service with the
    30     board.
    20070H0261B2772                 - 10 -     

     1     (c)  Terms.--
     2         (1)  Of the nine initial appointments, two shall be
     3     appointed for a term of two years, three for a term of three
     4     years and four for a term of four years.
     5         (2)  The chair of the board, whose initial term shall be
     6     for four years, shall have the other appointees draw lots to
     7     determine which length of initial term each of them shall
     8     serve.
     9         (3)  After initial terms, each term shall be four years.
    10         (4)  An individual appointed to fill a vacancy shall
    11     serve the unexpired term.
    12         (5)  A board member may be reappointed to serve
    13     subsequent terms.
    14         (6)  If the chair becomes vacant, the board shall elect a
    15     new chair as provided in subsection (a)(4).
    16     (d)  Meetings.--
    17         (1)  The board shall meet as frequently as it deems
    18     appropriate, but at least once during each quarter of the
    19     fiscal year.
    20         (2)  The chair shall be responsible for calling meetings
    21     of the board and shall set a date, time and place for
    22     meetings.
    23         (3)  The member appointed by the Governor shall set a
    24     date, time and place for the initial organizational meetings
    25     of the board within ten days after the completion of the
    26     initial five appointments and within ten days after the
    27     completion of the remaining four appointments.
    28         (4)  The chair shall call a meeting of the board if a
    29     request for such meeting is submitted to the chair by at
    30     least three members of the board.
    20070H0261B2772                 - 11 -     

     1     (e)  Procedure.--
     2         (1)  The chair shall, when present, preside at the
     3     meeting. In the chair's absence, a member designated by the
     4     board shall preside. Actions of the chair are subject in
     5     every case to majority approval of the board.
     6         (2)  Five members constitute a quorum.
     7     (f)  Reimbursement.--Members shall receive reimbursement for
     8  actual and necessary expenses incurred while performing the
     9  business of the board.
    10  Section 2806-D.  Powers and duties.
    11     (a)  Funds.--The board may expend appropriated funds
    12  necessary to perform the function provided for in this article.
    13     (b)  Administration.--
    14         (1)  The board shall hire an executive director to aid in
    15     carrying out the powers and duties of the board. The chair
    16     shall, upon the approval of a majority of the members,
    17     delegate to the executive director powers the chair deems
    18     necessary to carry out the purposes of the board, subject to
    19     the supervision and control of the board. The initial
    20     appointment of the executive director shall take place within
    21     30 days after all initial appointments to the board.
    22         (2)  The executive director may not seek or hold a
    23     position as any other public official within this
    24     Commonwealth or as a party officer during service with the
    25     board. The executive director may not seek election as a
    26     public official or party officer for one year after service
    27     with the board. The executive director may serve as an
    28     appointed public official any time after service with the
    29     board.
    30         (3)  The executive director shall hire support staff as
    20070H0261B2772                 - 12 -     

     1     necessary to carry out the functions of the board. The
     2     initial chair of the board shall use the staff of the
     3     Governor's Office as support staff until the executive
     4     director has hired necessary support staff.
     5     (c)  Fiscal review.--The board shall conduct a comprehensive   <--
     6  fiscal review and recommend a proposal, within 18 months of the
     7  effective date of this section, to redesign and modernize
     8  Commonwealth and local revenue systems as required under section
     9  2807-D. The board shall carry out all of its powers and duties
    10  imposed by this article by first addressing and completing its
    11  duties with regard to the comprehensive fiscal review before
    12  exercising any of its powers and duties with regard to
    13  documented revenue forecasts, fiscal analysis and Commonwealth
    14  and local revenue systems as provided in subsections (d) and
    15  (e).
    16     (d) (C)  Revenue forecast.--                                   <--
    17         (1)  The board shall prepare a documented revenue
    18     forecast by April 30 and at any other time deemed necessary
    19     by the board.
    20         (2)  The board shall analyze the documented revenue
    21     forecasts which the Governor submits to the board as required
    22     under section 2810-D 2809-D. The board shall ensure that the   <--
    23     documented revenue forecasts are a matter of public record.
    24         (3)  The board shall analyze how its most recent General
    25     Fund revenue forecast compares with the official estimate.
    26     Part of the analysis shall include a comparison of the
    27     documented revenue forecast with the monthly report of the
    28     official estimate as required under section 620(b). The board
    29     shall provide to the public a summary of information
    30     presented in a manner which a lay person can understand. The
    20070H0261B2772                 - 13 -     

     1     board shall meet to approve information by a majority vote
     2     before the information is released. Except as otherwise
     3     provided, the board shall make information available in
     4     printed form to the Governor, the Chairs of the
     5     Appropriations Committees and the public by July 15, October
     6     15, January 15, April 15 and June 15 and at any other time
     7     that the board deems necessary. For purposes of this
     8     paragraph, publication in the Pennsylvania Bulletin within
     9     one week of the due date shall be sufficient to meet the
    10     public reporting requirement.
    11         (4)  The board shall act in an advisory capacity and
    12     shall develop policies and procedures for maintaining the
    13     confidentiality of individual requests concerning General
    14     Fund revenue forecasts, General Fund revenue proposals and
    15     General Fund revenue analysis, upon the request of the
    16     Governor or the Chairs of the Appropriations Committees.
    17     (e) (D)  Fiscal analysis.--                                    <--
    18         (1)  The board shall prepare and issue a fiscal analysis
    19     for any bill proposing to expand, alter or reduce General
    20     Fund revenue and for any amendment to a bill proposing to
    21     expand, alter or reduce General Fund revenue. The fiscal
    22     analysis shall include policy effects and estimated revenue
    23     impacts for the current fiscal year and for each of the two
    24     succeeding fiscal years, including all reference and data
    25     sources and an explanation of the methodology used to
    26     estimate the revenue impacts. In preparing a fiscal analysis,
    27     the board shall consider the evaluation criteria set forth in
    28     section 2808-D 2807-D.                                         <--
    29         (2)  Except as provided in paragraph (3):
    30             (i)  no bill proposing to expand, alter or reduce
    20070H0261B2772                 - 14 -     

     1         General Fund revenue shall be given second consideration
     2         in either chamber of the General Assembly until the board
     3         has attached a fiscal analysis; and
     4             (ii)  no amendment to any bill which proposes
     5         amendment to expand, alter or reduce General Fund revenue
     6         shall be considered by either chamber of the General
     7         Assembly until the board has attached a fiscal analysis.
     8         (3)  If the board fails to attach a fiscal analysis
     9     within 20 legislative days after a bill proposing to expand,
    10     alter or reduce General Fund revenue has received first
    11     consideration, the bill may be further considered in the same
    12     manner as if the fiscal analysis had been attached to the
    13     bill. If the board fails to attach a fiscal analysis within
    14     20 legislative days after an amendment to a bill proposing to
    15     expand, alter or reduce General Fund revenue has been
    16     submitted to the board, the amendment may be considered in
    17     the same manner as if the fiscal analysis had been attached
    18     to the amendment.
    19     (f) (E)  Evaluation.--                                         <--
    20         (1)  The board shall periodically monitor and, using the
    21     evaluation criteria set forth in section 2808-D 2807-D,        <--
    22     evaluate the relationship of Commonwealth and local revenue
    23     systems to fiscal policy in this Commonwealth and to changes
    24     and developments in factors which impact the revenue systems.
    25     Factors the board should consider include:
    26             (i)  General economic and demographic trends.
    27             (ii)  Patterns of business methods and organization.
    28             (iii)  Economic activity.
    29             (iv)  Federal and State legislative and
    30         administrative actions.
    20070H0261B2772                 - 15 -     

     1             (v)  Accounting standards.
     2             (vi)  Regulatory requirements.
     3         (2)  At its discretion or upon request of the Governor or
     4     the General Assembly, the board shall evaluate the impact of
     5     any factor on the revenue systems in this Commonwealth and
     6     recommend any revisions to policy that it deems advisable.
     7  Section 2807-D.  Comprehensive fiscal review.                     <--
     8     (a)  Purpose.--The purpose of the comprehensive fiscal review
     9  is to address the structural problems in the existing revenue
    10  systems in this Commonwealth and, in turn, to develop a
    11  consensus proposal for making Commonwealth and local revenue
    12  systems straightforward, fair, efficient and reliable for
    13  funding the public programs and services provided in this
    14  Commonwealth. It is the intent of the General Assembly that the
    15  proposal not result in excess revenues.
    16     (b)  Review.--Within three months of the effective date of
    17  this section, the board shall commence a review of the entire
    18  structure of Commonwealth and local revenue systems. Using the
    19  evaluation criteria set forth in section 2808-D, the board shall
    20  make a comprehensive assessment of the revenue systems in this
    21  Commonwealth and recommend a proposal to redesign and modernize
    22  such systems.
    23     (c)  Final report.--No later than 16 months after the
    24  effective date of this section, the board shall issue to the
    25  Governor and the General Assembly a final report containing its
    26  evaluation of the Commonwealth and local revenue systems and
    27  recommended proposal for improving the systems, including
    28  supporting analysis, such as rationale and fiscal analyses.
    29  Within 90 days of issuing the report, the board shall submit
    30  suggested statutory language for implementing its
    20070H0261B2772                 - 16 -     

     1  recommendations.
     2     (d)  Publication.--Within 105 days of issuing the report
     3  required by subsection (b), the board shall publish in the
     4  Pennsylvania Bulletin all of the following:
     5         (1)  A brief summary of the report.
     6         (2)  A notice of availability of the text of the report,
     7     the statutory language for implementing the recommendations
     8     set forth in the report and a fiscal analysis relating to the
     9     recommendations.
    10         (3)  A request for written comments.
    11  Section 2808-D 2807-D.  Evaluation criteria.                      <--
    12     In carrying out its powers and duties under this article, the
    13  board shall take into consideration all of the following:
    14         (1)  The simplicity of the taxes and the ability of
    15     individual taxpayers to easily understand and comply with
    16     them.
    17         (2)  The overall mix of taxes.
    18         (3)  Whether the tax burden is distributed fairly among
    19     taxpayers in terms of ability to pay and the relationship
    20     between benefits received and payments made.
    21         (4)  The need to eliminate subjective interpretation of
    22     taxes.
    23         (5)  The reliability of taxes and whether their bases
    24     yield automatic growth and cyclical stability in revenues
    25     generated.
    26         (6)  The collection and enforcement costs associated with
    27     the various taxes and the ability to easily administer the
    28     taxes.
    29         (7)  Whether the taxes create incentives for individuals
    30     and firms to alter their behavior in order to minimize their
    20070H0261B2772                 - 17 -     

     1     tax burden.
     2         (8)  The system of taxation within various jurisdictions
     3     and the incentives for households to move and firms to
     4     relocate activities to jurisdictions which provide more
     5     favorable tax treatment.
     6         (9)  The value of tax incentives and whether they meet
     7     the performance requirements on which they are based.
     8         (10)  The responsiveness of revenue systems to economic
     9     and social conditions, including the following:
    10             (i)  Changes in the economic base, such as the shift
    11         from manufacturing to services.
    12             (ii)  Changes in the types and forms of business
    13         organizations, such as the formation of S corporations
    14         and limited liability companies.
    15             (iii)  Expansion of interstate and international
    16         businesses and transactions, which impacts nexus
    17         requirements, apportionment methods and methods of
    18         reporting, including combined or separate company
    19         reporting.
    20             (iv)  Changes in technology and regulations, such as
    21         in telecommunications and financial services.
    22             (v)  Goals of Commonwealth economic development
    23         policy, such as targeted job creation and public
    24         investments.
    25  Section 2809-D 2808-D.  Economic Advisory Council.                <--
    26     (a)  Establishment.--The Economic Advisory Council is
    27  established to act in an advisory capacity to the board
    28  concerning Commonwealth and local revenue systems, economic
    29  conditions in this Commonwealth and General Fund revenue
    30  forecasts, whenever the board calls upon it. The council shall
    20070H0261B2772                 - 18 -     

     1  meet with the board at least once during each quarter of the
     2  fiscal year.
     3     (b)  Membership.--
     4         (1)  The council shall consist of at least seven members.
     5         (2)  The council shall consist of a representative from
     6     each of the following sectors: labor, manufacturing, banking,
     7     nonbanking financial services, retail and public utilities.
     8         (3)  The board shall appoint each member for a two-year
     9     term based upon a majority vote.
    10         (4)  If a vacancy occurs on the council, the vacancy
    11     shall be filled within 60 days. An individual appointed to
    12     fill a vacancy shall serve the unexpired term.
    13     (c)  Other offices.--A member may not seek or hold a position
    14  as any other public official within this Commonwealth or as a
    15  party officer while serving on the council. A member may not
    16  seek election as a public official or party officer for one year
    17  after service with the council. A member may serve as an
    18  appointed public official any time after service with the
    19  council. A member may not be a lobbyist, as defined in 65
    20  Pa.C.S. § 13A03 (relating to definitions). A member may not be
    21  an employee of the executive, legislative or judicial branch of
    22  State government.
    23  Section 2810-D 2809-D.  Duties of the Governor and Cabinet        <--
    24  officers.
    25     (a)  Revenue forecast.--The Governor shall submit to the
    26  board a documented revenue forecast with the submission of the
    27  Executive Budget as required under section 613 and with the
    28  official estimate.
    29     (b)  Confidentiality.--Notwithstanding any statute or
    30  regulation regarding confidential information to the contrary,
    20070H0261B2772                 - 19 -     

     1  the Secretary of the Budget and the Secretary of Revenue shall
     2  provide information which the board requests for purposes of
     3  fulfilling its duties under this article. The board shall be
     4  bound by the same statutes and regulations regarding
     5  confidentiality as the person that provides the confidential
     6  information to the board.
     7     (c)  Information and reports.--In order to facilitate the
     8  board's carrying out its powers and duties under section 2806-    <--
     9  D(d) 2806-D(C), the Secretary of the Budget and Secretary of      <--
    10  Revenue shall make available to the board all information and
    11  reports used for generating General Fund revenue forecasts.
    12     Section 5.  This act shall take effect immediately JULY 1,     <--
    13  2011.












    A10L71VDL/20070H0261B2772       - 20 -