Regular Session 2015-2016 Senate Bill 1341 P.N. 2080

PRIOR PRINTER'S NO. 2023

PRINTER'S NO. 2080

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1341

Session of

2015

INTRODUCED BY MENSCH, WAGNER, RESCHENTHALER, BARTOLOTTA,

EICHELBERGER, RAFFERTY, AUMENT, GREENLEAF, VULAKOVICH,

FOLMER, WHITE, HUTCHINSON, STEFANO, VOGEL, SMUCKER, BROOKS,

ALLOWAY, ARGALL AND WARD, JULY 11, 2016

SENATOR BROWNE, APPROPRIATIONS, AS AMENDED, SEPTEMBER 26, 2016

AN ACT

Providing for performance-based budgeting; establishing the

Performance-based Budget Board and providing for its powers

and duties; and conferring powers and imposing duties on the

Independent Fiscal Office.

PROVIDING FOR PERFORMANCE-BASED BUDGETING; ESTABLISHING THE

PERFORMANCE-BASED BUDGET BOARD AND PROVIDING FOR ITS POWERS

AND DUTIES; AND CONFERRING POWERS AND IMPOSING DUTIES ON THE

INDEPENDENT FISCAL OFFICE.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Performance-

based Budgeting Act.

Section 2. Findings.

The General Assembly finds and declares as follows:

(1) The traditional method of budget development, which

relies upon incremental adjustments to expenditures made in

the previous financial period, insulates governmental

activities from the thorough fiscal review expected by

taxpaying citizens.

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(2) New and changing demands for public services are met

through excessive budget growth rather than by pruning

obsolete programs and redirecting existing funds. Some

programs were established so long ago that the original

statutory basis has either been forgotten or is out of date.

In time, the budget is driven by inertia rather than by clear

and defensible purposes.

(3) Performance-based budgeting is an effective method

to counter the tendency toward perpetuation of outmoded State

programs.

Section 3. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Board." The Performance-based Budget Board established

under this act.

Section 4. Performance-based Budget Board.

(a) Establishment.--The Performance-based Budget Board is

established as an independent board to review the performance-

based budget plans of State agencies and make recommendations on

how each agency's programs may be made more transparent,

effective and efficient.

(b) Members.--The board shall consist of the following

members:

(1) The Secretary of the Budget.

(2) The chairperson of the Appropriations Committee of

the Senate.

(3) The minority chairperson of the Appropriations

Committee of the Senate.

(4) The chairperson of the Appropriations Committee of

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the House of Representatives.

(5) The minority chairperson of the Appropriations

Committee of the House of Representatives.

Section 5. Budget review.

(a) Board.--The following shall apply:

(1) The board shall review each State agency's

performance-based budget plan submitted under paragraph (2)

and make recommendations on making the programs administered

by the agency more transparent, effective and efficient. The

board shall submit its recommendations to the Independent

Fiscal Office for review.

(2) The following shall apply:

(i) Except as otherwise provided under subparagraph

(ii), each time a State agency is under review by the

board, the board shall notify the agency and require the

agency to prepare and submit a performance-based budget

plan in addition to any other information that may be

required by statute, rule or directive. At a minimum, the

plan shall contain the following information:

(A) A description of those discrete activities

that comprise the agency and a justification for the

existence of each activity by reference to statute or

other legal authority.

(B) For each activity, a quantitative estimate

of any adverse impacts that could reasonably be

expected should the activity be discontinued,

together with a full description of the methods by

which the adverse impact is estimated.

expenditures that would be required to maintain the

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activity at the minimum level of service required by

the statutory authority, together with a concise

statement of the quantity and quality of services

required at that minimum level.

(D) For each activity, an itemized account of

expenditures required to maintain the activity at

current levels of service, together with a concise

statement of the quantity and quality of services

being provided.

(E) A ranking of all activities that shows the

relative contribution of each activity to the overall

goals and purposes of the agency at current service

levels.

(F) A mission statement on how the agency is

accountable to taxpayers.

(ii) In 2016, the Governor shall submit a

performance-based budget plan to the board for agencies

with cumulative total expenditures of at least 8% of the

General Fund budget.

(3) Each agency shall receive a performance-based budget

review no less often than once every five years. In order to

implement this schedule, beginning in 2018, approximately 20%

of agencies shall be subject to performance-based budget plan

review each year.

(b) Independent Fiscal Office.--Within 30 days of receipt of

the board's recommendations, the Independent Fiscal Office shall

review the recommendations and prepare a report that approves or

disapproves the recommendations. The report shall be issued to

the Governor, the President pro tempore of the Senate, the

Minority Leader of the Senate, the Speaker of the House of

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Representatives, the Minority Leader of the House of

Representatives, the chairperson of the Appropriations Committee

of the Senate and the chairperson of the Appropriations

Committee of the House of Representatives.

Section 6. Effective date.

This act shall take effect in 60 days.

SECTION 1. SHORT TITLE.

THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE PERFORMANCE-

BASED BUDGETING ACT.

SECTION 2. FINDINGS.

THE GENERAL ASSEMBLY FINDS AND DECLARES AS FOLLOWS:

(1) THE TRADITIONAL METHOD OF BUDGET DEVELOPMENT, WHICH

RELIES UPON INCREMENTAL ADJUSTMENTS TO EXPENDITURES MADE IN

THE PREVIOUS FINANCIAL PERIOD, INSULATES GOVERNMENTAL

ACTIVITIES FROM THE THOROUGH FISCAL REVIEW EXPECTED BY

TAXPAYING CITIZENS.

(2) NEW AND CHANGING DEMANDS FOR PUBLIC SERVICES ARE MET

THROUGH EXCESSIVE BUDGET GROWTH RATHER THAN BY SYSTEMATIC AND

THOROUGH ANALYSIS BASED ON PERFORMANCE MEASUREMENT AND

ESTABLISHED PERFORMANCE BENCHMARKS AND THE REALLOCATION OF

EXISTING FISCAL RESOURCES. TRADITIONAL BUDGETING PROCESSES

OFTEN RESULT IN THE CONTINUATION OF OBSOLETE OR INEFFECTIVE

PROGRAMS AND INCREASED RELIANCE ON TAXPAYER SUPPORT. SOME

PROGRAMS WERE ESTABLISHED SO LONG AGO THAT THE ORIGINAL

STATUTORY BASIS HAS EITHER BEEN FORGOTTEN OR IS OUT OF DATE.

IN TIME, THE BUDGET IS DRIVEN BY INERTIA RATHER THAN BY CLEAR

AND DEFENSIBLE PURPOSES.

(3) PERFORMANCE-BASED BUDGETING IS AN EFFECTIVE METHOD

TO COUNTER THE TENDENCY TOWARD PERPETUATION OF OUTMODED STATE

PROGRAMS.

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SECTION 3. DEFINITIONS.

THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ACT SHALL

HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE

CONTEXT CLEARLY INDICATES OTHERWISE:

"AGENCY." AN AGENCY, BOARD OR COMMISSION UNDER THE

GOVERNOR'S JURISDICTION.

"BOARD." THE PERFORMANCE-BASED BUDGET BOARD ESTABLISHED

UNDER THIS ACT.

"IFO." THE INDEPENDENT FISCAL OFFICE ESTABLISHED UNDER

ARTICLE VI-B OF THE ACT OF APRIL 9, 1929 (P.L.177, NO.175),

KNOWN AS THE ADMINISTRATIVE CODE OF 1929.

"SECRETARY." THE SECRETARY OF THE BUDGET OF THE

COMMONWEALTH.

SECTION 4. PERFORMANCE-BASED BUDGETS.

(A) INITIATION OF PROGRAM.--NOTWITHSTANDING THE PROVISIONS

OF SECTIONS 610 AND 611 OF THE ACT OF APRIL 9, 1929 (P.L.177,

NO.175), KNOWN AS THE ADMINISTRATIVE CODE OF 1929, TO THE

CONTRARY, THE SECRETARY SHALL FOR FISCAL YEAR 2018-2019 INITIATE

A PROGRAM OF PERFORMANCE-BASED BUDGET REVIEWS AS PART OF THE

ANNUAL BUDGET PREPARATION AND PROGRAM EVALUATION PROCESSES.

(B) SCHEDULE.--THE SECRETARY, IN CONJUNCTION WITH THE

DIRECTOR OF THE IFO, SHALL, BY JANUARY 1, 2017, ESTABLISH A

SCHEDULE OF PERFORMANCE-BASED BUDGET REVIEWS FOR ALL AGENCIES.

THE SCHEDULE SHALL ENSURE THAT THE AGENCIES ARE SUBJECT TO A

PERFORMANCE-BASED BUDGET REVIEW AT LEAST ONCE EVERY FIVE YEARS.

PERFORMANCE-BASED BUDGET REVIEW, THE SECRETARY SHALL NOTIFY THE

AGENCY AND REQUIRE THE AGENCY TO PREPARE AND SUBMIT SUCH

INFORMATION TO THE IFO AS MAY BE REQUIRED FOR THE PREPARATION OF

A PERFORMANCE-BASED BUDGET PLAN. THE INFORMATION SHALL INCLUDE,

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BUT NOT BE LIMITED TO:

(1) DETAILED DESCRIPTIONS OF ALL AGENCY LINE ITEM

APPROPRIATIONS AND PROGRAMS INCLUDING INFORMATION ON

POPULATIONS SERVED, GRANTS AWARDED AND SUBSIDIES PROVIDED FOR

GRANT AND SUBSIDY APPROPRIATIONS.

(2) DESCRIPTIVE INFORMATION AND DATA RELATED TO EXISTING

PERFORMANCE MEASURES FOR AGENCY APPROPRIATIONS AND PROGRAMS.

(3) AN AGENCY MISSION STATEMENT AND AGENCY GOALS AND

OBJECTIVE FOR THE BUDGET YEAR AND SUCCESSIVE PLANNING YEARS

INCLUDING SPECIFIC GOALS AND OBJECTIVES, WHERE THEY EXIST,

FOR AGENCY PROGRAMS.

(4) ANY OTHER INFORMATION AS THE IFO MAY REQUIRE.

(D) SUBMISSION OF INFORMATION.--AGENCIES SHALL SUBMIT

PERFORMANCE-BASED BUDGET INFORMATION CONTEMPORANEOUSLY TO THE

SECRETARY, THE IFO, THE CHAIR AND MINORITY CHAIR OF THE

APPROPRIATIONS COMMITTEE OF THE SENATE AND THE CHAIR AND

MINORITY CHAIR OF THE APPROPRIATIONS COMMITTEE OF THE HOUSE OF

REPRESENTATIVES.

(E) CONCURRENT RESOLUTIONS.--THE GENERAL ASSEMBLY MAY DIRECT

A PERFORMANCE-BASED BUDGET REVIEW FOR AN AGENCY BY ADOPTION OF A

CONCURRENT RESOLUTION. UPON ADOPTION OF A CONCURRENT RESOLUTION

UNDER THIS SUBSECTION, THE SECRETARY SHALL MAKE NOTIFICATION TO

THE AGENCY UNDER SUBSECTION (C).

SECTION 5. INDEPENDENT FISCAL OFFICE.

(A) DEVELOPMENT OF AGENCY PERFORMANCE-BASED BUDGET PLAN.--

(1) THE IFO, PURSUANT TO ITS MANDATE UNDER SECTION 604-

B(A)(3) OF THE ACT OF APRIL 9, 1929 (P.L.177, NO.175), KNOWN

AS THE ADMINISTRATIVE CODE OF 1929, AND THIS ACT, SHALL

REVIEW AGENCY PERFORMANCE-BASED BUDGET INFORMATION AND

DEVELOP AN AGENCY PERFORMANCE-BASED BUDGET PLAN FOR AGENCIES

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SUBJECT TO A PERFORMANCE-BASED BUDGET REVIEW UNDER SECTION 4.

(2) IN DEVELOPING PERFORMANCE-BASED BUDGET PLANS THE IFO

SHALL EVALUATE EACH AGENCY PROGRAM OR LINE-ITEM APPROPRIATION

AND DEVELOP PERFORMANCE MEASURES FOR EACH AGENCY PROGRAM OR

LINE-ITEM APPROPRIATION.

(3) PERFORMANCE MEASUREMENTS SHALL INCLUDE OUTCOME-BASED

MEASURES ALONG WITH EFFICIENCY MEASURES, ACTIVITY COST

ANALYSIS, RATIO MEASURES, MEASURES OF STATUS IMPROVEMENT OF

RECIPIENT POPULATIONS, ECONOMIC OUTCOMES AND PERFORMANCE

BENCHMARKS AGAINST SIMILAR STATE PROGRAMS OR SIMILAR PROGRAMS

OF OTHER STATES OR JURISDICTIONS.

(B) COMPLETION AND SUBMISSION OF EVALUATIONS.--THE

EVALUATIONS UNDER SUBSECTION (A) SHALL BE COMPLETED IN A TIMELY

MANNER AND SUBMITTED BY THE IFO TO THE BOARD FOR REVIEW AND

APPROVAL.

AGENCIES SHALL COOPERATE WITH THE IFO AND PROVIDE ANY

INFORMATION OR DATA THAT THE IFO MAY REQUIRE TO CARRY OUT ITS

DUTIES UNDER THIS ACT.

SECTION 6. PERFORMANCE-BASED BUDGET BOARD.

(A) ESTABLISHMENT.--THE PERFORMANCE-BASED BUDGET BOARD IS

ESTABLISHED AS AN INDEPENDENT BOARD TO REVIEW AND APPROVE THE

PERFORMANCE-BASED BUDGET PLANS DEVELOPED BY THE IFO FOR AGENCIES

AND TO MAKE RECOMMENDATIONS ON HOW EACH AGENCY'S OPERATIONS AND

PROGRAMS MAY BE MADE MORE TRANSPARENT, EFFECTIVE AND EFFICIENT.

(B) MEMBERS.--THE BOARD SHALL CONSIST OF THE FOLLOWING

MEMBERS:

(1) THE SECRETARY.

(2) THE CHAIRPERSON OF THE APPROPRIATIONS COMMITTEE OF

THE SENATE.

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(3) THE MINORITY CHAIRPERSON OF THE APPROPRIATIONS

COMMITTEE OF THE SENATE.

(4) THE CHAIRPERSON OF THE APPROPRIATIONS COMMITTEE OF

THE HOUSE OF REPRESENTATIVES.

(5) THE MINORITY CHAIRPERSON OF THE APPROPRIATIONS

COMMITTEE OF THE HOUSE OF REPRESENTATIVES.

(1) THE BOARD SHALL REVIEW AND APPROVE OR DISAPPROVE

EACH PERFORMANCE-BASED BUDGET PLAN SUBMITTED BY THE IFO IN A

TIMELY MANNER.

(2) PLANS SHALL BE APPROVED BY A MAJORITY VOTE OF THE

BOARD TAKEN AT A PUBLIC MEETING.

(3) MEETINGS OF THE BOARD SHALL BE SUBJECT TO THE ACT OF

FEBRUARY 14, 2008 (P.L.6, NO.3), KNOWN AS THE RIGHT-TO-KNOW

LAW, AND 65 PA.C.S. CH. 7 (RELATING TO OPEN MEETINGS).

(4) PLANS NOT APPROVED OR DISAPPROVED BY THE BOARD

WITHIN 45 DAYS OF SUBMISSION BY THE IFO SHALL BE DEEMED

APPROVED. IF THE BOARD DISAPPROVES A PLAN, IT SHALL BE

RETURNED TO THE IFO WITH RECOMMENDATIONS FOR REVISION AND

RESUBMISSION TO THE BOARD.

(D) PUBLICATION.--APPROVED PERFORMANCE-BASED BUDGET PLANS

SHALL BE PUBLISHED ON THE IFO'S PUBLICLY ACCESSIBLE INTERNET

WEBSITE.

(E) AGENCY REPRESENTATION DURING BOARD REVIEW.--THE HEAD OF

THE AGENCY, OR A DEPUTY SECRETARY-LEVEL POSITION, SHALL:

(1) ATTEND THE PERFORMANCE-BASED BUDGET BOARD MEETING

WHEN THE IFO PRESENTS THE AGENCY'S PERFORMANCE-BASED BUDGET

PLAN.

(2) BE AVAILABLE TO OFFER ADDITIONAL EXPLANATION FOR

INFORMATION CONTAINED IN THE PLAN.

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SECTION 7. GOVERNOR.

THE GOVERNOR SHALL CONSIDER APPROVED AGENCY PERFORMANCE-BASED

BUDGETING PLANS AND PERFORMANCE MEASUREMENTS RELATED THERETO IN

THE ANNUAL BUDGET DEVELOPMENT AND IMPLEMENTATION PROCESSES.

SECTION 8. GENERAL ASSEMBLY.

THE GENERAL ASSEMBLY SHALL CONSIDER APPROVED AGENCY

PERFORMANCE-BASED BUDGETING PLANS AND PERFORMANCE MEASUREMENTS

RELATED THERETO IN THE ANNUAL BUDGET DEVELOPMENT AND

IMPLEMENTATION PROCESSES.

SECTION 9. EFFECTIVE DATE.

THIS ACT SHALL TAKE EFFECT IN 60 DAYS.

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