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PRIOR PRINTER'S NO. 417
PRINTER'S NO. 1046
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
410
Session of
2017
INTRODUCED BY WARNER, SAYLOR, DUNBAR, CUTLER, TOEPEL, GROVE,
STEPHENS, D. COSTA, WARD, KAUFFMAN, BLOOM, MILLARD, ORTITAY,
ZIMMERMAN, SANKEY, SIMMONS, RADER, GABLER, GILLEN AND DUSH,
FEBRUARY 8, 2017
AS REPORTED FROM COMMITTEE ON STATE GOVERNMENT, HOUSE OF
REPRESENTATIVES, AS AMENDED, MARCH 21, 2017
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.; AND PROVIDING FOR PERFORMANCE
HEARINGS AND PERFORMANCE REVIEWS.
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.
(2) New and changing demands for public services are met
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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statutory basis has either been forgotten or is out of date.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.
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
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contrary, the secretary BOARD 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, BOARD shall, within 30 days of the
effective date of this act, 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.
(c) Notice.--Each time an agency is subject to a
performance-based budget review, the secretary BOARD 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, 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
objectives 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 chairperson and minority chairperson of
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the Appropriations Committee of the Senate and the chairperson
and minority chairperson of the Appropriations Committee of the
House of Representatives BOARD.
(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 BOARD 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
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.
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(c) Interagency cooperation.--The secretary BOARD and the
heads of 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 DIRECTOR OF IFO.
(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
the House of Representatives.
(5) The minority chairperson of the Appropriations
Committee of the House of Representatives.
(c) Review and approval.--
(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).
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(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 AND DISTRIBUTED TO THE GENERAL ASSEMBLY AND BOARD BY
JANUARY 31.
(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.
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. PERFORMANCE HEARING.
(A) APPLICABILITY.--THIS SECTION APPLIES TO A PERFORMANCE
HEARING BY A STANDING COMMITTEE OF THE GENERAL ASSEMBLY TO
REVIEW AN AGENCY'S PROPOSED APPROPRIATION FOR THE NEXT FISCAL
YEAR.
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(B) FREQUENCY.--EACH STANDING COMMITTEE SHALL CONDUCT AT
LEAST ONE PERFORMANCE HEARING BETWEEN FEBRUARY 1 AND MAY 30.
(C) PURPOSE.--EACH STANDING COMMITTEE SHALL HEAR A
PRESENTATION FROM EACH AGENCY THAT IS ASSIGNED TO THAT STANDING
COMMITTEE. THE PRESENTATION SHALL INCLUDE, BUT NOT BE LIMITED
TO, THE AGENCY'S PERFORMANCE-BASED BUDGET PLAN AND REGULATORY
AGENDA FOR THE NEXT FISCAL YEAR.
SECTION 10. PERFORMANCE AUDITS.
(A) FREQUENCY.--THE DEPARTMENT OF THE AUDITOR GENERAL SHALL,
WITHIN EXISTING RESOURCES, CONDUCT OR CAUSE TO BE CONDUCTED
PERFORMANCE AUDITS OF ONE OR MORE SPECIFIC PROGRAMS OR SERVICES
IN AT LEAST TWO AGENCIES ON AN ANNUAL BASIS.
(B) SELECTION CONSIDERATIONS.--IN SELECTING AN AGENCY AND A
SPECIFIC PROGRAM OR SERVICE FOR A PERFORMANCE AUDIT, THE
DEPARTMENT OF THE AUDITOR GENERAL SHALL CONSIDER RISK, AUDIT
COVERAGE, RESOURCES REQUIRED TO CONDUCT THE PERFORMANCE AUDIT
AND THE IMPACT OF THE AUDITED PROGRAM OR SERVICE ON THE AGENCY'S
PERFORMANCE-BASED GOALS.
(C) REVIEW.--A PERFORMANCE AUDIT OF A PROGRAM OR SERVICE
SELECTED FOR AUDIT MAY INCLUDE, BUT IS NOT LIMITED TO, A REVIEW
OF ALL OF THE FOLLOWING:
(1) THE INTEGRITY OF THE PERFORMANCE MEASURES AUDITED.
(2) THE ACCURACY AND VALIDITY OF REPORTED RESULTS.
(3) THE OVERALL COST AND EFFECTIVENESS OF THE AUDITED
PROGRAM OR SERVICE IN ACHIEVING LEGISLATIVE INTENT AND THE
PERFORMANCE GOALS.
(D) TRANSMITTAL.--THE DEPARTMENT OF THE AUDITOR GENERAL
SHALL TRANSMIT EACH PERFORMANCE AUDIT REPORT FOR THE IMMEDIATELY
PRIOR FISCAL YEAR TO THE CHAIRPERSON AND MINORITY CHAIRPERSON OF
THE STANDING COMMITTEES WITH JURISDICTION OVER THE AGENCY.
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(E) OTHER REPORTS.--THE DEPARTMENT OF THE AUDITOR GENERAL
SHALL TRANSMIT ANY OTHER AUDIT REPORT REGARDING AN AGENCY THAT
IS DEEMED RELEVANT FOR REVIEW BY A STANDING COMMITTEE WITH
JURISDICTION OVER THE AGENCY.
Section 9 11. Effective date.
This act shall take effect in 60 days.
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