Regular Session 2017-2018 Senate Bill 0181 P.N. 0276

PRIOR PRINTER'S NO. 161

PRINTER'S NO. 276

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

181

Session of

2017

INTRODUCED BY MENSCH, BARTOLOTTA, GREENLEAF, BROOKS, ARGALL,

RESCHENTHALER, VULAKOVICH, DiSANTO, FOLMER, WAGNER, VOGEL,

STEFANO, EICHELBERGER, LAUGHLIN, RAFFERTY, WHITE, ALLOWAY,

AUMENT, SCARNATI, HUTCHINSON, MARTIN AND WARD,

JANUARY 25, 2017

SENATOR BROWNE, APPROPRIATIONS, AS AMENDED, JANUARY 31, 2017

AN ACT

Providing for performance-based budgeting AND TAX CREDIT

EFFICIENCY REVIEW; 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 AND TAX CREDIT EFFICIENCY 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statutory basis has either been forgotten or is out of date.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.

(4) A THOROUGH AND EFFICIENT REVIEW OF THE TAX CREDITS

THE COMMONWEALTH OFFERS TO VARIOUS INDIVIDUALS, ORGANIZATIONS

AND COMPANIES IS VITAL TO ENSURING THAT THE COMMONWEALTH IS

BEING A GOOD STALWART OF THE SUPPORT OF TAXPAYERS.

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.

"EVALUATION." THE PROCESS OF REVIEW OF A TAX CREDIT BY THE

IFO. THE TERM INCLUDES SOLICITING OR ACCEPTING PUBLIC INPUT.

"EVALUATION DATE." THE DATE BY WHICH AN EVALUATION OF A TAX

CREDIT BY THE IFO MUST BE COMPLETED.

"IFO." The Independent Fiscal Office established under

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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.

"TAX REFORM CODE OF 1971." THE ACT OF MARCH 4, 1971 (P.L.6,

NO.2), KNOWN AS THE TAX REFORM CODE OF 1971.

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, 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.

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,

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

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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

the Appropriations Committee of the Senate and the chairperson

and minority chairperson 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

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

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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. EVALUATION.

(A) EVALUATION.--BEGINNING JANUARY 1, 2018, THE IFO SHALL

UNDERTAKE AND COMPLETE AN EVALUATION OF A TAX CREDIT BY THE

EVALUATION DATE AS FOLLOWS:

(1) ON OR BEFORE JANUARY 1, 2019, FOR THE FOLLOWING TAX

CREDITS:

(I) ARTICLE XVII-D OF THE TAX REFORM CODE OF 1971.

(II) ARTICLE XVII-G OF THE TAX REFORM CODE OF 1971.

(III) ARTICLE XVIII-F OF THE TAX REFORM CODE OF

1971.

(IV) ARTICLE XX-B OF THE ACT OF MARCH 10, 1949

(P.L.30, NO.14), KNOWN AS THE PUBLIC SCHOOL CODE OF 1949.

(2) ON OR BEFORE JANUARY 1, 2020, FOR THE FOLLOWING TAX

CREDITS:

(I) ARTICLE XVII-B OF THE TAX REFORM CODE OF 1971.

(II) ARTICLE XVIII OF THE TAX REFORM CODE OF 1971.

(III) ARTICLE XVIII-E OF THE TAX REFORM CODE OF

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1971.

(IV) THE TAX CREDITS AUTHORIZED UNDER SECTIONS 518

AND 519 OF THE ACT OF OCTOBER 6, 1998 (P.L.705, NO.92),

KNOWN AS THE KEYSTONE OPPORTUNITY ZONE, KEYSTONE

OPPORTUNITY EXPANSION ZONE AND KEYSTONE OPPORTUNITY

IMPROVEMENT ZONE ACT.

(3) ON OR BEFORE JANUARY 1, 2021, FOR THE FOLLOWING TAX

CREDITS:

(I) ARTICLE XVII-E OF THE TAX REFORM CODE OF 1971.

(II) ARTICLE XVII-H OF THE TAX REFORM CODE OF 1971.

(III) ARTICLE XVIII-C OF THE TAX REFORM CODE OF 1971.

(IV) SECTION 1906-F OF THE TAX REFORM CODE OF 1971.

(4) ON OR BEFORE JANUARY 1, 2022, FOR THE FOLLOWING TAX

CREDITS:

(I) ARTICLE XVII-I OF THE TAX REFORM CODE OF 1971.

(II) ARTICLE XIX-A OF THE TAX REFORM CODE OF 1971.

(III) ARTICLE XIX-B OF THE TAX REFORM CODE OF 1971.

(IV) ARTICLE XIX-C OF THE TAX REFORM CODE OF 1971.

(V) THE TAX CREDIT AUTHORIZED UNDER CHAPTER 7 OF THE

ACT OF JULY 9, 2008 (1ST SP.SESS., P.L.1873, NO.1), KNOWN

AS THE ALTERNATIVE ENERGY INVESTMENT ACT.

(5) ON OR BEFORE JANUARY 1, 2023, FOR THE FOLLOWING TAX

CREDITS:

(I) ARTICLE XVII-A OF THE TAX REFORM CODE OF 1971.

(II) ARTICLE XVIII-B OF THE TAX REFORM CODE OF 1971.

(III) ARTICLE XVIII-D OF THE TAX REFORM CODE OF

1971.

(IV) ANY OTHER TAX CREDIT NOT SPECIFIED UNDER THIS

SUBSECTION.

(B) FREQUENCY.--TAX CREDITS ENUMERATED UNDER SUBSECTION (A)

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SHALL BE EVALUATED BY THE IFO ON OR BEFORE JANUARY 1 OF EVERY

FIFTH YEAR AFTER THE DATES SPECIFIED UNDER SUBSECTION (A)(1),

(2), (3), (4) AND (5).

CREDIT AUTHORIZED ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION

SHALL BE EVALUATED BY THE IFO ON OR BEFORE JANUARY 1 OF THE

FIFTH YEAR AFTER ENACTMENT.

(D) TERMINATION.--IF A TAX CREDIT HAS A TERMINATION DATE

PROVIDED FOR BY LAW, AN EVALUATION SHALL BE MADE BY THE IFO OF

THE TAX CREDIT ON OR BEFORE JANUARY 1 OF THE YEAR PRECEDING THE

CALENDAR YEAR OF THE TERMINATION DATE.

(E) DUTY.--THE IFO MUST SUBMIT A REPORT OF THE EVALUATIONS

MADE UNDER THIS SECTION TO THE GOVERNOR, THE CHAIRPERSON AND

MINORITY CHAIRPERSON OF THE APPROPRIATIONS COMMITTEE OF THE

SENATE, THE CHAIRPERSON AND MINORITY CHAIRPERSON OF THE FINANCE

COMMITTEE OF THE SENATE, THE CHAIRPERSON AND MINORITY

CHAIRPERSON OF THE APPROPRIATIONS COMMITTEE OF THE HOUSE OF

REPRESENTATIVES AND THE CHAIRPERSON AND MINORITY CHAIRPERSON OF

THE FINANCE COMMITTEE OF THE HOUSE OF REPRESENTATIVES AND MUST

MAKE THE REPORTS AVAILABLE ON THE IFO'S PUBLICLY ACCESSIBLE

INTERNET WEBSITE.

(F) CONTENTS.--A REPORT UNDER SUBSECTION (E) MUST INCLUDE

ALL OF THE FOLLOWING:

(1) THE PURPOSE FOR WHICH THE TAX CREDIT WAS

ESTABLISHED.

(2) WHETHER THE ORIGINAL INTENT OF THE TAX CREDIT IS

STILL APPROPRIATE.

(3) WHETHER THE TAX CREDIT IS MEETING THE TAX CREDIT'S

STATED INTENT.

(4) WHETHER THE TAX CREDIT COULD BE MORE EFFICIENTLY AND

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EFFECTIVELY CARRIED OUT THROUGH ALTERNATIVE METHODS.

(5) THE COSTS OF PROVIDING THE TAX CREDIT, INCLUDING THE

ADMINISTRATIVE COST TO THE COMMONWEALTH AND LOST REVENUES TO

THE COMMONWEALTH AND LOCAL GOVERNMENTS.

(6) WHETHER THE TAX CREDIT SHOULD BE CONTINUED,

TERMINATED OR AMENDED.

(7) IF THE TAX CREDIT SHOULD BE AMENDED, RECOMMENDED

CHANGES TO MAKE THE TAX CREDIT MORE EFFICIENT AND EFFECTIVE.

Section 6 7. 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.

(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

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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.

Section 7 8. 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 9. General Assembly.

The General Assembly shall consider approved agency

performance-based budgeting plans and, performance measurements

related thereto AND WHETHER OR NOT A TAX CREDIT IS EFFICIENT in

the annual budget development and implementation processes.

Section 9 10. Effective date.

This act shall take effect in 60 days.

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