Regular Session 2015-2016 Senate Bill 1227 P.N. 1759

PRINTER'S NO. 1759

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1227

Session of

2015

INTRODUCED BY BLAKE AND BROWNE, MAY 9, 2016

REFERRED TO FINANCE, MAY 9, 2016

AN ACT

Amending the act of April 9, 1929 (P.L.177, No.175), entitled

"An act providing for and reorganizing the conduct of the

executive and administrative work of the Commonwealth by the

Executive Department thereof and the administrative

departments, boards, commissions, and officers thereof,

including the boards of trustees of State Normal Schools, or

Teachers Colleges; abolishing, creating, reorganizing or

authorizing the reorganization of certain administrative

departments, boards, and commissions; defining the powers and

duties of the Governor and other executive and administrative

officers, and of the several administrative departments,

boards, commissions, and officers; fixing the salaries of the

Governor, Lieutenant Governor, and certain other executive

and administrative officers; providing for the appointment of

certain administrative officers, and of all deputies and

other assistants and employes in certain departments, boards,

and commissions; and prescribing the manner in which the

number and compensation of the deputies and all other

assistants and employes of certain departments, boards and

commissions shall be determined," in organization of

independent administrative boards and commissions,

transferring certain powers and duties relating to public

pension system analysis and legislation; providing for the

Independent Fiscal Office; in powers and duties of the

Department of the Auditor General, transferring certain

powers and duties relating to municipal pension reporting and

analysis; and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of April 9, 1929 (P.L.177, No.175), known

as The Administrative Code of 1929, is amended by adding a

section to read:

Section 310. Transferring Certain Powers and Duties Relating

to Public Pension System Analysis and Legislation.--(a)

Notwithstanding any other provision of law, the Independent

Fiscal Office shall have the following additional duties as they

relate to any retirement pension plan or pension system

established by a municipality under any act or authority granted

by the General Assembly and any retirement or pension plan

established and administered pursuant to 24 Pa.C.S. Pt. IV

(relating to retirement for school employees) and 71 Pa.C.S. Pt.

XXV (relating to retirement for State employees and officers):

(1) At the request of any officer listed in this clause, to

analyze the provisions of a bill relating to public employe

retirement or pension policy and issue a report on the bill in a

timely fashion. The report shall provide a synopsis of the bill

and financial cost and shall identify proposed changes to

current law and current policy. The report, after consultation

with the requesting officer, may include an assessment of the

actuarial impact and shall be submitted to the following:

(i) The President pro tempore of the Senate and the Speaker

of the House of Representatives.

(ii) The Majority Leader and the Minority Leader of the

Senate.

(iii) The Majority Leader and the Minority Leader of the

House of Representatives.

(iv) The chairperson and the minority chairperson of the

Appropriations Committee of the Senate.

(v) The chairperson and the minority chairperson of the

Appropriations Committee of the House of Representatives.

(2) To prepare actuarial notes in the form and manner

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prescribed under section 7 of the act of July 9, 1981 (P.L.208,

No.66), known as the "Public Employee Retirement Commission

Act," by selecting an enrolled pension actuary to prepare an

actuarial note. Actuarial notes shall include a reliable

estimate of the financial and actuarial effect of the proposed

change in any pension or retirement system. The Independent

Fiscal Office shall transmit actuarial notes to the Governor,

President pro tempore of the Senate and the Speaker of the House

of Representatives within the time periods specified under

section 7 of the "Public Employee Retirement Commission Act" at

the request of any of the following:

(i) The President pro tempore of the Senate or the Speaker

of the House of Representatives.

(ii) The Majority Leader or the Minority Leader of the

Senate.

(iii) The Majority Leader or the Minority Leader of the

House of Representatives.

(iv) The chairperson or the minority chairperson of the

Appropriations Committee of the Senate.

(v) The chairperson or the minority chairperson of the

Appropriations Committee of the House of Representatives.

(3) To establish and review public employe retirement plans

for actuarial soundness and report the results to the General

Assembly.

(4) To maintain the following on its Internet website in a

publicly accessible and searchable area:

(i) All actuarial notes issued by the Public Employee

Retirement Commission prior to the effective date of this

section.

(ii) All actuarial notes issued by the Independent Fiscal

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Office.

(iii) Any other information that is requested to be posted

by an officer listed in clause (1).

(5) After expending all appropriations for the performance

of its duties under this section, to request a reimbursement of

expense from the entity requesting the preparation of materials

under this subsection.

(6) To perform any other duty under section 6(a)(1) or (10)

of the "Public Employee Retirement Commission Act" as requested

by any officer listed in paragraph (1).

(b) A restricted account is established in the General Fund

which shall consist of reimbursement payments received by the

Independent Fiscal Office under subsection (a)(5). The money in

the restricted account is hereby appropriated on a continuing

basis to the Independent Fiscal Office for the purpose of the

performance of its duties under this section, provided that the

money in the restricted account may not be expended unless the

Independent Fiscal Office expends all other appropriations for

the performance of its duties under this section.

retirement plan" shall mean any of the following:

(1) The State Employees' Retirement System established under

71 Pa.C.S. Pt. XXV.

(2) The Public School Employees' Retirement System

established under 24 Pa.C.S. Pt. IV.

(3) The Pennsylvania Municipal Retirement System established

under the act of February 1, 1974 (P.L.34, No.15), known as the

"Pennsylvania Municipal Retirement Law."

(4) Any other independent pension or retirement plan for

public officers and employes of the Commonwealth.

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(5) Pension or retirement plans established under 11 Pa.C.S.

Pt. V (relating to third class cities).

(6) Pension or retirement plans created pursuant to the act

of May 29, 1956 (1955 P.L.1804, No.600), referred to as the

Municipal Police Pension Law.

Section 2. The act is amended by adding an article to read:

ARTICLE VI-B

INDEPENDENT FISCAL OFFICE

Section 601-B. Scope of article.

This article relates to independent fiscal estimates.

Section 602-B. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Commonwealth agency." Any office, department, authority,

board, multistate agency or commission of the executive branch.

The term includes:

(1) The Office of the Governor.

(2) The Office of Attorney General, the Department of

the Auditor General and the Treasury Department.

(3) An independent agency as defined in 62 Pa.C.S. § 103

(relating to definitions).

(4) A State-affiliated entity as defined in 62 Pa.C.S. §

103 (relating to definitions).

(5) The General Assembly.

(6) The Judiciary.

"Director." The Director of the Independent Fiscal Office.

"Office." The Independent Fiscal Office established in

section 603-B.

"Selection and organization committee." The Independent

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Fiscal Office Selection and Organization Committee.

Section 603-B. Office established.

There is established a nonpartisan Independent Fiscal Office

as an independent agency.

Section 604-B. Duties of office.

(a) Mandatory.--The office shall:

(1) Prepare revenue estimates to include Federal funds,

State revenues and funds from other resources, including any

projected revenue surplus or deficit for a given fiscal year,

as provided under section 605-B.

(2) By November 15 of each year, provide an assessment

of the State's current fiscal condition and a projection of

what the fiscal condition will be during the next five years.

The assessment shall take into account the state of the

economy, demographics, revenues and expenditures.

(3) Develop performance measures for executive-level

programs and departments and evaluate performance measures

and results as promulgated and reported by executive-level

departments. Performance measurements shall be outcome based

and include, but not be limited to, activity cost analysis,

measures of status improvement of recipient populations,

economic outcomes and performance benchmarks against similar

State programs.

(4) Provide an analysis, including economic impact, of

all tax and revenue proposals submitted by the Governor or

the Office of the Budget.

(5) Study and analyze the existing sales and use tax law

and propose recommendations to the Governor and the General

Assembly for amending the tax to:

(i) eliminate obsolete and unnecessary provisions;

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(ii) expand the tax base as necessary;

(iii) ensure a competitive economic market in this

Commonwealth; and

(iv) protect the stability of the Commonwealth's

budget.

(6) Establish an Internet website.

(7) Study and analyze the impact of shared-risk

contributions under 24 Pa.C.S. § 8321(b) (relating to regular

member contributions for current service) and 71 Pa.C.S. §

5501.1 (relating to shared-risk member contributions for

Class A-3 and Class A-4 service).

(b) Discretionary.--The office may:

(1) Develop and use econometric models to annually

forecast State revenues and update the models. The office

shall make the equations of a model and any historic

databases related thereto available to the chair and minority

chair of the Appropriations Committee of the Senate, the

chair and minority chair of the Appropriations Committee of

the House of Representatives, the Majority Leader and

Minority Leader of the Senate and the Majority Leader and

Minority Leader of the House of Representatives.

(2) Provide an analysis of the executive budget,

including budgetary projections, economic outlook and

economic impact. The budget analysis may include performance

recommendations to secure greater efficiency and economy.

(3) Provide an assessment of the Pennsylvania economy

and the national economy and the impact of the existing or

emerging State or national economic trends on revenue

performance for the current year and the forecasted or

projected revenue collections for the budget year and the

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succeeding year.

Section 605-B. Revenue estimates.

(a) Initial revenue estimate.--By May 1, the office shall

submit to the General Assembly an initial revenue estimate for

the next fiscal year.

(b) Official revenue estimate.--

(1) By June 15 of each year, the office shall submit an

official revenue estimate for the next fiscal year.

(2) A revenue estimate submitted under this section

shall be considered by the Governor and the General Assembly

as the amount of revenue which may be considered for the

general appropriation act for the ensuing fiscal year unless

the General Assembly or the Governor determines that revenues

are greater than or less than the estimate provided under

this section. The office may amend the revenue estimate under

this section if changes in law affecting revenues and

receipts are enacted or proposed to be enacted with the

annual State budget or unless significant changes in economic

assumptions occur prior to June 30. The office shall submit

the amended revenue estimate to the General Assembly within

10 days of the change.

(3) The office shall publish the methodology used to

develop revenue estimates.

minority chair of the Appropriations Committee of the Senate,

the chair and minority chair of the Appropriations Committee of

the House of Representatives and the Secretary of the Budget all

data, assumptions or econometric models used to develop

projections and revenue estimates.

(d) Required information.--

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(1) A revenue estimate submitted by the office under

subsection (b) shall include:

(i) Projected revenue collections by specific tax or

revenue source, including Federal funds, the General

Fund, the Lottery Fund and the Motor License Fund.

(ii) All data, assumptions and econometric models

used to develop a revenue estimate.

(iii) Any projected revenue surplus or deficit for

the current fiscal year.

(2) A revenue estimate shall be based on existing law

and tax policy and existing or emerging State or national

economic trends.

(e) Proposed change in law.--The office shall prepare a

revenue estimate of any change in law affecting revenues and

receipts, including increases in regulatory fees, proposed or

considered as part of the annual State budget. If the proposed

change in law will have a fiscal impact in excess of $10,000,000

in any fiscal year, the estimate shall be prepared on the basis

of assumptions that estimate the probable behavioral responses

of taxpayers, businesses and other persons to the proposed

changes and shall include a statement identifying those

assumptions. The information may be used to revise the revenue

estimate under subsection (a).

(f) Department of Revenue.--The Department of Revenue in

conjunction with the Secretary of the Budget shall make revenue

estimates for the use of the Governor in preparing the budget.

(g) Governor.--The Governor shall certify that any

appropriation bill does not cause total appropriations to exceed

revenues plus any unappropriated surplus as provided in section

618.

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Section 606-B. Budget information.

The office shall be notified and shall attend any briefings

provided by the Governor or the Secretary of the Budget under

section 619.

Section 607-B. Expenditures.

(a) Expenditure reports.--Commonwealth agencies shall make

monthly expenditure data available to the office. The data shall

be provided within seven days after the end of each month. The

monthly data shall include a summary of the last monthly

submission. The data shall be provided in finished reports or

electronically, as provided in this act. The data shall be

provided by fund, by appropriation, by department and by

organization within each department and shall include:

(1) Number of filled personnel positions and their cost.

(2) Itemized personnel vacancies and their cost.

(3) New positions created and their cost.

(4) Wage and overtime costs.

(5) Allotments and expenditures for itemized personnel

expenses.

(6) Allotments and expenditures for itemized operating

expenses.

(7) Allotments and expenditures for itemized fixed

assets.

(8) The rate of expenditures in appropriations for major

subsidy and grant programs during the month.

(b) Revenue reports.--The Governor shall direct that monthly

revenue reports be submitted to the office. The revenue reports

shall show the actual collection of revenue itemized by source

and a comparison of the actual collections with estimated

collections for each month. The comparison shall include an

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analysis of any change in collection patterns which will cause a

shortfall or overrun on annual estimates of more than 1%.

to be prepared any other revenue data as may be requested from

time to time by the office.

(d) Electronic access.--Except for information that is

confidential pursuant to statute, the office shall have access

to all information available under this section on inquiry-only

screens through an integrated central computer system.

Section 608-B. Revenue conference.

By January 31 of each year, the office shall convene a

meeting with the Secretary of the Budget, the Secretary of

Revenue and 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 to

discuss the following:

(1) The Pennsylvania economy and the national economy

and the impact of the economic trends on revenue performance

for the budget year and the succeeding year.

(2) Current year-to-date revenue collections by specific

tax or revenue source, including Federal funds, the General

Fund, the Lottery Fund and the Motor License Fund and

variations that may be occurring in the revenue estimate

submitted under section 605-B(a).

(3) Any statutory or tax policy changes that may be

recommended by the Governor or the General Assembly for the

next succeeding fiscal year.

Section 609-B. Access to information.

(a) Agencies.--The director is authorized to secure

information, data, expense information, estimates and statistics

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directly from a Commonwealth agency or a political subdivision.

All Commonwealth agencies and political subdivisions shall

furnish the director with all reports of expenditure for each

agency and any other available material or data which the

director determines to be necessary in the performance of the

duties of the office, other than material the disclosure of

which would be a violation of law. The director is also

authorized, upon agreement with the head of any Commonwealth

agency or political subdivision, to utilize the services,

facilities and personnel of the agency with or without

reimbursement.

(b) Office of the Budget.--In carrying out the duties and

functions of the office, the director is authorized to obtain

information, data, estimates and statistics developed by the

Office of the Budget and all Commonwealth agencies. The Office

of the Budget shall submit to the office copies of final agency

budget requests at the same time they are submitted to the

General Assembly under this act.

under this article, the office shall have access to any

computerized database of a State agency that is required to aid

the office in the performance of its duties, except that any

statutory requirements regarding privacy of individuals' records

shall be observed in providing access.

(d) Daily revenue data.--

(1) The Secretary of Revenue and the Secretary of the

Budget shall post revenue collection data for each deposit

day and make the information available to the office and the

chair and minority chair of the Appropriations Committee of

the Senate and the chair and minority chair of the

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Appropriations Committee of the House of Representatives.

(2) The Governor, the Attorney General, the Auditor

General and the State Treasurer shall cause to be prepared

any other revenue data as may be requested by the office.

(e) Tax information.--For the purposes of carrying out its

official duties under section 605-B and notwithstanding any

other law of this Commonwealth, the office shall be authorized

to access any information in the possession of the Department of

Revenue that is obtained from tax payments, returns or reports,

including adjustments or corrections made by the department. The

information accessed under this section shall be confidential

except for official purposes and any person divulging the

information shall be subject to section 731 of the act of April

9, 1929 (P.L.343, No.176), known as The Fiscal Code.

(f) Civil action.--If information is not made available by a

Commonwealth agency or political subdivision within a reasonable

time, the director may make a written request to the agency

head, stating the authority to receive the information. The

agency head shall have 15 days to respond. If the information is

not provided within 15 days of the receipt of the director's

request, the director may bring a civil action to require the

agency head to provide the information.

Section 610-B. Selection and organization committee.

(a) Selection and organization committee.--The Independent

Fiscal Office Selection and Organization Committee is

established to organize the office and select the director of

the office. The selection and organization committee shall

consist of the following:

(1) The chair and minority chair of the Appropriations

Committee of the Senate and the chair and minority chair of

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the Appropriations Committee of the House of Representatives.

(2) The Majority Leader and the Minority Leader of the

Senate and the Majority Leader and the Minority Leader of the

House of Representatives.

(3) The President pro tempore of the Senate and the

Speaker of the House of Representatives.

(b) Duties of committee.--The selection and organization

committee shall deliberate the following:

(1) The procedures to be adopted to select the director

of the office.

(2) The operational budget for the office.

Section 611-B. Appointment.

(a) Director.--The office shall be headed by a director

appointed by the selection and organization committee. The

appointment shall be made without regard to political

affiliation and solely on the basis of fitness to perform the

duties of the office based on qualifications published by the

selection and organization committee.

(b) Deputy director.--The director shall appoint a deputy

director who shall perform such duties as assigned by the

director and who shall, during the absence or incapacity of the

director or a vacancy, act as the director.

years. An individual appointed as director to fill a vacancy

prior to the expiration of a term shall serve only for the

unexpired portion of that term. An individual serving as

director at the expiration of a term may continue to serve until

a successor is appointed.

(d) Removal.--The director may be removed by a concurrent

resolution passed by the Senate and the House of

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Representatives.

Section 612-B. Powers and duties of director.

(a) Personnel.--The director shall appoint and fix the

compensation of personnel as necessary to carry out the duties

and functions of the office. All personnel of the office shall

be appointed without regard to political affiliation and solely

on the basis of their fitness to perform their duties.

(b) Experts and consultants.--In carrying out the duties and

functions of the office, the director may procure the temporary

or intermittent services of attorneys, experts or consultants or

organization thereof by contract.

Section 613-B. Records.

The office shall be a legislative agency for purpose of the

act of February 14, 2008 (P.L.6, No.3), known as the Right-to-

Know Law.

Section 614-B. Applicability.

To the extent that this article is inconsistent with section

618, the provisions of this article shall apply.

Section 3. The act is amended by adding sections to read:

Section 1004. Transferring Certain Powers and Duties

Relating to Municipal Pension Reporting and Analysis.--(a)

Notwithstanding any other provision of law, the powers and

duties of the Public Employee Retirement Commission under the

act of December 18, 1984 (P.L.1005, No.205), known as the

"Municipal Pension Plan Funding Standard and Recovery Act,"

shall be transferred to the Department of the Auditor General in

accordance with this section. The transferred duties shall be

independent of the Department of the Auditor General's existing

audit functions and shall be segregated in a departmental bureau

separate from the bureau that performs audit functions as of the

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effective date of this section.

(b) Within thirty (30) days of the effective date of this

section, the Department of the Auditor General shall provide

notice of the transfer of powers and duties under this section

to all of the following:

(1) The Governor.

(2) The President pro tempore of the Senate.

(3) The Speaker of the House of Representatives.

(4) The Minority Leader of the Senate.

(5) The Minority Leader of the House of Representatives.

(6) The chair and minority chair of the Finance

Committee of the Senate.

(7) The chair and minority chair of the Finance

Committee of the House of Representatives.

the Auditor General which are used or held in connection with

the powers and duties transferred under this section:

(1) All necessary personnel.

(2) Contractual obligations.

(3) Mortgages, liens, encumbrances and any other secured

interests, records, files, property, supplies and equipment.

(4) The unexpended balance of appropriations,

allocations and other funds available or to be made

available.

(d) The responsibility of municipalities to file and report

materials and to otherwise comply with the "Municipal Pension

Plan Funding Standard and Recovery Act" shall remain in effect

after the effective date of this section, except all filing and

reporting under the "Municipal Pension Plan Funding Standard and

Recovery Act" shall be made to the Department of the Auditor

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General in the manner directed by the department. Within thirty

(30) days of the effective date of this section, the Auditor

General shall submit to the Legislative Reference Bureau for

publication in the Pennsylvania Bulletin, and shall post on the

Department of the Auditor General's publicly accessible Internet

website, the manner of preparing the filings and reports

required by the "Municipal Pension Plan Funding Standard and

Recovery Act" and the method of delivering and submitting those

filings and reports to the Department of the Auditor General.

(e) The Department of the Auditor General shall perform the

cost certification procedures pursuant to Chapter 5 of the

"Municipal Pension Plan Funding Standard and Recovery Act" and

shall transmit its calculation and determination to the Office

of the Budget for review and certification within ninety (90)

days. After performing its review and certification, the Office

of the Budget shall transmit its certification to the Department

of the Auditor General for the performance of any additional

functions that have been assigned to it under the "Municipal

Pension Plan Funding Standard and Recovery Act" in accordance

with this section by August 1 of each calendar year. The

Department of the Auditor General shall maintain and post the

reports required under the "Municipal Pension Plan Funding

Standard and Recovery Act" on its publicly accessible Internet

website.

Section 1005. Transfer of Certain Employes.--By October 1,

2016, or upon the duties in section 1004 being transferred,

whichever occurs first, the employes of the Public Employee

Retirement Commission are transferred to the Department of

Auditor General.

Section 4. The addition of Article VI-B of the act is a

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continuation of 71 Pa.C.S. Ch. 41. The following apply:

(1) Except as otherwise provided in Article VI-B of the

act, all activities initiated under 71 Pa.C.S. Ch. 41 shall

continue and remain in full force and effect and may be

completed under Article VI-B of the act. Orders, regulations,

rules and decisions which were made under 71 Pa.C.S. Ch. 41

and which are in effect on the effective date of this section

shall remain in full force and effect until revoked, vacated

or modified under Article VI-B of the act. Contracts,

obligations and collective bargaining agreements entered into

under 71 Pa.C.S. Ch. 41 are not affected nor impaired by the

repeal of 71 Pa.C.S. Ch. 41.

(2) Any difference in language between Article VI-B of

the act and the 71 Pa.C.S. Ch. 41 is intended only to conform

to the style of the act and is not intended to change or

affect the legislative intent, judicial construction or

administration and implementation of 71 Pa.C.S. Ch. 41.

Section 5. Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of

Article VI-B of the act.

(2) The provisions of 71 Pa.C.S. Ch. 41 are repealed.

(3) The act of July 9, 1981 (P.L.208, No.66), known as

the Public Employee Retirement Commission Act, is repealed

insofar as it is inconsistent with this act.

Section 6. This act shall take effect immediately.

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