Regular Session 2019-2020 House Bill 1995 P.N. 4078

PRIOR PRINTER'S NOS. 2798, 3260

PRINTER'S NO. 4078

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1995

Session of

2019

INTRODUCED BY RYAN, BERNSTINE, BROOKS, ECKER, GLEIM, HERSHEY,

KAUFFMAN, LEWIS, MACKENZIE, B. MILLER, STAATS, ROTHMAN AND

JONES, OCTOBER 25, 2019

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,

JULY 7, 2020

AN ACT

Establishing the Keystone Solvency Operating Study Commission

and providing for its powers and duties and for a report.

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 Keystone

Solvency Operating Study Commission Act.

Section 2. Legislative intent.

The intent of this act is to provide insight into financial

risks relative to unfunded pension liabilities, other

postemployment benefit unfunded liabilities, deferred public

sector infrastructure projects to include deferred maintenance,

municipal solvency concerns, school district solvency concerns,

debt service solvency risks of the Commonwealth, financial

stress testing of the Commonwealth's cash flow projections and

current comprehensive annual financial reports under various

economic scenarios and other financial risks that may come

before the Keystone Solvency Operating Study Commission and

provide financial analysis of other states considered

financially vulnerable.

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:

"Commission." The Keystone Solvency Operating Study

Commission established under section 4.

"Commonwealth." The Commonwealth of Pennsylvania.

"Critical risk factor." Any element of risk of sufficient

magnitude which, if not dealt with, may negatively affect the

ability of the Commonwealth to continue to meet financial

obligations.

"PROMESA." The Puerto Rico Oversight, Management, and

Economic Stability Act (Public Law 114-187, 130 Stat. 549).

Section 4. Keystone Solvency Operating Study Commission.

(a) Establishment.--The Keystone Solvency Operating Study

Commission is established as a legislative commission for the

purpose of analyzing the economic conditions of the

Commonwealth, specifically unfunded obligations of school

districts, municipalities and public pension plans. The

commission shall consider unfunded postemployment benefits of

the Commonwealth to determine the impact on operations of other

financial commitments during periods of economic recession. The

study shall ensure that the priority of financial claims is

understood within the framework of the Constitution of

Pennsylvania. The commission shall be comprised of the following

members:

(1) One member appointed by the Governor.

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(2) Two members appointed by the President pro tempore

of the Senate, one from the majority party and one from the

minority party.

(3) Two members appointed by the Speaker of the House of

Representatives, one from the majority party and one from the

minority party.

(2) ONE MEMBER APPOINTED BY THE PRESIDENT PRO TEMPORE OF

THE SENATE.

(3) ONE MEMBER APPOINTED BY THE MINORITY LEADER OF THE

SENATE.

(4) ONE MEMBER APPOINTED BY THE SPEAKER OF THE HOUSE OF

REPRESENTATIVES.

(5) ONE MEMBER APPOINTED BY THE MINORITY LEADER OF THE

HOUSE OF REPRESENTATIVES.

(b) Duties.--The commission shall:

(1) Analyze the financial insolvencies under PROMESA and

solvency concerns of other states to determine if the

Commonwealth can become bankrupt or insolvent and to

determine lessons learned on the impact that insolvency

proceedings may have on the Commonwealth's ability to meet

its financial obligations in annual operating budgets.

(2) Assess how insolvency proceedings may affect the

Commonwealth's ability to meet its obligations to make

employer contributions to the Public School Employees'

Retirement System under 24 Pa.C.S. § 8326 (relating to

contributions by the Commonwealth) and to the State

Employees' Retirement System under 71 Pa.C.S. § 5507

(relating to contributions to the system by the Commonwealth

and other employers), including employer contributions

necessary to pay each system's respective unfunded actuarial

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accrued liability.

(3) Assess how insolvency proceedings may affect the

ability of the State Employees' Retirement System and the

Public School Employees' Retirement System to pay benefits to

annuitants and beneficiaries.

(4) In consultation with the Independent Fiscal Office,

develop cash flow projections for the immediate five years

following the effective date of this section. The projections

shall include best case, expected case and worst-case

scenarios to be defined by the Independent Fiscal Office in

the creation of the projections.

(5) Determine critical risk factors of importance to the

Commonwealth for financial well-being and other control

measures to monitor the associated risk factors.

(6) Develop performance metrics for use by the

Independent Fiscal Office to monitor the critical risk

factors identified with the measures published in the

quarterly economic updates from the Independent Fiscal

Office.

constitute a quorum for the purpose of conducting business.

(d) Chairperson and vice chairperson.--The members shall

select one of the members to be chairperson and another member

to be vice chairperson.

(e) Qualified vote.--A vote on the findings and

recommendations to the General Assembly under section 5 shall

require two-thirds of the members voting in the affirmative.

(f) Compensation and reimbursement.--Members of the

commission shall not receive compensation or reimbursement for

their services on the commission.

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(g) Information gathering.--The commission may conduct

hearings and otherwise gather pertinent information and analysis

that the commission considers appropriate and necessary to

fulfill its duties.

(h) Support.--The General Assembly shall provide

administrative support, meeting space and any other assistance

required by the commission to carry out the commission's duties

under this act.

(i) Transparency and ethics.--The commission shall be

subject to the following laws:

(1) 65 Pa.C.S. Ch. 7 (relating to open meetings).

(2) The act of February 14, 2008 (P.L.6, No.3), known as

the Right-to-Know Law. The commission shall be considered a

legislative agency as defined in section 102 of the Right-to-

Know Law.

Section 5. Report and expiration.

(a) Report.--The commission shall report its findings and

recommendations to the Governor and the General Assembly within

six months of its first organizational meeting. The report shall

be directly submitted to:

(1) The President pro tempore of the Senate.

(2) The Majority Leader of the Senate.

(3) The Minority Leader of the Senate.

(4) The chair and minority chair of the Finance

Committee of the Senate.

(5) The chair and minority chair of the State Government

Committee of the Senate.

(6) The chair and minority chair of the Appropriations

Committee of the Senate.

(7) The Speaker of the House of Representatives.

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(8) The Majority Leader of the House of Representatives.

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

(10) The chair and minority chair of the Finance

Committee of the House of Representatives.

(11) The chair and minority chair of the State

Government Committee of the House of Representatives.

(12) The chair and minority chair of the Appropriations

Committee of the House of Representatives.

(b) Expiration.--The commission shall expire 60 days after

delivery of its report under subsection (a).

Section 6. Effective date.

This act shall take effect in 30 days.

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