Regular Session 2021-2022 House Bill 0259 P.N. 0230

PRINTER'S NO. 230

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

259

Session of

2021

INTRODUCED BY GROVE, JONES, RYAN, STAATS, IRVIN, KAUFFMAN, ROAE,

PICKETT, ROWE, JAMES, OWLETT, COOK, ZIMMERMAN, B. MILLER,

GAYDOS, MOUL, WHEELAND AND GLEIM, JANUARY 26, 2021

REFERRED TO COMMITTEE ON FINANCE, JANUARY 26, 2021

AN ACT

Amending Title 72 (Taxation and Fiscal Affairs) of the

Pennsylvania Consolidated Statutes, providing for preliminary

provisions, for taxation, for fiscal affairs and for

Commonwealth budget procedures; establishing the Joint

Revenue Estimation Committee and the Performance-based

Incentive Account; and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Title 72 of the Pennsylvania Consolidated

Statutes is amended by adding parts to read:

PART I

PRELIMINARY PROVISIONS

(Reserved)

PART II

TAXATION

Chapter

17. (Reserved)

CHAPTER 17

(Reserved)

PART III

FISCAL AFFAIRS

Chapter

100. Commonwealth Budget Procedures

CHAPTER 100

COMMONWEALTH BUDGET PROCEDURES

Subchapter

A. General Provisions

B. Office of the Budget

C. Budget Procedures

D. Performance, Transparency and Accountability-based

Budgeting

E. Expenditures and Lapsed Funds

F. Cost Savings and Performance-based Incentive Account

G . Implementation

SUBCHAPTER A

GENERAL PROVISIONS

Sec.

10001. Scope of chapter.

10002. Definitions.

10003. Applicability of chapter .

§ 10001. Scope of chapter.

The chapter relates to State measurement for accountable,

responsive and transparent (SMART) budgeting for the

Commonwealth.

§ 10002. Definitions.

The following words and phrases when used in this chapter

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

context clearly indicates otherwise:

"Committee." The Joint Revenue Estimation Committee

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established in section 10026 (relating to revenue estimates).

"Continuous improvement process system." A system that may

involve any of the following strategies:

(1) Developing a process map that describes the lean

government principles or another widely accepted business

process improvement system by which an executive agency

engages in specific activities that have the purpose of

increasing efficiency and eliminating waste in the processes

used to deliver goods and services to taxpayers and customers

of the Commonwealth. The term includes the measurement of the

outcomes regarding increased efficiency and the elimination

of waste and procedures by which the executive agency

produces goods or serves its customers.

(2) Engaging in specific activities to rapidly improve

the executive agency's processes that will increase value or

decrease staff time, inventory, defects, overproduction,

complexity, delays or excessive movement.

(3) Involving executive agency employees at all levels

to map the executive agency's processes and recommend

improvements, with specific importance placed on the

involvement of executive agency employees closest to the

customer or end user of the State government product or

service.

(4) Providing the means to measure each process in order

to demonstrate the effectiveness of each process or process

improvement.

(5) Training executive agency employees to mentor and

train other executive agency employees in continuous

improvement process system methodologies.

"Executive agency." Any of the following:

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(1) The Governor's Office.

(2) A department, board, commission, authority or other

agency of the Commonwealth that is subject to the policy

supervision and control of the Governor.

(3) The Office of Lieutenant Governor.

(4) An independent department.

(5) An independent agency.

"Fiscal year." The period beginning on July 1 of each

calendar year and ending on June 30 of the next calendar year.

"Independent agency." A board, commission, authority or

other agency of the Commonwealth that is not subject to the

policy supervision and control of the Governor. The term does

not include:

(1) a court or agency of the unified judicial system; or

(2) the General Assembly or an agency of the General

Assembly.

"Independent department." Any of the following:

(1) The Department of the Auditor General.

(2) The Treasury Department.

(3) The Office of Attorney General.

(4) A board or commission of an entity under paragraph

(1), (2) or (3).

"Performance evaluation." A regular review of an executive

agency's outcomes compared to its published performance goals. A

performance evaluation shall be based on actual historical

information.

"Performance goal." A specific, quantifiable goal related to

a performance measure adopted by an executive agency.

"Performance management system." A formal system of managing

the processes and operations of executive agencies.

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"Performance measure." A quantitative indicator used to

assess the operational performance of an executive agency under

a published performance plan. A performance measure must:

(1) Apply to activities directly under the influence of

the executive agency.

(2) Demonstrate the executive agency's efficiency and

effectiveness in delivering goods or services to customers

and taxpayers.

(3) Be reasonably understandable to the public.

"Performance plan." A document prepared by an executive

agency as part of a performance management system. A performance

plan must incorporate the impact of management strategies and

continuous improvement process system activities on the costs

and efficiency of delivering goods and services to taxpayers and

customers of the State government. An executive agency shall

coordinate performance plans to ensure a continuity of programs

affecting similar constituencies.

"Process map." A written or visual presentation that

describes the steps involved in producing a product or service

from beginning to end.

"Secretary." The Secretary of the Budget.

"Strategic plan." A systemic process of envisioning a

desired future and translating the vision into broadly defined

goals or objectives and a sequence of steps to achieve them.

§ 10003. Applicability of chapter .

This chapter shall not apply to any of the following:

(1) A court or agency of the unified judicial system.

(2) The General Assembly or an agency of the General

Assembly.

(3) A political subdivision.

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(4) A municipal authority or other local authority.

(5) An agency of an entity under paragraph (3) or (4).

SUBCHAPTER B

OFFICE OF THE BUDGET

Sec.

10011. Administration of office.

10012. Duties of office generally.

10013. Appointment of secretary.

10014. Salary of secretary.

10015. Program evaluation.

10016. Audit functions.

10017. Fiscal note.

§ 10011. Administration of office.

The Office of the Budget shall be an administrative agency

within the Governor's Office.

§ 10012. Duties of office generally.

The Office of the Budget shall:

(1) Continue to exercise the powers and perform the

duties vested in and imposed upon the secretary.

(2) Be centrally concerned with the development of the

budget request of the Governor and with the decisions

necessary to allocate revenues among the various Commonwealth

programs.

§ 10013. Appointment of secretary.

The Governor shall appoint a Secretary of the Budget to serve

at the pleasure of the Governor.

§ 10014. Salary of secretary.

(a) Amount.--The annual salary of the secretary shall be

$160,000 or at such higher level as is established by the

Governor with the approval of the Executive Board.

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(b) Definition.--As used in this section, the term

"Executive Board" is as described in section 204 of the act of

April 9, 1929 (P.L.177, No.175), known as The Administrative

Code of 1929.

§ 10015. Program evaluation.

The secretary shall have the power and duty to initiate and

conduct, under the direction of the Governor, evaluations of the

effectiveness and management efficiency of programs supported by

an agency subject to the policy supervision and control of the

Governor, including federally funded programs and State-funded

programs, and to direct, coordinate, assist or advise the agency

in the conduct of evaluations of the agency's programs or

programs which the agency supports. The secretary shall also

prepare reports detailing the results of program evaluations

conducted by the secretary for distribution to the Governor, the

Independent Fiscal Office, the General Assembly, interested

agencies and the general public.

§ 10016. Audit functions.

The secretary shall initiate and conduct, under the direction

of the Governor, audits of the programs supported by an agency

subject to the policy supervision and control of the Governor,

including federally funded programs and State-funded programs.

The audits shall comply with the Single Audit Act of 1984 (31

U.S.C. § 7501 et seq.) and the Office of Management and Budget

Circular A-133 and any other Federal requirements for a

Statewide single audit. The secretary shall also prepare reports

detailing the results of audits conducted by the secretary for

distribution to the Governor, the Independent Fiscal Office, the

members of the General Assembly, interested agencies and the

general public.

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§ 10017. Fiscal note.

(a) Preparation.--The Office of the Budget shall prepare a

fiscal note for regulatory actions and administrative procedures

of each executive agency receiving money from the State

Treasury. The fiscal note shall state whether the proposed

action or procedure causes a loss of revenue or an increase in

the cost of programs to the Commonwealth or its political

subdivisions.

(b) Publication.--Any regulatory action or administrative

procedure that requires a fiscal note shall be transmitted to

the Legislative Reference Bureau for publication in the

Pennsylvania Bulletin at the same time that the proposed change

is advertised.

information:

(1) The designation of the fund out of which the

appropriation providing for expenditures for the action or

procedure shall be made.

(2) The projected cost of the action or procedure during

the fiscal year in which it is implemented and for each of

the five succeeding fiscal years.

(3) The projected loss of revenue associated with the

action or procedure during the fiscal year in which it is

implemented and for each of the five succeeding fiscal years.

(4) The fiscal history of the action or procedure for

which expenditures are to be made.

(5) The line item, if any, of the General Appropriation

Act or other appropriation act out of which expenditures or

losses of Commonwealth funds shall occur as a result of the

action or procedure.

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(6) Any recommendation of the secretary and the reason

for the recommendation.

SUBCHAPTER C

BUDGET PROCEDURES

Sec.

10021. Submission of budget information.

10022. Mid-year budget review.

10023. Balanced budget presentation.

10024. Performance hearing.

10025 . Annual performance plans.

10026 . Revenue estimates.

§ 10021. Submission of budget information.

(a) Commencement.--On July 1 of each year, the secretary

shall begin the process of obtaining and preparing the pertinent

financial and program information regarding the next fiscal year

for review by the Governor and the General Assembly.

(b) Request for information.--

(1) Not later than August 1 of each year, the secretary

shall distribute the proper instructions and blanks necessary

to the preparation of the budget requests.

(2) The request for information under paragraph (1)

shall contain a notice that the blanks shall be returned with

the information desired not later than October 1 of the same

year.

(3) The request for information under paragraph (1)

shall be distributed to the following:

(i) Each executive agency.

(ii) The Chief Clerk of the Senate.

(iii) The Chief Clerk of the House of

Representatives.

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(iv) The State court administrator.

(v) Each institution or other agency that desires

State appropriations.

(1) The information requested by the secretary under

subsection (b) shall be returned no later than October 1 of

the same year that the request was made.

(2) An executive agency and the State court

administrator shall designate a person to return the

information.

(3) An executive agency and the State court

administrator shall provide the same information submitted to

the secretary to a member of the General Assembly.

(d) Additional information.--In addition to the other

information submitted under this section, an executive agency

shall also submit the following to the secretary , the

Independent Fiscal Office and the General Assembly:

(1) A performance plan aligned with the executive

agency's strategic plan .

(2) An update on its continuous improvement process

system, including a detailed report on anticipated savings

reflected by line item .

(3) A strategic plan .

(4) A written statement that describes the following:

(i) The purposes of each program to be funded.

(ii) The expected levels of activity of each program

to be funded.

(iii) The expected levels of accomplishment

regarding each program to be funded.

(iv) The measures to be used to determine the extent

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that each program to be funded has achieved its stated

purposes.

(v) Each executive agency's reduction of all program

expenditures by 100% from the immediate prior fiscal year

and the rebuilding of its budget by the following

criteria:

(A) Justified mandated expenses.

(B) Performance criteria for executive agency

programs.

(e) Publication of information.--Upon receipt of a

performance plan of an executive agency, the secretary shall

make the performance plan readily accessible on the Office of

the Budget's publicly accessible Internet website.

(f) Further inquiry and investigation.--The secretary may

make further inquiries and investigations regarding the

financial needs, expenditures, revenues, expected levels of

program activities and accomplishments or other relevant matters

of any entity receiving money from the State Treasury.

(g) Determination by Governor.--After providing an entity

the opportunity to be heard regarding the information submitted

under this section, the Governor may approve, disapprove or

alter a budget request.

(h) Basis for appropriations.--Before December 16 of each

year, the secretary shall submit to the Governor in writing the

information provided under this section, along with any

additional information requested by the Governor, as the basis

for the Governor's requests for appropriations for the next

fiscal year.

§ 10022. Mid-year budget review.

(a) Review.--No later than December 16 of each year, the

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Governor and secretary shall provide the members of the General

Assembly with a review on the budget for the current fiscal

year. This review shall include, but is not limited to, the

following:

(1) Changes in current revenue projections from the

enactment of the General Appropriation Act for the

immediately prior fiscal year.

(2) State expenditures for the current fiscal year and

anticipated overages and lapses from the enactment of the

General Appropriation Act for the immediately prior fiscal

year.

(3) Reviews under this subsection shall specifically

include the following:

(i) Anticipated increases or decreases in programs,

including the specific policy, statute, Federal law,

Federal regulation, executive agency contract, executive

agency contract amendment, executive agency guideline,

executive agency approved entitlement, court case or

executive order which is the basis of the anticipated

increases or decreases.

(ii) The results or anticipated results of employee

union negotiations for salaries, wages and other

benefits.

(iii) The statistics involved in preliminary

forecasts of the major programs mandated by statute,

including, but not limited to, education subsidies,

public assistance programs, debt service and forecasts of

revenue.

(iv) The top five cost-drivers of the budget and any

executive agency recommendations to mitigate these costs.

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(v) Status on the cash flow of the General Fund.

(vi) Other appropriate budget information.

(b) Briefing by Governor.--

(1) In December of each year, the Governor shall meet

with the following:

(i) The chairperson and minority chairperson of the

Appropriations Committee of the Senate.

(ii) The chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives.

(iii) The officers of the General Assembly.

(2) During the meeting under this subsection, the

Governor shall brief the individuals under paragraph (1) on

the issues foreseen as being imminent in the budget for the

next fiscal year. The Governor and individuals shall exchange

views on the issues before the budget is formally presented

to the General Assembly. The individuals shall also inform

the Governor of financial matters which should be considered

in the budget.

Senate and the Appropriations Committee of the House of

Representatives shall form a joint committee to conduct a joint

hearing to review the midyear status of the finances of the

Commonwealth. The following shall be members of the joint

committee:

(1) The chairperson and minority chairperson of the

Appropriations Committee of the Senate.

(2) The chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives.

(3) Three members of the Appropriations Committee of the

Senate appointed by the chairperson of the Appropriations

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Committee of the Senate.

(4) Two members of the Appropriations Committee of the

Senate appointed by the minority chairperson of the

Appropriations Committee of the Senate.

(5) Three members of the Appropriations Committee of the

House of Representatives appointed by the chairperson of the

Appropriations Committee of the House of Representatives.

(6) Two members of the Appropriations Committee of the

House of Representatives appointed by the minority

chairperson of the Appropriations Committee of the House of

Representatives.

§ 10023. Balanced budget presentation.

(a) Contents of submission.--Subject to subsection (h), the

Governor shall submit to the Independent Fiscal Office and the

General Assembly copies of original agency budget requests, all

subsequent revised agency budget requests, a State budget and

program, and financial plans that include the following:

(1) A balanced operating budget for the next fiscal year

specifying the following in detail:

(i) The amounts recommended by the Governor to be

appropriated to the General Assembly, the Judicial

Department, each executive agency and institutions and

other agencies within this Commonwealth, and for all

public purposes, classified by department or agency and

by program.

(ii) The estimated revenues or receipts from each

source and an estimated amount to be raised by taxation

or otherwise, including proposals for new revenues and

receipts.

(2) A capital budget for the next fiscal year specifying

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capital projects to be financed from the proceeds of

obligations of the Commonwealth or its agencies or

authorities or from operating funds.

(3) Program and financial plans for not less than the

immediately prior fiscal year, the current fiscal year and

the next four fiscal years, which shall include the following

for each fiscal year:

(i) Actual or estimated operating expenditures

classified by department or agency and by program, in

reasonable detail, and actual or estimated revenue by

major categories from existing and additional sources.

(ii) Clearly stated purposes of each program in

terms of desired accomplishments.

(iii) Measures used to determine to what extent each

program has achieved its stated purposes.

(iv) Actual and estimated levels of accomplishment

for each program and actual and estimated levels of

program activities and their associated costs.

(v) Clearly stated purposes for each recommended new

or revised program, measures to be used to determine

whether each new or revised program has achieved its

purpose, estimated levels of additional or new

accomplishment of each new or revised program, estimated

levels of additional activities for each program and

their associated costs.

(vi) Use of Federal funds, including requirements by

the Federal Government attached to those funds, the cost

in State dollars to meet those requirements and

recommendations to mitigate Federal mandates at a lower

cost to the Commonwealth .

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(vii) Cross references to performance measures used

to determine funding levels.

(4) Specific reasons that program increases or decreases

are occurring, including recommendations to eliminate or

reduce program increases.

(b) Program evaluation.--The budget shall include the

results of any program evaluation report or audit findings

completed by the Office of the Budget , the Independent Fiscal

Office or the Department of the Auditor General in the fiscal

year preceding the year in which the budget request is made. The

results of any evaluation report and its recommendations shall

be concisely summarized and included in the budget

documentation.

(1) When the secretary identifies a new or expanded

program by criteria used in the budget instructions, the new

or expanded program shall be displayed and justified as a

separate item in the Governor's budget request.

(2) A new program shall not be considered to be enacted

by the General Assembly in its first year unless it is

specifically referred to or displayed as a line item in an

appropriation bill.

(3) A cost-benefit analysis shall be provided for each

new or expanded program.

(d) Cost breakouts.--The budget shall include for each

executive agency a single, separate line listing the separate

cost for each program. The line item shall include:

(1) Employee salaries.

(2) Health care costs.

(3) Pension costs.

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(4) Lease agreements.

(5) Vehicle, travel and transportation reimbursements.

(6) Consultants.

(7) Augmented employees and staff.

(8) Office supplies.

(9) Information technology.

(10) Telecommunications.

(11) Travel, meals, lodging and similar expenses.

(12) The cost of purchasing new equipment and supplies.

(13) The cost of purchasing material, including

newspapers, magazines, movies, films and tapes.

(e) Performance goals.--The budget shall include a summary

of programs by an executive agency which lists each program, if

it exceeded, met or did not meet its performance goals of the

previous fiscal year and by what percentage the program did or

did not meet its performance goals.

(f) Cash flow.--The budget shall include an analysis of the

cash flow of the General Fund and detail how the budget will

impact the cash flow of the General Fund in the ensuing fiscal

year.

(g) Documentation.--Upon the request of the Independent

Fiscal Office, the chairperson of the Appropriations Committee

of the Senate or the chairperson of the Appropriations Committee

of the House of Representatives , an executive agency shall

provide documentation of any budget request, including revenue

estimates upon which the budget estimate is based.

(h) Timeliness of submission.--The submission under

subsection (a) shall occur:

(1) Subject to paragraph (2), as soon as possible after

the organization of the General Assembly, but not later than

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the first full week in February of each year.

(2) Not later than the first full week in March of the

first year of the first term of the Governor after the

gubernatorial election.

§ 10024. Performance hearing.

(a) Applicability.--This section relates to a performance

hearing by a standing committee to review an executive agency's

proposed performance measures for the next fiscal year.

(b) Frequency.--Each standing committee shall conduct at

least one hearing between October 1 and May 15.

presentation from each executive agency that is assigned to that

standing committee that includes, but is not limited to, the

executive agency's strategic plan and performance plan for the

next fiscal year.

(d) Public testimony.--Each standing committee shall allow

for written public testimony regarding the presentation by an

executive agency.

(e) Liaison.--The head of an executive agency shall serve as

liaison or designate an individual within the executive agency

to serve as liaison with a standing committee. The liaison shall

inform the committee of the executive agency's performance

management system and performance plan.

(f) Recommendations.--After a standing committee holds its

performance hearings, the standing committee may make

recommendations to the members of the General Assembly on

changes to performance data and recommendations for any

incentives or disincentives based on program performance

measures to use in determining the level of appropriations in

the final performance-based budget. By May 30, recommendations

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shall be submitted to the Appropriations Committee of the house

in which the standing committee is making the recommendations

under this subsection.

§ 10025 . Annual performance plans.

(a) Transmittal.--Following the presentation of the budget

under section 10023 (relating to balanced budget presentation),

each executive agency shall transmit its annual performance

report for the current fiscal year to all of the following:

(1) The Independent Fiscal Office.

(2) The General Assembly.

(b) Posting.--After transmitting the annual performance

report under subsection (a), each executive agency shall post

the annual performance report on the executive agency's publicly

accessible Internet website.

of the following:

(1) A summary of the executive agency's submitted

performance plan aligned to the executive agency's strategic

plan .

(2) A brief summary of the executive agency's budget

request.

(3) Performance measurements on how the executive agency

has moved toward meeting performance goals for the current

fiscal year.

(4) How performance plans have been coordinated across

executive agencies to ensure a continuity of services to

residents of this Commonwealth.

(5) Continuous improvement process system efforts from

the current fiscal year and a detailed analysis of cost

savings and service improvement.

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§ 10026 . Revenue estimates.

(a) Committee established.--The Joint Revenue Estimation

Committee is established and shall be convened by the Secretary

of Revenue no later than the first week of February following

the beginning of each legislative session of the General

Assembly.

(b) Membership.--The committee shall be comprised of the

following members:

(1) The secretary.

(2) The Secretary of Revenue.

(3) The chairperson and minority chairperson of the

Appropriations Committee of the Senate.

(4) The chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives.

(5) One resident appointed by the Governor.

(6) One resident appointed by the President pro tempore

of the Senate.

(7) One resident appointed by the Speaker of the House

of Representatives.

(8) One resident appointed by the Minority Leader of the

Senate.

(9) One resident appointed by the Minority Leader of the

House of Representatives.

(10) The Director of the Independent Fiscal Office as an

ex officio member.

the Department of Revenue who shall prepare any documents

requested by a member of the committee.

(d) Meetings.--The committee shall meet at least once a

month to discuss changes in revenue collected by the

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Commonwealth during the current month and fiscal year compared

to the most recently released estimate made by the committee.

(e) Revenue estimates.--Twice each fiscal year, by December

16 and May 15, the committee shall prepare a joint estimate of

revenue for the General Fund. The estimate shall include revenue

the Commonwealth can anticipate collecting for the current

fiscal year and the ensuing fiscal year.

(f) Approval of revenue estimates.--No revenue estimate

shall be approved without being approved by 11 members of the

committee. The following shall apply:

(1) If, prior to final adjournment of any regular

legislative session of the General Assembly, a law is enacted

providing for additional or less money to be deposited into

the General Fund, the committee shall prepare a joint

estimate of those revenues.

(2) The committee may release a revised revenue estimate

90 days following the release of an approved revenue estimate

only if the estimate is approved by 11 members of the

committee.

(g) Submission.--The committee shall submit the revenue

estimates to the Governor, General Assembly, State Treasurer and

Independent Fiscal Office.

(h) Failure to approve estimate.--If the committee fails to

approve a revenue estimate under this section, the Governor and

the General Assembly shall utilize the revenue estimates of the

Independent Fiscal Office for approving General Fund

expenditures.

(i) Initial revenue estimate.--The secretary shall convene

the committee, which shall release a revenue estimate for the

current fiscal year and ensuing fiscal year within 30 days of

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the effective date of this section. If the committee is unable

to agree on a revenue estimate, the Governor and the General

Assembly shall use a revenue estimate from the Independent

Fiscal Office to enact General Fund expenditures for the ensuing

fiscal year.

(j) Report on error rates.--The committee shall provide a

public report on the error rates of the previous fiscal year

revenue estimates no later than October 1 of the following

fiscal year. Revenue error rates for each tax must not be

greater than 3%. If an error rate is greater than 3%, the

committee shall develop a new model to ensure error rates remain

under 3%.

(k) Duty of Governor.--

(1) Prior to signing an appropriation bill or allowing

an appropriation bill to become law without the signature of

the Governor:

(i) the revenue estimates must be completed; and

(ii) the Governor shall line item veto any part of

an appropriations bill that causes total appropriations

to exceed the official estimates plus any unappropriated

surplus.

(2) No subsequent changes in the revenue estimates shall

be made unless changes in statutes affecting revenues and

receipts are enacted.

(l) Duty of General Assembly.--The General Assembly shall

not send a general appropriation bill to the Governor unless the

General Assembly has sent legislation to the Governor providing

for the revenues and augmentations needed to fund the

expenditures in the general appropriation bill.

SUBCHAPTER D

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PERFORMANCE, TRANSPARENCY AND

ACCOUNTABILITY-BASED BUDGETING

Sec.

10031. Performance management systems.

10032. Performance plans.

10033. Performance evaluations.

10034. Performance and forensic audits.

10035. Electronic access of information and Commonwealth

checkbook.

10036. Estimates of current expenditures by certain executive

agencies.

10037. Estimates of current expenditures by independent

departments.

10038. Books and accounts.

10039. Audit of Auditor General records.

§ 10031. Performance management systems.

(a) Development.--

(1) The Governor shall develop components of a

performance management system for managing executive agencies

through instructions issued by the secretary.

(2) The Judicial Department shall develop components of

a performance management system for managing the judicial

branch through instructions issued by the Administrative

Office of Pennsylvania Courts.

(b) Contents.--A performance management system under this

section must address all of the following:

(1) Strategic plans and priorities that are consistent

with the charge of the respective executive agency or entity

within the Judicial Department.

(2) Strategies for enhancing productivity, improving

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efficiency, reducing costs and eliminating waste in the

processes and operations that deliver goods and services to

taxpayers and customers of State government.

(3) Parameters for the development of performance plans.

(4) A continuous improvement process system.

(5) Elements to ensure that employees are appropriately

trained to implement the components under this subsection.

(6) Suggested incentives for exceeding performance goals

and disincentives for not exceeding performance goals.

July 1:

(1) The Governor shall publish the components under

subsection (a)(1).

(2) The Judicial Department shall publish the components

under subsection (a)(2).

(d) Posting.--The secretary and the Administrative Office of

Pennsylvania Courts shall post the instructions under subsection

(a) on its publicly accessible Internet website.

§ 10032. Performance plans.

(a) Development.--By August 1, 2022, and by each subsequent

August 1, each executive agency and the Administrative Office of

Pennsylvania Courts shall develop a performance plan in

accordance with the developed performance management system.

(b) Purpose.--A performance plan shall serve as a guide to

the major functions of an executive agency or the Judicial

Department and as a tool to evaluate performance goals over

time.

the following components regarding the executive agency or

entity within the Judicial Department:

20210HB0259PN0230 - 24 -

(1) A statement of its mission or vision.

(2) A description of its major functions.

(3) A strategic plan.

(4) Performance measures for its major functions aligned

to the executive agency's strategic plan . If reasonable and

appropriate, performance measures shall be developed with the

input of its employees.

(5) Performance goals that correspond to its performance

measures and extend to at least three years into the future.

(6) A narrative description of the strategies necessary

to meet the performance goals.

(7) A summary of its most recent performance evaluation.

(d) Revisions.--

(1) An executive agency or the Administrative Office of

Pennsylvania Courts may further refine a performance plan in

the performance management system published under section

10031 (relating to performance management systems).

(2) The secretary or another individual within the

Office of the Budget may not edit a transmitted performance

plan or any information related to the performance plan.

(e) Transmittal.--By August 1, 2022, and by each subsequent

August 1, each completed performance plan shall be transmitted

to the following:

(1) The Governor's Office.

(2) The secretary.

(3) The Independent Fiscal Office.

(4) The General Assembly.

(f) Posting.--By August 1, 2022, and by each subsequent

August 1, each executive agency and the Administrative Office of

Pennsylvania Courts shall post the completed performance plan on

20210HB0259PN0230 - 25 -

its publicly accessible Internet website and on the publicly

accessible Internet website of the Office of the Budget.

(g) Retirement systems.--The Public School Employees'

Retirement System and the State Employees' Retirement System

shall comply with the requirements of this section.

§ 10033. Performance evaluations.

(a) Distribution.--An executive agency shall conduct a

performance evaluation and distribute it to the Independent

Fiscal Office and each member of the General Assembly.

(b) Frequency.--A performance evaluation shall be

distributed at least twice each calendar year as defined in the

published performance management system.

conduct a performance check on each executive agency's

performance evaluations on a rolling five-year cycle.

§ 10034. Performance and forensic 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 executive agencies on an annual basis during the

regular audit of the executive agency.

(b) Selection considerations.--In selecting an executive

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 executive agency's performance-based goals.

selected for audit may include, but is not limited to, a review

of all of the following:

20210HB0259PN0230 - 26 -

(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 electronically each performance audit report for

the immediately prior fiscal year to members of the General

Assembly and the Independent Fiscal Office .

(e) Other reports.--The Department of the Auditor General

shall transmit any other audit report regarding an executive

agency that is deemed relevant for review by a standing

committee with jurisdiction over the executive agency.

(f) Forensic audits.--The Department of the Auditor General

may conduct forensic audits at the expense of the agency under

forensic audit if a prior or current audit shows alleged

criminal action, misappropriation of expenditures, misuse of

expenditures, accounting discrepancies or passage of a

concurrent resolution by the General Assembly.

§ 10035. Electronic access of information and Commonwealth

checkbook.

(a) Electronic access of information.--Except for

confidential information, the Independent Fiscal Office and the

General Assembly shall have access to all information available

on inquiry-only screens through the Integrated Central System

under section 620.1 of the act of April 9, 1929 (P.L.177,

No.175), known as The Administrative Code of 1929.

(b) Commonwealth checkbook.--The Office of the Budget shall

maintain a public version of financial information and

transactions under this chapter, which shall be known as the

20210HB0259PN0230 - 27 -

Commonwealth checkbook.

§ 10036. Estimates of current expenditures by certain executive

agencies.

(a) Preparation.--Each executive agency, other than an

independent department, shall from time to time as requested by

the Governor or a member of the General Assembly, prepare an

estimate of the amount of money required and the levels of

activity and accomplishment for each program carried on by the

executive agency during the next month, quarter or other period

as the Governor or member of the General Assembly shall

prescribe.

(b) Inclusion of other funds.--All available Federal funds

and funds from other sources shall be characterized as such and

included in the estimate under subsection (a) before any

expenditures shall be made.

submitted to the secretary for approval or disapproval and the

Appropriations Committee of the Senate and the Appropriations

Committee of the House of Representatives.

(d) Revision.--If the secretary does not approve an estimate

under this section, the estimate shall be revised as necessary

and resubmitted for approval.

(e) Personnel complement level.--The secretary may establish

an authorized personnel complement level in conjunction with the

approved estimate under this section.

(f) Prohibited spending.--After the approval of the estimate

under this section, the executive agency submitting the estimate

may not expend all or part of any appropriation, Federal funds

or funds from other sources except in accordance with the

estimate and any authorized complement level unless the estimate

20210HB0259PN0230 - 28 -

is revised with the approval of the secretary and within the

limits appropriated by the General Assembly.

(g) Failure to comply.--

(1) If an executive agency to which this section applies

fails or refuses to submit to the secretary an estimate under

this section, the Governor may notify the State Treasurer in

writing of the failure or refusal.

(2) After receipt of the notice under paragraph (1), the

State Treasurer may not draw any warrant in favor of the

executive agency until the Governor notifies the State

Treasurer in writing that the delinquent executive agency has

furnished the Governor with, and the Governor has approved,

the required estimate.

(h) Disapproval or reduction of appropriated amounts.--

(1) The secretary may not, under the authority granted

under this section, disapprove or reduce any amount

appropriated by the General Assembly for grants or subsidies

without the approval of the Appropriations Committee of the

Senate and the Appropriations Committee of the House of

Representatives.

(2) If the secretary favors the disapproval or reduction

under paragraph (1), the secretary shall give at least 10

days' prior notice to the Independent Fiscal Office, 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.

(3) The notice under paragraph (2) must include all of

the following:

(i) The amount of the appropriation to be

20210HB0259PN0230 - 29 -

disapproved or reduced.

(ii) The reasons that the appropriation should be

disapproved or reduced.

(iii) The estimated impact of the disapproval or

reduction on the programs, services or purposes for which

the appropriation is provided.

§ 10037. Estimates of current expenditures by independent

departments.

(a) Preparation.--Each independent department shall from

time to time as requested by the Governor, prepare an estimate

of the amount of money required for each activity or function to

be carried on by the independent department during the next

month, quarter or other period as the Governor shall prescribe.

(b) Submittal.--The estimate under this section shall be

submitted to the secretary for approval or disapproval and to

the Appropriations Committee of the Senate, the Appropriations

Committee of the House of Representatives and the Independent

Fiscal Office.

§ 10038. Books and accounts.

All books and accounts kept by each executive agency shall be

kept on a fiscal-year basis utilizing the full accrual

accounting method.

§ 10039. Audit of Auditor General records.

The Auditor General and the Department of the Auditor General

shall submit to any accountants appointed by the Governor for

the purpose of making an audit of the affairs of the Auditor

General and the Department of the Auditor General all books,

papers and other records that in any way pertain to that

position and department.

SUBCHAPTER E

20210HB0259PN0230 - 30 -

EXPENDITURES AND LAPSED FUNDS

Sec.

10041. Total actual revenues less than total estimated

revenues.

10042. Unexpended appropriations.

10043. Encumbered appropriations.

10044. Budget implementation data.

10045. Revenue data.

10046. Lapsed funds.

10047. Financial reports due to General Assembly.

10048. Disposition of Commonwealth assets.

10049. Tax expenditures.

10050. Special and restricted funds analysis.

§ 10041. Total actual revenues less than total estimated

revenues.

(a) Budgetary reserve.--If the Commonwealth's total actual

revenues are less than the Commonwealth's total estimated

revenues in any given month, the Governor shall place the amount

of appropriations under revenue estimates into budgetary

reserve.

(b) Reduction of line item.--In depositing the amount of

appropriations under revenue estimates under subsection (a), the

Governor shall reduce in the General Appropriation Act each line

item under the policy supervision and control of the Governor

for that fiscal year by the same percentage, excluding debt,

pension payments and court orders.

actual revenues exceed the Commonwealth's total estimated

revenues for two consecutive months, the Governor may remove

appropriations in the budgetary reserve and allocate the

20210HB0259PN0230 - 31 -

appropriations of each line item in the General Appropriation

Act under the policy supervision and control of the Governor for

that fiscal year by the same percentage as long as total actual

revenues continue to exceed the total estimated revenues. Any

appropriations remaining in the budgetary reserve after October

31 of the preceding fiscal year shall expire and lapse to the

General Fund.

§ 10042. Unexpended appropriations.

By May 15 of each year, the Governor shall provide the

Independent Fiscal Office and the General Assembly with a

detailed report on all potential unexpended appropriations for

that fiscal year.

§ 10043. Encumbered appropriations.

By May 15 of each year, the Governor shall provide the

Independent Fiscal Office and the General Assembly with a

detailed report of specific appropriations of the current fiscal

year that may need to be carried over to the next fiscal year.

Each report shall also include the following:

(1) Each c ommitment for the next fiscal year by

appropriation and line item.

(2) The name of the organization to which each

commitment was made.

(3) The total amount expended during the fiscal year for

each commitment.

(4) A description of each commitment or project.

(5) The location of each commitment or project,

including the senatorial district and representative district

in which the commitment or project is located.

(6) The five-year cash flow demonstrating how each

d epartment, board, commission, authority or other agency of

20210HB0259PN0230 - 32 -

the Commonwealth that is subject to the policy supervision

and control of the Governor is planning to fund the agency's

commitments.

(7) The date that each encumbrance was approved.

(8) The schedule that each encumbrance is set to be

paid.

(9) The total amount of the encumbrances.

(10) A description of how each executive agency can fund

the encumbrances of the executive agency through budgeted

appropriations and statutory authority.

(11) A statement for each encumbrance as to whether or

not the encumbrance is to be expended by October 31 of that

calendar year and, if the encumbrance is not to be expended

by October 31 of that calendar year, an in-depth explanation

of the reason that the encumbrance will continue beyond

October 31 of that calendar year.

§ 10044. Budget implementation data.

(a) Duty.--The Governor, the Auditor General, the State

Treasurer and the Attorney General shall make monthly

expenditure data available to the Independent Fiscal Office and

each member of the General Assembly.

(b) Timeliness.--Monthly data shall be provided within 15

days after the end of each month.

(1) Monthly data shall be:

(i) prepared in such a way that the last monthly

submission is a summary inclusive of the preceding months

of the fiscal year; and

(ii) able to establish a history of expenditure

file.

20210HB0259PN0230 - 33 -

(2) At the discretion of 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,

monthly data may be provided in a computer file.

(3) Monthly data shall be provided by fund,

appropriation, department and organization within each

department and include all of the following:

(i) The number and costs of filled personnel

positions.

(ii) Itemized personnel vacancies and their costs.

(iii) New positions created and their costs.

(iv) Wage and overtime costs.

(v) Allotments and expenditures for itemized

personnel expenses.

(vi) Allotments and expenditures for itemized

operating expenses.

(vii) Allotments and expenditures for itemized fixed

assets.

(viii) The rate of expenditures in appropriations

for major subsidy and grant programs during the month.

(d) Other budgetary data.--Upon the request of the

Independent Fiscal Office or a member of the General Assembly,

the Governor, the Auditor General, the State Treasurer and the

Attorney General shall make available to that office or member

any other budgetary data as may be requested from time to time.

§ 10045. Revenue data.

(a) Duty.--The Governor shall make monthly revenue reports

to the Independent Fiscal Office and the General Assembly.

(b) Contents of report.--A revenue report shall show the

20210HB0259PN0230 - 34 -

actual collection of revenue itemized by source and a comparison

of the actual collections with estimated collections for each

month. The comparison shall be accompanied by an analysis

indicating any change in collection patterns that will cause a

shortfall or overrun on the annual estimates of more than one

percent.

Fiscal Office or a member of the General Assembly, the Governor

shall make available to that office or member any other revenue

data as may be requested from time to time.

§ 10046. Lapsed funds.

(a) Report on lapsed funds.--By May 15 of each year, the

Governor shall provide the Independent Fiscal Office and the

members of the General Assembly with a detailed report of

potential lapsed funds for the preceding fiscal year by line

item.

(b) Encumbrances generally.--

(1) Each action regarding the encumbrance of funds shall

be supported by complete documentation.

(2) Each procurement document must have a specified

delivery date.

(3) Encumbrances shall be expended as provided under

this section.

shall be charged to the fiscal year in which the expense was

incurred or the liability accrued.

(d) Operational expenses.--Payments for operational expenses

or grants and subsidies shall be charged as follows:

(1) Purchases of supplies shall be charged to the fiscal

year in which the actual expenses or commitment to purchase

20210HB0259PN0230 - 35 -

was incurred.

(2) Contracted services and rentals, excluding rentals

regarding the Department of General Services, shall be

charged to the fiscal year in which the service was provided

or rental occurred.

(3) Contracted repairs shall be charged to the fiscal

year in which the encumbrance was created.

(4) Grants and subsidies shall be charged to the fiscal

year in which funds were appropriated, encumbered or

allocated for their designated purpose.

(5) Except as otherwise provided in this section, no

encumbrance for operational expenses and grants or subsidies

shall be made after May 31 in the fiscal year to which the

encumbrance is charged.

(6) Encumbrances for operational expenses and grants and

subsidies made because of purchase orders issued from

purchase requisitions or because of an emergency may be

created subsequent to May 31 but not later than June 30.

(7) Encumbrances for economic development grants or

projects may be retained until the close of the second fiscal

year following the fiscal year in which the original grants

or projects were encumbered.

(e) Fixed assets.--Fixed assets shall be charged as follows:

(1) Purchase or cost of fixed assets shall be charged to

the fiscal year in which the encumbrance was created.

(2) Except as otherwise provided in this section, no

encumbrance for fixed assets shall be made after May 31 in

the fiscal year to which the encumbrance is charged.

(3) Encumbrances for fixed assets made because of

purchase orders issued from purchase requisitions or because

20210HB0259PN0230 - 36 -

of an emergency may be created subsequent to May 31 but not

later than June 30.

(f) Prior year encumbrance.--Outstanding prior year

encumbrances shall be canceled as of October 31, except for

those involving construction, repairs and improvements or due to

litigation.

(g) Available balance.--An available balance created by the

liquidation or cancellation of an encumbrance from a prior

fiscal year shall be lapsed. The balance may not be transferred

between major categories of expenditures and may not be used to

create any new obligation unless specifically authorized and

directed by the General Assembly as an incentive for an

executive agency that exceeds its performance goals.

(h) Limitation on holding encumbrance.--Except as a result

of litigation, an encumbrance may not be held past October 31 of

the next complete fiscal year.

(i) Limitation on transfer.--In no case shall there be a

transfer of funds from an encumbrance in one major category of

expenditure to an encumbrance in another major category of

expenditure unless specifically authorized and directed by the

General Assembly as an incentive for an executive agency that

exceeds its performance goals.

(j) Deadline.--A deadline for creating an encumbrance shall

be extended when the encumbrance applies to an appropriation

received after the deadline under this section.

(k) Time limitation.--In no case shall an encumbrance be

created after June 30 of the fiscal year in which the

appropriation was made.

(l) Report on encumbered funds.--By November 30 of each

year, the secretary shall provide the Governor , the Independent

20210HB0259PN0230 - 37 -

Fiscal Office and the General Assembly a detailed report on the

disposition of encumbered funds of the previous fiscal year.

(m) Definitions.--The following words and phrases when used

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

subsection unless the context clearly indicates otherwise:

"Contracted repairs." All repairs, including costs that will

restore an asset to the condition that will permit the effective

use of the asset up to but not beyond its previously determined

useful life, to buildings, grounds, roads, fixed and movable

equipment and furniture, excluding maintenance and repair work

performed by State employees.

"Economic development." A program to maximize employment

opportunities, economic growth and development of communities

and the overall economic development of this Commonwealth

through industrial development, employability development,

community development, resource development, labor-management

relations and job training.

"Emergency." A situation or circumstance that threatens the

continued operation of government or the health, safety or lives

of the residents of this Commonwealth.

"Encumbrance." An obligation or commitment in the form of

purchase orders, field purchase orders, contracts, grant

agreements or other authorizing documents related to unperformed

contracts for goods and services that are chargeable to an

appropriation and for which a part of the appropriation is

reserved.

"Fixed asset." Includes the following:

(1) With respect to machinery, equipment or furniture,

an item that can be:

(i) expected to have a useful life of more than one

20210HB0259PN0230 - 38 -

year;

(ii) used repeatedly without materially changing or

impairing its physical condition; and

(iii) kept in serviceable condition by normal

repair, maintenance or replacement of components.

(2) Livestock, game and poultry purchased primarily for

farm stock, breeding or similar use.

(3) Land acquisitions, acquisitions of buildings or

structures, capital improvements to buildings or structures

and nonstructural improvements.

"Grants and subsidies." Includes any payment, award, bounty

or indemnity made by the Commonwealth to a political

subdivision, individual, institution or organization for which

no direct services are rendered to the Commonwealth.

"Litigation." Any pending, proposed or current action or

matter, including arbitration or audit, subject to appeal before

a court of law or administrative adjudicative body, the decision

of which body may be appealed to a court of law.

"Major categories of expenditure." Includes personnel

services, operational expenses, fixed assets, grants and

subsidies, debt service and fixed charges and nonexpense items.

"Operational expenses." Includes the following:

(1) The cost of commodities, substances or manufactured

articles that are used or consumed in current operation or

processed in the construction or manufacture of articles.

(2) Equipment, expendable tools and other articles not

meeting the criteria for machinery and equipment as fixed

assets.

(3) Services performed by an executive agency or another

agency within or outside the Commonwealth, which may include

20210HB0259PN0230 - 39 -

the use of equipment or the furnishing of commodities in

connection with these services under an express or implied

contract.

"Personnel services." Includes the following:

(1) The cost of salaries and wages paid to or on behalf

of State officials and employees for services rendered.

(2) The State share of payroll taxes, employee benefits,

unemployment compensation, employee training and annual and

sick leave payouts, paid to or on behalf of State officials

and employees for services rendered.

(3) Benefits paid to State annuitants.

"Procurement document." A document authorizing delivery of

specified items or the rendering of certain services and the

incurrence of a charge for them. The term includes a purchase

order, field purchase order, lease, contract or other

authorizing document.

"Purchase requisition." A written or electronic request to

the central purchasing agency for the purchase of specified

items.

§ 10047. Financial reports due to General Assembly.

(a) Agency reports on encumbrances.--The Governor shall

ensure that each department, board, commission, authority or

other agency of the Commonwealth that is subject to the policy

supervision and control of the Governor shall submit to the

General Assembly by November 30 of each year a report which

shall include information regarding the disposition of all

encumbrances identified in the annual report submitted under

section 10043 (relating to encumbered appropriations).

(b) Agency reports on cost savings.--The Governor shall

require each department, board, commission, authority or other

20210HB0259PN0230 - 40 -

agency of the Commonwealth that is subject to the policy

supervision and control of the Governor to submit a report to

the General Assembly about cost savings identified by the agency

during the current fiscal year. The report shall include all of

the following:

(1) The total amount saved by the agency, broken down by

appropriation and line item.

(2) A d escription of the cost savings of the agency,

including whether the savings are expected to be realized

once or on an annual basis.

(3) The status on cost savings reported from prior

fiscal years.

(4) Cost savings realized by the agency from prior

fiscal years during the current fiscal year.

(5) A statement regarding whether the cost savings

realized by the agency were returned to the General Fund or

spent. If the cost savings were spent, the statement shall

include the purpose for which the cost savings were spent and

the line item representing where the cost savings were spent.

secretary to provide the Independent Fiscal Office and members

of the General Assembly with a report at the end of each quarter

of the fiscal year regarding any changes in State encumbrances

and appropriations which shall be updated through the Integrated

Central System under section 620.1 of the act of April 9, 1929

(P.L.177, No.175), known as The Administrative Code of 1929 . The

report shall also include all of the following:

(1) A ppropriations which are being expended at a rate

which could exceed the authorized amount appropriated by the

General Assembly.

20210HB0259PN0230 - 41 -

(2) General Fund expenditures broken down by each

department, board, commission, authority or other agency of

the Commonwealth that is subject to the policy supervision

and control of the Governor .

(3) Restricted and special fund expenditures broken down

by each department, board, commission, authority or other

agency of the Commonwealth that is subject to the policy

supervision and control of the Governor .

(4) All revenue which has gone into the Commonwealth's

restricted or special funds.

§ 10048. Disposition of Commonwealth assets.

Money received from the disposition of assets of the

Commonwealth shall be deposited into the Budget Stabilization

Reserve Fund established under section 1701-A of the act of

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

§ 10049. Tax expenditures.

(a) Applicability.--This section relates to a tax

expenditure under any of the following:

(1) Sales and use tax imposed under Article II of the

act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform

Code of 1971.

(2) Personal income tax imposed under Article III of the

Tax Reform Code of 1971.

(3) Corporate net income tax imposed under Article IV of

the Tax Reform Code of 1971.

(4) Capital stock and franchise tax imposed under

Article VI of the Tax Reform Code of 1971.

(5) Bank and trust company shares tax imposed under

Article VII of the Tax Reform Code of 1971.

(6) Title insurance companies shares tax imposed under

20210HB0259PN0230 - 42 -

Article VIII of the Tax Reform Code of 1971.

(7) Insurance premiums tax imposed under Article IX of

the Tax Reform Code of 1971.

(8) Gross receipts tax imposed under Article XI of the

Tax Reform Code of 1971.

(9) Public utility realty tax imposed under Article XI-A

of the Tax Reform Code of 1971.

(10) Realty transfer tax imposed under Article XI-C of

the Tax Reform Code of 1971.

(11) Cigarette tax imposed under Article XII of the Tax

Reform Code of 1971.

(12) Mutual thrift institutions tax imposed under

Article XV of the Tax Reform Code of 1971.

(13) Malt beverage tax imposed under Article XX of the

Tax Reform Code of 1971.

(14) Inheritance tax imposed under Article XXI of the

Tax Reform Code of 1971.

(15) Vehicle registration fees imposed under 75 Pa.C.S.

(relating to vehicles).

(16) Liquid fuels and fuel use taxes imposed under 75

Pa.C.S. Ch. 90 (relating to liquid fuels and fuels tax).

(17) Oil company franchise tax imposed under 75 Pa.C.S.

Ch. 95 (relating to taxes for highway maintenance and

construction).

(18) Motor carriers road tax imposed under 75 Pa.C.S.

Ch. 96 (relating to motor carriers road tax).

(19) Motorbus road tax imposed under 75 Pa.C.S. Ch. 98

(relating to motorbus road tax credit or refund).

(20) Marine insurance tax imposed under the act of May

13, 1927 (P.L.998, No.486).

20210HB0259PN0230 - 43 -

(21) Unemployment compensation contributions imposed

under the act of December 5, 1936 (2nd Sp.Sess., 1937

P.L.2897, No.1), known as the Unemployment Compensation Law.

(22) Co-operative agricultural association corporate net

income tax imposed under the act of May 23, 1945 (P.L.893,

No.360), known as the Co-operative Agricultural Association

Corporate Net Income Tax Act.

(23) Exemptions granted under any of the following:

(i) 40 Pa.C.S. § 6307(b) (relating to exemptions

applicable to certificated professional health service

corporations).

(ii) 53 Pa.C.S. Ch. 55 (relating to parking

authorities).

(iii) 53 Pa.C.S. Ch. 56 (relating to municipal

authorities).

(iv) Section 23 of the act of May 28, 1937 (P.L.955,

No.265), known as the Housing Authorities Law.

(v) Section 14 of the act of July 5, 1947 (P.L.1217,

No.498), known as the State Public School Building

Authority Act.

(vi) Section 15 of the act of March 31, 1949

(P.L.372, No.34), known as The General State Authority

Act of one thousand nine hundred forty-nine.

(24) Any statutory exemption, reduction, deduction,

limitation, exclusion, tax deferral, discount, commission,

credit, preferential rate or preferential treatment

established after the effective date of this section.

(b) Duty to submit plan.--At the time of the presentation of

the budget under section 10023 (relating to balanced budget

presentation), the Governor shall submit to the General Assembly

20210HB0259PN0230 - 44 -

a tax expenditure plan for not less than the immediately prior

fiscal year, the current fiscal year and the next four fiscal

years.

(1) A tax expenditure plan shall include the following

information:

(i) The actual or estimated revenue loss to the

Commonwealth caused by each tax expenditure in each

fiscal year covered by the plan.

(ii) The actual or estimated cost of administering

and implementing each tax expenditure for each fiscal

year covered by the plan.

(iii) The actual or estimated number and

description, in reasonable detail, of taxpayers

benefiting from each tax expenditure in each fiscal year

covered by the plan.

(iv) The purpose of each tax expenditure in terms of

desired accomplishments.

(2) The data in a tax expenditure plan shall be revised

and updated yearly.

(d) Specific contents.--A tax expenditure plan shall include

the following information according to the following annual

schedule:

(1) For the first fiscal year in which a tax expenditure

plan is required, the plan need only provide the required

information for tax expenditures itemized in subsection (a)

(1), (5), (6), (7), (12), (20) and (21).

(2) For the second year in which a tax expenditure plan

is required, the plan need only provide the required

information:

20210HB0259PN0230 - 45 -

(i) under paragraph (1); and

(ii) for the tax expenditures itemized in subsection

(a)(3), (4), (8), (9) and (22).

(3) For the third year in which a tax expenditure plan

is required, the plan need only provide the required

information:

(i) under paragraph (2); and

(ii) for the tax expenditures itemized in subsection

(a)(2), (15), (16), (17) and (18).

(4) For the fourth year in which a tax expenditure plan

is required, the plan shall provide the required information

for all the tax expenditures itemized in subsection (a).

(e) Tax expenditure assessment.--The Governor shall submit

to the General Assembly and the Independent Fiscal Office an

assessment of each tax expenditure based on whether or not each

tax expenditure has been successful in meeting the purpose for

which it was enacted and on whether each tax expenditure is the

most fiscally effective means of achieving its purpose along

with the impact the expenditure has on the overall cash flow of

the General Fund.

(f) Obtaining information.--

(1) The secretary may obtain the necessary data and

other information required to comply with this section from

each executive agency in the same manner as provided for

budget information under this chapter.

(2) The secretary is authorized to obtain the necessary

data and other information required to comply with this

section from the appropriate local government officials.

(g) Religious institutions.--The General Assembly recognizes

that the exemption from taxation accorded religious institutions

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is founded on principles of church-state separation, and:

(1) Nothing in this section is intended to express or

imply that tax exemption constitutes subsidization of the

religious activities of these institutions.

(2) This section shall not be construed to authorize the

imposition of any additional requirements on these

institutions relating to tax exemption.

(h) Definitions.--The following words and phrases when used

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

subsection unless the context clearly indicates otherwise:

"Tax expenditure." A reduction in revenue that would

otherwise be collected by the Commonwealth as the result of an

exemption, reduction, deduction, limitation, exclusion, tax

deferral, discount, commission, credit, preferential rate or

preferential treatment, except for local tax purposes, under any

of the provisions under subsection (a).

§ 10050. Special and restricted funds analysis.

(a) Applicability.--This section relates to a special or

restricted fund established by the Treasury Department outside

the General Fund.

(b) Duty to submit analysis.--At the time of the

presentation of the budget under section 10023 (relating to

balanced budget presentation), the Governor shall submit to the

Independent Fiscal Office and the members of the General

Assembly an analysis for not less than the immediately prior

fiscal year, the current fiscal year and the next four fiscal

years.

(1) The analysis shall include the following

information:

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(i) The actual or estimated revenue loss to the

General Fund caused by each special or restricted fund

for each fiscal year.

(ii) The actual or estimated cost of administering

and implementing each special or restricted fund for each

fiscal year covered by the analysis.

(iii) The actual or estimated commitments for each

special or restricted fund delineated by the fiscal year

the commitment was made and the fiscal year in which the

commitment is to be expended.

(iv) Schedule of commitments for each special or

restricted fund.

(v) Actual or estimated changes in expenditures and

commitments for each special or restricted fund.

(vi) Actual and estimated changes in revenue sources

for each special or restricted fund.

(2) The analysis shall be revised and updated yearly.

(d) Summary assessment.--The Governor shall submit to the

Independent Fiscal Office and the members of the General

Assembly an assessment of the impact of each special or

restricted fund on the General Fund, including the cash flow of

the General Fund. The assessment shall:

(1) Show changes in the cash flow of the General Fund if

the revenues and expenditures of each special or restricted

fund were to be moved within the General Fund.

(2) Include assessing whether moving each special or

restricted fund into the General Fund will reduce the need

for the Commonwealth to borrow money to pay for expenditures

within the General Fund.

SUBCHAPTER F

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COST SAVINGS AND PERFORMANCE-BASED

INCENTIVE ACCOUNT

Sec.

10061. Notice of savings by executive agency.

10062. Notice of savings by secretary.

10063. Transfer by Treasury Department.

10064 . Performance-based Incentive Account.

§ 10061. Notice of savings by executive agency.

Following the enactment of the general appropriation bill for

a given fiscal year and prior to the passage of the general

appropriation bill for the fiscal year that immediately follows,

an executive agency shall provide notice of any savings realized

from its line items within the enacted appropriation bill to the

secretary within 14 calendar days of determining the existence

of the savings.

§ 10062. Notice of savings by secretary.

Upon receiving notice under section 10061 (relating to notice

of savings by executive agency), the secretary shall send

written notification of the savings realized to the following:

(1) The Treasury Department.

(2) The Independent Fiscal Office.

(3) The General Assembly.

§ 10063. Transfer by Treasury Department.

Upon receiving notice under section 10062 (relating to notice

of savings by secretary), the Treasury Department shall transfer

the reported savings realized into the account established under

section 10064 (relating to Performance-based Incentive Account).

§ 10064 . Performance-based Incentive Account.

The Performance-based Incentive Account is established as a

restricted account within the General Fund to which all cost

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savings realized under this subchapter shall be deposited for

explicit use for providing incentives to executive agencies and

their employees when performance goals are exceeded .

SUBCHAPTER G

IMPLEMENTATION

Sec.

10071. Budget implementation.

10072. List of employees.

§ 10071. Budget implementation.

(a) General rule.--Except as provided in subsection (b),

before the enactment of the General Appropriation Act for the

current fiscal year, the State Treasurer may not release or

approve the transfer of State funds to an executive agency or

the General Assembly for any expense that would result in the

disbursement of State funds beyond the amount that was enacted

or funds not included in the General Appropriation Act for the

prior fiscal year.

(b) Exception.--The following are not subject to subsection

(a):

(1) Expenditures required under the Fair Labor Standards

Act of 1938 (52 Stat. 1060, 29 U.S.C. § 201 et seq.).

(2) Expenditures required in compliance with Federal or

State court decisions.

§ 10072. List of employees.

(a) Recipients.--By July 15 of each year:

(1) Each executive agency, other than the Department of

the Auditor General and the Treasury Department, shall

transmit the complete list under subsection (b) to all of the

following:

(i) The secretary.

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(ii) The Auditor General.

(iii) The State Treasurer.

(iv) The Legislative Data Processing Center, in the

form of a computer file.

(2) The Auditor General and State Treasurer shall

transmit the complete list under subsection (b) to both of

the following:

(i) The secretary.

(ii) The Legislative Data Processing Center, in the

form of a computer file.

(b) Contents.--The list to be transmitted under subsection

(a) shall contain the names of all persons, as of the preceding

July 1, except day-laborers, entitled to receive compensation

from the Commonwealth for services rendered in or to the

executive agency. The list shall show the following for each

person:

(1) The person's:

(i) position occupied;

(ii) date of birth;

(iii) county of residence;

(iv) voting residence;

(v) salary at which or other basis upon which the

person is entitled to be paid; and

(vi) date of entry into the service of the

Commonwealth.

(2) Whether the person has been continuously employed by

the Commonwealth since the person's date of entry into the

service of the Commonwealth.

(3) All periods of service and positions held by the

person as an employee of the Commonwealth or the part of the

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information related to previous service and positions as the

Governor may prescribe.

after July of each year:

(1) Each executive agency, other than the Department of

the Auditor General and the Treasury Department, shall

certify any change to the list under subsection (b) that

occurred during the preceding month to all of the following:

(i) The secretary.

(ii) The Auditor General.

(iii) The State Treasurer.

(2) The Auditor General and State Treasurer shall

certify any change to the list under subsection (b) that

occurred during the preceding month to the secretary.

(d) Transmittal of updated list.--Any change to the list

under subsection (b) shall be transmitted to the Legislative

Data Processing Center, in the form of a computer file.

(e) Public information.--

(1) Except as provided in paragraph (2), the information

received by the secretary, Auditor General or State Treasurer

under this section shall be public information.

(2) Information that identifies the voting residence of

a person employed by the Commonwealth shall not be public

information.

(f) Payment of employees.--An employee of an executive

agency shall only be paid by the entity for which the employee

works.

Section 2. Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of 72

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Pa.C.S. Ch. 100.

(2) Article VI of the act of April 9, 1929 (P.L.177,

No.175), known as The Administrative Code of 1929, is

repealed.

(3) All other acts or parts of acts are repealed insofar

as they are inconsistent with this act.

Section 3. The addition of 72 Pa.C.S. Ch. 100 is a

continuation of Article VI of the act of April 9, 1929 (P.L.177,

No.175), known as The Administrative Code of 1929. The following

apply:

(1) Except as otherwise provided in 72 Pa.C.S. Ch. 100,

all activities initiated under Article VI of The

Administrative Code of 1929 shall continue and remain in full

force and effect and may be completed under 72 Pa.C.S. Ch.

100. Orders, regulations, rules and decisions which were made

under Article VI of The Administrative Code of 1929 and which

are in effect on the effective date of 72 Pa.C.S. Ch. 100

shall remain in full force and effect until revoked, vacated

or modified under 72 Pa.C.S. Ch. 100. Contracts, obligations

and collective bargaining agreements entered into under

Article VI of The Administrative Code of 1929 are not

affected nor impaired by the repeal of Article VI of The

Administrative Code of 1929.

(2) Except as otherwise provided in 72 Pa.C.S. Ch. 100,

any difference in language between 72 Pa.C.S. Ch. 100 and

Article VI of The Administrative Code of 1929 is intended

only to conform to the style of the Pennsylvania Consolidated

Statutes and is not intended to change or affect the

legislative intent, judicial construction or administration

and implementation of The Administrative Code of 1929.

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(3) Any expenditures needed to implement this act shall

be paid using unencumbered or encumbered funds of the

respective executive agency.

Section 4. This act shall take effect July 1, 2021.

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