PRINTER'S NO. 1082
No. 974 Session of 1999
INTRODUCED BY LaGROTTA, EVANS, SOLOBAY, ROBINSON, GEORGE,
GORDNER, MYERS, CAPPABIANCA, GRUCELA, MUNDY, SURRA, TRELLO,
SCRIMENTI, SHANER, STURLA, MANDERINO, M. COHEN, DeWEESE,
TIGUE, TRICH, MICHLOVIC, RAMOS, DeLUCA, HARHAI, STEELMAN,
McCALL, FREEMAN AND MANN, MARCH 22, 1999
REFERRED TO COMMITTEE ON APPROPRIATIONS, MARCH 22, 1999
AN ACT
1 Amending the act of April 9, 1929 (P.L.177, No.175), entitled
2 "An act providing for and reorganizing the conduct of the
3 executive and administrative work of the Commonwealth by the
4 Executive Department thereof and the administrative
5 departments, boards, commissions, and officers thereof,
6 including the boards of trustees of State Normal Schools, or
7 Teachers Colleges; abolishing, creating, reorganizing or
8 authorizing the reorganization of certain administrative
9 departments, boards, and commissions; defining the powers and
10 duties of the Governor and other executive and administrative
11 officers, and of the several administrative departments,
12 boards, commissions, and officers; fixing the salaries of the
13 Governor, Lieutenant Governor, and certain other executive
14 and administrative officers; providing for the appointment of
15 certain administrative officers, and of all deputies and
16 other assistants and employes in certain departments, boards,
17 and commissions; and prescribing the manner in which the
18 number and compensation of the deputies and all other
19 assistants and employes of certain departments, boards and
20 commissions shall be determined," further providing for
21 budget submission, for personnel lists, for expenditure
22 estimates, for revenue estimates, for budget information, for
23 budget implementation data and for electronic access to
24 information; and providing for the Independent Fiscal Review
25 Board.
26 The General Assembly of the Commonwealth of Pennsylvania
27 hereby enacts as follows:
28 Section 1. Section 613 of the act of April 9, 1929 (P.L.177,
1 No.175), known as The Administrative Code of 1929, amended or
2 added July 1, 1981 (P.L.143, No.48) and August 14, 1991
3 (P.L.331, No.35)is amended to read:
4 Section 613. Submission of Budget to General Assembly.--As
5 soon as possible after the organization of the General Assembly,
6 but not later than the first full week in February of each year,
7 except in the case where a Governor has been elected for his
8 first term of office and then no later than the first full week
9 in March, the Governor shall submit to the General Assembly
10 copies of original agency budget requests and all subsequent
11 revised agency budget requests and a State budget and program
12 and financial plan embracing:
13 (1) A balanced operating budget for the ensuing fiscal year
14 setting forth in detail:
15 (i) The amounts recommended by him to be appropriated to the
16 General Assembly, the Judicial Department, the Governor, and the
17 several administrative departments, boards, and commissions of
18 the State Government, and to institutions within the State, and
19 for all public purposes, classified by department or agency and
20 by program.
21 (ii) The estimated revenues or receipts from any and all
22 sources, and an estimated amount to be raised by taxation or
23 otherwise, including proposals for new revenues and receipts.
24 (2) A capital budget for the ensuing fiscal year setting
25 forth capital projects to be financed from the proceeds of
26 obligations of the Commonwealth or of its agencies or
27 authorities or from operating funds.
28 (3) A program and financial plan for not less than the prior
29 fiscal year, the current fiscal year, this budget year and the
30 four succeeding fiscal years, which plan shall include for each
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1 such fiscal year:
2 (i) Actual or estimated operating expenditures classified by
3 department or agency and by program, in reasonable detail, and
4 actual or estimated revenue by major categories from existing
5 and additional sources.
6 (ii) Clearly stated purposes of each program in terms of
7 desired accomplishments.
8 (iii) Measures used to determine to what extent such program
9 has achieved its stated purposes.
10 (iv) Actual or estimated levels of accomplishment for each
11 program and actual or estimated levels of program activities and
12 their associated costs.
13 (v) Clearly stated purposes for each recommended new or
14 revised program, measures to be used to determine whether each
15 new or revised program has achieved its purpose, estimated
16 levels of additional or new accomplishment of each new or
17 revised program, estimated levels of additional activities for
18 each such program, and their associated costs.
19 (vi) When the Secretary of the Budget identifies a new or
20 expanded program by criteria used in the budget instructions,
21 the new or expanded program shall be displayed and justified as
22 a separate item in the Governor's budget request. A new program
23 shall not be considered to be enacted by the General Assembly in
24 its first year unless it is specifically referred to or
25 displayed as a line item in an appropriation bill.
26 (4) The budget shall list as a single, separate line item
27 for each administrative department, board, and commission the
28 amount which the Governor recommends to be appropriated for the
29 ensuing fiscal year for public relations. For the purposes of
30 this clause, "public relations" shall include the preparation,
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1 presentation and distribution of advertising, publications,
2 radio tapes, television films and tapes, and media releases. The
3 separate line item shall include all compensation, including
4 fringe benefits; all travel, meal, lodging, and similar
5 expenses; the cost of purchasing new equipment and supplies; the
6 cost of leasing offices and equipment; the cost of purchasing
7 material, including newspapers, magazines, movies, films and
8 tapes; the cost of using wire service equipment; and all other
9 similar public relations expenditures.
10 (5) No later than thirty (30) days following the submission
11 of the budget to the General Assembly, the Governor must submit
12 copies of all proposed legislation necessary for the
13 implementation of his proposed budget for the ensuing fiscal
14 year.
15 Section 2. Section 614 of the act, amended November 26, 1997
16 (P.L.530, No.57), is amended to read:
17 Section 614. List of Employes to be Furnished to Certain
18 State Officers.--(a) (1) All administrative departments,
19 boards, and commissions and the Attorney General shall on July
20 15 of each year, transmit to the Auditor General, the State
21 Treasurer and Secretary of the Budget a complete list, and to
22 the Legislative Data Processing Center a computer tape of such
23 list, as of July 1 preceding, of the names of all persons,
24 except day-laborers, entitled to receive compensation from the
25 Commonwealth for services rendered in or to the department,
26 board, or commission, as the case may be. [Such list]
27 (2) The lists under clause (1) shall show the position
28 occupied by each such person, the date of birth and voting
29 residence of such person, the salary at which or other basis
30 upon which such person is entitled to be paid, the date when
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1 such person entered the service of the Commonwealth, whether
2 such person has been continuously employed by the Commonwealth
3 since that date, and all periods of service and positions held
4 as an employe of the Commonwealth, or such part of such
5 information as the Governor may prescribe.
6 (a.1) The Auditor General and the State Treasurer shall on
7 July 15 of each year transmit to the Secretary of the Budget a
8 complete list, and to the Legislative Data Processing Center a
9 computer tape of such list, as of July 1 preceding, of the names
10 of all persons, except day-laborers, entitled to receive
11 compensation from the Commonwealth for services rendered in or
12 to the Auditor General or the State Treasurer, as the case may
13 be. Such list shall show the position occupied by each such
14 person, the date of birth and voting residence of such person,
15 the salary at which or other basis upon which such person is
16 entitled to be paid, the date when such person entered the
17 service of the Commonwealth, whether such person has been
18 continuously employed by the Commonwealth since that date, and
19 all periods of service and positions held as an employe of the
20 Commonwealth.
21 (b) No later than the 15th of each month thereafter, the
22 Attorney General, the heads of the several administrative
23 departments, and the several independent administrative boards
24 and commissions, shall certify to the Auditor General, the State
25 Treasurer and the Secretary of the Budget any changes in the
26 annual list of employes last transmitted to them which shall
27 have occurred during the preceding month and shall provide to
28 the Legislative Data Processing Center a computer tape of such
29 changes.
30 (b.1) No later than the 15th of each month thereafter, the
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1 Auditor General and the State Treasurer shall certify to the
2 Secretary of the Budget any changes in the annual list of
3 employes last transmitted to them which shall have occurred
4 during the preceding month and shall provide to the Legislative
5 Data Processing Center a computer tape of such changes.
6 (c) The information received by the Auditor General, the
7 State Treasurer and the Secretary of the Budget, under this
8 section, shall be public information.
9 Section 3. Section 615 of the act, amended or added
10 September 27, 1978 (P.L.775, No.149) and August 14, 1991
11 (P.L.331, No.35), is amended to read:
12 Section 615. Estimates of Current Expenditures by
13 Departments, Boards and Commissions.--(a) Each administrative
14 department, board and commission, except the departments of
15 which the Auditor General, the State Treasurer and the Attorney
16 General are respectively the heads, shall from time to time, as
17 requested by the Governor, prepare and submit to the Secretary
18 of the Budget, for approval or disapproval, an estimate of the
19 amount of money required and the levels of activity and
20 accomplishment for each program carried on by each department,
21 board or commission, during the ensuing month, quarter, or such
22 other period as the Governor shall prescribe. All available
23 Federal funds and funds from other sources shall be
24 characterized as such and shall be included in the estimated
25 expenditures which must be submitted to the Secretary of the
26 Budget before any expenditures therefrom may be made. If such
27 estimates do not meet with the approval of the Secretary of the
28 Budget, it shall be revised as necessary and resubmitted for
29 approval. The approved rebudget for each administrative
30 department, board and commission subject to this section shall
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1 be submitted to the General Assembly within ninety (90) days
2 following enactment of the budget for the current fiscal year.
3 The Secretary of the Budget may establish an authorized
4 personnel complement level in conjunction with the approved
5 expenditure estimate.
6 (b) After the approval of any such estimate, it shall be
7 unlawful for the department, board, or commission to expend any
8 appropriation, Federal funds or funds from other sources or part
9 thereof, except in accordance with such estimate and the
10 authorized complement level, unless the same be revised with the
11 approval of the Secretary of the Budget and within the limits
12 appropriated by the General Assembly.
13 (c) If any department, board, or commission, to which this
14 section applies, shall fail or refuse to submit to the Secretary
15 of the Budget estimates of expenditures, in accordance with the
16 Governor's request, the Governor may notify the State Treasurer,
17 in writing, of such failure or refusal, and, after receipt of
18 such notice, the State Treasurer shall not draw any warrant in
19 favor of such department, board, or commission, until the
20 Governor shall have notified the State Treasurer, in writing,
21 that the delinquent department, board, or commission has
22 furnished him with, and he has approved, the estimate as
23 required in this section.
24 (d) The Secretary of the Budget shall not, under his
25 authority pursuant to this section, reserve, disapprove or
26 reduce any amount appropriated by the General Assembly for
27 grants and subsidies without giving ten (10) days' prior notice
28 to the Majority and Minority [Chairmen] Chairs of the
29 Appropriations Committees of the Senate and the House of
30 Representatives, for their review and comment. Such notice shall
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1 include the amount of the appropriation to be reduced or
2 disapproved, the reasons why the appropriation should be reduced
3 or disapproved and the estimated impact of such reduction or
4 disapproval on the programs, services or purposes for which the
5 appropriation is provided.
6 Section 4. Sections 618 and 619 of the act, added September
7 27, 1978 (P.L.775, No.149), are amended to read:
8 Section 618. Revenue Estimates.--(a) The Department of
9 Revenue in conjunction with the Secretary of the Budget shall
10 make revenue estimates for the use of the Governor in preparing
11 the budget with periodic revisions until the final estimate is
12 signed by the Governor not later than the time he signs the
13 general appropriation bill. The revenue estimates used to sign
14 any appropriation bill shall show separately State revenues,
15 Federal funds, and, if specifically appropriated, funds from
16 other sources. The Governor shall item veto any part of any
17 appropriation bill that causes total appropriations to exceed
18 the official estimate plus any unappropriated surplus. No
19 changes in the revenue estimates shall be made thereafter unless
20 changes in statutes affecting revenues and receipts are enacted.
21 (b) The revenue estimates shall be prepared in a way that
22 they are subject to complete and thorough oversight by the
23 Appropriations Committees of the Senate and the House of
24 Representatives and the Independent Fiscal Review Board with
25 full knowledge of all data, assumptions, and econometric models
26 which were used to develop the projections and any subsequent
27 revisions of these projections.
28 (c) A committee consisting of the Governor, the Secretary of
29 the Budget, the Secretary of Revenue [and the Chairmen], the
30 Chairs of the Appropriations Committees of the Senate and the
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1 House of Representatives and the Chair of the Independent Fiscal
2 Review Board is hereby established to oversee the development,
3 maintenance and/or use of econometric models which may be
4 applied in the forecasting of State revenues. A model or models
5 shall be developed for this purpose in the event that one does
6 not currently exist. The Governor's Office shall maintain and
7 update the model or models or appoint an appropriate agency or
8 agencies to perform this responsibility. The Governor's Office
9 shall inform the Oversight Committee of any changes to be made
10 to the model or models to keep it updated. The equations of the
11 model or models and any historic data bases related thereto
12 shall be available to any member of the Oversight Committee or
13 to the Minority [Chairman] Chair of the Appropriations Committee
14 of the Senate or House of Representatives upon request at any
15 time for any reason. Members of the Oversight Committee or the
16 Minority [Chairman] Chair of the Appropriations Committee of the
17 Senate or the House of Representatives may request the
18 Governor's Office or the appropriate agency to run the model or
19 models for any purpose including the testing of new equations
20 and to produce forecasts. Forecasts produced by the model or
21 models and any forecasted data bases related thereto shall be
22 kept confidential by the Governor's Office and the appropriate
23 agency or agencies producing these forecasts until or unless the
24 individual requesting such forecast shall release them from this
25 requirement. In no way shall this confidentiality provision be
26 construed to prevent access by the Appropriations Committees of
27 the Senate or House of Representatives or the Independent Fiscal
28 Review Board to forecasts used in the preparation of the
29 Governor's revenue estimates after the presentation of the
30 budget as required in section 619(b).
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1 Section 619. Transmission of Budget Information to the
2 General Assembly.--(a) In December of each year, the Governor
3 shall meet with the Majority and Minority [Chairmen] Chairs of
4 the Appropriations Committees and the officers of the General
5 Assembly to brief the legislative leadership on the issues he
6 can foresee as being imminent in the budget for the next fiscal
7 year and exchange views with them on issues on the budget before
8 it is formally submitted to the General Assembly. The Governor's
9 briefing shall include:
10 (1) Major anticipated increases or decreases in programs.
11 (2) The results or anticipated results of employee union
12 negotiations for salaries, wages and other benefits.
13 (3) The statistics involved in preliminary forecasts of the
14 major programs mandated by statute such as education subsidies,
15 all public assistance programs, debt service and forecasts of
16 revenue.
17 (4) Other appropriate budget information.
18 The legislative officers shall also inform the Governor of
19 financial matters which should be considered in the budget.
20 (a.1) At the same time that the Governor presents the budget
21 to the General Assembly, the Governor shall, as provided in
22 section 2808-D, present a documented revenue forecast as defined
23 in section 2802-D.
24 (b) In the year the Governor is inaugurated, the Governor
25 shall present the budget to the General Assembly no later than
26 the first full week in March and in other years, no later than
27 the first full week in February.
28 (c) The budget shall include the results of any program
29 evaluation report completed by the Budget Office in the fiscal
30 year preceding the year in which the budget request is made. The
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1 results of the evaluation report and its recommendations shall
2 be summarized and included in the budget documentation.
3 (d) The Governor and each department or agency of the
4 Commonwealth, upon request of the [Chairman] Chair of the
5 Appropriations Committees of either the Senate or the House of
6 Representatives, shall provide documentation of any budget
7 request, including revenue estimates upon which the Governor's
8 budget estimate is based.
9 Section 5. Section 620 of the act, amended November 26, 1997
10 (P.L.530, No.57), is amended to read:
11 Section 620. Budget Implementation Data.--(a) The Governor
12 shall make monthly expenditure data available to the Majority
13 and Minority [Chairmen] Chairs of the Appropriations Committees
14 of the Senate and the House of Representatives. Monthly data
15 shall be provided within fifteen (15) days after the end of each
16 month. The monthly data shall be prepared in such a way that the
17 last monthly submission is a summary inclusive of the preceding
18 months of the fiscal year and shall be usable to establish a
19 history of expenditure file. This data, at the discretion of the
20 Majority and Minority [Chairmen] Chairs of the Appropriations
21 Committees of the Senate and the House of Representatives may be
22 provided either in finished reports or on computer tapes. The
23 data shall be provided by fund, by appropriation, by department
24 and by organization within each department and shall include:
25 (1) Number of filled personnel positions and their cost.
26 (2) Itemized personnel vacancies and their cost.
27 (3) New positions created and their cost.
28 (4) Wage and overtime costs.
29 (5) Allotments and expenditures for itemized personnel
30 expenses.
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1 (6) Allotments and expenditures for itemized operating
2 expenses.
3 (7) Allotments and expenditures for itemized fixed assets.
4 (8) The rate of expenditures in appropriations for major
5 subsidy and grant programs during the month.
6 In addition to the above specified budgetary data, the Governor
7 shall make available any other budgetary data as may be
8 requested from time to time by the Majority and Minority
9 [Chairmen] Chairs of the Appropriations Committees of the Senate
10 and the House of Representatives.
11 (b) The Governor shall make monthly revenue reports to the
12 Majority and Minority [Chairmen] Chairs of the Appropriations
13 Committees of the Senate and the House of Representatives and
14 the Independent Fiscal Review Board. The revenue reports shall
15 show the actual collection of revenue itemized by source and a
16 comparison of the actual collections with estimated collections
17 for each month. The comparison shall be accompanied by an
18 analysis which would indicate any change in collection patterns
19 which will cause a shortfall or overrun on the annual estimates
20 of more than one per centum (1%).
21 (c) The Governor shall cause to be prepared any other
22 revenue data as may be requested from time to time by the
23 Majority or Minority [Chairmen] Chairs of the Appropriations
24 Committees of the Senate or the House of Representatives and to
25 the Chair of the Independent Fiscal Review Board.
26 Section 6. Section 620.1 of the act, added August 14, 1991
27 (P.L.331, No.35), is amended to read:
28 Section 620.1. Electronic Access [of] to Information.--
29 Except for confidential information, the Majority and Minority
30 [Chairmen] Chairs of the Appropriations Committees of the Senate
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1 and House of Representatives and the Chair of the Independent
2 Fiscal Review Board shall have access to all information
3 available on inquiry-only screens through the Integrated Central
4 System.
5 Section 7. The act is amended by adding an article to read:
6 ARTICLE XXVIII-D
7 POWERS AND DUTIES OF THE INDEPENDENT FISCAL
8 REVIEW BOARD
9 Section 2801-D. Legislative Purpose.--The General Assembly
10 recognizes the continued need for public services which insure
11 the economic and social well-being of individuals and businesses
12 in this Commonwealth. To that end, the General Assembly hereby
13 finds and declares that the Commonwealth should establish an
14 independent entity to:
15 (1) recommend changes which will modernize and reform the
16 State and local revenue system which supports these public
17 services;
18 (2) continually monitor this system;
19 (3) encourage discussion in a public forum of issues and
20 concerns related to this system; and
21 (4) particularly focus on revenue forecasts and legislation
22 affecting the General Fund.
23 The General Assembly further recognizes that the Commonwealth
24 should establish an independent entity which is composed of
25 professionals who are experts in their fields, experts who can
26 encourage debate on whether our State revenue system equitably
27 distributes the burden of payment, promotes economic efficiency
28 and growth, provides appropriate and timely revenues, is easy to
29 understand and easy to administer, and ensures accountability.
30 Section 2802-D. Definitions.--The following words and
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1 phrases when used in this article shall have the meanings given
2 to them in this section unless the context clearly indicates
3 otherwise:
4 "Board" means the Independent Fiscal Review Board established
5 in section 2803-D.
6 "Chairs of the Appropriations Committees" means the Majority
7 Chair and the Minority Chair of the Appropriations Committee of
8 the Senate and the Majority Chair and the Minority Chair of the
9 Appropriations Committee of the House of Representatives.
10 "Council" means the Economic Advisory Council established in
11 section 2809-D.
12 "Documented revenue forecast" means General Fund revenue
13 estimates for the current and succeeding two fiscal years
14 accompanied by supporting documentation which is sufficient for
15 an individual to independently replicate and verify the
16 forecast. Supporting documentation includes, but is not limited
17 to:
18 (1) All reference and data sources used to prepare the
19 forecast.
20 (2) Economic growth assumptions accompanied with supporting
21 rationale.
22 (3) A printout of all historical and forecast data used,
23 including the effective rate of taxes.
24 (4) A printout of all adjustments to historical and forecast
25 data accompanied with supporting rationale where the rationale
26 includes, but is not limited to, a discussion of adjustments due
27 to statutory changes, litigation, and administrative practices.
28 (5) All models used, including econometric, structural and
29 cash flow models.
30 (6) All formulas and calculations used to be accompanied
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1 with supporting rationale.
2 "General Fund revenue" means the income sources for the
3 General Fund.
4 "Official estimate" means the official estimate as required
5 under section 618(a) for General Fund revenue.
6 "Revenue system" means the taxes levied by the various taxing
7 jurisdictions in this Commonwealth.
8 Section 2803-D. Board.--The Independent Fiscal Review Board
9 is established as an independent advisory board.
10 Section 2804-D. Purpose of Board.--The Independent Fiscal
11 Review Board shall prepare periodic advisory General Fund
12 revenue estimates and reports, monitor State and local revenue
13 systems and act as an advisor to the Governor, the General
14 Assembly and the public concerning the following:
15 (1) General Fund revenue forecasts.
16 (2) Economic conditions in this Commonwealth.
17 (3) Trends and developments relevant to revenue systems in
18 this Commonwealth.
19 (4) Other information or analysis related to State and local
20 revenue systems which the Governor or the Chairs of the
21 Appropriations Committees may request or as may be required by
22 law.
23 Section 2805-D. Board Membership.--(a) (1) The Independent
24 Fiscal Review Board shall consist of nine members.
25 (2) The Governor shall appoint one member of the board and
26 each of the Chairs of the Appropriations Committees shall
27 appoint one member of the board. The appointments under this
28 clause shall be made within thirty (30) days of the effective
29 date of this section.
30 (3) The five appointments under clause (2) shall appoint
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1 four additional members to the board. The five board
2 appointments must unanimously approve each of the four
3 additional members. The additional four board members shall be
4 appointed within sixty (60) days of the effective date of this
5 section.
6 (4) The board shall by a vote of six of the nine members
7 elect one of the four additional members to serve as chair of
8 the board.
9 (5) Whenever a vacancy occurs on the board, whether prior to
10 or at the expiration of a term, the vacancy shall be filled
11 within sixty (60) days. All successors shall be appointed by the
12 same appointing authority as the members whom they are
13 replacing.
14 (b) (1) All members of the board shall be skilled and
15 knowledgeable in tax policy, and have at least five years'
16 experience in public finance, economics or accounting. At least
17 three members of the board shall have a minimum of five years'
18 professional economic forecasting experience. At least one
19 member shall have a minimum of five years of corporate tax
20 accounting experience.
21 (2) A member of the board may not be a "lobbyist" as defined
22 in 65 Pa.C.S. § 1303 (relating to definitions).
23 (3) A board member may not be an employe of the executive,
24 legislative or judicial branch of State government.
25 (4) The board members shall not seek or hold a position as
26 any other public official within this Commonwealth or as a party
27 officer while a member of the board. The board members shall not
28 seek election as public officials or party officers for one year
29 after their service with the board. The board members may serve
30 as appointed public officials any time after their period of
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1 service with the board.
2 (c) Except as otherwise provided, the board members shall
3 serve a four-year term. Of the nine initial appointments, two
4 shall be appointed for a term of two years, three for a term of
5 three years and four for a term of four years. The chair of the
6 board, whose initial term shall be for four years, shall have
7 the other appointees draw lots to determine which length of
8 initial term each of them shall serve. Any person appointed to
9 fill a vacancy occurring prior to the expiration of a term shall
10 serve the unexpired term. A board member may be reappointed to
11 serve subsequent terms. If the chair shall become vacant, the
12 board shall elect a new chair as provided in subsection (a)(4).
13 (d) The board shall meet as frequently as it deems
14 appropriate, but at least once during each quarter of the fiscal
15 year. Except as otherwise provided by law, the chair shall be
16 responsible for calling meetings of the board and shall set a
17 date, time and place for such meetings. The member appointed by
18 the Governor shall set a date, time and place for the initial
19 organizational meetings of the board within ten (10) days after
20 the completion of the initial five appointments and within ten
21 (10) days after the completion of the remaining four
22 appointments. In addition, the chair shall call a meeting of the
23 board if a request for such meeting is submitted to the
24 chairperson by at least three members of the board.
25 (e) (1) The chair shall, when present, preside at all
26 meetings. In the chair's absence, a member designated by the
27 board shall preside. Any actions of the chair are subject in
28 every case to majority approval of the board.
29 (2) Five of the members who compose the board shall
30 constitute a quorum for the purpose of conducting the business
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1 of the board and for all other purposes except as otherwise
2 provided.
3 (f) The members of the board shall receive reimbursement for
4 actual and necessary expenses incurred while performing the
5 business of the board.
6 Section 2806-D. Powers and Duties of Board.--(a) The
7 Independent Fiscal Review Board may expend such appropriated
8 funds as are necessary to perform the function provided for in
9 this article.
10 (b) (1) The board shall hire an executive director to aid
11 in carrying out the powers and duties of the board. The chair
12 shall, upon the approval of a majority of the members who
13 compose the board, delegate to the executive director such
14 powers of the board as the chair shall deem necessary to carry
15 out the purposes of the board, subject in every case to the
16 supervision and control of the board. The initial appointment of
17 the executive director shall take place within thirty (30) days
18 after all initial appointments to the board.
19 (2) The executive director shall not seek or hold a position
20 as any other public official within this Commonwealth or as a
21 party officer while filling the position of executive director.
22 The executive director shall not seek election as a public
23 official or party officer for one year after service with the
24 board. The executive director may serve as an appointed public
25 official any time after his period of service with the board.
26 (3) The executive director shall hire support staff as
27 deemed necessary to carry out the duties and requests of the
28 board. The initial chair of the board shall use the staff of the
29 Governor's Office until the executive director has hired
30 necessary support staff.
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1 (c) The board shall conduct a comprehensive fiscal review
2 and recommend a proposal, within eighteen (18) months of the
3 effective date of this article, to redesign and modernize the
4 State and local revenue systems as required under section 2808-
5 D. The board shall carry out all of its powers and duties
6 imposed by this article by first addressing and completing its
7 duties with regard to such comprehensive fiscal review before
8 exercising any of its powers and duties with regard to
9 documented revenue forecasts, fiscal analysis and State and
10 local revenue systems as provided in subsections (d) and (e).
11 (d) (1) The board shall prepare a documented revenue
12 forecast by April 30 and any other time deemed necessary by the
13 board.
14 (2) The board shall analyze the documented revenue forecasts
15 which the Governor and Chairs of the Appropriations Committees
16 submit to the board as required under section 2811-D. The board
17 shall insure that the documented revenue forecasts are a matter
18 of public record.
19 (3) The board shall analyze how its most recent General Fund
20 revenue forecast compares with the official estimate. Part of
21 the analysis shall include a comparison of the documented
22 revenue forecast with the monthly report of the official
23 estimate as required under section 620(b). In addition, the
24 board shall also provide to the public a summary of such
25 information presented in a manner which a lay person can
26 understand. The board shall meet to approve such information by
27 a majority vote before the information is released. Except as
28 otherwise provided, the board shall make such information
29 available in printed form to the Governor, Chairs of the
30 Appropriations Committees and the public by the following dates:
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1 July 15, October 15, January 15, April 15, June 15 and at any
2 other time that the board deems necessary. For purposes of this
3 subsection, publication in the Pennsylvania Bulletin within one
4 week of the due date shall be sufficient to meet the public
5 reporting requirement.
6 (4) The board shall act in an advisory capacity and shall
7 develop policies and procedures for maintaining the
8 confidentiality of individual requests concerning General Fund
9 revenue forecasts, General Fund revenue proposals or General
10 Fund revenue analysis upon the request of the Governor or the
11 Chairs of the Appropriations Committees.
12 (e) (1) The board shall prepare and issue a fiscal analysis
13 for any bill proposing to expand, alter, or reduce General Fund
14 revenue, and for any amendment to a bill proposing to expand,
15 alter, or reduce General Fund revenue. The fiscal analysis shall
16 include policy effects and estimated revenue impacts for the
17 current fiscal year and for each of the two succeeding fiscal
18 years, including all reference and data sources and an
19 explanation of the methodology used to estimate the revenue
20 impacts. When preparing a fiscal analysis, the board shall
21 consider the evaluation criteria set forth in section 2809-D.
22 (2) Except as otherwise provided in clause (3), no bill
23 proposing to expand, alter, or reduce General Fund revenue shall
24 be given second consideration in either House of the General
25 Assembly until the board has attached a fiscal analysis, and no
26 amendment to any bill which proposes amendment to expand, alter,
27 or reduce General Fund revenue shall be considered by either
28 House of the General Assembly until the board has attached a
29 fiscal analysis.
30 (3) If the board fails to attach a fiscal analysis within
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1 twenty (20) legislative days after a bill proposing to expand,
2 alter, or reduce General Fund revenue has received first
3 consideration in either House of the General Assembly, the bill
4 may be further considered in the same manner as if the fiscal
5 analysis had been attached to the bill. If the board fails to
6 attach a fiscal analysis within twenty (20) legislative days
7 after an amendment to a bill proposing to expand, alter, or
8 reduce General Fund revenue has been submitted to the board, the
9 amendment may be considered in the same manner as if the fiscal
10 analysis had been attached to the amendment.
11 (f) The board shall periodically monitor and, using the
12 evaluation criteria set forth in section 2808-D, evaluate the
13 relationship of State and local revenue systems to fiscal policy
14 in this Commonwealth and to changes and developments in factors
15 that impact the revenue systems. Such factors that the board
16 should consider include:
17 (1) general economic and demographic trends;
18 (2) patterns of business methods and organization;
19 (3) economic activity;
20 (4) Federal and State legislative and administrative
21 actions;
22 (5) accounting standards; and
23 (6) regulatory requirements.
24 At its own discretion, or upon request of the Governor or the
25 General Assembly, the board shall evaluate the impact of any
26 factor on the revenue systems in this Commonwealth and recommend
27 any revisions to policy that it deems advisable.
28 Section 2807-D. Comprehensive Fiscal Review.--(a) The
29 purpose of the comprehensive fiscal review is to address the
30 structural problems in the existing revenue systems in this
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1 Commonwealth and, in turn, to develop a consensus proposal for
2 making State and local revenue systems straightforward, fair,
3 efficient, and reliable for funding the public programs and
4 services provided in this Commonwealth. It is the intent of the
5 General Assembly that such proposal shall not result in excess
6 revenues.
7 (b) Within three (3) months of the effective date of this
8 section, the Independent Fiscal Review Board shall commence a
9 review of the entire structure of State and local revenue
10 systems in this Commonwealth. Using the evaluation criteria set
11 forth in section 2808-D, the board shall make a comprehensive
12 assessment of the revenue systems in this Commonwealth and
13 recommend a proposal to redesign and modernize such systems.
14 (c) No later than sixteen (16) months after the effective
15 date of this section, the board shall issue to the Governor and
16 the General Assembly a final report containing its evaluation of
17 the State and local revenue systems and recommended proposal for
18 improving such systems, including supporting analysis, such as
19 rationale and fiscal analyses. Within ninety (90) days of
20 issuing the report, the board shall submit suggested statutory
21 language for implementing its recommendations.
22 (d) Within one hundred five (105) days of issuing the report
23 required by subsection (b), the board shall publish in the
24 Pennsylvania Bulletin:
25 (1) a brief summary of the report;
26 (2) a notice of availability of the text of the report, the
27 statutory language for implementing the recommendations set
28 forth in the report, and a fiscal analysis relating to the
29 recommendations; and
30 (3) a request for written comments.
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1 Section 2808-D. Evaluation Criteria.--When carrying out its
2 duties under this article, when appropriate, the Independent
3 Fiscal Review Board shall take into consideration the following:
4 (1) The simplicity of the taxes and the ability of
5 individual taxpayers to easily understand and comply with them.
6 (2) The overall mix of taxes.
7 (3) Whether the tax burden is distributed fairly among
8 taxpayers in terms of ability to pay and the relationship
9 between benefits received and payments made.
10 (4) The need to eliminate subjective interpretation of
11 taxes.
12 (5) The reliability of taxes and whether their bases yield
13 automatic growth and cyclical stability in revenues generated.
14 (6) The collection and enforcement costs associated with the
15 various taxes and the ability to easily administer the taxes.
16 (7) Whether the taxes create incentives for individuals and
17 firms to alter their behavior in order to minimize their tax
18 burden.
19 (8) The system of taxation within various jurisdictions and
20 the incentives for households to move and firms to relocate
21 activities to jurisdictions which provide more favorable tax
22 treatment.
23 (9) The value of tax incentives and whether they meet the
24 performance requirements on which they are based.
25 (10) The responsiveness of revenue systems to economic and
26 social conditions, including the following:
27 (i) changes in the economic base, such as the shift from
28 manufacturing to services;
29 (ii) changes in the types and forms of business
30 organizations, such as the formation of S corporations and
19990H0974B1082 - 23 -
1 limited liability companies;
2 (iii) expansion of interstate and international businesses
3 and transactions, which impacts nexus requirements,
4 apportionment methods and methods of reporting, including
5 combined or separate company reporting;
6 (iv) changes in technology and regulations, such as in
7 telecommunications and financial services; and
8 (v) goals of State economic development policy, such as
9 targeted job creation and public investments.
10 Section 2809-D. Economic Advisory Council.--(a) The
11 Economic Advisory Council is established to act in an advisory
12 capacity to the Independent Fiscal Review Board concerning State
13 and local revenue systems, economic conditions in this
14 Commonwealth and General Fund revenue forecasts whenever the
15 board calls upon them to do so. The council shall meet with the
16 board at least once during each quarter of the fiscal year.
17 (b) The council shall consist of at least seven members. The
18 board shall appoint each member for a two-year term based upon a
19 majority vote. Whenever a vacancy occurs on the council, whether
20 prior to or at the expiration of a term, the vacancy shall be
21 filled within sixty (60) days. Any person appointed to fill a
22 vacancy occurring prior to the expiration of a term shall serve
23 the unexpired term. The council shall at least consist of a
24 representative from each of the following sectors: labor,
25 manufacturing, banking, nonbanking financial services, retail
26 and public utilities.
27 (c) Members of the council shall not seek or hold a position
28 as any other public official within this Commonwealth or as a
29 party officer while a member of the council. The council members
30 shall not seek election as public officials or party officers
19990H0974B1082 - 24 -
1 for one year after their service with the council. The council
2 members may serve as appointed public officials any time after
3 their period of service with the council. A member of the
4 council may not be a "lobbyist" as defined in 65 Pa.C.S. § 1303
5 (relating to definitions). A board member of the council may not
6 be an employe of the executive, legislative or judicial branch
7 of State government.
8 Section 2810-D. Duties of the Governor, Secretary of Revenue
9 and Chairs of the Appropriations Committees.--(a) The Governor
10 shall submit to the Independent Fiscal Review Board a documented
11 revenue forecast with the submission of the Executive Budget as
12 required under section 613 and with the official estimate. The
13 Chairs of the Appropriations Committees shall submit to the
14 board a documented revenue forecast when their respective
15 budgets are introduced as required under appropriate
16 legislation.
17 (b) Notwithstanding any law or regulation regarding
18 confidential information to the contrary, the Secretary of the
19 Budget and the Secretary of Revenue shall provide information
20 which the board requests for purposes of fulfilling its duties
21 under this act. The board shall be bound by the same laws and
22 regulations regarding confidentiality as the individual which
23 provides the confidential information to the board.
24 (c) In order to facilitate the board in carrying out its
25 duties under section 2806-D(e), the Secretary of the Budget and
26 Secretary of Revenue shall make available to the board all
27 information and reports used for generating General Fund revenue
28 forecasts.
29 Section 8. This act shall take effect immediately.
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