HB 1995 — An Act establishing the Keystone Solvency Operating Study Commission and providing for its powers and duties and for a report.

PRIOR PRINTER'S NO.

2798 PRINTER'STHE NO.GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

3260 THE GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

MILLER,MILLER STAATS, ROTHMAN AND JONES,STAATS, OCTOBER 25, 2019 ASREFERRED REPORTEDTO FROM COMMITTEE ON STATE GOVERNMENT, HOUSEOCTOBER OF25, REPRESENTATIVES,2019 ASAN AMENDED,ACT FEBRUARYEstand 3,providing 2020for ANits ACTpowers Establishingand theduties Keystoneand Solvencyfor Operatinga Studyreport.n CommissionThe andGeneral providingAssembly forof itsthe powersCommonwealth andof dutiesPennsylvania andhereby forenacts aas report.follows:

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

"COMMONWEALTH.""Critical THErisk COMMONWEALTHfactor." OFAny PENNSYLVANIA.element of risk of sufficient magnitude which, if not dealt with, may negatively affect the ability of the Commonwealth to continue to meet financial obligations.

<-- "Critical risk factor." Any element of risk of sufficient magnitude which, if not dealt with, may negatively affect the ability of the Commonwealth to continue to meet financial obligations.

20190HB1995PN3260 - 2 - (2) Two members appointed by the President pro tempore 20190HB1995PN2798 - 2 - of the Senate, one from the majority party and one from the minority party.

(1) Analyze the financial insolvencies under PROMESA and solvency concerns of other states to determine lessons <-- learned and the impact of insolvency proceedings to meet financial obligations in operating budgets.

IF(2) THEIn <--consultation COMMONWEALTHwith CANthe BECOMEIndependent BANKRUPTFiscal OROffice, INSOLVENTdevelop ANDcash TOflow DETERMINEprojections LESSONSfor LEARNEDthe ONimmediate THEfive IMPACTyears THATfollowing INSOLVENCYthe PROCEEDINGSeffective MAYdate HAVEof ONthis THEsection. COMMONWEALTH'S ABILITY TO MEET ITS FINANCIAL OBLIGATIONS IN ANNUAL OPERATING BUDGETS.

(2)The ASSESSprojections HOWshall INSOLVENCYinclude PROCEEDINGSbest MAYcase, AFFECTexpected THEcase COMMONWEALTH'Sand ABILITYworst TOcase MEETscenarios ITSto OBLIGATIONSbe TOdefined MAKEby EMPLOYERthe CONTRIBUTIONSIndependent TOFiscal THEOffice PUBLICin SCHOOLthe EMPLOYEES'creation RETIREMENTof SYSTEMthe UNDERprojections. 24 PA.C.S.

§(3) 8326Determine (RELATINGcritical TOrisk CONTRIBUTIONSfactors BYof THEimportance COMMONWEALTH)to ANDthe TOCommonwealth THEon STATEthe EMPLOYEES'Commonwealth's RETIREMENTfinancial SYSTEMwell-being UNDERand 71control PA.C.S.measures to monitor the risk factors.

§(4) 5507Develop (RELATINGperformance TOmetrics CONTRIBUTIONSfor TOuse THEby SYSTEMthe BYIndependent THEFiscal COMMONWEALTHOffice ANDto OTHERmonitor EMPLOYERS),the INCLUDINGcritical EMPLOYERrisk CONTRIBUTIONSfactors NECESSARYidentified TOwith PAYthe EACHmeasures SYSTEM'Spublished RESPECTIVEin UNFUNDEDthe ACTUARIALquarterly ACCRUEDeconomic LIABILITY.updates from the Independent Fiscal Office.

(3) ASSESS HOW INSOLVENCY PROCEEDINGS MAY AFFECT THE ABILITY OF THE STATE EMPLOYEES' RETIREMENT SYSTEM AND THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM TO PAY BENEFITS TO ANNUITANTS AND BENEFICIARIES.

(2) (4) In consultation with the Independent Fiscal <-- 20190HB1995PN3260 - 3 - Office, develop cash flow projections for the immediate five years following the effective date of this section.

The projections shall include best case, expected case and worst <-- case WORST-CASE scenarios to be defined by the Independent <-- Fiscal Office in the creation of the projections.

(3) (5) Determine critical risk factors of importance to <-- the Commonwealth on the Commonwealth's financial FOR <-- FINANCIAL well-being and OTHER control measures to monitor <-- the ASSOCIATED risk factors.

<-- (4) (6) Develop performance metrics for use by the <-- Independent Fiscal Office to monitor the critical risk factors identified with the measures published in the quarterly economic updates from the Independent Fiscal Office.

(e) Qualified vote.--A vote on the findings and 20190HB1995PN2798 - 3 - recommendations to the General Assembly under section 5 shall require two-thirds of the members voting in the affirmative.

(g) Information gathering.--The commission may conduct hearings and otherwise gather pertinent information and analysis that the commission considers appropriate and necessary to fulfill its duties, which may include, but shall not be limited <-- to, the Independent Fiscal Office and the Joint State Government 20190HB1995PN3260 - 4 - Commission.

20190HB1995PN2798 - 4 - (4) The chair and minority chair of the Finance Committee of the Senate.

(5) THEThe CHAIRSpeaker ANDof MINORITYthe CHAIRHouse OFof THERepresentatives. STATE GOVERNMENT <-- COMMITTEE OF THE SENATE.

(6) THEThe CHAIRMajority ANDLeader MINORITYof CHAIRthe OFHouse THEof APPROPRIATIONSRepresentatives. COMMITTEE OF THE SENATE.

(5) (7) The SpeakerMinority Leader of the House of Representatives.

<-- (6) (8) The Majoritychair Leaderand minority chair of the HouseFinance Committee of <--the House of Representatives.

(7) (9) The Minority Leader of the House of <-- 20190HB1995PN3260 - 5 - Representatives.

(8) (10) The chair and minority chair of the Finance <-- Committee of the House of Representatives.

(11) THE CHAIR AND MINORITY CHAIR OF THE STATE <-- GOVERNMENT COMMITTEE OF THE HOUSE OF REPRESENTATIVES.

(12) THE CHAIR AND MINORITY CHAIR OF THE APPROPRIATIONS COMMITTEE OF THE HOUSE OF REPRESENTATIVES.

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