HB 229 — An Act establishing the Keystone Solvency Operating Study Commission; and providing for its powers and duties and for a report.

PRINTER'S NO.   182

                   THE GENERAL ASSEMBLY OF PENNSYLVANIA



                       HOUSE BILL
                       No. 229
                                                Session of
                                                  2025

     INTRODUCED BY GLEIM, HAMM, LEADBETER, KAUFFMAN, KUZMA AND
        ZIMMERMAN, JANUARY 22, 2025

     REFERRED TO COMMITTEE ON APPROPRIATIONS, JANUARY 22, 2025


                                   AN ACT
 1   Establishing the Keystone Solvency Operating Study Commission;
 2      and providing for its powers and duties and for a report.
 3      The General Assembly of the Commonwealth of Pennsylvania
 4   hereby enacts as follows:
 5   Section 1.   Short title.
 6      This act shall be known and may be cited as the Keystone
 7   Solvency Operating Study Commission Act.
 8   Section 2.   Legislative intent.
 9      The intent of this act is to provide insight into financial
10   risks relative to unfunded pension liabilities, other
11   postemployment benefit unfunded liabilities, deferred public
12   sector infrastructure projects to include deferred maintenance,
13   municipal solvency concerns, school district solvency concerns,
14   debt service solvency risks of the Commonwealth, financial
15   stress testing of the Commonwealth's cash flow projections and
16   current comprehensive annual financial reports under various
17   economic scenarios and other financial risks that may come
18   before the Keystone Solvency Operating Study Commission and
 1   provide financial analysis of other states considered
 2   financially vulnerable.
 3   Section 3.     Definitions.
 4      The following words and phrases when used in this act shall
 5   have the meanings given to them in this section unless the
 6   context clearly indicates otherwise:
 7      "Commission."     The Keystone Solvency Operating Study
 8   Commission established under section 4.
 9      "Commonwealth."     The Commonwealth of Pennsylvania.
10      "Critical risk factor."     Any element of risk of sufficient
11   magnitude which, if not dealt with, may negatively affect the
12   ability of the Commonwealth to continue to meet financial
13   obligations.
14      "PROMESA."     Puerto Rico Oversight, Management, and Economic
15   Stability Act (Public Law 114-187, 20 U.S.C. § 2101 et seq.).
16   Section 4.     Keystone Solvency Operating Study Commission.
17      (a)     Establishment.--The Keystone Solvency Operating Study
18   Commission is established as a legislative commission for the
19   purpose of analyzing the economic conditions of the
20   Commonwealth, specifically unfunded obligations of school
21   districts, municipalities and public pension plans. The
22   commission shall consider unfunded postemployment benefits of
23   the Commonwealth to determine the impact on operations of other
24   financial commitments during periods of economic recession. The
25   study shall ensure that the priority of financial claims is
26   understood within the framework of the Constitution of
27   Pennsylvania. The commission shall be comprised of the following
28   members:
29            (1)   One member appointed by the Governor.
30            (2)   One member appointed by the President pro tempore of

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 1    the Senate.
 2          (3)   One member appointed by the Speaker of the House of
 3    Representatives.
 4          (4)   One member appointed by the Minority Leader of the
 5    Senate.
 6          (5)   One member appointed by the Minority Leader of the
 7    House of Representatives.
 8    (b)   Duties.--The commission shall:
 9          (1)   Analyze the financial insolvencies under PROMESA and
10    solvency concerns of other states to determine if the
11    Commonwealth can become bankrupt or insolvent and to
12    determine lessons learned on the impact that insolvency
13    proceedings may have on the Commonwealth's ability to meet
14    its financial obligations in annual operating budgets.
15          (2)   Assess how insolvency proceedings may affect the
16    Commonwealth's ability to meet its obligations to make
17    employer contributions to the Public School Employees'
18    Retirement System under 24 Pa.C.S. § 8326 (relating to
19    contributions by the Commonwealth) and to the State
20    Employees' Retirement System under 71 Pa.C.S. § 5507
21    (relating to contributions to the system by the Commonwealth
22    and other employers), including employer contributions
23    necessary to pay each system's respective unfunded actuarial
24    accrued liability.
25          (3)   Assess how insolvency proceedings may affect the
26    ability of the State Employees' Retirement System and the
27    Public School Employees' Retirement System to pay benefits to
28    annuitants and beneficiaries.
29          (4)   In consultation with the Independent Fiscal Office,
30    develop cash flow projections for the immediate five years

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 1      following the effective date of this section. The projections
 2      shall include best case, expected case and worst-case
 3      scenarios to be defined by the Independent Fiscal Office in
 4      the creation of the projections.
 5            (5)   Determine critical risk factors of importance to the
 6      Commonwealth for financial well-being and other control
 7      measures to monitor the associated risk factors.
 8            (6)   Develop performance metrics for use by the
 9      Independent Fiscal Office to monitor the critical risk
10      factors identified with the measures published in the
11      quarterly economic updates from the Independent Fiscal
12      Office.
13      (c)   Quorum.--A majority of appointed members shall
14   constitute a quorum for the purpose of conducting business.
15      (d)   Chairperson and vice chairperson.--The members shall
16   select one of the members to be chairperson and another member
17   to be vice chairperson.
18      (e)   Qualified vote.--A vote on the findings and
19   recommendations to the General Assembly under section 5 shall
20   require two-thirds of the members voting in the affirmative.
21      (f)   Compensation and reimbursement.--Members of the
22   commission shall not receive compensation or reimbursement for
23   their services on the commission.
24      (g)   Information gathering.--The commission may conduct
25   hearings and otherwise gather pertinent information and analysis
26   that the commission considers appropriate and necessary to
27   fulfill its duties.
28      (h)   Support.--The General Assembly shall provide
29   administrative support, meeting space and any other assistance
30   required by the commission to carry out the commission's duties

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 1   under this act.
 2      (i)   Transparency and ethics.--The commission shall be
 3   subject to the following laws:
 4            (1)    65 Pa.C.S. Ch. 7 (relating to open meetings).
 5            (2)    The act of February 14, 2008 (P.L.6, No.3), known as
 6      the Right-to-Know Law. The commission shall be considered a
 7      legislative agency as defined in section 102 of the Right-to-
 8      Know Law.
 9   Section 5.      Report and expiration.
10      (a)   Report.--The commission shall report its findings and
11   recommendations to the Governor and the General Assembly within
12   12 months of its first organizational meeting. The report shall
13   be directly submitted to:
14            (1)    The President pro tempore of the Senate.
15            (2)    The Speaker of the House of Representatives.
16            (3)    The Majority Leader of the Senate.
17            (4)    The Majority Leader of the House of Representatives.
18            (5)    The Minority Leader of the Senate.
19            (6)    The Minority Leader of the House of Representatives.
20            (7)    The chair and minority chair of the Appropriations
21      Committee of the Senate.
22            (8)    The chair and minority chair of the Appropriations
23      Committee of the House of Representatives.
24            (9)    The chair and minority chair of the Finance
25      Committee of the Senate.
26            (10)    The chair and minority chair of the Finance
27      Committee of the House of Representatives.
28            (11)    The chair and minority chair of the State
29      Government Committee of the Senate.
30            (12)    The chair and minority chair of the State

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1      Government Committee of the House of Representatives.
2      (b)   Expiration.--The commission shall expire 60 days after
3   delivery of its report under subsection (a).
4   Section 6.   Effective date.
5      This act shall take effect in 30 days.




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