HF 2952

as introduced - 87th Legislature (2011 - 2012) Posted on 03/21/2012 02:34pm

A bill for an act
relating to government reform; requiring a system of zero-based budgeting;
amending Minnesota Statutes 2010, sections 16A.103; 16A.11, subdivision 3;
proposing coding for new law in Minnesota Statutes, chapter 16A; repealing
Minnesota Statutes 2010, section 16A.103, subdivisions 1b, 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 16A.103, is amended to read:

16A.103 FORECASTS OF REVENUE AND EXPENDITURES.

Subdivision 1.

State revenue and expenditures.

In February and November
each year, the commissioner shall prepare a forecast of state revenue and expenditures.
The November forecast must be delivered to the legislature and governor no later than
the end of the first week of December. The February forecast must be delivered to the
legislature and governor by the end of February. Forecasts must be delivered to the
legislature and governor on the same day. If requested by the Legislative Commission on
Planning and Fiscal Policy, delivery to the legislature must include a presentation to the
commission. new text begin The portion of each forecast dealing with state expenditures must forecast
these expenditures only for the remainder of the current biennium.
new text end

Subd. 1a.

Forecast parameters.

The forecast must assume the continuation of
current laws and reasonable estimates of projected growth in the national and state
economies and affected populations. Revenue must be estimated for all sources provided
for in current law. Expenditures new text begin for the remainder of the current biennium new text end must be
estimated for all obligations imposed by law and those projected to occur as a result of
variables outside the control of the legislature. Expenditure estimates must not include an
allowance for inflation.

deleted text begin Subd. 1b. deleted text end

deleted text begin Forecast variable. deleted text end

deleted text begin In determining the amount of state bonding as it
affects debt service, the calculation of investment income, and the other variables to be
included in the expenditure part of the forecast, the commissioner must consult with the
chairs and lead minority members of the senate State Government Finance Committee
and the house of representatives Ways and Means Committee, and legislative fiscal staff.
This consultation must occur at least three weeks before the forecast is to be released. No
later than two weeks prior to the release of the forecast, the commissioner must inform the
chairs and lead minority members of the senate State Government Finance Committee and
the house of representatives Ways and Means Committee, and legislative fiscal staff of
any changes in these variables from the previous forecast.
deleted text end

Subd. 1c.

Expenditure data.

State agencies must submit any revisions in
expenditure data new text begin for the remainder of the current biennium new text end the commissioner determines
necessary for the forecast to the commissioner at least four weeks prior to the release of
the forecast. The information submitted by state agencies and any modifications to that
information made by the commissioner must be made available to legislative fiscal staff
no later than three weeks prior to the release of the forecast.

Subd. 1d.

Revenue data.

On a monthly basis, the commissioner must provide
legislative fiscal staff with an update of the previous month's state revenues no later than
12 days after the end of that month.

Subd. 1e.

Economic information.

The commissioner must review economic
information including economic forecasts with legislative fiscal staff no later than two
weeks before the forecast is released. The commissioner must invite the chairs and lead
minority members of the senate Finance Committee and the house of representatives Ways
and Means Committee, and legislative fiscal staff to attend any meetings held with outside
economic advisors. The commissioner must provide legislative fiscal staff with monthly
economic forecast information received from outside sources.

Subd. 1f.

Personal income.

In addition, the commissioner shall forecast Minnesota
personal income for each of the years covered by the forecast and include these estimates
in the forecast documents.

Subd. 1g.

Period to be forecast.

A forecast prepared during the first fiscal year
of a biennium must cover that biennium and the next biennium. A forecast prepared
during the second fiscal year of a biennium must cover that biennium and the next two
bienniums. new text begin However, each forecast must cover expenditures only for the remainder of the
current biennium.
new text end

Subd. 2.

Local revenue.

In February and November of each year, the commissioner
of revenue shall prepare and deliver to the governor and the legislature forecasts of
revenue to be received by school districts as a group, counties as a group, and the group of
cities and towns that have a population of more than 2,500. The forecasts must assume
the continuation of current laws, projections of valuation changes in real property, and
reasonable estimates of projected growth in the national and state economies and affected
populations. Revenue must be estimated for property taxes, state and federal aids, local
sales taxes, if any, and a single projection for all other revenue for each group of affected
local governmental units.

deleted text begin Subd. 4. deleted text end

deleted text begin Report on expenditure increases. deleted text end

deleted text begin By January 10 of an odd-numbered
year, the commissioner of management and budget must report on those programs or
components of programs for which expenditures for the next biennium according to the
forecast issued the previous November are projected to increase more than 15 percent over
the expenditures for that program in the current biennium. The report must include an
analysis of the factors that are causing the increases in expenditures.
deleted text end

Sec. 2.

new text begin [16A.106] ZERO-BASED BUDGETING.
new text end

new text begin (a) The proposed budget of each state agency and each entity in the legislative
branch and judicial branch must be prepared in a manner such that the base budget of the
agency or entity is assumed to be zero, and each proposed expenditure must be justified
as if it were a new expenditure.
new text end

new text begin (b) The commissioner's budget preparation rules and instructions must contain
requirements, deadlines, and technical assistance to facilitate implementation of this
section. The instructions may establish parameters for the three alternative funding levels
required in clause (3). The instructions must require each executive agency to submit the
following information to the commissioner, and must also be contained in the detailed
budget presented to the legislature:
new text end

new text begin (1) a description of each activity for which the agency or entity receives an
appropriation in the current biennium or for which the agency or entity requests an
appropriation in the next biennium;
new text end

new text begin (2) the legal basis for each activity;
new text end

new text begin (3) for each activity, three alternative funding levels, and a summary of the priorities
that would be accomplished within each level, and the additional increments of value that
would be added by the higher funding levels; and
new text end

new text begin (4) for each activity, one or more measures of cost efficiency and effectiveness of
program delivery, which must include comparisons to other states or entities with similar
programs.
new text end

Sec. 3.

Minnesota Statutes 2010, section 16A.11, subdivision 3, is amended to read:

Subd. 3.

Part two: detailed budget.

(a) Part two of the budget, the detailed budget
estimates both of expenditures and revenues, must contain any statements on the financial
plan which the governor believes desirable or which may be required by the legislature.
The detailed estimates shall include the governor's budget arranged in tabular form.

deleted text begin (b) Tables listing expenditures for the next biennium must show the appropriation
base for each year. The appropriation base is the amount appropriated for the second year
of the current biennium. The tables must separately show any adjustments to the base
required by current law or policies of the commissioner of management and budget. For
forecasted programs, the tables must also show the amount of the forecast adjustments,
based on the most recent forecast prepared by the commissioner of management and
budget under section 16A.103. For all programs, the tables must show the amount of
appropriation changes recommended by the governor, after adjustments to the base and
forecast adjustments, and the total recommendation of the governor for that year.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end The detailed estimates must include a separate line listing the total cost of
professional and technical service contracts for the prior biennium and the projected costs
of those contracts for the current and upcoming biennium. They must also include a
summary of the personnel employed by the agency, reflected as full-time equivalent
positions.

deleted text begin (d) deleted text end new text begin (c) new text end The detailed estimates for internal service funds must include the number of
full-time equivalents by program; detail on any loans from the general fund, including
dollar amounts by program; proposed investments in technology or equipment of $100,000
or more; an explanation of any operating losses or increases in retained earnings; and a
history of the rates that have been charged, with an explanation of any rate changes and
the impact of the rate changes on affected agencies.

Sec. 4. new text begin IMPLEMENTATION.
new text end

new text begin The principles of zero-based budgeting required by Minnesota Statutes, section
16A.106, must be implemented for approximately half of executive branch agencies for
the biennium beginning July 1, 2011, and for the remaining agencies for the biennium
beginning July 1, 2013. The governor must designate which agencies are in each category.
For agencies subject to zero-based budgeting for the biennium beginning July 1, 2011,
agencies must submit supplemental budget materials, in compliance with section 2, as
soon as possible after enactment of this act.
new text end

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 16A.103, subdivisions 1b and 4, new text end new text begin are repealed.
new text end

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 5 are effective the day following final enactment.
new text end