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HF 990

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:43am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/19/2009

Current Version - as introduced

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A bill for an act
relating to the budget reserve; modifying priorities for additional revenues in
general fund forecasts; requiring a report; amending Minnesota Statutes 2008,
section 16A.152, subdivision 2, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2008, section 16A.152, subdivision 2, is amended to
read:


Subd. 2.

Additional revenues; priority.

(a) If on the basis of a forecast of general
fund revenues and expenditures, the commissioner of finance determines that there will be
a positive unrestricted budgetary general fund balance at the close of the biennium, the
commissioner of finance must allocate money to the following accounts and purposes in
priority order:

(1) the cash flow account established in subdivision 1 until that account reaches
$350,000,000;new text begin and
new text end

(2) the budget reserve account established in subdivision 1a until that account
reaches deleted text begin $653,000,000deleted text end new text begin an amount equal to two percent of general fund expenditures and
transfers for the preceding biennium
new text end ;

(3) the amount necessary to increase the aid payment schedule for school district
aids and credits payments in section 127A.45 to not more than 90 percent rounded to the
nearest tenth of a percent without exceeding the amount available and with any remaining
funds deposited in the budget reserve; deleted text begin and
deleted text end

(4) the amount necessary to restore all or a portion of the net aid reductions under
section 127A.441 and to reduce the property tax revenue recognition shift under section
123B.75, subdivision 5, paragraph (b), deleted text begin and Laws 2003, First Special Session chapter 9,
article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, section
20,
deleted text end by the same amountnew text begin ; and
new text end

new text begin (5) 25 percent to the budget reserve account established in subdivision 1a until
that account reaches an amount equal to five percent of the general fund expenditures
and transfers for the preceding biennium
new text end .

(b) The amounts necessary to meet the requirements of this section are appropriated
from the general fund within two weeks after the forecast is released or, in the case of
transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations
schedules otherwise established in statute.

deleted text begin (c) To the extent that a positive unrestricted budgetary general fund balance is
projected, appropriations under this section must be made before section 16A.1522 takes
effect.
deleted text end

deleted text begin (d)deleted text end new text begin (c)new text end The commissioner of finance shall certify the total dollar amount of the
reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The
commissioner of education shall increase the aid payment percentage and reduce the
property tax shift percentage by these amounts and apply those reductions to the current
fiscal year and thereafter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2008, section 16A.152, is amended by adding a subdivision
to read:


new text begin Subd. 8. new text end

new text begin Report on budget reserve percentage. new text end

new text begin (a) The commissioner of finance
must periodically review the formula used to estimate the percentage of the preceding
biennium's general fund expenditures and transfers recommended as a budget reserve.
new text end

new text begin (b) The commissioner must annually review the variables and coefficients in the
formula used to model the base of the general fund taxes and the mix of taxes that provide
revenues to the general fund. If the commissioner determines that the variables and
coefficients have changed enough to result in a change in the percentage of the preceding
biennium's general fund expenditures and transfers recommended as a budget reserve,
the commissioner must update the variables and coefficients in the formula to reflect the
current base and mix of general fund taxes.
new text end

new text begin (c) Every ten years, the commissioner must review the methodology underlying the
formula, taking into consideration relevant economic literature from the past ten years, and
determine if the formula remains adequate as a tool for estimating the percentage of the
preceding biennium's general fund expenditures and transfers recommended as a budget
reserve. If the commissioner determines that the methodology underlying the formula is
outdated, the commissioner must revise the formula.
new text end

new text begin (d) By January 15 of each year, the commissioner must report to the chairs of the
house of representatives Committee on Ways and Means and the senate Committee on
Finance, in compliance with sections 3.195 and 3.197, on the percentage of the preceding
biennium's general fund expenditures and transfers recommended as a budget reserve.
The report must specify:
new text end

new text begin (1) if the commissioner updated the variables and coefficients in the formula, to
reflect significant changes to either the base of one or more general fund taxes or to the
mix of taxes that provide revenues to the general fund, as provided in paragraph (b);
new text end

new text begin (2) if the commissioner revised the formula after determining the methodology was
outdated, as provided in paragraph (c); and
new text end

new text begin (3) if the percentage of the preceding biennium's general fund expenditures and
transfers recommended as a budget reserve has changed as a result of an update of or a
revision to the formula.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end