HF 1547

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to state government; providing for the 
  1.3             development of a long-range expenditure plan for state 
  1.4             expenditures; creating a budget reserve account; 
  1.5             restricting use of budget reserve and cash flow 
  1.6             account balances; amending Minnesota Statutes 1994, 
  1.7             sections 16A.152, subdivisions 1, 2, 3, 4, and by 
  1.8             adding a subdivision; 121.904, subdivision 4a; and 
  1.9             124.195, subdivisions 7 and 10; proposing coding for 
  1.10            new law in Minnesota Statutes, chapter 16A; repealing 
  1.11            Minnesota Statutes 1994, sections 121.904, 
  1.12            subdivisions 4c and 4d. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  [16A.104] [LONG-TERM EXPENDITURE PLAN.] 
  1.15     Subdivision 1.  [PURPOSE, DEFINITION.] The long-term 
  1.16  expenditure plan is a statement of expenditure goals to provide 
  1.17  long-range policy and program direction to state programs and 
  1.18  recipients of state funds.  The plan shall be based on the most 
  1.19  recent forecasts under section 16A.103 and the governor's and 
  1.20  legislature's determination of state and local needs.  The plan 
  1.21  shall be for the period comprising two biennia, consistent with 
  1.22  provisions of section 16A.102. 
  1.23     Subd. 2.  [GOVERNOR'S RECOMMENDATION.] By the fourth Monday 
  1.24  in January in each odd-numbered year, the governor shall submit 
  1.25  to the legislature a recommended general fund expenditure plan 
  1.26  for the next two biennia. 
  1.27     (a) The plan must specify expenditure targets for all major 
  1.28  functional areas.  Expenditure targets must be identified by 
  1.29  year for, but not limited to, kindergarten through grade 12 
  2.1   education finance, post-secondary education, property tax aid 
  2.2   and credit and local government aid programs, health care and 
  2.3   family support, and all other general fund spending, including 
  2.4   debt service. 
  2.5      (b) The expenditure plan must not exceed the revenue 
  2.6   targets under section 16A.102 for the same biennium. 
  2.7      (c) In order to ensure a more stable financial environment 
  2.8   for the state, the plan must provide that for fiscal year 1999 
  2.9   and each year thereafter, each fiscal year must be structurally 
  2.10  balanced, except as provided in paragraph (d).  For the purposes 
  2.11  of this subdivision, "structurally balanced" means that, for 
  2.12  each year of a biennium, current revenues (excluding prior year 
  2.13  balances) will equal or exceed projected spending for the same 
  2.14  period. 
  2.15     (d) If a proposed expenditure plan is not structurally 
  2.16  balanced, because prior period balances are proposed to be used, 
  2.17  the plan must identify the one-time nature of any proposed use 
  2.18  of prior period balances and must exclude such balances from the 
  2.19  ongoing expenditure base. 
  2.20     (e) If proposed expenditure targets by functional area are 
  2.21  less than forecast current law expenditures prepared by the 
  2.22  department of finance under sections 16A.103 and 16A.11, the 
  2.23  expenditure plan must identify, by fiscal year, proposed 
  2.24  specific program and policy changes which would be implemented 
  2.25  to reduce expenditures to the target levels. 
  2.26     Subd. 3.  [LEGISLATIVE EXPENDITURE TARGET RESOLUTION.] By 
  2.27  April 15 of each odd-numbered year, the legislature shall, by 
  2.28  concurrent resolution, adopt general fund expenditure targets 
  2.29  for the next two biennia.  The resolution must conform with the 
  2.30  requirements of subdivision 2, paragraphs (a) to (e).  The 
  2.31  resolution must be based on the revenue targets recommended by 
  2.32  the legislature under section 16A.102, subdivision 2. 
  2.33     Subd. 4.  [EVEN-NUMBERED YEAR AND SPECIAL SESSIONS.] The 
  2.34  governor or the legislature may elect to modify their 
  2.35  expenditure targets in a special session or an even-numbered 
  2.36  year regular session.  The requirements of subdivisions 1 to 3 
  3.1   apply, except that within ten days of the start of the session 
  3.2   the dates provided in those subdivisions must be modified to be 
  3.3   consistent with the planned date of adjournment. 
  3.4      Sec. 2.  Minnesota Statutes 1994, section 16A.152, 
  3.5   subdivision 1, is amended to read: 
  3.6      Subdivision 1.  [BUDGET RESERVE AND CASH FLOW ACCOUNT 
  3.7   ESTABLISHED.] (a) A budget reserve and cash flow account is 
  3.8   created in the general fund in the state treasury.  The 
  3.9   commissioner of finance shall restrict part or all of the 
  3.10  balance before reserves in the general fund as may be necessary 
  3.11  to fund the budget reserve and cash flow account as provided by 
  3.12  law from time to time. 
  3.13     (b) The commissioner of finance shall transfer the amount 
  3.14  necessary to bring the total amount of the budget reserve and 
  3.15  cash flow account, including any existing balance in the account 
  3.16  on June 30, 1993, to $360,000,000 $350,000,000 on July 1, 1995.  
  3.17  The amounts restricted shall remain in the account until drawn 
  3.18  down under subdivision 1 or increased under subdivision 2 3. 
  3.19     Sec. 3.  Minnesota Statutes 1994, section 16A.152, is 
  3.20  amended by adding a subdivision to read: 
  3.21     Subd. 1a.  [BUDGET RESERVE ESTABLISHED.] A budget reserve 
  3.22  is created in the general fund in the state treasury.  The 
  3.23  commissioner of finance shall transfer the amount necessary to 
  3.24  bring the total amount in the account to $220,000,000 on July 1, 
  3.25  1995.  The amount restricted shall remain in the account until 
  3.26  drawn down under the provisions of subdivision 3 or 4. 
  3.27     Sec. 4.  Minnesota Statutes 1994, section 16A.152, 
  3.28  subdivision 2, is amended to read: 
  3.29     Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
  3.30  of a forecast of general fund revenues and expenditures the 
  3.31  commissioner of finance determines that there will be a positive 
  3.32  unrestricted budgetary general fund balance at the close of the 
  3.33  biennium, the commissioner of finance must allocate money an 
  3.34  amount equal to the lesser of the forecast increase in total net 
  3.35  general fund tax receipts or the total positive unrestricted 
  3.36  budgetary balance to the budget reserve.  and cash flow account 
  4.1   until the total amount in the account equals five percent of 
  4.2   total general fund appropriations for the current biennium as 
  4.3   established by the most recent legislative session.  Beginning 
  4.4   July 1, 1993, forecast unrestricted budgetary general fund 
  4.5   balances are first appropriated to restore the budget reserve 
  4.6   and cash flow account to $500,000,000.  Additional biennial 
  4.7   unrestricted budgetary general fund balances available after 
  4.8   November 1 of every odd-numbered calendar year are appropriated 
  4.9   in January of the following year to reduce the property tax levy 
  4.10  recognition percent under section 121.904, subdivision 4a, to 
  4.11  zero before additional money beyond $500,000,000 is allocated to 
  4.12  the budget reserve and cash flow account.  $180,000,000 of the 
  4.13  budget reserve and cash flow account shall be dedicated to 
  4.14  elementary and secondary education. 
  4.15     The amounts necessary to meet the requirements of this 
  4.16  section are appropriated from the general fund. 
  4.17     Sec. 5.  Minnesota Statutes 1994, section 16A.152, 
  4.18  subdivision 3, is amended to read: 
  4.19     Subd. 3.  [USE.] (a) The purpose of the cash flow account 
  4.20  is to reserve sufficient cash balances to meet cash flow 
  4.21  deficiencies resulting from uneven distribution of revenue 
  4.22  collections and required expenditure payments during a fiscal 
  4.23  year.  Appropriations from this account shall be restricted to 
  4.24  modifying state expenditures payment dates in a manner that 
  4.25  reduces the amount needed in the account to avoid short-term 
  4.26  borrowing.  Appropriations for this purpose shall not exceed the 
  4.27  value of the improvement in forecast annual cash lowpoints. 
  4.28     (b) The use of the budget reserve is restricted to the 
  4.29  following purposes: 
  4.30     (1) to offset a decline in forecast general fund tax 
  4.31  receipts for the current biennium, subject to the provisions of 
  4.32  subdivision 4; 
  4.33     (2) to provide interim funding of programs affected by 
  4.34  federal funding reductions by appropriation in regular or 
  4.35  special legislative session or in accordance with the provisions 
  4.36  of section 3.30; or 
  5.1      (3) to provide one-time funding for program dissolution or 
  5.2   restructuring costs by appropriation in regular or special 
  5.3   legislative session or in accordance with the provisions of 
  5.4   section 3.30. 
  5.5      (c) The use of the budget reserve should be governed by 
  5.6   principles based on the full economic cycle rather than the 
  5.7   budget cycle.  The budget reserve may be used when a negative 
  5.8   budgetary balance is projected and when objective measures, such 
  5.9   as reduced growth in total wages, retail sales, or employment, 
  5.10  reflect downturns in the state's economy.  
  5.11     Sec. 6.  Minnesota Statutes 1994, section 16A.152, 
  5.12  subdivision 4, is amended to read: 
  5.13     Subd. 4.  [REDUCTION.] (a) If the commissioner determines 
  5.14  that probable forecast tax receipts for the general fund will be 
  5.15  less than anticipated, and that the amount available for the 
  5.16  remainder of forecast total general fund resources for the 
  5.17  biennium will be less than needed, the commissioner shall, with 
  5.18  the approval of the governor, and after consulting the 
  5.19  legislative advisory commission, reduce the amount in the budget 
  5.20  reserve and cash flow account as needed up to an amount equal to 
  5.21  the reduction in net forecast tax revenues, not to exceed the 
  5.22  amount necessary to balance expenditures with revenue.  
  5.23     (b) An additional deficit shall, with the approval of the 
  5.24  governor, and after consulting the legislative advisory 
  5.25  commission, be made up by reducing unexpended allotments of any 
  5.26  prior appropriation or transfer.  Notwithstanding any other law 
  5.27  to the contrary, the commissioner is empowered to defer or 
  5.28  suspend prior statutorily created obligations which would 
  5.29  prevent effecting such reductions.  
  5.30     (c) If the commissioner determines that probable receipts 
  5.31  for any other fund, appropriation, or item will be less than 
  5.32  anticipated, and that the amount available for the remainder of 
  5.33  the term of the appropriation or for any allotment period will 
  5.34  be less than needed, the commissioner shall notify the agency 
  5.35  concerned and then reduce the amount allotted or to be allotted 
  5.36  so as to prevent a deficit. 
  6.1      (d) In reducing allotments, the commissioner may consider 
  6.2   other sources of revenue available to recipients of state 
  6.3   appropriations and may apply allotment reductions based on all 
  6.4   sources of revenue available.  
  6.5      (e) In like manner, the commissioner shall reduce 
  6.6   allotments to an agency by the amount of any saving that can be 
  6.7   made over previous spending plans through a reduction in prices 
  6.8   or other cause. 
  6.9      Sec. 7.  Minnesota Statutes 1994, section 121.904, 
  6.10  subdivision 4a, is amended to read: 
  6.11     Subd. 4a.  [LEVY RECOGNITION.] (a) "School district tax 
  6.12  settlement revenue" means the current, delinquent, and 
  6.13  manufactured home property tax receipts collected by the county 
  6.14  and distributed to the school district, including distributions 
  6.15  made pursuant to section 279.37, subdivision 7, and excluding 
  6.16  the amount levied pursuant to section 124.914, subdivision 1. 
  6.17     (b) In June of each year, the school district shall 
  6.18  recognize as revenue, in the fund for which the levy was made, 
  6.19  the lesser of:  
  6.20     (1) the May, June, and July school district tax settlement 
  6.21  revenue received in that calendar year; or 
  6.22     (2) the sum of the state aids and credits enumerated in 
  6.23  section 124.155, subdivision 2, which are for the fiscal year 
  6.24  payable in that fiscal year plus an amount equal to the levy 
  6.25  recognized as revenue in June of the prior year plus 37.4 48 
  6.26  percent for fiscal year 1994 1996 and thereafter of the amount 
  6.27  of the levy certified in the prior calendar year according to 
  6.28  section 124A.03, subdivision 2, plus or minus auditor's 
  6.29  adjustments, not including levy portions that are assumed by the 
  6.30  state; or 
  6.31     (3) 37.4 48 percent for fiscal year 1994 1996 and 
  6.32  thereafter of the amount of the levy certified in the prior 
  6.33  calendar year, plus or minus auditor's adjustments, not 
  6.34  including levy portions that are assumed by the state, which 
  6.35  remains after subtracting, by fund, the amounts levied for the 
  6.36  following purposes:  
  7.1      (i) reducing or eliminating projected deficits in the 
  7.2   reserved fund balance accounts for unemployment insurance and 
  7.3   bus purchases; 
  7.4      (ii) statutory operating debt pursuant to section 124.914, 
  7.5   subdivision 1; 
  7.6      (iii) retirement and severance pay pursuant to sections 
  7.7   122.531, subdivision 9, 124.2725, subdivision 15, 124.4945, 
  7.8   124.912, subdivision 1, and 124.916, subdivision 3, and Laws 
  7.9   1975, chapter 261, section 4; 
  7.10     (iv) amounts levied for bonds issued and interest thereon, 
  7.11  amounts levied for debt service loans and capital loans, amounts 
  7.12  levied for down payments under section 124.82, subdivision 3, 
  7.13  and amounts levied pursuant to section 136C.411; and 
  7.14     (v) amounts levied under section 124.755.  
  7.15     (c) In July of each year, the school district shall 
  7.16  recognize as revenue that portion of the school district tax 
  7.17  settlement revenue received in that calendar year and not 
  7.18  recognized as revenue for the previous fiscal year pursuant to 
  7.19  clause (b).  
  7.20     (d) All other school district tax settlement revenue shall 
  7.21  be recognized as revenue in the fiscal year of the settlement. 
  7.22  Portions of the school district levy assumed by the state, 
  7.23  including prior year adjustments and the amount to fund the 
  7.24  school portion of the reimbursement made pursuant to section 
  7.25  273.425, shall be recognized as revenue in the fiscal year 
  7.26  beginning in the calendar year for which the levy is payable. 
  7.27     Sec. 8.  Minnesota Statutes 1994, section 124.195, 
  7.28  subdivision 7, is amended to read: 
  7.29     Subd. 7.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
  7.30  fiscal year state general fund payments for a district 
  7.31  nonoperating fund shall be made at 85 percent of the estimated 
  7.32  entitlement during the fiscal year of the entitlement, unless a 
  7.33  higher rate has been established according to section 121.904, 
  7.34  subdivision 4d.  This amount shall be paid in 12 equal monthly 
  7.35  installments.  The amount of the actual entitlement, after 
  7.36  adjustment for actual data, minus the payments made during the 
  8.1   fiscal year of the entitlement shall be paid prior to October 31 
  8.2   of the following school year.  The commissioner may make advance 
  8.3   payments of homestead and agricultural credit aid for a 
  8.4   district's debt service fund earlier than would occur under the 
  8.5   preceding schedule if the district submits evidence showing a 
  8.6   serious cash flow problem in the fund.  The commissioner may 
  8.7   make earlier payments during the year and, if necessary, 
  8.8   increase the percent of the entitlement paid to reduce the cash 
  8.9   flow problem. 
  8.10     Sec. 9.  Minnesota Statutes 1994, section 124.195, 
  8.11  subdivision 10, is amended to read: 
  8.12     Subd. 10.  [AID PAYMENT PERCENTAGE.] Except as provided in 
  8.13  subdivisions 8, 9, and 11, each fiscal year, all education aids 
  8.14  and credits in this chapter and chapters 121, 123, 124A, 124B, 
  8.15  125, 126, 134, and section 273.1392, shall be paid at 90 percent 
  8.16  for districts operating a program under section 121.585 for 
  8.17  grades 1 to 12 for all students in the district and 85 percent 
  8.18  for other districts of the estimated entitlement during the 
  8.19  fiscal year of the entitlement, unless a higher rate has been 
  8.20  established according to section 121.904, subdivision 4d.  The 
  8.21  amount of the actual entitlement, after adjustment for actual 
  8.22  data, minus the payments made during the fiscal year of the 
  8.23  entitlement shall be paid as the final adjustment payment 
  8.24  according to subdivision 6. 
  8.25     Sec. 10.  [INITIAL EXPENDITURE PLAN.] 
  8.26     By February 15, 1996, the governor shall submit to the 
  8.27  legislature recommended expenditure targets for the 1996-1997 
  8.28  fiscal biennium and the 1998-1999 fiscal biennium, in accordance 
  8.29  with the provisions of section 1.  The legislature shall by 
  8.30  concurrent resolution adopt or amend the recommended expenditure 
  8.31  targets prior to passing any bill appropriating state funds in 
  8.32  the 1996 legislative session. 
  8.33     Sec. 11.  [REPEALER.] 
  8.34     Minnesota Statutes 1994, section 121.904, subdivisions 4c 
  8.35  and 4d, are repealed. 
  8.36     Sec. 12.  [EFFECTIVE DATE.] 
  9.1      This act is effective the day after final enactment.