HF 2038

2nd Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:57am

A bill for an act
relating to the budget reserve; requiring periodic review of the formula used for
the budget reserve percentage; requiring reports; amending Minnesota Statutes
2008, section 16A.152, by adding a subdivision; proposing coding for new law
in Minnesota Statutes, chapter 16B.

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

Section 1.

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 developed as part of the Budget Trends Study
Commission authorized by Laws 2007, chapter 148, article 2, section 81, 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outdated, the commissioner must revise the formula.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

Sec. 2.

new text begin [16B.90] MILESTONES REPORT REQUIRED.
new text end

new text begin The Department of Administration may establish a statewide system of economic,
social, and environmental performance measures. The milestones must provide the
economic, social, and environmental information necessary for public and elected
officials to understand and evaluate the sustainability of the state's long-term trends.
The commissioner may report on the trends and their implications each year. The
commissioner may contract for the development of information and measures.
new text end

Sec. 3. new text begin CASH FLOW STUDY.
new text end

new text begin By January 15, 2010, the commissioner of finance must submit to the chair of the
Finance Committee in the senate and the chair of the Ways and Means Committee in the
house of representatives, a report on the cash flow condition of the general fund for the
fiscal year 2010-2011 biennium and the following biennium, including an assessment of
the options for improving the long-term cash flow of the state through changes in the
timing of general fund payment dates, revenue collections, or other changes. In addition,
the report must identify all major provisions of law that result in state expenditures or
revenues being recognized in budget documents in a fiscal year earlier or later than the
fiscal year in which the obligation to pay state expenses was incurred or the liability
to pay state taxes was incurred.
new text end