SF 1481

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:21am

A bill for an act
relating to the budget reserve; modifying priorities for additional revenues in
general fund forecasts; requiring a report; appropriating money; amending
Minnesota Statutes 2008, sections 4A.01; 16A.103, subdivisions 1a, 1b, by
adding a subdivision; 16A.11, subdivision 1, by adding a subdivision; 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 4A.01, is amended to read:

4A.01 OFFICE OF STRATEGIC AND LONG-RANGE PLANNING.

new text begin Subdivision 1. new text end

new text begin Creation; duties. new text end

The Office of Strategic and Long-Range Planning
is created new text begin as an independent agency of state government new text end , with a director appointed by the
governor. new text begin The director is the state planning officer and is responsible for the coordination,
development, assessment, and communication of information, performance measures,
planning, and policy concerning the state's future. The director may not hold another state
office. The director may contract with another agency for the provision of administrative
services.
new text end

new text begin Subd. 2. new text end

new text begin Long-range plan. new text end

new text begin By September 15, 2010, and every five years thereafter,
new text end the deleted text begin Office of Strategic and Long-Range Planning deleted text end new text begin director new text end must develop an integrated
long-range plan for the state new text begin based upon the plans and strategies of state agencies, public
advice about the future, and other information developed under this chapter new text end . The deleted text begin office deleted text end new text begin
director new text end must coordinate activities among all levels of government and must stimulate
public interest and participation in the future of the state.

The deleted text begin office deleted text end new text begin director new text end must act in coordination with the commissioner of finance,
affected state agencies, and the legislature in the planning and financing of major public
programs.

Sec. 2.

Minnesota Statutes 2008, section 16A.103, subdivision 1a, is amended to read:

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 must be estimated for all obligations imposed by law and
those projected to occur as a result of new text begin inflation and other new text end variables outside the control of
the legislature. deleted text begin Expenditure estimates must not include an allowance for inflation.
deleted text end

Sec. 3.

Minnesota Statutes 2008, section 16A.103, subdivision 1b, is amended to read:

Subd. 1b.

Forecast variable.

In determining new text begin the rate of inflation, the application
of inflation, new text end 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 deleted text begin State Government deleted text end 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 deleted text begin State Government deleted text end 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.

Sec. 4.

Minnesota Statutes 2008, section 16A.103, is amended by adding a subdivision
to read:

new text begin Subd. 1h. new text end

new text begin Demographic trends analysis. new text end

new text begin Each November forecast must include
an analysis of projected state demographic changes and the implications of those
demographic trends for state revenues and expenditures for ten and 20 years beyond
the forecast period under subdivision 1g.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with the November 2010
state budget forecast.
new text end

Sec. 5.

Minnesota Statutes 2008, section 16A.11, subdivision 1, is amended to read:

Subdivision 1.

When.

The governor shall submit a three-part budget to the
legislature. Parts one and two, the budget message and detailed operating budget, must
be submitted by the fourth Tuesday in January in each odd-numbered year. However,
in a year following the election of a governor who had not been governor the previous
year, parts one and two must be submitted by the third Tuesday in February. Part three,
the detailed recommendations as to capital expenditure, must be submitted as follows:
agency capital budget requests by July 15 of each odd-numbered year, and governor's
recommendations by January 15 of each even-numbered year. Detailed recommendations
as to information technology expenditure must be submitted as part of the detailed
operating budget. Information technology recommendations must include projects to be
funded during the next biennium and planning estimates for an additional two bienniums.
Information technology recommendations must specify purposes of the funding such as
infrastructure, hardware, software, or training. new text begin Within two weeks following the February
forecast of odd-numbered years, the governor must submit revisions to the proposed
budget to address any changes in the forecast.
new text end

Sec. 6.

Minnesota Statutes 2008, section 16A.11, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Structurally balanced budget. new text end

new text begin Biennial budget recommendations
submitted by the governor must include recommendations for eliminating any shortfall
between projected revenues and spending for the following biennium.
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. 7.

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;

(2) the budget reserve account established in subdivision 1a until that account
reaches deleted text begin $653,000,000 deleted 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 amount new 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. 8.

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. 9. 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 should 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

Sec. 10. new text begin TRANSFER OF STAFF AND RESOURCES.
new text end

new text begin The responsibilities, staff, and resources of the Office of Geographic and
Demographic Analysis in state and community services are transferred under Minnesota
Statutes, section 15.039, to the Office of Strategic and Long-Range Planning.
new text end

Sec. 11. new text begin APPROPRIATIONS.
new text end

new text begin $....... for the fiscal year ending June 30, 2010, and $....... for the fiscal year ending
June 30, 2011, is appropriated from the general fund to the director of the Office of
Strategic and Long-Range Planning for the purposes of Minnesota Statutes, sections
4A.01 to 4A.07.
new text end