SF 3307

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to finance; improving access to budget information by members of the
legislature; requiring a forecast of cash flow for the general fund; providing
deadline for modifying budget after February forecast; specifying format for
detailed budget estimates of expenditures; imposing deadline for notice of
deficiency requests; providing for an increase in the budget reserve; eliminating
obsolete requirements; amending Minnesota Statutes 2006, sections 3.885,
subdivisions 4, 5, by adding a subdivision; 13.605, subdivision 1; 16A.10,
subdivision 1, by adding a subdivision; 16A.11, subdivisions 1, 3, by adding a
subdivision; Minnesota Statutes 2007 Supplement, section 16A.152, subdivision
2; proposing coding for new law in Minnesota Statutes, chapter 16A; repealing
Minnesota Statutes 2006, sections 16A.152, subdivision 1b; 16A.1522,
subdivision 4.

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

Section 1.

Minnesota Statutes 2006, section 3.885, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Findings. new text end

new text begin The legislature finds that direct legislative access to the
programmatic and human resource capacity of state agencies is necessary for effective
planning and fiscal policy. In addition to the governor's budget recommendations and
other required reports, direct access includes explicit responses to requests for agency
budget recommendations and state agency assistance with the development of legislative
budget proposals.
new text end

Sec. 2.

Minnesota Statutes 2006, section 3.885, subdivision 4, is amended to read:

Subd. 4.

Agencies to cooperate.

All departments, agencies, and education
institutions of the executive and judicial branches must comply with a request of the
commission for information, data, estimates, and statistics on the funding revenue
operations, and other affairs of the department, agency, or education institution. The
commissioner of finance and the commissioner of revenue shall provide the commission
with full and free access to information, data, estimates, and statistics in the possession of
the Finance and Revenue Departments on the state budget, revenue, expenditures, and
tax expenditures. new text begin The agency response to a commission request must be in the format
specified by the commission in the request, if any.
new text end

Sec. 3.

Minnesota Statutes 2006, section 3.885, subdivision 5, is amended to read:

Subd. 5.

Duties.

(a) The commission shall:

(1) provide the legislature with research and analysis of current and projected state
revenue, state expenditures, and state tax expenditures;

(2) provide the legislature with a report analyzing the governor's proposed levels of
revenue and expenditures for biennial budgets submitted under section 16A.11 as well as
other supplemental budget submittals to the legislature by the governor;

(3) provide an analysis of the impact of the governor's proposed revenue and
expenditure plans for the next biennium;

(4) conduct research on matters of economic and fiscal policy and report to the
legislature on the result of the research;

(5) provide economic reports and studies on the state of the state's economy,
including trends and forecasts for consideration by the legislature;

(6) conduct budget and tax studies and provide general fiscal and budgetary
information;

(7) review and make recommendations on the operation of state programs in order
to appraise the implementation of state laws regarding the expenditure of funds and to
recommend means of improving their efficiency;

(8) recommend to the legislature changes in the mix of revenue sources for programs,
in the percentage of state expenditures devoted to major programs, and in the role of the
legislature in overseeing state government expenditures and revenue projections;

(9) make a continuing study and investigation of the building needs of the
government of the state of Minnesota, including, but not limited to the following: the
current and future requirements of new buildings, the maintenance of existing buildings,
rehabilitating and remodeling of old buildings, the planning for administrative offices, and
the exploring of methods of financing building and related costs; deleted text begin and
deleted text end

(10) new text begin develop and make requests to state agencies for budget information and
recommendations; and
new text end

new text begin (11) new text end conduct a continuing study of state-local finance, analyzing and making
recommendations to the legislature on issues including levels of state support for
political subdivisions, basic levels of local need, balances of local revenues and options,
relationship of local taxes to individuals' ability to pay, and financial reporting by political
subdivisions. In conducting this study, the commission shall consult with the governor,
the staff of executive branch agencies, and the governor's Advisory Commission on
State-Local Relations.

(b) In performing its duties under paragraph (a), the commission shall consider,
among other things:

(1) the relative dependence on state tax revenues, federal funds, and user fees
to support state-funded programs, and whether the existing mix of revenue sources is
appropriate, given the purposes of the programs;

(2) the relative percentages of state expenditures that are devoted to major programs
such as education, assistance to local government, aid to individuals, state agencies and
institutions, and debt service; and

(3) the role of the legislature in overseeing state government expenditures, including
legislative appropriation of money from the general fund, legislative appropriation of
money from funds other than the general fund, state agency receipt of money into
revolving and other dedicated funds and expenditure of money from these funds, and
state agency expenditure of federal funds.

(c) The commission's recommendations must consider the long-term needs of the
state. The recommendations must not duplicate work done by standing committees of
the senate and house of representatives.

The commission shall report to the legislature on its activities and recommendations
by January 15 of each odd-numbered year.

The commission shall provide the public with printed and electronic copies of
reports and information for the legislature. Copies must be provided at the actual cost
of furnishing each copy.

Sec. 4.

Minnesota Statutes 2006, section 13.605, subdivision 1, is amended to read:

Subdivision 1.

Legislative and budget proposal data.

(a) Definition. As used
in this section, "state administration" means the governor's office, the Department of
Finance, and any state agency that is under the direct control of the governor.

(b) Classifications. new text begin Except for requests from the legislature, new text end legislative and budget
proposals, including preliminary drafts, that are created, collected, or maintained by the
state administration are protected nonpublic data deleted text begin . After deleted text end new text begin until new text end the budget is presented to the
legislature by the state administration deleted text begin , supporting data, including agency requests, deleted text end new text begin and new text end are
public data new text begin after the budget is presented to the legislature new text end . deleted text begin Supporting data do not include
preliminary drafts. deleted text end The state administration may disclose any of the data within the state
administration and to the public at any time if disclosure would aid the administration in
considering and preparing its proposals.

Sec. 5.

Minnesota Statutes 2006, section 16A.10, subdivision 1, is amended to read:

Subdivision 1.

Budget format.

In each even-numbered calendar year the
commissioner shall prepare budget forms and instructions for all agencies, including
guidelines for reporting agency performance measures, subject to the approval of the
governor. The commissioner shall request and receive advisory recommendations from
the chairs of the senate Finance Committee and house of representatives Ways and
Means Committee before adopting a format for the biennial budget document. By June
15, the commissioner shall send the proposed budget forms to the appropriations and
finance committees. The committees have until July 15 to give the commissioner their
advisory recommendations on possible improvements. To facilitate this consultation, the
commissioner shall establish a working group consisting of executive branch staff and
designees of the chairs of the senate Finance and house of representatives Ways and Means
Committees. The commissioner must involve this group in all stages of development of
budget forms and instructions. The budget format must show actual expenditures and
receipts for the new text begin three new text end most recent fiscal deleted text begin year deleted text end new text begin years new text end , estimated expenditures and receipts for
the current fiscal year, and estimates for each fiscal year of the next biennium. Estimated
expenditures must be classified by funds and character of expenditures and may be
subclassified by programs and activities. Agency revenue estimates must show how the
estimates were made and what factors were used. Receipts must be classified by funds,
programs, and activities. Expenditure and revenue estimates must be based on the law in
existence at the time the estimates are prepared.

Sec. 6.

Minnesota Statutes 2006, section 16A.10, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Agency budget requests. new text end

new text begin Whenever a general solicitation for budget
recommendations is communicated to state agencies by the state administration, a copy of
that communication and the agency responses to that request must also be provided to
the chair of the senate Finance Committee and the chair of the house Ways and Means
Committee. All agency budget requests, whether or not included in the governor's budget
recommendations, must be documented in a form developed by the commissioner under
subdivision 1 and submitted as part of the detailed budget estimates under section 16A.11,
subdivision 3.
new text end

Sec. 7.

new text begin [16A.107] CASH FLOW FORECAST.
new text end

new text begin Within three weeks after the November forecast of state revenue and expenditures
under section 16A.103, the commissioner shall deliver to the governor and the legislature
a forecast of cash flow for the general fund, showing the expected maximum and minimum
cash balance in the fund for each month of the forecast period.
new text end

Sec. 8.

Minnesota Statutes 2006, 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 Any modifications to the operating budget
made necessary by the forecast in February of an odd-numbered year must be submitted
within two weeks after the forecast.
new text end

Sec. 9.

Minnesota Statutes 2006, 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.

(b) Tables listing expenditures for the next biennium must show the appropriation
base for each year new text begin in column form broken down by appropriation allotments at budget
activity level relative to proposed appropriation and appropriation allotment levels by
budget activity new text end . 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 finance. 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 finance under section 16A.103. For
all programs, the tables must show new text begin the agency requests, new text end 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.

(c) 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.

(d) 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.

new text begin (e) The detailed estimates must provide a spending trend analysis by program
showing at least the three most recent years of actual spending, or as many years of actual
spending as are available for new programs.
new text end

Sec. 10.

Minnesota Statutes 2006, section 16A.11, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Deficiency requests. new text end

new text begin By January 15 of each year, the commissioner of
finance must notify the chair of the senate Finance Committee and the chair of the house
Ways and Means Committee of any state agency requests to eliminate budget shortfalls
likely to occur before the end of the legislative session.
new text end

Sec. 11.

Minnesota Statutes 2007 Supplement, 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 five percent of biennial general fund
expenditures and transfers for the current 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; and

(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), and Laws 2003, First Special Session chapter 9,
article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, section
20, by the same amount.

(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.

(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.

(d) 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.

Sec. 12. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, sections 16A.152, subdivision 1b; and 16A.1522,
subdivision 4, new text end new text begin are repealed.
new text end