16A.152 BUDGET RESERVE AND CASH FLOW ACCOUNTS.
Subdivision 1. Cash flow account established.
A cash flow account is created in the
general fund in the state treasury. Amounts in the cash flow account shall remain in the account
until drawn down and used to meet cash flow deficiencies resulting from uneven distribution of
revenue collections and required expenditures during a fiscal year.
Subd. 1a. Budget reserve.
A budget reserve account is created in the general fund in the
state treasury. The commissioner of finance shall transfer to the budget reserve account on July 1
of each odd-numbered year any amounts specifically appropriated by law to the budget reserve.
Subd. 1b. Budget reserve increase.
On July 1, 2003, the commissioner of finance shall
transfer $300,000,000 to the budget reserve account in the general fund. On July 1, 2004, the
commissioner of finance shall transfer $296,000,000 to the budget reserve account in the general
fund. The amounts necessary for this purpose are appropriated from the general fund.
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
(2) the budget reserve account established in subdivision 1a until that account reaches
(3) the amount necessary to increase the aid payment schedule for school district aids and
credits payments in section
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
and to reduce the property tax revenue recognition shift under section
, 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
(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.
Subd. 3. Use.
The use of the budget reserve should be governed by principles based on
the full economic cycle rather than the budget cycle. The budget reserve may be used when a
negative budgetary balance is projected and when objective measures, such as reduced growth in
total wages, retail sales, or employment, reflect downturns in the state's economy.
Subd. 4. Reduction.
(a) If the commissioner determines that probable receipts for the
general fund will be less than anticipated, and that the amount available for the remainder of the
biennium will be less than needed, the commissioner shall, with the approval of the governor, and
after consulting the Legislative Advisory Commission, reduce the amount in the budget reserve
account as needed to balance expenditures with revenue.
(b) An additional deficit shall, with the approval of the governor, and after consulting the
legislative advisory commission, be made up by reducing unexpended allotments of any prior
appropriation or transfer. Notwithstanding any other law to the contrary, the commissioner
is empowered to defer or suspend prior statutorily created obligations which would prevent
effecting such reductions.
(c) If the commissioner determines that probable receipts for any other fund, appropriation,
or item will be less than anticipated, and that the amount available for the remainder of the term
of the appropriation or for any allotment period will be less than needed, the commissioner
shall notify the agency concerned and then reduce the amount allotted or to be allotted so as
to prevent a deficit.
(d) In reducing allotments, the commissioner may consider other sources of revenue
available to recipients of state appropriations and may apply allotment reductions based on all
sources of revenue available.
(e) In like manner, the commissioner shall reduce allotments to an agency by the amount
of any saving that can be made over previous spending plans through a reduction in prices or
Subd. 5. Restoration.
The restoration of the budget reserve should be governed by principles
based on the full economic cycle rather than the budget cycle. Restoration of the budget reserve
should occur when objective measures, such as increased growth in total wages, retail sales, or
employment, reflect upturns in the state's economy. The budget reserve should be restored before
new or increased spending commitments are made.
Subd. 6. Notice to committees.
The commissioner shall notify the committees on finance
and taxes and tax laws of the senate and the committees on ways and means and taxes of the house
of representatives of a reduction in an allotment under this section. The notice must be in writing
and delivered within 15 days of the commissioner's act. The notice must specify:
(1) the amount of the reduction in the allotment;
(2) the agency and programs affected;
(3) the amount of any payment withheld; and
(4) any additional information the commissioner determines is appropriate.
Subd. 7. Delay; reduction.
The commissioner may delay paying up to 15 percent of an
appropriation to a special taxing district or a system of higher education in that entity's fiscal year
for up to 60 days after the start of its next fiscal year. The delayed amount is subject to allotment
reduction under subdivision 4.
History: 1973 c 492 s 23; 1978 c 793 s 47; 1981 c 1 s 2; 1Sp1981 c 5 s 1; 2Sp1981 c 1 s 3;
3Sp1981 c 1 art 1 s 1; 3Sp1981 c 2 art 2 s 3; 1983 c 342 art 18 s 1-3; 1984 c 502 art 1 s 1; 1984 c
628 art 2 s 1; 1Sp1985 c 14 art 18 s 1,2,4; 1Sp1986 c 1 art 5 s 1-3; 1987 c 268 art 18 s 1-3; 1988
c 690 art 2 s 1; 1988 c 719 art 13 s 1,2; 1989 c 329 art 1 s 1; 1Sp1989 c 1 art 15 s 1,2; 1990 c 604
art 10 s 4; 1991 c 291 art 21 s 2; 1992 c 511 art 9 s 1; 1993 c 192 s 58-63,111; 1993 c 375 art 17
s 1,2; 1994 c 632 art 5 s 1; 1994 c 647 art 1 s 1; 1995 c 264 art 6 s 1; 1Sp1995 c 3 art 14 s 1-3;
1996 c 461 s 1; 1996 c 471 art 10 s 1; 1997 c 231 art 9 s 1; 1998 c 389 art 9 s 1; 1Sp2001 c 5 art
20 s 2,3; 1Sp2001 c 10 art 2 s 24; 2002 c 220 art 13 s 3-5; 2002 c 377 art 12 s 1; 1Sp2003 c 21
art 11 s 2-4; 2004 c 272 art 3 s 1; 2005 c 156 art 2 s 16; 2007 c 146 art 1 s 1