MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Appropriations

By: Senator(s) Kirby

Senate Bill 2037

AN ACT TO AMEND SECTION 27-103-203, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT ANY AMOUNT OF THE UNENCUMBERED GENERAL FUND CASH BALANCE AT THE CLOSE OF EACH FISCAL YEAR GREATER THAN 2% OF THE UNENCUMBERED BALANCE IN GENERAL FUNDS THAT WERE AVAILABLE AND ON HAND AT THE BEGINNING OF SUCH FISCAL YEAR AND THE GENERAL FUND REVENUE FOR SUCH FISCAL YEAR SHALL BE DEPOSITED INTO THE WORKING CASH-STABILIZATION RESERVE FUND UNTIL THE BALANCE IN SUCH FUND REACHES 7-1/2% OF THE GENERAL FUND APPROPRIATIONS FOR SUCH FISCAL YEAR; TO PROVIDE THAT IN THE EVENT THE BALANCE OF THE WORKING CASH-STABILIZATION RESERVE FUND REACHES 7-1/2% OF THE GENERAL FUND APPROPRIATIONS FOR SUCH FISCAL YEAR, ANY AMOUNT OF THE UNENCUMBERED GENERAL FUND CASH BALANCE GREATER THAN 2% OF THE UNENCUMBERED BALANCE IN GENERAL FUNDS THAT WERE AVAILABLE AND ON HAND AT THE BEGINNING OF SUCH FISCAL YEAR AND THE GENERAL FUND REVENUE FOR SUCH FISCAL YEAR SHALL BE TRANSFERRED TO THE EDUCATION ENHANCEMENT FUND, THE CAPITAL IMPROVEMENT FUND AND THE DEBT RETIREMENT FUND; TO CREATE A SPECIAL FUND TO BE DESIGNATED AS THE CAPITAL IMPROVEMENT FUND INTO WHICH CERTAIN REVENUE SHALL BE DEPOSITED FOR THE MAINTENANCE AND IMPROVEMENT OF PROPERTY OWNED BY THE STATE OF MISSISSIPPI OR TO FUND OTHER INFRASTRUCTURE PROJECTS; TO CREATE A SPECIAL FUND TO BE DESIGNATED AS THE DEBT RETIREMENT FUND INTO WHICH CERTAIN REVENUE SHALL BE DEPOSITED TO BE USED TO ACCELERATE THE RETIREMENT OR DEFEASANCE OF THE BONDED INDEBTEDNESS OF THE STATE OF MISSISSIPPI; TO AMEND SECTIONS 27-103-125 AND 27-103-139, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT FOR THE PURPOSE OF THE FORMULATION OF A BALANCED BUDGET FOR THE STATE, THE UNENCUMBERED BALANCES IN GENERAL FUNDS THAT WILL BE AVAILABLE AND ON HAND AT THE CLOSE OF THE FISCAL YEAR SHALL NOT INCLUDE CERTAIN ADDITIONAL SPECIAL FUNDS; AND FOR RELATED PURPOSES. 

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

SECTION 1. Section 27-103-203, Mississippi Code of 1972, is amended as follows:

27-103-203. (1) There is created in the State Treasury a special fund, separate and apart from any other fund, to be designated the Working Cash-Stabilization Reserve Fund, into which shall be deposited one hundred percent (100%) of that portion of the unencumbered General Fund cash balance that exceeds Six Million Dollars ($6,000,000.00) at the close of the fiscal year ending June 30, 1992, and one hundred percent (100%) of the unencumbered General Fund cash balance at the close of each succeeding fiscal year until such time as the balance in the fund reaches Forty Million Dollars ($40,000,000.00). After the balance in the fund reaches Forty Million Dollars ($40,000,000.00), any amount of the unencumbered General Fund cash balance at the close of each fiscal year greater than two percent (2%) of the sum of the unencumbered balances in general funds that were available and on hand at the beginning of such fiscal year, plus the General Fund revenue for such fiscal year, shall be deposited into the Working Cash-Stabilization Reserve Fund; provided, however, that the balance in such fund shall not exceed seven and one-half percent (7-1/2%) of the General Fund appropriations for such fiscal year * * *.  * * * In the event that the balance of the Working Cash-Stabilization Reserve Fund reaches seven and one-half percent (7-1/2%) of the General Fund appropriations for the fiscal year, any amount of the unencumbered General Fund cash balance greater than two percent (2%) of the sum of the unencumbered balances in general funds that were available and on hand at the beginning of such fiscal year, plus the General Fund revenue for such fiscal year, shall be transferred as follows:

(a) Forty percent (40%) shall be transferred to the Education Enhancement Fund created pursuant to Section 37-61-33;

(b) Forty percent (40%) shall be transferred to the Capital Improvement Fund created pursuant to Section 2 of Senate Bill No. 2037, 1997 Regular Session; and

(c) Twenty percent (20%) shall be transferred to the Debt Retirement Fund created pursuant to Section 3 of Senate Bill No. 2037, 1997 Regular Session.

Unencumbered cash in the General Fund may be used for new year cash flow needs and may also be used for deficit appropriations or regular appropriations.

(2) The Working Cash-Stabilization Reserve Fund shall not be considered as a surplus or available funds when adopting a balanced budget as required by law. The State Treasurer shall invest all sums in the Working Cash-Stabilization Reserve Fund not needed for the purposes provided for in this section in certificates of deposit, repurchase agreements and other securities as authorized in Section 27-105-33(d) or 7-9-103, Mississippi Code of 1972, as the State Treasurer may determine to yield the highest market rate available. The interest earned on such sums shall be deposited in the fund until the balance of principal and interest therein reaches seven and one-half percent (7-1/2%) of the total General Fund appropriations for the current fiscal year, and all interest earned in excess of amounts necessary to maintain the seven and one-half percent (7-1/2%) fund balance requirement shall be deposited by the State Treasurer into the State General Fund.

(3) The Working Cash-Stabilization Reserve Fund, except for Four Million Dollars ($4,000,000.00), shall be used by the State Treasurer for cash flow needs throughout the year when the Executive Director of the Department of Finance and Administration certifies that in his opinion there will be cash flow deficiencies in the State General Fund. No borrowing of monies from other special funds for such purposes as authorized by Section 31-17-101 et seq., Mississippi Code of 1972, shall be made as long as an unencumbered balance in excess of Four Million Dollars ($4,000,000.00) remains in the fund. The State Treasurer shall reimburse the fund for all sums borrowed for such purposes from General Fund revenues collected during the fiscal year in which such funds are used. The State Treasurer shall immediately notify the Legislative Budget Office and the State Department of Finance and Administration of each transfer into and out of such fund. Four Million Dollars ($4,000,000.00) in the Working Cash-Stabilization Reserve Fund shall remain available for use pursuant to Section 27-103-81, Mississippi Code of 1972.

(4) The Working Cash-Stabilization Reserve Fund, except for Forty Million Dollars ($40,000,000.00), shall also be used for the purpose of covering any projected deficits that may occur in the General Fund at the end of a fiscal year as a result of revenue shortfalls. In the event the Governor determines that a deficit in revenues from all sources may occur, it shall be the duty of the Executive Director of the Department of Finance and Administration to transfer such funds as necessary to the General Fund to alleviate the deficit in accordance with Sections 27-104-13 and 31-17-123; however, not more than Fifty Million Dollars ($50,000,000.00) may be transferred from the fund for such purpose in any one (1) fiscal year. In the event it becomes necessary to apply a part of the fund to this purpose, the amount so applied shall be restored to the Working Cash-Stabilization Reserve Fund out of future annual surpluses, as provided in subsection (1) of this section, until the seven and one-half percent (7-1/2%) maximum is again attained.

(5) The Working Cash-Stabilization Reserve Fund also shall be used to provide funds for the Disaster Assistance Trust Fund when such funds are immediately needed to provide for disaster assistance under Sections 33-15-301 through 33-15-317. Any transfer of funds from the Working Cash-Stabilization Reserve Fund to the Disaster Assistance Trust Fund shall be made in accordance with the provisions of subsection (5) of Section 33-15-307.

(6) The Department of Finance and Administration shall immediately send notice of any transfers made, or other action taken under authority of this section, to the Legislative Budget Office.

(7) Funds deposited in the Working Cash-Stabilization Reserve Fund shall be used only for the purposes specified in this section; and as long as the provisions of this section remain in effect, no other expenditure, appropriation or transfer of funds in the Working Cash-Stabilization Reserve Fund shall be made except by act of the Legislature making specific reference to the Working Cash-Stabilization Reserve Fund as the source of such funds.

SECTION 2. There is hereby created in the State Treasury a special fund to be designated as the Capital Improvement Fund into which shall be deposited revenue required to be transferred into such fund pursuant to Section 27-103-203, Mississippi Code of 1972. Money in such special fund shall be appropriated by the Legislature for the maintenance and improvement of property owned by the State of Mississippi or to fund other infrastructure projects.

SECTION 3. There is hereby created in the State Treasury a special fund to be designated as the Debt Retirement Fund into which shall be deposited revenue required to be transferred into such fund pursuant to Section 27-103-203, Mississippi Code of 1972. Money in such special fund shall be appropriated by the Legislature to accelerate the retirement or defeasance of the bonded indebtedness of the State of Mississippi.

SECTION 4. Section 27-103-125, Mississippi Code of 1972, is amended as follows:

27-103-125. The proposed budget of each state agency shall show the amounts required for operating expenses separately from the amounts required for permanent improvements. The overall budget shall show, separately by each source, the estimated amount of General Fund revenue and of special fund revenues of general fund agencies. The total proposed expenditures in Part 1 of the overall budget shall not exceed the amount of estimated revenues which will be available in the general and special funds for appropriation or use during the succeeding fiscal year, including any balances which will be on hand in the general and special funds at the close of the then current fiscal year. Beginning with the budget for Fiscal Year 1994, the total proposed expenditures from the General Fund in Part 1 of the overall budget shall not exceed ninety-eight percent (98%) of the amount of General Fund revenue estimate for the succeeding fiscal year, plus any unencumbered balances in general funds that will be available and on hand at the close of the then current fiscal year. The General Fund revenue estimate shall be the estimate jointly adopted by the Governor and the Joint Legislative Budget Committee. Unencumbered balances in general funds that will be available and on hand at the close of the current fiscal year shall not include projected amounts required to be deposited into the Working Cash-Stabilization Reserve Fund, * * * the Education Enhancement Fund, the Capital Improvement Fund and the Debt Retirement Fund pursuant to Section 27-103-203. The Legislative Budget Office may recommend additional taxes or sources of revenue if in its judgment such additional funds are necessary to adequately support the functions of the state government.

SECTION 5. Section 27-103-139, Mississippi Code of 1972, is amended as follows:

27-103-139. On or before November 15 preceding each regular session of the Legislature, except the first regular session of a new term of office, the Governor shall submit to the members of the Legislature, the Legislative Budget Office or the members-elect, as the case may be, and to the executive head of each state agency a balanced budget for the succeeding fiscal year. Beginning with the 1996 fiscal year, the budget submitted shall be prepared in a format which will include performance measurement data associated with the various programs operated by each agency. The total proposed expenditures in the balanced budget shall not exceed the amount of estimated revenues that will be available for appropriation or use during the succeeding fiscal year, including any balances that will be on hand at the close of the then current fiscal year, as determined by the revenue estimate jointly adopted by the Governor and the Legislative Budget Committee. Beginning with the budget for Fiscal Year 1994, the total proposed expenditures from the General Fund in the balanced budget shall not exceed ninety-eight percent (98%) of the amount of General Fund revenue estimate for the succeeding fiscal year, plus any unencumbered balances in general funds that will be available and on hand at the close of the then current fiscal year. The General Fund revenue estimate shall be the estimate jointly adopted by the Governor and the Joint Legislative Budget Committee. Unencumbered balances in general funds that will be available and on hand at the close of the fiscal year shall not include projected amounts required to be deposited into the Working Cash-Stabilization Reserve Fund, * * * the Education Enhancement Fund, the Capital Improvement Fund and the Debt Retirement Fund pursuant to Section 27-103-203.

The revenues used in preparing the balanced budget shall be only those revenues that will be available under the general laws of the state as they exist when the balanced budget is prepared, and shall not include any proposed revenues that would become available only after the enactment of new legislation. If the Governor has any recommendations for additional proposed expenditures or proposed revenues that are not included in his balanced budget, he shall submit those recommendations in a supplement that is separate from his balanced budget, and whenever the Governor recommends any such additional proposed expenditures, he also shall recommend proposed revenues that are sufficient to fund the additional proposed expenditures, providing specific details regarding the sources and the total amount of those proposed revenues.

The Governor may employ a budget officer for the purpose of receiving information from the State Fiscal Officer and preparing his recommendations on the budget. In the event the Governor determines that information received from the State Fiscal Officer is not sufficient to enable him to prepare his budget recommendations, he may request an appropriation from the Legislature to provide additional staff within the Governor's office for such purpose. At the first regular session after his election for Governor, the Governor shall submit any budget recommendations plus the required revenue source recommendations no later than January 31 of such year. The Governor shall work with the Legislative Budget Office to design a format whereby the legislative and executive budget recommendations can be published as one (1) report. The recommendations shall be published together in one (1) report beginning with the recommendations for the fiscal year beginning July 1, 1987.

SECTION 6. This act shall take effect and be in force from and after July 1, 1997.