House Bill 3

AN ACT TO AMEND SECTION 27-104-17, MISSISSIPPI CODE OF 1972, TO AUTHORIZE ADDITIONAL TRANSFERS BETWEEN MAJOR BUDGET CATEGORIES BY STATE AGENCIES DUE TO FINANCIAL CIRCUMSTANCES CAUSED BY HURRICANE KATRINA; TO AMEND SECTION 27-104-21, MISSISSIPPI CODE OF 1972, TO AUTHORIZE STATE AGENCIES TO ESCALATE AND EXPEND ANY FEDERAL OR SPECIAL SOURCE FUNDS DUE TO FINANCIAL CIRCUMSTANCES CAUSED BY HURRICANE KATRINA; TO AUTHORIZE THE STATE FISCAL OFFICER TO WAIVE CERTAIN PERSONNEL PROVISIONS PROVIDED IN FISCAL YEAR 2006 APPROPRIATION ACTS; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 27-104-17, Mississippi Code of 1972, is amended as follows:

27-104-17. (1) An allotment period shall be one-half (1/2) of twelve (12) months, and expenditure one-half (1/2) of the appropriated amount, unless otherwise specified in the appropriation bill or justified by the agency to the Department of Finance and Administration, and the first allotment period shall commence on July 1. Estimates shall be filed with the Department of Finance and Administration not later than the first day of the month preceding the beginning period.

* * * The Department of Finance and Administration may, in its discretion, restrict an agency to monthly allotment period when it becomes evident that an agency's rate of expenditure to date indicates this restriction will be necessary to prevent depletion of its appropriation prior to the close of the fiscal year or when the condition of the State General Fund requires monthly monitoring and control of the rate of General Fund expenditures.

[From and after passage and until June 30, 2006, this subsection (2) shall read as follows:]

(2) Due to the unforeseen financial circumstances caused by Hurricane Katrina, the agency head of any state agency, with the approval of the Department of Finance and Administration, may authorize increases in major objects of expenditure within each specific budget within each appropriation bill, provided that other major objects of expenditure are decreased by a corresponding dollar amount. The agency head shall submit written justification for the transfer(s) to the Department of Finance and Administration, the Legislative Budget Office and the State Auditor on or before the fifteenth of the month before the effective date of the transfer. The transfer shall be effective the first working day of the month following timely submissions and approval required in this subsection. In cases of extreme hardship, certified in writing by the agency head and timely submitted as required in this subsection, the Executive Director of the Department of Finance and Administration, in his discretion, may authorize an earlier effective date for the transfer.

[From and after July 1, 2006, this subsection (2) shall read as follows:]

(2) Unless otherwise specified in the agency appropriation bill, in the event any emergency or unforeseen circumstances shall arise, the agency head may authorize increases in major objects of expenditure within each specific budget within each appropriation bill in total amounts not to exceed ten percent (10%) of the appropriated amount of each object, provided that other major objects of expenditure are decreased by a corresponding dollar amount. No transfers shall be authorized which increase or decrease the major object of expenditure "Salaries, Wages and Fringe Benefits," or which increase the major object of expenditure "Capital Outlay - Equipment." The agency head shall submit written justification for the transfer to the Legislative Budget Office, the Department of Finance and Administration, and the State Auditor, on or before the fifteenth of the month prior to the effective date of the transfer. The transfer shall be effective the first working day of the month following timely submissions required herein. In cases of extreme hardship, certified in writing by the agency head and submitted with timely submissions required herein, the Executive Director of the Department of Finance and Administration, in his discretion, may authorize an earlier effective date for the transfer.

SECTION 2. Section 27-104-21, Mississippi Code of 1972, is amended as follows:

27-104-21. (1) All general and special fund agencies shall, upon making application for federal funds, forward a summary of such applications to the Legislative Budget Office. The Legislative Budget Office shall have an opportunity to review such applications and make its comments thereon to the Executive Director of the Department of Finance and Administration and the state agency making application. Unless otherwise specified in the appropriation bill, the Executive Director of the Department of Finance and Administration shall have the authority to approve escalations in a budget using one hundred percent (100%) federal money. In addition, the Executive Director of the Department of Finance and Administration shall have the authority to approve escalations in a budget using one hundred percent (100%) federal or other special source funds available and necessary to assist agencies with any unforeseen financial circumstances specifically related to Hurricane Katrina. New employee positions funded one hundred percent (100%) by or from federal funds or other special source funds may be authorized by the Executive Director of the Department of Finance and Administration subject to the rules and regulations of the State Personnel Board. No federal or other special source funds may be expended for programs or activities other than those which have been authorized by act of the Legislature or which are encompassed by a state agency's program structure as provided by law; however, any expenditures related to a Hurricane Katrina relief program shall be specifically authorized. The Executive Director of the Department of Finance and Administration shall immediately send notice of the approval of such budget escalation to the Legislative Budget Office. The Executive Director of the Department of Finance and Administration shall ensure that the Legislative Budget Office receives timely, detailed and accurate information about the amount and use of federal and special source hurricane relief funds by state agencies.

(2) The Department of Finance and Administration shall require, by rule and regulation, that each agency receiving federal funds shall apply for federal reimbursement for state central services costs in accordance with Office of Management and Budget Circular A-21 or A-87, which reimbursement shall be deposited directly into the Statewide Cost Allocation Fund, which is * * * established within the State Treasury. With the exception of any reimbursement for Hurricane Katrina related relief programs, an agency's failure to timely apply for such reimbursement shall be condition sufficient to authorize the Department of Finance and Administration to transfer an amount equal to not less than fifty percent (50%) nor more than one hundred percent (100%) of the total amount designated to such agency in the applicable fixed cost agreement of the state central service cost allocation plan. These funds shall be transferred from any available funds within such agency into the Statewide Cost Allocation Fund upon execution of a requisition for issuance of warrant by the Executive Director of the Department of Finance and Administration. Any funds on hand in the Statewide Cost Allocation Fund at the end of the fiscal year shall lapse into the State General Fund.

SECTION 3. (1) It is the intention of the Legislature that state agencies be granted flexibility to administer their authorized personnel in the most efficient and effective manner to insure the agencies' statutory missions are not compromised as they meet all additional requirements necessitated by the unforeseen circumstances caused by Hurricane Katrina that are necessary to insure that the safety, health and welfare of all residents of the state are properly met.

(2) Due to the unforeseen circumstances caused by Hurricane Katrina, the State Fiscal Officer is authorized to waive any provisions in acts of the Legislature appropriating funds for fiscal year 2006 that require agency heads to insure that no single personnel action increases the projected annual cost and/or the fiscal year 2006 appropriation for "personal services" when annualized, with the exception of escalated funds. Any waivers authorized by this section shall not completely waive requirements of agencies to maintain compliance with fiscal year 2006 appropriated levels for "personal services," but shall require agencies to maintain monthly compliance similar to requirements in fiscal year 2004 appropriation acts. Any waivers granted by the State Fiscal Officer shall further require agencies to maintain compliance as follows:

With the funds appropriated by the agency's appropriation bill, it is the intention of the Legislature that it shall be the agency's responsibility to make certain that funds required to be appropriated for "personal services" for fiscal year 2007 do not exceed fiscal year 2006 funds appropriated for that purpose, unless programs or positions are added to the agency's fiscal year 2007 budget by the Mississippi Legislature. Based on data provided by the Legislative Budget Office, the State Personnel Board shall determine and publish the projected annual cost to fully fund all appropriated positions in compliance with the provisions of the agency's appropriation bill. It shall be the responsibility of the agency head to insure that no single personnel action increases this projected annual cost and/or the fiscal year 2006 appropriation for "personal services" when annualized. If, at the end of any calendar month, the State Personnel Board determines that the agency has taken action(s) that would cause the agency to exceed this projected annual cost or the fiscal year 2006 "personal services" appropriated level, when annualized, then only those actions that reduce the projected annual cost and/or the appropriation requirement will be processed by the State Personnel Board until such time as the requirements of this provision are met.

SECTION 4. This act shall take effect and be in force from and after its passage.