Senate Bill 2517

AN ACT ENTITLED THE "BUDGET REFORM ACT OF 2006"; TO AMEND SECTIONS 27-103-139, 27-103-137, 27-103-125 AND 27-103-211, MISSISSIPPI CODE OF 1972, TO REVISE THE MEMBERSHIP OF THE REVENUE ESTIMATING COMMITTEE, TO DIRECT THE JOINT LEGISLATIVE BUDGET COMMITTEE AND THE GOVERNOR TO BASE BUDGET RECOMMENDATIONS ON THE REVENUE ESTIMATE, TO REQUIRE THE LEGISLATURE TO ADOPT A FINAL BUDGET BASED ON THE REVENUE ESTIMATE BY THE 45TH DAY OF A 125-DAY REGULAR SESSION AND BY THE 10TH DAY OF A 90-DAY SESSION; TO CODIFY SECTION 27-103-140, MISSISSIPPI CODE OF 1972, TO PROVIDE 9 SPECIFIC CATEGORIES FOR APPROPRIATION BILLS FOR ALL STATE AGENCIES; TO REQUIRE THAT AFTER THE LEGISLATURE HAS ADOPTED ITS ANNUAL BUDGET, ANY BILL THAT IS CONSIDERED ON THE FLOOR OF EITHER HOUSE WHICH AUTHORIZES AN EXPENSE NOT IN THE BUDGET SHALL INCLUDE AN EQUAL REDUCTION IN THE BUDGET PREVIOUSLY ADOPTED, AND ANY SUBSEQUENT BILL CONSIDERED ON THE FLOOR OF EITHER HOUSE WHICH DECREASES THE REVENUE EXPENDED IN THE ADOPTED BUDGET SHALL INCLUDE AN EQUAL INCREASE IN ANOTHER REVENUE SOURCE; TO AMEND SECTIONS 27-104-25 AND 27-104-17, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.

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

SECTION 1. This act shall be known and may be cited as the "Budget Reform Act of 2006."

SECTION 2. Section 27-103-139, Mississippi Code of 1972, is amended as follows:

27-103-139. (1) There is hereby established a revenue estimating committee to prepare an annual revenue estimate for the budget of the State of Mississippi. The revenue estimating committee shall be comprised of the following nine (9) members: (a) the State Treasurer; (b) the Commissioner of Revenue; (c) the State Economist; (d) the Director of the Legislative Budget Office; (e) the State Fiscal Officer; (f) two (2) appointments of the Governor to serve a term concurrent with that of the Governor; (g) one (1) appointment of the Lieutenant Governor to serve a term concurrent with that of the Lieutenant Governor; and (h) one (1) appointment of the Speaker of the House of Representatives to serve a term concurrent with that of the Speaker. The revenue estimating committee shall meet on the call of the State Treasurer, who shall serve as chairman, and shall adopt its annual revenue estimate on or about November 1 for the upcoming fiscal year preceding each Regular Session of the Legislature.

(2) 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. The budget submitted shall be prepared in a format that 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 * * * adopted by the revenue estimating committee established in subsection (1). The total proposed expenditures from the State 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. However, for fiscal year 2006 only, the total proposed expenditures from the State General Fund in the balanced budget shall not exceed one hundred percent (100%) of the amount of the 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. * * * 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 and the Education Enhancement Fund under Section 27-103-203.

(3) 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.

(4) 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. If 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 that 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 that year.

SECTION 3. Section 27-103-137, Mississippi Code of 1972, is amended as follows:

27-103-137. (1) The Joint Legislative Budget Committee shall hold such hearings as may be necessary to determine the actual budget requirements of the agencies. The State Fiscal Management Board and the Governor's Budget Officer shall be notified of such hearings and the board and any staff members of the board and of the Governor's office may attend such hearings in order to give the Governor adequate information on which to base any budget recommendations he may desire to submit to the Legislature. The total proposed expenditures in the balanced budget adopted by the Joint Legislative Budget Committee 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 adopted by the revenue estimating committee under Section 27-103-139(1). The Legislative Budget Office shall have made a sufficient number of copies of its proposed budget in order that the data contained therein will be available to the members of the Legislature for consideration, and to provide a copy for each state agency included in the budget proposal, and shall forward a copy to each member or member-elect of the Legislature and to each state agency on or about December 15 of each year.

(2) A budget based on the revenue estimate adopted by the revenue estimating committee shall be adopted by the Legislature annually by the end of the forty-fifth (45th) day of the Regular Session in a one-hundred-twenty-five-day session and by the end of the tenth (10th) day of the Regular Session in a ninety-day session.

(3) After the annual budget has been adopted by the Legislature, any bill that is considered on the floor of either house which authorizes expenditures in addition to the amount in the adopted budget shall include an amendment containing an equivalent decrease to the adopted budget. After the annual budget has been adopted by the Legislature, any bill that is considered on the floor of either house which authorizes a decrease in revenues used to fund the adopted budget shall include an amendment containing an equivalent increase in revenue to the amount of the adopted revenue estimate.

SECTION 4. The following provision shall be codified as Section 27-103-140, Mississippi Code of 1972:

27-103-140. Beginning with the 2007 Regular Session, the Legislature shall enact the following nine (9) appropriation bills to defray the expenses of all State General Fund agencies and State Special Fund agencies as defined in Section 27-103-103: (a) Government Operations; (b) Agriculture and Natural Resources; (c) Health and Human Services; (d) Education; (e) Judiciary; (f) Public Safety; (g) Business and Commerce; (h) Economic Development and Tourism; and (i) Transportation.

SECTION 5. 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 that will be available in the general and special funds for appropriation or use during the succeeding fiscal year, including any balances that will be on hand in the general and special funds at the close of the then current fiscal year. The total proposed expenditures from the State 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. However, for fiscal year 2006 only, the total proposed expenditures from the State General Fund in Part 1 of the overall budget shall not exceed one hundred percent (100%) of the amount of the 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 * * * adopted by the revenue estimating committee under Section 27-103-139. 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 under Section 27-103-203. The Joint Legislative Budget Committee may recommend additional taxes or sources of revenue if in its judgment those additional funds are necessary to adequately support the functions of the state government.

SECTION 6. Section 27-103-211, Mississippi Code of 1972, is amended as follows:

27-103-211. The total sum appropriated by the Legislature from the State General Fund for any fiscal year shall not exceed ninety-eight percent (98%) of the general fund revenue estimate for that fiscal year developed and adopted by the revenue estimating committee under Section 27-103-139, plus any unencumbered balances in general funds that will be available and on hand at the close of the then current fiscal year. The 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 under Section 27-103-203. However, for fiscal year 2006 only, the total sum appropriated by the Legislature from the State General Fund shall not exceed one hundred percent (100%) of the amount of the general fund revenue estimate for that 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.

SECTION 7. Section 27-104-25, Mississippi Code of 1972, is amended as follows:

27-104-25. (1) The executive head and business manager of each state agency shall be responsible for all obligations or indebtedness incurred in the name of the agency, or by any employee for them when incurred by such employee acting within the scope of his employment.

(2) No obligations or indebtedness shall be incurred by any such person during any allotment period in excess of the amount of the estimate approved by the Department of Finance and Administration or in the agency appropriation * * *.

If a claim arising from orders for goods or services from the prior fiscal year is presented within one (1) year and (a) the payment of a claim does not cause an agency to exceed the amount of its prior year budget estimate as approved by the Department of Finance and Administration or its appropriation bill, and (b) sufficient funds remain in the current fiscal year's allotment to pay the claim, the State Treasurer, upon approval of the claim by the Department of Finance and Administration, shall draw a warrant in payment of the claim.

(3) Contractual obligations, such as salary contracts, shall be considered as incurred within the fiscal period in which they are to be paid, and are to be encumbered against funds to be available in that fiscal period, and shall include appropriate cancellation clauses in the event the anticipated revenues from which they are to be paid do not become available.

(4) Agencies having special funds, as defined in Section 27-103-103, shall not incur obligations or indebtedness against such special funds in an amount in excess of revenues actually anticipated and budgeted.

(5) If obligations or indebtedness shall be incurred contrary to the provisions hereof, then neither the State of Mississippi nor the agency shall have any liability therefor, and the person, firm or corporation to whom the obligation or indebtedness is due may recover the amount of the obligation or indebtedness and twenty-five percent (25%) of the amount as liquidated damages from the responsible officers, either personally or upon their official bonds, either severally of jointly.

SECTION 8. 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.

Provided further, that 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.

(2) Except as otherwise provided in subsection (3), and unless otherwise specified in the agency appropriation * * *, 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.

(3) From and after passage and until June 30, 2006, due to the unforeseen financial circumstances caused by Hurricane Katrina, the agency heads of the following state agencies, 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: State Contractors Board, State Veterans' Affairs Board, State Board of Engineers and Land Surveyors, State Board of Animal Health, State Pharmacy Board, Mississippi Nursing Board, Port of Gulfport, Mississippi Department of Employment Security, Mississippi Insurance Department, Mississippi Department of Mental Health, Mississippi Department of Finance and Administration, Mississippi Department of Human Services, Mississippi Emergency Management Authority (MEMA), Mississippi Department of Health, Mississippi Department of Marine Resources, Mississippi Gaming Commission, State Tax Commission, Mississippi Department of Rehabilitation Services, Mississippi Gulf Coast Coliseum, Secretary of State, Mississippi Department of Archives and History, Mississippi Department of Transportation, and the Office of State Aid Road Construction of the Mississippi Department of Transportation. 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 prior to the effective date of the transfer. The transfer shall be effective the first working day of the month following timely submissions and approval required herein. In cases of extreme hardship, certified in writing by the agency head and timely submitted as 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 9. This act shall take effect and be in force from and after July 1, 2006.