Identical to H 7 filed on 1/25/17.
Amends GS 143C-4-2 to rename the Savings Reserve Account to the Savings Reserve, and makes the following changes to its creation, source of funding, and use.
Currently, the State Controller is required to reserve one fourth of any unreserved fund balance from the General Fund at the end of each fiscal year. The act eliminates this requirement of the State Controller.
Currently, subsections (b) and (c) provide for use of the funds in the Savings Reserve only upon an act of appropriation by the General Assembly, and sets out that the goals for the Savings Reserve Account balance are to address unanticipated events and circumstances such as natural disasters; economic downturns; threats to public safety, health and welfare; and other emergencies. The act revises the use of funds prescribed in subsection (b) as follows, and eliminates the goals set out in subsection (c).
Revises subsection (b) to provide that, in each fiscal year, funds reserved to the Savings Reserve must be available for expenditure upon appropriation by a majority vote of the Senate and House of Representatives present and voting in an aggregate amount that cannot exceed 7.5% of the prior fiscal year’s General Fund net appropriations operating budget. Limits the general use of the funds in the Savings Reserve under subsection (b) to the following four purposes: (1) to cover a decline in General Fund revenue between fiscal years; (2) to cover the difference between that fiscal year’s base budget needs and projected revenue; (3) to pay costs imposed by a court or administrative order; (4) to provide relief and assistance from the effects of an emergency.
Creates a new subsection (b1) to provide that, in each fiscal year, funds reserved in the Savings Reserve must be available for expenditure upon a two-thirds vote of the Senate and House of Representatives present and voting. Limits the extraordinary use of the funds in the Savings Reserve under subsection (b1) to any of the four uses specified in subsection (b) where the aggregate amount exceeds 7.5% of the prior year’s General Fund net appropriations operating budget, or for another purpose in any amount.
Creates new subsection (d) to require each Appropriations Act to transfer 15% of each fiscal year’s estimated growth in State tax revenues to the Savings Reserve, unless the transfer must be reduced because the transfer would cause the balance of the Reserve to exceed the recommended balance developed pursuant to subsection (e).
Creates subsection (e) to direct the Office of State Budget and Management and the Fiscal Research Division of the General Assembly to estimate the target balance for the Savings Reserve, expressed as a percentage of the prior year’s General Fund net appropriations operating budget, to be reported to the chairs of the Senate and House Appropriations and Finance Committees no later than February 1 of each year.
Creates new subsection (f) to allow for additional appropriation of funds to be deposited into the Savings Reserve by the General Assembly.
Amends GS 143C-3-5, which sets out the provisions for the Governor’s budget recommendations, to require that, in odd-numbered years, the Governor’s Recommended State Budget must include a transfer to the Savings Reserve of 15% of the estimated growth in State tax revenues for each fiscal year of the upcoming biennium. Provides that this requirement only applies if the balance of the Savings Reserve remains below the recommended balance developed under GS 143C-4-25(e), as enacted by this act.
Makes conforming changes to GS 142-15.4 (requiring savings from the refinancing of general obligation bonds to be placed in the Savings Reserve) and GS 142-96 (requiring savings from refinancing of special indebtedness to be placed in the Savings Reserve), effective July 1, 2017, and GS 143C-5-4(b)(8) and GS 147-86.11(e)(7), effective October 1, 2017.
Sets out that, during the 2019 Regular Session, it is the intent of the General Assembly to study whether the changes to the Savings Reserve enacted by this act have accomplished the purpose of establishing and maintaining sufficient reserves to address unanticipated events and circumstances such as natural disasters; economic downturns; threats to public safety, health and welfare; and other emergencies.
Effective October 1, 2017.
Bill Summaries: S14 (2017-2018 Session)
Bill S14 (2017-2018)Summary date: Jan 26 2017 - View summary