SB2088 96TH GENERAL ASSEMBLY

LRB096 08364 RCE 18474 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB2088

Introduced 2/20/2009, by Sen. Chris Lauzen

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.719 new

Creates the Taxpayer Bill of Rights Spending Limitation Act. Establishes fiscal year spending limits based on inflation and population changes. Creates an Emergency Reserve Cash Fund, requires transfers to the Fund based on revenues limits, and requires expenditures only for emergencies and from appropriations adopted by a two-thirds vote of the House and Senate. Allows transfer of excess amounts in the Fund. Amends the State Finance Act to create the Fund. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Taxpayer Bill of Rights Spending Limitation Act.

Section 5. Definitions.

"Calendar year" means January 1 of any year through December 31 of the same year.

"Emergency" means an extraordinary event or occurrence that could not have been reasonably foreseen or prevented and that requires immediate expenditure to preserve the health, safety, and general welfare of the people. "Emergency" does not mean a revenue shortfall or budget shortfall.

"Fiscal year" means July 1 of any year through June 30 of the following year.

"Fiscal year spending" means the total amount of moneys appropriated by the State except: (1) appropriated funds received from the federal government; (2) principal and interest on bonded indebtedness; (3) appropriations funded by unemployment and disability insurance funds; (4) appropriations funded from permanent endowment, trust funds, or pension funds; or (5) proceeds of gifts or bequests made for purposes specified by the donor.

"Inflation" means the Consumer Price Index (all items) for the United States of America, or any comparable index, as computed by the Bureau of Labor Statistics.

"Per capita expenditures" mean the quotient derived from dividing expenditures of the State for a fiscal year by its population on the first day of that fiscal year.

"Population" means the number of people residing in the State; excluding armed forces stationed overseas, as determined by the United States Bureau of Census.

"Total State revenues" means all moneys derived from the State's own revenue sources.

Section 10. Spending limits.

(a) For any fiscal year that commences on or after July 1, 2010, the maximum annual percentage change in State fiscal year spending equals inflation plus the percentage change in State population in the prior calendar year, adjusted for approved revenue changes. Population shall be determined by annual federal census estimates, and that number shall be adjusted as the federal census data is adjusted.

(b) If the amount of total State revenue for the prior fiscal year exceeds the amount of total State revenue for the next preceding fiscal year, the maximum amount of total State revenues shall be the lesser of the amount of total State revenues for the prior State fiscal year or the amount of total State revenues limit for the prior fiscal year plus the product of the applicable amount and the sum of inflation and the percentage change in State population in the prior calendar year.

(c) If the amount of total State revenues for the prior fiscal year is less than the amount of total State revenues for the next preceding fiscal year, the maximum amount of the total State revenues shall be the amount of total State revenues limit for the most recent year for which the amount of total State revenues exceeded the amount of total State revenues for the preceding fiscal year.

Section 15. Emergency Reserve Fund.

(a) For any State fiscal year that commences on or after July 1, 2010 and before making any transfers to the Budget Stabilization Fund or any refunds as required by this Act, the State Treasurer shall transfer revenues in excess of the total State revenues limit determined under this Act, to the Emergency Reserve Cash Fund, which is hereby created, to the extent necessary to ensure that the balance of the Fund at the end of the fiscal year is an amount equal to 50% of the total State revenues limit. The State shall not be required to transfer any moneys other than revenue in excess of the total State revenues limit to the fund. Unused revenues apply to the next State fiscal year's emergency reserve fund. The Emergency Reserve Cash Fund shall be in addition to, and shall not be used to meet, any other reserve requirement of law.

(b) Moneys in the Emergency Reserve Cash Fund may be expended for declared emergencies only. Appropriation from the Fund can only occur upon a two-thirds vote of all elected members of each house of the Illinois General Assembly concurring therein. Interest or other income earned on the Emergency Reserve Cash Fund shall accrue to the fund.

Section 20. Budget Stabilization Fund.

(a) For any State fiscal year that commences on or after July 1, 2010, if revenue from sources not excluded from total State revenues exceeds the limit on total State revenues calculated in accordance with this Act, for that fiscal year, the excess shall be reserved or refunded as follows:

(1) The State Treasurer shall first transfer the excess to the Emergency Reserve Cash Fund to the extent necessary to ensure that the balance of the Fund at the end of the fiscal year is an amount equal to 50% of the total State revenues limit for the fiscal year as required by this Act. The State Treasurer shall transfer any additional excess to the Budget Stabilization Fund to the extent necessary to ensure that the balance of the Fund at the end of the fiscal year is an amount equal to 50% of the total State revenues limit for the fiscal year. Interest or other income earned on the Budget Stabilization Fund shall accrue to the Fund.

(2) For any State fiscal year that commences on or after July 1, 2010, if an amount of the total State revenues is less than the amount of total State revenues for the prior fiscal year, the State Treasurer shall transfer money from the Budget Stabilization Fund to the General Revenue Fund in an amount equal to the difference between the amount of total State revenues for the prior fiscal year and the amount of total State revenues for the fiscal year. Under no other circumstances shall the State Treasurer transfer moneys from the Budget Stabilization Fund.

(3) Any excess that remains after the State Treasurer has made the transfers required by paragraph (2) of this Section shall be reserved in the current fiscal year and refunded during the next fiscal year through temporary income or sales tax rate reductions.

Section 95. The State Finance Act is amended by adding Section 5.719 as follows:

(30 ILCS 105/5.719 new)

Sec. 5.719. The Emergency Reserve Cash Fund.

Section 99. Effective date. This Act takes effect upon becoming law.