98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5981

 

Introduced , by Rep. Tom Cross

 

SYNOPSIS AS INTRODUCED:
 
New Act
15 ILCS 405/6.01  from Ch. 15, par. 206.01
15 ILCS 405/19.7 new
15 ILCS 405/30 new
25 ILCS 155/4  from Ch. 63, par. 344

    Creates the Long-Term Accounting Act. Provides that the purpose of the Act is to improve transparency and accountability during the State budget process. Contains provisions concerning the passage of appropriation bills and the electronic publication of appropriation bills. Amends the State Comptroller Act. Requires that the Comptroller publish a comprehensive annual financial report. Amends the Commission on Government Forecasting and Accountability Act. Provides that the Commission on Government Forecasting and Accountability must publish fiscal budget statements. Sets forth the requirements for the fiscal budget statements. Contains other provisions. Effective immediately.


LRB098 17083 OMW 52170 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5981LRB098 17083 OMW 52170 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Long-Term Accounting Act.
 
6    Section 5. Legislative intent. It is the intent of this Act
7to improve transparency and accountability during the State
8budget process that:
9    (1) Confirms and strengthens the State's special
10responsibility to disclose its actions and results of those
11actions in a timely and useful way.
12    (2) Establishes the concept that State budgeting
13disclosures and financial reporting are created primarily for
14the purpose of informing the public of government activity and
15creating widespread understanding of these actions.
16    (3) Adopts the use of a consolidating budget documents to
17facilitate the public's ability to understand the State's
18annual and accumulated shortfalls despite the relative scale of
19the State's financial operations and the volume and complexity
20of budget and financial data.
21    (4) Establishes the State's duty to report the best
22estimate of its own financial condition.
23    (5) Requires a comprehensive indication of the total

 

 

HB5981- 2 -LRB098 17083 OMW 52170 b

1activity of government and the long-term effects of current
2policy.
3    (6) Calls for the calculation of the long-term financial
4implications to the State and others of the budgetary
5decisions.
6    (7) Provides the full costing information necessary to
7accurately calculate performance measurements.
8    (8) Establishes definitions of existing statutory language
9to strengthen the Governor's and the General Assembly's ability
10to determine compliance with the intent of the Section 2 of
11Article XIII of the Illinois Constitution requirement, which is
12to preserve intergenerational equity.
13    (9) Requires explicit disclosure and accurate reporting by
14the Governor and the General Assembly of:
15        (A) debt incurred to fund current operating expenses;
16        (B) current and past costs shifted to future budgets
17    and imposed upon future taxpayers;
18        (C) State obligations, including, but not limited to,
19    current and future personnel benefit costs and
20    lapse-period expenditures; and
21        (D) a fiscal deficit in terms of the excess of full
22    accrual expenses over full accrual revenues and a budget
23    surplus in terms of the excess of full accrual revenues
24    over full accrual expenses at the time the final budget is
25    sent to the Governor.
26    (10) Calls for the Governor and the General Assembly to

 

 

HB5981- 3 -LRB098 17083 OMW 52170 b

1determine if future budgetary resources will likely be
2sufficient to sustain public services and to meet obligations
3as they come due.
4    (11) Acknowledges costs when incurred during the budget
5year regardless of when they are paid.
6    (12) Injects the expertise and knowledge of the State
7Comptroller's Office into the preparation of budget
8calculations.
9    (13) Unveils the State's unusual reliance upon the use of
10more than 600 special funds.
11    (14) Requires the Annual Budget and the State's
12Comprehensive Annual Financial Report to be prepared to
13facilitate a simple comparison of budgeted amounts to the
14actual amounts spent and received.
15    (15) Requires State agencies to report to the Comptroller
16all fiscal information necessary to prepare a comprehensive
17annual financial report in a timely manner.
18    (16) Mandates the production of the State's Comprehensive
19Annual Financial Report within 6 months after the State's
20fiscal year end.
 
21    Section 10. Definitions.
22    "Amounts due to pension funds" means the unfunded actuarial
23accrued liability for the State pension plans, including the
24portion of multiple-employer plans attributed to the State.
25    "Benefit enhancements" means the actuarial present value

 

 

HB5981- 4 -LRB098 17083 OMW 52170 b

1of total projected benefits attributed to the estimated
2increase in the benefits of retirees or beneficiaries granted
3by the proposed budget or proposed or enacted changes to the
4Illinois Pension Code. The benefit enhancements that result
5from plan members' expected future service amount may be
6reduced by the amount of specified revenue sources enacted into
7law.
8    "Capital assets" is defined using Governmental Accounting
9Standards Board concepts outlined in GASB Statement 34.
10    "Comptroller's budget statements" means the estimated
11balance sheet, the estimated statement of activities, and the
12estimated statement of cash flow.
13    "Estimated balance sheet" means the estimated statement of
14net assets prepared using the GASB concepts outlined in GASB
1534.
16    "Estimated retirement plans' assets gain or loss" means the
17change in the actuarial value of assets at the beginning of the
18budget period and the actuarial value of assets at the end of
19the budget period.
20    "Fiscal budget statements" means the estimated statement
21of fiscal balance, the estimated statement of fiscal deficit,
22and the estimated financial state of the State.
23    "Fiduciary funds" is defined using GASB concepts outlined
24in Governmental Accounting Standards Board Statement 34.
25    "Government-Wide Generally Accepted Accounting Principles
26(Government-Wide GAAP)" means the accounting standards used in

 

 

HB5981- 5 -LRB098 17083 OMW 52170 b

1the preparation of the State's government-wide financial
2statements, using GASB concepts outlined in the Governmental
3Accounting Standards Board Statement 34. While the
4Governmental Accounting Standards Board does not prescribe
5standards for preparing governmental budgets, the accounting
6standards' concepts shall be applied to the fiscal budget
7statements prepared under this Act.
8    "Increase (Decrease) in Other Post Employment Benefits
9(OPEB) Due" means the change in the State's OPEB plans'
10estimated actuarial accrued liability at the beginning of the
11budget period and the State's OPEB plans' estimated actuarial
12accrued liability at the end of the budget period.
13    "Increase (Decrease) in Pension Benefits Due" means the
14change in the State's pension plans' estimated actuarial
15accrued liability at the beginning of the budget period and the
16sum of each pension plan's estimated actuarial accrued
17liability at the end of the budget period.
18    "Net Pension Obligation (Asset)", "Net Other Post
19Employment Obligation (Asset)", "Actuarial Value of Assets",
20"Actuarial Accrued Liability" and "Unfunded Actuarial Accrued
21Liability (UAAL)" "Actuarial Present Value of Total Projected
22Benefits" are defined using GASB concepts outlined in GASB
23Statement 45, GASB Statement 25, and GASB Statement 27, as
24amended by GASB 50.
25    "Off Balance Sheet Other Post Employment (OPEB)
26Liabilities" means the difference between the State OPEB plans'

 

 

HB5981- 6 -LRB098 17083 OMW 52170 b

1Estimated UAAL and the estimated Net OPEB Obligation (Asset)
2included in the estimated balance sheet.
3    "Off Balance Sheet Pension Liabilities" means the
4difference between the State pension plans' estimated unfunded
5actuarial accrued liability (UAAL) and the estimated net
6pension obligation (Asset) included in the estimated balance
7sheet.
8    "Retirees' health care benefits" means the unfunded
9actuarial accrued liability (UAAL) for the State OPEB Plans,
10including the portion of multiple-employer plans attributed to
11the State.
12    "State Other Post Employment Benefit (OPEB) Plans" include
13the State's Single-Employer Other Post Employment Benefit
14(OPEB) plans, and also include the portion of Agent
15Multiple-Employer (OPEB) plans attributed to the State.
16    "State pension plans" means the State's single-employer
17pension plans and the portion of agent multiple-employer
18pension plans attributed to the State.
 
19    Section 15. Electronic publication of appropriation bills;
20publication deadlines with respect to second and third
21readings. The General Assembly shall publish, on a web page
22controlled by the General Assembly, the texts of all
23appropriation bills. Each publication shall include an
24embedded time stamp setting forth the time of electronic
25publication. No amendment to an appropriation bill shall be

 

 

HB5981- 7 -LRB098 17083 OMW 52170 b

1considered on second reading until at least 72 hours after the
2amendment has been published electronically and no bill to
3appropriate funds shall be passed on third reading until at
4least 72 hours after the time of electronic publication in
5final form.
 
6    Section 20. Passage of appropriation bills prohibited
7before adoption of joint resolution. The General Assembly shall
8not enact any bill to appropriate funds within any fiscal year
9prior to their adoption of the joint resolution reflecting the
10estimate of funds available for that fiscal year as required
11under Section 4 of the Commission on Government Forecasting and
12Accountability Act.
 
13    Section 25. State funds as fiduciary funds. All State funds
14shall be fiduciary funds unless explicitly provided otherwise
15by law.
 
16    Section 90. The State Comptroller Act is amended by
17changing Section 6.01 and by adding Sections 19.7 and 30 as
18follows:
 
19    (15 ILCS 405/6.01)  (from Ch. 15, par. 206.01)
20    Sec. 6.01. Specification and establishment of accounting
21standards and principles. The Comptroller shall specify and
22establish the financial accounting and reporting standards and

 

 

HB5981- 8 -LRB098 17083 OMW 52170 b

1principles to be used by all State government and State
2agencies. The standards and principles shall be effective upon
3filing by the Comptroller with the Auditor General. The
4Comptroller shall maintain and publish the standards and
5principles as a public document. These standards and principles
6shall be known as the Generally Accepted Accounting Standards
7and Principles for Illinois State Government, and shall be
8compatible with generally accepted accounting standards and
9principles for government as prescribed by the Governmental
10Accounting Standards Board (GASB). , whenever possible, be
11compatible with any similar nationally existing generally
12accepted accounting standards and principles for government.
13    In establishing the Generally Accepted Accounting
14Standards and Principles for Illinois State Government, the
15Comptroller shall consult with the Governor and the other
16members of the Executive Branch, the Chief Justice of the
17Supreme Court, and the leadership of the General Assembly and
18shall provide to these officials, and publish on the
19Comptroller's Internet website, draft copies of any proposed
20standards at least 90 days prior to their adoption and shall
21consider any responses or suggestions that these officials or
22the public may present.
23(Source: P.A. 86-1415.)
 
24    (15 ILCS 405/19.7 new)
25    Sec. 19.7. Timely reporting. On or before October 31 of

 

 

HB5981- 9 -LRB098 17083 OMW 52170 b

1each year, the director or secretary of each State agency shall
2report to the Comptroller all of the agency's fiscal
3information necessary to prepare a comprehensive annual
4financial report for the fiscal year ending June 30 of that
5year. The Comptroller may require certain State agencies to
6report the information prior to October 31 under a schedule
7established by the Comptroller. Whenever the Comptroller
8determines that a State agency director or secretary is
9delinquent in reporting the information, the Comptroller shall
10notify in writing the Office of the Auditor General, the Office
11of the Governor, the Speaker and Minority Leader of the House
12of Representatives, and the President and Minority Leader of
13the Senate of the delinquency.
 
14    (15 ILCS 405/30 new)
15    Sec. 30. Comprehensive annual financial reports. The
16Comptroller shall publish each comprehensive annual financial
17report within 6 months after the end of the fiscal year to
18which the report relates. At a minimum the Comptroller shall
19publish the report by on a web page controlled by the
20Comptroller. If the report is not published within that period,
21the Comptroller must promptly give notice of the delay to the
22Governor, the Speaker and Minority Leader of the House of
23Representatives, and the President and Minority Leader of the
24Senate and post notice of the delay on a web page controlled by
25the Comptroller.
 

 

 

HB5981- 10 -LRB098 17083 OMW 52170 b

1    Section 95. The Commission on Government Forecasting and
2Accountability Act is amended by changing Section 4 as follows:
 
3    (25 ILCS 155/4)  (from Ch. 63, par. 344)
4    Sec. 4. (a) The Commission shall publish, at the convening
5of each regular session of the General Assembly, a report on
6the estimated income of the State from all applicable revenue
7sources for the next ensuing fiscal year and of any other funds
8estimated to be available for such fiscal year. The Commission,
9in its discretion, may consult with the Governor's Office of
10Management and Budget in preparing the report. On the third
11Wednesday in March after the session convenes, the Commission
12shall issue a revised and updated set of revenue figures
13reflecting the latest available information. The House and
14Senate by joint resolution shall adopt or modify such estimates
15as may be appropriate. The joint resolution must include all
16applicable revenues and other funds available. The joint
17resolution shall constitute the General Assembly's estimate,
18under paragraph (b) of Section 2 of Article VIII of the
19Constitution, of the funds estimated to be available during the
20next fiscal year. The report must estimate all applicable
21revenues and must estimate other funds available. The report
22shall clearly separate and distinguish all applicable revenues
23and other funds available when estimating the funds estimated
24to be available for purposes of calculating funds estimated to

 

 

HB5981- 11 -LRB098 17083 OMW 52170 b

1be available as required under subsection (b) of Section 2 of
2Article VIII of the Illinois Constitution.
3    (a-5) The annual March estimates issued by the Commission
4shall include an estimated balance sheet, an estimated
5statement of activities, and an estimated statement of cash
6flow. The March estimates shall include a variance report of
7the ongoing fiscal year's budget and appropriations.
8    (a-10) The Commission shall also prepare:
9        (1) The estimated statement of fiscal balance, which
10    shall include:
11            (A) The columns used in the estimated balance
12        sheet.
13            (B) The total net assets, as determined in the
14        estimated balance sheet.
15            (C) The off-balance sheet pension liability.
16            (D) The off-balance sheet OPEB liability
17            (E) The resulting fiscal balance.
18        (2) The estimated statement of fiscal deficit, which
19    shall include:
20            (A) The columns used in the estimated statement of
21        activities.
22            (B) The change in net assets, as determined in the
23        estimated statement of activities.
24            (C) Benefit enhancements.
25            (D) Retirement plans' assets gain or loss.
26            (E) Increase (decrease) in pension benefits due.

 

 

HB5981- 12 -LRB098 17083 OMW 52170 b

1            (F) Increase (decrease) in OPEB benefits due.
2            (G) The resulting fiscal deficit.
3        (3) The estimated financial state of the State, which
4    shall include:
5            (A) Amounts reported on the State's Comprehensive
6        Annual Financial Report for the State's fiscal year 2
7        years prior to the current budget year.
8            (B) The estimated values from last period's
9        budget.
10            (C) The estimated values from the current budget
11        period.
12            (D) What the State owns:
13                (i) Capital assets.
14                (ii) Other assets that are derived from the
15            total assets reported on the statement of net
16            assets/balance sheet minus capital assets.
17                (iii) State assets shall equal the total
18            assets.
19            (E) What the State owes:
20                (i) The amount of State bonds, including, but
21            not limited to, General Obligation Bonds and
22            Special Revenue Bonds.
23                (ii) Amounts due pension funds.
24                (iii) Retirees' health care benefits (OPEB).
25                (iv) Other liabilities that are derived by
26            subtracting the State bonds, the net pension

 

 

HB5981- 13 -LRB098 17083 OMW 52170 b

1            obligation, and the net OPEB obligation from the
2            total liabilities reported on the statement of net
3            assets/balance sheet.
4                (v) State bills.
5            (F) Where the State stands:
6                (i) Illinois' financial position.
7                (ii) Each Illinois family's share, which is
8            derived by dividing Illinois' financial position
9            divided by the Illinois population estimate as
10            determined by the U.S. Census Bureau divided by the
11            national average size of a family as determined by
12            the U.S. Census Bureau.
13    (a-20) In conjunction with the State Comptroller, the
14Commission shall publish the fiscal budget statements outlined
15in subsection (a-5) in concert with Government Wide-GAAP. The
16fiscal budget statements shall include information about the
17State as a whole. The fiscal budget statements should include
18the primary government and its component units, expect for the
19fiduciary funds of the primary government and component units
20that are fiduciary in nature. The fiscal budget statements
21should be prepared using the economic resources measurement
22focus and the accrual basis of accounting. The fiscal budget
23statements should not be presented using the current financial
24resources measurement focus and the modified accrual basis of
25accounting, which are used to prepare the State's governmental
26funds financial statements. The Commission shall obtain from

 

 

HB5981- 14 -LRB098 17083 OMW 52170 b

1each of the State's pension and OPEB plans' actuaries to
2determine the pension and OPEB amounts needed to prepare the
3fiscal budget statements.
4    (b) On the third Wednesday in March, the Commission shall
5issue estimated:
6        (1) pension funding requirements under P.A. 86-273;
7    and
8        (2) liabilities of the State employee group health
9    insurance program.
10    These estimated costs shall be for the fiscal year
11beginning the following July 1.
12    (c) The requirement for reporting to the General Assembly
13shall be satisfied by filing copies of the report with the
14Speaker, the Minority Leader and the Clerk of the House of
15Representatives and the President, the Minority Leader and the
16Secretary of the Senate and the Legislative Research unit, as
17required by Section 3.1 of the General Assembly Organization
18Act, and filing such additional copies with the State
19Government Report Distribution Center for the General Assembly
20as is required under paragraph (t) of Section 7 of the State
21Library Act.
22    (d) For each fiscal year, the General Assembly shall adopt
23a joint resolution accepting the amounts reported on the fiscal
24budget statements.
25    (e) For the purposes of this Section, "all applicable
26revenues" means "own source revenues", including:

 

 

HB5981- 15 -LRB098 17083 OMW 52170 b

1        (1) personal income tax;
2        (2) corporate income tax;
3        (3) corporate personal property replacement tax;
4        (4) sales tax retained by the State;
5        (5) excise taxes, such as excise taxes on alcohol,
6    gasoline, or energy;
7        (6) user fees;
8        (7) fines and penalties;
9        (8) gaming taxes;
10        (9) investment income;
11        (10) unencumbered funds provided by other governmental
12    units; or
13        (11) any other revenue source for which the State has
14    no ongoing or unfulfilled obligation to any other party.
15    For the purposes of this Section, "other funds available"
16means:
17        (1) funds that result from the actions of another
18    entity or government;
19        (2) funds received that are held in trust or have a
20    fiduciary element;
21        (3) pass-through funds or funds received by the State
22    when acting as an agent or collector for another entity;
23        (4) pension contributions made by State employees not
24    used to pay pensions or used to purchase assets for the
25    State's pension funds;
26        (5) that portion of sales tax collections that

 

 

HB5981- 16 -LRB098 17083 OMW 52170 b

1    retailers pay to the State but that will be remitted to
2    home rule and local governments;
3        (6) court-ordered collections of child support;
4        (7) inter-period borrowings;
5        (8) prepaid tuition plans; or
6        (9) any other source of funds for which the State has
7    an unfulfilled or ongoing obligation.
8    The definitions set forth in Section 10 of the Truth in
9Accounting Act of 2010 are incorporated.
10(Source: P.A. 96-958, eff. 7-1-10.)
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.