HB-4602, As Passed Senate, December 19, 2018

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 4602

 

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1984 PA 431, entitled

 

"The management and budget act,"

 

by amending sections 302, 352, 354, 355, 356, 358, and 367b (MCL

 

18.1302, 18.1352, 18.1354, 18.1355, 18.1356, 18.1358, and

 

18.1367b), sections 352, 354, 355, and 356 as amended by 1999 PA 8,

 

section 358 as amended by 2014 PA 188, and section 367b as amended

 

by 2011 PA 47; and to repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 302. (1) "Adjusted personal income" means the total

 

personal income of this state, less transfer payments, adjusted for

 

inflation. The adjustment for inflation shall be determined by

 

reducing the total personal income of this state less transfer

 

payments for a calendar year by the average of the Detroit consumer

 

price index for the 12 months ending 6 months before the same

 

calendar year. ends.

 

     (2) "Allocation of state financial resources" means the

 

decision process to place priorities on services by proposing and

 

appropriating money by law for state government services.

 

     (3) "Allotment schedule" means the estimated periodic

 

expenditures and obligations of appropriations constituting a

 

spending plan.

 

     (4) "Annual growth rate" means the percentage change in

 

adjusted personal income for the current calendar year as compared

 

to adjusted personal income for the calendar year immediately

 

preceding the current calendar year. The annual growth rate shall

 

be rounded off to the nearest 0.1%.

 

     Sec. 352. (1) When the annual growth rate is more than 2%, the

 

percentage excess over 2% shall be multiplied by the total state

 

general fund-general purpose revenue for the fiscal year ending in

 

the current calendar year to determine the amount to be transferred

 

to the fund from the state general fund in the fiscal year

 

beginning in the current calendar year.

 

     (2) Except as otherwise provided in section 358, the

 

legislature shall not appropriate money from the fund for a fiscal

 

year when the annual growth rate for the calendar year in which

 

that fiscal year ends is estimated to be greater than 0% at the

 

most recent consensus revenue estimating conference. When the

 

annual growth rate is less than 0%, estimated to be less than 0% at

 

the most recent consensus revenue estimating conference, the

 

percentage deficiency under 0% shall be multiplied by the total

 

state general fund-general purpose revenue for the fiscal year

ending in the current calendar year to determine the eligible

 

amount to be transferred to the state general fund from the fund in

 

the fiscal year ending in the current calendar year. When the

 

formula calls for a larger transfer from the fund than is necessary

 

to balance the current fiscal year state general fund-general

 

purpose budget, the excess shall remain in the fund.legislature may

 

appropriate by law for the fiscal year ending in the current

 

calendar year no more than 25% of the prior fiscal year ending

 

balance in the fund as reported in the comprehensive annual

 

financial report. However, if the annual growth rate is estimated

 

to be less than 0% in consecutive calendar years, for each of the

 

fiscal years ending in those calendar years, the legislature may

 

appropriate by law no more than 25% of the available fund balance

 

at the beginning of the first fiscal year ending in the first

 

calendar year that had an annual growth rate less than 0%.

 

     (3) The legislature shall provide for transfers into or out of

 

the fund through an appropriations act.

 

     Sec. 354. (1) The executive budget for each fiscal year shall

 

contain an estimate of the required transfer into or the fund or

 

the amount of funds recommended to be appropriated out of the fund

 

required by under section 352. The executive budget for each fiscal

 

year shall not contain an estimate for a transfer out of the fund

 

unless the annual growth rate is estimated to be less than 0% in

 

that fiscal year.

 

     (2) The legislature shall include a the final estimate amount

 

of the transfer into or the fund or the amount of funds

 

appropriated out of the fund required by under section 352 in the

appropriations bill which contains the revenue estimate required by

 

section 31 of article IV of the state constitution of 1963.

 

     (3) Except as provided in subsection (4), a A transfer into

 

the fund shall be made in equal monthly installments throughout the

 

fiscal year. Except as provided in subsection (4), a A transfer out

 

of the fund may be made as needed during the fiscal year.

 

     (4) Notwithstanding section 352, for each fiscal year ending

 

after October 1, 1997, all unreserved general fund-general purpose

 

balances at the final close of the fiscal year shall be transferred

 

to the fund. If an amount is required to be transferred to the fund

 

for a fiscal year under section 352, any amount transferred to the

 

fund under this subsection shall be considered to be a part of the

 

amount transferred to the fund for purposes of section 352.

 

     Sec. 355. (1) The transfer into or out of the fund as provided

 

in section 352 for each fiscal year beginning after September 30,

 

1978, may be adjusted in light of revision in the annual growth

 

rate for the calendar year upon which that transfer was made. If an

 

adjustment is made, it shall be implemented by an appropriation

 

bill enacted into law. The

 

     (2) For a transfer into the fund, the adjustment, if made,

 

shall be directly proportional to an increase or decrease in the

 

annual growth rate. , but the adjustment shall not be in excess of

 

1% multiplied by the total general fund-general purpose revenue of

 

the fiscal year upon which the transfer was based.

 

     (3) The basis for an adjustment under this section shall be a

 

change in the personal income level for that calendar year as

 

determined by the bureau of economic analysis of the United States

department of commerce Department of Commerce or its successor in

 

the last report it makes before April 30 of the fiscal year in

 

which that calendar year ended. The adjustment, if made, shall be

 

effective on June 1 of the fiscal year in which the transfer is

 

made.

 

     Sec. 356. The balance in the fund shall not exceed 10% 15% of

 

the combined level of general fund-general purpose and school aid

 

fund revenues. If the balance in the fund at the end of a fiscal

 

year exceeds 10% 15% of the actual state general fund-general

 

purpose and school aid fund revenues for that fiscal year, the

 

excess shall be rebated to taxpayers on the individual income tax

 

returns filed following the close of that fiscal year according to

 

a schedule to be established by law.

 

     Sec. 358. (1) Except as otherwise provided in this section,

 

the legislature may make an emergency appropriation from the fund

 

subject to all of the following conditions:

 

     (a) The maximum appropriation from the fund for budget

 

stabilization as provided in section 352(2) has already been made

 

for the current fiscal year.

 

     (b) The legislature has approved the emergency appropriations

 

bill by a 2/3 majority vote of the members elected to and serving

 

in each house.

 

     (c) The emergency appropriations bill becomes law.

 

     (2) The additional transfer from the fund may be made only for

 

the current fiscal year.

 

     (3) For the fiscal year ending September 30, 2001, the fiscal

 

year ending September 30, 2002 and for each fiscal year beginning

with the fiscal year ending September 30, 2004 and ending with the

 

fiscal year ending September 30, 2016, there is appropriated and

 

transferred from the fund to the state trunk line fund established

 

under section 11 of 1951 PA 51, MCL 247.661, the sum of

 

$35,000,000.00.

 

     (4) For the fiscal year ending September 30, 2000, there is

 

appropriated and transferred from the fund to the state trunk line

 

fund established under section 11 of 1951 PA 51, MCL 247.661, the

 

sum of $37,100,000.00.

 

     (5) For the fiscal year ending September 30, 2000, an amount

 

equal to the unreserved general fund/general purpose balance

 

transferred to the fund for the fiscal year ending September 30,

 

2000, but not to exceed $62,900,000.00, is appropriated and

 

transferred from the fund to the state trunk line fund established

 

under section 11 of 1951 PA 51, MCL 247.661.

 

     (6) For the fiscal year ending September 30, 2014, there is

 

transferred $194,800,000.00 from the fund to the settlement

 

administration fund created in the Michigan settlement

 

administration authority act for the purposes described in that

 

act.

 

     Sec. 367b. (1) A revenue estimating conference shall be held

 

in the second week of January and in the third week in May of each

 

year, and as otherwise provided in this act.

 

     (2) The principals of the conference shall be the state budget

 

director or the state treasurer, the director of the senate fiscal

 

agency, and the director of the house fiscal agency, or their

 

respective designees.

     (3) The conference shall establish an official economic

 

forecast of major variables of the national and state economies.

 

The conference shall also establish a forecast of anticipated state

 

revenues as the conference determines including the following:

 

     (a) State income tax collections.

 

     (b) State sales tax collections.

 

     (c) Corporate income tax collections.

 

     (d) Michigan business tax collections.

 

     (e) Total general fund/general purpose revenues.

 

     (f) Lottery transfers to the school aid fund.

 

     (g) Total school aid fund revenues.

 

     (h) Annual percentage growth in the basic foundation allowance

 

provided for in the state school aid act of 1979, 1979 PA 94, MCL

 

388.1601 to 388.1772.388.1896.

 

     (i) Compliance with the state revenue limit established by

 

section 26 of article IX of the state constitution of 1963.

 

     (j) Pay-ins or maximum allowable pay-outs required under the

 

countercyclical budget and economic stabilization fund.

 

     (4) The conference's official forecast of economic and revenue

 

variables shall be determined by consensus among the principals.

 

     (5) The forecasts required by this section shall be for the

 

fiscal year in which the conference is being held and the next 2

 

ensuing fiscal years. The conference shall also forecast general

 

fund/general purpose revenue trend line projections and school aid

 

fund revenue trend line projections for the next 2 ensuing fiscal

 

years.

 

     (6) The May revenue estimating conference shall establish

expenditure forecasts for medicaid Medicaid expenditures and for

 

human services caseloads and expenditures for the fiscal year in

 

which the conference is being held and the next 2 ensuing fiscal

 

years.

 

     (7) The official conference forecasts of revenues and

 

expenditures shall be based upon the assumption that the current

 

law and current administrative procedures will remain in effect for

 

the forecast period.

 

     Enacting section 1. Sections 353 and 397 of the management and

 

budget act, 1984 PA 431, MCL 18.1353 and 18.1397, are repealed.

 

     Enacting section 2. This amendatory act takes effect 90 days

 

after the date it is enacted into law.