6896-S.E AMH ANDG FRAS 109
ESSB 6896 - H AMD 1172
By Representative Anderson
FAILED 3/7/2006
Beginning on page 4, line 9, strike all of sections 7 and 8 and insert the following:
"NEW SECTION. Sec. 7. A new section is added to chapter 43.135 RCW to read as follows:
(1) Quarterly during each fiscal year, the treasurer shall transfer from the state general fund or any successor fund to the required reserve fund an amount equal to one percent of the forecasted general state revenues for that fiscal year. Nothing in this subsection prevents the appropriation of additional amounts to the required reserve fund. Amounts in the required reserve fund may be invested as provided by law and interest earnings retained in that fund.
(2) If the forecasted growth of general state revenues for any fiscal year, excluding legislation, is estimated to be less than one percent, as adjusted for inflation, then for that fiscal year moneys may be appropriated from the required reserve fund by a majority vote of the members elected to each house of the legislature, and then only if the appropriation does not cause total expenditures to exceed the state expenditure limit under this chapter. Any amount may be appropriated from the required reserve fund at any time by the favorable vote of at least three-fifths of the members elected to each house of the legislature.
(3) When the balance in the required reserve fund, including investment earnings, equals more than ten percent of the estimated general state revenues in the prior fiscal year, then any amounts in excess of ten percent of the estimated general state revenues in the prior fiscal year may be appropriated only for costs of capital construction in public schools and higher education.
(4) Transfers of general state revenue to the required reserve fund are general revenue for purposes of the debt limit calculation. Neither transfers of general state revenue to nor expenditures from the required reserve fund shall result in an adjustment to any state expenditure limit.
(5) As used in this section, "general state revenues" has the meaning set forth in Article VIII, section 1 of the state Constitution. As used in this section, "inflation" means the implicit price deflator for the United States as published by the United States department of commerce. Forecasts and estimates shall be those made by the state economic and revenue forecast council or its successor agency.
Sec. 8. RCW 39.42.070 and 2003 1st sp.s. c 9 s 1 are each amended to read as follows:
(1) On or after the effective date of this act, the treasurer shall compute general state revenues for the three fiscal years immediately preceding such date and shall determine the arithmetic mean thereof. As soon as is practicable after the close of each fiscal year thereafter, he or she shall do likewise. In determining the amount of general state revenues, the treasurer shall include all state money received in the treasury from each and every source whatsoever except: (a) Fees and revenues derived from the ownership or operation of any undertaking, facility or project; (b) moneys received as gifts, grants, donations, aid or assistance or otherwise from the United States or any department, bureau or corporation thereof, or any person, firm or corporation, public or private, when the terms and conditions of such gift, grant, donation, aid or assistance require the application and disbursement of such moneys otherwise than for the general purposes of the state of Washington; (c) moneys to be paid into and received from retirement system funds, and performance bonds and deposits; (d) moneys to be paid into and received from trust funds including but not limited to moneys received from taxes levied for specific purposes and the several permanent and irreducible funds of the state and the moneys derived therefrom but excluding bond redemption funds; (e) proceeds received from the sale of bonds or other evidences of indebtedness. Upon computing general state revenues, the treasurer shall make and file in the office of the secretary of state, a certificate containing the results of such computations. Copies of said certificate shall be sent to each elected official of the state and each member of the legislature. The treasurer shall, at the same time, advise each elected official and each member of the legislature of the current available debt capacity of the state, and may make estimated projections for one or more years concerning debt capacity.
(2) For purposes of this chapter, general state revenues shall also include revenues that are deposited in the general fund under RCW 82.45.180(2), lottery revenues as provided in RCW 67.70.240(3), revenues paid into the general fund under RCW 84.52.067, revenues deposited in the required reserve fund under section 6 of this act, and revenues deposited into the student achievement fund and distributed to school districts as provided in RCW 84.52.068.
Sec. 9. RCW 43.135.035 and 2005 c 72 s 2 are each amended to read as follows:
(1) After July 1, 1995, any action or combination of actions by the legislature that raises state revenue or requires revenue-neutral tax shifts may be taken only if approved by a two-thirds vote of each house, and then only if state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter. However, for legislation enacted between the effective date of this 2005 act and June 30, ((2007)) 2006, any action or combination of actions by the legislature that raises state revenue or requires revenue-neutral tax shifts may be taken with the approval of a majority of members elected to each house, so long as state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter.
(2)(a) If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature shall not take effect until approved by a vote of the people at a November general election. The state expenditure limit committee shall adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment shall not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit shall be adjusted downward upon expiration or repeal of the legislative action.
(b) The ballot title for any vote of the people required under this section shall be substantially as follows:
"Shall taxes be imposed on . . . . . . . in order to allow a spending increase above last year's authorized spending adjusted for inflation and population increases?"
(3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a two-thirds vote of each house of the legislature and signed by the governor. The law shall set forth the nature of the emergency, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance. The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.
(b) Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes shall expire upon expiration of the declaration of emergency. The legislature shall not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.
(c) The state or any political subdivision of the state shall not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.
(4) If the cost of any state program or function is shifted from the state general fund on or after January 1, 1993, to another source of funding, or if moneys are transferred from the state general fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to the dedication or use of lottery revenues under RCW 67.70.240(3) or property taxes under RCW 84.52.068, in support of education or education expenditures. This subsection does not apply to transfers to the required reserve fund.
(5) If the cost of any state program or function is shifted to the state general fund on or after January 1, 2000, from another source of funding, or if moneys are transferred to the state general fund from another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall increase the state expenditure limit to reflect the shift.
Sec. 10. RCW 43.135.035 and 2005 c 72 s 5 are each amended to read as follows:
(1) After July 1, 1995, any action or combination of actions by the legislature that raises state revenue or requires revenue-neutral tax shifts may be taken only if approved by a two-thirds vote of each house, and then only if state expenditures in any fiscal year, including the new revenue, will not exceed the state expenditure limits established under this chapter.
(2)(a) If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature shall not take effect until approved by a vote of the people at a November general election. The state expenditure limit committee shall adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment shall not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit shall be adjusted downward upon expiration or repeal of the legislative action.
(b) The ballot title for any vote of the people required under this section shall be substantially as follows:
"Shall taxes be imposed on . . . . . . . in order to allow a spending increase above last year's authorized spending adjusted for personal income growth?"
(3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a two-thirds vote of each house of the legislature and signed by the governor. The law shall set forth the nature of the emergency, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance. The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.
(b) Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes shall expire upon expiration of the declaration of emergency. The legislature shall not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.
(c) The state or any political subdivision of the state shall not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.
(4) If the cost of any state program or function is shifted from the state general fund or a related fund to another source of funding, or if moneys are transferred from the state general fund or a related fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund or a related fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund or a related fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to the dedication or use of lottery revenues under RCW 67.70.240(3) or property taxes under RCW 84.52.068, in support of education or education expenditures. This subsection does not apply to transfers to the required reserve fund.
(5) If the cost of any state program or function and the ongoing revenue necessary to fund the program or function are shifted to the state general fund or a related fund on or after January 1, 2007, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall increase the state expenditure limit to reflect the shift.
NEW SECTION. Sec. 11. A new section is added to chapter 28A.505 RCW to read as follows:
(1) Funds from the student achievement fund shall be appropriated to the superintendent of public instruction solely for distribution to school districts to meet the provisions set out in the student achievement act. Allocations shall be made on an equal per full-time equivalent student basis to each school district.
(2) When per-student state funding for the maintenance and operation of K-12 education meets a level of no less than ninety percent of the national average of total funding from all sources per student as determined by the most recent published data from the national center for education statistics of the United States department of education, as calculated by the office of financial management, further deposits to the student achievement fund shall be required only to the extent necessary to maintain the ninety-percent level. Remaining funds are part of the general fund balance and these funds are subject to the expenditure limits of chapter 43.135 RCW.
NEW SECTION. Sec. 12. A new section is added to chapter 43.79 RCW to read as follows:
The education construction fund is hereby created in the state treasury.
(1) Funds may be appropriated from the education construction fund exclusively for common school construction or higher education construction. During the fiscal years beginning July 1, 2005, and ending June 30, 2007, funds may also be used for higher education facilities preservation and maintenance.
(2) An excess balance in the required reserve fund under Article VIII, section . . . (HJR 4220) shall be deposited into the education construction fund and may be appropriated only for costs of capital construction in public schools and higher education.
Sec. 13. RCW 43.135.051 and 1999 c 288 s 1 are each amended to read as follows:
(1) The state investment board has the full power to invest, reinvest, manage, contract, sell, or exchange investment moneys in the ((emergency)) required reserve fund. All investment and operating costs associated with the investment of money shall be paid pursuant to RCW 43.33A.160 and 43.84.160. With the exception of these expenses, the earnings from the investment of the money shall be retained by the fund.
(2) All investments made by the state investment board shall be made with the exercise of that degree of judgment and care pursuant to RCW 43.33A.140 and the investment policies established by the state investment board.
(3) As deemed appropriate by the state investment board, moneys in the fund may be commingled for investment with other funds subject to investment by the board.
NEW SECTION. Sec. 14. RCW 43.135.045 (Emergency reserve fund-- Excess balance to education construction fund--Appropriation conditions--Transfer of earnings to multimodal transportation account) and 2005 c 518 s 931, 2005 c 488 s 920, 2005 c 314 s 401, 2005 c 72 s 6, & 2003 1st sp.s. c 25 s 920 are each repealed.
NEW SECTION. Sec. 15. Section 9 of this act expires July 1, 2007.
NEW SECTION. Sec. 16.
Section 10 of this act takes effect July 1, 2007.
NEW SECTION. Sec. 17.
Sections 7 through 16 of this act take effect if the proposed amendment to Article VIII, section . . . of the state Constitution (HJR 4220) is validly submitted to and is approved and ratified by the voters at a general election held in November 2006. If the proposed amendment is not approved and ratified, sections 7 through 16 of this act are void in their entirety."
Renumber remaining sections consecutively and correct title and internal references accordingly.
On page 9, line 1, strike "the emergency reserve fund," and insert "((the emergency reserve fund,))"
On page 9, at the beginning of line 24, after "account," insert "the required reserve fund,"
On page 12, line 12, strike "the emergency reserve fund," and insert "((the emergency reserve fund,))"
On page 12, line 35, after "district account, insert "the required reserve fund,"
On page 14, beginning on line 14, strike all of section 12
Renumber remaining sections consecutively and correct title and internal references accordingly.
EFFECT: Strikes the amendments to I-601 that would have adjusted the limit upward for the appropriations in the bill and avoided a decrease in the limit for program cost shifts. Contingent upon the adoption of the constitutional amendment in 4220(required reserve fund) the amendment establishes the Required Reserve Fund in lieu of the Emergency Reserve Fund, which is repealed. The State Treasurer must transfer 1% of forecasted annual revenues to the Required Reserve Fund. If forecasted growth in state revenues is less than 1% as adjusted by the IPD, the legislature may appropriate from the Required Reserve Fund. Under other circumstances, appropriations from the Required Reserve Fund require a 3/5 vote of both houses. If the balance in the fund exceeds 10% of forecasted revenues then the excess may be appropriated for capital costs of K-12 and higher education.