SENATE BILL REPORT

SB 6532

BYSenators McDonald, Niemi, McCaslin, Owen, Craswell, Moore, Bailey, Stratton, Hayner, Smith, Rasmussen, Conner, Anderson, Hansen, von Reichbauer, West, Kiskaddon, Garrett, Nelson, Lee, Zimmerman, Benitz, Cantu, Barr, McMullen and Johnson

Establishing an emergency reserve fund.

Senate Committee on Ways & Means

Senate Hearing Date(s):January 28, 1988

Majority Report:  That Substitute Senate Bill No. 6532 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Bluechel, Cantu, Deccio, Hayner, Johnson, Lee, Newhouse, Saling, Smith, Zimmerman.

Minority Report:  Do not pass.

      Signed by Senators Bauer, Fleming, Gaspard, Moore, Talmadge, Vognild, Williams, Wojahn.

Senate Staff:Gary Benson (786-7715)

                  February 1, 1988

AS REPORTED BY COMMITTEE ON WAYS & MEANS, JANUARY 28, 1988

BACKGROUND:

SJR 8229 provides for an emergency reserve fund.  This fund is to receive two percent of general fund-state revenues annually.  The balance in the account is not to exceed 8 percent of the biennium's total general fund-state.  Excess balances and interest earnings are to go to an education instruction account.

Appropriations from the emergency reserve fund need to be preceded by a declaration of an emergency by the Legislature and a two-thirds vote of the Legislature.  Emergency includes casualty losses.

Current state law provides for a "budget stabilization account" into which monies are to be deposited if the state economy grows faster than 3 percent per year after adjusting for inflation.

SUMMARY:

SJR 8229 is implemented.  The State Treasurer is directed to withdraw on a monthly basis from general fund-state revenues:  1 percent from July 1, 1989 to June 30, 1990, 1-1/2 percent from July 1, 1990 to June 30, 1991; and, 2 percent from July 1, 1991 thereafter.

Appropriations from the account are to be for emergencies.

An education construction account is created.

The budget stabilization account is repealed.

EFFECT OF PROPOSED SUBSTITUTE:

In addition to the above, emergencies include casualty losses.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Effective Date:July 1, 1989 if SJR 8229 is approved by the voters in November, 1988.

Senate Committee - Testified: No one