AN ACT Relating to state government; changing the budget process and the commencing date of regular sessions; and amending RCW 44.04.010, 43.88.060, and 43.88.110.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 1, chapter 20, Laws of 1891 as last amended by section 27, chapter 87, Laws of 1980 and RCW 44.04.010 are each amended to read as follows:

Regular sessions of the legislature shall be held annually, commencing on the second Monday of ((~~January~~)) February.

Sec. 2. Section 43.88.060, chapter 8, Laws of 1965 as last amended by section 2, chapter 247, Laws of 1977 ex. sess. and RCW 43.88.060 are each amended to read as follows:

The governor shall submit the budget document ((~~for the 1975-77 biennium and each succeeding biennium to the legislature no later than the twentieth day of December in the year preceding the session during which the budget is to be considered~~)) in the following manner: On or before February 10 of each odd-numbered year, a budget which sets forth the expenditures necessary to continue current services in the ensuing biennium. This essential requirement level should include adjustments for mandatory impacts of increases or decreases in caseloads or enrollment, inflation, and adjustments to expenditure levels necessary to biennialize the cost of program adjustments made in the course of the biennium; on or before March 20, a budget which identifies program expansions or reductions which when added to the current level budget presented on February 10, shall comprise the executive request budget: PROVIDED, That where a budget document is submitted for a fiscal period other than a biennium, such document shall be submitted no less than twenty days prior to the first day of the session at which such budget document is to be considered. The governor shall also submit a budget bill or bills which for purposes of this chapter is defined to mean the appropriations proposed by the governor as set forth in the budget document. Such representatives of agencies as have been designated by the governor for this purpose shall, when requested, by either house of the legislature, appear to be heard with respect to the budget document and the budget bill or bills and to supply such additional information as may be required.

Sec. 3. Section 43.88.110, chapter 8, Laws of 1965 as last amended by section 5, chapter 502, Laws of 1987 and RCW 43.88.110 are each amended to read as follows:

This section sets forth the expenditure programs and the allotment and reserve procedures to be followed by the executive branch for public funds. Allotments of an appropriation for any fiscal period shall conform to the terms, limits, or conditions of the appropriation.

(1) The director of financial management shall provide all agencies with a complete set of instructions for preparing a statement of proposed expenditures at least thirty days before the beginning of a fiscal period. The set of instructions need not include specific appropriation amounts for the agency.

(2) Within forty-five days after the beginning of the fiscal period or within forty-five days after the governor signs the omnibus biennial appropriations act, whichever is later, all agencies shall submit to the governor a statement of proposed expenditures at such times and in such form as may be required by the governor. If at any time during the fiscal period the governor projects a cash deficit as defined by RCW 43.88.050, the governor shall make ((~~across-the-board~~)) reductions in allotments so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods. Except for the legislative and judicial branches and other agencies headed by elective officials, the governor shall review the statement of proposed expenditures for reasonableness and conformance with legislative intent. Once the governor approves the statements of proposed expenditures, further revisions shall be made only at the beginning of the second fiscal year and must be initiated by the governor. However, changes in appropriation level authorized by the legislature, changes required by ((~~across-the-board~~)) reductions mandated by the governor, and changes caused by executive increases to spending authority may require additional revisions. Revisions shall not be made retroactively. Revisions caused by executive increases to spending authority shall not be made after June 30, 1987. However, the governor may assign to a reserve status any portion of an agency appropriation withheld as part of ((~~across-the-board~~)) reductions made by the governor and any portion of an agency appropriation conditioned on a contingent event by the appropriations act. The governor may remove these amounts from reserve status if the ((~~across-the-board~~)) reductions are subsequently modified or if the contingent event occurs. The director of financial management shall enter approved statements of proposed expenditures into the state budgeting, accounting, and reporting system within forty-five days after receipt of the proposed statements from the agencies. If an agency or the director of financial management is unable to meet these requirements, the director of financial management shall provide a timely explanation in writing to the legislative fiscal committees.

(3) It is expressly provided that all agencies shall be required to maintain accounting records and to report thereon in the manner prescribed in this chapter and under the regulations issued pursuant to this chapter. Within ninety days of the end of the fiscal year, all agencies shall submit to the director of financial management their final adjustments to close their books for the fiscal year. Prior to submitting fiscal data, written or oral, to committees of the legislature, it is the responsibility of the agency submitting the data to reconcile it with the budget and accounting data reported by the agency to the director of financial management. The director of financial management shall monitor agency expenditures against the approved statement of proposed expenditures and shall provide the legislature with quarterly explanations of major variances.

(4) The director of financial management may exempt certain public funds from the allotment controls established under this chapter if it is not practical or necessary to allot the funds. Allotment control exemptions expire at the end of the fiscal biennium for which they are granted. The director of financial management shall report any exemptions granted under this subsection to the legislative fiscal committees.