BILL REQ. #:  S-0806.2 

Read first time 01/29/2007.   Referred to Committee on Ways & Means.

     AN ACT Relating to the near general fund and requiring revenue forecasts thereof; amending RCW 82.33.020 and 43.135.025; reenacting and amending RCW 43.135.045; and providing an effective date.

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

Sec. 1   RCW 82.33.020 and 2005 c 319 s 137 are each amended to read as follows:
     (1) Four times each year the supervisor shall prepare, subject to the approval of the economic and revenue forecast council under RCW 82.33.010:
     (a) An official state economic and revenue forecast that includes all near general fund revenues as defined in RCW 43.135.025;
     (b) An unofficial state economic and revenue forecast based on optimistic economic and revenue projections; and
     (c) An unofficial state economic and revenue forecast based on pessimistic economic and revenue projections.
     (2) The supervisor shall submit forecasts prepared under this section, along with any unofficial forecasts provided under RCW 82.33.010, to the governor and the members of the committees on ways and means and the chairs of the committees on transportation of the senate and house of representatives, including one copy to the staff of each of the committees, on or before November 20th, February 20th in the even-numbered years, March 20th in the odd-numbered years, June 20th, and September 20th. All forecasts shall include both estimated receipts and estimated revenues in conformance with generally accepted accounting principles as provided by RCW 43.88.037.
     (3) All agencies of state government shall provide to the supervisor immediate access to all information relating to economic and revenue forecasts. Revenue collection information shall be available to the supervisor the first business day following the conclusion of each collection period.
     (4) The economic and revenue forecast supervisor and staff shall co-locate and share information, data, and files with the tax research section of the department of revenue but shall not duplicate the duties and functions of one another.
     (5) As part of its forecasts under subsection (1) of this section, the supervisor shall provide estimated revenue from tuition fees as defined in RCW 28B.15.020.

Sec. 2   RCW 43.135.025 and 2005 c 72 s 4 are each amended to read as follows:
     (1) The state shall not expend from the near general fund ((and related funds)) during any fiscal year state moneys in excess of the state expenditure limit established under this chapter.
     (2) Except pursuant to a declaration of emergency under RCW 43.135.035 or pursuant to an appropriation under RCW 43.135.045(4)(b), the state treasurer shall not issue or redeem any check, warrant, or voucher that will result in a state general fund or related fund expenditure for any fiscal year in excess of the state expenditure limit established under this chapter. A violation of this subsection constitutes a violation of RCW 43.88.290 and shall subject the state treasurer to the penalties provided in RCW 43.88.300.
     (3) The state expenditure limit for any fiscal year shall be the previous fiscal year's state expenditure limit increased by a percentage rate that equals the fiscal growth factor.
     (4) For purposes of computing the state expenditure limit for the fiscal year beginning July 1, ((2007)) 2008, the phrase "the previous fiscal year's state expenditure limit" means the total state expenditures from the ((state)) near general fund ((and related funds)), not including federal funds, for the fiscal year beginning July 1, ((2006)) 2007, plus the fiscal growth factor.
     (5) A state expenditure limit committee is established for the purpose of determining and adjusting the state expenditure limit as provided in this chapter. The members of the state expenditure limit committee are the director of financial management, the attorney general or the attorney general's designee, and the chairs and ranking minority members of the senate committee on ways and means and the house of representatives committee on appropriations. All actions of the state expenditure limit committee taken pursuant to this chapter require an affirmative vote of at least four members.
     (6) Each November, the state expenditure limit committee shall adjust the expenditure limit for the preceding fiscal year based on actual expenditures and known changes in the fiscal growth factor and then project an expenditure limit for the next two fiscal years. If, by November 30th, the state expenditure limit committee has not adopted the expenditure limit adjustment and projected expenditure limit as provided in subsection (5) of this section, the attorney general or his or her designee shall adjust or project the expenditure limit, as necessary.
     (7) "Fiscal growth factor" means the average growth in state personal income for the prior ten fiscal years.
     (8) (("General fund" means the state general fund.
     (9) "Related)) "Near general fund" means the state general fund, health services account, violence reduction and drug enforcement account, public safety and education account, water quality account, ((or)) student achievement fund, education legacy trust account, and pension funding stabilization account.

Sec. 3   RCW 43.135.045 and 2005 c 518 s 931, 2005 c 314 s 401, and 2005 c 72 s 6 are each reenacted and amended to read as follows:
     (1) The emergency reserve fund is established in the state treasury. During each fiscal year, the state treasurer shall transfer an amount from the state general fund to the emergency reserve fund. The amount transferred shall equal the amount by which total state revenue for the near general fund ((and related funds)) exceeds the state expenditure limit, multiplied by the percentage that general fund expenditures are of total expenditures from the near general fund ((and related funds)). Transfers shall be made at the end of each fiscal quarter based on projections of state revenues, expenditures, and the state expenditure limit. The treasurer shall make transfers between these accounts as necessary to reconcile actual annual revenues and the expenditure limit for fiscal year 2000 and thereafter.
     (2) The legislature may appropriate moneys from the emergency reserve fund only with approval of at least two-thirds of the members of 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.
     (3) The emergency reserve fund balance shall not exceed five percent of annual near general fund(( -- state)) revenues as projected by the official state revenue forecast. Any balance in excess of five percent shall be transferred on a quarterly basis by the state treasurer as follows: Seventy-five percent to the student achievement fund hereby created in the state treasury and twenty-five percent to the general fund balance. The treasurer shall make transfers between these accounts as necessary to reconcile actual annual revenues for fiscal year 2000 and thereafter. 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 this chapter.
     (4) The education construction fund is hereby created in the state treasury.
     (a) Funds may be appropriated from the education construction fund exclusively for common school construction or higher education construction.
     (b) Funds may be appropriated for any other purpose only if approved by a two-thirds vote of each house of the legislature and if approved by a vote of the people at the next general election. An appropriation approved by the people under this subsection shall result in an adjustment to the state expenditure limit only for the fiscal period for which the appropriation is made and shall not affect any subsequent fiscal period.
     (5) Funds from the student achievement fund shall be appropriated to the superintendent of public instruction strictly 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.

NEW SECTION.  Sec. 4   This act takes effect July 1, 2008.