HB5212 96TH GENERAL ASSEMBLY

LRB096 20082 JAM 35603 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5212

Introduced 2/3/2010, by Rep. Michael W. Tryon

SYNOPSIS AS INTRODUCED:

New Act
15 ILCS 405/6.01	from Ch. 15, par. 206.01
15 ILCS 405/20	from Ch. 15, par. 220
25 ILCS 155/4	from Ch. 63, par. 344

Creates the Truth in Accounting Act of 2010 and amends the State Comptroller Act and the Commission on Government Forecasting and Accountability Act. Prohibits the General Assembly from passing appropriation bills until it adopts a joint resolution reflecting for that fiscal year the State's estimated income, balance sheet, cash flow, and surplus or deficit. Requires the Commission's annual March estimates to include the State's estimated income, balance sheet, cash flow, and surplus or deficit, based on full accrual accounting standards developed by the Governmental Accounting Standards Board. Requires electronic publication of appropriation bills and amendments before legislative committee consideration or General Assembly passage. Provides that the State's financial accounting and reporting standards shall comply with full accrual accounting standards developed by the Governmental Accounting Standards Board. Requires the Comptroller to publish a Consolidated Annual Financial Report based on full accrual accounting principles. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Truth in Accounting Act of 2010.

Section 5. Legislative intent. It is the intent of this Act to develop a State budgeting process that:

(1) Reflects the State's duty to report the best estimate of its own financial condition.

(2) Reflects the principle that the purpose of proper State budgeting is to preserve intergenerational equity, in conformity with the understanding of intergenerational equity promulgated by the Governmental Accounting Standards Board (GASB), and to prevent the imposition of undue burdens upon unborn Illinois residents and Illinois residents who, at the time a budget is enacted into law, are too young to vote.

(3) Reflects the principle that it is not proper to incur State debt for operating expenses.

(4) Preserves intergenerational equity in the State budgeting process. Prohibiting one generation from obligating future generations comports with the Government Accounting Standards Board's interpretation of the purpose of "balanced public budgets".

(5) Resolves the ambiguity under the State's current budgeting process of the State's fiscal deficit.

(6) Recognizes the distinction between operating budgets and capital budgets and that it is proper to incur long-term obligations to acquire long-lived assets.

(7) Addresses the nebulous nature of expenditures that are defined by their funding sources as "capital expenditures" or "operating expenditures" when they may be expenditures of a different type or multiple types.

(8) Develops comprehensive definitions of "capital expenditures" and "capital assets".

(9) Adopts the use of a consolidating budget document to eliminate the difficulty of grasping the State's annual shortfall or its accumulated deficits due to the amount of data, the complexity of that data, the relative scale of the State's financial operations, and the inadequate reporting systems.

(10) Addresses the State's unusual reliance upon the use of more than 600 special funds.

(11) Defines "trust funds" as those with a fiduciary component.

(12) Requires production of the Consolidated Annual Financial Report within 90 days after the end of the State's fiscal year.

(13) Enables any analysis of the State's budget to be conducted in a holistic fashion that requires gross cash flowing into the State's accounts to be adjusted to reflect what is actually available to the State and expenditures flowing out to be similarly modified.

(14) Establishes a more certain definition of "funds available", to which the Governor and General Assembly are constitutionally limited for expenditure, by evaluating such concepts as the use of earned revenues only, the sweeping of funds, the characterization of debt proceeds as available funds, and the restricted or unrestricted nature of federal funds.

(15) Enables inclusion in the State budget of accurate State obligations, including but not limited to current and future personnel benefit costs and lapse-period expenditures.

Section 10. Definitions; prohibition against covering operating expenses or expenditures by incurring certain debt.

(a) "General long-term capital debt", "operating debt", "operating expenditures", "capital expenditures", and "debt service expenditures" shall be as defined by Governmental Accounting Standards Board Statement 11. "Full accrual" and "fiduciary funds" shall be as defined by Governmental Accounting Standards Board Statement 34.

(b) The fiscal deficit of the State is the excess of full accrual expenses over full accrual revenues. A fiscal surplus is the excess of full accrual revenues over full accrual expenses.

(c) The State shall not incur general long-term capital debt, and shall not incur operating debt, in order to cover operating expenses or operating expenditures.

Section 15. Electronic publication of appropriation bills; publication deadlines with respect to second and third readings. The General Assembly shall publish, by means of the Internet on a web page controlled by the General Assembly, the texts of all appropriation bills. Each publication shall include an embedded time stamp setting forth the time of electronic publication, and no bill to appropriate funds shall be passed on third reading until at least 72 hours after the time of electronic publication. No amendment to an appropriation bill shall be considered on second reading until at least 72 hours after the amendment has been published electronically.

Section 20. Passage of appropriation bills prohibited before adoption of joint resolution. The General Assembly shall not pass any bill to appropriate funds within any fiscal year prior to its adoption of the joint resolution reflecting the estimate for that fiscal year.

Section 25. State funds as fiduciary funds. All State funds shall be fiduciary funds unless explicitly provided otherwise by law.

Section 90. The State Comptroller Act is amended by changing Sections 6.01 and 20 as follows:

(15 ILCS 405/6.01) (from Ch. 15, par. 206.01)

Sec. 6.01. Specification and establishment of accounting standards and principles. The Comptroller shall specify and establish the financial accounting and reporting standards and principles to be used by all State government and State agencies. The standards and principles shall be effective upon filing by the Comptroller with the Auditor General. Effective January 1, 2011, the financial accounting and reporting standards to be used by all State government and State agencies shall be in compliance with full accrual accounting standards as defined by the Governmental Accounting Standards Board (GASB). The Comptroller shall maintain and publish the standards and principles as a public document. These standards and principles shall be known as the Generally Accepted Accounting Standards and Principles for Illinois State Government, and shall, whenever possible, be compatible with any similar nationally existing generally accepted accounting standards and principles for government.

In establishing the Generally Accepted Accounting Standards and Principles for Illinois State Government, the Comptroller shall consult with the Governor and the other members of the Executive Branch, the Chief Justice of the Supreme Court, and the leadership of the General Assembly and shall provide to these officials draft copies of any proposed standards at least 90 days prior to their adoption and shall consider any responses or suggestions that these officials may present.

(Source: P.A. 86-1415.)

(15 ILCS 405/20) (from Ch. 15, par. 220)

Sec. 20. Annual report. The comptroller shall annually, as soon as possible after the close of the fiscal year but no later than December 31, make out and present to the Governor, the President of the Senate, the Speaker of the House of Representatives, the Minority Leader of the Senate, and the Minority Leader of the House of Representatives a report, showing the amount of warrants drawn on the treasury, on other funds held by the State Treasurer and on any public funds held by State agencies, during the preceding fiscal year, and stating, particularly, on what account they were drawn, and if drawn on the contingent fund, to whom and for what they were issued. He shall, also, at the same time, report to the Governor, the President of the Senate, the Speaker of the House of Representatives, the Minority Leader of the Senate, and the Minority Leader of the House of Representatives the amount of money received into the treasury, into other funds held by the State Treasurer and into any other funds held by State agencies during the preceding fiscal year, and stating particularly, the source from which the same may be derived, and also a general account of all the business of his office during the preceding fiscal year. The report shall also summarize for the previous fiscal year the information required under Section 19.

Within 60 days after the expiration of each calendar year, the comptroller shall compile, from records maintained and available in his office, a list of all persons including those employed in the office of the comptroller, who have been employed by the State during the past calendar year and paid from funds in the hands of the State Treasurer.

The list shall be arranged according to counties and shall state in alphabetical order the name of each employee, the address in the county in which he votes, except as specified below, the position and the total salary paid to him during the past calendar year. For persons employed by the Department of Corrections, Department of Children and Family Services and the Department of State Police no address shall be listed. The list so compiled and arranged shall be kept on file in the office of the comptroller and be open to inspection by the public at all times.

No person who utilizes the names obtained from this list for solicitation shall represent that such solicitation is authorized by any officer or agency of the State of Illinois. Violation of this provision is a Business Offense punishable by a fine not to exceed $3,000.

Effective January 1, 2011, the Comptroller shall publish a Consolidated Annual Financial Report (CAFR) no more than 90 days after the end of each State fiscal year. The Report shall be prepared in accordance with the principles of full accrual accounting. The Report shall include explanations of any variance that exists between the estimates adopted by the General Assembly for each fiscal year and the actual numbers reported. The Comptroller shall, by administrative rule, determine a time line and protocol for the publication of this Report.

(Source: P.A. 86-1003.)

Section 95. The Commission on Government Forecasting and Accountability Act is amended by changing Section 4 as follows:

(25 ILCS 155/4) (from Ch. 63, par. 344)

Sec. 4. (a) The Commission shall publish, at the convening of each regular session of the General Assembly, a report on the estimated income of the State from all applicable revenue sources for the next ensuing fiscal year and of any other funds estimated to be available for such fiscal year. On the third Wednesday in March after the session convenes, the Commission shall issue a revised and updated set of revenue figures reflecting the latest available information. The House and Senate by joint resolution shall adopt or modify such estimates as may be appropriate. The joint resolution shall constitute the General Assembly's estimate, under paragraph (b) of Section 2 of Article VIII of the Constitution, of the funds estimated to be available during the next fiscal year.

(a-5) The annual March estimates issued by the Commission shall include statements of the State's estimated revenues, estimated balance sheet, estimated cash flow, and estimated fiscal surplus or deficit. These estimates shall be based upon principles of full accrual accounting. The March estimates shall include a variance report of the ongoing fiscal year's budget and appropriations.

(a-10) In publishing its estimates, the Commission shall adhere to the standards published by the Governmental Accounting Standards Board (GASB). In adopting and, when appropriate, modifying these estimates prior to adoption of the joint resolution embodying these estimates, the General Assembly shall adhere to the standards published by GASB.

(b) On the third Wednesday in March, the Commission shall issue estimated:

(1) pension funding requirements under P.A. 86-273; and

(2) liabilities of the State employee group health insurance program.

These estimated costs shall be for the fiscal year beginning the following July 1.

(c) The requirement for reporting to the General Assembly shall be satisfied by filing copies of the report with the Speaker, the Minority Leader and the Clerk of the House of Representatives and the President, the Minority Leader and the Secretary of the Senate and the Legislative Research unit, as required by Section 3.1 of the General Assembly Organization Act, and filing such additional copies with the State Government Report Distribution Center for the General Assembly as is required under paragraph (t) of Section 7 of the State Library Act.

(d) For each fiscal year, the General Assembly shall adopt a joint resolution reflecting the estimated income, estimated balance sheet, estimated cash flow, and estimated fiscal surplus or deficit of the State. These estimates shall be based upon principles of full accrual accounting. The General Assembly shall not pass any bill to appropriate funds within any fiscal year prior to its adoption of the joint resolution reflecting the estimate for that fiscal year.

(Source: P.A. 93-632, eff. 2-1-04.)

Section 99. Effective date. This Act takes effect upon becoming law.