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.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning State government.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 1. Short title. This Act may be cited as the Truth
5 in Accounting Act of 2010.
 
6     Section 5. Legislative intent. It is the intent of this Act
7 to develop a State budgeting process that:
8         (1) Reflects the State's duty to report the best
9     estimate of its own financial condition.
10         (2) Reflects the principle that the purpose of proper
11     State budgeting is to preserve intergenerational equity,
12     in conformity with the understanding of intergenerational
13     equity promulgated by the Governmental Accounting
14     Standards Board (GASB), and to prevent the imposition of
15     undue burdens upon unborn Illinois residents and Illinois
16     residents who, at the time a budget is enacted into law,
17     are too young to vote.
18         (3) Reflects the principle that it is not proper to
19     incur State debt for operating expenses.
20         (4) Preserves intergenerational equity in the State
21     budgeting process. Prohibiting one generation from
22     obligating future generations comports with the Government
23     Accounting Standards Board's interpretation of the purpose

 

 

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1     of "balanced public budgets".
2         (5) Resolves the ambiguity under the State's current
3     budgeting process of the State's fiscal deficit.
4         (6) Recognizes the distinction between operating
5     budgets and capital budgets and that it is proper to incur
6     long-term obligations to acquire long-lived assets.
7         (7) Addresses the nebulous nature of expenditures that
8     are defined by their funding sources as "capital
9     expenditures" or "operating expenditures" when they may be
10     expenditures of a different type or multiple types.
11         (8) Develops comprehensive definitions of "capital
12     expenditures" and "capital assets".
13         (9) Adopts the use of a consolidating budget document
14     to eliminate the difficulty of grasping the State's annual
15     shortfall or its accumulated deficits due to the amount of
16     data, the complexity of that data, the relative scale of
17     the State's financial operations, and the inadequate
18     reporting systems.
19         (10) Addresses the State's unusual reliance upon the
20     use of more than 600 special funds.
21         (11) Defines "trust funds" as those with a fiduciary
22     component.
23         (12) Requires production of the Consolidated Annual
24     Financial Report within 90 days after the end of the
25     State's fiscal year.
26         (13) Enables any analysis of the State's budget to be

 

 

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1     conducted in a holistic fashion that requires gross cash
2     flowing into the State's accounts to be adjusted to reflect
3     what is actually available to the State and expenditures
4     flowing out to be similarly modified.
5         (14) Establishes a more certain definition of "funds
6     available", to which the Governor and General Assembly are
7     constitutionally limited for expenditure, by evaluating
8     such concepts as the use of earned revenues only, the
9     sweeping of funds, the characterization of debt proceeds as
10     available funds, and the restricted or unrestricted nature
11     of federal funds.
12         (15) Enables inclusion in the State budget of accurate
13     State obligations, including but not limited to current and
14     future personnel benefit costs and lapse-period
15     expenditures.
 
16     Section 10. Definitions; prohibition against covering
17 operating expenses or expenditures by incurring certain debt.
18     (a) "General long-term capital debt", "operating debt",
19 "operating expenditures", "capital expenditures", and "debt
20 service expenditures" shall be as defined by Governmental
21 Accounting Standards Board Statement 11. "Full accrual" and
22 "fiduciary funds" shall be as defined by Governmental
23 Accounting Standards Board Statement 34.
24     (b) The fiscal deficit of the State is the excess of full
25 accrual expenses over full accrual revenues. A fiscal surplus

 

 

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1 is the excess of full accrual revenues over full accrual
2 expenses.
3     (c) The State shall not incur general long-term capital
4 debt, and shall not incur operating debt, in order to cover
5 operating expenses or operating expenditures.
 
6     Section 15. Electronic publication of appropriation bills;
7 publication deadlines with respect to second and third
8 readings. The General Assembly shall publish, by means of the
9 Internet on a web page controlled by the General Assembly, the
10 texts of all appropriation bills. Each publication shall
11 include an embedded time stamp setting forth the time of
12 electronic publication, and no bill to appropriate funds shall
13 be passed on third reading until at least 72 hours after the
14 time of electronic publication. No amendment to an
15 appropriation bill shall be considered on second reading until
16 at least 72 hours after the amendment has been published
17 electronically.
 
18     Section 20. Passage of appropriation bills prohibited
19 before adoption of joint resolution. The General Assembly shall
20 not pass any bill to appropriate funds within any fiscal year
21 prior to its adoption of the joint resolution reflecting the
22 estimate for that fiscal year.
 
23     Section 25. State funds as fiduciary funds. All State funds

 

 

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1 shall be fiduciary funds unless explicitly provided otherwise
2 by law.
 
3     Section 90. The State Comptroller Act is amended by
4 changing Sections 6.01 and 20 as follows:
 
5     (15 ILCS 405/6.01)  (from Ch. 15, par. 206.01)
6     Sec. 6.01. Specification and establishment of accounting
7 standards and principles. The Comptroller shall specify and
8 establish the financial accounting and reporting standards and
9 principles to be used by all State government and State
10 agencies. The standards and principles shall be effective upon
11 filing by the Comptroller with the Auditor General. Effective
12 January 1, 2011, the financial accounting and reporting
13 standards to be used by all State government and State agencies
14 shall be in compliance with full accrual accounting standards
15 as defined by the Governmental Accounting Standards Board
16 (GASB). The Comptroller shall maintain and publish the
17 standards and principles as a public document. These standards
18 and principles shall be known as the Generally Accepted
19 Accounting Standards and Principles for Illinois State
20 Government, and shall, whenever possible, be compatible with
21 any similar nationally existing generally accepted accounting
22 standards and principles for government.
23     In establishing the Generally Accepted Accounting
24 Standards and Principles for Illinois State Government, the

 

 

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1 Comptroller shall consult with the Governor and the other
2 members of the Executive Branch, the Chief Justice of the
3 Supreme Court, and the leadership of the General Assembly and
4 shall provide to these officials draft copies of any proposed
5 standards at least 90 days prior to their adoption and shall
6 consider any responses or suggestions that these officials may
7 present.
8 (Source: P.A. 86-1415.)
 
9     (15 ILCS 405/20)  (from Ch. 15, par. 220)
10     Sec. 20. Annual report. The comptroller shall annually, as
11 soon as possible after the close of the fiscal year but no
12 later than December 31, make out and present to the Governor,
13 the President of the Senate, the Speaker of the House of
14 Representatives, the Minority Leader of the Senate, and the
15 Minority Leader of the House of Representatives a report,
16 showing the amount of warrants drawn on the treasury, on other
17 funds held by the State Treasurer and on any public funds held
18 by State agencies, during the preceding fiscal year, and
19 stating, particularly, on what account they were drawn, and if
20 drawn on the contingent fund, to whom and for what they were
21 issued. He shall, also, at the same time, report to the
22 Governor, the President of the Senate, the Speaker of the House
23 of Representatives, the Minority Leader of the Senate, and the
24 Minority Leader of the House of Representatives the amount of
25 money received into the treasury, into other funds held by the

 

 

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1 State Treasurer and into any other funds held by State agencies
2 during the preceding fiscal year, and stating particularly, the
3 source from which the same may be derived, and also a general
4 account of all the business of his office during the preceding
5 fiscal year. The report shall also summarize for the previous
6 fiscal year the information required under Section 19.
7     Within 60 days after the expiration of each calendar year,
8 the comptroller shall compile, from records maintained and
9 available in his office, a list of all persons including those
10 employed in the office of the comptroller, who have been
11 employed by the State during the past calendar year and paid
12 from funds in the hands of the State Treasurer.
13     The list shall be arranged according to counties and shall
14 state in alphabetical order the name of each employee, the
15 address in the county in which he votes, except as specified
16 below, the position and the total salary paid to him during the
17 past calendar year. For persons employed by the Department of
18 Corrections, Department of Children and Family Services and the
19 Department of State Police no address shall be listed. The list
20 so compiled and arranged shall be kept on file in the office of
21 the comptroller and be open to inspection by the public at all
22 times.
23     No person who utilizes the names obtained from this list
24 for solicitation shall represent that such solicitation is
25 authorized by any officer or agency of the State of Illinois.
26 Violation of this provision is a Business Offense punishable by

 

 

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1 a fine not to exceed $3,000.
2     Effective January 1, 2011, the Comptroller shall publish a
3 Consolidated Annual Financial Report (CAFR) no more than 90
4 days after the end of each State fiscal year. The Report shall
5 be prepared in accordance with the principles of full accrual
6 accounting. The Report shall include explanations of any
7 variance that exists between the estimates adopted by the
8 General Assembly for each fiscal year and the actual numbers
9 reported. The Comptroller shall, by administrative rule,
10 determine a time line and protocol for the publication of this
11 Report.
12 (Source: P.A. 86-1003.)
 
13     Section 95. The Commission on Government Forecasting and
14 Accountability Act is amended by changing Section 4 as follows:
 
15     (25 ILCS 155/4)  (from Ch. 63, par. 344)
16     Sec. 4. (a) The Commission shall publish, at the convening
17 of each regular session of the General Assembly, a report on
18 the estimated income of the State from all applicable revenue
19 sources for the next ensuing fiscal year and of any other funds
20 estimated to be available for such fiscal year. On the third
21 Wednesday in March after the session convenes, the Commission
22 shall issue a revised and updated set of revenue figures
23 reflecting the latest available information. The House and
24 Senate by joint resolution shall adopt or modify such estimates

 

 

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1 as may be appropriate. The joint resolution shall constitute
2 the General Assembly's estimate, under paragraph (b) of Section
3 2 of Article VIII of the Constitution, of the funds estimated
4 to be available during the next fiscal year.
5     (a-5) The annual March estimates issued by the Commission
6 shall include statements of the State's estimated revenues,
7 estimated balance sheet, estimated cash flow, and estimated
8 fiscal surplus or deficit. These estimates shall be based upon
9 principles of full accrual accounting. The March estimates
10 shall include a variance report of the ongoing fiscal year's
11 budget and appropriations.
12     (a-10) In publishing its estimates, the Commission shall
13 adhere to the standards published by the Governmental
14 Accounting Standards Board (GASB). In adopting and, when
15 appropriate, modifying these estimates prior to adoption of the
16 joint resolution embodying these estimates, the General
17 Assembly shall adhere to the standards published by GASB.
18     (b) On the third Wednesday in March, the Commission shall
19 issue estimated:
20         (1) pension funding requirements under P.A. 86-273;
21     and
22         (2) liabilities of the State employee group health
23     insurance program.
24     These estimated costs shall be for the fiscal year
25 beginning the following July 1.
26     (c) The requirement for reporting to the General Assembly

 

 

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1 shall be satisfied by filing copies of the report with the
2 Speaker, the Minority Leader and the Clerk of the House of
3 Representatives and the President, the Minority Leader and the
4 Secretary of the Senate and the Legislative Research unit, as
5 required by Section 3.1 of the General Assembly Organization
6 Act, and filing such additional copies with the State
7 Government Report Distribution Center for the General Assembly
8 as is required under paragraph (t) of Section 7 of the State
9 Library Act.
10     (d) For each fiscal year, the General Assembly shall adopt
11 a joint resolution reflecting the estimated income, estimated
12 balance sheet, estimated cash flow, and estimated fiscal
13 surplus or deficit of the State. These estimates shall be based
14 upon principles of full accrual accounting. The General
15 Assembly shall not pass any bill to appropriate funds within
16 any fiscal year prior to its adoption of the joint resolution
17 reflecting the estimate for that fiscal year.
18 (Source: P.A. 93-632, eff. 2-1-04.)
 
19     Section 99. Effective date. This Act takes effect upon
20 becoming law.