HB199 By Representative Poole RFD Ways and Means Education Rd 1 11-FEB-16

SYNOPSIS: In order to further provide for efficient and effective budgeting of the revenues of the state, this bill amends the Budget Management Act of 1976 so as to provide for biennial budget periods, annual fiscal accounting, and performance review. Provision is made for the State General Fund and the Education Trust Fund biennial budgets to be considered on alternate years, enrolling sufficient financial detail into each budget so as to adequately define each source of revenue and totals for each budgeted program, cost center, and line item in each budget and the entire appropriation bill by each source of revenue, and to further provide for performance review of the state agencies, departments, boards, bureaus, the Legislature, and institutions of the state. This bill becoming law is contingent upon the constitutional amendment proposed by HB ___ providing for biennial budgeting sessions of the legislature and approval in a statewide referendum as is provided for in law governing such election.

A BILL TO BE ENTITLED AN ACT

To amend The Budget Management Act of 1976, so as to provide for biennial budgeting by the State of Alabama and to further provide for performance review of entities funded by the State of Alabama.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Sections 41-19-1, 41-19-3 through 41-19-8, and 41-19-10 through 41-19-12, Code of Alabama 1975, are hereby amended to read as follows:

§41-19-1.

"This chapter may be cited as The Budget Management and Performance Review Act of 2016.

§41-19-3.

"It is the purpose of this chapter to establish a comprehensive system for budgeting, and financial management, and performance review which furthers the capacity of the Governor and the Legislature to plan and finance the services which they determine the state will provide for citizens. The system shall include procedures for all of the following:

"(1) The orderly establishment, continuing review, and periodic revision of the program and financial goals and policies of the state.

"(2) The development, coordination, and review of long-range program and financial plans that will implement established state goals and policies.

"(3) The preparation, coordination, analysis, and enactment of a budget budgets, organized to focus on state services and their costs, and that authorizes authorize the implementation of policies and plans in the succeeding budget period.

"(4) The evaluation of alternatives to existing policies, plans, and procedures that offer potential for more efficient or effective state services.

"(5) The regular appraisal and reporting of program performance.

"To this end, each Governor shall develop a four-year strategic plan and executive budget for presentation to the Legislature prior to the first day of the second regular seven days in advance of each fiscal legislative session in a format to be determined by the Governor each term of office. The plan shall encompass the basic appropriations for fiscal years included in the budget period to be addressed in the fiscal session and shall include program, long-range revenue and expenditure plans for the quadrennium, improvements in the state infrastructure requiring capital outlay, and recommended steps to reduce the cost of operation of state government.

§41-19-3.1.

"The Legislative Council shall serve in an advisory capacity to the Governor in the development of the long-range program, revenue and expenditure plans, and in the performance review of agencies, departments, boards, bureaus, the Legislature, and institutions of the state. The Legislative Council shall be aided by the Legislative Fiscal Office.

§41-19-4.

"The Beginning in the calendar year 2017, the Governor shall present, on or before the seventh day in advance of each fiscal session of the Legislature, is responsible for the preparation and administration of the state an executive budget for the two years of basic appropriations to be addressed in that fiscal session. The executive budget shall be based on and the evaluation of the long range agency/department program plans plan, and requested budgets, and the examination of alternatives. to state agency/department policies and programs and formulation and recommendation for consideration by the Legislature of a proposed comprehensive program and financial plan which The executive budget shall cover all estimated receipts and expenditures of the state government, including all grants, loans and moneys received from the federal government. Proposed expenditures shall not exceed estimated revenues and resources.

For transition purposes, the Governor shall present a one-year executive budget for the ordinary expenses of the executive, legislative, and judicial departments, and associated debt service, of the state on or before the first legislative day of the regular session of 2017 for fiscal year 2018.

§41-19-5.

"The Department of Finance shall:

"(1) Assist the Governor in the preparation and explanation of the proposed comprehensive program and financial plan, including the coordination and analysis of state agency/department program goals and objectives, program plans and program budget requests;

"(2) Develop procedures to produce the information needed for effective decision making;

"(3) Assist agencies/departments in preparing their statement of goals and objectives, program plans, program budget requests and reporting of program performance and review;

"(4) Administer its responsibilities under the program execution provisions of this chapter so that the policy decisions and budget determination of the Governor and the Legislature are implemented to the fullest extent possible within the concepts of proper management;

"(5) Provide the Legislature with budget information related to the development of recommendations for each fiscal year of each biennial period; and

"(6) Assist agencies/departments in the preparation of their proposals under Section 41-19-6. This assistance shall include organization of materials, provision of centrally collected accounting, budgeting and personnel information, standards and guidelines formulation, provision of population and other required data, and any other assistance that will help the state agencies/departments produce the information necessary for efficient agency/department management and effective decision making by the Governor and the Legislature for each fiscal year of the biennial budget period.

§41-19-6.

"(a) Each state agency/department, on the date and in the form and content prescribed by the Department of Finance, shall prepare and forward to the Budget Officer the following program and financial information:

"(1) The goals and objectives of the agency/department programs, together with proposed supplements, deletions and revisions to such programs for each fiscal year of the biennial budget period;

"(2) Its proposed plans to implement the goals and objectives, including estimates of future service needs, planned methods of administration, proposed modification of existing program services and establishment of new program services, and the estimated resources needed to carry out the proposed plan;

"(3) The budget requested request for each fiscal year of the biennial budget period to carry out its proposed plans in the succeeding fiscal year. The budget request information shall include the expenditures during the last fiscal year, those estimated for the current fiscal year, those proposed for each of the two succeeding fiscal year years of the budget period, and any other information requested by the Department of Finance;

"(4) A report of the revenues during the last fiscal year, an estimate of the revenues during the current fiscal year and an estimate for the each succeeding fiscal year of the biennial budget period;

"(5) A statement of legislation required to implement the proposed programs and financial plans; and

"(6) An evaluation of the advantages and disadvantages of specific alternatives to existing or proposed program policies or administrative methods.

"(b) The state agency/department proposals prepared under subsection (a) of this section shall describe the relationships of their programs services to those of other state agencies/departments and other branches of state government.

"(c) If any state agency/department fails to transmit the program and financial information required under subsection (a) of this section on the specified date, the Department of Finance may prepare such information.

"(d) The Department of Finance shall compile and submit to the Governor or the Governor-elect for any year when a new Governor has been elected, not later than November 20, a summary of the program and financial information prepared by state agencies/departments.

§41-19-7.

"(a) The Governor shall formulate the program and financial plan to be recommended to the Legislature after considering each state agency's proposed program and financial plan. The Governor's plan shall include his recommended goals and policies, recommended plans to implement the goals and policies, recommended budget for the two succeeding fiscal year years of the biennial budget period and recommended revenue measures to balance the budget.

"Beginning in the calendar year 2017, the Governor’s plan shall focus on the basic appropriations and fiscal years included in the biennial budget period to be addressed in the fiscal session.

"(b) The proposed comprehensive program and financial plan shall be presented by the Governor in a message to a joint session of the Legislature on or before the fifth first legislative day of each regular fiscal session of the Legislature. This presentation shall explain the budget plan previously submitted to the Legislature seven days in advance of the Legislative Fiscal Session. The message shall be accompanied by an explanatory report which summarizes recommended goals, plans and appropriations. The explanatory report shall be furnished each member of the Legislature and each state agency/department on or before the fifth seventh day in advance of the first legislative day of the regular fiscal session of the Legislature. The report shall contain the following information:

"(1) The coordinate program goals and objectives that the Governor recommends to guide the decisions on the proposed program plans and budget appropriations;

"(2) The program and budget recommendations of the Governor for each fiscal year of the succeeding fiscal year biennial budget period;

"(3) A summary of state revenues in the last fiscal year, a revised estimate for the current fiscal year and an estimate for the succeeding each fiscal year of the succeeding biennial budget period;

"(4) A summary of expenditures during the last fiscal year, those estimated for the current fiscal year and those recommended by the Governor for the each fiscal year of the succeeding fiscal year biennial budget period; and

"(5) Any additional information which will facilitate understanding of the Governor's proposed program and financial plan by the Legislature and the public.

§41-19-8.

"The Legislature shall:

"(1) Consider the program and financial plan recommended by the Governor, including proposed goals and policies, tax rate and other revenue changes and long range program plans;

"(2) Adopt programs and alternatives to the plan recommended by the Governor which it deems appropriate;

"(3) Adopt legislation to authorize the implementation of a comprehensive program and financial plan; and

"(4) Provide for performance review of agency/departments in each fiscal year of the biennial budget period and for a post audit of financial transactions, program accomplishments and execution of legislative policy direction.

§41-19-10.

"(a) Except as limited by policy decisions of the Governor, appropriations by the Legislature and other provisions of law, the several state agencies/departments shall have full authority for administering their program assignments and appropriations and shall be responsible for their proper management.

"(b) Each state agency/department shall prepare an annual plan for the operation of each of its assigned programs for each fiscal year of the biennial budget period. The operations plan shall be prepared in the form and content and be transmitted on the date prescribed to the Department of Finance. The operations plan shall be separate for each fiscal year of the biennium; provided, however, that unexpended funds for the first fiscal year of a biennial budget period may be carried forward and expended in the second fiscal year of the biennial budget period. Funds unexpended at the end of the biennial budget period shall revert to the respective fund.

"(c) The Department of Finance shall:

"(1) Review each operations plan to determine that it is consistent with the policy decisions of the Governor and appropriations by the Legislature, that it reflects proper planning and efficient management methods and that appropriations have been made for the planned purpose and will not be exhausted before the end of each fiscal year of the biennial budget period;

"(2) Approve the operations plan if satisfied that it meets the requirements under subdivision (1) of this subsection; otherwise, the Department of Finance shall require revision of the operations plan in whole or in part; and

"(3) Modify or withhold the planned expenditures at any time during the appropriation period if the Department of Finance finds that such expenditures are greater than those necessary to execute the programs at the level authorized by the Governor and the Legislature or that the revenues and resources will be insufficient to meet the authorized expenditure levels.

"(d) No state agency/department may increase salaries of its employees, employ additional employees or expend money or incur any obligations except in accordance with law and with a properly approved operations plan by the Director of Finance.

"(e) Appropriation transfers or changes as between objects of expenditures within a program may be made only by the Director of Finance. Appropriation transfers or changes between programs within an agency/department may be made only by the Governor and shall be reported to the Legislature quarterly. No transfers shall be made between agencies/departments except pursuant to interagency agreements executed for purposes of accomplishing objectives for which the funds involved were appropriated.

"(f) The Department of Finance shall report quarterly to the Governor and the Legislature on the operations of each state agency/department, relating actual accomplishments to those planned and modifying, if necessary, the operations plan of any agency/department for the balance of the each fiscal year of the biennial budget period.

§41-19-11.

"(a) Each state agency/department, shall submit a performance report to the Department of Finance on or before November 1 for the preceding fiscal year. These reports shall be in the form prescribed by the Budget Officer and shall include statements concerning:

"(1) The work accomplished and the services provided in the preceding fiscal year or other meaningful work period, relating actual accomplishments to those planned under subsection (b) of Section 41-19-10;

"(2) The relationship of accomplishments and services to the policy decisions and budget determinations of the Governor and the Legislature;

"(3) The costs of accomplishing the work and providing the services, to the extent feasible, citing meaningful measures of program effectiveness and costs; and

"(4) The administrative improvements made in the preceding year, potential improvements in future years and suggested changes in legislation or administrative procedures to make further improvements.

"(b) The Finance Department shall summarize the performance reports and forward copies these reports to each member of the Legislature annually in a form to be determined by the Finance Department.

"(c) In order to accomplish the provisions of this Act, there is hereby created within the Office of the State Finance Director the Division of Planning. The Director of this Division shall be appointed by the Finance Director and shall not be under the state merit system. Additional employees of this Division may be subject to the state merit system.

"(d) In order to assure effective administration of the planning and performance management provisions of this Act, The Budget and Planning Divisions of the Finance Department shall be funded by an assessment made against each state agency, department, board, bureau, the Legislature, and each institution of higher education of the state receiving a state appropriation and required to participate in the requirements of this Chapter.

§41-19-12.

"(a) Any person in state government, including elected or appointed officials, who prepares false budget or fiscal information to be presented to any legislative committee or who presents false budget or fiscal information to any legislative committee, knowing such budget or fiscal information to be false, shall be guilty of a misdemeanor and, on conviction, shall be imprisoned in the county jail for not more than one year and may also be fined not more than $1,000.00 $10,000.00.

"(b) In the event of a second conviction under this section, such person shall be forever ineligible to hold any position with the State of Alabama."

Section 2. Section 41-19-3.2, Code of Alabama 1975, is hereby added to read as follows:

"§41-19-3.2

"Beginning in the calendar year 2017, regular session of the Legislature shall begin on the last Tuesday of January in each calendar year from which bills making appropriations shall be excluded. On the fourth Tuesday of April of each calendar year, a fiscal session of the Legislature shall be held annually following the regular session. The fiscal session shall be limited to 12 legislative days and 30 calendar days. While in fiscal session, the Legislature shall consider only bills making basic appropriations for the two succeeding fiscal years or amending such bills as the legislature shall determine. The basic appropriations in these bills shall be itemized and totaled for each fiscal year of the biennial budget period.

"The term “basic appropriations” means such appropriations as the Legislature may deem appropriate for the ordinary expenses of the executive, legislative, and judicial departments of the state, for payment of the public debt, and for education. The legislature shall divide appropriations into two parts, passing basic appropriations for the ordinary expenses of the executive, legislative, and judicial departments of the state in one annual fiscal session, and passing basic appropriations for education in the succeeding annual fiscal session. Appropriations for interest on the public debt divided between the two parts according to the purposes served by the debt.

"Beginning in the calendar year 2017, the Legislature in the fiscal session held in an even calendar year shall pass bills making basic appropriations for the ordinary expenses of the executive, legislative, and judicial departments, and associated debt service, of the state in the fiscal session for the biennial budgeting period beginning with an odd-numbered fiscal year. This bill shall contain basic appropriations for the two succeeding fiscal years.

"Beginning in the calendar year 2018, the Legislature in the fiscal session held in an odd calendar year shall pass bills making basic appropriations for education, and associated debt service, in the fiscal session the biennial budgeting period beginning with an even-numbered fiscal year. These bills shall contain basic appropriations for the two succeeding fiscal years.

"Basic appropriations for interest on the public debt shall be divided between the two types of making basic appropriations according to the purposes served by the debt.

"For transition purposes, the Legislature shall pass a one-year bill making basic appropriations for ordinary expenses of the executive, legislative, and judicial departments, and associated debt service, during the regular legislative session of calendar year 2017. This bill shall provide basic appropriations for fiscal year 2018."

Section 3. Any provision of law in conflict with the provisions of this Act are hereby repealed.

Section 4. If a court of competent jurisdiction shall adjudge to be invalid or unconstitutional any clause, sentence, paragraph, section or part of this Act, such judgment or decree shall not affect, impair, invalidate or nullify the remainder of this Act, but the effect thereof shall be confined to the clause, sentence, paragraph, section, part of this Act so adjudged to be invalid or unconstitutional.