Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                          Act 1058 of the Regular Session
 State of Arkansas                   As Engrossed:       S4/26/21
 93rd General Assembly                        A Bill
 Regular Session, 2021                                                             SENATE BILL 375
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 By: Senators J. Dismang, Hickey
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                                   For An Act To Be Entitled
                AN ACT TO DEFINE THE MONIES TO BE AVAILABLE IN THE
                RESTRICTED RESERVE FUND; AND TO ALLOW THAT ADDITIONAL
                FUNDS MAY BE MADE AVAILABLE FOR STATE AGENCIES AND
                INSTITUTIONS APPROPRIATIONS; AND FOR OTHER PURPOSES
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                                               Subtitle
                         AN ACT TO DEFINE THE MONIES TO BE
                         AVAILABLE IN THE RESTRICTED RESERVE FUND;
                         AND TO ALLOW THAT ADDITIONAL FUNDS MAY BE
                         MADE AVAILABLE FOR STATE AGENCIES AND
                         INSTITUTIONS APPROPRIATIONS; AND FOR
                         OTHER PURPOSES
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 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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         SECTION 1.       DO NOT CODIFY.      Legislative findings  Nonseverability.
         (a)   The General Assembly finds that:
                (1)      Determining the maximum amount of appropriation and funding
 for a state agency or institution each fiscal year is the prerogative of the
 General Assembly;
                (2)      Determining the maximum amount of appropriation and funding
 for a state agency or institution is usually accomplished by delineating the
 maximum amounts in the appropriation acts for the state agency or institution
 and in the general revenue allocations authorized for each relevant fund and
 fund account by amendment to the Revenue Stabilization Law,  19-5-101 et
 seq.;
                (3)      The Restricted Reserve Fund has established procedures for
     *JKA001*                                                                    04-26-2021 13:21:36 JKA001
     As Engrossed:      S4/26/21                                                SB375
 the transfer of funds to various funds and fund accounts for the efficient
 and effective operation of state government; and
              (4)    It is necessary and appropriate that the General Assembly
 maintain oversight by requiring prior approval of the Legislative Council or,
 if the General Assembly is in session, the Joint Budget Committee, as
 provided in  19-5-1263(c).
      (b)    The requirement of approval by the Legislative Council or, if the
 General Assembly is in session, the Joint Budget Committee, is not a
 severable part of  19-5-1263.     If the requirement of approval by the
 Legislative Council or, if the General Assembly is in session, the Joint
 Budget Committee, is ruled unconstitutional by a court of competent
 jurisdiction,  19-5-1263 (c)(d) and (e) are void in their entirety.
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      SECTION 2. DO NOT CODIFY.     TRANSFERS TO THE RESTRICTED RESERVE FUND.
 Immediately upon the effective date of this Act, as soon thereafter as is
 practical or as authorized in this Section the State Treasurer shall transfer
 and credit to the "Restricted Reserve Fund or the Rainy Day Fund as
 authorized in subsection (a)(2) herein, upon certification of the amounts
 thereof by the Chief Fiscal Officer of the State, the following:
    (a)(1)    Any unobligated funds, which are set aside as authorized in
 Subsections (b)(2)(4)(5)(6) and (7) of Section 3 of Act 1023 of 2019,
 remaining in the Rainy Day Fund, on July 1, 2021;
           (2) Any unobligated funds remaining in the Rainy Day Fund from funds
 made available Subsections (d)(1) and (2) of Section 3 of Act 1023 of 2019
 shall be transferred to the Rainy Day Fund, on July 1, 2021;
           (3) Any unobligated funds remaining in the Rainy Day Fund from funds
 made available for the Debt Obligations/Priority Rainy Day Set-Aside, for a
 transfer to the Economic Development Incentive Quick Action Closing Fund as
 authorized in subsection (b)(3) of Section 3 of Act 1023 of 2019 shall be
 transferred and credited to the Restricted Reserve Fund for the Quick Action
 Closing Fund Carry Forward Set-Aside authorized in Section 3(a)(3)(B) of this
 Act, on July 1, 2021;
     (b)    All unobligated and unallocated monies remaining in the "General
 Improvement Fund" or the Development and Enhancement Fund on June 30, 2021
 which are not required to finance projects to be financed therefrom pursuant
 to appropriations enacted by the General Assembly, or which have not been
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     As Engrossed:    S4/26/21                                                    SB375
 reappropriated or reallocated for financing from the Development and
 Enhancement Fund by the 93rd General Assembly;
     (c)(1) Any unobligated or unallocated funds remaining on July 2, 2021 in
 the "General Revenue Allotment Reserve Fund" from monies accruing thereto
 which are not required to finance enactments of the 93rd General Assembly
 that do not expire on June 30, 2021, including all General Revenue Funds
 recovered from remaining fund balances;
           (2) All General Revenue Funds recovered from remaining fund balances
 in the "General Revenue Allotment Reserve Fund" from monies accruing thereto
 during the 2021-2022 fiscal year which are not required to finance enactments
 of the 93rd General Assembly that do not expire on June 30, 2022, including
 all General Revenue Funds recovered from remaining fund balances;
     (d)     Those special revenues credited to the General Improvement Fund or
 the Development and Enhancement Fund from estate taxes as set out in Arkansas
 Code  19-6-301(171);
     (e) Other revenues as may be transferred or authorized by law.
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      SECTION 3.    DO NOT CODIFY. RESTRICTED RESERVE FUND DISTRIBUTION AND
 SET-ASIDES.    (a) After having transferred or set-aside the obligations as set
 out in 19-5-202(b)(2)(B)(iii) as determined by the Chief Fiscal Officer of
 the State, those funds transferred and credited to the Restricted Reserve
 Fund as authorized in Section 2 of this Act and any current unobligated
 balances in the Restricted Reserve Fund, the State Treasurer shall first set-
 aside one hundred seventy one million four hundred and five thousand dollars
 ($171,405,000) for the "Restricted Reserve Fund Set-Asides" as enumerated in
 subsections (a)(1) through (a)(3) of this section, with the exception of
 (a)(3)(B) Quick Action Closing Fund Carry Forward Set-Aside funds to be made
 available as authorized in Section 2(a)(3) of this Act.
           (1) Not withstanding other provisions of law as set out in 19-5-
 1263(c) the Set-Asides authorized in subsections (a)(1)(A) and (B) herein
 shall require prior approval of the greater of three-fifths (3/5) of the
 quorum present or a majority of the membership by the Legislative Council
 during the extended recess, beginning on May 1, 2021, of the 2021 Regular
 Session or during the interim, or the Joint Budget Committee during a regular
 session, fiscal session, or extraordinary session of the General Assembly in
 the vote for the disbursements;
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     As Engrossed:     S4/26/21                                                   SB375
           (A) Executive/Legislative 3/5 Vote Set-Aside.      For transfers from
 time to time as determined by the Chief Fiscal Officer of the State, in a sum
 not to exceed $133,500,000;
           (B) State Police Vehicles 3/5 Vote Set-Aside.      For transfers from
 time to time as determined by the Chief Fiscal Officer of the State for the
 Division of State Police Fund for State Police Vehicles, in a sum not to
 exceed $3,000,000.
         (2) Not withstanding other provisions of law as set out in 19-5-
 1263(c) the Unallocated Restricted Reserve Majority Vote Set-Aside authorized
 in subsections (a)(2)(A) herein shall only require a majority affirmative
 vote as set out in the rules of the Legislative Council during the extended
 recess, beginning on May 1, 2021, of the 2021 Regular Session or during the
 interim, or the Joint Budget Committee during a regular session, fiscal
 session, or extraordinary session of the General Assembly for prior approval
 of the disbursement;
                (A) Unallocated Restricted Reserve Majority Vote Set-Aside.      For
 transfers from time to time as determined by the Chief Fiscal Officer of the
 State, in a sum not to exceed $15,000,000.
         (3) Not withstanding other provisions of law the Set-Asides
 authorized in subsections (a)(3)(A) through (C) herein shall not be subject
 to the approval requirements set out 19-5-1263(c) and shall only require
 reporting of the date and amount of transfers;
                (A) Economic Stimulus Programs Set-Aside.   For transfers from
 time to time to the Department of Commerce Arkansas Economic Development
 Commission to fund or fund accounts as determined by the Chief Fiscal Officer
 of the State for funding for economic stimulus activities throughout the
 state, in a sum not to exceed $5,800,000;
            (B) Quick Action Closing Fund Carry Forward Set-Aside.      To the
 Economic Development Incentive Quick Action Closing Fund, for incentives to
 attract new business and economic development to the state, for transfers
 from time to time from funds made available as authorized in Section 2(a)(3)
 of this Act;
            (C) Department of Correction Lease Payments Set-Aside.      For the
 Department of Correction to the Development and Enhancement Fund or its
 successor fund or fund accounts or any appropriation authorized by the
 General Assembly for the Department of Correction debt service payments, in a
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     As Engrossed:     S4/26/21                                                       SB375
 sum not to exceed $14,105,000.
        (b) The next ten million dollars ($10,000,000) shall be transferred to
 the Rainy Day Fund. This transfer to the Rainy Day Fund shall not be subject
 to the approval requirements set out 19-5-1263(c), however after the funds
 are transferred to the Rainy Day Fund those funds shall be subject to any
 requirements set out in law for Rainy Day Fund distributions for reporting or
 prior approval by the Legislative Council during the extended recess,
 beginning on May 1, 2021, of the 2021 Regular Session or during the interim,
 or the Joint Budget Committee during a regular session, fiscal session, or
 extraordinary session of the General Assembly.
        (c) Then all remaining unobligated funds not set-aside, that are
 transferred or credited to the Restricted Reserve Fund and any future
 collections, deposits and transfers authorized in Section 2 of this Act shall
 be transferred and credited to the Long Term Reserve Fund.
   (d) On July 1, 2023 any unobligated funds remaining in the Restricted
 Reserve Fund Set-Asides established in subsection (a) herein shall be
 transferred to the Long Term Reserve Fund.
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         SECTION 4. CODE AMENDMENT.      Arkansas Code  19-5-1262 is repealed.
                    19-5-1262.     Rainy Day Fund.
                    (a)    There is created on the books of the Treasurer of State,
 the Auditor of State, and the Chief Fiscal Officer of the State a
 miscellaneous fund to be known as the Rainy Day Fund.
                    (b)    The Rainy Day Fund shall consist of:
                          (1)   Funds transferred to the Rainy Day Fund from the
 General Improvement Fund or its successor fund or fund accounts, including
 the Development and Enhancement Fund;
                          (2)   Attorney General settlement funds;
                          (3)   Interagency transfers of funds to the Rainy Day
 Fund;
                          (4)   Any revenues provided by law; and
                          (5)   Any other funds and fund transfers provided for by
 law.
                    (c)    The Chief Fiscal Officer of the State shall use the
 Rainy Day Fund for transfers to:
                          (1)(A)   Provide funding for one (1) or more
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     As Engrossed:    S4/26/21                                                        SB375
 appropriations or reappropriations enacted by the General Assembly from the
 General Improvement Fund or its successor fund or fund accounts, including
 the Development and Enhancement Fund.
                              (B)   At the time of a transfer under subdivision
 (c)(1)(A) of this section, the Chief Fiscal Officer of the State shall notify
 the Legislative Council or, if the General Assembly is in session, the Joint
 Budget Committee, of the transfer of funds, the amount of funds transferred,
 and the purpose of the transfer; and
                        (2)     One (1) or more funds or fund accounts authorized by
 the General Assembly, other than the General Improvement Fund or its
 successor fund or fund accounts, including the Development and Enhancement
 Fund, upon prior approval by the Legislative Council or, if the General
 Assembly is in session, the Joint Budget Committee.
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         SECTION 5.   EFFECTIVE DATE.      Section 4 of this act is effective on and
 after December 31, 2022 and any remaining unobligated balances in the Rainy
 Day Fund shall be transferred to the Long Term Reserve Fund at that time.
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         SECTION 6.   CODE AMENDMENT.     Arkansas Code  19-5-406, concerning the
 transfer of remaining general revenues is amended to read as follows:
 19-5-406. Transfer of remaining revenues.
 After making the maximum annual allocation as provided for in  19-5-402:
   (1)     The first two hundred million shall be distributed as follows:
         (1)(A) Seventy-five percent (75%) of the remaining general revenues
 available for distribution during each fiscal year shall be transferred on
 the last day of business in each calendar month to the General Revenue
 Allotment Reserve Fund, there to be used for the respective purposes as
 provided by law; and
         (2)(B) Twenty-five percent (25%) of the remaining general revenues
 available for distribution during each fiscal year shall be transferred on
 the last day of business in each calendar month to the Arkansas Highway
 Transfer Fund State Highway and Transportation Department Fund.
    (2) Any additional revenues available after the distributions in
 subsection (1) shall be transferred on the last day of business in each
 calendar month to the General Revenue Allotment Reserve Fund, there to be
 used for the respective purposes as provided by law.
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     As Engrossed:      S4/26/21                                                  SB375
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      SECTION 7.      Arkansas Code  19-5-1263(c) and (d), concerning the
 Restricted Reserve Fund, are amended to read as follows:
     (c)     For the purpose of and after meeting the requirements of subsection
 (d) of this section, the Chief Fiscal Officer of the State may from time to
 time transfer on his or her books and those of the Treasurer of State and the
 Auditor of State funds from the Restricted Reserve Fund to one (1) or more
 general revenue operating funds or fund accounts, the Miscellaneous Agencies
 Fund Account, the Arkansas Department of Transportation for state matching
 funds, and the State Central Services Fund, the Development and Enhancement
 Fund, and any fund, fund account, or appropriations authorized by the General
 Assembly upon prior approval of the greater of three-fifths (3/5) of the
 quorum present or a majority of the membership of the Legislative Council or,
 if the General Assembly is in session, the Joint Budget Committee.
     (d)(1)      If at any time during the fiscal year a department, state
 agency, board, commission, state institution of higher education, or
 constitutional officer determines that it is necessary to perform its duties
 or is in the best interest of the citizens of the State of Arkansas to
 request a transfer from the Restricted Reserve Fund, that entity shall submit
 a detailed request in writing to the Chief Fiscal Officer of the State
 stating:
                     (A)   The need and purpose of the transfer;
                     (B)   Efforts to find efficiencies and savings prior to making
 the request;
                     (C)   Current year-to-date budget and expenditures by line
 item; and
                     (D)   A detailed line item budget reflecting proposed
 expenditures in the amount requested.
              (2)    The Chief Fiscal Officer of the State may request additional
 information to make a determination and may then approve, modify, or deny the
 request.
              (3)    Upon the determination by the Chief Fiscal Officer of the
 State that a transfer is necessary, the Chief Fiscal Officer of the State
 shall submit the entity's request and his or her recommendation for approval
 as required in subsection (c) of this section.
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