2012 -- H 7076

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LC00248

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO PUBLIC FINANCE -- STATE BUDGET

     Introduced By: Representatives Reilly, Newberry, Savage, Chippendale, and Edwards

     Date Introduced: January 11, 2012

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 35-3-4, 35-3-7 and 35-3-9 of the General Laws in Chapter 35-3

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entitled "State Budget" are hereby amended to read as follows:

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     35-3-4. Estimates submitted by department heads. -- (a) On dates determined by the

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budget officer, but not later than the first day of October in each year, each head of a department

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of the state government, not including the general assembly or the judiciary, shall assemble,

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correlate, and revise, with power to increase or decrease, the estimates for expenditures and

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requests for appropriations for the next ensuing fiscal year of each of the divisions, boards,

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commissions, officers, bureaus, institutions, or agencies of the state included within his or her

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department, and, after this revision, shall prepare an itemized departmental estimate of the

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appropriations necessary to meet the financial needs of the department, including a statement in

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detail of all moneys for which any general or special appropriation is desired at the ensuing

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session of the general assembly. The estimate shall be in such form, and in such number of

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copies, and with such explanation as the budget officer may require, and, on dates determined by

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the budget officer, but not later than the first day of October in each year, shall be submitted to

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the governor through the budget officer. The budget officer shall provide copies to the house

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fiscal advisor and senate fiscal advisor.

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      (b) The estimates shall also include a supplemental presentation of estimates of

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expenditures for information resources and information technologies as defined in section 29-8-2,

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regardless of source of financing. The estimate shall include a detailed listing and explanation of

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expenses and the source of funds and shall be in such form, and in such number of copies, and

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with such explanation as the budget officer may require. Copies shall be provided directly to the

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house fiscal advisor, the senate fiscal advisor, and the Rhode Island Information Resources

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Management Board.

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      (c) Commencing with the fiscal year beginning on July 1, 2012, and in accordance with

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the schedule provided herein, the estimates for expenditures and requests for appropriations shall

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be based upon a justification by each department head of the budget of the department from a

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zero base. The budget request shall be accompanied by a statement giving facts and explanations

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of reasons for each item requested. It shall include a brief explanation of the functions of each of

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the divisions, boards, commissions, officers, bureaus, institutions or agencies of the state included

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within the department and comments on its policies and plans, with such descriptive, quantitative,

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comparative and other data as to work done and other information as is considered necessary or

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desirable. “Zero based budget” requests so-called, requests for appropriations based upon a

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justification of a department from a zero base as if the budget for the department was being

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initiated for the first time shall be required based upon the following schedule:

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     (1) Beginning with the fiscal year July 1, 2012, zero based budgets shall be submitted by

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twenty percent (20%) of state departments, being those departments which submitted the lowest

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budget request for the fiscal year beginning July 1, 2011;

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     (2) Beginning with the next fiscal year, zero based budgets shall be submitted by twenty

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percent (20%) of state departments, being those submitting the lowest budget request for the

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fiscal year beginning July 1, 2011, except for those departments included in subsection (1) above;

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     (3) Beginning with the next fiscal year, zero based budget requests shall be submitted by

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twenty percent (20%) of state departments submitting the lowest budget requests for the fiscal

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year beginning July 1, 2011, except for those departments included in subsections (1) and (2);

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     (4) Beginning with the next fiscal year, zero based budget requests shall be submitted by

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twenty percent (20%) of state departments submitting the lowest budget requests for the fiscal

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year beginning July 1, 2011, except for those departments included in subsections (1), (2) and (3)

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herein;

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     (d) For the fiscal year beginning July 1, 2016, and thereafter, zero based budgets shall be

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submitted by all remaining state departments.

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     The budget officer shall provide copies to the house fiscal advisor and senate fiscal

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advisor.

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     35-3-7. Submission of budget to general assembly -- Contents. -- (a) On or before the

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third Thursday in January in each year of each January session of the general assembly, the

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governor shall submit to the general assembly a budget containing a complete plan of estimated

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revenues and proposed expenditures, with a personnel supplement detailing the number and titles

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of positions of each agency and the estimates of personnel costs for the next fiscal year. Provided,

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however, in those years that a new governor is inaugurated, the new governor shall submit the

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budget on or before the first Thursday in February. Beginning with the fiscal year beginning July

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1, 2012, and in accordance with the schedule set forth in section 35-3-4, the budget submitted by

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the governor shall be a “zero based budget,” a budget based upon a justification of each

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department’s estimate of expenditures and requests for appropriations from a zero base. In

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accordance with the schedule set forth in section 35-3-4 the entire budget for the fiscal year

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beginning July 1, 2016, shall be a zero based budget.

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     In the budget the governor may set forth in summary and detail:

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      (1) Estimates of the receipts of the state during the ensuing fiscal year under laws

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existing at the time the budget is transmitted and also under the revenue proposals, if any,

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contained in the budget, and comparisons with the estimated receipts of the state during the

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current fiscal year, as well as actual receipts of the state for the last two (2) completed fiscal

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years.

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      (2) Estimates of the expenditures and appropriations necessary in the governor's

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judgment for the support of the state government for the ensuing fiscal year, and comparisons

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with appropriations for expenditures during the current fiscal year, as well as actual expenditures

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of the state for the last two (2) complete fiscal years.

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      (3) Financial statements of the

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      (i) Condition of the treasury at the end of the last completed fiscal year;

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      (ii) The estimated condition of the treasury at the end of the current fiscal year; and

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      (iii) Estimated condition of the treasury at the end of the ensuing fiscal year if the

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financial proposals contained in the budget are adopted.

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      (4) All essential facts regarding the bonded and other indebtedness of the state.

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      (5) A report indicating those program revenues and expenditures whose funding source

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is proposed to be changed from state appropriations to restricted receipts, or from restricted

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receipts to other funding sources.

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      (6) Such other financial statements and data as in the governor's opinion are necessary or

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desirable.

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      (b) Any other provision of the general laws to the contrary notwithstanding, the proposed

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appropriations submitted by the governor to the general assembly for the next ensuing fiscal year

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should not be more than five and one-half percent (5.5%) in excess of total state appropriations,

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excluding any estimated supplemental appropriations, enacted by the general assembly for the

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fiscal year previous to that for which the proposed appropriations are being submitted; provided,

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that the increased state share provisions required to achieve fifty percent (50%) state financing of

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local school operations as provided for in P.L. 1985, ch. 182, shall be excluded from the

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definition of total appropriations.

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      (c) Notwithstanding the provisions of subsection 35-3-7(a), the governor shall submit to

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the general assembly a budget for the fiscal year ending June 30, 2006 not later than the fourth

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(4th) Thursday in January 2005.

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      (d) Notwithstanding the provisions of subsection 35-3-7(a), the governor shall submit to

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the general assembly a supplemental budget for the fiscal year ending June 30, 2006 and/or a

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budget for the fiscal year ending June 30, 2007 not later than Thursday, January 26, 2006.

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      (e) Notwithstanding the provisions of subsection 35-3-7(a), the governor shall submit to

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the general assembly a supplemental budget for the fiscal year ending June 30, 2007 and/or a

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budget for the fiscal year ending June 30, 2008 not later than Wednesday, January 31, 2007.

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     35-3-9. Action on bills by house committee -- Hearings. -- The budget plan and bill or

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bills for proposed appropriations, when sent by the governor to the general assembly, shall be

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referred as soon as practicable to an appropriate committee of the house of representatives, and

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the committee shall forthwith proceed to the consideration of the bill and upon receipt of the

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budget plan the committee shall refer it to a budget panel consisting of three (3) persons: one of

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whom shall be appointed by the speaker of the house; one of whom shall be appointed by the

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house minority leader; and one of whom shall be appointed by the senate majority leader. The

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members of the panel shall be persons with expertise and experience in the areas of finance or

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accounting. The panel shall review the budget plan and shall consider the objectives, operations,

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and costs of all activities of each department; explore alternative means of conducting the

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activities of each department; evaluate alternative budget amounts for various levels of effort for

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each activity of each department. The panel shall report its findings and make its

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recommendations as to the needs of each department, the programs and activities of each

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department and all other recommendations and information that it deems appropriate, to the

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committee, within thirty (30) days after the budget plan as referred to it.

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     The committee shall proceed to the consideration of the bill upon receipt of this

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recommendation of the panel. The committee shall hear the budget officer upon the bill as a

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whole or upon any item thereof or any proposed amendment thereto as each may elect, and the

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committee may summon the budget officer to appear before it and to furnish such information

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relative to the bill or any item therein, or any proposed amendment thereto, as it may require, and

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the committee may in its discretion hear the proper person representing any department or agency

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desiring to be heard with respect to any item or amendment in the bill relating to the department

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or agency; provided, that nothing contained in this section shall be construed to limit the right of

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the committee to hold public hearings upon the bill as a whole or upon any item therein, or to

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summon any person for examination regarding any item contained therein, or for the purpose of

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obtaining information necessary for a full and proper consideration of the bill. The committee,

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after the consideration of the bill, shall report the bill with its recommendation endorsed thereon

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to the house of representatives.

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     SECTION 2. This act shall take effect upon passage.

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LC00248

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PUBLIC FINANCE -- STATE BUDGET

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     This act would require that the governor submit a zero based budget to the general

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assembly. The zero based budget would be phased in over a five (5) year period.

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     This act would take effect upon passage.

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LC00248

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