S*220 Session 108 (1989-1990)
S*0220(Rat #0004, Act #0001 of 1989) General Bill, By Senate Finance
A Bill to ratify an amendment to Section 36, Article III of the Constitution
of South Carolina, 1895, relating to the General Fund Reserve, so as to change
the name of the General Fund Reserve to the General Reserve Fund, reduce from
four to three percent of the General Fund Revenue of the latest completed
fiscal year the amount required in the Fund, delete provisions requiring a
special vote to adjust the percentage required in the Fund, delete provisions
requiring the General Assembly to review the law on this subject every five
years, provide a mechanism for restoring the Fund should monies from the fund
be expended, require a Capital Reserve Fund equal to two percent of the
General Fund Revenue of the latest completed fiscal year, and provide that
before March first the Capital Reserve Fund must be used to offset mid-year
budget reductions before mandating cuts in operating appropriations and after
March first monies from the Fund may be appropriated by a special vote in
separate legislation by the General Assembly to finance in cash previously
authorized capital improvement bond projects, retire bond principal or
interest on bonds previously issued, and for capital improvements or other
nonrecurring purposes which must be ranked in order of priority of expenditure
and not be funded until thirty days after completion of the fiscal year and
provide that any appropriations of monies from the Capital Reserve Fund after
March first must be reduced based on the rank of priority beginning with the
lowest priority to the extent necessary and applied to the year-end deficits
before withdrawing monies from the General Reserve Fund and to provide that
monies in the Capital Reserve Fund not appropriated or any appropriation for a
particular project or item which has been reduced due to application of the
monies to year-end deficit must lapse and be credited to the General Fund.
01/19/89 Senate Introduced, read first time, placed on calendar
without reference SJ-10
01/24/89 Senate Read second time SJ-17
01/25/89 Senate Read third time and sent to House SJ-10
01/25/89 House Introduced, read first time, placed on calendar
without reference HJ-16
01/31/89 House Read second time HJ-13
02/01/89 House Read third time and enrolled HJ-29
02/08/89 Ratified R 4
02/08/89 No signature required
02/08/89 Act No. 1
02/27/89 Copies available
(A1, R4, S220)
AN ACT TO RATIFY AN AMENDMENT TO SECTION 36, ARTICLE III OF THE CONSTITUTION
OF SOUTH CAROLINA, 1895, RELATING TO THE GENERAL FUND RESERVE, SO AS TO CHANGE
THE NAME OF THE GENERAL FUND RESERVE TO THE GENERAL RESERVE FUND, REDUCE FROM
FOUR TO THREE PERCENT OF THE GENERAL FUND REVENUE OF THE LATEST COMPLETED FISCAL
YEAR THE AMOUNT REQUIRED IN THE FUND, DELETE PROVISIONS REQUIRING A SPECIAL VOTE
TO ADJUST THE PERCENTAGE REQUIRED IN THE FUND, DELETE PROVISIONS REQUIRING THE
GENERAL ASSEMBLY TO REVIEW THE LAW ON THIS SUBJECT EVERY FIVE YEARS, PROVIDE A
MECHANISM FOR RESTORING THE FUND SHOULD MONIES FROM THE FUND BE EXPENDED, REQUIRE
A CAPITAL RESERVE FUND EQUAL TO TWO PERCENT OF THE GENERAL FUND REVENUE OF THE
LATEST COMPLETED FISCAL YEAR, AND PROVIDE THAT BEFORE MARCH FIRST THE CAPITAL
RESERVE FUND MUST BE USED TO OFFSET MID-YEAR BUDGET REDUCTIONS BEFORE MANDATING
CUTS IN OPERATING APPROPRIATIONS AND AFTER MARCH FIRST MONIES FROM THE FUND MAY
BE APPROPRIATED BY A SPECIAL VOTE IN SEPARATE LEGISLATION BY THE GENERAL ASSEMBLY
TO FINANCE IN CASH PREVIOUSLY AUTHORIZED CAPITAL IMPROVEMENT BOND PROJECTS,
RETIRE BOND PRINCIPAL OR INTEREST ON BONDS PREVIOUSLY ISSUED, AND FOR CAPITAL
IMPROVEMENTS OR OTHER NONRECURRING PURPOSES WHICH MUST BE RANKED IN ORDER OF
PRIORITY OF EXPENDITURE AND NOT BE FUNDED UNTIL THIRTY DAYS AFTER COMPLETION OF
THE FISCAL YEAR AND PROVIDE THAT ANY APPROPRIATIONS OF MONIES FROM THE CAPITAL
RESERVE FUND AFTER MARCH FIRST MUST BE REDUCED BASED ON THE RANK OF PRIORITY
BEGINNING WITH THE LOWEST PRIORITY TO THE EXTENT NECESSARY AND APPLIED TO THE
YEAR-END DEFICITS BEFORE WITHDRAWING MONIES FROM THE GENERAL RESERVE FUND AND TO
PROVIDE THAT MONIES IN THE CAPITAL RESERVE FUND NOT APPROPRIATED OR ANY
APPROPRIATION FOR A PARTICULAR PROJECT OR ITEM WHICH HAS BEEN REDUCED DUE TO
APPLICATION OF THE MONIES TO YEAR-END DEFICIT MUST LAPSE AND BE CREDITED TO THE
GENERAL FUND.
Be it enacted by the General Assembly of the State of South Carolina:
General Reserve Fund - Constitutional amendment ratified
SECTION 1. The amendment to Section 36, Article III of the Constitution of South
Carolina, 1895, prepared under the terms of Joint Resolution 687 of 1988, having
been submitted to the qualified electors at the general election of 1988 as
prescribed in Section 1, Article XVI of the Constitution of South Carolina, 1895,
and a favorable vote having been received on the amendment, is ratified and
declared to be a part of the Constitution so that Section 36 of Article III is
amended to read:
"Section 36. (A) The General Assembly shall provide for a General
Reserve Fund of three percent of the general fund revenue of the latest completed
fiscal year. Funds may be withdrawn from the reserve only for the purpose of
covering operating deficits of state government. The General Assembly must
provide for the orderly restoration of funds withdrawn from the reserve from
future revenues and out of funds accumulating in excess of annual operating
expenditures.
(1) The General Assembly shall provide by law for a procedure to survey the
progress of the collection of revenue and the expenditure of funds and to
authorize and direct reduction of appropriations as may be necessary to prevent
a deficit.
(2) In the event of a year-end operating deficit, so much of the reserve
fund as may be necessary must be used to cover the deficit; and the amount must
be restored to the reserve fund within three fiscal years out of future revenues
until the three percent General Reserve Fund is again reached and maintained.
Provided that a minimum of one percent of the general fund revenue of the latest
completed fiscal year, if so much is necessary, must be restored to the reserve
fund each year following the deficit until the three percent General Reserve Fund
is restored.
(B) The General Assembly, in the annual general appropriations act, shall
appropriate, out of the estimated revenue of the general fund for the fiscal year
for which the appropriations are made, into a Capital Reserve Fund, which is
separate and distinct from the General Reserve Fund, an amount equal to two
percent of the general fund revenue of the latest completed fiscal year.
(1) The General Assembly must provide by law that if before March first the
revenue forecast for the current fiscal year projects that revenues at the end
of the fiscal year will be less than expenditures authorized by appropriation for
that year, then the current year's appropriation to the Capital Reserve Fund
first must be reduced to the extent necessary before mandating any reductions in
operating appropriations.
(2) After March first of a fiscal year, monies from the Capital Reserve Fund
may be appropriated by the General Assembly in separate legislation upon an
affirmative vote in each branch of the General Assembly by two-thirds of the
members present and voting, but not less than three-fifths of the total
membership in each branch for the following purposes:
(a) to finance in cash previously authorized capital improvement bond
projects;
(b) to retire interest or principal on bonds previously issued;
(c) for capital improvements or other nonrecurring purposes.
(3)(a) Any appropriation of monies from the Capital Reserve Fund as provided
in this subsection must be ranked in priority of expenditure and is effective
thirty days after completion of the fiscal year. If it is determined that the
fiscal year has ended with an operating deficit, then the monies appropriated
from the Capital Reserve Fund must be reduced based on the rank of priority,
beginning with the lowest priority, to the extent necessary and applied to the
year-end operating deficit before withdrawing monies from the General Reserve
Fund.
(b) At the end of the fiscal year, any monies in the Capital Reserve Fund
that are not appropriated as provided in this subsection or any appropriation for
a particular project or item which has been reduced due to application of the
monies to a year-end deficit must lapse and be credited to the General
Fund." |