S 0453 General Bill, By Bryan, Giese, Setzler and H.S. Stilwell
 A Bill to amend Article 1, as amended, and Article 5, Chapter 11, Title 11,
 Code of Laws of South Carolina, 1976, relating to the State Budget System, so
 as to make changes in procedures used in the budgetary process, to eliminate
 the use of surplus funds to match funds for miscellaneous purposes, and to
 prohibit the increase of state employee positions to exceed appropriations
 limitations.

   01/10/91  Senate Introduced and read first time SJ-6
   01/10/91  Senate Referred to Committee on Finance SJ-6

A BILL

TO AMEND ARTICLE 1, AS AMENDED, AND ARTICLE 5, CHAPTER 11, TITLE 11, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE STATE BUDGET SYSTEM, SO AS TO MAKE CHANGES IN PROCEDURES USED IN THE BUDGETARY PROCESS, TO ELIMINATE THE USE OF SURPLUS FUNDS TO MATCH FUNDS FOR MISCELLANEOUS PURPOSES, AND TO PROHIBIT THE INCREASE OF STATE EMPLOYEE POSITIONS TO EXCEED APPROPRIATIONS LIMITATIONS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Article 1, Chapter 11, Title 11 of the 1976 Code, is amended to read:

Section 11-11-10. The State Budget and Control Board shall employ competent budget assistants and such special help as it may require to carry out the provisions of this chapter. It shall fix the compensation of such persons as it shall employ in this connection and cause such compensation, together with their necessary traveling expenses, to be paid out of the civil contingent fund. It shall call upon the State Tax Commission for any information desired, and the State Tax Commission shall furnish such information and shall be present at all hearings before the committees having charge of the appropriations in the Senate and House. (A) Beginning with fiscal year 1994-95, the State Budget and Control Board shall institute a process to make available to the General Assembly a detailed analysis of the base budgets of agencies of state government according to the following agency groupings and review schedule:

(1) fiscal year 1994-95, Group I: human service, health care, and social service agencies;

(2) fiscal year 1995-96, Group II: correctional, criminal justice, public safety, and natural resource agencies;

(3) fiscal year 1996-97, Group III: executive, regulatory, judicial, quasi-judicial agencies and boards, and other agencies determined by the Budget and Control Board not to fall in the first two categories;

(4) fiscal year 1997-98, Group IV: education functions of government including but not limited to public education and higher education.

The review for Group I must be transmitted to the General Assembly not later than December 1, 1992, and each fiscal year after that year the review for the subsequent group is due no later than December first of that year, the process to be continued for each subsequent group on a rotating basis.

(B) The analysis required by this section, at a minimum, must include but is not limited to:

(1) a review of Legislative Audit Council findings as specified in this article, a review of the State Auditor's annual audits, and the application of the effectiveness measures as developed by the State Reorganization Commission;

(2) an analysis of the base budget displayed in a format which delineates specifically the authority, statutory or otherwise, under which each agency program is established and operated; and

(3) a summary of possible reductions or elimination of individual programs in a given agency and the fiscal impact of the reduction or elimination.

(C) Beginning with fiscal year 1991-92, the Legislative Audit Council shall conduct, publish, and transmit to the Reorganization Commission statutory compliance audits for each of the agencies delineated in Group I. The Group I audits must be transmitted to the Reorganization Commission not later than June 1, 1992. In each ensuing fiscal year, the compliance audits for the subsequent group must be transmitted not later than June first of that fiscal year and continue on a rotating basis.

(D) Beginning with fiscal year 1992-93, the Reorganization Commission shall conduct, publish, and transmit to the Budget and Control Board a complete review and analysis of efficiency and effectiveness of each agency delineated under Group I as established in this section. The review for Group I must be transmitted to the board not later than March 1, 1993, and the review for each subsequent group in the ensuing fiscal years must be transmitted not later than March first of that fiscal year, to be continued on a rotating basis. The efficiency and effectiveness standards to be used in the conduct of the Reorganization Commission review must be established and reported to the General Assembly not later than May 1, 1992, for its review and approval.

Section 11-11-20. On or before the first day of November in each year the State Budget and Control Board and its assistants shall complete a careful survey of all the departments, bureaus, divisions, officers, boards, commissions, institutions and other agencies and undertakings of the State, through which it shall be in possession of all the working knowledge upon which to base its recommendations to the General Assembly.

Section 11-11-30. In addition to the review and reports provided for in Section 11-11-10, On or before the first day of November, annually October second of each fiscal year, each of the several State state departments, bureaus, divisions, officers, commissions, institutions, and other agencies, (hereinafter referred to as 'agency') and undertakings receiving or asking, requesting financial aid from the State in excess of its contingent base budget from the current fiscal year, as defined in Section 11-11-32, shall report to the State Budget and Control Board, on official estimate blanks budget request forms furnished for such that purpose, an estimate, in itemized form showing the by program and ranked in order of priority, of the amount needed for the year beginning with the first day of July thereafter. The official estimate blanks which must be budget request forms used in making these reports shall must be furnished by the Board board, shall must be uniform, and shall clearly must designate clearly the kind of information to be given thereon.

Section 11-11-31. The official budget request form must include a statement of statutory authority under which the agency established and operates each program for which it requests continued financial support from the State. If an agency operates a program under executive order, the number and date of the executive order must be shown. If a program is authorized by regulation, the specific regulation and the statutory grant of authority under which it was promulgated must be shown.

Section 11-11-32. Before September second of each fiscal year, the Budget Division of the State Budget and Control Board shall notify each agency of the general funds authorized for expenditures in that fiscal year. Before October first, each agency shall submit a contingent base budget, classified by program, for the fiscal year. The contingent base budget may not exceed ninety-five percent of the amount certified by the Budget Division as the total general fund expenditure authorization for the fiscal year.

Section 11-11-50. On or before the first day of Before December second, annually, the Comptroller General shall furnish to the State Budget and Control Board an estimate of the financial needs of the State, itemized in strict accordance with the budget classifications adopted by the Board and certified and approved by the presiding officer of each House for each year beginning with the first day of July thereafter; and he shall board. He also shall furnish an estimate of the financial needs of the judiciary, as provided by law, itemized in strict accordance with the budget classification classifications adopted by the Board board, for each year, beginning with the first day of July thereafter. The Comptroller General shall transmit to the Board board with these estimates full and detailed explanations of all increases or decreases. These estimates together with the accompanying explanations of increases and decreases shall must be included in the budget by the Board board without revisions, but with its recommendations thereon.

Section 11-11-60. The State Budget and Control Board shall provide for public hearings on any and all estimates to be included in the budget which shall must be held during the month of November in first quarter of each fiscal year.

The Board board shall require the attendance at these hearings of the heads or responsible representatives of all State departments, bureaus, divisions, officers, boards, commissions, institutions or other state agencies or undertakings receiving or asking financial aid from the State.

The board shall invite members of the Ways and Means Committee of the House of Representatives and members of the Finance Committee of the Senate. Members attending shall receive per diem, subsistence, and mileage to be paid from approved accounts of their respective houses.

Section 11-11-70. (A) Within five days after the beginning of each regular session of the General Assembly the State Budget and Control Board shall submit to the presiding officer of each house printed copies of a budget its recommended allocation plan, based on its own conclusions and judgments, containing a complete and itemized plan of all proposed expenditures for allocations to each State department, bureau, division, officer, board, commission, institution, or other state agency or undertaking, classified by functions, character, and object program, and of estimated revenues and borrowings for each the fiscal year, beginning with the first day of the next fiscal year. Opposite each item of the proposed expenditures the budget must show in separate parallel columns the amount appropriated authorized for expenditures for the last preceding appropriation year, for the current appropriation fiscal year and the increase or decrease.

(B) The budget which is submitted by the board to the presiding officer of each house must conform to the funding requirements contained in Section 36 of Article III of the Constitution of this State.

Section 11-11-80. The State Budget and Control Board shall accompany the budget its recommended allocation plan with:

(1) A a statement of the revenues and expenditures for each of the two appropriation years next preceding, classified and itemized in accordance with the official budget classification adopted by the Board board;

(2) A a statement of the current assets, liabilities, revenues, and surplus or deficit of the State;

(3) A a statement of the debts and funds of the State;

(4) A a statement showing the Board's board's itemized estimates of the condition of the State Treasury as of the beginning and end of each year;

(5) An an itemized and complete financial balance sheet for the State at the close of the last preceding fiscal year ending June thirtieth; and

(6) A a general survey of the State's state's financial and natural resources, with a review of the general economic, industrial, and commercial condition of the State.

Section 11-11-90. The standing committees of the House of Representatives and of the Senate in charge of appropriation measures shall must sit jointly in open sessions while considering the budget appropriations bill and shall begin such joint meetings within five days after the budget has been submitted to the General Assembly by the State Budget and Control Board. This joint committee, or either committee acting independently, may cause require the attendance of heads or responsible representatives of the departments, institutions and all other agencies of the State to furnish such information and answer such questions as the joint committee shall require requests and to these sessions shall be admitted, with the right to be heard, all persons interested in the estimates under consideration. The Board, or its representatives, and the Governor-elect shall have the right to sit at these public hearings and be heard on all matters coming before the joint committee.

Section 11-11-100. The General Assembly may increase or decrease items in the budget bill as it may deem to be in the interest of greater economy and efficiency in the public service.

Section 11-11-110. The chairman of the ways and means committee of the House of Representatives and the chairman of the finance committee of the Senate shall receive, in addition to their per diem, their actual traveling expenses, to be audited and approved by the Comptroller General.

Section 11-11-130. Any agency of the State of South Carolina desiring to request supplemental appropriations shall submit such requests to the Budget and Control Board on or before February first of each year. These requests shall contain such information and be in such form as the Budget and Control Board may require. The Budget and Control Board may conduct such investigations and hearings as it may deem necessary and shall, not later than March fifteenth, submit to the presiding officers of each House its recommendations for supplemental appropriations. The recommendations for supplemental appropriations shall be accompanied by a statement from the Budget and Control Board as to the availability of revenue to fund the proposed expenditures. An agency of the State requesting supplemental appropriations must submit requests to the Ways and Means Committee of the House of Representatives and the Finance Committee of the Senate before February second of each year. The committees may conduct investigations and hearings which they consider necessary. Not later than March first of each year, the Comptroller General shall transmit to the Ways and Means Committee and the Finance Committee a statement as to the availability of general fund surplus after compliance with the provisions of Section 11-11-310.

A supplemental appropriations bill must identify specifically the source of funds, General Fund Surplus, Education Improvement Fund, Highway Fund, Capital Expenditure fund, federal funds, or other funds, from which the expenditure is authorized."

SECTION 2. Article 5, Chapter 11, Title 11 of the 1976 Code is amended to read:

Section 11-11-410. (A) State appropriations in any a fiscal year may not exceed appropriations authorized by the spending limitation prescribed in this section. State appropriations subject to the spending limitation are those appropriations authorized annually in the State General Appropriation Appropriations Act and acts supplemental thereto which fund general, school, and highway purposes. A statement of total 'General general, School school, and Highway Revenues highway revenues' must be included in each annual General Appropriation Appropriations Act. As used in this section, the appropriations so limited as defined above in this subsection must be are those funded by 'General general, School school, and Highway Revenues highway revenues' that must be defined as such in the 1985-86 General Appropriation Appropriations Act; it being the. The intent of this section is that all additional nonfederal and nonuser fee revenue items must be included in that category as they may be created by act of the General Assembly.

(B) The limitation on state appropriations prescribed in subsection (A) is an amount equal to either those state appropriations authorized by the spending limit for the previous fiscal year increased by the average percentage rate of growth in state personal income for the previous three completed calendar years or nine and one-half percent of the total personal income of the State for the calendar year ending before the fiscal year under consideration, whichever is greater. As used in this section, 'state personal income' means total personal income for a calendar year as determined by the State Budget and Control Board or its successor based on the most recent data of the United States Department of Commerce or its successors. During the initial year this spending limit is in effect, the actual state appropriations for general, school, and highway purposes for the fiscal year 1985-1986 must be used as the base figure for computation of the spending limitation if the average rate of growth method is used.

(C) The Comptroller General, or any other authorized agency, commission, or officer, may not approve or issue warrants which would allow disbursements above the amount appropriated for general fund purposes unless and until the General Assembly authorizes expenditures in excess of the limitation through procedures provided for in this article. This subsection may does not apply to funds transferred from the reserve fund to the general fund.

(D) The Division of Research and Statistical Services of the Budget and Control Board shall annually shall compute and certify to the General Assembly a current figure to limit appropriations as provided in subsection (B) of this section prior to before the Budget and Control Board's board's submission of its recommended budget to the House Ways and Means Committee.

(E) Notwithstanding the provisions of subsection (A) of this section, the General Assembly may declare a financial emergency and suspend the spending limitation for any one fiscal year for a specific amount by a special vote as provided in this subsection by enactment of legislation which relates only to that matter. The authorized state appropriations for the fiscal year following the suspension must be determined as if the suspension had not occurred and, for purposes of determining subsequent limits, must be presumed to have been the maximum limit which could have been authorized if such the limitation had not been suspended.

The special vote referred to in this subsection means 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.

(F) In any year when surplus funds are collected, such revenue surplus may be appropriated by the General Assembly to match funds for public education, public welfare, public health, road and highway construction, rehabilitation, replacement, or maintenance financed in part with federal participation funding or federal grants or tolls, or to accelerate the retirement of bonded indebtedness or transferred to the general fund reserve, or tax relief or for avoiding the issuance of bonds for projects that are authorized but not issued or any combination of these purposes without regard to the spending limitation. For the purposes of this section, surplus funds mean that portion of revenues, as defined in subsection (A) of this section, over and above revenues authorized for appropriation in subsection (B).

Section 11-11-420. (A) In any a fiscal year, the ratio of the number of permanent state positions to the total annually up-dated updated resident population of the State may not exceed that ratio of permanent state positions as existed in fiscal year 1980-81 compared to the total resident population of the State as determined by the 1980 decennial census. The number of permanent state positions shall be is based on full-time annual equivalency funded in whole or in part by appropriations of the General Assembly as defined by the South Carolina Classification and Compensation System or its successor.

(B) To insure ensure compliance with subsection (A) of this section, the State Budget and Control Board shall annually and prior to before December first shall determine the total number of permanent state positions based on full-time annual equivalency and the total resident population of the State for which data are available.

(C) The Budget and Control Board may not present to the Ways and Means Committee of the House of Representatives and the committee may not introduce any appropriation an appropriations bill which provides for an increase in state employment in excess of the ratio prescribed in subsection (A) of this section. The committee may alter the specific positions created or eliminated so long as the total employment remains within the prescribed limitation.

(D) Notwithstanding the provisions of subsection (A) of this section, the General Assembly may declare an emergency and suspend the employment limitation for any one fiscal year for a specific number by a special vote as provided in this subsection by enactment of legislation which relates only to that matter. The authorized state employment for the fiscal year following the suspension must be determined as if the suspension had not occurred and, for purposes of determining subsequent limits, must be presumed to have been the maximum limit which could may have been authorized if such the limitation had not been suspended.

The special vote referred to in this subsection means 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.

(E) When any appropriation an appropriations bill is under consideration by the House of Representatives or the Senate, the respective presiding officer of either House of the General Assembly officer shall may not allow to be introduced the introduction of any an amendment to such the bill which increases the number of state employees unless there is attached thereto a certificate of the State Auditor that such the increase in state employees is within the limitations prescribed.

(F) The Budget and Control Board may not authorize an increase in positions which would have the effect of exceeding the limitations prescribed in this article."

Section 11-11-430. (A) In order to continue to maintain the fiscal integrity of the State, the proceeds of the state bonds must not be used to fund operating expenses of state government and such proceeds must be used only for capital improvements.

(B) In order to continue the policy of the State to maintain the full faith and credit of the State with respect to any existing or future bonded indebtedness, the principal and interest payments on general obligation bonds shall constitute priority state expenditures.

(C) The issuance of general obligation bonds of the State must be limited so that the maximum annual debt service on all general obligation bonds of the State (excluding highway bonds, state institution bonds, tax anticipation notes, and bond anticipation notes) may not exceed five percent of the general revenues of the State for the fiscal year next preceding (excluding revenues which are authorized to be pledged for state highway bonds and state institution bonds).

Section 11-11-440. (A) The General Assembly may not provide for any general tax increase or enact new general taxes in the permanent provisions of the State General Appropriation Act or acts supplemental thereto, and any such general tax increases or new general taxes must be enacted only by separate act.

(B) General tax increases and new general taxes as used in this section mean tax increases and new taxes which apply to over fifty percent of the population as a whole.

SECTION 3. This act takes effect July 1, 1991.