97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3231

 

Introduced 2/24/2011, by Rep. Michael W. Tryon

 

SYNOPSIS AS INTRODUCED:
 
New Act
15 ILCS 405/6.01  from Ch. 15, par. 206.01
15 ILCS 405/19.5 new
15 ILCS 405/30 new
25 ILCS 155/4  from Ch. 63, par. 344

    Creates the Long-Term Accounting Act of 2011. Provides that the purpose of the Act is to improve transparency and accountability during the State budget process. Contains provisions concerning the passage of appropriation bills and the electronic publication of appropriation bills. Amends the State Comptroller Act. Requires that the Comptroller publish a comprehensive annual financial report. Amends the Commission on Governmental Forecasting and Accountability Act. Provides that the Commission on Governmental Forecasting and Accountability must publish fiscal budget statements. Sets forth the requirements for the fiscal budget statements. Contains other provisions. Effective immediately.


LRB097 10921 RLJ 51479 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3231LRB097 10921 RLJ 51479 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Long-Term Accounting Act of 2011.
 
6    Section 5. Legislative intent. It is the intent of this Act
7to improve transparency and accountability during the State
8budget process that:
9    (1) Confirms and strengthens the State's special
10responsibility to disclose its actions and results of those
11actions in a timely and useful way.
12    (2) Establishes the concept that State budgeting
13disclosures and financial reporting are created primarily for
14the purpose of informing the public of government activity and
15creating widespread understanding of these actions.
16    (3) Adopts the use of a consolidating budget documents to
17facilitate the public's ability to understand the State's
18annual and accumulated shortfalls despite the relative scale of
19the State's financial operations and the volume and complexity
20of budget and financial data.
21    (4) Establishes the State's duty to report the best
22estimate of its own financial condition.
23    (5) Requires a comprehensive indication of the total

 

 

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1activity of government and the long-term effects of current
2policy.
3    (6) Calls for the calculation of the long-term financial
4implications to the State and others of the budgetary
5decisions.
6    (7) Provides the full costing information to necessary to
7accurately calculate performance measurements.
8    (8) Establishes definitions of existing statutory language
9to strengthen the Governor's and the General Assembly's ability
10to determine compliance with the intent of the Section 2 of
11Article XIII of the Illinois Constitution requirement, which is
12to preserve intergenerational equity.
13    (9) Requires explicit disclosure and accurate reporting by
14the Governor and the General Assembly of:
15        (A) debt incurred to fund current operating expenses;
16        (B) current and past costs shifted to future budgets
17    and imposed upon future taxpayers;
18        (C) State obligations, including, but not limited to,
19    current and future personnel benefit costs and
20    lapse-period expenditures; and
21        (D) a fiscal deficit in terms of the excess of full
22    accrual expenses over full accrual revenues and a budget
23    surplus in terms of the excess of full accrual revenues
24    over full accrual expenses at the time the final budget is
25    sent to the Governor.
26    (10) Calls for the Governor and the General Assembly to

 

 

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1determine if future budgetary resources will likely be
2sufficient to sustain public services and to meet obligations
3as they come due.
4    (11) Acknowledges costs when incurred during the budget
5year regardless of when they are paid.
6    (12) Injects the expertise and knowledge of the State
7Comptroller's Office into the preparation of budget
8calculations.
9    (13) Unveils the State's unusual reliance upon the use of
10more than 600 special funds.
11    (14) Requires the Annual Budget and the State's
12Comprehensive Annual Financial Report to be prepared to
13facilitate a simple comparison of budgeted amounts to the
14actual amounts spent and received.
15    (15) Requires State agencies to report to the Comptroller
16all fiscal information necessary to prepare a comprehensive
17annual financial report in a timely manner.
18    (16) Mandates the production of the State's Comprehensive
19Annual Financial Report within 6 months after the State's
20fiscal year end.
 
21    Section 10. Definitions.
22    "Amounts due to pension funds" means the unfunded actuarial
23accrued liability for the State pension plans, including the
24portion of multiple-employer plans attributed to the State.
25    "Benefit enhancements" means the actuarial present value

 

 

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1of total projected benefits attributed to the estimated
2increase in the benefits of retirees or beneficiaries granted
3by the proposed budget or proposed or enacted changes to the
4Illinois Pension Code. The benefit enhancements that result
5from plan members' expected future service amount may be
6reduced by the amount of specified revenue sources enacted into
7law.
8    "Capital assets" shall be defined using Governmental
9Accounting Standards Board concepts outlined in GASB Statement
1034.
11    "Comptroller's budget statements" means the estimated
12balance sheet, the estimated statement of activities, and the
13estimated statement of cash flow.
14    "Estimated balance sheet" means the estimated statement of
15net assets prepared using the GASB concepts outlined in GASB
1634.
17    "Estimated retirement plans' assets gain or loss" means the
18change in the actuarial value of assets at the beginning of the
19budget period and the actuarial value of assets at the end of
20the budget period.
21    "Fiscal budget statements" means the estimated statement
22of fiscal balance, the estimated statement of fiscal deficit,
23and the estimated financial state of the State.
24    "Fiduciary funds" shall be defined using GASB concepts
25outlined in Governmental Accounting Standards Board Statement
2634.

 

 

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1    "Government-Wide Generally Accepted Accounting Principles
2(Government-Wide GAAP)" means the accounting standards used in
3the preparation of the State's government-wide financial
4statements, using GASB concepts outlined in the Governmental
5Accounting Standards Board Statement 34. While the
6Governmental Accounting Standards Board does not prescribe
7standards for preparing governmental budgets, the accounting
8standards' concepts shall be applied to the fiscal budget
9statements prepared under this Act.
10    "Increase (Decrease) in Other Post Employment Benefits
11(OPEB) Due" means the change in the State's OPEB plans'
12estimated actuarial accrued liability at the beginning of the
13budget period and the State's OPEB plans' estimated actuarial
14accrued liability at the end of the budget period.
15    "Increase (Decrease) in Pension Benefits Due" means the
16change in the State's pension plans' estimated actuarial
17accrued liability at the beginning of the budget period and the
18sum of each pension plan's estimated actuarial accrued
19liability at the end of the budget period.
20    "Net Pension Obligation (Asset)", "Net Other Post
21Employment Obligation (Asset)", "Actuarial Value of Assets",
22"Actuarial Accrued Liability" and "Unfunded Actuarial Accrued
23Liability (UAAL)" "Actuarial Present Value of Total Projected
24Benefits" shall be defined using GASB concepts outlined in GASB
25Statement 45, GASB Statement 25 and GASB Statement 27, as
26amended by GASB 50.

 

 

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1    "Off Balance Sheet Other Post Employment (OPEB)
2Liabilities" means the difference between the State OPEB plans'
3Estimated UAAL and the estimated Net OPEB Obligation (Asset)
4included in the estimated balance sheet.
5    "Off Balance Sheet Pension Liabilities" means the
6difference between the State pension plans' estimated unfunded
7actuarial accrued liability (UAAL) and the estimated net
8pension obligation (Asset) included in the estimated balance
9sheet.
10    "Retirees' health care benefits" means the unfunded
11actuarial accrued liability (UAAL) for the State OPEB Plans,
12including the portion of multiple-employer plans attributed to
13the State.
14    "State Other Post Employment Benefit (OPEB) Plans" include
15the State's Single-Employer Other Post Employment Benefit
16(OPEB) plans, and also include the portion of Agent
17Multiple-Employer (OPEB) plans attributed to the State.
18    "State pension plans" means the State's single-employer
19pension plans and the portion of agent multiple-employer
20pension plans attributed to the State.
 
21    Section 15. Electronic publication of appropriation bills;
22publication deadlines with respect to second and third
23readings. The General Assembly shall publish, on a web page
24controlled by the General Assembly, the texts of all
25appropriations bills. Each publication shall include an

 

 

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1embedded time stamp setting forth the time of electronic
2publication. No amendment to an appropriation bill shall be
3considered on second reading until at least 72 hours after the
4amendment has been published electronically and no bill to
5appropriate funds shall be passed on third reading until at
6least 72 hours after the time of electronic publication in
7final form.
 
8    Section 20. Passage of appropriation bills prohibited
9before adoption of joint resolution. The General Assembly shall
10not enact any bill to appropriate funds within any fiscal year
11prior to their adoption of the joint resolution reflecting the
12estimate of funds available for that fiscal year as required
13under Section 4 of the Commission on Government Forecasting and
14Accountability Act.
 
15    Section 25. State funds as fiduciary funds. All State funds
16shall be fiduciary funds unless explicitly provided otherwise
17by law.
 
18    Section 90. The State Comptroller Act is amended by
19changing Section 6.01 and by adding Sections 19.5 and 30 as
20follows:
 
21    (15 ILCS 405/6.01)  (from Ch. 15, par. 206.01)
22    Sec. 6.01. Specification and establishment of accounting

 

 

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1standards and principles. The Comptroller shall specify and
2establish the financial accounting and reporting standards and
3principles to be used by all State government and State
4agencies. The standards and principles shall be effective upon
5filing by the Comptroller with the Auditor General. The
6Comptroller shall maintain and publish the standards and
7principles as a public document. These standards and principles
8shall be known as the Generally Accepted Accounting Standards
9and Principles for Illinois State Government, and shall be
10compatible with generally accepted accounting standards and
11principles for government as prescribed by the Governmental
12Accounting Standards Board (GASB). , whenever possible, be
13compatible with any similar nationally existing generally
14accepted accounting standards and principles for government.
15    In establishing the Generally Accepted Accounting
16Standards and Principles for Illinois State Government, the
17Comptroller shall consult with the Governor and the other
18members of the Executive Branch, the Chief Justice of the
19Supreme Court, and the leadership of the General Assembly and
20shall provide to these officials, and publish on the
21Comptroller's website, draft copies of any proposed standards
22at least 90 days prior to their adoption and shall consider any
23responses or suggestions that these officials or the public may
24present.
25(Source: P.A. 86-1415.)
 

 

 

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1    (15 ILCS 405/19.5 new)
2    Sec. 19.5. Timely reporting. On or before October 31 of
3each year, the director or secretary of each State agency shall
4report to the Comptroller all of the agency's fiscal
5information necessary to prepare a comprehensive annual
6financial report (CAFR) for the fiscal year ending June 30 of
7that year. The Comptroller may require certain State agencies
8to report the information prior to October 31 under a schedule
9established by the Comptroller. Whenever the Comptroller
10determines that a State agency director or secretary is
11delinquent in reporting the information, the Comptroller shall
12notify in writing the Office of the Auditor General, the Office
13of the Governor, the Speaker and Minority Leader of the House
14of Representatives, and the President and Minority Leader of
15the Senate of the delinquency.
 
16    (15 ILCS 405/30 new)
17    Sec. 30. Comprehensive annual financial reports. The
18Comptroller shall publish each comprehensive annual financial
19report (CAFR) within 6 months after the end of the fiscal year
20to which the report relates. At a minimum the Comptroller shall
21publish the CAFR by on a web page controlled by the
22Comptroller. If the report is not published within that period,
23the Comptroller must promptly give notice of the delay to the
24Governor, the Speaker and Minority Leader of the House of
25Representatives, and the President and Minority Leader of the

 

 

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1Senate and post notice of the delay on a web page controlled by
2the Comptroller.
 
3    Section 95. The Commission on Government Forecasting and
4Accountability Act is amended by changing Section 4 as follows:
 
5    (25 ILCS 155/4)  (from Ch. 63, par. 344)
6    Sec. 4. (a) The Commission shall publish, at the convening
7of each regular session of the General Assembly, a report on
8the estimated income of the State from all applicable revenue
9sources for the next ensuing fiscal year and of any other funds
10estimated to be available for such fiscal year. The Commission,
11in its discretion, may consult with the Governor's Office of
12Management and Budget in preparing the report. On the third
13Wednesday in March after the session convenes, the Commission
14shall issue a revised and updated set of revenue figures
15reflecting the latest available information. The House and
16Senate by joint resolution shall adopt or modify such estimates
17as may be appropriate. The joint resolution must include all
18applicable revenues and other funds available. The joint
19resolution shall constitute the General Assembly's estimate,
20under paragraph (b) of Section 2 of Article VIII of the
21Constitution, of the funds estimated to be available during the
22next fiscal year. The report must estimate all applicable
23revenues and must estimate other funds available. The report
24shall clearly separate and distinguish all applicable revenues

 

 

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1and other funds available when estimating the funds estimated
2to be available for purposes of calculating funds estimated to
3be available as required under subsection (b) of Section 2 of
4Article VIII of the Illinois Constitution.
5    (a-5) The annual March estimates issued by the Commission
6shall include an estimated balance sheet, an estimated
7statement of activities, and an estimated statement of cash
8flow. The March estimates shall include a variance report of
9the ongoing fiscal year's budget and appropriations.
10    (a-10) The Commission shall also prepare:
11        (1) The estimated statement of fiscal balance, which
12    shall include:
13            (A) The columns used in the estimated balance
14        sheet.
15            (B) The total net assets, as determined in the
16        estimated balance sheet.
17            (C) The off-balance sheet pension liability.
18            (D) The off-balance sheet OPEB liability
19            (E) The resulting fiscal balance.
20        (2) The estimated statement of fiscal deficit, which
21    shall include:
22            (A) The columns used in the estimated statement of
23        activities.
24            (B) The change in net assets, as determined in the
25        estimated statement of activities.
26            (C) Benefit enhancements.

 

 

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1            (D) Retirement plans' assets gain or loss.
2            (E) Increase (decrease) in pension benefits due.
3            (F) Increase (decrease) in OPEB benefits due.
4            (G) The resulting fiscal deficit.
5        (3) The estimated financial state of the State, which
6    shall include:
7            (A) Amounts reported on the State's Comprehensive
8        Annual Financial Report (CAFR) for the State's fiscal
9        year 2 years prior to the current budget year.
10            (B) The estimated values from last period's
11        budget.
12            (C) The estimated values from the current budget
13        period.
14            (D) What the State owns:
15                (i) Capital assets.
16                (ii) Other assets that are derived from the
17            total assets reported on the statement of net
18            assets/balance sheet minus capital assets.
19                (iii) State assets shall equal the total
20            assets.
21            (E) What the State owes:
22                (i) The amount of State bonds, including, but
23            not limited to, General Obligation Bonds and
24            Special Revenue Bonds.
25                (ii) Amounts due pension funds.
26                (iii) Retirees' health care benefits (OPEB).

 

 

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1                (iv) Other liabilities that are derived by
2            subtracting the State bonds, the net pension
3            obligation, and the net OPEB obligation from the
4            total liabilities reported on the statement of net
5            assets/balance sheet.
6                (v) State bills.
7            (F) Where the State stands:
8                (i) Illinois' financial position.
9                (ii) Each Illinois family's share, which is
10            derived by dividing Illinois' financial position
11            divided by the Illinois population estimate as
12            determined by the U.S. Census Bureau divided by the
13            national average size of a family as determined by
14            the U.S. Census Bureau.
15    (a-20) In conjunction with the State Comptroller, the
16Commission shall publish the fiscal budget statements outlined
17in subsection (a-5) in concert with Government Wide-GAAP. The
18fiscal budget statements shall include information about the
19State as a whole. The fiscal budget statements should include
20the primary government and its component units, expect for the
21fiduciary funds of the primary government and component units
22that are fiduciary in nature. The fiscal budget statements
23should be prepared using the economic resources measurement
24focus and the accrual basis of accounting. The fiscal budget
25statements should not be presented using the current financial
26resources measurement focus and the modified accrual basis of

 

 

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1accounting, which are used to prepare the State's governmental
2funds financial statements. The Commission shall obtain from
3each of the State's pension and OPEB plans' actuaries to
4determine the pension and OPEB amounts needed to prepare the
5fiscal budget statements.
6    (b) On the third Wednesday in March, the Commission shall
7issue estimated:
8        (1) pension funding requirements under P.A. 86-273;
9    and
10        (2) liabilities of the State employee group health
11    insurance program.
12    These estimated costs shall be for the fiscal year
13beginning the following July 1.
14    (c) The requirement for reporting to the General Assembly
15shall be satisfied by filing copies of the report with the
16Speaker, the Minority Leader and the Clerk of the House of
17Representatives and the President, the Minority Leader and the
18Secretary of the Senate and the Legislative Research unit, as
19required by Section 3.1 of the General Assembly Organization
20Act, and filing such additional copies with the State
21Government Report Distribution Center for the General Assembly
22as is required under paragraph (t) of Section 7 of the State
23Library Act.
24    (d) For each fiscal year, the General Assembly shall adopt
25a joint resolution accepting the amounts reported on the fiscal
26budget statements.

 

 

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1    (e) For the purposes of this Section, "all applicable
2revenues" means "own source revenues", including:
3        (1) personal income tax;
4        (2) corporate income tax;
5        (3) corporate personal property replacement tax;
6        (4) sales tax retained by the State;
7        (5) excise taxes, such as excise taxes on alcohol,
8    gasoline, or energy;
9        (6) user fees;
10        (7) fines and penalties;
11        (8) gaming taxes;
12        (9) investment income;
13        (10) unencumbered funds provided by other governmental
14    units; or
15        (11) any other revenue source for which the State has
16    no ongoing or unfulfilled obligation to any other party.
17    For the purposes of this Section, "other funds available"
18means:
19        (1) funds that result from the actions of another
20    entity or government;
21        (2) funds received that are held in trust or have a
22    fiduciary element;
23        (3) pass-through funds or funds received by the State
24    when acting as an agent or collector for another entity;
25        (4) pension contributions made by State employees not
26    used to pay pensions or used to purchase assets for the

 

 

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1    State's pension funds;
2        (5) that portion of sales tax collections that
3    retailers pay to the State but that will be remitted to
4    home rule and local governments;
5        (6) court-ordered collections of child support;
6        (7) inter-period borrowings;
7        (8) prepaid tuition plans; or
8        (9) any other source of funds for which the State has
9    an unfulfilled or ongoing obligation.
10    The definitions set forth in Section 10 of the Truth in
11Accounting Act of 2010 are incorporated.
12(Source: P.A. 96-958, eff. 7-1-10.)
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.