HB2532 99TH GENERAL ASSEMBLY

LRB099 06628 JLK 26701 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB2532

Introduced 2/18/2015, by Rep. Michael W. Tryon

SYNOPSIS AS INTRODUCED:

New Act
15 ILCS 405/6.01	from Ch. 15, par. 206.01
25 ILCS 155/4	from Ch. 63, par. 344

Creates the Long-Term Accounting Act. 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. 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.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Long-Term Accounting Act.

Section 5. Legislative intent. It is the intent of this Act to improve transparency and accountability during the State budget process by:

(1) confirming and strengthening the State's special responsibility to disclose its actions and results of those actions in a timely and useful way;

(2) establishing the concept that State budgeting disclosures and financial reporting are created primarily for the purpose of informing the public of government activity and creating widespread understanding of these actions;

(3) adopting the use of consolidated budget documents to facilitate the public's ability to understand the State's annual and accumulated shortfalls despite the relative scale of the State's financial operations and the volume and complexity of budget and financial data;

(4) establishing the State's duty to report the best estimate of its own financial condition;

(5) requiring a comprehensive indication of the total activity of government and the long-term effects of current policy;

(6) calling for the calculation of the long-term financial implications to the State and others of the budgetary decisions;

(7) providing the full-cost information necessary to accurately calculate performance measurements;

(8) establishing definitions of existing statutory language to strengthen the Governor's and the General Assembly's ability to determine compliance with the intent of Section 2 of Article VIII of the Illinois Constitution requirement, which is to preserve intergenerational equity;

(9) requiring explicit disclosure and accurate reporting by the Governor and the General Assembly of:

(A) debt incurred to fund current operating expenses;

(B) current and past costs shifted to future budgets and imposed upon future taxpayers;

(C) State obligations, including, but not limited to, current and future personnel benefit costs and lapse-period expenditures; and

(D) any fiscal deficit in terms of the excess of full accrual expenses over full accrual revenues, as well as any budget surplus in terms of the excess of full accrual revenues over full accrual expenses, at the time the final budget is sent to the Governor;

(10) calling for the Governor and the General Assembly to determine if future budgetary resources will likely be sufficient to sustain public services and to meet obligations as they come due;

(11) acknowledging costs when incurred during the budget year regardless of when they are paid;

(12) injecting the expertise and knowledge of the State Comptroller's Office into the preparation of budget calculations;

(13) unveiling the State's unusual reliance upon the use of more than 600 special funds;

(14) requiring the Annual Budget and the State's Comprehensive Annual Financial Report to be prepared to facilitate a simple comparison of budgeted amounts to the actual amounts spent and received;

(15) requiring State agencies to report to the Comptroller all fiscal information necessary to prepare a comprehensive annual financial report in a timely manner; and

(16) mandating the production of the State's Comprehensive Annual Financial Report within 6 months after the end of the State's fiscal year.

Section 10. Definitions.

"Amounts due to pension funds" means the unfunded actuarial accrued liability for the State pension plans, including the portion of multiple-employer plans attributed to the State.

"Benefit enhancements" means the actuarial present value of total projected benefits attributed to the estimated increase in the benefits of retirees or beneficiaries granted by the proposed budget or proposed or enacted changes to the Illinois Pension Code. The benefit enhancements that result from plan members' expected future service amount may be reduced by the amount of specified revenue sources enacted into law.

"Capital assets" shall be defined using Governmental Accounting Standards Board concepts outlined in GASB Statement 34.

"Comptroller's budget statements" means the estimated balance sheet, the estimated statement of activities, and the estimated statement of cash flow.

"Estimated balance sheet" means the estimated statement of net assets prepared using the GASB concepts outlined in GASB Statement 34.

"Estimated retirement plans' assets gain or loss" means the change in the actuarial value of assets from the beginning of the budget period to the end of the budget period.

"Fiscal budget statements" means the estimated statement of fiscal balance, the estimated statement of fiscal deficit, and the estimated financial state of the State.

"Fiduciary funds" shall be defined using GASB concepts outlined in GASB Statement 34.

"Government-Wide Generally Accepted Accounting Principles (Government-Wide GAAP)" means the accounting standards used in the preparation of the State's government-wide financial statements, using GASB concepts outlined in the GASB Statement 34. While the Governmental Accounting Standards Board does not prescribe standards for preparing governmental budgets, the accounting standards' concepts shall be applied to the fiscal budget statements prepared under this Act.

"Increase or Decrease in Other Post Employment Benefits (OPEB) Due" means the change in the State's OPEB plans' estimated actuarial accrued liability from the beginning of the budget period to the end of the budget period.

"Increase or Decrease in Pension Benefits Due" means the change in the State's pension plans' estimated actuarial accrued liability at the beginning of the budget period and the sum of each pension plan's estimated actuarial accrued liability at the end of the budget period.

"Net Pension Obligations or Assets", "Net Other Post Employment Obligations Assets", "Actuarial Value of Assets", "Actuarial Accrued Liability", "Unfunded Actuarial Accrued Liability (UAAL)", and "Actuarial Present Value of Total Projected Benefits" shall be defined using GASB concepts outlined in GASB Statement 45, GASB Statement 25, and GASB Statement 27, as amended by GASB 50.

"Off Balance Sheet Other Post Employment (OPEB) Liabilities" means the difference between the State OPEB plans' Estimated UAAL and the estimated Net OPEB Obligations or Assets included in the estimated balance sheet.

"Off Balance Sheet Pension Liabilities" means the difference between the State pension plans' estimated unfunded actuarial accrued liability (UAAL) and the estimated net pension obligations or Assets included in the estimated balance sheet.

"Retirees' health care benefits" means the unfunded actuarial accrued liability (UAAL) for the State OPEB Plans, including the portion of multiple-employer plans attributed to the State.

"State Other Post Employment Benefit (OPEB) Plans" include the State's Single-Employer Other Post Employment Benefit (OPEB) plans, and also include the portion of Agent Multiple-Employer (OPEB) plans attributed to the State.

"State pension plans" means the State's single-employer pension plans and the portion of agent multiple-employer pension plans attributed to the State.

Section 15. Electronic publication of appropriation bills; publication deadlines with respect to second and third readings. The General Assembly shall publish, on a web page controlled by the General Assembly, the texts of all appropriations bills. Each publication shall include an embedded time stamp setting forth the time of electronic publication. No amendment to an appropriation bill shall be considered on second reading until at least 72 hours after the amendment has been published electronically and no bill to appropriate funds shall be passed on third reading until at least 72 hours after the time of electronic publication in final form.

Section 20. Passage of appropriation bills prohibited before adoption of joint resolution. The General Assembly shall not enact any bill to appropriate funds within any fiscal year prior to its adoption of a joint resolution reflecting the estimate of funds available for that fiscal year as required under Section 4 of the Commission on Government Forecasting and Accountability Act.

Section 25. State funds as fiduciary funds. All State funds shall be fiduciary funds unless explicitly provided otherwise by law.

Section 90. The State Comptroller Act is amended by changing Section 6.01 as follows:

(15 ILCS 405/6.01) (from Ch. 15, par. 206.01)

Sec. 6.01. Specification and establishment of accounting standards and principles. The Comptroller shall specify and establish the financial accounting and reporting standards and principles to be used by all State government and State agencies. The standards and principles shall be effective upon filing by the Comptroller with the Auditor General. The Comptroller shall maintain and publish the standards and principles as a public document. These standards and principles shall be known as the Generally Accepted Accounting Standards and Principles for Illinois State Government, and shall be compatible with generally accepted accounting standards and principles for government as prescribed by the Governmental Accounting Standards Board (GASB). , whenever possible, be compatible with any similar nationally existing generally accepted accounting standards and principles for government.

In establishing the Generally Accepted Accounting Standards and Principles for Illinois State Government, the Comptroller shall consult with the Governor and the other members of the Executive Branch, the Chief Justice of the Supreme Court, and the leadership of the General Assembly and shall provide to these officials, and publish on the Comptroller's website, draft copies of any proposed standards at least 90 days prior to their adoption and shall consider any responses or suggestions that these officials or the public may present.

(Source: P.A. 86-1415.)

Section 95. The Commission on Government Forecasting and Accountability Act is amended by changing Section 4 as follows:

(25 ILCS 155/4) (from Ch. 63, par. 344)

Sec. 4. (a) The Commission shall publish, at the convening of each regular session of the General Assembly, a report on the estimated income of the State from all applicable revenue sources for the next ensuing fiscal year and of any other funds estimated to be available for such fiscal year. The Commission, in its discretion, may consult with the Governor's Office of Management and Budget in preparing the report. On the third Wednesday in March after the session convenes, the Commission shall issue a revised and updated set of revenue figures reflecting the latest available information. The House and Senate by joint resolution shall adopt or modify such estimates as may be appropriate. The joint resolution must include all applicable revenues and other funds available. The joint resolution shall constitute the General Assembly's estimate, under paragraph (b) of Section 2 of Article VIII of the Constitution, of the funds estimated to be available during the next fiscal year. The report must estimate all applicable revenues and must estimate other funds available. The report shall clearly separate and distinguish all applicable revenues and other funds available when estimating the funds estimated to be available for purposes of calculating funds estimated to be available as required under subsection (b) of Section 2 of Article VIII of the Illinois Constitution.

(a-5) The annual March estimates issued by the Commission shall include an estimated balance sheet, an estimated statement of activities, and an estimated statement of cash flow. The March estimates shall include a variance report of the ongoing fiscal year's budget and appropriations.

(a-10) The Commission shall also prepare:

(1) The estimated statement of fiscal balance, which shall include:

(A) The columns used in the estimated balance sheet.

(B) The total net assets, as determined in the estimated balance sheet.

(C) The off-balance sheet pension liability.

(D) The off-balance sheet OPEB liability

(E) The resulting fiscal balance.

(2) The estimated statement of fiscal deficit, which shall include:

(A) The columns used in the estimated statement of activities.

(B) The change in net assets, as determined in the estimated statement of activities.

(C) Benefit enhancements.

(D) Retirement plans' assets gain or loss.

(E) Increases or decreases in pension benefits due.

(F) Increases or decreases in OPEB benefits due.

(G) The resulting fiscal deficit.

(3) The estimated financial state of the State, which shall include:

(A) Amounts reported on the State's Comprehensive Annual Financial Report (CAFR) for the State fiscal year 2 years prior to the current budget year.

(B) The estimated values from last period's budget.

(C) The estimated values from the current budget period.

(D) What the State owns:

(i) Capital assets.

(ii) Other assets that are derived from the total assets reported on the statement of net assets/balance sheet minus capital assets.

(iii) State assets shall equal the total assets.

(E) What the State owes:

(i) The amount of State bonds, including, but not limited to, General Obligation Bonds and Special Revenue Bonds.

(ii) Amounts due pension funds.

(iii) Retirees' health care benefits (OPEB).

(iv) Other liabilities that are derived by subtracting the State bonds, the net pension obligation, and the net OPEB obligation from the total liabilities reported on the statement of net assets/balance sheet.

(v) State bills.

(F) Where the State stands:

(i) Illinois' financial position.

(ii) Each Illinois family's share, which is derived by dividing Illinois' financial position divided by the Illinois population estimate as determined by the U.S. Census Bureau divided by the national average size of a family as determined by the U.S. Census Bureau.

(a-20) In conjunction with the State Comptroller, the Commission shall publish the fiscal budget statements outlined in subsection (a-5) in concert with Government Wide-GAAP. The fiscal budget statements shall include information about the State as a whole. The fiscal budget statements should include the primary government and its component units, except for the fiduciary funds of the primary government and component units that are fiduciary in nature. The fiscal budget statements shall be prepared using the economic resources measurement focus and the accrual basis of accounting. The fiscal budget statements shall not be presented using the current financial resources measurement focus and the modified accrual basis of accounting, which are used to prepare the State's governmental funds financial statements. The Commission shall obtain from each of the State's pension and OPEB plans' actuaries to determine the pension and OPEB amounts needed to prepare the fiscal budget statements.

(b) On the third Wednesday in March, the Commission shall issue estimated:

(1) pension funding requirements under P.A. 86-273; and

(2) liabilities of the State employee group health insurance program.

These estimated costs shall be for the fiscal year beginning the following July 1.

(c) The requirement for reporting to the General Assembly shall be satisfied by filing copies of the report with the Speaker, the Minority Leader and the Clerk of the House of Representatives and the President, the Minority Leader and the Secretary of the Senate and the Legislative Research unit, as required by Section 3.1 of the General Assembly Organization Act, and filing such additional copies with the State Government Report Distribution Center for the General Assembly as is required under paragraph (t) of Section 7 of the State Library Act.

(d) For each fiscal year, the General Assembly shall adopt a joint resolution accepting the amounts reported on the fiscal budget statements.

(e) For the purposes of this Section, "all applicable revenues" means "own source revenues", including:

(1) personal income tax;

(2) corporate income tax;

(3) corporate personal property replacement tax;

(4) sales tax retained by the State;

(5) excise taxes, such as excise taxes on alcohol, gasoline, or energy;

(6) user fees;

(7) fines and penalties;

(8) gaming taxes;

(9) investment income;

(10) unencumbered funds provided by other governmental units; or

(11) any other revenue source for which the State has no ongoing or unfulfilled obligation to any other party.

For the purposes of this Section, "other funds available" means:

(1) funds that result from the actions of another entity or government;

(2) funds received that are held in trust or have a fiduciary element;

(3) pass-through funds or funds received by the State when acting as an agent or collector for another entity;

(4) pension contributions made by State employees not used to pay pensions or used to purchase assets for the State's pension funds;

(5) that portion of sales tax collections that retailers pay to the State but that will be remitted to home rule and local governments;

(6) court-ordered collections of child support;

(7) inter-period borrowings;

(8) prepaid tuition plans; or

(9) any other source of funds for which the State has an unfulfilled or ongoing obligation.

The definitions set forth in Section 10 of the Truth in Accounting Act of 2010 are incorporated.

(Source: P.A. 96-958, eff. 7-1-10.)

Section 99. Effective date. This Act takes effect upon becoming law.