HJR 28 -- BUDGET RESERVE FUND

CO-SPONSORS:  Franklin, Shields

COMMITTEE ACTION:  Voted "do pass" by the Committee on Fiscal
Review by a vote of 12 to 0.

This proposed constitutional amendment creates the Budget
Reserve Fund.  On the effective date of this amendment, the
balances in the Cash Operating Reserve Fund and the Budget
Stabilization Fund are to be transferred to the Budget Reserve
Fund.

The Commissioner of Administration may, during any fiscal year,
transfer amounts from the Budget Reserve Fund to any State fund
without legislative action if such amounts are necessary for the
cash requirements of the state.  These transfers are to be
called cash operating transfers.

Prior to May 15 of any fiscal year in which a cash operating
transfer occurs, the Commissioner of Administration is to
transfer from the appropriate fund to the Budget Reserve Fund an
amount equal to the cash operating transfer together with the
interest that would have been earned on such amount.

In any fiscal year in which the Governor reduces the
expenditures of the state or any of its agencies below their
appropriations or in which there is a budget need due to a
disaster, the General Assembly may, upon request from the
Governor and a two-thirds vote of each house, appropriate funds
from the Budget Reserve Fund to fulfill the expenditures
authorized by any of the existing appropriations which were
affected by the Governor's decision to reduce expenditures or to
meet budget needs due to disaster.  The maximum amount which may
be appropriated at any one time is one-half the sum of the
balance of the fund and any amounts appropriated or owed to the
fund, less all amounts owed to the fund for budget stabilization
purposes but not yet appropriated for repayment to the fund.

One-third of the amount transferred from the Budget Reserve Fund
for budget stabilization purposes in any one fiscal year,
together with interest the amount would have otherwise earned,
is to stand appropriated to the Budget Reserve Fund for the next
3 years or until the full amount, plus interest, has been
returned. The maximum amount which may be outstanding for budget
stabilization purposes at any one time is one-half the sum of
the balance in the fund and all outstanding amounts owed the
fund.

If the balance in the Budget Reserve Fund at the end of any
fiscal year exceeds 7.5% of net General Revenue collections, the
Commissioner of Administration is to transfer the excess to
General Revenue, unless the excess balance is due to
appropriations for the purpose of increasing the balance in the
fund.  If the balance exceeds 10% in any one fiscal year the
Commissioner of Administration is to transfer the excess amount
to General Revenue.  If the ending balance of the fund in any
fiscal year is less than 7.5% of net general revenue
collections, the difference is to stand appropriated to the fund.

FISCAL NOTE:  Cost to General Revenue Fund of $135,000 in FY
2001.  Estimated Net Increase to Budget Reserve Fund of
$400,000,000 in FY 2001.  Estimated Net Decrease to Cash
Operating Reserve Fund of $270,000,000.  Estimated Net Decrease
to Budget Stabilization Fund of $130,000,000 in FY 2001.

PROPONENTS:  Supporters say that the amount of funds available
for rainy day purposes is increased to 3.75% of net revenue
collections and maintenance of reserves is automatic.  The
reserves are allowed to grow to 10% of net general revenue
collections.  Such reserves enhance Missouri's bond rating.

Testifying for the bill were Representative Franklin; and Office
of Administration.

OPPONENTS:  There was no opposition voiced to the committee.

Roland Tackett, Legislative Analyst

HJR 28 -- Budget Reserve Fund

Co-Sponsors:  Franklin, Shields

This proposed constitutional amendment creates the Budget
Reserve Fund.  On the effective date of this amendment the
balances in the Cash Operating Reserve Fund and the Budget
Stabilization Fund are to be transferred to the Budget Reserve
Fund.

The Commissioner of Administration may, during any fiscal year,
transfer amounts from the Budget Reserve Fund to any State fund
without legislative action if such amounts are necessary for the
cash requirements of the state.  These transfers are to be
called cash operating transfers.

Prior to May 15 of any fiscal year in which a cash operating
transfer occurs, the Commissioner of Administration is to
transfer from the appropriate fund to the Budget Reserve Fund an
amount equal to the cash operating transfer together with the
interest that would have been earned on such amount.

In any fiscal year in which the Governor reduces the
expenditures of the state or any of its agencies below their
appropriations or in which there is a budget need due to a
disaster, the General Assembly may, upon request from the
Governor and a two-thirds vote of each house, appropriate funds
from the Budget Reserve Fund to fulfill the expenditures
authorized by any of the existing appropriations which were
affected by the Governor's decision to reduce expenditures or to
meet budget needs due to disaster.  The maximum amount which may
be appropriated at any one time is one-half the sum of the
balance of the fund and any amounts appropriated or owed to the
fund, less all amounts owed to the fund for budget stabilization
purposes but not yet appropriated for repayment to the fund.

One-third of the amount transferred from the Budget Reserve Fund
for budget stabilization purposes in any one fiscal year,
together with interest the amount would have otherwise earned,
is to stand appropriated to the Budget Reserve Fund for the next
3 years or until the full amount, plus interest, has been
returned. The maximum amount which may be outstanding for budget
stabilization purposes at any one time is one-half the sum of
the balance in the fund and all outstanding amounts owed the
fund.

If the balance in the Budget Reserve Fund at the end of any
fiscal year exceeds 7.5% of net General Revenue collections, the
Commissioner of Administration is to transfer the excess to
General Revenue, unless the excess balance is due to
appropriations for the purpose of increasing the balance in the
fund.  If the balance exceeds 10% in any one fiscal year the
Commissioner of Administration is to transfer the excess amount
to General Revenue.  If the ending balance of the fund in any
fiscal year is less than 7.5% of net general revenue
collections, the difference is to stand appropriated to the fund.