H 3846 Joint Resolution, By Harrell
 A JOINT RESOLUTION PROPOSING AN AMENDMENT TO SECTION 36, ARTICLE III OF THE
 CONSTITUTION OF SOUTH CAROLINA, 1895, RELATING TO THE GENERAL RESERVE FUND AND
 THE CAPITAL RESERVE FUND, SO AS TO PROVIDE THAT THE GENERAL RESERVE FUND SHALL
 CONSIST NOT ONLY OF THREE PERCENT OF THE GENERAL FUND REVENUE OF THE LATEST
 COMPLETED FISCAL YEAR BUT ALSO THE FIRST TEN PERCENT OF ANY SURPLUS GENERAL
 FUND REVENUES ACCRUING FOR ANY FISCAL YEAR, TO PROVIDE THAT APPROPRIATIONS
 FROM THE CAPITAL RESERVE FUND TAKE EFFECT ON SEPTEMBER FIRST OF THE FOLLOWING
 FISCAL YEAR, TO PROVIDE THAT SURPLUS GENERAL FUND REVENUES FOR ANY FISCAL YEAR
 NOT OTHERWISE OBLIGATED AND APPROPRIATIONS TO THE CAPITAL RESERVE FUND ARE
 DEEMED TO HAVE ACCRUED AND ARE AVAILABLE FOR EXPENDITURE AFTER SEPTEMBER FIRST
 OF THE NEXT FISCAL YEAR AND AFTER THE STATE'S FINANCIAL BOOKS FOR THE PREVIOUS
 FISCAL YEAR HAVE BEEN CLOSED, AND TO PROVIDE THAT IF THE COMPTROLLER GENERAL
 DETERMINES UPON THE CLOSING OF THE STATE'S FINANCIAL BOOKS FOR A FISCAL YEAR
 THAT THE STATE HAS A NEGATIVE GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FUND
 BALANCE (GAAP FUND DEFICIT), ANY APPROPRIATIONS CONTAINED IN A GENERAL OR
 SUPPLEMENTAL APPROPRIATIONS ACT WHICH EXPENDS SURPLUS GENERAL FUND REVENUES OR
 IN A CAPITAL RESERVE FUND APPROPRIATIONS ACT TO BE EFFECTIVE DURING THE NEXT
 FISCAL YEAR ARE SUSPENDED AND MUST BE USED TO THE EXTENT NECESSARY TO OFFSET
 THE GAAP FUND DEFICIT IN THE MANNER THE GENERAL ASSEMBLY SHALL PROVIDE.

   04/05/05  House  Introduced and read first time HJ-8
   04/05/05  House  Referred to Committee on Ways and Means HJ-9
   04/13/05  House  Committee report: Favorable Ways and Means HJ-5
   04/19/05  House  Read second time HJ-29
   04/19/05  House  Roll call Yeas-110  Nays-0 HJ-34
   04/20/05  House  Read third time and sent to Senate HJ-21
   04/20/05  Senate Introduced and read first time SJ-12
   04/20/05  Senate Referred to Committee on Finance SJ-12
   04/20/05  Senate Referred to Subcommittee: Hayes (ch), Alexander,
                     Land, Matthews, Grooms, Richardson

Indicates Matter Stricken

Indicates New Matter

COMMITTEE REPORT

April 13, 2005

H. 3846

S. Printed 4/13/05--H.

Read the first time April 5, 2005.

To whom was referred a Joint Resolution (H. 3846) proposing an amendment to Section 36, Article III of the Constitution of South Carolina, 1895, relating to the General Reserve Fund and the Capital Reserve Fund, so as to, etc., respectfully

That they have duly and carefully considered the same and recommend that the same do pass:

ROBERT W. HARRELL, JR. for Committee.

REVENUE IMPACT 1/

This bill has no impact on state or local general fund revenue in FY2005-06.

Explanation

This joint resolution would permit four referendums to amend Section 36, Article III of the Constitution of South Carolina, 1895, relating to provisions of the General Reserve Fund and the Capital Reserve Fund. This joint resolution would have no impact on state or local general fund revenue in FY2005-06.

Approved By:

William C. Gillespie

Board of Economic Advisors

1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.

PROPOSING AN AMENDMENT TO SECTION 36, ARTICLE III OF THE CONSTITUTION OF SOUTH CAROLINA, 1895, RELATING TO THE GENERAL RESERVE FUND AND THE CAPITAL RESERVE FUND, SO AS TO PROVIDE THAT THE GENERAL RESERVE FUND SHALL CONSIST NOT ONLY OF THREE PERCENT OF THE GENERAL FUND REVENUE OF THE LATEST COMPLETED FISCAL YEAR BUT ALSO THE FIRST TEN PERCENT OF ANY SURPLUS GENERAL FUND REVENUES ACCRUING FOR ANY FISCAL YEAR, TO PROVIDE THAT APPROPRIATIONS FROM THE CAPITAL RESERVE FUND TAKE EFFECT ON SEPTEMBER FIRST OF THE FOLLOWING FISCAL YEAR, TO PROVIDE THAT SURPLUS GENERAL FUND REVENUES FOR ANY FISCAL YEAR NOT OTHERWISE OBLIGATED AND APPROPRIATIONS TO THE CAPITAL RESERVE FUND ARE DEEMED TO HAVE ACCRUED AND ARE AVAILABLE FOR EXPENDITURE AFTER SEPTEMBER FIRST OF THE NEXT FISCAL YEAR AND AFTER THE STATE'S FINANCIAL BOOKS FOR THE PREVIOUS FISCAL YEAR HAVE BEEN CLOSED, AND TO PROVIDE THAT IF THE COMPTROLLER GENERAL DETERMINES UPON THE CLOSING OF THE STATE'S FINANCIAL BOOKS FOR A FISCAL YEAR THAT THE STATE HAS A NEGATIVE GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FUND BALANCE (GAAP FUND DEFICIT), ANY APPROPRIATIONS CONTAINED IN A GENERAL OR SUPPLEMENTAL APPROPRIATIONS ACT WHICH EXPENDS SURPLUS GENERAL FUND REVENUES OR IN A CAPITAL RESERVE FUND APPROPRIATIONS ACT TO BE EFFECTIVE DURING THE NEXT FISCAL YEAR ARE SUSPENDED AND MUST BE USED TO THE EXTENT NECESSARY TO OFFSET THE GAAP FUND DEFICIT IN THE MANNER THE GENERAL ASSEMBLY SHALL PROVIDE.

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

SECTION    1.    It is proposed that Section 36(A), Article III of the Constitution of this State be amended to read:

"(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 plus the first ten percent of any surplus general fund revenues accruing for any 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.

(3)    No restoration within three fiscal years is required for funds in the General Reserve Fund used to cover an operating deficit which were derived from the requirement in this subsection that the first ten percent of any surplus general fund revenue for any fiscal year be placed in the General Reserve Fund."

SECTION    2.    The proposed amendment must be submitted to the qualified electors at the next general election for representatives. Ballots must be provided at the various voting precincts with the following words printed or written on the ballot:

"Must Section 36(A), Article III of the Constitution of this State be amended so as to provide that the General Reserve Fund shall consist not only of three percent of the General Fund Revenue of the latest completed fiscal year but also the first ten percent of any surplus general fund revenues accruing for any fiscal year?

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."

SECTION    3.    It is proposed that Section 36(B)(3)(a), Article III of the Constitution of this State be amended to read:

"(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 on September first of the following 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."

SECTION    4.    The proposed amendment must be submitted to the qualified electors at the next general election for representatives. Ballots must be provided at the various voting precincts with the following words printed or written on the ballot:

"Must Section 36(B)(3)(a), Article III of the Constitution of this State be amended so as to provide that appropriations from the Capital Reserve Fund take effect on September first of the following fiscal year?

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."

SECTION    5.    It is proposed that Section 36, Article III of the Constitution of this State be amended by adding a new subsection (C) to read:

"(C)    Surplus General Fund Revenues for any fiscal year not otherwise obligated and appropriations to the Capital Reserve Fund are deemed to have occurred and are available for expenditure after September first of the next fiscal year and after the state's financial books for the previous fiscal year have been closed."

SECTION    6.    The proposed amendment must be submitted to the qualified electors at the next general election for representatives. Ballots must be provided at the various voting precincts with the following words printed or written on the ballot:

"Must Section 36, Article III of the Constitution of this State be amended so as to provide that surplus General Fund Revenues for any fiscal year not otherwise obligated and appropriations to the Capital Reserve Fund are deemed to have occurred and are available for expenditure after September first of the next fiscal year and after the state's financial books for the previous fiscal year have been closed?

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."

SECTION    7.    It is proposed that Section 36, Article III of the Constitution of this State be amended by adding a new subsection (D) to read:

"(D)(1)    If the Comptroller General determines upon the closing of the state's financial books for a fiscal year that the State has a negative Generally Accepted Accounting Principles Fund balance (GAAP Fund Deficit), any appropriations contained in a general or supplemental appropriations act which expends surplus general fund revenues or in a Capital Reserve Fund appropriations act to be effective during the next fiscal year are suspended and must be used to the extent necessary to offset the GAAP Fund deficit in the manner the General Assembly shall provide.

(2)    A negative GAAP Fund balance is defined as the amount remaining after subtracting all state liabilities and reserve funds from state assets on an accrual basis."

SECTION    8.    The proposed amendment must be submitted to the qualified electors at the next general election for representatives. Ballots must be provided at the various voting precincts with the following words printed or written on the ballot:

"Must Section 36, Article III of the Constitution of this State be amended so as to provide that if the Comptroller General determines upon the closing of the state's financial books for a fiscal year that the State has a negative Generally Accepted Accounting Principles Fund balance (GAAP Fund Deficit), any appropriations contained in a general or supplemental appropriations act which expends surplus general fund revenues or in a Capital Reserve Fund appropriations act to be effective during the next fiscal year are suspended and must be used to the extent necessary to offset the GAAP Fund deficit in the manner the General Assembly shall provide.

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."