HCR2035 - 512R

Be it resolved by the House of Representatives of the State of Arizona, the Senate concurring:

1. Article IX, Constitution of Arizona, is proposed to be amended by adding sections 25 and 26 as follows if approved by the voters and on proclamation of the Governor:

25. Balanced state budget; estimates; procedures; time limits; definition

A. For the purpose of passing a balanced state budget that does not exceed expected state revenues, the legislature and the governor shall designate in law a committee of the legislature or an elected state officer to be responsible for adopting quarterly estimates of total general fund revenues as described in this subsection. The designated committee of the legislature or elected state officer shall adopt the estimated total state general fund revenues for each quarter of the following fiscal year on or before February 1 of each year. The estimated total state general fund revenues adopted must include any monies carried forward from the previous fiscal year and may not include transfers from any fund if the amount transferred from the fund exceeds the amount previously appropriated to the fund from the general fund. Before the legislature adopts a state budget, the designated committee of the legislature or elected state officer shall adopt updated revenue estimates that supersede any revenue estimates previously adopted pursuant to this subsection.

B. On or before May 1 of each year, the legislature shall adopt and the governor shall approve for the following fiscal year a balanced state budget in which the total state general fund appropriations do not exceed the total state general fund revenues that this state is expected to receive pursuant to the most recent estimate adopted pursuant to subsection A of this section. The state budget may not allow the obligations of this state in a fiscal year to be deferred in whole or in part to another fiscal year. The state budget may permit an obligation to be paid in the following fiscal year if there are sufficient monies unexpended by an agency in the current fiscal year to cover the cost of the obligation.

C. Except as provided in subsection D of this section, if a state budget that complies with subsection B of this section is not approved by the legislature and signed by the governor on or before May 1 or if the designated committee of the legislature or elected state officer fails to adopt revenue estimates pursuant to subsection A of this section on or before February 1, state general fund appropriations for each state department or agency for the next fiscal year are immediately enacted in an amount equal to the appropriation that the department or agency received for the current fiscal year, notwithstanding statutory or constitutional funding formulas.

D. If the total of the state general fund appropriations in the current fiscal year exceeds the most recent estimate of total general fund revenues adopted pursuant to subsection A of this section and a state budget that complies with subsection B of this section is not approved by the legislature and signed by the governor on or before May 1, state general fund appropriations for each state department or agency for the next fiscal year are immediately enacted in an amount equal to the appropriation that the department or agency received for the current fiscal year multiplied by the percentage calculated by dividing the amount described in paragraph 1 of this subsection by the amount described in paragraph 2 of this subsection, notwithstanding statutory or constitutional funding formulas:

1. The amount of the most recent estimate of total general fund revenues adopted pursuant to subsection A of this section.

2. The amount of the total state general fund appropriations in the current fiscal year.

E. Except as required by subsection H of this section, if state general fund appropriations are enacted according to subsection C or D of this section, the legislature shall not alter the individual appropriations or the aggregate amount of appropriations for the following fiscal year without the approval of two-thirds of both houses of the legislature and the approval of the governor, if the altered state budget is a balanced state budget that complies with the requirements described in subsections B and H of this section.

F. On or before October 20, January 20 and April 20 of each fiscal year, the committee of the legislature or elected state officer designated pursuant to subsection A of this section shall determine and report the cumulative state general fund revenues actually received by this state in the current fiscal year, taking into account revenues received during the most recent fiscal year quarter and each prior quarter. The committee of the legislature or elected state officer shall compare the quarterly revenue actually received by the state in the current fiscal year to the corresponding quarterly revenue estimates adopted pursuant to subsection A of this section as adjusted pursuant to subsection G, paragraph 1 of this section. The committee of the legislature or elected state officer shall determine whether the actual revenues for the completed quarters of the current fiscal year are at least two per cent below the most recent estimate of the corresponding quarters of general fund revenues adopted pursuant to subsection A of this section as adjusted pursuant to subsection G, paragraph 1 of this section.

G. If it is determined in a quarterly report pursuant to subsection F of this section that the current fiscal year's actual revenues as of the most recently completed quarter are at least two per cent below the sum of the corresponding quarterly estimates most recently adopted pursuant to subsection A of this section as adjusted according to paragraph 1 of this subsection:

1. The committee of the legislature or elected state officer designated pursuant to subsection A of this section shall adopt adjusted estimates of the total state general fund revenues for each quarter of the current fiscal year. These adjusted estimates shall include the actual revenues for each quarter of the current fiscal year for which the state has already collected revenues and shall include reduced estimates for each of the remaining quarters of the fiscal year that reflect the lower-than-projected actual revenues in the already‑completed quarters of the current fiscal year.

2. The governor shall call the legislature into special session to address the expected current fiscal year state budget deficit. The call for the special session shall be issued within fifteen days after the issuance of the report described in subsection F of this section.

H. If the legislature is called into a special session to address a current fiscal year state budget deficit pursuant to subsection G, paragraph 2 of this section, within the first thirty days of the special legislative session the legislature shall adopt and the governor shall approve reductions in the state general fund appropriations of the current fiscal year in an amount so that the total of the remaining state general fund appropriations do not exceed the total state general fund revenues that this state is expected to receive pursuant to the most recent estimates adopted pursuant to subsection A of this section as adjusted pursuant to subsection G, paragraph 1 of this section. The state budget may not allow the obligations of this state in a fiscal year to be deferred in whole or in part to another fiscal year. The state budget may permit an obligation to be paid in the following fiscal year if there are sufficient monies unexpended by an agency in the current fiscal year to cover the cost of the obligation.

I. If a state budget that complies with subsection H of this section is not approved by the legislature and signed by the governor on or before the thirtieth day of the special session, the appropriation for each state department or agency in the current fiscal year is reduced to the appropriation that each department or agency received for the current fiscal year multiplied by the percentage calculated by subtracting the amount described in paragraph 1 of this subsection from the amount described in paragraph 2 of this subsection and dividing the difference by the amount described in paragraph 2 of this subsection, notwithstanding statutory or constitutional funding formulas:

1. The amount of the most recent estimate of total general fund revenues adopted pursuant to subsection A of this section as adjusted pursuant to subsection G, paragraph 1 of this section.

2. The amount of the total state general fund appropriations in the current fiscal year, without regard to the impact of this subsection.

J. Except as required by subsection H of this section, if state general fund appropriations are enacted according to subsection I of this section, the legislature shall not alter the individual appropriations or the aggregate amount of appropriations for the following fiscal year without the approval of two-thirds of both houses of the legislature and the approval of the governor, if the altered state budget is a balanced state budget that complies with the requirements described in subsections B and H of this section.

K. For the purposes of this section, "state budget" means the general appropriation bill and supplemental appropriation bills for the support and maintenance of the different departments of this state, for state institutions, for public schools and for interest on the public debt for a specific fiscal year.

26. Deferral of state obligations; repeal

A. Notwithstanding section 25 of this article, the state budget or adjusted state budget may allow for the obligations of this state in a given fiscal year to be deferred in whole or in part to another fiscal year subject to the following limits:

1. In the fiscal year ending June 30, 2016, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed nine-tenths of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

2. In the fiscal year ending June 30, 2017, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed eight-tenths of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

3. In the fiscal year ending June 30, 2018, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed seven-tenths of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

4. In the fiscal year ending June 30, 2019, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed six-tenths of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

5. In the fiscal year ending June 30, 2020, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed five-tenths of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

6. In the fiscal year ending June 30, 2021, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed four-tenths of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

7. In the fiscal year ending June 30, 2022, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed three-tenths of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

8. In the fiscal year ending June 30, 2023, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed two-tenths of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

9. In the fiscal year ending June 30, 2024, the total amount of obligations of this state that may be deferred from the current fiscal year to the following fiscal year may not exceed one-tenth of the total amount of obligations of the fiscal year ending June 30, 2014 that was deferred to the fiscal year ending June 30, 2015.

B. This section is repealed on July 1, 2025.

2. The Secretary of State shall submit this proposition to the voters at the next general election as provided by article XXI, Constitution of Arizona.