72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3493
House Bill 3612
Sponsored by Representative NELSON
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Requires Governor to present performance-based, zero-based
budget. First applies to biennium beginning July 1, 2005.
A BILL FOR AN ACT
Relating to budgeting; creating new provisions; and amending ORS
199.432, 291.002, 291.200, 291.206, 291.216, 292.039, 576.435
and 577.440.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 291.002 is amended to read:
291.002. As used in ORS 291.001 to 291.034, { + 291.200, + }
291.201 to 291.222, 291.232 to 291.260, 291.307 and 291.990,
unless the context requires otherwise:
{ + (1) 'Classification of expenditures' means the major
groups or categories of expenditures for the purpose of
budget-making and accounting that are established as provided in
ORS 291.206. + }
{ - (1) 'Department' means the Oregon Department of
Administrative Services. - }
{ - (2) 'Director' means the Director of the Oregon
Department of Administrative Services. - }
{ - (3) - } { + (2) + } 'Dedicated fund' means a fund in
the State Treasury, or a separate account or fund in the General
Fund in the State Treasury, that by law is dedicated,
appropriated or set aside for a limited object or purpose; but
'dedicated fund' does not include a revolving fund or a trust
fund.
{ + (3) 'Performance-based budgeting' means a method of
budgeting in which the allocation of program moneys is tied to
measures that indicate how well the program is meeting the goals
established for the program. + }
(4) 'Revolving fund' means a fund in the State Treasury,
established by law, from which is paid the cost of goods or
services furnished to or by a state agency, and which is
replenished through charges made for such goods or services or
through transfers from other accounts or funds; and specifically
includes funds derived from receipts by the State Board of Higher
Education of tuition, fees, dormitory earnings, student activity
receipts and sales of products and services incident to education
functions.
(5) 'Trust fund' means a fund in the State Treasury in which
designated persons or classes of persons have a vested beneficial
interest or equitable ownership, or which was created or
established by a gift, grant, contribution, devise or bequest
that limits the use of the fund to designated objects or
purposes.
{ - (6) 'Classification of expenditures' means the major
groups or categories of expenditures for the purpose of
budget-making and accounting that are established as provided in
ORS 291.206. - }
{ - (7) - } { + (6) + } 'State agency' or 'agency' means
every state officer, board, commission, department, institution,
branch or agency of the state government, whose costs are paid
wholly or in part from funds held in the State Treasury, except
the Legislative Assembly, the courts and their officers and
committees, and except the Secretary of State and the State
Treasurer in the performance of the duties of their
constitutional offices.
{ - (8) - } { + (7) + } 'State officer' means any elected
or appointed state officer, including members of boards and
commissions, except the members and officers of the Legislative
Assembly, the courts and the Secretary of State and the State
Treasurer in the performance of the duties of their
constitutional offices.
{ + (8) 'Zero-based budgeting' means a method of budgeting in
which the initial funding amount for a program is assumed to be
zero and all proposed expenditures for the program are justified
in the budget. + }
SECTION 2. ORS 291.200 is amended to read:
291.200. (1) It is the intent of the Legislative Assembly to
require the Governor, in the preparation of the biennial budget,
to state as precisely as possible what programs the Governor
recommends be approved for funding under estimated revenues under
ORS 291.342. If estimated revenues are inadequate, the
Legislative Assembly intends that it be advised by the Governor
as precisely as possible how the Legislative Assembly might
proceed to raise the additional funds. It is also the intent of
the Legislative Assembly, in the event that the additional
funding is not possible, to be informed by the Governor precisely
what programs or portions thereof the Governor recommends be
reduced accordingly. Finally, if the Governor chooses to
recommend additional new programs or program enhancements, the
Legislative Assembly intends that the Governor specify how the
additional funding might be achieved. The Legislative Assembly
believes that the state government must allocate its resources
for effective and efficient delivery of public services by:
(a) Clearly identifying desired results;
(b) Setting priorities;
(c) Assigning accountability; { - and - }
(d) Measuring, reporting and evaluating outcomes to determine
future allocation { + ; and
(e) Using performance-based budgeting and zero-based
budgeting + }.
(2) To achieve the intentions of subsection (1) of this
section, it is the budget policy of this state to create and
administer programs and services designed to attain societal
outcomes such as the Oregon benchmarks and to promote the
efficient and measured use of resources.
(3) To effect the policy stated in subsection (2) of this
section, state government shall:
(a) Allocate resources to achieve desired outcomes;
(b) Express program outcomes in measurable terms;
(c) Measure progress toward desired outcomes;
(d) Encourage savings;
(e) Promote investments that reduce or avoid future costs;
(f) Plan for the short term and long term using consistent
assumptions for major demographic and other trends; and
(g) Require accountability at all levels for meeting program
outcomes.
SECTION 3. ORS 291.206 is amended to read:
291.206. (1) The Governor shall prescribe such rules and
regulations as the Governor deems necessary for the guidance of
agencies in the preparation of the budget estimates and requests.
The Governor, with the approval of the Secretary of State, shall
prepare and prescribe classifications of expenditures and revenue
for the purpose of budget-making and accounting.
{ + (2) The Governor shall require that all agencies base
their budget estimates and requests on performance-based
budgeting and zero-based budgeting. + }
{ - (2) - } { + (3) + } In so far as practicable, agency
budget estimates and requests and appropriation measures shall be
prepared in a manner that reflects state governmental
organization and state agency duties, functions and powers under
the law in effect on January 1 of the following year. The Oregon
Department of Administrative Services shall maintain agency
budget estimates and requests in the form in which they are
submitted.
SECTION 4. ORS 291.216 is amended to read:
291.216. (1) Not later than November 10 of each even-numbered
year the Governor shall cause the budget report to be compiled
and prepared for printing.
(2) The budget report shall include a budget message prepared
by the Governor, including recommendations of the Governor with
reference to the fiscal policy of the state government for the
coming biennium, describing the important features of the budget
plan, embracing a general budget summary setting forth the
aggregate figures of the budget report so as to show a balanced
relation between the total proposed expenditures and the total
anticipated income, with the basis and factors on which the
estimates are made, the amount to be borrowed, and other means of
financing the estimated expenditures for the ensuing biennium,
compared with the corresponding figures for at least the last
completed biennium and the current biennium.
{ + (3) The budget report shall present a performance-based,
zero-based budget. + }
{ - (3) - } { + (4) + } The budget plan shall be supported
by explanatory schedules or statements, classifying the
expenditures reported therein, both past and proposed, by
organization units, objects and funds, and the income by
organization units, sources and funds, and the proposed amount of
new borrowing as well as proposed new tax or revenue sources,
including a single comprehensive list of all proposed increases
in fees, licenses and assessments assumed in the budget plan.
{ - (4) - } { + (5) + } The budget plan shall be submitted
for all dedicated funds, as well as the state General Fund, and
shall include the estimated amounts of federal and other aids or
grants to state agencies or activities provided for any purpose
whatever, together with estimated expenditures therefrom.
{ - (5) - } { + (6) + } The budget report shall embrace the
detailed estimates of expenditures and revenues. It shall include
statements of the bonded indebtedness of the state government,
showing the actual amount of the debt service for at least the
past biennium, and the estimated amount for the current biennium
and the ensuing biennium, the debt authorized and unissued, the
condition of the sinking funds and the borrowing capacity. It
shall contain the Governor's recommendations concerning tax
expenditures identified under ORS 291.214. It shall also contain
any statements relative to the financial plan which the Governor
may deem desirable or which may be required by the legislature.
{ - (6) - } { + (7) + } The budget plan shall use the
estimated revenues under ORS 291.342 for the fiscal year in which
the plan is submitted as the basis for total anticipated income
under subsection (2) of this section, subject to such adjustment
as may be necessary to reflect accurately projections for the
next biennium.
{ - (7) - } { + (8) + } As supplemental information to the
budget report, the Governor shall publish an existing level
tentative budget plan for the two fiscal years for which the
budget report is required. This summary budget shall reflect
only existing revenues estimated under subsection { - (6) - }
{ + (7) + } of this section; subject to such adjustment as may
be necessary to reflect accurately projections for the next
biennium. The supplemental information to the budget report shall
be submitted at the same time as the budget report.
{ - (8)(a) - } { + (9)(a) + } The budget report shall
present information regarding the expenses of the state in the
following categories:
(A) Personnel expenses, including compensation and benefits for
state employees, but excluding costs of services contracted out
and temporary service costs.
(B) Supplies, equipment and the costs of services contracted
out.
(C) Capital construction.
(D) Capital outlay.
(E) Debt service.
(b) For each category described in paragraph (a) of this
subsection, the report shall show actual expenditures to date.
(c) For each category described in paragraph (a) of this
subsection, the report shall show:
(A) The amount of merit increases for the existing workforce.
(B) Increases for the cost of replacement and repair of
supplies and equipment.
(C) Increases for the costs of new construction or major
remodeling.
(D) Increases for the cost of inflation.
(d) The report shall show the total increase in the cost of
salaries and benefits for all state positions.
{ - (9) - } { + (10) + } The budget report shall include:
(a) The total number of positions included in the budget.
(b) The average vacancy rate in the present biennium.
(c) The number of permanent, full-time equivalent vacancies,
excluding academics, as of July 1 of even-numbered years.
{ - (10) - } { + (11) + } The budget report shall include
computations showing budget figures as a percentage of the total
General Fund, federal fund, fee or other source category, as may
be appropriate.
{ - (11) - } { + (12) + } The budget report shall include,
in a format that provides side-by-side comparison with the State
Debt Policy Advisory Commission report of net debt capacity, a
six-year forecast, by debt type and repayment source, of:
(a) That portion of the capital construction program required
to be reported by ORS 291.224 that will be financed by debt
issuance.
(b) The acquisition of equipment or technology in excess of
$500,000 that will be financed by debt issuance.
(c) Other state agency debt issuance for grant or loan
purposes.
{ - (12) - } { + (13) + } As supplemental information to
the budget report, the Governor shall prepare an alternative
budget plan for the two fiscal years for which the budget report
is required and shall provide the alternative budget plan to the
President of the Senate, the Speaker of the House of
Representatives and the majority and minority leaders in the
Senate and the House of Representatives. The alternative budget
plan shall establish funding for each state agency's programs and
activities at 90 percent of the appropriations requested for the
state agency in the budget report, excluding appropriations that
are not made to fund recurring activities. For each state agency,
the Governor shall describe the 10 percent reduction in
appropriated moneys in terms of the activities or programs that
the agency will not undertake. The activities or programs that
are not undertaken as a result of the reductions in appropriated
moneys made in the alternative budget plan shall be ranked in
order of importance and priority on the basis of lowest cost for
benefit obtained.
SECTION 5. ORS 576.435 is amended to read:
576.435. (1) The final budget prepared by the commission under
ORS 576.415 (2) and the proposed and final budgets prepared by
the commission under ORS 576.425 and 576.430 shall show the
estimated receipts and expenditures by or under the authority of
the commission under ORS 576.051 to 576.584 for the fiscal year
for which the budget is adopted. The proposed budget prepared by
the commission under ORS 576.425 shall also show the actual
receipts and expenditures by or under the authority of the
commission for the fiscal year preceding the fiscal year in which
the proposed budget is prepared, if any, and the estimated
receipts and expenditures by or under the authority of the
commission for the fiscal year in which the proposed budget is
prepared, if any.
(2) Estimated receipts and expenditures for the fiscal year for
which the budget is adopted shall be fully itemized in the
proposed and final budgets and shall be prepared and arranged to
show in plain and succinct language each particular item of such
receipts and expenditures. Such items of receipts and
expenditures shall be arranged under major groups or categories
as nearly as practicable the same as the most recent
classifications of revenue and expenditures established under ORS
{ - 291.002 (6) and - } 291.206.
(3) The proposed and final budgets shall contain one estimate
only for the fiscal year for which the budget is adopted for
emergency or other expenditures unforeseen at the time the budget
is prepared.
SECTION 6. ORS 577.440 is amended to read:
577.440. (1) The final budget prepared by the Oregon Beef
Council under section 18, chapter 685, Oregon Laws 1959, and the
proposed and final budgets prepared by the council under ORS
577.420 and 577.430 shall show the estimated receipts and
expenditures by or under the authority of the council under ORS
577.110 to 577.605, 561.250 and 599.245 for the fiscal year for
which the budget is adopted. The proposed budget prepared by the
council under ORS 577.420 shall also show the actual receipts and
expenditures by or under the authority of the council for the
fiscal year preceding the fiscal year in which the proposed
budget is prepared, if any, and the estimated receipts and
expenditures by or under the authority of the council for the
fiscal year in which the proposed budget is prepared, if any.
(2) Estimated receipts and expenditures for the fiscal year for
which the budget is adopted shall be fully itemized in the
proposed and final budget and shall be prepared and arranged to
show in plain and succinct language each particular item of such
receipts and expenditures. Such items of receipts and
expenditures shall be arranged under major groups or categories
as nearly as practicable the same as the most recent
classifications of revenue and expenditures established under ORS
{ - 291.002 (6) and - } 291.206.
(3) The proposed and final budgets shall contain one estimate
only for the fiscal year for which the budget is adopted for
emergency or other expenditures unforeseen at the time the budget
is prepared.
SECTION 7. ORS 199.432 is amended to read:
199.432. (1) A boundary commission created under ORS 199.425 or
199.430 may sue and be sued, enter into contracts and perform
such other actions as may be necessary to carry out the
provisions of ORS 199.410 to 199.534.
(2) A boundary commission is a state agency as defined in ORS
291.002 { - (7) - } and is not subject to the provisions of
ORS 291.201 to 291.226, 291.232 to 291.260 and 291.371 to
291.385.
(3) A boundary commission employing personnel under ORS 199.455
shall provide employee benefits provided to state management
service employees.
SECTION 8. ORS 292.039 is amended to read:
292.039. (1) The payment of the salary or compensation of the
employees of the Department of Transportation and the officers
and employees of any state agency, as defined in ORS 291.002
{ - (7) - } , if such agency is authorized by the Director of
the Oregon Department of Administrative Services, where such
salary or compensation is payable out of the State Treasury and
is fixed by law or the proper governing board or authority at a
definite rate per day, week, month or year, shall be made
monthly, as provided in this section.
(2) The superintendent, president or chief executive officer of
the institutions, boards, commissions or state agencies listed in
subsection (1) of this section, or such other officer thereof as
may be, with the approval of the department, designated by the
proper governing board or authority, shall, at the end of each
month, make out, certify and transmit to the department, a
payroll, duly verified by the superintendent, president or chief
executive officer or designated other officer and approved by the
proper auditing committee or officer, showing the names of the
several officers and employees during the preceding payroll
period, the rate of compensation of each by the day, week, month
or year, the time employed, the amount due and any other facts
the department requires. The department, if it approves the
payroll, shall draw a warrant on the State Treasurer for the
aggregate amount allowed by it thereon, in favor of the
superintendent, president or other officer of the institution,
board, commission or state agency, who shall immediately pay over
the moneys received thereon to the several parties entitled
thereto, taking receipts therefor, which shall be transmitted to
the department.
SECTION 9. { + The amendments to ORS 291.200, 291.206 and
291.216 by sections 2 to 4 of this 2003 Act first apply to budget
estimates and requests and the budget report prepared for the
biennium beginning July 1, 2005. + }
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