Tennessee § 9-4-211 - Reserve for revenue fluctuations.

§ 9-4-211. Reserve for revenue fluctuations.

There is hereby created on the books and records of the state treasury a reserve account in the general fund to be known as the “reserve for revenue fluctuations.” Amounts which may from time to time be in this reserve shall be available, as hereinafter provided, to meet unexpected shortfalls of revenue or to meet expenditure requirements in excess of budgeted appropriation levels. Each year, beginning with the budget for the 1998-1999 fiscal year, the governor shall include in the budget document and the general appropriations bill prepared pursuant to § 9-4-5106, an amount to be allocated to this reserve at least equal to ten percent (10%) of the estimated growth in state tax revenues to be allocated to the general fund and the education trust fund. This allocation shall be included in the budget presented each year until the amount in the reserve equals eight percent (8%) of the estimated state tax revenues to be allocated to the general fund and the education trust fund for that year. In subsequent budgets, the governor shall include an allocation to the reserve equal to the lesser of: An amount equal to ten percent (10%) of the estimated growth in state tax revenues to be allocated to the general fund and the education trust fund; or An amount sufficient to maintain the reserve at eight percent (8%) of the estimated state tax revenues to be allocated to the general fund and the education trust fund for that year. Amounts available in the revenue fluctuation reserve may be used by the commissioner of finance and administration to offset shortfalls in state tax revenues which may occur and for which funds are not otherwise available. It is hereby declared to be the legislative intent that to the extent practicable, all revenue shortfalls will be offset by reductions in expenditures before using amounts in the revenue fluctuation reserve. Upon determining that it is likely that amounts in the revenue fluctuation reserve will be required to be utilized to meet a shortfall of state tax revenue, the commissioner shall report this determination immediately to the chairs of the finance, ways and means committees of the senate and the house of representatives. Upon receipt of such notification, each chair shall, as soon as practicable, call a meeting of the finance, ways and means committees, at which time the commissioner shall report information concerning the need to utilize amounts in the revenue fluctuation reserve. At the discretion of the chairs, the committees may meet jointly to receive the commissioner's report. Subject to specific provisions of the general appropriations bill, an amount not to exceed the greater of one hundred million dollars ($100,000,000) or one-half (½) of the amount available in the reserve may be used by the commissioner to meet expenditure requirements in excess of budgeted appropriation levels. It is hereby declared to be the legislative intent that any such excess expenditure requirements be avoided by reducing such requirements insofar as possible. Prior to using any amounts in the reserve for this purpose, the commissioner shall notify the secretary of the state funding board and the chairs of the finance, ways and means committees of the senate and the house of representatives that the reserve funds are to be used for this purpose. Upon receipt of such notification, each chair shall, as soon as practicable, call a meeting of the finance, ways and means committees, at which time the commissioner shall report information concerning the need to utilize amounts in the revenue fluctuation reserve. At the discretion of the chairs, the committees may meet jointly to receive the commissioner's report. Acts 1987, ch. 429, § 1; 1996, ch. 832, § 1; T.C.A. § 9-6-120 ; Acts 2003, ch. 355, § 12; 2013, ch. 175, § 1. Code Commission Notes. Former subdivision (a)(2)(C), concerning subdivision (a)(2) not applying in the fiscal year beginning on July 1, 2003, and ending on June 30, 2004, was deleted as obsolete by the code commission in 2012. Compiler's Notes. Acts 2003, ch. 355, § 66 provided that no expenditure of public funds pursuant to the act shall be made in violation of the provisions of Title VI of the Civil Rights Act of 1964, as codified in 42 U.S.C. § 2000 d. Attorney General Opinions. State tax revenue allocated to the Rainy Day Fund in the budget document should not be included in “appropriations from state tax revenues” when determining whether the Copeland Cap has been exceeded. When state officials calculate the rate of growth, they may include only appropriations from state tax revenues that are received in the fiscal year. Appropriations from the reserve for revenue fluctuation, to the extent it includes state tax revenue from the earlier year, are not included in the Copeland Cap calculation. OAG 18-05, 2018 Tenn. AG LEXIS 5 (2/12/2018).