§ 704. Interim budget and appropriation adjustments
(a) The General Assembly recognizes that acts of appropriations and their sources of funding
reflect the priorities for expenditures of public funds enacted by the General Assembly
and that major reductions or transfers, when required by reduced State revenues or
other reasons, ought to be made whenever possible by an act of the General Assembly
reflecting its revisions of those priorities. Nevertheless, the General Assembly also
recognizes that when it is not in session, it may be necessary to reduce authorized
appropriations and their sources of funding, and funds may need to be transferred,
to maintain a balanced State budget. Under these limited circumstances, it is the
intent of the General Assembly that appropriations may be reduced and funds transferred
when the General Assembly is not in session pursuant to the provisions of this section.
(b)(1) Except as otherwise provided in subsection (f) of this section, in each instance that
the official State revenue estimate for the General Fund, the Transportation Fund,
or federal funds has been reduced by one percent or more from the estimates determined
and assumed for purposes of the current fiscal year’s appropriations, the Secretary
of Administration shall prepare an expenditure reduction plan for consideration and
approval by the Joint Fiscal Committee pursuant to subsection (e) of this section,
provided that any total reductions in appropriations and transfers of funds are not
greater than the reductions in the official State revenue estimate.
(2) In each instance that the official State revenue estimate for the General Fund, the
Transportation Fund, or federal funds has been reduced by less than one percent from
the estimates determined and assumed for purposes of the current fiscal year’s appropriations,
the Secretary of Administration may prepare and implement an expenditure reduction
plan without the approval of the Joint Fiscal Committee, provided that any total reductions
in appropriations and transfers of funds are not greater than the reductions in the
official State revenue estimate. The Secretary may implement an expenditure reduction
plan under this subdivision if plan reductions to the total amount appropriated in
any section or subsection do not exceed five percent, the plan is designed to minimize
any negative effects on the delivery of services to the public, and the plan does
not have any unduly disproportionate effect on any single function, program, service,
benefit, or county. Plans not requiring the approval of the Joint Fiscal Committee
shall be filed with the Joint Fiscal Office prior to implementation. If the Secretary’s
plan consists of reductions greater than five percent to the total amount appropriated
in any section or subsection, such plan shall only be implemented in the manner provided
for in subdivision (1) of this subsection.
(c) An expenditure reduction plan prepared by the Secretary shall indicate:
(1) the amounts to be reduced in each appropriation by funding source and the amounts
to be transferred;
(2) in personal services, operating expenses, grants, and other categories, the effect
of each reduction in appropriations and their sources of funding, and each fund transfer,
on the primary purposes of the program;
(3) how it is designed to minimize any negative effects on the delivery of services to
the public; and
(4) any unduly disproportionate effect the plan may have on any single function, program,
service, benefit, or county.
(d) An expenditure reduction plan implemented under subdivision (b)(2) of this section
shall not include any reduction in:
(1) appropriations authorized and necessary to fulfill the State’s debt obligations;
(2) appropriations authorized for the Judicial or Legislative Branch, except that the
plan may recommend reductions for consideration by the Judicial or Legislative Branch;
or
(3) appropriations for the salaries of elected officers of the Executive Branch listed
in subsection 1003(a) of this title.
(e)(1) The Joint Fiscal Committee shall have 21 days from the date of submission of any expenditure
reduction plan under subdivision (b)(1) of this section to consider the plan and may
approve or disapprove the plan upon a vote of a majority of the members of the Committee.
If the Committee vote results in a tie, the plan shall be deemed disapproved, and
if the Committee fails for any other reason to take final action on such plan within
21 days of its submission to the Committee, it shall be deemed to be disapproved.
During the 21-day period for consideration of the plan, the Committee shall conduct
a public hearing and provide an opportunity for public comment on the plan.
(2) If the plan is disapproved, then in order to communicate the priorities of the General
Assembly, the Committee shall make recommendations to the Secretary for amendments
to the plan. Within seven days after the Committee notifies the Secretary of its disapproval
of a plan, the Secretary may submit a final plan to the Committee. The Committee shall
have 14 days from the date of submission of a final plan to consider that plan and
to vote by a majority of the members of the Committee to approve or disapprove the
plan, but if the Committee fails to approve or disapprove the plan by a majority vote,
the plan shall be deemed disapproved. If the Secretary’s final plan includes any changes
from the original plan other than those recommended by the Committee, then during
the 14-day period for consideration of the final plan, the Committee shall conduct
a public hearing and provide an opportunity for public comment, with the scope of
the hearing and the comments limited to the changes from the original plan.
(3) In determining whether to approve a plan submitted by the Secretary under this subsection,
the Committee shall consider whether the plan minimizes any negative effects on the
delivery of services to the public and whether the plan will have any unduly disproportionate
effect on any single function, program, service, benefit, or county.
(4) Any plan disapproved under subdivision (b)(1) of this section shall not be implemented.
(5) For purposes of this section, the Committee shall be convened at the call of the Chair
or at the request of at least three members of the Committee.
(f) In the event of a reduction in the official revenue estimate of one percent or more
and the Joint Fiscal Committee does not approve the Secretary’s final expenditure
reduction plan prepared under subdivision (b)(1) of this section, the Secretary may
implement an expenditure reduction plan in the manner provided for in subdivision
(b)(2) of this section, provided that the expenditure reduction plan is not greater
than one percent of the prior official revenue estimate. If the Secretary implements
an expenditure reduction plan under the authority of this subsection, any subsequent
expenditure reduction plan that is required to address the remaining imbalance under
the current official State revenue estimate may only be implemented in the manner
provided for in subdivision (b)(1) of this section.
(g) No expenditure reduction plan may be approved or implemented under this section that:
(1) would result in total reductions in appropriations from any fund, or transfers to
that fund, by more than four percent of the estimate originally determined and assumed
for purposes of the current fiscal year’s appropriations; or
(2) would reduce expenditures or transfer revenues of the Education Fund as prescribed
by law.
(h) An expenditure reduction plan may only be implemented under subsection (b) of this
section subsequent to an official State revenue estimate and when the General Assembly
is not in session.
(i) [Repealed.]
(j) In each instance that cumulative revenue collections during the month of September
or October are four percent or more below the respective cumulative monthly revenue
targets, the Emergency Board shall convene in the manner provided for in subsection 305a(b) of this title to determine whether to revise the official State revenue estimate.
(k) As used in this section:
(1) “Cumulative monthly revenue targets” means monthly revenue targets adopted based on
the most current official State revenue estimates, as agreed upon by the Legislative
Joint Fiscal Office and the Secretary.
(2) “Expenditure reduction plan” means a rescission plan that includes reducing and adjusting
appropriations and their sources of funding, and transferring and adjusting funds,
from the amounts authorized in the current fiscal year’s appropriations.
(3) “Official State revenue estimates” means a revenue estimate determined by the Emergency
Board, as provided in section 305a of this title. An official State revenue estimate does not mean cumulative monthly revenue targets. (Added 1995, No. 178 (Adj. Sess.), § 280; amended 1997, No. 61, § 262a; 2009, No. 52, § 1; 2013, No. 142 (Adj. Sess.), § 63; 2015, No. 58, § C.103, eff. June 11, 2015; 2015, No. 131 (Adj. Sess.), § 33; 2021, No. 105 (Adj. Sess.), § 462, eff. July 1, 2022; 2025, No. 27, § E.127, eff. July 1, 2025.)