9-2-1014.2. Budget shortfall measures; expenditure reductions; use of contingent appropriations.

(a) The governor shall periodically review agency budgets and expenditures. If the governor determines during the review that the probable receipts from taxes or other sources of revenue for any fund or account will be less than were anticipated, and if the governor determines that these receipts plus existing revenues in the fund or account which are available will be less than the amount appropriated, the governor, after complying with the provisions of this section, shall give notice to the state agencies concerned and reduce the amount expended to prevent a deficit. In making any determination under this subsection the governor may but need not consider statutory authority to transfer appropriated funds or use a contingent appropriation to address revenue shortfalls. This subsection shall apply to all appropriations to state agencies regardless of whether the appropriation is for a specified project or purpose, including but not limited to capital construction projects. This subsection shall apply whether the appropriation is to be expended directly by an agency or is made to an agency for distribution to another entity.

(b) Before any expenditure is reduced pursuant to subsection (a) of this section, or if the governor otherwise determines that a shortfall in appropriated funds is likely at any time in a fiscal biennium prior to the convening of the next regular general or budget session of the legislature, the following actions shall be taken:

(i) The governor shall notify the chairmen of the joint appropriations committee, the management council of the legislature and the chairmen of the consensus revenue estimating group of any proposed expenditure reduction and any recommended use of a contingent appropriation. The consensus revenue estimating group shall meet as soon as feasible, review its latest official revenue forecast and determine if adjustments should be made to that forecast in light of existing economic conditions;

(ii) The management council shall forward to the legislature the proposals and recommendations of the governor and assign review of the proposals and recommendations to various standing committees of the legislature as the council deems appropriate;

(iii) The joint appropriations committee shall determine if it should recommend the use of a contingent appropriation to offset any likely budget shortfall for the remainder of the fiscal biennium. In making this determination and any recommendation the committee shall consider:

(A) The expenditure reductions that would be required without use of a contingent appropriation and the impact on services provided. The joint appropriations committee shall consider any comments received from any standing committee of the legislature regarding the potential impact on services;

(B) The period of time any decline in revenues resulting in the budget shortfall is forecasted to last;

(C) The availability of any other existing or projected funds to offset any predicted shortfall;

(D) The amount of time before the next regular general or budget legislative session;

(E) The percentage of the contingent appropriation needed to be used to ensure a budget shortfall will be alleviated until the end of either the fiscal biennium or the convening of a regular legislative session, as the joint appropriations committee deems in the best interests of the state.

(c) The joint appropriations committee shall submit its recommendations to the governor not more than thirty (30) days after receiving notification under this section. After receiving the recommendation the governor may authorize the transfer of any contingent appropriation, subject to any condition placed on the contingent appropriation in the law making the appropriation, to any account or fund as he deems appropriate and to prevent a budget shortfall. The governor shall report all expenditure reductions and uses of contingent appropriations to the joint appropriations committee not later than ten (10) days after his action to implement the expenditure reduction or transfer contingent appropriations.