Maybe NO will Finally Mean NO when it comes zeroing out General Ledger items in a budget prepared by a Budget Committee. As longer term readers know, I was on my hamlet’s BudComm for three – three year terms (see “Tales from the BudComm“) and I had discovered a technical flaw in the budget process that once a budget was approved by the voters, written into the format required by the NH Dept. Revenue of Administration’s MS Forms. Effectively, all of the General Ledger line items get rolled up by department and that total is assigned as a “Purpose”. The flaw is that once rolled up into a summary sub-total, the visibility into the individual line items is lost.
And the “Governing Bodies” (like the Selectmen or School Board) then have the “assumed” ability to transfer back into those zeroed out line items because it is spending “to the sub-title’s Purpose”. The problem with that folks that aren’t that hep on “the Spirit of the Law” outlook can void both the BudComm’s decision AND the Will of the People by ignoring what the voters determined what was needed for the Town (or SB or…) and what was NOT.
My HB576 last session was an attempt to fix this technical problem – it was voted down by the Democrats on the Municipal and County Government. Nice to see that newly re-elected NH State Rep Norm Silber (and Grokster, and former BudComm member with me) did a resubmit as LSR 2021-0678 (Legislative Service Request).
And now it has been turned into HB459. In its entirety (some bolding mine):
HB 459 – AS INTRODUCED
2021 SESSION
21-0678
06/10
HOUSE BILL 459
AN ACT prohibiting a transfer of funds within an adopted budget to a general ledger line item in such budget that contains an entry of zero dollars.
SPONSORS: Rep. Silber, Belk. 2; Rep. Sylvia, Belk. 6; Rep. Torosian, Rock. 14; Rep. Yakubovich, Merr. 24; Rep. Bean, Belk. 2; Rep. Aldrich, Belk. 2
COMMITTEE: Municipal and County Government
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ANALYSIS
This bill prohibits a transfer of funds in an adopted budget to a general ledger line that contains zero dollars.
This bill also creates a cause of action for violation of such prohibition and establishes penalties.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
21-0678
06/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty One
AN ACT prohibiting a transfer of funds within an adopted budget to a general ledger line item in such budget that contains an entry of zero dollars.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Statement of Findings and Purpose.
I. The general court finds that budgets approved by relevant voters by each municipality and school board, as well as budgets approved by county delegations or by the governing bodies of municipalities that do not require voter approval of budgets often contain general ledger line items containing an entry of zero dollars, whether determined by a budget committee, in a town deliberative session, a town meeting, or by a county delegation, it being the reasonable expectation of those authorized to grant final approval of budgets that while the governing bodies of the municipalities, counties, and school boards have discretion to transfer funds between general ledger line items, no such transfers are to be made to general ledger line items that contain an entry of zero dollars in the approved budgets.
II. Because the general ledger line items in the approved budgets are grouped and aggregated together for purposes of reporting the budgets to the department of revenue administration on its forms, the governing bodies of the municipalities, counties, and school boards are known to make transfers between general ledger line items into such general ledger line items containing entries of zero dollars as long as the transfers to not exceed the total budget allocation contained in the larger categories of budget categories in the department budget reporting forms. This practice effectively contravenes the intent of the voters and, as applicable, the governing bodies, that approved the respective budgets with the expectation that an entry of zero dollars in a line item means that no money shall be transferred into such a line item in the approved budget.
2 New Sections; General Ledger Line Items Containing Zero Dollars. Amend RSA 32 by inserting after section 5-c the following new sections:
32:5-d General Ledger Line Items Containing Zero Dollars.
I. The legislative or governing body of every municipality, county, school board, and school administrative unit shall regularly report in detail to the department of revenue administration every general ledger line item of its duly adopted budget that contains an entry of zero dollars. Such report shall be in the form of a detailed spreadsheet with full identifying information of any such general ledger line items, and such spreadsheets shall be deemed to be addenda to, and incorporated within, the budget forms filed with the department of revenue administration under penalties of perjury.
II. Notwithstanding any other provisions of law and notwithstanding the forms and regulations of the department of revenue administration, no governing body of any municipality, county, school board, or school administrative unit shall transfer funds within its adopted budget, whether approved by the voters, the county delegation, or any other governing body having authority to approve budgets, to a general ledger line item of its adopted budget that contains an entry of zero dollars, nor utilize public funds for the purposes enumerated in such line items, and any such purported transfer shall be null and void. No new general ledger line item shall be created after a budget has been finally approved unless it is due to an emergency or unforeseen circumstances and specifically approved at a special meeting called to create such new general ledger line item and to appropriate additional money to the budget. Any moneys expended from a line item originally containing a zero dollar entry by reason of a transfer otherwise prohibited by this section shall revert to the general ledger line item from which the wrongful transfer had been made by transferring funds within the approved budget to offset said wrongful transfer from other general ledger line items having a positive dollar balance.
32:5-e Procedure; Penalties..
I. The superior court shall have jurisdiction to declare the purported transfer of funds from any source into a general ledger item within its accounting system that has been allocated zero dollars in its approved budget invalid and to issue a permanent injunction against the county, city, town, or other government entity, including, without limitation, any school district or school administrative unit, prohibiting it from enforcing or implementing such purported transfer. It shall be no defense that in enacting the transfer the county, city, town, or other local government entity, including, without limitation, any school district or school administrative unit was acting in good faith or upon advice of counsel.
II. Upon a good faith belief that a county, city, town, or other local government entity has violated RSA 32:5-d, any citizen of this state believing they have been aggrieved by such actions shall give written notice, by certified mail, return receipt requested, or by a nationally recognized courier service, to the county, city, town, or other government entity that is believed to have violated RSA 32:5-d of the reasonable belief of such a violation, and the county, city, town, or other government entity shall have a not more than 90 days after the giving of such notice to rescind any such transfer of funds from any source into a general ledger item within its accounting system that has been allocated zero dollars in its approved budget. However, if after the expiration of such 90 day period, the county, city, town, or other government entity that made such a transfer has failed or refused to rescind any such transfer, the aggrieved citizen may bring an action in superior court and the elected or appointed local government official or administrative agency head under whose authority the violation occurred shall be personally liable as provided for in this section. A citizen of this state giving such notice shall be deemed to have standing to bring an action under this section.
III. If the court determines that a violation was inadvertent or the result of simple negligence, the court shall assess a civil fine of $500 against the defendant; up to $1,000 for a second violation; and up to $2,500 for a third violation. If the court determines that a violation was knowing and willful, or committed recklessly or as the result of gross negligence, the court shall assess a civil fine of up to $5,000 against the defendant. No such civil fines shall be payable by any insurance carried at taxpayer expense or by any tax moneys.
IV. No public funds or insurance purchased with public funds may be used to defend, reimburse, or indemnify the unlawful conduct of any person found to have knowingly or willfully violated RSA 32:5-d.
V. Implementation of a transfer prohibited by RSA 32:5-d shall be cause for termination of employment or contract or removal from office by the governor.
VI. Any person, entity, or organization whose membership is aggrieved by any purported transfer implemented in violation of RSA 32:5-d may, after the giving of notice and expiration of the time period under paragraph II, bring an action against any county, agency, municipality, school district, school administrative unit, or other entity in any court of this state having jurisdiction over any defendant in an action for declaratory and injunctive relief and for the assessment of civil fines, caused by such violation. The court shall schedule a hearing on the matter which shall be within 10 business days from the date of filing. After a hearing on the merits, if the court finds in favor of the petitioner, the court shall:
(a) Issue an injunction against the person, public entity, or political subdivision from implementing the prohibited transfer;
(b) Issue a declaratory judgment that the purported transfer is null and void;
(c) Award the prevailing petitioner reasonable attorney’s fees and costs, including a contingency fee if the petitioner was represented by counsel working on the basis of a contingent fee; and
(d) Assess against the person, public entity, or political subdivision a civil fine of 3 times the amount of the prohibited transfer, such fine being in addition to any civil fines assessed under the provisions of paragraph III. Interest on any sums awarded under this section shall accrue at the legal rate from the date on which the action was filed, and any civil fines assessed under this section shall not be dischargeable in bankruptcy.
3 Effective Date. This act shall take effect upon its passage.
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So obviously this will be a bill that I will be following. I’ll also be following HB107, the nitwit $22.50 minimum hourly wage put forward by NH State Reps Jan Schmidt and Sherry Frost.
Hey guys and gals! Any others you’d like to see us follow as well?
