Specified percent of all “unencumbered” special revenue accounts to be surrendered to general revenue if there has been activity in the account for specified periods
Impact
The implications of HB2502 are significant as it directly affects the financial management practices of state agencies. By enforcing the forfeiture of inactive funds, the bill aims to streamline financial operations and reduce unnecessary holdings in special revenue accounts. Supporters argue it will enhance the efficiency of state fund utilization, ensuring that money is redirected to the General Revenue Fund, which can then be appropriated for state services or necessary programs. This move may lead to more active and accountable financial practices within state agencies.
Summary
House Bill 2502 aims to amend the West Virginia Code regarding the management of special revenue accounts. Specifically, the bill stipulates that unencumbered funds in these accounts will be forfeited and returned to the state’s General Revenue Fund after a specified period of inactivity. If an account has had no deposits or expenditures for over one year, it will incur a 50% forfeiture, and for accounts inactive for two years, the forfeiture will be 100%. This measure is positioned as a way to ensure state resources are actively utilized and not left dormant in the accounts.
Sentiment
Reactions to the bill have generally been supportive among those advocating for fiscal responsibility and proactive financial governance. Proponents believe that the legislation promotes better management of state funds and discourages the accumulation of unutilized revenue. However, some critics express concerns that strict forfeiture rules may inadvertently penalize state programs that rely on slower-moving funds or may not receive regular activity, thereby constraining their financial flexibility.
Contention
A notable point of contention surrounding HB2502 is the potential impact on various stakeholders reliant on special revenue funds. Opponents argue that this forfeiture could disrupt funding for programs that do not have immediate financial activity but are nonetheless essential. Furthermore, the enforcement mechanism and the timeline for inactivity are under scrutiny, as some fear that quick forfeiture may undermine carefully planned budgeting strategies that require longer timelines to execute administative or project-related expenditures.