SB126 - General Fund Budget Reform Act

• Establishes a State General Fund appropriation limitation beginning with fiscal year 2023, limiting annual appropriations to recurring revenues from the prior year plus nonrecurring revenue, phased in with 80% of estimated growth in FY2023, declining to 20% by FY2026.

• Creates two new funds: the State General Fund Budget Reserve Fund (for emergencies and unexpected expenses) and the State General Fund Capital Fund (for capital improvements), with interest retained in each fund.

• Requires 80% of unexpended and reverted appropriations to be reappropriated to respective offices (limited to 25% of annual budget), with the remaining 20% transferred to the Budget Reserve Fund until it reaches 10% of prior year appropriations.

• Directs excess State General Fund revenues above appropriations to be transferred to the Budget Reserve Fund first, then to the Capital Fund once the reserve reaches 10% target; allows withdrawal from Budget Reserve Fund only to cover 50% of revenue deficits starting in FY2023.

• Requires the Director of Finance and Legislative Services Agency to certify the State General Fund appropriation limitation by the third day of each regular session.