Reserve funds.

There is established an emergency cash reserve fund (“emergency reserve fund”) as an interest-bearing account (separate from other accounts in the General Fund) into which the Mayor shall make a deposit in cash not later than October 1 of each fiscal year of such an amount as may be required to maintain a balance in the fund of at least 2 percent of the operating expenditures as defined in paragraph (2) of this subsection or such amount as may be required for deposit in a fiscal year in which the District is replenishing the emergency reserve fund pursuant to paragraph (7) of this subsection. For the purpose of this subsection, operating expenditures is defined as the amount reported in the District of Columbia’s Comprehensive Annual Financial Report for the fiscal year immediately preceding the current fiscal year as the actual operating expenditure from local funds, less such amounts that are attributed to debt service payments for which a separate reserve fund is already established under this chapter. Interest earned on the emergency reserve fund shall remain in the account and shall only be withdrawn in accordance with paragraph (4) of this subsection. The Chief Financial Officer, in consultation with the Mayor, shall develop a policy to govern the emergency reserve fund which shall include (but which may not be limited to) the following requirements: The emergency reserve fund may be used to provide for unanticipated and nonrecurring extraordinary needs of an emergency nature, including a natural disaster or calamity as defined by section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Public Law 100-707) or unexpected obligations by Federal law. The emergency reserve fund may also be used in the event of a State of Emergency as declared by the Mayor pursuant to § 7-2304. The emergency reserve fund may not be used to fund: Any department, agency, or office of the Government of the District of Columbia which is administered by a receiver or other official appointed by a court; Shortfalls in any projected reductions which are included in the budget proposed by the District of Columbia for the fiscal year; or Settlements and judgments made by or against the Government of the District of Columbia. Funds may be allocated from the emergency reserve fund only after: An analysis has been prepared by the Chief Financial Officer of the availability of other sources of funding to carry out the purposes of the allocation and the impact of such allocation on the balance and integrity of the emergency reserve fund; and With respect to fiscal years beginning with fiscal year 2005, the contingency reserve fund established by subsection (b) of this section has been projected by the Chief Financial Officer to be exhausted at the time of the allocation. The Mayor, the Council, and (in the case of a fiscal year which is a control year, as defined in § 47-393(4)) the District of Columbia Financial Responsibility and Management Assistance Authority shall notify the Committees on Appropriations of the Senate and House of Representatives in writing not more than 30 days after the expenditure of funds from the emergency reserve fund. The District of Columbia shall appropriate sufficient funds each fiscal year in the budget process to replenish any amounts allocated from the emergency reserve fund during the preceding fiscal years so that not less than 50 percent of any amount allocated in the preceding fiscal year or the amount necessary to restore the emergency reserve fund to the 2 percent required balance, whichever is less, is replenished by the end of the first fiscal year following each such allocation and 100 percent of the amount allocated or the amount necessary to restore the emergency reserve fund to the 2 percent required balance, whichever is less, is replenished by the end of the second fiscal year following each such allocation. If the District allocates amounts from the emergency reserve fund during a fiscal year for cash flow management purposes pursuant to the authority of subsection (c) of this section and at any time afterwards during the year makes a subsequent allocation from the fund for purposes of this subsection, and if as a result of the subsequent allocation the balance of the fund is reduced to an amount which is less than 50 percent of the balance of the fund as of the first day of the fiscal year, the District shall replenish the fund by such amount as may be required to restore the balance to an amount which is equal to 50 percent of the balance of the fund as of the first day of the fiscal year. The District shall carry out any replenishment required under sub-subparagraph (i) of this subparagraph as a result of a subsequent allocation described in such sub-subparagraph not later than the expiration of the 60-day period which begins on the date of the subsequent allocation. There is established a contingency cash reserve fund (“contingency reserve fund”) as an interest-bearing account, separate from other accounts in the General Fund, into which the Mayor shall make a deposit in cash not later than October 1 of each fiscal year of such amount as may be required to maintain a balance in the fund of at least 4 percent of the operating expenditures as defined in paragraph (2) of this subsection or such amount as may be required for deposit in a fiscal year in which the District is replenishing the emergency reserve fund pursuant to paragraph (6) of this subsection. For the purpose of this subsection, operating expenditures is defined as the amount reported in the District of Columbia’s Comprehensive Annual Financial Report for the fiscal year immediately preceding the current fiscal year as the actual operating expenditure from local funds, less such amounts that are attributed to debt service payments for which a separate reserve fund is already established under this chapter. Interest earned on the contingency reserve fund shall remain in the account and may only be withdrawn in accordance with paragraph (4) of this section. The Chief Financial Officer, in consultation with the Mayor, shall develop a policy governing the use of the contingency reserve fund which shall include (but which may not be limited to) the following requirements: The contingency reserve fund may only be used to provide for nonrecurring or unforeseen needs that arise during the fiscal year, including expenses associated with unforeseen weather or other natural disasters, unexpected obligations created by Federal law or new public safety or health needs or requirements that have been identified after the budget process has occurred, or opportunities to achieve cost savings. The contingency reserve fund may be used, if needed, to cover revenue shortfalls experienced by the District government for 3 consecutive months (based on a 2 month rolling average) that are 5 percent or more below the budget forecast. The contingency reserve fund may not be used to fund any shortfalls in any projected reductions which are included in the budget proposed by the District of Columbia for the fiscal year. Funds may be allocated from the contingency reserve fund only after an analysis has been prepared by the Chief Financial Officer of the availability of other sources of funding to carry out the purposes of the allocation and the impact of such allocation on the balance and integrity of the contingency reserve fund. The District of Columbia shall appropriate sufficient funds each fiscal year in the budget process to replenish any amounts allocated from the contingency reserve fund during the preceding fiscal years so that not less than 50 percent of any amount allocated in the preceding fiscal year or the amount necessary to restore the contingency reserve fund to the 4 percent required balance, whichever is less, is replenished by the end of the first fiscal year following each such allocation and 100 percent of the amount allocated or the amount necessary to restore the contingency reserve fund to the 4 percent required balance, whichever is less, is replenished by the end of the second fiscal year following each such allocation. If the District allocates amounts from the contingency reserve fund during a fiscal year for cash flow management purposes pursuant to the authority of subsection (c) of this section and at any time afterwards during the year makes a subsequent allocation from the fund for purposes of this subsection, and if as a result of the subsequent allocation the balance of the fund is reduced to an amount which is less than 50 percent of the balance of the fund as of the first day of the fiscal year, the District shall replenish the fund by such amount as may be required to restore the balance to an amount which is equal to 50 percent of the balance of the fund as of the first day of the fiscal year. The District shall carry out any replenishment required under sub-subparagraph (i) of this subparagraph as a result of a subsequent allocation described in such sub-subparagraph not later than the expiration of the 60-day period which begins on the date of the subsequent allocation. Notwithstanding any other provision of this section, in addition to the authority provided under this section to allocate and use amounts from the emergency reserve fund under subsection (a) of this section and the contingency reserve fund under subsection (b) of this section, the District of Columbia may allocate amounts from such funds during a fiscal year and use such amounts for cash flow management purposes. The amount of an allocation made from the emergency reserve fund or the contingency reserve fund pursuant to the authority of this subsection may not exceed 50 percent of the balance of the fund involved at the time the allocation is made. The aggregate amount allocated from the emergency reserve fund or the contingency reserve fund pursuant to the authority of this subsection during a fiscal year may not exceed 50 percent of the balance of the fund involved as of the first day of such fiscal year. If the District of Columbia allocates any amounts from a reserve fund pursuant to the authority of this subsection during a fiscal year, the District shall fully replenish the fund for the amounts allocated not later than the earlier of — the expiration of the 9-month period which begins on the date the allocation is made; or the last day of the fiscal year. This subsection shall apply with respect to fiscal years 2006 through 2007. The Chief Financial Officer shall submit a quarterly report to the Mayor, the Council, the District of Columbia Financial Responsibility and Management Assistance Authority (in the case of a fiscal year which is a control year, as defined in § 47-393(4)), and the Committees on Appropriations of the Senate and House of Representatives that includes a monthly statement on the balance and activities of the contingency and emergency reserve funds. “(2) This subsection shall apply with respect to fiscal year 2001 and each succeeding fiscal year until the requirements of section 450A of the District of Columbia Home Rule Act have been met.” “(c)(1) The Mayor of the District of Columbia shall deposit the annual interest savings resulting from debt reductions using the proceeds of the tobacco securitization program into the emergency reserve fund established under section 450A of the District of Columbia Home Rule Act (as added by section 159 of the District of Columbia Appropriations Act, 2001). Section 404(c) of Chapter 4 of Division A of H.R. 5666 provided: