Text: HF00002 Text: HF00000 - HF00099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 DIVISION I 1 2 Section 1. Section 422.4, subsection 1, paragraphs b and 1 3 c, Code 1995, are amended to read as follows: 1 4 b. "Cumulative inflation factor" means the product of the 1 5 annual inflation factor for the19881995 calendar year and 1 6 all annual inflation factors for subsequent calendar years as 1 7 determined pursuant to this subsection. The cumulative 1 8 inflation factor applies to all tax years beginning on or 1 9 after January 1 of the calendar year for which the latest 1 10 annual inflation factor has been determined. 1 11 c. The annual inflation factor for each of the19881995, 1 12 1996, 1997, 1998, and 1999 calendaryearyears is one hundred 1 13 percent. 1 14 Sec. 2. Section 422.5, subsection 1, unnumbered paragraph 1 15 1, and paragraphs a through i, Code 1995, are amended by 1 16 striking the unnumbered paragraph and lettered paragraphs and 1 17 inserting in lieu thereof the following: 1 18 A tax is imposed upon every resident and nonresident of the 1 19 state which tax shall be levied, collected, and paid annually 1 20 upon and with respect to the entire taxable income as defined 1 21 in this division at rates and for tax years beginning in the 1 22 following calendar years as follows: 1 23 On all taxable 1 24 income exceeding 1 25 the beginning CALENDAR YEARS 1 26 amount through 1999 and 1 27 the ending subsequent 1 28 amount: 1995 1996 1997 1998 years 1 29 a. $ 0- 1,060 .4 % .4 % .35% .35% .35% 1 30 b. 1,060- 2,120 .8 .75 .75 .7 .7 1 31 c. 2,120- 4,240 2.65 2.55 2.45 2.35 2.3 1 32 d. 4,240- 9,540 4.9 4.75 4.55 4.35 4.25 1 33 e. 9,540-15,900 6.65 6.45 6.2 5.95 5.8 1 34 f. 15,900-21,200 7.05 6.8 6.6 6.3 6.1 1 35 g. 21,200-31,800 7.35 7.15 6.9 6.6 6.4 2 1 h. 31,800-47,700 8.6 8.3 8.05 7.65 7.5 2 2 i. 47,700+ 9.75 9.45 9.15 8.7 8.5 2 3 Sec. 3. This division of this Act, being deemed of 2 4 immediate importance, takes effect upon enactment and applies 2 5 retroactively to January 1, 1995, for tax years beginning on 2 6 or after that date. 2 7 DIVISION II 2 8 Sec. 4. Section 8.56, subsection 1, Code 1995, is amended 2 9 to read as follows: 2 10 1. A cash reserve fund is created in the state treasury. 2 11 The cash reserve fund shall be separate from the general fund 2 12 of the state and shall not be considered part of the general 2 13 fund of the state except in determining the cash position of 2 14 the state as provided in subsection 3. The moneys in the cash 2 15 reserve fund are not subject to section 8.33 and shall not be 2 16 transferred, used, obligated, appropriated, or otherwise 2 17 encumbered except as provided in this section. 2 18 Notwithstanding section 12C.7, subsection 2, interest or 2 19 earnings on moneys deposited in the cash reserve fund shall be 2 20 credited to the rebuild Iowaeconomic emergency fund2 21 infrastructure account created in section 8.57. Moneys in the 2 22 cash reserve fund may be used for cash flow purposes provided 2 23 that any moneys so allocated are returned to the cash reserve 2 24 fund by the end of each fiscal year. However, the fund shall 2 25 be considered a special account for the purposes of section 2 26 8.53. 2 27 Sec. 5. Section 8.56, subsection 4, paragraph b, Code 2 28 1995, is amended to read as follows: 2 29 b. In addition to the requirements of paragraph "a", an 2 30 appropriation shall not be made from the cash reserve fund 2 31which would cause the fund's balance to be less than three2 32percent of the adjusted revenue estimate for the year for2 33which the appropriation is madeunless the bill or joint 2 34 resolution making the appropriation is approved by vote of at 2 35 least three-fifths of the members of both chambers of the 3 1 general assembly and is signed by the governor. 3 2 Sec. 6. Section 8.57, subsection 1, paragraph a, Code 3 3 1995, is amended by striking the paragraph and inserting in 3 4 lieu thereof the following: 3 5 a. The cash reserve goal percentage for fiscal years 3 6 beginning on or after July 1, 1995, is five percent of the 3 7 adjusted revenue estimate. For each fiscal year beginning on 3 8 or after July 1, 1995, in which the appropriation of the 3 9 surplus existing in the general fund of the state at the 3 10 conclusion of the prior fiscal year pursuant to paragraph "b" 3 11 was not sufficient for the cash reserve fund to reach the cash 3 12 reserve goal percentage for the current fiscal year, there is 3 13 appropriated from the general fund of the state an amount to 3 14 be determined as follows: 3 15 (1) If the balance of the cash reserve fund in the current 3 16 fiscal year is not more than four percent of the adjusted 3 17 revenue estimate for the current fiscal year, the amount of 3 18 the appropriation under this lettered paragraph is one percent 3 19 of the adjusted revenue estimate for the current fiscal year. 3 20 (2) If the balance of the cash reserve fund in the current 3 21 fiscal year is more than four percent but less than five 3 22 percent of the adjusted revenue estimate for that fiscal year, 3 23 the amount of the appropriation under this lettered paragraph 3 24 is the amount necessary for the cash reserve fund to reach 3 25 five percent of the adjusted revenue estimate for the current 3 26 fiscal year. 3 27 (3) The moneys appropriated under this lettered paragraph 3 28 shall be credited in equal and proportionate amounts in each 3 29 quarter of the current fiscal year. 3 30 Sec. 7. Section 8.57, subsection 1, paragraph b, Code 3 31 1995, is amended to read as follows: 3 32 b.Commencing June 30, 1993, theThe surplus existing in 3 33 the general fund of the state at the conclusion of the fiscal 3 34 year is appropriated for distribution in the succeeding fiscal 3 35 year as provided inthis sectionsubsections 2 and 3. Moneys 4 1 credited to the cash reserve fund from the appropriation made 4 2 in this paragraph shall not exceed the amount necessary for 4 3 the cash reserve fund to reach the cash reserve goal 4 4 percentage for the succeeding fiscal year. As used in this 4 5 paragraph, "surplus" means the excess of revenues and other 4 6 financing sources over expenditures and other financing uses 4 7 for the general fund of the state in a fiscal year. 4 8 Sec. 8. NEW SECTION. 8.57A PERSONAL INCOME TAX RATE 4 9 REDUCTION REPLACEMENT FUND. 4 10 1. The personal income tax rate reduction replacement fund 4 11 is created in the state treasury under the authority of the 4 12 department of management. The fund shall be separate from the 4 13 general fund of the state and shall not be considered part of 4 14 the general fund of the state except in determining the cash 4 15 position of the state for payment of state obligations. The 4 16 moneys in the fund are not subject to the provisions of 4 17 section 8.33 and shall not be transferred, used, obligated, 4 18 appropriated, or otherwise encumbered except as provided in 4 19 this section. Moneys in the fund may be used for cash flow 4 20 purposes provided that any moneys so allocated are returned to 4 21 the fund by the end of each fiscal year. However, the fund 4 22 shall be considered a special account for the purposes of 4 23 section 8.53, relating to elimination of any GAAP deficit. 4 24 The fund is created upon the effective date of this section, 4 25 and shall remain in existence until the close of the fiscal 4 26 year beginning July 1, 1999. 4 27 2. The provisions of this subsection apply for the fiscal 4 28 years beginning July 1 of 1994, 1995, 1996, 1997, and 1998. 4 29 Notwithstanding the provisions of section 8.57, subsection 3, 4 30 for each of the designated fiscal years, moneys remaining 4 31 following the appropriations made pursuant to section 8.57, 4 32 subsection 1, shall not be appropriated to the Iowa economic 4 33 emergency fund but are instead appropriated to the personal 4 34 income tax rate reduction replacement fund. 4 35 3. Effective for the fiscal year beginning July 1, 1995, 5 1 and the subsequent three fiscal years, on or before December 5 2 31 of each of the fiscal years, the state revenue estimating 5 3 conference created in section 8.22A shall certify an estimate 5 4 of the net change in revenues deposited into the general fund 5 5 of the state for that fiscal year due to the personal income 5 6 tax rate reduction implemented pursuant to section 422.5. The 5 7 director of the department of management shall transfer not 5 8 more than the certified amount from the personal income tax 5 9 rate reduction replacement fund to the general fund of the 5 10 state. Prior to the transfer, the director shall determine 5 11 whether the balance of the general fund of the state is 5 12 sufficient to absorb the revenue change, and if the certified 5 13 balance is sufficient the director may defer the transfer to a 5 14 succeeding fiscal year. Moneys transferred to the general 5 15 fund of the state pursuant to this section shall be added to 5 16 the general fund expenditure limitation, to the extent not 5 17 already included, for the fiscal year in which the transfer 5 18 takes place and ninety-nine percent of the transferred amount 5 19 is available for expenditure as directed by the general 5 20 assembly. 5 21 4. Notwithstanding section 12C.7, subsection 2, interest 5 22 or earnings on moneys deposited in the personal income tax 5 23 rate reduction replacement fund shall be credited to the 5 24 rebuild Iowa infrastructure account created in section 8.57. 5 25 5. This section is repealed September 1, 2000. 5 26 Sec. 9. TRANSFER TO INFRASTRUCTURE ACCOUNT. Moneys in the 5 27 Iowa economic emergency fund, created in section 8.55, at the 5 28 conclusion of the fiscal year beginning July 1, 1994, shall be 5 29 transferred to the rebuild Iowa infrastructure account. 5 30 Sec. 10. EFFECTIVE DATE. This division of this Act, being 5 31 deemed of immediate importance, takes effect upon enactment. 5 32 EXPLANATION 5 33 Division I of this bill reduces the individual income tax 5 34 rates by approximately 15 percent over five tax years 5 35 beginning with the tax year beginning January 1, 1995. 6 1 Because of the reduction in tax rates the division eliminates 6 2 the indexation of the tax brackets for tax years beginning 6 3 before January 1, 2000. 6 4 Division I takes effect upon enactment. 6 5 Division II revises provisions associated with the state 6 6 general fund expenditure limitation. 6 7 Section 8.56 is amended to credit the interest and earnings 6 8 of the cash reserve fund to the rebuild Iowa infrastructure 6 9 account instead of the Iowa economic emergency fund. Current 6 10 law requires the vote of a three-fifths majority of the 6 11 general assembly for an appropriation from the cash reserve 6 12 fund in an amount which would reduce the balance of the fund 6 13 to less than three percent of the adjusted revenue estimate. 6 14 The bill requires that three-fifths majority for any 6 15 appropriation from the fund. 6 16 Section 8.57 currently provides for an annual increase in 6 17 the cash reserve goal percentage until a five percent maximum 6 18 amount of the adjusted revenue estimate is reached in fiscal 6 19 year 1997-1998. The bill accelerates the implementation of 6 20 the maximum amount to fiscal year 1995-1996. In addition, the 6 21 provisions are rewritten to specify the mechanism of the 6 22 appropriations. 6 23 New section 8.57A creates a new personal income tax rate 6 24 reduction replacement fund. Moneys remaining after the 6 25 surplus in the state general fund ending balance is used to 6 26 fill the cash reserve and to maintain the state's activities 6 27 under generally accepted accounting principles (GAAP), are to 6 28 be deposited in the replacement fund. Moneys deposited into 6 29 the replacement fund may be transferred back to the general 6 30 fund to replace revenues not collected due to the income tax 6 31 rate reduction unless the director of the department of 6 32 management determines the balance of the general fund is 6 33 sufficient without the transfer. In this case, the transfer 6 34 may take place in a succeeding fiscal year. The new section 6 35 is repealed September 1, 2000. 7 1 Division II takes effect upon enactment. 7 2 LSB 1476YH 76 7 3 mg/cf/24
Text: HF00002 Text: HF00000 - HF00099 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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