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Text: HSB00754                          Text: HSB00756
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House Study Bill 755

Bill Text

PAG LIN
  1  1    Section 1.  Section 422.4, subsection 1, paragraph a, Code
  1  2 1995, is amended to read as follows:
  1  3    a.  "Annual inflation factor" means an index, expressed as
  1  4 a percentage, determined by the department by October 15 of
  1  5 the calendar year preceding the calendar year for which the
  1  6 factor is determined, which reflects the purchasing power of
  1  7 the dollar as a result of inflation during the fiscal year
  1  8 ending in the calendar year preceding the calendar year for
  1  9 which the factor is determined.  In determining the annual
  1 10 inflation factor, the department shall use the annual percent
  1 11 change, but not less than zero percent, in the implicit price
  1 12 deflator for the gross national product gross domestic product
  1 13 price deflator computed for the second quarter of the calendar
  1 14 year by the bureau of economic analysis of the United States
  1 15 department of commerce and shall add one-half all of that
  1 16 percent change to one hundred percent.  The annual inflation
  1 17 factor and the cumulative inflation factor shall each be
  1 18 expressed as a percentage rounded to the nearest one-tenth of
  1 19 one percent.  The annual inflation factor shall not be less
  1 20 than one hundred percent.
  1 21    Sec. 2.  Section 422.4, subsection 1, paragraph d, Code
  1 22 1995, is amended by striking the paragraph.
  1 23    Sec. 3.  Section 422.4, subsection 2, paragraph a, Code
  1 24 1995, is amended to read as follows:
  1 25    a.  "Annual standard deduction factor" means an index,
  1 26 expressed as a percentage, determined by the department by
  1 27 October 15 of the calendar year preceding the calendar year
  1 28 for which the factor is determined, which reflects the
  1 29 purchasing power of the dollar as a result of inflation during
  1 30 the fiscal year ending in the calendar year preceding the
  1 31 calendar year for which the factor is determined.  In
  1 32 determining the annual standard deduction factor, the
  1 33 department shall use the annual percent change, but not less
  1 34 than zero percent, in the implicit price deflator for the
  1 35 gross national product gross domestic product price deflator
  2  1 computed for the second quarter of the calendar year by the
  2  2 bureau of economic analysis of the United States department of
  2  3 commerce and shall add one-half all of that percent change to
  2  4 one hundred percent.  The annual standard deduction factor and
  2  5 the cumulative standard deduction factor shall each be
  2  6 expressed as a percentage rounded to the nearest one-tenth of
  2  7 one percent.  The annual standard deduction factor shall not
  2  8 be less than one hundred percent.
  2  9    Sec. 4.  This Act, being deemed of immediate importance,
  2 10 takes effect upon enactment and applies to the computation of
  2 11 the annual inflation factor and annual standard deduction
  2 12 factor for calendar years beginning on or after January 1,
  2 13 1996.  The department of revenue and finance shall adjust the
  2 14 annual inflation factor and annual standard deduction factor
  2 15 previously computed for the 1996 calendar year to reflect the
  2 16 change made in the computation of those factors in this Act.  
  2 17                           EXPLANATION
  2 18    Under present law the tax brackets and standard deduction
  2 19 for the state individual income tax are adjusted by an
  2 20 inflation factor that uses 50 percent of the change in the
  2 21 implicit price deflator for the gross national product.  The
  2 22 bill increases this to 100 percent of the change in the gross
  2 23 domestic product price deflator.  The bill also changes the
  2 24 reference from the gross national product price deflator to
  2 25 the gross domestic product price deflator since the former no
  2 26 longer exists.  In addition the bill eliminates the
  2 27 requirement that before the tax brackets may be adjusted for
  2 28 inflation, $60 million must be in the state general fund at
  2 29 the end of the fiscal year.
  2 30    This bill applies retroactively to tax years beginning on
  2 31 or after January 1, 1996.  
  2 32 LSB 4450HC 76
  2 33 mg/sc/14
     
Text: HSB00754                          Text: HSB00756
Text: HSB00700 - HSB00799               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index
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