House File 142
HOUSE FILE
BY EICHHORN, MANTERNACH,
and J. R. VAN FOSSEN
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act revising the requirements for the state general fund
2 expenditure limitation and providing an applicability date.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 1291YH 80
5 jp/cf/24
PAG LIN
1 1 Section 1. Section 8.22A, subsection 3, Code 2003, is
1 2 amended to read as follows:
1 3 3. By December 15 of each fiscal year the conference shall
1 4 agree to a revenue estimate for the fiscal year beginning the
1 5 following July 1. That estimate shall be used by the governor
1 6 in the preparation of the budget message under section 8.22
1 7 and by the general assembly in the budget process. In
1 8 addition, the conference shall agree to a projection of the
1 9 amount that will be transferred to the general fund of the
1 10 state from the Iowa economic emergency fund pursuant to
1 11 section 8.55, subsection 2, and as a result may be
1 12 appropriated for the fiscal year beginning the following July
1 13 1. If the conference agrees at a later meeting to a different
1 14 estimate at a later meeting which projects a greater amount of
1 15 revenue amount to be transferred than the initial estimate
1 16 projected amount agreed to by December 15, the governor and
1 17 the general assembly shall continue to use the initial
1 18 estimate projected amount in the budget process for that
1 19 fiscal year. However, if the conference agrees at a later
1 20 meeting to a different estimate at a later meeting which
1 21 projects a lesser amount of revenue than the initial estimate
1 22 projected amount, the governor and the general assembly shall
1 23 use the lesser amount in the budget process for that fiscal
1 24 year. As used in this subsection, "later meeting" means only
1 25 those later meetings which are held prior to the conclusion of
1 26 the regular session of the general assembly.
1 27 Sec. 2. Section 8.22A, subsection 5, Code 2003, is amended
1 28 by adding the following new paragraphs:
1 29 NEW PARAGRAPH. e. The amount of a revenue reduction for a
1 30 fiscal year.
1 31 NEW PARAGRAPH. f. The amount of revenue increases to the
1 32 general fund of the state for the current and succeeding
1 33 fiscal years with the portion that is due to new revenue
1 34 identified separately.
1 35 Sec. 3. Section 8.54, subsection 1, Code 2003, is amended
2 1 to read as follows:
2 2 1. For the purposes of section 8.22A, this section, and
2 3 sections 8.55 through 8.57:
2 4 a. "Adjusted revenue estimate" means the appropriate
2 5 revenue estimate for the general fund for the following fiscal
2 6 year as determined by the revenue estimating conference under
2 7 section 8.22A, subsection 3, adjusted by subtracting estimated
2 8 tax refunds payable from that estimated revenue and as
2 9 determined by the conference, adding any new revenues which
2 10 may be considered to be eligible for deposit in the general
2 11 fund.
2 12 b. "Adjusted revenue increase estimate" means the
2 13 appropriate estimate for revenue increase to the general fund
2 14 for the following fiscal year as determined by the revenue
2 15 estimating conference, adjusted by subtracting estimated tax
2 16 refunds payable from that estimated revenue increase. To the
2 17 extent not included in the net revenue credited to the general
2 18 fund of the state in the most recently completed fiscal year,
2 19 previously enacted new revenues shall be included in the
2 20 estimate.
2 21 c. "Net revenue" means the actual amount of revenue
2 22 credited to the general fund of the state for a fiscal year,
2 23 as adjusted by subtracting tax refunds paid from that revenue.
2 24 b. d. "New revenues" means moneys which are received by
2 25 the state due to increased tax rates and fees or newly created
2 26 taxes and fees over and above those moneys which are received
2 27 due to state taxes and fees which are in effect as of January
2 28 1 following the December state revenue estimating conference
2 29 meeting. "New revenues" also includes moneys projected to be
2 30 received by the general fund of the state due to new transfers
2 31 over and above those moneys received by the general fund of
2 32 the state due to transfers which are in effect as of January 1
2 33 following the December state revenue estimating conference
2 34 meeting. The department of management shall obtain
2 35 concurrence from the revenue estimating conference on the
3 1 eligibility of transfers to the general fund of the state
3 2 which are to be considered as new revenue in determining the
3 3 state general fund expenditure limitation.
3 4 e. "Revenue reduction" means a reduction in revenue to the
3 5 general fund of the state projected for a fiscal year due to a
3 6 statutory reduction or elimination of a tax or fee that is
3 7 enacted after the initial expenditure limitation amount for
3 8 that fiscal year was established.
3 9 f. "State general fund expenditure limitation" or
3 10 "expenditure limitation" means the state general fund
3 11 expenditure limitation computed in accordance with this
3 12 section.
3 13 Sec. 4. Section 8.54, subsections 3, 4, and 5, Code 2003,
3 14 are amended to read as follows:
3 15 3. Except as otherwise provided in this section, the state
3 16 general fund expenditure limitation for a fiscal year shall be
3 17 ninety=nine percent of the adjusted revenue estimate computed
3 18 in accordance with this section at a meeting of the revenue
3 19 estimating conference held by December 15 of the fiscal year
3 20 preceding the fiscal year to which the expenditure limitation
3 21 applies. The expenditure limitation shall be equal to the sum
3 22 of the following:
3 23 a. One hundred percent of the net revenue credited to the
3 24 general fund of the state in the most recently completed
3 25 fiscal year.
3 26 b. Ninety percent of the adjusted revenue increase
3 27 estimate for the following fiscal year.
3 28 c. Ninety percent of the amount projected by the revenue
3 29 estimating conference under section 8.22A that will be
3 30 transferred to the general fund of the state from the Iowa
3 31 economic emergency fund pursuant to section 8.55, subsection
3 32 2, for the fiscal year to which the expenditure limitation
3 33 applies.
3 34 4. a. The state general fund expenditure limitation
3 35 amount provided for in this section shall be used by the
4 1 governor in the preparation of the budget under section 8.22
4 2 and approval of the budget and by the general assembly in the
4 3 budget process. An amount equal to that portion of the
4 4 expenditure limitation attributable to subsection 3,
4 5 paragraphs "b" and "c", shall be considered a contingent
4 6 funding amount. As part of the expenditure limitation
4 7 requirements under this section, unless the total
4 8 appropriations recommended by the governor or passed by the
4 9 general assembly are less than the expenditure limitation for
4 10 a fiscal year, the governor's budget recommendations under
4 11 section 8.22 and the general assembly in passage of the budget
4 12 shall incorporate contingent appropriations at least equal to
4 13 the contingent funding amount. If the total of the
4 14 appropriations recommended or passed is less than the
4 15 expenditure limitation, the amount of contingent
4 16 appropriations otherwise required may be reduced accordingly.
4 17 The governor and the general assembly shall identify
4 18 priorities for implementation of the contingent
4 19 appropriations.
4 20 b. If a source for new revenues is proposed, the budget
4 21 revenue projection used for that new revenue source for the
4 22 period beginning on the effective date of the new revenue
4 23 source and ending in the fiscal year in which the source is
4 24 included in the revenue base shall be an amount determined by
4 25 subtracting estimated tax refunds payable from the projected
4 26 revenue from that new revenue source, multiplied by ninety=
4 27 five ninety percent. If a new revenue source is established
4 28 and implemented, the original state general fund expenditure
4 29 limitation amount provided for in subsection 3 shall be
4 30 readjusted to include ninety=five revised by adding ninety
4 31 percent of the estimated revenue from the new revenue source.
4 32 c. If a revenue reduction affecting the original state
4 33 general fund expenditure limitation computed in subsection 3
4 34 is enacted, the original expenditure limitation shall be
4 35 revised by subtracting one hundred percent of the revenue
5 1 reduction amount.
5 2 5. For fiscal years in which section 8.55, subsection 2,
5 3 results in moneys being transferred to the general fund, the
5 4 original state general fund expenditure limitation amount
5 5 provided for in subsection 3 shall be readjusted to include
5 6 the moneys which are so transferred If the revenue estimating
5 7 conference agrees under section 8.22A to a projection that a
5 8 lesser amount of revenue will be transferred to the general
5 9 fund of the state from the Iowa economic emergency fund than
5 10 originally projected, the original state general fund
5 11 expenditure limitation computed in accordance with subsection
5 12 3 shall be revised to reflect the lesser amount, as adjusted
5 13 by the percentage specified in subsection 3, paragraph "c".
5 14 Sec. 5. APPLICABILITY. This Act is first applicable to
5 15 the budget for the fiscal year beginning July 1, 2004, and
5 16 ending June 30, 2005.
5 17 EXPLANATION
5 18 This bill revises the requirements for the state general
5 19 fund expenditure limitation. The initial expenditure
5 20 limitation would still be established for the succeeding
5 21 fiscal year at the time of the revenue estimating conference
5 22 meeting held by December 15 as it is in current law. Instead
5 23 of being based upon projected revenue for the succeeding
5 24 fiscal year, the expenditure limitation would be computed
5 25 based upon 100 percent of net revenue for the general fund in
5 26 the most recently completed fiscal year plus 90 percent of the
5 27 adjusted revenue increase estimate for the succeeding fiscal
5 28 year and 90 percent of the projected amount that will be
5 29 transferred to the state general fund from the Iowa economic
5 30 emergency fund due to that fund reaching its maximum balance.
5 31 The bill provides that the portion of the expenditure
5 32 limitation amount attributable to 90 percent of the adjusted
5 33 revenue increase estimate plus 90 percent of the amount
5 34 projected to be transferred from the Iowa economic emergency
5 35 fund to the general fund is to be considered to be a
6 1 contingent funding amount. As part of the expenditure
6 2 limitation budgeting requirements, except when less than the
6 3 entire amount of the expenditure limitation is appropriated,
6 4 the governor's budget recommendations and the general assembly
6 5 in passage of the budget are to incorporate contingent
6 6 appropriations at least equal to the contingent funding
6 7 amount. If a budget does not appropriate the entire amount of
6 8 the expenditure limitation, the amount of contingent
6 9 appropriations otherwise required may be reduced accordingly.
6 10 In addition, the governor and the general assembly shall
6 11 identify priorities for implementation of the contingent
6 12 appropriations.
6 13 Code section 8.22A, relating to the revenue estimating
6 14 conference, is amended. The conference remains responsible
6 15 for making budget estimates that are used in the budget
6 16 process; however, language requiring the overall revenue
6 17 estimate to be used in establishing the expenditure limitation
6 18 is eliminated. New requirements are established for the
6 19 conference to estimate the amount that will be transferred to
6 20 the general fund from the Iowa economic emergency fund; the
6 21 amount of an enacted revenue reduction's effect to reduce
6 22 revenues available for expenditure under the previously
6 23 computed state general fund expenditure limitation for a
6 24 fiscal year; and the amount of revenue increases to the
6 25 general fund for the current and succeeding fiscal years, with
6 26 the amount of revenue increase with the portion that is due to
6 27 growth identified separately.
6 28 Code section 8.54, relating to the state general fund
6 29 expenditure limitation, is extensively amended. The bill
6 30 defines the terms "adjusted revenue increase estimate",
6 31 "expenditure limitation", "net revenue", and "revenue
6 32 reduction", and requires the revenue estimating conference to
6 33 compute the initial expenditure limitation amount for a fiscal
6 34 year. If certain factors change after the initial amount is
6 35 established, the initial expenditure limitation amount is to
7 1 be revised. The governor is required to revise the submitted
7 2 budget if the revision results in a lower amount while the
7 3 general assembly is in session.
7 4 The provisions of the bill are first applicable to the
7 5 budget for fiscal year 2004=2005.
7 6 LSB 1291YH 80
7 7 jp/cf/24.1