House File 148 - Introduced HOUSE FILE 148 BY COMMITTEE ON STATE GOVERNMENT (SUCCESSOR TO HF 1) A BILL FOR An Act relating to state expenditure and oversight requirements 1 by establishing an organized system of reviews and ongoing 2 repeal dates for programs and projects administered by 3 executive branch departments, revising state expenditure 4 limitations and related state budget requirements, and 5 revising the process for establishing the state percent 6 of growth and including effective date and applicability 7 provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 1388HV (2) 84 jp/sc

H.F. 148 DIVISION I 1 PROGRAM REVIEW 2 Section 1. NEW SECTION . 8.71 Ongoing program review —— 3 repeal dates. 4 1. The general assembly finds that a regular review of 5 the programs and projects administered by state government is 6 necessary to determine whether each program and project is 7 effectively and efficiently meeting the needs for which created 8 and whether the needs remain applicable. The general assembly 9 further finds that a regular, systematic review process can 10 identify the programs and projects that are no longer relevant 11 or functioning at a desirable level and can eliminate or 12 reorganize those programs and projects so that state resources 13 can be used most effectively or diverted to other priorities. 14 2. The committees on state government of the senate 15 and house of representatives shall propose legislation for 16 consideration by the Eighty-fourth General Assembly, 2012 17 Session, providing a staggered schedule for establishing an 18 automatic repeal date for each program or project administered 19 by a department of state government over the succeeding 20 five-year period. The committees on state government shall 21 consult with the office of the governor and the department 22 of management in formulating the staggered schedule and the 23 office and department shall cooperate in providing necessary 24 information requested by either committee. The repeal date 25 provisions shall be implemented in a manner so that any program 26 or project that is reauthorized by law is again subject to 27 automatic repeal five years after reauthorization. 28 DIVISION II 29 STATE EXPENDITURE LIMITATIONS 30 Sec. 2. Section 8.22A, Code 2011, is amended to read as 31 follows: 32 8.22A Revenue estimating conference. 33 1. The state revenue estimating conference is created 34 consisting of the governor or the governor’s designee, the 35 -1- LSB 1388HV (2) 84 jp/sc 1/ 17

H.F. 148 director of the legislative services agency or the director’s 1 designee, and a third member agreed to by the other two. 2 2. The conference shall meet as often as deemed necessary, 3 but shall meet at least quarterly. The conference may use 4 sources of information deemed appropriate. At each meeting, 5 the conference shall agree to estimates for the current and the 6 next two succeeding fiscal years for the general fund of the 7 state, lottery revenues to be available for disbursement, and 8 from gambling revenues and from interest earned on the cash 9 reserve fund and the economic emergency fund to be deposited in 10 the rebuild Iowa infrastructure fund. 11 3. By For purposes of the state general fund expenditure 12 limitation and other expenditure limitations under section 13 8.54, by December 15 of each fiscal year the conference 14 shall agree to a revenue estimate revenue estimates for the 15 amounts of moneys subject to an expenditure limitation under 16 section 8.54 for the fiscal year beginning the following July 17 1. That The estimate amounts shall be used by the governor 18 in the preparation of the budget message under section 8.22 19 and by the general assembly in the budget process. If the 20 conference agrees to a different estimate at a later meeting 21 which projects a greater amount of revenue than the initial 22 estimate amount agreed to by December 15, the governor and the 23 general assembly shall continue to use the initial estimate 24 amount in the budget process for that fiscal year. However, 25 if the conference agrees to a different estimate at a later 26 meeting which projects a lesser amount of revenue than the 27 initial estimate amount, the governor and the general assembly 28 shall use the lesser amount in the budget process for that 29 fiscal year. As used in this subsection , “later meeting” 30 means only those later meetings which are held prior to the 31 conclusion of the regular session of the general assembly and, 32 if the general assembly holds an extraordinary session prior 33 to the commencement of the fiscal year to which the estimate 34 applies, those later meetings which are held before or during 35 -2- LSB 1388HV (2) 84 jp/sc 2/ 17

H.F. 148 the extraordinary session. 1 4. At the meeting in which the conference agrees to the 2 revenue estimate for the general fund of the state for the 3 following fiscal year in accordance with the provisions of 4 subsection 3 , the conference shall agree to an estimate for tax 5 refunds payable from that estimated revenue. The estimates 6 required by this subsection shall be used in determining the 7 adjusted revenue estimate under section 8.54 . The conference 8 shall also agree to the estimates required by this subsection 9 for the current fiscal year and for the fiscal year subsequent 10 to the following fiscal year. 11 5. At the meeting in which the conference agrees to the 12 revenue estimate for the general fund of the state for the 13 succeeding fiscal year in accordance with the provisions of 14 subsection 3 , the conference shall also agree to the following 15 estimates which shall be used by the governor in preparation of 16 the budget message under section 8.22 and the general assembly 17 in the budget process for the succeeding fiscal year: 18 a. The amount of lottery revenues that will be deposited in 19 the general fund for the following fiscal year to be available 20 for disbursement following the deductions made pursuant to 21 section 99G.39, subsection 1 . This estimate shall be included 22 in the conference’s estimate of general fund revenues and shall 23 be calculated as the sum of the following, divided by seven, 24 as agreed to by the conference: 25 (1) The conference’s estimate of the amount of lottery 26 revenues to be deposited in the general fund for the succeeding 27 fiscal year. 28 (2) The conference’s estimate of the amount of lottery 29 revenues to be deposited in the general fund for the current 30 fiscal year. 31 (3) The actual amount of the lottery revenues deposited in 32 the general fund for the five most recently completed fiscal 33 years, adjusted for inflation through the close of the most 34 recently completed fiscal year. 35 -3- LSB 1388HV (2) 84 jp/sc 3/ 17

H.F. 148 b. The amount of revenue for the following fiscal year from 1 gambling revenues and from interest earned on the cash reserve 2 fund and the economic emergency fund to be deposited in the 3 rebuild Iowa infrastructure fund under section 8.57, subsection 4 6 , paragraph “e” . 5 c. The amount of accruals of those revenues collected by or 6 due from entities other than the state on or before June 30 of 7 the fiscal year but not remitted to the state until after June 8 30. 9 d. The amount of accrued lottery revenues collected on or 10 before June 30 of the fiscal year but not transferred to the 11 general fund of the state until after June 30. 12 The conference shall also agree to estimates of the items 13 enumerated in paragraphs “a” through “d” for the current fiscal 14 year and for the fiscal year subsequent to the following fiscal 15 year. 16 6. At the meeting in which the conference agrees to the 17 revenue estimates for the following fiscal year in accordance 18 with subsection 3, the conference shall agree to the amount 19 available in the cash reserve fund as of the close of the 20 previous fiscal year that may be appropriated for nonrecurring 21 emergency expenditures as provided in section 8.56, subsection 22 5. 23 Sec. 3. Section 8.39, Code 2011, is amended to read as 24 follows: 25 8.39 Use of appropriations —— transfer. 26 1. Except as otherwise provided by law, an appropriation or 27 any part of it shall not be used for any other purpose than that 28 for which it was made. However, with the prior written consent 29 and approval of the governor and the director of the department 30 of management, the governing board or head of any state 31 department, institution, or agency may, at any time during the 32 fiscal year, make a whole or partial intradepartmental transfer 33 of its unexpended appropriations for purposes within the scope 34 of such department, institution, or agency. Such transfer 35 -4- LSB 1388HV (2) 84 jp/sc 4/ 17

H.F. 148 shall be to an appropriation made from the same funding source 1 and within the same fiscal year. The amount of a transfer made 2 from an appropriation under this subsection shall be limited 3 to not more than one-tenth of one percent of the total of all 4 appropriations made from the funding source of the transferred 5 appropriation for the fiscal year in which the transfer is 6 made. 7 2. If the appropriation of a department, institution, or 8 agency is insufficient to properly meet the legitimate expenses 9 of the department, institution, or agency, the director, with 10 the approval of the governor, may make an interdepartmental 11 transfer from any other department, institution, or agency of 12 the state having an appropriation in excess of its needs, of 13 sufficient funds to meet that deficiency. Such transfer shall 14 be to an appropriation made from the same funding source and 15 within the same fiscal year. The amount of a transfer made 16 from an appropriation under this subsection shall be limited 17 to not more than one-tenth of one percent of the total of all 18 appropriations made from the funding source of the transferred 19 appropriation for the fiscal year in which the transfer is 20 made. An interdepartmental transfer to an appropriation which 21 is not an entitlement appropriation is not authorized when 22 the general assembly is in regular session and, in addition, 23 the sum of interdepartmental transfers in a fiscal year to an 24 appropriation which is not an entitlement appropriation shall 25 not exceed fifty percent of the amount of the appropriation 26 as enacted by the general assembly. For the purposes of 27 this subsection , an entitlement appropriation is a line item 28 appropriation to the state public defender for indigent defense 29 or to the department of human services for foster care, state 30 supplementary assistance, or medical assistance, or for the 31 family investment program. 32 3. Prior to any transfer of funds pursuant to subsection 33 1 or 2 of this section or a transfer of an allocation from 34 a subunit of a department which statutorily has independent 35 -5- LSB 1388HV (2) 84 jp/sc 5/ 17

H.F. 148 budgeting authority, the director shall notify the chairpersons 1 of the standing committees on budget of the senate and the 2 house of representatives and the chairpersons of subcommittees 3 of such committees of the proposed transfer. The notice from 4 the director shall include information concerning the amount 5 of the proposed transfer, the departments, institutions or 6 agencies affected by the proposed transfer and the reasons for 7 the proposed transfer. Chairpersons notified shall be given at 8 least two weeks to review and comment on the proposed transfer 9 before the transfer of funds is made. 10 4. Any transfer made under the provisions of this section 11 shall be reported to the legislative fiscal committee on a 12 monthly basis. The report shall cover each calendar month and 13 shall be due the tenth day of the following month. The report 14 shall contain the following: The amount of each transfer; the 15 date of each transfer; the departments and funds affected; 16 a brief explanation of the reason for the transfer; and 17 such other information as may be required by the committee. 18 A summary of all transfers made under the provisions of 19 this section shall be included in the annual report of the 20 legislative fiscal committee. 21 Sec. 4. Section 8.54, Code 2011, is amended to read as 22 follows: 23 8.54 General fund expenditure limitation and other 24 expenditure limitations . 25 1. For the purposes of section 8.22A , this section , and 26 sections 8.55 through 8.57 : 27 a. “Adjusted revenue estimate” means the appropriate revenue 28 estimate for the general fund for the following fiscal year as 29 determined by the revenue estimating conference under section 30 8.22A, subsection 3 , adjusted by subtracting estimated tax 31 refunds payable from that estimated revenue , adding accruals 32 determined in accordance with section 8.22A, subsection 5, and 33 as determined by the conference, adding any new revenues which 34 may be considered to be eligible for deposit in the general 35 -6- LSB 1388HV (2) 84 jp/sc 6/ 17

H.F. 148 fund. 1 b. “Inflation” means the percentage change in the consumer 2 price index for all urban consumers, midwest region, published 3 by the United States department of labor, bureau of labor 4 statistics. 5 c. “New revenues” means moneys which are received by the 6 general fund of the state due to increased tax rates and fees 7 or newly created taxes and fees over and above those moneys 8 which are received due to state taxes and fees which are in 9 effect as of January 1 following the December state revenue 10 estimating conference. “New revenues” also includes moneys 11 received by the general fund of the state due to new transfers 12 over and above those moneys received by the general fund of 13 the state due to transfers which are in effect as of January 14 1 following the December state revenue estimating conference. 15 The department of management shall obtain concurrence from the 16 revenue estimating conference on the eligibility of transfers 17 to the general fund of the state which are to be considered as 18 new revenue in determining the state general fund expenditure 19 limitation. 20 2. a. There is created a state general fund expenditure 21 limitation for each fiscal year calculated as provided in this 22 section . 23 b. There is created a gambling revenue expenditure 24 limitation calculated as provided in this section. The 25 limitation applies to revenues received by the state that 26 are attributable to gambling and available for appropriation 27 but are not credited to the general fund of the state. The 28 gambling revenue expenditure limitation does not include 29 lottery revenue. 30 c. An expenditure limitation shall be used for the portion 31 of the budget process commencing on the date the revenue 32 estimating conference agrees to a revenue estimate for the 33 following fiscal year in accordance with section 8.22A, 34 subsection 3 , and ending with the governor’s final approval 35 -7- LSB 1388HV (2) 84 jp/sc 7/ 17

H.F. 148 or disapproval of the appropriations bills applicable to that 1 fiscal year that were passed prior to July 1 of that fiscal 2 year in a regular or extraordinary legislative session. 3 3. Except as otherwise provided in this section , the state 4 general fund expenditure limitation for a fiscal year shall be 5 ninety-nine percent of the adjusted revenue estimate. of the 6 general fund average, as agreed to by the revenue estimating 7 conference. The general fund average for a fiscal year is the 8 sum of the following, divided by seven: 9 a. The adjusted revenue estimate for the succeeding fiscal 10 year. 11 b. The revenue estimate for the current fiscal year, 12 adjusted by subtracting estimated tax refunds payable from that 13 estimated revenue and as determined by the conference, adding 14 any new revenues which may be considered to be eligible for 15 deposit in the general fund. 16 c. The net revenue for the general fund of the state for 17 the five most recently completed fiscal years, adjusted by 18 subtracting tax refunds paid from the revenue and adjusted for 19 inflation through the close of the most recently completed 20 fiscal year. 21 4. The gambling revenue expenditure limitation for a fiscal 22 year shall be the sum of the following, divided by seven, as 23 agreed to by the revenue estimating conference: 24 a. The gambling revenues estimate for the succeeding fiscal 25 year. 26 b. The gambling revenues estimate for the current fiscal 27 year. 28 c. The net gambling revenues for the five most recently 29 completed fiscal years, adjusted for inflation through the 30 close of the most recently completed fiscal year. 31 4. 5. The state general fund expenditure limitation amount 32 and the gambling revenue expenditure limitation amount provided 33 for in this section shall be used by the governor in the 34 preparation of the budget under section 8.22 and approval of 35 -8- LSB 1388HV (2) 84 jp/sc 8/ 17

H.F. 148 the budget and by the general assembly in the budget process. 1 If a source for new revenues is proposed, the budget revenue 2 projection used for that new revenue source for the period 3 beginning on the effective date of the new revenue source and 4 ending in the fiscal year in which the source is included in 5 the revenue base shall be an amount determined by subtracting 6 estimated tax refunds payable from the projected revenue from 7 that new revenue source, multiplied by ninety-five percent. If 8 a new revenue source is established and implemented that would 9 affect an expenditure limitation amount , the original state 10 general fund expenditure limitation amount provided for in 11 subsection 3 shall be readjusted to include ninety-five percent 12 of the estimated revenue from the new revenue source. 13 5. For fiscal years in which section 8.55, subsection 2 , 14 results in moneys being transferred to the general fund, the 15 original state general fund expenditure limitation amount 16 provided for in subsection 3 shall be readjusted to include the 17 moneys which are so transferred. 18 6. The scope of the expenditure limitation limitations 19 under subsection 3 this section shall not encompass federal 20 funds, donations, constitutionally dedicated moneys, moneys 21 appropriated from the cash reserve fund or Iowa economic 22 emergency fund, and moneys in expenditures from state 23 retirement system moneys. 24 7. The governor shall transmit to the general assembly, in 25 accordance with section 8.21 , a budget which does not exceed 26 the state general fund expenditure limitation expenditure 27 limitations under this section . The general assembly shall 28 pass a budget which does not exceed the state general fund 29 expenditure limitation expenditure limitations . The governor 30 shall not transmit a budget with recommended appropriations 31 in excess of the state general fund expenditure limitation 32 expenditure limitations and the general assembly shall not 33 pass a budget with appropriations in excess of the state 34 general fund expenditure limitation expenditure limitations . 35 -9- LSB 1388HV (2) 84 jp/sc 9/ 17

H.F. 148 The governor shall not approve or disapprove appropriation 1 bills or items of appropriation bills passed by the general 2 assembly in a manner that would cause the final budget approved 3 by the governor to exceed the state general fund expenditure 4 limitation expenditure limitations . In complying with the 5 requirements of this subsection , the governor and the general 6 assembly shall not rely on any anticipated reversion of 7 appropriations in order to meet the state general fund any 8 expenditure limitation. 9 Sec. 5. Section 8.56, subsections 2 and 3, Code 2011, are 10 amended to read as follows: 11 2. a. Moneys shall be credited to the cash reserve fund 12 from all of the following: 13 (1) Appropriations made to the fund pursuant to section 14 8.57. 15 (2) The state’s share of the proceeds under chapter 809A. 16 (3) Moneys collected in the settlement or prosecution 17 of a claim by the state that are not otherwise specifically 18 allocated in accordance with law to another fund. 19 (4) Other moneys designated by law or by the executive 20 council as one-time revenues and which are not otherwise 21 specifically allocated by law to another fund. 22 b. The maximum balance of the cash reserve fund is the 23 amount equal to the cash reserve goal percentage, as defined in 24 section 8.57 , multiplied by the adjusted revenue estimate for 25 the general fund of the state for the current fiscal year. 26 3. The moneys in the cash reserve fund shall only be used 27 pursuant to an appropriation made by the general assembly. An 28 Except as provided in subsection 5, an appropriation shall be 29 made in accordance with subsection 4 from the cash reserve fund 30 only for the fiscal year in which the appropriation is made. 31 The moneys shall only be appropriated by the general assembly 32 for nonrecurring emergency expenditures and shall not be 33 appropriated for payment of any collective bargaining agreement 34 or arbitrator’s decision negotiated or awarded under chapter 35 -10- LSB 1388HV (2) 84 jp/sc 10/ 17

H.F. 148 20 . Except as provided in section 8.58 , the cash reserve fund 1 shall be considered a special account for the purposes of 2 section 8.53 in determining the cash position of the general 3 fund of the state for the payment of state obligations. 4 Sec. 6. Section 8.56, Code 2011, is amended by adding the 5 following new subsection: 6 NEW SUBSECTION . 5. If the adjusted revenue estimate 7 for the succeeding fiscal year is less than ninety-eight 8 percent of the general fund average for that fiscal year under 9 section 8.54, subsection 3, an appropriation for nonrecurring 10 emergency expenditures from the cash reserve fund may be made 11 to provide additional funding for the succeeding fiscal year. 12 However, the amount of such appropriation shall not exceed 13 the difference of ninety-eight percent of such general fund 14 average minus the adjusted revenue estimate for the succeeding 15 fiscal year. The amount of such appropriation shall not exceed 16 twenty-five percent of the ending balance in the cash reserve 17 fund in the most recently completed fiscal year. 18 Sec. 7. Section 284.3A, subsection 4, Code 2011, is amended 19 to read as follows: 20 4. The teacher salary supplement district cost as 21 calculated under section 257.10, subsection 9 , and the area 22 education agency teacher salary supplement district cost 23 as calculated under section 257.37A, subsection 1 , are not 24 subject to a uniform reduction in accordance with section 25 8.31 . Notwithstanding any provision of law to the contrary, 26 if the governor orders budget reductions in accordance with 27 section 8.31, a collective bargaining agreement negotiated 28 under chapter 20 and in effect on the date the budget reduction 29 was ordered shall be reopened and renegotiated by the boards of 30 directors of school districts and area education agencies and 31 the employee organizations representing the employees of the 32 school districts and area education agencies. 33 Sec. 8. Section 809A.17, subsection 3, Code 2011, is amended 34 to read as follows: 35 -11- LSB 1388HV (2) 84 jp/sc 11/ 17

H.F. 148 3. The state share of the cash proceeds from forfeited 1 property shall be credited to the cash reserve fund. Forfeited 2 property that is not cash or sold may be used by the department 3 of justice in the enforcement of the criminal law. The 4 department may give, sell, or trade forfeited property that is 5 not cash or sold to any other state agency or to any other law 6 enforcement agency within the state if, in the opinion of the 7 attorney general, it the forfeited property will enhance law 8 enforcement within the state. 9 Sec. 9. APPLICABILITY. This division of this Act applies 10 beginning July 1, 2011, for the budget process for the 11 succeeding fiscal year. 12 DIVISION III 13 STATE PERCENT OF GROWTH 14 Sec. 10. Section 257.8, subsections 1 and 2, Code 2011, are 15 amended to read as follows: 16 1. State percent of growth. The state percent of growth 17 for the budget year beginning July 1, 2009, is four percent. 18 The state percent of growth for the budget year beginning July 19 1, 2010, is two percent. The state percent of growth for 20 each subsequent budget year shall be established by statute 21 which shall be enacted within thirty days of the submission 22 in the year preceding the base year of the governor’s budget 23 under section 8.21 . The establishment of the state percent 24 of growth for a budget year shall be the only subject matter 25 of the bill which enacts the state percent of growth for a 26 budget year. The state percent of growth for each budget year 27 shall be established by statute which shall be enacted in an 28 odd-numbered year for the budget year and the budget year 29 subsequent to the budget year as follows: 30 a. For the budget year, the statute establishing the state 31 percent of growth shall be enacted within thirty days of the 32 submission of the governor’s budget under section 8.21. 33 b. For the budget year subsequent to the budget year, the 34 statute establishing the state percent of growth shall be 35 -12- LSB 1388HV (2) 84 jp/sc 12/ 17

H.F. 148 enacted before adjournment of the regular legislative session 1 of the odd-numbered year. 2 2. Categorical state percent of growth. The categorical 3 state percent of growth for the budget year beginning July 4 1, 2010, is two percent. The categorical state percent of 5 growth for each budget year shall be established by statute 6 which shall be enacted within thirty days of the submission 7 in the year preceding the base year of the governor’s budget 8 under section 8.21 . The establishment of the categorical state 9 percent of growth for a budget year shall be the only subject 10 matter of the bill which enacts the categorical state percent 11 of growth for a budget year. The categorical state percent of 12 growth may include state percents of growth for the teacher 13 salary supplement, the professional development supplement, 14 and the early intervention supplement. The categorical state 15 percent of growth for each budget year shall be established by 16 statute which shall be enacted in an odd-numbered year for the 17 budget year and the budget year subsequent to the budget year 18 as follows: 19 a. For the budget year, the statute establishing the 20 categorical state percent of growth shall be enacted within 21 thirty days of the submission of the governor’s budget under 22 section 8.21. 23 b. For the budget year subsequent to the budget year, the 24 statute establishing the categorical state percent of growth 25 shall be enacted before adjournment of the regular legislative 26 session of the odd-numbered year. 27 Sec. 11. EFFECTIVE UPON ENACTMENT AND APPLICABILITY. This 28 division of this Act, being deemed of immediate importance, 29 takes effect upon enactment and applies to school budget years 30 beginning in 2011 and 2012 and subsequent school budget years. 31 EXPLANATION 32 This bill relates to state expenditure and oversight 33 requirements by requiring an organized system of state 34 program reviews, revising state expenditure limitations and 35 -13- LSB 1388HV (2) 84 jp/sc 13/ 17

H.F. 148 related state budget requirements, and revising the process 1 for establishing the state percent of growth for purposes of 2 the school foundation program. The bill is organized into 3 divisions. 4 PROGRAM REVIEW. This division addresses regular review 5 of programs and projects administered by executive branch 6 departments by providing for implementation of an organized 7 system of ongoing repeal dates for the programs and projects. 8 Code section 8.2 defines the term “department” to mean any 9 executive department, commission, board, institution, bureau, 10 office, or other agency of the state government, that uses, 11 expends, or receives any state funds. 12 New Code section 8.71 states legislative findings as to 13 the purposes for performing a regular review of programs and 14 projects. The committees on state government of the senate and 15 house of representatives are directed to propose legislation 16 for the Eighty-fourth General Assembly, 2012 Session, providing 17 a staggered schedule for establishing an automatic repeal date 18 for each program or project administered by a department over 19 the succeeding five-year period. The standing committees on 20 state government are required to consult with the office of 21 the governor and the department of management in formulating 22 the staggered schedule and the office and the department are 23 required to cooperate in providing information requested by 24 either committee. The repeal date provisions are required to 25 be implemented in a manner so that any program or project that 26 is reauthorized by law is again subject to automatic repeal 27 five years after reauthorization. 28 STATE EXPENDITURE LIMITATIONS. This division relates to the 29 state general fund expenditure limitation and related state 30 budget requirements. 31 Code section 8.22A, relating to the state revenue estimating 32 conference, is amended to require the conference to provide 33 estimates for the current and next two succeeding fiscal years 34 at each meeting. The conference’s estimate of the lottery 35 -14- LSB 1388HV (2) 84 jp/sc 14/ 17

H.F. 148 revenues credited to the general fund for purposes of the 1 estimate used in developing the state general fund expenditure 2 limitation is revised to require the use of an adjusted 3 seven-year average. New duties are added to conform with other 4 provisions in the division. 5 Code section 8.39, relating to the authority of the 6 executive branch to make intra- and interdepartmental 7 transfers, is amended. For both types of transfers, the bill 8 provides that the amount per transfer cannot exceed one-tenth 9 of 1 percent of the sum of all of the appropriations made for 10 the fiscal year in which the transfer is made, the transfer 11 must be to an appropriation from the same funding source, and 12 the transfer must be within the same fiscal year. 13 Code section 8.54, relating to the state general fund 14 expenditure limitation, is amended in several ways. The list 15 of adjustments in the term “adjusted revenue estimate” is 16 augmented to include revenue accruals identified by the revenue 17 estimating conference. The term “inflation” is defined to 18 mean the percentage change in the consumer price index for all 19 urban consumers, midwest region, published by the United States 20 department of labor, bureau of labor statistics. The division 21 provides that the period of inflation addressed is through the 22 close of the most recently completed fiscal year. 23 A gambling revenue expenditure limitation is established 24 for the revenues received by the state that are attributable 25 to gambling and available for appropriation but are not 26 credited to the general fund of state. The gambling revenue 27 expenditure limitation does not include lottery revenue. 28 Requirements of the governor and general assembly in the budget 29 and appropriations process are made applicable to the gambling 30 revenue expenditure limitation. 31 Under current law, the state general fund expenditure 32 limitation is 99 percent of the adjusted revenue estimate for 33 the succeeding fiscal year. This one-year approach is replaced 34 to utilize an average seven-year period, consisting of net 35 -15- LSB 1388HV (2) 84 jp/sc 15/ 17

H.F. 148 revenues for the current and succeeding fiscal years, plus the 1 net revenues for the five most recently completed fiscal years, 2 as adjusted for inflation, divided by seven. 3 Code section 8.56, relating to the cash reserve fund, is 4 amended in several ways. A new listing of funding sources 5 for the fund is added. In addition to the current ending 6 balance and other appropriations in Code section 8.57, the 7 fund is to receive the state’s share of proceeds under the 8 forfeiture law in Code chapter 809A, moneys collected in the 9 settlement or prosecution of a claim by the state that are not 10 otherwise allocated, and other moneys designated by law or by 11 the executive council as one-time revenues. 12 Under current law, appropriations from the cash reserve fund 13 are only authorized for emergency nonrecurring expenditures to 14 be made for the same fiscal year in which the appropriation 15 is made. The bill authorizes an appropriation for such 16 expenditures for the succeeding fiscal year when a revenue 17 reduction is anticipated that exceeds a threshold specified in 18 the bill. The amount of such an appropriation is subject to 19 various limitations. 20 Code section 284.3A, relating to teacher compensation and 21 a single salary system, is amended. The provision currently 22 provides that the teacher salary supplement district cost 23 and the area education agency (AEA) teacher salary district 24 costs are not subject to a uniform reduction in appropriations 25 ordered by the governor under Code section 8.31. The bill 26 adds that if such reduction is ordered by the governor, the 27 collective bargaining agreements for school district and AEA 28 employees are to be reopened and renegotiated. 29 Code section 809A.17, relating to allocation of forfeited 30 property, is amended to provide that cash proceeds are credited 31 to the cash reserve fund. 32 An applicability section provides that the changes made 33 in the division apply beginning July 1, 2011, for the budget 34 process for the succeeding fiscal year. 35 -16- LSB 1388HV (2) 84 jp/sc 16/ 17

H.F. 148 STATE PERCENT OF GROWTH. This division amends Code section 1 257.8, relating to the state percent of growth used to 2 determine the regular program allowable growth and categorical 3 allowable growth appropriations in the school foundation aid 4 formula. 5 Under current law, the state percent of growth amounts are 6 to be enacted within 30 days of submission of the governor’s 7 budget recommendation and apply to the school budget year which 8 commences in the calendar year one year after the calendar year 9 in which the state percent of growth amounts are enacted. 10 The bill provides instead that the state percent of growth 11 amounts for two budget years are to be enacted in each 12 odd-numbered regular legislative session. For the next budget 13 year, the regular program and categorical amounts are to be 14 enacted within 30 days of submission of the governor’s budget. 15 For the budget year subsequent to the next budget year, the two 16 state growth amounts are to be enacted before adjournment of 17 the legislative session. 18 This division takes effect upon enactment and applies to the 19 school budget years beginning in 2011 and 2012. 20 -17- LSB 1388HV (2) 84 jp/sc 17/ 17