SENATE FILE 203

BY  HOGG

A BILL FOR

An Act relating to the creation of the bond repayment fund and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 8.55, subsection 2, Code 2011, is amended to read as follows:
   2.
  a.  The maximum balance of the fund is the amount equal to two and one-half percent of the adjusted revenue estimate for the fiscal year. If the amount of moneys in the Iowa economic emergency fund is equal to the maximum balance, moneys in excess of this amount shall be transferred to the general bond repayment fund.
   b.  Notwithstanding paragraph “a”, any moneys in excess of the maximum balance in the economic emergency fund after the distribution of the surplus in the general bond repayment fund of the state at the conclusion of each fiscal year shall not be transferred to the general bond repayment fund of the state but shall be transferred to the senior living trust fund. The total amount appropriated, reverted, or transferred, in the aggregate, under this paragraph, section 8.57, subsection 2, and any other law providing for an appropriation or reversion or transfer of an appropriation to the credit of the senior living trust fund, for all fiscal years beginning on or after July 1, 2004, shall not exceed the amount specified in section 8.57, subsection 2, paragraph “c”.
   Sec. 2.  NEW SECTION.  8.57E  Bond repayment fund.
   1.  The bond repayment fund is created. The fund shall be separate from the general fund of the state and the balance in the fund shall not be considered part of the balance of the general fund of the state. The moneys credited to the fund are not subject to section 8.33 and shall not be transferred, used, obligated, appropriated, or otherwise encumbered except as provided in this section.
   2.  Moneys in the bond repayment fund shall only be used for the defeasance of outstanding obligations of state-issued revenue bonds that have a debt service paid by a dedicated state revenue source.
   3.
  a.  Moneys in the fund may be used for cash flow purposes during a fiscal year provided that any moneys so allocated are returned to the fund by the end of that fiscal year.
   b.  Except as provided in section 8.58, the bond repayment fund shall be considered a special account for the purposes of section 8.53 in determining the cash position of the general fund of the state for the payment of state obligations.
   4.  Notwithstanding section 12C.7, subsection 2, interest or earnings deposited in the bond repayment fund shall be credited to the fund.
   Sec. 3.  Section 8.58, Code 2011, is amended to read as follows:
   8.58  Exemption from automatic application.
   1.  To the extent that moneys appropriated under section 8.57 do not result in moneys being credited to the general fund under section 8.55, subsection 2, moneys appropriated under section 8.57 and moneys contained in the cash reserve fund, rebuild Iowa infrastructure fund, environment first fund, and Iowa economic emergency fund, and bond repayment fund shall not be considered in the application of any formula, index, or other statutory triggering mechanism which would affect appropriations, payments, or taxation rates, contrary provisions of the Code notwithstanding.
   2.  To the extent that moneys appropriated under section 8.57 do not result in moneys being credited to the general fund under section 8.55, subsection 2, moneys appropriated under section 8.57 and moneys contained in the cash reserve fund, rebuild Iowa infrastructure fund, environment first fund, and Iowa economic emergency fund, and bond repayment fund shall not be considered by an arbitrator or in negotiations under chapter 20.
   Sec. 4.  EFFECTIVE UPON ENACTMENT —— APPLICABILITY.
   1.  This Act, being deemed of immediate importance, takes effect upon enactment.
   2.  The amendment to section 8.55, providing for transfer of moneys from the Iowa economic emergency fund to the bond repayment fund instead of the general fund of the state applies to transfers made from the Iowa economic emergency fund after the effective date of this Act and the state general fund expenditure limitation calculated for the fiscal year beginning July 1, 2011, shall be adjusted accordingly.
EXPLANATION
   This bill creates the bond repayment fund and provides effective date and applicability provisions.
   The bond repayment fund is to be separate from the general fund of the state and the balance in the fund shall not be considered part of the balance of the general fund of the state. Moneys in the bond repayment fund shall only be used for the defeasance of outstanding obligations of state-issued revenue bonds that have a debt service paid by a dedicated state revenue source.
   Code section 8.55 is amended to provide that when the Iowa economic emergency fund achieves its maximum balance the excess funds are transferred to the bond repayment fund instead of the general fund of the state. Code section 8.58, exempting the balances in existing reserve funds from being considered in the application of any formula, index, or other statutory triggering mechanism which would affect appropriations, payments, or taxation rates, and by an arbitrator or collective bargaining negotiation under Code chapter 20, is amended by adding the new bond repayment fund created in the bill.
   The bill takes effect upon enactment, applies to transfers made from the Iowa economic emergency fund to the bond repayment fund instead of the general fund on or after the effective date, and requires the effect of such transfers to be reflected by adjusting the state general fund expenditure limitation calculated for fiscal year 2011-2012 accordingly.