Text: HSB33 Text: HSB35

## House Study Bill 34

HOUSE FILEBY (PROPOSED COMMITTEE ON ECONOMIC GROWTH BILL BY CHAIRPERSON HOFFMAN) Passed House, DatePassed Senate, DateVote: AyesNaysVote: AyesNaysApprovedA BILL FOR1 An Act establishing a growth restriction for the state general 2 fund expenditure limitation. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1492HC 80 5 jp/sh/8 PAG LIN 1 1 1 2 Section 1. Section 8.54, subsection 2, Code 2003, is 1 3 amended by adding the following new paragraph: 1 4NEW PARAGRAPH. aa. "Inflation factor" means the sum of 1 5 the most recently issued annual inflation factor determined by 1 6 the department of revenue and finance in accordance with 1 7 section 422.4, and the percentage change in the state's annual 1 8 population estimate for July 1 of the fiscal year in progress 1 9 as compared to the state's annual population estimate for July 1 10 1 of the previous fiscal year. The change in the population 1 11 estimate shall be expressed as a percentage rounded to the 1 12 nearest one=tenth of one percent. The population estimate 1 13 used to calculate the inflation factor shall be the most 1 14 recent estimate issued annually in December by the United 1 15 States bureau of the census. The inflation factor shall not 1 16 be less than one hundred percent. 1 17 Sec. 2. Section 8.54, subsection 3, Code 2003, is amended 1 18 to read as follows: 1 19 3. Except as otherwise provided in this section, the state 1 20 general fund expenditure limitation for a fiscal year shall be 1 21 ninety=nine percent of the adjusted revenue estimate. 1 22However, the state general fund expenditure limitation amount 1 23 for a fiscal year shall not exceed the state general fund 1 24 expenditure limitation amount for the previous fiscal year 1 25 multiplied by the inflation factor calculated at or about the 1 26 time of the meeting of the revenue estimating conference held 1 27 annually by December 15.1 28 EXPLANATION 1 29 This bill establishes a growth restriction for the state 1 30 general fund expenditure limitation under Code section 8.54 1 31 based upon a defined inflation factor. 1 32 The inflation factor is calculated as the sum of the annual 1 33 inflation factor determined by the department of revenue and 1 34 finance for purposes of indexing the state's personal net 1 35 income tax and the percentage change in the state's 2 1 population, based upon estimates issued by the U.S. census 2 2 bureau. The department of revenue and finance's inflation 2 3 factor is equal to the percentage change in the gross domestic 2 4 product implicit price deflator for the fiscal year ending in 2 5 the calendar year plus 100 percent. The expenditure 2 6 limitation amount for a fiscal year cannot exceed the 2 7 expenditure limitation amount for the previous fiscal year 2 8 multiplied by the inflation factor. 2 9 LSB 1492HC 80 2 10 jp/sh/8