House Study Bill 34


                                          HOUSE FILE       
                                          BY  (PROPOSED COMMITTEE ON
                                               ECONOMIC GROWTH BILL BY
                                               CHAIRPERSON HOFFMAN)


       Passed House, Date                Passed Senate,  Date             
       Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                    Approved                            

                                         A BILL FOR

     1 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  4    NEW 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 22 However, 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