Senate Study Bill 3038 - Introduced
SENATE/HOUSE FILE _____
BY (PROPOSED GOVERNOR BILL)
A BILL FOR
1 An Act relating to state taxation and appropriations by
2 combining special purpose funds, modifying individual income
3 tax rates, placing assessment limitations for property tax
4 purposes on commercial child care facilities, and modifying
5 unemployment benefits, and including effective date and
6 retroactive applicability provisions.
7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 DIVISION I
2 SPECIAL PURPOSE FUNDS
3 Section 1. Section 7D.29, subsection 1, paragraphs a and b,
4 Code 2024, are amended to read as follows:
5 a. From the appropriation made from the Iowa economic
6 emergency cash reserve fund in section 8.55 8.56 for purposes
7 of paying such expenses.
8 b. To the extent the appropriation from the Iowa economic
9 emergency cash reserve fund described in paragraph “a” is
10 insufficient to pay such expenses, there is appropriated
11 from moneys in the general fund of the state not otherwise
12 appropriated the amount necessary to fund that deficiency.
13 Sec. 2. Section 8.22A, subsection 2, Code 2024, is amended
14 to read as follows:
15 2. The conference shall meet as often as deemed necessary,
16 but shall meet at least three times per year with at least
17 one meeting taking place each year in March. The conference
18 may use sources of information deemed appropriate. At each
19 meeting, the conference shall agree to estimates for the
20 current fiscal year and the following fiscal year for the
21 general fund of the state, lottery revenues to be available
22 for disbursement, and from gambling revenues and from interest
23 earned on the cash reserve fund and the economic emergency
24 fund to be deposited in the rebuild Iowa infrastructure fund.
25 At the meeting taking place each year in March, in addition
26 to agreeing to estimates for the current fiscal year and the
27 following fiscal year, the conference shall agree to estimates
28 for the fiscal year beginning July 1 of the following calendar
29 year. Only an estimate for the following fiscal year agreed
30 to by the conference pursuant to subsection 3, 4, or 5, shall
31 be used for purposes of calculating the state general fund
32 expenditure limitation under section 8.54, and any other
33 estimate agreed to shall be considered a preliminary estimate
34 that shall not be used for purposes of calculating the state
35 general fund expenditure limitation.
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1 Sec. 3. Section 8.22A, subsection 5, paragraph b, Code 2024,
2 is amended to read as follows:
3 b. The amount of revenue for the following fiscal year from
4 gambling revenues and from interest earned on the cash reserve
5 fund and the economic emergency fund to be deposited in the
6 rebuild Iowa infrastructure fund under section 8.56 and section
7 8.57, subsection 5, paragraph “e” “f”.
8 Sec. 4. Section 8.54, subsection 1, unnumbered paragraph 1,
9 Code 2024, is amended to read as follows:
10 For the purposes of section 8.22A, this section, and
11 sections 8.55 through 8.56 and 8.57:
12 Sec. 5. Section 8.54, subsection 5, paragraph a, Code 2024,
13 is amended to read as follows:
14 a. For fiscal years in which it is anticipated that the
15 distribution of moneys from the Iowa economic emergency fund
16 in accordance with section 8.55 8.57, subsection 2, paragraph
17 “c”, will result in moneys being transferred to the general
18 fund of the state, the original state general fund expenditure
19 limitation amount provided for in subsection 3 shall be
20 readjusted to include the amount of moneys anticipated to be
21 so transferred.
22 Sec. 6. Section 8.56, subsections 1 and 3, Code 2024, are
23 amended to read as follows:
24 1. A cash reserve fund is created in the state treasury.
25 The cash reserve fund shall be separate from the general fund
26 of the state and shall not be considered part of the general
27 fund of the state except in determining the cash position of
28 the state as provided in subsection 3. The moneys in the cash
29 reserve fund are not subject to section 8.33 and shall not
30 be transferred, used, obligated, appropriated, or otherwise
31 encumbered except as provided in this section. Notwithstanding
32 section 12C.7, subsection 2, interest or earnings on moneys
33 deposited in the cash reserve fund shall be credited to the
34 rebuild Iowa infrastructure fund created in section 8.57.
35 Moneys in the cash reserve fund may be used for cash flow
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1 purposes during a fiscal year provided that any moneys so
2 allocated are returned to the cash reserve fund by the end of
3 that fiscal year.
4 3. a. The moneys in the cash reserve fund shall only be
5 used pursuant to an appropriation made by the general assembly
6 or as provided in this section. An appropriation shall be
7 made in accordance with subsection 4 only for the fiscal year
8 in which the appropriation is made. The moneys shall only be
9 appropriated by the general assembly for nonrecurring emergency
10 expenditures and shall not be appropriated for payment of
11 any collective bargaining agreement or arbitrator’s decision
12 negotiated or awarded under chapter 20. Except as provided
13 in section 8.58, the cash reserve fund shall be considered a
14 special account for the purposes of section 8.53 in determining
15 the cash position of the general fund of the state for the
16 payment of state obligations.
17 b. Moneys in the cash reserve fund may be used for cash
18 flow purposes during a fiscal year provided that any moneys so
19 allocated are returned to the cash reserve fund by the end of
20 that fiscal year.
21 c. There is appropriated from the cash reserve fund to the
22 executive council an amount sufficient to pay the expenses
23 authorized by the executive council, as specified in section
24 7D.29.
25 d. There is appropriated from the cash reserve fund to the
26 general fund of the state for the fiscal year in which moneys
27 in the fund were used for cash flow purposes, for the purposes
28 of reducing or preventing any overdraft on or deficit in the
29 general fund of the state, the amount from the cash reserve
30 fund that was used for cash flow purposes pursuant to paragraph
31 “b” and that was not returned to the cash reserve fund by June
32 30 of the fiscal year. The appropriation in this paragraph
33 shall not exceed one percent of the adjusted revenue estimate
34 for the fiscal year for which the appropriation is made and is
35 contingent upon all of the following having occurred:
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1 (1) Prior to an appropriation being made pursuant to this
2 paragraph, the balance of the general fund of the state at the
3 end of the fiscal year for which the appropriation is made is
4 negative.
5 (2) The governor issues an official proclamation and
6 notifies the legislative fiscal committee and the legislative
7 services agency that the balance of the general fund is
8 negative and that an appropriation made pursuant to this
9 paragraph brings the general fund of the state into balance.
10 e. If an appropriation is made pursuant to paragraph “d”
11 for a fiscal year, there is appropriated from the general fund
12 of the state to the cash reserve fund for the following fiscal
13 year the amount of the appropriation made pursuant to paragraph
14 “d”.
15 Sec. 7. Section 8.56, subsection 4, paragraph a, unnumbered
16 paragraph 1, Code 2024, is amended to read as follows:
17 Except as provided in subsection 1 3, an appropriation shall
18 not be made from the cash reserve fund unless the appropriation
19 is in accordance with all of the following:
20 Sec. 8. Section 8.57, subsection 1, paragraph a, Code 2024,
21 is amended to read as follows:
22 a. The “cash reserve goal percentage” for fiscal years
23 beginning on or after July 1, 2004 2024, is seven twelve and
24 one-half percent of the adjusted revenue estimate. For each
25 fiscal year in which the appropriation of the surplus existing
26 in the general fund of the state at the conclusion of the prior
27 fiscal year pursuant to paragraph “b” was not sufficient for the
28 cash reserve fund to reach the cash reserve goal percentage for
29 the current fiscal year, there is appropriated from the general
30 fund of the state an amount to be determined as follows:
31 (1) If the balance of the cash reserve fund in the current
32 fiscal year is not more than six eleven and one-half percent of
33 the adjusted revenue estimate for the current fiscal year, the
34 amount of the appropriation under this lettered paragraph is
35 one percent of the adjusted revenue estimate for the current
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1 fiscal year.
2 (2) If the balance of the cash reserve fund in the current
3 fiscal year is more than six eleven and one-half percent but
4 less than seven twelve and one-half percent of the adjusted
5 revenue estimate for that fiscal year, the amount of the
6 appropriation under this lettered paragraph is the amount
7 necessary for the cash reserve fund to reach seven twelve and
8 one-half percent of the adjusted revenue estimate for the
9 current fiscal year.
10 (3) The moneys appropriated under this lettered paragraph
11 shall be credited in equal and proportionate amounts in each
12 quarter of the current fiscal year.
13 Sec. 9. Section 8.57, subsections 2 and 3, Code 2024, are
14 amended to read as follows:
15 2. a. Moneys appropriated under subsection 1 shall be first
16 credited to the cash reserve fund. To the extent that moneys
17 appropriated under subsection 1 would make the moneys in the
18 cash reserve fund exceed the cash reserve goal percentage of
19 the adjusted revenue estimate for the fiscal year, the moneys
20 are appropriated to the department of management to be spent
21 for the purpose of eliminating Iowa’s GAAP deficit, including
22 the payment of items budgeted in a subsequent fiscal year
23 which under generally accepted accounting principles should be
24 budgeted in the current fiscal year. These moneys shall be
25 deposited into a GAAP deficit reduction account established
26 within the department of management.
27 b. The department of management shall annually file
28 with both houses of the general assembly at the time of the
29 submission of the governor’s budget, a schedule of the items
30 for which moneys appropriated under this subsection for the
31 purpose of eliminating Iowa’s GAAP deficit, including the
32 payment of items budgeted in a subsequent fiscal year which
33 under generally accepted accounting principles should be
34 budgeted in the current fiscal year, shall be spent. The
35 schedule shall indicate the fiscal year in which the spending
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1 for an item is to take place and shall incorporate the items
2 detailed in 1994 Iowa Acts, ch. 1181, §17. The schedule
3 shall list each item of expenditure and the estimated dollar
4 amount of moneys to be spent on that item for the fiscal
5 year. The department of management may submit during a
6 regular legislative session an amended schedule for legislative
7 consideration. If moneys appropriated under this subsection
8 are not enough to pay for all listed expenditures, the
9 department of management shall distribute the payments among
10 the listed expenditure items. Moneys appropriated to the
11 department of management under this subsection shall not be
12 spent on items other than those included in the filed schedule.
13 c. On September 1 following the close of a fiscal year,
14 moneys in the GAAP deficit reduction account which remain
15 unexpended for items on the filed schedule for the previous
16 fiscal year shall be credited to the Iowa economic emergency
17 fund as follows:
18 (1) The difference between the actual net revenue for the
19 general fund of the state for the fiscal year and the adjusted
20 revenue estimate for the fiscal year shall be transferred to
21 the taxpayer relief fund created in section 8.57E.
22 (2) The remainder of the excess, if any, shall be
23 transferred to the general fund of the state.
24 3. To the extent that moneys appropriated under subsection
25 subsections 1 and 2 exceed the amounts necessary for the
26 cash reserve fund to reach its maximum balance and the
27 amounts necessary to eliminate Iowa’s GAAP deficit, including
28 elimination of the making of any appropriation in an incorrect
29 fiscal year, the moneys shall be appropriated to the Iowa
30 economic emergency fund transferred pursuant to subsection 2,
31 paragraph “c”.
32 Sec. 10. Section 8.57, subsection 5, paragraph d, Code 2024,
33 is amended to read as follows:
34 d. The general assembly may provide that all or part of the
35 moneys deposited in the GAAP deficit reduction account created
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1 in this section shall be transferred to the rebuild Iowa
2 infrastructure fund in lieu of appropriation of the moneys to
3 the Iowa economic emergency fund under subsection 2, paragraph
4 “c”.
5 Sec. 11. Section 8.57E, subsection 2, paragraph b,
6 subparagraph (1), Code 2024, is amended to read as follows:
7 (1) For the fiscal year beginning July 1, 2023, and for
8 each fiscal year thereafter, if the actual net revenue for the
9 general fund of the state for the fiscal year plus the amount
10 transferred to the general fund of the state under section 8.55
11 8.57, subsection 2, paragraph “b” “c”, for the fiscal year, if
12 any, is less than one hundred three and one-half percent of
13 the actual net revenue for the general fund of the state for
14 the prior fiscal year, there is transferred from the taxpayer
15 relief fund to the general fund of the state an amount equal to
16 the difference or the remaining balance of the taxpayer relief
17 fund, whichever is lower, subject to subparagraph (2).
18 Sec. 12. Section 8.58, Code 2024, is amended to read as
19 follows:
20 8.58 Exemption from automatic application.
21 1. To the extent that moneys appropriated under section 8.57
22 do not result in moneys being credited to the general fund of
23 the state under section 8.55 8.57, subsection 2, paragraph “c”,
24 moneys appropriated under section 8.57 and moneys contained
25 in the cash reserve fund, rebuild Iowa infrastructure fund,
26 environment first fund, Iowa economic emergency fund, taxpayer
27 relief fund, state bond repayment fund, Iowa coronavirus fiscal
28 recovery fund, and Iowa coronavirus capital projects fund
29 shall not be considered in the application of any formula,
30 index, or other statutory triggering mechanism which would
31 affect appropriations, payments, or taxation rates, contrary
32 provisions of the Code notwithstanding.
33 2. To the extent that moneys appropriated under section 8.57
34 do not result in moneys being credited to the general fund of
35 the state under section 8.55 8.57, subsection 2, paragraph “c”,
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1 moneys appropriated under section 8.57 and moneys contained
2 in the cash reserve fund, rebuild Iowa infrastructure fund,
3 environment first fund, Iowa economic emergency fund, taxpayer
4 relief fund, state bond repayment fund, Iowa coronavirus fiscal
5 recovery fund, and Iowa coronavirus capital projects fund shall
6 not be considered by an arbitrator or in negotiations under
7 chapter 20.
8 Sec. 13. REPEAL. Section 8.55, Code 2024, is repealed.
9 Sec. 14. TRANSFER OF MONEYS. On the effective date of this
10 division of this Act, moneys remaining in the Iowa economic
11 emergency fund created in section 8.55, Code 2024, shall be
12 transferred as follows:
13 1. To the cash reserve fund created in section 8.56 up to
14 the maximum balance of the cash reserve fund as described in
15 sections 8.56 and 8.57, as amended by this division of this
16 Act.
17 2. If moneys remain after the transfer under subsection 1,
18 to the general fund of the state.
19 DIVISION II
20 INDIVIDUAL INCOME TAXES —— FUTURE INCOME TAX RATES —— ALTERNATE
21 TAX RATES —— WITHHOLDING
22 Sec. 15. Section 421.27, subsec