Bill Text: IN HB1150 | 2010 | Regular Session | Introduced
Bill Title: State spending cap.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2010-01-07 - First reading: referred to Committee on Ways and Means [HB1150 Detail]
Download: Indiana-2010-HB1150-Introduced.html
Citations Affected: IC 2-2.1; IC 4-10-21-0.5; IC 4-10-21-9;
IC 4-13-2-18.
Synopsis: State spending cap. Imposes general expenditure controls
on the state beginning with the budget adopted for the state fiscal year
beginning July 1, 2011. Provides procedures for the implementation of
the spending controls. Permits the general assembly to appropriate and
the state to expend an amount exceeding the general expenditure limit
if at least two-thirds of the members of the senate and two-thirds of the
members of the house of representatives adopt a resolution declaring
the general assembly's intent to authorize the additional expenditure.
Provides that the business cycle state spending controls expire at the
end of the state fiscal year ending June 30, 2011.
Effective: July 1, 2010.
January 7, 2010, read first time and referred to Committee on Ways and Means.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or
A BILL FOR AN ACT to amend the Indiana Code concerning state
offices and administration.
Chapter 4. General Expenditure Controls
Sec. 1. This chapter applies only to appropriations and allotments for state fiscal years that begin after June 30, 2011.
Sec. 2. As used in this chapter, "budget period" means a biennium beginning July 1 of an odd-numbered year.
Sec. 3. As used in this chapter, "controlled state fund" refers to the following:
(1) The state general fund.
(2) The counter-cyclical revenue and economic stabilization fund.
(3) The state tuition reserve fund.
Sec. 4. (a) As used in this chapter, "expenditure" refers to an expenditure from a controlled state fund in a state fiscal year.
(b) The term does not include the following:
(1) A payment of a tax refund or refundable tax credit related to a state tax liability.
(2) A transfer between controlled state funds or accounts within a controlled state fund.
(3) The costs of judgments and settlements.
(4) A distribution of revenue from any of the following excise taxes to a political subdivision (as defined in IC 36-1-2-13):
(A) Financial institutions excise tax (IC 6-5.5).
(B) Motor vehicle excise taxes (IC 6-6-5).
(C) Commercial vehicle excise taxes (IC 6-6-5.5).
(D) Boat excise tax (IC 6-6-11).
(E) Aircraft excise tax (IC 6-6-6.5).
(5) A distribution of state tax revenues collected under IC 7.1 that is payable to a city or town.
(6) The costs of making motor vehicle excise tax replacement payments.
(7) A distribution or an allocation of state tax revenues to a unit of local government under IC 36-7-13, IC 36-7-26, IC 36-7-27, IC 36-7-31, or IC 36-7-31.3.
(8) The costs of providing supplemental distributions under IC 4-33-13-5 to replace riverboat admissions taxes.
(9) A transfer from the state general fund to the build Indiana fund required under IC 4-33-13-5(d).
(10) A distribution of state tax revenues collected under any other statute that is:
(A) deposited in a controlled state fund; and
(B) payable to a political subdivision.
Sec. 5. As used in this chapter, "IPI growth quotient" refers to the Indiana personal income growth quotient determined under section 7 of this chapter.
Sec. 6. As used in this chapter, "state spending cap" for a state fiscal year refers to the limit on expenditures determined under section 8 of this chapter.
Sec. 7. (a) The IPI growth quotient for a specified state fiscal year is the amount determined under STEP THREE of the following formula:
STEP ONE: For each of the six (6) calendar years immediately preceding the specified state fiscal year, divide:
(A) the Indiana personal income for the calendar year; by
(B) the Indiana personal income for the immediately preceding calendar year.
STEP TWO: Add the quotients determined under STEP ONE.
STEP THREE: Divide:
(A) the STEP TWO result; by
(B) six (6).
(b) Not later than January 31 of each odd-numbered year, the budget agency shall determine the IPI growth quotient for the state fiscal year beginning July 1 of the odd-numbered year. Computation of the IPI growth quotient must be based on Indiana personal income, as computed by the federal Bureau of Economic Analysis or its successor using any actual data for a calendar year and any estimated data by the federal Bureau of Economic Analysis or its successor, as determined appropriate by the Bureau or its successor.
(c) The budget agency shall publish the IPI growth quotient determined under subsection (b) for a particular budget period in the Indiana Register not later than February 15 of each odd-numbered year. In addition, the budget agency shall publish historic IPI growth quotient data in the Indiana Register not later than July 1 of each odd-numbered year.
Sec. 8. (a) The maximum total expenditure allowed from controlled state funds for a budget period is the sum of the maximum total expenditures allowed from controlled state funds for each state fiscal year of the budget period.
(b) The maximum total expenditure allowed from controlled state funds for the state fiscal year beginning July 1, 2011, is the amount determined under STEP SIX of the following formula:
STEP ONE: Determine the actual total expenditure from controlled state funds for the state fiscal year beginning July 1, 2009.
STEP TWO: Adjust the STEP ONE result to account for differences in spending responsibilities from controlled state funds between:
(A) the state fiscal year beginning July 1, 2009; and
(B) the state fiscal year beginning July 1, 2011;
in terms of actual expenditures for the state fiscal year beginning July 1, 2009.
STEP THREE: Determine the IPI growth quotient for the state fiscal year beginning July 1, 2010.
STEP FOUR: Multiply:
(A) the STEP TWO result; by
(B) the STEP THREE result.
STEP FIVE: Determine the IPI growth quotient for the state fiscal year beginning July 1, 2011.
STEP SIX: Multiply:
(A) the STEP FOUR result; by
(B) the STEP FIVE result.
(c) This subsection applies only to state fiscal years beginning in an odd-numbered year after June 30, 2013. The maximum total expenditure allowed from controlled state funds for the first state fiscal year of a budget period beginning July 1 of an odd-numbered year is the amount determined under STEP THREE of the following formula:
STEP ONE: Determine the maximum total expenditure allowed from controlled state funds for the state fiscal year beginning July 1 of the immediately preceding even-numbered year, as calculated under subsection (d).
STEP TWO: Determine the IPI growth quotient for the first state fiscal year of the budget period.
STEP THREE: Multiply:
(A) the STEP ONE result; by
(B) the STEP TWO result.
(d) This subsection applies only to state fiscal years beginning in an even-numbered year after June 30, 2012. The maximum total expenditure allowed from controlled state funds for the second state fiscal year of a budget period beginning July 1 of an even-numbered year is the amount determined under STEP THREE of the following formula:
STEP ONE: Determine the maximum total expenditure allowed from controlled state funds for the first state fiscal year of the budget period, as calculated under subsection (b) or (c).
STEP TWO: Determine an estimated IPI growth quotient for the second state fiscal year of the budget period, based on an estimate by the budget agency of Indiana personal income for the calendar year that includes July 1 of the first state fiscal year of the budget period.
STEP THREE: Multiply:
(A) the STEP ONE result; by
(B) the STEP TWO result.
(e) The budget agency shall publish:
(1) the maximum total expenditure amounts determined under subsections (b), (c), and (d), as applicable, for the budget period beginning July 1 of an odd-numbered year; and
(2) the IPI growth quotients for each state fiscal year;
in the Indiana Register not later than February 15 of the
odd-numbered year. Except for revisions to correct calculation
errors, the maximum total expenditure amounts published under
this subsection remain in effect for the duration of the
corresponding budget period.
Sec. 9. Except as provided in sections 10, 11, and 14 of this
chapter, the state spending cap for a state fiscal year equals the
amount of the maximum total expenditure determined under
section 8(b), 8(c), or 8(d) of this chapter, as applicable. The general
assembly shall not appropriate, and the budget director may not
allot, a total sum of expenditures in a state fiscal year that exceeds
the state spending cap.
Sec. 10. The general assembly, by approval of a two-thirds (2/3)
majority of the house of representatives and a two-thirds (2/3)
majority of the senate, may increase the state spending cap above
the amount that would otherwise be permitted by application of the
IPI growth quotient. However, an action of the general assembly
under this section may be taken only if the action is taken for one
(1) or more of the following reasons:
(1) A spending responsibility has shifted from another level of
government to a controlled state fund.
(2) A spending responsibility has shifted from a fund not
limited by this chapter to a fund limited by this chapter.
(3) There will be in the state fiscal year in which the increased
state spending cap initially applies:
(A) an expansion of state services that requires additional
state expenditures; and
(B) additional revenue from a tax increase that has been
enacted to finance the additional state services and
spending.
Sec. 11. The general assembly, in a regular session, may
authorize an emergency appropriation by enacting a supplemental
appropriations act and a joint resolution that contains all the
statements described in section 12 of this chapter. A supplemental
appropriations act must be approved by a two-thirds (2/3)
majority of the house of representatives and a two-thirds (2/3)
majority of the senate.
Sec. 12. A joint resolution described in section 11 of this chapter
must contain the following:
(1) A statement that all spending authorized in the act exceeds
the limit of the state spending cap.
(2) A description of the amount of emergency expenditures
and an explanation of the specific circumstances that created
the need for a supplemental appropriation.
Sec. 13. Except as allowed in an emergency appropriation under
section 11 of this chapter, all appropriations for expenditures for
a state fiscal year, including continuing appropriations, are void if
the total amount appropriated for expenditures exceeds the
amount allowed by the state spending cap for the state fiscal year
under this chapter. If the appropriations for a state fiscal year are
voided under this section, the general assembly in a regular or
special session may reappropriate an amount that does not exceed
the amount allowed by the state spending cap under this chapter.
Sec. 14. (a) Subject to subsection (c), reductions in the state
spending cap are mandatory in each year when spending
responsibility is:
(1) shifted from a controlled state fund or to another level of
government; or
(2) transferred from a controlled state fund to a fund that is
not limited by this chapter.
The state spending cap must be decreased by the amount of the
shift or transfer.
(b) The amount of the state spending cap reduction shall be
determined by the budget agency upon the recommendation of the
budget committee by a simple majority vote.
(c) If the budget agency determines that:
(1) the amount of a state spending cap reduction required
under subsection (a) is less than one-tenth of one percent
(0.1%); or
(2) there is a need to waive the mandatory downward
adjustment;
the state spending cap reduction must receive a unanimous
recommendation from the budget committee to take effect.
Chapter 5. Budget Bill Requirements
Sec. 1. This chapter applies only to appropriations and allotments for state fiscal years that begin after June 30, 2011.
Sec. 2. As used in this chapter, "controlled state fund" has the meaning set forth in IC 2-2.1-4-3.
Sec. 3. As used in this chapter, "digest" refers to the description of the contents of a bill or a conference committee report that is located on:
(1) the cover page of a bill; or
(2) the first page of a conference committee report.
Sec. 4. As used in this chapter, "expenditure" has the meaning set forth in IC 2-2.1-4-4.
Sec. 5. The digest of a budget bill or a conference committee report on a budget bill must contain the following information:
(1) The total amount of appropriations from controlled state funds.
(2) The total amount of appropriations for expenditures subject to IC 2-2.1-4 from controlled state funds.
(3) The expenditure limit for controlled state funds established under IC 2-2.1-4.
(b) Except as otherwise expressly provided in this section, the provisions of this chapter relating to the allotment system and to the encumbering of funds shall apply to appropriations and funds of all kinds, including standing or annual appropriations and dedicated funds, from which expenditures are to be made from time to time by or under the authority of any state agency. However, the provisions relating to the allotment system shall not apply to moneys made available for the purpose of conducting a postaudit of financial transactions of any state agency. Likewise, appropriations for construction or for the acquisition of real estate for public purposes may be exempted from the allotment
system by the state budget director, but in such cases he the budget
director shall prescribe such regulations as will insure the proper
application and encumbering of funds.
(c) No appropriation to any state agency shall become available for
expenditure until:
(1) such state agency shall have submitted to the state budget
agency a request for allotment, such request for allotment to
consist of an estimate of the amount required for each activity and
each purpose for which money is to be expended during the
applicable allotment period; and
(2) such estimate contained in the request for allotment shall have
been approved, increased, or decreased by the state budget
director and funds allotted therefor as hereinafter provided.
The form of a request for allotment, including a request by hand, mail,
facsimile transmission, or other electronic transmission, shall be
prescribed by the state budget agency with the approval of the auditor
of state and shall be submitted to them at least twenty-five (25) days
prior to the beginning of the allotment period.
(d) Each request for allotment shall be reviewed by the state budget
agency, and respective amounts therein shall be allotted for
expenditure if:
(1) the estimate therein is within the terms of the appropriation as
to amount and purpose, having due regard for the probable future
needs of the state agency for the remainder of the fiscal year or
other term for which the appropriation was made; and
(2) the agency contemplates expenditure of the allotment during
the period.
Otherwise, the state budget agency shall modify the estimate so as to
conform with the terms of the appropriation and the prospective needs
of the state agency and shall reduce the amount to be allotted
accordingly. The state budget agency shall act promptly upon all
requests for allotment and shall notify every state agency of its
allotments at least five (5) days before the beginning of each allotment
period. The total amount allotted to any agency for the fiscal year or
other term for which the appropriation was made shall not exceed the
amount appropriated for such year or term.
(e) The state budget director shall also have authority at any time to
modify or amend any allotment previously made by him. the budget
director.
(f) In case the state budget director shall discover at any time that:
(1) the probable receipts from taxes or other sources for any fund
will be less than were anticipated; and
(2) as a consequence the amount available for the remainder of the term of the appropriation or for any allotment period will be less than the amount estimated or allotted therefor;
(g) This subsection applies to state fiscal years beginning after June 30, 2011. The definitions in IC 2-2.1-4 apply throughout this subsection. Allotments for a state fiscal year that exceed the state spending cap are void. The budget agency shall allot money for an appropriation, including an appropriation that is not made in a specific amount, to provide that the total allotment for expenditures from controlled state funds in a state fiscal year does not exceed the state spending cap. If the budget director finds that the projected expenditures for the remainder of a state fiscal year probably will exceed the state spending cap, the budget director shall, with the approval of the governor and after notice to the state agency or agencies concerned, reduce the amount or amounts allotted or to be allotted to prevent a total allotment that exceeds the state spending cap.
therein, and every person receiving such payment, or any part thereof,
shall be jointly and severally liable to the state for the full amount so
paid or received. If any appointive officer or employee of the state shall
knowingly incur any obligation or shall authorize or make any
expenditure in violation of the provisions of this chapter, or take any
part therein, it shall be ground for his the officer's or employee's
removal by the officer appointing him, the officer or employee, and
if the appointing officer be other than the governor and shall fail to
remove such officer or employee, the governor may exercise such
power of removal after giving notice of the charges and opportunity for
hearing thereon to the accused officer or employee and to the officer
appointing him. the officer or employee.