CHAPTER 21. BUSINESS CYCLE STATE SPENDING CONTROLS
IC 4-10-21
Chapter 21. Business Cycle State Spending Controls
IC 4-10-21-1
"State spending cap" defined
Sec. 1. As used in this chapter, "state spending cap" refers to thestate spending cap determined under section 2 of this chapter.
As added by P.L.192-2002(ss), SEC.4.
IC 4-10-21-2
State spending cap formula
Sec. 2. (a) For the state fiscal year beginning July 1, 2003, andending June 30, 2004, the state spending cap is equal to the resultdetermined under STEP THREE of the following formula:
STEP ONE: Determine the sum of the total of theappropriations made from the state general fund and theproperty tax replacement fund (including continuingappropriations) for the state fiscal year beginning July 1, 2002,and ending June 30, 2003.
STEP TWO: Subtract from the STEP ONE result two hundredforty-three million dollars ($243,000,000), which is the amountof certain reversions made by state agencies.
STEP THREE: Multiply the STEP TWO result by one andthirty-five thousandths (1.035).
(b) For the state fiscal year beginning July 1, 2004, and endingJune 30, 2005, the state spending cap is equal to the product of theresult determined under subsection (a) multiplied by one andthirty-five thousandths (1.035).
(c) The state spending cap for a state fiscal year beginning afterJune 30, 2005, is equal to the product of the state spending growthquotient for the state fiscal year determined under section 3 of thischapter multiplied by the state spending cap for the immediatelypreceding state fiscal year.
(d) The state spending cap imposed under this section is increasedin the initial state fiscal year in which the state receives additionalrevenue for deposit in the state general fund as a result of theenactment of a law that:
(1) establishes a new tax or fee after June 30, 2002;
(2) increases the rate of a previously enacted tax or fee afterJune 30, 2002; or
(3) reduces or eliminates an exemption, a deduction, or a creditagainst a previously enacted tax or fee after June 30, 2002.
The amount of the increase is equal to the average revenue that thebudget agency estimates will be raised by the legislative action in theinitial two (2) full state fiscal years in which the legislative changeis in effect.
(e) The state spending cap imposed under this section is decreasedin the initial state fiscal year in which the state is affected by adecrease in revenue deposited in the state general fund as the resultof the enactment of a law that: (1) eliminates a tax or fee after June 30, 2002;
(2) eliminates any part of a tax rate or fee after June 30, 2002;or
(3) establishes or increases an exemption, a deduction, or acredit against a tax or fee after June 30, 2002.
The amount of the decrease is equal to the average revenue that thebudget agency estimates will be lost as a result of the legislativeaction in the initial two (2) full state fiscal years in which thelegislative change is in effect.
As added by P.L.192-2002(ss), SEC.4. Amended by P.L.146-2008,SEC.10.
IC 4-10-21-3
State spending growth quotient; calculation by budget agency
Sec. 3. The budget agency shall compute a new state spendinggrowth quotient under this section before December 31 in 2004 andeach even-numbered year thereafter. The state spending growthquotient determined under this section applies to each of the statefiscal years in the immediately following biennial budget period. Thestate spending growth quotient to be used in the biennial budgetperiod is the amount determined under STEP FOUR of the followingformula:
STEP ONE: For each of the six (6) calendar years immediatelypreceding the beginning of the first state fiscal year in abiennial budget period, divide the Indiana nonfarm personalincome for the calendar year by the Indiana nonfarm personalincome for the calendar year immediately preceding thatcalendar year.
STEP TWO: Determine the sum of the STEP ONE results.
STEP THREE: Divide the STEP TWO result by six (6).
STEP FOUR: Determine the lesser of the following:
(A) The STEP THREE quotient.
(B) One and six-hundredths (1.06).
As added by P.L.192-2002(ss), SEC.4.
IC 4-10-21-4
Determination of Indiana nonfarm personal income
Sec. 4. For purposes of section 3 of this chapter, Indiana nonfarmpersonal income is the estimate of total nonfarm personal income forIndiana in a calendar year as computed by the federal Bureau ofEconomic Analysis before December 31 immediately preceding thebeginning of the first state fiscal year in a biennial budget period,using any:
(1) actual data available for the calendar year; and
(2) estimated data for the calendar year whenever actual data isnot available.
As added by P.L.192-2002(ss), SEC.4.
IC 4-10-21-5
Prohibition on spending exceeding state spending cap Sec. 5. (a) The maximum total amount that may be expended ina state fiscal year from the state general fund and the counter-cyclicalrevenue and economic stabilization fund is the least of the following:
(1) Subject to sections 6 and 7 of this chapter, the statespending cap for the state fiscal year.
(2) The amount appropriated by the general assembly from thestate general fund and the counter-cyclical revenue andeconomic stabilization fund.
(3) The amount of money available in the state general fund andthe counter-cyclical revenue and economic stabilization fund topay expenditures.
(b) Subject to sections 6 and 7 of this chapter, if the statespending cap for the state fiscal year is less than the amountappropriated by the general assembly in the state fiscal year from thestate general fund and the counter-cyclical revenue and economicstabilization fund, the budget agency shall reduce the amountsavailable for expenditure from the state general fund and thecounter-cyclical revenue and economic stabilization fund in the statefiscal year by using the procedures in IC 4-13-2-18.
As added by P.L.192-2002(ss), SEC.4. Amended by P.L.146-2008,SEC.11.
IC 4-10-21-6
Exclusions from state spending cap
Sec. 6. The following expenditures that would otherwise besubject to this chapter shall be excluded from all computations anddeterminations related to a state spending cap:
(1) Expenditures derived from money deposited in the stategeneral fund and the counter-cyclical revenue and economicstabilization fund from any of the following:
(A) Gifts.
(B) Federal funds.
(C) Dedicated funds.
(D) Intergovernmental transfers.
(E) Damage awards.
(F) Property sales.
(2) Expenditures for any of the following:
(A) Transfers of money among the state general fund and thecounter-cyclical revenue and economic stabilization fund.
(B) Reserve fund deposits.
(C) Refunds of intergovernmental transfers.
(D) Payment of judgments against the state and settlementpayments made to avoid a judgment against the state, otherthan a judgment or settlement payment for failure to pay acontractual obligation or a personnel expenditure.
(E) Distributions or allocations of state tax revenues to a unitof 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.
(F) Motor vehicle excise tax replacement payments that arederived from amounts transferred to the state general fund
from the lottery and gaming surplus account of the buildIndiana fund.
(G) Distributions of state tax revenues collected under IC 7.1that are payable to cities and towns.
As added by P.L.192-2002(ss), SEC.4. Amended by P.L.146-2008,SEC.12.
IC 4-10-21-7
Exemptions by action of general assembly
Sec. 7. (a) An appropriation otherwise subject to the statespending cap limitation imposed by section 5 of this chapter shall betreated as exempt from the state spending cap limitation only if thegeneral assembly specifically exempts the appropriation from thestate spending cap in clear and unambiguous language contained inthe bill making the appropriation.
(b) The following language shall be treated as meeting therequirements of subsection (a):
"The general assembly waives the state spending cap limitationimposed by IC 4-10-21-5 for the state fiscal year beginning July1, (insert the applicable year), and ending June 30, (insert theapplicable year), for the following appropriation: (insert thelanguage of the appropriation). NotwithstandingIC 4-10-21-5(a)(1), the budget agency may allot appropriationsfor the appropriation without making any reduction underIC 4-10-21-5(b).".
(c) Language in a bill such as "Notwithstanding IC 4-10-21" or"IC 4-10-21 does not apply to this appropriation" shall not be treatedas meeting the requirements of subsection (a). The budget agencymay consider the language described in this subsection or otherlanguage that does not meet the requirements of subsection (a) onlyin determining which appropriations to make available forexpenditure under section 5(b) of this chapter.
As added by P.L.192-2002(ss), SEC.4.
IC 4-10-21-8
Annual report; budget agency
Sec. 8. Not earlier than December 1 and not later than the firstsession day of the general assembly after December 31 of eacheven-numbered year, the budget agency shall submit a report in anelectronic format under IC 5-14-6 to the executive director of thelegislative services agency that includes at least the followinginformation:
(1) The state spending cap for each of the state fiscal years inthe immediately following biennial budget period.
(2) The supporting data and calculations necessary for a personto independently verify the manner in which the state spendingcaps described in subdivision (1) were determined.
As added by P.L.192-2002(ss), SEC.4. Amended by P.L.28-2004,SEC.34.