HLS 182ES-53 ORIGINAL
2018 Second Extraordinary Session
HOUSE BILL NO. 16
BY REPRESENTATIVE BARRAS
BUDGETARY CONTROL S: Provides for changes in the expenditure limit calculation
1 AN ACT
2To amend and reenact R.S. 39:33.1(A) through (C) and 52.1 and to repeal R.S. 39:94(A)(1),
3 relative to the expenditure limit; to provide for submission of the expenditure limit
4 to the legislature; to cap the annual growth of the expenditure limit; to provide for
5 the calculation of the growth factor; to change the uses of money in excess of the
6 expenditure limit; to provide for the contents of the expenditure limit calculation; to
7 provide for changing the expenditure limit; to provide for effectiveness; and to
8 provide for related matters.
9Be it enacted by the Legislature of Louisiana:
10 Section 1. R.S. 39:33.1(A) through (C) and 52.1 are hereby amended and reenacted
11to read as follows:
12 §33.1. Determination of expenditure limit
13 A. The commissioner of administration shall submit a calculation for the
14 expenditure limit for the ensuing fiscal year to the Joint Legislative Committee on
15 the Budget no later than thirty-five days prior to each regular session at the same
16 time the executive budget is submitted to the Joint Legislative Committee on the
17 Budget pursuant to R.S. 39:37. The calculation shall include a comparison of the
18 expenditure limit to the applicable expenditures in the executive budget
19 recommendation, the appropriated amount at the beginning of the year, and the most
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1 recent appropriated amount available for the current fiscal year and each of the
2 previous four fiscal years.
3 B.(1) The expenditure limit for the ensuing fiscal year shall be the
4 expenditure limit for the current fiscal year plus an amount equal to that limit times
5 multiplied by the lesser of six percent or the growth factor if the growth factor is
6 positive. If the growth factor is negative, the expenditure limit for the ensuing fiscal
7 year shall be the expenditure limit for the current fiscal year.
8 (2) The growth factor is defined as the average of the following three
9 indicators:
10 (a) The average annual percentage rate of change of personal income for
11 Louisiana as defined and reported by the United States Department of Commerce,
12 or its successor agency, for the three calendar years prior to the fiscal year for which
13 the limit is calculated.
14 (b) The percentage rate of change in the official forecast between the next
15 fiscal year and the current fiscal year.
16 (c) The average annual percentage rate of change of the consumer price
17 index for the South Region as defined and reported by the United States Department
18 of Labor, or its successor agency, for the three calendar years prior to the fiscal year
19 for which the limit is calculated.
20 (3) The figures used for the calculation of the growth factor shall be those
21 actual or estimated figures most recently reported by the United States Department
22 of Commerce at the time the expenditure limit is submitted to the Joint Legislative
23 Committee on the Budget.
24 (4) The annual percentage rate of change of personal income for the calendar
25 year immediately preceding the fiscal year for which the expenditure limit is
26 calculated shall be derived by:
27 (a) Computing the simple average of the available quarterly total personal
28 income estimates for that calendar year.
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1 (b) Dividing that result by the reported annual estimate of total personal
2 income for the calendar year that is two years prior to the fiscal year for which the
3 limit is calculated.
4 (c) Subtracting 1.0 from the result obtained in Subparagraph (b) of this
5 Paragraph. The calculation of the expenditure limit each fiscal year shall include the
6 methodology and data sources used to determine the rates of change for each factor.
7 Any changes in the methodology used from the prior year calculation shall require
8 review and prior approval of the Joint Legislative Committee on the Budget.
9 C. After review by the Joint Legislative Committee on the Budget, or its
10 designated staff, the commissioner of administration shall determine the state general
11 fund and designated dedicated funds to include and exclude in the calculation of the
12 state general fund and dedicated funds appropriated in the current fiscal year and the
13 state general fund and dedicated funds applicable to the expenditure limit in
14 accordance with Subsection D of this Section.
15 * * *
16 §52.1. Change in expenditure limit
17 A change to the expenditure limit shall be made pursuant to a concurrent
18 resolution adopted by a favorable vote of two-thirds of the elected members of each
19 house directing the commissioner of administration to change the expenditure limit
20 to a designated amount for a specified fiscal year. If the legislature is not in session,
21 the two-thirds consent requirement shall be obtained as provided in R.S. 39:87.
22 Section 2. R.S. 39:94(A)(1) is hereby repealed in its entirety.
23 Section 3. This Act shall take effect and become operative if and when the proposed
24amendment of Article VII, Section 10 of the Constitution of Louisiana contained in the Act
25which originated as House Bill No. of this 2018 Second Extraordinary Session of the
26Legislature is adopted at a statewide election and becomes effective.
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 16 Original 2018 Second Extraordinary Session Barras
Abstract: Changes requirements for submission of the expenditure limit calculation, limits
expenditure limit growth to 6%, changes the method of determining the growth
factor, and allows for mail ballot to change the expenditure limit.
Present law requires the commissioner of administration to submit the calculation for the
expenditure limit for the ensuing fiscal year to the Joint Legislative Committee on the
Budget (JLCB) no later than 35 days prior to each regular session.
Proposed law deletes the 35 day requirement in present law and instead requires that the
expenditure limit be submitted at the same time the executive budget is submitted to JLCB.
Proposed law requires that the expenditure limit calculation include a comparison of
expenditure limit to applicable expenditures and historical comparative information.
Present law provides that the determination of the expenditure limit for the next fiscal year
be based on the current limit multiplied by a positive growth factor.
Proposed law limits the growth of the expenditure limit to 6%.
Proposed law provides that, if the growth factor is not positive, the expenditure limit for the
next fiscal year shall be the expenditure limit for the current fiscal year.
Present law defines the growth factor as the three-year average growth in La. personal
income.
Proposed law retains the average growth in personal income and adds two other indicators
to the determination of the growth factor:
(1)Growth of the official forecast between the next fiscal year and the current fiscal
year.
(2)The three-year average change of the consumer price index for the South Region
(CPI-South) as defined and reported by the U.S. Dept. of Labor, or its successor
agency.
Present law requires for the determination of the percentage rate of change of personal
income in the current year and prior years.
Proposed law deletes present law and requires that the commissioner of administration
include the methodology and data sources used to determine the rates of change for each
factor. Any changes in the methodology from the prior year calculation shall require review
and prior approval of the JLCB.
Present law requires the commissioner to determine the state general fund and designated
funds to be included in the expenditure limit.
Proposed law requires the commissioner to determine the funds to be included and excluded
in the expenditure limit. Further requires the commissioner to determine the state general
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HB NO. 16
fund and dedicated funds to be included and excluded from the determination of the amount
appropriated in the current fiscal year applicable to the expenditure limit.
Present law requires a concurrent resolution adopted by a 2/3 vote of each house of the
legislature to change the expenditure limit.
Proposed law allows the legislature to use the mail ballot procedure contained in present law
to obtain the 2/3 approval of each house to change the expenditure limit when the legislature
is not in session.
Present law requires that all money available for appropriation from the state general fund
and dedicated funds in excess of the expenditure limit shall be deposited in the Budget
Stabilization Fund.
Proposed law repeals present law.
Effective if and when the proposed amendment of Article VII of the Constitution of La.
contained in the Act which originated as House Bill No. of this 2018 Second ES of the
Legislature is adopted at a statewide election and becomes effective.
(Amends R.S. 39:33.1(A)-(C) and 52.1; Repeals R.S. 39:94(A)(1))
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