HB 6195 Summary

• Amends section 51 of the 1967 Income Tax Act to establish an automatic income tax rate reduction mechanism beginning January 1, 2023, if general fund/general purpose revenue growth exceeds inflation.

• Creates a formula to reduce the income tax rate when revenue growth exceeds inflation by multiplying the current rate by a fraction comparing excess revenue to total tax collections from the prior fiscal year.

• Defines "capped general fund/general purpose revenue" using 2020-2021 fiscal year baseline multiplied by cumulative inflation adjustments and a 1.425 multiplier.

• Designates state treasurer, senate fiscal agency director, and house fiscal agency director to make annual determinations of whether revenue reduction triggers are met, starting with the January 2023 revenue estimating conference.

• Makes the amendment contingent upon enactment of a companion bill (Senate Bill No. ____ or House Bill No. ____ ) to take effect.