House Joint Resolution 1 - Introduced HOUSE JOINT RESOLUTION 1 BY PAULSEN , RAECKER , WAGNER , PETTENGILL , BRANDENBURG , WATTS , FRY , ROGERS , CHAMBERS , DEYOE , HANUSA , HUSEMAN , DRAKE , GARRETT , HELLAND , FORRISTALL , BALTIMORE , GRASSLEY , DOLECHECK , HAGENOW , KLEIN , J. TAYLOR , WINDSCHITL , SCHULTZ , SANDS , SCHULTE , VANDER LINDEN , HEIN , RASMUSSEN , WORTHAN , BYRNES , J. SMITH , TJEPKES , HORBACH , ANDERSON , UPMEYER , COWNIE , SODERBERG , LOFGREN , and KAUFMANN HOUSE JOINT RESOLUTION A Joint Resolution proposing an amendment to the Constitution 1 of the State of Iowa relating to state budgeting by creating 2 a state general fund expenditure limitation and requiring 3 authorization for certain bonds. 4 BE IT RESOLVED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1385YH (7) 84 jp/sc

H.J.R. 1 Section 1. The following amendment to the Constitution of 1 the State of Iowa is proposed: 2 The Constitution of the State of Iowa is amended by adding 3 the following new section to new Article XIII: 4 ARTICLE XIII. 5 EXPENDITURE LIMITATION. 6 General fund expenditure limitation. SECTION 1. 7 1. For the purposes of this section: 8 a. “Adjusted revenue estimate” means the most recent revenue 9 estimate determined before January 1, or a later and lesser 10 revenue estimate determined before adjournment of the regular 11 session of the general assembly, for the general fund for the 12 following fiscal year as determined by a revenue estimating 13 conference which shall be established by the general assembly 14 by law, adjusted by subtracting estimated refunds payable from 15 that estimated revenue and adding any available surplus in 16 accordance with subsection 6. However, if the general assembly 17 holds an extraordinary session prior to the commencement of the 18 fiscal year to which the revenue estimate applies and before 19 or during the extraordinary session the revenue estimating 20 conference determines a lesser revenue estimate, the lesser 21 estimate shall be used for the adjusted revenue estimate. 22 b. “General fund” means the principal operating fund of the 23 state which shall be established by the general assembly by 24 law. 25 c. “New revenues” means moneys which are received by the 26 state due to increased tax rates or fees or newly created 27 taxes or fees over and above those moneys which are received 28 due to state taxes or fees which are in effect as of January 29 1 following the most recent meeting of the state revenue 30 estimating conference. “New revenues” also includes moneys 31 received by the general fund due to new transfers over 32 and above those moneys received by the general fund due to 33 transfers which are in effect as of January 1 following the 34 most recent meeting of the state revenue estimating conference. 35 -1- LSB 1385YH (7) 84 jp/sc 1/ 5

H.J.R. 1 The state revenue estimating conference shall determine the 1 eligibility of transfers to the general fund which are to be 2 considered as new revenue in determining the state general fund 3 expenditure limitation. 4 d. “Surplus” means the cumulative excess of revenues and 5 other financing sources over expenditures and other financing 6 uses for the general fund at the end of a fiscal year. 7 2. A state general fund expenditure limitation is created 8 and calculated in subsection 3, for each fiscal year beginning 9 on or after July 1 following the effective date of this 10 section. 11 3. Except as otherwise provided in this section, the state 12 general fund expenditure limitation for a fiscal year shall be 13 ninety-nine percent of the adjusted revenue estimate. 14 4. The state general fund expenditure limitation shall be 15 used by the governor in the preparation and approval of the 16 budget and by the general assembly in the budget process. 17 5. If a new revenue source is proposed, the budget revenue 18 projection used for that new revenue source for the period 19 beginning on the effective date of the new revenue source and 20 ending in the fiscal year in which the source is included in 21 the adjusted revenue estimate shall be ninety-five percent 22 of the amount remaining after subtracting estimated refunds 23 payable from the projected revenue from that source. If a new 24 revenue source is established and implemented, the original 25 state general fund expenditure limitation amount provided for 26 in subsection 3 shall be readjusted to include ninety-five 27 percent of the estimated revenue from that source. 28 6. Any surplus existing at the end of a fiscal year which 29 exceeds ten percent of the adjusted revenue estimate of 30 that fiscal year shall be included in the adjusted revenue 31 estimate for the following fiscal year. Any surplus equal to 32 ten percent or less of the adjusted revenue estimate of the 33 fiscal year may be included in the adjusted revenue estimate 34 for the following fiscal year if approved in a bill receiving 35 -2- LSB 1385YH (7) 84 jp/sc 2/ 5

H.J.R. 1 the affirmative votes of at least three-fifths of the members 1 elected to each house of the general assembly. 2 7. If a bill or joint resolution provides for new revenue or 3 appropriations bonding authority, or an expansion of existing 4 revenue or appropriations bonding authority, which bonds are 5 funded in whole or in part from revenues from the general 6 fund or from another portion of the state treasury, the bill 7 or joint resolution shall not become law unless approved by 8 the affirmative votes of at least two-thirds of the members 9 elected to each house of the general assembly. In addition, 10 the state general fund expenditure limitation for the initial 11 or subsequent fiscal year to which the bill or joint resolution 12 applies shall include any appropriations of such revenues for 13 the fiscal year. 14 8. The scope of the state general fund expenditure 15 limitation under subsection 3 shall not include federal funds, 16 donations, constitutionally dedicated moneys, and moneys 17 expended from a state retirement system. 18 9. The governor shall submit and the general assembly shall 19 pass a budget which does not exceed the state general fund 20 expenditure limitation. The governor shall not approve or 21 disapprove appropriation bills or items of appropriation bills 22 passed by the general assembly in a manner that would cause 23 the final budget approved by the governor to exceed the state 24 general fund expenditure limitation. 25 10. The governor shall not submit and the general assembly 26 shall not pass a budget which in order to balance assumes 27 reversion of any part of the total of the appropriations 28 included in the budget. 29 11. The state shall use consistent standards, in accordance 30 with generally accepted accounting principles, for all state 31 budgeting and accounting purposes. 32 12. The general assembly shall enact laws to implement this 33 section. 34 Sec. 2. REFERRAL AND PUBLICATION. The foregoing proposed 35 -3- LSB 1385YH (7) 84 jp/sc 3/ 5

H.J.R. 1 amendment to the Constitution of the State of Iowa is referred 1 to the general assembly to be chosen at the next general 2 election for members of the general assembly, and the secretary 3 of state is directed to cause it to be published for three 4 consecutive months previous to the date of that election as 5 provided by law. 6 EXPLANATION 7 This joint resolution proposes an amendment to the 8 Constitution of the State of Iowa relating to state budgets and 9 authorization for certain bonds. 10 The amendment creates a state general fund expenditure 11 limitation. The amount of the limitation is 99 percent of the 12 adjusted revenue estimate. The amendment defines adjusted 13 revenue estimate and requires that that estimate be determined 14 by a revenue estimating conference which is to be created by 15 the general assembly by law. The amendment requires that the 16 expenditure limitation be used by the governor in preparation 17 of the governor’s budget and by the general assembly in the 18 budget process. The governor is prohibited from approving or 19 disapproving of appropriations in a manner that would cause the 20 final budget approved by the governor to exceed the expenditure 21 limitation. 22 The amendment also provides that if a new revenue source is 23 established and implemented, 95 percent of the estimate of that 24 new revenue shall be included in the expenditure limitation. 25 The amendment also requires that the amount of any surplus 26 which exceeds an amount equal to 10 percent of the adjusted 27 revenue estimate be included in the adjusted revenue estimate 28 for the following fiscal year. Any surplus which is equal 29 to 10 percent or less of the amount of the adjusted revenue 30 estimate may be included in the following year’s adjusted 31 revenue estimate if inclusion is approved in a bill by at 32 least three-fifths of the members elected to each house of the 33 general assembly. 34 The amendment requires that enactment of a bill or joint 35 -4- LSB 1385YH (7) 84 jp/sc 4/ 5

H.J.R. 1 resolution providing for new or expanded authority to issue 1 revenue or appropriations bonds funded in whole or in part 2 from revenues from the general fund or from another portion of 3 the state treasury requires a vote of at least two-thirds of 4 the members elected to each house of the general assembly. In 5 addition, the appropriations of such revenues are required to 6 be included in the state general fund expenditure limitation 7 for each applicable fiscal year. 8 The amendment also requires the state to use generally 9 accepted accounting principles for state budgeting and 10 accounting purposes. The amendment provides that the general 11 assembly shall enact laws to implement the amendment. 12 The resolution, if adopted, will be referred to the next 13 general assembly. If the next general assembly adopts the 14 resolution, the amendment will be submitted to the voters for 15 ratification. 16 -5- LSB 1385YH (7) 84 jp/sc 5/ 5