Text: HF00479 Text: HF00481 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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1 1 Section 1. NEW SECTION. 8B.1 REVENUE LIMIT ESTABLISHED
1 2 &endash; INCREASE.
1 3 The state government and each local government is subject
1 4 to a revenue limit and a spending limit as provided in section
1 5 8B.4. Each government's beginning revenue limit is equal to
1 6 its highest total revenue in any one of the last four fiscal
1 7 years before this chapter becomes effective. This limit is
1 8 adjusted annually for the total of (1) the cumulative
1 9 percentage rate of inflation or deflation since the base date,
1 10 as measured by the federal implicit price deflator for state
1 11 and local government purchases or its successor index, and (2)
1 12 that government's cumulative percentage population increase
1 13 since the base date. There is no reduction or offset for any
1 14 cumulative population decrease since the base date.
1 15 "Population" is determined by the most recent federal
1 16 census or federal census estimate. A school district's
1 17 "population" is its full-time equivalent student enrollment.
1 18 The "base date" is the date eighteen months before this
1 19 chapter becomes effective. Each county government's revenue
1 20 limit includes all townships in the county.
1 21 Official revisions of inflation and population data affect
1 22 revenue limits for future fiscal years, but do not change
1 23 limits for the fiscal year in which a revision is made or for
1 24 prior years.
1 25 Sec. 2. NEW SECTION. 8B.2 DEFINITION OF REVENUE &endash;
1 26 EXCLUSIONS.
1 27 1. "Revenue" includes all amounts received from all
1 28 sources, including but not limited to all taxes, fees,
1 29 charges, assessments, and other receipts, except these
1 30 excluded amounts: (1) amounts refunded to the payers; (2)
1 31 gifts and bequests and contracts from nongovernmental sources;
1 32 (3) receipts from the federal government; (4) fees voluntarily
1 33 paid for hospital or public utility services, but any part of
1 34 a fee in excess of the actual cost of providing that service
1 35 is revenue; (5) an amount equal to a government's net cost
2 1 increase required by a federal law or rule, or change in a
2 2 federal law or rule, that takes effect after this chapter
2 3 becomes effective, but only to the extent not offset by
2 4 federal funds; (6) amounts collected pursuant to section 8 of
2 5 Article VII of the Constitution of the State of Iowa; (7) all
2 6 amounts borrowed lawfully; (8) receipts applied to repay
2 7 borrowing, including interest, if the borrowing was authorized
2 8 by vote of the electors; (9) receipts applied to repay
2 9 borrowing, including interest, if the borrowing is within a
2 10 class for which the receipts applied to repayment are excluded
2 11 from revenue by law adopted by two-thirds vote of the entire
2 12 membership of each house of the general assembly and approved
2 13 by the governor; and (10) amounts excluded from revenue by
2 14 this section and section 8B.5.
2 15 2. The state revenue limit excludes, and the local limits
2 16 include, state revenue transferred to local governments or
2 17 applied as tax credits against local taxes. Any other amount
2 18 transferred between governments is counted only once as
2 19 revenue, by the government first receiving it.
2 20 3. If a government's revenue in a fiscal year exceeds its
2 21 revenue limit, its limit for the next fiscal year shall be
2 22 reduced by the excess amount.
2 23 Sec. 3. NEW SECTION. 8B.3 TEMPORARY INCREASES IN REVENUE
2 24 LIMIT.
2 25 1. A government's revenue limit may be temporarily
2 26 increased in an amount approved by a majority of that
2 27 government's electors voting in a referendum. The increase is
2 28 effective for no more than five fiscal years. Each referendum
2 29 ballot is limited to this issue and shall not include any
2 30 other proposal or subject. Each such referendum shall be held
2 31 only on the first Tuesday after the first Monday in June or
2 32 the first Tuesday after the first Monday in November.
2 33 2. One or more revenue limits may be temporarily increased
2 34 by law adopted by two-thirds vote of the whole membership of
2 35 each house of the general assembly and approved by the
3 1 governor. A local government's revenue limit may be
3 2 temporarily increased by not more than ten percent, by vote of
3 3 three-fourths of the whole membership of its governing body
3 4 after prominent notice and public hearing. Each increase
3 5 under this section is effective for only one fiscal year.
3 6 3. In each referendum under this section, the ballot and
3 7 published notice shall clearly state that the proposal would
3 8 allow the specified government to increase its taxes and other
3 9 revenue by a stated amount above its limit for each fiscal
3 10 year during a stated period; the total increase for that
3 11 period; and the amount of the government's revenue limit under
3 12 section 8B.1 for the preceding and current fiscal years and
3 13 for the next fiscal year, estimated if necessary.
3 14 4. Any change in a limit under section 8B.2 or 8B.3 is
3 15 effective only for the specified fiscal year or years and does
3 16 not affect computation of the limit under section 8B.1.
3 17 Sec. 4. NEW SECTION. 8B.4 SPENDING LIMIT ESTABLISHED.
3 18 Each government's total spending in a fiscal year shall not
3 19 exceed its spending limit, which is equal to the sum of its
3 20 (1) revenue limit for that year, adjusted for any change under
3 21 section 8B.2 or 8B.3, or actual revenue, whichever is less;
3 22 (2) actual receipts in that year which are excluded from
3 23 revenue by section 8B.2; and (3) net unspent funds carried
3 24 over from the preceding year. "Spending" includes all outlays
3 25 for all purposes, unless expressly excluded by section 8B.5.
3 26 If a government has a deficit of net unspent funds at the
3 27 end of a fiscal year, the deficit is subtracted in computing
3 28 the next year's spending limit under section 8B.4. However,
3 29 section 8B.4 is intended to prevent any such deficit and to
3 30 require each government to operate on a balanced budget.
3 31 Sec. 5. NEW SECTION. 8B.5 TRUST FUNDS.
3 32 "Revenue" includes all receipts for a government's trust
3 33 funds for unemployment, retirement, medical, or other
3 34 benefits, but earnings of these trust funds are excluded from
3 35 both revenue and spending. "Spending" includes all payments
4 1 and transfers into these trust funds, and excludes payments
4 2 out of these trust funds for the purpose for which the
4 3 payments into the trust fund were made. "Net unspent funds"
4 4 excludes these trust funds.
4 5 Sec. 6. NEW SECTION. 8B.6 NEW LOCAL GOVERNMENTS &endash;
4 6 ESTABLISHMENT OF LIMITS.
4 7 If a new local government is created, the state shall
4 8 establish its base date and the amount of its beginning
4 9 revenue limit, and shall reduce the appropriate state or local
4 10 revenue limit or limits by that amount. If two or more local
4 11 governments are combined, their revenue limits shall be
4 12 combined. If a service or program is transferred by law among
4 13 local governments, their revenue limits shall be
4 14 proportionally adjusted by law, with no increase in the
4 15 combined limits. The state may transfer any part of its
4 16 revenue limit to a local government but shall not transfer any
4 17 part of a local limit to the state.
4 18 Sec. 7. NEW SECTION. 8B.7 MANDATES.
4 19 If a state law or rule, or change in a state law or rule,
4 20 that takes effect after this chapter becomes effective
4 21 requires a local government to incur a net cost increase, the
4 22 state shall pay to the local government the amount of the
4 23 necessary net cost increase, and shall increase the local
4 24 revenue limit and decrease the state revenue limit by that
4 25 amount. The local government need not comply with the law,
4 26 rule, or change until the state has complied with this
4 27 section.
4 28 Sec. 8. NEW SECTION. 8B.8 EMPLOYEE BENEFITS &endash; FUNDING.
4 29 Any state or local government plan for retirement or other
4 30 employee benefits shall be completely funded within ten years
4 31 after this chapter becomes effective, and at all times
4 32 thereafter, in accordance with generally accepted actuarial
4 33 and accounting principles.
4 34 Sec. 9. NEW SECTION. 8B.9 USE OF GENERALLY ACCEPTED
4 35 ACCOUNTING PRINCIPLES.
5 1 The state and local governments shall use consistent
5 2 accounting, in accordance with generally accepted accounting
5 3 principles, for all purposes.
5 4 Sec. 10. NEW SECTION. 8B.10 CONSTRUCTION OF STATUTE.
5 5 1. This chapter creates fundamental and inalienable rights
5 6 in each taxpayer and each citizen. Any infringement of these
5 7 rights shall be subjected to strictest scrutiny. This chapter
5 8 shall be interpreted and implemented to achieve its purpose to
5 9 limit the growth rate of revenue and spending of the state and
5 10 local governments. Any taxpayer or citizen has standing to
5 11 sue by individual or class action to enforce this chapter and
5 12 laws implementing it and, if successful, shall be reimbursed
5 13 for all reasonable expenses of the suit. All provisions of
5 14 this chapter are self-executing and severable.
5 15 2. This chapter does not authorize any borrowing and does
5 16 not impair constitutional debt limits. It does not impair any
5 17 law that limits taxes, revenue, spending, borrowing, or debt
5 18 or that requires approval by the electors for a tax, tax
5 19 increase, borrowing, or debt, including laws requiring more
5 20 than a majority vote and laws allowing the electors to approve
5 21 borrowing or debt for any stated number of years. It does not
5 22 impair any contract in existence when the chapter becomes
5 23 effective.
5 24 Sec. 11. NEW SECTION. 8B.11 DEFINITION OF GOVERNMENT.
5 25 "Government" includes all parts, agencies, enterprises, and
5 26 operations of a government. "Local government" includes each
5 27 city, county, school district, special district, and political
5 28 subdivision in the state, except that townships are included
5 29 with county governments. An agreement or joint action by two
5 30 or more governments does not create a new government unless
5 31 expressly provided by state law, but all revenue and spending
5 32 related to the agreement or joint action are included in
5 33 revenue and spending of the appropriate governments.
5 34 Because county limits include townships, a county
5 35 government may limit the total revenue and spending of
6 1 townships in that county.
6 2 Sec. 12. EFFECTIVE AND APPLICABILITY DATES. This Act,
6 3 being deemed of immediate importance, takes effect upon
6 4 enactment and applies to fiscal years beginning on or after
6 5 July 1, 1996.
6 6 EXPLANATION
6 7 This bill limits the future growth rate of the total
6 8 revenue and total spending of the state and local governments,
6 9 with some exceptions.
6 10 Each government has its own revenue limit and spending
6 11 limit. County limits include townships.
6 12 Each government's beginning revenue limit is equal to its
6 13 highest total revenue in any of the four fiscal years before
6 14 this amendment becomes effective. This limit is adjusted
6 15 annually for the combined total of cumulative inflation or
6 16 deflation and any cumulative population increase after the
6 17 base date. The population adjustment can rise or fall, but it
6 18 cannot fall below the population at the base date. The base
6 19 date is the date 18 months before this amendment becomes
6 20 effective.
6 21 Each government's spending limit is equal to its revenue
6 22 limit, or actual revenue if less, for that year, plus almost
6 23 all actual receipts which are outside the revenue limit, plus
6 24 unspent funds carried over. This will require each government
6 25 to operate on a balanced budget.
6 26 A government's revenue limit can be temporarily increased
6 27 in any of three ways: (1) A majority vote of the people in a
6 28 state or local referendum can increase the limit in any
6 29 amount, for any purpose, and for any period up to five years,
6 30 (2) a vote of two-thirds of all members of each house of the
6 31 legislature, with the governor's approval, can increase any or
6 32 all limits for one year, (3) a vote of three-fourths of all
6 33 members of a local governing body can increase that local
6 34 government's limit by not more than 10 percent for one year,
6 35 after notice and hearing.
7 1 If a government's actual revenue exceeds its revenue limit,
7 2 its limit for the next year is reduced by the excess amount.
7 3 The excess revenue cannot be spent in the year it is received
7 4 but can be spent in any future year. This is intended to help
7 5 governments even out the good and bad economic years.
7 6 State aid to local governments and state credits against
7 7 local taxes are outside the state limit and are included in
7 8 local limits. Thus, one additional state tax dollar sent to a
7 9 local government that is at its revenue limit will require an
7 10 equal $1 reduction in local taxes. This provision encourages
7 11 using state revenue for local property tax replacement.
7 12 The state must pay for a state-mandated net cost increase
7 13 imposed on a local government after this amendment becomes
7 14 effective, and must increase the local revenue limit and
7 15 decrease the state limit by the amount of the net cost
7 16 increase. The local government need not obey the mandate
7 17 until the state has complied.
7 18 The revenue limits include all taxes and most other
7 19 revenue. Receipts outside the revenue limit are: amounts
7 20 refunded; private gifts, bequests, and contracts; receipts
7 21 from the federal government; a fee for hospital or public
7 22 utility service, if the fee does not exceed the cost of the
7 23 service; the amount of a net cost increase caused by a new
7 24 federal mandate and not offset by federal funds; amounts from
7 25 transportation-related fees and taxes; amounts borrowed
7 26 lawfully; amounts borrowed with the voters' approval; receipts
7 27 used to repay borrowed money if the exclusion is approved by a
7 28 two-thirds majority of the general assembly; and earnings of
7 29 trust funds.
7 30 If a government's actual revenue is below its revenue
7 31 limit, this does not reduce any future revenue limit. Thus, a
7 32 government is not penalized for holding its revenue and
7 33 spending below the limit.
7 34 The amendment provides for changes in revenue limits if a
7 35 new local government is created, if local governments combine,
8 1 or if a state law transfers services among local governments.
8 2 However, the state cannot increase its share of total state
8 3 and local revenue and spending limits.
8 4 Sound funding of any retirement or benefit plan for
8 5 government employees is required within 10 years.
8 6 The state and all local governments are required to follow
8 7 generally accepted accounting principles.
8 8 Any taxpayer or citizen may sue to enforce this new chapter
8 9 of the Code of Iowa.
8 10 The bill takes effect upon enactment and applies to fiscal
8 11 years beginning on or after July 1, 1996.
8 12 LSB 2558HV 76
8 13 sc/sc/14
Text: HF00479 Text: HF00481 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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