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PAG LIN
1 1 Section 1. The following amendment to the Constitution of
1 2 the State of Iowa is proposed:
1 3 The Constitution of the State of Iowa is amended by adding
1 4 the following new Article XIII:
1 5 ARTICLE XIII.
1 6 TAXPAYERS' RIGHTS.
1 7 SECTION 1. The state government and each local government
1 8 is subject to a revenue limit and a spending limit as provided
1 9 in section 8. Each government's beginning revenue limit is
1 10 equal to its highest total revenue in any one of the last four
1 11 fiscal years before this Article becomes effective. This
1 12 limit is adjusted annually for the total of (1) the cumulative
1 13 percentage rate of inflation or deflation since the base date,
1 14 as measured by the federal implicit price deflator for state
1 15 and local government purchases or its successor index, and (2)
1 16 that government's cumulative percentage population increase
1 17 since the base date. There is no reduction or offset for any
1 18 cumulative population decrease since the base date.
1 19 "Population" is determined by the most recent federal census
1 20 or federal census estimate. A school district's "population"
1 21 is its full-time equivalent student enrollment. The "base
1 22 date" is the date eighteen months before this Article becomes
1 23 effective. Each county government's revenue limit includes
1 24 all townships in the county.
1 25 SEC. 2. "Revenue" includes all amounts received from all
1 26 sources, including but not limited to all taxes, fees,
1 27 charges, assessments, and other receipts, except these
1 28 excluded amounts: (1) amounts refunded to the payers; (2)
1 29 gifts and contracts from nongovernmental sources; (3) receipts
1 30 from the federal government; (4) fees voluntarily paid for
1 31 hospital or public utility services, but any part of a fee in
1 32 excess of the actual cost of providing that service is
1 33 revenue; (5) an amount equal to a government's net cost
1 34 increase required by a federal law or rule, or change in a
1 35 federal law or rule, that takes effect after this Article
2 1 becomes effective, but only to the extent not offset by
2 2 federal funds; (6) amounts collected pursuant to section 8 of
2 3 Article VII; (7) all amounts borrowed lawfully; (8) receipts
2 4 applied to repay borrowing, including interest, if the
2 5 borrowing was authorized by vote of the electors; (9) receipts
2 6 applied to repay borrowing, including interest, if the
2 7 borrowing is within a class for which the receipts applied to
2 8 repayment are excluded from revenue by law adopted by two-
2 9 thirds vote of the whole membership of each house of the
2 10 General Assembly and approved by the Governor; and (10)
2 11 amounts excluded from revenue by sections 3 and 9.
2 12 SEC. 3. The state revenue limit excludes, and the local
2 13 limits include, state revenue transferred to local governments
2 14 or applied as tax credits against local taxes. Any other
2 15 amount transferred between governments is counted only once as
2 16 revenue, by the government first receiving it.
2 17 SEC. 4. If a government's revenue in a fiscal year exceeds
2 18 its revenue limit, its limit for the next fiscal year shall be
2 19 reduced by the excess amount.
2 20 SEC. 5. A government's revenue limit may be temporarily
2 21 increased in an amount approved by a majority of that
2 22 government's electors voting in a referendum. The increase is
2 23 effective for no more than five fiscal years. Each referendum
2 24 ballot is limited to this issue and shall not include any
2 25 other proposal or subject. Each such referendum shall be held
2 26 only on the first Tuesday after the first Monday in June or
2 27 the first Tuesday after the first Monday in November.
2 28 SEC. 6. One or more revenue limits may be temporarily
2 29 increased by law adopted by two-thirds vote of the whole
2 30 membership of each house of the General Assembly and approved
2 31 by the Governor. A local government's revenue limit may be
2 32 temporarily increased by not more than ten percent, by vote of
2 33 three-fourths of the whole membership of its governing body
2 34 after prominent notice and public hearing. Each increase
2 35 under this section is effective for only one fiscal year.
3 1 SEC. 7. Any change in a limit under section 4, 5, or 6 is
3 2 effective only for the specified fiscal year or years and does
3 3 not affect computation of the limit under section 1.
3 4 SEC. 8. Each government's total spending in a fiscal year
3 5 shall not exceed its spending limit, which is equal to the sum
3 6 of its (1) revenue limit for that year, adjusted for any
3 7 change under section 4, 5, or 6, or actual revenue, whichever
3 8 is less; (2) actual receipts in that year which are excluded
3 9 from revenue by section 2 or 3; and (3) net unspent funds
3 10 carried over from the preceding year. "Spending" includes all
3 11 outlays for all purposes, unless expressly excluded by section
3 12 9.
3 13 SEC. 9. "Revenue" includes all receipts for a government's
3 14 trust funds for unemployment, retirement, medical, or other
3 15 benefits, but earnings of these trust funds are excluded from
3 16 both revenue and spending. "Spending" includes all payments
3 17 and transfers into these trust funds, and excludes payments
3 18 out of these trust funds for the purpose for which the
3 19 payments into the trust fund were made. "Net unspent funds"
3 20 excludes these trust funds.
3 21 SEC. 10. If a new local government is created, the State
3 22 shall establish its base date and the amount of its beginning
3 23 revenue limit, and shall reduce the appropriate state or local
3 24 revenue limit or limits by that amount. If two or more local
3 25 governments are combined, their revenue limits shall be
3 26 combined. If a service or program is transferred by law among
3 27 local governments, their revenue limits shall be
3 28 proportionally adjusted by law, with no increase in the
3 29 combined limits. The State may transfer any part of its
3 30 revenue limit to a local government but shall not transfer any
3 31 part of a local limit to the State.
3 32 SEC. 11. If a state law or rule, or change in a state law
3 33 or rule, that takes effect after this Article becomes
3 34 effective requires a local government to incur a net cost
3 35 increase, the State shall pay to the local government the
4 1 amount of the necessary net cost increase, and shall increase
4 2 the local revenue limit and decrease the state revenue limit
4 3 by that amount. The local government need not comply with the
4 4 law, rule, or change until the State has complied with this
4 5 section.
4 6 SEC. 12. Any state or local government plan for retirement
4 7 or other employee benefits shall be completely funded within
4 8 ten years after this Article becomes effective, and at all
4 9 times thereafter, in accordance with generally accepted
4 10 actuarial and accounting principles.
4 11 SEC. 13. The state and local governments shall use
4 12 consistent accounting, in accordance with generally accepted
4 13 accounting principles, for all purposes.
4 14 SEC. 14. This Article creates fundamental and inalienable
4 15 rights in each taxpayer and each citizen. Any infringement of
4 16 these rights shall be subjected to strictest scrutiny. This
4 17 Article shall be interpreted and implemented to achieve its
4 18 purpose to limit the growth rate of revenue and spending of
4 19 the state and local governments. Any taxpayer or citizen has
4 20 standing to sue by individual or class action to enforce this
4 21 Article and laws implementing it and, if successful, shall be
4 22 reimbursed for all reasonable expenses of the suit.
4 23 SEC. 15. This Article becomes effective for the first
4 24 state fiscal year beginning at least six months after its
4 25 approval and ratification by the electors. The State, by law,
4 26 shall implement this Article and may adopt further
4 27 restrictions and limits. However, all provisions of this
4 28 Article are self-executing and severable.
4 29 Sec. 2. DECLARATION OF INTENT. It is the intent of the
4 30 General Assembly in agreeing to the foregoing proposed
4 31 amendment that:
4 32 1. This declaration of intent shall be relied on by the
4 33 electors and the courts, with the same results as if it were
4 34 in the Constitution.
4 35 2. Article XIII does not authorize any borrowing and does
5 1 not impair the debt limits and other provisions of Article
5 2 VII. It does not impair any law that limits taxes, revenue,
5 3 spending, borrowing, or debt or that requires approval by the
5 4 electors for a tax, tax increase, borrowing, or debt,
5 5 including laws requiring more than a majority vote and laws
5 6 allowing the electors to approve borrowing or debt for any
5 7 stated number of years. It does not impair any contract in
5 8 existence when Article XIII becomes effective.
5 9 3. In each referendum under section 5 of Article XIII, the
5 10 ballot and published notice shall clearly state: that the
5 11 proposal would allow the specified government to increase its
5 12 taxes and other revenue by a stated amount above its
5 13 constitutional limit for each fiscal year during a stated
5 14 period; the total increase for that period; and the amount of
5 15 the government's revenue limit under section 1 of Article XIII
5 16 for the preceding and current fiscal years and for the next
5 17 fiscal year, estimated if necessary.
5 18 4. Official revisions of inflation and population data
5 19 affect revenue limits for future fiscal years, but do not
5 20 change limits for the fiscal year in which a revision is made
5 21 or for prior years.
5 22 5. A government which excludes an amount from revenue or
5 23 spending under any provision of Article XIII must accurately
5 24 determine and establish the correct amount excluded.
5 25 6. "Government" includes all parts, agencies, enterprises,
5 26 and operations of a government. "Local government" includes
5 27 each city, county, school district, special district, and
5 28 political subdivision in the State, except that townships are
5 29 included with county governments. An agreement or joint
5 30 action by two or more governments does not create a new
5 31 government unless expressly provided by state law, but all
5 32 revenue and spending related to the agreement or joint action
5 33 are included in revenue and spending of the appropriate
5 34 governments.
5 35 7. Because county limits include townships, a county
6 1 government may limit the total revenue and spending of
6 2 townships in that county.
6 3 8. If a government has a deficit of net unspent funds at
6 4 the end of a fiscal year, the deficit is subtracted in
6 5 computing the next year's spending limit under section 8 of
6 6 Article XIII. However, section 8 is intended to prevent any
6 7 such deficit and to require each government to operate on a
6 8 balanced budget.
6 9 Sec. 3. The foregoing proposed amendment to the
6 10 Constitution of the State of Iowa is referred to the General
6 11 Assembly to be chosen at the next general election for members
6 12 of the General Assembly and the Secretary of State is directed
6 13 to cause it to be published for three consecutive months
6 14 previous to the date of that election as provided by law.
6 15 EXPLANATION
6 16 This proposed Taxpayers' Rights Amendment adds a new
6 17 Article to the Iowa Constitution. It limits the future growth
6 18 rate of the total revenue and total spending of the state and
6 19 local governments, with some exceptions.
6 20 Each government has its own revenue limit and spending
6 21 limit. County limits include townships.
6 22 Each government's beginning revenue limit is equal to its
6 23 highest total revenue in any of the four fiscal years before
6 24 this amendment becomes effective. This limit is adjusted
6 25 annually for the combined total of cumulative inflation or
6 26 deflation and any cumulative population increase after the
6 27 base date. The population adjustment can rise or fall, but it
6 28 cannot fall below the population at the base date. The base
6 29 date is the date 18 months before this amendment becomes
6 30 effective.
6 31 Each government's spending limit is equal to its revenue
6 32 limit, or actual revenue if less, for that year, plus almost
6 33 all actual receipts which are outside the revenue limit, plus
6 34 unspent funds carried over. This will require each government
6 35 to operate on a balanced budget.
7 1 A government's revenue limit can be temporarily increased
7 2 in any of three ways: (1) A majority vote of the people in a
7 3 state or local referendum can increase the limit in any
7 4 amount, for any purpose, and for any period up to five years.
7 5 (2) A vote of two-thirds of all members of each house of the
7 6 legislature, with the governor's approval, can increase any or
7 7 all limits for one year. (3) A vote of three-fourths of all
7 8 members of a local governing body can increase that local
7 9 government's limit by not more than 10 percent for one year,
7 10 after notice and hearing.
7 11 If a government's actual revenue exceeds its revenue limit,
7 12 its limit for the next year is reduced by the excess amount.
7 13 The excess revenue cannot be spent in the year it is received
7 14 but can be spent in any future year. This is intended to help
7 15 governments even out the good and bad economic years.
7 16 State aid to local governments and state credits against
7 17 local taxes are outside the state limit and are included in
7 18 local limits. Thus, one additional state tax dollar sent to a
7 19 local government that is at its revenue limit will require an
7 20 equal $1 reduction in local taxes. This provision encourages
7 21 using state revenue for local property tax replacement.
7 22 The State must pay for a state-mandated net cost increase
7 23 imposed on a local government after this amendment becomes
7 24 effective, and must increase the local revenue limit and
7 25 decrease the state limit by the amount of the net cost
7 26 increase. The local government need not obey the mandate
7 27 until the State has complied.
7 28 The revenue limits include nearly all taxes and most other
7 29 revenue. Receipts outside the revenue limit are: amounts
7 30 refunded; private gifts and contracts; receipts from the
7 31 federal government; a fee for hospital or public utility
7 32 service, if the fee does not exceed the cost of the service;
7 33 the amount of a net cost increase caused by a new federal
7 34 mandate and not offset by federal funds; motor vehicle
7 35 registration fees and motor vehicle fuel taxes; receipts used
8 1 to repay amounts borrowed with the voters' approval; receipts
8 2 used to repay other kinds of borrowing as designated by law
8 3 adopted by a two-thirds majority of the general assembly; and
8 4 earnings of trust funds.
8 5 If a government's actual revenue is below its revenue
8 6 limit, this does not reduce any future revenue limit. Thus, a
8 7 government is not penalized for holding its revenue and
8 8 spending below the limit.
8 9 The amendment provides for changes in revenue limits if a
8 10 new local government is created, if local governments combine,
8 11 or if a state law transfers services among local governments.
8 12 However, the State cannot increase its share of total state
8 13 and local revenue and spending limits.
8 14 Sound funding of any retirement or benefit plan for
8 15 government employees is required within 10 years.
8 16 The state and all local governments are required to follow
8 17 generally accepted accounting principles.
8 18 Any taxpayer or citizen may sue to enforce this new Article
8 19 of the Constitution.
8 20 Explanatory language is included in a separate declaration
8 21 of intent which will not become part of the Constitution but
8 22 will serve as a guide for interpretation.
8 23 This resolution, if adopted, will be referred to the next
8 24 general assembly. If the next general assembly adopts this
8 25 resolution, the amendment will be submitted to the voters for
8 26 their decision on ratification.
8 27 LSB 1381XL 77
8 28 sc/sc/14.1
Text: HSB00110 Text: HSB00112 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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