Text: HSB00687 Text: HSB00689 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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 is subject to a revenue 1 8 limit and a spending limit as provided in section 7. Its 1 9 beginning revenue limit is equal to its total revenue in the 1 10 last fiscal year before this Article becomes effective. This 1 11 limit is adjusted annually for the total of (1) the cumulative 1 12 percentage rate of inflation or deflation since the base date, 1 13 as measured by the federal implicit price deflator for state 1 14 and local government purchases or its successor index, and (2) 1 15 the state's cumulative percentage population increase above 1 16 the population at the base date. There is no reduction or 1 17 offset for any cumulative population decrease below the 1 18 population at the base date. "Population" is determined by 1 19 the most recent federal census or federal census estimate. 1 20 The "base date" is the date eighteen months before this 1 21 Article becomes effective. 1 22 SEC. 2. "Revenue" includes all amounts received from all 1 23 sources, including but not limited to all taxes, fees, 1 24 charges, assessments, amounts borrowed, and other receipts, 1 25 except these excluded amounts: (1) amounts refunded to the 1 26 payers; (2) gifts and contracts from nongovernmental sources; 1 27 (3) receipts from the federal government; (4) fees voluntarily 1 28 paid for state university hospital services, but any part of a 1 29 fee in excess of the actual cost of providing that service is 1 30 revenue; (5) an amount equal to the state government's net 1 31 cost increase required by a federal law or rule, or change in 1 32 a federal law or rule, that takes effect after this Article 1 33 becomes effective, but only to the extent not offset by 1 34 federal funds; (6) amounts collected pursuant to section 8 of 1 35 Article VII; (7) amounts borrowed after approval by vote of 2 1 the electors; (8) amounts borrowed by issuing revenue bonds on 2 2 which no payment can be made from tax revenue; (9) receipts 2 3 applied to repay money borrowed lawfully, including interest; 2 4 (10) receipts applied, after this Article becomes effective, 2 5 to increase total payments to local governments and for tax 2 6 credits against local property taxes, to the extent that state 2 7 law ensures a reduction of local property taxes by an amount 2 8 at least equal to the excluded amount; and (11) amounts 2 9 excluded from revenue by section 8. 2 10 SEC. 3. If state government revenue in a fiscal year 2 11 exceeds the revenue limit, the limit for the next fiscal year 2 12 shall be reduced by the excess amount. 2 13 SEC. 4. The revenue limit may be temporarily increased in 2 14 an amount approved by a majority of the electors voting in a 2 15 referendum. The increase is effective for no more than five 2 16 fiscal years. Each referendum ballot is limited to this issue 2 17 and shall not include any other proposal or subject. Each 2 18 such referendum shall be held only on the first Tuesday after 2 19 the first Monday in June or the first Tuesday after the first 2 20 Monday in November. 2 21 SEC. 5. The revenue limit may be temporarily increased by 2 22 law adopted by two-thirds vote of the whole membership of each 2 23 house of the General Assembly and approved by the Governor. 2 24 Each such law is effective for only one fiscal year. 2 25 SEC. 6. Any change under section 3, 4, or 5 is effective 2 26 only for the specified fiscal year or years and does not 2 27 affect computation of the limit under section 1. 2 28 SEC. 7. Total state government spending in a fiscal year 2 29 shall not exceed the spending limit, which is equal to the sum 2 30 of the (1) revenue limit for that year, adjusted for any 2 31 change under section 3, 4, or 5, or actual revenue, whichever 2 32 is less; (2) actual receipts in that year which are excluded 2 33 from revenue by section 2; and (3) net unspent funds carried 2 34 over from the preceding year. "Spending" includes all outlays 2 35 for all purposes, unless expressly excluded by section 8. 3 1 SEC. 8. "Revenue" includes all receipts for state 3 2 government trust funds for retirement, medical, or other 3 3 benefits, but earnings of these trust funds are excluded from 3 4 both revenue and spending. "Spending" includes all payments 3 5 and transfers into these trust funds, and excludes payments 3 6 out of these trust funds for the kind of benefits for which 3 7 the payments into the trust fund were made. Payments for 3 8 expenses of administration are included in spending. "Net 3 9 unspent funds" excludes these trust funds. This section also 3 10 applies to any state government trust fund for unemployment 3 11 benefits and to the state's unemployment trust fund account 3 12 with the federal government, except that (1) its receipts, 3 13 including reimbursements for benefits paid but excluding 3 14 penalties and interest, are excluded from revenue to the 3 15 extent that federal law requires them to be deposited promptly 3 16 with the federal government as a condition of federal approval 3 17 of the state's unemployment program, and (2) amounts lawfully 3 18 paid as unemployment benefits are excluded from spending. 3 19 SEC. 9. In each fiscal year the percentage of state 3 20 government spending that consists of state transfers to local 3 21 governments and tax credits against local taxes shall be at 3 22 least equal to that percentage in the last fiscal year before 3 23 this Article becomes effective. 3 24 SEC. 10. If a state law or rule, or change in a state law 3 25 or rule, that takes effect after this Article becomes 3 26 effective requires a local government to incur a net cost 3 27 increase, the State shall pay to the local government the 3 28 amount of the necessary net cost increase. The local 3 29 government need not comply with the law, rule, or change until 3 30 the State has complied with this section. 3 31 SEC. 11. Any state government plan for retirement or other 3 32 employee benefits shall be completely funded within ten years 3 33 after this Article becomes effective and at all times 3 34 thereafter, in accordance with generally accepted actuarial 3 35 and accounting principles. 4 1 SEC. 12. The state government shall use consistent 4 2 accounting, in accordance with generally accepted accounting 4 3 principles, for all purposes. 4 4 SEC. 13. This Article creates fundamental and inalienable 4 5 rights in each taxpayer and each citizen. Any infringement of 4 6 these rights shall be subjected to strictest scrutiny. This 4 7 Article shall be interpreted and implemented to achieve its 4 8 purpose to limit the growth rate of revenue and spending of 4 9 the state government. Any taxpayer or citizen has standing to 4 10 sue by individual or class action to enforce this Article and 4 11 laws implementing it and, if successful, shall be reimbursed 4 12 for all reasonable attorney fees and other expenses of the 4 13 suit. 4 14 SEC. 14. This Article becomes effective for the first 4 15 state fiscal year beginning at least six months after its 4 16 approval and ratification by the electors. The State, by law, 4 17 shall implement this Article and may adopt further 4 18 restrictions and limits. However, all provisions of this 4 19 Article are self-executing and severable. 4 20 Sec. 2. DECLARATION OF INTENT. It is the intent of the 4 21 General Assembly in agreeing to this proposed amendment that: 4 22 1. This declaration of intent shall be relied on by the 4 23 electors and the courts, with the same results as if it were 4 24 in the Constitution. 4 25 2. Article XIII requires all amounts borrowed to be 4 26 included in revenue, except the two kinds of borrowing 4 27 expressly excluded by section 2 of Article XIII. Article XIII 4 28 does not authorize any borrowing and does not impair the debt 4 29 limits and other provisions of Article VII. It does not 4 30 impair any law that limits taxes, revenue, spending, 4 31 borrowing, or debt or that requires approval by the electors 4 32 for a tax, tax increase, borrowing, or debt, including laws 4 33 requiring more than a majority vote and laws allowing the 4 34 electors to approve borrowing or debt for any stated number of 4 35 years. It does not impair any contract in existence when 5 1 Article XIII becomes effective. 5 2 3. In each referendum under section 4 of Article XIII, the 5 3 ballot and published notice shall clearly state: that the 5 4 proposal would allow the state government to increase its 5 5 taxes and other revenue by a stated amount above its 5 6 constitutional limit for each fiscal year during a stated 5 7 period; the total increase for that period; and the amount of 5 8 the revenue limit under section 1 of Article XIII for the 5 9 preceding and current fiscal years and for the next fiscal 5 10 year, estimated if necessary. 5 11 4. Official revisions of inflation and population data 5 12 affect the revenue limit for future fiscal years, but do not 5 13 change the limit for the fiscal year in which a revision is 5 14 made or for prior years. 5 15 5. If the state government excludes an amount from revenue 5 16 or spending under any provision of Article XIII, it must 5 17 accurately determine and establish the correct amount 5 18 excluded. 5 19 6. "Government" includes all parts, agencies, enterprises, 5 20 and operations of a government. "Local government" includes 5 21 each city, county, school district, special district, and 5 22 political subdivision in the State. 5 23 7. If the state government has a deficit of net unspent 5 24 funds at the end of a fiscal year, the deficit is subtracted 5 25 in computing the next year's spending limit under section 7 of 5 26 Article XIII. However, section 7 is intended to prevent any 5 27 such deficit and to require the state government to operate on 5 28 a balanced budget. 5 29 8. If a tax is lawfully imposed by a local government or 5 30 its electors, and the state government collects for and remits 5 31 to that local government the entire amount of the tax, that 5 32 amount, excluding amounts retained by the state government to 5 33 pay administrative costs, is not state government revenue. 5 34 Sec. 3. It is the intent of the General Assembly that the 5 35 declaration of intent in section 2 be placed on the ballot 6 1 containing the question of ratification of this proposed 6 2 amendment to the Constitution. 6 3 Sec. 4. The foregoing proposed amendment to the 6 4 Constitution of the State of Iowa is referred to the General 6 5 Assembly to be chosen at the next general election for members 6 6 of the General Assembly and the Secretary of State is directed 6 7 to cause it to be published for three consecutive months 6 8 previous to the date of that election as provided by law. 6 9 EXPLANATION 6 10 This proposed Taxpayers' Rights Amendment adds a new 6 11 Article to the Iowa Constitution. It limits the future growth 6 12 rate of the total revenue and total spending of the state 6 13 government, with some exceptions. 6 14 The state government's beginning revenue limit is equal to 6 15 its total revenue in the last fiscal year before this 6 16 amendment becomes effective. This limit is adjusted annually 6 17 for the combined total of cumulative inflation or deflation 6 18 and any cumulative population increase after the base date. 6 19 The population adjustment can rise or fall, but it cannot fall 6 20 below the population at the base date. The base date is 18 6 21 months before this amendment becomes effective. 6 22 The state government's spending limit is equal to its 6 23 revenue limit, or actual revenue if less, for that year, plus 6 24 almost all actual receipts which are outside the revenue 6 25 limit, plus unspent funds carried over. This will require the 6 26 State to operate on a balanced budget. 6 27 The revenue limit can be temporarily increased in either of 6 28 two ways: 6 29 1. A majority vote of the people in a state referendum can 6 30 increase the limit in any amount, for any purpose, and for any 6 31 period up to five years. 6 32 2. A vote of two-thirds of all members of each house of 6 33 the General Assembly, with the governor's approval, can 6 34 increase the limit for one year. 6 35 If actual state revenue exceeds the revenue limit, the 7 1 limit for the next year is reduced by the excess amount. The 7 2 excess revenue cannot be spent in the year it is received but 7 3 can be spent in any future year. This is intended to help the 7 4 State even out the good and bad economic years. 7 5 The State must maintain the percentage of total state 7 6 spending that consists of state transfers to local governments 7 7 and tax credits against local taxes, at least equal to that 7 8 percentage in the last fiscal year before this amendment 7 9 becomes effective. This is intended to protect local 7 10 governments and property taxpayers. 7 11 The State must pay for a state-mandated net cost increase 7 12 imposed on a local government after this amendment becomes 7 13 effective. The local government need not obey the mandate 7 14 until the State has complied. 7 15 The revenue limits include nearly all taxes and most other 7 16 revenue. Receipts outside the revenue limit are: amounts 7 17 refunded; private gifts and contracts; receipts from the 7 18 federal government; a fee for state university hospital 7 19 services, if the fee does not exceed the cost of the service; 7 20 the amount of a net cost increase caused by a new or changed 7 21 federal mandate and not offset by federal funds; motor vehicle 7 22 registration fees and motor vehicle fuel taxes which are 7 23 constitutionally earmarked for roads; amounts borrowed with 7 24 the voters' approval; amounts borrowed by revenue bonds not 7 25 payable from taxes; receipts used to repay borrowed money; 7 26 amounts paid to local governments or used to fund property tax 7 27 credits if the law requires a local government to reduce 7 28 property taxes in an equal amount; and earnings of trust 7 29 funds. 7 30 If actual revenue is below the revenue limit, this does not 7 31 reduce any future revenue limit. Thus, the State is not 7 32 penalized for holding its revenue and spending below the 7 33 limit. 7 34 Sound funding of any state retirement or benefit plan for 7 35 employees is required within 10 years. 8 1 The state government is required to follow generally 8 2 accepted accounting principles. 8 3 Any taxpayer or citizen may sue to enforce this new Article 8 4 of the Constitution. 8 5 Explanatory language is included in a separate declaration 8 6 of intent which will not become part of the Constitution but 8 7 will serve as a guide for interpretation. 8 8 This resolution, if adopted, will be referred to the next 8 9 General Assembly. If the next General Assembly adopts this 8 10 resolution, the amendment will be submitted to the voters for 8 11 their decision on ratification. 8 12 LSB 4341YC 77 8 13 sc/jw/5
Text: HSB00687 Text: HSB00689 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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