Senate Joint Resolution 1 - Introduced SENATE JOINT RESOLUTION BY McKIBBEN, JOHNSON, BEHN, SEYMOUR, BOETTGER, NOBLE, WARD, WIECK, KETTERING, McKINLEY, HARTSUCH, ZIEMAN, ANGELO, HAHN, and HOUSER Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved SENATE JOINT RESOLUTION 1 A Joint Resolution proposing an amendment to the Constitution of 2 the State of Iowa requiring approval by popular election 3 before certain tax or fee increases take effect. 4 BE IT RESOLVED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2012XS 82 6 sc/es/88 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 sections to new Article XIII: 1 5 ARTICLE XIII 1 6 PEOPLE'S RIGHT TO VOTE ON TAX OR FEE INCREASES 1 7 PEOPLE'S RIGHT TO VOTE ON TAX OR FEE INCREASES. SECTION 1. 1 8 If all tax and fee increases adopted in a fiscal year would 1 9 produce new annual revenue exceeding one percent of total 1 10 state general fund revenue received in the preceding fiscal 1 11 year, excluding transfers from other state funds, the 1 12 increases shall be submitted to the electors, starting with 1 13 the largest increase and including increases in descending 1 14 order, except the remaining increases that total one percent 1 15 or less. All increases of any one tax or fee shall together 1 16 be regarded as one increase. An adopted tax or fee increase 1 17 required by this article to be submitted to the electors shall 1 18 take effect only if submitted to the electors at the next 1 19 state general election and approved by a majority of the 1 20 electors voting thereon. 1 21 APPLICATION. SEC. 2. In this article: 1 22 1. "Local governments" includes all political 1 23 subdivisions. 1 24 2. a. "Increase" includes but is not limited to imposing 1 25 a new tax or fee; raising a rate or amount; repealing, 1 26 reducing, or delaying an exemption, deduction, credit, 1 27 exclusion, reduction, or indexing requirement; or broadening 1 28 the base or scope of a tax or fee in any way. 1 29 b. "Increase" includes legislation that allows or requires 1 30 one or more local governments, with or without approval by 1 31 local electors, to impose or increase any tax on income, 1 32 sales, or property, but excludes legislation in which the only 1 33 subject matter is establishment of the state percentage of 1 34 growth for school foundation aid. 1 35 c. "Increase" of property tax includes legislation that 2 1 has the effect of reducing total state funds transferred to 2 2 all local governments in a fiscal year in comparison with the 2 3 preceding fiscal year, taking into account all legislation 2 4 increasing or reducing such transfers. 2 5 d. "Increase" of property tax includes legislation that 2 6 has the effect of requiring local governments to incur 2 7 aggregate net cost increases in a fiscal year, after deducting 2 8 increased transfers of state funds for the express purpose of 2 9 offsetting those cost increases. Such increased transfers 2 10 shall be deducted under this paragraph and not under paragraph 2 11 "c". 2 12 3. "New annual revenue" means the estimated net increase 2 13 over the fiscal year preceding adoption in total state general 2 14 fund revenue produced by the total of all tax and fee 2 15 increases adopted in a fiscal year, less estimated refunds 2 16 payable as a result of the increases, all as estimated for the 2 17 fiscal year in which all such increases are adopted, as if all 2 18 such increases and refunds were fully effective and entirely 2 19 implemented for that full fiscal year. Actual amounts, if 2 20 known, shall be used instead of estimates. 2 21 4. "Adopted" or "adoption" means that after 2010, a bill 2 22 has been passed and all requirements of article III have been 2 23 met, so that the bill would become law except for the 2 24 requirements of this article. 2 25 5. This article does not apply to taxes and fees subject 2 26 to article VII, sections 5 and 8. 2 27 EMERGENCY. SEC. 3. A temporary exception to the preceding 2 28 requirements of this article shall be allowed only to this 2 29 extent and only if all these conditions are met: (1) the 2 30 Governor requests the General Assembly to adopt an emergency 2 31 tax increase for only one specified fiscal year; (2) the 2 32 request specifically states the nature of the emergency, the 2 33 expenditures needed to respond to the emergency, and the 2 34 proposed tax increase to pay for the emergency expenditures 2 35 for that year; and (3) a law declaring an emergency and 3 1 providing an emergency tax increase in accordance with the 3 2 Governor's specific request is passed by a vote of two=thirds 3 3 of all the members elected to each branch of the General 3 4 Assembly and is approved by the Governor. Such law shall not 3 5 be passed more than four months prior to the fiscal year to 3 6 which it applies. Such law must be enacted prior to 3 7 obligating any requested emergency expenditures. 3 8 ENFORCEMENT. SEC. 4. Any citizen or taxpayer may, within 3 9 two years after a tax or fee increase is adopted, bring suit 3 10 to enforce compliance with this article. If no such suit is 3 11 filed within the two=year period, the elector approval 3 12 requirement for that tax or fee increase is negated. The 3 13 Supreme Court shall have original jurisdiction of any such 3 14 suit. The Supreme Court shall invalidate any increase which 3 15 should have been, but was not, submitted to the electors as 3 16 required by this article and shall order that the revenue 3 17 collected in violation of this article be refunded or applied 3 18 to reduce future taxes. A citizen or taxpayer who brings suit 3 19 and prevails shall receive from the state the costs of the 3 20 suit, including reasonable attorney fees. 3 21 IMPLEMENTATION. SEC. 5. This article shall be interpreted 3 22 and implemented to achieve its purpose to increase the 3 23 electors' control of taxes and fees. The General Assembly 3 24 shall enact laws to implement this article. 3 25 Sec. 2. REFERRAL AND PUBLICATION. The foregoing proposed 3 26 amendment to the Constitution of the State of Iowa is referred 3 27 to the General Assembly to be chosen at the next general 3 28 election for members of the General Assembly and the Secretary 3 29 of State is directed to cause it to be published for three 3 30 consecutive months previous to the date of that election as 3 31 provided by law. 3 32 EXPLANATION 3 33 This joint resolution proposes an amendment adding a new 3 34 Article XIII to the Constitution of the State of Iowa, giving 3 35 the people of Iowa the right to vote on certain adopted 4 1 increases of taxes and fees, so that the increases will not 4 2 take effect unless approved by majority vote at a state 4 3 general election. 4 4 The amendment requires that a law or laws increasing any 4 5 taxes or fees that would result in new annual revenue of more 4 6 than 1 percent of total state general fund revenue received in 4 7 the fiscal year preceding enactment of the law or laws must 4 8 receive voter approval at a state general election. The 4 9 amendment defines "new annual revenue". The amendment also 4 10 defines "increase". This definition includes legislation that 4 11 allows or requires a local government to impose or increase 4 12 any tax on income, sales, or property; legislation that has 4 13 the effect of reducing total state funds transferred to all 4 14 local governments; and legislation that requires local 4 15 governments to incur aggregate net cost increases in a fiscal 4 16 year. The article does not apply to a statewide tax to pay a 4 17 state debt approved by the people or to motor vehicle fees and 4 18 fuel taxes. 4 19 The amendment allows the general assembly, at the 4 20 governor's request and by two=thirds vote, to increase taxes 4 21 in emergency situations. 4 22 The amendment allows any citizen or taxpayer to bring suit 4 23 to enforce compliance with the voter approval requirement 4 24 within two years of adoption of a tax or fee increase. The 4 25 amendment also provides that the general assembly shall enact 4 26 laws to implement the amendment. 4 27 The resolution, if adopted, will be referred to the next 4 28 general assembly. If the next general assembly adopts the 4 29 resolution, the amendment will be submitted to the voters for 4 30 ratification. 4 31 LSB 2012XS 82 4 32 sc:rj/es/88