House Joint Resolution 2010 - Introduced HOUSE JOINT RESOLUTION 2010 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO HJR 2006) HOUSE JOINT RESOLUTION A Joint Resolution proposing amendments to the Constitution of 1 the State of Iowa relating to state budgeting by creating a 2 state general fund expenditure limitation, providing for a 3 taxpayers relief fund, requiring authorization for certain 4 bonds, and restricting certain state revenue changes. 5 BE IT RESOLVED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5334HV (2) 84 jp/sc
H.J.R. 2010 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. However, if the general assembly holds 16 an extraordinary session prior to the commencement of the 17 fiscal year to which the revenue estimate applies and before 18 or during the extraordinary session the revenue estimating 19 conference determines a lesser revenue estimate, the lesser 20 estimate shall be used for the adjusted revenue estimate. 21 b. “General fund” means the principal operating fund of the 22 state which shall be established by the general assembly by 23 law. 24 c. “New revenue” means moneys which are received by the 25 general fund due to increased tax rates or fees or newly 26 created taxes or fees over and above those moneys which are 27 received due to state taxes or fees which are in effect as 28 of January 1 following the most recent meeting of the state 29 revenue estimating conference. “New revenue” also includes 30 moneys received by the general fund due to new transfers over 31 and above those moneys received by the general fund due to 32 transfers which are in effect as of January 1 following the 33 most recent meeting of the state revenue estimating conference. 34 Except for transfers provided for by law, the state revenue 35 -1- LSB 5334HV (2) 84 jp/sc 1/ 7
H.J.R. 2010 estimating conference shall determine the eligibility of 1 transfers to the general fund which are to be considered as 2 new revenue in determining the state general fund expenditure 3 limitation. 4 d. “Surplus” means the cumulative excess of revenue 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. a. If there is a surplus existing at the end of a fiscal 29 year which exceeds ten percent of the adjusted revenue estimate 30 of that fiscal year and the actual net revenue for the general 31 fund exceeds the adjusted revenue estimate for that fiscal 32 year, the surplus shall be transferred to a taxpayers trust 33 fund. Except for temporary cash flow purposes, moneys in the 34 taxpayers trust fund shall only be used in accordance with 35 -2- LSB 5334HV (2) 84 jp/sc 2/ 7
H.J.R. 2010 appropriations made for purposes of providing tax relief. 1 b. Any surplus equal to ten percent or less of the adjusted 2 revenue estimate of the following fiscal year may be included 3 in the adjusted revenue estimate for the following fiscal year 4 if approved in a bill receiving the affirmative votes of at 5 least three-fifths of the members elected to each house of the 6 general assembly. 7 7. If a bill or joint resolution provides for new revenue or 8 appropriations bonding authority, or an expansion of existing 9 revenue or appropriations bonding authority, which bonds are 10 funded in whole or in part from revenue from the general 11 fund or from another portion of the state treasury, the bill 12 or joint resolution shall not become law unless approved by 13 the affirmative votes of at least two-thirds of the members 14 elected to each house of the general assembly. In addition, 15 the state general fund expenditure limitation for the initial 16 or subsequent fiscal year to which the bill or joint resolution 17 applies shall include any appropriations of such revenue for 18 the fiscal year. 19 8. The scope of the state general fund expenditure 20 limitation under subsection 3 shall not include federal funds, 21 donations, constitutionally dedicated moneys, and moneys 22 expended from a state retirement system. 23 9. The governor shall submit and the general assembly shall 24 pass a budget which does not exceed the state general fund 25 expenditure limitation. The governor shall not approve or 26 disapprove appropriation bills or items of appropriation bills 27 passed by the general assembly in a manner that would cause 28 the final budget approved by the governor to exceed the state 29 general fund expenditure limitation. 30 10. The governor shall not submit and the general assembly 31 shall not pass a budget which in order to balance assumes 32 reversion of any part of the total of the appropriations 33 included in the budget. 34 11. The state shall use consistent standards, in accordance 35 -3- LSB 5334HV (2) 84 jp/sc 3/ 7
H.J.R. 2010 with generally accepted accounting principles, for all state 1 budgeting and accounting purposes. 2 12. The general assembly shall enact laws to implement this 3 section. 4 Sec. 2. The following amendment to the Constitution of the 5 State of Iowa is proposed: 6 The Constitution of the State of Iowa is amended by adding 7 the following new sections to new Article XIII: 8 ARTICLE XIII. 9 THREE-FIFTHS MAJORITY FOR TAX LAW CHANGES. 10 Three-fifths majority to increase taxes. SECTION 1. A 11 bill containing provisions enacting, amending, or repealing 12 the state income tax or enacting, amending, or repealing the 13 state sales and use taxes, in which the aggregate fiscal 14 impact of those provisions relating to those taxes results 15 in a net increase in state tax revenue, as determined by the 16 general assembly, shall require the affirmative votes of at 17 least three-fifths of the members elected to each house of the 18 general assembly for passage. This section does not apply to 19 income tax or sales and use taxes imposed at the option of a 20 local government. 21 Three-fifths majority to enact new state tax. SEC. 2. A bill 22 that establishes a new state tax to be imposed by the state 23 shall require the affirmative votes of at least three-fifths 24 of the members elected to each house of the general assembly 25 for passage. 26 Enforcement of three-fifths majority requirement. SEC. 3. A 27 lawsuit challenging the proper enactment of a bill pursuant to 28 section 1 or 2 shall be filed no later than one year following 29 the enactment. Failure to file such a lawsuit within the 30 one-year time limit shall negate the three-fifths majority 31 requirement as it applies to the bill. 32 Each bill to which section 1 or 2 applies shall include a 33 separate provision describing the requirements for enactment 34 prescribed by section 1 or 2. 35 -4- LSB 5334HV (2) 84 jp/sc 4/ 7
H.J.R. 2010 Implementation. SEC. 4. The general assembly shall enact 1 laws to implement sections 1 through 3. 2 Sec. 3. The foregoing proposed amendments to the 3 Constitution of the State of Iowa are referred to the general 4 assembly to be chosen at the next general election for members 5 of the general assembly, and the Secretary of State is directed 6 to cause them to be published for three consecutive months 7 previous to the date of that election as provided by law. 8 EXPLANATION 9 This resolution proposes two amendments within a new Article 10 XIII to the Constitution of the State of Iowa which relates to 11 state budgets and state revenue. 12 The first amendment creates a state general fund expenditure 13 limitation. The amount of the limitation is 99 percent of the 14 adjusted revenue estimate. The amendment defines adjusted 15 revenue estimate and requires that that estimate be determined 16 by a revenue estimating conference which is to be created by 17 the general assembly by law. The amendment requires that the 18 expenditure limitation be used by the governor in preparation 19 of the governor’s budget and by the general assembly in the 20 budget process. The governor is prohibited from approving or 21 disapproving of appropriations in a manner that would cause the 22 final budget approved by the governor to exceed the expenditure 23 limitation. 24 The first amendment also provides that if a new revenue 25 source is established and implemented, 95 percent of the 26 estimate of that new revenue shall be included in the 27 expenditure limitation. 28 The first amendment provides that if there is a surplus 29 existing at the end of a fiscal year which exceeds 10 percent 30 of the adjusted revenue for the fiscal year and the actual net 31 revenue for the general fund for the fiscal year exceeds the 32 adjusted revenue estimate for the fiscal year, the surplus is 33 required to be transferred to a taxpayers trust fund. Any 34 surplus which is equal to 10 percent or less of the amount of 35 -5- LSB 5334HV (2) 84 jp/sc 5/ 7
H.J.R. 2010 the adjusted revenue estimate of the following fiscal year may 1 be included in the following year’s adjusted revenue estimate 2 if inclusion is approved in a bill by at least three-fifths of 3 the members elected to each house of the general assembly. 4 The first amendment requires that enactment of a bill or 5 joint resolution providing for new or expanded authority to 6 issue revenue or appropriations bonds funded in whole or in 7 part from revenue from the general fund or from another portion 8 of the state treasury requires a vote of at least two-thirds of 9 the members elected to each house of the general assembly. In 10 addition, the appropriations of such revenue are required to 11 be included in the state general fund expenditure limitation 12 for each applicable fiscal year. 13 The first amendment also requires the state to use generally 14 accepted accounting principles for state budgeting and 15 accounting purposes. The amendment provides that the general 16 assembly shall enact laws to implement the amendment. 17 The second amendment contained in the resolution requires 18 a three-fifths majority vote of the members elected to each 19 house of the general assembly for certain tax law changes. 20 The amendment provides that any bill that enacts, amends, 21 or repeals the state income tax or the state sales and use 22 tax, and which causes, in the aggregate, an increase in state 23 tax revenues, as determined by the general assembly, must be 24 adopted by at least three-fifths of the members elected to each 25 house of the general assembly. The amendment also requires 26 a three-fifths majority vote of the members elected to each 27 house of the general assembly in order to enact a new state tax 28 to be imposed by the state. A lawsuit challenging enactment 29 of a bill subject to either three-fifths majority passage 30 requirement must be filed no later than one year from the date 31 of enactment of the bill. Finally, the amendment provides 32 that the general assembly shall enact laws to implement the 33 amendment. 34 The resolution, if adopted, will be referred to the next 35 -6- LSB 5334HV (2) 84 jp/sc 6/ 7
H.J.R. 2010 general assembly. If the next general assembly adopts this 1 resolution, the amendments will be submitted to the voters for 2 their decision on ratification. 3 -7- LSB 5334HV (2) 84 jp/sc 7/ 7