Senate Joint Resolution 12 - Introduced SENATE JOINT RESOLUTION 12 BY DIX , KETTERING , JOHNSON , SORENSON , WARD , HOUSER , SEYMOUR , BEHN , McKINLEY , BOETTGER , BACON , SMITH , GREINER , KAPUCIAN , FEENSTRA , HAHN , ANDERSON , BERTRAND , HAMERLINCK , and ERNST SENA TE JOINT RESOLUTION A Joint Resolution proposing an amendment to the Constitution 1 of the State of Iowa providing for a general state revenue 2 expenditure limitation. 3 BE IT RESOLVED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2074XS (3) 84 jp/sc

S.J.R. 12 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 state revenue expenditure limitation. SECTION 1. 7 1. For the purposes of this section: 8 a. “Adjusted revenue estimate” means the most recent 9 revenue estimate determined before January 1, or a later and 10 lesser revenue estimate determined before adjournment of the 11 regular session of the general assembly, for the general 12 state revenue for the following fiscal year as determined by 13 a revenue estimating conference which shall be established by 14 the general assembly by law, adjusted by subtracting estimated 15 refunds payable from that estimated revenue and adding any 16 available surplus in accordance with subsection 6. However, 17 if the general assembly holds an extraordinary session prior 18 to the commencement of the fiscal year to which the revenue 19 estimate applies and before or during the extraordinary session 20 the revenue estimating conference determines a lesser revenue 21 estimate, the lesser estimate shall be used for the adjusted 22 revenue estimate. 23 b. “General state revenue” means taxes, fees, and other 24 revenues credited to the state treasury and subject to 25 appropriation by law. “General state revenue” does not include 26 any of the following: 27 (1) Federal funds. 28 (2) Motor vehicle fees and fuel taxes identified by this 29 constitution. 30 (3) Fish and wildlife protection funds identified by this 31 constitution. 32 (4) Moneys credited to the natural resources and outdoor 33 recreation trust fund created by this constitution. 34 (5) Moneys credited to the permanent fund for the state 35 -1- LSB 2074XS (3) 84 jp/sc 1/ 5

S.J.R. 12 university, the perpetual support fund, or other school fund 1 identified by this constitution. 2 (6) Donations. 3 (7) Moneys expended from a state retirement system. 4 (8) Any other tax, fee, revenue, or fund specifically 5 enumerated in or protected by this constitution. 6 c. “New general state revenue” means moneys which are 7 received by the state and credited as general state revenue due 8 to increased tax rates or fees or newly created taxes or fees 9 over and above those moneys which are received due to state 10 taxes or fees which are in effect as of January 1 following the 11 most recent meeting of the state revenue estimating conference. 12 “New general state revenue” also includes moneys credited as 13 general state revenue due to new transfers over and above those 14 moneys credited as general state revenue due to transfers 15 which are in effect as of January 1 following the most recent 16 meeting of the state revenue estimating conference. The state 17 revenue estimating conference shall determine the eligibility 18 of transfers of moneys to be credited as general state revenue 19 which are to be considered as new revenue in determining the 20 general state revenue expenditure limitation. 21 d. “Surplus” means the cumulative excess of revenues and 22 other financing sources over expenditures and other financing 23 uses for the general state revenue at the end of a fiscal year. 24 2. A general state revenue expenditure limitation is 25 created and calculated in subsection 3, for each fiscal year 26 beginning on or after July 1 following the effective date of 27 this section. 28 3. Except as otherwise provided in this section, the general 29 state revenue expenditure limitation for a fiscal year shall be 30 ninety-nine percent of the adjusted revenue estimate. 31 4. The general state revenue expenditure limitation shall 32 be used by the governor in the preparation and approval of the 33 budget and by the general assembly in the budget process. 34 5. If a new general state revenue source is proposed, the 35 -2- LSB 2074XS (3) 84 jp/sc 2/ 5

S.J.R. 12 budget revenue projection used for that new general state 1 revenue source for the period beginning on the effective date 2 of the new general state revenue source and ending in the 3 fiscal year in which the source is included in the adjusted 4 revenue estimate shall be ninety-five percent of the amount 5 remaining after subtracting estimated refunds payable from the 6 projected revenue from that source. If a new general state 7 revenue source is established and implemented, the original 8 general state revenue expenditure limitation amount provided 9 for in subsection 3 shall be readjusted to include ninety-five 10 percent of the estimated revenue from that source. 11 6. Any surplus existing at the end of a fiscal year which 12 exceeds ten percent of the adjusted revenue estimate of 13 that fiscal year shall be included in the adjusted revenue 14 estimate for the following fiscal year. Any surplus equal to 15 ten percent or less of the adjusted revenue estimate of the 16 fiscal year may be included in the adjusted revenue estimate 17 for the following fiscal year if approved in a bill receiving 18 the affirmative votes of at least three-fifths of the members 19 elected to each house of the general assembly. 20 7. The scope of the general state revenue expenditure 21 limitation under subsection 3 shall include any portion of an 22 appropriation subject to a general state revenue expenditure 23 limitation for a previous fiscal year that remains authorized 24 for expenditure in the fiscal year to which the expenditure 25 limitation under subsection 3 is applicable. 26 8. The governor shall submit and the general assembly shall 27 pass a budget which does not exceed the general state revenue 28 expenditure limitation. The governor shall not approve or 29 disapprove appropriation bills or items of appropriation bills 30 passed by the general assembly in a manner that would cause the 31 final budget approved by the governor to exceed the general 32 state revenue expenditure limitation. 33 9. The governor shall not submit and the general assembly 34 shall not pass a budget for general state revenue which in 35 -3- LSB 2074XS (3) 84 jp/sc 3/ 5

S.J.R. 12 order to balance assumes reversion of any part of the total of 1 the appropriations included in the budget. 2 10. The state shall use consistent standards, in accordance 3 with generally accepted accounting principles, for all state 4 budgeting and accounting purposes. 5 11. The general assembly shall enact laws to implement this 6 section. 7 Sec. 2. REFERRAL AND PUBLICATION. The foregoing proposed 8 amendment to the Constitution of the State of Iowa is referred 9 to the general assembly to be chosen at the next general 10 election for members of the general assembly, and the secretary 11 of state is directed to cause it to be published for three 12 consecutive months previous to the date of that election as 13 provided by law. 14 EXPLANATION 15 This joint resolution proposes an amendment to the 16 Constitution of the State of Iowa relating to state budgets. 17 The amendment provides for a general state revenue 18 expenditure limitation. The amount of the limitation is 99 19 percent of the adjusted revenue estimate. The amendment 20 defines adjusted revenue estimate and requires that that 21 estimate be determined by a revenue estimating conference 22 which is to be created by the general assembly by law. The 23 amendment requires that the expenditure limitation be used by 24 the governor in preparation of the governor’s budget and by 25 the general assembly in the budget process. The governor is 26 prohibited from approving or disapproving of appropriations 27 in a manner that would cause the final budget approved by the 28 governor to exceed the expenditure limitation. 29 The amendment also provides that, if a new general state 30 revenue source is established and implemented, 95 percent of 31 the estimate of that new revenue shall be included in the 32 expenditure limitation. 33 The amendment also requires that the amount of any surplus 34 which exceeds an amount equal to 10 percent of the adjusted 35 -4- LSB 2074XS (3) 84 jp/sc 4/ 5

S.J.R. 12 revenue estimate be included in the adjusted revenue estimate 1 for the following fiscal year. Any surplus which is equal 2 to 10 percent or less of the amount of the adjusted revenue 3 estimate may be included in the following year’s adjusted 4 revenue estimate if inclusion is approved in a bill by 5 three-fifths of the members elected to each house of the 6 general assembly. 7 The scope of the expenditure limitation encompasses 8 any portion of an appropriation previously subject to an 9 expenditure limitation which remains authorized for expenditure 10 in the fiscal year to which the expenditure limitation being 11 addressed applies. 12 The amendment also requires the state to use generally 13 accepted accounting principles for state budgeting and 14 accounting purposes. The amendment provides that the general 15 assembly shall enact laws to implement the amendment. 16 The resolution, if adopted, will be referred to the next 17 general assembly. If the next general assembly adopts the 18 resolution, the amendment will be submitted to the voters for 19 ratification. 20 -5- LSB 2074XS (3) 84 jp/sc 5/ 5