Senate Joint Resolution 10 - Introduced SENATE JOINT RESOLUTION 10 BY DIX , BEHN , ZUMBACH , SINCLAIR , COSTELLO , GARRETT , BREITBACH , SCHULTZ , SEGEBART , JOHNSON , KAPUCIAN , SMITH , ROZENBOOM , GUTH , CHAPMAN , BERTRAND , SHIPLEY , KRAAYENBRINK , WHITVER , CHELGREN , SCHNEIDER , ZAUN , FEENSTRA , and ANDERSON SENA TE JOINT RESOLUTION A Joint Resolution proposing an amendment to the Constitution 1 of the State of Iowa relating to the state budget by 2 creating a state general fund expenditure limitation. 3 BE IT RESOLVED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1687XS (4) 86 tm/sc

S.J.R. 10 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 15 from that estimated revenue. However, if the state general 16 fund expenditure limitation is calculated based upon the 17 adjusted revenue estimate and the general assembly holds an 18 extraordinary session prior to the commencement of the fiscal 19 year to which the adjusted revenue estimate applies and before 20 or during the extraordinary session the revenue estimating 21 conference determines a lesser revenue estimate, the lesser 22 estimate shall be used for the adjusted revenue estimate. 23 b. “Current fiscal year” means the fiscal year preceding 24 the fiscal year to which the state general fund expenditure 25 limitation applies. 26 c. “General fund” means the principal operating fund of the 27 state which shall be established by the general assembly by 28 law. 29 d. “Net revenue estimate” means the most recent revenue 30 estimate determined before January 1, or a later and lesser 31 estimate determined before adjournment of the regular 32 session of the general assembly for the general fund for the 33 current fiscal year, as determined by the revenue estimating 34 conference, and adjusted by subtracting estimated refunds 35 -1- LSB 1687XS (4) 86 tm/sc 1/ 4

S.J.R. 10 payable from that estimated revenue. However, if the state 1 general fund expenditure limitation is calculated based upon 2 the net revenue estimate and the general assembly holds an 3 extraordinary session prior to the completion of the fiscal 4 year to which the net revenue estimate applies and before 5 or during the extraordinary session the revenue estimating 6 conference determines a lesser revenue estimate for the current 7 fiscal year, such lesser estimate shall be used for calculating 8 the net revenue estimate for the general fund. 9 e. “New revenue” means moneys which are received by the 10 general fund due to increased tax rates or fees or newly 11 created taxes or fees over and above those moneys which are 12 received due to state taxes or fees which are in effect as 13 of January 1 following the most recent meeting of the state 14 revenue estimating conference. “New revenue” also includes 15 moneys received by the general fund due to new transfers over 16 and above those moneys received by the general fund due to 17 transfers which are in effect as of January 1 following the 18 most recent meeting of the state revenue estimating conference. 19 Except for transfers provided for by law, the state revenue 20 estimating conference shall determine whether transfers to the 21 general fund are to be considered as new revenue in determining 22 the state general fund expenditure limitation. 23 2. A state general fund expenditure limitation is created 24 and calculated in subsection 3, for each fiscal year beginning 25 on or after July 1 following the effective date of this 26 section. 27 3. Except as otherwise provided in this section, the state 28 general fund expenditure limitation for a fiscal year shall be 29 the lesser of the following amounts: 30 a. Ninety-nine percent of the adjusted revenue estimate for 31 the general fund for the following fiscal year. 32 b. One hundred four percent of the current fiscal year net 33 revenue estimate for the general fund. 34 4. The state general fund expenditure limitation shall be 35 -2- LSB 1687XS (4) 86 tm/sc 2/ 4

S.J.R. 10 used by the governor in the preparation and approval of the 1 budget and by the general assembly in the budget process. 2 5. If a new revenue source is proposed, the budget revenue 3 projection used for that new revenue source for the period 4 beginning on the effective date of the new revenue source and 5 ending in the fiscal year in which the source is included in 6 the adjusted revenue estimate or the net revenue estimate, 7 as applicable, shall be ninety-five percent of the amount 8 remaining after subtracting estimated refunds payable from the 9 projected revenue from that source. If a new revenue source 10 is established and implemented, the original state general 11 fund expenditure limitation amount provided for in subsection 12 3 shall be recalculated to include ninety-five percent of the 13 estimated revenue from that source that is attributed to the 14 revenue estimate used to calculate the original limitation 15 amount. 16 6. The scope of the state general fund expenditure 17 limitation calculated in accordance with this section shall not 18 include federal funds, donations, constitutionally dedicated 19 moneys, and moneys expended from a state retirement system. 20 7. The governor shall submit and the general assembly shall 21 pass a budget which does not exceed the state general fund 22 expenditure limitation. The governor shall not approve or 23 disapprove appropriation bills or items of appropriation bills 24 passed by the general assembly in a manner that would cause 25 the final budget approved by the governor to exceed the state 26 general fund expenditure limitation. 27 8. The governor shall not submit and the general assembly 28 shall not pass a budget which in order to balance assumes 29 reversion of any part of the total of the appropriations 30 included in the budget. 31 9. The state shall use consistent standards, in accordance 32 with generally accepted accounting principles, for all state 33 budgeting and accounting purposes. 34 10. The general assembly shall enact laws to implement this 35 -3- LSB 1687XS (4) 86 tm/sc 3/ 4

S.J.R. 10 section. 1 EXPLANATION 2 The inclusion of this explanation does not constitute agreement with 3 the explanation’s substance by the members of the general assembly. 4 This resolution proposes an amendment within a new Article 5 XIII to the Constitution of the State of Iowa that relates to 6 state budgets and state revenue. 7 The amendment creates a state general fund expenditure 8 limitation. The amount of the limitation is the lesser of 9 99 percent of the adjusted revenue estimate for the general 10 fund of the state for the following fiscal year or 104 percent 11 of the net revenue estimate for the general fund for the 12 current fiscal year. The amendment defines adjusted revenue 13 estimate and net revenue estimate and requires that the 14 estimates be determined by a revenue estimating conference 15 which is to be created by the general assembly by law. The 16 expenditure limitation is required to be used by the governor 17 in preparation of the governor’s budget and by the general 18 assembly in the budget process. The governor is prohibited 19 from approving or disapproving of appropriations in a manner 20 that would cause the final budget approved by the governor to 21 exceed the expenditure limitation. 22 If a new revenue source is established and implemented, 95 23 percent of the estimate of that new revenue shall be included 24 in the revenue estimate used to calculate the expenditure 25 limitation. 26 The amendment also requires the state to use generally 27 accepted accounting principles for state budgeting and 28 accounting purposes. The amendment provides that the general 29 assembly shall enact laws to implement the amendment. 30 The resolution, if adopted, will be referred to the next 31 general assembly. If the next general assembly adopts this 32 resolution, the amendments will be submitted to the voters for 33 their decision on ratification. 34 -4- LSB 1687XS (4) 86 tm/sc 4/ 4