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First Substitute S.J.R. 22

Senator Stuart C. Reid proposes the following substitute bill:


             1     
JOINT RESOLUTION ON STATE SPENDING

             2     
LIMITATIONS

             3     
2012 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Stuart C. Reid

             6     
House Sponsor: Kenneth W. Sumsion

             7     
             8      LONG TITLE
             9      General Description:
             10          This joint resolution of the Legislature proposes to amend the Utah Constitution to
             11      modify a provision of the Revenue and Taxation Article relating to state expenditures.
             12      Highlighted Provisions:
             13          This resolution proposes to amend the Utah Constitution to:
             14          .    limit legislative appropriations or expenditures from tax revenues to the amount the
             15      state spent in one of the five preceding fiscal years, adjusted by inflation or deflation
             16      and any change in population, unless three-fifths of both houses approve;
             17          .    require surplus state revenue to be used for debt service, for budget reserves, and for
             18      reserves for emergency preparedness and disaster relief, and require any remaining
             19      surplus revenue to be refunded to taxpayers;
             20          .    reduce the spending limit by the amount required to sustain funding levels for a
             21      program or service transferred from state to political subdivision responsibility, and
             22      increase the spending limit by the amount required to sustain funding levels for a
             23      program or service transferred from political subdivision to State responsibility; and
             24          .    make technical changes.
             25      Special Clauses:


             26          This resolution directs the lieutenant governor to submit this proposal to voters.
             27          This resolution provides a contingent effective date of January 1, 2013 for this proposal.
             28      Utah Constitution Sections Affected:
             29      AMENDS:
             30          ARTICLE XIII, SECTION 5
             31     
             32      Be it resolved by the Legislature of the state of Utah, two-thirds of all members elected to each
             33      of the two houses voting in favor thereof:
             34          Section 1. It is proposed to amend Utah Constitution Article XIII, Section 5, to read:
             35           Article XIII, Section 5. [Use and amount of taxes and expenditures -- State
             36      spending limit.]
             37          (1) The Legislature shall provide by statute for an annual tax sufficient, with other
             38      revenues, to defray the estimated ordinary expenses of the State for each fiscal year.
             39          (2) (a) Unless three-fifths of all the members of each house vote in favor of the
             40      appropriation or expenditure, and except for an increased appropriation or expenditure required
             41      by federal law, the Legislature may not make an appropriation or authorize an expenditure from
             42      tax revenues for any fiscal year if the appropriation or expenditure would cause the State to
             43      spend from tax revenues in that fiscal year an amount that exceeds the amount spent from tax
             44      revenues in any one of the five immediately preceding fiscal years, as designated by statute.
             45          (b) The amount that may be spent in any fiscal year under Subsection (2)(a) shall be
             46      adjusted, as provided by statute, by a single measure of inflation or deflation and an amount
             47      that is directly proportional to the change in the State's population.
             48          (c) (i) State revenue prohibited from being appropriated or expended because of
             49      Subsection (2)(a) shall be used for debt service, for budget reserves, and for reserves for
             50      emergency preparedness and disaster relief, in that order of priority, until the debt service and
             51      reserves are funded to a level that the Legislature by statute determines to be adequate, and then
             52      any remaining State revenue shall be refunded to taxpayers.
             53          (ii) Until debt service, budget reserves, and reserves for emergency preparedness and
             54      disaster relief are adequately funded, as provided in Subsection (2)(c)(i), the Legislature may
             55      not lower a tax rate if the effect is to reduce revenue to the State.
             56          (d) If a program or service funded by State revenue becomes instead the financial


             57      responsibility of a political subdivision of the State, the amount of allowable appropriations or
             58      expenditures under Subsection (2)(a) for that fiscal year is reduced by the amount of funding
             59      that the program or service had while being funded by State revenue.
             60          (e) If a program or service funded by one or more political subdivisions of the State
             61      becomes the financial responsibility of the State, the amount of allowable appropriations or
             62      expenditures under Subsection (2)(a) for that fiscal year is increased by the amount that the
             63      State would be required to spend to maintain the same level of funding that the program or
             64      service had while being funded by the political subdivision or subdivisions of the State.
             65          (f) An appropriation or expenditure of federal funds or for emergency preparedness,
             66      disaster relief, or debt service may not be considered for any purpose under Subsection (2)(a).
             67          [(2)] (3) (a) For any fiscal year, the Legislature may not make an appropriation or
             68      authorize an expenditure if the State's expenditure exceeds the total tax provided for by statute
             69      and applicable to the particular appropriation or expenditure.
             70          (b) Subsection [(2)] (3)(a) does not apply to an appropriation or expenditure to
             71      suppress insurrection, defend the State, or assist in defending the United States in time of war.
             72          [(3)] (4) For any debt of the State, the Legislature shall provide by statute for an annual
             73      tax sufficient to pay:
             74          (a) the annual interest; and
             75          (b) the principal within 20 years after the final passage of the statute creating the debt.
             76          [(4)] (5) Except as provided in Article X, Section 5, Subsection (5)(a), the Legislature
             77      may not impose a tax for the purpose of a political subdivision of the State, but may by statute
             78      authorize political subdivisions of the State to assess and collect taxes for their own purposes.
             79          [(5)] (6) All revenue from taxes on intangible property or from a tax on income shall
             80      be used to support the systems of public education and higher education as defined in Article
             81      X, Section 2.
             82          [(6)] (7) Proceeds from fees, taxes, and other charges related to the operation of motor
             83      vehicles on public highways and proceeds from an excise tax on liquid motor fuel used to
             84      propel those motor vehicles shall be used for:
             85          (a) statutory refunds and adjustments and costs of collection and administration;
             86          (b) the construction, maintenance, and repair of State and local roads, including
             87      payment for property taken for or damaged by rights-of-way and for associated administrative


             88      costs;
             89          (c) driver education;
             90          (d) enforcement of state motor vehicle and traffic laws; and
             91          (e) the payment of the principal of and interest on any obligation of the State or a city
             92      or county, issued for any of the purposes set forth in Subsection [(6)] (7)(b) and to which any of
             93      the fees, taxes, or other charges described in this Subsection [(6)] (7) have been pledged,
             94      including any paid to the State or a city or county, as provided by statute.
             95          [(7)] (8) Fees and taxes on tangible personal property imposed under Section 2,
             96      Subsection (6) of this article are not subject to Subsection [(6)] (7) of this Section 5 and shall
             97      be distributed to the taxing districts in which the property is located in the same proportion as
             98      that in which the revenue collected from real property tax is distributed.
             99          [(8)] (9) A political subdivision of the State may share its tax and other revenues with
             100      another political subdivision of the State as provided by statute.
             101          Section 2. Submittal to voters.
             102          The lieutenant governor is directed to submit this proposed amendment to the voters of
             103      the state at the next regular general election in the manner provided by law.
             104          Section 3. Effective date.
             105          If the amendment proposed by this joint resolution is approved by a majority of those
             106      voting on it at the next regular general election, the amendment shall take effect on January 1,
             107      2013.


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