- A state government enacts a new law;
- A group that opposes the new law collects enough signatures within the statutory timeframe in that state to place that new law on a statewide ballot for the voters to either endorse it as a law, or to withhold their approval.
When veto referenda appear on a ballot, the state's voters who vote "yes" are voting in favor of the same law that their state legislature already passed. This can sometimes be confusing. Typically, when a news report says that a referendum has failed, what they mean is that voters rejected the ballot measure. However, from the point of view of the group that forced the referendum onto the ballot through collecting signatures, they succeeded, since what they wanted to do was defeat a state law that otherwise would have gone into effect.
After a state legislature has passed a bill that may become the target of a veto referendum effort, typically those opposed to the bill have two windows of opportunity. In most states that allow the veto referendum, if citizens collect enough signatures to force the matter onto their state's ballot within a (typically) short amount of time, the targeted law does not then go into effect when it otherwise would have done so. Rather, the law is held in abeyance pending the outcome of the statewide vote. However, there is often a provision that if those who oppose the targeted law collect signatures but on a more extended timeline, that they can still force the issue to a vote but in the meantime, it will have gone into effect.