Kansas Revenue, Assessment and Expenditure Limitation Act, constitutional text changes

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Back to Kansas Revenue, Assessment and Expenditure Limitation Act (2010)

The Kansas Constitution would be amended by adding a new Article 16 to read as follows:[1]

Article 16. — Revenue, Assessment and Expenditure Limitations

§ 1. Definitions. As used within this article:

(a) ‘‘State means the state government including all branches, state offices, authorities, agencies, boards, commissions, institutions, instrumentalities and any division or unit of state government which are directly supported with tax funds, except that ‘‘state does not include any enterprise;
(b) ‘‘local government means any county, township, city, education district, other special district and any other taxing district or political subdivision of Kansas which is directly supported by tax funds, except that ‘‘local government does not include any enterprise;
(c) ‘‘enterprise means a state-owned or local government-owned business authorized to issue its own revenue bonds and receiving less than 10% of annual revenue in grants or other direct cash benefit from the state and local governments combined;
(d) ‘‘bond means any bond, note, debenture, interim certificate, grant and revenue anticipation note, lease-purchase agreement, lease certificate of participation or other evidence of indebtedness which, in any such case, is entered into or establishes a debt obligation for longer than one fiscal year, whether or not the interest on which is subject to federal income taxation;
(e) ‘‘fiscal year means the twelve-month fiscal period prescribed by law for the state;
(f) ‘‘fiscal year spending means all expenditures and reserve increases except, as to both, (1) expenditures for refunds of any kind, (2) expenditures of moneys received from the federal government, moneys received as grants, gifts or donations which are to be expended for purposes specified by the donor, moneys that are collections for another government, moneys received for pension contributions by employees and pension fund earnings, or (3) budget stabilization reserve fund transfers, emergency reserve fund transfers, or expenditures in accordance with this article;
(g) ‘‘base revenue year means the fiscal year ending June 30, 2007, or the succeeding fiscal year having the greatest total state revenue of any succeeding fiscal year that exceeds the total state revenue for the fiscal year ending June 30, 2007, if any;
(h) ‘‘inflation means the change expressed as a percentage in the consumer price index for the Kansas City metropolitan area, all goods, all urban consumers, as officially reported by the bureau of labor statistics of the United States department of labor, or the successor index to such consumer price index;
(i) ‘‘population means the more recent of either the periodic census conducted by the United States department of commerce or its successor agency or the annual update of such census as prescribed by the legislature by law, which shall be adjusted every decade to match the federal decennial census;
(j) ‘‘education district means each school district, vocational or technical school, community college, technical college, municipal university, and any other public educational entity established as provided by law, except that ‘‘education district does not include any state educational institution under the control and supervision of the state board of regents; and
(k) ‘‘total state revenue means all moneys received by the state from any source except any of the following:
(1) Moneys received as grants, gifts or donations which are to be expended for purposes specified by the donor;
(2) moneys received from the federal government; and
(3) moneys which are income earned on moneys in permanent endowment funds, trust funds, deferred compensation funds or pension funds and which are credited to such funds.

§ 2. Supermajority for passage of certain bills for new or increased taxes. On and after July 1, 2011, a supermajority of two-thirds (2⁄3) of the members then elected (or appointed) and qualified of each house, voting in the affirmative, shall be necessary to pass any bill enacting or amending any law creating any new state tax or increasing the rate of any existing state income tax, sales tax, compensating use tax or other excise tax or a tax in the nature of an excise tax, property tax, or tax in the nature of a property tax, or estate or inheritance tax, or a tax in the nature of an estate or inheritance tax, or any combination thereof.

§ 3. Spending and Revenue Limits. (a) Except as provided by this section, for any fiscal year that commences on or after July 1, 2011, fiscal year spending by the state shall not increase above the fiscal year spending for the preceding fiscal year by more than the maximum percentage increase determined pursuant to this section. The maximum percentage increase in fiscal year spending for a fiscal year shall be equal to the result obtained by adding the rate of inflation for the calendar year ending during the preceding fiscal year, plus the percentage change in state population during the calendar year ending during the preceding fiscal year if a positive number, adjusted for revenue changes resulting from acts enacted in accordance with section 2 of this article. The limitation imposed on fiscal year spending shall not apply to expenditures of moneys transferred to the state general fund from the state budget stabilization reserve fund pursuant to section 6 of this article. The limitation imposed on fiscal year spending for a fiscal year may be authorized to be exceeded by act of the legislature that is passed by a supermajority of two-thirds (2⁄3) of the members then elected (or appointed) and qualified of each house, voting in the affirmative, and that authorizes fiscal year spending for such fiscal year in excess of such limitation.

(b) For any fiscal year commencing on or after July 1, 2011, the total state revenue limitation shall be determined in accordance with this section. If the amount of the total state revenue for the preceding fiscal year exceeds the amount of total state revenue for the second preceding fiscal year, the total state revenue limitation for a fiscal year shall be the result obtained by adding (1) the lesser of (A) the amount of total state revenue for the preceding fiscal year or (B) the amount of the total state revenue limitation for the preceding fiscal year, and (2) the product of (A) the amount determined under clause (1) of this subsection, and (B) the sum of (i) the rate of inflation for the calendar year ending during the preceding fiscal year, plus (ii) the percentage change in state population during the calendar year ending during the preceding fiscal year if a positive number.
(c) If the amount of the total state revenue for the preceding fiscal year is less than the amount of total state revenue for the second preceding fiscal year, the amount of the total state revenue limitation for a fiscal year shall be the lesser of (1) the amount of total state revenue for the second preceding fiscal year, or (2) the amount of the total state revenue limitation for the base revenue year.
(d) The legislature, by law, shall provide a mechanism to adjust the amount of a limitation under this section to reflect any subsequent transfer of all or any part of the cost of providing a governmental function. The mechanism shall adjust the amount of a limitation so that total costs are not increased as a result of the transfer. The adjustment mechanism provided for in this subsection shall be used in determining a limitation under this section beginning with the fiscal year immediately following the transfer.
(e) For the purposes of determining total revenue limitations under this section for the state, the total authorized fiscal year expenditures for the fiscal year ending on June 30, 2010, shall be construed to be the total state revenue and the total revenue limitation for that preceding fiscal year and the total authorized fiscal year expenditures for the fiscal year ending on June 30, 2011, shall be construed to be the total state revenue and the total revenue limitation for that preceding fiscal year.

§ 4. Budget Stabilization Reserve Fund. (a) For any fiscal year that commences on or after July 1, 2011, if total state revenue exceeds the total state revenue limitation for that fiscal year, as determined in accordance with section 3 of this article, then a portion of the excess amount of state revenue shall be reserved as prescribed by this section or refunded as prescribed by section 6 of this article. Any amount required to be maintained in the ending balance of the state general fund as provided by law shall be excluded from the amount available for transfer to the budget stabilization reserve fund by this section.

(b) An amount of any excess amount of total state revenue shall be transferred in the amount and in the manner prescribed by the legislature by law to the budget stabilization reserve fund, which fund is hereby created in the state treasury. The amount transferred to the budget stabilization reserve fund in accordance with this subsection shall be equal to the lesser of (1) the amount necessary to ensure that the balance in the budget stabilization reserve fund at the end of the fiscal year is an amount equal to 7% of the total state revenue limitation for the ensuing fiscal year, or (2) the amount equal to 50% of any such remaining excess amount of total state revenue. Income earned on the moneys credited to the budget stabilization reserve fund shall accrue to the budget stabilization reserve fund. In no case shall additional moneys be transferred into the budget stabilization reserve fund if the balance in the fund is equal to or more than 7% of the total state revenue limitation for the ensuing fiscal year. Each transfer to the budget stabilization reserve fund prescribed by this section shall be made before any transfer to the emergency reserve fund as provided in section 5 of this article or any refunds as required by section 6 of this article.
(c) For any fiscal year that commences on or after July 1, 2011, if the amount of the total state revenue is less than the amount of total state revenue for the prior fiscal year, the legislature may provide by law for the transfer of moneys from the budget stabilization reserve fund to the state general fund in an amount equal to not more than the difference between the amount of total state revenue for the prior fiscal year and the amount of total state revenue for the current fiscal year. Under no other circumstances shall moneys be transferred or expended from the budget stabilization reserve fund of the state.

§ 5. Emergency Reserve Fund. (a) For any fiscal year that commences on or after July 1, 2011, if total state revenue exceeds the total state revenue limitation for that fiscal year, as determined in accordance with section 3 of this article, then, after making any transfer to the budget stabilization reserve fund as required by section 4 of this article, a portion of any remaining total state revenue in excess of the total state revenue limitation shall be transferred in the amount and in the manner prescribed by the legislature by law to the emergency reserve fund, which fund is hereby created in the state treasury, to the extent necessary to ensure that a balance of the emergency reserve fund at the end of the fiscal year is an amount equal to not more than 3% of the total state revenue limitation for the ensuing fiscal year. Any amount required to be maintained in the ending balance of the state general fund as provided by law shall be excluded from the amount available for transfer to the emergency reserve fund by this section. Each transfer to the emergency reserve fund prescribed by this section shall be made after making any transfer to the budget stabilization reserve fund as provided in section 4 of this article. The state shall not be required to transfer any moneys other than any amount of total state revenue in excess of the total state revenue limitation to the emergency reserve fund. The moneys in the emergency reserve fund shall be in addition to, and shall not be used to meet, any other reserve requirement under this constitution or any law. In no case shall additional moneys be transferred to the emergency reserve fund if the balance in the emergency reserve fund is more than 3% of the total state revenue limitation for the ensuing fiscal year.

(b) Moneys in the emergency reserve fund may be expended only for an emergency declared by the governor to exist within the state. Two-thirds (2⁄3) of the members then elected (or appointed) and qualified of each house, voting in the affirmative, shall be necessary to pass any bill making an appropriation of money or transferring any moneys from the emergency reserve fund. Income earned on moneys credited to the emergency reserve fund shall accrue to the emergency reserve fund.

(c) As used in this section ‘‘emergency means an extraordinary event or occurrence that could not have been reasonably foreseen or prevented and that requires immediate expenditures to preserve the health, safety and general welfare of the people within the state and ‘‘emergency does not mean a revenue shortfall or budget shortfall. § 6. Disposition of Excess Revenues. (a) Any excess amount of total state revenues for a fiscal year that remains after the transfers to the budget stabilization reserve fund and emergency reserve fund pursuant to section 4 or section 5 of this article, if any, shall be reserved in the current fiscal year and shall be refunded as provided by law during the next ensuing fiscal year to the taxpayers who paid the state ad valorem property taxes or state income taxes, or both, for the preceding fiscal year, in a manner that is proportional, on a pro rata basis, to the manner in which such taxes were collected from such taxpayers for such fiscal year. Any amount required to be maintained in the ending balance of the state general fund as provided by law shall be excluded from the amount available to be reserved and refunded by the state as prescribed by this section.

(b) In a case of any amount that is received pursuant to any tax and required to be reserved and refunded to taxpayers by the state pursuant to this section and that is determined by the state in the manner prescribed by law to be insufficient for refunds to be made during the ensuing fiscal year, such amount shall be reserved for refunds to be made thereafter when the amount reserved is sufficient therefore.

§ 7. Temporary Borrowing. On or after July 1, 2011, during any fiscal year, transfers which are temporary and are to be repaid, or any other temporary borrowing, through certificates of indebtedness or any other device or manner, of any moneys in the state treasury to be credited to the state general fund, are prohibited unless the moneys so transferred or otherwise borrowed are restored or repaid to the original funds or accounts of the state treasury from the state general fund within the same fiscal year. The provisions of this section do not apply to transfers from the budget stabilization reserve fund or the emergency reserve fund to the state general fund in accordance with this article.

§ 8. General Revenue Supplanting. On or after July 1, 2011, any appropriation of moneys in the state treasury that either supplants any appropriation from the state general fund, or that, if not made, would require an appropriation from the state general fund is prohibited. For purposes of this section, any appropriation of moneys in the state treasury that is funded by user charges or fees imposed on goods or services that do not exceed the cost of the goods or services provided shall not be deemed to be an appropriation that supplants any appropriation from the state general fund.

§ 9. State Mandates on Local Governments. A local government may not be required to fulfill any mandate imposed by the state unless and until, and may be required to fulfill that mandate only to the extent that, funds are provided to the local government by the state for that purpose. The legislature is not required to appropriate funds for mandates if more than two years have passed since the effective date of the mandate and no claim for funding has been made by the local government during that period.

§ 10. Construction. (a) The provisions of this article shall be liberally construed for the purpose of effectuating the purposes thereof, except that nothing in this article shall be construed to authorize any new or increased tax of any kind other than as provided or authorized by law enacted by the legislature in accordance with and subject to the other provisions of this constitution.

(b) In any case of a conflict between any provision of this article and any other provision contained in the constitution, the provisions of this article shall control.
(c) All laws in force at the time of the adoption of this amendment and consistent therewith shall remain in full force and effect until amended or repealed by the legislature. The legislature shall repeal or amend all laws inconsistent with the provisions of this article to conform with the provisions of this article.

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