INITIATIVE 1053

To the People

Chapter 1, Laws of 2011

TAX AND FEE INCREASES IMPOSED BY STATE GOVERNMENT

EFFECTIVE DATE: 12/02/10

Approved by the

People of the State of Washington

in the General Election on

November 2, 2010

ORIGINALLY FILED

January 5, 2010

Secretary of State

 1AN ACT Relating to tax and fee increases imposed by state

 2government; amending RCW 43.135.035 and 43.135.055; adding a new

 3section to chapter 43.135 RCW; creating new sections; repealing RCW

 443.135.035; and providing contingent effective dates.

 5BE IT ENACTED BY THE PEOPLE OF THE STATE OF WASHINGTON:

 6INTENT

 7NEW SECTION. Sec. 1. This initiative should deter the governor

 8and the legislature from sidestepping, suspending or repealing any of

 9Initiative 960's policies in the 2010 legislative session. But

10regardless of legislative action taken during the 2010 legislative

11session concerning Initiative 960's policies, the people intend, by the

12passage of this initiative, to require either two-thirds legislative

13approval or voter approval for tax increases and majority legislative

14approval for fee increases. These important policies ensure that

15taking more of the people's money will always be an absolute last

16resort.

 1PROTECTING TAXPAYERS BY REQUIRING EITHER TWO-THIRDS LEGISLATIVE

 2APPROVAL OR VOTER APPROVAL FOR STATE GOVERNMENT TO RAISE TAXES

 3(sections 2 and 3 take effect if the 2010 legislature suspends or

 4repeals the two-thirds legislative vote requirement for tax increases)

 5NEW SECTION. Sec. 2. A new section to chapter 43.135 RCW is added

 6and reads as follows:

 7(1) After July 1, 1995, any action or combination of actions by the

 8legislature that raises taxes may be taken only if approved by at least

 9two-thirds legislative approval in both the house of representatives

10and the senate. Pursuant to the referendum power set forth in Article

11II, section 1(b) of the state Constitution, tax increases may be

12referred to the voters for their approval or rejection at an election.

13(2)(a) If the legislative action under subsection (1) of this

14section will result in expenditures in excess of the state expenditure

15limit, then the action of the legislature shall not take effect until

16approved by a vote of the people at a November general election. The

17state expenditure limit committee shall adjust the state expenditure

18limit by the amount of additional revenue approved by the voters under

19this section. This adjustment shall not exceed the amount of revenue

20generated by the legislative action during the first full fiscal year

21in which it is in effect. The state expenditure limit shall be

22adjusted downward upon expiration or repeal of the legislative action.

23(b) The ballot title for any vote of the people required under this

24section shall be substantially as follows:

25"Shall taxes be imposed on . . . . . . . in order to allow a

26spending increase above last year's authorized spending adjusted for

27personal income growth?"

28(3)(a) The state expenditure limit may be exceeded upon declaration

29of an emergency for a period not to exceed twenty-four months by a law

30approved by a two-thirds vote of each house of the legislature and

31signed by the governor. The law shall set forth the nature of the

32emergency, which is limited to natural disasters that require immediate

33government action to alleviate human suffering and provide humanitarian

34assistance. The state expenditure limit may be exceeded for no more

35than twenty-four months following the declaration of the emergency and

36only for the purposes contained in the emergency declaration.

37(b) Additional taxes required for an emergency under this section

38may be imposed only until thirty days following the next general

 1election, unless an extension is approved at that general election.

 2The additional taxes shall expire upon expiration of the declaration of

 3emergency. The legislature shall not impose additional taxes for

 4emergency purposes under this subsection unless funds in the education

 5construction fund have been exhausted.

 6(c) The state or any political subdivision of the state shall not

 7impose any tax on intangible property listed in RCW 84.36.070 as that

 8statute exists on January 1, 1993.

 9(4) If the cost of any state program or function is shifted from

10the state general fund to another source of funding, or if moneys are

11transferred from the state general fund to another fund or account, the

12state expenditure limit committee, acting pursuant to RCW

1343.135.025(5), shall lower the state expenditure limit to reflect the

14shift. For the purposes of this section, a transfer of money from the

15state general fund to another fund or account includes any state

16legislative action taken that has the effect of reducing revenues from

17a particular source, where such revenues would otherwise be deposited

18into the state general fund, while increasing the revenues from that

19particular source to another state or local government account. This

20subsection does not apply to: (a) The dedication or use of lottery

21revenues under RCW 67.70.240(3), in support of education or education

22expenditures; or (b) a transfer of moneys to, or an expenditure from,

23the budget stabilization account.

24(5) If the cost of any state program or function and the ongoing

25revenue necessary to fund the program or function are shifted to the

26state general fund on or after January 1, 2007, the state expenditure

27limit committee, acting pursuant to RCW 43.135.025(5), shall increase

28the state expenditure limit to reflect the shift unless the shifted

29revenue had previously been shifted from the general fund.

30(6) For the purposes of this chapter, "raises taxes" means any

31action or combination of actions by the legislature that increases

32state tax revenue deposited in any fund, budget, or account, regardless

33of whether the revenues are deposited into the general fund.

34NEW SECTION. Sec. 3. RCW 43.135.035 (Tax legislation--Referral to

35voters--Conditions and restrictions--Ballot title--Declarations of

36emergency--Taxes on intangible property--Expenditure limit to reflect

 1program cost shifting or fund transfer) and 2009 c 479 s 36 are each

 2repealed.

 3PROTECTING TAXPAYERS BY REQUIRING EITHER TWO-THIRDS LEGISLATIVE

 4APPROVAL OR VOTER APPROVAL FOR STATE GOVERNMENT TO RAISE TAXES

 5(section 4 takes effect if the 2010 legislature does not suspend or

 6repeal the two-thirds legislative vote requirement for tax increases)

 7Sec. 4. RCW 43.135.035 and 2009 c 479 s 36 are each amended to

 8read as follows:

 9(1) After July 1, 1995, any action or combination of actions by the

10legislature that raises taxes may be taken only if approved by ((a)) at

11least two-thirds ((vote of each house of the legislature)) legislative

12approval in both the house of representatives and the senate, and then

13only if state expenditures in any fiscal year, including the new

14revenue, will not exceed the state expenditure limits established under

15this chapter. Pursuant to the referendum power set forth in Article

16II, section 1(b) of the state Constitution, tax increases may be

17referred to the voters for their approval or rejection at an election.

18(2)(a) If the legislative action under subsection (1) of this

19section will result in expenditures in excess of the state expenditure

20limit, then the action of the legislature shall not take effect until

21approved by a vote of the people at a November general election. The

22state expenditure limit committee shall adjust the state expenditure

23limit by the amount of additional revenue approved by the voters under

24this section. This adjustment shall not exceed the amount of revenue

25generated by the legislative action during the first full fiscal year

26in which it is in effect. The state expenditure limit shall be

27adjusted downward upon expiration or repeal of the legislative action.

28(b) The ballot title for any vote of the people required under this

29section shall be substantially as follows:

30"Shall taxes be imposed on . . . . . . . in order to allow a

31spending increase above last year's authorized spending adjusted for

32personal income growth?"

33(3)(a) The state expenditure limit may be exceeded upon declaration

34of an emergency for a period not to exceed twenty-four months by a law

35approved by a two-thirds vote of each house of the legislature and

36signed by the governor. The law shall set forth the nature of the

 1emergency, which is limited to natural disasters that require immediate

 2government action to alleviate human suffering and provide humanitarian

 3assistance. The state expenditure limit may be exceeded for no more

 4than twenty-four months following the declaration of the emergency and

 5only for the purposes contained in the emergency declaration.

 6(b) Additional taxes required for an emergency under this section

 7may be imposed only until thirty days following the next general

 8election, unless an extension is approved at that general election.

 9The additional taxes shall expire upon expiration of the declaration of

10emergency. The legislature shall not impose additional taxes for

11emergency purposes under this subsection unless funds in the education

12construction fund have been exhausted.

13(c) The state or any political subdivision of the state shall not

14impose any tax on intangible property listed in RCW 84.36.070 as that

15statute exists on January 1, 1993.

16(4) If the cost of any state program or function is shifted from

17the state general fund to another source of funding, or if moneys are

18transferred from the state general fund to another fund or account, the

19state expenditure limit committee, acting pursuant to RCW

2043.135.025(5), shall lower the state expenditure limit to reflect the

21shift. For the purposes of this section, a transfer of money from the

22state general fund to another fund or account includes any state

23legislative action taken that has the effect of reducing revenues from

24a particular source, where such revenues would otherwise be deposited

25into the state general fund, while increasing the revenues from that

26particular source to another state or local government account. This

27subsection does not apply to: (a) The dedication or use of lottery

28revenues under RCW 67.70.240(3), in support of education or education

29expenditures; or (b) a transfer of moneys to, or an expenditure from,

30the budget stabilization account.

31(5) If the cost of any state program or function and the ongoing

32revenue necessary to fund the program or function are shifted to the

33state general fund on or after January 1, 2007, the state expenditure

34limit committee, acting pursuant to RCW 43.135.025(5), shall increase

35the state expenditure limit to reflect the shift unless the shifted

36revenue had previously been shifted from the general fund.

37(6) For the purposes of this chapter ((1, Laws of 2008)), "raises

38taxes" means any action or combination of actions by the legislature

 1that increases state tax revenue deposited in any fund, budget, or

 2account, regardless of whether the revenues are deposited into the

 3general fund.

 4PROTECTING TAXPAYERS BY REQUIRING MAJORITY LEGISLATIVE APPROVAL

 5FOR STATE GOVERNMENT TO INCREASE FEES

 6Sec. 5. RCW 43.135.055 and 2008 c 1 s 14 are each amended to read

 7as follows:

 8(1) ((No)) A fee may only be imposed or increased in any fiscal

 9year ((without prior legislative approval)) if approved with majority

10legislative approval in both the house of representatives and the

11senate and must be subject to the accountability procedures required by

12RCW 43.135.031.

13(2) This section does not apply to an assessment made by an

14agricultural commodity commission or board created by state statute or

15created under a marketing agreement or order under chapter 15.65 or

1615.66 RCW, or to the forest products commission, if the assessment is

17approved by referendum in accordance with the provisions of the

18statutes creating the commission or board or chapter 15.65 or 15.66 RCW

19for approving such assessments.

20CONSTRUCTION CLAUSE

21NEW SECTION. Sec. 6. The provisions of this act are to be

22liberally construed to effectuate the intent, policies, and purposes of

23this act.

24SEVERABILITY CLAUSE

25NEW SECTION. Sec. 7. If any provision of this act or its

26application to any person or circumstance is held invalid, the

27remainder of the act or the application of the provision to other

28persons or circumstances is not affected.

29MISCELLANEOUS

 1NEW SECTION. Sec. 8. This act shall be known and cited as Save

 2The 2/3's Vote For Tax Increases Act of 2010.

 3NEW SECTION. Sec. 9. Sections 2 and 3 of this act take effect if,

 4during the 2010 legislative session, the legislature amends or repeals

 5RCW 43.135.035.

 6NEW SECTION. Sec. 10. Section 4 of this act takes effect if,

 7during the 2010 legislative session, the legislature does not amend or

 8repeal RCW 43.135.035.

Originally filed in Office of Secretary of State January 5, 2010.

Approved by the People of the State of Washington in the General Election on November 2, 2010.