BILL REQ. #:  S-2241.1 

Read first time 04/14/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to revenue increases for purposes of imposing a supermajority voting requirement in the legislature; amending RCW 43.135.034; creating a new section; and providing for submission of this act to a vote of the people.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds that the multitude of tax exemptions built into our state tax code have the same effect on the budgeting of state revenues as expenditures for education, higher education, physical and mental health care, criminal justice, and environmental protection.
     (2) The legislature further finds that tax exemptions do not provide an inherently greater benefit than these other allocated public expenditures, especially during times of an underperforming economy and when available revenues are inadequate to fund the state's basic commitments to educate, care for the vulnerable and protect the health and safety of the public and the environment.
     (3) Therefore it is the legislature's intent to request that the people determine that existing tax exemptions should not be privileged under the law nor subject to a greater threshold required to modify or end them than are other expenditures provided for in the state general fund.

Sec. 2   RCW 43.135.034 and 2011 c 1 s 2 (Initiative Measure No. 1053) are each amended to read as follows:
     (1) After July 1, 1995, any action or combination of actions by the legislature that raises taxes may be taken only if approved by at least two-thirds legislative approval in both the house of representatives and the senate. Pursuant to the referendum power set forth in Article II, section 1(b) of the state Constitution, tax increases may be referred to the voters for their approval or rejection at an election.
     (2)(a) If the legislative action under subsection (1) of this section will result in expenditures in excess of the state expenditure limit, then the action of the legislature ((shall)) does not take effect until approved by a vote of the people at a November general election. The state expenditure limit committee ((shall)) must adjust the state expenditure limit by the amount of additional revenue approved by the voters under this section. This adjustment ((shall)) may not exceed the amount of revenue generated by the legislative action during the first full fiscal year in which it is in effect. The state expenditure limit ((shall)) must be adjusted downward upon expiration or repeal of the legislative action.
     (b) The ballot title for any vote of the people required under this section ((shall)) must be substantially as follows:

     "Shall taxes be imposed on . . . . . . . in order to allow a spending increase above last year's authorized spending adjusted for personal income growth?"

     (3)(a) The state expenditure limit may be exceeded upon declaration of an emergency for a period not to exceed twenty-four months by a law approved by a two-thirds vote of each house of the legislature and signed by the governor. The law ((shall)) must set forth the nature of the emergency, which is limited to natural disasters that require immediate government action to alleviate human suffering and provide humanitarian assistance. The state expenditure limit may be exceeded for no more than twenty-four months following the declaration of the emergency and only for the purposes contained in the emergency declaration.
     (b) Additional taxes required for an emergency under this section may be imposed only until thirty days following the next general election, unless an extension is approved at that general election. The additional taxes ((shall)) expire upon expiration of the declaration of emergency. The legislature ((shall)) may not impose additional taxes for emergency purposes under this subsection unless funds in the education construction fund have been exhausted.
     (c) The state or any political subdivision of the state ((shall)) may not impose any tax on intangible property listed in RCW 84.36.070 as that statute exists on January 1, 1993.
     (4) If the cost of any state program or function is shifted from the state general fund to another source of funding, or if moneys are transferred from the state general fund to another fund or account, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), shall lower the state expenditure limit to reflect the shift. For the purposes of this section, a transfer of money from the state general fund to another fund or account includes any state legislative action taken that has the effect of reducing revenues from a particular source, where such revenues would otherwise be deposited into the state general fund, while increasing the revenues from that particular source to another state or local government account. This subsection does not apply to: (a) The dedication or use of lottery revenues under RCW 67.70.240(3), in support of education or education expenditures; or (b) a transfer of moneys to, or an expenditure from, the budget stabilization account.
     (5) If the cost of any state program or function and the ongoing revenue necessary to fund the program or function are shifted to the state general fund on or after January 1, 2007, the state expenditure limit committee, acting pursuant to RCW 43.135.025(5), ((shall)) must increase the state expenditure limit to reflect the shift unless the shifted revenue had previously been shifted from the general fund.
     (6) For the purposes of this chapter, "raises taxes" means any action or combination of actions, other than a reduction, repeal, termination, expiration, or other modification of a tax preference as defined by RCW 43.136.021, by the legislature that increases state tax revenue deposited in any fund, budget, or account, regardless of whether the revenues are deposited into the general fund.

NEW SECTION.  Sec. 3   The secretary of state shall submit this act to the people for their adoption and ratification, or rejection, at the next general election to be held in this state, in accordance with Article II, section 1 of the state Constitution and the laws adopted to facilitate its operation.