Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to the Arkansas
                                                  Constitution.
 State of Arkansas                  As Engrossed:       H3/28/23
 94th General Assembly
 Regular Session, 2023                                                                       HJR 1005
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 By: Representative Long
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                              HOUSE JOINT RESOLUTION
                AN AMENDMENT TO THE ARKANSAS CONSTITUTION TO CREATE
                THE "ARKANSAS TAXPAYER BILL OF RIGHTS"; AND TO AMEND
                THE ARKANSAS CONSTITUTION CONCERNING THE COLLECTION
                AND EXPENDITURE OF STATE REVENUE.
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                                              Subtitle
                         AN AMENDMENT TO THE ARKANSAS CONSTITUTION
                         TO CREATE THE "ARKANSAS TAXPAYER BILL OF
                         RIGHTS".
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 BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-FOURTH GENERAL
 ASSEMBLY OF THE STATE OF ARKANSAS, AND BY THE SENATE, A MAJORITY OF ALL
 MEMBERS ELECTED TO EACH HOUSE AGREEING THERETO:
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        THAT the following is proposed as an amendment to the Constitution of
 the State of Arkansas, and upon being submitted to the electors of the state
 for approval or rejection at the next general election for Representatives
 and Senators, if a majority of the electors voting thereon at the election
 adopt the amendment, the amendment shall become a part of the Constitution of
 the State of Arkansas, to wit:
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        SECTION 1.       The Arkansas Constitution is amended to add an additional
 amendment to read as follows:
        § 1.    Title.
        This amendment shall be known and may be cited as the "Arkansas
 Taxpayer Bill of Rights".
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     As Engrossed:     H3/28/23                                              HJR1005
      § 2.   Budgeting.
      (a)    When enacting a budget for the state's fiscal year, the General
 Assembly shall utilize a process that prohibits deficit spending of general
 revenues by ensuring that the expenditure of general revenues in a fiscal
 year does not exceed the amount of general revenues collected by the State of
 Arkansas.
      (b)    Subsection (a) of this section does not prohibit the General
 Assembly from budgeting for a fiscal year based on the state's expected
 collection of general revenues and subsequently adjusting budgeting
 priorities based upon actual collections of general revenue to ensure that
 deficit spending does not occur.
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      § 3.   Increase of state taxes and fees.
      (a)    For any fiscal year that commences on or after July 1, 2025, a
 three-fourths (3/4) vote of each house of the General Assembly shall be
 required for the following:
             (1)    Establishing a new tax or a new fee;
             (2)    Increasing the rate of a tax or fee;
             (3)    Extending an expiring tax or fee; or
             (4)    An amendment to the law directly causing a gain to the state
 in net tax revenue or net fee revenue.
      (b)    The General Assembly may submit a proposal under subdivisions
 (a)(1)-(4) for the approval of qualified electors voting upon the matter at a
 general election.
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      § 4.   Increase in general revenue expenditures.
      (a)    A budget prepared by the General Assembly for the state's fiscal
 year shall provide that the increase in expenditures of net general revenue
 available for distribution is no greater than three percent (3%) as compared
 to the expenditures of net general revenue available for distribution in the
 preceding fiscal year.
      (b)    The limitation under subsection (a) of this section does not apply
 to one-time expenditures for the settlement of claims against the state or a
 state entity.
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      § 5.   Transfer to Catastrophic Reserve Fund.
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     As Engrossed:       H3/28/23                                                   HJR1005
      (a)    As used in this section, "emergency" means an extraordinary event
 or occurrence that:
               (1)    Could not have been reasonably foreseen or prevented; and
               (2)    Requires immediate expenditure to preserve the health,
 safety, and general welfare of the people of Arkansas.
      (b)(1)     For any state fiscal year that commences on or after July 1,
 2025, before making any transfers to the Budget Stabilization Trust Fund or
 any refunds as required by § 6 of this amendment, the Treasurer of State
 shall transfer revenues in excess of the limitation on the increase in
 expenditures of net general revenue available for distribution under § 4 of
 this amendment to the Catastrophic Reserve Fund or its successor fund to the
 extent necessary to ensure that the balance of the Catastrophic Reserve Fund
 at the end of the fiscal year is an amount equal to twenty percent (20%) of
 the previous fiscal year’s expenditures of net general revenue.
               (2)    The Treasurer of State shall not be required to transfer any
 moneys to the Catastrophic Reserve Fund other than the moneys required under
 subdivision (b)(1) of this section.
               (3)    The Catastrophic Reserve Fund shall be in addition to, and
 shall not be used to meet, any other reserve requirement of this constitution
 or Arkansas law.
      (b)(1)     Moneys in the Catastrophic Reserve Fund may be expended only
 for an emergency.
               (2)(A)     An expenditure from the Catastrophic Reserve Fund may
 occur upon a three-fourths (3/4) vote of a quorum present of:
                                (i)    Each house of the General Assembly in a regular,
 fiscal, or extraordinary session; or
                                (ii)   The Legislative Council during the interim.
                        (B)   Approval of an expenditure under subdivision (b)(2)(A)
 of this section may include an appropriation for the expenditure of funds.
               (3)    Interest or other income earned on the Catastrophic Reserve
 Fund shall accrue to the Catastrophic Reserve Fund.
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      § 6.     Transfer to Budget Stabilization Trust Fund.
      (a)    For any state fiscal year that commences on or after July 1, 2025,
 if net general revenue of the state exceeds the limitation on the increase in
 expenditures of net general revenue available for distribution under § 4 of
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     As Engrossed:       H3/28/23                                                 HJR1005
 this amendment, for that fiscal year the excess shall be utilized or refunded
 as provided in this section.
      (b)    The Treasurer of State shall first transfer the excess to the
 Catastrophic Reserve Fund as necessary under § 5 of this amendment.
      (c)(1)     The Treasurer of State shall transfer all additional excess
 revenues to the Budget Stabilization Trust Fund or its successor fund, to the
 extent necessary to ensure that the balance of the Budget Stabilization Fund
 at the end of the fiscal year is an amount equal to twenty percent (20%) of
 the previous fiscal year’s expenditures of net general revenue.
               (2)    The Budget Stabilization Trust Fund may exceed the balance
 under subdivision (c)(1)of this section but shall not fall below that
 balance.
               (3)    Interest or other income earned on the Budget Stabilization
 Trust Fund shall accrue to the Budget Stabilization Trust Fund.
      (d)    For any state fiscal year that commences on or after July 1, 2025,
 if the amount of net general revenue is less than the amount of net general
 revenue for the prior fiscal year, the Treasurer of State shall transfer
 money from the Budget Stabilization Trust Fund to the General Revenue Fund
 Account of the State Apportionment Fund in an amount equal to the difference
 between the amount of net general revenues for the prior fiscal year and the
 amount of net general revenues for the fiscal year.
      (e)(1)     The Budget Stabilization Trust Fund may consist of other funds
 as provided by law.
               (2)    The General Assembly may provide by law for additional uses
 of the Budget Stabilization Trust Fund.
      (f)    Any moneys that remain after the Treasurer of State has made the
 transfers required by this section or by law shall be reserved in the current
 fiscal year and refunded during the next fiscal year through temporary income
 tax or sales tax rate reductions.
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      § 7.     Laws necessary to implement amendment.
      The General Assembly may enact laws necessary to implement this
 amendment, including without limitation laws concerning temporary income or
 sales tax rate reductions authorized under § 6 of this amendment.
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      SECTION 2.       Arkansas Constitution, Article 5, § 38, is repealed.
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     As Engrossed:      H3/28/23                                                HJR1005
      § 38. Taxes — Increase — Approval by electors.
      § 2.    None of the rates for property, excise, privilege or personal
 taxes, now levied shall be increased by the General Assembly except after the
 approval of the qualified electors voting thereon at an election, or in case
 of emergency, by the votes of three-fourths of the members elected to each
 House of the General Assembly.
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      SECTION 3.      EFFECTIVE DATE.   This amendment is effective on and after
 January 1, 2025.
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      SECTION 4.      BALLOT TITLE AND POPULAR NAME.   When this proposed
 amendment is submitted to the electors of this state on the general election
 ballot:
              (1)    The title of this Joint Resolution shall be the ballot
 title; and
              (2)    The popular name shall be "A Constitutional Amendment To
 Create the "Arkansas Taxpayer Bill of Rights"; and to Amend the Arkansas
 Constitution Concerning the Collection and Expenditure of State Revenue.
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                                        /s/Long
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