98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3302

 

Introduced , by Rep. Thomas Morrison

 

SYNOPSIS AS INTRODUCED:
 
New Act
30 ILCS 105/5.826 new
30 ILCS 105/5.827 new
30 ILCS 105/5.828 new

    Creates the Responsible Spending Act. Provides for the calculation of a Spending Growth Index and requires it to be calculated separately for the General Fund, Road Fund, and all other funds. Sets forth requirements for any increase in State revenue or in State spending beyond the Spending Growth Index limitation, including a three-fifths majority vote of all members of each house and submission of the increase to voters by referendum. Permits emergency tax increases in certain circumstances. Creates the Past Due Paydown Fund and provides that the State Comptroller shall transfer to the fund any amount necessary, up to the total past due operating debt owed by the State, from the unappropriated surplus of the General Fund. Creates the Budget Stabilization Fund for Illinois and provides that the State Comptroller shall allocate a portion of unappropriated funds from the General Fund to pay down past operating debt to zero. Creates the Taxpayer Relief Fund and provides that if the amount in this Fund exceeds 1% of General Fund expenditures, the General Assembly shall enact legislation to provide for a refund to taxpayers. Amends the State Finance Act to create the Past Due Paydown Fund, the Budget Stabilization Fund for Illinois, and the Taxpayer Relief Fund.


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A BILL FOR

 

HB3302LRB098 07551 HLH 37622 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Responsible Spending Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Emergency" means extraordinary circumstances outside the
8control of the General Assembly, including catastrophic
9events, such as a natural disaster, terrorism, fire, war, and
10riot, and court orders or decrees.
11    "General Fund" means the General Revenue Fund, Common
12School Fund, and Education Assistance Fund.
13    "Increase in revenue" means any legislation or tax levy
14that is estimated to result in a net gain in State revenue of
15at least 0.01% of General Fund revenue in at least one fiscal
16year, and (1) enacts a new tax or fee; (2) increases the rate
17or expands the base of an existing tax or fee; (3) repeals or
18reduces any tax exemption, credit, or refund; or (4) extends an
19expiring tax increase or fee. Any and all borrowing or
20increases in state debt shall not be considered an increase in
21revenue.
22    "Inflation adjustment factor" means the increase in the
23Chicago Metropolitan Statistical Area Consumer Price Index for

 

 

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1the most recently available calendar year as calculated by the
2United States Department of Labor, Bureau of Labor Statistics.
3However, the inflation adjustment factor may not be less than
4zero or more than 10%.
5    "Population adjustment factor" means the average annual
6percentage increase in population for the 3 most recent years
7for which data is available, as determined annually by the
8United States Department of Commerce, Census Bureau. The
9population adjustment factor may not be less than zero.
10    "Revenue" means taxes and fees collected by the State. Any
11and all borrowing or increases in State debt shall not be
12considered revenue.
13    "State spending" means any authorized State appropriations
14and allocations.
15    "Tax" means any amount raised for the general support of
16government functions.
 
17    Section 10. Spending Growth Index.
18    (a) Beginning with the fiscal year that starts after this
19Act takes effect, the maximum annual percentage change in State
20fiscal year spending in the categories specified may not exceed
21the inflation adjustment factor plus the population adjustment
22factor and any increases attributable to measures approved
23under Section 15 of this Act. This limitation, the Spending
24Growth Index, must be calculated separately for the following
25categories: General Fund, Road Fund, and all other funds.

 

 

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1    (b) The following may not be counted in calculating
2expenditure limitations:
3        (1) amounts returned to taxpayers as refunds of amounts
4    exceeding the expenditure limitation in a prior year;
5        (2) amounts received from the federal government;
6        (3) amounts collected on behalf of another level of
7    government;
8        (4) pension contributions by employees and pension
9    fund earnings;
10        (5) pension and disability payments made to former
11    government employees;
12        (6) amounts received as grants, gifts, or donations
13    that must be spent for purposes specified by the donor;
14        (7) amounts paid pursuant to a court award; and
15        (8) reserve transfers.
 
16    Section 15. Approval of expenditure increases.
17    (a) In order to adopt an increase in State spending beyond
18the limitation set forth in Section 10 of this Act, the measure
19must be approved by a three-fifths majority vote of all members
20of each house of the General Assembly and must be approved by a
21majority of voters. Voter approval is not required if the
22spending is as a result of an increase in State revenue under
23Section 20 of this Act.
24    (b) The question of whether to adopt legislation to allow
25an increase in State spending beyond the limitation set forth

 

 

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1in Section 10 of this Act must be submitted to the voters for
2approval at the next general election. If the General Assembly
3determines by a three-fifths majority vote that legislation to
4increase spending beyond the limitation should take effect
5sooner than the next general election, the General Assembly
6shall provide for submission of the question to the voters at
7any regular or special election.
8    A measure submitted to the voters must include an estimate
9as set forth in the legislation of the spending increase by the
10measure for the first 3 fiscal years of its implementation.
11    (c) At least 30 days before an election, the Secretary of
12State shall mail, at least once, a titled notice or set of
13notices addressed to all registered voters in the State at each
14address of every registered voter. Notices must include all of
15the following information and may not include any additional
16information:
17        (1) The election date, hours, ballot title, and text.
18        (2) For each proposed spending increase, the estimated
19    or actual total of fiscal year spending for the current
20    year and each of the past 4 years, and the overall
21    percentage change and dollar change.
22        (3) For the first full fiscal year of each proposed
23    spending increase, estimates of the maximum dollar amount
24    of each increase and of fiscal year spending without the
25    increase.
26    (d) Ballot question for spending increases must begin:

 

 

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1"Shall State spending increase by (amount of first or, if
2phased in, full fiscal year dollar increase) annually for the
3purpose of....?".
4    (e) The State shall reimburse municipalities and counties
5for the costs of any special elections.
 
6    Section 20. Approval of revenue increases.
7    (a) In order to adopt an increase in State revenue, the
8measure must be approved by a three-fifths majority vote of all
9members of each house of the General Assembly and must be
10approved by a majority of voters. Voter approval is not
11required if annual State revenue is less than annual payments
12on general obligation bonds, required payments relating to
13pensions, and final court judgments or the measure is an
14emergency tax.
15    (b) The question of whether to adopt legislation to impose
16an increase in revenue of the State must be submitted to the
17voters for approval at the next general election. If the
18General Assembly determines by a three-fifths majority vote
19that legislation to increase revenue through an emergency tax
20should take effect sooner than the next general election, the
21General Assembly may provide for submission of the question to
22the voters at any regular or special election.
23    A measure submitted to the voters must include an estimate
24of the amount to be raised by the measure for the first 3
25fiscal years of its implementation.

 

 

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1    (c) At least 30 days before an election, the Secretary of
2State shall mail, at least once, a titled notice or set of
3notices addressed to all registered voters at each address of
4every registered voter. Notices must include all of the
5following information and may not include any additional
6information:
7        (1) The election date, hours, ballot title, and text.
8        (2) For each proposed revenue increase, the estimated
9    or actual total of fiscal year spending for the current
10    year and each of the past 4 years, and the overall
11    percentage change and dollar change.
12        (3) For the first full fiscal year of each proposed
13    revenue increase, estimates of the maximum dollar amount of
14    each increase and of fiscal year spending without the
15    increase.
16    (d) Ballot questions for revenue increases must begin:
17"Shall (description of the tax increase) to increase State
18revenues by (amount of first or, if phased in, full fiscal year
19dollar increase) annually for the purpose of...?".
20    (e) The State shall reimburse municipalities and counties
21for the costs of any special elections.
 
22    Section 25. Emergency taxes.
23    (a) The State may impose emergency taxes only in accordance
24with this Section.
25    (b) The tax must be approved for a specified time period by

 

 

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1a three-fifths majority of the members of each house of the
2General Assembly.
3    (c) Emergency tax revenue may be spent only after other
4available reserves are depleted and must be refunded 180 days
5after the emergency ends if not spent on the emergency.
6    (d) The tax must be submitted for approval by the voters at
7the next regular election.
8    (e) If not approved by the voters as provided in subsection
9(d) of this Section, the emergency tax expires 30 days
10following the election.
 
11    Section 30. Past Due Paydown Fund. The Past Due Paydown
12Fund is established as a special fund in the State treasury and
13must be administered for the purposes identified in this
14Section. At the close of the lapse period for each fiscal year
15beginning in 2014, the State Comptroller shall identify the
16amount of General Fund unappropriated surplus above the
17Spending Growth Index limitation and transfer to the fund any
18amount necessary up to the total past due operating debt owed
19by the State as of the close of fiscal year 2014.
20    The General Assembly may authorize transfers,
21appropriations, and allocations from the Fund only to fund the
22costs of paying down the remaining past due debt until such
23debt is zero. Any remaining funds shall be transferred to the
24Budget Stabilization Fund for Illinois.
 

 

 

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1    Section 35. Budget Stabilization Fund for Illinois. The
2Budget Stabilization Fund for Illinois is established as a
3special fund in the State treasury and must be administered for
4the purposes identified in this Section. At the close the lapse
5period of each fiscal year, the State Comptroller shall
6identify the amount of General Fund unappropriated surplus
7above the State Spending Growth Index expenditure limitation
8and above the amount necessary to fully fund and pay down the
9past operating debt to zero. The Fund may not exceed 8% of the
10total General Fund revenues received in the immediately
11preceding fiscal year.
12    The General Assembly may authorize transfers,
13appropriations, and allocations from the Fund only to fund the
14costs of State government up to the expenditure limit
15calculated under Section 10 in years when State revenues are
16less thatn the amount necessary to finance the level of
17expenditures permitted under Section 10. Transfers require a
18three-fifths majority vote of the General Assembly.
19    The money in the Fund may be invested as provided by law,
20with the earnings credited to the Fund. At the close of every
21month during which the Fund is at the 8% limitation, the State
22Comptroller shall transfer the excess to the Taxpayer Relief
23Fund.
 
24    Section 40. Taxpayer Relief Fund. The Taxpayer Relief Fund
25is established as a special fund in the State treasury and must

 

 

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1be administered for the purposes identified in this Section. At
2the close of the lapse period of each fiscal year, the State
3Comptroller shall identify the amount of General Fund
4unappropriated surplus above the State expenditure limitation
5and above the amount necessary to fully fund the Past Due
6Paydown Fund and the Budget Stabilization Fund for Illinois.
7    By September 1st annually, the State Comptroller shall
8notify the Commission on Government Forecasting and
9Accountability and the Department of Revenue of the amount in
10the Fund as a result of the transfers.
11    If the amount in the Fund exceeds 1% of General Fund
12expenditures, then the General Assembly shall, by September
1315th, enact legislation to provide for the refund to taxpayers
14of amounts in the Fund. Refunds may only take the form of
15temporary or permanent broad-based tax rate reductions.
16    If the General Assembly does not enact legislation by
17September 15th to provide refunds, then the State Comptroller
18shall, by September 30th, notify the Department of Revenue of
19the amount in the Fund. The Department of Revenue shall
20calculate a one-time bonus personal exemption refund. The
21amount of personal exemption refund must be calculated by
22dividing the amount in the Fund identified by the State
23Comptroller by the number of personal exemptions claimed on
24income tax returns filed for tax year beginning in the previous
25calendar year. The Department of Revenue shall issue a refund
26by October 30th to a taxpayer who filed an income tax return by

 

 

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1April 15th of the same calendar year based on the number of
2exemptions claimed (times refund per exemption) on the
3taxpayer's return without regard to the taxpayer's tax
4liability for the year.
 
5    Section 45. The State Finance Act is amended by adding
6Sections 5.826, 5.827, and 5.828 as follows:
 
7    (30 ILCS 105/5.826 new)
8    Sec. 5.826. The Past Due Paydown Fund.
 
9    (30 ILCS 105/5.827 new)
10    Sec. 5.827. The Budget Stabilization Fund for Illinois.
 
11    (30 ILCS 105/5.828 new)
12    Sec. 5.828. The Taxpayer Relief Fund.