2004 Initiative Petitions Approved for Circulation in Missouri

2004-004 RE: Education and Health Care Protection Amendment

Submitted by:

Husch & Eppenberger, LLC

Contact for further information. Doug Burnett 102 East High, PO Box 1247 Jefferson City, MO 65102
Phone Number (573) 638-2695

Petition sample form approved for circulation on November 26, 2003. Official ballot title certified by Secretary of State on December 15, 2003.

OFFICIAL BALLOT TITLE AS CERTIFIED BY SECRETARY OF STATE

Shall the Missouri Constitution be amended to adopt an Education and Health Care Protection Amendment authorizing a temporary sales and use tax, the specific amount determined by the director of revenue not exceeding one cent per dollar, if the commissioner of administration certifies a fiscal emergency (when state revenue falls below adjusted amounts collected in 2001), proceeds to be deposited into an annually-audited trust fund used only for elementary and secondary education and for health care services for those enrolled in the state’s Medicaid program, the amendment to be terminated in 2010, unless extended by vote of the people?

The constitutional amendment could generate net sales and use tax revenues only if the conditions for a fiscal emergency exist. The range of sales and use tax generated would be dependent on the level of fiscal emergency, as determined by the drop in revenue. The indirect fiscal impact on state and local governments, if any, is unknown.

FULL TEXT AS SUBMITTED BY PETITIONER

NOTICE: You are advised that the proposed constitutional amendment changes, repeals, or modifies by implication, or may be construed to change, repeal or modify by implication, the following provisions of the Constitution of Missouri - Section 1 of Article II, Sections 1, 21, 22, 23, 24, 25, 27, 28, 29, 30, 31, 32 and 36 of Article III; Sections 8, 15, 22, 23, 27 and 28 of Article IV; Section 18 of Article V; and Sections 1, 3, 17, 18, 18(e), 19, 20 and 21 of Article X.

THE PROPOSED AMENDMENT

Be it resolved by the people of the State of Missouri that the Constitution be amended:

One new section is adopted to be known as Section 38(d) of Article III to read as follows:

Section 38(d). 1. (1) This subsection 38(d) may be cited and shall be known as the "Education and Health Care Protection Amendment".

(2) The people of Missouri adopt this Education and Health Care Protection Amendment in order to better assure that there will not be spending reductions in the basic state investment in education and the basic state investment in health care during periods of economic downturns and lessened general revenues.

2. (1) Within thirty-five days after this section is adopted and thereafter by September 15 of each fiscal year commencing after the effective date of this section, the commissioner of administration shall determine whether the basic state resources per person for the just completed year are greater or less than the inflation adjusted basic state resources per person for the fiscal year ending June 30, 2001. If they are greater, the commissioner of administration shall certify to the director of revenue and the secretary of state that no fiscal emergency exists, and any temporary additional sales and use taxes which are then in effect shall cease to be effective at the end of the day on December 31 following such determination. If they are less, a fiscal emergency shall be deemed to exist and the commissioner of administration (i) shall determine the fiscal deficiency amount by subtracting the basic state resources per person for the just completed year from the inflation adjusted basic state resources per person for the fiscal year ending June 30, 2001, then multiplying the difference by the estimated population for the just completed year and (ii) shall issue a certification to the director of revenue certifying that a fiscal emergency exists and certifying the fiscal deficiency amount. Copies of any such certification shall be provided to the governor, the secretary of state, the state auditor, the speaker of the house of representatives and the president pro tempore of the senate. Notwithstanding the foregoing provisions, a fiscal emergency shall not be certified by the commissioner of administration if tax cuts authorized after the effective date of this Education and Health Care Protection Amendment by the adoption of a new state law or constitutional provision constitute the only cause for the basic state resources per person for the year just completed being less than the basic state resources per person for the fiscal year ending June 30, 2001.

(2) Within thirty days after the issuance of such a certificate of fiscal emergency and fiscal deficiency amount, the director of revenue shall determine the minimum sales and use tax rate to the nearest one-tenth of one cent, but not more than one cent, that would be needed to generate revenues covering the fiscal deficiency amount and shall issue a certification of such minimum sales and use tax rate. In making such determination the director of revenue shall utilize a prorated amount of the actual state sales and use tax revenues collected during the just completed year, excluding temporary additional sales and use taxes, as a basis for calculating the minimum sales and use tax rate that would be needed to generate revenues covering the fiscal deficiency. The director of revenue shall file the certification with the secretary of state and shall provide copies of the certification to the governor, the state auditor, the speaker of the house of representatives, the president pro tempore of the senate and the commissioner of administration.

(3) Temporary additional sales and use taxes at the minimum sales and use tax rate certified by the director of revenue to the secretary of state shall become effective at the end of the day on the first day of January after the director of revenue certifies the minimum sales and use tax rate to the secretary of state, and shall continue in effect until the end of the day on the following December 31; provided, however, that if this section shall be adopted at an election after the primary election in calendar year 2004 and the commissioner of administration in calendar year 2004 certifies to the director of revenue that a fiscal emergency exists, the resulting temporary additional sales and use taxes at the minimum sales and use tax rate certified by the director of revenue to the secretary of state shall become effective at the beginning of the day on April 1, 2005, and shall continue in effect until the end of the day on December 31, 2005.

3. (1) When the commissioner of administration has certified that a fiscal emergency exists and a fiscal deficiency amount and the director of revenue has certified the minimum sales and use tax rate pursuant to the provisions of subsection 2, temporary additional sales and use taxes at the rate certified by the director of revenue shall stand imposed and levied without legislative action on the effective date specified in subsection 2.

(2) When the commissioner of administration has certified pursuant to the provisions of subdivision (1) of subsection 2 that no fiscal emergency exists, any temporary additional sales and use taxes then in effect shall stand repealed without legislative action on December 31 following the date of the certification.

4. During January of 2005 or January of any year thereafter while any temporary additional sales and use taxes are in effect pursuant to the provisions of subsections 2 and 3 of this Education and Healthcare Protection Amendment and notwithstanding the provisions of those subsections, the general assembly by legislative action taken prior to February 1 by a two-thirds vote of the members elected to each house, signified by the presiding officer of each house signing the legislative action in open session prior to that date, may determine and order that either (i) the temporary additional sales and use taxes shall cease to be effective as of the end of the day on the 31 st day of March after such legislative action or (ii) the rate of the temporary additional sales and use tax shall be lowered to a specified lower tax rate to be effective at the beginning of the day on April 1 after the said legislative action. Such legislative action taken by a two-thirds vote of the members elected to each house shall be conclusively presumed by all courts to be an emergency within the meaning of section 29 of article III of this constitution and shall become effective upon such passage by both houses of the general assembly without presentation to or consideration by the governor. If a court of competent jurisdiction finally determines that such legislative action is a bill and must be presented to the governor, then such legislative action must be presented to the governor prior to February 1.

5. (1) The revenues received by the state as a result of the provisions of this Education and Health Care Protection Amendment shall be deposited in the Education and Health Care Protection Trust Fund which is hereby created within the state treasury and shall be appropriated and used solely to fund authorized programs encompassed within the basic state investment in education and the basic state investment in health care. Except for costs of collection and refunds, the revenues received by the state as a result of this Education and Health Care Protection Amendment shall not be diverted or used for any other purpose.

(2) The provisions of this Education and Health Care Protection Amendment are designed to ensure that economic downturns will not reduce the state's support for elementary and secondary education and health care services for the elderly and disabled and children and their parents and caregivers who are enrolled in the state's Medicaid program.

(3) The general assembly shall appropriate annually and/or by supplemental appropriation from the Education and Health Care Protection Trust Fund sufficient monies to assure that the authorized state programs encompassed within the basic state investment in education and the basic state investment in health care are fully funded. Any monies that are appropriated from the Education and Health Care Protection Trust Fund, to the extent that there are monies in such Fund, shall be expended and shall not be subject to withholding or control of the rate of expenditure, other than on a pro rata basis throughout the fiscal year. Monies in the Education and Health Care Protection Trust Fund which are not appropriated and expended shall not lapse into general revenue.

(4) The general assembly in making appropriations shall not divert revenues from or reduce the level of state funding from other revenues sources for the authorized programs encompassed within the basic state investment in education and the basic state investment in health care which was in effect for the just completed year because of the appropriation of funds for such programs from the Education and Health Care Protection Fund.

(5) The commissioner of administration shall establish such books of account as are necessary to account for revenues received as a result of this Education and Health Care Protection Amendment and for funds appropriated and expended from the Education and Health Care Protection Trust Fund and shall make or refuse to make such certifications as are necessary, including but not limited to certifications pursuant to section 28 of article IV of the Missouri Constitution, to ensure that these funds are used and expended only for the purposes authorized by this section.

6. (1) The state auditor shall provide an annual audit and detailed accounting of all receipts and expenditures that occur as a result of taxes which become effective pursuant to this Education and Health Care Protection Amendment.

(2) The commissioner of administration and the director of revenue shall make available to the public and to the members of the general assembly the determinations and certifications, including underlying calculations upon which those determinations and certifications are based, which they make pursuant to this Education and Health Care Amendment.

7. The state auditor or any taxpayer may bring an action in the circuit court of Cole County against the commissioner of administration and/or the director of revenue to determine whether a certification or determination made by the commissioner of administration or the director of revenue made pursuant to this Education and Health Care Protection Amendment is unlawful because it is arbitrary, capricious, an abuse of discretion or not authorized by law and for no other reasons. Any action challenging the lawfulness of such a certification or determination must be brought pursuant to this subsection 7 and must be commenced within thirty days of the issuance of the certification or determination. Because of the difficulty in ascertaining the consumers or users who actually pay such taxes, any temporary additional sales or use taxes which are paid to the director of revenue prior to (i) a court order enjoining the collection of the taxes or (ii) a final circuit court judgment or a final appellate court decision determining that the certification or determination to be unlawful shall not be subject to refund.

8. Any temporary additional sales and use taxes shall not be a part of "total state revenues" as that term is defined and used in sections 17 and 18 of article X of the Missouri Constitution nor shall they be a part of "new annual revenues" as that term is defined and used in section 18(e) of article X of the Missouri Constitution. The expenditure of the temporary additional sales and use taxes shall not be an "expense of state government" as that term is used in section 20 of article X of the Missouri Constitution.

9. The provisions of this section are self enforcing. All of the provisions of this section are severable. If any provision of this section is finally determined by a court of competent jurisdiction to be unconstitutional or unconstitutionally enacted, the remaining provisions of this section shall be and remain valid.

10. (1) The provision of this Education and Health Care Protection Amendment shall terminate at the end of the day on December 31, 2010, unless a majority of the voters cast for the ballot question set forth in subdivision (2) of this subsection 10 shall be in the affirmative, in which event the provisions of this Education and Health Care Protection Amendment shall continue in effect.

(2) The secretary of state shall place on the ballot at the general election in 2010 the question of whether the provisions of this Education and Health Care Protection Amendment shall continue in effect after December 31, 2010. The question which shall be placed on the ballot shall be as follows:

"Shall the provisions of the Education and Health Care Protection Amendment to the Missouri Constitution providing education and health care protection in periods of economic downturn continue in effect after December 31, 2010?

     Yes            No          "

11. As used in this Education and Health Care Protection Amendment -

(1) "Base year" means the fiscal year ending June 30, 2001.

(2) "Basic state investment in education" means avoiding spending reductions, within the limits of the funds generated pursuant to the provisions of this Education and Health Care Protection Amendment, in state elementary and secondary education funding per pupil, other than spending reductions directly attributable to statutory changes regarding education funding.

(3) "Basic state investment in health care" means avoiding spending reductions, within the limits of the funds generated pursuant to the provisions of this Education and Health Care Protection Amendment, in Medicaid appropriations per enrollee, and Medicaid eligibility, enrollment, benefits and provider payments, other than spending reductions directly attributable to statutory changes regarding Medicaid funding.

(4) "Basic state resources" means the total general revenues collected in the appropriate state fiscal year excluding any temporary additional sales and use taxes.

(5) "Basic state resources per person" means the basic state resources, net of refunds and costs of collection, divided by the estimated population of the state.

(6) "Estimated population" means the population of the state as estimated by the United States Census Bureau as of July 1 of the fiscal year. If the United States Census Bureau has not yet determined the estimated population of the state for July 1 of the fiscal year in question, then the population of the state as estimated by the United States Census Bureau for July 1 of the fiscal year previous to the fiscal year in question shall be used as the estimated population.

(7) "Fiscal deficiency amount" means the amount ascertained, when a fiscal emergency is determined to exist, by subtracting the basic state resources per person for the just completed year from the inflation adjusted basic resources per person for the base year, and then multiplying the difference by the estimated population for the just completed year.

(8) "Fiscal emergency" means that the basic resources per person for the just completed fiscal year are less than the inflation adjusted basic state resources per person for the base year.

(9) "General revenue" includes all revenues which are received in the state treasury, other than (i) revenues which are received from the United States government, (ii) revenues which are required by the constitution or voter approved statute to be deposited when first received in the state treasury into a special fund, (iii) revenues which were required by a statute which was in effect on June 30, 2001, to be deposited when first received in the state treasury into a special revenue fund, and (iv) any new revenues as defined in section 18(e) of article X of the Constitution which are imposed by statute enacted after June 30, 2001, and which are required by such statute to be deposited when first received into a special revenue fund.

(10) "Inflation adjusted" means adjusting the basic state resources for the base year by the consumer price index for all urban consumers as determined by the United States Department of Labor, or its successor agency.

(11) "Just completed year" means the most recently completed state fiscal year ending June 30.

(12) "Medicaid" means the medicaid programs authorized by Title XIX and XXI of the Social Security Act, as amended, or successor programs.

(13) "Per person" means basic state resources divided by the estimated population of the state for the fiscal year in question.

(14) "Sales tax" means a tax upon sales and services which now are or hereafter listed and set forth in, and except as to the amount of the tax, subject to the provisions of and to be collected as provided in the "Sales Tax Law" as presently set forth in chapter 144, RSMo, or as hereafter amended, and subject to the rules and regulations promulgated in connection therewith.

(15) "Temporary additional sales and use taxes" means sales and use taxes which become effective pursuant to this Education and Health Care Amendment.

(16) "Use Tax" means a tax for the privilege of storing, using or consuming within this state any article of tangible personal property as set forth and provided in the "Compensating Use Tax Law" as presently set forth in chapter 144, RSMo, or as hereafter amended, and, except as to the amount of the tax, subject to rules and regulations promulgated in connection therewith.