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ARTICLE VII
TAXATION AND FINANCE
TAXING POWER INALIENABLE
Section 1. The power of taxation shall never be
surrendered, suspended or contracted away. [Ren Const Con 1978 and
election Nov 7, 1978]
INCOME TAXATION
Section 2. In enacting any law imposing a tax on or
measured by income, the legislature may define income by reference to
provisions of the laws of the United States as they may be or become
effective at any time or from time to time, whether retrospective or
prospective in their operation. The legislature may provide
that amendments to such laws of the United States shall become the law
of the State upon their becoming the law of the United
States. The legislature shall in any such law set the rate or
rates of such tax. The legislature may in so defining income
make exceptions, additions or modifications to any provisions of the
laws of the United States so referred to and provide for retrospective
exceptions or modifications to those provisions which are retrospective.
[Add Const Con 1978 and election Nov 7, 1978]
TAX REVIEW COMMISSION
Section 3. There shall be a tax review commission,
which shall be appointed as provided by law on or before July 1, 1980,
and every five years thereafter. The commission shall submit
to the legislature an evaluation of the State's tax structure, recommend
revenue and tax policy and then dissolve. [Add Const Con 1978 and
election Nov 7, 1978]
APPROPRIATIONS FOR PRIVATE PURPOSES PROHIBITED
Section 4. No tax shall be levied or appropriation of
public money or property made, nor shall the public credit be used,
directly or indirectly, except for a public purpose. No grant
shall be made in violation of Section 4 of Article I of this
constitution. No grant of public money or property shall be
made except pursuant to standards provided by law. [Ren Const Con 1968
and election Nov 5, 1968; ren and am Const Con 1978 and election Nov 7,
1978]
EXPENDITURE CONTROLS
Section 5. Provision for the control of the rate of
expenditures of appropriated state moneys, and for the reduction of such
expenditures under prescribed conditions, shall be made by law.
No public money shall be expended except pursuant to appropriations
made by law. General fund expenditures for any fiscal year
shall not exceed the State's current general fund revenues and
unencumbered cash balances, except when the governor publicly declares
the public health, safety or welfare is threatened as provided by law.
[Ren Const Con 1968 and election Nov 5, 1968; ren and am Const Con 1978
and election Nov 7, 1978]
DISPOSITION OF EXCESS REVENUES
Section 6. Whenever the state general fund balance at
the close of each of two successive fiscal years exceeds five percent of
general fund revenues for each of the two fiscal years, the legislature
in the next regular session shall provide for a tax refund or tax credit
to the taxpayers of the State, as provided by law. [Add Const Con 1978
and election Nov 7, 1978]
COUNCIL ON REVENUES
Section 7. There shall be established by law a council
on revenues which shall prepare revenue estimates of the state
government and shall report the estimates to the governor and the
legislature at times provided by law. The estimates shall be
considered by the governor in preparing the budget, recommending
appropriations and revenues and controlling expenditures. The
estimates shall be considered by the legislature in appropriating funds
and enacting revenue measures. All revenue estimates
submitted by the council to the governor and the legislature shall be
made public. If the legislature in appropriating funds or if
the governor in preparing the budget or recommending appropriations
exceeds estimated revenues due to proposed expenditures, this fact shall
be made public including the reasons therefor. [Add Const Con 1978 and
election Nov 7, 1978]
THE BUDGET
Section 8. Within such time prior to the opening of
each regular session in an odd-numbered year as may be provided by law,
the governor shall submit to the legislature a budget in a form provided
by law setting forth a complete plan of proposed expenditures of the
executive branch, estimates as provided by law of the aggregate
expenditures of the judicial and legislative branches, and anticipated
receipts of the State for the ensuing fiscal biennium, together with
such other information as the legislature may require. A
complete plan of proposed expenditures of the judicial branch for the
ensuing fiscal biennium shall be submitted by the chief justice to the
legislature in a form and within such time prior to the opening of each
regular session in an odd-numbered year as shall be provided by
law. The budget prepared by the governor and the plan of
proposed expenditures prepared by the chief justice shall also be
submitted in bill form. The governor shall also, upon the
opening of each such session, submit bills to provide for such proposed
expenditures and for any recommended additional revenues or borrowings
by which the proposed expenditures are to be met. The
proposed general fund expenditures in the plan of proposed expenditures,
including estimates of the aggregate expenditures of the judicial and
legislative branches, submitted by the governor shall not exceed the
general fund expenditure ceiling established by the legislature under
section 9 of this article; provided that proposed general fund
expenditures in the plan may exceed such ceiling if the governor sets
forth the dollar amount and the rate by which the ceiling will be
exceeded and the reasons therefor. [Am Const Con 1968 and election Nov
5, 1968; ren and am Const Con 1978 and election Nov 7, 1978]
LEGISLATIVE APPROPRIATIONS; PROCEDURES; EXPENDITURE CEILING
Section 9. In each regular session in an odd-numbered
year, the legislature shall transmit to the governor an appropriation
bill or bills providing for the anticipated total expenditures of the
State for the ensuing fiscal biennium. In such session, no
appropriation bill, except bills recommended by the governor for
immediate passage, or to cover the expenses of the legislature, shall be
passed on final reading until the bill authorizing operating
expenditures for the ensuing fiscal biennium, to be known as the general
appropriations bill, shall have been transmitted to the governor.
In each regular session in an even-numbered year, at such time as may
be provided by law, the governor may submit to the legislature a bill to
amend any appropriation for operating expenditures of the current fiscal
biennium, to be known as the supplemental appropriations bill, and bills
to amend any appropriations for capital expenditures of the current
fiscal biennium, and at the same time the governor shall submit a bill
or bills to provide for any added revenues or borrowings that such
amendments may require. In each regular session in an
even-numbered year, bills may be introduced in the legislature to amend
any appropriation act or bond authorization act of the current fiscal
biennium or prior fiscal periods. In any such session in
which the legislature submits to the governor a supplemental
appropriations bill, no other appropriation bill, except bills
recommended by the governor for immediate passage, or to cover the
expenses of the legislature, shall be passed on final reading until such
supplemental appropriations bill shall have been transmitted to the
governor.
GENERAL FUND EXPENDITURE CEILING
Notwithstanding any other provision to the contrary, the legislature
shall establish a general fund expenditure ceiling which shall limit the
rate of growth of general fund appropriations, excluding federal funds
received by the general fund, to the estimated rate of growth of the
State's economy as provided by law. No appropriations in
excess of such ceiling shall be authorized during any legislative
session unless the legislature shall, by a two-thirds vote of the
members to which each house of the legislature is entitled, set forth
the dollar amount and the rate by which the ceiling will be exceeded and
the reasons therefor. [Am Const Con 1968 and election Nov 5, 1968; am SB
1947-72 (1972) and election Nov 7, 1972; ren and am Const Con 1978 and
election Nov 7, 1978]
AUDITOR
Section 10. The legislature, by a majority vote of
each house in joint session, shall appoint an auditor who shall serve
for a period of eight years and thereafter until a successor shall have
been appointed. The legislature, by a two-thirds vote of the
members in joint session, may remove the auditor from office at any time
for cause. It shall be the duty of the auditor to conduct
post-audits of the transactions, accounts, programs and performance of
all departments, offices and agencies of the State and its political
subdivisions, to certify to the accuracy of all financial statements
issued by the respective accounting officers and to report the auditor's
findings and recommendations to the governor and to the legislature at
such times as shall be provided by law. The auditor shall
also make such additional reports and conduct such other investigations
as may be directed by the legislature. [Ren Const Con 1968 and election
Nov 5, 1968; ren and am Const Con 1978 and election Nov 7, 1978]
LAPSING OF APPROPRIATIONS
Section 11. All appropriations for which the source is
general obligation bond funds or general funds shall be for specified
periods. No such appropriation shall be made for a period
exceeding three years; provided that appropriations from the state
educational facilities improvement special fund may be made for periods
exceeding three years to allow for construction or acquisition of public
school facilities. Any such appropriation or any portion of
any such appropriation that is unencumbered at the close of the fiscal
period for which the appropriation is made shall lapse; provided that no
appropriation for which the source is general obligation bond funds nor
any portion of any such appropriation shall lapse if the legislature
determines that the appropriation or any portion of the appropriation is
necessary to qualify for federal aid financing and
reimbursement. Where general obligation bonds have been
authorized for an appropriation, the amount of the bond authorization
shall be reduced in an amount equal to the amount lapsed. [Add Const Con
1978 and election Nov 7, 1978; am SB 2211 (1996) and election Nov 5,
1996]
DEFINITIONS; ISSUANCE OF INDEBTEDNESS
Section 12. For the purposes of this
article:
1. The term "bonds" shall include bonds, notes and other
instruments of indebtedness.
2. The term "general obligation bonds" means all bonds for
the payment of the principal and interest of which the full faith and
credit of the State or a political subdivision are pledged and, unless
otherwise indicated, includes reimbursable general obligation bonds.
3. The term "net revenues" or "net user tax receipts"
means the revenues or receipts derived from:
a. A public undertaking,
improvement or system remaining after the costs of operation,
maintenance and repair of the public undertaking, improvement or system,
and the required payments of the principal of and interest on all
revenue bonds issued therefor, have been made; or
b. Any payments or return on
security under a loan program or a loan thereunder, after the costs of
operation and administration of the loan program, and the required
payments of the principal of and interest on all revenue bonds issued
therefor, have been made.
4. The term "person" means an individual, firm,
partnership, corporation, association, cooperative or other legal
entity, governmental body or agency, board, bureau or other
instrumentality thereof, or any combination of the foregoing.
5. The term "rates, rentals and charges" means all
revenues and other moneys derived from the operation or lease of a
public undertaking, improvement or system, or derived from any payments
or return on security under a loan program or a loan thereunder;
provided that insurance premium payments, assessments and surcharges,
shall constitute rates, rentals and charges of a state property
insurance program.
6. The term "reimbursable general obligation bonds" means
general obligation bonds issued for a public undertaking, improvement or
system from which revenues, or user taxes, or a combination of both, may
be derived for the payment of the principal and interest as
reimbursement to the general fund and for which reimbursement is
required by law, and, in the case of general obligation bonds issued by
the State for a political subdivision, general obligation bonds for
which the payment of the principal and interest as reimbursement to the
general fund is required by law to be made from the revenue of the
political subdivision.
7. The term "revenue bonds" means all bonds payable from
the revenues, or user taxes, or any combination of both, of a public
undertaking, improvement, system or loan program and any loan made
thereunder and secured as may be provided by law, including a loan
program to provide loans to a state property insurance program providing
hurricane insurance coverage to the general public.
8. The term "special purpose revenue bonds" means all
bonds payable from rental or other payments made to an issuer by a
person pursuant to contract and secured as may be provided by law.
9. The term "user tax" means a tax on goods or services or
on the consumption thereof, the receipts of which are substantially
derived from the consumption, use or sale of goods and services in the
utilization of the functions or services furnished by a public
undertaking, improvement or system; provided that mortgage recording
taxes shall constitute user taxes of a state property insurance
program.
The legislature, by a majority vote of the members to which each
house is entitled, shall authorize the issuance of all general
obligation bonds, bonds issued under special improvement statutes and
revenue bonds issued by or on behalf of the State and shall prescribe by
general law the manner and procedure for such issuance. The
legislature by general law shall authorize political subdivisions to
issue general obligation bonds, bonds issued under special improvement
statutes and revenue bonds and shall prescribe the manner and procedure
for such issuance. All such bonds issued by or on behalf of a
political subdivision shall be authorized by the governing body of such
political subdivision.
Special purpose revenue bonds shall only be authorized or issued to
finance facilities of or for, or to loan the proceeds of such bonds to
assist:
1.Manufacturing, processing, or industrial enterprises;
2.Utilities serving the general public;
3.Health care facilities provided to the general public by
not-for-profit corporations;
4.Early childhood education and care facilities provided to the
general public by not-for-profit corporations;
5.Low and moderate income government housing programs;
6.Not-for-profit private nonsectarian and sectarian elementary
schools, secondary schools, colleges and universities; or
7.Agricultural enterprises serving important agricultural lands, each
of which is hereinafter referred to in this paragraph as a special
purpose entity.
The legislature, by a two-thirds vote of the members to which each
house is entitled, may enact enabling legislation for the issuance of
special purpose revenue bonds separately for each special purpose
entity, and, by a two-thirds vote of the members to which each house is
entitled and by separate legislative bill, may authorize the State to
issue special purpose revenue bonds for each single project or
multi-project program of each special purpose entity; provided that the
issuance of such special purpose revenue bonds is found to be in the
public interest by the legislature; and provided further that the State
may combine into a single issue of special purpose revenue bonds two or
more proposed issues of special purpose revenue bonds to assist
not-for-profit private nonsectarian and sectarian elementary schools,
secondary schools, colleges, and universities, separately authorized as
aforesaid, in the total amount of not exceeding the aggregate of the
proposed separate issues of special purpose revenue
bonds. The legislature may enact enabling legislation to
authorize political subdivisions to issue special purpose revenue
bonds. If so authorized, a political subdivision by a
two-thirds vote of the members to which its governing body is entitled
and by separate ordinance may authorize the issuance of special purpose
revenue bonds for each single project or multi-project program of each
special purpose entity; provided that the issuance of such special
purpose revenue bonds is found to be in the public interest by the
governing body of the political subdivision. No special
purpose revenue bonds shall be secured directly or indirectly by the
general credit of the issuer or by any revenues or taxes of the issuer
other than receipts derived from payments by a person or persons under
contract or from any security for such contract or contracts or special
purpose revenue bonds and no moneys other than such receipts shall be
applied to the payment thereof. The governor shall provide
the legislature in November of each year with a report on the cumulative
amount of all special purpose revenue bonds authorized and issued, and
such other information as may be necessary. [Am Const Con 1968 and
election Nov 5, 1968; ren and am Const Con 1978 and election Nov 7,
1978; am L 1994, c 280, §2 (HB 2692-94) and election Nov 8, 1994;
am HB 4142 (1996) and election Nov 5, 1996; am HB 2848 (2002) and
election Nov 5, 2002; am SB 2479 (2006) and election Nov 7, 2006]
DEBT LIMIT; EXCLUSIONS
Section 13. General obligation bonds may be issued by
the State; provided that such bonds at the time of issuance would not
cause the total amount of principal and interest payable in the current
or any future fiscal year, whichever is higher, on such bonds and on all
outstanding general obligation bonds to exceed: a sum equal
to twenty percent of the average of the general fund revenues of the
State in the three fiscal years immediately preceding such issuance
until June 30, 1982; and thereafter, a sum equal to eighteen and
one-half percent of the average of the general fund revenues of the
State in the three fiscal years immediately preceding such
issuance. Effective July 1, 1980, the legislature shall
include a declaration of findings in every general law authorizing the
issuance of general obligation bonds that the total amount of principal
and interest, estimated for such bonds and for all bonds authorized and
unissued and calculated for all bonds issued and outstanding, will not
cause the debt limit to be exceeded at the time of
issuance. Any bond issue by or on behalf of the State may
exceed the debt limit if an emergency condition is declared to exist by
the governor and concurred to by a two-thirds vote of the members to
which each house of the legislature is entitled. For the
purpose of this paragraph, general fund revenues of the State shall not
include moneys received as grants from the federal government and
receipts in reimbursement of any reimbursable general obligation bonds
which are excluded as permitted by this section.
A sum equal to fifteen percent of the total of the assessed values
for tax rate purposes of real property in each political subdivision, as
determined by the last tax assessment rolls pursuant to law, is
established as the limit of the funded debt of such political
subdivision that is outstanding and unpaid at any time.
All general obligation bonds for a term exceeding two years shall be
in serial form maturing in substantially equal installments of
principal, or maturing in substantially equal installments of both
principal and interest. The first installment of principal of
general obligation bonds and of reimbursable general obligation bonds
shall mature not later than five years from the date of issue of such
series. The last installment on general obligation bonds
shall mature not later than twenty-five years from the date of such
issue and the last installment on general obligation bonds sold to the
federal government, on reimbursable general obligation bonds and on
bonds constituting instruments of indebtedness under which the State or
a political subdivision incurs a contingent liability as a guarantor
shall mature not later than thirty-five years from the date of such
issue. The interest and principal payments of general
obligation bonds shall be a first charge on the general fund of the
State or political subdivision, as the case may be.
In determining the power of the State to issue general obligation
bonds or the funded debt of any political subdivision under section 12,
the following shall be excluded:
1. Bonds that have matured, or that mature in the then
current fiscal year, or that have been irrevocably called for redemption
and the redemption date has occurred or will occur in the then fiscal
year, or for the full payment of which moneys or securities have been
irrevocably set aside.
2. Revenue bonds, if the issuer thereof is obligated by
law to impose rates, rentals and charges for the use and services of the
public undertaking, improvement or system or the benefits of a loan
program or a loan thereunder or to impose a user tax, or to impose a
combination of rates, rentals and charges and user tax, as the case may
be, sufficient to pay the cost of operation, maintenance and repair, if
any, of the public undertaking, improvement or system or the cost of
maintaining a loan program or a loan thereunder and the required
payments of the principal of and interest on all revenue bonds issued
for the public undertaking, improvement or system or loan program, and
if the issuer is obligated to deposit such revenues or tax or a
combination of both into a special fund and to apply the same to such
payments in the amount necessary therefor.
3. Special purpose revenue bonds, if the issuer thereof is
required by law to contract with a person obligating such person to make
rental or other payments to the issuer in an amount at least sufficient
to make the required payment of the principal of and interest on such
special purpose revenue bonds.
4. Bonds issued under special improvement statutes when
the only security for such bonds is the properties benefited or improved
or the assessments thereon.
5. General obligation bonds issued for assessable
improvements, but only to the extent that reimbursements to the general
fund for the principal and interest on such bonds are in fact made from
assessment collections available therefor.
6. Reimbursable general obligation bonds issued for a
public undertaking, improvement or system but only to the extent that
reimbursements to the general fund are in fact made from the net
revenue, or net user tax receipts, or combination of both, as determined
for the immediately preceding fiscal year.
7. Reimbursable general obligation bonds issued by the
State for any political subdivision, whether issued before or after the
effective date of this section, but only for as long as reimbursement by
the political subdivision to the State for the payment of principal and
interest on such bonds is required by law; provided that in the case of
bonds issued after the effective date of this section, the consent of
the governing body of the political subdivision has first been obtained;
and provided further that during the period that such bonds are excluded
by the State, the principal amount then outstanding shall be included
within the funded debt of such political subdivision.
8. Bonds constituting instruments of indebtedness under
which the State or any political subdivision incurs a contingent
liability as a guarantor, but only to the extent the principal amount of
such bonds does not exceed seven percent of the principal amount of
outstanding general obligation bonds not otherwise excluded under this
section; provided that the State or political subdivision shall
establish and maintain a reserve in an amount in reasonable proportion
to the outstanding loans guaranteed by the State or political
subdivision as provided by law.
9. Bonds issued by or on behalf of the State or by any
political subdivision to meet appropriations for any fiscal period in
anticipation of the collection of revenues for such period or to meet
casual deficits or failures of revenue, if required to be paid within
one year, and bonds issued by or on behalf of the State to suppress
insurrection, to repel invasion, to defend the State in war or to meet
emergencies caused by disaster or act of God.
The total outstanding indebtedness of the State or funded debt of any
political subdivision and the exclusions therefrom permitted by this
section shall be made annually and certified by law or as provided by
law. For the purposes of section 12 and this section, amounts
received from on-street parking may be considered and treated as
revenues of a parking undertaking.
Nothing in section 12 or in this section shall prevent the refunding
of any bond at any time. [Am Const Con 1968 and election Nov 5, 1968;
ren and am Const Con 1978 and election Nov 7, 1978]
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