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:
- The term "bonds" shall include bonds, notes and other instruments of indebtedness.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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:
- Manufacturing, processing or industrial enterprises;
- Utilities serving the general public;
- Health care facilities provided to the general public by not-for-profit corporations;
- Early childhood education and care facilities provided to the
general public by not-for-profit corporations;
- Low and moderate income government housing programs; or
- Not-for-profit private nonsectarian and sectarian elementary
schools, secondary schools, colleges and universities,
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 NovÊ5, 1968; ren and am Const Con 1978 and election NovÊ7,
1978; am L 1994, c 280, §2 (HB 2692-94) and election NovÊ8, 1994; am HB
4142 (1996) and election Nov 5, 1996; am HB 2848 (2002) and election Nov
5, 2002]
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:
- 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.
- 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.
- 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.
- Bonds issued under special improvement statutes when the
only security for such bonds is the properties benefited or
improved or the assessments thereon.
- 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.
- 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.
- 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.
- 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.
- 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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