Dr. Hill asked that we promote and distribute the following model legislation to our respective states.
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State Sovereignty and Federal Tax Escrow Account
The _____________ League of the South encourages legislators in the State of _____________ to read, study, and sponsor the following “State Sovereignty and Federal Tax Escrow Account” bill. It is a first step toward the reassertion of State Sovereignty and independence.
1. Name of sponsoring Senator or Representative
SB or HB _______
A BILL TO BE ENTITLED AN ACT
To enact, pursuant to the amendment of the Official Code of the State of ___________, the State Sovereignty and Federal Tax Escrow Account Act;” to provide legislative findings; to define certain terms; to properly define the legal geographic borders of the State of _____________; to create the Federal Tax Escrow Account in the State treasury; to provide that moneys collected by the State for payment to the federal government shall be paid into such fund; to provide that any private person liable for a federal tax shall pay such tax into such fund; to provide that should the federal government, including, but not limited to, the federal courts, act toward the State of ____________ or any of its citizens in a manner deemed unconstitutional by the ____________ State Legislature, the State treasury shall withhold a certain portion of the funds due the federal government; to provide that if the federal government takes any punitive action against the State in any manner for failure to comply with a federal statute or directive of any kind that the ____________ State Legislature deems unconstitutional, the State treasury shall withhold from payment a certain portion of the funds due the federal government; to provide sanctions for failure to comply with such provisions; to provide that State officials shall comply with such provisions without regard to any action taken by the federal government; to provide for a special session of the ____________ State Legislature; to provide that unconstitutional measures taken by the federal authorities shall constitute an action against the State of ____________ and shall be met with all necessary measures to safeguard the sovereignty of the state and the constitutional rights of its citizens; to provide for retroactive application; to provide for the expenditure of funds withheld from the federal government; to provide for other matters relative to the foregoing; to provide an effective date; to repeal all conflicting laws; and for other purposes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ____________
SECTION 1.
This article shall be known as the “State Sovereignty and Federal Tax Escrow Account Act.”
(a) The Constitution of the United States of America is a compact between the people of the sovereign States creating a general, or federal, government as their agent and endowing it with only enumerated powers. That general, or federal, government is not, and can never be, the sole authority in determining what powers were enumerated, or delegated, and what powers were reserved to the States and to the people thereof.
(b) The Tenth Amendment to the Constitution of the United States of America states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The ____________ State Legislature finds that the Tenth Amendment to the Constitution of the United States of America defines the entire scope of federal power as being limited to that specifically delegated in the said Constitution and no more.
(c) The ____________ State Legislature finds that the Congress of the United States has the power to lay and collect taxes pursuant only to clause 1 of Section 8 of Article 1; and clauses 4 and 5 of Section 9 of Article 1 of the Constitution of the United States of America.
(d) The ____________ State Legislature finds that the federal government, it agencies or agents, including the Congress of the United States, does not have the power under the Constitution of the United States of America to withhold from the States the benefits of those taxes defined in Section 1 (b) of this act by the use of federal mandates or other means that fall outside the scope of the powers delegated to the federal government by the Constitution of the United States of America.
(e) In consideration of the continuing unconstitutional federal mandates, directives, laws, court orders, and other usurpations that withhold the benefits of those taxes defined in Section 1 (b) of this act to the States, the State of ____________ hereby reasserts it claim of sovereignty pursuant to the original compact between the several States and the Tenth Amendment to the Constitution of the United States of America.
SECTION 2.
As used in the following sections of this code, the term:
(1) “Consumer tax” means any tax imposed by the federal government on any beer, liquor, wine, or similar alcoholic beverage, tobacco, gasoline, or any other consumer goods.
(2) “Excise tax” means any tax that forms a component of the State Highway Fund.
(3) “Federal Tax Escrow Account” means the escrow account described in this act.
(4) “Income tax” means any tax imposed by the taxing authorities of the federal government on incomes from whatever source derived.
(5) “Person” means natural persons, corporations, partnerships, limited liability companies, associations, and other legal entities.
(a) The Federal Tax Escrow Account is created in the State Treasury. All federal tax moneys collected by the State of ____________ on behalf of the federal government, or any of its agencies or agents, shall be deposited by the State Treasurer into the Federal Tax Escrow Account.
(b) The State Treasurer, on a quarterly basis, shall disburse the funds to the appropriate federal recipient if the ____________ State Legislature deems that the federal government, and its agencies or agents, have acted in a constitutional manner toward the State of ____________ or its citizens. If, as a result of State action taken pursuant to this article, the federal government imposes or mandates any financial sanctions or penalties or otherwise acts in a punitive manner toward the State of ____________ and its citizens, the State Treasurer shall withhold from payment all or part of the quarterly disbursement that otherwise would be disbursed or transferred to the appropriate federal recipient.
(c) Funds that are withheld by the State Treasurer from the federal recipient shall be transferred to and deposited in the State of ____________’s General Fund for general use.
SECTION 3.
(a) Any person liable for any federal excise, income, or consumer tax shall remit such tax when due along with a federal taxpayer identification number (if applicable) to the State Treasurer for deposit into the Federal Tax Escrow Account. A Social Security Number, according to statute, is not to be defined as a federal tax identification number.
(b) All moneys collected pursuant to Section 3. (a) of this code shall be transmitted to the State Treasurer, who, as a fiduciary agent, shall credit such funds to the Federal Tax Escrow Account on behalf of the person who remitted the tax.
(c) The State Treasurer shall submit to the federal Internal Revenue Service, or other such tax-collecting agencies that the Congress of the United States may from time to time establish, the names and tax identification numbers, where applicable (and excluding Social Security Numbers), of, and the amounts deposited by, persons liable for any federal excise, income, or consumer tax so that the Internal Revenue Service can credit the State of ____________’s taxpayers for federal tax obligations.
(d) Upon enactment of this code, no federal agent or agents may operate within the borders of the State of ____________, as defined in Section 4. (f) of this code, for the purpose of collecting taxes or of exacting punitive measures because of the exercise by the State of ____________ of any provision or provisions of this code.
(e) Except as provided for in Section 2.(b) of this code, the State Treasurer shall transfer at the end of each quarter the moneys held in the Federal Tax Escrow Account, less any interest earned on the deposit, to the appropriate federal recipient in payment of the tax obligations of those persons who remitted the tax funds to the State Treasurer.
(f) Should the federal government, or any of its agencies or agents, impose sanctions on or take punitive actions of any sort against the State of ____________ for failing to enact legislation called for by a mandate from the federal government, of any of its agencies or agents, a vote shall be taken in the ____________ State Legislature as to the constitutionality of the said sanctions or punitive actions. By a simple majority vote in each house of the ____________ State Legislature, if the federal government, or any of its agencies or agents, is found to be operating beyond the scope of its constitutionally delegated powers, and therefore unlawfully, the State Treasurer shall be notified in writing within two (2) days by the Attorney General of the vote of the each house of the ____________ State Legislature, and the ____________ State Legislature shall instruct the State Treasurer to carry out the procedure specified in Section 2.(b) of this code.
(g) It shall be determined by a simple majority vote in each house of the ____________ State Legislature when the federal government, or its agencies or agents, have properly rescinded or removed any sanctions or have ceased punitive actions against the State of ____________ and its citizens. Until such time as both houses of the ____________ State Legislature have determined by a simple majority vote in each that the federal government, or its agencies or agents, are operating within the scope of its constitutionally delegated powers, and therefore lawfully, the State Treasurer shall disburse or transfer no funds from the Federal Tax Escrow Account to the federal tax recipient.
(h) Any person liable for any federal excise, income, or consumer tax who fails to forward said federal tax moneys to the State Treasurer shall be subject to penalties assessed pursuant to the applicable laws and statutes of the State of ____________.
SECTION 4.
(a) The Governor, members of each house of the ____________ State Legislature, judges, the Attorney General, the Secretary of State, the State Treasurer, the State Auditor, and all other State officers and employees shall implement the provisions of this article regardless of any sanctions, threats, punitive action, federal court orders, or other measures brought to bear against them by any and all federal authorities and their agencies and agents.
(b) Should the federal government, or its agencies or agents, impose any sanctions on or execute any punitive action against the State of ____________ or any of its citizens while the ____________ State Legislature is not in session, the Governor shall call the ____________ State Legislature into special session for the purpose of implementing the appropriate provision of this article.
(c) Any action by the federal government, or its agencies or agents, including the President of the United States, the Congress of the United States, and the federal courts, against any person in the State of ____________ for compliance with the provisions of this article shall be considered a hostile and unconstitutional action against the State of ____________ and its citizens, and the State of ____________ shall by all necessary measures act to preserve its sovereignty.
(d) This article shall apply to all federal actions within the State of ____________, including, but not limited to, the collection of federal excise, income, and consumer taxes, upon the date, which it is enacted. Because the Constitution of the United States of America has been the fundamental law of the land since its ratification by the requisite nine (9) states in 1788, this article shall be enforced retroactively to repeal any unconstitutional federal laws, mandates, edicts, and court orders that have been imposed on the State of ____________ and its citizens.
(e) The ____________ State Legislature, by a simple majority vote in each house, shall determine how the moneys transferred from the Federal Tax Escrow Account to the State General Fund, including accrued interest, are to be used for the benefit of the people of the State of ____________. These moneys shall be used only for the benefit of the people of the State of ____________.
(f) The ____________ State Legislature shall, upon approval of this article, commission an official survey of the current geographical borders of the State of ____________. Upon completion of such survey, the ____________ State Legislature, by a simple majority vote in each house, shall declare the current borders of the State of ____________ inviolate against any action undertaken by the federal government, or its agencies or agents, to change or otherwise alter such borders. The federal government, or its agencies or agents, including the President of the United States, the Congress of the United States, and the federal courts, shall have no authority to determine the geographic borders of the State of ____________.
SECTION 5.
This Act shall become effective immediately upon its approval by the Governor or upon its becoming law without such approval.
SECTION 6.
All laws and portions of laws in conflict with this Act will be thereby repealed upon its approval
________________________________________
Revised Drafts: Prepared by The League of the South, 31 July 1999 & 29 July 2009. © Copyright 1999-2009, The League of the South, Inc. All rights reserved.
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