1.1 	A bill for an act
1.2 	relating to taxes; proposing an amendment to the
1.3 	Minnesota Constitution, article X, by adding a
1.4 	section; allowing a reverse referendum to rescind
1.5 	increases in certain state tax revenues; allowing a
1.6 	refund of rescinded revenue increases; appropriating
1.7 	money; proposing coding for new law in Minnesota
1.8 	Statutes, chapters 16A; 290.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. CONSTITUTIONAL AMENDMENT.
 1.11 	An amendment to the Minnesota Constitution is proposed to
1.12 	the people.  If the amendment is adopted, a section will be
1.13 	added to article X, to read as follows:
1.14 	Sec. 9.  Notwithstanding section 1, a law may be enacted to
1.15 	allow for a referendum or reverse referendum regarding increases
1.16 	in state tax rates or state tax revenue collections.

1.17 	Sec. 2. SUBMISSION TO VOTERS.
 1.18 	The proposed amendment in section 1 must be submitted to
1.19 	the people at the 2006 general election.  The question submitted
1.20 	shall be:
1.21 	"Shall the Minnesota Constitution be amended to authorize
1.22 	the enactment of a law allowing voters to approve or disapprove
1.23 	of increases in state tax rates or state tax revenue collections? 
1.24 	Yes .......
1.25 	                                   No ........" 

1.26 	Sec. 3. [16A.104] REVERSE REFERENDUMS TO RESCIND REVENUE
1.27 	INCREASES.
2.1 		Subdivision 1.Duties of commissioner. (a) Each year
2.2 	within 21 days after the close of the regular legislative
2.3 	session, the commissioner shall prepare an estimate of the
2.4 	revenues that will be received in the current and next fiscal
2.5 	years under the individual income tax and the general sales tax
2.6 	including the sales tax on motor vehicles.  If the estimated
2.7 	amount of revenue for the next fiscal year for the taxes is
2.8 	estimated to exceed the revenues for the current fiscal year by
2.9 	a percentage greater than the sum of the percentage increase in
2.10 	the implicit price deflator and the percentage increase in the
2.11 	number of households in the state, the commissioner shall mail
2.12 	notices to each individual income taxpayer (a married couple
2.13 	filing a joint return must be treated as two filers), each
2.14 	holder of a sales tax permit, and each payer of use tax, who
2.15 	filed and paid tax to the state in the previous calendar year
2.16 	within 30 days after the close of the legislative session.  To
2.17 	the extent reasonably possible, the commissioner shall mail only
2.18 	one notice and postcard to an individual or business.  The
2.19 	notices must:
2.20 	(1) be written in clear, plain, and simple language;
2.21 	(2) state the estimated amount of the increase in state
2.22 	individual income and sales and use tax over the threshold
2.23 	increase both in total and on a per capita basis;
2.24 	(3) inform the recipient of the right to return the
2.25 	attached postcard to trigger an election as to whether the
2.26 	increase should be rebated under section 290.0676, the required
2.27 	time limit for returning the postcard, and describe the
2.28 	estimated rebate if the voters approve it;
2.29 	(4) include a postcard, preaddressed to the secretary of
2.30 	state, upon which the recipient can indicate an intent to
2.31 	require an election on the question of whether to rebate the
2.32 	increase under section 290.0676.
2.33 	(b) For purposes of this section, "percentage increase in
2.34 	the implicit price deflator" means the percentage increase in
2.35 	the implicit deflator for government consumption and gross
2.36 	investment for state and local governments prepared by the
3.1 	Bureau of Economic Analysis of the United States Department of
3.2 	Commerce for the 12-month period ending on March 31 of the
3.3 	current calendar year.  For purposes of this section, the
3.4 	"percentage increase in the number of households" means the
3.5 	percentage increase in the number of households in the state for
3.6 	the most recently available calendar year as of March 31 of the
3.7 	current calendar year.
3.8 		Subd. 2.Reverse referendum. The secretary of state
3.9 	shall tabulate the postcards returned within 45 days after the
3.10 	mailing deadline under subdivision 1, but no later than
3.11 	September 15.  If the total number of postcards received that
3.12 	indicate an intent to require an election to be held exceeds ten
3.13 	percent of the taxpayers notified, an election must be held on
3.14 	whether the increase is to be refunded under section 290.0676.
3.15 		Subd. 3.Election. The election must be held on the
3.16 	first Tuesday after the first Monday in November.  If a majority
3.17 	of the voters at the election do not vote to sustain the tax
3.18 	increase, the increase must be refunded as provided in section
3.19 	290.0676.
3.20 		Subd. 4.Form of petition and ballot question. The
3.21 	commissioner of finance shall prepare the form of the question
3.22 	to be submitted to the voters.
3.23 	
EFFECTIVE DATE. This section is effective after approval
3.24 	by the voters of the constitutional amendment in section 1.

3.25 	Sec. 4. [290.0676] REFUND OF RESCINDED REVENUE
3.26 	INCREASES.
3.27 		Subdivision 1.Credit allowed. If a majority of the
3.28 	voters at an election under section 16A.104, subdivision 3, do
3.29 	not vote to sustain the tax increase, an individual is allowed a
3.30 	credit against the tax imposed by this chapter equal to the sum
3.31 	of the allowable dollar amounts, determined under subdivision 3,
3.32 	for each of the following:
3.33 	(1) the taxpayer;
3.34 	(2) the taxpayer's spouse for a credit claimed on a joint
3.35 	return; and 
3.36 	(3) each dependent of the taxpayer.
4.1 		Subd. 2.Definition. For purposes of this section, a
4.2 	"dependent" means a dependent as defined in section 152 of the
4.3 	Internal Revenue Code.
4.4 		Subd. 3.Determination of allowable amount. (a) If a
4.5 	reverse referendum is to be submitted to the voters under
4.6 	section 16A.104, the commissioner shall estimate the total
4.7 	number of filers, spouses, and dependents for the current
4.8 	taxable year.
4.9 	(b) The allowable amount for the taxable year equals the
4.10 	increase in revenues published in the State Register under
4.11 	section 16A.104, divided by the number estimated under paragraph
4.12 	(a).
4.13 		Subd. 4.Credit refundable. If the claimant is eligible
4.14 	to receive a credit that is larger than the claimant's tax
4.15 	liability under this chapter, the commissioner shall refund the
4.16 	excess to the claimant.
4.17 		Subd. 5.Dependent barred from claiming own credit. No
4.18 	credit may be paid to an individual claimed as a dependent on
4.19 	the federal tax return of another individual.
4.20 		Subd. 6.Tax forms. If the issue is submitted to the
4.21 	voters under section 16A.104, the commissioner shall include the
4.22 	credit in the forms and tax instructions.  After the results of
4.23 	the vote have been certified, the commissioner shall undertake
4.24 	efforts to publicize whether or not the credit is available for
4.25 	the taxable year.  This may include mailing a notice to each
4.26 	taxpayer, advertising in print or electronic media, or other
4.27 	measures.
4.28 		Subd. 7.Appropriation. An amount sufficient to pay the
4.29 	refunds required by this section is appropriated to the
4.30 	commissioner from the general fund.
4.31 	
EFFECTIVE DATE. This section is effective after approval
4.32 	by the voters of the constitutional amendment in section 1.