1.1                          A bill for an act 
  1.2             relating to taxation; providing for limits on state 
  1.3             spending increases; providing for rebate of excess 
  1.4             revenues; appropriating money; proposing coding for 
  1.5             new law in Minnesota Statutes, chapter 16A. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [16A.106] [SPENDING LIMITS; REFUNDS.] 
  1.8      Subdivision 1.  [SPENDING LIMITS; SPENDING BASE.] (a) No 
  1.9   money shall be appropriated out of the state treasury unless it 
  1.10  is within the spending limits set by this section.  
  1.11     (b) For purposes of this section: 
  1.12     (1) "state fiscal year spending" means all state 
  1.13  expenditures and reserve increases except refunds, reserve or 
  1.14  cash flow transfers or expenditures, or expenditures from gifts, 
  1.15  federal funds, collections from another government, pension 
  1.16  contributions by employees and pension fund earnings, damage 
  1.17  awards, litigation settlements, or property sales; 
  1.18     (2) "inflation" means the percentage change in the United 
  1.19  States Bureau of Labor Statistics Consumer Price Index for the 
  1.20  Minneapolis-St. Paul metropolitan area, all items, all urban 
  1.21  consumers, or its successor index in the calendar year prior to 
  1.22  the beginning of the fiscal year; and 
  1.23     (3) "disaster" and "emergency" have the meanings given them 
  1.24  in section 12.03, subdivisions 2 and 3. 
  1.25     (c) The maximum annual percentage change in state fiscal 
  2.1   year spending equals inflation plus the percentage change in 
  2.2   state population in the prior calendar year.  Population is 
  2.3   determined by the most recent federal census estimates and 
  2.4   adjusted every decade to match the federal census. 
  2.5      (d) Except as provided in subdivision 4, if revenue from 
  2.6   sources not excluded from fiscal year spending exceeds those 
  2.7   limits in dollars for that fiscal year, the excess shall be 
  2.8   refunded in the next calendar year as provided by subdivision 3. 
  2.9      Subd. 2.  [SPENDING BASE.] The initial state spending base 
  2.10  is state fiscal year spending for fiscal year 2005.  Future 
  2.11  creation of state bonded debt shall increase, and retiring in 
  2.12  financing district bonded debt shall lower fiscal year spending 
  2.13  by the annual debt service so funded.  Debt service changes, 
  2.14  reductions, and refunds are dollar amounts that are exceptions 
  2.15  to, and not part of, the spending base. 
  2.16     Subd. 3.  [REFUND PROCEDURE.] If a refund is required under 
  2.17  subdivision 1, the commissioner of finance shall designate the 
  2.18  amount to be refunded and the governor shall present a plan to 
  2.19  the legislature for the rebate.  The plan must provide for 
  2.20  payment of the refund during the calendar year.  The legislature 
  2.21  shall enact a plan for the rebate.  The commissioner shall 
  2.22  certify to the commissioner of revenue the amount available for 
  2.23  the refund.  The amount necessary to pay the refunds under this 
  2.24  section is appropriated from the general fund to the 
  2.25  commissioner of revenue. 
  2.26     Subd. 4.  [EXCEPTION FOR DISASTERS OR EMERGENCIES.] The 
  2.27  spending limit and requirement for rebate in subdivision 1 do 
  2.28  not apply to appropriations required by an emergency or to 
  2.29  mitigate or provide relief from a disaster.  Appropriations made 
  2.30  under this subdivision are not included in the state spending 
  2.31  base under subdivision 2. 
  2.32     <b>[EFFECTIVE DATE.]</b> This section is effective for the state 
  2.33  fiscal year beginning July 1, 2005, and thereafter.