HF 4207

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
proposing an amendment to the Minnesota Constitution, by adding an article XV;
providing for limits on state and local spending and tax increases.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin CONSTITUTIONAL AMENDMENTS PROPOSED.
new text end

new text begin An amendment to the Minnesota Constitution is proposed to the people. If the
amendment is adopted, a new article XV shall be added to read as follows:
new text end

new text begin ARTICLE XV
new text end new text begin TAXPAYER'S BILL OF RIGHTS
new text end

new text begin Section 1. new text end

new text begin This section takes effect July 1, 2007. Its preferred interpretation shall
reasonably restrain most of the growth of government. All provisions are self-executing
and severable and supersede conflicting state constitutional, state statutory, charter, or
other state or local provisions. Individual or class action enforcement suits may be filed
and shall have the highest civil priority of resolution. Successful plaintiffs shall be
awarded costs and reasonable attorney fees, but a district shall not be awarded costs and
reasonable attorney fees unless a suit against it is ruled frivolous. Revenue collected, kept,
or spent illegally since four full fiscal years before a suit is filed shall be refunded with 12
percent annual simple interest from the initial conduct. Subject to judicial review, districts
may use any reasonable method for refunds under this section, including temporary tax
credits or rate reductions. Refunds need not be proportional when prior payments are
impractical to identify or return. Other limits on district revenue, spending, and debt may
be weakened only by future voter approval in the district that enacted the limit. Only
when annual district revenue is less than annual payments on general obligation bonds,
pensions, and final court judgments, sections 4 and 6 shall be suspended to provide for the
deficiency. This article shall be strictly construed in favor of taxpayers and substantial
compliance and good faith are no defense.
new text end

new text begin Sec. 2. new text end

new text begin Within this article, the following terms have the meanings given them.
new text end

new text begin (a) "Ballot issue" means a petition or a referred measure in an election requesting
voter authorization to increase taxes, debt, or revenue as required under the provisions
of this article.
new text end

new text begin (b) "District" means the state or any local government, excluding enterprises.
new text end

new text begin (c) "Emergency" excludes economic conditions, revenue shortfalls, or district salary
or fringe benefit increases.
new text end

new text begin (d) "Enterprise" means a government-owned business authorized to issue its own
revenue bonds and receiving under ten percent of annual revenue in grants from all state
and local governments combined.
new text end

new text begin (e) "Fiscal year spending" means all district expenditures and reserve increases
except, as to both, those for refunds made in the current or next fiscal year or those from
private gifts, federal funds, collections for another government, pension contributions by
employees and pension fund earnings, reserve transfers or expenditures, or real property
sales.
new text end

new text begin (f) "Inflation" means the percentage change in the United States Bureau of Labor
Statistics Consumer Price Index for the midwest region, all items, all urban consumers, or
its successor index.
new text end

new text begin (g) "Local government" means a city, town, or any political subdivision with
authority to levy property taxes, except a school district.
new text end

new text begin (h) "Local growth" for a local government means a net percentage change in
actual value of all real property in a district from construction of taxable real property
improvements, minus destruction of similar improvements, and additions to, minus
deletions from, taxable real property.
new text end

new text begin (i) "Population" means the population established by the federal census, by a special
census conducted by the United States, or by a population estimate by the Metropolitan
Council, state demographer, or other body or official as established by law, whichever is
the most recent for the preceding calendar year.
new text end

new text begin new text end

new text begin Sec. 3. new text end

new text begin (a) Ballot issues shall be decided in a general election on the first Tuesday after
the first Monday in November.
new text end

new text begin (b) At least 30 days before a ballot issue election, districts shall mail at the least cost,
and as a package where districts with ballot issues overlap, a titled notice or set of notices
addressed to "All Registered Voters" at each address of one or more active registered
electors. The wording listed immediately above each ballot title shall state the first
appropriate one of the following headings: "NOTICE OF ELECTION TO INCREASE
TAXES ON A CITIZEN PETITION/ON A REFERRED MEASURE." Notices shall
include only:
new text end

new text begin (1) the election date and hours; ballot title; text of any statute, ordinance, or other
law being adopted or amended in relation to, or as a result of, the ballot issue; and the
local election office address and telephone number;
new text end

new text begin (2) for proposed district tax or tax increase, the estimated or actual total of district
fiscal year spending for the current year and each of the past four years, and the overall
percentage and dollar change;
new text end

new text begin (3) for the first full fiscal year of each proposed district tax increase, district estimates
of the maximum dollar amount of each increase and of district fiscal year spending
without the increase;
new text end

new text begin (4) two summaries, up to 500 words each, one for and one against the proposal,
of written comments filed with the election officer at least 45 days before the election.
No summary shall mention names of persons or private groups, nor any endorsements
of or resolutions against the proposal. Petition representatives following these rules
shall write this summary for their petition. The election officer shall maintain and
accurately summarize all other relevant written comments filed in good faith and not as a
counterproductive or irrelevant argument.
new text end

new text begin (c) Except by later voter approval, if a tax increase or if fiscal year spending exceeds
any estimate in paragraph (b), clause (3), for the same fiscal year, the tax increase is
thereafter reduced up to 100 percent in proportion to the combined dollar excess, and the
combined excess revenue deposited under section 6, paragraph (d). Ballot titles for tax
increases shall begin, "SHALL (DISTRICT) TAXES BE INCREASED (first, or if phased
in, final, full fiscal year dollar increase) ANNUALLY...?" Omissions and misstatement
of the information required in this paragraph and paragraph (b), or a numerical variance
greater than five percent from the true amounts, shall invalidate the ballot issue; strict
compliance is required. There shall be a 100-word limit on ballot titles.
new text end

new text begin Sec. 4. new text end

new text begin Unless section 1 or 5 applies, districts must have voter approval in advance
for any new tax, tax rate increase, or extension of an expiring tax; or a tax policy change
directly causing a net tax revenue gain to any district.
new text end

new text begin Sec. 5. new text end

new text begin This section grants no new taxing power. Emergency property and income tax
revenue is excluded for purposes of sections 3, paragraph (c), and 6, even if later ratified
by voters. Emergency taxes shall also meet all of the following conditions:
new text end

new text begin (a) A three-fourths majority of the members of each house of the legislature or the
governing body of a local district declares the emergency and imposes the tax or tax
increase of any type defined in section 4 or otherwise by separate recorded roll call votes.
new text end

new text begin (b) Emergency tax revenue shall be spent only after reserves are depleted, and shall
be refunded within 180 days after the emergency ends if not spent on the emergency.
new text end

new text begin (c) An emergency tax or tax increase not approved on the next election date 60 days
or more after the declaration shall end with that election month.
new text end

new text begin Sec. 6. new text end

new text begin (a) The maximum annual percentage change in state fiscal year spending
equals inflation plus the percentage change in state population in the prior calendar year,
adjusted for revenue changes approved by voters. The percentage change in population
cannot be less than zero.
new text end

new text begin (b) The maximum annual percentage change in each local district's fiscal year
spending equals inflation in the prior calendar year plus annual local growth, adjusted for
revenue changes approved by voters and the reductions in section 7. Annual local growth
cannot be less than zero.
new text end

new text begin (c) The maximum annual percentage change in each district's property tax revenue
equals inflation in the prior calendar year plus annual local growth, adjusted for property
tax revenue changes approved by voters and the reductions in section 7. Levies shall be
reduced in advance to prevent collection in violation of this paragraph.
new text end

new text begin (d) Unless voters approve a revenue change, as an offset, if revenue from sources not
excluded from fiscal year spending exceeds these limits in dollars for the two previous
fiscal years, the excess must be deposited in a reserve and cash flow account until the
amounts in the account exceed .. percent of the spending limit. Excess revenues exceeding
that amount must be deposited in an account dedicated to tax reform and tax and debt
reductions. Funds in the tax reform and tax and debt reduction account must be expended
within two fiscal years after the required date of deposit in the fund. Initial district bases
are 2007 fiscal year spending and property taxes payable in 2007. Retiring or refinancing
debt shall lower fiscal year spending by the annual debt service so funded. Debt service
changes and voter-approved revenue changes are dollar amounts that are exceptions to,
and not part of, any district base. Voter-approved revenue changes do not require a tax
rate change. Voter-approved revenue increases are specific, fixed dollar amounts in only
the amount listed at the beginning of the ballot title as required in section 3 and, in later
years, shall not be adjusted for inflation, growth, or other factors. Voter-approved revenue
decreases shall lower the spending limits by the revenue decrease each year they exist.
Changes and adjustments referred to in this section may be increases or decreases.
new text end

new text begin (e) Each district shall treat all its excess revenue as follows:
new text end

new text begin Elections on district retention of excess revenue shall be referred by a 3/4ths vote of the
members of both houses of the legislature or of the local elected governing body and shall
occur in November only. Voter approval shall retain a specific, fixed dollar amount from
the prior year only. Ballot issues to retain current or future excess revenue are prohibited.
In computing excess revenue, revenue increases approved by voters after July 1, 2007,
shall adjust spending limits only by the specific, fixed dollar amount constitutionally
required to begin that ballot title. Ballot language shall state these words only:
new text end

new text begin "SHALL (DISTRICT) TAXES BE INCREASED (specific, fixed dollar amount) BY
LETTING THAT GOVERNMENT SPEND LAST YEAR'S EXCESS REVENUE
INSTEAD OF DEDICATING IT TO BUDGET RESERVES AND/OR TAX OR
DEBT REDUCTION?"
new text end

new text begin Sec. 7. new text end

new text begin Except for public education through grade 12 or as required of a local district
by federal law, a local district may reduce or end its subsidy to any program delegated to
it by the legislature for administration. For current programs, the state may require 90
days' written notice and that the adjustment occur in a maximum of three equal annual
installments. For purposes of this section, any district is considered a separate government
and not a political subdivision or part of the state.
new text end

new text begin Sec. 8. new text end

new text begin A school district shall not increase a tax rate or tax levy except by approval of a
majority of voters casting votes in the school district at a general election.
new text end

Sec. 2. new text begin SUBMISSION TO VOTERS.
new text end

new text begin The proposed amendment must be submitted to the people at the 2006 general
election. The question submitted shall be:
new text end

new text begin "Effective July 1, 2007, shall the Minnesota Constitution be amended to limit
increases in government spending and taxes, unless approved by the voters, as follows:
new text end

new text begin (1) for state spending, to a percentage no greater than the percentage increases in
inflation and population;
new text end

new text begin (2) for local government spending, other than school districts, to a percentage
increase no greater than the percentage increases in inflation and in the taxable real
property base; and
new text end

new text begin (3) for state and local governments, to limit tax increases and prohibit new taxes?
new text end

new text begin Yes ....... new text end

new text begin No ......." new text end