1.1                          A bill for an act 
  1.2             proposing an amendment to the Minnesota Constitution 
  1.3             by adding an article XV; providing for limits on state 
  1.4             and local spending and tax increases. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [CONSTITUTIONAL AMENDMENT.] 
  1.7      An amendment to the Minnesota Constitution is proposed to 
  1.8   the people.  If the amendment is adopted, a new article XV shall 
  1.9   be added to read as follows: 
  1.10                             ARTICLE XV
  1.11                     TAXPAYER'S BILL OF RIGHTS 
  1.12     Section 1.  [GENERAL PROVISIONS.] 
  1.13     This section takes effect July 1, 2005.  Its preferred 
  1.14  interpretation shall reasonably restrain most of the growth of 
  1.15  government.  All provisions are self-executing and severable and 
  1.16  supersede conflicting state constitutional, state statutory, 
  1.17  charter, or other state or local provisions.  Other limits on 
  1.18  district revenue, spending, and debt may be weakened only by 
  1.19  future voter approval.  When annual district revenue is less 
  1.20  than annual payments on general obligation bonds, pensions, and 
  1.21  final court judgments, sections 4, paragraph (a), and 6 shall be 
  1.22  suspended to provide for the deficiency. 
  1.23     Sec. 2.  [TERM DEFINITIONS.] 
  1.24     Within this article the following terms have the meanings 
  1.25  given them. 
  2.1      (a) "Ballot issue" means a petition or a referred measure 
  2.2   in an election requesting voter authorization to increase taxes, 
  2.3   debt, or revenue as required under the provisions of this 
  2.4   article. 
  2.5      (b) "District" means the state, a home rule charter or 
  2.6   statutory city, a county, or a school district. 
  2.7      (c) "Emergency" excludes economic conditions, revenue 
  2.8   shortfalls, or district salary or fringe benefit increases. 
  2.9      (d) "Fiscal year spending" means all district expenditures 
  2.10  and reserve increases except, as to both, those for refunds made 
  2.11  in the current or next fiscal year or those from gifts, federal 
  2.12  funds, collections for another government, pension contributions 
  2.13  by employees and pension fund earning, reserve transfers or 
  2.14  expenditures, damage awards, or property sales. 
  2.15     (e) "Inflation" means the percentage change in the United 
  2.16  States Bureau of Labor Statistics Consumer Price Index for 
  2.17  Minnesota, all items, all urban consumers, or its successor 
  2.18  index. 
  2.19     (f) "Local growth" for a city or county means a net 
  2.20  percentage change in actual value of all real property in a 
  2.21  district from construction of taxable real property 
  2.22  improvements, minus destruction of similar improvements, and 
  2.23  additions to, minus deletions from, taxable real property.  For 
  2.24  a school district, it means the percentage change in its student 
  2.25  enrollment. 
  2.26     Sec. 3.  [ELECTION PROVISIONS.] 
  2.27     (a) Ballot issues shall be decided in a state general 
  2.28  election, biennial local district election, or on the first 
  2.29  Tuesday in November of odd-numbered years.  
  2.30     (b) At least 30 days before a ballot issue election, 
  2.31  districts shall mail at the least cost, and as a package where 
  2.32  districts with ballot issues overlap, a titled notice or set of 
  2.33  notices addressed to "All Registered Voters" at each address of 
  2.34  one or more active registered electors.  Titles shall have this 
  2.35  order of preference:  "NOTICE OF ELECTION TO INCREASE TAXES/TO 
  2.36  INCREASE DEBT/ON A CITIZEN PETITION/ON A REFERRED MEASURE."  
  3.1   Notices shall include only: 
  3.2      (1) the election date, hours, ballot title, text, and local 
  3.3   election office address and telephone number; 
  3.4      (2) for proposed district tax or bonded debt increases, the 
  3.5   estimated or actual total of district fiscal year spending for 
  3.6   the current year and each of the past four years, and the 
  3.7   overall percentage and dollar change; 
  3.8      (3) for the first full fiscal year of each proposed 
  3.9   district tax increase, district estimates of the maximum dollar 
  3.10  amount of each increase and of district fiscal year spending 
  3.11  without the increase; 
  3.12     (4) for proposed district bonded debt, its principal amount 
  3.13  and maximum annual and total district repayment cost, and the 
  3.14  principal balance of total current district bonded debt and its 
  3.15  maximum annual and remaining total district repayment cost; 
  3.16     (5) two summaries, up to 500 words each, one for and one 
  3.17  against the proposal, of written comments filed with the 
  3.18  election officer at least 45 days before the election.  No 
  3.19  summary shall mention names of persons or private groups, nor 
  3.20  any endorsements of or resolutions against the proposal.  
  3.21  Petition representatives following these rules shall write this 
  3.22  summary for their petition.  The election officer shall maintain 
  3.23  and accurately summarize all other relevant written comments. 
  3.24     (c) Except by later voter approval, if a tax increase or if 
  3.25  fiscal year spending exceeds any estimate in paragraph (b), 
  3.26  clause (3), for the same fiscal year, the tax increase is 
  3.27  thereafter reduced up to 100 percent in proportion to the 
  3.28  combined dollar excess, and the combined excess revenue refunded 
  3.29  in the next fiscal year.  District bonded debt shall not issue 
  3.30  on terms that could exceed its share of its maximum repayment 
  3.31  costs in paragraph (b), clause (4).  Ballot titles for tax or 
  3.32  bonded debt increases shall begin, "SHALL (DISTRICT) TAXES BE 
  3.33  INCREASED (first, or if phased in, final, full fiscal year 
  3.34  dollar increase) ANNUALLY...?" or "SHALL (DISTRICT) DEBT BE 
  3.35  INCREASED (principal amount), WITH A REPAYMENT COST OF (maximum 
  3.36  total district cost), ...?" 
  4.1      Sec. 4.  [REQUIRED ELECTIONS.] 
  4.2      Districts must have voter approval in advance for: 
  4.3      (a) Unless section 1 or 5 applies, any new tax, tax rate 
  4.4   increase, extension of an expiring tax, or a tax policy change 
  4.5   directly causing a net tax revenue gain to any district. 
  4.6      (b) Except for refinancing district bonded debt at a lower 
  4.7   interest rate, creation of any multiple-fiscal year direct or 
  4.8   indirect district debt or other financial obligation whatsoever 
  4.9   without adequate present cash reserves pledged irrevocably and 
  4.10  held for payments in all future fiscal years. 
  4.11     Sec. 5.  [EMERGENCY TAXES.] 
  4.12     This section grants no new taxing power.  Emergency tax 
  4.13  revenue is excluded for purposes of sections 3, paragraph (c), 
  4.14  and 6, even if later ratified by voters.  Emergency taxes shall 
  4.15  also meet all of the following conditions: 
  4.16     (a) A two-thirds majority of the members of each house of 
  4.17  the legislature or the governing body of a local district 
  4.18  declares the emergency and imposes the tax or tax increase by 
  4.19  separate recorded roll call votes. 
  4.20     (b) Emergency tax revenue shall be spent only after 
  4.21  reserves are depleted, and shall be refunded within 180 days 
  4.22  after the emergency ends if not spent on the emergency. 
  4.23     (c) A tax or tax increase not approved on the next election 
  4.24  date 60 days or more after the declaration shall end with that 
  4.25  election month. 
  4.26     Sec. 6.  [SPENDING LIMITS.] 
  4.27     (a) The maximum annual percentage change in state fiscal 
  4.28  year spending equals inflation plus the percentage change in 
  4.29  state population in the prior calendar year, adjusted for 
  4.30  revenue changes approved by voters.  Population shall be 
  4.31  determined by annual federal census estimates and shall be 
  4.32  adjusted every decade to match the federal census. 
  4.33     (b) The maximum annual percentage change in each local 
  4.34  district's fiscal year spending equals inflation in the prior 
  4.35  calendar year plus annual local growth, adjusted for revenue 
  4.36  changes approved by voters and the reductions in section 7. 
  5.1      (c) The maximum annual percentage change in each district's 
  5.2   property tax revenue equals inflation in the prior calendar year 
  5.3   plus annual local growth, adjusted for property tax revenue 
  5.4   changes approved by voters and the reductions in section 7. 
  5.5      (d) If revenue from sources not excluded from fiscal year 
  5.6   spending exceeds these limits in dollars for that fiscal year, 
  5.7   the excess shall be refunded in the next fiscal year unless 
  5.8   voters approve a revenue change as an offset.  Initial district 
  5.9   bases are 2004 fiscal year spending and 2004 property taxes 
  5.10  collected in 2005.  Future creation of district bonded debt 
  5.11  shall increase, and retiring or refinancing district bonded debt 
  5.12  shall lower, fiscal year spending and property tax revenue by 
  5.13  the annual debt service so funded.  Debt service changes, 
  5.14  refunds under section 3, paragraph (c), and voter-approved 
  5.15  revenue changes are dollar amounts that are exceptions to, and 
  5.16  not part of, any district base.  Voter-approved revenue changes 
  5.17  do not require a tax rate change. 
  5.18     Sec. 7.  [STATE MANDATES.] 
  5.19     Except for public education through grade 12 or as required 
  5.20  of a local district by federal law, a local district may reduce 
  5.21  or end its subsidy to any program delegated to it by the 
  5.22  legislature for administration.  For current programs, the state 
  5.23  may require 90 days' notice and that the adjustment occur in a 
  5.24  maximum of three equal annual installments. 
  5.25     Sec. 2.  [SUBMISSION TO VOTERS.] 
  5.26     The proposed amendment must be submitted to the people at 
  5.27  the 2004 general election.  The question submitted shall be: 
  5.28     "Effective July 1, 2005, shall the Minnesota Constitution 
  5.29  be amended to limit increases in government spending and taxes, 
  5.30  unless approved by the voters, as follows: 
  5.31     (1) for state spending, to a percentage no greater than the 
  5.32  percentage increases in inflation and population; 
  5.33     (2) for local government spending, to a percentage increase 
  5.34  no greater than the percentage increases in inflation and growth 
  5.35  in property value or, for school districts, student enrollment; 
  5.36  and 
  6.1      (3) for state and local governments, to limit tax increases 
  6.2   and prohibit new taxes? 
  6.3                                      Yes .......
  6.4                                      No ........"