Senate Bill No. 452
(By Senators Hall and Barnes)
[Introduced January 30, 2012; referred to the Committee on the Judiciary; and then to the Committee on Finance.]
A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §11-13CC-1, §11-13CC-2, §11-13CC-3, §11-13CC-4, §11-13CC-5, §11-13CC-6, §11-13CC-7, §11-13CC-8, §11-13CC-9 and §11-13CC-10, all relating to creating the Taxpayer’s Bill of Rights Act; providing a preferred interpretation of the act; requiring voter approval to increase governmental spending or debt; requiring elections; setting forth election provisions; requiring summaries of ballot issues be mailed to voters; providing exceptions; providing for emergency reserves; providing for emergency taxes; providing spending limits; providing revenue limits; defining terms; and providing for civil suits and judicial review.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §11-13CC-1, §11-13CC-2, §11-13CC-3, §11-13CC-4, §11-13CC-5, §11-13CC-6, §11-13CC-7, §11-13CC-8, §11-13CC-9 and §11-13CC-10, all to read as follows:
ARTICLE 13CC. THE TAXPAYER’S BILL OF RIGHTS ACT.
§11-13CC-1. Short title.
This article shall be known and may be cited as the “Taxpayer’s Bill of Rights Act.”
§11-13CC-2. General provisions.
The preferred interpretation of this article 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. Other limits on state and its subdivisions revenue, spending and debt may be weakened only by future voter approval. Individual or class action enforcement suits may be filed and shall have the highest civil priority of resolution. Successful plaintiffs are allowed costs and reasonable attorney fees, but the state and its subdivisions are not, unless a suit against it be ruled frivolous. Revenue collected, kept, or spent illegally since four full fiscal years before a suit is filed shall be refunded with ten percent annual simple interest from the initial conduct. Subject to judicial review, the state and its subdivisions may use any reasonable method for refunds under this article, including temporary tax credits or rate reductions. Refunds need not be proportional when prior payments are impractical to identify or return. When annual state or its subdivisions revenue is less than annual payments on general obligation bonds, pensions, and final court judgments, sections five and eight of this article shall be suspended to provide for the deficiency.
For the purpose of this article:
(1) "Ballot issue" means a nonrecall petition or referred measure in an election.
(2) "Emergency" excludes economic conditions, revenue shortfalls, or state or its subdivisions salary or fringe benefit increases.
(3) "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.
(4) "Fiscal year spending" means all state or its subdivisions expenditures and reserve increases except, as to both, those for refunds made in the current or next fiscal year or those from gifts, federal funds, collections for another government, pension contributions by employees and pension fund earnings, reserve transfers or expenditures, damage awards or property sales.
(5) "Inflation" means the percentage change in the United States Bureau of Labor Statistics Consumer Price Index for Charleston, all items, all urban consumers, or its successor index.
(6) "Local growth" means the percentage change in county student enrollment.
(7) "State and/or its subdivisions" means the State of West Virginia, its political subdivisions and county and municipal governments.
§11-13CC-4. Elections; general provisions.
(a) Ballot issues shall be decided in a state general election or on the first Tuesday in November of even-numbered years. Except for petitions, bonded debt, or charter or constitutional provisions, the state and its subdivisions may consolidate ballot issues and voters may approve a delay of up to four years in voting on ballot issues. State or its subdivisions actions taken during such a delay may not extend beyond that period.
(b) At least thirty days before a ballot issue election, the state and its subdivisions shall mail at the least cost, and as a package where the state and its subdivisions 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 state and its subdivisions may coordinate this mailing required in order to save mailing costs. Titles shall have this order of preference: "NOTICE OF ELECTION TO INCREASE TAXES/TO INCREASE DEBT/ON A CITIZEN PETITION/ON A REFERRED MEASURE." Except for the state and its subdivisions voter-approved additions, notices shall include only: (1) The election date, hours, ballot title, text, and local election office address and telephone number; (2) for the proposed state or its subdivisions tax or bonded debt increases, the estimated or actual total of the state and its subdivisions fiscal year spending for the current year and each of the past four years, and the overall percentage and dollar change; (3) for the first full fiscal year of each proposed state or its subdivisions tax increase, the state or its subdivisions estimates of the maximum dollar amount of each increase and of the state or its subdivisions fiscal year spending without the increase; (4) for the proposed state or its subdivisions bonded debt, its principal amount and maximum annual and total the state or its subdivisions repayment cost, and the principal balance of the total current state or its subdivisions bonded debt and its maximum annual and remaining total of the state or its subdivisions repayment cost; and (5) two summaries, up to five hundred words each, one for and one against the proposal, of written comments filed with the election officer by forty-five 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.
(c) Except by later voter approval, if a tax increase or fiscal year spending exceeds any estimate in subdivision (3), subsection (b) of this section for the same fiscal year, the tax increase is thereafter reduced up to one hundred percent in proportion to the combined dollar excess, and the combined excess revenue refunded in the next fiscal year. State or its subdivisions bonded debt shall not issue on terms that could exceed its share of its maximum repayment costs in subdivision (4), subsection (b) of this section. Ballot titles for tax or bonded debt increases shall begin, "SHALL (STATE or POLITICAL SUBDIVISION) TAXES BE INCREASED (first, or if phased in, final, full fiscal year dollar increase) ANNUALLY" or "SHALL (STATE or POLITICAL SUBDIVISION) DEBT BE INCREASED (principal amount), WITH A REPAYMENT COST OF (maximum total the state or its subdivisions cost)."
§11-13CC-5. Required elections.
Starting November 4, 2014, the state and its subdivisions must have voter approval in advance for: (1) Unless sections two or seven of this article applies, any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, or a tax policy change directly causing a net tax revenue gain to the state or its subdivisions; and (2) except for refinancing the state or its subdivisions bonded debt at a lower interest rate or adding new employees to existing the state or its subdivisions pension plans, creation of any multiple-fiscal year direct or indirect the state or its subdivisions debt or other financial obligation whatsoever without adequate present cash reserves pledged irrevocably and held for payments in all future fiscal years.
§11-13CC-6. Emergency reserves.
To use for declared emergencies only, the state and each of its subdivisions shall reserve for 2013, one percent or more, for 2014, two percent or more, and for all later years three percent or more of its fiscal year spending excluding bonded debt service. Unused reserves apply to the next year's reserve.
§11-13CC-7. Emergency taxes.
This section grants no new taxing power. Emergency property taxes are prohibited. Emergency tax revenue is excluded for purposes of subsection (c), section four and section eight of this article even if later ratified by voters. Emergency taxes shall also meet all of the following conditions: (1) A two-thirds majority of the members of both the House of Delegates and the Senate or of a county or municipal government declares the emergency and imposes the tax by separate recorded roll call votes; (2) emergency tax revenue shall be spent only after emergency reserves are depleted, and shall be refunded within one hundred eighty days after the emergency ends if not spent on the emergency; and (3) a tax not approved on the next election date sixty days or more after the declaration shall end with that election month.
§11-13CC-8. Spending limits.
(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 after 2012. Population shall be determined by annual federal census estimates and such number shall be adjusted every decade to match the federal census.
(b) The maximum annual percentage change fiscal year spending equals inflation in the prior calendar year plus annual local growth, adjusted for revenue changes approved by voters after 2012 and subsection (b), section nine and section ten of this article reductions.
(c) The maximum annual percentage change in the state or its subdivisions’ property tax revenue equals inflation in the prior calendar year plus annual local growth, adjusted for property tax revenue changes approved by voters after 2012 and subsection (b), section nine and section ten of this article reductions.
(d) If revenue from sources not excluded from fiscal year spending exceeds these limits in dollars for that fiscal year, the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Initial state and its subdivisions’ bases are current fiscal year spending and 2012 property tax. Qualification or disqualification as an enterprise shall change the state or its subdivisions’ bases and future year limits. Future creation of state or its subdivisions bonded debt shall increase, and retiring or refinancing the state or its subdivisions bonded debt shall lower, fiscal year spending and property tax revenue by the annual debt service so funded. Debt service changes, reductions, section two and subsection (c), section four of this article refunds, and voter-approved revenue changes are dollar amounts that are exceptions to, and not part of, the state or its subdivisions base. Voter-approved revenue changes do not require a tax rate change.
§11-13CC-9. Revenue limits.
(a) New or increased transfer tax rates on real property are prohibited. No new state real property tax or local income tax shall be imposed. Neither an income tax rate increase nor a new state definition of taxable income shall apply before the next tax year. Any income tax law change after July 1, 2013, shall also require all taxable net income to be taxed at one rate, excluding refund tax credits or voter-approved tax credits, with no added tax or surcharge.
(b) The state and its subdivisions may enact cumulative uniform exemptions and credits to reduce or end business personal property taxes.
(c) Regardless of reassessment frequency, valuation notices shall be mailed annually and may be appealed annually, with no presumption in favor of any pending valuation. Past or future sales by a lender or government shall also be considered as comparable market sales and their sales prices kept as public records. Actual value shall be stated on all property tax bills and valuation notices and, for residential real property, determined solely by the market approach to appraisal.
§11-13CC-10. State mandates.
Except for public education kindergarten through grade twelve or as required of the state or its subdivisions by federal law, it may reduce or end its subsidy to any program delegated to it by the general assembly for administration. For current programs, the state may require ninety days notice and that the adjustment occur in a maximum of three equal annual installments.
NOTE: The purpose of this bill is to create the Taxpayer’s Bill of Rights Act. The bill provides a preferred interpretation of the act. The bill requires voter approval to increase governmental spending or debt. The bill requires elections and sets forth election provisions. The bill requires summaries of ballot issues be mailed to voters. The bill provides exceptions. The bill provides for emergency reserves and emergency taxes. The bill provides spending and revenue limits. The bill defines terms. The bill also provides for civil suits and judicial review.
This article is new; therefore, strike-throughs and underscoring have been omitted.