HOUSE BILL NO. 673

INTRODUCED BY B. DAVIES

A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING FOR THE RIGHT OF PEOPLE TO VOTE ON TAX ENACTMENTS AND INCREASES; PROVIDING DEFINITIONS; PROVIDING FOR ENFORCEMENT; AND PROVIDING A RETROACTIVE APPLICABILITY DATE."

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

NEW SECTION. Section 1. People's right to vote on taxes -- fairness in tax elections -- enforcement. (1) No new tax or tax increase may be enacted unless first approved by a majority of the electors voting on the measure in the geographic area subject to the tax.

(2) As used in this section, the following definitions apply:

(a) "Government" or "governmental unit" means the state or any political subdivision of the state, including but not limited to local governments, school districts, and other districts.

(b) "New tax" includes:

(i) any new tax imposed by a governmental unit; and

(ii) any tax extended to a geographic area not formerly subject to the tax.

(c) "Tax" means an ad valorem property tax, an income tax, or a sales or use tax imposed by a governmental unit and from which revenue accrues to government.

(d) "Tax increase" includes:

(i) an increase in the rate of a tax;

(ii) an expansion in the legal definition of a tax base;

(iii) an extension of an expiring tax;

(iv) complete or partial repeal of inflation indexing; or

(v) a required acceleration in payment of a tax.

(3) This section does not apply to:

(a) new taxes and tax increases approved by voter initiative;

(b) specific taxes dedicated to payment of public debt either existing on January 1, 1999, or authorized by the voters; or

(c) any specific emergency measure authorized by a vote of three-fourths of the members of each house of the legislature, subject to Article III, section 5, of the Montana constitution, and expiring not later than the end of the tax year during which the succeeding regular legislative session ends.

(4) In order to promote fairness in tax elections, each ballot issue may encompass only a single tax and may not encompass a general waiver or delegation of approval authority for future taxing power. If a proposed tax increase requires an election because it raises the base or rate, but does not raise additional revenue, the statement of implication must so declare.

(5) The legislature may raise the required level of voter turnout or the required percentage of voter approval.

(6) In order to promote effective enforcement of this section, any elector of a governmental unit has standing to sue for enforcement of this section against the governmental unit and its agents.

(7) This section must be liberally construed to subject a new tax or a tax increase to a fair referendum.

NEW SECTION. Section 2. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 15, chapter 1, and the provisions of Title 15, chapter 1, apply to [section 1].

NEW SECTION. Section 3. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109, to taxes imposed on or after January 1, 1999.

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