Revision: June 8, 2011, midnight
SB 2 – AS AMENDED BY THE HOUSE
03/30/11 1149s
1June2011… 1978h
2011 SESSION
10/01
SENATE BILL 2
AN ACT relative to adoption of tax caps by cities, towns, and other political subdivisions.
SPONSORS: Sen. Boutin, Dist 16; Sen. Bradley, Dist 3; Sen. Bragdon, Dist 11; Sen. Gallus, Dist 1; Sen. Odell, Dist 8; Sen. Barnes, Jr., Dist 17; Sen. De Blois, Dist 18; Sen. Forsythe, Dist 4; Sen. Groen, Dist 6; Sen. Lambert, Dist 13; Sen. Sanborn, Dist 7; Sen. White, Dist 9; Rep. Infantine, Hills 13; Rep. Greazzo, Hills 17; Rep. Gagne, Hills 13; Rep. Gonzalez, Hills 17; Rep. W. Hutchinson, Hills 9
COMMITTEE: Public and Municipal Affairs
This bill allows cities and towns under a charter, and towns, school districts, and other political subdivisions under the municipal budget act to adopt a tax cap to limit increases to the amount to be raised by taxes in the annual budget.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/30/11 1149s
1June2011… 1978h
11-0413
10/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to adoption of tax caps by cities, towns, and other political subdivisions.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Findings; Intent. The general court finds that:
I. There is a need to enact enabling legislation to allow the citizens of New Hampshire to adopt a tax cap either in their charters or at their town meetings.
II. A simple process for towns and other political subdivisions to enact a tax cap is to limit the amount of money to be raised by taxes by the governing body at the local level.
III. The general court hereby proposes that in towns and districts adopting a tax cap the estimated amount of taxes to be raised for the fiscal year shall not exceed the taxes raised for the prior year by a percentage or fixed amount as determined by the legislative body.
2 New Paragraph; City Charters; Vote. Amend RSA 49-C:12 by inserting after paragraph II the following new paragraph:
III. Notwithstanding any contrary provision in paragraph I, the adoption of an override threshold provision to a tax cap included in a charter pursuant to RSA 49-C:33, I(d) shall provide for a supermajority vote of the elected body to adopt the annual budget.
3 New Subparagraph; City Charters; Optional Provisions; Tax Cap Added. Amend RSA 49-C:33, I by inserting after subparagraph (c) the following new subparagraph:
(d) A limit on the annual spending increases that increase the amount raised by taxes under the city budget adopted pursuant to RSA 49-C:23. Such a tax cap shall provide for an override threshold on a vote to exceed the limit on annual increases which shall be by a supermajority as determined in the charter. A tax cap provision in the city charter may provide for specific exclusions for dedicated, enterprise, or self-supporting funds or accounts, capital reserve funds, grants, or revenue from sources other than local taxes.
4 Town Charters; Optional Matters; Tax Cap. Amend RSA 49-D: 3, I(e) to read as follows:
(e) Other matters of local concern may be included in a charter including, but not limited to, conflict of interest provisions which shall be at least as strict as those established in the general laws, citizen powers of initiative, referendum and recall as described in RSA 49-C, [and] the adoption and periodic review of an administrative code, a merit personnel system, a purchasing system, and a town investment policy, and the adoption of a tax cap limiting the annual increases in amounts raised by taxes under the town budget. Such tax cap shall include an override threshold on a vote to exceed the limit on annual increases which shall be by a supermajority as determined in the charter. Such tax cap may specifically exclude certain dedicated, enterprise, or self-supporting funds or accounts, capital reserve funds, grants, or revenue from sources other than local taxes.
5 Municipal Budget Law; Application. Amend RSA 32:2 to read as follows:
32:2 Application. RSA 32:1-13, shall apply to all towns, school districts, cooperative school districts, village districts, and any other municipal entities, including those created pursuant to RSA 53-A or 53-B, which adopt their budgets at an annual meeting of their voters, except RSA 32:5-b, which shall apply only in those towns or districts adopting that section pursuant to RSA 32:5-c. RSA 32:14-23, concerning budget committees, shall apply only in those towns or districts adopting that section pursuant to RSA 32:14, I, and shall apply automatically in school districts or village districts located wholly within towns adopting that section.
6 New Sections; Local Tax Cap; Adoption of Local Tax Cap. Amend RSA 32 by inserting after section 5-a the following new sections:
32:5-b Local Tax Cap. Upon adoption under RSA 32:5-c, the following shall apply:
I. In a town or district that has adopted this section, the estimated amount of local taxes to be raised for the fiscal year, as shown on the budget certified by the governing body or the budget committee and posted with the warrant for the annual meeting pursuant to RSA 32:5, shall not exceed the local taxes raised for the prior year, as shown on the same budget, by more than the tax cap authorized when this section was adopted.
II. The tax cap shall be either a fixed dollar amount or a fixed percentage applied to the amount of local taxes raised by the town or district for the prior fiscal year as reported to the department of revenue administration.
III. The legislative body may override the cap by the usual procedures applicable to annual meetings and deliberative sessions of the legislative body. The provisions of this section shall not limit the legislative body’s authority to increase or decrease the amount of any appropriation or the total amount of all appropriations.
32:5-c Adoption of Local Tax Cap.
I. The provisions of RSA 32:5-b may be adopted by any local political subdivision of the state whose legislative body raises and appropriates funds through an annual meeting. A 3/5 majority of those voting on the question shall be required to adopt the provisions of RSA 32:5-b. Only votes in the affirmative or negative shall be included in the calculation of the 3/5 majority.
II. The question shall be placed on the warrant of the annual meeting by the governing body or by petition under the procedures set out in RSA 39:3 or RSA 197:6.
III. A public hearing shall be held by the local governing body on the question at least 15 days, but not more than 30 days, before the question is to be voted on. In multi-town districts, a public hearing shall be held in each town embraced by the district, none of which shall be held on the same day. Notice of the hearing shall be posted in at least 2 public places in the town and at least 2 public places in each town of multi-town districts, and published in a newspaper of general circulation at least 7 days prior to the date of the hearing.
IV. The wording of the question shall be: “Shall we adopt the provisions of RSA 32:5-b, and implement a tax cap whereby the governing body (or budget committee) shall not submit a recommended budget that increases the amount to be raised by local taxes, based on the prior fiscal year’s actual amount of local taxes raised, by more than _______ (insert either a fixed dollar amount or a fixed percentage)?”
V. Voting on the question shall be by ballot, but the question shall not be placed on the official ballot used to elect officers, except in the case of a legislative body that uses an official ballot form of meeting under RSA 40:13 or under a charter adopted pursuant to RSA 49-D. Polls shall remain open and ballots shall be accepted by the moderator for a period of not less than one hour following the completion of discussion on the question. If a 3/5 majority of those voting on the question vote “yes,” RSA 32:5-b shall apply within the local political subdivision beginning with the following fiscal year and for all subsequent years until it is rescinded as provided in paragraph VI.
VI. Any local political subdivision which has adopted RSA 32:5-b may consider rescinding its action in the manner described in paragraphs I through V. The wording of the question shall be: “Shall we rescind the provisions of RSA 32:5-b, known as the tax cap, as adopted by the (local subdivision) on (date of adoption), so that there will no longer be a limit on increases to the recommended budget in the amount to be raised by local taxes?” A 3/5 majority of those voting on the question shall be required to rescind the provisions of this section, except in the case of repeal by charter enactment under RSA 49-D. Only votes in the affirmative or negative shall be included in the calculation of the 3/5 majority.
7 Home Rule Municipal Charters; Preservation. Amend RSA 49-B:13 to read as follows:
49-B:13 Separability; Preservation.
I. The provisions of this chapter and of charters created under this chapter are separable. If any portion of this chapter, or of any charter adopted under the provisions of this chapter, or if the application of the chapter or such charter to any person or circumstance shall be invalid, the remainder of the chapter or such charter or the application of such invalid portions to other persons or circumstances shall not be affected by such invalidation.
II. All town and city charters which have been adopted, revised, or amended; all charter commissions which have been properly established and elected; all elections properly held; and actions properly taken pursuant to such charters are hereby legalized, provided that such charters at the time of their adoption were not contrary to the general laws and constitution of the state.
II-a. All town or city charters which have been adopted, revised, or amended to include a tax or spending cap of any kind and all charter commissions which have been properly established and elected; all elections properly held; and all actions properly taken related to the tax or spending cap in such charters are hereby endorsed, ratified, validated, and legalized and are fully enforceable, without regard to whether such entities or actions were authorized by law at the time they were established or taken.
III. RSA 32 shall not apply to a municipality adopting, revising, or amending a charter under RSA 49-C or RSA 49-D unless that municipality adopts a budgetary town meeting, official ballot town meeting, an official ballot town council, or representative town meeting pursuant to RSA 49-D:3, I-a, II, II-a and III. Except that a municipality may adopt a tax cap as provided in RSA 49-C:33, I(d) or RSA 49-D:3, I(e), notwithstanding the provisions of RSA 32:5-b and RSA 32:5-c.
8 Effective Date. This act shall take effect upon its passage.