Commonwealth Constitution : Article X


TAXATION AND PUBLIC FINANCE

 

Section 1: Public PurposeA tax may not be levied and an appropriation of public money may not be made, directly or indirectly, except for a public purpose. The legislature shall provide the definition of public purpose.
 
Source: Original provision (ratified 1977, effective 1978); amended by Second Const. Conv. Amend. 28 (1985).

 

Section 2: Report on Tax ExemptionsEvery five years the governor shall report to the legislature on the social, fiscal and economic impact of tax exemptions provided by law. The report may include recommendations by the governor on tax exemption policy or laws.

 

Source: Original provision, unaltered (ratified 1977, effective 1978).
 

Section 3: Public Debt AuthorizationPublic debt may not be authorized or incurred without the affirmative vote of two-thirds of the members in each house of the legislature.

 

Source: Original provision, unaltered (ratified 1977, effective 1978).

 

Section 4: Public Debt LimitationPublic indebtedness other than bonds or other obligations of the government payable solely from the revenues derived from a public improvement or undertaking may not be authorized in excess of ten percent of the aggregate assessed valuation of the real property within the Commonwealth. Public indebtedness may not be authorized for operating expenses of the Commonwealth government or its political subdivisions.

 

Source: Original provision, unaltered (ratified 1977, effective 1978).

 

Section 5: Real Property TaxesNo tax may be levied upon any owner-occupied single family residential, agricultural, or unimproved real property, unless approved by three-fourths of the votes cast in an election conducted in the senatorial district in which the tax is to be levied.

 

 

Section 6: Liquidation of DeficitsBefore October 1, 1985, the legislature shall adopt a seven-year plan in which the government operations deficit through fiscal year 1985 shall be retired in equal shares. If the legislature fails to adopt or adhere to the plan, any person may bring an action to require the government to reallocate its expenditures in accordance with a deficit reduction plan. If an operating deficit is incurred in future fiscal years, the government shall retire the deficit during the second consecutive fiscal year following the year.

 

 

Section 7: Government EmploymentIn the annual appropriations acts, the legislature shall establish ceilings on the number of persons that may be employed by each branch, department, agency, authority and public corporation of the Commonwealth to which public funds are appropriated. Except upon specific approval by joint resolution of the legislature, no public funds may be expended for personnel in excess of the ceilings so established.

 

 

Section 8: Control of Public FinanceThe Department of Finance or its successor department shall control and regulate the expenditure of public funds. The department shall promulgate regulations including accounting procedures that require public officials to provide full and reasonable documentation that public funds are expended for public purposes.

 

 

Section 9: Taxpayer's Right of ActionA taxpayer may bring an action against the government or one of its instrumentalities in order to enjoin the expenditure of public funds for other than public purposes or for a breach of fiduciary duty. The court shall award costs and attorney fees to any person who prevails in such an action in a reasonable amount relative to the public benefit of the suit.

 


Case Annotations: Mafnas v. Commonwealth, 2 N.M.I. 248--254, 260, 262, 263; Govendo v. Micronesian Garment Mfg., Inc., 2 N.M.I. 270--275, 276.


In decision reversing ruling that party lacked standing to bring action challenging Superior Court judge's right to hold office of Presiding Judge (on basis that judge was never appointed and confirmed to the office) as a taxpayer suit pursuant to N.M.I. Const. art. X, § 9, NMI Supreme Court would not remand for ruling on the merits because:

(1) the material facts were not in dispute;

(2) the question depended wholly on the construction of statutes; and
(3) the trial court had already implicitly ruled on the merits and dismissed the action with prejudice.

Mafnas v. Commonwealth, 2 N.M.I.248 (1991).

 

Section 10: Pension Obligation BondsUpon the affirmative vote of two-thirds of the members of each house of the Legislature, the Commonwealth may issue pension obligation bonds, the cumulative amount of which shall not exceed the Commonwealth's actuarially determined unfunded accrued liability to the Retirement Fund. The net proceeds of each bond issuance shall be deposited and invested along with other monies in a defined benefit plan trust fund administered by the Northern Mariana Islands Retirement Fund. The bonds issued under this section shall comply with Section 3 of this Article and shall be exempt from Section 4 of this Article.