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HF 649

as introduced - 87th Legislature (2011 - 2012) Posted on 02/24/2011 09:50am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to local sales taxes; allowing cities to impose a local sales tax if
certain criteria are met; amending Minnesota Statutes 2010, section 297A.99,
subdivision 1, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2010, section 297A.99, subdivision 1, is amended to
read:


Subdivision 1.

Authorization; scope.

(a) A political subdivision of this state may
impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) if
permitted by special law enacted prior to May 20, 2008, or (4) if the political subdivision
enacted and imposed the tax before January 1, 1982, and its predecessor provisionnew text begin , or if
the tax is allowed under subdivision 1a
new text end .

(b) This section governs the imposition of a general sales tax by the political
subdivision. The provisions of this section preempt the provisions of any special law:

(1) enacted before June 2, 1997, or

(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
provision from this section's rules by reference.

(c) This section does not apply to or preempt a sales tax on motor vehicles or a
special excise tax on motor vehicles.

(d) Until after May 31, 2010, a political subdivision may not advertise, promote,
expend funds, or hold a referendum to support imposing a local option sales tax unless
it is for extension of an existing tax or the tax was authorized by a special law enacted
prior to May 20, 2008.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for local sales taxes for which the
authorizing referendum is held after June 30, 2011.
new text end

Sec. 2.

Minnesota Statutes 2010, section 297A.99, is amended by adding a subdivision
to read:


new text begin Subd. 1a. new text end

new text begin General authority; certain cities. new text end

new text begin (a) A city, or a group of cities acting
under a joint powers agreement, may impose a local sales and use tax of up to one-half of
one percent without authorization under a special law provided that:
new text end

new text begin (1) imposition of the tax is approved by the voters of each city at a general election
pursuant to subdivision 3, paragraph (a); and
new text end

new text begin (2) all the conditions for adoption, use, and termination of the tax contained in this
subdivision and subdivisions 3 to 12 are met.
new text end

new text begin The authority under this section is in addition to any local sales tax authority
permitted under special law.
new text end

new text begin (b) If a city imposes a tax under paragraph (a) at a rate less than one-half of one
percent, the city may increase the rate upon approval of the voters at a general election up
to a rate of one-half of one percent without authorization under a special law provided that
all of the conditions of this subdivision are met.
new text end

new text begin (c) The proceeds of a tax imposed under this subdivision must be dedicated
exclusively to pay for specific capital projects approved by the voters in the authorizing
referendum. No proceeds may be used for normal maintenance or operating costs of a
facility or properties owned by a city or group of cities. The proceeds may be used to
pay for collecting and administering the tax, to pay all or part of the capital costs of the
development, acquisition, construction, expansion, and improvement, and to secure and
pay debt service on bonds or other obligations issued to finance capital costs of a regional
project, including the following:
new text end

new text begin (1) convention or civic center;
new text end

new text begin (2) public libraries;
new text end

new text begin (3) parks, trails, and recreational centers;
new text end

new text begin (4) overpasses, arterial and collector roads, or bridges, on, adjacent to, or connecting
to a Minnesota state highway;
new text end

new text begin (5) railroad overpasses or crossing safety improvements;
new text end

new text begin (6) flood control and protection;
new text end

new text begin (7) water quality projects to address groundwater and drinking water pollution
problems;
new text end

new text begin (8) court facilities;
new text end

new text begin (9) fire, law enforcement, or public safety facilities; or
new text end

new text begin (10) municipal buildings.
new text end

new text begin (d) At least three months prior to holding a referendum to impose the tax, a city must
provide to the commissioner of revenue a resolution approved by the city that shows that
the tax will fund a project that meets the requirements of paragraphs (a) to (c), the date on
which the referendum will be held, the maximum amount raised by the tax that may be
used for the specified project, excluding issuance and interest costs for any related bonds,
and the maximum time that the tax may be imposed. The commissioner shall certify that
the requirements under this subdivision are met and the city shall provide any additional
information on the commissioner's requests in order to make that determination. The
commissioner's decision is final.
new text end

new text begin (e) The question put to the voters at the referendum authorizing the vote must
include information on the specific project or projects to be funded by the proceeds of the
tax, the maximum amount of sales tax revenues that will be used to fund each project, not
including any issuance and interest costs for related bonds, and the maximum length of
time that the tax will be imposed, which must not exceed ten years from the date the initial
tax was imposed without regard to an increase in the rate. If the referendum is not held on
the date contained in the resolution, the authority for imposing the tax expires.
new text end

new text begin (f) A city may issue general obligation bonds to pay the costs of projects specified
in the referendum authorizing imposition of the tax. The approval of the question under
paragraph (e) meets the requirement for elector approval for issuance of bonds under
section 475.58, subdivision 1. The debt represented by the bonds must not be included in
computing any debt limitations applicable to the city, and the levy of taxes required by
section 475.61 to pay the principal or any interest on the bonds must not be subject to any
levy limitations or be included in computing or applying any levy limitation to the city.
new text end

new text begin (g) The tax, if enacted, expires when the specified revenue has been raised or the
maximum time in which the tax is in effect under the resolution is reached, whichever is
sooner. Any tax imposed under this subdivision must expire no later than ten years after
imposition from the date the initial tax was imposed without regard to an increase in the
rate. The governing board of the city may, by ordinance, terminate the tax at an earlier
date. A city must not impose a new local option sales and use tax until a previously
authorized one has been terminated.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for local sales taxes for which the
authorizing referendum is held after June 30, 2011.
new text end