HF 5336

as introduced - 93rd Legislature (2023 - 2024) Posted on 04/09/2024 11:06am

A bill for an act
relating to taxation; local sales and use; authorizing cities and counties to impose
local sales taxes for certain projects; establishing a local sales tax equalization
distribution; providing for state auditor oversight; appropriating money; amending
Minnesota Statutes 2022, section 297A.99, subdivision 3, by adding a subdivision;
Minnesota Statutes 2023 Supplement, section 297A.99, subdivision 1; proposing
coding for new law in Minnesota Statutes, chapter 297A; repealing Minnesota
Statutes 2023 Supplement, section 297A.99, subdivision 3a.

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

Section 1.

Minnesota Statutes 2023 Supplement, section 297A.99, subdivision 1, is
amended to read:

Subdivision 1.

Authorization deleted text begin ; scope deleted text end .

(a) A political subdivision of this state may impose
a general sales tax new text begin :
new text end

(1) new text begin under section 297A.9901;
new text end

new text begin (2) new text end under section 297A.9915 deleted text begin , (2) deleted text end new text begin ;
new text end

new text begin (3) new text end under section 297A.992 deleted text begin , (3) deleted text end new text begin ;
new text end

new text begin (4) new text end under section 297A.9925 deleted text begin , (4) deleted text end new text begin ;
new text end

new text begin (5) new text end under section 297A.993 deleted text begin , (5) deleted text end new text begin ;
new text end

new text begin (6) new text end if permitted by special law deleted text begin , deleted text end new text begin ; new text end or

deleted text begin (6) deleted text end new text begin (7) new text end if the political subdivision enacted and imposed the tax before January 1, 1982,
and its predecessor provision.

(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 deleted text begin , or deleted text end new text begin ;
new text end

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

new text begin (3) enacted before July 1, 2024.
new text end

(c) This section does not apply to or preempt a sales tax on motor vehicles. Beginning
July 1, 2019, no political subdivision may impose a special excise tax on motor vehicles
unless it is imposed under section 297A.993.

(d) A political subdivision may not advertise or expend funds for the promotion of a
referendum to support imposing a local sales tax and may only spend funds related to
imposing a local sales tax to:

(1) conduct the referendum;

(2) disseminate information included in the resolution adopted under subdivision 2, but
only if the disseminated information includes a list of specific projects and the cost of each
individual project;

(3) provide notice of, and conduct public forums at which proponents and opponents on
the merits of the referendum are given equal time to express their opinions on the merits of
the referendum;

(4) provide facts and data on the impact of the proposed local sales tax on consumer
purchases; and

(5) provide facts and data related to the individual programs and projects to be funded
with the local sales tax.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2022, section 297A.99, is amended by adding a subdivision to
read:

new text begin Subd. 2a. new text end

new text begin Scope. new text end

new text begin The provisions of this section only apply to a tax imposed and enacted
by special law. A political subdivision seeking to amend, extend, or otherwise change a tax
imposed and enacted before July 1, 2024, must do so pursuant to the requirements of section
297A.9901.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2022, section 297A.99, subdivision 3, is amended to read:

Subd. 3.

Legislative authority required before voter approval; requirements for
adoption, use, termination.

(a) A political subdivision must receive legislative authority
to impose a local sales tax before submitting the tax for approval by voters of the political
subdivision. Imposition of a local sales tax is subject to approval by voters of the political
subdivision at a general election. The election must be conducted at a general election within
the two-year period after the governing body of the political subdivision has received
authority to impose the tax. If the authorizing legislation allows the tax to be imposed for
more than one project, there must be a separate question approving the use of the tax revenue
for each project. Notwithstanding the authorizing legislation, a project that is not approved
by the voters may not be funded with the local sales tax revenue and the termination date
of the tax set in the authorizing legislation must be reduced proportionately based on the
share of that project's cost to the total costs of all projects included in the authorizing
legislation.

(b) The proceeds of the tax must be dedicated exclusively to payment of the construction
and rehabilitation costs and associated bonding costs related to the specific capital
improvement projects that were approved by the voters under paragraph (a).

(c) The tax must terminate after the revenues raised are sufficient to fund the projects
approved by the voters under paragraph (a).

(d) After a sales tax imposed by a political subdivision has expired or been terminated,
the political subdivision is prohibited from imposing a local sales tax for a period of one
year.

(e) deleted text begin Notwithstanding paragraph (a), if a political subdivision received voter approval to
seek authority for a local sales tax at the November 6, 2018, general election and is granted
authority to impose a local sales tax before January 1, 2021, the tax may be imposed without
an additional referendum provided that it meets the requirements of subdivision 2 and the
list of specific projects contained in the resolution does not conflict with the projects listed
in the approving referendum. deleted text end new text begin Beginning January 1, 2025, the reporting requirements under
section 297A.9902 apply to taxes authorized under special law or the requirements of this
section.
new text end

(f) If a tax is terminated because sufficient revenues have been raised, any amount of
tax collected under subdivision 9, after sufficient revenues have been raised and before the
quarterly termination required under subdivision 12, paragraph (a), that is greater than the
average quarterly revenues collected over the immediately preceding 12 calendar months
must be retained by the commissioner for deposit in the general fund.

new text begin (g) Upon expiration of a tax authorized under this section or any other law, ordinance,
or city charter, the combined tax rate limit in section 297A.9901, subdivision 5, applies.
new text end

new text begin (h) If, after receiving voter approval, a political subdivision decides to cancel a project
approved by the voters, the political subdivision must notify the commissioner. The
commissioner must proportionately decrease the maximum amount of tax revenue the
political subdivision may collect and must adjust the termination of the tax accordingly. If
the political subdivision has already collected revenue for the canceled project, the political
subdivision must return the funds to the commissioner for deposit into the local sales tax
equalization distribution account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

new text begin [297A.9901] LOCAL SALES TAXES; LOCAL AUTHORIZATION
ALLOWED.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Convention center" means a structure that is expressly designed and constructed
for the purpose of presenting conventions, public meetings, and exhibitions and that contains
at least 50,000 square feet for exhibit and meeting spaces and includes parking facilities
that serve the center.
new text end

new text begin (c) "Library" means a library that is part of a regional public library system as designated
by the regional library board pursuant to section 134.20.
new text end

new text begin (d) "Metropolitan county" has the meaning given in section 473.121, subdivision 4.
new text end

new text begin (e) "Park" means a park that meets the five criteria established in the Department of
Natural Resources Parks and Trails Legacy Plan dated February 14, 2011, required by Laws
2009, chapter 172, article 3, section 2, paragraph (e).
new text end

new text begin (f) "Political subdivision" means a county located in Minnesota or a statutory or home
rule charter city located in Minnesota.
new text end

new text begin (g) "Prevailing wage rate" has the meaning given in section 177.42, subdivision 6.
new text end

new text begin (h) "Sports complex" means a defined area of sports pavilions, stadiums, gymnasiums,
swimming pools, or similar facilities where regional tournaments may be hosted, and where
members of the public engage in physical exercise, participate in athletic competitions,
witness sporting events, and host regional tournaments.
new text end

new text begin (i) "Specified capital project" means a convention center, library, park, sports complex,
or trail. A specified capital project must serve a regional population, provide economic
development benefits and opportunities, or draw nonresident individuals to the region.
new text end

new text begin (j) "Trail" means a trail that meets the five criteria established in the Department of
Natural Resources Parks and Trails Legacy Plan dated February 14, 2011, required by Laws
2009, chapter 172, article 3, section 2, paragraph (e).
new text end

new text begin Subd. 2. new text end

new text begin Local authorization allowed. new text end

new text begin Notwithstanding section 477A.016, or any other
law or ordinance, a political subdivision may impose, extend, or modify the uses of a local
sales tax to finance a specified capital project by: (1) meeting the requirements of this
section; (2) receiving approval from the state auditor; and (3) receiving voter approval. The
authorization under this section applies to an extension to or modification of a local sales
tax authorized under special law or the requirements of section 297A.99.
new text end

new text begin Subd. 3. new text end

new text begin Use of proceeds. new text end

new text begin The proceeds of a tax imposed under this section must be
dedicated exclusively to payment of the construction or rehabilitation costs, including
associated bonding costs, related to the specified capital projects approved by the voters.
Specified capital projects must meet the requirements specified in subdivision 4. The political
subdivision imposing the tax must not commingle revenue from a tax approved by the voters
under this section with revenue from a tax authorized under section 297A.99, or any other
law, ordinance, city charter, or other provision, including an extension of or modification
to the uses of a tax for a different project.
new text end

new text begin Subd. 4. new text end

new text begin Specified capital projects; additional requirements. new text end

new text begin (a) A political subdivision
seeking to impose a tax to fund the construction or rehabilitation of a sports complex or
convention center must demonstrate the following:
new text end

new text begin (1) an analysis of the surrounding region demonstrates that there is no similar sports
complex or convention center open to nonresidents at the same cost as residents within a
15-mile radius of the political subdivision for political subdivisions located outside of a
metropolitan county and within an eight-mile radius of the political subdivision for political
subdivisions located within a metropolitan county; and
new text end

new text begin (2) if admission or entry fees are charged to members of the public for use of the facility,
the fees must be charged equally to residents and nonresidents of the political subdivision
imposing the tax.
new text end

new text begin (b) The political subdivision must submit documentation of the requirements of paragraph
(a) to the state auditor pursuant to the requirements of section 297A.9902, subdivision 1.
new text end

new text begin Subd. 5. new text end

new text begin Tax rate and duration. new text end

new text begin (a) The combined total tax rate imposed by a political
subdivision under this section and section 297A.99 must not exceed one percent. If a local
sales tax is imposed by a county, the limit under this paragraph includes any tax authorized
under section 297A.993.
new text end

new text begin (b) The maximum collection period for a tax imposed under this section must be the
earlier of the amount of time necessary to collect the revenue equal to the cost of the
qualifying projects, including associated financing costs, or 30 years.
new text end

new text begin Subd. 6. new text end

new text begin Public hearing required. new text end

new text begin (a) Prior to seeking authority to impose a tax under
this section, a political subdivision must hold at least one public hearing occurring not before
6:00 p.m. that is open to residents and nonresidents, at which equal time is given to
proponents and opponents to express their opinions on the imposition of the tax. Notice of
the hearing must be given at least 14 days in advance and published on the political
subdivision's website detailing the time and location of the hearing and contain the following
information:
new text end

new text begin (1) the proposed tax rate;
new text end

new text begin (2) a description of each project proposed to be funded by the local sales tax; and
new text end

new text begin (3) the amount of tax revenue that would be used for each project and the estimated time
needed to raise that amount of revenue, inclusive of the estimated amount distributed under
subdivision 13, paragraph (a).
new text end

new text begin (b) The political subdivision must submit the minutes from this hearing to the state
auditor when requesting approval of the tax.
new text end

new text begin Subd. 7. new text end

new text begin Resolution required. new text end

new text begin (a) After conducting the public hearing required under
subdivision 6 and before the governing body of a political subdivision seeks voter approval
to impose a local sales tax, the governing body must adopt a resolution indicating its approval
of the tax. The resolution must include the following information:
new text end

new text begin (1) the proposed tax rate;
new text end

new text begin (2) a detailed description of no more than three projects that will be funded with revenue
from the tax;
new text end

new text begin (3) documentation of the regional significance of each specified capital project, including:
new text end

new text begin (i) the share of the economic benefit to or use of each project by persons residing, or
businesses located, outside of the jurisdiction; and
new text end

new text begin (ii) demonstration that the project meets the requirements of the applicable definitions
in subdivision 1, as well as the requirements of subdivision 4;
new text end

new text begin (4) the amount of local sales tax revenue that will be used for each project and the
estimated time needed to raise that amount of revenue; and
new text end

new text begin (5) the total revenue that will be raised for all projects before the tax expires, and the
estimated length of time that the tax will be in effect if all proposed projects are funded.
new text end

new text begin (b) The political subdivision must submit the resolution along with underlying
documentation to the state auditor pursuant to the provisions of section 297A.9902,
subdivision 1, paragraph (a).
new text end

new text begin Subd. 8. new text end

new text begin Community support required. new text end

new text begin Prior to seeking authority to impose a tax under
this section, a political subdivision must provide to the state auditor letters or resolutions
from the governing bodies of at least two surrounding local governments that affirmatively
acknowledge that there is a local or regional need for the proposed specified capital project.
new text end

new text begin Subd. 9. new text end

new text begin Voter approval required. new text end

new text begin (a) A local sales tax approved by the state auditor
is subject to voter approval prior to being imposed. A referendum must be conducted pursuant
to the following requirements:
new text end

new text begin (1) the referendum must be held on the first Tuesday after the first Monday in November
at a general or special election, so long as the ballot question for approval of the tax is not
the only item on the ballot, within the two-year period after the political subdivision has
received authority to impose the tax. For purposes of this section, "general election" and
"special election" have the meanings given in section 200.02, except that a special election
held under this section must be held on the first Tuesday after the first Monday in November;
new text end

new text begin (2) the ballot language must contain the following information:
new text end

new text begin (i) a description of each specified capital project that will be funded by the tax;
new text end

new text begin (ii) the projected start date of the tax;
new text end

new text begin (iii) the proposed tax rate;
new text end

new text begin (iv) the cost of the project, including associated financing costs;
new text end

new text begin (v) the maximum amount of time the tax will be imposed;
new text end

new text begin (vi) a statement that a portion of the tax revenue will be used for payment into the local
sales tax equalization distribution account; and
new text end

new text begin (vii) a statement that an affirmative vote means that a new tax will be imposed or that
an existing tax will be extended or increased;
new text end

new text begin (3) the ballot language must not contain any statement that informs the voter that by
voting "no" the voter acknowledges that the project subject to approval in the question may
be funded by increased property taxes; and
new text end

new text begin (4) each project must be a separate ballot question if a political subdivision is seeking
voter approval for more than one project.
new text end

new text begin (b) A project that is not approved by the voters may not be funded with the tax revenue
and the termination date of the tax approved by the state auditor must be reduced
proportionately based on the share of that project's cost to the total costs of all projects.
new text end

new text begin (c) A political subdivision may not advertise or expend funds for the promotion of a
referendum to support imposing a tax and may only spend funds related to:
new text end

new text begin (1) conduct the referendum;
new text end

new text begin (2) disseminate information regarding the projects to be funded with the tax;
new text end

new text begin (3) provide notice of and conduct public forums at which proponents and opponents of
the referendum are given equal time to express their opinions on the merits of the referendum;
and
new text end

new text begin (4) provide facts and data on the impact of the proposed local sales tax on consumer
purchases.
new text end

new text begin (d) The political subdivision must submit the language of each ballot question to the
state auditor for approval prior to printing the ballot for use in a referendum.
new text end

new text begin Subd. 10. new text end

new text begin Legislative approval required. new text end

new text begin (a) A political subdivision seeking to impose
a tax must obtain legislative approval to impose the tax if the tax does not meet the
requirements of this section or if the state auditor does not approve the proposal submitted
for imposition of the tax. The provisions of section 297A.99 apply to any tax imposed by
special law.
new text end

new text begin (b) In addition to the requirements imposed under section 297A.99, subdivision 2, the
political subdivision must include in its resolution submitted to the legislature:
new text end

new text begin (1) a detailed description of how the request does not meet the requirements of this
section; and
new text end

new text begin (2) letters or resolutions from the governing bodies of each local government located in
Minnesota that abuts the political subdivision that affirmatively acknowledge that there is
a local or regional need for the proposed capital project.
new text end

new text begin (c) A tax approved by the legislature is subject to the collection and retention provisions
of subdivision 13 and section 297A.9903.
new text end

new text begin Subd. 11. new text end

new text begin Filing requirements. new text end

new text begin After receiving voter approval, a political subdivision
with approval to impose a tax from the state auditor or special law must file a certificate of
local approval with the secretary of state pursuant to section 645.021, subdivisions 2 and
3, for the tax to be lawfully imposed.
new text end

new text begin Subd. 12. new text end

new text begin Administration; termination. new text end

new text begin (a) A political subdivision imposing a tax
under this section must not commingle revenue from a tax for a project or projects approved
by the voters under this section with revenue from a tax authorized under section 297A.99,
or any other law, ordinance, city charter, or other provision, including an extension of or
modification to the uses of a tax for a different project.
new text end

new text begin (b) A political subdivision imposing the tax must notify the commissioner and the state
auditor at least 60 days before the date the political subdivision anticipates that revenues
raised from the tax are sufficient to fund the projects approved by the voters. The notification
applies to each authorization of a tax and each project approved by the voters, regardless
of whether the legislature has authorized the tax, notwithstanding the requirements of section
297A.99, subdivision 3, paragraph (d).
new text end

new text begin (c) After a tax imposed by a political subdivision has expired or been terminated, the
political subdivision is prohibited from imposing a new local sales tax for a period of one
year.
new text end

new text begin (d) If, after receiving voter approval, a political subdivision decides to cancel a project
approved by the voters, the political subdivision must notify the commissioner and the state
auditor. The commissioner must proportionately decrease the maximum amount of tax
revenue the political subdivision may collect and must adjust the termination of the tax
accordingly. If the political subdivision has already collected revenue for the canceled
project, the political subdivision must return the funds to the commissioner for deposit into
the local sales tax equalization distribution account.
new text end

new text begin Subd. 13. new text end

new text begin Collection and retention. new text end

new text begin (a) The commissioner shall remit the proceeds of
the tax, less refunds and a proportionate share described in clauses (1) to (3), at least
quarterly, to the political subdivision. The commissioner shall deduct from the proceeds
distributed to a political subdivision an amount that equals:
new text end

new text begin (1) one percent for the direct and indirect costs of the department to administer, audit,
and collect the tax, of which one-half must be used for the cost of constructing and
maintaining a zip code or geocode database necessary for local sales tax collections under
the Streamlined Sales and Use Tax Agreement in section 297A.995;
new text end

new text begin (2) one percent for the direct and indirect costs of the state auditor to approve and audit
the tax; and
new text end

new text begin (3) 15 percent for the political subdivision's contribution share of the amount to be paid
for distribution under section 297A.9903.
new text end

new text begin (b) The revenue retained by the commissioner under paragraph (a), clause (1), must be
deposited into the Revenue Department service and recovery special revenue fund established
under section 270C.15.
new text end

new text begin (c) The revenue retained for the purpose outlined in paragraph (a), clause (2), must be
deposited into the state auditor service and recovery account.
new text end

new text begin (d) The revenue retained for the purpose outlined in paragraph (a), clause (3), must be
deposited into the local sales tax equalization distribution account.
new text end

new text begin Subd. 14. new text end

new text begin Accounts established; transfer. new text end

new text begin (a) The local sales tax equalization distribution
account is established in the special revenue fund. Funds in the account must be distributed
in accordance with section 297A.9903.
new text end

new text begin (b) The state auditor service and recovery account is established in the special revenue
fund. Each October 1, the commissioner of revenue must transfer the balance of the account
into the general fund.
new text end

new text begin Subd. 15. new text end

new text begin Other provisions apply. new text end

new text begin (a) The provisions of section 297A.99, subdivisions
4 to 10 and 12 to 13, apply to taxes authorized under this section.
new text end

new text begin (b) The requirements of section 475.53 apply to bonds issued for projects under this
section.
new text end

new text begin (c) The prevailing wage rate applies to all contracts for construction of specified capital
projects under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

new text begin [297A.9902] LOCAL SALES TAXES; OVERSIGHT.
new text end

new text begin Subdivision 1. new text end

new text begin Filing requirement. new text end

new text begin (a) A political subdivision seeking to impose a local
sales tax under the provisions of section 297A.9901 must file a copy of all documentation
required under section 297A.9901 with the commissioner and the state auditor by November
30.
new text end

new text begin (b) The state auditor must verify whether each project included in the submission under
paragraph (a) meets the requirements of section 297A.9901. By January 10 of the following
year, the state auditor must notify the political subdivision of its determination. If the state
auditor determines that a project does not meet the requirements of section 297A.9901, the
political subdivision may seek legislative authorization for a local sales tax to finance the
project under the provisions of section 297A.99.
new text end

new text begin Subd. 2. new text end

new text begin Annual financial reporting. new text end

new text begin (a) The state auditor shall develop a uniform
system of accounting and financial reporting for political subdivisions imposing a local
sales and use tax under sections 297A.99 and 297A.9901. The system of accounting and
financial reporting shall, as nearly as possible:
new text end

new text begin (1) provide for full disclosure of the uses of local sales and use tax revenues;
new text end

new text begin (2) permit comparison and reconciliation with the political subdivision's accounts and
financial reports;
new text end

new text begin (3) permit auditing of the funds expended on behalf of a political subdivision, including
a single political subdivision that is part of a multijurisdictional project or that is funded in
part or wholly through a local sales and use tax from other jurisdictions or with other public
money; and
new text end

new text begin (4) be consistent with generally accepted accounting principles.
new text end

new text begin (b) The political subdivision must annually submit to the state auditor a financial report
in compliance with paragraph (a). Copies of the report must also be provided to the auditor
and governing body of the political subdivision. To the extent necessary to permit compliance
with the requirement of financial reporting, the political subdivision and any other appropriate
political subdivision or private entity must provide the necessary records or information to
the state auditor as provided by the system of accounting and financial reporting developed
pursuant to paragraph (a). The political subdivision must submit the annual report for a year
on or before ... of the ...
new text end

new text begin (c) The annual financial report must also include the following items: ...
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end

Sec. 6.

new text begin [297A.9903] LOCAL SALES TAX EQUALIZATION DISTRIBUTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Adjusted net tax capacity" means the qualified recipient's adjusted net tax capacity
under section 273.1325.
new text end

new text begin (c) "Average fiscal capacity" means the sum of the adjusted net tax capacities of all
qualified recipients, divided by the sum of their populations.
new text end

new text begin (d) "Political subdivision" means a political subdivision as defined in section 297A.9901,
subdivision 1.
new text end

new text begin (e) "Local sales tax" means: (1) a local sales tax imposed under section 297A.9901; or
(2) a local sales tax imposed under section 297A.99, or special law that was enacted or
modified after July 1, 2024.
new text end

new text begin (f) "Contribution share" means 15 percent of the total local sales taxes that were collected
by a political subdivision in the previous calendar year pursuant to section 297A.99,
subdivision 2a, or section 297A.9901, subdivision XX.
new text end

new text begin (g) "Distribution index" for a qualified recipient means the product of: (1) its population;
and (2) the proportion which the average fiscal capacity in the preceding year bears to the
fiscal capacity of the qualified recipient for the preceding year.
new text end

new text begin (h) "Distribution share" for a qualified recipient means the product of: (1) the total of
all contribution shares of all political subdivisions; and (2) the proportion which the
distribution index for the qualified recipient bears to the sum of the distribution indices of
all qualified recipients.
new text end

new text begin (i) "Fiscal capacity" of a qualified recipient means its adjusted net tax capacity divided
by its population.
new text end

new text begin (j) "Population" means the population estimated or established, as of January 1 in the
year distributions under this section are calculated, by the most recent federal census, by a
special census conducted under contract with the United States Bureau of the Census, or
by a population estimate of the state demographer made pursuant to section 4A.02, whichever
is the most recent.
new text end

new text begin (k) "Qualified recipient" means a political subdivision that either: (1) had a contribution
share greater than $0 based on local sales taxes collected in the prior calendar year; or (2)
did not collect a local sales tax in the prior calendar year that was approved by voters prior
to July 1, 2024.
new text end

new text begin Subd. 2. new text end

new text begin Local sales tax revenue sharing required. new text end

new text begin A political subdivision with a local
sales tax is subject to the contribution requirements under subdivision 3 for any calendar
year, or portion thereof, in which a local sales tax was collected. All qualified recipients
are eligible for distributions under this section, and the commissioner of revenue must
annually calculate each qualified recipient's distribution share.
new text end

new text begin Subd. 3. new text end

new text begin Contribution share. new text end

new text begin Pursuant to section 297A.9901, subdivision XX, the
commissioner of revenue must annually retain each political subdivision's contribution
share. For any calendar year in which a political subdivision does not have a local sales tax,
the political subdivision's contribution share is $0.
new text end

new text begin Subd. 4. new text end

new text begin Certification. new text end

new text begin The commissioner of revenue must annually calculate and certify
each political subdivision's contribution share and each qualified recipient's distribution
share, based on local sales taxes collected in the prior calendar year. The commissioner
must provide notice of the certification to each political subdivision by January 31.
new text end

new text begin Subd. 5. new text end

new text begin Settlement. new text end

new text begin By March 15 annually, the commissioner of revenue must pay to
each qualified recipient the distribution share certified under subdivision 4.
new text end

new text begin Subd. 6. new text end

new text begin Future contributions and payments new text end

new text begin A political subdivision that has imposed
a local sales tax prior to July 1, 2024, is a qualified recipient under this section if:
new text end

new text begin (1) the political subdivision modifies, increases, or extends the local sales tax;
new text end

new text begin (2) the political subdivision imposes a new local tax pursuant to section 297A.9901 or
special law; or
new text end

new text begin (3) the political subdivision's existing local sales tax expires.
new text end

new text begin Subd. 7. new text end

new text begin Appropriation. new text end

new text begin The amount required to make distributions under this section
is appropriated from the local sales tax equalization distribution account established under
section 297A.9901, subdivision 14, to the commissioner of revenue.
new text end

Sec. 7. new text begin OFFICE OF THE STATE AUDITOR; APPROPRIATION.
new text end

new text begin $....... in fiscal year 2025 is appropriated from the general fund to the state auditor to
implement the requirements of section 297A.9902. The funds appropriated are available
through June 30, 2027.
new text end

Sec. 8. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2023 Supplement, section 297A.99, subdivision 3a, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end

APPENDIX

Repealed Minnesota Statutes: 24-08184

297A.99 LOCAL SALES TAXES.

Subd. 3a.

Temporary moratorium.

(a) Notwithstanding subdivisions 1, 2, and 3, until after May 31, 2025, a political subdivision may not engage in any of the following activities in connection with imposing a new local sales and use tax or modifying an existing local sales and use tax:

(1) any activity described in subdivision 1, paragraph (d);

(2) adopt a resolution; or

(3) seek voter approval.

(b) Paragraph (a) does not apply to new local sales and use taxes or modifications to existing local sales and use taxes authorized in May, 2023.

(c) This subdivision expires June 1, 2025.