Minnesota Legislature
HF 2979
as introduced - 93rd Legislature (2023 - 2024) Posted on 03/20/2023 02:12pm
Bill Text Versions
| Engrossments | ||
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| Introduction | Posted on 03/17/2023 |
Current Version - as introduced
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A bill for an act
relating to taxation; local sales and use; clarifying local resolution submission and
referendum requirements for imposing a new local sales tax or modifying an
existing local sales tax; imposing a nexus requirement between nonresidents and
the project to be funded; amending Minnesota Statutes 2022, sections 297A.99,
subdivisions 1, 2, 3; 469.190, subdivision 7.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2022, 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, or (4) 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, 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. 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 deleted text begin anddeleted text end new text begin .
new text end
new text begin (e) Notwithstanding paragraph (d), a political subdivisionnew text end may only spend funds related
to imposing a local sales tax to:
(1) conduct the referendum;
(2) disseminate information included in the resolution adopted new text begin and submitted new text end 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, subdivision 2, is amended to read:
Subd. 2.
Local resolution before application for authority.
(a) deleted text begin Before the governing
body of a political subdivision requests legislative approval to impose a local sales tax
authorized by a special law, it shall adopt a resolution indicating its approval of the tax. The
resolution must include the following information:deleted text end new text begin The governing body of a political
subdivision seeking legislative approval to either impose a new local sales tax authorized
by special law or modify an existing local sales tax authorized by special law must adopt a
resolution indicating the governing body's approval of the tax each year the governing body
requests legislative approval. The resolution must include the following information:
new text end
(1) the proposed tax rate;
(2) a detailed description of no more than five capital projects that will be funded with
revenue from the tax;
(3) documentation of the regional significance of each project, including the share of
the economic benefit to or use of each project by persons residing, or businesses located,
outside of the jurisdiction;
(4) the amount of local sales tax revenue that would be used for each project and the
estimated time needed to raise that amount of revenue; deleted text begin and
deleted text end
(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 fundeddeleted text begin .deleted text end new text begin ;
and
new text end
new text begin
(6) a description of the nexus between the nonresident users of a project and the payment
of the tax, as required in paragraph (e).
new text end
(b) The jurisdiction deleted text begin seeking authority to impose a local sales tax by special lawdeleted text end must
submit the resolution in paragraph (a) along with underlying documentation indicating how
the benefits under paragraph (a), clause (3), were determined, to the chairs and ranking
minority members of the deleted text begin legislativedeleted text end committees new text begin of the house of representatives and senate
new text end with jurisdiction over taxes no later than January 31 of deleted text begin thedeleted text end new text begin eachnew text end year in which the jurisdiction
is seeking a special law authorizing the tax.new text begin The jurisdiction must submit an amended
resolution if, after meeting the requirements of this paragraph, the jurisdiction seeks to:
new text end
new text begin
(1) add a project that will be funded with the revenue from the tax;
new text end
new text begin
(2) increase the amount that will be used for any project;
new text end
new text begin
(3) increase the total revenue raised for all projects before the tax expires; or
new text end
new text begin
(4) increase the estimated length of time that the tax will be in effect if all proposed
projects are funded.
new text end
(c) The special legislation granting new text begin or modifying new text end local sales tax authority is not required
to allow funding for all projects listed in the resolution with the revenue from the local sales
tax, but must not include any projects not contained in the resolution.
(d) For purposes of this section, a "capital project" or "project" means:
(1) a single building or structure including associated infrastructure needed to safely
access or use the building or structure;
(2) improvements within a single park or named recreation area; or
(3) a contiguous trail.
new text begin
(e) The resolution required in paragraph (a) must also include a description of the nexus
between the nonresident users of a project and the payment of tax. Nexus exists if two of
the following requirements are met:
new text end
new text begin
(1) a significant number of the users of the project will be nonresidents of the political
subdivision imposing the tax;
new text end
new text begin
(2) the project includes a unique or uncommon characteristic;
new text end
new text begin
(3) the project is part of a regional or statewide network or system for providing facilities
or services;
new text end
new text begin
(4) the project promotes an activity having a duration long enough to encourage retail
activity incident to the project in the political subdivision imposing the tax; and
new text end
new text begin
(5) the project includes improvements or amenities to facilities that increase the project's
capacity to serve visitors at a volume that exceeds the capacity for facilities that serve a
local population, including but not limited to heating, ventilation, and air conditioning
systems, parking facilities including accessibility upgrades, and other improvements
necessary for compliance with state building codes for the improved facilities.
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 new text begin or modify new text end a local sales tax before submitting the tax for approval by voters of the
political subdivision. Imposition new text begin or modification new text end of a local sales tax is subject to approval
by voters of the political subdivision at a general election. The election must be conducted
deleted text begin at a general electiondeleted text end new text begin on the first Tuesday after the first Monday in Novembernew text end within the
two-year period after the governing body of the political subdivision has received authority
to impose new text begin or modify new text end the tax. If the authorizing legislation deleted text begin allowsdeleted text end new text begin authorizes or modifies new text end the
tax deleted text begin to be imposeddeleted text end for more than one project, deleted text begin there must bedeleted text end new text begin the political subdivision is not
required to present each project separately on the ballot. The political subdivision may
present new text end a separate question approving the use of the tax revenue for each project. new text begin Regardless
of whether the ballot presents a separate question for each project, the question must state
the project or projects proposed to be funded with the tax, the amount for each project
proposed to be funded with the tax, and the estimated length of time the tax will be in effect.
new text end Notwithstanding the authorizing legislationnew text begin or special law modifying the taxnew text end , 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 new text begin or special law modifying the
tax new text end must be reduced proportionately based on the share of that project's cost to the total
costs of all projects included in the authorizing legislationnew text begin or special law modifying the taxnew text end .
(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) 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.
(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 EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 4.
Minnesota Statutes 2022, section 469.190, subdivision 7, is amended to read:
Subd. 7.
Collection.
The statutory or home rule charter citynew text begin , town, or county when the
county board is acting as a town board with respect to an unorganized territorynew text end may agree
with the commissioner of revenue that a tax imposed pursuant to this section shall be
collected by the commissioner together with the tax imposed by chapter 297A, and subject
to the same interest, penalties, and other rules and that its proceeds, less the cost of collection,
shall be remitted to the city.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end