HF 1284

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

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 2004, sections 297A.99,
subdivisions 1, 3, by adding a subdivision; 477A.016.

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

Section 1.

Minnesota Statutes 2004, 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 if
permitted by special law or if the political subdivision enacted
and imposed the tax before the effective date of section
477A.016 and its predecessor provision new 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.

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, 2005.
new text end

Sec. 2.

Minnesota Statutes 2004, section 297A.99, is
amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin General authority; cities. new text end

new text begin (a) A city, or a
group of cities acting pursuant to a joint powers agreement,
that are located outside of the metropolitan area, as defined in
section 473.121, subdivision 2, may impose a local sales tax of
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 pursuant to this subdivision; 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
through 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) The proceeds of a tax imposed under this subdivision
must be dedicated exclusively to pay for regional capital
projects specified and approved by the voters in the authorizing
referendum. No proceeds may be used for normal maintenance or
operating costs of a facility. The proceeds may be used to pay
for collecting and administering the tax, and to pay all or part
of the capital and administrative costs of the development,
acquisition, construction, expansion, improvement, and securing
and paying debt service on bonds or other obligations issued to
finance capital costs of the approved project. For purposes of
this subdivision, "regional capital project" means a project
where at least ... percent of the users or ... percent of the
benefit will accrue to persons or property located outside of
the city limits.
new text end

new text begin (c) Imposition of the local tax is subject to approval by
the voters of the political subdivision at a general election.
The specific project must be designated at least 90 days before
the referendum on the imposition of the tax is conducted. The
question put to the voters in order to approve imposition of the
tax must contain at minimum the following information:
new text end

new text begin (1) a description of the specified project, including how
this project will benefit persons or property outside of the
city limits;
new text end

new text begin (2) the maximum amount that will be spent on the project,
including proceeds from bonds;
new text end

new text begin (3) the maximum time that tax will be imposed in order to
raise sufficient revenues to fund the project; and
new text end

new text begin (4) if general obligation bonds are to be issued for the
project, the maximum amount of the bonds.
new text end

new text begin (d) The city may request authority to fund more than one
project from the sales tax at the time of the imposition,
provided that the use of the tax for each project is voted on
separately and the question related to each project meets the
requirements under paragraph (c).
new text end

new text begin (e) 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 (c) 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 (f) 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
20 years after imposition. The governing board of the city may,
by ordinance, terminate the tax at an earlier date.
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, 2005.
new text end

Sec. 3.

Minnesota Statutes 2004, section 297A.99,
subdivision 3, is amended to read:

Subd. 3.

Requirements for adoption, use, termination.

(a) Imposition of a local sales tax is subject to approval by
voters of the political subdivision at a general election.

(b) The proceeds of the tax must be dedicated exclusively
to payment of the cost of a specific capital improvement which
is designated at least 90 days before the referendum on
imposition of the tax is conducted.

(c) The tax must terminate after the improvement designated
under paragraph (b) has been completed.

deleted text begin (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. Notwithstanding subdivision 13, this paragraph applies to
all local sales taxes in effect at the time of or imposed after
May 26, 1999.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 4.

Minnesota Statutes 2004, section 477A.016, is
amended to read:

477A.016 NEW TAXES PROHIBITED.

No county, city, town or other taxing authority shall
increase a present tax or impose a new tax on sales or income new text begin ,
except as provided in section 297A.99, subdivision 1a new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end