HF 2285

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

A bill for an act
relating to local sales taxes; allowing certain cities
to impose a local sales tax if certain criteria are
met; authorizing the city of Mankato to extend the
duration of its sales tax; authorizing the city of
Waite Park to impose a sales tax approved by the
voters; 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, 2004.
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; 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 tax of one-half of one percent without
authorization under a special law provided that:
new text end

new text begin (1) the city or cities are located outside of the
metropolitan counties, as defined in section 473.121,
subdivision 4;
new text end

new text begin (2) imposition of the tax is approved by the voters of each
city pursuant to subdivision 3, paragraph (a); and
new text end

new text begin (3) 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) The proceeds of a tax imposed under this subdivision
must be dedicated exclusively to pay for specific regional
capital projects that provide benefit to persons outside of the
city boundaries, as defined in paragraph (c) as well as to the
city, and is 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, to pay all or part of
the capital and administrative 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, but
not limited to, the following:
new text end

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

new text begin (2) regional airport;
new text end

new text begin (3) regional public libraries;
new text end

new text begin (4) parks, trails, regional recreational centers, and open
space;
new text end

new text begin (5) arts and related educational facilities;
new text end

new text begin (6) lake improvement projects included in a watershed plan;
new text end

new text begin (7) overpasses, arterial and collector roads, or bridges,
on, adjacent to, or connecting to a Minnesota state highway;
new text end

new text begin (8) railroad overpasses or crossing safety improvements;
new text end

new text begin (9) flood control and protection; or
new text end

new text begin (10) water quality projects to address groundwater and
drinking water pollution problems.
new text end

new text begin (c) A capital project is considered to be a "regional
capital project that provides benefits to persons outside the
city boundaries" if it meets one of the following criteria:
new text end

new text begin (1) the project is one of the projects listed in paragraph
(b), clauses (6) to (10);
new text end

new text begin (2) the project is funded by more than one city under a
joint powers agreement and no more than 90 percent of the
revenues for the project will be provided by one city;
new text end

new text begin (3) at least ten percent of the direct users of the
facility, except for a convention or civic center, will be
persons from outside of the city; or
new text end

new text begin (4) at least ten percent of the benefit derived from the
project will accrue to persons residing or businesses located
outside of the city boundaries.
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 the commissioner 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. 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
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, 2004. If the authorizing referendum was held prior to July
1, 2005, the three month prior notice to the commissioner
contained in paragraph (d) shall not apply, but the commissioner
must still certify that all other provisions of this subdivision
are met before the tax may be imposed.
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

Sec. 5. new text begin CITY OF MANKATO; LOCAL SALES TAX EXPIRATION
DATE.
new text end

new text begin Notwithstanding any other provision of law or municipal
charter to the contrary, the city of Mankato may by resolution
extend the imposition of the taxes imposed under Laws 1991,
chapter 291, article 8, section 27, subdivisions 1 and 2, until
December 31, 2018. The proceeds of the tax must be used for the
purposes authorized under Laws 1991, chapter 291, article 8,
section 27, and Laws 1996, chapter 471, article 2, section 25.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after
compliance by the city of Mankato with Minnesota Statutes,
section 645.021, subdivision 3.
new text end

Sec. 6. new text begin CITY OF WAITE PARK; LOCAL SALES TAX.
new text end

new text begin Notwithstanding Minnesota Statutes, sections 297A.99 and
477A.03, or any other provision of law, ordinance, or charter to
the contrary, the city of Waite Park may impose a sales tax
under section 2, pursuant to the approval of the city voters at
a general election on November 4, 2003. Revenues from the tax
may be used to fund the projects approved by the city voters
that meet the criteria in section 2, paragraph (b), and may,
without an additional vote, also be used to fund under a joint
powers agreement a regional library located in the city of St.
Cloud. All other provisions of section 297A.99 not in conflict
with the provisions of this section shall apply to the
imposition, collection, administration, and use of revenues from
this tax.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after
compliance by the city of Waite Park with Minnesota Statutes,
section 645.021, subdivision 3.
new text end