SF 128

as introduced - 90th Legislature (2017 - 2018) Posted on 01/18/2017 08:34am

A bill for an act
relating to taxation; clarifying the authority for the city of Duluth to use proceeds
from sales taxes on food and beverages and the local lodging tax; amending Laws
1980, chapter 511, sections 1, subdivision 2, as amended; 2, as amended.

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

Section 1.

Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
chapter 291, article 8, section 22, Laws 1998, chapter 389, article 8, section 25, Laws 2003,
First Special Session chapter 21, article 8, section 11, Laws 2008, chapter 154, article 5,
section 2, and Laws 2014, chapter 308, article 3, section 21, is amended to read:

Subd. 2.

(a) Notwithstanding Minnesota Statutes, section 477A.016, or any other law,
ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
impose an additional sales tax of up to one and three-quarter percent on sales transactions
which are described in Minnesota Statutes 2000, section 297A.01, subdivision 3, clause (c).
The imposition of this tax shall not be subject to voter referendum under either state law or
city charter provisions. When the city council determines that the taxes imposed under this
paragraph at a rate of three-quarters of one percent and other sources of revenue produce
revenue sufficient to pay debt service on bonds in the principal amount of $40,285,000 plus
issuance and discount costs, issued for capital improvements at the Duluth Entertainment
and Convention Center, which include a new arena, the rate of tax under this subdivision
must be reduced by three-quarters of one percent.

(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes, section
477A.016, or any other law, ordinance, or city charter provision to the contrary, the city of
Duluth may, by ordinance, impose an additional sales tax of up to one-half of one percent
on sales transactions which are described in Minnesota Statutes 2000, section 297A.01,
subdivision 3, clause (c). This tax expires when the city council determines that the tax
imposed under this paragraph, along with the tax imposed under section 22, paragraph (b),
has produced revenues sufficient to pay the debt service on bonds in a principal amount of
no more than $18,000,000, plus issuance and discount costs, to finance capital improvements
to public facilities to support tourism and recreational activities in that portion of the city
west of deleted text begin 34th deleted text end new text begin 14th new text end Avenue West new text begin and the area south of and including Skyline Parkway new text end .

(c) The city of Duluth may sell and issue up to $18,000,000 in general obligation bonds
under Minnesota Statutes, chapter 475, plus an additional amount to pay for the costs of
issuance and any premiums. The proceeds may be used to finance capital improvements to
public facilities that support tourism and recreational activities in the portion of the city
west of deleted text begin 34th deleted text end new text begin 14th new text end Avenue West new text begin and the area south of and including Skyline Parkway new text end , as
described in paragraph (b). The issuance of the bonds is subject to the provisions of
Minnesota Statutes, chapter 475, except no election shall be required unless required by the
city charter. The bonds shall not be included in computing net debt. The revenues from the
taxes that the city of Duluth may impose under paragraph (b) and under section 22, paragraph
(b), may be pledged to pay principal of and interest on such bonds.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the
city of Duluth and its chief clerical officer comply with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
new text end

Sec. 2.

Laws 1980, chapter 511, section 2, as amended by Laws 1998, chapter 389, article
8, section 26, Laws 2003, First Special Session chapter 21, article 8, section 12, and Laws
2014, chapter 308, article 3, section 22, is amended to read:

Sec. 22. CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND MOTELS.

(a) Notwithstanding Minnesota Statutes, section 477A.016, or any other law, or ordinance,
or city charter provision to the contrary, the city of Duluth may, by ordinance, impose an
additional tax of one percent upon the gross receipts from the sale of lodging for periods of
less than 30 days in hotels and motels located in the city. The tax shall be collected in the
same manner as the tax set forth in the Duluth city charter, section 54(d), paragraph one.
The imposition of this tax shall not be subject to voter referendum under either state law or
city charter provisions.

(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes, section
477A.016, or any other law, ordinance, or city charter provision to the contrary, the city of
Duluth may, by ordinance, impose an additional sales tax of up to one-half of one percent
on the gross receipts from the sale of lodging for periods of less than 30 days in hotels and
motels located in the city. This tax expires when the city council first determines that the
tax imposed under this paragraph, along with the tax imposed under section 21, paragraph
(b), has produced revenues sufficient to pay the debt service on bonds in a principal amount
of no more than $18,000,000, plus issuance and discount costs, to finance capital
improvements to public facilities to support tourism and recreational activities in that portion
of the city west of deleted text begin 34th deleted text end new text begin 14th new text end Avenue West new text begin and the area south of and including Skyline
Parkway new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the
city of Duluth and its chief clerical officer comply with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
new text end