SF 1295

as introduced - 85th Legislature (2007 - 2008) 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; amending Minnesota Statutes 2006, section 297A.99,
subdivisions 1, 3, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2006, 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, 2007.
new text end

Sec. 2.

Minnesota Statutes 2006, 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 approved by the voters in the
authorizing referendum that provide benefit to persons outside of the city boundaries, as
defined in paragraph (c), as well as to the city. No proceeds may be used for normal
maintenance or operating costs of a facility or properties owned by a city or group of
cities. The proceeds may be used to pay for collecting and administering the tax, to pay all
or part of the capital 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) overpasses, arterial and collector roads, or bridges, on, adjacent to, or connecting
to a Minnesota state highway;
new text end

new text begin (6) railroad overpasses or crossing safety improvements;
new text end

new text begin (7) flood control and protection; or
new text end

new text begin (8) 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 (8);
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 20 percent of the direct users of the facility will be persons from outside
of the city; or
new text end

new text begin (4) at least 20 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 on the commissioner's 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, 2007.
new text end

Sec. 3.

Minnesota Statutes 2006, 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 after June 30, 2007.
new text end