Minnesota Legislature
SF 2785
as introduced - 91st Legislature (2019 - 2020) Posted on 04/04/2019 03:25pm
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A bill for an act
relating to taxation; sales and use; amending the requirements for imposition and
use of local sales and use taxes; amending Minnesota Statutes 2018, section
297A.99, subdivisions 1, 2, 3, by adding a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2018, 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 or a special
excise tax on motor vehicles.
(d) A political subdivision may not advertise or expend funds for the promotion of a
referendum to support imposing a local option sales taxdeleted text begin .deleted text end new text begin and may only spend funds related
to imposing a local sales tax to:
new text end
deleted text begin
(e) Notwithstanding paragraph (d), a political subdivision may expend funds to:
deleted text end
(1) conduct the referendum;
(2) disseminate information included in the resolution adopted under subdivision 2new text begin , but
only if the disseminated information includes a list of specific projects and the cost of each
individual projectnew text end ;
(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 sales tax on consumer purchases;
and
(5) provide facts and data related to the new text begin individual new text end programs and projects to be funded
with the 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 2018, section 297A.99, is amended by adding a subdivision to
read:
new text begin Subd. 1a. new text end
new text begin Purpose statement. new text end
new text begin
Local sales taxes are to be used instead of traditional
local revenues only for construction and rehabilitation of capital projects when a clear
regional benefit beyond the taxing jurisdiction can be demonstrated. Use of local sales tax
revenues for local projects decreases the benefits to taxpayers of the deductibility of local
property taxes and the state assistance provided through the property tax refund system and
increases the fiscal inequities between similar communities.
new text end
Sec. 3.
Minnesota Statutes 2018, section 297A.99, subdivision 2, is amended to read:
Subd. 2.
Local resolution before application for authority.
new text begin (a) new text end Before the governing
body of a political subdivision requests legislative approval deleted text begin ofdeleted text end new text begin to impose a local sales tax
authorized bynew text end a special law deleted text begin for a local sales tax that is administered under this sectiondeleted text end , it
shall adopt a resolution indicating its approval of the tax. The resolution must includedeleted text begin , at a
minimum,deleted text end new text begin the following new text end information deleted text begin ondeleted text end new text begin :
new text end
new text begin (1) new text end the proposed tax ratedeleted text begin , how the revenues will be used,deleted text end new text begin ;
new text end
new text begin
(2) a detailed description of no more than five capital projects that will be funded with
revenue from the tax;
new text end
new text begin
(3) documentation of the share of the economic benefit to or use of each project by
persons residing, or businesses located, outside of the jurisdiction;
new text end
new text begin
(4) the amount of sales tax revenue that would be used for each project and the estimated
time needed to raise that amount of revenue; and
new text end
new text begin (5)new text end the total revenue that will be raised new text begin for all projects new text end before the tax expires, and the
estimated length of time that the tax will be in effectnew text begin if all proposed projects are fundednew text end .
deleted text begin
This subdivision applies to local laws enacted after June 30, 1998.
deleted text end
new text begin
(b) The jurisdiction
seeking authority to impose a local sales tax by special law 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 of both the senate and house
committees with jurisdiction over taxes no later than January 31 of the year in which the
jurisdiction is seeking a special law authorizing the tax.
new text end
new text begin
(c) The special legislation granting sales tax authority is not required to allow funding
for all projects listed in the resolution with the revenue from the sales tax, but must not
include any projects not contained in the resolution.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment and
applies to all local sales taxes not authorized by the legislature before July 1, 2019.
new text end
Sec. 4.
Minnesota Statutes 2018, section 297A.99, subdivision 3, is amended to read:
Subd. 3.
new text begin Legislative authority required before voter approval; new text end requirements for
adoption, use, termination.
(a) new text begin A political subdivision must receive legislative authority
to impose a local sales tax before submitting the tax for approval by voters of the political
subdivision. new text end Imposition 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 beforedeleted text end new text begin at a general election
within the two-year period afternew text end the governing body of the political subdivision deleted text begin requests
legislative approval ofdeleted text end new text begin has received authority to imposenew text end the tax.new text begin If the authorizing legislation
allows the tax to be imposed for more than one project, there must be a separate question
approving the use of the tax revenue for each project. Notwithstanding the authorizing
legislation, a project that is not approved by the voters may not be funded with the sales tax
revenue and the termination date of the tax set in the authorizing legislation must be reduced
proportionately based on the share of that project's cost to the total costs of all projects
included in the authorizing legislation.
new text end
(b) The proceeds of the tax must be dedicated exclusively to payment of the deleted text begin cost of adeleted text end
new text begin construction and rehabilitation costs and associated bonding costs related to the new text end specific
capital improvement deleted text begin which is designated at least 90 days before the referendum on imposition
of the tax is conducteddeleted text end new text begin projects that were approved by the voters under paragraph (a)new text end .
(c) The tax must terminate after deleted text begin the improvement designated under paragraph (b) has
been completeddeleted text end new text begin the revenues raised are sufficient to fund the projects approved by the voters
under paragraph (a)new text end .
(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. deleted text begin 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
(e) Notwithstanding paragraph (a), if a city 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.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment and
applies to all local sales taxes not authorized by the legislature before July 1, 2019.
new text end