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HF 621

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/18/2021 04:47pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/01/2021

Current Version - as introduced

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A bill for an act
relating to taxation; modifying authority to impose local sales and use taxes;
requiring an election before seeking legislative authority; removing the requirement
to submit a local resolution; amending Minnesota Statutes 2020, section 297A.99,
subdivisions 1, 1a, 3; repealing Minnesota Statutes 2020, section 297A.99,
subdivision 2.

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

Section 1.

Minnesota Statutes 2020, 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. Beginning
July 1, 2019, no political subdivision may impose a special excise tax on motor vehicles
unless it is imposed under section 297A.993.

(d) A political subdivision may not advertise or expend funds for the promotion of a
referendum to support imposing a local sales tax and may only spend funds related to
imposing a local sales tax to:

(1) conduct the referendum;

(2) disseminate information included in the resolution adopted under subdivision deleted text begin2deleted text endnew text begin 1anew text end,
but only if the disseminated information includes a list of specific projects and the cost of
each individual project;

(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 local sales tax on consumer
purchases; and

(5) provide facts and data related to the individual programs and projects to be funded
with the local 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 2020, section 297A.99, subdivision 1a, is amended to read:


Subd. 1a.

Requirements.

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 begin Prior to submitting a local sales tax for
approval by voters under subdivision 3, a political subdivision must adopt a resolution that
includes a description of the capital projects that will be funded with revenue from the tax
and provide documentation of the regional significance of each project, including 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 EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2020, section 297A.99, subdivision 3, is amended to read:


Subd. 3.

deleted text beginLegislative authority required before voter approvaldeleted text endnew text begin Local election required
before seeking legislative authority
new text end; requirements for adoption, use, termination.

(a)
A political subdivision must deleted text beginreceive legislative authority to impose a local sales tax before
submitting the
deleted text endnew text begin submit a local salesnew text end tax for approval by voters of the political subdivisionnew text begin
before seeking legislative authority to impose the tax
new text end. Imposition of a local sales tax is
subject to approval by voters of the political subdivision at a general election. deleted text beginThe election
must be conducted at a general election within the two-year period after
deleted text end deleted text beginthe governing body
of the political subdivision has received authority to impose the tax.
deleted text end If the deleted text beginauthorizing
legislation allows
deleted text endnew text begin political subdivision intends fornew text end 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.new text begin A political subdivision must not propose to fund more than five capital projects
with a local sales tax. The ballot question must identify: (1) the proposed tax rate; (2) the
amount of local sales tax revenue that would be used for each project and the estimated
time needed to raise that amount of revenue; and (3) the total revenue that will be raised
for all projects before the tax expires, and the estimated length of time that the tax will be
in effect if all proposed projects are funded.
new text end Notwithstanding thenew text begin subsequentnew text end authorizing
legislation, a project that is not approved by the voters may not be funded with the local
sales tax revenue deleted text beginand 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
deleted text end.

(b) The proceeds of the tax must be dedicated exclusively to payment of the construction
and rehabilitation costs and associated bonding costs related to the specific capital
improvement projects that were approved by the voters under paragraph (a).

(c) The tax must terminate after the revenues raised are sufficient to fund the projects
approved by the voters under paragraph (a).

(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 (e) Notwithstanding paragraph (a), if a political subdivision 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.
deleted text end

deleted text begin (f)deleted text endnew text begin (e)new text end If a tax is terminated because sufficient revenues have been raised, any amount
of tax collected under subdivision 9, after sufficient revenues have been raised and before
the quarterly termination required under subdivision 12, paragraph (a), that is greater than
the average quarterly revenues collected over the immediately preceding 12 calendar months
must be retained by the commissioner for deposit in the general fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text beginREPEALER.
new text end

new text begin Minnesota Statutes 2020, section 297A.99, subdivision 2, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

APPENDIX

Repealed Minnesota Statutes: 21-01575

297A.99 LOCAL SALES TAXES.

Subd. 2.

Local resolution before application for authority.

(a) Before the governing body of a political subdivision requests legislative approval to impose a local sales tax authorized by a special law, it shall adopt a resolution indicating its approval of the tax. The resolution must include the following information:

(1) the proposed tax rate;

(2) a detailed description of no more than five capital projects that will be funded with revenue from the tax;

(3) documentation of the regional significance of each project, including the share of the economic benefit to or use of each project by persons residing, or businesses located, outside of the jurisdiction;

(4) the amount of local sales tax revenue that would be used for each project and the estimated time needed to raise that amount of revenue; and

(5) the total revenue that will be raised for all projects before the tax expires, and the estimated length of time that the tax will be in effect if all proposed projects are funded.

(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 and ranking minority members of the legislative 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.

(c) The special legislation granting local sales tax authority is not required to allow funding for all projects listed in the resolution with the revenue from the local sales tax, but must not include any projects not contained in the resolution.