1.1 	A bill for an act
1.2 	relating to local sales taxes; allowing certain cities
1.3 	to impose a local sales tax if certain criteria are
1.4 	met; authorizing the city of Mankato to extend the
1.5 	duration of its sales tax; authorizing the city of
1.6 	Waite Park to impose a sales tax approved by the
1.7 	voters; amending Minnesota Statutes 2004, sections
1.8 	297A.99, subdivisions 1, 3, by adding a subdivision;
1.9 	477A.016.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Minnesota Statutes 2004, section 297A.99,
1.12 	subdivision 1, is amended to read:
1.13 		Subdivision 1.Authorization; scope.  (a) A political
1.14 	subdivision of this state may impose a general sales tax if
1.15 	permitted by special law or if the political subdivision enacted
1.16 	and imposed the tax before the effective date of section
1.17 	477A.016 and its predecessor provision, or if the tax is allowed
1.18 	under subdivision 1a.
1.19 	(b) This section governs the imposition of a general sales
1.20 	tax by the political subdivision.  The provisions of this
1.21 	section preempt the provisions of any special law:
1.22 	(1) enacted before June 2, 1997, or
1.23 	(2) enacted on or after June 2, 1997, that does not
1.24 	explicitly exempt the special law provision from this section's
1.25 	rules by reference.
1.26 	(c) This section does not apply to or preempt a sales tax
1.27 	on motor vehicles or a special excise tax on motor vehicles.
2.1 	
EFFECTIVE DATE. This section is effective for local sales
2.2 	taxes for which the authorizing referendum is held after June
2.3 	30, 2004.

2.4 	Sec. 2. Minnesota Statutes 2004, section 297A.99, is
2.5 	amended by adding a subdivision to read:
2.6 		Subd. 1a.General authority; certain cities. (a) A city,
2.7 	or a group of cities acting under a joint powers agreement, may
2.8 	impose a local sales tax of one-half of one percent without
2.9 	authorization under a special law provided that:
2.10 	(1) the city or cities are located outside of the
2.11 	metropolitan counties, as defined in section 473.121,
2.12 	subdivision 4;
2.13 	(2) imposition of the tax is approved by the voters of each
2.14 	city pursuant to subdivision 3, paragraph (a); and 
2.15 	(3) all the conditions for adoption, use, and termination
2.16 	of the tax contained in this subdivision and subdivisions 3 to
2.17 	12 are met.
2.18 	The authority under this section is in addition to any
2.19 	local sales tax authority permitted under special law.
2.20 	(b) The proceeds of a tax imposed under this subdivision
2.21 	must be dedicated exclusively to pay for specific regional
2.22 	capital projects that provide benefit to persons outside of the
2.23 	city boundaries, as defined in paragraph (c) as well as to the
2.24 	city, and is approved by the voters in the authorizing
2.25 	referendum.  No proceeds may be used for normal maintenance or
2.26 	operating costs of a facility.  The proceeds may be used to pay
2.27 	for collecting and administering the tax, to pay all or part of
2.28 	the capital and administrative costs of the development,
2.29 	acquisition, construction, expansion, and improvement, and to
2.30 	secure and pay debt service on bonds or other obligations issued
2.31 	to finance capital costs of a regional project including, but
2.32 	not limited to, the following:
2.33 	(1) regional convention or civic center;
2.34 	(2) regional airport;
2.35 	(3) regional public libraries;
2.36 	(4) parks, trails, regional recreational centers, and open
3.1 	space;
3.2 	(5) arts and related educational facilities;
3.3 	(6) lake improvement projects included in a watershed plan;
3.4 	(7) overpasses, arterial and collector roads, or bridges,
3.5 	on, adjacent to, or connecting to a Minnesota state highway;
3.6 	(8) railroad overpasses or crossing safety improvements;
3.7 	(9) flood control and protection; or 
3.8 	(10) water quality projects to address groundwater and
3.9 	drinking water pollution problems.
3.10 	(c) A capital project is considered to be a "regional
3.11 	capital project that provides benefits to persons outside the
3.12 	city boundaries" if it meets one of the following criteria:
3.13 	(1) the project is one of the projects listed in paragraph
3.14 	(b), clauses (6) to (10);
3.15 	(2) the project is funded by more than one city under a
3.16 	joint powers agreement and no more than 90 percent of the
3.17 	revenues for the project will be provided by one city;
3.18 	(3) at least ten percent of the direct users of the
3.19 	facility, except for a convention or civic center, will be
3.20 	persons from outside of the city; or 
3.21 	(4) at least ten percent of the benefit derived from the
3.22 	project will accrue to persons residing or businesses located
3.23 	outside of the city boundaries.
3.24 	(d) At least three months prior to holding a referendum to
3.25 	impose the tax, a city must provide to the commissioner of
3.26 	revenue a resolution approved by the city that shows that the
3.27 	tax will fund a project that meets the requirements of
3.28 	paragraphs (a) to (c), the date on which the referendum will be
3.29 	held, the maximum amount raised by the tax that may be used for
3.30 	the specified project, excluding issuance and interest costs for
3.31 	any related bonds, and the maximum time that the tax may be
3.32 	imposed.  The commissioner shall certify that the requirements
3.33 	under this subdivision are met and the city shall provide any
3.34 	additional information the commissioner requests in order to
3.35 	make that determination.  The commissioner's decision is final.
3.36 	(e) The question put to the voters at the referendum
4.1 	authorizing the vote must include information on the specific
4.2 	project or projects to be funded by the proceeds of the tax, the
4.3 	maximum amount of sales tax revenues that will be used to fund
4.4 	each project, not including any issuance and interest costs for
4.5 	related bonds, and the maximum length of time that the tax will
4.6 	be imposed.  If the referendum is not held on the date contained
4.7 	in the resolution, the authority for imposing the tax expires.
4.8 	(f) A city may issue general obligation bonds to pay the
4.9 	costs of projects specified in the referendum authorizing
4.10 	imposition of the tax.  The approval of the question under
4.11 	paragraph (e) meets the requirement for elector approval for
4.12 	issuance of bonds under section 475.58, subdivision 1.  The debt
4.13 	represented by the bonds must not be included in computing any
4.14 	debt limitations applicable to the city, and the levy of taxes
4.15 	required by section 475.61 to pay the principal or any interest
4.16 	on the bonds must not be subject to any levy limitations or be
4.17 	included in computing or applying any levy limitation to the
4.18 	city.
4.19 	(g) The tax, if enacted, expires when the specified revenue
4.20 	has been raised or the maximum time in which the tax is in
4.21 	effect under the resolution is reached, whichever is sooner.
4.22 	Any tax imposed under this subdivision must expire no later than
4.23 	20 years after imposition.  The governing board of the city may,
4.24 	by ordinance, terminate the tax at an earlier date.
4.25 	
EFFECTIVE DATE. This section is effective for local sales
4.26 	taxes for which the authorizing referendum is held after June
4.27 	30, 2004.  If the authorizing referendum was held prior to July
4.28 	1, 2005, the three month prior notice to the commissioner
4.29 	contained in paragraph (d) shall not apply, but the commissioner
4.30 	must still certify that all other provisions of this subdivision
4.31 	are met before the tax may be imposed.

4.32 	Sec. 3. Minnesota Statutes 2004, section 297A.99,
4.33 	subdivision 3, is amended to read:
4.34 		Subd. 3.Requirements for adoption, use, termination.
 4.35 	(a) Imposition of a local sales tax is subject to approval by
4.36 	voters of the political subdivision at a general election.
5.1 	(b) The proceeds of the tax must be dedicated exclusively
5.2 	to payment of the cost of a specific capital improvement which
5.3 	is designated at least 90 days before the referendum on
5.4 	imposition of the tax is conducted.
5.5 	(c) The tax must terminate after the improvement designated
5.6 	under paragraph (b) has been completed.
5.7 	(d) After a sales tax imposed by a political subdivision
5.8 	has expired or been terminated, the political subdivision is
5.9 	prohibited from imposing a local sales tax for a period of one
5.10 	year.  Notwithstanding subdivision 13, this paragraph applies to
5.11 	all local sales taxes in effect at the time of or imposed after
5.12 	May 26, 1999.
5.13 	
EFFECTIVE DATE. This section is effective July 1, 2005.

5.14 	Sec. 4. Minnesota Statutes 2004, section 477A.016, is
5.15 	amended to read:
5.16 	477A.016 NEW TAXES PROHIBITED.
5.17 	No county, city, town or other taxing authority shall
5.18 	increase a present tax or impose a new tax on sales or income,
5.19 	except as provided in section 297A.99, subdivision 1a.

5.20 	EFFECTIVE DATE. This section is effective July 1, 2005.

5.21 	Sec. 5. CITY OF MANKATO; LOCAL SALES TAX EXPIRATION
5.22 	DATE.
 5.23 	Notwithstanding any other provision of law or municipal
5.24 	charter to the contrary, the city of Mankato may by resolution
5.25 	extend the imposition of the taxes imposed under Laws 1991,
5.26 	chapter 291, article 8, section 27, subdivisions 1 and 2, until
5.27 	December 31, 2018.  The proceeds of the tax must be used for the
5.28 	purposes authorized under Laws 1991, chapter 291, article 8,
5.29 	section 27, and Laws 1996, chapter 471, article 2, section 25.

5.30 	EFFECTIVE DATE. This section is effective the day after
5.31 	compliance by the city of Mankato with Minnesota Statutes,
5.32 	section 645.021, subdivision 3.

5.33 	Sec. 6. CITY OF WAITE PARK; LOCAL SALES TAX.
 5.34 	Notwithstanding Minnesota Statutes, sections 297A.99 and
5.35 	477A.03, or any other provision of law, ordinance, or charter to
5.36 	the contrary, the city of Waite Park may impose a sales tax
6.1 	under section 2, pursuant to the approval of the city voters at
6.2 	a general election on November 4, 2003.  Revenues from the tax
6.3 	may be used to fund the projects approved by the city voters
6.4 	that meet the criteria in section 2, paragraph (b), and may,
6.5 	without an additional vote, also be used to fund under a joint
6.6 	powers agreement a regional library located in the city of St.
6.7 	Cloud.  All other provisions of section 297A.99 not in conflict
6.8 	with the provisions of this section shall apply to the
6.9 	imposition, collection, administration, and use of revenues from
6.10 	this tax.

6.11 	EFFECTIVE DATE. This section is effective the day after
6.12 	compliance by the city of Waite Park with Minnesota Statutes,
6.13 	section 645.021, subdivision 3.