1.1 	A bill for an act
1.2 	relating to local sales taxes; allowing certain cities to impose a local sales tax if 
1.3 	certain criteria are met;amending Minnesota Statutes 2006, section 297A.99, 
1.4 	subdivisions 1, 3, by adding a subdivision.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2006, section 297A.99, subdivision 1, is amended to 
1.7 	read:
1.8 		Subdivision 1.Authorization; scope. (a) A political subdivision of this state may 
1.9 	impose a general sales tax if permitted by special law or if the political subdivision enacted 
1.10 	and imposed the tax before the effective date of section 477A.016 and its predecessor 
1.11 	provision, or if the tax is allowed under subdivision 1a. 
1.12 	(b) This section governs the imposition of a general sales tax by the political 
1.13 	subdivision. The provisions of this section preempt the provisions of any special law:
1.14 	(1) enacted before June 2, 1997, or
1.15 	(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 
1.16 	provision from this section's rules by reference.
1.17 	(c) This section does not apply to or preempt a sales tax on motor vehicles or a 
1.18 	special excise tax on motor vehicles.

1.19 	EFFECTIVE DATE. This section is effective for local sales taxes for which the 
1.20 	authorizing referendum is held after June 30, 2007.

1.21 	Sec. 2. Minnesota Statutes 2006, section 297A.99, is amended by adding a subdivision 
1.22 	to read:
2.1 		Subd. 1a.General authority; certain cities. (a) A city, or a group of cities acting 
2.2 	under a joint powers agreement, may impose a local sales tax of one-half of one percent 
2.3 	without authorization under a special law provided that:
2.4 	(1) the city or cities are located outside of the metropolitan counties, as defined in 
2.5 	section 473.121, subdivision 4;
2.6 	(2) imposition of the tax is approved by the voters of each city pursuant to 
2.7 	subdivision 3, paragraph (a); and
2.8 	(3) all the conditions for adoption, use, and termination of the tax contained in this 
2.9 	subdivision and subdivisions 3 to 12 are met.
2.10 	The authority under this section is in addition to any local sales tax authority 
2.11 	permitted under special law.
2.12 	(b) The proceeds of a tax imposed under this subdivision must be dedicated 
2.13 	exclusively to pay for specific regional capital projects approved by the voters in the 
2.14 	authorizing referendum that provide benefit to persons outside of the city boundaries, as 
2.15 	defined in paragraph (c), as well as to the city. No proceeds may be used for normal 
2.16 	maintenance or operating costs of a facility or properties owned by a city or group of 
2.17 	cities. The proceeds may be used to pay for collecting and administering the tax, to pay all 
2.18 	or part of the capital costs of the development, acquisition, construction, expansion, and 
2.19 	improvement, and to secure and pay debt service on bonds or other obligations issued to 
2.20 	finance capital costs of a regional project, including, but not limited to, the following:
2.21 	(1) regional convention or civic center;
2.22 	(2) regional airport;
2.23 	(3) regional public libraries;
2.24 	(4) parks, trails, regional recreational centers, and open space;
2.25 	(5) overpasses, arterial and collector roads, or bridges, on, adjacent to, or connecting 
2.26 	to a Minnesota state highway;
2.27 	(6) railroad overpasses or crossing safety improvements;
2.28 	(7) flood control and protection; or
2.29 	(8) water quality projects to address groundwater and drinking water pollution 
2.30 	problems.
2.31 	(c) A capital project is considered to be a "regional capital project that provides 
2.32 	benefits to persons outside the city boundaries" if it meets one of the following criteria:
2.33 	(1) the project is one of the projects listed in paragraph (b), clauses (6) to (8);
2.34 	(2) the project is funded by more than one city under a joint powers agreement and 
2.35 	no more than 90 percent of the revenues for the project will be provided by one city;
3.1 	(3) at least 20 percent of the direct users of the facility will be persons from outside 
3.2 	of the city; or
3.3 	(4) at least 20 percent of the benefit derived from the project will accrue to persons 
3.4 	residing or businesses located outside of the city boundaries.
3.5 	(d) At least three months prior to holding a referendum to impose the tax, a city must 
3.6 	provide to the commissioner of revenue a resolution approved by the city that shows that 
3.7 	the tax will fund a project that meets the requirements of paragraphs (a) to (c), the date on 
3.8 	which the referendum will be held, the maximum amount raised by the tax that may be 
3.9 	used for the specified project, excluding issuance and interest costs for any related bonds, 
3.10 	and the maximum time that the tax may be imposed. The commissioner shall certify that 
3.11 	the requirements under this subdivision are met and the city shall provide any additional 
3.12 	information on the commissioner's requests in order to make that determination. The 
3.13 	commissioner's decision is final.
3.14 	(e) The question put to the voters at the referendum authorizing the vote must 
3.15 	include information on the specific project or projects to be funded by the proceeds of the 
3.16 	tax, the maximum amount of sales tax revenues that will be used to fund each project, not 
3.17 	including any issuance and interest costs for related bonds, and the maximum length of 
3.18 	time that the tax will be imposed. If the referendum is not held on the date contained in 
3.19 	the resolution, the authority for imposing the tax expires.
3.20 	(f) A city may issue general obligation bonds to pay the costs of projects specified 
3.21 	in the referendum authorizing imposition of the tax. The approval of the question under 
3.22 	paragraph (e) meets the requirement for elector approval for issuance of bonds under 
3.23 	section 475.58, subdivision 1. The debt represented by the bonds must not be included in 
3.24 	computing any debt limitations applicable to the city, and the levy of taxes required by 
3.25 	section 475.61 to pay the principal or any interest on the bonds must not be subject to any 
3.26 	levy limitations or be included in computing or applying any levy limitation to the city.
3.27 	(g) The tax, if enacted, expires when the specified revenue has been raised or the 
3.28 	maximum time in which the tax is in effect under the resolution is reached, whichever 
3.29 	is sooner. Any tax imposed under this subdivision must expire no later than 20 years 
3.30 	after imposition. The governing board of the city may, by ordinance, terminate the tax at 
3.31 	an earlier date.

3.32 	EFFECTIVE DATE. This section is effective for local sales taxes for which the 
3.33 	authorizing referendum is held after June 30, 2007.

3.34 	Sec. 3. Minnesota Statutes 2006, section 297A.99, subdivision 3, is amended to read:
4.1 		Subd. 3.Requirements for adoption, use, termination. (a) Imposition of a local 
4.2 	sales tax is subject to approval by voters of the political subdivision at a general election.
4.3 	(b) The proceeds of the tax must be dedicated exclusively to payment of the cost of a 
4.4 	specific capital improvement which is designated at least 90 days before the referendum 
4.5 	on imposition of the tax is conducted.
4.6 	(c) The tax must terminate after the improvement designated under paragraph (b) 
4.7 	has been completed.
4.8 	(d) After a sales tax imposed by a political subdivision has expired or been 
4.9 	terminated, the political subdivision is prohibited from imposing a local sales tax for a 
4.10 	period of one year. Notwithstanding subdivision 13, this paragraph applies to all local 
4.11 	sales taxes in effect at the time of or imposed after May 26, 1999.

4.12 	EFFECTIVE DATE. This section is effective after June 30, 2007.