1.1 	A bill for an act
1.2 	relating to taxation; sales and use; allowing cities to impose local sales tax if 
1.3 	certain criteria are met;amending Minnesota Statutes 2010, section 297A.99, by 
1.4 	adding a subdivision; Minnesota Statutes 2011 Supplement, section 297A.99, 
1.5 	subdivision 1.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2011 Supplement, section 297A.99, subdivision 1, 
1.8 	is amended to read:
1.9 		Subdivision 1.Authorization; scope. (a) A political subdivision of this state may 
1.10 	impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) if 
1.11 	permitted by special law, or (4) if the political subdivision enacted and imposed the tax 
1.12 	before January 1, 1982, and its predecessor provision, or (5) if the tax is allowed under 
1.13 	subdivision 1a.
1.14 	(b) This section governs the imposition of a general sales tax by the political 
1.15 	subdivision. The provisions of this section preempt the provisions of any special law:
1.16 	(1) enacted before June 2, 1997, or
1.17 	(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 
1.18 	provision from this section's rules by reference.
1.19 	(c) This section does not apply to or preempt a sales tax on motor vehicles or a 
1.20 	special excise tax on motor vehicles.
1.21 	(d) A political subdivision may not advertise or expend funds for the promotion of a 
1.22 	referendum to support imposing a local option sales tax. A political subdivision may only 
1.23 	expend funds to conduct the referendum.

2.1 	EFFECTIVE DATE. This section is effective for local sales taxes for which the 
2.2 	authorizing referendum is held after June 30, 2012.

2.3 	Sec. 2. Minnesota Statutes 2010, section 297A.99, is amended by adding a subdivision 
2.4 	to read:
2.5 		Subd. 1a.General authority; certain cities. (a) A city, or a group of cities acting 
2.6 	under a joint powers agreement, may impose a local sales and use tax of up to one-half of 
2.7 	one percent without authorization under a special law provided that:
2.8 	(1) imposition of the tax is approved by the voters of each city at a general election; 
2.9 	and
2.10 	(2) all the conditions for adoption, use, and termination of the tax contained in this 
2.11 	subdivision and subdivisions 3 to 12 are met.
2.12 	The authority under this subdivision is in addition to any local sales tax authority 
2.13 	permitted under special law.
2.14 	(b) If a city imposes a tax under paragraph (a) at a rate less than one-half of one 
2.15 	percent, the city may increase the rate upon approval of the voters at a general election up 
2.16 	to a rate of one-half of one percent without authorization under a special law provided that 
2.17 	all of the conditions of this subdivision are met.
2.18 	(c) The proceeds of a tax imposed under this subdivision must be dedicated 
2.19 	exclusively to pay for specific capital projects approved by the voters in the authorizing 
2.20 	referendum. No proceeds may be used for normal maintenance or operating costs of a 
2.21 	facility or properties owned by a city or group of cities. The proceeds may be used to 
2.22 	pay for collecting and administering the tax; to pay all or part of the capital costs of the 
2.23 	development, acquisition, construction, expansion, and improvement; and to secure and 
2.24 	pay debt service on bonds or other obligations issued to finance capital costs of a regional 
2.25 	project, including the following:
2.26 	(1) convention or civic center;
2.27 	(2) public libraries;
2.28 	(3) parks, trails, and recreational centers;
2.29 	(4) overpasses, arterial and collector roads, or bridges, on, adjacent to, or connecting 
2.30 	to a Minnesota state highway;
2.31 	(5) flood control and protection;
2.32 	(6) water quality projects to address groundwater and drinking water pollution 
2.33 	problems;
2.34 	(7) court facilities;
2.35 	(8) fire, law enforcement, or public safety facilities; or
3.1 	(9) municipal buildings.
3.2 	(d) At least three months prior to holding a referendum to impose the tax, a city must 
3.3 	provide to the commissioner of revenue a resolution approved by the city that shows that 
3.4 	the specific project or projects to be funded by the tax meet the requirements of paragraphs 
3.5 	(a) to (c); the date on which the referendum will be held; the maximum amount raised 
3.6 	by the tax that may be used for the specified project or projects, excluding issuance and 
3.7 	interest costs for any related bonds; and the maximum time that the tax may be imposed. 
3.8 	The commissioner shall certify that the requirements under this subdivision are met and 
3.9 	the city shall provide any additional information on the commissioner's requests in order 
3.10 	to make that determination. The commissioner's decision is final.
3.11 	(e) The question put to the voters at the referendum authorizing the vote must 
3.12 	include information on the specific project or projects to be funded by the proceeds of the 
3.13 	tax; the maximum amount of sales tax revenues that will be used to fund each project, not 
3.14 	including any issuance and interest costs for related bonds; and the maximum length of 
3.15 	time that the tax will be imposed, which must not exceed ten years from the date the initial 
3.16 	tax was imposed without regard to an increase in the rate. If the referendum is not held on 
3.17 	the date contained in the resolution, the authority for imposing the tax expires.
3.18 	(f) A city may issue general obligation bonds to pay the costs of projects specified 
3.19 	in the referendum authorizing imposition of the tax. The approval of the question under 
3.20 	paragraph (e) meets the requirement for elector approval for issuance of bonds under 
3.21 	section 475.58, subdivision 1. The debt represented by the bonds must not be included in 
3.22 	computing any debt limitations applicable to the city, and the levy of taxes required by 
3.23 	section 475.61 to pay the principal or any interest on the bonds must not be subject to any 
3.24 	levy limitations or be included in computing or applying any levy limitation to the city.
3.25 	(g) The tax, if enacted, expires when the specified revenue has been raised or the 
3.26 	maximum time in which the tax is in effect under the resolution is reached, whichever is 
3.27 	sooner. Any tax imposed under this subdivision must expire no later than ten years after 
3.28 	imposition from the date the initial tax was imposed without regard to an increase in the 
3.29 	rate. The governing board of the city may, by ordinance, terminate the tax at an earlier 
3.30 	date. A city must not impose a new local option sales and use tax until a previously 
3.31 	authorized one has been terminated.

3.32 	EFFECTIVE DATE. This section is effective for local sales taxes for which the 
3.33 	authorizing referendum is held after June 30, 2012.