HF3366

Purpose

• Authorizes the City of Robbinsdale to ask voters to approve a local sales and use tax of up to 0.5% to fund specific city projects and related costs.

Main Provisions

• Tax authorization and approval:
  • Robbinsdale may impose a local sales and use tax of up to one-half of 1 percent (0.5%), if voters approve at an election as required by state law.
  • The tax would be in addition to any other local sales and use taxes.
  • Administration, collection, and enforcement would follow existing state law (Minnesota Statutes section 297A.99).
• Use of tax revenues:
  • Revenues must be used to pay for defined city projects and related costs, including the costs of collecting the tax and paying debt service on bonds issued to finance those projects.
  • The listed projects include: a new public works facility and a new community building in Sanborn Park.
• Bonding authority:
  • Robbinsdale may issue bonds (under Minnesota Statutes chapter 475) to finance all or part of the project costs.
  • The total principal amount of bonds may not exceed $40,000,000, plus the costs of issuing the bonds.
  • Bonds may be paid from the tax revenues or other city funds; bond issuance is not subject to certain state debt rules and the bonds are not counted toward debt limits.
  • A separate election to approve the bonds is not required.
• Tax duration and termination:
  • The tax would expire no later than 20 years after it is first imposed, or earlier if the city determines the tax amount is sufficient to pay project costs plus bond costs (including interest).
  • Any remaining money after paying allowed costs, due to timing of termination, must be placed in the city’s general fund.
  • The tax may terminate earlier if the city adopts an ordinance to do so.

Relationship to Existing Law

• The new local tax is subject to voter approval and to Minnesota statutes governing local taxes (notably 297A.99).
• It is intended to be in addition to other local taxes and is governed by established rules for imposition, administration, collection, and enforcement.
• Bonding and debt-related provisions reference Minnesota Statutes chapters 475 (bonds) and related sections, and specific exclusions from some debt and levy limits (e.g., 275.60 and 275.61).

Notable Changes or Effects

• Creates a new, voter-approved local sales and use tax option for Robbinsdale to fund capital projects.
• Enables the city to issue up to $40 million in bonds (plus issuance costs) tied to the tax, with debt service funded by the tax revenues.
• Delineates a clear end date (up to 20 years) or an earlier termination once project and bond costs are covered.
• Specifies that any surplus funds after costs go to the city’s general fund, and that bond-related provisions are not subject to some standard debt or levy limitations.

Practical Impact

• Residents would vote to allow a small tax increase to pay for the new public works facility and Sanborn Park community building, with repayment through bonds financed by the tax.
• The arrangement includes built-in safeguards like voter approval, defined uses, and a finite time horizon for the tax.

Potential Considerations

• The exact amount raised depends on tax duration and local economic activity.
• The city can issue bonds without a separate bond election, which may affect long-term budgeting and debt levels.

Relevant Terms

local sales and use tax; Robbinsdale; voter approval; Minnesota Statutes 297A.99; use of revenues; debt service; bonds; Minnesota Statutes chapter 475; public works facility; Sanborn Park; community building; issuance costs; levy limitations; 275.60; 275.61; general fund; termination; 20 years; issuance costs.