HF3583

Purpose

This bill would authorize the city of Roseau to adopt a local sales and use tax to fund specific project costs. The tax would require voter approval and, if enacted, would apply only within Roseau to support the projects described below.

Main Provisions

• Local tax authority: Roseau may impose by ordinance a local sales and use tax of up to 0.5% (one-half of one percent), if approved by voters as required by law.
• Additional tax: The Roseau tax would be in addition to any other local sales and use taxes already in place.
• Use of revenue: Revenues from the tax would be used to cover:
  • Costs of collecting and administering the tax, and
  • The following project costs in Roseau: renovation of the Roseau Memorial Arena and construction of a new community and wellness center, plus related bond issuance costs.
• Bonding to finance projects: The city may issue bonds (up to a total principal of $12.5 million, plus issuance costs) to help pay these project costs. Bond debt may be paid from the tax revenues or other city funds.
• Bonding details: Bonds would be issued under Minnesota Statutes chapter 475 and are not subject to certain debt levy limits or statutory debt-related restrictions; there is no separate election required to issue the bonds. The bonds are not included in the city’s general debt limit, and any levy to pay debt service is not subject to levy limitations.
• Election requirements: A separate election to approve the bonds is not required.

Duration, Termination, and Exit

• Expiration: The tax would terminate at the earlier of 30 years after the tax first is imposed or once enough revenue has been collected to pay the authorized project costs and related bond costs (including interest) as determined by the city council.
• Excess funds: Any funds remaining after paying the allowed costs, due to the timing of the termination, would be placed in the city’s general fund.
• Early termination: The tax may expire earlier if the city adopts an ordinance to end it sooner.
• Voter and statutory alignment: Termination and existence are subject to Minnesota Statutes section 297A.99, subdivision 12, and the project and voter-approval requirements specified in Minnesota Statutes section 297A.99.

Administration and Oversight

• Administration: The revenue would first cover the costs of collecting and administering the tax.
• Project oversight: The projects (arena renovation and new community/wellness center) require voter-approved authorization under the applicable statutes.

Notable Legal References (context)

• Voter approval as required under Minnesota Statutes section 297A.99 subdivision 3.
• Bonding and debt provisions under Minnesota Statutes chapter 475.
• Exemption from certain debt and levy limitations (not subject to 275.60, 275.61; not included in debt limit; levy not subject to limits).

Relevant Terms - local sales and use tax - Roseau - up to one-half of one percent (0.5%) - renovation of the Roseau Memorial Arena - construction of a new community and wellness center - revenues - bond issuance costs - Minnesota Statutes chapter 475 - 12,500,000 (bond principal limit) - not subject to debt limitations - levy limitations - 275.60 and 275.61 - 297A.99 - voter approval / election - administration and collection - general fund - termination / expiration date - associated costs related to issuance of bonds