Purpose

To authorize Kandiyohi County to adopt a local sales and use tax and use the revenue to fund specific county projects and related costs, including debt service, through a voter-approved process.

Main provisions

• Tax allowance and voter approval: If voters approve at an election, Kandiyohi County may impose a local sales and use tax of up to 0.5% (one-half of one percent). The tax is in addition to any other local taxes and is governed by the state’s election and tax rules.
• Use of tax revenues (Subdivision 2): Revenues must be used to fund:
  • Construction of a new joint judicial center and public safety facility, and
  • Renovations to the county health and human services building,
  • Plus the costs of collecting and administering the tax and paying debt service on bonds issued to finance the projects.
• Bonding authority (Subdivision 3):
  • The county may issue bonds under state bonding laws to finance all or part of the project costs, with a total principal amount not to exceed $67.8 million plus issuance costs.
  • Bonds may be paid from the tax revenues or other available county funds, and are not counted toward certain debt limits.
  • The issuance of bonds does not require a separate public vote, and the bonds are not included in the county’s debt limit; the tax levy to pay bond principal and interest is not subject to levy limits.
• Termination of the tax (Subdivision 4):
  • The tax expires at the earlier of 25 years after it is first imposed or when the county determines the tax revenue is sufficient to pay the project costs (including issuance costs) approved by voters.
  • Any remaining money after paying approved costs may go to the county’s general fund.
  • The county can terminate the tax earlier by ordinance.

Significant changes to existing law

• Enables Kandiyohi County to establish a local sales and use tax for a specific capital project package, contingent on voter approval.
• Introduces a dedicated bonding framework to finance part of the projects, with a specified cap and certain protections (not counting toward typical debt limits, no separate bond election required).
• Sets project-specific funding priorities (judicial center/public safety facility and health and human services building renovations) and addresses how funds are managed, including potential surplus funds.

Administrative and governance notes

• Administration and collection would follow the state’s rules under Minnesota Statutes section 297A.99, with the local ordinance controlling the tax and its termination.
• The plan ensures debt service and project costs are funded through the new tax, with the possibility of using other County funds if needed.

Relevant terms - Kandiyohi County - local sales and use tax - 0.5% (one-half of one percent) - joint judicial center - public safety facility - health and human services building - debt service - bonds - bonding authority - Minnesota Statutes 297A.99 - Minnesota Statutes 475 - issuance costs - levy limits - general fund - termination date - voter approval - projects funded by tax