HF3847

Purpose

This bill would authorize Douglas County to establish a local sales and use tax to fund the construction of a new library, but only if voters approve under Minnesota law. The tax would be up to 0.25% (one-quarter of one percent) and would be in addition to any other local taxes.

Main Provisions

• Subd. 1 — Sales and use tax authorization

  • If voters approve under Minnesota Statutes section 297A.99 subdivision 3, Douglas County may impose by ordinance a local sales and use tax of up to 0.25% for the purposes described in Subd. 2. The tax is in addition to any other local sales and use tax.

• Subd. 2 — Use of revenues

  • Revenues from the tax must be used to pay the costs of collecting and administering the tax and to finance up to $18,500,000 plus associated bonding costs for constructing a new library.

• Subd. 3 — Bonding authority

  • a) Douglas County may issue bonds under Minnesota Statutes chapter 475 to finance all or part of the library project costs, as approved by voters under 297A.99 subdivision 3 paragraph a.
  • The total principal amount may not exceed $18,500,000 plus issuance costs. Bonds may be paid from or secured by any money available to the county, including the tax revenues.
  • Bond issuance is not subject to Minnesota Statutes sections 275.60 and 275.61. The bonds are not counted toward any county debt limit. Any levy to pay principal and interest under section 475.61 is not subject to levy limits. A separate election to approve the bonds under section 475.58 is not required.

• Subd. 4 — Termination of taxes

  • The tax expires no later than ten years after first imposition, or earlier if the county board determines the amount collected is sufficient to pay the project costs (and related bond costs, including interest) as approved by voters under 297A.99 subdivision 2 paragraph a. Any remaining funds after paying allowed costs must be placed in the county’s general fund. The tax may expire earlier if the county decides so by ordinance.

Significant Changes to Existing Law

• Creates a new local option sales and use tax for Douglas County to fund a library project, contingent on voter approval.
• Establishes bonding authority under chapter 475 to finance the library project, with a cap of $18.5 million plus issuance costs, and allows that debt to be serviced by the tax revenues without being counted toward certain debt limits.
• Removes the need for a separate bond election to authorize the debt, and it specifies how long the tax can run and how any excess funds are handled (general fund).
• Clarifies that the tax is in addition to other local taxes and sets conditions for termination and remaining funds.

Relevant Terms

• Douglas County
• local sales and use tax
• 0.25% / one-quarter of one percent
• library construction / new library
• revenues / collection and administration costs
• bonding / bonds
• Minnesota Statutes section 297A.99 subdivision 3
• Minnesota Statutes chapter 475
• debt limits / not counted toward debt limit
• 275.60 and 275.61 (debt limits exemption)
• levy under Minnesota Statutes 475.61
• not requiring separate bond election (475.58)
• termination of tax / ten-year term
• general fund (leftover funds)
• voter approval requirements
• subdivision references (Subd. 1–4)