HF3950

Purpose

• Authorizes the city of Maplewood to impose a local sales and use tax of 0.5% (one-half percent) if approved by voters.
• The tax is intended to raise funds for specific projects and related bond costs, including administration and collection.

Main Provisions

• Tax authorization and approval

  • The tax may be imposed by ordinance only if voters approve it at an election as required by law.
  • The tax is local and in addition to any other local sales and use taxes.

• Use of tax revenues

  • Revenues must be used to pay for the costs of collecting and administering the tax.
  • Revenues also fund three approved projects in Maplewood plus costs related to issuing bonds:
  • East Metro Public Safety Training Facility — $25,000,000
  • Maplewood Community Center — $48,000,000
  • Afton Heights Park — $8,000,000

• Bonding authority

  • The city may issue bonds under Minnesota Statutes, chapter 475, to finance all or part of the project costs.
  • The total bonded amount may not exceed $81,000,000 plus costs of issuing the bonds.
  • Bond proceeds and the tax revenue can be used to pay principal and interest on the bonds and related issuance costs.
  • Bonds are not counted toward the city’s debt limit and are not subject to certain levy limitations.
  • A separate election to approve bonds is not required unless required by law.

Term, Termination, and Oversight

• Term of the tax

  • The tax expires at the earlier of 20 years from when it is first imposed or when the city determines the tax revenue is sufficient to cover project costs and bond-related costs.

• Termination and residual funds

  • After the tax ends, any remaining money from the tax that is not needed to pay authorized costs must be placed in the city’s general fund.
  • The city may terminate the tax earlier by ordinance if it wishes.

• Administration and regulatory framework

  • Administration, collection, and enforcement follow the applicable Minnesota statutes (including provisions under 297A.99).
  • The tax is subject to the broader statutory framework governing local taxes and debt-related financing.

Significant Changes to Existing Law (impact)

• Creates a new, city-specific local sales and use tax for Maplewood to fund named capital projects and related bond costs.
• Establishes a dedicated funding stream via a 0.5% tax and up to $81 million in bonds (plus issuance costs) to finance the projects.
• Removes certain traditional debt and levy restrictions for the bond financing (debt limits and levy limits not applying to the bonds), while requiring voter approval for the tax itself and compliance with 297A.99 for bond approval.
• Sets a defined 20-year window for the tax, with a clear mechanism to terminate early if funds are sufficient, and directs any excess funds to the general fund.

Relevant Terms - sales and use tax - 0.5% / one-half percent - Maplewood - East Metro Public Safety Training Facility - Maplewood Community Center - Afton Heights Park - bonds / bonding authority - Minnesota Statutes chapter 475 - Minnesota Statutes section 297A.99 - debt limitation - levy limitation - election / voter approval - issuance costs - term of tax (20 years) - administration and collection - general fund

Relevant Terms (inferred / related concepts) - local financing - capital projects - bond issuance costs - tax revenue allocation - project funding verification