HF4008

Purpose

• Allow the city of Alexandria to choose, by voter approval, to impose a local sales and use tax of up to 0.25% (one-quarter of one percent) to fund the expansion and renovation of the PrimeWest Health Runestone Community Center. The tax would also cover the costs of collecting and administering the tax.

Main Provisions

• Local sales tax authorization

  • The city may impose the tax by ordinance, if approved by voters as required by law.
  • The tax would be in addition to any other local sales or use taxes.

• Use of tax revenues (Subdivision 2)

  • Revenues collected would pay the costs of administering and enforcing the tax.
  • The funds would also finance up to $30,000,000 plus related bonding costs for the Runestone Community Center project.

• Bonding authority (Subdivision 3)

  • The city may issue bonds under the state’s bonding law (Chapter 475) to finance all or part of the project.
  • The total principal of bonds may not exceed $30,000,000 plus the costs of issuing bonds.
  • Bond proceeds can be paid from or secured by any money available to the city, including tax revenues.
  • Bond issuance is not subject to certain debt statutes (275.60 and 275.61) and these bonds are not counted in the city’s debt limit.
  • Any statewide tax levy to pay bond principal and interest under Chapter 475.61 is not subject to levy limits.
  • A separate election to approve the bonds under 475.58 is not required.

• Termination of the tax (Subdivision 4)

  • The tax would expire no later than 20 years after it is first imposed, or earlier if the city determines the project costs (plus related bond costs) are fully funded.
  • After expiration, any remaining money would go to the city’s general fund, unless other law provides otherwise.
  • The city may set an earlier expiration by ordinance.

Notable Changes to Law

• Creates a local option for Alexandria to levy a specific sales and use tax for a defined capital project.
• Establishes a capped bonding amount linked to the project (up to $30,000,000 plus issuing costs) with special debt and tax treatment.
• Removes the need for a separate bond election and provides a fixed expiration timeline tied to funding milestones.

How it Works in Practice

• Voters in Alexandria would decide whether to allow the tax.
• If approved, the city would collect the tax to fund project costs and repay bonds.
• The city could issue bonds without being counted in its debt limit and without following some standard debt-levy rules.
• The tax would end once the project costs (and bond costs) are covered, up to a maximum of 20 years.

Relevant Terms - local sales and use tax - city of Alexandria - one-quarter of one percent (0.25%) - voter approval / election under 297A.99 - PrimeWest Health Runestone Community Center - expansion and renovation - bonding costs - Minnesota Statutes chapter 475 - bond issuance costs - 275.60 and 275.61 (debt statutes not applicable) - debt limit - 475.61 levy - 475.58 (bond election not required) - termination / expiration after 20 years - general fund - administration and collection costs