HF4033

Purpose

Authorize the Cloquet Area Fire District to impose a local sales and use tax to fund ambulance and fire station construction and related debt, subject to voter approval in the affected cities (Cloquet and Scanlon).

Key Provisions

• A local sales and use tax of up to 0.5% may be imposed by the Cloquet Area Fire District if approved by voters in meetings and elections required by law.
• Separate elections are required in the City of Cloquet and the City of Scanlon; the tax applies only in the cities where it is approved and does not apply elsewhere.
• The tax is in addition to any other local sales and use taxes.

Revenue Allocation and Administration

• The Commissioner of Revenue must remit the tax proceeds to the Cloquet Area Fire District after refunds and a proportional share of collection costs.
• The tax revenue may be used to pay for:
  • Costs of collecting and administering the tax
  • Financing up to $10,000,000 for the construction of Ambulance and Fire Station I
  • Securing and paying debt service on bonds issued to finance all or part of the project

Bonding Authority

• The Fire District may issue bonds under Minnesota Statutes chapter 475 to finance the project, up to $10,000,000 plus costs of issuing the bonds.
• Bonds may be paid from or secured by any funds available to the district, including the tax revenue.
• Bond issuance is not subject to certain debt limit statutes (275.60 and 275.61), and the bonds are not counted toward the district’s debt limit. The levy to repay bonds is not subject to the same levy limitations.
• A separate election to approve the bonds is not required.

Termination and Sunset

• The tax expires at the earlier of 20 years after the tax is first imposed or when the district determines the tax revenue is enough to pay the project costs plus bond-related costs.
• Any funds remaining after paying allowed costs must go to the district’s general fund, unless otherwise provided.
• The district governing body may terminate the tax earlier if they decide so.

Significant Changes to Existing Law

• Establishes a new, dedicated local sales and use tax authority for the Cloquet Area Fire District (0.5%), contingent on voter approval in Cloquet and Scanlon.
• Enables the district to issue bonds up to $10,000,000 to finance the project, with specific provisions about bond issuance, debt limits, and administration.
• Changes how revenues are collected, distributed, and used for emergency infrastructure (Ambulance and Fire Station I) and debt service.

Administration Notes

• The tax is administered under Minnesota Statutes related to local taxes (with specific governance under 297A.99).
• Refunds and costs of collection are handled before remittance to the district.

Relevant Terms - Cloquet Area Fire District - local sales and use tax - sales tax up to 0.5% (one-half of one percent) - voters / election - City of Cloquet - City of Scanlon - Minnesota Statutes 297A.99 - Minnesota Statutes chapter 475 - Ambulance and Fire Station I - debt service - bonds - issuance costs - refunds - cost of collection - general fund - termination / sunset