HF4033 (Legislative Session 94 (2025-2026))
Cloquet Area Fire District authorized to impose a local sales tax.
Related bill: SF4188
AI Generated Summary
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
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 05, 2026 | House | Action | Introduction and first reading, referred to | Taxes |
Citations
[
{
"analysis": {
"added": [],
"removed": [],
"summary": "Notwithstanding Minnesota Statutes section 477A.016, the Cloquet Area Fire District may impose a local sales and use tax up to 0.5% with voter approval for purposes described.",
"modified": []
},
"citation": "477A.016",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Provides for the local sales tax to be approved by voters and directs remittance of the tax proceeds to the Cloquet Area Fire District, as governed by 297A.99, subdivision 3.",
"modified": []
},
"citation": "297A.99",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Bonding authority under 297A.99, subdivision 3, paragraph a; aggregate principal not to exceed $31,000,000; bonds may be paid from or secured by district funds including tax; not subject to sections 275.60 and 275.61.",
"modified": []
},
"citation": "297A.99",
"subdivision": "subdivision 3 paragraph a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Funds remaining after payment of allowed costs due to timing of tax termination must be placed in the district's general fund.",
"modified": []
},
"citation": "297A.99",
"subdivision": "subdivision 3 paragraph f"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Tax expires at the earlier of 20 years after first imposition or when funds are sufficient to pay project costs and issuance costs; remaining funds go to the district general fund; may end earlier if determined by the district.",
"modified": []
},
"citation": "297A.99",
"subdivision": "subdivision 12"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "The Cloquet Area Fire District may issue bonds under Minnesota Statutes chapter 475 to finance all or part of the project costs approved by voters.",
"modified": []
},
"citation": "475",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Bonds issued under this subdivision are not subject to the debt/levy rules that would otherwise apply under sections 275.60 and 275.61.",
"modified": []
},
"citation": "275.60",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Not subject to levy limitations for the bonds described in this act.",
"modified": []
},
"citation": "275.61",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "A separate election to approve the bonds under Minnesota Statutes section 475.58 is not required.",
"modified": []
},
"citation": "475.58",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Any levy of taxes under Minnesota Statutes section 475.61 to pay principal of and interest on the bonds is not subject to any levy limitation.",
"modified": []
},
"citation": "475.61",
"subdivision": ""
}
]Progress through the legislative process
In Committee