Purpose

This bill changes how long the City of St. Paul can collect a local sales tax and clarifies what happens to funds after projects are completed and bonds are paid off. It modernizes expiration rules and ties the tax duration to specific project and debt milestones, with some funds possibly returning to the city’s general fund.

Main Provisions

• Expiration of taxing authority
  • The city’s authority to impose the local sales tax shall expire on the earlier of:
  • December 31, 2042 or December 31, 2060, or
  • an earlier date set by the city’s ordinance.
• Use and disposition of funds after project completion
  • Any funds still available after finishing approved projects and after retirement or redemption of bonds or other obligations may be placed in the City of St. Paul’s general fund.
• Expiration timing for the tax itself (subdivision 1a)
  • The tax ends at the earlier of:
  • 20 years after the tax is first imposed, or
  • the point when the city determines the revenues are sufficient to pay for the voter-approved project costs (as required under Minnesota Statutes section 297A.99, subdivision 3, paragraph a) plus an amount needed to cover the costs of issuing bonds (including interest) under subdivision 3a.
  • Any funds remaining after paying the allowed costs due to the timing of termination under Minnesota Statutes section 297A.99, subdivision 12, go to the city’s general fund, unless another provision applies.
• Optional earlier expiration
  • The city can set an earlier expiration date by ordinance.

Changes to Existing Law

• The bill amends the statute governing the St. Paul local sales tax (and its amendments from 1993, 1998, 2013, and 2023) to:
  • Update expiration provisions for the tax authority.
  • Clarify how funds are to be handled after project completion and debt service.
  • Align expiration and fund-disposition rules with voter-approved projects under the state’s 297A.99 framework.

Fiscal/Financial Implications

• Provides a defined end date for the local sales tax and ties that end date to project debt and revenue sufficiency milestones.
• Specifies that leftover funds after debt service or timing-related termination generally go to the city’s general fund.
• Ensures that bond issuance costs and interest are covered before funds are deemed surplus.

Potential Impacts

• May affect the duration of revenue streams available for St. Paul projects and debt service.
• Could influence budgeting and planning for future city projects, as well as the handling of any surplus funds.

Effective Date

• The changes set expiration timelines and fund disposition, with dates tied to ordinance decisions and voter-approved project requirements. Specific implementation timing would follow the normal legislative effective-date process.

Relevant Terms local sales tax; taxing authority; City of Saint Paul; expiration date; December 31, 2042; December 31, 2060; ordinance; subdivision; project costs; voter-approved projects; Minnesota Statutes section 297A.99; subdivision 3; bond issuance; interest; retirement; redemption; general fund; funds remaining; timing of termination; 297A.99 subdivision 12.