HF5081

Purpose

• Explain changes to how revenues from the St. Paul local sales tax can be used. The bill directs that tax revenues be allocated to cover administrative costs and to fund or finance specific capital projects in St. Paul, particularly streets, bridges, and parks/recreation facilities, plus related debt service.

Main Provisions

• Use of tax revenues (subdivision 2b):
  • A. Revenues must be used by the City of St. Paul to:
  • pay the costs of collecting and administering the local sales tax, and
  • finance all or part of certain projects, including debt service on bonds issued for these projects.
  • B. Specific projects and funding amounts:
  • Streets and bridges: up to $738,000,000 plus associated bonding costs for improvements to streets and bridges.
  • Parks and recreation facilities: up to $246,000,000 plus associated bonding costs for capital improvements to parks and recreation facilities.
• Amended resolution and voter approval:
  • The city must adopt an amended resolution authorizing the use of the tax revenues for the listed purposes.
  • The amended resolution must be submitted to the state auditor by August 31 of the year the city presents the tax for voter approval.
  • The ballot question presented to voters must indicate the purposes for which the revenues will be used, as described in the amended resolution.
  • If the city does not adopt and submit the amended resolution, the ballot question may not include or authorize the use of revenues for the specified purposes (the city cannot use the tax revenues for those purposes without the amended resolution).

Significant Changes to Existing Law

• Adds a formal requirement that revenue use be tied to an amended resolution approved by the city and submitted to the state auditor, with a precise deadline (August 31) and a clearly defined ballot description.
• Establishes explicit funding caps for two categories of projects (streets/bridges and parks/recreation facilities) and ties these to debt service on bonds.
• Strengthens the process by which voter-approved uses of tax revenues are determined and enforced, ensuring revenues cannot be used for the specified projects unless the amended resolution is adopted and submitted.

Process and Compliance Notes

• Timeline: Amended resolution must be adopted and submitted to the state auditor by August 31 in the year the tax is put to voters.
• Ballot wording: The voter question must reflect the purposes stated in the amended resolution.
• Consequence of inaction: If the amended resolution isn’t adopted/submitted, the revenue uses for the specified purposes cannot be included in the ballot or used.

Impact

• Financial controls: Creates explicit limits on how much can be allocated for streets/bridges and parks/recreation facilities and requires debt financing plans to accompany those uses.
• Administrative and oversight requirements: Adds a formal process involving the city, the state auditor, and voter-approved ballot measures to govern revenue use.

Relevant Terms - St. Paul local sales tax - revenues - costs of collecting and administering - debt service - bonds - subdivision 3a - streets and bridges - parks and recreation facilities - capital improvements - amended resolution - state auditor - voter approval - Minnesota Statutes 297A.99