SF3592

Purpose

This bill would let the city of Robbinsdale create its own local sales and use tax to fund a Public Works Facility Project. The tax would require voter approval and would be used to cover the costs of collecting the tax as well as to pay for the project through bonds.

Key Provisions

• Local tax authorization

  • Robbinsdale could impose a sales and use tax of up to 0.5% (one-half of one percent) if voters approve it.

• Use of revenue

  • Revenue from the tax would be used to pay for:
  • the costs of collecting and administering the tax, and
  • the Public Works Facility Project, up to $40,000,000 plus related bonding costs.

• Bonding authority

  • The city could issue bonds under state law (Chapter 475) to finance all or part of the project costs.
  • The total bond principal could not exceed $40,000,000 plus issuance costs.
  • Bond proceeds can be paid from the tax revenues or other city money.
  • Bond issuance is not subject to certain debt-related statutes and is not counted in city debt limits.
  • Any tax levy to pay bond principal and interest would not be limited by typical levy caps.
  • A separate election to approve bonds is not required.

• Termination and sunset

  • The tax would expire at the earlier of:
  • 20 years after the tax is first imposed, or
  • when the city determines the tax revenue is enough to pay the project costs (including bond costs and interest) as approved by voters, plus associated issuance costs.
  • Any remaining money after paying allowed costs would go to the city’s general fund.
  • The city could end the tax earlier by ordinance.

• Additional notes

  • The tax is in addition to any other local sales tax.
  • The proposal follows voter approval rules and local ordinance authority, with references to specific Minnesota statutes for administration and elections.

Significant Changes to Existing Law

• Establishment of a new local sales and use tax for Robbinsdale (up to 0.5%), subject to voter approval.
• Authorization for up to $40 million in bonding plus issuance costs to fund a Public Works Facility Project, with a streamlined process that does not require a separate bond election.
• Bonds and debt related provisions are made not to count toward certain debt limits and not to be restricted by some levy limitations.
• Tax termination is tied to a project funding goal and bonds, with a specified sunset mechanism (up to 20 years or earlier if funding goals are met).
• Funds from any remaining balance would be funneled to the city’s general fund after project and bond costs are covered.

Relevant Terms - local sales and use tax, 0.5% tax, Robbinsdale - Public Works Facility Project - bonding, bonds, Chapter 475, issuance costs - debt limits, levy limitations - voter approval, election, Minnesota Statutes 297A.99 - administration costs, collection costs - termination, sunset, general fund - ordinance, local option taxation