SF3601

Purpose

This bill would allow the city of Plymouth to create a local sales and use tax of up to 0.5% (one-half of 1 percent). The tax would require approval by Plymouth voters in a general election. The revenue from the tax would be used to cover costs related to collecting and administering the tax and to fund named local projects, plus the costs of issuing bonds to pay for those projects.

How the tax would be authorized

• Plymouth can impose the tax only if voters approve it at a general election.
• The city would need to adopt a resolution approving the tax by June 30, 2025 (or 30 days after the bill becomes law, whichever is later). The resolution must meet specific content requirements.

Use of revenue

• Revenue from the tax would be used to cover:
  • Costs of collecting and administering the tax.
  • Costs for three major local projects in Plymouth:
  • Improvements to the Plymouth Ice Center, including construction of an adjacent City Center public parking ramp (involving tens of millions of dollars).
  • Improvements to the Plymouth Community Center, including construction of a permanent fieldhouse.
  • Construction and improvements to Plymouth regional sports complexes.
• These project costs could be funded directly by the tax receipts or used to support bond financing for the projects.

Bonding (debt financing)

• Plymouth could issue bonds to finance all or part of the project costs, with voter approval as required.
• The total principal amount for bonds could not exceed $120 million, plus costs to issue the bonds.
• Bond payments could come from the tax revenues and other city funds; bond issuance would not be subject to certain state debt statutes.
• The bonds would not count toward the city’s debt limits, and levy limits would not apply to taxes used to pay principal and interest on the bonds.
• A separate election for the bonds would not be required.

Termination and sunset

• The local tax would expire no later than 20 years after it is first imposed, or earlier if the city determines that the revenue received is enough to pay the project costs and any related bond costs (including interest).
• Any funds remaining after paying approved costs would go to the city’s general fund.
• The city could end the tax earlier by ordinance.

Additional context

• The tax is authorized notwithstanding some existing Minnesota statutes and would follow the administration rules under those statutes.
• The bill specifies that revenues may be used for the listed projects and related bond costs, including interest.

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Relevant Terms local sales and use tax, Plymouth, voter approval, general election, ordinance, resolution, Plymouth Ice Center, City Center parking ramp, Plymouth Community Center, permanent fieldhouse, Plymouth regional sports complexes, bonds, bonding, Minnesota Statutes 297A.99, 475, debt limits, levy limits, revenue use, project costs, administration costs, sunset, expiration, general fund.