SF3910

Purpose

This bill would let the city of Maplewood place a local sales and use tax on its residents and visitors, if approved by voters. The tax would fund specific city projects and related costs, and it would also allow the city to issue bonds to help pay for those projects.

Key Provisions

• Local tax authorization: Maplewood may impose a 0.5% (one-half percent) sales and use tax by ordinance, but only if voters approve it in an election as required by state law. The tax would be in addition to any other local taxes.
• Use of tax revenues: Revenue from the tax would be used to pay for:
  • Costs to collect and administer the tax
  • The following city projects (and bond-related costs): East Metro Public Safety Training Facility, Maplewood Community Center, and Afton Heights Park
• Bonding authority: The city could issue bonds to finance all or part of the project costs, with a combined principal limit of up to $80,000,000 plus issuance costs. Bond payback could come from the tax revenue and other money available to the city. Bonds would not be subject to certain debt rules and would not count toward the city’s debt limit. A separate election to approve bonds is not required.
• Relationship to other law: The tax and its administration follow Minnesota statutes related to local taxes (notably section 297A.99), and the bond provisions reference other state statutes (e.g., 475.58 for bond approvals, and security/debt rules in 275.60 and 275.61).
• Additive impact: The new local tax would be in addition to any existing local sales taxes.

Tax Rate and Election Requirements

• Rate: 0.5% local sales and use tax
• Election: Tax approval requires a voter-approved election under Minnesota law (297A.99, subdivision 3)

Specific Projects Funded

• East Metro Public Safety Training Facility – $25,000,000
• Maplewood Community Center – $48,000,000
• Afton Heights Park – $8,000,000

Financing and Debt Provisions

• Bond amount: Up to $80,000,000 in principal, plus costs of issuing bonds
• Security and payment: Bonds may be paid from the tax revenue or other city funds
• Debt rules: Bonds are not counted toward the city’s debt limit and are not subject to certain state debt laws (275.60, 275.61)
• Levy limits: Taxes to pay bond principal and interest are not subject to levy limitations
• Election for bonds: No separate election is required to issue the bonds

Termination and Reversion

• Term: The tax would expire at the earlier of 20 years after it begins or when funds raised are sufficient to pay for project costs and bond costs (including interest)
• Excess funds: Any remaining money after costs can be placed in the city’s general fund
• Early termination: The city could end the tax earlier by ordinance

Significance / Changes to Law

• Creates a new, voter-approved local sales and use tax for Maplewood to fund specific capital projects and related costs
• Establishes a separate bonding authority to finance project costs, with a substantial maximum bond amount and flexible repayment
• Provides a structured timeline (up to 20 years) for tax collection and project funding, with defined termination rules
• Alters how Maplewood can debt-finance these projects by enabling bonds outside certain state debt limitations

Relevant Terms - Maplewood - local sales and use tax - 0.5% / one-half percent - voter approval / election - East Metro Public Safety Training Facility - Maplewood Community Center - Afton Heights Park - bonding authority - Minnesota Statutes section 297A.99 - Minnesota Statutes section 475.58 - Minnesota Statutes sections 275.60 and 275.61 - debt limit - levy limitations - issuance costs - bond principal up to $80,000,000