SF4308

Purpose

This bill would let the city of Lanesboro impose a local sales and use tax of up to 0.5% (one-half of one percent) if voters approve it. The tax would be used to fund specific local projects and related costs, and it would be administered under state law for local taxes.

Key provisions

• The tax requires voter approval at an election under Minnesota law (297A.99, subdivision 3) and would be in addition to any other local taxes.
• The tax is limited to a half-percent and can be implemented by city ordinance if approved by the voters.
• Revenues from the tax must be used for the projects described in the bill and for costs to collect/ administer the tax and to pay debt service on bonds issued to finance those projects.

Revenue use and funded projects

• Project 1: Rehabilitation and improvements to Sylvan Park – $500,000.
• Project 2: Trunk Highway 250 road improvement – $2,000,000.
• In addition, revenues may cover the costs of collecting and administering the tax and debt service on bonds issued to finance these projects.

Bonding authority and financing

• The city may issue bonds under Minnesota Statutes chapter 475 to finance all or part of the project costs, with a total principal limit of $2,500,000 plus issuance costs.
• Bonds may be paid from or secured by any money available to the city, including tax revenues.
• Bond issuance is not subject to certain state debt provisions (275.60 and 275.61) and bonds are not counted toward the city’s debt limit.
• Any levy to pay principal and interest on the bonds is not subject to levy limitations.
• A separate election to approve the bonds under 475.58 is not required.

Termination and sunset

• The tax would expire at the earlier of: (a) 30 years after the first imposition, or (b) when the amount received from the tax is sufficient to pay the project costs plus costs related to bond issuance (including interest).
• Any money remaining after these costs, once the tax ends, must be placed in the city’s general fund.
• The tax may expire earlier if the city enacts an ordinance to terminate it.

Election, oversight, and related guidance

• Voter approval is required for the tax; no separate bond election is required for the stated bond authority (per the law cited in the bill).
• The tax proceeds are governed by existing statutes on local sales taxes and debt management.

Important notes for context

• The tax is expressly "in addition to" any other local sales and use taxes the city may have.
• The bill specifies particular project funding amounts and ties the funding to debt service and administration costs, creating a targeted local funding mechanism.

Relevant Terms

local sales tax sales and use tax Lanesboro voter approval 297A.99 Sylvan Park Trunk Highway 250 road improvements bonding bonds debt service Minnesota Statutes chapter 475 issuance costs 275.60 275.61 475.58 475.61 general fund sunset 30 years collection and administration project costs local government debt limits tax revenues local tax administration