Purpose

The bill would let the city of Audubon ask voters to approve a local sales and use tax of up to 0.5% to fund the construction of a new fire station. The tax would be administered under state law and run for a set period, with proceeds used to cover project costs and related financial needs.

Key Provisions

• Subdivision 1: Tax authorization

  • Audubon may impose by ordinance a local sales and use tax up to one-half of one percent (0.5%), but only if approved by voters as required under Minnesota law.
  • The tax is in addition to any other local sales and use taxes and is governed by Minnesota statutes for imposition, administration, collection, and enforcement (specifically 297A.99).

• Subdivision 2: Use of revenues

  • Revenues from the tax must be used to pay the costs of collecting and administering the tax.
  • Revenues may finance up to $3,000,000 plus any bonding costs for the construction of a new fire station.

• Subdivision 3: Bonding authority

  • The city may issue bonds under Minnesota Statutes chapter 475 to finance all or part of the project costs, as approved by voters.
  • The total principal amount of bonds may not exceed $3,000,000 plus issuance costs. Bond payment may come from the tax revenues or other funds available to the city.
  • Bond issuance is not subject to certain debt-limitation statutes (275.60 and 275.61), and the bonds are not counted toward the city’s debt limit. Levy authority for debt service under 475.61 is not subject to levy limitations.
  • No separate election is required to approve the bonds (no 475.58 election).

• Subdivision 4: Termination and sunset

  • The tax would expire at the earlier of 20 years after first imposition or when enough money has been collected to pay project costs and bond costs (including interest), as approved by voters.
  • Any remaining money after paying authorized costs, due to timing of termination, must be placed in the city’s general fund.
  • The city may end the tax earlier by ordinance, and termination is subject to existing provisions about when taxes end (297A.99(12)).

• Additional context

  • The bill references using local tax authority in line with state rules and allows for the city to issue bonds without a separate bond election, while still requiring voter approval for the overall tax and for the project as described.

Significant Changes to Existing Law

• Creates a new, voter-approved local sales and use tax for Audubon (up to 0.5%).
• Adds bonding authority (up to $3,000,000 plus issuance costs) without requiring a separate bonds election.
• Allows debt financing for a city project to be funded via the tax, with certain protections around debt limits and levy restrictions.
• Sets a defined sunset/termination timeline (up to 20 years) and specifies how excess funds are handled.
• Integrates with existing state statutes for tax administration (297A.99) and personal debt limitations (275.60, 275.61).

Practical Impact

• Audubon could fund a new fire station using a local sales tax and related bonds, subject to voter approval.
• The city would collect and administer the tax and allocate funds to cover project costs, with a defined cap on bonding and a clear sunset timeline.

Relevant Terms - local sales and use tax - Audubon - ordinance - voters / voter approval - Minnesota Statutes section 297A.99 - construction of a new fire station - Minnesota Statutes chapter 475 - bonds / bonding - issuance costs - debt limit / debt limitations (275.60, 275.61) - levy - termination / sunset - 475.58 election (no separate election required)