HF4324

1. Purpose

2. Authorizes the City of Windom to impose a new local sales and use tax of 1%, but only if approved by voters. The tax would be collected and administered under existing state law and would be in addition to any other local taxes.

3. Main Provisions

4. Subdivision 1 (Authorization): The city can adopt an ordinance to impose a 1% local sales and use tax, subject to voter approval as required by law. The tax is separate from other local taxes and is governed by the state’s sales tax laws.

5. Subdivision 2 (Use of revenues): Revenue from the tax would be used to cover the costs of collecting and administering the tax and to finance two specific city projects:

   • A swimming pool project (up to $7,500,000).
   • Flood mitigation measures (up to $1,500,000).
   • These amounts include associated costs related to issuing bonds for the projects.

6. Subdivision 3 (Bonding authority): The city may issue bonds to help pay for the projects, under state bonding law. Key details:

   • Aggregate principal for bonds may not exceed $9,000,000 plus bond issuance costs.
   • Bonds can be paid from money available to the city, including the tax revenues.
   • Bond issuance is not subject to certain city debt limit statutes and is not counted for debt limitations.
   • Levy limits do not apply to the taxes that repay the bonds’ principal and interest.
   • A separate election to approve the bonds under a different statute is not required.

7. Subdivision 4 (Termination of taxes): The tax ends when either:

   • 18 years have passed since the first imposition, or
   • the city determines the tax receipts are sufficient to cover the project costs and any bond-related costs, including interest. Any remaining funds after costs would go to the city’s general fund. The city could end the tax earlier by ordinance, subject to the law’s sunset rules.

8. Significant Changes to Existing Law

9. Creates a new, voter-approved 1% local sales and use tax for Windom, added to any existing local taxes.

10. Allows bonding up to $9 million (plus issuance costs) for specified projects, with debt funded by the new tax but exempt from certain debt and levy limits.

11. Removes need for a separate bond election for these projects (no additional referendum required for the bonds themselves).

12. Establishes a fixed project scope (swimming pool and flood mitigation) and a planned sunset (or earlier termination by city action) tied to the tax receipts.

Relevant terms - Windom - local sales and use tax - 1% tax - voter approval / election - Minnesota Statutes 297A.99 - administering and collecting tax - swimming pool project - flood mitigation measures - bonding authority / bonds - Minnesota Statutes chapter 475 - debt limit/levy limit exceptions - bond issuance costs - sunset / termination of tax - general fund (of the city)