HF4779

Purpose

• The bill would let Chisago County create a local sales and use tax of 0.5% (one-half of one percent) to fund specified local projects and costs. The tax would be in addition to any existing local sales taxes or special laws.

Main Provisions

• Subd.1 — Tax authorization

  • Chisago County can, by ordinance, impose a local sales and use tax of 0.5% for the purposes described in Subdivision 2.
  • The tax would follow the general rules for local sales taxes, but may operate alongside other existing taxes and laws.

• Subd.2 — Use of revenues

  • Revenues from the tax must be used to pay:
  • the costs of collecting and administering the tax,
  • projects and costs allowed under Minnesota Statutes section 297A.993 subdivision 2,
  • and the bond costs for any bonds issued under Subdivision 3.

• Subd.3 — Bonding authority

  • Chisago County may issue bonds under Minnesota Statutes chapter 475 to finance all or part of the authorized projects and costs.
  • Bonds may be paid from money available to the county, including the tax revenue.
  • Bond issuance is not subject to certain debt- and levy-related statutory limits (e.g., not subject to certain sections like 275.60 and 275.61, and not counted toward debt limits).
  • Any levy to pay principal and interest on the bonds is not subject to levy limits.
  • A separate election to approve the bonds under Minnesota Statutes section 475.58 is not required.

• Subd.4 — Termination

  • The county may terminate the tax by ordinance.

Significant Changes to Existing Law

• Creates a new local option sales and use tax for Chisago County at 0.5%, supplementing other taxes.
• Allows the county to finance projects and costs (including bond costs) using bond proceeds without standard debt- or levy-limit constraints.
• Removes the need for a separate voter election to approve bonds (no required election under 475.58).
• Enables use of tax revenues to cover bond costs and the costs of collecting/administering the tax, in addition to projects allowed under existing state law (297A.993(2)).

Practical implications

• Local funding mechanism for infrastructure or other eligible projects in Chisago County.
• Potentially faster or more flexible financing for projects due to bond authority and relaxed debt/levy limits.
• Tax rate and use are determined by county ordinance and existing state statutes governing local taxes and bonds.

Relevant Terms - Chisago County - local sales and use tax - one-half of one percent (0.5%) - Minnesota Statutes 297A.99 - Minnesota Statutes 297A.993 subdivision 2 - Minnesota Statutes chapter 475 - bonds - debt limitation - levy limitation - 275.60 - 275.61 - 475.58 - 475.61 - not subject to levy/debt limits - costs of collecting and administering - projects and costs allowed under 297A.993(2) - termination by ordinance - ordinance - separate election not required