HF5071

Purpose

• Add and modify a local option sales and use tax in the city of St. Peter. The tax would be 0.5% and would require voter approval at a general election. It is intended to fund specific city projects and related costs, in addition to any existing local taxes.

Key Provisions

• Subdivision 1 — Authorization and rules

  • The city of St. Peter may impose by ordinance a sales and use tax of one-half of one percent, but only if approved by voters at a general election.
  • The tax can be altered by the city as provided in later subdivisions (2 to 4).
  • The tax is subject to the standard rules in Minnesota law (notably Minn. Stat. 297A.99) for imposition, administration, collection, and enforcement.
  • The tax would be in addition to any existing local sales and use taxes.

• Subdivision 2 — Use of revenues

  • Revenues from the tax must be used by the city to cover the costs of collecting and administering the tax.
  • Revenue may also be used to fund specific city projects and related debt service on bonds issued to finance those projects.
  • The section identifies two target projects (see below) and allows funding for debt service as needed for those projects.

• Subdivisions 3–4 — Modifications (not fully shown)

  • The bill references additional methods to modify the tax and its use, as provided in subdivisions 3 and 4, but these specifics aren’t included in the excerpt provided.

Specific Projects and Funding

• Projects funded by the tax (as described in the text) include:
  • Construction of a new fire station in St. Peter.
  • Phase 2 of Gorman Park improvements.
• The revenues can also cover debt service on bonds issued to finance all or part of these projects.

Significance and Changes to Law

• Establishes a new 0.5% local sales tax for the City of St. Peter, contingent on voter approval.
• Provides a dedicated funding stream, through the tax, for two capital projects and associated debt service.
• Changes how this city-specific revenue interacts with state tax law by allowing use of the funds for administration costs and listed projects, while still being governed by Minnesota statutes for imposition and collection.

Summary of Mechanisms

• The tax is optional and city-specific, not a statewide tax.
• It requires voter consent and local ordinance to implement.
• Revenues are restricted to administration costs and the two capital projects plus debt service, under the framework of state tax law.

Relevant Terms - sales and use tax - local option tax - 0.5 percent (one-half of one percent) - City of St. Peter - general election - voter approval - Minn. Stat. 297A.99 - administration and collection - debt service - bonds - construction of a new fire station - Phase 2 of Gorman Park improvements - Laws 2021 First Special Session chapter 14 article 8 section 17 subdivisions 1-4 - Notwithstanding (legal override language)