SF4864

Purpose

• The bill authorizes Chisago County to impose a local sales and use tax of one-half of one percent to fund specified projects and related costs. The tax is in addition to any other local sales tax or special law taxes, and the county would follow the existing rules for imposing, collecting, and enforcing the tax.

Main Provisions

• Tax authorization

  • Chisago County may by ordinance impose a sales and use tax of one-half of one percent (0.5%) for the purposes described in the bill’s subdivision 2.
  • The tax rules follow Minnesota Statutes section 297A.99, and apply in addition to other local taxes such as those under 297A.993 or other special laws.

• Use of revenues

  • Revenues from the tax must be used to pay the costs of collecting and administering the tax.
  • Revenues may also be used for projects and costs allowed under Minnesota Statutes section 297A.993 subdivision 2.
  • The revenues can also cover the bond costs for any bonds issued under the bonding authority described below.

• Bonding authority

  • The county may issue bonds under Minnesota Statutes chapter 475 to finance all or part of the costs of the authorized projects and costs.
  • Bonds may be paid from or secured by any money available to the county, including the tax revenue.
  • The bond issuance is not subject to Minnesota Statutes sections 275.60 or 275.61.
  • The bonds are not counted toward the county’s debt limit.
  • Any levy of taxes under section 475.61 to pay principal and interest on the bonds is not subject to levy limits.
  • A separate election to approve the bonds under section 475.58 is not required.

• Termination

  • The county may terminate the tax by ordinance.

Significant Changes to Existing Law

• Establishes a new local sales and use tax authority for Chisago County at 0.5%.
• Allows bonding under Chapter 475 with relaxed constraints (no 275.60/275.61 limits, no impact on debt or levy limitations, and no separate election required for bonds).
• Directs that tax revenues be used for administrative costs, eligible projects, and associated bond costs, expanding how a county can finance and manage local improvements.

Practical Effect

• The county gains the ability to fund local projects and costs through a dedicated 0.5% tax and to issue bonds to finance those projects, with some procedural and debt provisions removed or overridden compared to typical tax and debt rules. It also provides a mechanism to end the tax through a county ordinance.

Relevant Terms - Chisago County - local sales and use tax - one-half of one percent - Minnesota Statutes section 297A.99 - Minnesota Statutes section 297A.993 subdivision 2 - bond costs - Minnesota Statutes chapter 475 - 275.60 - 275.61 - debt limitation - levy limitation - ordinance - bonds issued - election 475.58 - administration and enforcement