SF5188

Purpose

• Authorize the city of Champlin to impose a local sales and use tax to fund a specific project, with voter approval required, and to outline how the tax would be collected, used, and eventually terminated.

Tax rate and approval

• Champlin may impose by ordinance a sales and use tax of up to 0.5% (one-half of one percent).
• The tax must be approved by voters at an election as required by state law.
• The tax is in addition to any other local sales and use taxes that may exist.

Use of tax revenue

• Revenues from the tax must be used to pay the costs of collecting and administering the tax.
• Revenues may finance up to $18,000,000 plus associated bonding costs for the construction of a new indoor athletic facility.

Bonding authority and debt treatment

• Champlin may issue bonds to finance all or part of the project costs, up to the $18,000,000 cap plus issuance costs, with voter approval as required.
• Bonds may be paid from any money available to the city, including the tax revenues, and the bond issuance is not subject to certain state debt rules.
• The bonds are not counted toward the city’s debt limit, and any levy to pay principal and interest on the bonds is not subject to levy limitations.
• A separate election to approve the bonds is not required. (No need for a separate 475.58 election.)

Term and termination of the tax

• The tax expires at the earlier of 30 years after it is first imposed or when the city determines the tax proceeds are sufficient to pay the project costs and bond costs, including interest.
• Any remaining money after paying the allowed costs, due to when the tax ends, must go to the city’s general fund.
• The tax may end earlier by ordinance.

Administration and legal framework

• The imposition, administration, collection, and enforcement of the tax follow Minnesota Statutes governing local taxes (specifically 297A.99).

Relationship to existing law

• The new tax is in addition to any local sales and use tax authorized under other laws or charters.

Relevant Terms sales and use tax; Champlin; voter approval; 0.5% tax rate; local taxes; administration; collection; enforcement; Minnesota Statutes 297A.99; bonding; Minnesota Statutes chapter 475; indoor athletic facility; project financing; bonded debt; debt limit; levy limitations; issuance costs; 30-year termination; general fund; separate election; 275.60; 275.61; 475.58.