SF5006

Purpose

• Authorize the city of St. Peter to impose a local sales and use tax of one-half of one percent (0.5%) if approved by voters at a general election.
• Make this local option tax in addition to any other local sales and use taxes the city may have.
• Establish how the tax is administered, collected, and governed, referencing state law, and set the framework for funding specific local projects.

Main Provisions

• Tax authorization and limits:
  • The city may impose a 0.5% sales and use tax by ordinance, subject to voter approval at a general election.
  • The tax is in addition to existing local sales and use taxes and follows Minnesota law (Minnesota Statutes 297A.99, etc.).
  • The city may modify the tax amount or structure as described in later subdivisions (subdivisions 2 to 4).
• Governing law and administration:
  • Imposition, administration, collection, and enforcement of the tax follow the provisions of Minnesota Statutes section 297A.99.
  • The tax is a local option authorized under state law and is contingent on voter approval.

Revenue Use and Projects

• Use of tax revenues:
  • Revenues from the tax must be used to cover the costs of collecting and administering the tax.
  • Revenues may also be used for specific projects in the city, plus debt service on bonds issued to finance those projects.
• Specific projects and amounts (subject to securing and paying debt service):
  • Construction of a new fire station: up to $9,121,000.
  • Debt service on bonds issued to finance the fire station project (amount not to exceed the applicable debt service need, e.g., up to $1,990,000 noted in the text).
  • Phase 2 of Gorman Park improvements: up to $2,195,000.

Impact on State Law and Local Authority

• This act amends existing law to adjust or clarify the authorization and use of a St. Peter local option sales tax, aligning with the referenced Laws 2021 First Special Session chapters and sections.
• The tax is narrowly targeted to the City of St. Peter and the specified local projects, with debt financing connected to those projects.

Process and Oversight

• Voter approval required: The tax may be imposed only if approved by voters at a general election, as required by law.
• Local ordinance: The city must enact the tax by ordinance, consistent with the statute and approved by voters.
• Debt and administration: Revenue use includes costs of administration and debt service, as well as financing the listed projects.

Significance / What changes

• Creates a new, voter-approved local option sales tax for St. Peter (0.5%) to fund municipal projects.
• Allows the city to fund a new fire station and Phase 2 improvements to Gorman Park, with associated debt service funded by the tax revenues.
• Establishes defined funding targets and the requirement to use proceeds for administration and specified capital projects.

Relevant Terms - sales and use tax - local option tax - one-half of one percent (0.5%) - ordinance - general election - voters - Minnesota Statutes 297A.99 - use of revenues - costs of collecting and administering - debt service - bonds - construction of a new fire station - Phase 2 of Gorman Park improvements - City of St. Peter