Rochester; approved uses of collected local sales tax funds amended.

A bill for an act

relating to taxation; local sales taxes; amending the approved uses of local sales

tax funds collected by the city of Rochester; amending Laws 1998, chapter 389,

article 8, section 43, subdivisions 3a, as added, 4a, as added, 5, as amended.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Laws 1998, chapter 389, article 8, section 43, subdivision 3a, as added by Laws

2023, chapter 64, article 10, section 7, is amended to read:

Subd. 3a.

Use of sales and use tax revenues; additional projects.

new text begin
(a)
new text end
The revenues

derived from the extension of the tax authorized under subdivision 1a must be used by the

city of Rochester to pay the costs of collecting and administering the tax and paying for the

following projects in the city, including securing and paying debt service on bonds issued

to finance all or part of the following projects, plus associated bonding costs:

(1) notwithstanding Minnesota Statutes, section
297A.99, subdivision 2
, paragraph (d),

$50,000,000 for an economic vitality fund and expenses eligible to be paid from the fund;

(2) notwithstanding Minnesota Statutes, section
297A.99, subdivision 2
, paragraph (d),

$50,000,000 for street reconstruction;

(3) notwithstanding Minnesota Statutes, section
297A.99, subdivision 2
, paragraph (d),

$40,000,000 for flood control and water quality, excluding removal of the MN00515 dam;

and

(4) $65,000,000 for a sports and recreation complex.

new text begin

(b) Notwithstanding voter approval, the city must not collect funds for the use designated

in paragraph (a), clause (4), after June 30, 2026. Any funds generated by the tax after voter

approval and through June 30, 2026, must be applied to the uses in paragraph (a), clauses

(1) to (3).

new text end

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 2.

Laws 1998, chapter 389, article 8, section 43, subdivision 4a, as added by Laws

2023, chapter 64, article 10, section 8, is amended to read:

Subd. 4a.

Bonding authority; additional projects and extension of tax.

(a) The city

of Rochester may issue bonds under Minnesota Statutes, chapter 475, to finance all or a

portion of the costs of the projects authorized in subdivision 3a and approved by the voters

as required under Minnesota Statutes, section
297A.99, subdivision 3
, paragraph (a). The

aggregate principal amount of bonds issued under this subdivision may not exceed
deleted text begin

$205,000,000
deleted text end
new text begin
$140,000,000
new text end
for the projects described in subdivision 3a, clauses (1) to
deleted text begin
(4)
deleted text end
new text begin

(3)
new text end
, plus an amount to be applied to the payment of the costs of issuing the bonds.

(b) The bonds may be paid from or secured by any funds available to the city of

Rochester, including the tax authorized under subdivision 1a and the full faith and credit

of the city. The issuance of bonds under this subdivision is not subject to Minnesota Statutes,

sections
275.60
and
275.61
.

(c) The bonds are not included in computing any debt limitation applicable to the city

of Rochester, and any levy of taxes under Minnesota Statutes, section
475.61
, to pay principal

and interest on the bonds is not subject to any levy limitation. A separate election to approve

the bonds under Minnesota Statutes, section
475.58
, is not required.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end

Sec. 3.

Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by Laws

2005, First Special Session chapter 3, article 5, section 30, Laws 2011, First Special Session

chapter 7, article 4, section 7, Laws 2013, chapter 143, article 10, section 13, and Laws

2023, chapter 64, article 10, section 9, is amended to read:

Subd. 5.

Termination of taxes.

(a) The taxes imposed under subdivisions 1 and 2 expire

at the later of (1) December 31, 2009, or (2) when the city council determines that sufficient

funds have been received from the taxes to finance the first $71,500,000 of capital

expenditures and bonds for the projects authorized in subdivision 3, including the amount

to prepay or retire at maturity the principal, interest, and premium due on any bonds issued

for the projects under subdivision 4, unless the taxes are extended as allowed in paragraph

(b). Any funds remaining after completion of the project and retirement or redemption of

the bonds shall also be used to fund the projects under subdivision 3. The taxes imposed

under subdivisions 1 and 2 may expire at an earlier time if the city so determines by

ordinance.

(b) Notwithstanding Minnesota Statutes, sections
297A.99
and
477A.016
, or any other

contrary provision of law, ordinance, or city charter, the city of Rochester may, by ordinance,

extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009, if approved

by the voters of the city at a special election in 2005 or the general election in 2006. The

question put to the voters must indicate that an affirmative vote would allow up to an

additional $40,000,000 of sales tax revenues be raised and up to $40,000,000 of bonds to

be issued above the amount authorized in the June 23, 1998, referendum for the projects

specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended under

this paragraph, the taxes expire when the city council determines that sufficient funds have

been received from the taxes to finance the projects and to prepay or retire at maturity the

principal, interest, and premium due on any bonds issued for the projects under subdivision

4. Any funds remaining after completion of the project and retirement or redemption of the

bonds may be placed in the general fund of the city.

(c) Notwithstanding Minnesota Statutes, sections
297A.99
and
477A.016
, or any other

contrary provision of law, ordinance, or city charter, the city of Rochester may, by ordinance,

extend the taxes authorized in subdivisions 1, paragraph (a), and 2, up to December 31,

2049, provided that all additional revenues above those necessary to fund the projects and

associated financing costs listed in subdivision 3, paragraphs (a) to (e), are committed to

fund public infrastructure projects contained in the development plan adopted under

Minnesota Statutes, section
469.43
, including all financing costs; otherwise the taxes

terminate when the city council determines that sufficient funds have been received from

the taxes to finance expenditures and bonds for the projects authorized in subdivision 3,

paragraphs (a) to (e), plus an amount equal to the costs of issuance of the bonds and including

the amount to prepay or retire at maturity the principal, interest, and premiums due on any

bonds issued for the projects under subdivision 4.

(d) The tax imposed under subdivision 1, paragraph (b), expires at the earlier of December

31, 2049, or when the city council determines that sufficient funds have been raised from

the tax plus all other city funding sources authorized in this article to meet the city obligation

for financing the public infrastructure projects contained in the development plan adopted

under Minnesota Statutes, section
469.43
, including all financing costs.

(e) The tax imposed under subdivision 1a expires at the earlier of (1)
deleted text begin
24
deleted text end
new text begin
20
new text end
years after

first imposed, or (2) when the city council determines that the amount of revenues received

from the tax is sufficient to pay for the project costs authorized under subdivision 3a for

projects approved by the voters as required under Minnesota Statutes, section
297A.99,

subdivision 3
, paragraph (a), plus an amount sufficient to pay the costs related to issuance

of the bonds under subdivision 4a, including interest on the bonds. Except as otherwise

provided in Minnesota Statutes, section
297A.99, subdivision 3
, paragraph (f), any funds

remaining after payment of the allowed costs due to the timing of the termination of the tax

under Minnesota Statutes, section
297A.99, subdivision 12
, shall be placed in the general

fund of the city. The tax imposed under subdivision 1a may expire at an earlier time if the

city so determines by ordinance.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective the day following final enactment.

new text end