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HF 4583

Audubon; city authorized to impose local sales and use tax.

2025-2026 Regular Session Introduced by Jim Joy

Audubon may enact a 0.5% local tax, with voter approval, to fund and bond up to $3 million for a Fire Hall project, plus related costs.

Introduction and first reading, referred to Taxes
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Bill Summary · HF 4583

Summary of HF 4583 (2025-2026) – Audubon; City Authorized to Impose Local Sales and Use Tax

Overview

HF 4583 would authorize the City of Audubon to levy a local sales and use tax of 0.5% (one-half percent) to fund a Fire Hall Project. The tax would operate under the framework for local option taxes found in Minnesota law, with voter approval required. The bill sets forth the use of revenues, bonding authority, duration, and administration of the tax, and clarifies interaction with existing local taxes.

Purpose and Intent

  • Create a dedicated funding stream to finance the Fire Hall Project in Audubon.
  • Provide the city with bonding flexibility to cover project costs and issuing costs, with a defined maximum bonded amount.
  • Ensure administration and collection of the tax align with state law and applicable statutes, while allowing the tax to operate in addition to any other local sales tax.

Key Provisions

1) Tax Authorization and Scope

  • Audubon may impose by ordinance a local sales and use tax of 0.5%.
  • The tax would be in addition to any other local sales/use taxes permitted by law.
  • Voter approval is required for the tax (election as per Minnesota Statutes 297A.99, subd. 3).
  • The tax administration, collection, and enforcement would follow Minnesota Statutes, including 297A.99, with the local ordinance controlling only to the extent consistent with state law.

2) Use of Tax Revenues

  • Revenues from the tax must be used to:
    • Cover the costs of collecting and administering the tax.
    • Finance up to $3,000,000 (plus associated bond issuance costs) for the Fire Hall Project.

3) Bonding Authority

  • The city may issue bonds under Minnesota Statutes, chapter 475, to finance all or part of the Fire Hall Project costs, as approved by voters.
  • Aggregate principal amount of bonds cannot exceed $3,000,000 plus issuance costs.
  • Bonds may be paid from any city funds, including revenues from the authorized tax.
  • Bond issuance is not subject to certain debt/levy limitations found in 275.60 and 275.61.
  • Bonds are not counted toward city debt limits, and tax levies to service debt are not subject to levy limitations.
  • A separate bond election is not required (no need to seek a separate approval under 475.58).

4) Termination and Residuals

  • Tax expiration: The tax would expire at the earlier of:
    • 20 years after first imposition, or
    • When the city determines the tax revenues are sufficient to pay project costs (plus bond issuance costs and interest) as approved by voters.
  • Any remaining funds after satisfying allowed costs, due to timing of termination, must be placed in the city’s general fund (except as otherwise provided by 297A.99, subd. 3(f)).
  • The tax may terminate earlier if the city so determines by ordinance.

5) Effective Date

  • The provision becomes effective once Audubon’s governing body and chief clerical officer comply with Minnesota Statutes 645.021, subds. 2 and 3 (post-enactment procedural filing).

Affected Parties and Impacts

  • City of Audubon: Gains authority to impose a 0.5% local sales and use tax and to issue up to $3 million in bonds to fund the Fire Hall Project, including issuance costs. Responsible for administration, collection, and ensuring voter-approved implementation.
  • Taxpayers and Businesses in Audubon: Potentially affected by the 0.5% local sales/use tax on taxable purchases within the city, subject to voter approval and applicable exemptions.
  • Fire Hall Project: Receives funding through tax revenues and bonded financing, with the project costs and debt service tied to the tax lifecycle.
  • General Fund and City Finances: Any excess funds after project costs and debt costs would revert to the city’s general fund at the termination of the tax, subject to statutory constraints.

Procedural and Timeline Aspects

  • Requires voter approval under state law (commissioned by 297A.99, subd. 3).
  • If approved, the city must establish a tax, begin collection, and manage bond issuance up to the $3 million cap.
  • The term is up to 20 years or ends earlier when debt and project costs are fully funded as determined by the city.
  • Effective implementation hinges on compliance with Section 645.021, ensuring proper filing and procedural steps.

Notes

  • The bill explicitly clarifies that the new tax can operate alongside any other local taxes established under different statutes.
  • The proposed bonds are exempt from certain statutory debt limitations and do not require a separate election beyond voter approval for the tax itself.

Compiled from official sources — confirm details with the bill’s official record.

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