Bill
HF 5038
Virginia may impose a 1% local sales tax to fund renovation of the Miners Memorial complex and steam-system projects, plus up to $30M in bonds for those costs.
Authors: Warwas, Davids
Jurisdiction: Minnesota
Committee: Taxes
Date introduced: April 20, 2026
Status: Referred to the House Committee on Taxes
Purpose
- To amend the existing local sales and use tax authorization for the city of Virginia, Minnesota, expanding or clarifying how the tax may be used to finance renovation, reconstruction, and related municipal improvements, including projects tied to the city’s steam system conversion.
Key provisions and changes
1) Local sales and use tax authorization (Subdivision 1)
- The city of Virginia may impose, by ordinance, a local sales and use tax of up to 1%.
- The tax is authorized notwithstanding certain Minnesota tax statutes and other laws, and was approved by voters at the November 6, 2018 general election.
- The tax is intended for purposes specified in Subdivision 2 (see uses below).
2) Authorized uses of revenues (Subdivision 2)
- Revenues must be used to pay:
- Costs of collecting and administering the tax.
- Costs of renovation, reconstruction, expansion, and improvement of the Miners Memorial recreation complex and convention center (including engineering, construction, and bond issuance costs).
- This subd. 2 sets the primary uses for the tax receipts.
2a) Additional authorized uses (Subdivision 2a)
- In addition to Subdivision 2, revenues must be used for projects related to converting the city’s steam system. Specifically, to pay costs of the following, including bonding costs:
1) Reconstruction and improvement of public streets, roads, sidewalks, and rights-of-way affected by the steam system.
2) Replacement, repair, relocation, or abandonment of underground infrastructure affected by the steam system (water, sewer, stormwater).
3) Assessment and remediation of contaminated soils, hazardous materials, and related environmental conditions linked to the steam system.
4) Removal or rehabilitation of obsolete or deteriorated steam infrastructure and related facilities.
5) Design, engineering, environmental review, and construction costs for projects described in items (1)–(4).
3) Bonding authority (Subdivision 3)
- Virginia may issue bonds under Chapter 475 to finance all or part of the costs of projects authorized in Subdivisions 2 and 2a.
- Aggregate principal of bonds may not exceed $30,000,000, plus bond issuance costs.
- Bonds may be paid from or secured by any funds available to the city, including the tax revenues.
- Bond issuance is not subject to certain bonding statutes (275.60, 275.61) and is not constrained by the city’s home rule charter or debt levy limitations.
- A separate election under § 475.58 is not required to issue these bonds.
4) Termination of the tax (Subdivision 4)
- The local sales tax expires no later than:
- 20 years after the tax is first imposed (with a specified initial period ending December 31, 2055, if first imposed before that date), or
- When the city council determines that $30,000,000 has been received to fund the authorized projects and cover related costs (including interest).
- Any remaining funds after satisfying allowed costs may go to the city’s general fund.
- The city council may terminate the tax earlier by ordinance.
5) Effective date
- The act becomes effective the day after Virginia’s governing body and chief clerical officer comply with Minnesota Statutes, § 645.021, subds. 2 and 3 (related to publication/operational requirements).
Potential impact
Notes for readers
- This summary focuses on the substantive provisions related to the local sales tax authority, authorized uses, bonding, termination, and effective date as drafted in HF 5038. For precise legal text, consult the bill as filed and any official fiscal notes or amendments.
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
