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HomeMy WebLinkAboutOrdinance No. 4529 - Repealing and Replacing RCO 10-2 Related to Extension of the Local Sales and Use Tax ORDINANCE NO. _________ AN ORDINANCE OF THE CITY OF ROCHESTER, MINNESOTA, REPEALING AND REPLACING CHAPTER 10-2 OF THE CITY CODE: SALES TAX THE COMMON COUNCIL OF THE CITY OF ROCHESTER DO ORDAIN: The City Code, Chapter 10-2, is repealed in its entirety and replaced with the following: CHAPTER 10-2 LOCAL SALES AND USE TAX Section 10-2-1. Authority. Pursuant to Minnesota Laws 1998, chapter 389, article 8, section 43, as amended by Minnesota Laws 2005, First Special Session, chapter 3, article 5, sections 28-30, Minnesota Laws 2011, First Special Session, chapter 7, article 4, sections 5-7, Minnesota Laws 2013, chapter 143, article 10, sections 11-13, and Minnesota Laws 2023, chapter 64, article 10, sections 6-9 (the “Act”), the Minnesota Legislature has authorized the City of Rochester, Minnesota to impose a one-half of one percent (0.50%) sales and use tax to provide revenues to pay the costs of collecting and administering the tax and to pay the capital expenditures of or bonds for 2012 Designated Projects and 2023 Designated Projects identified in the Act and approved by the voters at the general elections held November 6, 2012 and November 7, 2023 plus a one-quarter of one percent (0.25%) sales and use tax to provide revenues to pay the costs of collecting and administering the tax and to finance the capital and administrative costs related to the funding of DMC Designated Projects. Section 10-2-2. Definitions. For purposes of this chapter, the following words, terms, and phrases have the meanings given them in this section unless the language or context clearly indicates a different meaning is intended. (1) “Act” means Minnesota Laws 1998, chapter 389, article 8, section 43, as amended by Minnesota Laws 2005, First Special Session, chapter 3, article 5, sections 28-30, Minnesota Laws 2011, First Special Session, chapter 7, article 4, sections 5-7, Minnesota Laws 2013, chapter 143, article 10, sections 11-13, and Minnesota Laws 2023, chapter 64, article 10, sections 6-9, and as may be further amended. (2) “City” means the City of Rochester, Minnesota. (3) “Commissioner” means the commissioner of revenue of the state of Minnesota or a person to whom the commissioner has delegated functions. (4) “2012 Designated Projects” means the planning, design, construction, acquisition, betterment, and any other capital and administrative costs of the following projects in the City, including securing and paying debt service on bonds issued to finance all or part of the following projects: a. $17,000,000 for capital expenditures and bonds for the following Olmsted County transportation infrastructure improvements: i. County State Aid Highway 34 reconstruction; ii. Trunk Highway 63 and County State Aid Highway 16 interchange; iii. phase II of the Trunk Highway 52 and County State Aid Highway 22 interchange; iv. widening of County State Aid Highway 22 West Circle Drive; and v. 60th Avenue Northwest corridor preservation; b. $30,000,000 for city transportation projects including: i. Trunk Highway 52 and 65th Street interchange; ii. NW transportation corridor acquisition; iii. Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange; iv. Trunk Highway 14 and Trunk Highway 63 intersection; v. Southeast transportation corridor acquisition; vi. Rochester International Airport expansion; and vii. a transit operations center bus facility; c. $14,000,000 for the University of Minnesota Rochester academic and complementary facilities; d. $6,500,000 for the Rochester Community and Technical College/Winona State University career technical education and science and math facilities; e. $6,000,000 for the Rochester Community and Technical College regional recreation facilities at University Center Rochester; f. $20,000,000 for the Destination Medical Community Initiative; g. $8,000,000 for the regional public safety and 911 dispatch center facilities; h. $20,000,000 for a regional recreation/senior center; i. $10,000,000 for an economic development fund, $5,000,000 of which may be used for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin, Eyota, Hayfield, Kasson, Mantorville, Oronoco, Pine Island, Plainview, Spring Valley, St. Charles, Stewartville, West Concord, and Zumbrota, for economic development projects that these communities would fund through their economic development authority or housing and redevelopment authority; and j. $8,000,000 for downtown infrastructure. k. 2012 Designated Projects do not include transportation improvements related to a railroad bypass that would divert traffic from the city of Rochester. (5) “2023 Designated Projects” means the planning, design, construction, acquisition, betterment, and any other capital and administrative costs of the following projects in the City, including securing and paying debt service on bonds issued to finance all or part of the following projects: a. $50,000,000 plus associated bonding costs for an economic vitality fund and expenses eligible to be paid from the fund; b. $50,000,000 plus associated bonding costs for street reconstruction; c. $40,000,000 plus associated bonding costs for flood control and water quality, excluding removal of the MN00515 dam; and d. $65,000,000 plus associated bonding costs for a sports and recreation complex. (6) “Designated Projects” means, collectively, the 2012 Designated Projects, the 2023 Designated Projects, and the DMC Designated Projects. (7) “DMC Designated Projects” means the payment of obligations or expenses for public infrastructure projects approved by the corporation or of any other costs qualifying as a local matching contribution under section 469.47, subdivision 4. (8) “Local Sales and Use Tax” means the sales and use tax imposed and collected pursuant to this chapter. (9) “State Sales and Use Tax Laws and Rules” means those provisions of the state revenue laws applicable to state sales and use tax imposition, administration, collection, and enforcement, including Minnesota Statutes, chapters 270C, 289A, 297A and Minnesota Rules, chapter 8130, as amended from time to time. Section 10-2-3. Local Sales and Use Tax imposed; amount of tax; coordination with State Sales and Use Tax Laws and Rules. A local sales tax is imposed in the amount of three-quarters of one percent (0.75%) on the gross receipts from sales at retail sourced within City limits which are taxable under the State Sales and Use Tax Laws and Rules. A local use tax is imposed in the amount of three-quarters of one percent (0.75%) on the storage, use, distribution or consumption of goods or services sourced within City limits which are taxable under the State Sales and Use Tax Laws and Rules. All of the provisions of the State Sales and Use Tax Laws and Rules apply to the Local Sales and Use Tax imposed by this chapter. The Local Sales and Use Tax imposed by this chapter shall be collected and remitted to the Commissioner on any sale or purchase when the state sales tax must be collected and remitted to the Commissioner under the State Sales and Use Tax Laws and Rules and is in addition to the state sales and use tax. Section 10-2-4. Effective date of tax; transitional sales. Except as otherwise provided herein, the Local Sales and Use Tax imposed by this chapter shall apply to sales and purchases made on or after January 1, 2013, and shall be in addition to all other taxes now in effect. The Local Sales and Use Tax is governed by State Sales and Use Tax Laws and Rules regarding sales that occur during any transition period described therein and, in addition, the Local Sales and Use Tax imposed by this chapter shall not apply to: (1) The gross receipts from retail sales or leases of tangible personal property or Motor Vehicles made pursuant to a bona fide written contract, which unconditionally vests the rights and obligations of the parties thereto, provided that such contract was enforceable prior to January 1, 2013, and that delivery of the tangible personal property subject thereto is made on or before January 1, 2013. (2) The gross receipts from retail sales made pursuant to a bona fide lump sum or fixed price construction contract, which unconditionally vests the rights and obligations of the parties thereto and which does not make provision or allocation of future taxes, provided that such contract was enforceable prior to January 1, 2013, and that delivery of the tangible personal property used in performing such construction contract is made before January 1, 2013. (3) The purchase of taxable services, including utility services, if the billing period includes charges for services furnished before and after January 1, 2013, but the Local Sales and Use Tax imposed by this chapter shall apply on the first billing period not including charges for services furnished before January 1, 2013. (4) Lease payments for tangible personal property and Motor Vehicles that includes a period before and after January 1, 2013, but the Local Sales and Use Tax imposed by this chapter shall apply on a prorated basis to lease payment amounts attributable to that portion of the lease payment period on or after January 1, 2013 and on the entire lease payment for all lease payment periods thereafter. Section 10-2-5. Tax Clearance; Issuance of Licenses. (1) The City may not issue or renew a license for the conduct of a trade or business within the City if the Commissioner notifies the licensing division of the City that the applicant owes delinquent Local Sales and Use Taxes as provided in this chapter, or penalties or interest due on such taxes. For the purposes of this chapter, the penalties and interest due on Local Sales and Use Taxes are included in the meaning of Local Sales and Use Taxes. (2) Delinquent Local Sales and Use Taxes do not include a tax liability if: (i) an administrative or court action which contests the amount or validity of the liability has been filed or served, (ii) the appeal period to contest the tax liability has not expired, or (iii) the applicant has entered into a payment agreement and is current with the payments. (3) Applicant means an individual if the license is issued to or in the name of an individual or the corporation, partnership or other entity if the license is issued to or in the name of a corporation, partnership or other entity. (4) A copy of the notice of delinquent taxes given to the licensing division of the City shall also be sent to the applicant taxpayer. In the case of renewal of a license, if the applicant requests a hearing in writing, within 30 days of receipt of the notice of delinquent taxes, then a contested hearing shall be held under the same procedures as provided in Minn. Stat. 270A, as amended, for the state sales and use tax imposed under Minn. Stat. 297A, as amended; provided further that if a hearing must be held on the state sales and use tax, hearings must be combined. Section 10-2-6. Deposit of revenues; costs of administration; termination of tax. (1) All of the revenues, interest, and penalties derived from the Local Sales and Use Tax imposed by this chapter collected by the Commissioner and remitted to the City shall be deposited by the City Finance Director in the City treasury and shall be credited to the fund established to pay the costs of collecting the Local Sales and Use Tax imposed by this chapter and to finance the capital and administrative costs directly related to completing the Designated Projects. (2) The Local Sales and Use Tax imposed by this chapter shall terminate: a. with respect to Local Sales and Use Tax for the 2012 Designated Projects, when the Common Council determines that $139,500,000 has been received from the Local Sales and Use Taxes to finance the 2012 Designated Projects plus an amount sufficient to prepay or retire at maturity the principal, interest, and premium due on any bonds issued for the 2012 Designated Projects, including any bonds issued to refund the bonds (the “2012 Designated Projects Satisfaction Date”) plus a period thereafter until the Local Sales and Use Tax for the 2023 Designated Projects commences; provided that any Local Sales and Use Tax collected such period after the 2012 Designated Projects Satisfaction Date and before the Local Sales and Use Tax for the 2023 Designated Projects commences shall be used solely for DMC Designated Projects. Any funds remaining after completion of the projects and retirement or redemption of the bonds may be placed in the general fund of the city. b. with respect to Local Sales and Use Tax for the 2023 Designated Projects, at the earlier of (1) 24 years after the tax is first imposed, or (2) when the Common Council determines that the amount received from the tax is sufficient to pay for the 2023 Designated Projects, plus an amount sufficient to pay interest on and the costs of issuing any bonds issued pursuant to the Act. Any funds remaining after payment of all such costs and retirement or redemption of the bonds 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. c. with respect to Local Sales and Use Tax for the DMC Designated Projects, at the earlier of December 31, 2049 or when the Common Council determines that sufficient funds have been raised from the tax plus all other city funding sources authorized under section 469.47, subdivision 4 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. d. The Local Sales and Use Tax imposed by this chapter may terminate at an earlier time if the Common Council so determines by ordinance. Section 10-2-7. Agreement with the Commissioner. The City may enter into an agreement with the Commissioner regarding each party’s respective roles and responsibilities related to the imposition, administration, collection, enforcement, and termination of the Local Sales and Use Tax imposed by this chapter. Any such agreement shall not abrogate, alter, or otherwise conflict with the State Sales and Use Tax Laws and Rules, this ordinance, or the Act. Section 10-2-8. Summary publication. The following summary is approved by the Common Council and shall be published in lieu of publishing the entire ordinance pursuant to Minnesota Statutes section 412.191: In addition to the City’s existing one-quarter of one percent (0.25%) on retail sales, pursuant to a voter-approved referendum, the City is authorized to and will extend the City’s existing local sales and use tax of one-half of one percent (0.50%) on retail sales to pay for the cost of collecting and administering the taxes and to pay for certain costs related to the funding of the planning, design, construction and any other capital and administrative costs of the following projects plus an amount sufficient to pay interest on and the costs of issuing any bonds issued pursuant to Minnesota Laws 1998, chapter 389, article 8, section 43, as amended by Minnesota Laws 2005, First Special Session, chapter 3, article 5, sections 28-30, Minnesota Laws 2011, First Special Session, chapter 7, article 4, sections 5-7, Minnesota Laws 2013, chapter 143, article 10, sections 11-13, and Minnesota Laws 2023, chapter 64, article 10, sections 6-9: (1) 50,000,000 plus associated bonding costs for an economic vitality fund and expenses eligible to be paid from the fund; (2) $50,000,000 plus associated bonding costs for street reconstruction; (3) $40,000,000 plus associated bonding costs for flood control and water quality, excluding removal of the MN00515 dam; and (4) $65,000,000 plus associated bonding costs for a sports and recreation complex. Section 10-2-9. This Ordinance repeals and replaces Chapter 10-2 of the City Code. This Ordinance shall be in full force and effect from and after its passage and publication (or publication of a summary thereof in accordance with applicable law). PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2024. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2024. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota)