Minnesota Session Laws - 1986, Regular Session

  

                         Laws of Minnesota 1986 

                        CHAPTER 396-S.F.No. 1671 
           An act relating to the city of Minneapolis; 
          authorizing the city to construct and own certain 
          facilities; authorizing the city to levy and collect 
          certain taxes; authorizing the city to issue bonds and 
          expend certain funds including taxes to finance the 
          acquisition and betterment of a convention center and 
          related facilities. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [DEFINITIONS.] 
    For the purposes of this act, the following terms have the 
following meanings. 
    (a) "City" means the city of Minneapolis, its city council, 
and any other board, authority, commission, or officer 
authorized by law, charter, or ordinance to exercise city powers 
of the nature referred to in this act. 
    (b) "Convention center" means any convention, auditorium, 
conference, or education center facility located at the site of 
the existing Minneapolis convention hall and auditorium, 
including all property, real or personal, tangible or 
intangible, located in the city, intended to be used as part of 
the center or additions to or extensions of it. 
    (c) "Related facilities" means all property, real or 
personal, tangible or intangible, that is determined by the city 
to facilitate the use of the convention center, including but 
not limited to property for parking, pedestrian needs, meetings 
facilities, skyways, lighting, landscaping, utilities, street 
facilities, and land acquired and prepared for private 
redevelopment in a manner related to use of the convention 
center. 
    (d) "Downtown taxing area" means the geographic area 
bounded by the portion of the Mississippi River between I-35W 
and Washington Avenue, the portion of Washington Avenue between 
the river and I-35W, the portion of I-35W between Washington 
Avenue and 8th Street South, the portion of 8th Street South 
between I-35W and Portland Avenue South, the portion of Portland 
Avenue South between 8th Street South and I-94, the portion of 
I-94 from the intersection of Portland Avenue South to the 
intersection of I-94 and the Burlington Northern Railroad 
tracks, the portion of the Burlington Northern Railroad tracks 
from I-94 to University Avenue N.E. and including Nicollet 
Island, and the portion of University Avenue N.E. and S.E. from 
the Burlington Northern Railroad tracks to I-35W, and by I-35W 
from University Avenue S.E., to the river. 
    Sec. 2.  [GENERAL AUTHORIZATION.] 
    Subdivision 1.  [ACTIVITIES; CONTRACTS.] The city may 
acquire, design, construct, equip, improve, control, operate, 
and maintain the convention center and related facilities.  The 
city shall have all powers necessary or convenient for those 
purposes and may enter into any contract for those purposes, 
including the financing of the convention center and any related 
facilities. 
    The city may contract for construction materials, supplies, 
and equipment in accordance with Minnesota Statutes, section 
471.345, except that it may enter into contracts with persons, 
firms, or corporations to perform one or more or all of the 
functions of architect, engineer, and construction manager with 
respect to all or part of a project to build or remodel the 
convention center and related facilities.  Contractors shall be 
selected through the process of public bidding, provided that it 
shall be permissible for the city to narrow the listing of 
eligible bidders to those which the city determines to possess 
sufficient expertise to perform the intended functions and the 
city may negotiate with the three lowest responsible bidders to 
achieve the lowest possible bid.  The city may require any 
construction manager to certify a construction price and 
completion date to the city.  The city may require the posting 
of a bond in an amount determined by the city to cover any costs 
which may be incurred over and above the certified price, 
including but not limited to costs incurred by the city or loss 
of revenues resulting from incomplete construction on the 
completion date and any other obligations the city may require 
the construction manager to bear.  The city shall secure surety 
bonds as required in Minnesota Statutes, section 574.26, 
securing payment of just claims in connection with all public 
work undertaken by it.  Persons entitled to the protection of 
the bonds may enforce them as provided in Minnesota Statutes, 
sections 574.28 to 574.32, and shall not be entitled to a lien 
on any property of the city under the provisions of Minnesota 
Statutes, sections 514.01 to 514.16.  
    Subd. 2.  [LIMITATION ON EXPENDITURES.] A reasonable 
estimate for demolition and construction costs under 
construction contracts, not including costs for construction 
managers, architectural, engineering, and other professional 
fees, insurance, performance bonds, permits, licenses, taxes, 
the cost of issuing bonds including the costs described in 
paragraphs (b), (c), (d), and (e) of section 3, acquisition of 
real and personal property, expenditures for replacement 
housing, and similar costs for constructing or improving the 
convention center may not require more than $118,000,000 in 
public funds. 
    Sec. 3.  [BONDS.] 
    Upon approval by the city's board of estimate and taxation 
by a vote of at least five members, the city may by resolution 
authorize, sell, and issue bonds to finance all or a portion of 
the costs of acquisition or betterment of the convention center, 
any related facilities or replacement housing for housing 
removed from the site of the convention center or any related 
facilities or to refund the bonds issued pursuant to this act or 
other obligations issued by the city pursuant to Minnesota 
Statutes, section 273.77 to finance costs of the convention 
center or related facilities.  The bonds may be general or 
limited obligations, or both.  The bonds may be paid from or 
secured by any funds available to the city, including taxes 
levied under sections 4 and 5.  Bonds may be issued in one or 
more series and sold without election.  Bonds that are limited 
obligations may be sold at public or private sale and at the 
price or prices the city may determine.  Bonds which are general 
obligations of the city shall be sold in the manner provided by 
Minnesota Statutes, section 475.60.  The bonds shall: 
    (1) be secured; 
    (2) bear the interest rate or rates; 
    (3) have the rank or priority; 
    (4) be executed in the manner; 
    (5) be payable in the manner; 
    (6) mature; and 
    (7) be subject to the defaults, redemptions, repurchases, 
tender options, or other terms, as the city may determine.  The 
city may enter into and perform all contracts deemed necessary 
or desirable by it to issue the bonds and apply their proceeds, 
including an indenture of trust with a trustee within or without 
the state. 
    Costs of acquisition and betterment referred to in this act 
include: 
    (a) costs of acquisition or betterment referred to in 
Minnesota Statutes, section 475.65; 
    (b) capitalized interest for a period not longer than 36 
months; 
    (c) any underwriter discount and issuance expenses; 
    (d) reserves for debt service, repair, or operations; and 
    (e) costs for credit enhancement of the bonds. 
The debt represented by the bonds shall not be included in 
computing any debt limitation applicable to the city.  Any levy 
of taxes required by Minnesota Statutes, section 475.61 to pay 
the principal of and interest on the bonds shall not be subject 
to any levy limitation or be included in computing or applying 
any levy limitation applicable to the city.  Maturities of the 
bonds shall not be subject to the limitations of Minnesota 
Statutes, section 475.54.  Subject to this section, bonds 
authorized by this section shall be sold, issued, and secured in 
the manner provided in Minnesota Statutes, chapter 475. 
    Sec. 4.  [SALES AND USE TAX.] 
    Subdivision 1.  [IMPOSITION.] Notwithstanding Minnesota 
Statutes, section 477A.016, or any other contrary provision of 
law, ordinance, or city charter, upon approval by the city's 
board of estimate and taxation by a vote of at least five 
members, the city of Minneapolis may by ordinance impose an 
additional sales tax of up to one-half of one percent on sales 
taxable pursuant to Minnesota Statutes, chapter 297A that occur 
within the city, and may also by ordinance impose an additional 
compensating use tax of up to one-half of one percent on uses of 
property within the city, the sale of which would be subject to 
the additional sales tax but for the fact such property was sold 
outside the city.  The tax may not be imposed on gross receipts 
from sales of intoxicating liquor that are exempt from taxation 
under sections 297A.25 to 297A.257 or other provision of chapter 
297A exempting sales of intoxicating liquor and use from 
taxation, including amendments adopted after enactment of this 
act. 
    For purposes of this subdivision, sales that occur within 
the city shall not include (a) the sale of tangible personal 
property (i) which, without intermediate use, is shipped or 
transported outside Minneapolis by the purchaser and thereafter 
used in a trade or business or is stored, processed, fabricated 
or manufactured into, attached to or incorporated into other 
tangible personal property transported or shipped outside 
Minneapolis and thereafter used in a trade or business outside 
Minneapolis, and which is not thereafter returned to a point 
within Minneapolis, except in the course of interstate or 
intrastate commerce (storage shall not constitute intermediate 
use); or (ii) which the seller delivers to a common carrier for 
delivery outside Minneapolis, places in the United States mail 
or parcel post directed to the purchaser outside Minneapolis, or 
delivers to the purchaser outside Minneapolis by means of the 
seller's own delivery vehicles, and which is not thereafter 
returned to a point within Minneapolis, except in the course of 
interstate or intrastate commerce; or (b) sales which would be 
described in clause (e) or (u) of Minnesota Statutes, section 
297A.25, subdivision 1 if the word "Minneapolis" were 
substituted for the words "Minnesota" or "state of Minnesota" in 
such clauses.  A tax may be imposed under this section only if 
the taxes imposed under section 5 are imposed at the maximum 
rate allowed under that section.  The tax authorized by this 
section shall be imposed, and may be adjusted periodically by 
the city council such that the rate imposed, rounded to the next 
highest one-tenth of one percent, does not exceed the rate 
estimated to be required to produce revenue sufficient to 
finance the costs described in subdivision 3. 
    Subd. 2.  [ENFORCEMENT; COLLECTION.] These taxes shall be 
subject to the same interest penalties and other rules imposed 
under Minnesota Statutes, chapter 297A.  The commissioner of 
revenue may enter into appropriate agreements with the city to 
provide for collection of these taxes by the state on behalf of 
the city.  The commissioner may charge the city a reasonable fee 
for its collection from the proceeds of any taxes. 
    Subd. 3.  [USE OF PROPERTY.] Revenues received from the tax 
may only be used: 
    (1) to pay costs of collection; 
    (2) to pay or secure the payment of any principal of, 
premium or interest on bonds issued in accordance with this act; 
    (3) to pay costs to acquire, design, equip, construct, 
improve, maintain, operate, administer, or promote the 
convention center or related facilities, including financing 
costs related to them; 
    (4) to pay reasonable and appropriate costs determined by 
the city to replace housing removed from the site; and 
    (5) to maintain reserves for the foregoing purposes deemed 
reasonable and appropriate by the city. 
In the event of any amendment to chapter 297A enacted subsequent 
to the effective date of this act which exempts sales or uses 
which were taxable under chapter 297A on the effective date of 
this act, the city may by ordinance extend the tax authorized 
hereby to any such sales or uses provided that the city council 
shall have determined that such extension is necessary to 
provide revenues for the uses to which taxes may be applied 
under this section and further provided that, in the estimation 
of the city council, the aggregate annual collections following 
such extension will not exceed the aggregate annual collections 
which would have been generated if chapter 297A, as in effect on 
the effective date of this act, were then in effect.  Any 
revenue bonds issued in accordance with this act may, with the 
consent of the city council, contain a covenant that the tax 
will be so extended to the extent necessary to pay principal and 
interest on the bonds when due. 
    Money for replacement housing shall be made available by 
the city only for new construction, conversion of nonresidential 
buildings, and for rehabilitation of vacant residential 
structures, only if all of the units in the newly constructed 
building, converted nonresidential building, or rehabilitated 
residential structure are to be used for replacement housing. 
    Sec. 5.  [LIQUOR, LODGING, AND RESTAURANT TAXES.] 
    The city may, by resolution, levy in addition to taxes 
authorized by other law: 
    (1) a sales tax of not more than three percent on the gross 
receipts on retail on-sales of intoxicating liquor and fermented 
malt beverages described in section 473.592 occurring in the 
downtown taxing area, provided that this tax may not be imposed 
if sales of intoxicating liquor and fermented malt beverages are 
exempt from taxation under chapter 297A; 
    (2) a sales tax of not more than three percent on the gross 
receipts from the furnishing for consideration of lodging 
described in section 473.592 by a hotel or motel which has more 
than 50 rooms available for lodging; the tax imposed under this 
clause shall be at a rate that, when added to the sum of the 
rate of the sales tax imposed under Minnesota Statutes, chapter 
297A, the rate of the sales tax imposed under section 4, and the 
rate of any other taxes on lodging in the city of Minneapolis, 
equals 12 percent; and 
    (3) a sales tax of not more than three percent on the gross 
receipts on all sales of food primarily for consumption on or 
off the premises by restaurants and places of refreshment as 
defined by resolution of the city that occur within the downtown 
taxing area. 
These taxes shall be applied solely to pay costs of collection 
and to pay or secure the payment of any principal of, premium 
and interest on any bonds or any costs referred to in section 4, 
subdivision 3.  The commissioner of revenue may enter into 
appropriate agreements with the city to provide for the 
collection of these taxes by the state on behalf of the city.  
The commissioner may charge the city a reasonable fee for its 
collection from the proceeds of any taxes.  These taxes shall be 
subject to the same interest penalties and enforcement 
provisions as the taxes imposed under section 473.592. 
    Sec. 6.  [POWERS GRANTED NOT LIMITED.] 
    Except as specifically provided in this act, the exercise 
of powers granted in this act shall not be limited by Minnesota 
Statutes, chapter 475, or any conflicting city charter provision.
    Sec. 7.  [EFFECTIVE DATE.] 
    This act is effective the day after compliance by the 
governing body of the city of Minneapolis with Minnesota 
Statutes, section 645.021, subdivision 3, but no tax permitted 
by sections 4 and 5 may become effective before January 1, 1987. 
    Approved March 21, 1986