Bill Text: MN SF343 | 2013-2014 | 88th Legislature | Engrossed
Bill Title: Rochester Destination Medical Center development authority establishment
Sponsorship: Bipartisan Bill
Status: (Introduced - Dead) 2013-03-21 - Comm report: To pass as amended and re-refer to Taxes [SF343 Detail]
Download: Minnesota-2013-SF343-Engrossed.html
1.2relating to economic development; establishing a medical center development
1.3authority and providing for its organization, powers, and duties; providing
1.4for medical center development districts; authorizing the issuance of revenue
1.5obligations by the authority; authorizing city bonds; authorizing state assistance;
1.6providing for tax increment financing within a medical center development
1.7district; appropriating money;amending Minnesota Statutes 2012, sections
1.8272.02, subdivision 39; 469.174, subdivision 8; 469.176, subdivisions 1b, 4c;
1.9proposing coding for new law in Minnesota Statutes, chapter 469.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 Section 1. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
1.12 Subd. 39. Economic development; public purpose. The holding of property by
1.13a political subdivision of the state for later resale for economic development purposes,
1.14including property held as part of a destination medical center project described in
1.15section 469.41, subdivision 12, shall be considered a public purpose in accordance with
1.16subdivision 8 for a period not to exceed nine years, except that for property located in a
1.17city of 5,000 population or under that is located outside of the metropolitan area as defined
1.18in section473.121, subdivision 2 , the period must not exceed 15 years.
1.19The holding of property by a political subdivision of the state for later resale (1)
1.20which is purchased or held for housing purposes, or (2) which meets the conditions
1.21described in section469.174, subdivision 10 , shall be considered a public purpose in
1.22accordance with subdivision 8.
1.23The governing body of the political subdivision which acquires property which is
1.24subject to this subdivision shall after the purchase of the property certify to the city or
1.25county assessor whether the property is held for economic development purposes or
1.26housing purposes, or whether it meets the conditions of section469.174, subdivision 10 .
2.1If the property is acquired for economic development purposes and buildings or other
2.2improvements are constructed after acquisition of the property, and if more than one-half
2.3of the floor space of the buildings or improvements which is available for lease to or use
2.4by a private individual, corporation, or other entity is leased to or otherwise used by
2.5a private individual, corporation, or other entity the provisions of this subdivision shall
2.6not apply to the property. This subdivision shall not create an exemption from section
2.7272.01, subdivision 2
;
272.68 ;
273.19 ; or
469.040, subdivision 3 ; or other provision of
2.8law providing for the taxation of or for payments in lieu of taxes for publicly held property
2.9which is leased, loaned, or otherwise made available and used by a private person.
2.10 Sec. 2. Minnesota Statutes 2012, section 469.174, subdivision 8, is amended to read:
2.11 Subd. 8. Project. "Project" means a project as described in section469.142 ;
2.12an industrial development district as described in section469.058, subdivision 1 ; an
2.13economic development district as described in section469.101, subdivision 1 ; a project as
2.14defined in section469.002, subdivision 12 ; a development district as defined in section
2.15469.125, subdivision 9
, or any special law; or a project as defined in section
469.153,
2.16subdivision 2 , paragraph (a), (b), or (c), or a medical center development district as
2.17defined in section 469.41, subdivision 10.
2.18 Sec. 3. Minnesota Statutes 2012, section 469.176, subdivision 1b, is amended to read:
2.19 Subd. 1b. Duration limits; terms. (a) No tax increment shall in any event be
2.20paid to the authority:
2.21(1) after 15 years after receipt by the authority of the first increment for a renewal
2.22and renovation district;
2.23(2) after 20 years after receipt by the authority of the first increment for a soils
2.24condition district;
2.25(3) after eight years after receipt by the authority of the first increment for an
2.26economic development district or, for an economic development district within a medical
2.27center development district created under section 469.48, subdivision 4, (i) after 15 years
2.28after receipt by the authority of the first increment for a residential rental/owner-occupied
2.29housing subdistrict, (ii) after 15 years after receipt by the authority of the first increment
2.30for a medical/healthcare industry subdistrict, or (iii) after ten years after receipt by the
2.31authority of the first increment for a commercial/industrial/retail subdistrict;
2.32(4) for a housing district, a compact development district, or a redevelopment
2.33district, after 25 years from the date of receipt by the authority of the first increment.
3.1(b) For purposes of determining a duration limit under this subdivision or subdivision
3.21e that is based on the receipt of an increment, any increments from taxes payable in the year
3.3in which the district terminates shall be paid to the authority. This paragraph does not affect
3.4a duration limit calculated from the date of approval of the tax increment financing plan or
3.5based on the recovery of costs or to a duration limit under subdivision 1c. This paragraph
3.6does not supersede the restrictions on payment of delinquent taxes in subdivision 1f.
3.7(c) An action by the authority to waive or decline to accept an increment has no
3.8effect for purposes of computing a duration limit based on the receipt of increment under
3.9this subdivision or any other provision of law. The authority is deemed to have received an
3.10increment for any year in which it waived or declined to accept an increment, regardless
3.11of whether the increment was paid to the authority.
3.12(d) Receipt by a hazardous substance subdistrict of an increment as a result of a
3.13reduction in original net tax capacity under section469.174, subdivision 7 , paragraph
3.14(b), does not constitute receipt of increment by the overlying district for the purpose of
3.15calculating the duration limit under this section.
3.16 Sec. 4. Minnesota Statutes 2012, section 469.176, subdivision 4c, is amended to read:
3.17 Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
3.18from an economic development district may not be used to provide improvements, loans,
3.19subsidies, grants, interest rate subsidies, or assistance in any form to developments
3.20consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
3.21facilities (determined on the basis of square footage) are used for a purpose other than:
3.22(1) the manufacturing or production of tangible personal property, including
3.23processing resulting in the change in condition of the property;
3.24(2) warehousing, storage, and distribution of tangible personal property, excluding
3.25retail sales;
3.26(3) with the consent of the Destination Medical Center Authority and within
3.27a subdistrict of a medical center development district created under section 469.48,
3.28subdivision 4, (i) residential rental or owner-occupied housing, (ii) the provision of medical
3.29or healthcare industry related services or products, or (iii) other commercial/industrial
3.30development and retail sales;
3.31(3) (4) research and development related to the activities listed in clause (1) or,
3.32 (2), or (3);
3.33(4) (5) telemarketing if that activity is the exclusive use of the property;
3.34(5) (6) tourism facilities;
3.35(6) (7) qualified border retail facilities; or
4.1(7) (8) space necessary for and related to the activities listed in clauses (1) to (6) (7).
4.2(b) Notwithstanding the provisions of this subdivision, revenues derived from tax
4.3increment from an economic development district may be used to provide improvements,
4.4loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
4.5square feet of any separately owned commercial facility located within the municipal
4.6jurisdiction of a small city, if the revenues derived from increments are spent only to
4.7assist the facility directly or for administrative expenses, the assistance is necessary to
4.8develop the facility, and all of the increments, except those for administrative expenses,
4.9are spent only for activities within the district.
4.10(c) A city is a small city for purposes of this subdivision if the city was a small city
4.11in the year in which the request for certification was made and applies for the rest of
4.12the duration of the district, regardless of whether the city qualifies or ceases to qualify
4.13as a small city.
4.14(d) Notwithstanding the requirements of paragraph (a) and the finding requirements
4.15of section469.174, subdivision 12 , tax increments from an economic development district
4.16may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or
4.17assistance in any form to developments consisting of buildings and ancillary facilities, if
4.18all the following conditions are met:
4.19(1) the municipality finds that the project will create or retain jobs in this state,
4.20including construction jobs, and that construction of the project would not have
4.21commenced before July 1, 2012, without the authority providing assistance under the
4.22provisions of this paragraph;
4.23(2) construction of the project begins no later than July 1, 2012;
4.24(3) the request for certification of the district is made no later than June 30, 2012; and
4.25(4) for development of housing under this paragraph, the construction must begin
4.26before January 1, 2012.
4.27The provisions of this paragraph may not be used to assist housing that is developed
4.28to qualify under section469.1761, subdivision 2 or 3, or similar requirements of other law,
4.29if construction of the project begins later than July 1, 2011.
4.30 Sec. 5. [469.41] DEFINITIONS.
4.31 Subdivision 1. Generally. In sections 469.41 to 469.53, the terms defined in this
4.32section have the meanings given them, unless the context indicates a different meaning.
4.33 Subd. 2. Authority. "Authority" means the Destination Medical Center Authority
4.34established in section 469.42.
5.1 Subd. 3. Board. "Board" means the governing body of the Destination Medical
5.2Center Authority.
5.3 Subd. 4. City. "City" means the city of Rochester, Minnesota.
5.4 Subd. 5. County. "County" means Olmsted County, Minnesota.
5.5 Subd. 6. Designated state taxes. "Designated state taxes" means as of any
5.6calculation date under section 469.53, subdivision 2, the following state taxes:
5.7(1) personal income taxes payable under chapter 290 that are attributable to payroll
5.8for employees of all facilities in the city of any business entity, including any medical
5.9business entity, and all facilities of any medical business entity located outside of the
5.10city but in the state;
5.11(2) corporate franchise taxes paid under chapter 290 by any business with its
5.12principal place of business in the city, including any medical business entity;
5.13(3) commercial-industrial property taxes paid under section 275.025 by businesses,
5.14including any medical business entity, on property located in the city and by any medical
5.15business entity on property located outside of the city and in the state; and
5.16(4) sales taxes collected by businesses on retail sales within the city under sections
5.17297A.62 and 297A.63 and all such taxes paid by any medical business entity on retail
5.18sales within the state.
5.19 Subd. 7. Development; developing. "Development" includes redevelopment,
5.20and "developing" includes redeveloping.
5.21 Subd. 8. Development plan. "Development plan" means the long-range plan for the
5.22development of the medical center development district or districts.
5.23 Subd. 9. Medical business entity. "Medical business entity" means a medical
5.24business entity with its principal place of business in the city as of the date of final
5.25enactment of this act, together with all business entities of which it is a sole member or
5.26shareholder, that collectively employs more than 30,000 persons in the state as of that date.
5.27 Subd. 10. Medical center development district. "Medical center development
5.28district" means a contiguous or noncontiguous geographic area in the city created to
5.29facilitate one or more projects.
5.30 Subd. 11. Medical center economic development corporation. "Medical center
5.31economic development corporation" means a nonprofit corporation organized and existing
5.32under chapter 317A by any medical business entity to assist the authority and the city to
5.33secure Minnesota's status as one of the world's leading global medical destinations with
5.34the city as its hub.
5.35 Subd. 12. Project. "Project" means the following works or undertakings for the
5.36purpose of establishing, supporting, and maintaining a medical center development
6.1district, including attracting and fostering urban economic development and renewal
6.2within a medical center development district in accordance with the development plan:
6.3(1) to acquire real property and other assets associated with the real property;
6.4(2) to demolish, repair, or rehabilitate buildings;
6.5(3) to remediate or otherwise prepare land and buildings for acquisition or
6.6development;
6.7(4) to provide relocation benefits to the occupants of acquired properties;
6.8(5) to install, construct or reconstruct, and equip public infrastructure, including,
6.9without limitation, streets, roadways, utilities systems and related facilities, utility
6.10relocations and replacements, vertical transportation, network and communication
6.11systems, streetscape improvements, drainage systems, sewer and water systems, subgrade
6.12structures and associated improvements, landscaping, façade construction and restoration,
6.13and wayfinding and signage;
6.14(6) to acquire, construct or reconstruct, and equip parking facilities and other
6.15facilities or improvements to encourage intermodal transportation and public transit;
6.16(7) to install, construct or reconstruct, and equip public facilities or improvements
6.17and related infrastructure, including, without limitation, parks, cultural facilities,
6.18community and recreational facilities, facilities to promote tourism and hospitality,
6.19conferencing and conventions, broadcast and related multimedia infrastructure, and
6.20instructional, educational, and other facilities;
6.21(8) to make site improvements, including, without limitation, excavation,
6.22earth retention, soil stabilization and correction, subgrade structures and associated
6.23improvement, landscaping, and other improvements necessary due to the extraordinary
6.24cost of economic development of a site;
6.25(9) to sell or lease land; and
6.26(10) to construct and equip all or a portion of one or more suitable structures on land
6.27owned by the authority for sale or lease for private development; provided, however, that
6.28the portion of any such structure directly financed as a project cost must not be sold or
6.29leased to a medical business entity.
6.30 Subd. 13. Project cost. (a) "Project cost" with respect to a medical center
6.31development district project means all costs of the project activities described in
6.32subdivision 12, and includes, without limitation:
6.33(1) costs of planning, engineering, legal, marketing, development, insurance,
6.34finance, and other related professional services associated with a project;
6.35(2) costs providing relocation benefits to the occupants of acquired properties;
6.36(3) costs associated with the operational start-up and commissioning of a project; and
7.1(4) the allocated administrative expenses of the authority for the project.
7.2(b) Expenditures for project costs are not business subsidies under section 116J.993.
7.3 Sec. 6. [469.42] AUTHORITY ESTABLISHMENT; BOARD MEMBERS;
7.4TERMS, VACANCIES, PAY, CONTINUITY.
7.5 Subdivision 1. Destination Medical Center Authority; establishment. The
7.6Destination Medical Center Authority is established. The authority's governing board
7.7shall have seven members, appointed by the governor and confirmed by the senate. A
7.8person is eligible for appointment if the person is not a resident of Rochester and does
7.9not have a direct or indirect financial interest in the Mayo Clinic, its subsidiaries, or
7.10affiliated businesses, the Destination Medical Center, or any projects authorized by or
7.11under consideration by the authority.
7.12 Subd. 2. Terms; vacancies. The governor shall appoint the initial seven members
7.13by the first Monday in January 2014. The governor shall make appointments to replace
7.14three of the board's seats by the first Monday in January 2019 and every six years
7.15thereafter. The governor shall make appointments to replace the other four of the board's
7.16seats by the first Monday in January 2020 and every six years thereafter. Each member
7.17shall serve until a replacement for the member's seat on the board has been confirmed by
7.18the senate. When a member resigns or is removed for cause, the governor shall fill the
7.19vacancy for the balance of the member's term, subject to the same confirmation required
7.20for an appointment for a full term as provided in subdivision 1.
7.21 Subd. 3. Chair. The governor shall appoint a chair from the board's membership,
7.22and the chair shall convene the first meeting within two months of senate confirmation of
7.23the members.
7.24 Subd. 4. Pay. Members must be compensated as provided in section 15.0575,
7.25subdivision 3, for each regular or special authority board meeting attended. In addition,
7.26the board members may be reimbursed for actual expenses incurred in doing official
7.27business of the authority. All money paid for compensation or reimbursement must be
7.28paid out of the authority's budget.
7.29 Subd. 5. Removal for cause. A member may be removed by the board for
7.30inefficiency, neglect of duty, or misconduct in office. A member may be removed only
7.31after a hearing of the board. A copy of the charges must be given to the board member at
7.32least ten days before the hearing. The board member must be given an opportunity to be
7.33heard in person or by counsel at the hearing. When written charges have been submitted
7.34against a board member, the board may temporarily suspend the member. If the board finds
7.35that those charges have not been substantiated, the board member shall be immediately
8.1reinstated. If a board member is removed, a record of the proceedings, together with the
8.2charges and findings, shall be filed with the office of the appointing authority.
8.3 Subd. 6. Sunset. The authority shall sunset December 31, 2043. When the authority
8.4sunsets, all right, title, and interest to all assets held by the authority are transferred or
8.5assigned to the city of Rochester.
8.6 Sec. 7. [469.43] CHARACTERISTICS AND JURISDICTION.
8.7 Subdivision 1. Public body characteristics. The authority is a body politic and
8.8corporate and a political subdivision of the state, with the right to sue and be sued in
8.9its own name.
8.10 Subd. 2. Boundaries. The boundary for activities and the use of the powers of
8.11the authority must be within a medical center development district. The authority also
8.12has the power to finance activities outside of a medical center development district but
8.13within the county, if necessary; provided, however, that the financing of activities outside
8.14of a medical center development district but within the county must be included in the
8.15development plan and must be approved by, and subject to the planning, zoning, sanitary
8.16and building laws, ordinances, regulations, and land use plans applicable to, the city,
8.17county, or town in which such activities are undertaken.
8.18 Sec. 8. [469.44] OFFICERS; DUTIES; ORGANIZATIONAL MATTERS.
8.19 Subdivision 1. Bylaws, rules, seal. The authority may adopt bylaws and rules of
8.20procedure and may adopt an official seal.
8.21 Subd. 2. Officers. The authority shall annually elect a president or chair, and a
8.22vice-president or vice-chair, and a treasurer. A member may not serve as president or
8.23chair and vice-president or vice-chair at the same time. The authority shall appoint a
8.24secretary and assistant treasurer. The secretary and assistant treasurer need not, but may,
8.25be members of the board, including the president or chair or vice-president or vice-chair.
8.26 Subd. 3. Duties and powers. The officers have the usual duties and powers of their
8.27offices. They may be given other duties and powers by the authority.
8.28 Subd. 4. Treasurer's duties. The treasurer:
8.29(1) shall receive and is responsible for authority money;
8.30(2) is responsible for the acts of the assistant treasurer;
8.31(3) shall disburse authority money by check or electronic procedures;
8.32(4) shall keep an account of the source of all receipts, and the nature, purpose, and
8.33authority of all disbursements; and
9.1(5) shall file the authority's detailed financial statement with its secretary at least
9.2once a year at times set by the authority.
9.3 Subd. 5. Assistant treasurer. The assistant treasurer has the powers and duties of
9.4the treasurer if the treasurer is absent or disabled.
9.5 Subd. 6. Treasurer's bond. The treasurer shall give bond to the state conditioned
9.6for the faithful discharge of official duties. The bond must be approved as to form and
9.7surety by the authority and filed with its secretary. The bond must be for twice the amount
9.8of money likely to be on hand at any one time, as determined at least annually by the
9.9authority, except that the bond must not exceed $300,000.
9.10 Subd. 7. Public money. Authority money is public money.
9.11 Subd. 8. Checks. An authority check must be signed by the treasurer and by one
9.12other officer named by the authority in a resolution. The check must state the name of the
9.13payee and the nature of the claim for which the check is issued.
9.14 Subd. 9. Financial statements; filing with state auditor. The financial statements
9.15of the authority must be prepared, audited, filed, and published or posted in the manner
9.16required for the financial statements of the city. The authority shall employ a certified
9.17public accountant to annually examine and audit its books. The report of the exam and audit
9.18must be filed with the state auditor by June 30 of each year. The state auditor shall review
9.19the report and may accept it or, in the public interest, audit the books of the authority.
9.20 Subd. 10. Meetings. Meetings of the governing board of the authority are subject to
9.21chapter 13D.
9.22 Sec. 9. [469.45] DEPOSITORIES; DEFAULT; COLLATERAL.
9.23 Subdivision 1. Named; bond. Every two years the authority shall name national
9.24or state banks within the state as depositories. Before acting as a depository, a named
9.25bank shall give the authority a bond approved as to form and surety by the authority.
9.26The bond must be conditioned for the safekeeping and prompt repayment of deposits.
9.27The amount of the bond must be at least equal to the maximum sum expected to be on
9.28deposit at any one time.
9.29 Subd. 2. Default; collateral. When authority funds are deposited by the treasurer
9.30in a bonded depository, the treasurer and the surety on the treasurer's official bond are
9.31exempt from liability for the loss of the deposits because of the failure, bankruptcy, or any
9.32other act or default of the depository. The authority may accept assignments of collateral
9.33from its depository to secure deposits in the same manner as assignments of collateral are
9.34permitted for a government entity under section 118A.03.
10.1 Sec. 10. [469.47] TAX LEVIES; CITY OR COUNTY APPROPRIATIONS;
10.2OTHER FISCAL MATTERS.
10.3 Subdivision 1. Obligations. The authority must not levy a tax or special assessment,
10.4pledge the credit of the state or the state's municipal corporations or other subdivisions, or
10.5incur an obligation enforceable on property not owned by the authority.
10.6 Subd. 2. Budget. The authority shall annually send its budget to the city, county,
10.7governor, and legislature.
10.8 Subd. 3. Fiscal year. The fiscal year of the authority may be established by the
10.9authority.
10.10 Subd. 4. City or county appropriations; levy. The city council of the city or the
10.11county board of the county may appropriate money for the use of the authority and may
10.12levy the amount of its appropriation in its general levy. The levy is a special levy within
10.13the meaning of, and as if specifically enumerated in, section 275.70, subdivision 5.
10.14 Subd. 5. Outside budget laws. Money appropriated to the authority by the city
10.15or county under this section is not subject to a budget law that applies to the city or
10.16county, respectively.
10.17 Subd. 6. City or county payment. The city or county treasurer shall pay money
10.18appropriated by a city or county under subdivision 4 when and in the manner directed by
10.19the city council or county board, as applicable.
10.20 Subd. 7. Local government tax base not reduced. Nothing in sections 469.41 to
10.21469.53 reduces the tax base or affects the taxes due and payable to the city, the county,
10.22or any school district within the boundaries of the city, including, without limitation, the
10.23city's 0.5 percent local sales tax.
10.24 Sec. 11. [469.48] DEVELOPMENT PLAN; MEDICAL CENTER
10.25DEVELOPMENT DISTRICTS.
10.26 Subdivision 1. Development plan; adoption by authority; notice; findings. The
10.27authority, in consultation with the medical center economic development corporation,
10.28shall prepare a development plan with the city's involvement. The development plan must
10.29be adopted by the board of the authority only after holding a public hearing. At least 45
10.30days before the hearing, the authority shall file a copy of the proposed development plan
10.31with the city. The city shall make copies of the proposed plan available to the public at the
10.32city offices during normal business hours and as otherwise determined appropriate by city
10.33council or city officials. At least ten days before the hearing, the authority shall publish
10.34notice of the hearing in a qualified or official newspaper of the city. The development plan
10.35may not be adopted unless the authority finds by resolution that:
11.1(1) the plan provides an outline for the development of the city as a global destination
11.2medical center, and the plan is sufficiently complete, including the identification of planned
11.3and anticipated projects, to indicate its relationship to definite state and local objectives;
11.4(2) the proposed development affords maximum opportunity, consistent with the
11.5needs of the city, county, and state, for the development of the city by private enterprise as
11.6a global destination medical center;
11.7(3) the proposed development conforms to the general plan for the development
11.8of the city; and
11.9(4) the plan includes:
11.10(i) strategic planning consistent with a global destination medical center in the
11.11core areas of commercial research and technology, learning environment, hospitality
11.12and convention, sports and recreation, livable communities, including mixed-use urban
11.13development and neighborhood residential development, retail/dining/entertainment,
11.14and health and wellness;
11.15(ii) estimates of short- and long-range fiscal and economic impacts;
11.16(iii) a framework to identify and prioritize short- and long-term public investment
11.17and infrastructure development and to facilitate private investment and development;
11.18(iv) land use planning;
11.19(v) transportation and transit planning;
11.20(vi) operational planning required to support the medical center development
11.21district; and
11.22(vii) ongoing market research plans.
11.23 Subd. 2. Development plan; approval by city; finding. After adoption by the
11.24authority under subdivision 1, the authority shall submit the development plan to the city
11.25for approval by the city only in accordance with this subdivision. The city shall approve
11.26the development plan by written resolution upon making the finding that the development
11.27plan is consistent with the adopted comprehensive plan of the city. The city shall consider
11.28the approval of the development plan and make its finding regarding consistency with
11.29the adopted comprehensive plan of the city within 45 days of submission of the adopted
11.30development plan. If the city determines, by written resolution, that the development plan
11.31is not consistent with the adopted comprehensive plan of the city, the resolution shall state
11.32the reasons and supporting facts for each determination, and the city shall transmit the
11.33resolution to the authority within seven days of adoption. A revised development plan
11.34may be submitted by the authority for approval by the city in the manner provided in this
11.35subdivision. The city may incorporate the approved development plan into the city's
11.36comprehensive plan.
12.1 Subd. 3. Modification of development plan. The authority may modify the
12.2development plan at any time. The authority shall update the original development plan
12.3not less than every five years. A modification or update under this subdivision must be
12.4prepared with the city's involvement and adopted by the authority upon the notice and
12.5after the public hearing and findings required for the original adoption of the development
12.6plan and upon approval by the city as provided in subdivision 2.
12.7 Subd. 4. Medical center development districts; creation; notice; findings. As
12.8part of the development plan, the authority may create and define the boundaries of
12.9medical center development districts and subdistricts at any place or places within the
12.10city. Projects may be undertaken within defined medical center development districts
12.11consistent with the development plan.
12.12 Subd. 5. Policy. It is state policy in the public interest to have the authority exercise
12.13the power of eminent domain to acquire property for a public use, as defined in section
12.14117.025, and advance and spend money for the purposes in sections 469.41 to 469.53.
12.15 Sec. 12. [469.49] POWERS AND DUTIES.
12.16 Subdivision 1. Powers generally. The authority has the powers of a city under
12.17chapter 462C and the powers of a redevelopment agency under sections 469.152 to
12.18469.1651, in connection with private development in the city for which the authority
12.19has previously undertaken or concurrently undertakes a project financed in whole or in
12.20part with authority revenue or obligations issued pursuant to section 469.50; provided,
12.21however, the authority shall not enter into any revenue agreement pursuant to section
12.22469.155, subdivision 5, with a medical business entity.
12.23 Subd. 2. Projects; project costs. The authority may, within a medical center
12.24development district, undertake projects and finance project costs. The authority must
12.25find by resolution that the project is consistent with and in furtherance of the approved
12.26development plan. Subject to other applicable law, revenue derived by the authority
12.27from any source may be used by the authority to make loans or grants, or to provide
12.28direct or indirect financial support to state public bodies or to private entities in payment
12.29or reimbursement of project costs; provided, however, projects as defined under section
12.30469.41, subdivision 12, clauses (5), (6), and (7), which will be owned, operated, or
12.31maintained by the city, must be approved by written resolution of the city.
12.32 Subd. 3. Medical center economic development corporation. (a) The authority
12.33shall engage a medical center economic development corporation to advise the authority
12.34on matters related to a project. The medical center economic development corporation
12.35shall assist the authority in the preparation of the development plan and shall provide
13.1services to assist the authority in implementing, consistent with the development plan, the
13.2goals, objectives, and strategies in the development plan, including, without limitation:
13.3(1) developing and updating the criteria for evaluating and underwriting
13.4development proposals;
13.5(2) implementing the development plan, including soliciting and evaluating
13.6proposals for development and evaluating and making recommendations to the authority
13.7regarding those proposals;
13.8(3) providing administrative services in connection with approved projects;
13.9(4) developing patient, visitor, and community outreach programs for a medical
13.10center development district;
13.11(5) working with the authority to acquire and facilitate the sale, lease, or other
13.12transactions involving land and real property;
13.13(6) seeking financial support for itself, the authority, and a project;
13.14(7) partnering with other development agencies and organizations and the city and
13.15county in joint efforts to promote economic development and establish a destination
13.16medical center;
13.17(8) supporting and administering the planning and development activities required to
13.18implement the development plan;
13.19(9) preparing and supporting the marketing and promotion of the medical center
13.20development district;
13.21(10) preparing and implementing a program for community and public relations in
13.22support of the medical center development district;
13.23(11) assisting the authority and others in applications for federal grants, tax credits,
13.24and other sources of funding to aid both private and public development; and
13.25(12) making other general advisory recommendations to the authority's governing
13.26board, as requested.
13.27(b) The authority may contract with the medical center economic development
13.28corporation to provide administrative services to the authority. The authority may agree
13.29to provide reasonable compensation to the medical center economic development
13.30corporation for the services described in this section. The authority may pay for such
13.31services out of any revenue sources available to it, including amounts received from the
13.32city or the county under section 469.47 or from payments received from the state under
13.33section 469.53. Nothing in sections 469.40 to 469.53 shall allow the authority's governing
13.34board to delegate to any person or entity the authority's duties and powers to adopt the
13.35development plan or to exercise judgment or discretion of the authority to finance projects
13.36or otherwise expend public funds.
14.1 Subd. 4. Revenue pooling. The authority may deposit all its money from any
14.2source in one bank account.
14.3 Subd. 5. Acquire property; exemption for taxes. (a) The authority may acquire by
14.4lease, purchase, gift, or devise the needed right, title, and interest in property to create
14.5medical center development districts and undertake projects. The authority may exercise
14.6the power of eminent domain to acquire property for a public use, as defined in section
14.7117.025. It shall pay for the property out of money it receives under sections 469.41 to
14.8469.53. It may hold and dispose of the property subject to the limits and conditions in
14.9sections 469.41 to 469.53. The title to property acquired by eminent domain or purchase
14.10must be in fee simple, absolute. The authority may accept an interest in property acquired
14.11in another way subject to any condition of the grantor or donor. The condition must
14.12be consistent with the proper use of the property under sections 469.41 to 469.53. The
14.13authority may sign options to purchase, sell, or lease property.
14.14(b) Property acquired, owned, leased, controlled, used, or occupied by the authority
14.15for any of the purposes of this section is for public governmental and municipal purposes
14.16and is exempt from taxation by the state or its political subdivisions, except to the extent
14.17that the property is subject to the sales and use tax under chapter 297A. The exemption in
14.18this paragraph applies only while the authority holds property for its own purpose, and is
14.19subject to section 272.02, subdivisions 8 and 39. When the property is sold it becomes
14.20subject to taxation.
14.21 Subd. 6. Subject to city requirements. All projects are subject to the planning,
14.22zoning, sanitary, and building laws, ordinances, regulations, and land use plans applicable
14.23to the city.
14.24 Subd. 7. Sale of property. The authority may sell, convey, and exchange any real
14.25or personal property owned or held by it in any manner and on any terms. Real property
14.26owned by the authority must not be sold, conveyed, exchanged, or have its title transferred
14.27without approval of two-thirds of the members of the board. All members must have ten
14.28days' written notice of a regular or special meeting at which a vote on sale, conveyance,
14.29exchange, or transfer of real property is to be taken. The notice must contain a complete
14.30description of the affected real property. The resolution authorizing the real property
14.31transaction is not effective unless a quorum is present.
14.32 Subd. 8. Contracts. The authority may make contracts for the purpose of economic
14.33development within the powers given it in sections 469.41 to 469.53. The authority
14.34may contract or arrange with the federal government, or any of its departments, with
14.35persons, public corporations, the state, or any of its political subdivisions, commissions, or
14.36agencies, for separate or joint action, on any matter related to using the authority's powers
15.1or performing its duties. The authority may contract to purchase and sell real and personal
15.2property. An obligation or expense must not be incurred by the authority unless existing
15.3appropriations together with the reasonably expected revenue of the authority from other
15.4sources are sufficient to discharge the obligation or pay the expense when due. The state
15.5and its municipal subdivisions are not liable on the obligations of the authority.
15.6 Subd. 9. Contract for services. The authority may contract for the services of
15.7consultants, agents, public accountants, legal counsel, and other persons needed to perform
15.8its duties and exercise its powers. The authority may contract with the city or county to
15.9provide administrative, clerical, and accounting services to the authority.
15.10 Subd. 10. Supplies. The authority may purchase the supplies and materials it needs
15.11to carry out sections 469.41 to 469.53.
15.12 Subd. 11. City purchasing. The authority may, by agreement with the city, use the
15.13facilities and services of the city's purchasing and public works departments in connection
15.14with construction work and to purchase equipment, supplies, or materials.
15.15 Subd. 12. City facilities, services. The city may furnish offices, structures and
15.16space, and clerical, engineering, or other services or assistance to the authority.
15.17 Subd. 13. Delegation power. The authority may delegate to one or more of its
15.18agents powers or duties as it deems proper.
15.19 Subd. 14. Government agent. The authority may cooperate with or act as agent
15.20for the federal or state government, a state public body, or an agency or instrumentality
15.21of a government or a public body to carry out sections 469.41 to 469.53 or any other
15.22related federal, state, or local law.
15.23 Subd. 15. Studies, analysis, research. The authority may study and analyze
15.24development needs in a medical center development district and ways to meet the needs.
15.25The authority may study the desirable patterns for land use and community growth and
15.26other factors affecting local development in a medical center development district and
15.27make the result of the studies available to the public and to potential developers. The
15.28authority may engage in research and disseminate information on development in its
15.29medical center development districts.
15.30 Subd. 16. Acceptance of public land. The authority may accept conveyances of
15.31land from all other public agencies, commissions, or other units of government, if the land
15.32can be properly used by the authority in a medical center development district, to carry
15.33out the purposes of sections 469.41 to 469.53. The city council of the city may transfer
15.34or cause to be transferred to the authority any property owned or controlled by the city
15.35and located within the jurisdiction of the authority. The transfer must be approved by
15.36majority vote of the city council and may be with or without consideration. The city may
16.1also put the property in the possession or control of the authority by a lease or other
16.2agreement for a limited period or in fee.
16.3 Subd. 17. Loans in anticipation of bonds. After authorizing bonds under section
16.4469.50, the authority may borrow to provide money immediately required for the bond
16.5purposes. The loans may not exceed the amount of the bonds. The authority shall by
16.6resolution decide the terms of the loans. The loans must be evidenced by negotiable
16.7notes due in not more than 12 months from the date of the loan payable to the order of
16.8the lender, to be repaid with interest from the proceeds of the bonds when the bonds are
16.9issued and delivered to the bond purchasers. The loan must not be obtained from any
16.10board member of the authority or from any corporation, association, or other institution of
16.11which an authority board member is a stockholder or officer.
16.12 Subd. 18. Reporting requirements. On or before January 15 of each odd-numbered
16.13year, the authority shall provide a report to the chairs and ranking minority members
16.14of the house of representatives and senate committees with jurisdiction over economic
16.15development and taxes, the commissioners of management and budget, revenue, and
16.16employment and economic development, the city council, and the county board of
16.17commissioners. The report must provide calculations of designated state taxes for the
16.18prior two fiscal years of the authority, a current draft of the development plan, and debt
16.19service schedules for all outstanding bonds or notes of the authority.
16.20 Subd. 19. No tax increment financing powers. The authority is not an authority as
16.21defined in section 469.174, subdivision 2.
16.22 Sec. 13. [469.50] REVENUE OBLIGATIONS; PLEDGE; COVENANTS.
16.23 Subdivision 1. Powers. The authority may decide by resolution to issue its revenue
16.24bonds, notes, or other obligations either at one time or in series from time to time. The
16.25revenue bonds may be issued to provide money to pay project costs. The issued bonds
16.26may include the amount the authority considers necessary to establish an initial reserve to
16.27pay principal of and interest on the bonds, including capitalized interest, and to pay the
16.28costs of issuance. The resolution shall state how the bonds are to be executed.
16.29 Subd. 2. Form. The bonds of each series issued by the authority under this section
16.30must bear interest at the rate or rates, mature at times not later than 30 years from the date
16.31of issuance, and be fully registered bonds in the form determined by the authority. All
16.32bonds issued under this section must be negotiable instruments.
16.33 Subd. 3. Sale. The sale of revenue bonds issued by the authority may be at public or
16.34private sale. The bonds may be sold in the manner and for the amount that the authority
17.1determines to be in the best interest of the authority. The bonds may be made callable upon
17.2terms as determined by the authority and may be refunded as provided in section 475.67.
17.3 Subd. 4. Agreements. The authority may by resolution make an agreement or
17.4covenant with the bondholders or their trustee if it determines that the agreement or
17.5covenant is needed or desirable to carry out the powers given to the authority under this
17.6section and to ensure that the revenue bonds are marketable and promptly paid.
17.7 Subd. 5. Revenue pledge. (a) In issuing bonds under this section, the authority may
17.8secure payment of the principal and interest on the bonds by:
17.9(1) a pledge of and lien on authority revenue. The revenue must come from the
17.10facility to be acquired, constructed, or improved with the bond proceeds or from other
17.11facilities named in the bond-authorizing resolutions. The authority also may secure the
17.12payment with its promise to impose, maintain, and collect enough rentals, rates, and
17.13charges, for the use and occupancy of the facilities and for services furnished in connection
17.14with the use and occupancy, to pay its current expenses to operate and maintain the named
17.15facilities, and to produce and deposit sufficient net revenue in a special fund to meet the
17.16interest and principal requirements of the bonds, and to collect and keep any more money
17.17required by the resolutions. The authority shall decide what constitutes "current" expense
17.18under this subdivision based on what is normal and reasonable under generally accepted
17.19accounting principles. Revenues pledged by the authority must not be used or pledged for
17.20any other authority purpose unless the other use or pledge is specifically authorized in the
17.21bond-authorizing resolutions; or
17.22(2) the payments to be made by the state to the authority under section 469.53.
17.23The aggregate principal amount of bonds issued under this clause may not exceed
17.24$585,000,000, less the principal amount of any city grant, bond, or note given or issued to
17.25finance project costs consistent with the development plan up to $60,000,000.
17.26(b) No bonds may be issued by the authority under this subdivision later than
17.2720 years from the date of final enactment of this act, and no bond issued under this
17.28subdivision may have a maturity later than December 31, 2049.
17.29 Subd. 6. Approval of commissioner of employment and economic development.
17.30(a) Prior to issuance of each series of bonds, notes, or other obligations under subdivision
17.315, paragraph (a), clause (2), the authority shall furnish to the commissioner of employment
17.32and economic development, in the form prescribed by the commissioner, the following
17.33information regarding a project:
17.34(1) the principal amount of bonds to be issued for the project;
17.35(2) the maximum annual debt service payable on the bonds in any year;
17.36(3) the proposed use, location, and ownership of the project;
18.1(4) evidence that the city has:
18.2(i) committed, by written resolution of its governing body or a vote of its electorate,
18.3to finance any project costs under section 469.41, subdivision 13, consistent with the
18.4development plan in an amount equal to or exceeding ten percent of the principal amount
18.5of authority bonds to be issued for the project pursuant to clause (1); and
18.6(ii) an agreement with the authority to pay for administrative and operating costs of
18.7the authority in an amount of $450,000 annually;
18.8(5) other sources of funds for the project; and
18.9(6) the specific uses of the proceeds of the bonds.
18.10For purposes of determining the maximum annual debt service under clause (2), for
18.11variable rate obligations, interest rates must be determined as the maximum rate of interest
18.12payable on the obligations in accordance with their terms.
18.13(b) In addition, the authority shall certify that the project is consistent with the
18.14development plan and that debt service in any year on all bonds then outstanding and the
18.15bonds proposed to be issued under subdivision 5, paragraph (a), clause (2), does not
18.16exceed the value capture amount calculated within the prior 12 months as determined
18.17under section 469.53, subdivision 2, paragraph (b).
18.18(c) Based upon the information provided by the authority, the commissioner
18.19of employment and economic development shall approve the issuance of that series
18.20of authority bonds as consistent with the requirements of sections 469.41 to 469.53,
18.21and the commissioner of employment and economic development shall promptly
18.22notify the authority and the commissioner of management and budget of its approval;
18.23provided, however, that the approval is not deemed an approval by the commissioner of
18.24employment and economic development or by the state of the feasibility of the project.
18.25The commissioner of employment and economic development shall keep a record of the
18.26information, which shall be available to the public at times the department prescribes.
18.27 Subd. 7. Not city, county, or state debt. Revenue bonds, notes, or other obligations
18.28issued under this section are not a debt of the city, county, or state, nor a pledge of the full
18.29faith and credit of the city, county, or state. All obligations under this section are payable
18.30only from revenues described in subdivision 5. A revenue bond must contain on its face a
18.31statement to the effect that the authority does not have to pay the bond or the interest on it
18.32except from the revenues pledged thereto and that the faith, credit, and taxing power of the
18.33city, the county, and the state are not pledged to pay the principal of or interest on the bond.
18.34 Sec. 14. [469.51] CITY BONDS; PUBLIC IMPROVEMENTS.
19.1The city may issue bonds and appropriate bond proceeds to pay project costs
19.2consistent with the development plan within a medical center development district. The city
19.3may undertake public improvements and infrastructure projects to be owned by the city or
19.4make grants to the authority for such public improvements and infrastructure projects in the
19.5same manner as if the facilities were owned or to be owned or operated solely by the city.
19.6 Sec. 15. [469.52] WHEN BOND ALLOCATION ACT APPLIES.
19.7Sections 474A.01 to 474A.21 apply to obligations issued under sections 469.41 to
19.8469.53 that are limited by a federal tax law as defined in section 474A.02, subdivision 8.
19.9 Sec. 16. [469.53] PAYMENTS TO AUTHORITY; CONDITIONS.
19.10 Subdivision 1. Conditions of payment; amount. Before the commissioner of
19.11management and budget may make any payments authorized in this section to the
19.12authority, the commissioner must have received, for payments to be made in state fiscal
19.13year 2016 and later years, the consultant's reports required by subdivision 2, paragraph
19.14(b), a request from the authority showing the amount of the payment requested for debt
19.15service on bonds, notes, and other obligations of the authority and for operating and
19.16administrative expenses of the authority and, if not previously received, the approval by
19.17the commissioner of employment and economic development of the bonds for which
19.18payment is being requested.
19.19 Subd. 2. Calculation of designated state tax amount. (a) The commissioner of
19.20revenue, working with a third-party, independent consultant selected and paid by the
19.21authority and acceptable to the commissioner of revenue, shall determine the amount of
19.22each of the designated state taxes attributable to calendar year 2011, which shall be referred
19.23to as the "baseline designated state tax amounts." The calculation of designated state tax
19.24amounts must be based on (1) direct employment tax data provided by any medical business
19.25entity, and (2) other direct and indirect methods of measurement used by the independent
19.26consultant that are acceptable to the authority and the commissioner of revenue. The
19.27commissioner of revenue shall make the determination and provide to the legislature, the
19.28commissioners of management and budget, and employment and economic development,
19.29the city, and the county a report showing the baseline designated state tax amounts no later
19.30than July 15, 2013. If, after determination of the baseline designated state tax amounts,
19.31area is annexed to the city, the commissioner shall adjust the baseline designated state
19.32tax amounts by each of the designated state taxes attributable to the area annexed for the
19.33calendar year of the annexation to determine the baseline designated state tax amounts.
20.1(b) On or before April 1, 2014, the commissioner of revenue, working with a
20.2third-party, independent consultant selected and paid by the authority and acceptable
20.3to the commissioner of revenue, shall determine the amount of designated state taxes
20.4attributable to calendar year 2013, and shall provide to the legislature, the commissioners
20.5of management and budget, and employment and economic development, the city, and
20.6the county a report showing the designated state taxes attributable to calendar year 2013,
20.7and the increases, if any, over the baseline designated state tax amounts. The report shall
20.8also show the results of the following formula: designated state taxes attributable to
20.9calendar year 2013 minus baseline designated state tax amounts, the difference of which is
20.10divided by 1.5. The result of the application of this formula to designated state taxes for
20.11any calendar year constitutes the "value capture amount." A similar report showing the
20.12designated state taxes attributable to the preceding calendar year and the value capture
20.13amount based on such taxes shall be prepared and delivered as described in this paragraph
20.14not later than April 1 in each subsequent year if requested by the authority no later than
20.15March 1 of that year.
20.16 Subd. 3. Payments. After the report in subdivision 2, paragraph (a), showing the
20.17baseline designated state tax amounts is provided to the commissioner of management and
20.18budget by the commissioner of revenue, the commissioner of management and budget
20.19shall transfer to the authority, on July 15 of each year commencing July 15, 2015, and for
20.20so long thereafter as any bonds, notes, or other obligations issued by the authority under
20.21section 469.50, subdivision 5, paragraph (a), clause (2), remain outstanding, the annual
20.22payments requested by the authority under subdivision 1.
20.23 Subd. 4. Appropriations. In each state fiscal year, beginning in fiscal year 2016 to
20.24and including fiscal year 2049, there is appropriated to the commissioner of management
20.25and budget for transfer to the authority the amount of debt service for the state fiscal year
20.26on outstanding authority bonds issued pursuant to section 469.50, subdivision 5, paragraph
20.27(a), clause (2), plus operating and administrative expense of the authority for such year,
20.28but subject to the limitations of subdivision 1 of this section.
1.3authority and providing for its organization, powers, and duties; providing
1.4for medical center development districts; authorizing the issuance of revenue
1.5obligations by the authority; authorizing city bonds; authorizing state assistance;
1.6providing for tax increment financing within a medical center development
1.7district; appropriating money;amending Minnesota Statutes 2012, sections
1.8272.02, subdivision 39; 469.174, subdivision 8; 469.176, subdivisions 1b, 4c;
1.9proposing coding for new law in Minnesota Statutes, chapter 469.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 Section 1. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
1.12 Subd. 39. Economic development; public purpose. The holding of property by
1.13a political subdivision of the state for later resale for economic development purposes,
1.14including property held as part of a destination medical center project described in
1.15section 469.41, subdivision 12, shall be considered a public purpose in accordance with
1.16subdivision 8 for a period not to exceed nine years, except that for property located in a
1.17city of 5,000 population or under that is located outside of the metropolitan area as defined
1.18in section
1.19The holding of property by a political subdivision of the state for later resale (1)
1.20which is purchased or held for housing purposes, or (2) which meets the conditions
1.21described in section
1.22accordance with subdivision 8.
1.23The governing body of the political subdivision which acquires property which is
1.24subject to this subdivision shall after the purchase of the property certify to the city or
1.25county assessor whether the property is held for economic development purposes or
1.26housing purposes, or whether it meets the conditions of section
2.1If the property is acquired for economic development purposes and buildings or other
2.2improvements are constructed after acquisition of the property, and if more than one-half
2.3of the floor space of the buildings or improvements which is available for lease to or use
2.4by a private individual, corporation, or other entity is leased to or otherwise used by
2.5a private individual, corporation, or other entity the provisions of this subdivision shall
2.6not apply to the property. This subdivision shall not create an exemption from section
2.8law providing for the taxation of or for payments in lieu of taxes for publicly held property
2.9which is leased, loaned, or otherwise made available and used by a private person.
2.10 Sec. 2. Minnesota Statutes 2012, section 469.174, subdivision 8, is amended to read:
2.11 Subd. 8. Project. "Project" means a project as described in section
2.12an industrial development district as described in section
2.13economic development district as described in section
2.14defined in section
2.16subdivision 2
2.17defined in section 469.41, subdivision 10.
2.18 Sec. 3. Minnesota Statutes 2012, section 469.176, subdivision 1b, is amended to read:
2.19 Subd. 1b. Duration limits; terms. (a) No tax increment shall in any event be
2.20paid to the authority:
2.21(1) after 15 years after receipt by the authority of the first increment for a renewal
2.22and renovation district;
2.23(2) after 20 years after receipt by the authority of the first increment for a soils
2.24condition district;
2.25(3) after eight years after receipt by the authority of the first increment for an
2.26economic development district or, for an economic development district within a medical
2.27center development district created under section 469.48, subdivision 4, (i) after 15 years
2.28after receipt by the authority of the first increment for a residential rental/owner-occupied
2.29housing subdistrict, (ii) after 15 years after receipt by the authority of the first increment
2.30for a medical/healthcare industry subdistrict, or (iii) after ten years after receipt by the
2.31authority of the first increment for a commercial/industrial/retail subdistrict;
2.32(4) for a housing district, a compact development district, or a redevelopment
2.33district, after 25 years from the date of receipt by the authority of the first increment.
3.1(b) For purposes of determining a duration limit under this subdivision or subdivision
3.21e that is based on the receipt of an increment, any increments from taxes payable in the year
3.3in which the district terminates shall be paid to the authority. This paragraph does not affect
3.4a duration limit calculated from the date of approval of the tax increment financing plan or
3.5based on the recovery of costs or to a duration limit under subdivision 1c. This paragraph
3.6does not supersede the restrictions on payment of delinquent taxes in subdivision 1f.
3.7(c) An action by the authority to waive or decline to accept an increment has no
3.8effect for purposes of computing a duration limit based on the receipt of increment under
3.9this subdivision or any other provision of law. The authority is deemed to have received an
3.10increment for any year in which it waived or declined to accept an increment, regardless
3.11of whether the increment was paid to the authority.
3.12(d) Receipt by a hazardous substance subdistrict of an increment as a result of a
3.13reduction in original net tax capacity under section
3.14(b), does not constitute receipt of increment by the overlying district for the purpose of
3.15calculating the duration limit under this section.
3.16 Sec. 4. Minnesota Statutes 2012, section 469.176, subdivision 4c, is amended to read:
3.17 Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
3.18from an economic development district may not be used to provide improvements, loans,
3.19subsidies, grants, interest rate subsidies, or assistance in any form to developments
3.20consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
3.21facilities (determined on the basis of square footage) are used for a purpose other than:
3.22(1) the manufacturing or production of tangible personal property, including
3.23processing resulting in the change in condition of the property;
3.24(2) warehousing, storage, and distribution of tangible personal property, excluding
3.25retail sales;
3.26(3) with the consent of the Destination Medical Center Authority and within
3.27a subdistrict of a medical center development district created under section 469.48,
3.28subdivision 4, (i) residential rental or owner-occupied housing, (ii) the provision of medical
3.29or healthcare industry related services or products, or (iii) other commercial/industrial
3.30development and retail sales;
3.31
3.32 (2), or (3);
3.33
3.34
3.35
4.1
4.2(b) Notwithstanding the provisions of this subdivision, revenues derived from tax
4.3increment from an economic development district may be used to provide improvements,
4.4loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
4.5square feet of any separately owned commercial facility located within the municipal
4.6jurisdiction of a small city, if the revenues derived from increments are spent only to
4.7assist the facility directly or for administrative expenses, the assistance is necessary to
4.8develop the facility, and all of the increments, except those for administrative expenses,
4.9are spent only for activities within the district.
4.10(c) A city is a small city for purposes of this subdivision if the city was a small city
4.11in the year in which the request for certification was made and applies for the rest of
4.12the duration of the district, regardless of whether the city qualifies or ceases to qualify
4.13as a small city.
4.14(d) Notwithstanding the requirements of paragraph (a) and the finding requirements
4.15of section
4.16may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or
4.17assistance in any form to developments consisting of buildings and ancillary facilities, if
4.18all the following conditions are met:
4.19(1) the municipality finds that the project will create or retain jobs in this state,
4.20including construction jobs, and that construction of the project would not have
4.21commenced before July 1, 2012, without the authority providing assistance under the
4.22provisions of this paragraph;
4.23(2) construction of the project begins no later than July 1, 2012;
4.24(3) the request for certification of the district is made no later than June 30, 2012; and
4.25(4) for development of housing under this paragraph, the construction must begin
4.26before January 1, 2012.
4.27The provisions of this paragraph may not be used to assist housing that is developed
4.28to qualify under section
4.29if construction of the project begins later than July 1, 2011.
4.30 Sec. 5. [469.41] DEFINITIONS.
4.31 Subdivision 1. Generally. In sections 469.41 to 469.53, the terms defined in this
4.32section have the meanings given them, unless the context indicates a different meaning.
4.33 Subd. 2. Authority. "Authority" means the Destination Medical Center Authority
4.34established in section 469.42.
5.1 Subd. 3. Board. "Board" means the governing body of the Destination Medical
5.2Center Authority.
5.3 Subd. 4. City. "City" means the city of Rochester, Minnesota.
5.4 Subd. 5. County. "County" means Olmsted County, Minnesota.
5.5 Subd. 6. Designated state taxes. "Designated state taxes" means as of any
5.6calculation date under section 469.53, subdivision 2, the following state taxes:
5.7(1) personal income taxes payable under chapter 290 that are attributable to payroll
5.8for employees of all facilities in the city of any business entity, including any medical
5.9business entity, and all facilities of any medical business entity located outside of the
5.10city but in the state;
5.11(2) corporate franchise taxes paid under chapter 290 by any business with its
5.12principal place of business in the city, including any medical business entity;
5.13(3) commercial-industrial property taxes paid under section 275.025 by businesses,
5.14including any medical business entity, on property located in the city and by any medical
5.15business entity on property located outside of the city and in the state; and
5.16(4) sales taxes collected by businesses on retail sales within the city under sections
5.17297A.62 and 297A.63 and all such taxes paid by any medical business entity on retail
5.18sales within the state.
5.19 Subd. 7. Development; developing. "Development" includes redevelopment,
5.20and "developing" includes redeveloping.
5.21 Subd. 8. Development plan. "Development plan" means the long-range plan for the
5.22development of the medical center development district or districts.
5.23 Subd. 9. Medical business entity. "Medical business entity" means a medical
5.24business entity with its principal place of business in the city as of the date of final
5.25enactment of this act, together with all business entities of which it is a sole member or
5.26shareholder, that collectively employs more than 30,000 persons in the state as of that date.
5.27 Subd. 10. Medical center development district. "Medical center development
5.28district" means a contiguous or noncontiguous geographic area in the city created to
5.29facilitate one or more projects.
5.30 Subd. 11. Medical center economic development corporation. "Medical center
5.31economic development corporation" means a nonprofit corporation organized and existing
5.32under chapter 317A by any medical business entity to assist the authority and the city to
5.33secure Minnesota's status as one of the world's leading global medical destinations with
5.34the city as its hub.
5.35 Subd. 12. Project. "Project" means the following works or undertakings for the
5.36purpose of establishing, supporting, and maintaining a medical center development
6.1district, including attracting and fostering urban economic development and renewal
6.2within a medical center development district in accordance with the development plan:
6.3(1) to acquire real property and other assets associated with the real property;
6.4(2) to demolish, repair, or rehabilitate buildings;
6.5(3) to remediate or otherwise prepare land and buildings for acquisition or
6.6development;
6.7(4) to provide relocation benefits to the occupants of acquired properties;
6.8(5) to install, construct or reconstruct, and equip public infrastructure, including,
6.9without limitation, streets, roadways, utilities systems and related facilities, utility
6.10relocations and replacements, vertical transportation, network and communication
6.11systems, streetscape improvements, drainage systems, sewer and water systems, subgrade
6.12structures and associated improvements, landscaping, façade construction and restoration,
6.13and wayfinding and signage;
6.14(6) to acquire, construct or reconstruct, and equip parking facilities and other
6.15facilities or improvements to encourage intermodal transportation and public transit;
6.16(7) to install, construct or reconstruct, and equip public facilities or improvements
6.17and related infrastructure, including, without limitation, parks, cultural facilities,
6.18community and recreational facilities, facilities to promote tourism and hospitality,
6.19conferencing and conventions, broadcast and related multimedia infrastructure, and
6.20instructional, educational, and other facilities;
6.21(8) to make site improvements, including, without limitation, excavation,
6.22earth retention, soil stabilization and correction, subgrade structures and associated
6.23improvement, landscaping, and other improvements necessary due to the extraordinary
6.24cost of economic development of a site;
6.25(9) to sell or lease land; and
6.26(10) to construct and equip all or a portion of one or more suitable structures on land
6.27owned by the authority for sale or lease for private development; provided, however, that
6.28the portion of any such structure directly financed as a project cost must not be sold or
6.29leased to a medical business entity.
6.30 Subd. 13. Project cost. (a) "Project cost" with respect to a medical center
6.31development district project means all costs of the project activities described in
6.32subdivision 12, and includes, without limitation:
6.33(1) costs of planning, engineering, legal, marketing, development, insurance,
6.34finance, and other related professional services associated with a project;
6.35(2) costs providing relocation benefits to the occupants of acquired properties;
6.36(3) costs associated with the operational start-up and commissioning of a project; and
7.1(4) the allocated administrative expenses of the authority for the project.
7.2(b) Expenditures for project costs are not business subsidies under section 116J.993.
7.3 Sec. 6. [469.42] AUTHORITY ESTABLISHMENT; BOARD MEMBERS;
7.4TERMS, VACANCIES, PAY, CONTINUITY.
7.5 Subdivision 1. Destination Medical Center Authority; establishment. The
7.6Destination Medical Center Authority is established. The authority's governing board
7.7shall have seven members, appointed by the governor and confirmed by the senate. A
7.8person is eligible for appointment if the person is not a resident of Rochester and does
7.9not have a direct or indirect financial interest in the Mayo Clinic, its subsidiaries, or
7.10affiliated businesses, the Destination Medical Center, or any projects authorized by or
7.11under consideration by the authority.
7.12 Subd. 2. Terms; vacancies. The governor shall appoint the initial seven members
7.13by the first Monday in January 2014. The governor shall make appointments to replace
7.14three of the board's seats by the first Monday in January 2019 and every six years
7.15thereafter. The governor shall make appointments to replace the other four of the board's
7.16seats by the first Monday in January 2020 and every six years thereafter. Each member
7.17shall serve until a replacement for the member's seat on the board has been confirmed by
7.18the senate. When a member resigns or is removed for cause, the governor shall fill the
7.19vacancy for the balance of the member's term, subject to the same confirmation required
7.20for an appointment for a full term as provided in subdivision 1.
7.21 Subd. 3. Chair. The governor shall appoint a chair from the board's membership,
7.22and the chair shall convene the first meeting within two months of senate confirmation of
7.23the members.
7.24 Subd. 4. Pay. Members must be compensated as provided in section 15.0575,
7.25subdivision 3, for each regular or special authority board meeting attended. In addition,
7.26the board members may be reimbursed for actual expenses incurred in doing official
7.27business of the authority. All money paid for compensation or reimbursement must be
7.28paid out of the authority's budget.
7.29 Subd. 5. Removal for cause. A member may be removed by the board for
7.30inefficiency, neglect of duty, or misconduct in office. A member may be removed only
7.31after a hearing of the board. A copy of the charges must be given to the board member at
7.32least ten days before the hearing. The board member must be given an opportunity to be
7.33heard in person or by counsel at the hearing. When written charges have been submitted
7.34against a board member, the board may temporarily suspend the member. If the board finds
7.35that those charges have not been substantiated, the board member shall be immediately
8.1reinstated. If a board member is removed, a record of the proceedings, together with the
8.2charges and findings, shall be filed with the office of the appointing authority.
8.3 Subd. 6. Sunset. The authority shall sunset December 31, 2043. When the authority
8.4sunsets, all right, title, and interest to all assets held by the authority are transferred or
8.5assigned to the city of Rochester.
8.6 Sec. 7. [469.43] CHARACTERISTICS AND JURISDICTION.
8.7 Subdivision 1. Public body characteristics. The authority is a body politic and
8.8corporate and a political subdivision of the state, with the right to sue and be sued in
8.9its own name.
8.10 Subd. 2. Boundaries. The boundary for activities and the use of the powers of
8.11the authority must be within a medical center development district. The authority also
8.12has the power to finance activities outside of a medical center development district but
8.13within the county, if necessary; provided, however, that the financing of activities outside
8.14of a medical center development district but within the county must be included in the
8.15development plan and must be approved by, and subject to the planning, zoning, sanitary
8.16and building laws, ordinances, regulations, and land use plans applicable to, the city,
8.17county, or town in which such activities are undertaken.
8.18 Sec. 8. [469.44] OFFICERS; DUTIES; ORGANIZATIONAL MATTERS.
8.19 Subdivision 1. Bylaws, rules, seal. The authority may adopt bylaws and rules of
8.20procedure and may adopt an official seal.
8.21 Subd. 2. Officers. The authority shall annually elect a president or chair, and a
8.22vice-president or vice-chair, and a treasurer. A member may not serve as president or
8.23chair and vice-president or vice-chair at the same time. The authority shall appoint a
8.24secretary and assistant treasurer. The secretary and assistant treasurer need not, but may,
8.25be members of the board, including the president or chair or vice-president or vice-chair.
8.26 Subd. 3. Duties and powers. The officers have the usual duties and powers of their
8.27offices. They may be given other duties and powers by the authority.
8.28 Subd. 4. Treasurer's duties. The treasurer:
8.29(1) shall receive and is responsible for authority money;
8.30(2) is responsible for the acts of the assistant treasurer;
8.31(3) shall disburse authority money by check or electronic procedures;
8.32(4) shall keep an account of the source of all receipts, and the nature, purpose, and
8.33authority of all disbursements; and
9.1(5) shall file the authority's detailed financial statement with its secretary at least
9.2once a year at times set by the authority.
9.3 Subd. 5. Assistant treasurer. The assistant treasurer has the powers and duties of
9.4the treasurer if the treasurer is absent or disabled.
9.5 Subd. 6. Treasurer's bond. The treasurer shall give bond to the state conditioned
9.6for the faithful discharge of official duties. The bond must be approved as to form and
9.7surety by the authority and filed with its secretary. The bond must be for twice the amount
9.8of money likely to be on hand at any one time, as determined at least annually by the
9.9authority, except that the bond must not exceed $300,000.
9.10 Subd. 7. Public money. Authority money is public money.
9.11 Subd. 8. Checks. An authority check must be signed by the treasurer and by one
9.12other officer named by the authority in a resolution. The check must state the name of the
9.13payee and the nature of the claim for which the check is issued.
9.14 Subd. 9. Financial statements; filing with state auditor. The financial statements
9.15of the authority must be prepared, audited, filed, and published or posted in the manner
9.16required for the financial statements of the city. The authority shall employ a certified
9.17public accountant to annually examine and audit its books. The report of the exam and audit
9.18must be filed with the state auditor by June 30 of each year. The state auditor shall review
9.19the report and may accept it or, in the public interest, audit the books of the authority.
9.20 Subd. 10. Meetings. Meetings of the governing board of the authority are subject to
9.21chapter 13D.
9.22 Sec. 9. [469.45] DEPOSITORIES; DEFAULT; COLLATERAL.
9.23 Subdivision 1. Named; bond. Every two years the authority shall name national
9.24or state banks within the state as depositories. Before acting as a depository, a named
9.25bank shall give the authority a bond approved as to form and surety by the authority.
9.26The bond must be conditioned for the safekeeping and prompt repayment of deposits.
9.27The amount of the bond must be at least equal to the maximum sum expected to be on
9.28deposit at any one time.
9.29 Subd. 2. Default; collateral. When authority funds are deposited by the treasurer
9.30in a bonded depository, the treasurer and the surety on the treasurer's official bond are
9.31exempt from liability for the loss of the deposits because of the failure, bankruptcy, or any
9.32other act or default of the depository. The authority may accept assignments of collateral
9.33from its depository to secure deposits in the same manner as assignments of collateral are
9.34permitted for a government entity under section 118A.03.
10.1 Sec. 10. [469.47] TAX LEVIES; CITY OR COUNTY APPROPRIATIONS;
10.2OTHER FISCAL MATTERS.
10.3 Subdivision 1. Obligations. The authority must not levy a tax or special assessment,
10.4pledge the credit of the state or the state's municipal corporations or other subdivisions, or
10.5incur an obligation enforceable on property not owned by the authority.
10.6 Subd. 2. Budget. The authority shall annually send its budget to the city, county,
10.7governor, and legislature.
10.8 Subd. 3. Fiscal year. The fiscal year of the authority may be established by the
10.9authority.
10.10 Subd. 4. City or county appropriations; levy. The city council of the city or the
10.11county board of the county may appropriate money for the use of the authority and may
10.12levy the amount of its appropriation in its general levy. The levy is a special levy within
10.13the meaning of, and as if specifically enumerated in, section 275.70, subdivision 5.
10.14 Subd. 5. Outside budget laws. Money appropriated to the authority by the city
10.15or county under this section is not subject to a budget law that applies to the city or
10.16county, respectively.
10.17 Subd. 6. City or county payment. The city or county treasurer shall pay money
10.18appropriated by a city or county under subdivision 4 when and in the manner directed by
10.19the city council or county board, as applicable.
10.20 Subd. 7. Local government tax base not reduced. Nothing in sections 469.41 to
10.21469.53 reduces the tax base or affects the taxes due and payable to the city, the county,
10.22or any school district within the boundaries of the city, including, without limitation, the
10.23city's 0.5 percent local sales tax.
10.24 Sec. 11. [469.48] DEVELOPMENT PLAN; MEDICAL CENTER
10.25DEVELOPMENT DISTRICTS.
10.26 Subdivision 1. Development plan; adoption by authority; notice; findings. The
10.27authority, in consultation with the medical center economic development corporation,
10.28shall prepare a development plan with the city's involvement. The development plan must
10.29be adopted by the board of the authority only after holding a public hearing. At least 45
10.30days before the hearing, the authority shall file a copy of the proposed development plan
10.31with the city. The city shall make copies of the proposed plan available to the public at the
10.32city offices during normal business hours and as otherwise determined appropriate by city
10.33council or city officials. At least ten days before the hearing, the authority shall publish
10.34notice of the hearing in a qualified or official newspaper of the city. The development plan
10.35may not be adopted unless the authority finds by resolution that:
11.1(1) the plan provides an outline for the development of the city as a global destination
11.2medical center, and the plan is sufficiently complete, including the identification of planned
11.3and anticipated projects, to indicate its relationship to definite state and local objectives;
11.4(2) the proposed development affords maximum opportunity, consistent with the
11.5needs of the city, county, and state, for the development of the city by private enterprise as
11.6a global destination medical center;
11.7(3) the proposed development conforms to the general plan for the development
11.8of the city; and
11.9(4) the plan includes:
11.10(i) strategic planning consistent with a global destination medical center in the
11.11core areas of commercial research and technology, learning environment, hospitality
11.12and convention, sports and recreation, livable communities, including mixed-use urban
11.13development and neighborhood residential development, retail/dining/entertainment,
11.14and health and wellness;
11.15(ii) estimates of short- and long-range fiscal and economic impacts;
11.16(iii) a framework to identify and prioritize short- and long-term public investment
11.17and infrastructure development and to facilitate private investment and development;
11.18(iv) land use planning;
11.19(v) transportation and transit planning;
11.20(vi) operational planning required to support the medical center development
11.21district; and
11.22(vii) ongoing market research plans.
11.23 Subd. 2. Development plan; approval by city; finding. After adoption by the
11.24authority under subdivision 1, the authority shall submit the development plan to the city
11.25for approval by the city only in accordance with this subdivision. The city shall approve
11.26the development plan by written resolution upon making the finding that the development
11.27plan is consistent with the adopted comprehensive plan of the city. The city shall consider
11.28the approval of the development plan and make its finding regarding consistency with
11.29the adopted comprehensive plan of the city within 45 days of submission of the adopted
11.30development plan. If the city determines, by written resolution, that the development plan
11.31is not consistent with the adopted comprehensive plan of the city, the resolution shall state
11.32the reasons and supporting facts for each determination, and the city shall transmit the
11.33resolution to the authority within seven days of adoption. A revised development plan
11.34may be submitted by the authority for approval by the city in the manner provided in this
11.35subdivision. The city may incorporate the approved development plan into the city's
11.36comprehensive plan.
12.1 Subd. 3. Modification of development plan. The authority may modify the
12.2development plan at any time. The authority shall update the original development plan
12.3not less than every five years. A modification or update under this subdivision must be
12.4prepared with the city's involvement and adopted by the authority upon the notice and
12.5after the public hearing and findings required for the original adoption of the development
12.6plan and upon approval by the city as provided in subdivision 2.
12.7 Subd. 4. Medical center development districts; creation; notice; findings. As
12.8part of the development plan, the authority may create and define the boundaries of
12.9medical center development districts and subdistricts at any place or places within the
12.10city. Projects may be undertaken within defined medical center development districts
12.11consistent with the development plan.
12.12 Subd. 5. Policy. It is state policy in the public interest to have the authority exercise
12.13the power of eminent domain to acquire property for a public use, as defined in section
12.14117.025, and advance and spend money for the purposes in sections 469.41 to 469.53.
12.15 Sec. 12. [469.49] POWERS AND DUTIES.
12.16 Subdivision 1. Powers generally. The authority has the powers of a city under
12.17chapter 462C and the powers of a redevelopment agency under sections 469.152 to
12.18469.1651, in connection with private development in the city for which the authority
12.19has previously undertaken or concurrently undertakes a project financed in whole or in
12.20part with authority revenue or obligations issued pursuant to section 469.50; provided,
12.21however, the authority shall not enter into any revenue agreement pursuant to section
12.22469.155, subdivision 5, with a medical business entity.
12.23 Subd. 2. Projects; project costs. The authority may, within a medical center
12.24development district, undertake projects and finance project costs. The authority must
12.25find by resolution that the project is consistent with and in furtherance of the approved
12.26development plan. Subject to other applicable law, revenue derived by the authority
12.27from any source may be used by the authority to make loans or grants, or to provide
12.28direct or indirect financial support to state public bodies or to private entities in payment
12.29or reimbursement of project costs; provided, however, projects as defined under section
12.30469.41, subdivision 12, clauses (5), (6), and (7), which will be owned, operated, or
12.31maintained by the city, must be approved by written resolution of the city.
12.32 Subd. 3. Medical center economic development corporation. (a) The authority
12.33shall engage a medical center economic development corporation to advise the authority
12.34on matters related to a project. The medical center economic development corporation
12.35shall assist the authority in the preparation of the development plan and shall provide
13.1services to assist the authority in implementing, consistent with the development plan, the
13.2goals, objectives, and strategies in the development plan, including, without limitation:
13.3(1) developing and updating the criteria for evaluating and underwriting
13.4development proposals;
13.5(2) implementing the development plan, including soliciting and evaluating
13.6proposals for development and evaluating and making recommendations to the authority
13.7regarding those proposals;
13.8(3) providing administrative services in connection with approved projects;
13.9(4) developing patient, visitor, and community outreach programs for a medical
13.10center development district;
13.11(5) working with the authority to acquire and facilitate the sale, lease, or other
13.12transactions involving land and real property;
13.13(6) seeking financial support for itself, the authority, and a project;
13.14(7) partnering with other development agencies and organizations and the city and
13.15county in joint efforts to promote economic development and establish a destination
13.16medical center;
13.17(8) supporting and administering the planning and development activities required to
13.18implement the development plan;
13.19(9) preparing and supporting the marketing and promotion of the medical center
13.20development district;
13.21(10) preparing and implementing a program for community and public relations in
13.22support of the medical center development district;
13.23(11) assisting the authority and others in applications for federal grants, tax credits,
13.24and other sources of funding to aid both private and public development; and
13.25(12) making other general advisory recommendations to the authority's governing
13.26board, as requested.
13.27(b) The authority may contract with the medical center economic development
13.28corporation to provide administrative services to the authority. The authority may agree
13.29to provide reasonable compensation to the medical center economic development
13.30corporation for the services described in this section. The authority may pay for such
13.31services out of any revenue sources available to it, including amounts received from the
13.32city or the county under section 469.47 or from payments received from the state under
13.33section 469.53. Nothing in sections 469.40 to 469.53 shall allow the authority's governing
13.34board to delegate to any person or entity the authority's duties and powers to adopt the
13.35development plan or to exercise judgment or discretion of the authority to finance projects
13.36or otherwise expend public funds.
14.1 Subd. 4. Revenue pooling. The authority may deposit all its money from any
14.2source in one bank account.
14.3 Subd. 5. Acquire property; exemption for taxes. (a) The authority may acquire by
14.4lease, purchase, gift, or devise the needed right, title, and interest in property to create
14.5medical center development districts and undertake projects. The authority may exercise
14.6the power of eminent domain to acquire property for a public use, as defined in section
14.7117.025. It shall pay for the property out of money it receives under sections 469.41 to
14.8469.53. It may hold and dispose of the property subject to the limits and conditions in
14.9sections 469.41 to 469.53. The title to property acquired by eminent domain or purchase
14.10must be in fee simple, absolute. The authority may accept an interest in property acquired
14.11in another way subject to any condition of the grantor or donor. The condition must
14.12be consistent with the proper use of the property under sections 469.41 to 469.53. The
14.13authority may sign options to purchase, sell, or lease property.
14.14(b) Property acquired, owned, leased, controlled, used, or occupied by the authority
14.15for any of the purposes of this section is for public governmental and municipal purposes
14.16and is exempt from taxation by the state or its political subdivisions, except to the extent
14.17that the property is subject to the sales and use tax under chapter 297A. The exemption in
14.18this paragraph applies only while the authority holds property for its own purpose, and is
14.19subject to section 272.02, subdivisions 8 and 39. When the property is sold it becomes
14.20subject to taxation.
14.21 Subd. 6. Subject to city requirements. All projects are subject to the planning,
14.22zoning, sanitary, and building laws, ordinances, regulations, and land use plans applicable
14.23to the city.
14.24 Subd. 7. Sale of property. The authority may sell, convey, and exchange any real
14.25or personal property owned or held by it in any manner and on any terms. Real property
14.26owned by the authority must not be sold, conveyed, exchanged, or have its title transferred
14.27without approval of two-thirds of the members of the board. All members must have ten
14.28days' written notice of a regular or special meeting at which a vote on sale, conveyance,
14.29exchange, or transfer of real property is to be taken. The notice must contain a complete
14.30description of the affected real property. The resolution authorizing the real property
14.31transaction is not effective unless a quorum is present.
14.32 Subd. 8. Contracts. The authority may make contracts for the purpose of economic
14.33development within the powers given it in sections 469.41 to 469.53. The authority
14.34may contract or arrange with the federal government, or any of its departments, with
14.35persons, public corporations, the state, or any of its political subdivisions, commissions, or
14.36agencies, for separate or joint action, on any matter related to using the authority's powers
15.1or performing its duties. The authority may contract to purchase and sell real and personal
15.2property. An obligation or expense must not be incurred by the authority unless existing
15.3appropriations together with the reasonably expected revenue of the authority from other
15.4sources are sufficient to discharge the obligation or pay the expense when due. The state
15.5and its municipal subdivisions are not liable on the obligations of the authority.
15.6 Subd. 9. Contract for services. The authority may contract for the services of
15.7consultants, agents, public accountants, legal counsel, and other persons needed to perform
15.8its duties and exercise its powers. The authority may contract with the city or county to
15.9provide administrative, clerical, and accounting services to the authority.
15.10 Subd. 10. Supplies. The authority may purchase the supplies and materials it needs
15.11to carry out sections 469.41 to 469.53.
15.12 Subd. 11. City purchasing. The authority may, by agreement with the city, use the
15.13facilities and services of the city's purchasing and public works departments in connection
15.14with construction work and to purchase equipment, supplies, or materials.
15.15 Subd. 12. City facilities, services. The city may furnish offices, structures and
15.16space, and clerical, engineering, or other services or assistance to the authority.
15.17 Subd. 13. Delegation power. The authority may delegate to one or more of its
15.18agents powers or duties as it deems proper.
15.19 Subd. 14. Government agent. The authority may cooperate with or act as agent
15.20for the federal or state government, a state public body, or an agency or instrumentality
15.21of a government or a public body to carry out sections 469.41 to 469.53 or any other
15.22related federal, state, or local law.
15.23 Subd. 15. Studies, analysis, research. The authority may study and analyze
15.24development needs in a medical center development district and ways to meet the needs.
15.25The authority may study the desirable patterns for land use and community growth and
15.26other factors affecting local development in a medical center development district and
15.27make the result of the studies available to the public and to potential developers. The
15.28authority may engage in research and disseminate information on development in its
15.29medical center development districts.
15.30 Subd. 16. Acceptance of public land. The authority may accept conveyances of
15.31land from all other public agencies, commissions, or other units of government, if the land
15.32can be properly used by the authority in a medical center development district, to carry
15.33out the purposes of sections 469.41 to 469.53. The city council of the city may transfer
15.34or cause to be transferred to the authority any property owned or controlled by the city
15.35and located within the jurisdiction of the authority. The transfer must be approved by
15.36majority vote of the city council and may be with or without consideration. The city may
16.1also put the property in the possession or control of the authority by a lease or other
16.2agreement for a limited period or in fee.
16.3 Subd. 17. Loans in anticipation of bonds. After authorizing bonds under section
16.4469.50, the authority may borrow to provide money immediately required for the bond
16.5purposes. The loans may not exceed the amount of the bonds. The authority shall by
16.6resolution decide the terms of the loans. The loans must be evidenced by negotiable
16.7notes due in not more than 12 months from the date of the loan payable to the order of
16.8the lender, to be repaid with interest from the proceeds of the bonds when the bonds are
16.9issued and delivered to the bond purchasers. The loan must not be obtained from any
16.10board member of the authority or from any corporation, association, or other institution of
16.11which an authority board member is a stockholder or officer.
16.12 Subd. 18. Reporting requirements. On or before January 15 of each odd-numbered
16.13year, the authority shall provide a report to the chairs and ranking minority members
16.14of the house of representatives and senate committees with jurisdiction over economic
16.15development and taxes, the commissioners of management and budget, revenue, and
16.16employment and economic development, the city council, and the county board of
16.17commissioners. The report must provide calculations of designated state taxes for the
16.18prior two fiscal years of the authority, a current draft of the development plan, and debt
16.19service schedules for all outstanding bonds or notes of the authority.
16.20 Subd. 19. No tax increment financing powers. The authority is not an authority as
16.21defined in section 469.174, subdivision 2.
16.22 Sec. 13. [469.50] REVENUE OBLIGATIONS; PLEDGE; COVENANTS.
16.23 Subdivision 1. Powers. The authority may decide by resolution to issue its revenue
16.24bonds, notes, or other obligations either at one time or in series from time to time. The
16.25revenue bonds may be issued to provide money to pay project costs. The issued bonds
16.26may include the amount the authority considers necessary to establish an initial reserve to
16.27pay principal of and interest on the bonds, including capitalized interest, and to pay the
16.28costs of issuance. The resolution shall state how the bonds are to be executed.
16.29 Subd. 2. Form. The bonds of each series issued by the authority under this section
16.30must bear interest at the rate or rates, mature at times not later than 30 years from the date
16.31of issuance, and be fully registered bonds in the form determined by the authority. All
16.32bonds issued under this section must be negotiable instruments.
16.33 Subd. 3. Sale. The sale of revenue bonds issued by the authority may be at public or
16.34private sale. The bonds may be sold in the manner and for the amount that the authority
17.1determines to be in the best interest of the authority. The bonds may be made callable upon
17.2terms as determined by the authority and may be refunded as provided in section 475.67.
17.3 Subd. 4. Agreements. The authority may by resolution make an agreement or
17.4covenant with the bondholders or their trustee if it determines that the agreement or
17.5covenant is needed or desirable to carry out the powers given to the authority under this
17.6section and to ensure that the revenue bonds are marketable and promptly paid.
17.7 Subd. 5. Revenue pledge. (a) In issuing bonds under this section, the authority may
17.8secure payment of the principal and interest on the bonds by:
17.9(1) a pledge of and lien on authority revenue. The revenue must come from the
17.10facility to be acquired, constructed, or improved with the bond proceeds or from other
17.11facilities named in the bond-authorizing resolutions. The authority also may secure the
17.12payment with its promise to impose, maintain, and collect enough rentals, rates, and
17.13charges, for the use and occupancy of the facilities and for services furnished in connection
17.14with the use and occupancy, to pay its current expenses to operate and maintain the named
17.15facilities, and to produce and deposit sufficient net revenue in a special fund to meet the
17.16interest and principal requirements of the bonds, and to collect and keep any more money
17.17required by the resolutions. The authority shall decide what constitutes "current" expense
17.18under this subdivision based on what is normal and reasonable under generally accepted
17.19accounting principles. Revenues pledged by the authority must not be used or pledged for
17.20any other authority purpose unless the other use or pledge is specifically authorized in the
17.21bond-authorizing resolutions; or
17.22(2) the payments to be made by the state to the authority under section 469.53.
17.23The aggregate principal amount of bonds issued under this clause may not exceed
17.24$585,000,000, less the principal amount of any city grant, bond, or note given or issued to
17.25finance project costs consistent with the development plan up to $60,000,000.
17.26(b) No bonds may be issued by the authority under this subdivision later than
17.2720 years from the date of final enactment of this act, and no bond issued under this
17.28subdivision may have a maturity later than December 31, 2049.
17.29 Subd. 6. Approval of commissioner of employment and economic development.
17.30(a) Prior to issuance of each series of bonds, notes, or other obligations under subdivision
17.315, paragraph (a), clause (2), the authority shall furnish to the commissioner of employment
17.32and economic development, in the form prescribed by the commissioner, the following
17.33information regarding a project:
17.34(1) the principal amount of bonds to be issued for the project;
17.35(2) the maximum annual debt service payable on the bonds in any year;
17.36(3) the proposed use, location, and ownership of the project;
18.1(4) evidence that the city has:
18.2(i) committed, by written resolution of its governing body or a vote of its electorate,
18.3to finance any project costs under section 469.41, subdivision 13, consistent with the
18.4development plan in an amount equal to or exceeding ten percent of the principal amount
18.5of authority bonds to be issued for the project pursuant to clause (1); and
18.6(ii) an agreement with the authority to pay for administrative and operating costs of
18.7the authority in an amount of $450,000 annually;
18.8(5) other sources of funds for the project; and
18.9(6) the specific uses of the proceeds of the bonds.
18.10For purposes of determining the maximum annual debt service under clause (2), for
18.11variable rate obligations, interest rates must be determined as the maximum rate of interest
18.12payable on the obligations in accordance with their terms.
18.13(b) In addition, the authority shall certify that the project is consistent with the
18.14development plan and that debt service in any year on all bonds then outstanding and the
18.15bonds proposed to be issued under subdivision 5, paragraph (a), clause (2), does not
18.16exceed the value capture amount calculated within the prior 12 months as determined
18.17under section 469.53, subdivision 2, paragraph (b).
18.18(c) Based upon the information provided by the authority, the commissioner
18.19of employment and economic development shall approve the issuance of that series
18.20of authority bonds as consistent with the requirements of sections 469.41 to 469.53,
18.21and the commissioner of employment and economic development shall promptly
18.22notify the authority and the commissioner of management and budget of its approval;
18.23provided, however, that the approval is not deemed an approval by the commissioner of
18.24employment and economic development or by the state of the feasibility of the project.
18.25The commissioner of employment and economic development shall keep a record of the
18.26information, which shall be available to the public at times the department prescribes.
18.27 Subd. 7. Not city, county, or state debt. Revenue bonds, notes, or other obligations
18.28issued under this section are not a debt of the city, county, or state, nor a pledge of the full
18.29faith and credit of the city, county, or state. All obligations under this section are payable
18.30only from revenues described in subdivision 5. A revenue bond must contain on its face a
18.31statement to the effect that the authority does not have to pay the bond or the interest on it
18.32except from the revenues pledged thereto and that the faith, credit, and taxing power of the
18.33city, the county, and the state are not pledged to pay the principal of or interest on the bond.
18.34 Sec. 14. [469.51] CITY BONDS; PUBLIC IMPROVEMENTS.
19.1The city may issue bonds and appropriate bond proceeds to pay project costs
19.2consistent with the development plan within a medical center development district. The city
19.3may undertake public improvements and infrastructure projects to be owned by the city or
19.4make grants to the authority for such public improvements and infrastructure projects in the
19.5same manner as if the facilities were owned or to be owned or operated solely by the city.
19.6 Sec. 15. [469.52] WHEN BOND ALLOCATION ACT APPLIES.
19.7Sections 474A.01 to 474A.21 apply to obligations issued under sections 469.41 to
19.8469.53 that are limited by a federal tax law as defined in section 474A.02, subdivision 8.
19.9 Sec. 16. [469.53] PAYMENTS TO AUTHORITY; CONDITIONS.
19.10 Subdivision 1. Conditions of payment; amount. Before the commissioner of
19.11management and budget may make any payments authorized in this section to the
19.12authority, the commissioner must have received, for payments to be made in state fiscal
19.13year 2016 and later years, the consultant's reports required by subdivision 2, paragraph
19.14(b), a request from the authority showing the amount of the payment requested for debt
19.15service on bonds, notes, and other obligations of the authority and for operating and
19.16administrative expenses of the authority and, if not previously received, the approval by
19.17the commissioner of employment and economic development of the bonds for which
19.18payment is being requested.
19.19 Subd. 2. Calculation of designated state tax amount. (a) The commissioner of
19.20revenue, working with a third-party, independent consultant selected and paid by the
19.21authority and acceptable to the commissioner of revenue, shall determine the amount of
19.22each of the designated state taxes attributable to calendar year 2011, which shall be referred
19.23to as the "baseline designated state tax amounts." The calculation of designated state tax
19.24amounts must be based on (1) direct employment tax data provided by any medical business
19.25entity, and (2) other direct and indirect methods of measurement used by the independent
19.26consultant that are acceptable to the authority and the commissioner of revenue. The
19.27commissioner of revenue shall make the determination and provide to the legislature, the
19.28commissioners of management and budget, and employment and economic development,
19.29the city, and the county a report showing the baseline designated state tax amounts no later
19.30than July 15, 2013. If, after determination of the baseline designated state tax amounts,
19.31area is annexed to the city, the commissioner shall adjust the baseline designated state
19.32tax amounts by each of the designated state taxes attributable to the area annexed for the
19.33calendar year of the annexation to determine the baseline designated state tax amounts.
20.1(b) On or before April 1, 2014, the commissioner of revenue, working with a
20.2third-party, independent consultant selected and paid by the authority and acceptable
20.3to the commissioner of revenue, shall determine the amount of designated state taxes
20.4attributable to calendar year 2013, and shall provide to the legislature, the commissioners
20.5of management and budget, and employment and economic development, the city, and
20.6the county a report showing the designated state taxes attributable to calendar year 2013,
20.7and the increases, if any, over the baseline designated state tax amounts. The report shall
20.8also show the results of the following formula: designated state taxes attributable to
20.9calendar year 2013 minus baseline designated state tax amounts, the difference of which is
20.10divided by 1.5. The result of the application of this formula to designated state taxes for
20.11any calendar year constitutes the "value capture amount." A similar report showing the
20.12designated state taxes attributable to the preceding calendar year and the value capture
20.13amount based on such taxes shall be prepared and delivered as described in this paragraph
20.14not later than April 1 in each subsequent year if requested by the authority no later than
20.15March 1 of that year.
20.16 Subd. 3. Payments. After the report in subdivision 2, paragraph (a), showing the
20.17baseline designated state tax amounts is provided to the commissioner of management and
20.18budget by the commissioner of revenue, the commissioner of management and budget
20.19shall transfer to the authority, on July 15 of each year commencing July 15, 2015, and for
20.20so long thereafter as any bonds, notes, or other obligations issued by the authority under
20.21section 469.50, subdivision 5, paragraph (a), clause (2), remain outstanding, the annual
20.22payments requested by the authority under subdivision 1.
20.23 Subd. 4. Appropriations. In each state fiscal year, beginning in fiscal year 2016 to
20.24and including fiscal year 2049, there is appropriated to the commissioner of management
20.25and budget for transfer to the authority the amount of debt service for the state fiscal year
20.26on outstanding authority bonds issued pursuant to section 469.50, subdivision 5, paragraph
20.27(a), clause (2), plus operating and administrative expense of the authority for such year,
20.28but subject to the limitations of subdivision 1 of this section.
