Bill Text: MN SF343 | 2013-2014 | 88th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Rochester Destination Medical Center development authority establishment

Spectrum: 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

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A bill for an act

relating to economic development; establishing a medical center development
authority and providing for its organization, powers, and duties; providing
for medical center development districts; authorizing the issuance of revenue
obligations by the authority; authorizing city bonds; authorizing state assistance;
providing for tax increment financing within a medical center development
district; appropriating money;amending Minnesota Statutes 2012, sections
272.02, subdivision 39; 469.174, subdivision 8; 469.176, subdivisions 1b, 4c;
proposing coding for new law in Minnesota Statutes, chapter 469.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

    Section 1. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
    Subd. 39. Economic development; public purpose. The holding of property by
a political subdivision of the state for later resale for economic development purposes,
including property held as part of a destination medical center project described in
section 469.41, subdivision 11, shall be considered a public purpose in accordance with
subdivision 8 for a period not to exceed nine years, except that for property located in a
city of 5,000 population or under that is located outside of the metropolitan area as defined
in section 473.121, subdivision 2, the period must not exceed 15 years.
The holding of property by a political subdivision of the state for later resale (1)
which is purchased or held for housing purposes, or (2) which meets the conditions
described in section 469.174, subdivision 10, shall be considered a public purpose in
accordance with subdivision 8.
The governing body of the political subdivision which acquires property which is
subject to this subdivision shall after the purchase of the property certify to the city or
county assessor whether the property is held for economic development purposes or
housing purposes, or whether it meets the conditions of section 469.174, subdivision 10.
If the property is acquired for economic development purposes and buildings or other
improvements are constructed after acquisition of the property, and if more than one-half
of the floor space of the buildings or improvements which is available for lease to or use
by a private individual, corporation, or other entity is leased to or otherwise used by
a private individual, corporation, or other entity the provisions of this subdivision shall
not apply to the property. This subdivision shall not create an exemption from section
272.01, subdivision 2 ; 272.68; 273.19; or 469.040, subdivision 3; or other provision of
law providing for the taxation of or for payments in lieu of taxes for publicly held property
which is leased, loaned, or otherwise made available and used by a private person.

    Sec. 2. Minnesota Statutes 2012, section 469.174, subdivision 8, is amended to read:
    Subd. 8. Project. "Project" means a project as described in section 469.142; an
industrial development district as described in section 469.058, subdivision 1; an economic
development district as described in section 469.101, subdivision 1; a project as defined
in section 469.002, subdivision 12; a development district as defined in section 469.125,
subdivision 9 , or any special law; or a project as defined in section 469.153, subdivision 2,
paragraph (a), (b), or (c), or a project as defined in section 469.41, subdivision 11.

    Sec. 3. Minnesota Statutes 2012, section 469.176, subdivision 1b, is amended to read:
    Subd. 1b. Duration limits; terms. (a) No tax increment shall in any event be
paid to the authority:
(1) after 15 years after receipt by the authority of the first increment for a renewal
and renovation district;
(2) after 20 years after receipt by the authority of the first increment for a soils
condition district;
(3) after eight years after receipt by the authority of the first increment for an
economic development district or, for an economic development district within a medical
center development district created under section 469.48, subdivision 4, (i) after 15 years
after receipt by the authority of the first increment for a residential rental/owner-occupied
housing subdistrict, (ii) after 15 years after receipt by the authority of the first increment
for a medical/healthcare industry subdistrict, or (iii) after ten years after receipt by the
authority of the first increment for a commercial/industrial/retail subdistrict;
(4) for a housing district, a compact development district, or a redevelopment
district, after 25 years from the date of receipt by the authority of the first increment.
(b) For purposes of determining a duration limit under this subdivision or subdivision
1e that is based on the receipt of an increment, any increments from taxes payable in the year
in which the district terminates shall be paid to the authority. This paragraph does not affect
a duration limit calculated from the date of approval of the tax increment financing plan or
based on the recovery of costs or to a duration limit under subdivision 1c. This paragraph
does not supersede the restrictions on payment of delinquent taxes in subdivision 1f.
(c) An action by the authority to waive or decline to accept an increment has no
effect for purposes of computing a duration limit based on the receipt of increment under
this subdivision or any other provision of law. The authority is deemed to have received an
increment for any year in which it waived or declined to accept an increment, regardless
of whether the increment was paid to the authority.
(d) Receipt by a hazardous substance subdistrict of an increment as a result of a
reduction in original net tax capacity under section 469.174, subdivision 7, paragraph
(b), does not constitute receipt of increment by the overlying district for the purpose of
calculating the duration limit under this section.

    Sec. 4. Minnesota Statutes 2012, section 469.176, subdivision 4c, is amended to read:
    Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
from an economic development district may not be used to provide improvements, loans,
subsidies, grants, interest rate subsidies, or assistance in any form to developments
consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
facilities (determined on the basis of square footage) are used for a purpose other than:
(1) the manufacturing or production of tangible personal property, including
processing resulting in the change in condition of the property;
(2) warehousing, storage, and distribution of tangible personal property, excluding
retail sales;
(3) with the consent of the Rochester Area Medical Center Development Authority
and within a subdistrict of a medical center development district created under section
469.48, subdivision 4, (i) residential rental or owner-occupied housing, (ii) the
provision of medical or healthcare industry related services or products, or (iii) other
commercial/industrial development and retail sales;
(3) (4) research and development related to the activities listed in clause (1) or,
(2), or (3);
(4) (5) telemarketing if that activity is the exclusive use of the property;
(5) (6) tourism facilities;
(6) (7) qualified border retail facilities; or
(7) (8) space necessary for and related to the activities listed in clauses (1) to (6) (7).
(b) Notwithstanding the provisions of this subdivision, revenues derived from tax
increment from an economic development district may be used to provide improvements,
loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
square feet of any separately owned commercial facility located within the municipal
jurisdiction of a small city, if the revenues derived from increments are spent only to
assist the facility directly or for administrative expenses, the assistance is necessary to
develop the facility, and all of the increments, except those for administrative expenses,
are spent only for activities within the district.
(c) A city is a small city for purposes of this subdivision if the city was a small city
in the year in which the request for certification was made and applies for the rest of
the duration of the district, regardless of whether the city qualifies or ceases to qualify
as a small city.
(d) Notwithstanding the requirements of paragraph (a) and the finding requirements
of section 469.174, subdivision 12, tax increments from an economic development district
may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or
assistance in any form to developments consisting of buildings and ancillary facilities, if
all the following conditions are met:
(1) the municipality finds that the project will create or retain jobs in this state,
including construction jobs, and that construction of the project would not have
commenced before July 1, 2012, without the authority providing assistance under the
provisions of this paragraph;
(2) construction of the project begins no later than July 1, 2012;
(3) the request for certification of the district is made no later than June 30, 2012; and
(4) for development of housing under this paragraph, the construction must begin
before January 1, 2012.
The provisions of this paragraph may not be used to assist housing that is developed
to qualify under section 469.1761, subdivision 2 or 3, or similar requirements of other law,
if construction of the project begins later than July 1, 2011.

    Sec. 5. [469.41] DEFINITIONS.
    Subdivision 1. Generally. In sections 469.41 to 469.53, the terms defined in this
section have the meanings given them, unless the context indicates a different meaning.
    Subd. 2. Authority. "Authority" means the Rochester Area Medical Center
Development Authority established in section 469.42.
    Subd. 3. City. "City" means the city of Rochester, Minnesota.
    Subd. 4. County. "County" means Olmsted County, Minnesota.
    Subd. 5. Designated state taxes. "Designated state taxes" means as of any
calculation date under section 469.53, subdivision 2, the following state taxes:
(1) personal income taxes payable under chapter 290 that are attributable to payroll
for employees of all facilities in the city of any business entity located in the city and all
facilities located in the state of any medical business entity;
(2) corporate franchise taxes paid under chapter 290 by businesses located in the
city and by any medical business entity;
(3) commercial-industrial property taxes paid under section 275.025 by businesses
located in the city and by any medical business entity; and
(4) sales taxes collected by businesses on retail sales within the city under sections
297A.62 and 297A.63 and for all such taxes paid by any medical business entity.
    Subd. 6. Development; developing. "Development" includes redevelopment,
and "developing" includes redeveloping.
    Subd. 7. Development plan. "Development plan" means the long-range plan for the
development of the medical center development district or districts.
    Subd. 8. Medical business entity. "Medical business entity" means a medical
business entity with its principal place of business in the city of Rochester as of the date of
final enactment of this act that employs more than 30,000 persons in the state as of that date.
    Subd. 9. Medical center development district. "Medical center development
district" means a contiguous or noncontiguous geographic area in the city created to
facilitate one or more projects.
    Subd. 10. Medical center economic development corporation. "Medical center
economic development corporation" means a nonprofit corporation organized and existing
under chapter 317A by any medical business entity to assist the authority and the city to
secure Minnesota's status as one of the world's leading global medical destinations with
the city as its hub.
    Subd. 11. Project. "Project" means the following works or undertakings for the
purpose of development of a medical center development district:
(1) to acquire real property and other assets associated with the real property;
(2) to demolish, repair, or rehabilitate buildings;
(3) to remediate land and buildings as required to prepare the property for acquisition
or development;
(4) to install, construct, or reconstruct elements of community infrastructure
required to support the overall development of the medical center development district,
including, without limitation, streets, roadways, utilities systems and related facilities,
utility relocations and replacements, network and communication systems, streetscape
improvements, drainage systems, sewer and water systems, subgrade structures and
associated improvements, landscaping, façade construction and restoration, wayfinding
and signage, and other components of community infrastructure;
(5) to acquire, construct or reconstruct, and equip parking facilities and other
facilities to encourage intermodal transportation and public transit;
(6) to install, construct or reconstruct, and equip core elements of community
infrastructure, to promote and encourage economic development and to anchor the medical
center developmental district in accordance with the development plan, including, without
limitation, parks, cultural facilities, community and recreational facilities, facilities to
promote tourism and hospitality, conferencing and conventions, broadcast and related
multimedia infrastructure, destination retail, urban residential housing, and instructional,
educational, and other facilities with the primary purpose of attracting and fostering urban
economic development within the medical center development district;
(7) to make related site improvements, including, without limitation, excavation,
earth retention, soil stabilization and correction, site improvements to support the medical
center development district;
(8) to prepare land for private development and to sell or lease land; and
(9) to build and equip suitable structures on land owned by the authority for sale or
lease for private development, except structures for sale or lease to a medical business
entity.
    Subd. 12. Project cost. (a) "Project cost" with respect to a medical center
development district project means all costs of the project activities described in
subdivision 11, and includes, without limitation:
(1) costs of planning, engineering, legal, marketing, development, insurance,
finance, and other related professional services associated with a project;
(2) costs providing relocation benefits to the occupants of acquired properties;
(3) costs associated with the operational start-up and commissioning of a project; and
(4) the allocated administrative expenses of the authority for the project not to
exceed ...... in any year.
(b) Expenditures for project costs constitute either (1) public improvements to
buildings or lands owned by the state or local government that serve a public purpose and
do not principally benefit a single business or defined group of businesses at the time the
improvements are made or (2) assistance generally available to all businesses or general
classes of similar businesses within a medical center development district, subject to
approval by the authority.

    Sec. 6. [469.42] AUTHORITY ESTABLISHMENT; BOARD MEMBERS;
TERMS, VACANCIES, PAY, CONTINUITY.
    Subdivision 1. Rochester Area Medical Center Development Authority;
establishment. The Rochester Area Medical Center Development Authority is
established. The authority's governing board is comprised of nine members, as follows:
(1) the mayor and city council president of the city shall serve on the authority. In
addition, the mayor, with approval of the city council, shall appoint one representative
from any medical business entity;
(2) the chair of the county board of commissioners, with approval of the board of
commissioners, shall appoint one representative from the county board of commissioners,
which includes the chair of the county board, from among the commissioners who reside
in the city;
(3) the governor shall appoint one representative from any medical business entity,
one community representative who resides in the city, and one representative from a
statewide labor organization representing the building trades;
(4) the speaker of the house of representatives shall appoint one member of the
house of representatives; and
(5) the Subcommittee on Committees of the senate Committee on Rules and
Administration shall appoint one member of the senate.
    Subd. 2. Terms; vacancies. The first members of the governing board of the
authority are appointed for initial terms as follows: county, speaker of the house, and senate
majority leader appointees for two years; gubernatorial appointees for four years; and city
appointees for six years. For subsequent terms, the term is six years. A vacancy is created
when a city council member of the authority ends council membership, when a county
board member of the authority ends county board membership or ceases to reside in the
city, when a community representative of the authority ceases to reside in the city; or when
a legislative member ceases to serve in the state legislature. A vacancy on the authority
board must be filled by the appointing authority for the balance of the term subject to the
same approval required for an appointment for a full term as provided in subdivision 1.
    Subd. 3. Pay. Members must be compensated as provided in section 15.0575,
subdivision 3, for each regular or special authority board meeting attended. In addition,
the board members may be reimbursed for actual expenses incurred in doing official
business of the authority. All money paid for compensation or reimbursement must be
paid out of the authority's budget.
    Subd. 4. Removal for cause. A member may be removed by the board for
inefficiency, neglect of duty, or misconduct in office. A member may be removed only
after a hearing of the board. A copy of the charges must be given to the board member at
least ten days before the hearing. The board member must be given an opportunity to be
heard in person or by counsel at the hearing. When written charges have been submitted
against a board member, the board may temporarily suspend the member. If the board finds
that those charges have not been substantiated, the board member shall be immediately
reinstated. If a board member is removed, a record of the proceedings, together with the
charges and findings, shall be filed with the office of the appointing authority.

    Sec. 7. [469.43] CHARACTERISTICS AND JURISDICTION.
    Subdivision 1. Public body characteristics. The authority is a body politic and
corporate and a political subdivision of the state, with the right to sue and be sued in
its own name.
    Subd. 2. Boundaries. The boundary for activities and the use of the powers of the
authority must be within a medical center development district. The authority also has the
power to finance activities outside of a medical center development district, if necessary;
provided, however, that the financing of activities outside of a medical center development
district must be included in the development plan and must be approved by, and subject to
the planning, zoning, sanitary and building laws, ordinances, regulations, and land use
plans applicable to, the city, county, or town in which such activities are undertaken.

    Sec. 8. [469.44] OFFICERS; DUTIES; ORGANIZATIONAL MATTERS.
    Subdivision 1. Bylaws, rules, seal. The authority may adopt bylaws and rules of
procedure and may adopt an official seal.
    Subd. 2. Officers. The authority shall annually elect a president or chair, and a
vice-president or vice-chair, and a treasurer. A member may not serve as president or
chair and vice-president or vice-chair at the same time. The authority shall appoint a
secretary and assistant treasurer. The secretary and assistant treasurer need not, but may,
be members of the board, including the president or chair or vice-president or vice-chair.
    Subd. 3. Duties and powers. The officers have the usual duties and powers of their
offices. They may be given other duties and powers by the authority.
    Subd. 4. Treasurer's duties. The treasurer:
(1) shall receive and is responsible for authority money;
(2) is responsible for the acts of the assistant treasurer;
(3) shall disburse authority money by check or electronic procedures;
(4) shall keep an account of the source of all receipts, and the nature, purpose, and
authority of all disbursements; and
(5) shall file the authority's detailed financial statement with its secretary at least
once a year at times set by the authority.
    Subd. 5. Assistant treasurer. The assistant treasurer has the powers and duties of
the treasurer if the treasurer is absent or disabled.
    Subd. 6. Treasurer's bond. The treasurer shall give bond to the state conditioned
for the faithful discharge of official duties. The bond must be approved as to form and
surety by the authority and filed with its secretary. The bond must be for twice the amount
of money likely to be on hand at any one time, as determined at least annually by the
authority, except that the bond must not exceed $300,000.
    Subd. 7. Public money. Authority money is public money.
    Subd. 8. Checks. An authority check must be signed by the treasurer and by one
other officer named by the authority in a resolution. The check must state the name of the
payee and the nature of the claim for which the check is issued.
    Subd. 9. Financial statements; filing with state auditor. The financial statements
of the authority must be prepared, audited, filed, and published or posted in the manner
required for the financial statements of the city. The authority shall employ a certified
public accountant to annually examine and audit its books. The report of the exam and audit
must be filed with the state auditor by June 30 of each year. The state auditor shall review
the report and may accept it or, in the public interest, audit the books of the authority.

    Sec. 9. [469.45] DEPOSITORIES; DEFAULT; COLLATERAL.
    Subdivision 1. Named; bond. Every two years the authority shall name national
or state banks within the state as depositories. Before acting as a depository, a named
bank shall give the authority a bond approved as to form and surety by the authority.
The bond must be conditioned for the safekeeping and prompt repayment of deposits.
The amount of the bond must be at least equal to the maximum sum expected to be on
deposit at any one time.
    Subd. 2. Default; collateral. When authority funds are deposited by the treasurer
in a bonded depository, the treasurer and the surety on the treasurer's official bond are
exempt from liability for the loss of the deposits because of the failure, bankruptcy, or any
other act or default of the depository. The authority may accept assignments of collateral
from its depository to secure deposits in the same manner as assignments of collateral are
permitted by law to secure deposits of the city.

    Sec. 10. [469.47] TAX LEVIES; CITY OR COUNTY APPROPRIATIONS;
OTHER FISCAL MATTERS.
    Subdivision 1. Obligations. The authority must not levy a tax or special assessment,
pledge the credit of the state or the state's municipal corporations or other subdivisions, or
incur an obligation enforceable on property not owned by the authority.
    Subd. 2. Budget. The authority shall annually send its budget to the city, county,
governor, and legislature.
    Subd. 3. Fiscal year. The fiscal year of the authority may be established by the
authority.
    Subd. 4. City or county appropriations; levy. The city council of the city or the
county board of the county may appropriate money for the use of the authority and may
levy the amount of its appropriation in its general levy. The levy is a special levy within
the meaning of, and as if specifically enumerated in, section 275.70, subdivision 5.
    Subd. 5. Outside budget laws. Money appropriated to the authority by the city
or county under this section is not subject to a budget law that applies to the city or
county, respectively.
    Subd. 6. City or county payment. The city or county treasurer shall pay money
appropriated by a city or county under subdivision 4 when and in the manner directed by
the city council or county board, as applicable.
    Subd. 7. Local government tax base not reduced. Nothing in sections 469.41 to
469.53 reduces the tax base or affects the taxes due and payable to the city, the county, or
Independent School District No. 535, including, without limitation, the city's 0.5 percent
local sales tax.

    Sec. 11. [469.48] DEVELOPMENT PLAN; MEDICAL CENTER
DEVELOPMENT DISTRICTS.
    Subdivision 1. Development plan; adoption by authority; notice; findings. The
authority, in consultation with the medical center economic development corporation,
shall prepare a development plan with the city's involvement. The development plan must
be adopted by the board of the authority only after holding a public hearing. At least 45
days before the hearing, the authority shall file a copy of the proposed development plan
with the city. The city shall make copies of the proposed plan available to the public at
the city offices during normal business hours and as otherwise determined appropriate
by city council or city officials. At least ten days before the hearing, the authority shall
publish notice of the hearing in a daily newspaper of general circulation in the city. The
development plan may not be adopted unless the authority finds by resolution that:
(1) the plan provides an outline for the development of the city as a global destination
medical center, and the plan is sufficiently complete, including the identification of planned
and anticipated projects, to indicate its relationship to definite state and local objectives;
(2) the proposed development affords maximum opportunity, consistent with the
needs of the city, county, and state, for the development of the city by private enterprise as
a global destination medical center;
(3) the proposed development conforms to the general plan for the development
of the city; and
(4) the plan includes:
(i) strategic planning consistent with a global destination medical center in the
core areas of commercial research and technology, learning environment, hospitality
and convention, sports and recreation, livable communities, including mixed-use urban
development and neighborhood residential development, retail/dining/entertainment,
and health and wellness;
(ii) estimates of short- and long-range fiscal and economic impacts;
(iii) a framework to identify and prioritize short- and long-term public investment
and infrastructure development and to facilitate private investment and development;
(iv) land use planning;
(v) transportation and transit planning;
(vi) operational planning required to support the medical center development
district; and
(vii) ongoing market research plans.
    Subd. 2. Development plan; approval by city; finding. After adoption by the
authority under subdivision 1, the authority shall submit the development plan to the city
for approval by the city only in accordance with this subdivision. The city shall approve
the development plan by written resolution upon making the finding that the development
plan is consistent with the adopted comprehensive plan of the city. The city shall consider
the approval of the development plan and make its finding regarding consistency with
the adopted comprehensive plan of the city within 45 days of submission of the adopted
development plan. If the city determines, by written resolution, that the development plan
is not consistent with the adopted comprehensive plan of the city, the resolution shall state
the reasons and supporting facts for each determination, and the city shall transmit the
resolution to the authority within seven days of adoption. A revised development plan
may be submitted by the authority for approval by the city in the manner provided in this
subdivision. The city may incorporate the approved development plan into the city's
comprehensive plan.
    Subd. 3. Modification of development plan. The authority may modify the
development plan at any time. The authority shall update the original development plan
not less than every five years. A modification or update under this subdivision must be
prepared with the city's involvement and adopted by the authority upon the notice and
after the public hearing and findings required for the original adoption of the development
plan and upon approval by the city as provided in subdivision 2.
    Subd. 4. Medical center development districts; creation; notice; findings. As
part of the development plan, the authority may create and define the boundaries of
medical center development districts and subdistricts at any place or places within the
city. Projects may be undertaken within defined medical center development districts
consistent with the development plan.
    Subd. 5. Policy. It is state policy in the public interest to have the authority exercise
the power of eminent domain to acquire property for a public use, as defined in section
117.025, and advance and spend money for the purposes in sections 469.41 to 469.53.

    Sec. 12. [469.49] POWERS AND DUTIES.
    Subdivision 1. Powers generally. The authority has the powers of a city under
chapter 462C and the powers of a redevelopment agency under sections 469.152 to
469.1651, in connection with private development in the city for which the authority
has previously undertaken or concurrently undertakes a project financed in whole or in
part with authority revenue or obligations issued pursuant to section 469.50; provided,
however, the authority shall not enter into any revenue agreement pursuant to section
469.155, subdivision 5, with a medical business entity.
    Subd. 2. Projects; project costs. The authority may, within a medical center
development district, undertake projects and finance project costs. The authority must
find by resolution that the project is consistent with and in furtherance of the approved
development plan. Subject to other applicable law, revenue derived by the authority
from any source may be used by the authority to make loans or grants, or to provide
direct or indirect financial support to state public bodies or to private entities in payment
or reimbursement of project costs; provided, however, projects as defined under section
469.41, subdivision 11, clauses (4), (5), and (6), which will be owned, operated, or
maintained by the city, must be approved by written resolution of the city.
    Subd. 3. Medical center economic development corporation. (a) The authority
shall engage a medical center economic development corporation to advise the authority
on matters related to a project. The provisions of section 465.717 do not apply to any
entity serving as the medical center economic development corporation. The medical
center economic development corporation shall assist the authority in the preparation of
the development plan and shall provide services to assist the authority in implementing,
consistent with the development plan, the goals, objectives, and strategies in the
development plan, including, without limitation:
(1) developing and updating the criteria for evaluating and underwriting
development proposals;
(2) implementing the development plan, including soliciting and evaluating
proposals for development and evaluating and making recommendations to the authority
regarding those proposals;
(3) providing transactional services in connection with approved projects;
(4) developing patient, visitor, and community outreach programs for a medical
center development district;
(5) working with the authority to acquire and facilitate the sale, lease, or other
transactions involving land and real property;
(6) seeking financial support for itself, the authority, and a project;
(7) partnering with other development agencies and organizations and the city and
county in joint efforts to promote economic development and establish a destination
medical center;
(8) supporting and administering the planning and development activities required to
implement the development plan;
(9) preparing and supporting the marketing and promotion of the medical center
development district;
(10) preparing and implementing a program for community and public relations in
support of the medical center development district;
(11) assisting the authority and others in applications for federal grants, tax credits,
and other sources of funding to aid both private and public development; and
(12) making other general advisory recommendations to the authority's governing
board, as requested.
(b) The authority may contract with the medical center economic development
corporation to provide administrative services to the authority. The authority may agree to
provide reasonable compensation to the medical center economic development corporation
for the services described in this section. The authority may pay for such services out of
any revenue sources available to it, including amounts received from the city or the county
under section 469.47 or from payments received from the state under section 469.53.
    Subd. 4. Revenue pooling. The authority may deposit all its money from any
source in one bank account.
    Subd. 5. Acquire property; exemption for taxes. (a) The authority may acquire by
lease, purchase, gift, or devise the needed right, title, and interest in property to create
medical center development districts and undertake projects. The authority may exercise
the power of eminent domain to acquire property for a public use, as defined in section
117.025. It shall pay for the property out of money it receives under sections 469.41 to
469.53. It may hold and dispose of the property subject to the limits and conditions in
sections 469.41 to 469.53. The title to property acquired by eminent domain or purchase
must be in fee simple, absolute. The authority may accept an interest in property acquired
in another way subject to any condition of the grantor or donor. The condition must
be consistent with the proper use of the property under sections 469.41 to 469.53. The
authority may sign options to purchase, sell, or lease property.
(b) Property acquired, owned, leased, controlled, used, or occupied by the authority
for any of the purposes of this section is for public governmental and municipal purposes
and is exempt from taxation by the state or its political subdivisions, except to the extent
that the property is subject to the sales and use tax under chapter 297A. The exemption in
this paragraph applies only while the authority holds property for its own purpose, and is
subject to section 272.02, subdivisions 38 and 39. When the property is sold it becomes
subject to taxation.
    Subd. 6. Subject to city requirements. All projects and development plans are
subject to the planning, zoning, sanitary, and building laws, ordinances, regulations,
and land use plans applicable to the city.
    Subd. 7. Sale of property. The authority may sell, convey, and exchange any real or
personal property owned or held by it in any manner and on any terms it wishes. Real
property owned by the authority must not be sold, conveyed, exchanged, or have its title
transferred without approval of two-thirds of the members of the board. All members
must have ten days' written notice of a regular or special meeting at which a vote on sale,
conveyance, exchange, or transfer of real property is to be taken. The notice must contain
a complete description of the affected real property. The resolution authorizing the real
property transaction is not effective unless a quorum is present.
    Subd. 8. Contracts. The authority may make contracts for the purpose of economic
development within the powers given it in sections 469.41 to 469.53. The authority
may contract or arrange with the federal government, or any of its departments, with
persons, public corporations, the state, or any of its political subdivisions, commissions, or
agencies, for separate or joint action, on any matter related to using the authority's powers
or performing its duties. The authority may contract to purchase and sell real and personal
property. An obligation or expense must not be incurred by the authority unless existing
appropriations together with the reasonably expected revenue of the authority from other
sources are sufficient to discharge the obligation or pay the expense when due. The state
and its municipal subdivisions are not liable on the obligations of the authority.
    Subd. 9. Contract for services. The authority may contract for the services of
consultants, agents, public accountants, legal counsel, and other persons needed to perform
its duties and exercise its powers. The authority may contract with the city or county to
provide administrative, clerical, and accounting services to the authority.
    Subd. 10. Supplies. The authority may purchase the supplies and materials it needs
to carry out sections 469.41 to 469.53.
    Subd. 11. City purchasing. The authority may, by agreement with the city, use the
facilities and services of the city's purchasing and public works departments in connection
with construction work and to purchase equipment, supplies, or materials.
    Subd. 12. City facilities, services. The city may furnish offices, structures and
space, and clerical, engineering, or other services or assistance to the authority.
    Subd. 13. Delegation power. The authority may delegate to one or more of its
agents powers or duties as it deems proper.
    Subd. 14. Government agent. The authority may cooperate with or act as agent
for the federal or state government, a state public body, or an agency or instrumentality
of a government or a public body to carry out sections 469.41 to 469.53 or any other
related federal, state, or local law.
    Subd. 15. Studies, analysis, research. The authority may study and analyze
development needs in a medical center development district and ways to meet the needs.
The authority may study the desirable patterns for land use and community growth and
other factors affecting local development in a medical center development district and
make the result of the studies available to the public and to potential developers. The
authority may engage in research and disseminate information on development in its
medical center development districts.
    Subd. 16. Acceptance of public land. The authority may accept conveyances of
land from all other public agencies, commissions, or other units of government, if the land
can be properly used by the authority in a medical center development district, to carry
out the purposes of sections 469.41 to 469.53. The city council of the city may transfer
or cause to be transferred to the authority any property owned or controlled by the city
and located within the jurisdiction of the authority. The transfer must be approved by
majority vote of the city council and may be with or without consideration. The city may
also put the property in the possession or control of the authority by a lease or other
agreement for a limited period or in fee.
    Subd. 17. Loans in anticipation of bonds. After authorizing bonds under section
469.50, the authority may borrow to provide money immediately required for the bond
purposes. The loans may not exceed the amount of the bonds. The authority shall by
resolution decide the terms of the loans. The loans must be evidenced by negotiable
notes due in not more than 12 months from the date of the loan payable to the order of
the lender, to be repaid with interest from the proceeds of the bonds when the bonds are
issued and delivered to the bond purchasers. The loan must not be obtained from any
board member of the authority or from any corporation, association, or other institution of
which an authority board member is a stockholder or officer.
    Subd. 18. Reporting requirements. On or before January 1 of each odd-numbered
year, the authority shall provide a report to the legislature, the commissioners of
management and budget, revenue, and employment and economic development, the city
council, and the county board of commissioners. The report must provide calculations
of dedicated state taxes for the prior two fiscal years of the authority, a current draft of
the development plan, and debt service schedules for all outstanding bonds or notes of
the authority.
    Subd. 19. No tax increment financing powers. The authority is not an authority as
defined in section 469.174, subdivision 2.

    Sec. 13. [469.50] REVENUE OBLIGATIONS; PLEDGE; COVENANTS.
    Subdivision 1. Powers. The authority may decide by resolution to issue its revenue
bonds, notes, or other obligations either at one time or in series from time to time. The
revenue bonds may be issued to provide money to pay project costs. The issued bonds
may include the amount the authority considers necessary to establish an initial reserve to
pay principal of and interest on the bonds, including capitalized interest, and to pay the
costs of issuance. The resolution shall state how the bonds are to be executed.
    Subd. 2. Form. The bonds of each series issued by the authority under this section
must bear interest at the rate or rates, mature at times not later than 30 years from the date
of issuance, and be fully registered bonds in the form determined by the authority. All
bonds issued under this section must be negotiable instruments.
    Subd. 3. Sale. The sale of revenue bonds issued by the authority may be at public or
private sale. The bonds may be sold in the manner and for the amount that the authority
determines to be in the best interest of the authority. The bonds may be made callable upon
terms as determined by the authority and may be refunded as provided in section 475.67.
    Subd. 4. Agreements. The authority may by resolution make an agreement or
covenant with the bondholders or their trustee if it determines that the agreement or
covenant is needed or desirable to carry out the powers given to the authority under this
section and to ensure that the revenue bonds are marketable and promptly paid.
    Subd. 5. Revenue pledge. (a) In issuing bonds under this section, the authority may
secure payment of the principal and interest on the bonds by:
(1) a pledge of and lien on authority revenue. The revenue must come from the
facility to be acquired, constructed, or improved with the bond proceeds or from other
facilities named in the bond-authorizing resolutions. The authority also may secure the
payment with its promise to impose, maintain, and collect enough rentals, rates, and
charges, for the use and occupancy of the facilities and for services furnished in connection
with the use and occupancy, to pay its current expenses to operate and maintain the named
facilities, and to produce and deposit sufficient net revenue in a special fund to meet the
interest and principal requirements of the bonds, and to collect and keep any more money
required by the resolutions. The authority shall decide what constitutes "current" expense
under this subdivision based on what is normal and reasonable under generally accepted
accounting principles. Revenues pledged by the authority must not be used or pledged for
any other authority purpose unless the other use or pledge is specifically authorized in the
bond-authorizing resolutions; or
(2) the payments to be made by the state to the authority under section 469.53.
The aggregate principal amount of bonds issued under this clause may not exceed
$585,000,000, less the principal amount of any city grant, bond, or note given or issued to
finance project costs consistent with the development plan up to $60,000,000.
(b) No bonds may be issued by the authority under this subdivision later than
20 years from the date of final enactment of this act, and no bond issued under this
subdivision may have a maturity later than December 31, 2049.
    Subd. 6. Approval of commissioner of employment and economic development.
(a) Prior to issuance of each series of bonds, notes, or other obligations under subdivision
5, clause (2), the authority shall furnish to the commissioner of employment and economic
development, in the form prescribed by the commissioner, the following information
regarding a project:
(1) the amount of bonds to be issued for the project;
(2) the maximum annual debt service payable on the bonds in any year;
(3) the proposed use, location, and ownership of the project;
(4) other sources of funds for the project; and
(5) the specific uses of the proceeds of the bonds.
For purposes of determining the maximum annual debt service under clause (2), for
variable rate obligations, interest rates must be determined as the maximum rate of interest
payable on the obligations in accordance with their terms.
(b) In addition, the authority shall certify that the project is consistent with the
development plan and that debt service in any year on all bonds then outstanding and the
bonds proposed to be issued under subdivision 5, clause (2), does not exceed the value
capture amount calculated within the prior 12 months as determined under section 469.53,
subdivision 2, paragraph (b).
(c) Based upon the information provided by the authority, the commissioner
of employment and economic development shall approve the issuance of that series
of authority bonds as consistent with the requirements of sections 469.41 to 469.53,
and the commissioner of employment and economic development shall promptly
notify the authority and the commissioner of management and budget of its approval;
provided, however, that the approval is not deemed an approval by the commissioner of
employment and economic development or by the state of the feasibility of the project.
The commissioner of employment and economic development shall keep a record of the
information, which shall be available to the public at times the department prescribes.
    Subd. 7. Not city, county, or state debt. Revenue bonds, notes, or other obligations
issued under this section are not a debt of the city, county, or state, nor a pledge of the full
faith and credit of the city, county, or state. All obligations under this section are payable
only from revenues described in subdivision 5. A revenue bond must contain on its face a
statement to the effect that the authority does not have to pay the bond or the interest on it
except from the revenues pledged thereto and that the faith, credit, and taxing power of the
city, the county, and the state are not pledged to pay the principal of or interest on the bond.

    Sec. 14. [469.51] CITY BONDS; PUBLIC IMPROVEMENTS.
The city may issue bonds and appropriate bond proceeds to pay project costs
consistent with the development plan within a medical center development district. The city
may undertake public improvements and infrastructure projects to be owned by the city or
make grants to the authority for such public improvements and infrastructure projects in the
same manner as if the facilities were owned or to be owned or operated solely by the city.

    Sec. 15. [469.52] WHEN BOND ALLOCATION ACT APPLIES.
Sections 474A.01 to 474A.21 apply to obligations issued under sections 469.41 to
469.53 that are limited by a federal tax law as defined in section 474A.02, subdivision 8.

    Sec. 16. [469.53] PAYMENTS TO AUTHORITY; CONDITIONS.
    Subdivision 1. Conditions of payment; amount. Before the commissioner of
management and budget may make any payments authorized in this section to the
authority, the commissioner must have received, for payments to be made in state fiscal
year 2016 and later years, the consultant's reports required by subdivision 2, paragraph
(b), a request from the authority showing the amount of the payment requested for debt
service on bonds, notes, and other obligations of the authority and for operating and
administrative expenses of the authority and, if not previously received, the approval by
the commissioner of employment and economic development of the bonds for which
payment is being requested; provided, however, in no event shall the commissioner
of management and budget transfer an appropriation of more than $75,000,000 to the
authority in any state fiscal year.
    Subd. 2. Calculation of designated state tax amount. (a) The commissioner of
revenue, working with a third-party, independent consultant selected and paid by the
authority and acceptable to the commissioner of revenue, shall determine the amount
of each of the designated state taxes attributable to calendar year 2011, which shall be
referred to as the "baseline designated state tax amounts." The calculation of designated
state tax amounts must be based on (1) direct employment tax data provided by any
medical business entity, and (2) other direct and indirect methods of measurement used by
the independent consultant that are acceptable to the authority and the commissioner of
revenue. The commissioner of revenue shall make the determination and provide to the
legislature, the commissioners of management and budget, and employment and economic
development, the city, and the county a report showing the baseline designated state
tax amounts no later than July 15, 2013.
(b) On or before April 1, 2014, the commissioner of revenue, working with a
third-party, independent consultant selected and paid by the authority and acceptable
to the commissioner of revenue, shall determine the amount of designated state taxes
attributable to calendar year 2013, and shall provide to the legislature, the commissioners
of management and budget, and employment and economic development, the city, and
the county a report showing the designated state taxes attributable to calendar year 2013,
and the increases, if any, over the baseline designated state tax amounts. The report shall
also show the results of the following formula: designated state taxes attributable to
calendar year 2013 minus baseline designated state tax amounts, the difference of which is
divided by 1.5. The result of the application of this formula to designated state taxes for
any calendar year constitutes the "value capture amount." A similar report showing the
designated state taxes attributable to the preceding calendar year and the value capture
amount based on such taxes shall be prepared and delivered as described in this paragraph
not later than April 1 in each subsequent year if requested by the authority no later than
March 1 of that year.
    Subd. 3. Payments. After the report in subdivision 2, paragraph (a), showing the
baseline designated state tax amounts is provided to the commissioner of management and
budget by the commissioner of revenue, the commissioner of management and budget
shall transfer to the authority, on July 15 of each year commencing July 15, 2015, and
for so long thereafter as any bonds, notes, or other obligations issued by the authority
under section 469.50, subdivision 5, clause (2), remain outstanding, the annual payments
requested by the authority under subdivision 1.
    Subd. 4. Appropriations. In each state fiscal year, beginning in fiscal year 2016 to
and including fiscal year 2049, there is appropriated to the commissioner of management
and budget for transfer to the authority the amount of debt service for the state fiscal year
on outstanding authority bonds issued pursuant to section 469.50, subdivision 5, clause
(2), plus operating and administrative expense of the authority for such year, but subject to
the limitations of subdivision 1 of this section.