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HF 27

as introduced - 89th Legislature (2015 - 2016) Posted on 01/14/2015 01:11pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to economic development; destination medical center; clarifying the
computation of state aid payments; amending Minnesota Statutes 2014, sections
469.40, subdivision 11; 469.44, subdivision 5; 469.47, subdivisions 1, 3, 4, 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 469.40, subdivision 11, is amended to read:


Subd. 11.

Public infrastructure project.

(a) "Public infrastructure project" means
a project financed in part or in whole with public money in order to support the medical
business entity's development plans, as identified in the DMCC development plan. A
public infrastructure project may:

(1) acquire real property and other assets associated with the real property;

(2) demolish, repair, or rehabilitate buildings;

(3) remediate land and buildings as required to prepare the property for acquisition
or development;

(4) install, construct, or reconstruct elements of public infrastructure required to
support the overall development of the destination medical center development district
including, but not limited to, 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) acquire, construct or reconstruct, and equip parking facilities and other facilities
to encourage intermodal transportation and public transit;

(6) install, construct or reconstruct, furnish, and equip parks, cultural, and
recreational facilities, facilities to promote tourism and hospitality, conferencing and
conventions, and broadcast and related multimedia infrastructure;

(7) make related site improvements including, without limitation, excavation,
earth retention, soil stabilization and correction, and site improvements to support the
destination medical center development district;

(8) prepare land for private development and to sell or lease land;

(9) provide costs of relocation benefits to occupants of acquired properties; and

(10) construct and equip all or a portion of one or more suitable structures on land
owned by the city for sale or lease to private development; provided, however, that the
portion of any structure directly financed by the city as a public infrastructure project must
not be sold or leased to a medical business entity.

(b) A public infrastructure project is not a business subsidy under section 116J.993.

new text begin (c) Public infrastructure project includes the preparation and modification of
the development plan under section 469.43, and the cost of that preparation and any
modification is a capital cost of the public infrastructure project.
new text end

Sec. 2.

Minnesota Statutes 2014, section 469.44, subdivision 5, is amended to read:


Subd. 5.

Project implementation before plan adoption.

The city may exercise the
powers under subdivision 3 with respect to any public infrastructure project commenced
within the area that will be in the destination medical center development district after June
22, 2013, but before the development plan is adopted subject to approval by the corporation.
Actions taken under this authority must be approved by the corporation to be credited
against the local contribution required under section 469.47, subdivision 4new text begin, or to qualify
for reimbursement of the city out of state aid paid under section 469.47, subdivision 3 or 5
new text end.

Sec. 3.

Minnesota Statutes 2014, section 469.47, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms
have the meanings given them.

(b) "Commissioner" means the commissioner of employment and economic
development.

(c) "Construction projects" means:

(1) for expenditures by a medical business entity, construction of buildings in the
city for which the building permit was issued after June 30, 2013; and

(2) for any other expenditures, construction of privately owned buildings and other
improvements that are undertaken pursuant to or as part of the development plan and are
located within a medical center development district.

(d) "Expenditures" means expenditures made by a medical business entity or by an
individual or private entity on construction projects for the capital cost of the project
including, but not limited to:

(1) design and predesign, including architectural, engineering, and similar services;

(2) legal, regulatory, and other compliance costs of the project;

(3) land acquisition, demolition of existing improvements, and other site preparation
costs;

(4) construction costs, including all materials and supplies of the project; and

(5) equipment and furnishings that are attached to or become part of the real property.

Expenditures excludes supplies and other items with a useful life of less than a
year that are not used or consumed in constructing improvements to real property or
are otherwise chargeable to capital costs.

(e) "Qualified expendituresdeleted text begin" has the following meaning. In the first year in
which aid is paid under this section, qualified expenditures
deleted text endnew text begin for the year"new text end means the
total certified expenditures since June 30, 2013, through the end of the preceding year,
minus $200,000,000. deleted text beginFor subsequent years, qualified expenditures means the certified
expenditures for the preceding year.
deleted text end

(f) "Transit costs" means the portions of a public infrastructure project that are for
public transit intended primarily to serve the district, such as transit stations, equipment,
rights-of-way, and similar costs.

Sec. 4.

Minnesota Statutes 2014, section 469.47, subdivision 3, is amended to read:


Subd. 3.

General state infrastructure aid.

(a) deleted text beginGeneral state infrastructure aid may
not be paid out under this section until total expenditures exceed $200,000,000.
deleted text end

deleted text begin (b)deleted text end The amount of the general state infrastructure aid for a deleted text beginfiscaldeleted text end year equals the deleted text beginsum
of
deleted text end qualified expendituresnew text begin for the year, as certified by the commissionernew text end, multiplied by 2.75
percent. The maximum amount of state aid payable in any year is limited to no more
than $30,000,000. deleted text beginIf the aid entitlement for the year exceeds the maximum annual limit,
the excess is an aid carryover to later years. The carryover aid must be paid in the first
year in which the aid entitlement for the current year is less than the maximum annual
limit, but only to the extent the carryover, when added to the current year aid, is less
than the maximum annual limit.
deleted text end If the commissioner determines that the city has made
the required matching local contribution under subdivision 4, the commissioner must pay
to the city the amount of general state infrastructure aid for the year by September 1.new text begin If
the commissioner determines that the city has not made the full required matching local
contribution for the year, the commissioner must pay only the aid permitted under the
agreement for the matching contribution made and any unpaid amount is a carryover aid.
The carryover aid must be paid in the first year after the required matching contribution
is made and in which the aid entitlement for the current year is less than the maximum
annual limit, but only to the extent the carryover, when added to the current year aid, is
less than the maximum annual limit.
new text end

deleted text begin (c)deleted text endnew text begin (b)new text end The city must use general state infrastructure aid it receives under this
subdivision for improvements and other capital costs related to the public infrastructure
projects approved new text beginor adopted new text endby the corporation, other than transit costs. The city must
maintain appropriate records to document the use of the funds under this requirement.

deleted text begin (d)deleted text endnew text begin (c)new text end The commissioner, in consultation with the commissioner of management
and budget, and representatives of the city and the corporation, must establish a total limit
on the amount of state aid payable under this subdivision that will be adequate to finance,
in combination with the local contribution, $455,000,000 of general public infrastructure
projects.

Sec. 5.

Minnesota Statutes 2014, section 469.47, subdivision 4, is amended to read:


Subd. 4.

General aid; local matching contribution.

In order to qualify for general
state infrastructure aid, the city must enter a written agreement with the commissioner
that requires the city to make a qualifying local matching contribution to pay for
$128,000,000 of the cost of public infrastructure projects approved by the corporation,
including financing costs, using funds other than state aid received under this section.
The $128,000,000 required local matching contribution is reduced by one-half of the
amounts the city pays for operating and administrative costs of the corporation up to a
maximum amount agreed to by the board and the city. The agreement must provide for the
manner, timing, and amounts of the city contributions, including the city's commitment
for each year. Notwithstanding any law to the contrary, the agreement may provide that
the city contributions for public infrastructure project principal costs may be made over a
20-year period at a rate not greater than $1 from the city for each $2.55 from the state.
The local match contribution may be provided by the city from any source identified in
section 469.45 and any other local tax proceeds or other funds from the city and may
include providing fundsnew text begin to prepare the development plan,new text end to assist developers undertaking
projects in accordance with the development plannew text begin,new text end or by the city directly undertaking
public infrastructure projects in accordance with the development plan, provided the
projects have been approved by the corporation. City contributions that are in excess of
this ratio carry forward and are credited toward subsequent years. The commissioner and
city may agree to amend the agreement at any time in light of new information or other
appropriate factors. The city may enter into arrangements with the county to pay for or
otherwise meet the local matching contribution requirement. Any public infrastructure
project within the area that will be in the destination medical center development district
whose implementation is started or funded by the city after June 22, 2013, but before
the development plan is adopted, as provided by section deleted text begin469.46, subdivision 5deleted text endnew text begin 469.43,
subdivision 1
new text end, will be included for the purposes of determining the amount the city has
contributed as required by this section and the agreement with the commissioner, subject
to approval by the corporation.

Sec. 6.

Minnesota Statutes 2014, section 469.47, subdivision 5, is amended to read:


Subd. 5.

State transit aid.

(a) The city qualifies for state transit aid under this section
if the county contributes the required local matching contribution under subdivision 6 or the
city or county has agreed to make an equivalent contribution out of other funds for the year.

(b) If the city qualifies for aid under paragraph (a), the commissioner must pay the
city the state transit aid in the amount calculated under this paragraph. The amount of the
state transit aid for a deleted text beginfiscaldeleted text end year equals the deleted text beginsum ofdeleted text end qualified expendituresnew text begin for the yearnew text end, as
certified by the commissioner deleted text beginfor the prior yeardeleted text end, multiplied by 0.75 percent, reduced by
the amount of the local contribution under subdivision 6. The maximum amount of state
transit aid payable in any year is limited to no more than $7,500,000. deleted text beginIf the aid entitlement
for the year exceeds the maximum annual limit, the excess is an aid carryover to later
years. The carryover aid must be paid in the first year in which the aid entitlement for the
current year is less than the maximum annual limit, but only to the extent the carryover,
when added to the current year aid, is less than the maximum annual limit.
deleted text endnew text begin If the
commissioner determines that the city or county has not made the full required matching
local contribution for the year, the commissioner must pay state aid only in proportion to
the amount of the matching contribution made for the year and any unpaid amount is a
carryover aid. The carryover aid must be paid in the first year after the required matching
contribution for that prior year is made and in which the aid entitlement for the current
year is less than the maximum annual limit, but only to the extent the carryover, when
added to the current year aid, is less than the maximum annual limit.
new text end

(c) The commissioner, in consultation with the commissioner of management and
budget, and representatives of the city and the corporation, must establish a total limit on
the amount of state aid payable under this subdivision that will be adequate to finance, in
combination with the local contribution, $116,000,000 of transit costs.

(d) The city must use state transit aid it receives under this subdivision for transit
costs. The city must maintain appropriate records to document the use of the funds
under this requirement.

Sec. 7. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective after the governing body of the city of Rochester and its
chief clerical officer timely comply with Minnesota Statutes, section 645.021, subdivisions
2 and 3, and apply retroactively to the original effective dates of the provisions of law
that are amended.
new text end