SF 1723

as introduced - 89th Legislature (2015 - 2016) Posted on 09/30/2015 02:07pm

A bill for an act
relating to economic development; the destination medical center; modifying
computation of the city's local contribution; restricting the use of funds;
amending Minnesota Statutes 2014, sections 469.40, subdivision 11, as amended;
469.45, subdivisions 1, 2; 469.46; 469.47, subdivision 4, as amended, by adding
a subdivision; Laws 1998, chapter 389, article 8, section 43, subdivision 3, as
amended; proposing coding for new law in Minnesota Statutes, chapter 16A.

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

Section 1.

new text begin [16A.1246] NO SPENDING FOR CERTAIN RAIL PROJECTS.
new text end

new text begin Notwithstanding any law to the contrary, no appropriation or other state money,
whether in the general or another fund, may be expended for any costs related to studying
the feasibility of, planning for, designing, engineering, acquiring property or constructing
facilities for or related to, or development or operation of intercity or interregional
passenger rail facilities or operations between the city of Rochester or locations in its
metropolitan area and any location in the metropolitan area, as defined in section 473.121,
subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
except it does not apply to funds appropriated under Laws 2009, chapter 93, article 1,
section 11, subdivision 5.
new text end

Sec. 2.

Minnesota Statutes 2014, section 469.40, subdivision 11, as amended by Laws
2015, chapter 1, section 6, 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.

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

new text begin (d) Public infrastructure project excludes any goods, services, other activities, or
items that are related to studying the feasibility of, planning for, designing, engineering,
acquiring property or constructing facilities for or related to, or development or operation
of intercity or interregional passenger rail facilities or operations.
new text end

Sec. 3.

Minnesota Statutes 2014, section 469.45, subdivision 1, is amended to read:

Subdivision 1.

Rochester, other local taxes authorized.

(a) Notwithstanding
section 477A.016 or any other contrary provision of law, ordinance, or city charter, and in
addition to any taxes the city may impose on these transactions under another statute or
law, the city of Rochester may, by ordinance, impose at a rate or rates, determined by the
city, any of the following taxes:

(1) a tax on the gross receipts from the furnishing for consideration of lodging and
related services as defined in section 297A.61, subdivision 3, paragraph (g), clause (2); the
city may choose to impose a differential tax based on the number of rooms in the facility;

(2) a tax on the gross receipts of food and beverages sold primarily for consumption
on the premises by restaurants and places of refreshment that occur in the city of
Rochester; the city may elect to impose the tax in a defined district of the city; and

(3) a tax on the admission receipts to entertainment and recreational facilities, as
defined by ordinance, in the city of Rochester.

(b) The provisions of section 297A.99, subdivisions 4 to 13, govern the
administration, collection, and enforcement of any tax imposed by the city under
paragraph (a).

(c) The proceeds of any taxes imposed under this subdivision, less refunds and
costs of collection, must be used by the city only to meet its share of obligations for
public infrastructure projects contained in the development plan and approved by the
corporation, including any associated financing costs new text begin or to pay any other costs qualifying
as a local matching contribution under section 469.47, subdivision 4, but must not be
expended for any costs related to studying the feasibility of, planning for, designing,
engineering, acquiring property or constructing facilities for or related to, or development
or operation of intercity or interregional passenger rail facilities or operations new text end . Any tax
imposed under paragraph (a) expires at the earlier of December 31, 2049, or when the
city council determines that sufficient funds have been raised from the tax plus all other
local funding sources authorized in Laws 2013, chapter 143, article 10, to meet the city
obligation for financing public infrastructure projects contained in the development plan
and approved by the corporation, including any associated financing costs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive to the original effective
date of Minnesota Statutes, section 469.47, except the provisions relating to expenditures
related to rail facilities are effective upon local approval.
new text end

Sec. 4.

Minnesota Statutes 2014, section 469.45, subdivision 2, is amended to read:

Subd. 2.

General sales tax authority.

The city may elect to extend the existing
local sales and use tax under Laws 2013, chapter 143, article 10, section 13, or to impose
an additional rate of up to one quarter of one percent tax on sales and use under Laws
2013, chapter 143, article 10, section 11. The proceeds of any extended or additional taxes
imposed under this subdivision, less refunds and costs of collection, must be used by the
city only to meet its share of obligations for public infrastructure projects contained in the
development plan and approved by the corporation, including all financing costs. Revenues
collected in any year to meet the obligations must be used for payment of obligations or
expenses for public infrastructure projects approved by the corporation new text begin or of any other
costs qualifying as a local matching contribution under section 469.47, subdivision 4, but
must not be expended for any costs related to studying the feasibility of, planning for,
designing, engineering, acquiring property or constructing facilities for or related to, or
development or operation of intercity or interregional passenger rail facilities or operations new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive to the original effective
date of Minnesota Statutes, section 469.47, except the provisions relating to expenditures
related to rail facilities are effective upon local approval.
new text end

Sec. 5.

Minnesota Statutes 2014, section 469.46, is amended to read:

469.46 COUNTY TAX AUTHORITY.

(a) Notwithstanding sections 297A.99, 297A.993, and 477A.016, or any other
contrary provision of law, ordinance, or charter, and in addition to any taxes the county
may impose under another law or statute, the Board of Commissioners of Olmsted County
may, by resolution, impose a transit tax of up to one quarter of one percent on retail sales
and uses taxable under chapter 297A. The provisions of section 297A.99, subdivisions
4 to 13, govern the imposition, administration, collection, and enforcement of the tax
authorized under this paragraph.

(b) The Board of Commissioners of Olmsted County may, by resolution, levy an
annual wheelage tax of up to $10 on each motor vehicle kept in the county when not in
operation which is subject to annual registration and taxation under chapter 168, for
transportation projects within the county. The wheelage tax must not be imposed on the
vehicles exempt from wheelage tax under section 163.051, subdivision 1. The board,
by resolution, may provide for collection of the wheelage tax by county officials, or it
may request that the tax be collected by the state registrar on behalf of the county. The
provisions of section 163.051, subdivisions 2, 2a, 3, and 7, must govern the administration,
collection, and enforcement of the tax authorized under this paragraph. The tax authorized
under this section is in addition to any tax the county may be authorized to impose under
section 163.051, but until January 1, 2018, the county tax imposed under this paragraph,
in combination with any tax imposed under section 163.051, must equal the specified
rate under section 163.051.

(c) The proceeds of any taxes imposed under paragraph (a), less refunds and costs of
collection, must be first used by the county to meet its local matching contributions under
section 469.47, subdivision 6, for financing transit infrastructure related to the public
infrastructure projects contained in the development plan and approved by the corporation,
including any financing costs. Revenues collected in any calendar year in excess of the
county obligation to pay for projects contained in the development plan may be retained
by the county and used for funding other transportation projects, including roads and
bridges, airports, and transportation improvements new text begin , subject to the limits in paragraph (e) new text end .

(d) Any taxes imposed under paragraph (a) expire December 31, 2049, or at an
earlier time if approved by resolution of the county board of commissioners. The taxes
must not terminate before the county board of commissioners determines that revenues
from these taxes and any other revenue source the county dedicates are sufficient to pay
the county share of transit project costs and financing costs under the development plan.

new text begin (e) Notwithstanding any other law to the contrary, the county must not expend any
revenues from the tax authorized under this section, any other general or special sales or use
taxes, or its property tax levy for any costs related to studying the feasibility of, planning
for, designing, engineering, acquiring property or constructing facilities for or related to, or
development or operation of intercity or interregional passenger rail facilities or operations.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon local approval by the governing
body of Olmsted County and compliance with the requirements of Minnesota Statutes,
section 645.021, subdivision 3. If the governing body of the county fails to approve this
section by November 15, 2015, including complying with Minnesota Statutes, section
645.021, subdivision 3, Minnesota Statutes, section 469.46, is repealed effective for sales
and purchases made after December 31, 2015.
new text end

Sec. 6.

Minnesota Statutes 2014, section 469.47, subdivision 4, as amended by Laws
2015, chapter 1, section 10, 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 deleted text begin one-half of deleted text end the amounts
the city pays deleted text begin for operating and administrative costs deleted text end new text begin out of funds other than state aid
received under this section for the support, administration, or operations new text end of the corporation new text begin
and economic development agency, new text end up to a maximum amount agreed to by the board and
the city. new text begin These amounts include any costs the city incurs in providing services, goods,
or other support to the corporation and the agency. new text end 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 funds to prepare the development plan, to assist developers undertaking
projects in accordance with the development plan, 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 469.43, subdivision 1, 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive to the original effective
date of Minnesota Statutes, section 469.47.
new text end

Sec. 7.

Minnesota Statutes 2014, section 469.47, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Prohibition; passenger rail. new text end

new text begin The city, county, and corporation must not
expend any aid received under this section for any costs related to studying the feasibility
of, planning for, designing, engineering, acquiring property or constructing facilities for
or related to, or development or operation of intercity or interregional passenger rail
facilities or operations.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by
Laws 2005, First Special Session chapter 3, article 5, section 28, Laws 2011, First Special
Session chapter 7, article 4, section 5, and Laws 2013, chapter 143, article 10, section
12, is amended to read:

Subd. 3.

Use of revenues.

(a) Revenues received from the taxes authorized by
subdivisions 1, paragraph (a), and 2 must be used by the city to pay for the cost of
collecting and administering the taxes and to pay for the following projects:

(1) transportation infrastructure improvements including regional highway and
airport improvements;

(2) improvements to the civic center complex;

(3) a municipal water, sewer, and storm sewer project necessary to improve regional
ground water quality; and

(4) construction of a regional recreation and sports center and other higher education
facilities available for both community and student use.

(b) The total amount of capital expenditures or bonds for projects listed in paragraph
(a) that may be paid from the revenues raised from the taxes authorized in this section
may not exceed $111,500,000. The total amount of capital expenditures or bonds for the
project in clause (4) that may be paid from the revenues raised from the taxes authorized
in this section may not exceed $28,000,000.

(c) In addition to the projects authorized in paragraph (a) and not subject to the
amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an
election under subdivision 5, paragraph (c), use the revenues received from the taxes and
bonds authorized in this section to pay the costs of or bonds for the following purposes:

(1) $17,000,000 for capital expenditures and bonds for the following Olmsted
County transportation infrastructure improvements:

(i) County State Aid Highway 34 reconstruction;

(ii) Trunk Highway 63 and County State Aid Highway 16 interchange;

(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22 interchange;

(iv) widening of County State Aid Highway 22 West Circle Drive; and

(v) 60th Avenue Northwest corridor preservation;

(2) $30,000,000 for city transportation projects including:

(i) Trunk Highway 52 and 65th Street interchange;

(ii) NW transportation corridor acquisition;

(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;

(iv) Trunk Highway 14 and Trunk Highway 63 intersection;

(v) Southeast transportation corridor acquisition;

(vi) Rochester International Airport expansion; and

(vii) a transit operations center bus facility;

(3) $14,000,000 for the University of Minnesota Rochester academic and
complementary facilities;

(4) $6,500,000 for the Rochester Community and Technical College/Winona State
University career technical education and science and math facilities;

(5) $6,000,000 for the Rochester Community and Technical College regional
recreation facilities at University Center Rochester;

(6) $20,000,000 for the Destination Medical Community Initiative;

(7) $8,000,000 for the regional public safety and 911 dispatch center facilities;

(8) $20,000,000 for a regional recreation/senior center;

(9) $10,000,000 for an economic development fund; and

(10) $8,000,000 for downtown infrastructure.

(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1
and 2 may be used to fund transportation improvements related to a railroad bypass that
would divert traffic from the city of Rochester new text begin or for the purposes listed in Minnesota
Statutes, section 469.47, subdivision 10 new text end .

(e) Notwithstanding Minnesota Statutes, section 297A.99, subdivisions 2 and 3, if
the city decides to extend the taxes in subdivisions 1, paragraph (a), and 2, as allowed
under subdivision 5, paragraph (c), the city must use any amount in excess of the amount
necessary to meet obligations under paragraphs (a) to (c) from those taxes to fund
obligations, including financing costs, related to public infrastructure projects in the
development plan adopted under Minnesota Statutes, section 469.43.

(f) Revenues from the tax under subdivision 1, paragraph (b), must be used to
fund obligations, including financing costs, related to the public infrastructure projects
contained in the development plan approved by the DMCC and adopted by the city under
Minnesota Statutes, section 469.43.

Sec. 9. new text begin CITY OF ROCHESTER; RESTRICTION ON USE OF TAX PROCEEDS.
new text end

new text begin Notwithstanding any other law to the contrary, the city of Rochester must not
expend any revenues from its property tax levy or general or special sales or use taxes
for any costs related to studying the feasibility of, planning for, designing, engineering,
acquiring property or constructing facilities for or related to, or development or operation
of intercity or interregional passenger rail facilities or operations.
new text end

Sec. 10. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 2 to 4, 6, 8, and 9, are effective upon local approval by the governing body of
the city of Rochester and compliance with the requirements of Minnesota Statutes, section
645.021, subdivision 3, but only if each and all of the sections are approved by the city.
new text end