Hennepin County local sales tax authority modified, and grants provided to county health care facilities and to ballpark authority for improvements.

A bill for an act

relating to taxation; modifying authority related to the Hennepin County local sales

tax; providing for grants to county health care facilities and to the ballpark authority

for certain improvements; amending Minnesota Statutes 2024, sections 473.756,

by adding a subdivision; 473.757, subdivisions 1, 3, 4, 7, 8, 9, 10, 11, by adding

subdivisions; 473.759, subdivision 3.

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

Section 1.

Minnesota Statutes 2024, section 473.756, is amended by adding a subdivision

to read:

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Subd. 15.

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Qualifying government.

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The authority is a qualifying government for purposes

of section 118A.09, subdivision 1. Whenever the authority's investments are managed by

the county, the authority's additional long-term equity investment limitations as provided

in section 118A.09, subdivision 3, are calculated based on the county's most recent audited

statement of net position instead of the authority's most recent audited statement of net

position.

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Sec. 2.

Minnesota Statutes 2024, section 473.757, subdivision 1, is amended to read:

Subdivision 1.

Ballpark grants.

The county may authorize, by resolution, and make

one or more grants to the authority for ballpark development and construction, public

infrastructure,
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capital improvement of the ballpark or public infrastructure within the

development area,
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reserves for capital improvements, and other purposes related to the

ballpark on the terms and conditions agreed to by the county and the authority
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, subject to

any applicable limits in subdivision 3a
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.

Sec. 3.

Minnesota Statutes 2024, section 473.757, is amended by adding a subdivision to

read:

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Subd. 2a.

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Hennepin County health care facilities.

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To the extent money is available

from collections of the tax authorized by subdivision 10 after payment each year of debt

service on the bonds authorized and issued under subdivision 9 and payments for the purposes

described in subdivisions 1 and 2:

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(1) the county may, subject to a grant agreement, distribute money according to the

formula in items (i) to (viii), up to $24,000,000 annually, subject to annual increases in

percentages acceptable to the county, to a private, nonprofit hospital located in Hennepin

County that is designated by the commissioner of health as a level I trauma hospital according

to section 144.605, subdivision 3, and provides statewide ground and air emergency medical

transportation services. The money must be used to fund uncompensated care provided in

facilities owned or operated by the eligible private, nonprofit hospital:

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(i) uncompensated care charges of the eligible private, nonprofit hospital means the total

of all bad debt and charity care as determined by generally accepted accounting principles.

Uncompensated care charges do not include (A) payment for an episode of care for which

the eligible private, nonprofit hospital has been paid the lesser of a negotiated rate with the

patient's third-party payer or the medical assistance reimbursement rate as defined in item

(iii), or (B) the benchmark amount as defined in item (ii). For the purposes of this item, bad

debts derived from individuals who the eligible private, nonprofit hospital has reasonable

evidence that the individuals' income level exceeds 300 percent of federal poverty levels

are excluded;

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(ii) the county must not provide payment to the eligible private, nonprofit hospital until

the aggregate amount of uncompensated care provided by the eligible private, nonprofit

hospital during a fiscal year exceeds the benchmark. The benchmark is the amount equal

to the average percent of gross revenues of uncompensated care for hospitals located in

Hennepin County as computed from the most recent data available from the Minnesota

Hospital Association;

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(iii) the average medical assistance reimbursement rate must include the base payment

rate and any payments due by the eligible private, nonprofit hospital for services provided

in 2017 from upper payment limits and medical education payments;

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(iv) the eligible private, nonprofit hospital must follow customary, lawful standard

hospital debt collection practices with respect to any amount owed as uncompensated care;

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(v) the county must provide its uncompensated care subsidy only for the estimated cost

of care provided to Hennepin County residents. The residency status of patients must be

determined as of the date of service;

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(vi) the eligible private, nonprofit hospital must not include Medicare bad debt claimed

on the hospital's Medicare cost report for that year in the calculation of this formula;

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(vii) the eligible private, nonprofit hospital must also include its estimate of the cumulative

Medicare disproportionate share hospital reduction the hospital has incurred as a result of

the Affordable Care Act beginning in 2014. This amount must be added to the amount

calculated for uncompensated care; and

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(viii) the eligible private, nonprofit hospital must determine if it has been paid any grant

money from the annual allotment from the state for the provision of care to emergency

medical assistance patients. Any receipts for this care that was previously counted as

uncompensated care must be used to reduce the total payment from the county;

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(2) the county need not distribute money to the private, nonprofit hospital identified in

clause (1) if the ownership, corporate governance structure, or majority control of a hospital

operated by the private, nonprofit hospital is sold or transferred to an entity that is organized

for profit. The private, nonprofit hospital must provide notice to the county of a sale or

transfer described in this clause at least 90 days in advance of the sale or transfer; and

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(3) the county may authorize from the remainder of the money available, by resolution,

appropriations to fund:

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(i) the development, construction, improvement, and equipping of county-owned or

county-operated health care facilities;

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(ii) public infrastructure determined by the county to facilitate the development and use

of facilities described in item (i);

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(iii) reserves for county-owned or county-operated health care facilities capital

improvements;

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(iv) uncompensated care provided in county-owned or county-operated health care

facilities;

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(v) other purposes related to county-owned or county-operated health care facilities,

including operating expenses for county-owned or county-operated health care facilities;

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(vi) other purposes related to county public health services or priorities; and

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(vii) other county-identified services or programs, including low-barrier housing, that

address health-related social needs.

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Sec. 4.

Minnesota Statutes 2024, section 473.757, subdivision 3, is amended to read:

Subd. 3.

Expenditure limitations.

The amount that the county may grant or expend for

ballpark costs shall not exceed $260,000,000.
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The amount of any grant for capital

improvement reserves shall not exceed $1,000,000 annually, subject to the agreement under

section
473.759
, subdivision 3, and to annual increases according to an inflation index

acceptable to the county.
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The amount of grants or expenditures for land, site improvements,

and public infrastructure shall not exceed $90,000,000, excluding capital improvement

reserves, bond reserves, capitalized interest, and financing costs. The authority to spend

money for land, site improvements, and public infrastructure is limited to payment of

amounts incurred or for construction contracts entered into during the period ending five

years after the date of the issuance of the initial series of bonds under Laws 2006, chapter

257. Such grant agreements are valid and enforceable notwithstanding that they involve

payments in future years and they do not constitute a debt of the county within the meaning

of any constitutional or statutory limitation or for which a referendum is required.

Sec. 5.

Minnesota Statutes 2024, section 473.757, is amended by adding a subdivision to

read:

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Subd. 3a.

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Capital improvement grants.

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Notwithstanding the limitations in subdivision

3, the county may make grants to the authority for capital improvement expenditures for

purposes permitted under subdivision 1. The amount of any grant to the authority for capital

improvement expenditures must not exceed $7,000,000 annually. The grants are subject to

agreement under section 473.759, subdivision 3, and to annual increases according to an

inflation index acceptable to the county. Grant agreements are valid and enforceable

notwithstanding the fact that grant agreements involve payments in future years. The grants

do not constitute a debt of the county within the meaning of any constitutional or statutory

limitation or for which a referendum is required.

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Sec. 6.

Minnesota Statutes 2024, section 473.757, subdivision 4, is amended to read:

Subd. 4.

Property acquisition and disposition.

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(a)
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The county may acquire by purchase,

eminent domain, or gift, land, air rights, and other property interests within the development

area for the ballpark site and public infrastructure and convey it to the authority with or

without consideration, prepare a site for development as a ballpark, and acquire and construct

any related public infrastructure. The purchase of property and development of public

infrastructure financed with revenues under this section is limited to infrastructure within

the development area or within 1,000 feet of the border of the development area. The public

infrastructure may include the construction and operation of parking facilities within the

development area notwithstanding any law imposing limits on county parking facilities in

the city of Minneapolis. The county may acquire and construct property, facilities, and

improvements within the stated geographical limits for the purpose of drainage and

environmental remediation for property within the development area, walkways and a

pedestrian bridge to link the ballpark to Third Avenue distributor ramps, street and road

improvements and access easements for the purpose of providing access to the ballpark,

streetscapes, connections to transit facilities and bicycle trails, and any utility modifications

which are incidental to any utility modifications within the development area.

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(b) The county or any of its subsidiaries may acquire by purchase, eminent domain, or

gift the land rights, air rights, and other property interests within the county for health care

facilities and related infrastructure.

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(c)
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To the extent property parcels or interests acquired are more extensive than the public

infrastructure requirements, the county may sell or otherwise dispose of the excess. The

proceeds from sales of excess property must be deposited in the debt service reserve fund.

Sec. 7.

Minnesota Statutes 2024, section 473.757, subdivision 7, is amended to read:

Subd. 7.

Local government expenditures.

The county may make expenditures or grants

for other costs incidental and necessary to further the purposes of Laws 2006, chapter 257,
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and this act
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and may by agreement, reimburse in whole or in part, any entity that has granted,

loaned, or advanced funds to the county to further the purposes of Laws 2006, chapter 257
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,

and this act
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. The county shall reimburse a local governmental entity within its jurisdiction

or make a grant to such a governmental unit for site acquisition, preparation of the site for

ballpark development, and public infrastructure. Amounts expended by a local governmental

unit with the proceeds of a grant or under an agreement that provides for reimbursement by

the county shall not be deemed an expenditure or other use of local governmental resources

by the governmental unit within the meaning of any law or charter limitation. Exercise by

the county of its powers under this section shall not affect the amounts that the county is

otherwise eligible to spend, borrow, tax, or receive under any law.

Sec. 8.

Minnesota Statutes 2024, section 473.757, subdivision 8, is amended to read:

Subd. 8.

County authority.

It is the intent of the legislature that, except as expressly

limited herein, the county has the authority to acquire and develop a site for the ballpark

and public infrastructure, to enter into contracts with the authority and other governmental

or nongovernmental entities, to appropriate funds,
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to fund capital reserves and make capital

improvements,
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and to make employees, consultants, and other revenues available for those

purposes.

Sec. 9.

Minnesota Statutes 2024, section 473.757, subdivision 9, is amended to read:

Subd. 9.

County revenue bonds.

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(a)
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The county may, by resolution, authorize, sell, and

issue revenue bonds to provide funds to make a grant or grants to the authority and to finance

all or a portion of the costs of site acquisition, site improvements, and other activities

necessary to prepare a site for development of a ballpark, to construct, improve, and maintain

the ballpark and to establish and fund any capital improvement reserves, and to acquire and

construct any related parking facilities and other public infrastructure and for other costs

incidental and necessary to further the purposes of Laws 2006, chapter 257. The county

may also, by resolution, issue bonds to refund the bonds issued pursuant to this section. The

bonds must be limited obligations, payable solely from or secured by taxes levied under

subdivision 10, and any other revenues to become available under Laws 2006, chapter 257.

The bonds may be issued in one or more series and sold without an election. The bonds

shall be sold in the manner provided by section
475.60
. The bonds shall be secured, bear

the interest rate or rates or a variable rate, have the rank or priority, be executed in the

manner, be payable in the manner, mature, and be subject to the defaults, redemptions,

repurchases, tender options, or other terms, as the county may determine. The county may

enter into and perform all contracts deemed necessary or desirable by it to issue and secure

the bonds, including an indenture of trust with a trustee within or without the state. The debt

represented by the bonds shall not be included in computing any debt limitation applicable

to the county. Subject to this subdivision, the bonds must be issued and sold in the manner

provided in chapter 475. The bonds shall recite that they are issued under Laws 2006, chapter

257, and the recital shall be conclusive as to the validity of the bonds and the imposition

and pledge of the taxes levied for their payment. In anticipation of the issuance of the bonds

authorized under this subdivision and the collection of taxes levied under subdivision 10,

the county may provide funds for the purposes authorized by Laws 2006, chapter 257,

through temporary interfund loans from other available funds of the county which shall be

repaid with interest.

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(b) The county may, by resolution, authorize, sell, and issue revenue bonds to provide

money to finance all or a portion of the costs of county-owned or county-operated health

care facilities, including but not limited to site acquisition, site improvements, and other

activities necessary to prepare a site for development of health care facilities and to construct,

maintain, and improve health care facilities; establishing and funding any capital

improvement reserves; acquiring and constructing any related parking facilities and related

infrastructure; and for other costs incidental and necessary to further the purposes of this

act. The county may also, by resolution, issue bonds to refund the bonds issued pursuant to

this section. The bonds may be limited obligations, payable solely from or secured by taxes

levied under subdivision 10, and any other revenues made available under this act, and the

county may also pledge its full faith, credit, and taxing power as additional security for the

bonds. The bonds may be issued in one or more series and sold without an election. The

bonds must be secured, bear the interest rate or rates or a variable rate, have the rank or

priority, be executed in the manner, be payable in the manner, mature, and be subject to the

defaults, redemptions, repurchases, tender options, or other terms, as the county may

determine. The county may enter into and perform all contracts deemed necessary or desirable

to issue and secure the bonds, including an indenture of trust with a trustee within or outside

of the state. The debt represented by the bonds must not be included in computing any debt

limitation applicable to the county. Subject to this subdivision, the bonds must be issued

and sold in the manner provided in chapter 475. The bonds must recite that they are issued

under this act, and the recital is conclusive as to the validity of the bonds and the imposition

and pledge of the taxes levied for their payment. In anticipation of the issuance of the bonds

authorized under this subdivision and the collection of taxes levied under subdivision 10,

the county may provide money for the purposes authorized by this act, through temporary

interfund loans from other available county money which must be repaid with interest.

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Sec. 10.

Minnesota Statutes 2024, section 473.757, subdivision 10, is amended to read:

Subd. 10.

Sales and use tax.

(a) Notwithstanding section
477A.016
, or other law, the

governing body of the county may by ordinance, impose a sales and use tax at the rate of
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0.15
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1.0
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percent for the purposes listed in this section. The taxes authorized under this

section and the manner in which they are imposed are exempt from the rules of section

297A.99
, subdivisions 2 and 3. The provisions of section
297A.99
, except for subdivisions

2 and 3, apply to the imposition, administration, collection, and enforcement of this tax.

(b) The tax imposed under this section is not included in determining if the total tax on

lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986,

chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article

12, section 87, or in determining a tax that may be imposed under any other limitations.

Sec. 11.

Minnesota Statutes 2024, section 473.757, subdivision 11, is amended to read:

Subd. 11.

Uses of tax.

(a) Revenues received from the tax imposed under subdivision

10 may be used
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for the following and for no other purpose
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:

(1) to pay costs of collection;

(2) to pay or reimburse or secure the payment of any principal of, premium, or interest

on bonds issued in accordance with Laws 2006, chapter 257, section 12
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, and this act
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;

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(3) to pay costs and make expenditures and grants described in this section, including

financing costs related to them;

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(4)
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(3)
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to maintain reserves for the foregoing purposes deemed reasonable and appropriate

by the county;

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(5)
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(4)
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to pay for operating costs of the ballpark authority other than the cost of operating

or maintaining the ballpark;
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and
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(6)
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(5)
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to make expenditures and grants for youth activities and amateur sports and

extension of library hours as described in subdivision 2;

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and for no other purpose.

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(6) to make expenditures and grants for Hennepin County health care facilities as

described in subdivision 2a, including financing costs related to them;

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(7) to make grants to the authority for capital improvement expenditures as authorized

by subdivision 3a and for purposes permitted under subdivision 1; and

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(8) to pay costs and make expenditures and grants for any other purpose described in

this section, including financing costs related to them.

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(b) Revenues from the tax designated for use under paragraph (a), clause (5), must be

deposited in the operating fund of the ballpark authority.

(c) After completion of the ballpark and public infrastructure, the tax revenues not

required for current payments of the expenditures described in paragraph (a), clauses (1) to
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(6)
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(8)
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, shall be used to
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(i)
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(1)
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redeem or defease the bonds
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,
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and
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(ii)
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(2)
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prepay or establish

a fund for
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payment of future obligations under grants or other commitments for future

expenditures which are permitted by this section. Upon the redemption or defeasance of

the bonds and the establishment of reserves adequate to meet such future obligations, the

taxes shall terminate and shall not be reimposed
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reserves adequate to meet such future

obligations
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. For purposes of this subdivision, "reserves adequate to meet such future

obligations" means a reserve that does not exceed the net present value of the county's

obligation to make grants under paragraph (a), clauses
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(5)
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(4)
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and
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(6)
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(5)
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, and to fund the

reserve for capital improvements required under section
473.759, subdivision 3
, for
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the later

of (i)
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the 30-year period beginning on the date of the original issuance of the
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latest-issued

series of
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bonds
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issued pursuant to subdivision 9
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, less those obligations that the county has

already paid
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, or (ii) the period extending through the final term of the agreement in section

473.759, subdivision 4, as the agreement may be modified or extended from time to time
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.

Sec. 12.

Minnesota Statutes 2024, section 473.759, subdivision 3, is amended to read:

Subd. 3.

Reserve for capital improvements.

The authority shall require that a reserve

fund for capital improvements to the ballpark
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and public infrastructure within the

development area
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be established and funded with annual payments of
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$2,000,000
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$14,000,000
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, with the team's share of those payments to be approximately
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$1,000,000
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$7,000,000
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, as determined by agreement of the team and county. The annual payments shall

increase according to an inflation index determined by the
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authority, provided that any

portion of the team's contribution that has already been reduced to present value shall not

increase according to an inflation index
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county
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. The authority may accept contributions

from the county or other source for the portion of the funding not required to be provided

by the team.

Sec. 13.
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EFFECTIVE DATE.
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Sections 1 to 12 are effective the day following final enactment.

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