Purpose

Expand the authority of hospital districts in Minnesota to support more health care services and providers. The bill would allow a hospital district to be created or reorganized to acquire, improve, and operate hospital and nursing home facilities, and to financially support other licensed health care programs, services, and facilities that the district’s hospital board decides are necessary and beneficial for residents.

Main Provisions

• Section 1 — Resolution for creating or reorganizing a hospital district

  • A resolution must state that a hospital district is authorized to be created or reorganized to run hospital and nursing home facilities and to financially support other licensed health care programs and services.
  • The resolution must name the two or more cities or towns included in the district.
  • Adoption requires a two-thirds vote of the governing body or approval by voters via a referendum, with rules for how that referendum can be triggered.
  • Resolutions adopted by a city or town must be published in the official newspaper and take effect 40 days after publication unless a referendum is filed.
  • A petition for referendum can be filed by at least 5% of voters from the last election; if filed, the resolution does not take effect until approved by voters in a regular or special election.
  • The resolution can also be initiated by a petition signed by at least 10% of voters from the last general election, which must present the text and request an election.
  • Special elections must be held within 30 days after petition filing (or the resolution can go to a regular election within 30 days). The resolution takes effect only if a majority approves it.
  • Only one petition-driven election may occur in any 12-month period.

• Section 2 — Specific powers of hospital districts

  • The district may hire nursing, administrative, legal, engineering, accounting, and other qualified staff, and pay them with salaries, wages, pensions, or other agreed compensation.
  • It may obtain reports, plans, studies, and recommendations.
  • It may lease, purchase, or otherwise acquire real or personal property, including by option contracts or other forms of transfer.
  • It may lease, construct, furnish, and maintain buildings and grounds, including facilities for hospital and nursing home operations.
  • It may adopt rules for operating and administering hospital and nursing home facilities and for patient admissions.
  • It may levy taxes as allowed under current law.
  • It may borrow money and issue bonds as prescribed by law.
  • It may buy liability insurance for the district, its officers, and employees, and insure facilities and equipment.
  • It may sell or lease its facilities or equipment as it finds expedient.
  • It must have its accounts and funds audited by competent public accountants.
  • It may enter into agreements with cities or counties relating to facilities that are attached to or related to nursing homes and provide supportive services to elderly persons not yet in nursing home care (including congregate housing, adult day care, respite care) and owned or operated by the city or county.
  • It may enter into agreements to provide financial or in-kind support to licensed health care providers and facilities (including primary care clinics, behavioral/mental health providers, dental clinics, home health agencies, urgent care centers, and community-based health service organizations).

• Section 3 — Support for licensed providers (447.44)

  • Agreement requirements: any agreement under the above section must require recipients to use hospital district funds only for identified programs, services, or capital investments that benefit district residents; require regular financial reporting to the district; and prohibit using funds for executive compensation, shareholder profit, or dividends.
  • The hospital board must create internal policies to ensure recipients comply with these requirements.
  • No new taxing authority is created by this section; existing taxing authority remains as provided by law (447.34) and other related statutes.

Significant Changes to Existing Law

• Expands the scope of hospital districts to actively fund and support a broader range of health care services beyond traditional hospital and nursing home care, including clinics, mental health services, dental services, home health, urgent care, and community-based health organizations.
• Formalizes a process for establishing or reorganizing districts with explicit vote requirements, referendum options, and petitions.
• Adds a structured framework for how district funds can be used with strict limits on usage (must benefit district residents, with annual reporting and avoidance of executive compensation or profit-taking).
• Clarifies taxation and financial authority remains bound by existing Minnesota law, while enabling broader partnerships with cities and counties for elderly and supportive services.

Practical implications and considerations

• Local oversight and accountability are enhanced through required public votes, referendum options, and ongoing reporting.
• Residents should expect potential tax implications if districts choose to levy taxes or issue bonds to fund expanded services.
• The bill potentially increases collaboration between hospital districts, cities, counties, and a wider range of health care providers and services.

Relevant Terms

• hospital district
• hospital board
• Minnesota Statutes sections 447.31 to 447.37
• resolution
• referendum
• petition
• election
• two-thirds vote
• health care services
• hospital and nursing home facilities
• licensed health care providers
• clinics
• behavioral health / mental health providers
• dental clinics
• home health agencies
• urgent care centers
• community-based health service organizations
• congregate housing
• adult day care
• respite care
• tax levy / taxes
• bonds
• indebtedness
• agreements with cities/counties
• 447.34 tax authority
• 447.33 powers
• 447.44 support for providers
• 447.45 related facilities and services
• capital investments
• financial reporting
• prohibition on executive compensation and dividends
• internal policies and procedures