HF4849

Purpose

Authorize Hennepin County to impose a local sales and use tax of up to 1% to fund a designated health care facility in the county and related infrastructure, in addition to any existing local taxes. The tax rate can be adjusted by the county to raise enough revenue for the described purposes.

Main Provisions

• Local tax authority and rate

  • Hennepin County may impose up to 1% sales and use tax for the purposes listed below.
  • The tax is in addition to any other local taxes.
  • The county can adjust the rate by resolution to ensure sufficient revenue.

• Revenue recipient and use

  • All revenue from the tax must be distributed to the board of directors of an eligible health care facility in Hennepin County.
  • The board must use the money only for the following: 1) Development, construction, improvement, and equipping of the health care facility 2) Construction or renovation of public infrastructure to support the facility 3) Accumulation of reserves for capital improvements 4) Reimbursement of uncompensated care provided by the facility 5) Operating expenses of the health care facility 6) Costs of issuing and financing any bonds tied to these obligations

• Eligible health care facility

  • The facility must be a nonstate government teaching hospital located in Hennepin County with high Medical Assistance (Medicaid) utilization and a Level 1 trauma center.

• Bonding authority

  • The county may issue bonds under Chapter 475 to finance all or part of the costs described above.
  • The county can issue bonds to refund previously issued bonds for the same purposes.
  • Bonds can be limited obligations payable solely from taxes levied under this section and other available revenues.
  • The county may pledge its full faith and credit and taxing power as additional security.
  • An election to approve bonds under the applicable statute is not required.
  • Bonds are not counted toward the county’s debt limit.

• Administration, collection, and enforcement

  • The tax is governed by the existing provisions that apply to administration, collection, and enforcement (specifically those in section 297A.99 and related subsections).

Significant Changes to Existing Law

• Creates a new local 1% sales tax authority for Hennepin County, tied to funding a specific health care facility and related projects, supplementing other local taxes.
• Establishes a defined eligible facility and explicit allowable uses, including operating expenses and uncompensated care reimbursement—items not always funded by local facility taxes.
• Allows the county to issue bonds (including refunding bonds) to finance these costs without requiring a separate voter election, and to pledge full faith and credit for security.
• Removes the need for election approval and does not count bonds under this program toward the county’s general debt limit.
• Integrates the new tax administration with existing Minnesota tax enforcement framework.

Relevant Terms - Hennepin County - local sales tax - sales and use tax - 1 percent - board of directors - eligible health care facility - nonstate government teaching hospital - high medical assistance utilization - Level 1 trauma center - public infrastructure - uncompensated care - operating expenses - development - construction - improvement - equipping - reserves for capital improvements - bonds - Chapter 475 - bond refunding - limited obligation - full faith and credit - debt limit - administration - collection - enforcement - 297A.99 - taxes - financing costs