Bill would give incentives for new rural providers

Legislation presented Wednesday in the Minnesota Legislature by District 27A Rep. Peggy Bennett would create tax incentives for medical facilities looking to locate to medically underserved areas in rural Minnesota.

Albert Lea City Manager Chad Adams and Blooming Prairie Mayor Harold Peterson testified in favor of the bill Wednesday at the Capitol.

Under the bill, local municipalities would need to pass resolutions first for the program to take effect. The bill would abate property taxes for 15 years for qualifying medical centers in counties with areas deemed medically underserved in rural Minnesota, as well as the sales tax for construction materials.

The statewide property tax could also be abated for 15 years for such projects, which could include medical or urgent care clinics, birthing centers, hospitals or outpatient surgical centers in counties outside the Metro area.

“Thank you to Chad and Mayor Peterson for joining me to testify in favor of this important legislation,” Bennett said in a press release. “In our area — and throughout much of Greater Minnesota — we’re seeing a reduction in health care services and options, and my legislation is one tool for local governments to make it easier for medical facilities to locate to rural parts of the state.

“This is especially important in cities like Albert Lea and Blooming Prairie, where we have lost critical health services.”

Bennett said helping health care providers locate to rural Minnesota would improve access to residents and increase competition, resulting in the lowering of health insurance costs. 

District 27 Sen. Dan Sparks, DFL-Austin, said the proposal is “a good idea,” and it is a tool for local representatives to entice health care providers to locate to rural Minnesota.

He said the legislation is especially needed after Mayo Clinic Health System’s decision to transfer most inpatient services from Albert Lea to Austin and the hospital system’s announcement it would close LeRoy and Adams clinics.

“If we can do anything to try to help, why wouldn’t we?” Sparks said, adding he plans to discuss the issue with local officials over Easter break.

On Thursday, Adams said he testified about Mayo’s planned transition and the benefits of Bennett’s legislation. 

“(I) kind of provided a background of what happened in June and how we have some services transitioning out of Albert Lea to Austin and how this legislation will help attract and hopefully retain medical services in the community in the future,” he said.

Adams said the bill could allow the community to bring in a birthing center, providing “a tool in the toolbox,” for local government entities.

Tax incentives could affect for-profit hospitals more than nonprofit organizations, because more for-profit companies pay property taxes than nonprofits.

Adams said the city will continue to evaluate legislation pertaining to the issue.

Bennett said the bill is moving through the committee process, and she hopes it is included in a tax omnibus bill.