by Laura Adelmann
thisweek newspapers

All of Dakota County is proposed to become a Bioscience Zone, allowing certain businesses significant tax breaks for locating or expanding in designated sub-zones within the county.

Under the proposal, Bioscience technology-related trade or businesses will be exempt from state and local sales taxes, including local taxes implemented by a county or city.

Bioscience companies will also be exempt from corporate franchise taxes and the minimum fee imposed on corporations.

In addition, the businesses in Dakota and Goodhue counties will receive jobs, research and development credits.

In committee, Dakota County commissioners recommended the proposal 6-1; Commissioner Joe Harris cast the dissenting vote.

During discussion, Harris suddenly soured on the idea of a tax-free zone for certain types of businesses.

He said the county has to pay state sales taxes, despite years of lobbying efforts.

"We're a governmental unit … yet we have to pay state sales tax on all our purchases, Certainly they (state government) have been robbing Peter to pay Paul," said Harris. "I'm not going to support this. It's rubbing me the wrong way all of the sudden."

Bio-Zones are promoted by Dakota Future, a local business and economic organization, that predicts it will bring high-paying jobs and attract scientific companies to the area.

A Bio-Zone application is being created jointly by Dakota and Goodhue counties for submission to the state Department of Employment and Economic Development (DEED), which gives final authorization for the zone.

The Legislature has not designated any funding for the zones, but will be lobbied to do so during the 2007 session.

Dakota County officials said the creation of Bio-Zones would help level the playing field for metro-area communities that have been excluded from the state's 2003 JOBZ (Jobs Opportunity Building Zones) bill.

DEED described the JOBZ program as Gov. Tim Pawlenty's "key initiative" to stimulating economic development in outstate Minnesota through tax breaks for businesses located in those areas.

Commissioner Will Branning said the Bio-Zone project will likewise stimulate development in Dakota County.

"We can get businesses to come in our community. That's great," said Branning.

He also said that the Bio-Zone will not impact local property tax collections, provided companies do not use tax increment financing (TIF).

Under TIF, property values are frozen at its pre-construction base level and any increased value created by development can be used to repay the improvement costs.

Property tax revenues for local taxing bodies, including counties and school districts, remain at the base level for the entire length of the TIF. As a result, the county and schools receive fewer tax dollars than the property value dictates.

Branning said that even if TIF is proposed in Bio-Zones, the county is given a chance to be "part of that decision process."

Harris disagreed, "We're not a partner in TIF. Cities make those decisions and we live with them."

All Dakota County cities except Hastings have nominated acreage to become a sub-Bioscience Zone, with 2,989 total acres proposed.

Of that land, 1,210 acres are in Rosemount, a situation which will allow the city to act as a "bank."

County Administrator Brandt Richardson explained Rosemount's excess acreage can be used to make additional sub-zones within the county in the future.

He added that Rosemount has agreed to be the Bioscience Zone applicant to DEED, and the Dakota County Community Development Agency is considering a resolution to assume the role of zone administrator at its Oct. 10 meeting.

The County Board is expected to pass a resolution for the application at its Oct. 10 meeting.

Laura Adelmann is at dceditor@frontiernet.net.

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