If final approval is granted following the public hearing, Richland County will authorize Minn-Dak Farmers Cooperative to refinance a series of Municipal Industrial Development Act (MIDA) bonds issued in 2000 and 2005-2006. The MIDA bonds were used to construct solid waste disposal equipment located in the county.
They'll also authorize a $7 million allocation of Recovery Zone Facility Bonds, which are tax-exempt and issued by the federal government to finance privately owned projects.
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Richland County was the third largest recipient of the recovery bonds, receiving $15 million, behind Cass and Grand Forks counties. The county was designated as a "recovery zone" in July of this year per the American Recovery and Reinvestment Act.
"It's a new type of bond that the federal government authorized. When it's used for private development, instead of it being tax exempt, you get a tax credit," said Richland County Auditor Harris Bailey, who added that the credit goes to the issuer of the bond. "They won't charge as much interest because they're getting it back as a tax credit. We're just the people that authorize this to happen."
Larson said the company has approved up to $6 million in improvement projects to date. The tax exempt $7 million bond would go toward similar improvement projects at the sugar beet processing facility, as the federally allocated bond is not restricted to solid waste disposal.
"They can be used on any investment in your company of a tangible nature," Larson said. "By going with a tax-exempt bond we're able to protect our investors and your citizens against some of the higher interest rate costs."
Larson added that he'd heard if the county doesn't use the allocated funds, they are redirected to the state of North Dakota. If the state doesn’t use them the funds are allocated into another state's recovery zone.
"There's no county money involved," Bailey said. "This bill transpired at a time after Imation closed down, so we were viewed as being economically depressed because of the job loss."
The public hearing will be held at 9:45 a.m. during the regularly scheduled Richland County Commission meeting at the county courthouse.
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