1.1 	A bill for an act
1.2 	relating to economic development; creating the airport
1.3 	areas development fund; proposing coding for new law
1.4 	in Minnesota Statutes, chapter 116J.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 	AIRPORT AREAS DEVELOPMENT FUND

1.7 	Section 1. [116J.582] CREATION OF ACCOUNT.
1.8 	(a) An airport areas development account is created in the
1.9 	general fund.  Money in the account may be used, as appropriated
1.10 	by law, to make grants as provided in section 116J.585 and to
1.11 	pay for the commissioner's costs in reviewing applications and
1.12 	making grants.
1.13 	(b) Notwithstanding anything to the contrary in section
1.14 	297A.94, to the extent revenues in any fiscal year derived from
1.15 	sales taxes imposed under chapter 297A, on airport sales exceed
1.16 	the level of revenue for the fiscal year ending in 2005, the
1.17 	excess revenues up to $4,000,000 are appropriated annually to
1.18 	the airport areas development account beginning in the fiscal
1.19 	year ending in 2007 and ending in 2026.  The percentage of
1.20 	excess revenues to be paid by individual qualified airports in
1.21 	each year must equal the percentage of total excess revenues at
1.22 	that qualified airport compared to the total excess revenues at
1.23 	all qualified airports for that year.  The legislature may
1.24 	appropriate additional funds to the airport areas development
1.25 	account in order to meet the needs of the statewide aviation
2.1 	transportation plan.

2.2 	Sec. 2. [116J.583] DEFINITIONS.
2.3 		Subdivision 1.Scope of application. For purposes of
2.4 	sections 116J.582 to 116J.587, the following terms have the
2.5 	meanings given.
2.6 		Subd. 2.Airport area economic development
2.7 	zone. "Airport area economic development zone" means an area
2.8 	adjacent to or within two miles of an existing airport in which
2.9 	the existing land uses are deemed by the commissioner to be
2.10 	incompatible with airport activity.
2.11 		Subd. 3.Airport sales. "Airport sales" mean sales that
2.12 	are taxable under chapter 297A, and vending, merchandise, and
2.13 	pay telephones.  Airport sales do not include the sales of goods
2.14 	or taxable services purchased by persons or entities conducting
2.15 	a private trade or business on airport property or by airport
2.16 	owners or operators, including the Metropolitan Airports
2.17 	Commission.
2.18 		Subd. 4.Development authority. "Development authority"
2.19 	includes a statutory or home rule charter city, county, housing
2.20 	and redevelopment authority, economic development authority, and
2.21 	a port authority.
2.22 		Subd. 5.Development costs. "Development costs" or
2.23 	"costs" means the costs of developing and implementing an
2.24 	economic development plan.
2.25 		Subd. 6.High wage jobs. "High wage jobs" means new jobs
2.26 	paying a wage that exceeds $15 per hour in the metropolitan area
2.27 	and $12 per hour outside the metropolitan area.
2.28 		Subd. 7.Metropolitan area. "Metropolitan area" means
2.29 	the seven-county metropolitan area, as defined in section
2.30 	473.121, subdivision 2.
2.31 		Subd. 8.Municipality. "Municipality" means the
2.32 	statutory or home rule charter city, town, or, in the case of
2.33 	unorganized territory, the county in which the site is located.
2.34 		Subd. 9.Project costs. "Project costs" includes
2.35 	economic development costs for the site and the cost of related
2.36 	site acquisition, demolition of existing improvements, and
3.1 	installation of public improvements necessary for the
3.2 	development authority to implement the economic development plan.
3.3 		Subd. 10.Qualified airport. "Qualified airport" means
3.4 	an airport that meets the Federal Aviation Administration's
3.5 	definition of a commercial service airport.  In addition, upon
3.6 	application by an airport that does not currently meet the
3.7 	definition of a commercial service airport, the commissioner of
3.8 	transportation may designate that airport as a qualified
3.9 	airport.  In making the decision to designate, the commissioner
3.10 	shall consider the priorities set forth in section 116J.586.

3.11 	Sec. 3. [116J.584] GRANT APPLICATIONS.
3.12 		Subdivision 1.Application required. To obtain an
3.13 	airport area development grant, the development authority shall
3.14 	apply to the commissioner.  The governing body of the
3.15 	municipality must approve, by resolution, the application.
3.16 		Subd. 2.Required content. The commissioner shall
3.17 	prescribe and provide the application form.  The application
3.18 	must include at least the following information:
3.19 	(1) identification of the site;
3.20 	(2) an economic development plan for the site, including
3.21 	any specific commitments from third parties to construct
3.22 	improvements on the site;
3.23 	(3) a detailed estimate, along with necessary supporting
3.24 	evidence, of the total costs for the proposed development on the
3.25 	site;
3.26 	(4) an appraisal of the current market value of the
3.27 	property prepared by a qualified independent appraiser using
3.28 	accepted appraisal methodology;
3.29 	(5) the manner in which the municipality will meet the
3.30 	local match requirement in section 116J.587; and 
3.31 	(6) any additional information or material that the
3.32 	commissioner prescribes.

3.33 	Sec. 4. [116J.585] GRANTS.
3.34 		Subdivision 1.Authority. (a) The commissioner may make
3.35 	a grant to an applicant development authority to pay for up to
3.36 	75 percent of the project costs for a qualifying site.
4.1 	(b) The commissioner may also make a grant to an applicant
4.2 	to fill a site that would represent more than 50 percent of the
4.3 	remaining land in a city suitable for industrial development if
4.4 	it were properly filled.
4.5 	(c) The determination of whether to make a grant for a
4.6 	qualifying site is within the sole discretion of the
4.7 	commissioner, subject to the process provided by this section,
4.8 	and available unencumbered money in the appropriation.  The
4.9 	commissioner's decisions and application of the priorities under
4.10 	section 116J.586 are not subject to judicial review, except for
4.11 	abuse of discretion.
4.12 		Subd. 2.Metropolitan livable communities. The
4.13 	commissioner may not make a grant to a municipality in the
4.14 	metropolitan area unless it is participating in the local
4.15 	housing incentives program under section 473.254.
4.16 		Subd. 3.Qualifying sites. A site qualifies for a grant
4.17 	under this section, if the following criteria are met:
4.18 	(1) the site is in an airport area economic development
4.19 	zone;
4.20 	(2) the economic development plan sets forth a future use
4.21 	for the site that is compatible with current and anticipated
4.22 	future airport operations;
4.23 	(3) if the proposed economic development project is
4.24 	completed, it is expected that the site will be improved with
4.25 	buildings or other improvements and these improvements will
4.26 	provide a substantial increase in the property tax base within a
4.27 	reasonable period of time or the site will be used for an
4.28 	important publicly owned or tax-exempt facility; and 
4.29 	(4) the proposed use is consistent with sections 360.061 to
4.30 	360.074.

4.31 	Sec. 5. [116J.586] PRIORITIES.
4.32 		Subdivision 1.Priorities. (a) The legislature expects
4.33 	that applications for grants will exceed the available
4.34 	appropriations and the agency will be able to provide grants to
4.35 	only some of the applicant development authorities.
4.36 	(b) If applications for grants for qualified sites exceed
5.1 	the available appropriations, the agency shall make grants for
5.2 	sites that, in the commissioner's judgment, provide the highest
5.3 	return in public benefits for the public costs incurred and that
5.4 	meet all the requirements provided by law.  In making this
5.5 	judgment, the commissioner shall consider the following factors:
5.6 	(1) the severity of existing or potential impacts on public
5.7 	health and quality of life;
5.8 	(2) the effect of the economic development project on
5.9 	reducing existing or potential threats to public health or
5.10 	quality of life, including the adverse effects of environmental
5.11 	noise and aircraft-related pollution, that would be reduced or
5.12 	eliminated by completion of each of the economic development
5.13 	plans;
5.14 	(3) the potential increase in the property tax base of the
5.15 	local taxing jurisdictions, considered relative to the fiscal
5.16 	needs of the jurisdictions, that will result from developments
5.17 	that will occur because of completion of each of the economic
5.18 	development plans;
5.19 	(4) the social value to the community of the redevelopment
5.20 	of the site, including the importance of development of the
5.21 	proposed public facilities on each of the sites;
5.22 	(5) the probability that each site will be redeveloped
5.23 	without use of government money in the reasonably foreseeable
5.24 	future;
5.25 	(6) the economic development plan anticipates the creation
5.26 	of high-wage jobs;
5.27 	(7) the amount of the commitment of municipal or other
5.28 	local resources to pay for the economic development costs;
5.29 	(8) the future uses described in the economic development
5.30 	plan are related to airport operations or the aviation industry
5.31 	or are uses that will benefit from close proximity to an
5.32 	airport; and 
5.33 	(9) compatibility with statewide aviation plans developed
5.34 	by the Department of Transportation.
5.35 	The factors are not listed in a rank order of priority;
5.36 	rather the commissioner may weigh each factor, depending upon
6.1 	the facts and circumstances, as the commissioner considers
6.2 	appropriate.  The commissioner may consider other factors that
6.3 	affect the net return of public benefits for completion of the
6.4 	economic development plan.  The commissioner, notwithstanding
6.5 	the listing of priorities and the goal of maximizing the return
6.6 	of public benefits, shall make grants that distribute available
6.7 	money to sites both within and outside of the metropolitan
6.8 	area.  The commissioner shall provide a written statement of the
6.9 	supporting reasons for each grant.  Unless sufficient
6.10 	applications are not received for qualifying sites outside of
6.11 	the metropolitan area, at least 35 percent of the money provided
6.12 	as grants must be made for sites located outside of the
6.13 	metropolitan area.
6.14 		Subd. 2.Application cycles; reporting to legislature.
 6.15 	(a) In making grants, the commissioner shall establish
6.16 	semiannual application deadlines in which grants will be
6.17 	authorized from all or part of the available appropriations of
6.18 	money in the account.
6.19 	(b) After each semiannual cycle in which grants are
6.20 	awarded, the commissioner shall report to the appropriation and
6.21 	policy committees of the senate and house of representatives
6.22 	with jurisdiction over transportation and economic development
6.23 	the grants awarded and appropriate supporting information
6.24 	describing each grant made.  This report must be made within 30
6.25 	days after the grants are awarded.
6.26 	(c) The commissioner shall annually report to the
6.27 	legislative committees in paragraph (b) on the status of the
6.28 	economic development projects undertaken under grants made under
6.29 	the programs.  The commissioner shall include in the annual
6.30 	report information on the economic development activities
6.31 	undertaken for the grants made in that and previous fiscal
6.32 	years.  The commissioner shall make this report no later than
6.33 	120 days after the end of the fiscal year.

6.34 	Sec. 6. [116J.587] LOCAL MATCH REQUIREMENT.
6.35 	(a) In order to qualify for a grant under sections 116J.582
6.36 	to 116J.586, the municipality must pay for at least one-quarter
7.1 	of the project costs as a local match.  The local match may be
7.2 	paid with money from the municipality's general fund, a property
7.3 	tax levy for that purpose, tax increments, regional, state, or
7.4 	federal money available for the economic development, or any
7.5 	other money available to the municipality.
7.6 	(b) If the development authority establishes a tax
7.7 	increment financing district or hazardous substance subdistrict
7.8 	on the site to pay for part of the local match requirement, the
7.9 	district or subdistrict is not subject to the state aid
7.10 	reductions under section 273.1399.  In order to qualify for the
7.11 	exemption from the state aid reductions, the municipality must
7.12 	elect, by resolution, on or before the request for certification
7.13 	is filed that all tax increments from the district or
7.14 	subdistrict will be used exclusively to pay (1) for project
7.15 	costs for the site and (2) administrative costs for the district
7.16 	or subdistrict.  The district or subdistrict must be decertified
7.17 	when an amount of tax increments equal to no more than three
7.18 	times the costs of implementing the response action plan for the
7.19 	site and the administrative costs for the district or
7.20 	subdistrict have been received, after deducting the amount of
7.21 	the state grant.