1.1                          A bill for an act 
  1.2             relating to economic development; creating a fund for 
  1.3             local development; authorizing bonds; appropriating 
  1.4             money; proposing coding for new law in Minnesota 
  1.5             Statutes, chapter 116J. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [116J.561] [CREATION OF ACCOUNT.] 
  1.8      A redevelopment account is created in the general fund.  
  1.9   Money in the account may be used to make grants as provided in 
  1.10  section 116J.564 and to pay for the commissioner's costs in 
  1.11  reviewing applications and making grants. 
  1.12     Sec. 2.  [116J.562] [DEFINITIONS.] 
  1.13     Subdivision 1.  [SCOPE OF APPLICATION.] For purposes of 
  1.14  sections 116J.561 to 116J.565, the terms in subdivisions 2 to 5 
  1.15  have the meanings given. 
  1.16     Subd. 2.  [REDEVELOPMENT COSTS OR COSTS.] "Redevelopment 
  1.17  costs" or "costs" means the costs of land acquisition, 
  1.18  demolition, infrastructure improvement, and ponding, or other 
  1.19  environmental improvements necessary to support industrial 
  1.20  development or community rebuilding in previously developed 
  1.21  areas. 
  1.22     Subd. 3.  [DEVELOPMENT AUTHORITY.] "Development authority" 
  1.23  includes a statutory or home rule charter city, county, housing 
  1.24  and redevelopment authority, economic development authority, and 
  1.25  port authority. 
  2.1      Subd. 4.  [METROPOLITAN AREA.] "Metropolitan area" means 
  2.2   </u>
  2.3   the seven-county metropolitan area, as defined in section 
  2.4   473.121, subdivision 2. 
  2.5      Subd. 5.  [MUNICIPALITY.] "Municipality" means the 
  2.6   statutory or home rule charter city, town, or, in the case of 
  2.7   unorganized territory, county in which the redevelopment is 
  2.8   located. 
  2.9      Sec. 3.  [116J.563] [GRANT APPLICATIONS.] 
  2.10     Subdivision 1.  [APPLICATION REQUIRED.] To obtain a 
  2.11  redevelopment grant, the development authority shall apply to 
  2.12  the commissioner.  The governing body of the municipality must 
  2.13  approve, by resolution, the application. 
  2.14     Subd. 2.  [REQUIRED CONTENT.] The commissioner shall 
  2.15  prescribe and provide the application form.  The application 
  2.16  must include at least the following information: 
  2.17     (1) identification of the site; 
  2.18     (2) a redevelopment plan for the site; 
  2.19     (3) a detailed estimate, along with necessary supporting 
  2.20  evidence, of the total redevelopment costs for the site; 
  2.21     (4) an assessment of the development potential or likely 
  2.22  use of the site after completion of the redevelopment plan, 
  2.23  including any specific commitments from third parties to 
  2.24  construct improvements on the site; 
  2.25     (5) the manner in which the municipality will meet the 
  2.26  local match requirement; and 
  2.27     (6) any additional information or material that the 
  2.28  commissioner prescribes. 
  2.29     Sec. 4.  [116J.564] [GRANTS.] 
  2.30     The commissioner may make a grant to an applicant 
  2.31  development authority to pay for up to 50 percent of the 
  2.32  redevelopment costs for a qualifying site.  The determination of 
  2.33  whether to make a grant for a site is within the sole discretion 
  2.34  of the commissioner, subject to sections 116J.561 to 116J.567 
  2.35  and available unencumbered money in the redevelopment account.  
  2.36  The commissioner's decisions and application of the priorities 
  2.37  under section 116J.565 are not subject to judicial review, 
  3.1   except for abuse of discretion. 
  3.2      Sec. 5.  [116J.565] [PRIORITIES.] 
  3.3      Subdivision 1.  [CHARACTERISTICS.] If applications for 
  3.4   grants exceed the available appropriations, grants shall be made 
  3.5   for sites that, in the commissioner's judgment, provide the 
  3.6   highest return in public benefits for the public costs 
  3.7   incurred.  In making this judgment, the commissioner shall give 
  3.8   priority to redevelopment projects with one or more of the 
  3.9   following characteristics: 
  3.10     (1) the need for redevelopment in conjunction with 
  3.11  contamination remediation needs; 
  3.12     (2) the redevelopment project meets current tax increment 
  3.13  financing requirements for a redevelopment district and tax 
  3.14  increments will contribute to the project; 
  3.15     (3) the redevelopment potential within the municipality; 
  3.16     (4) proximity to public transit if located in the 
  3.17  metropolitan area; and 
  3.18     (5) multijurisdictional projects that take into account the 
  3.19  need for affordable housing, transportation, environmental 
  3.20  impact, and other amenities to support community rebuilding. 
  3.21     The factors in clauses (1) to (5) are not listed in a rank 
  3.22  order of priority; rather the commissioner may weigh each 
  3.23  factor, depending upon the facts and circumstances, as the 
  3.24  commissioner considers appropriate.  The commissioner may 
  3.25  consider other factors that affect the net return of public 
  3.26  benefits for completion of the redevelopment plan.  The 
  3.27  commissioner, notwithstanding the listing of priorities and the 
  3.28  goal of maximizing the return of public benefits, shall make 
  3.29  grants that distribute available money to sites both within and 
  3.30  outside of the metropolitan area.  The commissioner shall 
  3.31  provide a written statement of the supporting reasons for each 
  3.32  grant.  Unless sufficient applications are not received for 
  3.33  qualifying sites outside of the metropolitan area, at least 25 
  3.34  percent of the money provided as grants must be made for sites 
  3.35  located outside of the metropolitan area.  The commissioner 
  3.36  shall consult with the metropolitan council about metropolitan 
  4.1   area grants. 
  4.2      Subd. 2.  [APPLICATION CYCLES.] In making grants, the 
  4.3   commissioner shall establish semiannual application deadlines in 
  4.4   which grants will be authorized from all or part of the 
  4.5   available money in the account. 
  4.6      Sec. 6.  [116J.566] [LOCAL MATCH REQUIREMENT.] 
  4.7      (a) In order to qualify for a grant under sections 116J.561 
  4.8   to 116J.567, the municipality must pay for at least one-half of 
  4.9   the redevelopment costs as a local match from any money 
  4.10  available to the municipality. 
  4.11     (b) If the development authority establishes a tax 
  4.12  increment financing district on the site to pay for part of the 
  4.13  local match requirement, the district is not subject to the 
  4.14  state aid reductions under section 273.1399.  In order to 
  4.15  qualify for the exemption from the state aid reductions, the 
  4.16  municipality must elect, by resolution, on or before the request 
  4.17  for certification is filed, that all tax increments from the 
  4.18  district will be used exclusively to pay (1) for redevelopment 
  4.19  costs for the site and (2) administrative costs for the district.
  4.20     Sec. 7.  [116J.567] [SALE OF LAND.] 
  4.21     Bond proceeds funds in the account may only be used for 
  4.22  redevelopment costs for publicly owned property.  Non-bond 
  4.23  proceeds funds in the account may be used for developing land 
  4.24  and constructing improvements that are intended to be sold to a 
  4.25  private developer provided that the fair market value of the 
  4.26  land and improvements sold, up to the amount of the grant, must 
  4.27  be paid to the account by the development authority within two 
  4.28  years of the sale. 
  4.29     Sec. 8.  [116J.568] [APPROPRIATION.] 
  4.30     $....... is appropriated from the general fund for fiscal 
  4.31  year 1999 for transfer to the redevelopment account in the 
  4.32  general fund for the purposes of the account. 
  4.33     Sec. 9.  [APPROPRIATION.] 
  4.34     $....... is appropriated from the bond proceeds fund for 
  4.35  transfer to the redevelopment account in the general fund for 
  4.36  the purposes of that account. 
  5.1      Sec. 10.  [BOND SALE AUTHORIZATIONS.] 
  5.2      To provide the money appropriated in section 9 from the 
  5.3   bond proceeds fund, the commissioner of finance, on request of 
  5.4   the governor, shall sell and issue bonds of the state in an 
  5.5   amount up to $....... in the manner, upon the terms, and with 
  5.6   the effect prescribed by Minnesota Statutes, sections 16A.631 to 
  5.7   16A.675, and by the Minnesota Constitution, article XI, sections 
  5.8   4 to 7.