1.1                          A bill for an act
  1.2             relating to economic development and redevelopment; 
  1.3             establishing the metropolitan revitalization fund; 
  1.4             providing funding for housing and urban development in 
  1.5             the metropolitan area; authorizing a special jobs 
  1.6             opportunity program for AFDC recipients; providing for 
  1.7             a sales tax refund for certain construction materials; 
  1.8             creating an urban homesteading program; providing 
  1.9             funding for affordable housing that is related to 
  1.10            community economic development and redevelopment; 
  1.11            providing for a sales tax refund for certain 
  1.12            construction materials; appropriating money; amending 
  1.13            Minnesota Statutes 1994, sections 290.01, subdivision 
  1.14            19b; 297A.15, by adding a subdivision; 297A.25, by 
  1.15            adding a subdivision; 462A.201, by adding a 
  1.16            subdivision; and 462A.222, subdivision 3; proposing 
  1.17            coding for new law in Minnesota Statutes, chapters 
  1.18            256; and 473; repealing Minnesota Statutes 1994, 
  1.19            sections 504.33; 504.34; and 504.35. 
  1.20  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.21                             ARTICLE 1 
  1.22                  METROPOLITAN REVITALIZATION FUND 
  1.23     Section 1.  [473.25] [METROPOLITAN REVITALIZATION FUND; 
  1.24  PURPOSE; ESTABLISHMENT.] 
  1.25     In order to encourage and support redevelopment and 
  1.26  revitalization of economically distressed sections of the 
  1.27  metropolitan area, the removal of barriers to job retention and 
  1.28  development, the enhancement of job skills, the provision of 
  1.29  opportunities for development of life-cycle and affordable 
  1.30  housing, and the remediation of contaminated land for commercial 
  1.31  and industrial redevelopment, the metropolitan revitalization 
  1.32  fund is established and shall be funded and administered as 
  2.1   provided in sections 473.25 to 473.253. 
  2.2      Sec. 2.  [473.251] [FUND ESTABLISHED.] 
  2.3      The metropolitan revitalization fund consists of the funds 
  2.4   provided to it under section 5. 
  2.5      Sec. 3.  [473.252] [FUND USES; DISTRIBUTION.] 
  2.6      The council shall establish criteria for uses of the fund 
  2.7   that are consistent with and promote the purposes of sections 
  2.8   473.25 to 473.253.  The council shall distribute funds to 
  2.9   establish or encourage projects or initiatives that: 
  2.10     (1) provide opportunities for jobs and job skills 
  2.11  development and retention; 
  2.12     (2) provide commercial or industrial redevelopment 
  2.13  opportunities in areas suffering from economic distress; 
  2.14     (3) remediate contaminated land for commercial and 
  2.15  industrial redevelopment; 
  2.16     (4) provide incentives for jobs-to-people or people-to-jobs 
  2.17  initiatives including, but not limited to, reverse commuting 
  2.18  opportunities and enterprise zones; 
  2.19     (5) provide incentives to remove or rehabilitate blighted 
  2.20  housing in the fully developed area; and 
  2.21     (6) create incentives for developing communities to include 
  2.22  a full range of housing opportunities. 
  2.23     Sec. 4.  [473.253] [REPORT.] 
  2.24     The council shall prepare and submit to the legislature, as 
  2.25  provided in section 3.195, an annual report on the metropolitan 
  2.26  revitalization fund.  The report must include information on the 
  2.27  amount of money in the fund, the amount distributed, to whom the 
  2.28  funds were distributed and for what purposes, and an evaluation 
  2.29  of the effectiveness of the projects funded in meeting the 
  2.30  policies and goals enumerated in sections 473.25 to 473.252.  
  2.31  The report may make recommendations to the legislature on 
  2.32  changes to this act. 
  2.33     Sec. 5.  [APPROPRIATION.] 
  2.34     $11,000,000 is appropriated from the general fund to the 
  2.35  commissioner of the department of trade and economic development 
  2.36  to provide matching grant funds for contamination cleanup grants 
  3.1   under Minnesota Statutes, sections 116J.551 to 116J.557.  
  3.2   Notwithstanding section 116J.555, subdivision 1, all grants made 
  3.3   using this appropriation will be made for qualifying sites 
  3.4   defined as fully developed areas by the metropolitan council.  
  3.5   This appropriation is available for the biennium ending June 30, 
  3.6   1997.  $6,000,000 is appropriated from the general fund to the 
  3.7   metropolitan revitalization fund provided by section 2. 
  3.8      Sec. 6.  [CITATION.] 
  3.9      This article may be cited as "the metropolitan 
  3.10  revitalization act." 
  3.11     Sec. 7.  [APPLICATION.] 
  3.12     This article applies in the counties of Anoka, Carver, 
  3.13  Dakota, Hennepin, Ramsey, Scott, and Washington. 
  3.14     Sec. 8.  [EFFECTIVE DATES.] 
  3.15     This article is effective the day after final enactment.  
  3.16                             ARTICLE 2
  3.17                      JOBS OPPORTUNITY PROGRAM 
  3.18     Section 1.  [256.7395] [JOBS OPPORTUNITY PROGRAM.] 
  3.19     Subdivision 1.  [WAIVER REQUEST.] The commissioner of human 
  3.20  services shall request a federal waiver of the requirements of 
  3.21  the program of aid to families with dependent children in order 
  3.22  to establish a JOBS opportunity program for AFDC recipients in 
  3.23  the seven-county metropolitan area, in accordance with the 
  3.24  requirements of this section. 
  3.25     Subd. 2.  [STATE AGENCY PLAN.] The commissioner of human 
  3.26  services, in collaboration with the commissioner of economic 
  3.27  security and the commissioner of trade and economic development, 
  3.28  shall design a JOBS opportunity program for the purpose of 
  3.29  moving AFDC clients into the workforce.  The commissioners shall 
  3.30  complete the project planning no later than October 30, 1995. 
  3.31     Subd. 3.  [ELIGIBLE PARTICIPANTS.] Caretakers in AFDC 
  3.32  households in the seven-county metropolitan area, who have been 
  3.33  on assistance for at least six months and who are not enrolled 
  3.34  in the Minnesota family investment plan, shall be eligible to 
  3.35  participate in the JOBS opportunity program.  Participants shall 
  3.36  be chosen on a random basis from among eligible applicants and 
  4.1   shall be required to participate, unless exempt from 
  4.2   registration under section 256.736, subdivision 3. 
  4.3      Subd. 4.  [PROGRAM DESIGN.] The commissioners of human 
  4.4   services and economic security shall collaborate with the social 
  4.5   service agencies in the designated metropolitan counties to 
  4.6   design employment and training services, and to develop 
  4.7   employment slots with public and private employers, for AFDC 
  4.8   recipients placed through the JOBS opportunity program.  The 
  4.9   commissioners of economic security and human services shall 
  4.10  contract with employers to deliver wage subsidies on behalf of 
  4.11  AFDC recipients.  The maximum monthly subsidy for any employer 
  4.12  recipient shall be the amount of assistance for which the 
  4.13  employee's household would otherwise be eligible under sections 
  4.14  256.72 to 256.879.  The wage to be paid to the recipient for the 
  4.15  minimum number of hours calculated under this subdivision shall 
  4.16  be the large employer minimum wage plus $2 per hour additional 
  4.17  to be paid by the employer.  For any hours worked above the 
  4.18  minimum number of hours, the employer shall not be required to 
  4.19  pay more than the minimum wage established by law.  Recipients 
  4.20  must work a minimum number of hours, which shall be the AFDC 
  4.21  grant amount divided by the large employer minimum wage under 
  4.22  section 177.24, subdivision 1, paragraph (a), clause (1). 
  4.23     Subd. 5.  [BENEFITS.] Clients participating in the JOBS 
  4.24  opportunity program shall continue to be eligible for medical 
  4.25  assistance and child care, including transitional child care and 
  4.26  medical assistance, in the same manner as other AFDC 
  4.27  recipients.  Participants shall not be considered employees for 
  4.28  purposes of unemployment compensation, workers' compensation, 
  4.29  retirement, or civil service status.  Claims for workers' 
  4.30  compensation shall be handled as provided in section 256.737. 
  4.31     Subd. 6.  [TIME LIMIT ON ELIGIBILITY.] Individuals selected 
  4.32  for the JOBS opportunity program may participate for a maximum 
  4.33  number of months which shall be twice the number of months that 
  4.34  the household has been on AFDC, but in no event more than 24 
  4.35  months. 
  4.36     Subd. 7.  [SANCTIONS.] Caretakers who refuse an offer of 
  5.1   employment, or are fired from a JOBS opportunity employment slot 
  5.2   for cause, shall be sanctioned as provided under section 
  5.3   256.736, subdivision 4. 
  5.4      Subd. 8.  [SUBMISSION OF WAIVER.] The waiver authorized by 
  5.5   this section shall be submitted and evaluated as part of the 
  5.6   AFDC waiver package authorized by the 1995 legislature, but 
  5.7   shall become effective as soon as federal approval is received. 
  5.8                              ARTICLE 3
  5.9                               HOUSING 
  5.10     Section 1.  Minnesota Statutes 1994, section 290.01, 
  5.11  subdivision 19b, is amended to read: 
  5.12     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  5.13  individuals, estates, and trusts, there shall be subtracted from 
  5.14  federal taxable income: 
  5.15     (1) interest income on obligations of any authority, 
  5.16  commission, or instrumentality of the United States to the 
  5.17  extent includable in taxable income for federal income tax 
  5.18  purposes but exempt from state income tax under the laws of the 
  5.19  United States; 
  5.20     (2) if included in federal taxable income, the amount of 
  5.21  any overpayment of income tax to Minnesota or to any other 
  5.22  state, for any previous taxable year, whether the amount is 
  5.23  received as a refund or as a credit to another taxable year's 
  5.24  income tax liability; 
  5.25     (3) the amount paid to others not to exceed $650 for each 
  5.26  dependent in grades kindergarten to 6 and $1,000 for each 
  5.27  dependent in grades 7 to 12, for tuition, textbooks, and 
  5.28  transportation of each dependent in attending an elementary or 
  5.29  secondary school situated in Minnesota, North Dakota, South 
  5.30  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
  5.31  legally fulfill the state's compulsory attendance laws, which is 
  5.32  not operated for profit, and which adheres to the provisions of 
  5.33  the Civil Rights Act of 1964 and chapter 363.  As used in this 
  5.34  clause, "textbooks" includes books and other instructional 
  5.35  materials and equipment used in elementary and secondary schools 
  5.36  in teaching only those subjects legally and commonly taught in 
  6.1   public elementary and secondary schools in this state.  
  6.2   "Textbooks" does not include instructional books and materials 
  6.3   used in the teaching of religious tenets, doctrines, or worship, 
  6.4   the purpose of which is to instill such tenets, doctrines, or 
  6.5   worship, nor does it include books or materials for, or 
  6.6   transportation to, extracurricular activities including sporting 
  6.7   events, musical or dramatic events, speech activities, driver's 
  6.8   education, or similar programs.  In order to qualify for the 
  6.9   subtraction under this clause the taxpayer must elect to itemize 
  6.10  deductions under section 63(e) of the Internal Revenue Code; 
  6.11     (4) to the extent included in federal taxable income, 
  6.12  distributions from a qualified governmental pension plan, an 
  6.13  individual retirement account, simplified employee pension, or 
  6.14  qualified plan covering a self-employed person that represent a 
  6.15  return of contributions that were included in Minnesota gross 
  6.16  income in the taxable year for which the contributions were made 
  6.17  but were deducted or were not included in the computation of 
  6.18  federal adjusted gross income.  The distribution shall be 
  6.19  allocated first to return of contributions until the 
  6.20  contributions included in Minnesota gross income have been 
  6.21  exhausted.  This subtraction applies only to contributions made 
  6.22  in a taxable year prior to 1985; 
  6.23     (5) income as provided under section 290.0802; 
  6.24     (6) the amount of unrecovered accelerated cost recovery 
  6.25  system deductions allowed under subdivision 19g; 
  6.26     (7) to the extent included in federal adjusted gross 
  6.27  income, income realized on disposition of property exempt from 
  6.28  tax under section 290.491; and 
  6.29     (8) to the extent not deducted in determining federal 
  6.30  taxable income, the amount paid for health insurance of 
  6.31  self-employed individuals as determined under section 162(l) of 
  6.32  the Internal Revenue Code, except that the 25 percent limit does 
  6.33  not apply.  If the taxpayer deducted insurance payments under 
  6.34  section 213 of the Internal Revenue Code of 1986, the 
  6.35  subtraction under this clause must be reduced by the lesser of: 
  6.36     (i) the total itemized deductions allowed under section 
  7.1   63(d) of the Internal Revenue Code, less state, local, and 
  7.2   foreign income taxes deductible under section 164 of the 
  7.3   Internal Revenue Code and the standard deduction under section 
  7.4   63(c) of the Internal Revenue Code; or 
  7.5      (ii) the lesser of (A) the amount of insurance qualifying 
  7.6   as "medical care" under section 213(d) of the Internal Revenue 
  7.7   Code to the extent not deducted under section 162(1) of the 
  7.8   Internal Revenue Code or excluded from income or (B) the total 
  7.9   amount deductible for medical care under section 213(a); and 
  7.10     (9) the exemption amount allowed under section 6, 
  7.11  subdivision 3. 
  7.12     Sec. 2.  Minnesota Statutes 1994, section 297A.15, is 
  7.13  amended by adding a subdivision to read: 
  7.14     Subd. 7.  [REFUND FOR HOUSING; APPROPRIATION.] The tax on 
  7.15  the gross receipts from the sale of items exempt under section 
  7.16  297A.25, subdivision 60, must be imposed and collected as if the 
  7.17  sale were taxable and the rates under sections 297A.02, 
  7.18  subdivision 1, and 297A.021 applied. 
  7.19     Upon application by the purchaser on forms prescribed by 
  7.20  the commissioner, a refund equal to the tax paid on the gross 
  7.21  receipts of the building materials and supplies must be paid to 
  7.22  the purchaser.  In the case of building materials and supplies 
  7.23  in which the tax was paid by a contractor, subcontractor, or 
  7.24  builder, application must be made by the purchaser for the sales 
  7.25  tax paid by the contractor.  The application must include 
  7.26  sufficient information to permit the commissioner to verify the 
  7.27  sales tax paid for the project.  The contractor, subcontractor, 
  7.28  or builder must furnish to the purchaser a statement of the cost 
  7.29  of building materials and supplies and the sales taxes paid on 
  7.30  them.  The amount required to make the refunds is annually 
  7.31  appropriated to the commissioner. 
  7.32     Sec. 3.  Minnesota Statutes 1994, section 297A.25, is 
  7.33  amended by adding a subdivision to read: 
  7.34     Subd. 60.  [CONSTRUCTION MATERIALS FOR AFFORDABLE HOUSING.] 
  7.35  Construction materials and supplies are exempt, regardless of 
  7.36  whether purchased by the owner, or by a contractor, 
  8.1   subcontractor, or builder, if: 
  8.2      (1) the material and supplies are used or consumed in 
  8.3   constructing or rehabilitating affordable permanent housing; 
  8.4      (2) all or a portion of the housing units are financed by 
  8.5   public assistance; and 
  8.6      (3) the property is owned by a public agency during the 
  8.7   construction or rehabilitation of the housing. 
  8.8      For the purpose of this subdivision, "public assistance" 
  8.9   means financed all or in part with any combination of grants, 
  8.10  loans, tax credits, or public bonding authority from the federal 
  8.11  government or any federal agency, or the state government or any 
  8.12  state agency. 
  8.13     This exemption shall only apply to the portion of 
  8.14  construction materials and supplies used in constructing housing 
  8.15  units that meet the definition of affordable housing used by the 
  8.16  program under which the public assistance is provided. 
  8.17     Sec. 4.  Minnesota Statutes 1994, section 462A.201, is 
  8.18  amended by adding a subdivision to read: 
  8.19     Subd. 1a.  [USES.] One-half of the available funds in the 
  8.20  housing trust fund account must be used for projects for the 
  8.21  development, construction, acquisition, preservation, and 
  8.22  rehabilitation of housing to benefit persons and families with 
  8.23  incomes greater than 30 percent, but no more than 60 percent, of 
  8.24  median family income for the metropolitan area.  Up to one-half 
  8.25  of the money available to fund projects that benefit persons and 
  8.26  families with incomes over 30 percent of median income may be 
  8.27  used for home ownership projects.  In making grants under this 
  8.28  subdivision, the agency shall determine the terms and conditions 
  8.29  of repayment and the appropriate security, if any, should 
  8.30  repayment be required. 
  8.31     Sec. 5.  Minnesota Statutes 1994, section 462A.222, 
  8.32  subdivision 3, is amended to read: 
  8.33     Subd. 3.  [ALLOCATION PROCEDURE.] (a) Projects will be 
  8.34  awarded tax credits in three competitive rounds on an annual 
  8.35  basis.  The date for applications for each round must be 
  8.36  determined by the agency.  No allocating agency may award tax 
  9.1   credits prior to the application dates established by the agency.
  9.2      (b) Each allocating agency must meet the requirements of 
  9.3   section 42(m) of the Internal Revenue Code of 1986, as amended 
  9.4   through December 31, 1989, for the allocation of tax credits and 
  9.5   the selection of projects. 
  9.6      (c) For applications submitted for the first round, an 
  9.7   allocating agency may allocate tax credits only to the following 
  9.8   types of projects: 
  9.9      (1) in the metropolitan area: 
  9.10     (i) new construction or substantial rehabilitation of 
  9.11  projects in which at least 75 50 percent of the total units are 
  9.12  single-room occupancy, efficiency, or one bedroom units and 
  9.13  which are affordable by households whose income does not exceed 
  9.14  30 percent of the median income; 
  9.15     (ii) new construction or substantial rehabilitation family 
  9.16  housing projects that are not restricted to persons who are 55 
  9.17  years of age or older and in which at least 75 percent of the 
  9.18  units contain two or more bedrooms and at least one-third of the 
  9.19  75 percent contain three or more bedrooms; or 
  9.20     (iii) substantial rehabilitation projects in neighborhoods 
  9.21  targeted by the city for revitalization; or 
  9.22     (iv) new construction or substantial rehabilitation 
  9.23  projects in developing areas of the metropolitan area as defined 
  9.24  by the metropolitan council; 
  9.25     (2) outside the metropolitan area, projects which meet a 
  9.26  locally identified housing need and which are in short supply in 
  9.27  the local housing market as evidenced by credible data submitted 
  9.28  with the application; 
  9.29     (3) projects in which a percentage of the units are set 
  9.30  aside and rented to persons: 
  9.31     (i) with a serious and persistent mental illness as defined 
  9.32  in section 245.462, subdivision 20, paragraph (c); 
  9.33     (ii) with a developmental disability as defined in United 
  9.34  States Code, title 42, section 6001, paragraph (5), as amended 
  9.35  through December 31, 1990; 
  9.36     (iii) who have been assessed as drug dependent persons as 
 10.1   defined in section 254A.02, subdivision 5, and are receiving or 
 10.2   will receive care and treatment services provided by an approved 
 10.3   treatment program as defined in section 254A.02, subdivision 2; 
 10.4      (iv) with a brain injury as defined in section 256B.093, 
 10.5   subdivision 4, paragraph (a); or 
 10.6      (v) with physical disabilities if at least 50 percent of 
 10.7   the units are accessible as provided under Minnesota Rules, 
 10.8   chapter 1340; 
 10.9      (4) projects which preserve existing subsidized housing 
 10.10  which is subject to prepayment if the use of tax credits is 
 10.11  necessary to prevent conversion to market rate use; or 
 10.12     (5) projects financed by the Farmers Home Administration 
 10.13  which meet statewide distribution goals. 
 10.14     (d) Before the date for applications for the second round, 
 10.15  the allocating agencies other than the agency shall return all 
 10.16  uncommitted and unallocated tax credits to the pool from which 
 10.17  they were allocated, along with copies of any allocation or 
 10.18  commitment.  In the second round, the agency shall allocate the 
 10.19  remaining credits from the regional pools to projects from the 
 10.20  respective regions.  
 10.21     (e) In the third round, all unallocated tax credits must be 
 10.22  transferred to a unified pool for allocation by the agency on a 
 10.23  statewide basis. 
 10.24     (f) Unused portions of the state ceiling for low-income 
 10.25  housing tax credits reserved to cities and counties for 
 10.26  allocation may be returned at any time to the agency for 
 10.27  allocation. 
 10.28     Sec. 6.  [URBAN HOMESTEADING PROGRAM.] 
 10.29     Subdivision 1.  [URBAN REVITALIZATION AND STABILIZATION 
 10.30  ZONES.] By September 1, 1995, the metropolitan council shall 
 10.31  designate one or more urban revitalization and stabilization 
 10.32  zones in the metropolitan area, as defined in section 473.121, 
 10.33  subdivision 2.  The designated zones must contain no more than 
 10.34  1,000 single family homes in total.  In designating urban 
 10.35  revitalization and stabilization zones, the council shall choose 
 10.36  areas that are transitioning toward blight and poverty.  The 
 11.1   council shall use indicators that evidence increasing 
 11.2   neighborhood distress such as declining residential property 
 11.3   values, declining resident incomes, declining rates of 
 11.4   owner-occupancy, and other indicators of blight and poverty in 
 11.5   determining which areas are to be urban revitalization and 
 11.6   stabilization zones. 
 11.7      Subd. 2.  [PROGRAM ELIGIBILITY.] Any person buying and 
 11.8   occupying a home within the boundaries of an urban 
 11.9   revitalization and stabilization zone after September 1, 1995, 
 11.10  is eligible to participate in the urban homesteading program.  
 11.11  An owner may participate by filing an application with the 
 11.12  county assessor of the county in which the homestead is 
 11.13  located.  The assessor shall provide written verification that 
 11.14  the homestead is within an urban revitalization and 
 11.15  stabilization zone to the owner in a form and manner prescribed 
 11.16  by the commissioner of revenue.  The form shall include the date 
 11.17  on which the owner purchased the property, the date on which the 
 11.18  owner applied for the urban homesteading program, and shall 
 11.19  indicate if the property has been found to be not in compliance 
 11.20  with applicable building codes, and the dates of inspections.  
 11.21  An owner shall become ineligible for the program if any of the 
 11.22  following occurs: 
 11.23     (1) the property is sold or otherwise transferred to 
 11.24  another party; 
 11.25     (2) the property is found not to be in compliance with 
 11.26  applicable building codes, provided that at least three years 
 11.27  have passed since the owner filed for participation in the 
 11.28  program; 
 11.29     (3) the owner ceases to occupy the property; or 
 11.30     (4) any of the owners of the property are convicted of a 
 11.31  gross misdemeanor or a felony. 
 11.32     Subd. 3.  [TAX BENEFITS.] Individuals participating in the 
 11.33  urban homesteading program shall receive an exemption from 
 11.34  Minnesota taxable income for each full tax year during which 
 11.35  eligibility under subdivision 2 is mandated, beginning in the 
 11.36  first full tax year following the filing of an application with 
 12.1   the county assessor.  Eligibility may continue for a maximum of 
 12.2   five years, provided that the individual does not become 
 12.3   ineligible for the program under subdivision 2.  The maximum 
 12.4   exemption amount shall equal $30,000 for married individuals 
 12.5   filing joint returns and surviving spouses as defined in section 
 12.6   2(a) of the Internal Revenue Code, $20,000 for unmarried 
 12.7   individuals, and $25,000 for unmarried individuals qualifying as 
 12.8   a head of household as defined in section 2(b) of the Internal 
 12.9   Revenue Code.  The maximum exemption amount shall be reduced by 
 12.10  two percent of the maximum exemption amount for each $1,000 of 
 12.11  adjusted gross income or part thereof above an income 
 12.12  threshold.  For purposes of this subdivision, adjusted gross 
 12.13  income means federal adjusted gross income as defined in section 
 12.14  62 of the Internal Revenue Code.  The income threshold shall 
 12.15  equal $60,000 for married individuals filing joint returns and 
 12.16  surviving spouses, $40,000 for unmarried individuals, and 
 12.17  $50,000 for unmarried individuals qualifying as a head of 
 12.18  household. 
 12.19     Subd. 4.  [EXPIRATION.] Applications for the urban 
 12.20  homesteading program shall not be accepted after July 1, 1997. 
 12.21     Subd. 5.  [INFORMATION TO POTENTIAL BUYERS.] The 
 12.22  metropolitan council shall market and promote the urban 
 12.23  homestead program to the extent feasible, but such efforts shall 
 12.24  at least include informing area realtors or realtor associations 
 12.25  about the program. 
 12.26     Subd. 6.  [REPORTS.] The metropolitan council shall make an 
 12.27  initial report to the legislature by January 1, 1998, on the 
 12.28  urban homesteading program.  The initial report shall contain 
 12.29  information on designation of zones, participation rates, and 
 12.30  current and projected future costs of providing state income tax 
 12.31  exemptions to program participants. 
 12.32     The metropolitan council shall make full reports to the 
 12.33  legislature by January 1, 2000, and January 1, 2003, on the 
 12.34  urban homesteading program.  The full reports shall include 
 12.35  information on those subjects covered by the initial report, as 
 12.36  well as information on neighborhood impacts, property values, 
 13.1   resident incomes, rates of owner-occupancy, and other indicators 
 13.2   of poverty and blight. 
 13.3      Sec. 7.  [APPROPRIATION; COMMUNITY REHABILITATION FUND 
 13.4   ACCOUNT.] 
 13.5      $3,000,000 is appropriated from the general fund to the 
 13.6   housing development fund under Minnesota Statutes, section 
 13.7   462A.20, for the community rehabilitation fund account under 
 13.8   section 462A.206, to remediate blighted areas in cities of the 
 13.9   first class in the metropolitan area, as defined by section 
 13.10  473.121, subdivision 2, and improve the physical conditions of 
 13.11  neighborhoods.  Grants or loans under this appropriation must be 
 13.12  for projects located in neighborhoods designated under section 
 13.13  462A.206, subdivision 4.  Grants or loans may be made for 
 13.14  projects to reduce housing density, create open space, or 
 13.15  provide buildable land for redevelopment.  In funding projects 
 13.16  under this subdivision, the agency may consider the extent to 
 13.17  which the city is using existing resources and authority to 
 13.18  remediate neighborhood property.  Funds under this subdivision 
 13.19  are only available to the extent they are matched by the city in 
 13.20  which the project is located.  This appropriation is available 
 13.21  for the biennium ending June 30, 1997.  
 13.22     Sec. 8.  [ECONOMIC VITALITY AND HOUSING INITIATIVE; 
 13.23  APPROPRIATION.] 
 13.24     Subdivision 1.  [ESTABLISHMENT.] The Minnesota housing 
 13.25  finance agency may establish an economic vitality and housing 
 13.26  initiative to provide funds for affordable housing projects in 
 13.27  connection with local communities' economic development and 
 13.28  redevelopment efforts.  The purpose of the economic vitality and 
 13.29  housing initiative is to provide resources for affordable 
 13.30  housing in communities throughout the state necessary to ensure 
 13.31  the expansion and preservation of the economic base and 
 13.32  employment opportunities.  The agency must use the economic 
 13.33  vitality and housing initiative to leverage to the extent 
 13.34  possible private and other public funds for the purpose of this 
 13.35  section. 
 13.36     Subd. 2.  [GREATER MINNESOTA.] In Greater Minnesota, which 
 14.1   is defined for this section as the area of the state not 
 14.2   included in subdivision 3, the agency must work with groups in 
 14.3   the McKnight initiative fund regions to assist the agency in 
 14.4   identifying the affordable housing needed in each region in 
 14.5   connection with economic development and redevelopment efforts 
 14.6   and in establishing priorities for uses of economic vitality and 
 14.7   housing funds.  The groups must include the McKnight initiative 
 14.8   funds, the regional development commissions, the private 
 14.9   industry councils, units of local government, community action 
 14.10  agencies, the Minnesota housing partnership network groups, 
 14.11  local lenders, for-profit and nonprofit developers, and 
 14.12  realtors.  In addition to priorities developed by the group, the 
 14.13  agency must give a preference to viable projects in which area 
 14.14  employers contribute financial assistance. 
 14.15     Subd. 3.  [METROPOLITAN AREA.] In the metropolitan area, as 
 14.16  defined in Minnesota Statutes, section 473.121, subdivision 2, 
 14.17  the agency must confer with the metropolitan council to identify 
 14.18  the priorities for use of the economic vitality and housing 
 14.19  funds.  Funds distributed in the metropolitan area must be used 
 14.20  consistent with the objectives set forth in section 473.252.  In 
 14.21  addition to the priorities identified in that section, the 
 14.22  agency shall give preference to economically viable projects 
 14.23  that: 
 14.24     (1) include a contribution of financial resources from 
 14.25  units of local government and area employers; 
 14.26     (2) are located in areas accessible to public 
 14.27  transportation or served by transportation programs; 
 14.28     (3) take into account the availability of job training 
 14.29  efforts in the community; 
 14.30     (4) where feasible, are located along arterial roadways; 
 14.31  and 
 14.32     (5) that address local and regional objectives for the 
 14.33  development of affordable and life cycle housing and the 
 14.34  redevelopment of neighborhoods and communities. 
 14.35     Subd. 4.  [APPROPRIATION.] $13,000,000 is appropriated from 
 14.36  the general fund to the commissioner of the housing finance 
 15.1   agency for the purposes of this section.  This appropriation is 
 15.2   available for the biennium ending June 30, 1997. 
 15.3      Sec. 9.  [REPEALER.] 
 15.4      Minnesota Statutes 1994, sections 504.33; 504.34; and 
 15.5   504.35, are repealed. 
 15.6      Sec. 10.  [APPLICATION.] 
 15.7      Sections 2, 3, and 6 apply in the counties of Anoka, 
 15.8   Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.  
 15.9      Sec. 11.  [EFFECTIVE DATE.] 
 15.10     Section 1 is effective for tax years beginning after 
 15.11  December 31, 1995.  Sections 2 and 3 are effective for sales 
 15.12  made after June 30, 1995.