1.1                          A bill for an act 
  1.2             relating to economic development; modifying 
  1.3             requirements of the contamination cleanup grant 
  1.4             program; providing for redevelopment and job creation 
  1.5             grants; appropriating money; amending Minnesota 
  1.6             Statutes 1996, sections 116J.553, subdivision 2; and 
  1.7             116J.554, subdivision 1; proposing coding for new law 
  1.8             in Minnesota Statutes, chapter 116J. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10                             ARTICLE 1 
  1.11                    CONTAMINATION CLEANUP GRANTS
  1.12     Section 1.  Minnesota Statutes 1996, section 116J.553, 
  1.13  subdivision 2, is amended to read: 
  1.14     Subd. 2.  [REQUIRED CONTENT.] (a) The commissioner shall 
  1.15  prescribe and provide the application form.  Except as provided 
  1.16  in paragraph (b), the application must include at least the 
  1.17  following information: 
  1.18     (1) identification of the site; 
  1.19     (2) an approved response action plan for the site, 
  1.20  including the results of engineering and other tests showing the 
  1.21  nature and extent of the release or threatened release of 
  1.22  contaminants at the site; 
  1.23     (3) a detailed estimate, along with necessary supporting 
  1.24  evidence, of the total cleanup costs for the site; 
  1.25     (4) an appraisal of the current market value of the 
  1.26  property, separately taking into account the effect of the 
  1.27  contaminants on the market value, prepared by a qualified 
  2.1   independent appraiser using accepted appraisal methodology; 
  2.2      (5) an assessment of the development potential or likely 
  2.3   use of the site after completion of the response action plan, 
  2.4   including any specific commitments from third parties to 
  2.5   construct improvements on the site; 
  2.6      (6) the manner in which the municipality will meet the 
  2.7   local match requirement; and 
  2.8      (7) any additional information or material that the 
  2.9   commissioner prescribes. 
  2.10     (b) An application for a grant under section 116J.554, 
  2.11  subdivision 1, paragraph (b), must include a detailed estimate 
  2.12  of the cost of the actions for which the grant is sought, but 
  2.13  need not include the information specified in paragraph (a), 
  2.14  clauses (2) to (4) and (6). 
  2.15     Sec. 2.  Minnesota Statutes 1996, section 116J.554, 
  2.16  subdivision 1, is amended to read: 
  2.17     Subdivision 1.  [AUTHORITY.] (a) The commissioner may make 
  2.18  a grant to an applicant development authority to pay for up to 
  2.19  75 percent of the cleanup costs for a qualifying site, except 
  2.20  the grant may not exceed or 50 percent of the project costs, 
  2.21  whichever is greater.  
  2.22     (b) The commissioner may also make a grant to an applicant 
  2.23  development authority to pay up to 75 percent or $50,000, 
  2.24  whichever is less, toward the cost of performing contaminant 
  2.25  investigations and the development of a response action plan for 
  2.26  a qualifying site. 
  2.27     (c) The determination of whether to make a grant for a 
  2.28  qualifying site is within the sole discretion of the 
  2.29  commissioner, subject to the process provided by this section, 
  2.30  and available unencumbered money in the appropriation.  The 
  2.31  commissioner's decisions and application of the priorities under 
  2.32  section 116J.555 are not subject to judicial review, except for 
  2.33  abuse of discretion. 
  2.34     (d) The total amount of money provided in grants under 
  2.35  paragraph (b) may not exceed $250,000 per fiscal year. 
  2.36     (e) In making grants under paragraph (b), the commissioner 
  3.1   shall give priority to applicants that have not received a grant 
  3.2   under paragraph (a) or section 473.252 during the year ending on 
  3.3   the date of application. 
  3.4      Sec. 3.  [APPROPRIATION.] 
  3.5      $8,000,000 is appropriated from the general fund to the 
  3.6   commissioner of trade and economic development for grants under 
  3.7   Minnesota Statutes, sections 116J.551 to 116J.558.  The 
  3.8   legislature intends that this amount be included in the base for 
  3.9   budget purposes. 
  3.10                             ARTICLE 2  
  3.11               REDEVELOPMENT AND JOB CREATION GRANTS 
  3.12     Section 1.  [116J.561] [PUBLIC PURPOSE; CREATION OF 
  3.13  ACCOUNT.] 
  3.14     The redevelopment of industrial properties requires 
  3.15  significant public funding to transform these sites into 
  3.16  marketable light industrial business parks that are in demand by 
  3.17  private sector manufacturing companies willing to construct new 
  3.18  facilities, hire local residents, and invest in the community.  
  3.19  To address this concern, a contaminated site redevelopment and 
  3.20  job creation account is created in the general fund.  Money in 
  3.21  the account may be used, as appropriated by law, to make grants 
  3.22  as provided in section 116J.564 and to pay for the 
  3.23  commissioner's costs in reviewing applications and making grants.
  3.24     Sec. 2.  [116J.562] [DEFINITIONS.] 
  3.25     Subdivision 1.  [APPLICATION.] For the purposes of sections 
  3.26  116J.562 to 116J.564, the following terms have the meanings 
  3.27  given. 
  3.28     Subd. 2.  [DEVELOPMENT AUTHORITY.] "Development authority" 
  3.29  has the meaning given in section 116J.552, subdivision 4. 
  3.30     Subd. 3.  [METROPOLITAN AREA.] "Metropolitan area" has the 
  3.31  meaning given in section 116J.552, subdivision 5. 
  3.32     Subd. 4.  [MUNICIPALITY.] "Municipality" has the meaning 
  3.33  given in section 116J.552, subdivision 6. 
  3.34     Subd. 5.  [QUALIFYING SITE.] "Qualifying site" means a 
  3.35  qualifying site under section 116J.564, subdivision 2. 
  3.36     Subd. 6.  [REDEVELOPMENT COSTS.] "Redevelopment costs" 
  4.1   means costs of the following:  property acquisition; demolition 
  4.2   of existing improvements; relocation of persons or businesses; 
  4.3   site preparation and grading; planning, engineering, and site 
  4.4   design; installation of infrastructure; site marketing; and 
  4.5   related administrative costs. 
  4.6      Sec. 3.  [116J.563] [GRANT APPLICATIONS.] 
  4.7      Subdivision 1.  [APPLICATION REQUIRED.] To obtain a 
  4.8   redevelopment and job creation grant, a development authority 
  4.9   shall apply to the commissioner. 
  4.10     Subd. 2.  [REQUIRED CONTENT.] The commissioner shall 
  4.11  prescribe and provide the application form.  An application must 
  4.12  include at least the following information: 
  4.13     (1) identification of the site; 
  4.14     (2) a detailed estimate, along with necessary supporting 
  4.15  evidence, of the total redevelopment costs for the site; 
  4.16     (3) an assessment of the development potential or likely 
  4.17  use of the site, including any specific commitments from third 
  4.18  parties to construct improvements on the site; and 
  4.19     (4) any additional information or material that the 
  4.20  commissioner prescribes. 
  4.21     Sec. 4.  [116J.564] [GRANTS.] 
  4.22     Subdivision 1.  [AUTHORITY.] The commissioner may make 
  4.23  grants to development authorities for redevelopment costs at 
  4.24  qualifying sites.  The determination of whether to make a grant 
  4.25  for a qualifying site is within the sole discretion of the 
  4.26  commissioner, subject to the process and criteria provided by 
  4.27  this section and available appropriations.  The commissioner's 
  4.28  decisions and application of the priorities under subdivision 3 
  4.29  are not subject to judicial review, except for abuse of 
  4.30  discretion. 
  4.31     Subd. 2.  [QUALIFYING SITES.] A site qualifies for a grant 
  4.32  under this section if: 
  4.33     (1) the appraised value of the site, after adjusting for 
  4.34  the effect on the value of the presence or possible presence of 
  4.35  contaminants, using accepted appraisal methodology (i) is less 
  4.36  than 50 percent of the estimated cleanup costs for the site or 
  5.1   (ii) is less than or equal to the estimated cleanup costs for 
  5.2   the site and the cleanup costs equal or exceed $3 per square 
  5.3   foot for the site; and 
  5.4      (2) after completion of the grant-funded project, it is 
  5.5   expected that the site will be further improved in a manner that 
  5.6   complies with the conditions in subdivision 4. 
  5.7      Subd. 3.  [PRIORITIES] (a) The legislature expects that 
  5.8   applications for grants will exceed the available appropriations 
  5.9   and the agency will be able to provide grants to only some of 
  5.10  the applicant development authorities. 
  5.11     (b) The agency shall make grants for sites that, in the 
  5.12  commissioner's judgment, provide the highest return in public 
  5.13  benefits for the public costs incurred and that meet all of the 
  5.14  requirements provided by law.  In making this judgment, the 
  5.15  commission shall consider the following factors: 
  5.16     (1) the number of jobs expected to be created and retained 
  5.17  after development of a qualified site and the average 
  5.18  anticipated wage levels of such jobs; 
  5.19     (2) the total amount of the requested assistance in 
  5.20  relation to the total full-time jobs which will result from the 
  5.21  redevelopment on the qualified site; 
  5.22     (3) the proportion of the requested assistance to the 
  5.23  estimated total redevelopment costs for a qualified site; 
  5.24     (4) the probability that a qualified site will be 
  5.25  redeveloped without use of public money in the reasonable 
  5.26  foreseeable future; 
  5.27     (5) the proportion of the estimated total costs of 
  5.28  contamination cleanup at a qualified site to the estimated total 
  5.29  of redevelopment costs; 
  5.30     (6) the availability of funds for contamination cleanup; 
  5.31     (7) the current unemployment rate in the municipality in 
  5.32  which the qualified site is located; 
  5.33     (8) the level of reliance on public assistance in the 
  5.34  municipality in which the qualified site is located, as measured 
  5.35  by the applicable county welfare roles; and 
  5.36     (9) the extent of poverty in the municipality in which the 
  6.1   qualified site is located, as measured by percentage of 
  6.2   population living below the poverty line, percentage of children 
  6.3   under 18 years of age living below the poverty line, and 
  6.4   percentage of ethnic minorities living below the poverty line. 
  6.5      (c) The factors in paragraph (b) are not listed in order of 
  6.6   priority and the commissioner may weigh each factor, depending 
  6.7   upon the facts and circumstances, as the commissioner considers 
  6.8   appropriate.  The absence of a specific commitment from a third 
  6.9   party to construct improvements on a site does not make the site 
  6.10  ineligible for a grant.  The commissioner shall provide a 
  6.11  written statement of the supporting reasons for each grant. 
  6.12     Subd. 4.  [GRANT CONDITIONS.] A grant awarded under this 
  6.13  section is subject to the following conditions applicable to the 
  6.14  use of the site when fully developed: 
  6.15     (1) the site must be used for industrial purposes; 
  6.16     (2) an average of 30 percent of the site must be covered by 
  6.17  buildings; 
  6.18     (3) the buildings constructed on the site must have an 
  6.19  average construction value of at least $30 per square foot if 
  6.20  the qualified site is located in the metropolitan area and $20 
  6.21  per square foot if the qualified site is located outside of the 
  6.22  metropolitan area; 
  6.23     (4) the site must provide at least one job for each 1,000 
  6.24  square feet of building space; and 
  6.25     (5) preference for employees hired to work at a business 
  6.26  located at the site must be given to qualified residents of the 
  6.27  municipality in which the site is located.  If at least 60 
  6.28  percent of the employees hired to work at a business are not 
  6.29  residents then the business must certify to the municipality 
  6.30  that a sufficient number of qualified residents are not 
  6.31  available and agree to fill vacant positions with qualified 
  6.32  residents referred to the business by the municipality, until 
  6.33  the 60 percent level is attained. 
  6.34     Subd. 5.  [APPLICATION CYCLES; REPORTS.] (a) In making 
  6.35  grants, the commissioner shall establish semiannual application 
  6.36  deadlines in which grants will be authorized from all or part of 
  7.1   the available appropriations of money in the account. 
  7.2      (b) The commissioner shall annually report to the 
  7.3   legislature on the status of the redevelopment and job creation 
  7.4   projects undertaken under grants made under this program.  The 
  7.5   commissioner shall include in the annual report information on 
  7.6   the redevelopment and job creation activities undertaken for the 
  7.7   grants made in that and previous fiscal years.  The commissioner 
  7.8   shall make this report no later than 120 days after the end of 
  7.9   the fiscal year. 
  7.10     Sec. 5.  [APPROPRIATION.] 
  7.11     $60,000,000 is appropriated from the lottery fund to the 
  7.12  commissioner of trade and economic development for grants under 
  7.13  sections 2 to 4.  This appropriation does not cancel.  The 
  7.14  legislature intends that this appropriation be included in the 
  7.15  base for budget purposes.