1.1                          A bill for an act 
  1.2             relating to cities of the first class; modifying 
  1.3             provisions concerning neighborhood revitalization 
  1.4             programs; amending Minnesota Statutes 1996, section 
  1.5             469.1831. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1996, section 469.1831, is 
  1.8   amended to read: 
  1.9      469.1831 [NEIGHBORHOOD REVITALIZATION PROGRAMS; FIRST CLASS 
  1.10  CITIES.] 
  1.11     Subdivision 1.  [PURPOSE.] The purposes of this section are 
  1.12  to: 
  1.13     (1) preserve and enhance private and public physical 
  1.14  improvements, promote health and safety, encourage economic 
  1.15  vitality and an educated citizenry, develop a sense of 
  1.16  community, and improve the environment for individuals, 
  1.17  families, and children within neighborhoods; 
  1.18     (2) redesign government services; 
  1.19     (3) enhance intragovernmental and intergovernmental 
  1.20  collaboration; and 
  1.21     (4) increase neighborhood ability to define and resolve 
  1.22  neighborhood problems. 
  1.23     Subd. 1a.  [DEFINITIONS.] (a) For the purposes of this 
  1.24  section, the following terms have the meanings given them. 
  1.25     (b) "Neighborhood action plan" or "plan" means the plan 
  2.1   developed with the participation of neighborhood residents under 
  2.2   subdivision 6. 
  2.3      (c) "Neighborhood revitalization program" or "program" 
  2.4   means the program developed under subdivision 5. 
  2.5      (d) "Neighborhood revitalization program money Program 
  2.6   funds" or "program money" means the money derived from tax 
  2.7   increments required to be expended on the program under section 
  2.8   469.1781, paragraph (b). 
  2.9      (e) "Neighborhood revitalization program funds" means 
  2.10  program funds and, for a city of the first class qualifying 
  2.11  under section 469.1781, paragraph (a), funds described in Laws 
  2.12  1990, chapter 604, article 7, section 29, as amended. 
  2.13     (f) "Social services" means those social service programs 
  2.14  that have been approved by the policy board and the city council 
  2.15  as part of a plan and which (i) can, by law, be accomplished by 
  2.16  a county; or (ii) can be identified as addressing particular 
  2.17  social needs of a neighborhood. 
  2.18     (g) "Housing programs and related purposes" means projects, 
  2.19  services, and activities identified in subdivision 3, clause (6).
  2.20     (h) "Education services" means those educational programs 
  2.21  and activities that have been approved by the policy board and 
  2.22  the city council as part of a plan and which (i) can, by law, be 
  2.23  accomplished by the school district, libraries, park board, or 
  2.24  other government jurisdictions; or (ii) can be identified as 
  2.25  addressing particular educational needs of a neighborhood.  
  2.26     Subd. 2.  [ESTABLISHMENT.] A city of the first class may 
  2.27  establish a neighborhood revitalization program authorizing the 
  2.28  expenditure of neighborhood revitalization program money funds.  
  2.29  The activities of a program must preserve and enhance within the 
  2.30  neighborhood private and public physical infrastructure, public 
  2.31  health and safety, economic vitality, the sense of community, 
  2.32  and social benefits meet the purposes under subdivision 1. 
  2.33     Subd. 3.  [PURPOSES; QUALIFYING COSTS AND RESTRICTIONS.] A 
  2.34  neighborhood revitalization program may provide for expenditure 
  2.35  of program money for the following purposes neighborhood 
  2.36  revitalization program funds to: 
  3.1      (1) to eliminate blighting influences by acquiring and 
  3.2   clearing or rehabilitating properties that the city finds have 
  3.3   caused or will cause a decline in the value of properties in the 
  3.4   area or will increase the probability that properties in the 
  3.5   area will be allowed to physically deteriorate; 
  3.6      (2) to assist in the development of industrial properties 
  3.7   that provide employment opportunities with the capacity of 
  3.8   paying a livable income to the residents of the neighborhood and 
  3.9   that will not adversely affect the overall character of the 
  3.10  neighborhood; 
  3.11     (3) to acquire, develop, construct, physically maintain, 
  3.12  rehabilitate, renovate, or replace neighborhood commercial and 
  3.13  retail facilities necessary to maintain neighborhood vitality; 
  3.14     (4) to eliminate health hazards through the removal of 
  3.15  remove hazardous waste and pollution and to return of land to 
  3.16  productive use, if the responsible party is unavailable or 
  3.17  unable to pay for the cost; 
  3.18     (5) to rehabilitate existing housing and encourage 
  3.19  homeownership protect public health and the environment through 
  3.20  the prevention and removal of pollution; 
  3.21     (6) to construct new housing, where appropriate; provide 
  3.22  for housing programs and related purposes that contribute to any 
  3.23  one or more of the following:  
  3.24     (i) creation of housing opportunities that increase the tax 
  3.25  base of the city; 
  3.26     (ii) new housing construction, including site acquisition 
  3.27  and preparation; 
  3.28     (iii) rehabilitation or maintenance of existing single and 
  3.29  multifamily residential structures; 
  3.30     (iv) creation of affordable rental or ownership units; 
  3.31     (v) compliance with city building and related housing 
  3.32  codes; 
  3.33     (vi) increased energy efficiency of new or existing 
  3.34  housing; 
  3.35     (vii) education for homeowners and renters that helps them 
  3.36  meet financial and other responsibilities associated with their 
  4.1   housing unit; 
  4.2      (viii) improvement of rental housing management; 
  4.3      (ix) increased opportunities for home ownership; 
  4.4      (x) acquisition and demolition of vacant and boarded 
  4.5   housing; 
  4.6      (xi) modification in the physical density of housing 
  4.7   structures within a neighborhood; or 
  4.8      (xii) investments and activities that encourage home 
  4.9   ownership in a neighborhood; 
  4.10     (7) to rehabilitate and construct new low-income, 
  4.11  affordable rental housing; provide working capital for 
  4.12  industrial or commercial businesses that have the capacity for 
  4.13  paying a livable income, will employ neighborhood residents, and 
  4.14  contribute to increased neighborhood vitality; 
  4.15     (8) to remove vacant and boarded up houses; and provide 
  4.16  funding for new social, educational, community crime prevention, 
  4.17  and recreational service programs or activities, or enhancements 
  4.18  of existing programs and activities, which would improve 
  4.19  prospects for children, stabilize families, or create a sense of 
  4.20  community; 
  4.21     (9) to acquire, rehabilitate, physically maintain, or 
  4.22  construct community-based nonprofit and public facilities 
  4.23  necessary to carry out the purpose of the program.; or 
  4.24     (10) accomplish the purposes in subdivision 1 in a manner 
  4.25  consistent with the general principles of subdivision 5, 
  4.26  paragraph (a). 
  4.27     Notwithstanding any other provisions in this section, no 
  4.28  neighborhood revitalization program funds may be used to fund or 
  4.29  replace annual appropriations or existing services that 
  4.30  otherwise would have been provided by the city, county, school 
  4.31  district, or other public or private entity.  
  4.32     Subd. 4.  [PROGRAM MONEY FUNDS; DISTRIBUTION AND 
  4.33  RESTRICTIONS.] (a) Neighborhood revitalization program money 
  4.34  funds may only be expended in accordance with the program for 
  4.35  a purpose qualifying cost listed in subdivision 3 or this 
  4.36  subdivision.  Program money may not be used in those project 
  5.1   areas of the city where the city determines that private 
  5.2   investment will be sufficient to provide for development and 
  5.3   redevelopment of the project area without public sector 
  5.4   assistance, except in cases where program money is being used to 
  5.5   remove or rehabilitate structurally substandard or obsolete 
  5.6   buildings.  Revenues derived from tax increments may only be 
  5.7   expended for the purposes otherwise permitted by law this 
  5.8   section, except that notwithstanding any law to the contrary, 
  5.9   the city must pay at least the following amount of program money 
  5.10  funds, including revenues derived from tax increments:  (1) 15 
  5.11  percent to the school district, one-half of which shall be used 
  5.12  for additional education programs and services in accordance 
  5.13  with the program and approved by the policy board and school 
  5.14  board, and (2) 7.5 15 percent to the county, and (3) 7.5 percent 
  5.15  one-half of which shall be used for additional social services.  
  5.16  Payment must be made to the county and school district within 15 
  5.17  days after the city receives the distribution of increment 
  5.18  revenues, provided that the payment for calendar year 1990 may 
  5.19  be made at any time during the year.  Payment to the county for 
  5.20  social services delivery shall be paid only after approval of 
  5.21  program and spending plans under paragraph (b).  Payment to the 
  5.22  school district for education programs and services shall be 
  5.23  paid only after approval of program and spending plans under 
  5.24  paragraph (b). 
  5.25     (b) The money program funds distributed to the county in a 
  5.26  calendar year must be deducted from the county's levy limit for 
  5.27  the following calendar year.  In calculating the county's levy 
  5.28  limit base for later years, the amount deducted must be treated 
  5.29  as a local government aid payment. 
  5.30     The city must notify the commissioner of children, 
  5.31  families, and learning of the amount of the payment made to the 
  5.32  school district for the year.  The commissioner shall deduct 
  5.33  from the school district's state education aid payments one-half 
  5.34  of the amount received by the school district. 
  5.35     The program money paid to the school district by the city 
  5.36  less any amount of state aid deducted by the commissioner must 
  6.1   be expended for additional education programs and services in 
  6.2   accordance with the program.  The amounts expended by the school 
  6.3   district may not replace existing services. 
  6.4      The money for social services must be paid to the county 
  6.5   for the cost of the provision of social services under the plan, 
  6.6   as approved by the policy board and the county board.  
  6.7      (c) The city must expend at least 75 percent of the program 
  6.8   funds on housing programs and related purposes as provided by 
  6.9   the program at least 75 percent of the program money, after 
  6.10  deducting the payments to the school district and county. 
  6.11     (d) Notwithstanding any other provisions of law to the 
  6.12  contrary, for a city of the first class qualifying under section 
  6.13  469.1781, paragraph (a), neighborhood revitalization program 
  6.14  money and money described in Laws 1990, chapter 604, article 7, 
  6.15  section 29, as amended, funds may be expended anywhere within 
  6.16  the city by the authority for a purpose permitted by this 
  6.17  section for any political subdivision without compliance with 
  6.18  section 469.175, subdivision 4, and such money funds shall be 
  6.19  deemed to be expended for a purpose that is a permitted project 
  6.20  under section 469.176 and for a purpose that is permitted under 
  6.21  section 469.176 for the district from which the increment was 
  6.22  received. 
  6.23     Subd. 5.  [NEIGHBORHOOD REVITALIZATION PROGRAM; CONTENTS.] 
  6.24  (a) The neighborhood revitalization program must be developed 
  6.25  based on the following general principles: 
  6.26     (1) the social needs of neighborhood residents, 
  6.27  particularly lower income residents, must be addressed to 
  6.28  provide a safe and healthy environment for neighborhood 
  6.29  residents, provide for the self-sufficiency of families, and 
  6.30  increase the economic and social stability of neighborhoods; 
  6.31     (2) the children residing in the neighborhoods must be 
  6.32  given the opportunity for a quality education and the needs of 
  6.33  each neighborhood must be addressed individually wherever 
  6.34  possible; and 
  6.35     (3) the physical structure of the neighborhoods must be 
  6.36  enhanced by providing safe and suitable housing and 
  7.1   infrastructure to increase the desirability of neighborhoods as 
  7.2   places to live.; and 
  7.3      (4) the economic needs of neighborhood residents, 
  7.4   particularly economically disadvantaged residents, must be 
  7.5   addressed to assist with the economic development of the 
  7.6   neighborhood and to create and maintain employment opportunities 
  7.7   which contribute to the economic self-sufficiency of residents. 
  7.8      (b) The neighborhood revitalization program must include 
  7.9   the following: 
  7.10     (1) the identification of the neighborhoods that require 
  7.11  assistance through the program; 
  7.12     (2) a strategy of for the citizen participation required 
  7.13  under subdivision 6; 
  7.14     (3) the neighborhood action plans required under 
  7.15  subdivision 6; 
  7.16     (4) the activities of participating organizations 
  7.17  undertaken to address the general principles; and 
  7.18     (5) an evaluation of the success of the neighborhood action 
  7.19  plans. 
  7.20     Subd. 6.  [CITIZEN PARTICIPATION REQUIRED.] (a) The 
  7.21  neighborhood revitalization program must be developed with the 
  7.22  process outlined in this subdivision. 
  7.23     (b) The program must include the preparation and 
  7.24  implementation of neighborhood action plans.  The city must 
  7.25  organize neighborhoods to prepare and implement the neighborhood 
  7.26  action plans.  The neighborhoods must include the participation 
  7.27  of, whenever possible, all populations and interests in each 
  7.28  neighborhood including renters, homeowners, people of color, 
  7.29  business owners, representatives of neighborhood institutions, 
  7.30  youth, and the elderly.  The neighborhood action plan must be 
  7.31  submitted to the policy board established under paragraph (c).  
  7.32  The city and the city's development agency must provide 
  7.33  available resources, information, and technical assistance to 
  7.34  prepare and coordinate the implementation of the neighborhood 
  7.35  action plans. 
  7.36     (c) Each city that develops a program must establish a 
  8.1   policy board whose membership includes members of the city 
  8.2   council, county board, school board, and citywide library and 
  8.3   park board where they exist appointed by the respective 
  8.4   governing bodies; the mayor or designee of the mayor; and a 
  8.5   representative from the city's house of representatives 
  8.6   delegation and a representative from the city's state senate 
  8.7   delegation appointed by the respective delegation.  The policy 
  8.8   board may also include representatives of citywide community 
  8.9   organizations, neighborhood organizations, business owners, 
  8.10  labor, and neighborhood residents.  The elected officials and 
  8.11  appointed members of the library board who are members of the 
  8.12  policy board may appoint the other members of the board. 
  8.13     (d) The policy board shall review, modify where 
  8.14  appropriate, and approve, in whole or in part, the neighborhood 
  8.15  action plans and forward its recommendations for final action to 
  8.16  the governing bodies represented on the policy board.  The 
  8.17  governing bodies shall review, modify where appropriate, and 
  8.18  give final approval, in whole or in part, to those actions over 
  8.19  which they have programmatic jurisdiction.  
  8.20     (e) Except for the legislative appointees, each of the 
  8.21  governmental units and groups named in paragraph (c) may, by 
  8.22  resolution or agreement of its governing body, become a member 
  8.23  of the policy board.  The nongovernmental organizations and 
  8.24  persons named in paragraph (c) shall provide members of the 
  8.25  policy board upon invitation by the governmental members of the 
  8.26  policy board.  The member to represent a nongovernmental 
  8.27  organization shall be a member of the policy board only upon 
  8.28  resolution or agreement of the governing body of the member's 
  8.29  organization.  Upon the resolution or agreement of two or more 
  8.30  governmental bodies or governmental boards, the policy board 
  8.31  shall be may exercise the powers of a joint powers board under 
  8.32  section 471.59, except that no power may be exercised under 
  8.33  section 471.59, subdivision 11.  
  8.34     (f) The policy board may: 
  8.35     (1) sue and be sued.  All defenses and limitations 
  8.36  available to municipalities under chapter 466 and other laws, 
  9.1   shall apply to the policy board, its members, director, and 
  9.2   other staff members, and employees; 
  9.3      (2) hire, retain, discipline, and terminate a director to 
  9.4   direct its activities and accomplish its program.  The director 
  9.5   may hire necessary staff subject to authorization by the board. 
  9.6   Persons hired by the policy board or by its director are 
  9.7   employees of the policy board; 
  9.8      (3) enter into contracts, leases, purchases, or other 
  9.9   documents evidencing its undertakings.  No contract, lease, or 
  9.10  purchase or other document may be entered into unless funds have 
  9.11  been appropriated or otherwise made available to the policy 
  9.12  board; 
  9.13     (4) adopt bylaws for its own governance; 
  9.14     (5) enter into agreements with governmental units and 
  9.15  governing boards, and nongovernmental organizations represented 
  9.16  on the policy board for services required to fulfill the policy 
  9.17  boards' purposes; 
  9.18     (6) accept gifts, donations, and appropriations from 
  9.19  governmental or nongovernmental sources and apply for and accept 
  9.20  grants from them; 
  9.21     (7) review activities to determine whether the expenditure 
  9.22  of neighborhood revitalization program money funds and other 
  9.23  money is in compliance with the neighborhood plans adopted by 
  9.24  the policy board and approved by the governing bodies having 
  9.25  jurisdiction over the program, and report its findings prior to 
  9.26  October 1 of each year to all of the governmental units, 
  9.27  agencies, and nongovernmental organizations represented on the 
  9.28  policy board; and 
  9.29     (8) prepare annually an administrative budget for the 
  9.30  ensuing year, estimating its expenditures and estimated 
  9.31  revenues, and forward its proposed budget to the governmental 
  9.32  units and agencies and nongovernmental organizations for 
  9.33  appropriate action.; and 
  9.34     (9) persons hired by neighborhood organizations are 
  9.35  employees or contractors of the neighborhood organizations.  
  9.36     Subd. 7.  [REVIEW OF PROGRAM COMPLIANCE.] The policy board 
 10.1   must periodically review the activities funded with 
 10.2   program money funds to determine if the expenditure of the 
 10.3   program money funds is in compliance with the neighborhood 
 10.4   revitalization program.  
 10.5      Subd. 8.  [DISTRIBUTION OF NEIGHBORHOOD PARTICIPATION.] The 
 10.6   city of Minneapolis shall ensure that all planning districts 
 10.7   neighborhoods in the city are allowed to participate in its 
 10.8   neighborhood revitalization program. 
 10.9      Sec. 2.  [EFFECTIVE DATE.] 
 10.10     Section 1 is effective July 1, 1997.