1.1                          A bill for an act 
  1.2             relating to Minneapolis-St. Paul International 
  1.3             Airport; providing for the impact of expansion of the 
  1.4             Minneapolis-St. Paul International Airport; 
  1.5             authorizing airport mitigation planning, the 
  1.6             establishment of airport impact zones, and tax 
  1.7             increment financing districts in the cities of 
  1.8             Bloomington, Burnsville, Eagan, Mendota Heights, 
  1.9             Minneapolis, Richfield, and St. Paul; creating an 
  1.10            airport impact mitigation fund in the state treasury; 
  1.11            authorizing certain related activities by the 
  1.12            metropolitan council; appropriating money. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  [FINDINGS.] 
  1.15     The legislature finds that: 
  1.16     (1) the legislature has directed the metropolitan airports 
  1.17  commission to develop a plan to mitigate aircraft noise 
  1.18  associated with the operation of the Minneapolis-St. Paul 
  1.19  International Airport; 
  1.20     (2) the metropolitan airports commission has developed a 
  1.21  noise mitigation plan in conjunction with communities adjacent 
  1.22  to the airport and is in the process of updating its FAR Part 
  1.23  150 noise mitigation program for submission to and approval by 
  1.24  the Federal Aviation Administration; 
  1.25     (3) the legislature also established the governor's airport 
  1.26  community stabilization funding task force that recommended 
  1.27  further mitigation funding to address federal, state, and local 
  1.28  participation in mitigation of noise and other impacts 
  1.29  associated with expansion of the Minneapolis-St. Paul 
  2.1   International Airport at its present location; 
  2.2      (4) the task force concluded that: 
  2.3      (i) the metropolitan airports commission has committed 
  2.4   significant resources toward mitigating the negative impacts 
  2.5   associated with airport expansion, but the FAR Part 150 noise 
  2.6   program is insufficient to address all impacts; 
  2.7      (ii) the metropolitan airports commission is neither 
  2.8   capable of, nor should it be required to, finance mitigation of 
  2.9   all airport impacts; 
  2.10     (iii) the decision to keep and expand the airport at its 
  2.11  current location was a state decision, and as such, the state 
  2.12  should be a financial partner in mitigation projects resulting 
  2.13  from the expansion of the airport; and 
  2.14     (iv) no single funding source is adequate for the range and 
  2.15  scope of proposed mitigation activities; and 
  2.16     (5) appropriate measures to mitigate adverse impacts 
  2.17  include, but are not limited to, insulation, redevelopment and 
  2.18  housing replacement activities, and property value assurance and 
  2.19  expenditures for all such measures are for a public purpose. 
  2.20     Sec. 2.  [DEFINITIONS.] 
  2.21     Subdivision 1.  [APPLICATION.] For the purposes of this 
  2.22  act, the terms defined in this section have the meanings given 
  2.23  them. 
  2.24     Subd. 2.  [AIRPORT IMPACT DISTRICT.] "Airport impact 
  2.25  district" means an airport impact tax increment financing 
  2.26  district described in section 4. 
  2.27     Subd. 3.  [AIRPORT IMPACT ZONE.] "Airport impact zone" 
  2.28  means a contiguous or noncontiguous geographic area designated 
  2.29  by a city and approved by the council as part of a mitigation 
  2.30  plan under section 3. 
  2.31     Subd. 4.  [AIRPORT SALES.] "Airport sales" means sales that 
  2.32  are taxable under Minnesota Statutes, chapter 297A, and occur on 
  2.33  property owned by the metropolitan airports commission at the 
  2.34  Minneapolis-St. Paul International Airport, including, without 
  2.35  limitation, parking, vehicle rental, food and beverage, vending, 
  2.36  merchandise, and pay telephones.  Airport sales do not include 
  3.1   sales of goods or taxable services purchased by the metropolitan 
  3.2   airports commission or by persons or entities conducting a 
  3.3   private trade or business on property owned by the metropolitan 
  3.4   airports commission at the Minneapolis-St. Paul International 
  3.5   Airport. 
  3.6      Subd. 5.  [CITY.] "City" means the cities of Bloomington, 
  3.7   Burnsville, Eagan, Mendota Heights, Minneapolis, Richfield, and 
  3.8   St. Paul or any of them. 
  3.9      Subd. 6.  [COUNCIL.] "Council" means the metropolitan 
  3.10  council.  
  3.11     Subd. 7.  [GOVERNING BODY.] "Governing body" means the city 
  3.12  council of a city. 
  3.13     Subd. 8.  [HOUSING REPLACEMENT ACTIVITIES.] "Housing 
  3.14  replacement activities" means rehabilitation, acquisition, 
  3.15  relocation assistance, relocation of existing dwelling units, 
  3.16  and construction of new dwelling units, for the purpose of 
  3.17  replacing dwelling units eliminated by airport mitigation 
  3.18  activities. 
  3.19     Subd. 9.  [IMPACT REPORT.] "Impact report" means a written 
  3.20  report identifying airport impacts adopted by a city under 
  3.21  section 3. 
  3.22     Subd. 10.  [MITIGATION FUND.] "Mitigation fund" means the 
  3.23  airport impact mitigation fund established under section 5. 
  3.24     Subd. 11.  [MITIGATION PLAN.] "Mitigation plan" means a 
  3.25  plan for airport impact mitigation developed by a city and 
  3.26  approved by the council under section 3. 
  3.27     Subd. 12.  [OBLIGATION.] "Obligation" has the meaning given 
  3.28  it in Minnesota Statutes, section 475.51, subdivision 3.  The 
  3.29  term includes obligations issued to refund prior obligations 
  3.30  issued under this act. 
  3.31     Subd. 13.  [SCHOOL DISTRICT.] "School district" means a 
  3.32  school district whose jurisdiction includes all or any portion 
  3.33  of a city. 
  3.34     Sec. 3.  [AIRPORT IMPACT MITIGATION PLANNING.] 
  3.35     Subdivision 1.  [IMPACT REPORT.] A city may study and 
  3.36  identify airport impacts and the scope of those impacts on the 
  4.1   city.  At the conclusion of an impact study, a city must adopt a 
  4.2   report of the impacts on the city.  In studying airport impacts 
  4.3   and preparing a report, a city must take into account airport 
  4.4   noise impacts and additional environmental, transportation, and 
  4.5   economic impacts associated with expansion of the 
  4.6   Minneapolis-St. Paul International Airport.  A city must also 
  4.7   consider and incorporate the overhead noise guidelines 
  4.8   established by the Federal Aviation Administration and 
  4.9   recommendations of the Low Frequency Noise Policy Committee 
  4.10  concerning noise impacts. 
  4.11     Subd. 2.  [MITIGATION PLAN.] (a) After adopting an airport 
  4.12  impact report, a city must develop an airport mitigation plan 
  4.13  for an airport impact zone in the city.  In developing the 
  4.14  mitigation plan, a city must seek to determine the most 
  4.15  effective measures for mitigating the impacts identified in the 
  4.16  impact report.  A city may consider any measures for mitigating 
  4.17  airport impacts, including, but not limited to, noise insulation 
  4.18  of residential and commercial buildings, land use conversion, 
  4.19  development of housing to replace units lost through mitigation 
  4.20  activities, and property value assurance programs.  The 
  4.21  mitigation plan must include: 
  4.22     (1) designated boundaries of the airport impact zone; 
  4.23     (2) a description of recommended impact mitigation 
  4.24  measures; 
  4.25     (3) if the plan includes establishment of one or more 
  4.26  airport impact tax increment financing districts, the proposed 
  4.27  boundaries of each district consistent with the terms of section 
  4.28  4; 
  4.29     (4) if the plan includes conversion of residential land 
  4.30  use, a description of proposed housing replacement activities; 
  4.31     (5) estimates of costs of the recommended mitigation 
  4.32  measures and possible financing sources; 
  4.33     (6) an analysis of the feasibility of property tax 
  4.34  abatement under Minnesota Statutes, sections 469.1813 to 
  4.35  469.1815, as a financing source; and 
  4.36     (7) the estimated amount of obligations, if any, to be 
  5.1   issued under this act, including a description of the proposed 
  5.2   security for the obligations and whether the city requests 
  5.3   credit enhancement by the council as provided in section 6, 
  5.4   subdivision 2. 
  5.5      (b) Before initial approval of a mitigation plan, a city 
  5.6   must conduct a public hearing after publishing at least ten days 
  5.7   before the hearing a notice in a newspaper of general 
  5.8   circulation in the city.  The hearing notice must state that the 
  5.9   mitigation plan and the mitigation report are available for 
  5.10  review in the administrative offices of the city.  After initial 
  5.11  approval of the mitigation plan by the governing body, the city 
  5.12  must submit the mitigation plan and the mitigation report to the 
  5.13  council for approval, and must also submit copies to the 
  5.14  metropolitan airports commission for review and comment.  Not 
  5.15  more than 60 days after receipt of the city's submission, the 
  5.16  council must approve, disapprove, or otherwise comment on the 
  5.17  mitigation plan.  Failure by the council to approve or comment 
  5.18  within 60 days is considered approval of the mitigation plan.  
  5.19  An action described in a mitigation plan must not be financed by 
  5.20  the mitigation fund or an airport impact district until the 
  5.21  mitigation plan has been approved by the council and then 
  5.22  approved by the governing body. 
  5.23     (c) Before approving any mitigation plan, the council must 
  5.24  establish criteria for evaluating proposed airport impact zones, 
  5.25  airport impact districts, and mitigation measures.  The council 
  5.26  must consult with the cities and the metropolitan airports 
  5.27  commission in developing the criteria.  The council must approve 
  5.28  final criteria by December 31, 2000.  Any mitigation plan 
  5.29  approved under this act must be consistent with the criteria 
  5.30  established under this paragraph. 
  5.31     (d) A mitigation plan may be changed after the notice, 
  5.32  hearing, and approvals required for approval of the original 
  5.33  plan.  The change is required only to: 
  5.34     (1) increase the total estimated cost of mitigation 
  5.35  activities; 
  5.36     (2) increase the total estimated amount of obligations to 
  6.1   be issued; 
  6.2      (3) secure any obligations by the pledge described in 
  6.3   section 6, subdivision 2, if the pledge was not included in the 
  6.4   original plan; 
  6.5      (4) expand the boundaries of an airport impact zone; 
  6.6      (5) create or expand the boundaries of an airport impact 
  6.7   district; or 
  6.8      (6) add mitigation activities beyond the scope of 
  6.9   activities described in the original plan. 
  6.10     (e) Expenditures to implement a mitigation plan are not 
  6.11  considered a business subsidy under Minnesota Statutes, sections 
  6.12  116J.993 to 116J.995. 
  6.13     Sec. 4.  [AIRPORT IMPACT TAX INCREMENT FINANCING 
  6.14  DISTRICTS.] 
  6.15     Subdivision 1.  [AUTHORIZATION.] A city may establish one 
  6.16  or more airport impact tax increment financing districts within 
  6.17  an airport impact zone.  At least 75 percent of the area of an 
  6.18  airport impact district must be located within the 60 DNL 
  6.19  contour surrounding the Minneapolis-St. Paul International 
  6.20  Airport.  The boundaries of each district must be described in a 
  6.21  mitigation plan. 
  6.22     Subd. 2.  [SPECIAL RULES.] (a) An airport impact district 
  6.23  is considered a redevelopment district within the meaning of, 
  6.24  and is subject to, Minnesota Statutes, sections 469.174 to 
  6.25  469.179, except as otherwise provided in this subdivision.  For 
  6.26  the purposes of Minnesota Statutes, section 469.174, subdivision 
  6.27  8, "project" means an airport impact zone described in section 3.
  6.28     (b) For the purposes of Minnesota Statutes, section 
  6.29  469.174, subdivision 10, the governing body must find that 
  6.30  parcels consisting of 70 percent of the area of the district are 
  6.31  occupied by buildings, streets, utilities, or other 
  6.32  improvements, and more than 50 percent of the buildings, not 
  6.33  including outbuildings, currently or upon completion of airport 
  6.34  expansion are reasonably expected to experience airport impacts 
  6.35  identified in the mitigation plan to a degree requiring land use 
  6.36  conversion to accommodate uses compatible with the airport.  
  7.1   This finding may be made at the time of approval of the 
  7.2   mitigation plan. 
  7.3      (c) For the purposes of Minnesota Statutes, section 
  7.4   469.1763, subdivision 2, the in-district percentage is 75 
  7.5   percent, except that any expenditures within the boundaries of 
  7.6   any other airport impact tax increment financing district in the 
  7.7   city are considered activities within the district whenever made 
  7.8   notwithstanding anything to the contrary in Minnesota Statutes, 
  7.9   section 469.1763, subdivision 3, and the 25 percent pooling 
  7.10  percentage may be used only to pay for administrative expenses 
  7.11  and housing replacement activities. 
  7.12     (d) For the purposes of Minnesota Statutes, section 
  7.13  469.176, subdivision 4j, the cost of correcting conditions that 
  7.14  allow designation of the airport impact district includes the 
  7.15  cost of a mitigation measure described in an approved mitigation 
  7.16  plan. 
  7.17     (e) Minnesota Statutes, sections 273.1399 and 469.1782, 
  7.18  subdivision 1, do not apply to the district if the city elects 
  7.19  either or both of the following: 
  7.20     (1) the exemption under Minnesota Statutes, section 
  7.21  273.1399, subdivision 6, paragraph (d); or 
  7.22     (2) at least 15 percent of the revenue generated from tax 
  7.23  increments from the airport impact district in any year is 
  7.24  deposited in the housing replacement account of the city and 
  7.25  spent for housing replacement activities described in the 
  7.26  mitigation plan. 
  7.27     (f) Housing replacement activities may be located in the 
  7.28  city within or outside the airport impact district. 
  7.29     (g) Minnesota Statutes, chapter 473F, does not apply to 
  7.30  property within an airport impact district beginning in the 
  7.31  first year in which tax increment is paid to the city and 
  7.32  continuing until decertification of the district.  Tax increment 
  7.33  from the district is calculated according to Minnesota Statutes, 
  7.34  section 469.177, subdivision 3, clause (a), without regard to 
  7.35  the fiscal disparities provisions of Minnesota Statutes, chapter 
  7.36  473F. 
  8.1      Sec. 5.  [AIRPORT IMPACT MITIGATION FUND.] 
  8.2      Subdivision 1.  [FUND CREATED; SOURCES.] The airport impact 
  8.3   mitigation fund is established in the state treasury.  The 
  8.4   mitigation fund is administered by the council for the purposes 
  8.5   described in this section. 
  8.6      Subd. 2.  [INCREMENTAL AIRPORT SALES TAX.] Notwithstanding 
  8.7   anything to the contrary in Minnesota Statutes, section 297A.44, 
  8.8   to the extent revenues derived from sales taxes imposed under 
  8.9   Minnesota Statutes, chapter 297A, on airport sales exceed 
  8.10  $12,000,000 in any fiscal year, the excess revenues are 
  8.11  appropriated annually to the mitigation fund beginning in the 
  8.12  fiscal year ending 2001 and ending in the fiscal year ending 
  8.13  2025. 
  8.14     Subd. 3.  [GENERAL FUND APPROPRIATION.] $2,000,000 is 
  8.15  appropriated from the general fund to the mitigation fund.  The 
  8.16  appropriation is available until spent. 
  8.17     Subd. 4.  [USE OF REVENUES.] Amounts in the mitigation fund 
  8.18  may be spent only for the following purposes: 
  8.19     (1) to pay principal of, interest on, and redemption 
  8.20  premium, if any, on obligations issued by a city under this act; 
  8.21     (2) to pay or reimburse a city for costs incurred to 
  8.22  implement a mitigation plan, including, without limitation, 
  8.23  costs of preparing the impact report and mitigation plan; 
  8.24     (3) to pay a school district to mitigate decreases in 
  8.25  student population created by mitigation activities of a city 
  8.26  under the city's mitigation plan; and 
  8.27     (4) by the department to pay the costs of administering the 
  8.28  mitigation fund and related activities of the department under 
  8.29  this act. 
  8.30     Subd. 5.  [PAYMENT PROVISIONS.] (a) Before disbursing any 
  8.31  amounts from the mitigation fund, the council must establish 
  8.32  criteria for selecting activities identified in subdivision 4 to 
  8.33  be financed from the fund.  The council must consult with the 
  8.34  cities, the school districts, and the metropolitan airports 
  8.35  commission in developing the criteria.  The council must approve 
  8.36  final criteria by December 31, 2000.  The criteria must identify 
  9.1   priorities for funding taking into account: 
  9.2      (1) the severity of airport impacts among the cities and 
  9.3   school districts; 
  9.4      (2) the type of mitigation measures required in order to 
  9.5   address the impacts; 
  9.6      (3) the cost of impact mitigation activities identified in 
  9.7   the mitigation plans; 
  9.8      (4) the amount of obligations to be issued under this act 
  9.9   as identified in the mitigation plans; and 
  9.10     (5) the amount of other revenues available to pay the costs 
  9.11  identified in subdivision 4. 
  9.12     (b) The council may establish procedures for administration 
  9.13  of the mitigation fund as necessary, including, without 
  9.14  limitation, a process for applications, disbursement, and 
  9.15  reporting of expenditures. 
  9.16     Subd. 6.  [TERMINATION OF MITIGATION FUND.] The mitigation 
  9.17  fund ends on the earlier of: 
  9.18     (1) the date by which all cities and school districts have 
  9.19  notified the council that all costs payable from the mitigation 
  9.20  fund under this act have been paid; or 
  9.21     (2) the end of the fiscal year ending 2030.  The balance of 
  9.22  amounts in the mitigation fund on its termination are credited 
  9.23  to the state general fund. 
  9.24     Sec. 6.  [BONDS; SECURITY.] 
  9.25     Subdivision 1.  [TERMS.] (a) A city may issue obligations 
  9.26  secured by: 
  9.27     (1) tax increments; 
  9.28     (2) abatements; 
  9.29     (3) amounts disbursed from the airport mitigation fund; 
  9.30     (4) any other revenues available to the city under law; or 
  9.31     (5) any combination of revenue described in clauses (1) to 
  9.32  (4). 
  9.33     (b) The proceeds of obligations must be used to pay or 
  9.34  reimburse any costs to implement a mitigation plan, including, 
  9.35  without limitation, costs of preparing the impact report and the 
  9.36  mitigation plan.  The governing body may provide by resolution 
 10.1   that the obligations are additionally secured by the full faith 
 10.2   and credit of the city.  Notwithstanding any other law or 
 10.3   charter provision, voter approval is not required and net debt 
 10.4   limits do not apply to obligations issued under this section.  
 10.5   Obligations secured in whole or in part with tax increments from 
 10.6   an airport impact district must be issued according to Minnesota 
 10.7   Statutes, section 469.178, and this act. 
 10.8      Subd. 2.  [METROPOLITAN AREA CREDIT ENHANCEMENT 
 10.9   PROGRAM.] (a) The council may establish an airport impact 
 10.10  mitigation bond credit enhancement program as provided in this 
 10.11  section.  The council may pledge its full faith and credit and 
 10.12  taxing powers to obligations issued under this act if: 
 10.13     (1) the city so requests and the council approves that 
 10.14  pledge as part of the city's mitigation plan; and 
 10.15     (2) the council finds that revenues pledged for payment of 
 10.16  the obligations will produce, as estimated at the time of the 
 10.17  pledge, at least 125 percent of the principal and interest due 
 10.18  on the obligations. 
 10.19     (b) The pledge must be made by resolution of the council.  
 10.20  Voter approval of obligations secured by the pledge described in 
 10.21  this subdivision is not required and net debt limits do not 
 10.22  apply. 
 10.23     (c) Before pledging its full faith and credit, the council 
 10.24  must, in consultation with the cities and the metropolitan 
 10.25  airports commission, establish criteria for approving requests 
 10.26  for credit enhancement under this section.  The criteria must 
 10.27  set forth priorities for credit enhancement that are consistent 
 10.28  with the priorities established by the council for disbursement 
 10.29  from the mitigation fund under section 5, and may contain limits 
 10.30  on the total amount of obligations that may be credit enhanced 
 10.31  under this subdivision. 
 10.32     (d) If there is a deficiency in revenues pledged to 
 10.33  obligations credit enhanced under this subdivision, the council 
 10.34  must levy a tax against all taxable property in the metropolitan 
 10.35  area and advance the proceeds of the levy to the city for 
 10.36  deposit in the debt service fund for the obligations.  The city 
 11.1   must reimburse the council for the advance to the extent the 
 11.2   deficient revenues are later collected. 
 11.3      (e) Taxes levied by the council because of credit 
 11.4   enhancement under this subdivision do not affect the amount or 
 11.5   rate of taxes that may be levied by the council for other 
 11.6   purposes and are not subject to limit as to rate or amount. 
 11.7      (f) The council and each city that participates in the 
 11.8   credit enhancement program may enter into agreements they 
 11.9   determine to be necessary to implement the credit enhancement 
 11.10  program.  The agreements may extend over any period, 
 11.11  notwithstanding any law to the contrary. 
 11.12     Sec. 7.  [EFFECTIVE DATE.] 
 11.13     Sections 1, 2, 3, 5, and 6 do not require local approval 
 11.14  because Minnesota Statutes, section 645.023, subdivision 1, 
 11.15  paragraph (a), applies.  Sections 1, 2, 3, 5, and 6 are 
 11.16  effective June 1, 2000.  Section 4 is effective for each of the 
 11.17  cities of Bloomington, Burnsville, Eagan, Mendota Heights, 
 11.18  Minneapolis, Richfield, and St. Paul the day after the governing 
 11.19  body of each city and its chief clerical officer, together with 
 11.20  the governing body of each affected county and school district 
 11.21  and its chief clerical officer, timely complete their compliance 
 11.22  with Minnesota Statutes, sections 645.021, subdivisions 2 and 3, 
 11.23  and 469.1782, subdivision 2.