1.1 	A bill for an act
1.2 	relating to eminent domain; providing for and regulating the use of eminent 
1.3 	domain; providing for notice, hearing, appeal, and other procedural requirements; 
1.4 	allowing attorney fees under certain conditions; providing for a right of first 
1.5 	refusal; providing definitions; making clarifying, conforming, and technical 
1.6 	changes; amending Minnesota Statutes 2004, sections 117.036; 117.055; 
1.7 	117.075, by adding subdivisions; 117.085; 117.51; 117.52, subdivision 1, by 
1.8 	adding a subdivision; 163.12, subdivisions 1a, 1b; 469.012, subdivision 1g; 
1.9 	proposing coding for new law in Minnesota Statutes, chapters 117; 469.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Minnesota Statutes 2004, section 117.036, is amended to read:
1.12 	117.036 APPRAISAL AND NEGOTIATION REQUIREMENTS 
1.13 	APPLICABLE TO ACQUISITION OF PROPERTY FOR TRANSPORTATION 
1.14 	PURPOSES.
1.15 		Subdivision 1.Application. This section applies to the acquisition of property 
1.16 	for public highways, streets, roads, alleys, airports, mass transit facilities, or for other 
1.17 	transportation facilities or purposes under this chapter.
1.18 		Subd. 2.Appraisal. (a) Before commencing an eminent domain proceeding under 
1.19 	this chapter, the acquiring authority must obtain at least one appraisal for the property 
1.20 	proposed to be acquired. In making the appraisal, the appraiser must confer with one or 
1.21 	more of the fee owners or contract purchasers of the property, if reasonably possible. 
1.22 	At least Notwithstanding section 13.44 or any other law to the contrary, the acquiring 
1.23 	authority must provide the fee owner or contract purchaser with a copy of the appraisal 
1.24 	at the time an offer is made, but no later than 20 days before presenting a petition under 
1.25 	section  117.055, the acquiring authority must provide the owner with a copy of the 
1.26 	appraisal and inform the owner of the owner's fee owner or contract purchaser of the right 
2.1 	to obtain an appraisal under this section. Upon request, the acquiring authority must make 
2.2 	available to the fee owner or contract purchaser all appraisals of the property.
2.3 	(b) The fee owner or contract purchaser may obtain an appraisal by a qualified 
2.4 	appraiser of the property proposed to be acquired. The fee owner or contract purchaser 
2.5 	is entitled to reimbursement for the reasonable costs of the appraisal from the acquiring 
2.6 	authority up to a maximum of $1,500 within 30 days after the for single family and 
2.7 	two-family residential property, agricultural property, and minimum damage acquisitions 
2.8 	and $5,000 for other types of property, provided that the fee owner or contract purchaser 
2.9 	submits to the acquiring authority the information necessary for reimbursement, provided 
2.10 	that the owner does so including a copy of the fee owner's or contract purchaser's 
2.11 	appraisal, within 60 90 days after the owner receives receiving the appraisal from the 
2.12 	authority under paragraph (a) and at least 30 days before a condemnation commissioners' 
2.13 	hearing. For purposes of this paragraph, a "minimum damage acquisition" means an 
2.14 	interest in property that a qualified person with appraisal knowledge indicates can be 
2.15 	acquired for a cost of $10,000 or less. For purposes of this paragraph, "agricultural 
2.16 	property" has the meaning given in section 583.22, subdivision 2.
2.17 	(c) The acquiring authority must pay the reimbursement to the fee owner or contract 
2.18 	purchaser within 30 days after receiving a copy of the appraisal and the reimbursement 
2.19 	information. Upon agreement between the acquiring authority and either the fee owner 
2.20 	or contract purchaser, the acquiring authority may pay the reimbursement directly to 
2.21 	the appraiser.
2.22 		Subd. 3.Negotiation. In addition to the appraisal requirements under subdivision 2, 
2.23 	before commencing an eminent domain proceeding, the acquiring authority must make a 
2.24 	good faith attempt to negotiate personally with the fee owner or contract purchaser of the 
2.25 	property in order to acquire the property by direct purchase instead of the use of eminent 
2.26 	domain proceedings. In making this negotiation, the acquiring authority must consider 
2.27 	the appraisals in its possession, including any appraisal obtained and furnished by the fee 
2.28 	owner or contract purchaser if available, and other information that may be relevant to a 
2.29 	determination of damages under this chapter.
2.30 		Subd. 4.Condemnation commissioners' hearing. Notwithstanding section 13.44, 
2.31 	an appraisal must not be used or considered in a condemnation commissioners' hearing, 
2.32 	nor may the appraiser who prepared the appraisal testify, unless a copy of the appraiser's 
2.33 	written report is provided to the opposing party at least five days before the hearing.

2.34 	Sec. 2. Minnesota Statutes 2004, section 117.055, is amended to read:
2.35 	117.055 PETITION AND NOTICE.
3.1 		Subdivision 1.Petition. In all cases a petition, describing the desired land, stating by 
3.2 	whom and for what purposes it is proposed to be taken, and giving the names of all persons 
3.3 	appearing of record or known to the petitioner to be the owners thereof shall be presented 
3.4 	to the district court of the county in which the land is situated praying for the appointment 
3.5 	of commissioners to appraise the damages which may be occasioned by such taking. 
3.6 		Subd. 2.Notice. (a) Notice of the objects of the petition and of the time and place of 
3.7 	presenting the same shall be served at least 20 days before such time of presentation upon 
3.8 	all persons named in the petition as owners as defined in section  117.025, subdivision 3, 
3.9 	and upon all occupants of such land in the same manner as a summons in a civil action. 
3.10 	(b) The notice must state that: (1) a party wishing to challenge the public purpose, 
3.11 	necessity, or authority for a taking must appear at the court hearing and state the objection; 
3.12 	(2) failure to appear and object is deemed a waiver of any objection; and (3) a court order 
3.13 	approving the public purpose, necessity, and authority for the taking is final unless an 
3.14 	appeal is brought within 60 days after service of the order on the party.
3.15 	(c) If any such owner be not a resident of the state, or the owner's place of residence 
3.16 	be unknown to the petitioner, upon the filing of an affidavit of the petitioner or the 
3.17 	petitioner's agent or attorney, stating that the petitioner believes that such owner is not 
3.18 	a resident of the state, and that the petitioner has mailed a copy of the notice to the 
3.19 	owner at the owner's place of residence, or that after diligent inquiry the owner's place 
3.20 	of residence cannot be ascertained by the affiant, then service may be made upon such 
3.21 	owner by three weeks' published notice. If the state be an owner, the notice shall be 
3.22 	served upon the attorney general. Any owner not served as herein provided shall not be 
3.23 	bound by such proceeding except upon voluntarily appearing therein. Any owner shall 
3.24 	be furnished a right-of-way map or plat of all that part of land to be taken upon written 
3.25 	demand, provided that the petitioner shall have ten days from the receipt of the demand 
3.26 	within which to furnish the same. Any plans or profiles which the petitioner has shall be 
3.27 	made available to the owner for inspection. 

3.28 	Sec. 3. Minnesota Statutes 2004, section 117.075, is amended by adding a subdivision 
3.29 	to read:
3.30 		Subd. 1a.Appeal of order. A party wishing to challenge the public purpose, 
3.31 	necessity, or authority for a taking must appear at the court hearing required by subdivision 
3.32 	1 and state the objection. Failure to appear and object is deemed a waiver of any objection. 
3.33 	A court order approving the public purpose, necessity, and authority for the taking is final 
3.34 	unless an appeal is brought within 60 days after service of the order on the party.

4.1 	Sec. 4. Minnesota Statutes 2004, section 117.075, is amended by adding a subdivision 
4.2 	to read:
4.3 		Subd. 1b.Attorney fees. If the court determines that a taking is not for a public 
4.4 	purpose or is unlawful, the court may award the owner reasonable attorney fees.

4.5 	Sec. 5. Minnesota Statutes 2004, section 117.085, is amended to read:
4.6 	117.085 COMMISSIONERS, POWERS, DUTIES.
4.7 	The commissioners, having been duly sworn and qualified according to law, shall 
4.8 	meet as directed by the order of appointment and hear the allegations and proofs of all 
4.9 	persons interested touching the matters to them committed. They may adjourn from time 
4.10 	to time and from place to place within the county, giving oral notice to those present of 
4.11 	the time and place of their next meeting. All testimony taken by them shall be given 
4.12 	publicly, under oath, and in their presence. They shall view the premises, and any of 
4.13 	them may subpoena witnesses, which shall be served as subpoenas in civil actions are 
4.14 	served, and at the cost of the parties applying therefor. If deemed necessary, they may 
4.15 	require the petitioner or owner to furnish for their use maps, plats, and other information 
4.16 	which the petitioner or owner may have showing the nature, character, and extent of the 
4.17 	proposed undertaking and the situation of lands desired therefor. In proper cases they may 
4.18 	reserve to the owner a right-of-way or other privilege in or over the land taken, or attach 
4.19 	reasonable conditions to such taking in addition to the damages given or they may make 
4.20 	an alternative award, conditioned upon the granting or withholding of the right specified. 
4.21 	Without unreasonable delay they shall make a separate assessment and award of the 
4.22 	damages which in their judgment will result to each of the owners of the land by reason 
4.23 	of such taking and report the same to the court. The commissioners shall not reduce the 
4.24 	amount of the damages awarded because the land being taken is, at the time of the taking, 
4.25 	valued under section  273.111, designated as an agricultural preserve under chapter 473H. 
4.26 	The commissioners, in all such proceedings, may in their discretion allow and show 
4.27 	separately in addition to the award of damages, reasonable appraisal fees not to exceed a 
4.28 	total of $500 $1,500 for single family and two-family residential property, agricultural 
4.29 	property, and minimum damage acquisitions and $5,000 for other types of property. Upon 
4.30 	request of an owner the commissioners shall show in their report the amount of the award 
4.31 	of damages which is to reimburse the owner and tenant or lessee for the value of the land 
4.32 	taken, and the amount of the award of damages, if any, which is to reimburse the owner 
4.33 	and tenant or lessee for damages to the remainder involved, whether or not described in 
4.34 	the petition. The amounts awarded to each person shall also be shown separately. The 
4.35 	commissioners shall, if requested by any party, make an express finding of the estimated 
5.1 	cost of removal and remedial actions that will be necessary on the taken property because 
5.2 	of existing environmental contamination. 

5.3 	Sec. 6. [117.226] RIGHT OF FIRST REFUSAL.
5.4 	(a) If the governing body of the acquiring authority determines that publicly owned 
5.5 	property acquired under this chapter has not been used and is no longer needed for the 
5.6 	purpose for which it was originally acquired, the authority must offer to sell the property 
5.7 	to the owner from whom it was acquired. If the former owner can be located, the acquiring 
5.8 	authority must offer to sell the property at the current fair market value of the property. If 
5.9 	the current fair market value is less than what the acquiring authority paid for the property, 
5.10 	the acquiring authority must offer to sell the property for the amount that the acquiring 
5.11 	authority paid when it originally acquired the property.
5.12 	(b) The acquiring authority must attempt to locate the former owner by:
5.13 	(1) sending notice of the right of first refusal by first class mail to the last known 
5.14 	address of the former owner; and
5.15 	(2) providing two weeks' published notice of the right of first refusal in a newspaper 
5.16 	of general circulation.
5.17 	(c) If the former owner cannot be located or declines to repurchase the property 
5.18 	within 60 days of providing the notice described in paragraph (b), the acquiring authority 
5.19 	shall prepare a certificate attesting to the same and record the certificate in the office of the 
5.20 	county recorder or county registrar of titles, as appropriate, to evidence the termination of 
5.21 	the right of first refusal.
5.22 	(d) This section shall not apply: 
5.23 	(1) if the acquiring authority has an alternative use for the property and the property 
5.24 	would remain in public ownership; or
5.25 	(2) to acquisitions of property for transportation purposes made by the commissioner 
5.26 	of transportation.

5.27 	Sec. 7. Minnesota Statutes 2004, section 117.51, is amended to read:
5.28 	117.51 COOPERATION WITH FEDERAL AUTHORITIES.
5.29 	In all acquisitions undertaken by any acquiring authority and in all voluntary 
5.30 	rehabilitation carried out by a person pursuant to acquisition or as a consequence thereof, 
5.31 	the acquiring authority shall cooperate to the fullest extent with federal departments and 
5.32 	agencies, and it shall take all necessary action in order to insure, to the maximum extent 
5.33 	possible, federal financial participation in any and all phases of acquisition, including the 
5.34 	provision of relocation assistance, services, payments and benefits to displaced persons. 
6.1 	An acquiring authority may consider reimbursing up to $50,000 in reestablishment 
6.2 	expenses of a displaced business.

6.3 	Sec. 8. Minnesota Statutes 2004, section 117.52, subdivision 1, is amended to read:
6.4 		Subdivision 1.Lack of federal funding. In all acquisitions undertaken by any 
6.5 	acquiring authority and in all voluntary rehabilitation carried out by a person pursuant 
6.6 	to acquisition or as a consequence thereof, in which, due to the lack of federal financial 
6.7 	participation, relocation assistance, services, payments and benefits under the Uniform 
6.8 	Relocation Assistance and Real Property Acquisition Policies Act of 1970, United States 
6.9 	Code, title 42, sections 4601 to 4655, as amended by the Surface Transportation and 
6.10 	Uniform Relocation Assistance Act of 1987, Statutes at Large, volume 101, pages 246 
6.11 	to 256 (1987), are not available, the acquiring authority, as a cost of acquisition, shall 
6.12 	provide all relocation assistance, services, payments and benefits required by the Uniform 
6.13 	Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended by 
6.14 	the Surface Transportation and Uniform Relocation Assistance Act of 1987, and those 
6.15 	regulations adopted pursuant thereto, and either (1) in effect as of July 1, 1988 January 1, 
6.16 	2006, or (2) becoming effective after July 1, 1988 January 1, 2006, following a public 
6.17 	hearing and comment. Comments received by an acquiring authority within 30 days after 
6.18 	the public hearing must be reviewed and a written response provided to the individual or 
6.19 	organization who initiated the comment. The response and comments may be addressed in 
6.20 	another public hearing by the acquiring authority before approval.

6.21 	Sec. 9. Minnesota Statutes 2004, section 117.52, is amended by adding a subdivision to 
6.22 	read:
6.23 		Subd. 1a.Reestablishment costs limit. For purposes of relocation benefits paid in 
6.24 	accordance with this section, the limitation in Code of Federal Regulations, title 49, section 
6.25 	24.304, with respect to reimbursement of reestablishment expenses for nonresidential 
6.26 	moves, an acquiring authority shall reimburse up to $50,000 for such expenses.

6.27 	Sec. 10. Minnesota Statutes 2004, section 163.12, subdivision 1a, is amended to read:
6.28 		Subd. 1a.Petition, notice, and access to information. (a) Upon passage of the 
6.29 	resolution specified in section  163.11, subdivision 2, a petition must be presented to the 
6.30 	district court of the county in which the land is located. The petition must describe each 
6.31 	tract of land through which the highway passes, state the purposes for which the land is 
6.32 	proposed to be taken, and list the names of all persons appearing of record or known to 
6.33 	the county to be the landowners. 
7.1 	(b) Notice of the objects of the petition and of the time and place of presenting the 
7.2 	notice must be served, together with a copy of the resolution, upon each occupant of 
7.3 	each tract of land through which the highway passes at least 20 days before the hearing 
7.4 	under subdivision 1b. If an owner is not a resident of the state, or the owner's place of 
7.5 	residence is unknown to the county, service may be made by three weeks' published 
7.6 	notice following the filing of an affidavit on behalf of the county by the county's agent or 
7.7 	attorney stating that the county:
7.8 	(1) believes that the owner is not a resident of the state; and
7.9 	(2) has either mailed a copy of the notice to the owner at the owner's last known 
7.10 	residence address or, after diligent inquiry, the owner's place of residence cannot be 
7.11 	ascertained by the county.
7.12 	If the state is an owner, the notice must be served upon the attorney general. An owner 
7.13 	not served as provided in this subdivision is not bound by the proceeding, except if the 
7.14 	owner voluntarily appears in the proceeding.
7.15 	(c) Within ten days of an owner's demand, the owner must be furnished a 
7.16 	right-of-way map or plat of all that part of the owner's land to be taken. Any applicable 
7.17 	plans or profiles that the county possesses must be made available to the owner for 
7.18 	inspection.
7.19 	(d) The notice must state that: (1) a party wishing to challenge the public purpose, 
7.20 	necessity, or authority for the taking must appear at the court hearing and state the 
7.21 	objection; (2) failure to appear and object is deemed a waiver of any objection; and (3) a 
7.22 	court order approving the public purpose, necessity, and authority for the taking is final 
7.23 	unless an appeal is brought within 60 days after service of the order on the party.

7.24 	Sec. 11. Minnesota Statutes 2004, section 163.12, subdivision 1b, is amended to read:
7.25 		Subd. 1b.Finding of necessity. When proof of service of the notice required in 
7.26 	subdivision 1a is filed with the court, the court shall hear all competent evidence offered 
7.27 	for or against granting the petition at the time and place fixed in the notice or otherwise set 
7.28 	by the court. On finding that the proposed taking is necessary and authorized by law the 
7.29 	court shall order the proceedings to commence pursuant to the remaining provisions of 
7.30 	this section. The court order finding the taking necessary and authorized by law is a final 
7.31 	order and must be appealed within 60 days from its service on the party.

7.32 	Sec. 12. Minnesota Statutes 2004, section 469.012, subdivision 1g, is amended to read:
7.33 		Subd. 1g.Get property; eminent domain. (a) An authority may, within its area of 
7.34 	operation, acquire real or personal property or any interest therein by gifts, grant, purchase, 
8.1 	exchange, lease, transfer, bequest, devise, or otherwise, and by the exercise of the power 
8.2 	of eminent domain, in the manner provided by chapter 117, acquire real property which it 
8.3 	may deem necessary for its purposes, after the adoption by it of a resolution declaring that 
8.4 	the acquisition of the real property is necessary:
8.5 	(1) to eliminate one or more of the conditions found to exist in the resolution adopted 
8.6 	pursuant to section  469.003 or to provide decent, safe, and sanitary housing for persons 
8.7 	of low and moderate income; or 
8.8 	(2) to carry out a redevelopment project.
8.9 	(b) Real property needed or convenient for a project may be acquired by the 
8.10 	authority for the project by condemnation pursuant to this section and section 469.401.
8.11 	(c) Prior to adoption of a resolution authorizing acquisition of property by 
8.12 	condemnation, the governing body of the authority must hold a public hearing on the 
8.13 	proposed acquisition after published notice in a newspaper of general circulation in the 
8.14 	municipality, which must be made at least one time not less than ten days nor more than 
8.15 	30 days prior to the date of the hearing. The notice must reasonably describe the property 
8.16 	to be acquired and state that the purpose of the hearing is to consider acquisition by 
8.17 	exercise of the authority's powers of eminent domain. Not less than ten days before the 
8.18 	hearing, notice of the hearing must also be mailed to the owner of each parcel proposed 
8.19 	to be acquired, but failure to give mailed notice or any defects in the notice does not 
8.20 	invalidate the acquisition. For the purpose of giving mailed notice, owners are determined 
8.21 	in accordance with section  429.031, subdivision 1, paragraph (a). 
8.22 	(d) (c) Property acquired by condemnation under this section may include any 
8.23 	property devoted to a public use, whether or not held in trust, notwithstanding that the 
8.24 	property may have been previously acquired by condemnation or is owned by a public 
8.25 	utility corporation, because the public use in conformity with the provisions of sections  
8.26 	469.001 to  469.047 shall be deemed a superior public use. Property devoted to a public 
8.27 	use may be so acquired only if the governing body of the municipality has approved 
8.28 	its acquisition by the authority. 
8.29 	(e) (d) An award of compensation shall not be increased by reason of any increase 
8.30 	in the value of the real property caused by the assembly, clearance or reconstruction, or 
8.31 	proposed assembly, clearance or reconstruction for the purposes of sections  469.001
8.32 	to  469.047 of the real property in an area. 

8.33 	Sec. 13. [469.401] ACQUISITION BY EMINENT DOMAIN UNDER THIS 
8.34 	CHAPTER.
9.1 		Subdivision 1.Application. Sections 469.401 to 469.403 apply to the exercise of 
9.2 	eminent domain powers by a condemning authority under this chapter if the property 
9.3 	interest to be acquired by eminent domain is intended to be sold, transferred, or otherwise 
9.4 	conveyed to a person or nongovernmental entity without the power of eminent domain.
9.5 		Subd. 2.Public hearing and notice required. Prior to adoption of a resolution 
9.6 	authorizing the use of eminent domain, the governing body of the condemning authority 
9.7 	must hold a public hearing on the proposed acquisition after published notice in a 
9.8 	newspaper of general circulation in the governing body's jurisdiction and on the governing 
9.9 	body's Web site, if applicable, which must be made at least one time not less than two 
9.10 	weeks nor more than 60 days prior to the date of the hearing. The notice must reasonably 
9.11 	describe the property interest to be acquired, state that the purpose of the hearing is to 
9.12 	consider acquisition by eminent domain, state that comments may be submitted orally 
9.13 	at the hearing or in writing prior to or at the hearing, and specify an address to which 
9.14 	written comments may be mailed. Not less than two weeks before the hearing, notice of 
9.15 	the hearing must also be mailed to the owner of each parcel proposed to be acquired, but 
9.16 	defects in the notice do not invalidate the acquisition. For the purpose of giving mailed 
9.17 	notice, owners are determined as provided by section 429.031, subdivision 1, paragraph 
9.18 	(a). The resolution authorizing the use of eminent domain must not be adopted at the same 
9.19 	meeting or on the same day as the public hearing.
9.20 		Subd. 3.Resolution. The resolution authorizing the use of eminent domain must:
9.21 	(1) identify and describe the public benefits that are known or expected to result 
9.22 	from the program or project for which the property interest is proposed to be acquired;
9.23 	(2) identify and describe the private benefits that are known or expected to result 
9.24 	from the anticipated conveyance of the property interest proposed to be acquired;
9.25 	(3) summarize and respond to any oral comments made at the public hearing or 
9.26 	written comments received at or prior to the public hearing; and
9.27 	(4) address how the acquisition of the property interest serves one or more identified 
9.28 	public purposes and why the acquisition of the property is reasonably necessary to 
9.29 	accomplish those purposes.
9.30 		Subd. 4.Summary of findings. The governing body of a condemning authority 
9.31 	must summarize the findings adopted in the resolution authorizing the use of eminent 
9.32 	domain in the notice of petition required under section 117.055.

9.33 	Sec. 14. [469.402] DEFINITIONS.
9.34 		Subdivision 1.Scope. For purposes of sections 469.401 to 469.403, the following 
9.35 	terms have the meanings given to them.
10.1 		Subd. 2.Abandoned. "Abandoned" means that at least 75 percent of a building's 
10.2 	area has been substantially unoccupied for at least one year prior to the date of inclusion 
10.3 	in a blighted area.
10.4 		Subd. 3.Blighted area. "Blighted area" is an area where the condemning authority 
10.5 	finds that the conditions provided in clauses (a), (b), and (c) exist:
10.6 	(a) the land is or has been in urban use;
10.7 	(b) at least one of the following conditions exist:
10.8 	(1) 50 percent or more of the buildings in the area are structurally substandard 
10.9 	or abandoned or a combination thereof;
10.10 	(2) 30 percent or more of the parcels in the area constitute an environmentally 
10.11 	contaminated area; or
10.12 	(3) (i) 20 percent or more of the buildings in the area are structurally substandard 
10.13 	or abandoned or a combination thereof, and (ii) an additional 30 percent or more of the 
10.14 	buildings in the area are obsolete as evidenced by lack of investment based on limited 
10.15 	building permits for repair or improvements in the previous five years; and
10.16 	(c) at least one of the following conditions is present:
10.17 	(1) diversity of ownership or defective or unusual conditions of title prevent the 
10.18 	free alienability of land within the area;
10.19 	(2) there is inadequate infrastructure in the area;
10.20 	(3) the crime rate in the area is higher than in the remainder of the county or 
10.21 	municipality;
10.22 	(4) 30 percent of the tax parcels have had delinquent taxes or special assessments for 
10.23 	a period of two years or more prior to inclusion in the area; or
10.24 	(5) negative market conditions exist in the area. 
10.25 		Subd. 4.Environmentally contaminated area. "Environmentally contaminated 
10.26 	area" means:
10.27 	(1) any parcel that would be eligible for contamination cleanup grants from: (i) the 
10.28 	Department of Employment and Economic Development's contamination cleanup grant 
10.29 	account under section 116J.552, subdivision 3, or 116J.554, subdivision 2, clause (2); or 
10.30 	(ii) the Metropolitan Council's tax base revitalization account under section 473.252; or
10.31 	(2) an area that qualifies as a soils condition district under section 469.174, 
10.32 	subdivision 19.
10.33 		Subd. 5.Inadequate infrastructure. "Inadequate infrastructure" means any 
10.34 	publicly owned physical infrastructure including sanitary sewer systems, water systems, 
10.35 	streets, wastewater treatment and pretreatment systems, storm water management systems, 
10.36 	natural gas systems, and electric utility systems which are inadequate to serve either 
11.1 	existing or projected users in the blighted area because the system is undersized, does not 
11.2 	meet current design standards, or is significantly deteriorated.
11.3 		Subd. 6.Market area. "Market area" means the geographic or locational 
11.4 	delineation of the market for a specific category of real estate.
11.5 		Subd. 7.Negative market conditions. "Negative market conditions" are evidenced 
11.6 	by one or more of the following factors for similarly classified property: (1) market values 
11.7 	are lower than in the remainder of the market area, are increasing at rates materially lower 
11.8 	than in the remainder of the market area, or are decreasing compared to the remainder of 
11.9 	the market area; (2) vacancy rates are higher than in the remainder of the market area; 
11.10 	or (3) other comparable evidence of negative market conditions in the blighted area 
11.11 	compared to the market area as a whole.
11.12 		Subd. 8.Public nuisance. "Public nuisance" has the meaning given in section 
11.13 	609.74.
11.14 		Subd. 9.Structurally substandard. "Structurally substandard" means a building 
11.15 	that contains defects in structural elements or a combination of deficiencies in essential 
11.16 	utilities and facilities, light and ventilation and fire protection including adequate egress, 
11.17 	which significant defects or deficiencies justify substantial renovation or clearance. A 
11.18 	building is not structurally substandard if it is in compliance with the building code 
11.19 	applicable to new buildings or could be modified to satisfy the building code at a cost of 
11.20 	less than 20 percent of the cost of constructing a new structure of the same square footage 
11.21 	and type on the site. The municipality or condemning authority may find that a building is 
11.22 	not disqualified as structurally substandard under the previous sentence on the basis of 
11.23 	reasonably available evidence, such as the size, type, and age of the building, the average 
11.24 	cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. The 
11.25 	municipality or the condemning authority may not make such a determination without an 
11.26 	interior inspection of the property, but need not have any independent, expert appraisal 
11.27 	prepared of the cost of repair and rehabilitation of the building. An interior inspection 
11.28 	of the property is not required, if the municipality finds that: (1) the municipality or 
11.29 	condemning authority is unable to gain access to the property after using its best efforts to 
11.30 	obtain permission from the party that owns or controls the property; and (2) the evidence 
11.31 	otherwise supports a reasonable conclusion that the building is structurally substandard. 
11.32 	Items of evidence that support such a conclusion include recent fire or police inspections, 
11.33 	on-site property tax appraisals or housing inspections, exterior evidence of deterioration, 
11.34 	or other similar reliable evidence. Written documentation of the findings and reasons why 
11.35 	an interior inspection was not conducted must be made and retained. Failure of a building 
12.1 	to be disqualified under the provisions of this subdivision is a necessary, but not sufficient 
12.2 	condition by itself, to determine that the building is substandard.

12.3 	Sec. 15. [469.403] LIMITATION ON USE OF EMINENT DOMAIN.
12.4 		Subdivision 1.Limitation. Notwithstanding any other provision of law, no 
12.5 	condemning authority under this chapter may exercise the power of eminent domain if the 
12.6 	property interest to be acquired is intended to be sold, transferred, or otherwise conveyed 
12.7 	to a person or nongovernmental entity without the power of eminent domain, unless the 
12.8 	condemning authority finds that the use of eminent domain is necessary to accomplish one 
12.9 	or more of the purposes in subdivision 2.
12.10 		Subd. 2.Purposes. For purposes of carrying out the powers and authority provided 
12.11 	under this chapter, a condemning authority with the power of eminent domain under 
12.12 	this chapter may exercise that power to acquire land to accomplish one or more of the 
12.13 	following purposes:
12.14 	(a) the possession, occupation, or enjoyment of the land by the general public or 
12.15 	by public agencies;
12.16 	(b) to remedy a public nuisance;
12.17 	(c) to carry out a program to remedy or improve an environmentally contaminated 
12.18 	area;
12.19 	(d) to carry out a program to remedy or improve a blighted area; or
12.20 	(e) to facilitate development of housing for low or moderate income persons as 
12.21 	defined under any federal, state, or local program.
12.22 		Subd. 3.Economic development. The public benefits of economic development, 
12.23 	including an increase in tax base, tax revenues, employment, or general economic health, 
12.24 	shall not by themselves constitute a public purpose except as provided in subdivision 4.
12.25 		Subd. 4.Exceptions. Notwithstanding any other provision of law, a condemning 
12.26 	authority under this chapter may condemn property if one or more of the following forms 
12.27 	of financial assistance are present: 
12.28 	(1) a grant awarded by a state agency for economic development related purposes, if 
12.29 	a single business receives $200,000 or more of the grant proceeds; 
12.30 	(2) a grant award to local units of government or development authorities under 
12.31 	sections 116J.551, 116J.559, 116J.571, and 116J.8731; 
12.32 	(3) a loan or the guaranty or purchase of a loan made by a state agency for economic 
12.33 	development related purposes if a single business receives $500,000 or more of the loan 
12.34 	proceeds;
13.1 	(4) a reduction, credit, or abatement of a tax assessed under chapter 297A or 290 
13.2 	where the tax reduction, credit, or abatement applies to a geographic area smaller than the 
13.3 	entire state and was granted for economic development related purposes; or
13.4 	(5) an appropriation by the legislature to acquire or better property, in whole or in 
13.5 	part, with the proceeds of state general obligation bonds authorized to be issued under 
13.6 	article XI, section 5, clause (a) of the Minnesota Constitution.
13.7 	Financial assistance does not include payments by the state of aids and credits under 
13.8 	chapter 273 or 477A to a political subdivision.
13.9 		Subd. 5.Disclosure. All applicants must indicate on applications for financial 
13.10 	assistance under subdivision 4 whether the use of eminent domain may be necessary to 
13.11 	acquire property for the project.

13.12 	Sec. 16. EFFECTIVE DATE.
 13.13 	Sections 1 to 6 and 10 and 11 are effective for condemnation proceedings that 
13.14 	are commenced on or after August 1, 2006. Sections 7, 8, and 9 are effective for all 
13.15 	acquisitions in which the initial notice of eligibility is given on or after August 1, 
13.16 	2006. Sections 12 to 15 apply to any property that is included in a redevelopment plan 
13.17 	established on or after August 1, 2006.

13.18 	Sec. 17. SUNSET.
 13.19 	Sections 14 and 15 expire January 1, 2009.