HF 1627

2nd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to economic development and redevelopment; 
  1.3             establishing the metropolitan revitalization fund; 
  1.4             providing funding for housing and urban development in 
  1.5             the metropolitan area; providing for a sales tax 
  1.6             refund for certain construction materials; creating an 
  1.7             urban homesteading program; providing funding for 
  1.8             affordable housing that is related to community 
  1.9             economic development and redevelopment; providing for 
  1.10            a sales tax refund for certain construction materials; 
  1.11            appropriating money; amending Minnesota Statutes 1994, 
  1.12            sections 290.01, subdivision 19b; 297A.15, by adding a 
  1.13            subdivision; 297A.25, by adding a subdivision; 
  1.14            477A.011, subdivision 37; 477A.013, subdivisions 8, 9, 
  1.15            and by adding subdivisions; and 477A.03, subdivision 
  1.16            1; proposing coding for new law in Minnesota Statutes, 
  1.17            chapter 473. 
  1.18  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.19                             ARTICLE 1 
  1.20                  METROPOLITAN REVITALIZATION FUND 
  1.21     Section 1.  [473.25] [METROPOLITAN REVITALIZATION FUND; 
  1.22  PURPOSE; ESTABLISHMENT.] 
  1.23     In order to encourage and support redevelopment and 
  1.24  revitalization of economically distressed sections of the 
  1.25  metropolitan area, the removal of barriers to job retention and 
  1.26  development, the enhancement of job skills, the provision of 
  1.27  opportunities for development of life-cycle and affordable 
  1.28  housing, and the remediation of contaminated land for commercial 
  1.29  and industrial redevelopment, the metropolitan revitalization 
  1.30  fund is established and shall be funded and administered as 
  1.31  provided in sections 473.25 to 473.253. 
  2.1      Sec. 2.  [473.251] [FUND ESTABLISHED.] 
  2.2      Subdivision 1.  [GENERAL.] The metropolitan revitalization 
  2.3   fund consists of the funds provided to it under this section. 
  2.4      Subd. 2.  [LOCAL GOVERNMENT AID DISTRIBUTION.] The council 
  2.5   shall receive a distribution under section 477A.03, subdivision 
  2.6   1, for the fund. 
  2.7      Sec. 3.  [473.252] [FUND USES; DISTRIBUTION.] 
  2.8      The council shall establish criteria for uses of the fund 
  2.9   that are consistent with and promote the purposes of sections 
  2.10  473.25 to 473.253.  The council shall distribute funds to 
  2.11  establish or encourage projects or initiatives that: 
  2.12     (1) provide opportunities for jobs and job skills 
  2.13  development and retention; 
  2.14     (2) provide commercial or industrial redevelopment 
  2.15  opportunities in areas suffering from economic distress; 
  2.16     (3) remediate contaminated land for commercial and 
  2.17  industrial redevelopment; 
  2.18     (4) provide incentives for jobs-to-people or people-to-jobs 
  2.19  initiatives including, but not limited to, reverse commuting 
  2.20  opportunities and enterprise zones; 
  2.21     (5) provide incentives to remove or rehabilitate blighted 
  2.22  housing in the fully developed area; and 
  2.23     (6) create incentives for developing communities to include 
  2.24  a full range of housing opportunities. 
  2.25     Sec. 4.  [473.253] [REPORT.] 
  2.26     The council shall prepare and submit to the legislature, as 
  2.27  provided in section 3.195, an annual report on the metropolitan 
  2.28  revitalization fund.  The report must include information on the 
  2.29  amount of money in the fund, the amount distributed, to whom the 
  2.30  funds were distributed and for what purposes, and an evaluation 
  2.31  of the effectiveness of the projects funded in meeting the 
  2.32  policies and goals enumerated in sections 473.25 to 473.252.  
  2.33  The report may make recommendations to the legislature on 
  2.34  changes to this act. 
  2.35     Sec. 5.  Minnesota Statutes 1994, section 477A.011, 
  2.36  subdivision 37, is amended to read: 
  3.1      Subd. 37.  [BASE REDUCTION PERCENTAGE.] "Base reduction 
  3.2   percentage" is (1) the difference between the amount available 
  3.3   for city aid under section 477A.03 for the year for which aid is 
  3.4   being calculated and the amount available for city aid under 
  3.5   section 477A.03 for calendar year 1994, (2) divided by the sum 
  3.6   of the city aid base for all cities and (3) multiplied by 100.  
  3.7   The reduction percentage for any year may not be less than the 
  3.8   reduction percentage from the previous year.  For aid paid in 
  3.9   calendar year 1994, the reduction percentage is zero.  The 
  3.10  reduction percentage may not be more than 100 percent 58 percent 
  3.11  for aid payable in 1996, 39 percent for aid payable in 1997, 20 
  3.12  percent for aid payable in 1998, and zero for aid payable in 
  3.13  1999 and thereafter. 
  3.14     Sec. 6.  Minnesota Statutes 1994, section 477A.013, 
  3.15  subdivision 8, is amended to read: 
  3.16     Subd. 8.  [CITY FORMULA AID.] In calendar year 1994 and 
  3.17  subsequent years, the formula aid for a city is equal to the 
  3.18  need increase percentage multiplied by the difference between 
  3.19  (1) the city's revenue need multiplied by its population, and 
  3.20  (2) the city's net tax capacity multiplied by the tax effort 
  3.21  rate.  No city may have a formula aid amount less than zero.  
  3.22  The need increase percentage must be the same for all cities for 
  3.23  aid payable in 1996 through 1999.  For aid payable in 2000 and 
  3.24  thereafter, the need increase percentage must be the same for 
  3.25  all cities located in the metropolitan areas defined in section 
  3.26  473.121, subdivision 2, and it must be the same for all cities 
  3.27  outside the metropolitan area.  
  3.28     Notwithstanding the prior sentence, in 1995 only, the need 
  3.29  increase percentage for a city shall be twice the need increase 
  3.30  percentage applicable to other cities if:  
  3.31     (1) the city, in 1992 or 1993, transferred an amount from 
  3.32  governmental funds to their sewer and water fund, and 
  3.33     (2) the amount transferred exceeded their net levy for 
  3.34  taxes payable in the year in which the transfer occurred. 
  3.35     The applicable need increase percentage or percentages must 
  3.36  be calculated by the department of revenue so that the total of 
  4.1   the aid under subdivision 9 equals the total amount available 
  4.2   for aid under section 477A.03.  
  4.3      Sec. 7.  Minnesota Statutes 1994, section 477A.013, 
  4.4   subdivision 9, is amended to read: 
  4.5      Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
  4.6   1994 1996 and thereafter, each city not in the metropolitan 
  4.7   area, as defined in section 473.121, subdivision 2, shall 
  4.8   receive an aid distribution equal to the sum of (1) the city 
  4.9   formula aid under subdivision 8, and (2) its city aid 
  4.10  base multiplied by the base reduction percentage.  In calendar 
  4.11  year 2000 and thereafter, this amount is subject to the limits 
  4.12  in paragraphs (b) and (c). 
  4.13     (b) The percentage increase for a first class city in 
  4.14  calendar year 1995 and thereafter shall not exceed the 
  4.15  percentage increase in the sum of the aid to all cities under 
  4.16  this section in the current calendar year compared to the sum of 
  4.17  the aid to all cities in the previous year. 
  4.18     (c) The total aid for any city, except a first class city, 
  4.19  shall not exceed the sum of (1) ten percent of the city's net 
  4.20  levy for the year prior to the aid distribution plus (2) its 
  4.21  total aid in the previous year before any increases or decreases 
  4.22  under sections 16A.711, subdivision 5, and 477A.0132. 
  4.23     (d) Notwithstanding paragraph (c), in 1995 only, for cities 
  4.24  which in 1992 or 1993 transferred an amount from governmental 
  4.25  funds to their sewer and water fund in an amount greater than 
  4.26  their net levy for taxes payable in the year in which the 
  4.27  transfer occurred, the total aid shall not exceed the sum of (1) 
  4.28  20 percent of the city's net levy for the year prior to the aid 
  4.29  distribution plus (2) its total aid in the previous year before 
  4.30  any increases or decreases under sections 16A.711, subdivision 
  4.31  5, and 477A.0132 For aids payable in 1996 through 1999, the 
  4.32  amount of aid a city located in the metropolitan area, as 
  4.33  defined in section 473.121, subdivision 2, receives, shall be 
  4.34  determined under subdivision 10.  For aid payable in 2000 and 
  4.35  thereafter, the amount of aid a city located in the metropolitan 
  4.36  area receives shall be determined under subdivision 11. 
  5.1      Sec. 8.  Minnesota Statutes 1994, section 477A.013, is 
  5.2   amended by adding a subdivision to read: 
  5.3      Subd. 10.  [TRANSITION CITY AID.] (a) In calendar years 
  5.4   1996 through 1999, each city located in the metropolitan area 
  5.5   shall receive an aid distribution equal to the sum of (1) the 
  5.6   city formula aid under subdivision 8, and (2) its city aid base 
  5.7   multiplied by the base reduction percentage; subject to the 
  5.8   limits in paragraphs (b) and (c). 
  5.9      (b) In 1996, no city may receive an aid amount greater than 
  5.10  102 percent over the amount of aid it received in 1995.  The 
  5.11  amount calculated under paragraph (a) above the 102 percent, 
  5.12  shall be distributed under paragraph (c).  For 1997 through 
  5.13  1999, no city may receive an aid amount greater than 100.9 
  5.14  percent of the amount received under the previous year, 
  5.15  multiplied by the inflation adjustment in section 477A.03, 
  5.16  subdivision 3.  The amount calculated in paragraph (a) in excess 
  5.17  of this amount shall be distributed as provided in paragraph (c).
  5.18     (c) A portion of the excess aid calculated under paragraph 
  5.19  (b) shall be used to increase the aid payment to each city in 
  5.20  the metropolitan area that has a payment under paragraph (a) 
  5.21  that is less than its aid amount in 1995, to an amount equal to 
  5.22  its aid amount in 1995.  The remainder of the excess amounts 
  5.23  calculated under paragraph (b) shall be distributed to the 
  5.24  metropolitan council for the metropolitan revitalization fund 
  5.25  established in section 1. 
  5.26     Sec. 9.  Minnesota Statutes 1994, section 477A.013, is 
  5.27  amended by adding a subdivision to read: 
  5.28     Subd. 11.  [METROPOLITAN CITY AID.] (a) Subject to the 
  5.29  limits in paragraphs (b), (c), and (d), in calendar year 2000 
  5.30  and thereafter, each city located in the metropolitan area will 
  5.31  receive an aid distribution equal to the sum of (1) the city 
  5.32  formula aid under subdivision 8, and (2) its city aid base 
  5.33  multiplied by the base reduction percentage. 
  5.34     (b) The percentage increase for a first class city in 
  5.35  calendar year 2000 and thereafter shall not exceed the 
  5.36  percentage increase in the sum of the aid to all cities under 
  6.1   this subdivision in the current calendar year compared to the 
  6.2   sum of the aid to all cities in the previous year. 
  6.3      (c) The total aid for any city, except a first class city, 
  6.4   shall not exceed the sum of (1) ten percent of the city's net 
  6.5   levy for the year prior to the aid distribution plus (2) its 
  6.6   total aid in the previous year before any increases or decreases 
  6.7   under sections 16A.711, subdivision 5, and 477A.0132. 
  6.8      (d) No city shall receive an aid distribution less than its 
  6.9   aid amount in 1995. 
  6.10     Sec. 10.  Minnesota Statutes 1994, section 477A.03, 
  6.11  subdivision 1, is amended to read: 
  6.12     Subdivision 1.  [ANNUAL APPROPRIATION.] A sum sufficient to 
  6.13  discharge the duties imposed by sections 477A.011 to 477A.014 is 
  6.14  annually appropriated from the local government trust fund to 
  6.15  the commissioner of revenue.  For aid payable in 1994, the total 
  6.16  aid paid to cities under section 477A.013, subdivision 9, is 
  6.17  limited to $330,636,900.  For aid payable in 1995, the total aid 
  6.18  paid to cities under section 477A.013, subdivision 9, is limited 
  6.19  to $337,249,600.  For aid payable in 1996 and thereafter, the 
  6.20  total aid paid to cities under section 477A.013, subdivision 
  6.21  subdivisions 9, 10, and 11, is limited to the amount paid in the 
  6.22  previous year, adjusted for inflation as provided under 
  6.23  subdivision 3.  For aid payable in 1996 through 1999, a portion, 
  6.24  as calculated under section 477A.013, subdivision 10, paragraph 
  6.25  (c), of the total amount that may be paid to cities under 
  6.26  section 477A.013, subdivision 9, shall be distributed to the 
  6.27  metropolitan council under section 1.  In calendar year 2000 and 
  6.28  thereafter, the total amount of aid distributed to cities 
  6.29  outside the metropolitan area under section 477A.013, 
  6.30  subdivision 9, cities in the metropolitan area under section 
  6.31  477A.013, subdivision 11, and to the metropolitan council under 
  6.32  section 1, shall be based on the relative share of the city 
  6.33  local government aid appropriation distributed to each group in 
  6.34  1999. 
  6.35     Aid payments to counties under section 477A.0121 are 
  6.36  limited to $8,400,000 in 1994 and $10,000,000 in 1995.  For aid 
  7.1   payable in 1996 and thereafter, payments to counties under 
  7.2   section 477A.0121 are limited to the amount paid in the previous 
  7.3   year, adjusted for inflation as provided under subdivision 3. 
  7.4      For aid payable in 1995, payments to counties under section 
  7.5   477A.0122 are limited to $1,500,000.  For aids payable in 1996 
  7.6   and thereafter, payments to counties under section 477A.0122 are 
  7.7   limited to the amount paid in the previous year, adjusted for 
  7.8   inflation as provided under subdivision 3. 
  7.9      Sec. 11.  [APPROPRIATION.] 
  7.10     $11,000,000 is appropriated from the general fund to the 
  7.11  commissioner of the department of trade and economic development 
  7.12  to provide matching grant funds for contamination cleanup grants 
  7.13  under Minnesota Statutes, sections 116J.551 to 116J.557.  
  7.14  Notwithstanding section 116J.555, subdivision 1, all grants made 
  7.15  using this appropriation will be made for qualifying sites 
  7.16  defined as fully developed areas by the metropolitan council.  
  7.17  This appropriation is available for the biennium ending June 30, 
  7.18  1997. 
  7.19     Sec. 12.  [CITATION.] 
  7.20     This article may be cited as "the metropolitan 
  7.21  revitalization act." 
  7.22     Sec. 13.  [APPLICATION.] 
  7.23     This article applies in the counties of Anoka, Carver, 
  7.24  Dakota, Hennepin, Ramsey, Scott, and Washington. 
  7.25     Sec. 14.  [EFFECTIVE DATES.] 
  7.26     This article is effective the day after final enactment.  
  7.27  Sections 5 to 10 of this article are effective for aid payable 
  7.28  in 1996 and thereafter. 
  7.29                             ARTICLE 2
  7.30                              HOUSING 
  7.31     Section 1.  Minnesota Statutes 1994, section 290.01, 
  7.32  subdivision 19b, is amended to read: 
  7.33     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  7.34  individuals, estates, and trusts, there shall be subtracted from 
  7.35  federal taxable income: 
  7.36     (1) interest income on obligations of any authority, 
  8.1   commission, or instrumentality of the United States to the 
  8.2   extent includable in taxable income for federal income tax 
  8.3   purposes but exempt from state income tax under the laws of the 
  8.4   United States; 
  8.5      (2) if included in federal taxable income, the amount of 
  8.6   any overpayment of income tax to Minnesota or to any other 
  8.7   state, for any previous taxable year, whether the amount is 
  8.8   received as a refund or as a credit to another taxable year's 
  8.9   income tax liability; 
  8.10     (3) the amount paid to others not to exceed $650 for each 
  8.11  dependent in grades kindergarten to 6 and $1,000 for each 
  8.12  dependent in grades 7 to 12, for tuition, textbooks, and 
  8.13  transportation of each dependent in attending an elementary or 
  8.14  secondary school situated in Minnesota, North Dakota, South 
  8.15  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
  8.16  legally fulfill the state's compulsory attendance laws, which is 
  8.17  not operated for profit, and which adheres to the provisions of 
  8.18  the Civil Rights Act of 1964 and chapter 363.  As used in this 
  8.19  clause, "textbooks" includes books and other instructional 
  8.20  materials and equipment used in elementary and secondary schools 
  8.21  in teaching only those subjects legally and commonly taught in 
  8.22  public elementary and secondary schools in this state.  
  8.23  "Textbooks" does not include instructional books and materials 
  8.24  used in the teaching of religious tenets, doctrines, or worship, 
  8.25  the purpose of which is to instill such tenets, doctrines, or 
  8.26  worship, nor does it include books or materials for, or 
  8.27  transportation to, extracurricular activities including sporting 
  8.28  events, musical or dramatic events, speech activities, driver's 
  8.29  education, or similar programs.  In order to qualify for the 
  8.30  subtraction under this clause the taxpayer must elect to itemize 
  8.31  deductions under section 63(e) of the Internal Revenue Code; 
  8.32     (4) to the extent included in federal taxable income, 
  8.33  distributions from a qualified governmental pension plan, an 
  8.34  individual retirement account, simplified employee pension, or 
  8.35  qualified plan covering a self-employed person that represent a 
  8.36  return of contributions that were included in Minnesota gross 
  9.1   income in the taxable year for which the contributions were made 
  9.2   but were deducted or were not included in the computation of 
  9.3   federal adjusted gross income.  The distribution shall be 
  9.4   allocated first to return of contributions until the 
  9.5   contributions included in Minnesota gross income have been 
  9.6   exhausted.  This subtraction applies only to contributions made 
  9.7   in a taxable year prior to 1985; 
  9.8      (5) income as provided under section 290.0802; 
  9.9      (6) the amount of unrecovered accelerated cost recovery 
  9.10  system deductions allowed under subdivision 19g; 
  9.11     (7) to the extent included in federal adjusted gross 
  9.12  income, income realized on disposition of property exempt from 
  9.13  tax under section 290.491; and 
  9.14     (8) to the extent not deducted in determining federal 
  9.15  taxable income, the amount paid for health insurance of 
  9.16  self-employed individuals as determined under section 162(l) of 
  9.17  the Internal Revenue Code, except that the 25 percent limit does 
  9.18  not apply.  If the taxpayer deducted insurance payments under 
  9.19  section 213 of the Internal Revenue Code of 1986, the 
  9.20  subtraction under this clause must be reduced by the lesser of: 
  9.21     (i) the total itemized deductions allowed under section 
  9.22  63(d) of the Internal Revenue Code, less state, local, and 
  9.23  foreign income taxes deductible under section 164 of the 
  9.24  Internal Revenue Code and the standard deduction under section 
  9.25  63(c) of the Internal Revenue Code; or 
  9.26     (ii) the lesser of (A) the amount of insurance qualifying 
  9.27  as "medical care" under section 213(d) of the Internal Revenue 
  9.28  Code to the extent not deducted under section 162(1) of the 
  9.29  Internal Revenue Code or excluded from income or (B) the total 
  9.30  amount deductible for medical care under section 213(a); and 
  9.31     (9) the exemption amount allowed under section 5, 
  9.32  subdivision 4. 
  9.33     Sec. 2.  Minnesota Statutes 1994, section 297A.15, is 
  9.34  amended by adding a subdivision to read: 
  9.35     Subd. 7.  [REFUND FOR HOUSING; APPROPRIATION.] The tax on 
  9.36  the gross receipts from the sale of items exempt under section 
 10.1   297A.25, subdivision 60, must be imposed and collected as if the 
 10.2   sale were taxable and the rates under sections 297A.02, 
 10.3   subdivision 1, and 297A.021 applied. 
 10.4      Upon application by the purchaser on forms prescribed by 
 10.5   the commissioner, a refund equal to the tax paid on the gross 
 10.6   receipts of the building materials and supplies must be paid to 
 10.7   the purchaser.  In the case of building materials and supplies 
 10.8   in which the tax was paid by a contractor, subcontractor, or 
 10.9   builder, application must be made by the purchaser for the sales 
 10.10  tax paid by the contractor.  The application must include 
 10.11  sufficient information to permit the commissioner to verify the 
 10.12  sales tax paid for the project.  The application must include 
 10.13  certification that the housing meets the definition of 
 10.14  affordable housing for at least ... years after completion of 
 10.15  construction or rehabilitation.  The contractor, subcontractor, 
 10.16  or builder must furnish to the purchaser a statement of the cost 
 10.17  of building materials and supplies and the sales taxes paid on 
 10.18  them.  The amount required to make the refunds is annually 
 10.19  appropriated to the commissioner. 
 10.20     Sec. 3.  Minnesota Statutes 1994, section 297A.25, is 
 10.21  amended by adding a subdivision to read: 
 10.22     Subd. 60.  [CONSTRUCTION MATERIALS FOR AFFORDABLE HOUSING.] 
 10.23  Construction materials and supplies are exempt, regardless of 
 10.24  whether purchased by the owner, or by a contractor, 
 10.25  subcontractor, or builder, if: 
 10.26     (1) the material and supplies are used or consumed in 
 10.27  constructing or rehabilitating affordable permanent housing; 
 10.28     (2) all or a portion of the housing units are financed by 
 10.29  public assistance; 
 10.30     (3) the property is owned by a public agency or nonprofit 
 10.31  organization during the construction or rehabilitation of the 
 10.32  housing and the same entity maintains ownership for at least a 
 10.33  ...-year period while renting the housing to low-income 
 10.34  occupants; and 
 10.35     (4) the housing units are located in the developing area of 
 10.36  the Twin Cities metropolitan area, as defined by the 
 11.1   metropolitan council. 
 11.2      For the purpose of this subdivision, "public assistance" 
 11.3   means financed all or in part with any combination of grants, 
 11.4   loans, tax credits, or public bonding authority from the federal 
 11.5   government or any federal agency, or the state government or any 
 11.6   state agency. 
 11.7      This exemption shall only apply to the portion of 
 11.8   construction materials and supplies used in constructing housing 
 11.9   units that meet the definition of affordable housing used by the 
 11.10  program under which the public assistance is provided for at 
 11.11  least ... years after the construction or rehabilitation is 
 11.12  completed.  The Minnesota housing finance agency must provide 
 11.13  certification to the housing owner that the housing meets this 
 11.14  requirement. 
 11.15     Sec. 4.  [473.202] [ELIMINATION OF BARRIERS.] 
 11.16     The council shall adopt rules under procedures provided in 
 11.17  chapter 14 that identify the local barriers to development of 
 11.18  life-cycle and affordable housing consistent with the council's 
 11.19  adopted housing policies and that specify the time frames for 
 11.20  elimination of those barriers.  The adopted rules shall be 
 11.21  binding on local governments in the metropolitan area. 
 11.22     Sec. 5.  [URBAN AND SUBURBAN HOMESTEADING PROGRAMS.] 
 11.23     Subdivision 1.  [URBAN REVITALIZATION AND STABILIZATION 
 11.24  ZONES.] By September 1, 1995, the metropolitan council shall 
 11.25  designate one or more urban revitalization and stabilization 
 11.26  zones in the metropolitan area, as defined in Minnesota 
 11.27  Statutes, section 473.121, subdivision 2.  The designated zones 
 11.28  must contain no more than 500 single family homes in total.  In 
 11.29  designating urban revitalization and stabilization zones, the 
 11.30  council shall choose areas that are transitioning toward blight 
 11.31  and poverty.  The council shall use indicators that evidence 
 11.32  increasing neighborhood distress such as declining residential 
 11.33  property values, declining resident incomes, declining rates of 
 11.34  owner-occupancy, and other indicators of blight and poverty in 
 11.35  determining which areas are to be urban revitalization and 
 11.36  stabilization zones. 
 12.1      Subd. 2.  [SUBURBAN ZONES.] By September 1, 1995, the 
 12.2   metropolitan council shall designate one or more suburban zones 
 12.3   in the metropolitan area, as defined in Minnesota Statutes, 
 12.4   section 473.121, subdivision 2.  The designated zones must 
 12.5   contain no more than 500 single family homes in total.  In 
 12.6   designating suburban zones, the council shall choose areas in 
 12.7   municipalities that have not met the goals for life-cycle and 
 12.8   affordable housing as set forth in the life-cycle and affordable 
 12.9   housing policies of the metropolitan development guide, as 
 12.10  defined in Minnesota Statutes, section 473.145. 
 12.11     Subd. 3.  [PROGRAM ELIGIBILITY.] Any person buying and 
 12.12  occupying a home within the boundaries of an urban 
 12.13  revitalization and stabilization zone after September 1, 1995, 
 12.14  is eligible to participate in the urban homesteading program.  
 12.15  Any person buying and occupying a home within the boundaries of 
 12.16  a suburban zone after September 1, 1995, is eligible to 
 12.17  participate in the suburban homesteading program.  An owner may 
 12.18  participate by filing an application with the county assessor of 
 12.19  the county in which the homestead is located.  The assessor 
 12.20  shall provide written verification that the homestead is within 
 12.21  an urban revitalization and stabilization zone or a suburban 
 12.22  zone to the owner in a form and manner prescribed by the 
 12.23  commissioner of revenue.  The form shall include the date on 
 12.24  which the owner purchased the property, the date on which the 
 12.25  owner applied for the urban or suburban homesteading program, 
 12.26  and shall indicate if the property has been found to be not in 
 12.27  compliance with applicable building codes, and the dates of 
 12.28  inspections.  The form shall also indicate if the owner has been 
 12.29  convicted of a felony or a gross misdemeanor in the previous ten 
 12.30  years.  Each year, the county assessor shall use the 
 12.31  computerized criminal history system maintained by the bureau of 
 12.32  criminal apprehension under Minnesota Statutes, section 299C.11, 
 12.33  to verify that a participant has not been convicted of a felony 
 12.34  or a gross misdemeanor in the previous ten years.  An owner 
 12.35  shall become ineligible for the program if any of the following 
 12.36  occurs: 
 13.1      (1) the property is sold or otherwise transferred to 
 13.2   another party; 
 13.3      (2) the property is found not to be in compliance with 
 13.4   applicable building codes, provided that at least three years 
 13.5   have passed since the owner filed for participation in the 
 13.6   program; 
 13.7      (3) the owner ceases to occupy the property; or 
 13.8      (4) any of the owners of the property are convicted of a 
 13.9   gross misdemeanor or a felony. 
 13.10     Subd. 4.  [TAX BENEFITS.] Individuals participating in the 
 13.11  urban or suburban homesteading program shall receive an 
 13.12  exemption from Minnesota taxable income for each full tax year 
 13.13  during which eligibility under subdivision 3 is mandated, 
 13.14  beginning in the first full tax year following the filing of an 
 13.15  application with the county assessor.  Eligibility may continue 
 13.16  for a maximum of five years, provided that the individual does 
 13.17  not become ineligible for the program under subdivision 3.  The 
 13.18  maximum exemption amount shall equal $30,000 for married 
 13.19  individuals filing joint returns and surviving spouses as 
 13.20  defined in section 2(a) of the Internal Revenue Code, $20,000 
 13.21  for unmarried individuals, and $25,000 for unmarried individuals 
 13.22  qualifying as a head of household as defined in section 2(b) of 
 13.23  the Internal Revenue Code.  The maximum exemption amount shall 
 13.24  be reduced by two percent of the maximum exemption amount for 
 13.25  each $1,000 of adjusted gross income or part thereof above an 
 13.26  income threshold.  For purposes of this subdivision, adjusted 
 13.27  gross income means federal adjusted gross income as defined in 
 13.28  section 62 of the Internal Revenue Code.  The income threshold 
 13.29  shall equal $60,000 for married individuals filing joint returns 
 13.30  and surviving spouses, $40,000 for unmarried individuals, and 
 13.31  $50,000 for unmarried individuals qualifying as a head of 
 13.32  household.  Owners of homesteads in a suburban zone whose income 
 13.33  in the current tax year exceeds 60 percent of the metropolitan 
 13.34  area median household income for that tax year are not eligible 
 13.35  for an exemption.  For purposes of this section, "income" means 
 13.36  household income as defined in Minnesota Statutes, section 
 14.1   290A.03, and "median household income" means median household 
 14.2   income as determined by the United States Department of Housing 
 14.3   and Urban Development. 
 14.4      Subd. 5.  [EXPIRATION.] Applications for the urban and 
 14.5   suburban homesteading programs shall not be accepted after July 
 14.6   1, 1997. 
 14.7      Subd. 6.  [INFORMATION TO POTENTIAL BUYERS.] The 
 14.8   metropolitan council shall market and promote the urban and 
 14.9   suburban homestead programs to the extent feasible, but such 
 14.10  efforts shall at least include informing area realtors or 
 14.11  realtor associations about the programs. 
 14.12     Subd. 7.  [REPORTS.] The metropolitan council shall make an 
 14.13  initial report to the legislature by January 1, 1998, on the 
 14.14  urban and suburban homesteading programs.  The initial report 
 14.15  shall contain information on designation of zones, participation 
 14.16  rates, and current and projected future costs of providing state 
 14.17  income tax exemptions to program participants. 
 14.18     The metropolitan council shall make full reports to the 
 14.19  legislature by January 1, 2000, and January 1, 2003, on the 
 14.20  urban and suburban homesteading programs.  The full reports 
 14.21  shall include information on those subjects covered by the 
 14.22  initial report, as well as information on neighborhood impacts, 
 14.23  property values, resident incomes, rates of owner-occupancy, and 
 14.24  other indicators of poverty and blight. 
 14.25     Sec. 6.  [APPROPRIATION; COMMUNITY REHABILITATION FUND 
 14.26  ACCOUNT.] 
 14.27     $3,000,000 is appropriated from the general fund to the 
 14.28  housing development fund under Minnesota Statutes, section 
 14.29  462A.20, for the community rehabilitation fund account under 
 14.30  Minnesota Statutes, section 462A.206, to remediate blighted 
 14.31  areas in cities of the first class in the metropolitan area, as 
 14.32  defined by Minnesota Statutes, section 473.121, subdivision 2, 
 14.33  and improve the physical conditions of neighborhoods.  Grants or 
 14.34  loans under this appropriation must be for projects located in 
 14.35  neighborhoods designated under Minnesota Statutes, section 
 14.36  462A.206, subdivision 4.  Grants or loans may be made for 
 15.1   projects to reduce housing density, create open space, or 
 15.2   provide buildable land for redevelopment.  In funding projects 
 15.3   under this subdivision, the agency may consider the extent to 
 15.4   which the city is using existing resources and authority to 
 15.5   remediate neighborhood property.  Funds under this subdivision 
 15.6   are only available to the extent they are matched by the city in 
 15.7   which the project is located.  This appropriation is available 
 15.8   for the biennium ending June 30, 1997.  
 15.9      Sec. 7.  [ECONOMIC VITALITY AND HOUSING INITIATIVE; 
 15.10  APPROPRIATION.] 
 15.11     Subdivision 1.  [ESTABLISHMENT.] The Minnesota housing 
 15.12  finance agency may establish an economic vitality and housing 
 15.13  initiative to provide funds for affordable housing projects in 
 15.14  connection with local communities' economic development and 
 15.15  redevelopment efforts.  The purpose of the economic vitality and 
 15.16  housing initiative is to provide resources for affordable 
 15.17  housing in communities throughout the state necessary to ensure 
 15.18  the expansion and preservation of the economic base and 
 15.19  employment opportunities.  The agency must use the economic 
 15.20  vitality and housing initiative to leverage to the extent 
 15.21  possible private and other public funds for the purpose of this 
 15.22  section. 
 15.23     Subd. 2.  [GREATER MINNESOTA.] In Greater Minnesota, which 
 15.24  is defined for this section as the area of the state not 
 15.25  included in subdivision 3, the agency must work with groups in 
 15.26  the McKnight initiative fund regions to assist the agency in 
 15.27  identifying the affordable housing needed in each region in 
 15.28  connection with economic development and redevelopment efforts 
 15.29  and in establishing priorities for uses of economic vitality and 
 15.30  housing funds.  The groups must include the McKnight initiative 
 15.31  funds, the regional development commissions, the private 
 15.32  industry councils, units of local government, community action 
 15.33  agencies, the Minnesota housing partnership network groups, 
 15.34  local lenders, for-profit and nonprofit developers, and 
 15.35  realtors.  In addition to priorities developed by the group, the 
 15.36  agency must give a preference to viable projects in which area 
 16.1   employers contribute financial assistance. 
 16.2      Subd. 3.  [METROPOLITAN AREA.] In the metropolitan area, as 
 16.3   defined in Minnesota Statutes, section 473.121, subdivision 2, 
 16.4   the agency must confer with the metropolitan council to identify 
 16.5   the priorities for use of the economic vitality and housing 
 16.6   funds.  Funds distributed in the metropolitan area must be used 
 16.7   consistent with the objectives set forth in Minnesota Statutes, 
 16.8   section 473.252.  In addition to the priorities identified in 
 16.9   that section, the agency shall give preference to economically 
 16.10  viable projects that: 
 16.11     (1) include a contribution of financial resources from 
 16.12  units of local government and area employers; 
 16.13     (2) are located in areas accessible to public 
 16.14  transportation or served by transportation programs; 
 16.15     (3) take into account the availability of job training 
 16.16  efforts in the community; 
 16.17     (4) where feasible, are located along arterial roadways; 
 16.18  and 
 16.19     (5) that address local and regional objectives for the 
 16.20  development of affordable and life cycle housing and the 
 16.21  redevelopment of neighborhoods and communities. 
 16.22     Subd. 4.  [APPROPRIATION.] $13,000,000 is appropriated from 
 16.23  the general fund to the commissioner of the housing finance 
 16.24  agency.  This appropriation is available for the biennium ending 
 16.25  June 30, 1997. 
 16.26     Sec. 8.  [APPLICATION.] 
 16.27     Sections 2 to 5 apply in the counties of Anoka, Carver, 
 16.28  Dakota, Hennepin, Ramsey, Scott, and Washington.  
 16.29     Sec. 9.  [EFFECTIVE DATE.] 
 16.30     Section 1 is effective for tax years beginning after 
 16.31  December 31, 1995.  Sections 2 and 3 are effective for sales 
 16.32  made after June 30, 1995.