HF 1888

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:56am

A bill for an act
relating to economic development; amending definitions; appropriating money;
amending Minnesota Statutes 2008, sections 469.201, subdivisions 2, 4, 6, 7,
11; 469.202, subdivisions 2, 3; 469.203; 469.204, subdivisions 2, 3; 469.205,
subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 469.201, subdivision 2, is amended to read:

Subd. 2.

City.

"City" means deleted text begin a city of the first class as defined in section 410.01 and
a city of the second class that is designated as an economically depressed area by the
United States Department of Commerce deleted text end new text begin any statutory or home rule charter city, town, or
township new text end . For each city, a port authority, housing and redevelopment authority, or other
agency or instrumentality, the jurisdiction of which is the territory of the city, is included
within the meaning of city.

Sec. 2.

Minnesota Statutes 2008, section 469.201, subdivision 4, is amended to read:

Subd. 4.

City matching money.

(a) "City matching money" means the money of a
city specified in a new text begin targeted new text end revitalization program. The sources of city matching money
may include:

(1) money from the general fund or a special fund of a city used to implement
a new text begin targeted new text end revitalization program;

(2) money paid or repaid to a city from the proceeds of a grant that a city has
received from the federal government, a profit or nonprofit corporation, or another entity
or individual, that is to be used to implement a new text begin targeted new text end revitalization program;

(3) tax increments received by a city under sections 469.174 to 469.179 or other
law, if eligible, to be spent in the targeted neighborhood;

(4) the greater of the fair market value or the cost to the city of acquiring land,
buildings, equipment, or other real or personal property that a city contributes, grants,
leases, or loans to a profit or nonprofit corporation or other entity or individual, in
connection with the implementation of a new text begin targeted new text end revitalization program;

(5) city money to be used to acquire, install, reinstall, repair, or improve the
infrastructure facilities of a targeted neighborhood;

(6) money contributed by a city to pay issuance costs, fund bond reserves, or to
otherwise provide financial support for revenue bonds or obligations issued by a city for a
project or program related to the implementation of a new text begin targeted new text end revitalization program;

(7) money derived from fees received by a city in connection with its community
development activities that are to be used in implementing a new text begin targeted new text end revitalization
program;

(8) money derived from the apportionment to the city under section 162.14 or by
special law, and expended in a targeted neighborhood for an activity related to the new text begin targeted new text end
revitalization program;

(9) administrative expenses of the city that are incurred in connection with the
planning, implementation, or reporting requirements of sections 469.201 to 469.207.

(b) City matching money does not include:

(1) city money used to provide a service or to exercise a function that is ordinarily
provided throughout the city, unless an increased level of the service or function is to be
provided in a targeted neighborhood in accordance with a new text begin targeted new text end revitalization program;

(2) the proceeds of bonds issued by the city under chapter 462C or 469 and payable
solely from repayments made by one or more nongovernmental persons in consideration
for the financing provided by the bonds; or

(3) money given by the state to fund any part of the new text begin targeted new text end revitalization program.

Sec. 3.

Minnesota Statutes 2008, section 469.201, subdivision 6, is amended to read:

Subd. 6.

Housing activities.

"Housing activities" include any work or undertaking
to provide housing and related services and amenities primarily for persons and families
of low or moderate income. This work or undertaking may include the planning of
buildings and improvements; the acquisition of real property which may be needed
immediately new text begin to address vacancies, foreclosures, and preservation of housing now new text end or in the
future for housing purposes new text begin ; new text end deleted text begin and the deleted text end demolition deleted text begin of any existing improvements deleted text end ; and the
construction, reconstruction, alteration, and repair of new and existing buildings. Housing
activities also include the provision of a housing rehabilitation and energy improvement
loan and grant program with respect to any residential property located within the targeted
neighborhood, the cost of relocation relating to acquiring property for housing activities,
and programs authorized by chapter 462C.

Sec. 4.

Minnesota Statutes 2008, section 469.201, subdivision 7, is amended to read:

Subd. 7.

Lost unit.

"Lost unit" means a rental housing unit new text begin , that has not been vacant
for more than six months or has not been condemned for code violations, new text end that is lost as a
result of revitalization activities because it is demolished, converted to an owner-occupied
unit that is not a cooperative, or converted to a nonresidential use, or because the gross
rent to be charged exceeds 125 percent of the gross rent charged for the unit six months
before the start of rehabilitation.

Sec. 5.

Minnesota Statutes 2008, section 469.201, subdivision 11, is amended to read:

Subd. 11.

Targeted neighborhood money.

"Targeted neighborhood money" means
the money designated in the new text begin targeted new text end revitalization program to be used to implement the new text begin
targeted new text end revitalization program.

Sec. 6.

Minnesota Statutes 2008, section 469.202, subdivision 2, is amended to read:

Subd. 2.

Eligibility requirements for targeted neighborhoods.

An area within a
city is eligible for designation as a targeted neighborhood if the area meets deleted text begin two deleted text end new text begin three new text end of
the following deleted text begin three deleted text end new text begin four new text end criteria:

deleted text begin (a) deleted text end new text begin (1) new text end The area had an unemployment rate that was twice the unemployment rate for
the Minneapolis and Saint Paul standard metropolitan statistical area as determined by
the most recent federal decennial census.

deleted text begin (b) deleted text end new text begin (2) new text end The median household income in the area was no more than deleted text begin half deleted text end new text begin 80 percent
of new text end the median household income for the Minneapolis and Saint Paul standard metropolitan
statistical area as determined by the most recent federal decennial census.

deleted text begin (c) deleted text end new text begin (3) new text end The area is characterized by residential dwelling units in need of substantial
rehabilitation. An area qualifies under this paragraph if 25 percent or more of the
residential dwelling units are in substandard condition as determined by the city, or if 70
percent or more of the residential dwelling units in the area were built before deleted text begin 1940 deleted text end new text begin 1960 new text end as
determined by the most recent federal decennial census.

new text begin (4) The area is characterized by having a disproportionate number of vacant
residential buildings and mortgage foreclosures. An area qualifies under this paragraph
if a total of one percent or more of the residential buildings have either gone through
mortgage foreclosure as determined by an actual sheriff's sale on record or are vacant as
determined by the city's local ordinances.
new text end

Sec. 7.

Minnesota Statutes 2008, section 469.202, subdivision 3, is amended to read:

Subd. 3.

Additional area eligible for inclusion in targeted neighborhood.

(a)
A city may add to the area designated as a targeted neighborhood under subdivision
2 additional area extending up to four contiguous city blocks in all directions from the
designated targeted neighborhood. For the purpose of this subdivision, "city block" has
the meaning determined by the city deleted text begin ; or deleted text end new text begin .
new text end

(b) The city may enlarge the targeted neighborhood to include portions of a census
tract that is contiguous to a targeted neighborhood, provided that the city council first
determines the additional area satisfies two of the deleted text begin three deleted text end new text begin four new text end criteria in subdivision 2.

Sec. 8.

Minnesota Statutes 2008, section 469.203, is amended to read:

469.203 TARGETED NEIGHBORHOOD REVITALIZATION AND
FINANCING.

Subdivision 1.

Requirements.

For each targeted neighborhood for which a
city requests state financial assistance under section 469.204, the city must prepare a
comprehensive revitalization and financing program that includes the following:

(1) the revitalization objectives of the city for the targeted neighborhood;

(2) the specific activities or means by which the city intends to pursue and implement
the revitalization objectives;

(3) the extent to which the activities identified in clause (2) will benefit low-
and moderate-income families, will alleviate the blighted condition of the targeted
neighborhood, or will otherwise assist in the revitalization of the targeted neighborhood;

(4) a statement of the intended outcomes to be achieved by implementation of the new text begin
targeted new text end revitalization program, how the outcomes will be measured both qualitatively and
quantitatively, and the estimated time over which they will occur; and

(5) a financing program and budget that identifies the financial resources necessary
to implement the new text begin targeted new text end revitalization program, including:

(i) the estimated total cost to implement the revitalization program;

(ii) the estimated cost to implement each activity in the revitalization program
identified in clause (2);

(iii) the estimated amount of financial resources that will be available from all
sources other than from the appropriation available under section 469.204 to implement
the revitalization program, including the amount of private investment expected to result
from the use of public money in the targeted neighborhood;

(iv) the estimated amount of the appropriation available under section 469.204 that
will be necessary to implement the new text begin targeted new text end revitalization program;

(v) a description of the activities identified in the new text begin targeted new text end revitalization program for
which the state appropriation will be committed or spent; and

(vi) a statement of how the city intends to meet the requirement for a financial
contribution from city matching money in accordance with section 469.204, subdivision 3.

Subd. 2.

Targeted neighborhood participation in preparing revitalization
program.

A city requesting state financial assistance under section 469.204 shall deleted text begin adopt deleted text end new text begin
follow new text end a process to involve the residents of targeted neighborhoods in the development,
drafting, and implementation of the new text begin targeted new text end revitalization program. The process shall
include the use of a citizen participation process established by the city. A description
of the process must be included in the program. The process to involve residents of the
targeted neighborhood must include at least one public deleted text begin hearing. The city of Minneapolis
shall establish the community-based process as outlined in subdivision 3. The city of St.
Paul shall use the same community-based process the city used in planning, developing,
drafting, and implementing the revitalization program required under Laws 1987, chapter
386, article 6, section 6. The city of Duluth shall use the same citizen participation process
the city used in planning, developing, and implementing the federal funded community
development program deleted text end new text begin meeting in the targeted neighborhoods new text end .

deleted text begin Subd. 3. deleted text end

deleted text begin Community participation; Minneapolis. deleted text end

deleted text begin (a) For the purposes of this
subdivision, "city" means the city of Minneapolis.
deleted text end

deleted text begin (b) The city shall adopt a process to involve the residents in targeted neighborhoods
and assisted housing in planning, developing, and implementing the program. As part of
this process, the city shall ensure that the community-based process has sufficient resources
to assist in the development of the program and that the advisory board is established.
deleted text end

deleted text begin (c) Beginning with the program for 1991, each targeted neighborhood or group of
targeted neighborhoods in the city must have a strategic planning group whose members
include residents of the targeted neighborhood and representatives of institutions in the
neighborhood. The group shall, as part of its responsibilities, develop a strategic plan
for the neighborhood. This strategic plan must include the elements that the planning
group recommends as part of the program. The strategic plan must also address how
the targeted neighborhood portions of the revitalization program will be integrated with
the elements that are recommended to be included as part of the community resources
program if such a program is developed in the city. If possible, the city shall integrate
the community participation process required under this subdivision with the community
participation process required for the development of the community resources program if
such a program is developed in the city.
deleted text end

deleted text begin (d) The city shall ensure that the strategic planning group required under paragraph
(c) is established. An existing group or organization that reflects the required membership
under paragraph (c) may be designated as the strategic planning group. The city may
provide financial and staff resources to ensure the establishment of the strategic planning
groups, and may use part of the money received from the state under section 469.204 to
assist in the establishment of the targeted neighborhood strategic planning groups.
deleted text end

deleted text begin (e) As part of the process for the development of the program, each targeted
neighborhood strategic planning group shall submit assigned priority recommendations
for the revitalization program to the city and the advisory board established under
paragraph (f).
deleted text end

deleted text begin (f) The city shall establish an urban revitalization action program advisory
committee to assist the city in developing and implementing the preliminary revitalization
program. The advisory committee shall consist of at least two representatives of the
city council appointed by the city council, one or more for-profit or nonprofit housing
developers, one or more representatives of the business community appointed by the city's
chamber of commerce, and resident representatives of the targeted neighborhoods. The
representatives of the targeted neighborhoods shall represent a majority of the membership
of the advisory committee and reflect the geographic, cultural, racial, and ethnic diversity
of the targeted neighborhoods. The city may determine the size of the advisory committee
and may designate an existing entity as the advisory committee if the entity meets the
membership requirements outlined in this subdivision.
deleted text end

deleted text begin (g) The advisory committee shall work closely with city staff in developing and
drafting the preliminary revitalization program. The advisory committee shall be involved
in assessing needs, prioritizing funds, and developing criteria for evaluating program
proposals. In developing the preliminary program, the advisory committee shall give
consideration to the recommendations made by the targeted neighborhood strategic
planning groups.
deleted text end

deleted text begin (h) The advisory committee shall conduct a public hearing and secure input from
residents of targeted neighborhoods, business persons, governmental units affected by the
program, and other organizations and persons.
deleted text end

deleted text begin (i) The advisory committee and city staff may make any changes to the preliminary
program resulting from testimony given at the public hearing. The advisory committee
must formally recommend to the city council a preliminary revitalization program.
deleted text end

Subd. 4.

City approval of program.

(a) Before new text begin or after new text end adoption of a revitalization
program under paragraph (b), the city must submit a preliminary program to the
commissioner and the Minnesota Housing Finance Agency for their comments. deleted text begin The city
may not adopt the revitalization program until comments have been received from the state
agencies or 30 days have elapsed without response after the program was sent to them. deleted text end
Comments received by the city from the state agencies within deleted text begin the 30-day period deleted text end new text begin 30 days new text end
must be responded to in writing by the city deleted text begin before adoption of the program by the city deleted text end .

(b) The city may adopt a new text begin targeted new text end revitalization program only deleted text begin after holding a public
hearing after the program has been prepared. Notice of the hearing must be provided in a
newspaper of general circulation in the city and in the most widely circulated community
newspaper in the targeted neighborhoods not less than ten days nor more than 30 days
before the date of the hearing deleted text end new text begin subject to any local public notification requirements
and consistent with citizen participation process established for identifying targeted
neighborhoods new text end .

(c) A certification by the city that a new text begin targeted new text end revitalization program has been
approved by the city council for the targeted neighborhood must be provided to the
commissioner together with a copy of the program. A copy of the program must also be
provided to the Minnesota Housing Finance Agency and the commissioner of employment
and economic development.

(d) A new text begin targeted new text end revitalization program for the city may be modified at any time by
the city council after a public hearing, notice of which is published in a newspaper of
general circulation in the city and new text begin also new text end in new text begin any community papers serving new text end the targeted
neighborhood at least ten days nor more than 30 days before the date of the hearing. If
the city council determines that the proposed modification is a significant modification
to the program originally certified under paragraph (c), the city council shall implement
the revitalization program approval and certification process of this subdivision for the
proposed modification.

Sec. 9.

Minnesota Statutes 2008, section 469.204, subdivision 2, is amended to read:

Subd. 2.

Allocation.

Each city of the first class, as defined in section 410.01, may
receive a part of the appropriations made available that is the proportion that the population
of such city bears to the combined population of such cities of the first class. One city may
agree to reduce its entitlement amount and to make it available to another city. For the
purposes of this subdivision the population of each city is determined according to the most
recent estimates available to the commissioner. Interest earned by a city from money paid
to the city must be repaid to the commissioner annually unless the new text begin targeted new text end revitalization
program identifies the interest as necessary to implement the revitalization program and
the requirement for city matching money is satisfied with respect to the interest.

Sec. 10.

Minnesota Statutes 2008, section 469.204, subdivision 3, is amended to read:

Subd. 3.

City matching money; drawdown and restriction on use of state
money.

A city may spend state money only if the new text begin targeted new text end revitalization program identifies
city matching money to be used to implement the program in an amount equal to the state
appropriation paid to the city. A city must keep the state money in a segregated fund
for accounting purposes.

Sec. 11.

Minnesota Statutes 2008, section 469.205, subdivision 2, is amended to read:

Subd. 2.

Grants and loans.

In addition to the authority granted by other law, a city
may make grants, loans, and other forms of public assistance to individuals, for-profit and
nonprofit corporations, and other organizations to implement a new text begin targeted new text end revitalization
program. The public assistance must contain the terms the city considers proper to
implement a new text begin targeted new text end revitalization program.

Sec. 12. new text begin APPROPRIATION; TARGETED NEIGHBORHOOD
REVITALIZATION PROGRAMS.
new text end

new text begin $30,000,000 is appropriated for fiscal years 2010 and 2011 from the general fund to
the Department of Employment and Economic Development to carry out activities under
the targeted neighborhood revitalization and financing program under Minnesota Statutes,
section 469.203. This appropriation is added to the department's base budget.
new text end