HF 2406

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to economic development; establishing a transit improvement center
grant program; appropriating money; amending Minnesota Statutes 2006,
sections 116J.415, subdivision 1; 116J.554, subdivision 2; 116J.575, subdivision
1a; 462A.201, subdivision 2; 473.252, subdivision 1a; 473.253, subdivision 2;
473.351, subdivision 1; proposing coding for new law in Minnesota Statutes,
chapter 469.

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

Section 1.

Minnesota Statutes 2006, section 116J.415, subdivision 1, is amended to
read:

Subdivision 1.

Organization.

The commissioner shall make challenge grants to
regional organizations, for the purpose of providing financial assistance to encourage
private investment, to provide jobs or job enhancement for low-income persons, new text begin to
fund transit improvement centers under section 469.350, new text end and to promote economic
development in the rural areas of the state.

Sec. 2.

Minnesota Statutes 2006, section 116J.554, subdivision 2, is amended to read:

Subd. 2.

Qualifying sites.

A site qualifies for a grant under this section, if the
following criteria are met:

(1) the site is not scheduled for funding during the current or next fiscal year under
the Comprehensive Environmental Response, Compensation, and Liability Act, United
States Code, title 42, section 9601, et seq. or under the Environmental Response, and
Liability Act under sections 115B.01 to 115B.20;

(2) the appraised value of the site after adjusting for the effect on the value of the
presence or possible presence of contaminants using accepted appraisal methodology, or
the current market value of the site as issued under section 273.121, separately taking into
account the effect of the contaminants on the market value, (i) is less than 75 percent of
the estimated project costs for the site or (ii) is less than or equal to the estimated cleanup
costs for the site and the cleanup costs equal or exceed $3 per square foot for the site; and

(3) if the proposed cleanup is completed, it is expected that the site will be improved
with buildings or other improvements and these improvements will provide a substantial
increase in the property tax base within a reasonable period of time or the site will be used
for an important publicly owned or tax-exempt facility new text begin or a transit improvement center
under section 469.350 new text end .

Sec. 3.

Minnesota Statutes 2006, section 116J.575, subdivision 1a, is amended to read:

Subd. 1a.

Priorities.

(a) If applications for grants exceed the available
appropriations, grants shall be made for sites that, in the commissioner's judgment, provide
the highest return in public benefits for the public costs incurred. "Public benefits" include
job creation, bioscience development, environmental benefits to the state and region,
efficient use of public transportation, efficient use of existing infrastructure, provision of
affordable housing, multiuse development that constitutes community rebuilding rather
than single-use development, crime reduction, blight reduction, community stabilization,
and property tax base maintenance or improvement. In making this judgment, the
commissioner shall give priority to redevelopment projects with one or more of the
following characteristics:

(1) the need for redevelopment in conjunction with contamination remediation needs;

(2) the redevelopment project meets current tax increment financing requirements
for a redevelopment district and tax increments will contribute to the project;

(3) the redevelopment potential within the municipality;

(4) proximity to public transit if located in the metropolitan area; and

(5) multijurisdictional projects that take into account the need for affordable
housing, transportation, and environmental impact new text begin , including, but not limited to, transit
improvement centers under section 469.350 new text end .

(b) The factors in paragraph (a) are not listed in a rank order of priority; rather, the
commissioner may weigh each factor, depending upon the facts and circumstances, as
the commissioner considers appropriate.

Sec. 4.

Minnesota Statutes 2006, section 462A.201, subdivision 2, is amended to read:

Subd. 2.

Low-income housing.

(a) The agency may use money from the housing
trust fund account to provide loans or grants for:

(1) projects for the development, construction, acquisition, preservation, and
rehabilitation of low-income rental and limited equity cooperative housing units, including
temporary and transitional housing new text begin , and housing included in a transit improvement center
under section 469.350 new text end ;

(2) the costs of operating rental housing, as determined by the agency, that are
unique to the operation of low-income rental housing or supportive housing; and

(3) rental assistance, either project-based or tenant-based.

For purposes of this section, "transitional housing" has the meaning given by the United
States Department of Housing and Urban Development. Loans or grants for residential
housing for migrant farmworkers may be made under this section.

(b) The housing trust fund account must be used for the benefit of persons and
families whose income, at the time of initial occupancy, does not exceed 60 percent of
median income as determined by the United States Department of Housing and Urban
Development for the metropolitan area. At least 75 percent of the funds in the housing
trust fund account must be used for the benefit of persons and families whose income, at
the time of initial occupancy, does not exceed 30 percent of the median family income
for the metropolitan area as defined in section 473.121, subdivision 2. For purposes of
this section, a household with a housing assistance voucher under Section 8 of the United
States Housing Act of 1937, as amended, is deemed to meet the income requirements
of this section.

The median family income may be adjusted for families of five or more.

(c) Rental assistance under this section must be provided by governmental
units which administer housing assistance supplements or by for-profit or nonprofit
organizations experienced in housing management. Rental assistance shall be limited
to households whose income at the time of initial receipt of rental assistance does not
exceed 60 percent of median income, as determined by the United States Department of
Housing and Urban Development for the metropolitan area. Priority among comparable
applications for tenant-based rental assistance will be given to proposals that will serve
households whose income at the time of initial application for rental assistance does not
exceed 30 percent of median income, as determined by the United States Department
of Housing and Urban Development for the metropolitan area. Rental assistance must
be terminated when it is determined that 30 percent of a household's monthly income
for four consecutive months equals or exceeds the market rent for the unit in which the
household resides plus utilities for which the tenant is responsible. Rental assistance may
only be used for rental housing units that meet the housing maintenance code of the local
unit of government in which the unit is located, if such a code has been adopted, or the
housing quality standards adopted by the United States Department of Housing and Urban
Development, if no local housing maintenance code has been adopted.

(d) In making the loans or grants, the agency shall determine the terms and
conditions of repayment and the appropriate security, if any, should repayment be required.
To promote the geographic distribution of grants and loans, the agency may designate
a portion of the grant or loan awards to be set aside for projects located in specified
congressional districts or other geographical regions specified by the agency. The agency
may adopt rules for awarding grants and loans under this subdivision.

Sec. 5.

new text begin [469.350] TRANSIT IMPROVEMENT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The terms defined in this section have the meanings
given them.
new text end

new text begin (b) "Applicant" means a local governmental unit or a joint powers board, established
under section 471.59.
new text end

new text begin (c) "Commissioner" means the commissioner of employment and economic
development.
new text end

new text begin (d) "Local governmental unit" means a statutory or home rule charter city or town,
county, or school district.
new text end

new text begin (e) "Minor transit station" means a physical structure that supports the
interconnection of various public transportation modes, and that promotes and achieves
the loading, discharging, and transporting of people. "Major transit station" offers
access to frequent high-speed service. If the term "transit station" is used without being
designated as major or minor, both types of transit stations are intended to be included.
new text end

new text begin (f) "Transit improvement center" means a geographic area designated by the
commissioner composed of parcels that lie in part within one-quarter mile of a minor
transit station, or one-half mile from a major transit station.
new text end

new text begin Subd. 2. new text end

new text begin Priorities. new text end

new text begin The commissioner shall designate a transit improvement
center if the proposed transit improvement center will increase the effectiveness of a
mass transit project by incorporating one or more modes of public transportation with
commercial and housing development, as well as providing a clean and pleasant place for
pedestrian use. Before designating a transit improvement center, the commissioner shall
consult with other affected state or regional agencies. This includes, but is not limited to,
the Department of Transportation, the Minnesota Housing Finance Agency, and, if the
proposed transit center is within the seven-county metropolitan area, the Metropolitan
Council. The commissioner may modify the transit improvement plan, including the
boundaries of the transit improvement center, if it would better meet the objectives
of the transit improvement center. The commissioner shall notify the applicant of the
modifications and provide a statement of the reasons for the modifications.
new text end

new text begin Subd. 3. new text end

new text begin Transit improvement center plan. new text end

new text begin The applicant must adopt by resolution
a transit improvement plan for the transit improvement center before submitting the
application to the commissioner. The transit improvement plan must, at a minimum,
include the following:
new text end

new text begin (1) a map indicating the geographic boundaries of the transit center;
new text end

new text begin (2) if there is a residential component, the plan must propose at least six residential
units per acre for a transit improvement center to support a minor transit station and at
least 12 residential units per acre for a transit improvement center designed to encourage
use of a major transit station. The plan must include a statement regarding the variety of
housing types, including housing appropriate for disabled people and senior citizens, and
prices to be offered within the transit improvement center;
new text end

new text begin (3) commercial areas in the plan must provide a minimum of 25 employees per acre
and a minimum of 50 employees per acre for transit improvement centers that include a
major transit station;
new text end

new text begin (4) an analysis of the demographic mix that is anticipated to use the transit station;
new text end

new text begin (5) a statement as to the facilities to be constructed, including public infrastructure
and privately owned structures, parks, and public buildings;
new text end

new text begin (6) a finding that the redevelopment or development of the transit center will
promote higher density land uses, which would lead to increased ridership;
new text end

new text begin (7) a description of pedestrian-friendly improvements to be provided, including
walkways, parkways, and signage; and
new text end

new text begin (8) specify how state, regional, and local resources will be used.
new text end

new text begin Subd. 4. new text end

new text begin Report. new text end

new text begin The commissioner shall report annually to the legislative
committees with jurisdiction over economic development and transportation on the status
of the transit improvement center program.
new text end

Sec. 6.

new text begin [469.351] REDEVELOPMENT AND TRANSIT IMPROVEMENT
INVESTMENT FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Investment fund establishment. new text end

new text begin A redevelopment and transit
improvement investment fund is established in the state treasury. The commissioner
of employment and economic development shall make low or no-interest loans to
eligible organizations for public infrastructure, including parks, walkways, and parking
facilities, environmental infrastructure, remediation, site acquisition, blight mitigation,
and geotechnical connections.
new text end

new text begin Subd. 2. new text end

new text begin Investment authorized. new text end

new text begin The commissioner may make loans under the
following terms:
new text end

new text begin (1) the organization seeking a loan must guarantee repayment of 100 percent of
the funds;
new text end

new text begin (2) loans must be for a term of ten years, unless repayment will be made from a
tax increment financing district or other state or federal funds, at an interest rate to be
negotiated by the commissioner;
new text end

new text begin (3) during the ten-year term of the loan, the eligible organization shall make annual
interest-only payments;
new text end

new text begin (4) at the end of the ten-year term, the eligible organization must pay the entire
principal amount of the initial loan;
new text end

new text begin (5) a loan may not exceed $2,000,000;
new text end

new text begin (6) the full amount of state investment will be advanced to the approved organization
upon execution of a formal loan agreement specifying the terms of the loan, as well as
reporting and other requirements outlined in subdivision 5;
new text end

new text begin (7) the eligible organization must maintain the funds in accounts that allow the funds
to be readily available for business investments;
new text end

new text begin (8) the eligible organization and the commissioner may agree on contract
specifications that are consistent with payback from a tax increment financing district or
any other state and federal funds that may be forthcoming; and
new text end

new text begin (9) an organization that receives a loan shall report annually, in a format prescribed
by the commissioner, the nature and amount of the business investments made, including,
for each financing transaction involving funds received as provided in this section, all
forms and amounts of financing from sources other than the loan under this section, along
with the number of jobs created and private sector investment leveraged.
new text end

new text begin Subd. 3. new text end

new text begin Requirements for state investments. new text end

new text begin All investments are subject to an
investment agreement that must include:
new text end

new text begin (1) a description of the eligible organization, including business finance experience,
qualifications, and investment history;
new text end

new text begin (2) a description of the uses of investment proceeds by the eligible organization;
new text end

new text begin (3) an explanation of the investment objectives; and
new text end

new text begin (4) a description of the method of payment.
new text end

Sec. 7.

Minnesota Statutes 2006, section 473.252, subdivision 1a, is amended to read:

Subd. 1a.

Development authority.

For the purpose of this section, "development
authority" means a statutory or home rule charter city, housing and redevelopment
authority, economic development authority, new text begin transit improvement center under section
469.350, new text end and a port authority.

Sec. 8.

Minnesota Statutes 2006, section 473.253, subdivision 2, is amended to read:

Subd. 2.

Distribution of funds.

The council shall use the funds in the livable
communities demonstration account to make grants or loans to municipalities participating
in the local housing incentives program under section 473.254 or to metropolitan area
counties or development authorities to fund the initiatives specified in section 473.25,
paragraph (b), in participating municipalities. A grant to a metropolitan county or a
development authority must be used for a project in a participating municipality. For the
purpose of this section, "development authority" means a statutory or home rule charter
city, housing and redevelopment authority, economic development authority, new text begin a transit
improvement center under section 469.350, new text end or port authority.

Sec. 9.

Minnesota Statutes 2006, section 473.351, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

The definitions in this subdivision apply to this section.

(a) "Implementing agency" means the counties of Anoka, Washington, Ramsey,
Scott, Carver, Dakota, the city of St. Paul, the city of Bloomington, the Minneapolis Park
and Recreation Board, and the Three Rivers Park District.

(b) "Operation and maintenance expenditures" means the cost of providing for the
operation and maintenance of waters, lands, and facilities that are a part of the metropolitan
area regional park and open space system new text begin or a transit improvement center under section
469.350 new text end , including but not limited to, the provision of fire, police, maintenance, forestry,
rehabilitation expenses pertaining to routine care, and the allocation of the administrative
overhead costs of the regional park and open space systems.

(c) "Operation and maintenance money" means money appropriated by the
legislature to the commissioner of employment and economic development for distribution
by the Metropolitan Council.

(d) "Regional recreation open space systems" means those parks that have been
designated by the Metropolitan Council under section 473.145.

Sec. 10. new text begin APPROPRIATION.
new text end

new text begin $12,000,000 is appropriated in fiscal year 2008 from the general fund to the
commissioner of employment and economic development for the loan program in the
redevelopment and transit improvement investment fund. This appropriation is available
until expended.
new text end