SF 1772

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:23am

A bill for an act
relating to economic development and housing; modifying the targeted
neighborhood revitalization program; creating a revolving fund; appropriating
money; amending Minnesota Statutes 2008, sections 469.201, subdivisions 2, 4,
6, 7, 10, 11, 12; 469.202; 469.203, subdivisions 1, 2, 4; 469.204, subdivision 1,
by adding a subdivision; 469.205; 469.207, subdivision 2; repealing Minnesota
Statutes 2008, sections 469.203, subdivision 3; 469.204, subdivisions 2, 3.

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 deleted text begin neighborhood deleted text end new text begin community new text end ;

(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 deleted text begin neighborhood deleted text end new text begin community new text end ;

(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 deleted text begin neighborhood deleted text end new text begin community new text end 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 deleted text begin neighborhood deleted text end new text begin community new text end 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 new text begin , new text end the planning of buildings
and improvements; the acquisition of real property new text begin , new text end which may be needed deleted text begin immediately deleted text end new text begin
to address vacancies, foreclosures, and preservation of housing now new text end or in the future deleted text begin for
housing purposes and the deleted text end new text begin ; new text end demolition deleted text begin of any existing improvements deleted text end new text begin ; activities to address
lead abatement, energy efficiencies, or other activities related to the health of a building new 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 deleted text begin neighborhood deleted text end new text begin community new text end , 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 been vacant
for more than six months or has 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 10, is amended to read:

Subd. 10.

Targeted deleted text begin neighborhood deleted text end new text begin community new text end .

"Targeted deleted text begin neighborhood deleted text end new text begin
community new text end " means an area including one or more census tracts, as determined and
measured by the Bureau of Census of the United States Department of Commerce, that
a city council determines in a resolution adopted under section 469.202, subdivision 1,
meets the criteria of section 469.202, subdivision 2, and any additional area designated
under section 469.202, subdivision 3.

Sec. 6.

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

Subd. 11.

Targeted deleted text begin neighborhood deleted text end new text begin community new text end money.

"Targeted deleted text begin neighborhood deleted text end new text begin
community new text end 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. 7.

Minnesota Statutes 2008, section 469.201, subdivision 12, is amended to read:

Subd. 12.

Targeted deleted text begin neighborhood deleted text end new text begin community new text end revitalization and financing
program.

"Targeted deleted text begin neighborhood deleted text end new text begin community new text end revitalization and financing program,"
"revitalization program," or "program" means the targeted deleted text begin neighborhood deleted text end new text begin community new text end
revitalization and financing program adopted in accordance with section 469.203.

Sec. 8.

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

469.202 DESIGNATION OF TARGETED deleted text begin NEIGHBORHOODS deleted text end new text begin
COMMUNITIES new text end .

Subdivision 1.

City authority.

A city may by resolution designate new text begin a new text end targeted
deleted text begin neighborhoods deleted text end new text begin community new text end within its borders after adopting detailed findings that the
designated deleted text begin neighborhoods deleted text end new text begin communities new text end meet the eligibility requirements in subdivision 2
or 3.

Subd. 2.

Eligibility requirements for targeted deleted text begin neighborhoods deleted text end new text begin communities new text end .

An
area within a city is eligible for designation as a targeted deleted text begin neighborhood deleted text end new text begin community new text end 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:

(a) 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.

(b) 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.

(c) 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 (d) The area is characterized by having a disproportionate number of vacant
residential buildings and mortgage foreclosures. An area qualifies under this paragraph
if it has either:
new text end

new text begin (1) a foreclosure rate of at least 1.5 percent in 2008; or
new text end

new text begin (2) a foreclosure rate in 2008 in the city or in a zip code area of the city that is at
least 50 percent higher than the average foreclosure rate in the metropolitan area, as
defined in section 473.121, subdivision 2. For purposes of this paragraph, "foreclosure
rate" means the number of foreclosures, as indicated by sheriff sales records, divided by
the number of households in the city in 2008.
new text end

Subd. 3.

Additional area eligible for inclusion in targeted deleted text begin neighborhood deleted text end new text begin
community new text end .

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

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

Sec. 9.

Minnesota Statutes 2008, section 469.203, subdivision 1, is amended to read:

Subdivision 1.

Requirements.

For each targeted deleted text begin neighborhood deleted text end new text begin community new text end 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 deleted text begin neighborhood deleted text end new text begin community new text end ;

(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
deleted text begin neighborhood deleted text end new text begin community new text end , or will otherwise assist in the revitalization of the targeted
deleted text begin neighborhood deleted text end new text begin community new text end ;

(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 new text begin targeted new text end 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 deleted text begin neighborhood deleted text end new text begin community new text end ;

(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.

Sec. 10.

Minnesota Statutes 2008, section 469.203, subdivision 2, is amended to read:

Subd. 2.

Targeted deleted text begin neighborhood deleted text end new text begin community new text end 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 deleted text begin neighborhoods deleted text end new text begin
communities new text end 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 deleted text begin neighborhood deleted text end new text begin community new text end
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 community new text end .

Sec. 11.

Minnesota Statutes 2008, section 469.203, subdivision 4, is amended to read:

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 the deleted text begin 30-day period deleted text end new text begin 30
days after submission of the preliminary program 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 deleted text begin only 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
communities 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 deleted text begin neighborhood deleted text end new text begin community new text end 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 deleted text begin and the commissioner of
employment and economic development deleted text end .

(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 deleted text begin and in the targeted neighborhood deleted text end 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 new text begin targeted new text end revitalization program
approval and certification process of this subdivision for the proposed modification.

Sec. 12.

Minnesota Statutes 2008, section 469.204, subdivision 1, is amended to read:

Subdivision 1.

Payment of state money.

Upon receipt from a city of a certification
that a revitalization program has been adopted or modified, the commissioner shall, within
30 days, pay to the city the amount of state money identified as necessary to implement
the revitalization program or program modification. State money may be paid to the
city only to the extent that the appropriation limit for the city specified in subdivision 2
is not exceeded. Once the state money has been paid to the city, it becomes targeted
deleted text begin neighborhood deleted text end new text begin community new text end money for use by the city in accordance with an adopted
revitalization program and subject only to the restrictions on its use in sections 469.201 to
469.207.

Sec. 13.

Minnesota Statutes 2008, section 469.204, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Revolving fund. new text end

new text begin A targeted community revitalization revolving fund
is established in the state treasury. The fund consists of all money appropriated to the
commissioner for the purposes of sections 469.201 to 469.207 and all proceeds received
by the commissioner as the result of housing activities related to a targeted community
revitalization program.
new text end

Sec. 14.

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

469.205 CITY POWERS; USES OF TARGETED deleted text begin NEIGHBORHOOD deleted text end new text begin
COMMUNITY new text end MONEY.

Subdivision 1.

Consolidation of existing powers in targeted deleted text begin neighborhoods deleted text end new text begin
communities new text end .

A city may exercise any of its corporate powers within a targeted
deleted text begin neighborhood deleted text end new text begin community new text end . Those powers shall include, but not be limited to, all of
the powers enumerated and granted to any city by chapters 462C, 469, and 474A. For
the purposes of sections 469.048 to 469.068, a targeted deleted text begin neighborhood deleted text end new text begin community new text end is
considered an industrial development district. A city may exercise the powers of sections
469.048 to 469.068 in conjunction with, and in addition to, exercising the powers granted
by sections 469.001 to 469.047 and chapter 462C, in order to promote and assist housing
construction and rehabilitation within a targeted deleted text begin neighborhood deleted text end new text begin community new text end . For the
purposes of section 462C.02, subdivision 9, a targeted deleted text begin neighborhood deleted text end new text begin community new text end is
considered a "targeted area."

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.

Subd. 3.

Eligible uses of targeted deleted text begin neighborhood deleted text end new text begin community new text end money.

The city may
spend targeted deleted text begin neighborhood deleted text end new text begin community new text end money for any purpose authorized by subdivision
1 or 2, except that an amount equal to at least 50 percent of the state payment under section
469.204 made to the city must be used for housing activities. Use of deleted text begin target neighborhood deleted text end new text begin
targeted community new text end money must be authorized in a new text begin targeted new text end revitalization program.

Sec. 15.

Minnesota Statutes 2008, section 469.207, subdivision 2, is amended to read:

Subd. 2.

Annual report.

A city that begins to implement a revitalization program
in a calendar year must, by March 1 of the succeeding calendar year, provide a detailed
report on the revitalization program or programs being implemented in the city. The report
must describe the status of the program implementation and analyze whether the intended
outcomes identified in section 469.203, subdivision 1, clause (4), are being achieved. The
report must include at least the following:

(1) the number of housing units, including lost units, removed, created, lost,
replaced, relocated, and assisted as a result of the program. The level of rent of the units
and the income of the households affected must be included in the report;

(2) the number and type of commercial establishments removed, created, and
assisted as a result of a revitalization program. The report must include information
regarding the number of new jobs created by category, whether the jobs are full time or
part time, and the salary or wage levels of both new and expanded jobs in the affected
commercial establishments;

(3) a description of a statement of the cost of the public improvement projects that
are part of the program and the number of jobs created for each $20,000 of money spent
on commercial projects and applicable public improvement projects;

(4) the increase in the tax capacity for the city as a result of the assistance to
commercial and housing assistance; and

(5) the amount of private investment that is a result of the use of public money
in a targeted deleted text begin neighborhood deleted text end new text begin community new text end .

The report must be submitted to the commissioner, the Minnesota housing finance
agency, and the legislative audit commission, and must be available to the public.

Sec. 16. new text begin APPROPRIATION.
new text end

new text begin $30,000,000 is appropriated in fiscal year 2010 from the general fund to the
Department of Employment and Economic Development to carry out activities under the
targeted community revitalization and financing program. This appropriation is available
until spent.
new text end

Sec. 17. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, sections 469.203, subdivision 3; and 469.204, subdivisions
2 and 3, new text end new text begin are repealed.
new text end