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SF 2078

4th Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 11:34pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 04/15/2009
1st Engrossment Posted on 04/29/2009
2nd Engrossment Posted on 05/05/2009
3rd Engrossment Posted on 05/07/2009
4th Engrossment Posted on 05/08/2009

Current Version - 4th Engrossment

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A bill for an act
relating to economic development; providing for stimulation of the construction
industry; streamlining certain construction projects; creating a construction
loan guarantee program; authorizing green energy revenue bonds; permitting
local assessments for energy improvements; providing for home purchase
loans; providing tax abatement for newly constructed residential structures in
flood-damaged areas; providing a low-income housing tax credit; appropriating
money; amending Minnesota Statutes 2008, sections 16C.16, by adding a
subdivision; 429.011, by adding subdivisions; 429.021, subdivision 1; 429.031,
subdivision 3; 462A.21, by adding a subdivision; 469.153, subdivision 2;
469.176, subdivision 2, by adding a subdivision; proposing coding for new law
in Minnesota Statutes, chapters 116J; 290; 462A; 469.

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

Section 1.

Minnesota Statutes 2008, section 16C.16, is amended by adding a
subdivision to read:


new text begin Subd. 13. new text end

new text begin Actions related to stimulus projects. new text end

new text begin This section applies to the
construction of a stimulus project, as authorized in section 469.176, subdivision 8.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [116J.408] TEMPORARY LOAN GUARANTEE ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Construction loan guarantee program created. new text end

new text begin The commissioner
of employment and economic development shall administer a program under this section
to guarantee construction or permanent loans by a private lender for construction projects
in this state that will commence on or after July 1, 2009. A loan guarantee may not be
made after December 31, 2012.
new text end

new text begin Subd. 2. new text end

new text begin Eligible projects. new text end

new text begin A project is eligible for a guarantee under this section if
it has a private loan commitment of $1,000,000 or more to pay for the costs of a related
residential, commercial, industrial, or institutional construction project.
new text end

new text begin Subd. 3. new text end

new text begin Guarantee amount limits. new text end

new text begin A guarantee may not be made for more than 25
percent of the principal amount of the loan made by a private lender.
new text end

new text begin Subd. 4. new text end

new text begin Loan guarantee application process. new text end

new text begin The commissioner shall develop
an application form by which a person may apply for a loan guarantee. The application
shall request information required by the commissioner to determine whether a project
loan is eligible for a guarantee and to determine whether a guarantee should be issued.
The application must be submitted jointly by a lender and a project developer. The
commissioner shall issue loan guarantees quarterly. The first round of guarantees must be
issued for applications submitted by June 30, 2009.
new text end

new text begin Subd. 5. new text end

new text begin Guarantee criteria. new text end

new text begin (a) In issuing loan guarantees for projects,
the commissioner shall attempt to distribute the projects throughout the state. The
commissioner shall require information from an applicant concerning the number of jobs
involved in a project and the wages expected to be paid for jobs related to the project and
may consider the number of jobs created in relation to the amount of a loan guarantee.
new text end

new text begin (b) The ability of the borrower to repay the loan from cash flow of the project is the
primary consideration in deciding whether to issue a loan guarantee. A comprehensive
source of standard financial ratios and financial statistics must be compared to companies
in the same industry. Other criteria, including audited financial statements, management
capability, collateral, and owner's equity contribution, are important considerations,
consistent with normal bank underwriting standards.
new text end

new text begin (c) The lender must certify that the state guarantee is necessary for the construction
project to proceed and that without the guarantee the loan as described in the application
will not be made.
new text end

new text begin Subd. 6. new text end

new text begin Construction loan guarantee account. new text end

new text begin A construction loan guarantee
account is established in the state treasury. Money in the account consists of money
appropriated to the account, interest and other earnings on money in the account, fees
credited to the account under subdivision 7, sales and local taxes credited to the account
under subdivision 8, and money received from any other source.
new text end

new text begin Subd. 7. new text end

new text begin Guarantee fee. new text end

new text begin The commissioner shall charge a onetime loan guarantee
issuance fee of no more than three percent of the principal amount of the loan being
guaranteed. Fees must be credited to the construction loan guarantee account.
new text end

new text begin Subd. 8. new text end

new text begin Sales and use taxes. new text end

new text begin The amount collected from taxes imposed by
chapter 297A, upon retail sales, and upon the privilege of use, storage, or consumption
in this state, of personal property and services purchased for the construction of any
project for which a loan guarantee has been made, less any refunds required by law and a
proportionate share of the cost of administration and enforcement of the assessment and
collection of the taxes, are appropriated from the general fund to the commissioner of
finance for transfer to the construction loan guarantee account at least once each year from
and after the date the guarantee was issued. The commissioner of finance shall determine
from information provided by the person to whom the loan guarantee was issued the
amount of taxes so imposed and from the information provided by the commissioner of
revenue the amount of refunds or costs to be deducted from them.
new text end

new text begin Subd. 9. new text end

new text begin Limitation on guaranteed amount. new text end

new text begin The amount of all guaranties under
this section must not exceed money in the construction loan guarantee account available
to satisfy all outstanding guaranties. Unless sufficient applications are not received, no
less than 40 percent of all amounts guaranteed must be for projects located outside the
seven-county metropolitan area. A guarantee may not exceed $50,000,000 on any one
project.
new text end

new text begin Subd. 10. new text end

new text begin Appropriation. new text end

new text begin Money in the construction loan guarantee account is
appropriated to the commissioner of employment and economic development to make
payments on loan guarantees and to administer the loan guarantee program under this
section.
new text end

new text begin Subd. 11. new text end

new text begin Repayment to general fund. new text end

new text begin The commissioner must annually,
commencing on July 1, 2013, transfer to the general fund any money in the construction
loan guarantee account that the commissioner determines is not needed to satisfy the
obligations of the account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [290.0682] LOW-INCOME HOUSING CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, unless the context clearly
requires otherwise, the following terms have the meanings given.
new text end

new text begin (a) "Agency" means the Minnesota Housing Finance Agency.
new text end

new text begin (b) "Commissioner" means the commissioner of revenue.
new text end

new text begin (c) "Compliance period" means the period of 15 taxable years beginning with the
first taxable year the credit is claimed under this section.
new text end

new text begin (d) "Eligibility statement" means a statement authorized and issued by the agency
certifying that a project is a qualified Minnesota project. The eligibility statement must
specify the maximum annual amount of the credit authorized for the project. The agency
shall only authorize tax credits to qualified Minnesota projects that are placed in service
on or after January 1, 2010. The agency shall issue the eligibility statement for any
suballocator within ten days of a request for a qualified Minnesota project.
new text end

new text begin (e) "Federal Low-Income Housing Tax Credit" means the federal tax credit as
provided in section 42 of the Internal Revenue Code.
new text end

new text begin (f) "Low-income project" is a qualified low-income housing project, as defined in
section 42 of the Internal Revenue Code that has restricted rents that do not exceed 30
percent of applicable imputed income limitation under section 42 of the Internal Revenue
Code, for at least 40 percent of its units occupied by persons or families having income of
60 percent or less of the median income, or at least 20 percent of the units occupied by
persons or families having income of 50 percent or less of the median income.
new text end

new text begin (g) "Median income" means the area median gross income as provided in section
42 of the Internal Revenue Code, and which is determined by the federal Department of
Housing and Urban Development guidelines and adjusted for family size.
new text end

new text begin (h) "Qualified Minnesota project" means a qualified low-income housing project
as that term is defined in section 42 of the Internal Revenue Code that is located in
Minnesota, that:
new text end

new text begin (1) meets the requirements of this section;
new text end

new text begin (2) has been allocated federal low-income housing tax credits by the agency or
a suballocator;
new text end

new text begin (3) has been allocated Minnesota low-income housing tax credits by the agency or
a suballocator; and
new text end

new text begin (4) whose owner enters into a regulatory agreement with the agency or the
suballocator enforceable by state and local agencies.
new text end

new text begin (i) "Regulatory agreement" means an agreement between the owner of the qualified
Minnesota project and the agency or suballocator and recorded as an affordable housing
restriction on the real property on which the qualified Minnesota project is located, that
requires the project to be operated in accordance with the requirements of this section for
not less than 15 years from the expiration date of the compliance period. The agreement
may be subordinated to the lien of a bank or other institutional lender providing financing
to the qualified Minnesota project upon the request of the bank or lender.
new text end

new text begin (j) "Suballocator" means an allocator of low-income federal housing credits and
credits under this section, other than the agency, as provided in section 462A.222.
new text end

new text begin (k) "Taxpayer" means a person, firm, partnership, or other entity subject to the
income tax or corporate franchise tax imposed by the provisions of this chapter.
new text end

new text begin (l) Terms not otherwise defined in this subdivision have the meanings provided in
section 42 of the Internal Revenue Code.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota low-income housing tax credit; allocation. new text end

new text begin (a) A Minnesota
low-income housing tax credit may be claimed under this section. The agency and all
suballocators, as provided in section 462A.222, may authorize credits annually, for the
ten-year period beginning January 1, 2010, and ending December 31, 2019, and each year
thereafter. The total amount of the credits allowable each year is: (1) 50 percent of the
federal per capita tax credits awarded to the state under section 42 of the Internal Revenue
Code; (2) unused Minnesota low-income housing tax credits, if any, for the preceding
calendar years; and (3) any Minnesota low-income housing tax credits returned to the
agency or a suballocator by a qualified Minnesota project.
new text end

new text begin (b) Unless otherwise provided in this section, the agency shall authorize, administer,
and determine eligibility for the credit under this section, in accordance with rules adopted
by the agency. The agency and suballocators, in the manner and in the respective amounts
provided in section 462A.222, shall allocate the credit in accordance with the standards
and requirements as set forth in section 42 of the Internal Revenue Code; provided,
however, that the combined allocated federal and Minnesota low-income housing tax
credit must be the least amount necessary to ensure financial feasibility.
new text end

new text begin (c) The agency and suballocators shall allocate the total available Minnesota
low-income housing tax credit among as many qualified Minnesota projects as fiscally
feasible.
new text end

new text begin (d) A taxpayer, if allocated a federal low-income housing tax credit with respect to a
project, is allowed a state tax credit with respect to the same qualified Minnesota project,
if the agency issues an eligibility statement for that project, and provided that the amount
of the credit available to a qualified Minnesota project shall be authorized and allocated
by the agency or suballocator, based on the qualified Minnesota project's need for the
credit for economic feasibility.
new text end

new text begin Subd. 3. new text end

new text begin How taken. new text end

new text begin (a) A taxpayer may claim the Minnesota low-income housing
tax credit against the taxes imposed under this chapter, in equal amounts for each of the
ten years of the credit period. The credit is not refundable. Any amount of the credit
that exceeds the tax due for a taxable year may be carried forward to any of the five
subsequent taxable years.
new text end

new text begin (b) All or any portion of tax credits issued under this section may be allocated to one
or more taxpayers who have any ownership interest in the taxpayer that owns the qualified
Minnesota project, without regard to any other allocation of credits, depreciation, profits,
or losses under the entities' organizational documents. Alternatively, all or any portions of
the tax credits issued under this section may be transferred, sold, or assigned to a taxpayer
without transferring any ownership interest in the qualified Minnesota project or any
interest in the entity owning the project. The transfer must include all credits attributable
to periods after the transfer date, except for carryforward of prior year credits.
new text end

new text begin (c) An owner of a qualified Minnesota project must certify to the commissioner the
amount of credit allocated to each taxpayer and provide the commissioner with other
information required by the commissioner to determine the allocation of the credit. The
owner of a qualified Minnesota project eligible for the credit shall submit, together with
the project owner's tax return under this chapter, a copy of the eligibility statement issued
by the agency with respect to the qualified Minnesota project. If the owner fails to attach
the eligibility statement, a credit is not allowed for that project for that taxable year until
the copy is provided to the commissioner.
new text end

new text begin (d) If recapture is required under subdivision 5, any statement submitted to the
commissioner as provided in this subdivision must include the proportion of the state
credit required to be recaptured, the identity of each taxpayer subject to the recapture, and
the amount of credit previously allocated to the taxpayer.
new text end

new text begin Subd. 4. new text end

new text begin Rules. new text end

new text begin The director of the agency, in consultation with the commissioner,
may adopt rules necessary to administer the provisions of this section.
new text end

new text begin Subd. 5. new text end

new text begin Recapture. new text end

new text begin If under section 42 of the Internal Revenue Code, a portion of
any federal low-income housing tax credits taken on a low-income project is required to
be recaptured, the credit authorized by this section with respect to the qualified Minnesota
project must also be recaptured. The state recapture amount shall be equal to the amount
of the state low-income housing tax credits previously claimed times a fraction, the
numerator of which is the amount of recaptured federal low-income housing tax credits
and the denominator of which is the amount of federal low-income housing tax credits
previously claimed.
new text end

new text begin Subd. 6. new text end

new text begin Credit duration. new text end

new text begin Except for unused credits carried forward under this
section, a taxpayer is eligible for the Minnesota low-income housing tax credit for a
project for no more than ten taxable years.
new text end

new text begin Subd. 7. new text end

new text begin Education, promotion, and enhancement. new text end

new text begin (a) The agency, in cooperation
with the suballocators, shall conduct periodic educational seminars and promotional
events to inform potentially interested purchasers of the state credit and shall facilitate
and encourage creation of state credit buyer pools to acquire federal and state credits
in Minnesota.
new text end

new text begin (b) The agency, in collaboration with the suballocators, may pursue methods of
enhancing the efficiency of the Minnesota low-income housing tax credit program,
including pursuing opinions from the United States Department of Treasury's Internal
Revenue Service in the form of general counsel memoranda, private letter rulings and
other notices, rulings, or guidelines, to enhance the value of the credits; by reviewing
other state low-income housing tax programs that utilize an option for taxpayers to receive
the tax credits in the form of a loan generated by transferring the credit to a designated
state entity; and any other methods.
new text end

new text begin (c) Not later than January 15, 2015, the agency shall submit a report to the chairs
and ranking minority members of the taxes committees of the senate and the house of
representatives on the success and efficiency of the Minnesota low-income housing tax
credit program and recommendations for enhancement or modifications of the program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
provided that the credit is available for taxable years beginning after December 31, 2009.
new text end

Sec. 4.

Minnesota Statutes 2008, section 429.011, is amended by adding a subdivision
to read:


new text begin Subd. 2c. new text end

new text begin Municipality, energy conservation improvements. new text end

new text begin For purposes
of construction, improvement, alteration, and reconstruction of an on-site energy
conservation system, a municipality may provide the improvements through and impose
special assessments upon the request of a port authority, economic development authority,
industrial development authority, or housing and redevelopment authority.
new text end

Sec. 5.

Minnesota Statutes 2008, section 429.011, is amended by adding a subdivision
to read:


new text begin Subd. 17. new text end

new text begin On-site energy conservation improvements. new text end

new text begin "On-site energy
conservation improvement" means any type of active or passive improvement, including
insulation; windows or doors; heating, cooling, or other building systems; lighting
systems; energy-related process or manufacturing changes; energy demand monitoring
and regulation equipment; and any other type of device, improvement, or equipment
installed in a building for the primary purpose of reduction in the use of energy in the
building, whether the devices, equipment, or improvements so installed are publicly
or privately owned.
new text end

Sec. 6.

Minnesota Statutes 2008, section 429.021, subdivision 1, is amended to read:


Subdivision 1.

Improvements authorized.

The council of a municipality shall have
power to make the following improvements:

(1) To acquire, open, and widen any street, and to improve the same by constructing,
reconstructing, and maintaining sidewalks, pavement, gutters, curbs, and vehicle parking
strips of any material, or by grading, graveling, oiling, or otherwise improving the same,
including the beautification thereof and including storm sewers or other street drainage
and connections from sewer, water, or similar mains to curb lines.

(2) To acquire, develop, construct, reconstruct, extend, and maintain storm and
sanitary sewers and systems, including outlets, holding areas and ponds, treatment plants,
pumps, lift stations, service connections, and other appurtenances of a sewer system,
within and without the corporate limits.

(3) To construct, reconstruct, extend, and maintain steam heating mains.

(4) To install, replace, extend, and maintain street lights and street lighting systems
and special lighting systems.

(5) To acquire, improve, construct, reconstruct, extend, and maintain water works
systems, including mains, valves, hydrants, service connections, wells, pumps, reservoirs,
tanks, treatment plants, and other appurtenances of a water works system, within and
without the corporate limits.

(6) To acquire, improve and equip parks, open space areas, playgrounds, and
recreational facilities within or without the corporate limits.

(7) To plant trees on streets and provide for their trimming, care, and removal.

(8) To abate nuisances and to drain swamps, marshes, and ponds on public or private
property and to fill the same.

(9) To construct, reconstruct, extend, and maintain dikes and other flood control
works.

(10) To construct, reconstruct, extend, and maintain retaining walls and area walls.

(11) To acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and
promote a pedestrian skyway system. Such improvement may be made upon a petition
pursuant to section 429.031, subdivision 3.

(12) To acquire, construct, reconstruct, extend, operate, maintain, and promote
underground pedestrian concourses.

(13) To acquire, construct, improve, alter, extend, operate, maintain, and promote
public malls, plazas or courtyards.

(14) To construct, reconstruct, extend, and maintain district heating systems.

(15) To construct, reconstruct, alter, extend, operate, maintain, and promote fire
protection systems in existing buildings, but only upon a petition pursuant to section
429.031, subdivision 3.

(16) To acquire, construct, reconstruct, improve, alter, extend, and maintain highway
sound barriers.

(17) To improve, construct, reconstruct, extend, and maintain gas and electric
distribution facilities owned by a municipal gas or electric utility.

(18) To purchase, install, and maintain signs, posts, and other markers for addressing
related to the operation of enhanced 911 telephone service.

(19) To improve, construct, extend, and maintain facilities for Internet access and
other communications purposes, if the council finds that:

(i) the facilities are necessary to make available Internet access or other
communications services that are not and will not be available through other providers or
the private market in the reasonably foreseeable future; and

(ii) the service to be provided by the facilities will not compete with service provided
by private entities.

(20) To assess affected property owners for all or a portion of the costs agreed to
with an electric utility, telecommunications carrier, or cable system operator to bury or
alter a new or existing distribution system within the public right-of-way that exceeds the
utility's design and construction standards, or those set by law, tariff, or franchise, but only
upon petition under section 429.031, subdivision 3.

new text begin (21) To construct, reconstruct, improve, alter, and maintain on-site energy
conservation improvements in existing buildings, but only upon a petition under section
429.031, subdivision 3. The activities under this clause may also be undertaken by a port
authority, economic development authority, industrial development authority, or housing
and redevelopment authority, and the municipality may act on the request of those entities
in imposing special assessments.
new text end

Sec. 7.

Minnesota Statutes 2008, section 429.031, subdivision 3, is amended to read:


Subd. 3.

Petition by all owners.

Whenever all owners of real property abutting
upon any street named as the location of any improvement shall petition the council
to construct the improvement and to assess the entire cost against their property, the
council may, without a public hearing, adopt a resolution determining such fact and
ordering the improvement. The validity of the resolution shall not be questioned by
any taxpayer or property owner or the municipality unless an action for that purpose
is commenced within 30 days after adoption of the resolution as provided in section
429.036. Nothing herein prevents any property owner from questioning the amount
or validity of the special assessment against the owner's property pursuant to section
429.081. In the case of a petition for the municipality to own and install a fire protection
system, a pedestrian skyway system, new text begin on-site energy conservation improvements, new text end or
on-site water contaminant improvements, the petition must contain or be accompanied
by an undertaking satisfactory to the city by the petitioner that the petitioner will grant
the municipality the necessary property interest in the building to permit the city to enter
upon the property and the building to construct, maintain, and operate the fire protection
system, pedestrian skyway system, new text begin on-site energy conservation improvements, new text end or on-site
water contaminant improvements. In the case of a petition for the installation of a
privately owned fire protection system, a privately owned pedestrian skyway system,
new text begin privately owned on-site energy conservation improvements, new text end or privately owned on-site
water contaminant improvements, the petition shall contain the plans and specifications
for the improvement, the estimated cost of the improvement and a statement indicating
whether the city or the owner will contract for the construction of the improvement. If the
owner is contracting for the construction of the improvement, the city shall not approve
the petition until it has reviewed and approved the plans, specifications, and cost estimates
contained in the petition. The construction cost financed under section 429.091 shall not
exceed the amount of the cost estimate contained in the petition. In the case of a petition
for the installation of a fire protection system, a pedestrian skyway system, new text begin on-site energy
conservation improvements,
new text end or on-site water contaminant improvements, the petitioner
may request abandonment of the improvement at any time after it has been ordered
pursuant to subdivision 1 and before contracts have been awarded for the construction of
the improvement under section 429.041, subdivision 2. If such a request is received, the
city council shall abandon the proceedings but in such case the petitioner shall reimburse
the city for any and all expenses incurred by the city in connection with the improvement.

Sec. 8.

new text begin [462A.2094] TAX CREDIT ADVANCE LOAN PROGRAM FOR
FIRST-TIME HOMEBUYERS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The agency may develop the tax credit advance
loan program for first-time homebuyers, up to the limits of available appropriations and
transfers. The program provides loans to first-time homebuyers who are eligible for the
federal first-time homebuyer credit. The maximum tax credit advance loan is the lesser of
(i) 8.5 percent of the purchase price of the home, or (ii) $6,750. The agency may charge a
reasonable fee for the costs associated with making and servicing tax credit advance loans.
The agency shall require the first-time homebuyer to execute a promissory note secured by
a second mortgage on the property being purchased to secure repayment of the loan as
referenced in subdivision 5. The agency may use amounts in the first-time homebuyer tax
credit advance loan account to fund the tax credit advance loan program.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, "federal first-time homebuyer
credit" means the credit allowed under section 36 of the Internal Revenue Code, and
"first-time homebuyer" has the meaning given in section 36 of the Internal Revenue Code.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility requirements. new text end

new text begin To be eligible for a tax credit advance loan, a
first-time homebuyer must:
new text end

new text begin (1) meet the eligibility requirements for the federal first-time homebuyer credit;
new text end

new text begin (2) have an annual gross income that does not exceed (A) 115 percent of the greater
of the state or area median income, as determined by the U.S. Department of Housing
and Urban Development, or (B) the federal first-time homebuyer tax credit income limits,
whichever is less;
new text end

new text begin (3) use the tax credit advance loan in conjunction with a home mortgage loan at
a 30-year fixed rate; and
new text end

new text begin (4) agree to apply for the federal first-time homebuyer credit and use the credit
refund to repay the tax credit advance loan.
new text end

new text begin Subd. 4. new text end

new text begin Repayment requirement. new text end

new text begin The tax credit advance loan agreement between
the agency and the homebuyer must require repayment of the tax credit advance loan on
or before June 15 of the calendar year following the year in which the tax credit advance
loan is received.
new text end

new text begin Subd. 5. new text end

new text begin Claims for repayments; deposit of repayments. new text end

new text begin The agency may submit
claims for debts owed due to failure to repay tax credit advance loans as provided under
the revenue recapture act in chapter 270A. Repayments of tax credit advance loans are
deposited in the housing development fund and credited to the first-time homebuyer
taxpayer advance loan account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2008, section 462A.21, is amended by adding a subdivision
to read:


new text begin Subd. 2a. new text end

new text begin First-time homebuyer tax credit advance loan account. new text end

new text begin The agency
may establish a first-time homebuyer tax credit advance loan account as a separate account
within the housing development fund for the purposes of section 462A.2094, and may pay
costs and expenses necessary and incidental to the development and operation of the tax
credit advance loan program from the account.
new text end

Sec. 10.

Minnesota Statutes 2008, section 469.153, subdivision 2, is amended to read:


Subd. 2.

Project.

(a) "Project" means (1) any properties, real or personal, used
or useful in connection with a revenue producing enterprise, or any combination of
two or more such enterprises engaged or to be engaged in generating, transmitting, or
distributing electricity, assembling, fabricating, manufacturing, mixing, processing,
storing, warehousing, or distributing any products of agriculture, forestry, mining, or
manufacture, or in research and development activity in this field; (2) any properties, real
or personal, used or useful in the abatement or control of noise, air, or water pollution, or
in the disposal of solid wastes, in connection with a revenue producing enterprise, or any
combination of two or more such enterprises engaged or to be engaged in any business
or industry; (3) any properties, real or personal, used or useful in connection with the
business of telephonic communications, conducted or to be conducted by a telephone
company, including toll lines, poles, cables, switching, and other electronic equipment
and administrative, data processing, garage, and research and development facilities;
(4) any properties, real or personal, used or useful in connection with a district heating
system, consisting of the use of one or more energy conversion facilities to produce hot
water or steam for distribution to homes and businesses, including cogeneration facilities,
distribution lines, service facilities, and retrofit facilities for modifying the user's heating
or water system to use the heat energy converted from the steam or hot water.

(b) "Project" also includes any properties, real or personal, used or useful in
connection with a revenue producing enterprise, or any combination of two or more
such enterprises engaged in any business.

(c) "Project" also includes any properties, real or personal, used or useful for the
promotion of tourism in the state. Properties may include hotels, motels, lodges, resorts,
recreational facilities of the type that may be acquired under section 471.191, and related
facilities.

(d) "Project" also includes any properties, real or personal, used or useful in
connection with a revenue producing enterprise, whether or not operated for profit,
engaged in providing health care services, including hospitals, nursing homes, and related
medical facilities.

(e) "Project" does not include any property to be sold or to be affixed to or consumed
in the production of property for sale, and does not include any housing facility to be
rented or used as a permanent residence.

(f) "Project" also means the activities of any revenue producing enterprise involving
the construction, fabrication, sale, or leasing of equipment or products to be used in
gathering, processing, generating, transmitting, or distributing solar, wind, geothermal,
biomass, agricultural or forestry energy crops, or other alternative energy sources for
use by any person or any residential, commercial, industrial, or governmental entity in
heating, cooling, or otherwise providing energy for a facility owned or operated by that
person or entity.

(g) "Project" also includes any properties, real or personal, used or useful in
connection with a county jail, county regional jail, community corrections facilities
authorized by chapter 401, or other law enforcement facilities, the plans for which are
approved by the commissioner of corrections; provided that the provisions of section
469.155, subdivisions 7 and 13, do not apply to those projects.

(h) "Project" also includes any real properties used or useful in furtherance of the
purpose and policy of section 469.141.

(i) "Project" also includes related facilities as defined by section 471A.02,
subdivision 11
.

(j) "Project" also includes an undertaking to purchase the obligations of local
governments located in whole or in part within the boundaries of the municipality that are
issued or to be issued for public purposes.

new text begin (k) "Project" also includes any properties designated as a qualified green building
and sustainable design project under section 469.1655.
new text end

Sec. 11.

new text begin [469.1655] QUALIFIED GREEN BUILDING AND SUSTAINABLE
DESIGN PROJECTS.
new text end

new text begin Subdivision 1. new text end

new text begin Project designation and eligibility. new text end

new text begin (a) A municipality or
redevelopment agency issuing revenue bonds under sections 469.152 to 469.165 may
designate the project for which the bonds are issued as a qualified green building and
sustainable design project as provided in this section.
new text end

new text begin (b) The issuer must ensure that each designated project substantially:
new text end

new text begin (1) reduces consumption of electricity compared to conventional construction;
new text end

new text begin (2) reduces daily carbon dioxide emissions compared to energy generated from coal;
new text end

new text begin (3) increases the use of solar photovoltaic cells in this state; or
new text end

new text begin (4) increases the use of fuel cells to generate energy.
new text end

new text begin (c) Before designating a project under this section, the issuer must document in
writing that the project will satisfy the eligibility criteria in this section.
new text end

new text begin (d) At least 75 percent of the square footage of commercial buildings that are part of
the project must be registered with a recognized green building rating system, including
Minnesota's sustainable building guidelines or the United States Green Building Council's
LEED certification, or in the case of residential buildings, Minnesota GreenStar rating,
and must be reasonably expected to receive the certification.
new text end

new text begin Subd. 2. new text end

new text begin Applications. new text end

new text begin An application for designation under this section must
include a project proposal that describes the energy-efficiency, renewable energy, and
sustainable design features of the project and demonstrates that the project satisfies the
eligibility criteria in this section. The application must include a description of:
new text end

new text begin (1) the amount of electric consumption reduced as compared to conventional
construction;
new text end

new text begin (2) the amount of carbon dioxide daily emissions reduced compared to energy
generated from coal;
new text end

new text begin (3) the amount of the gross installed capacity of the project's solar photovoltaic
capacity measured in megawatts; and
new text end

new text begin (4) the amount in megawatts of the project's energy generated by fuel cells.
new text end

new text begin Subd. 3. new text end

new text begin Use of bond financing. new text end

new text begin The project proposal must include a description of
the bond financing that will be allocated for financing of one or more of the following:
new text end

new text begin (1) the purchase, construction, integration, or other use of energy-efficiency,
renewable energy, and sustainable design features of the project; or
new text end

new text begin (2) compliance with certification standards cited under subdivision 1, paragraph (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for bonds issued after June 30, 2009.
new text end

Sec. 12.

Minnesota Statutes 2008, section 469.176, subdivision 2, is amended to read:


Subd. 2.

Excess increments.

(a) The authority shall annually determine the amount
of excess increments for a district, if any. This determination must be based on the tax
increment financing plan in effect on December 31 of the year and the increments and
other revenues received as of December 31 of the year. The authority must spend or return
the excess increments under paragraph (c) within nine months after the end of the year.

(b) For purposes of this subdivision, "excess increments" equals the excess of:

(1) total increments collected from the district since its certification, reduced by any
excess increments paid under paragraph (c), clause (4), for a prior year, over

(2) the total costs authorized by the tax increment financing plan to be paid with
increments from the district, reduced, but not below zero, by the sum of:

(i) the amounts of those authorized costs that have been paid from sources other than
tax increments from the district;

(ii) revenues, other than tax increments from the district, that are dedicated for or
otherwise required to be used to pay those authorized costs and that the authority has
received and that are not included in item (i);

(iii) the amount of principal and interest obligations due on outstanding bonds after
December 31 of the year and not prepaid under paragraph (c) in a prior year; and

(iv) increased by the sum of the transfers of increments made under section 469.1763,
subdivision 6
, to reduce deficits in other districts made by December 31 of the year.

(c) The authority shall use excess increment only to do one or more of the following:

(1) prepay any outstanding bonds;

(2) discharge the pledge of tax increment for any outstanding bonds;

(3) pay into an escrow account dedicated to the payment of any outstanding bonds; deleted text begin or
deleted text end

(4) new text begin pay or reimburse eligible project costs for a stimulus project certified by the
authority as defined in section 469.176, subdivision 8, paragraph (b); or
new text end

new text begin (5) new text end return the excess amount to the county auditor who shall distribute the excess
amount to the city or town, county, and school district in which the tax increment financing
district is located in direct proportion to their respective local tax rates.

(d) For purposes of a district for which the request for certification was made prior to
August 1, 1979, excess increments equal the amount of increments on hand on December
31, less the principal and interest obligations due on outstanding bonds or advances,
qualifying under subdivision 1c, clauses (1), (2), (4), and (5), after December 31 of the
year and not prepaid under paragraph (c).

(e) The county auditor must report to the commissioner of education the amount of
any excess tax increment distributed to a school district within 30 days of the distribution.

(f) For purposes of this subdivision, "outstanding bonds" means bonds which are
secured by increments from the district.

(g) The state auditor may exempt an authority from reporting the amounts calculated
under this subdivision for a calendar year, if the authority certifies to the auditor in
its report that the total amount authorized by the tax increment plan to be paid with
increments from the district exceeds the sum of the total increments collected for the
district for all years by 20 percent.

Sec. 13.

Minnesota Statutes 2008, section 469.176, is amended by adding a subdivision
to read:


new text begin Subd. 8. new text end

new text begin Economic stimulus projects. new text end

new text begin (a) In connection with a stimulus project,
the authority may extend by ten years the duration limits in subdivision 1b, paragraph
(a), for any district for which the request for certification was made after July 31, 1979,
and before January 1, 2013, to pay expenditures relating to a stimulus project located
within the district.
new text end

new text begin (b) A "stimulus project" means any capital project, the construction of which
commences after June 30, 2009, and before January 1, 2013, determined to create or retain
jobs in the state, including construction jobs, by the governing body of the municipality
in which the project is located.
new text end

Sec. 14. new text begin EXTENSION OF CERTAIN ECONOMIC DEVELOPMENT-RELATED
PERMITS.
new text end

new text begin Notwithstanding any law, rule, or local ordinance or regulation to the contrary, the
expiration date of a permit for an economic development project or subdivision approved
under Minnesota Statutes, section 326B.121, subdivision 2, or Minnesota Statutes,
sections 462.351 to 462.364, that has not expired before the effective date of this section is
extended for one year beyond its original expiration date.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 15. new text begin TAX ABATEMENT; NEWLY-CONSTRUCTED RESIDENTIAL
STRUCTURES IN FLOOD-DAMAGED AREAS.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin Property containing a residential structure qualifies
for a tax abatement under this section, if:
new text end

new text begin (1) the property is located in a city that meets the qualifications for the credit under
Minnesota Statutes, section 273.1398, subdivision 4;
new text end

new text begin (2) construction of the structure commenced after January 1, 2009, and is
substantially completed prior to December 31, 2010; and
new text end

new text begin (3) the property is classified as class 1a, 1b, 2a, 4a, 4b, 4bb, or 4d under Minnesota
Statutes, section 273.13.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin Application for the abatement authorized under this section
must be filed by January 2 of the year following the year in which construction began. The
application must be filed with the assessor of the county in which the property is located
on a form prescribed by the commissioner of revenue.
new text end

new text begin Subd. 3. new text end

new text begin Tax abated. new text end

new text begin (a) For a property qualifying under subdivision 1 and
classified as either class 1a, 1b, 2a, 4b, or 4bb, the tax attributable to the market value of
the structure shall be abated. For a property qualifying under subdivision 1 and classified
as class 4a or 4d, the tax attributable to (i) $250,000 of market value, or (ii) the entire
market value of the structure, whichever is less, shall be abated.
new text end

new text begin (b) The abatement under paragraph (a) shall be in effect for two taxes payable years,
corresponding to the two assessment years after construction has begun. The abatement
shall not apply to any special assessments that have been levied against the property.
new text end

new text begin Subd. 4. new text end

new text begin Reimbursement. new text end

new text begin By May 1 of each taxes payable year in which an
abatement has been authorized under this section, the auditor shall report the amount of
taxes abated for each jurisdiction within the county to the commissioner of revenue, on a
form prescribed by the commissioner. On or before September 1 of each taxes payable
year in which an abatement has been authorized under this section, the commissioner of
revenue shall reimburse each local jurisdiction for the amount of taxes abated for the
year under this section.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin The amount necessary to make the reimbursements
required under this section is annually appropriated to the commissioner of revenue from
the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment years 2010 to 2012,
for taxes payable in 2011 to 2013.
new text end

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

new text begin Subdivision 1. new text end

new text begin Department of Employment and Economic Development.
new text end

new text begin $100,000,000 is appropriated to the commissioner of employment and economic
development from the general fund for fiscal year 2010 for transfer to the construction
loan guarantee account for the purposes of section 2. This is a onetime appropriation
and does not cancel.
new text end

new text begin Subd. 2. new text end

new text begin Housing Finance Agency. new text end

new text begin $3,000,000 is appropriated from the general
fund in fiscal year 2010 to the commissioner of the Minnesota Housing Finance Agency
for transfer to the housing development fund for the purposes of section 8. This is a
onetime appropriation and does not cancel.
new text end

new text begin Subd. 3. new text end

new text begin Tax bill appropriation. new text end

new text begin The appropriation in 2009 H.F. No. 2323, article
15, section 15, as amended by the Senate April 28, 2009, if enacted, is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end