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SF 2078

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 11:34pm

KEY: stricken = removed, old language.
underscored = added, new language.
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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 a historic structure rehabilitation tax credit; 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; 469.176, subdivision 2, by
adding a subdivision; proposing coding for new law in Minnesota Statutes,
chapters 116J; 216C; 290; 462A.

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 defined 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] CONSTRUCTION CREDIT FREEZE; TEMPORARY LOAN
GUARANTEE ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Findings. new text end

new text begin The legislature finds that the construction industry in this
state is being damaged by a credit freeze imposed by private lenders. If credit is extended,
it is being extended for an amount much less than has historically been the case with
the result that there is a capital shortage to complete construction projects. The credit
freeze has resulted in the delay or cancellation of many construction projects resulting in
significant harm to the state economy, including the elimination of thousands of jobs and
the loss of significant tax revenues. A temporary state guarantee program for a portion
of a private loan may contribute to the thawing of the credit freeze to the benefit of the
state and its citizens.
new text end

new text begin Subd. 2. 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 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. 3. 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 $5,000,000 or more to pay for the costs of a related
residential, commercial, industrial, or institutional construction project.
new text end

new text begin Subd. 4. 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. 5. 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 may be submitted by a lender, developer, or 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. 6. new text end

new text begin Guarantee criteria. new text end

new text begin 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 Subd. 7. 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 8, and sales and local taxes credited to the
account under subdivision 9.
new text end

new text begin Subd. 8. 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 shall be credited to the construction loan guarantee account.
new text end

new text begin Subd. 9. 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. 10. 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 funds 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 shall be for projects located outside the
seven-county metropolitan area. No more than $50,000,000 may be guaranteed on any
one project.
new text end

new text begin Subd. 11. 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 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 [216C.149] BONDS FOR QUALIFIED GREEN BUILDING AND
SUSTAINABLE DESIGN PROJECTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this
subdivision have the meanings given them.
new text end

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

new text begin (c) "Rural area" means an area of the state outside the metropolitan area as defined
in section 473.121, subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Authority. new text end

new text begin An economic development authority or port authority may
apply to the commissioner for authorization to issue revenue bonds under sections 469.152
to 469.165, either at one time or in a series from time to time, for a qualified green building
and sustainable design project that meets the criteria in subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Project designations. new text end

new text begin (a) Within 60 days after the end of the nomination
period described in paragraph (c), clause (1), the commissioner shall designate qualified
green building and sustainable design projects for which bonds may be issued under
this section.
new text end

new text begin (b) The commissioner shall 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 sulfur 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) The commissioner may not designate a project under this subdivision unless:
new text end

new text begin (1) the project is nominated by an economic development authority or port authority
within 24 months of enactment of this section; and
new text end

new text begin (2) the economic development authority or port authority provides written
verification to the commissioner that the project will satisfy the eligibility criteria in
this section.
new text end

new text begin Subd. 4. new text end

new text begin Applications. new text end

new text begin (a) 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 subdivision.
new text end

new text begin (b) 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 B3 standards 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 (c) The project must have commitments to be granted state or local government
resources worth at least $500,000, including tax increment financing, tax abatement
benefits, or in-kind contributions.
new text end

new text begin (d) The project must include at least 25,000 square feet of building area, or be
located on a parcel that is at least two acres in size.
new text end

new text begin Subd. 5. 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 4, paragraph (b).
new text end

new text begin Subd. 6. new text end

new text begin Employment requirements. new text end

new text begin (a) To qualify for designation under this
section, the project must be projected to provide construction employment of at least
100 full-time equivalents, or ten full-time equivalents in rural areas, and permanent
employment of at least 250 full-time equivalents, or 25 full-time equivalents in rural
areas, when completed.
new text end

new text begin (b) The application must include an independent analysis that describes the project's
economic impact, including the amount of projected employment.
new text end

new text begin Subd. 7. new text end

new text begin Project description. new text end

new text begin Each application must contain for each project 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 sulfur 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. 8. new text end

new text begin Accountability. new text end

new text begin Each bond issuer shall maintain, on behalf of each project,
an interest-bearing reserve account into which one percent of the net proceeds of any bond
issued under this section for the project is deposited. Not later than five years after the
date of issuance, the commissioner shall determine whether the project has substantially
complied with the terms and conditions described in this section. If the commissioner
certifies that the project has substantially complied with the terms and conditions and
meets the commitments in the application for the project described in this section, the
issuer must release the amount in the reserve account, including accrued interest, to
the issuer's general account. If the commissioner determines that the project has not
substantially complied with the terms and conditions, the issuer must remit the amount in
the account, including accrued interest, to the commissioner, who must deposit it in the
state treasury and credit it to the general fund.
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. 4.

new text begin [290.0681] CREDIT FOR HISTORIC STRUCTURE REHABILITATION.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this
subdivision have the meanings given them.
new text end

new text begin (b) "Certified historic structure" means a property located in Minnesota and listed
individually on the National Register of Historic Places or a historic property designated
by either a certified local government or a heritage preservation commission created
under the National Historic Preservation Act of 1966 and whose designation is approved
by the state historic preservation officer.
new text end

new text begin (c) "Eligible property" means a certified historic structure or a structure in a certified
historic district that is offered or used for residential or business purposes.
new text end

new text begin (d) "Structure in a certified historic district" means a structure located in Minnesota
that is certified by the State Historic Preservation Office as contributing to the historic
significance of a certified historic district listed on the National Register of Historic Places
or a local district that has been certified by the United States Department of the Interior.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin A taxpayer who incurs costs for the rehabilitation of
eligible property may take a credit against the tax imposed under this chapter in an amount
equal to 25 percent of the total costs of rehabilitation. Costs of rehabilitation include,
but are not limited to, qualified rehabilitation expenditures as defined under section
47(c)(2)(A) of the Internal Revenue Code, provided that the costs of rehabilitation must
exceed 50 percent of the total basis in the property at the time the rehabilitation activity
begins and the rehabilitation must meet standards consistent with the standards of the
Secretary of the Interior for rehabilitation as determined by the State Historic Preservation
Office of the Minnesota Historical Society.
new text end

new text begin Subd. 3. new text end

new text begin Carryback and carryforward. new text end

new text begin If the amount of the credit under
subdivision 2 exceeds the tax liability under this chapter for the year in which the cost is
incurred, the amount that exceeds the tax liability may be carried back to any of the three
preceding taxable years or carried forward to each of the ten taxable years succeeding the
taxable year in which the expense was incurred. The entire amount of the credit must
be carried to the earliest taxable year to which the amount may be carried. The unused
portion of the credit must be carried to the following taxable year.
new text end

new text begin Subd. 4. new text end

new text begin Partnerships; multiple owners; transfers. new text end

new text begin (a) Credits granted to a
partnership, a limited liability company taxed as a partnership, or multiple owners of
property shall be passed through to the partners, members, or owners, respectively, pro
rata or pursuant to an executed agreement among the partners, members, or owners
documenting an alternate distribution method.
new text end

new text begin (b) Taxpayers eligible for credits may transfer, sell, or assign the credits in whole
or part. Any assignee may use acquired credits to offset up to 100 percent of the taxes
otherwise imposed by this chapter. The assignee shall perfect a transfer by notifying the
Department of Revenue in writing within 30 calendar days following the effective date
of the transfer in a form and manner as prescribed by the Department of Revenue. The
proceeds of any sale or assignment of a credit is exempt from taxation under this chapter.
new text end

new text begin Subd. 5. new text end

new text begin Process. new text end

new text begin To claim the credit, the taxpayer must apply to the State Historic
Preservation Office of the Minnesota Historical Society before a historic rehabilitation
project begins. The State Historic Preservation Office shall determine the amount of
eligible rehabilitation costs and whether the rehabilitation meets the standards of the
United States Department of the Interior. The State Historic Preservation Office shall issue
certificates verifying eligibility for and the amount of credit. The taxpayer shall attach
the certificate to any income tax return on which the credit is claimed. The State Historic
Preservation Office of the Minnesota Historical Society may collect fees for applications
for the historic preservation tax credit. Fees shall be set at an amount that does not exceed
the costs of administering the tax credit program.
new text end

new text begin Subd. 6. new text end

new text begin Mortgage certificates; credit for lending institutions. new text end

new text begin (a) The taxpayer
may elect, in lieu of the credit otherwise allowed under this section, to receive a historic
rehabilitation mortgage credit certificate.
new text end

new text begin (b) For purposes of this subdivision, a historic rehabilitation mortgage credit is a
certificate that is issued to the taxpayer according to procedures prescribed by the State
Historic Preservation Office with respect to the certified rehabilitation and meets the
requirements of this paragraph. The face amount of the certificate must be equal to
the credit that would be allowable under subdivision 2 to the taxpayer with respect to
the rehabilitation. The certificate may only be transferred by the taxpayer to a lending
institution, including a nondepository home mortgage lending institution, in connection
with a loan:
new text end

new text begin (1) that is secured by the building with respect to which the credit is issued; and
new text end

new text begin (2) the proceeds of which may not be used for any purpose other than the acquisition
or rehabilitation of the building.
new text end

new text begin (c) In exchange for the certificate, the lending institution must provide to the
taxpayer an amount equal to the face amount of the certificate discounted by the amount
by which the federal income tax liability of the lending institution is increased due to its
use of the certificate in the manner provided in this section. That amount must be applied,
as directed by the taxpayer, in whole or in part, to reduce:
new text end

new text begin (1) the principal amount of the loan;
new text end

new text begin (2) the rate of interest on the loan; or
new text end

new text begin (3) the taxpayer's cost of purchasing the building, but only in the case of a qualified
historic home that is located in a poverty-impacted area as designated by the State Historic
Preservation Office.
new text end

new text begin (d) The lending institution may take as a credit against the tax due under this chapter
an amount equal to the amount specified in the certificate. If the amount of the discount
retained by the lender exceeds the amount by which the lending institution's federal
income tax liability is increased due to the use of a mortgage credit certificate, the excess
shall be refunded to the borrower with interest at the rate prescribed by the State Historic
Preservation Office. The lending institution may carry forward all unused credits under
this subdivision until exhausted. Nothing in this subdivision requires a lending institution
to accept a historic rehabilitation certificate from any person.
new text end

new text begin Subd. 7. new text end

new text begin National landmarks. new text end

new text begin Notwithstanding subdivision 2, the rehabilitation
of a property designated as a National Historic Landmark on the National Register of
Historic Places shall be eligible for the credit under this section provided that:
new text end

new text begin (1) renovation of the specific property, designated as a National Historic Landmark,
without regard to its being part of a larger project, is consistent with the standards set forth
in section 47(c) of the Internal Revenue Code;
new text end

new text begin (2) any project of which the National Historic Landmark is a part has received the
approval of any local heritage preservation commission under section 471.193, with
review jurisdiction, or, if there is no applicable local heritage preservation commission,
the Minnesota State Historic Preservation Officer; and
new text end

new text begin (3) all other requirements of this section are met.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end

Sec. 5.

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, 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) "Applicable percentage" means the appropriate percentage prescribed by the
secretary of the treasury for the type of building for purposes of section 42 of the Internal
Revenue Code for the month that is the earlier of:
new text end

new text begin (1) the month in which the eligible low-income project is placed in service; or
new text end

new text begin (2) at the election of the taxpayer, the month in which the taxpayer and the agency or
suballocator enter into an agreement with respect to the building, which is binding on the
agency or suballocator, the taxpayer, and all successors in interest, as to the housing credit
dollar amount to be allocated to the project.
new text end

new text begin A month may be elected under clause (2) only if the election is made not later than
the fifth day after the close of the month. The election, once made, is irrevocable.
new text end

new text begin If, as of the close of a taxable year in the credit period, the qualified basis of an
eligible low-income building exceeds the basis as of the close of the first year of the credit
period, the applicable percentage that applies to the excess is two-thirds of the applicable
percentage originally ascribed to the building.
new text end

new text begin (c) "Compliance period" means the period of 15 taxable years beginning with the
first taxable year of the credit period with respect to a building.
new text end

new text begin (d) "Credit period" means, with respect to any eligible low-income project, the
period of ten taxable years beginning with:
new text end

new text begin (1) the taxable year in which the project is placed in service; or
new text end

new text begin (2) at the election of the taxpayer, the succeeding taxable year, but only if the
project is an eligible low-income project as of the close of the first year of the period.
The election, once made, is irrevocable.
new text end

new text begin (e) "Eligibility statement" means a statement issued by the agency or the suballocator
certifying that a project is an eligible low-income housing project. The statement must
set forth the taxable year in which the project is placed in service, the dollar amount
of low-income housing credit allocated to the project as provided in subdivision 5, the
applicable percentage and maximum qualified basis with respect to the project taken
into account in determining the dollar amount, sufficient information to identify each
project and the taxpayer or taxpayers who may claim a credit for each project, and other
information as the agency, in consultation with the commissioners of revenue and finance,
prescribe. The statement must be first issued following the close of the first taxable year in
the credit period, and thereafter, to the extent required by the commissioners of revenue
and finance, following the close of each taxable year of the compliance period.
new text end

new text begin (f) "Eligible low-income housing project" or "project" means a housing project
located in this state that is a qualified low-income project as defined in section 42(c) of
the Internal Revenue Code and that has been allocated federal low-income housing tax
credits from the agency or a suballocator.
new text end

new text begin (g) "Low-income project" means a project that has received an allocation of federal
nine percent low-income housing credits for the applicable year.
new text end

new text begin (h) "Qualified basis" of an eligible low-income housing project means the qualified
basis of the building determined under section 42(c) of the Internal Revenue Code.
new text end

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

new text begin (j) 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 Allowance. new text end

new text begin A taxpayer that owns an interest in one or more eligible
low-income housing projects shall be allowed a credit against the tax imposed under
this chapter for the amount of low-income housing credit allocated by the agency or a
suballocator to the project. The credit amount allocated shall be allowed as a credit against
the tax for the ten taxable years in the credit period, provided the credit allowable for the
first taxable year of the credit period for any project shall be adjusted as provided in section
42(f)(2) of the Internal Revenue Code and any reduction in first-year credit by reason of
the adjustment shall be allowable for the first taxable year following the credit period.
new text end

new text begin Subd. 3. new text end

new text begin Amount of credit. new text end

new text begin Except as provided in subdivisions 4 and 5, the amount
of low-income housing credit shall be the applicable percentage multiplied by the qualified
basis of each eligible low-income project.
new text end

new text begin Subd. 4. new text end

new text begin Statewide limitation. new text end

new text begin The aggregate dollar amount of credit available for
eligible low-income housing projects under this section is one-half the dollar amount of
the federal low-income housing tax credits allocated to the state in any year. The annual
amount of low-income credit shall be allocated between the agency and suballocators
in the same proportion as provided for federal credits and the allocation process shall
be as provided in section 462A.222. The state credit need not be allocated in the same
proportion among eligible low-income projects as the federal credit. The limitation
provided by this subdivision applies only to allocation of the annual aggregate dollar
amount of credit to be allocated by the agency and the suballocators, and does not apply
to allowance to a taxpayer of the credit with respect to an eligible low-income building
for each year of the credit period.
new text end

new text begin Subd. 5. new text end

new text begin Project allocation limitation. new text end

new text begin The dollar amount of credit allocated to
any project must not exceed the amount the agency and the suballocators determine is
necessary for the financial feasibility of the project as an eligible low-income project
throughout the credit period. In allocating a dollar amount of credit to any eligible
low-income project, the agency and suballocators must specify the applicable percentage
and the maximum qualified basis that may be taken into account under this section with
respect to the project. The applicable percentage and the maximum qualified basis for a
project must not exceed the amounts determined under this subdivision.
new text end

new text begin Subd. 6. new text end

new text begin Long-term commitment to low-income housing required. new text end

new text begin No credit
shall be allowed under this section with respect to a project or the taxable year, unless an
extended low-income housing commitment is in effect as of the end of the taxable year.
In this subdivision, the term "extended low-income housing commitment" means an
agreement between the taxpayer and the agency or suballocator, substantially similar to
the agreement specified in section 42(h)(6)(B) of the Internal Revenue Code.
new text end

new text begin Subd. 7. new text end

new text begin Credit to successor owner. new text end

new text begin If a credit is allowed under this section to an
eligible low-income housing project and the project or an interest in it is sold during the
credit period, the credit for the period after the sale that would have been allowable to the
prior owner had the project not been sold shall be allowable to the new owner. Credit for
the year of sale shall be allocated between the parties on the basis of the number of days
during the year that the project interest was held by each.
new text end

new text begin Subd. 8. new text end

new text begin Project monitoring. new text end

new text begin The agency shall establish procedures it deems
necessary for monitoring compliance of all eligible low-income projects with the
provisions of this section and section 42 of the Internal Revenue Code and for notifying
the commissioners of revenue and finance of any known noncompliance. The procedure
shall utilize existing procedures for monitoring the federal low-income housing tax credit
compliance with section 42 of the Internal Revenue Code.
new text end

new text begin Subd. 9. new text end

new text begin Credit recapture. new text end

new text begin If, as of the close of any taxable year in the compliance
period, the amount of the qualified basis of any low-income housing project for the
taxpayer is less than the amount of the basis as of the close of the preceding taxable
year, the credit under this section may be recaptured under a procedure to be established
by the commissioner of revenue.
new text end

new text begin Subd. 10. new text end

new text begin Education and promotion. new text end

new text begin The agency, in cooperation with the
suballocators, shall conduct a series of educational seminars and promotional events
targeted to corporations with major operations in Minnesota to inform potentially
interested purchasers of the state credit regarding the program 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 EFFECTIVE DATE. new text end

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

Sec. 6.

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. 7.

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. 8.

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. 9.

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. 10.

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

new text begin (a) The agency must develop the tax credit advance loan program for first time
homebuyers. The program provides loans to first-time homebuyers equal to the anticipated
amount of the federal first-time homebuyer credit which the homebuyer is eligible to
receive. The maximum tax credit advance loan is the lesser of (i) 10 percent of the
purchase price of the home, or (ii) $8,000. The agency may charge reasonable servicing
fees associated with issuing and administering tax credit advance loans. The agency
may only issue loans under this program when the federal first-time homebuyer credit is
in effect.
new text end

new text begin (b) 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 (c) To be eligible for a tax credit advance loan, a first-time homebuyer must
new text end

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

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

new text begin (iii) 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 (d) The tax credit advance loan agreement between the agency and the homebuyer
must include
new text end

new text begin (i) a statement of servicing fees associated with the loan; and
new text end

new text begin (ii) a schedule of principal and interest payments that will be due over a ten year
period if the homebuyer does not repay the loan by June 30 of the calendar year following
the year in which the loan is received.
new text end

new text begin (e) If the homebuyer applies for a federal first-time homebuyer credit and repays
the tax credit advance loan on or before June 30 of the calendar year following the year
in which the tax credit advance loan is received, there is no interest on the loan. If the
homebuyer does not repay the tax credit advance loan on or before June 30 of the calendar
year following the calendar year in which the tax credit advance loan is received, the
homebuyer must make principal and interest payments over a ten year period to repay the
loan, with the interest rate equal to the rate in the 30 year conventional mortgage entered
into in conjunction with the tax credit advance loan.
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. 11.

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. 12.

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.
new text end

new text begin (b) A "stimulus project" means any capital project, the construction of which
commences not later than December 31, 2012, 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. 13. 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