SF 2772

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

A bill for an act
relating to economic development; establishing accounts and a transit
improvement area program; authorizing the sale and issuance of state bonds;
requiring a report; appropriating money; proposing coding for new law in
Minnesota Statutes, chapter 469.

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

Section 1.

new text begin [469.35] TRANSIT IMPROVEMENT AREA ACCOUNTS.
new text end

new text begin Two transit improvement area accounts are created, one in the general fund and one
in the bond proceeds fund. Money in the accounts may be used to make grants or loans as
provided in section 469.351 and for the commissioner's costs in reviewing applications
and making loans or grants. Money in the accounts must not be used to pay for the
operation of transit lines or the construction or operating costs of transit stations.
new text end

Sec. 2.

new text begin [469.351] TRANSIT IMPROVEMENT AREA LOAN PROGRAM.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The terms defined in this section have the meanings
given them and apply to sections 469.35 and 469.351.
new text end

new text begin (b) "Applicant" means a local governmental unit or a joint powers board, established
under section 471.59.
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new text begin (c) "Commissioner" means the commissioner of employment and economic
development.
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new text begin (d) "Eligible organization" means an applicant that has been designated as a transit
improvement area by the commissioner.
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new text begin (e) "Local governmental unit" means a statutory or home rule charter city or town,
or a county.
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new text begin (f) "Transit improvement area" means a geographic area designated by the
commissioner composed of land parcels that are in proximity to a transit station.
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new text begin (g) "Transit station" means a physical structure to support the interconnection of
public transit modes including at least one of the following modes: bus rapid transit,
light rail transit, and commuter rail.
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new text begin Subd. 2. new text end

new text begin Designation of transit improvement areas. new text end

new text begin A transit improvement area
must increase the effectiveness of a transit project by incorporating one or more public
transit modes with commercial and housing development and by providing for safe
and pleasant pedestrian use. The commissioner, in consultation with effected state and
regional agencies, must designate transit improvement areas that meet the objectives
under this subdivision. Effected state and regional agencies include, but are not limited to,
the Minnesota Department of Transportation, the Minnesota Housing Finance Agency,
and the Metropolitan Council for transit improvement areas located in the seven-county
metropolitan region. To be eligible for designation, an applicant must submit a transit
area improvement plan according to the requirements and timelines established by the
commissioner. At a minimum, the plan must include the information specified under
subdivision 3. The commissioner may modify an applicant's plan to better achieve the
objectives of transit improvement areas. The commissioner must notify applicants of the
designations and must provide a statement of any changes to an applicant's plan with
justification for all changes.
new text end

new text begin Subd. 3. new text end

new text begin Transit area improvement plan. new text end

new text begin (a) An applicant must adopt a transit area
improvement plan by resolution before submitting the application to the commissioner
with the information required in this subdivision. Each transit area improvement plan
must include the following:
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new text begin (1) a map indicating the geographic boundaries of the transit improvement area;
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new text begin (2) an analysis of the demographic mix of people who are anticipated to use the
transit station;
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new text begin (3) a description of the ownership and intended use of public and private facilities
to be constructed in the transit improvement area, including infrastructure, buildings
and other structures, and parks;
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new text begin (4) a description of pedestrian-friendly improvements to be provided, including
walkways, parkways, and signage;
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new text begin (5) a statement of findings that the redevelopment or development of the transit
improvement area promotes higher density land uses resulting in increased transit
ridership;
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new text begin (6) a statement of the anticipated sources and amounts of local public funds;
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new text begin (7) a statement of the anticipated sources and amounts of private funds;
new text end

new text begin (8) a statement of the anticipated sources and amounts of leveraged regional, state,
and federal funds;
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new text begin (9) a description of the linkages to existing and proposed local, regional, and state
transit systems; and
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new text begin (10) a description of other factors in the proposed development to increase ridership.
new text end

new text begin (b) Transit improvement area plans with a residential component must propose at
least 12 residential units per acre or a density bonus that allows for an increase in the
number of residential units over what is permitted by the underlying zoning. The plan
must include a description of the variety of housing types, including housing appropriate
for low income persons, disabled persons, and senior citizens and the prices for each
housing type within the transit improvement area.
new text end

new text begin Subd. 4. new text end

new text begin Transit improvement area loans. new text end

new text begin (a) The commissioner may make low or
no-interest loans to eligible organizations to be used for eligible costs under paragraph (b).
A loan must be used for a designated transit improvement area, under the following terms:
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new text begin (1) the eligible organization must guarantee repayment of 100 percent of the loan;
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new text begin (2) a loan must be for a term of ten years, unless repayment is from a tax increment
financing district or other state or federal funds, at an interest rate to be negotiated by
the commissioner;
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new text begin (3) the eligible organization must make annual interest-only payments during the
ten-year term of the loan;
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new text begin (4) the eligible organization must pay the entire principal amount of the initial loan
at the end of the ten-year term;
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new text begin (5) a loan may not exceed $2,000,000;
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new text begin (6) the commissioner must advance the full amount of the loan to the eligible
organization upon execution of a formal loan agreement specifying the terms of the loan,
as well as reporting and other requirements outlined in subdivision 5;
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new text begin (7) the eligible organization must maintain the funds in accounts that allow the funds
to be readily available for business investments;
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new text begin (8) the eligible organization and the commissioner may agree on contract
specifications that are consistent with payback from a tax increment financing district or
from any other state and federal funds that may be forthcoming; and
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new text begin (9) an eligible organization that receives a loan must report annually, in a format
prescribed by the commissioner, on the nature and amount of the business investments in
the transit improvement area, including an account of each financing transaction involving
loans received under this section, the types and amounts of financing from sources other
than the transit improvement area loan, the number of jobs created, and the amount of
private sector and nonstate investment leveraged.
new text end

new text begin (b) Loans under this section must be used to supplement and not replace funding
from existing sources or programs. Loans must not be used for the construction costs of
transit stations; transit systems; or the operating costs of public transit or transportation,
including, but not limited to, the costs of maintaining, staffing, or operating transit
stations. Loans from the bond proceeds fund must be spent to acquire and to better
publicly owned land and buildings and other public improvements of a capital nature.
Loans can be used for the following eligible expenditures according to an approved transit
area improvement plan:
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new text begin (1) clearing land;
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new text begin (2) relocation costs;
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new text begin (3) corrections for soil, including removing or remediation of hazardous substances;
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new text begin (4) construction or installation of walkways, bridges or tunnels for pedestrians,
bikeways, parking facilities, and signage;
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new text begin (5) improvements to streetscapes;
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new text begin (6) construction of public infrastructure to support construction of new affordable
housing, senior housing, or housing for disabled persons;
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new text begin (7) construction of public infrastructure to support job creation in the area, especially
small business development;
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new text begin (8) developing green spaces and parks; and
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new text begin (9) administrative expenses of the authority.
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new text begin (c) All loan repayments under this section must be made to the appropriate account
under section 1 for reinvestment in transit improvement areas.
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new text begin Subd. 5. new text end

new text begin Loan requirements. new text end

new text begin All loans under this section are subject to an
investment agreement that must include:
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new text begin (1) a description of the eligible organization, including business finance experience,
qualifications, and investment history;
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new text begin (2) a description of the uses of investment proceeds by the eligible organization;
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new text begin (3) an explanation of the investment objectives; and
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new text begin (4) a description of the method of payment.
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new text begin Subd. 6. new text end

new text begin Report. new text end

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

Sec. 3. new text begin APPROPRIATIONS.
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new text begin Subdivision 1. new text end

new text begin Transit improvement account; general fund. new text end

new text begin $....... is appropriated
in fiscal year 2008 from the general fund for deposit into the transit improvement account
in the general fund under Minnesota Statutes, section 469.35, for the purposes of the
transit improvement area loan program under Minnesota Statutes, section 469.351. This
appropriation does not cancel but is available until expended.
new text end

new text begin Subd. 2. new text end

new text begin Transit improvement account; bond fund. new text end

new text begin $20,000,000 is appropriated
from the bond proceeds fund to the transit improvement account in the bond proceeds fund
under Minnesota Statutes, section 469.35, for the purposes of the transit improvement area
loan program under Minnesota Statutes, section 469.351.
new text end

new text begin Subd. 3. new text end

new text begin Bond sale. new text end

new text begin To provide the money appropriated in subdivision 2 from
the bond proceeds fund, the commissioner of finance shall sell and issue bonds of the
state in an amount up to $20,000,000 in the manner, upon the terms, and with the effect
prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
Constitution, article XI, sections 4 to 7.
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new text begin EFFECTIVE DATE. new text end

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