1.1 	A bill for an act
1.2 	relating to Minneapolis-St. Paul International
1.3 	Airport; providing for the impact of expansion of the
1.4 	Minneapolis-St. Paul International Airport;
1.5 	authorizing airport mitigation planning and the
1.6 	establishment of airport impact zones in the cities of
1.7 	Bloomington, Burnsville, Eagan, Mendota Heights,
1.8 	Minneapolis, Richfield, and St. Paul; creating an
1.9 	airport impact mitigation fund in the state treasury;
1.10 	authorizing certain related activities by the
1.11 	Department of Employment and Economic Development;
1.12 	authorizing a metropolitan area credit enhancement
1.13 	program including a contingent metropolitan area
1.14 	property tax levy; appropriating money.
1.15 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.16 	Section 1. FINDINGS.
 1.17 	The legislature finds that:
1.18 	(1) the legislature has directed the Metropolitan Airports
1.19 	Commission to develop a plan to mitigate aircraft noise
1.20 	associated with the operation of the Minneapolis-St. Paul
1.21 	International Airport;
1.22 	(2) the Metropolitan Airports Commission has developed a
1.23 	noise mitigation plan in conjunction with communities adjacent
1.24 	to the airport and is in the process of updating its FAR Part
1.25 	150 noise mitigation program for submission to and approval by
1.26 	the Federal Aviation Administration;
1.27 	(3) the legislature also established the governor's Airport
1.28 	Community Stabilization Funding Task Force that recommended
1.29 	further mitigation funding to address federal, state, and local
1.30 	participation in mitigation of noise and other impacts
2.1 	associated with expansion of the Minneapolis-St. Paul
2.2 	International Airport at its present location;
2.3 	(4) the task force concluded that:
2.4 	(i) the Metropolitan Airports Commission has committed
2.5 	significant resources toward mitigating the negative impacts
2.6 	associated with airport expansion, but the FAR Part 150 noise
2.7 	mitigation program is insufficient to address all impacts;
2.8 	(ii) the Metropolitan Airports Commission is neither
2.9 	capable of, nor should it be required to, finance mitigation of
2.10 	all airport impacts;
2.11 	(iii) the decision to keep and expand the airport at its
2.12 	current location was a state decision, and as such, the state
2.13 	should be a financial partner in mitigation projects resulting
2.14 	from the expansion of the airport; and 
2.15 	(iv) no single funding source is adequate for the range and
2.16 	scope of proposed mitigation activities;
2.17 	(5) the decision to keep and expand the airport at its
2.18 	current location was intended to benefit the state and the
2.19 	metropolitan region, but the undue, adverse impact of the
2.20 	decision is borne by the immediately surrounding communities;
2.21 	and 
2.22 	(6) appropriate measures to mitigate adverse impacts
2.23 	include, but are not limited to, insulation, redevelopment and
2.24 	housing replacement activities, and property value assurance;
2.25 	and expenditures for all such measures are for a public purpose.

2.26 	Sec. 2. DEFINITIONS.
 2.27 		Subdivision 1.Application. For the purposes of this
2.28 	act, the terms defined in this section have the meanings given
2.29 	them.
2.30 		Subd. 2.Airport impact zone. "Airport impact zone"
2.31 	means a contiguous or noncontiguous geographic area designated
2.32 	by a city and approved by the commissioner as part of a
2.33 	mitigation plan under section 3.
2.34 		Subd. 3.Airport sales. "Airport sales" means sales that
2.35 	are taxable under Minnesota Statutes, chapter 297A, and occur on
2.36 	property owned by the Metropolitan Airports Commission at the
3.1 	Minneapolis-St. Paul International Airport including, without
3.2 	limit, parking, vehicle rental, food and beverage, vending,
3.3 	merchandise, and pay telephones.  Airport sales do not include
3.4 	sales of goods or taxable services purchased by the metropolitan
3.5 	airports commission or by persons or entities conducting a
3.6 	private trade or business on property owned by the Metropolitan
3.7 	Airports Commission at the Minneapolis-St. Paul International
3.8 	Airport.
3.9 		Subd. 4.City. "City" means the cities of Bloomington,
3.10 	Burnsville, Eagan, Mendota Heights, Minneapolis, Richfield, and
3.11 	St. Paul, or any of them.
3.12 		Subd. 5.Commissioner. "Commissioner" means the
3.13 	commissioner of employment and economic development.
3.14 		Subd. 6.Council. "Council" means the Metropolitan
3.15 	Council.
3.16 		Subd. 7.Department. "Department" means the Department
3.17 	of Employment and Economic Development.
3.18 		Subd. 8.Governing body. "Governing body" means the city
3.19 	council of a city.
3.20 		Subd. 9.Housing replacement activities. "Housing
3.21 	replacement activities" means rehabilitation, acquisition,
3.22 	relocation assistance, relocation of existing dwelling units,
3.23 	and construction of new dwelling units, for the purpose of
3.24 	replacing dwelling units eliminated by airport mitigation
3.25 	activities.
3.26 		Subd. 10.Impact report. "Impact report" means a written
3.27 	report identifying airport impacts adopted by a city under
3.28 	section 3.
3.29 		Subd. 11.Mitigation fund. "Mitigation fund" means the
3.30 	airport impact mitigation fund established under section 4.
3.31 		Subd. 12.Mitigation plan. "Mitigation plan" means a
3.32 	plan for airport impact mitigation developed by a city and
3.33 	approved by the commissioner under section 3.
3.34 		Subd. 13.Obligation. "Obligation" has the meaning given
3.35 	it in Minnesota Statutes, section 475.51, subdivision 3.  The
3.36 	term includes obligations issued to refund prior obligations
4.1 	issued under this act.
4.2 		Subd. 14.School district. "School district" means a
4.3 	school district whose jurisdiction includes all or any portion
4.4 	of a city.

4.5 	Sec. 3. AIRPORT IMPACT MITIGATION PLANNING.
 4.6 		Subdivision 1.Impact report. A city may study and
4.7 	identify airport impacts and the scope of those impacts on the
4.8 	city.  At the conclusion of an impact study, a city must adopt a
4.9 	report of the impacts on the city.  In studying airport impacts
4.10 	and preparing a report, a city must take into account airport
4.11 	noise impacts and additional environmental, transportation, and
4.12 	economic impacts associated with expansion of the
4.13 	Minneapolis-St. Paul International Airport.  A city must also
4.14 	consider and incorporate the overhead noise guidelines
4.15 	established by the Federal Aviation Administration and
4.16 	recommendations of the Low Frequency Noise Policy Committee
4.17 	concerning noise impacts.
4.18 		Subd. 2.Mitigation plan. (a) After adopting an airport
4.19 	impact report, a city must develop an airport mitigation plan
4.20 	for an airport impact zone in the city.  In developing the
4.21 	mitigation plan, a city must seek to determine the most
4.22 	effective measures for mitigating the impacts identified in the
4.23 	impact report.  A city may consider any measures for mitigating
4.24 	airport impacts including, but not limited to, noise insulation
4.25 	of residential and commercial buildings, land use conversion,
4.26 	development of housing to replace units lost through mitigation
4.27 	activities, and property value assurance programs.  The
4.28 	mitigation plan must include:
4.29 	(1) designated boundaries of the airport impact zone;
4.30 	(2) a description of recommended impact mitigation
4.31 	measures;
4.32 	(3) whether the plan provides for conversion of residential
4.33 	land use or a description of proposed housing replacement
4.34 	activities;
4.35 	(4) estimates of costs of the recommended mitigation
4.36 	measures and possible financing sources;
5.1 	(5) an analysis of the feasibility of property tax
5.2 	abatement under Minnesota Statutes, sections 469.1813 to
5.3 	469.1815, as a financing source; and 
5.4 	(6) the estimated amount of obligations, if any, to be
5.5 	issued under this act, including a description of the proposed
5.6 	security for the obligations and whether the city requests
5.7 	credit enhancement by the council as provided in section 5,
5.8 	subdivision 2.
5.9 	(b) Before initial approval of a mitigation plan, a city
5.10 	must conduct a public hearing after publishing at least ten days
5.11 	before the hearing a notice in a newspaper of general
5.12 	circulation in the city.  The hearing notice must state that the
5.13 	mitigation plan and the mitigation report are available for
5.14 	review in the administrative offices of the city.  After initial
5.15 	approval of the mitigation plan by the governing body, the city
5.16 	must submit the mitigation plan and the mitigation report to the
5.17 	commissioner for approval and must also submit copies to the
5.18 	council and the Metropolitan Airports Commission for review and
5.19 	comment.  Not more than 60 days after receipt of the city's
5.20 	submission, the commissioner must approve, disapprove, or
5.21 	otherwise comment on the mitigation plan.  Failure by the
5.22 	commissioner to approve or comment within 60 days is considered
5.23 	approval of the mitigation plan.  An action described in a
5.24 	mitigation plan must not be financed by the mitigation fund or
5.25 	an airport impact district until the mitigation plan has been
5.26 	approved by the commissioner and then approved by the governing
5.27 	body.
5.28 	(c) Before approving any mitigation plan, the commissioner
5.29 	must establish criteria for evaluating proposed airport impact
5.30 	zones, airport impact districts, and mitigation measures.  The
5.31 	commissioner must consult with the cities, the council, and the
5.32 	Metropolitan Airports Commission in developing the criteria.
5.33 	The commissioner must approve final criteria by December 31,
5.34 	2005.  Any mitigation plan approved under this act must be
5.35 	consistent with the criteria established under this paragraph.
5.36 	(d) If the mitigation plan, or any amendment under
6.1 	paragraph (e), clause (3), includes credit enhancement by the
6.2 	council as provided in section 5, subdivision 2, the mitigation
6.3 	plan must also be approved by the council before issuance of
6.4 	bonds secured under section 5, subdivision 2.
6.5 	(e) A mitigation plan may be changed after the notice,
6.6 	hearing, and approvals required of the original mitigation
6.7 	plan.  A change is permitted only to:
6.8 	(1) increase the total estimated cost of mitigation
6.9 	activities;
6.10 	(2) increase the total estimated amount of obligations to
6.11 	be issued;
6.12 	(3) secure any obligations by the pledge described in
6.13 	section 5, subdivision 2, if the pledge was not included in the
6.14 	original plan;
6.15 	(4) expand the boundaries of an airport impact zone;
6.16 	(5) create or expand the boundaries of an airport impact
6.17 	district; or 
6.18 	(6) add mitigation activities beyond the scope of
6.19 	activities described in the original plan.
6.20 	(f) Expenditures to implement a mitigation plan are not
6.21 	considered a business subsidy under Minnesota Statutes, sections
6.22 	116J.993 to 116J.995.

6.23 	Sec. 4. AIRPORT IMPACT MITIGATION FUND.
 6.24 		Subdivision 1.Fund created; sources. The airport impact
6.25 	mitigation fund is established in the state treasury.  The
6.26 	mitigation fund is administered by the commissioner for the
6.27 	purposes described in this section.
6.28 		Subd. 2.Incremental airport sales tax. Notwithstanding
6.29 	anything to the contrary in Minnesota Statutes, section 297A.94,
6.30 	to the extent revenues in any fiscal year derived from sales
6.31 	taxes imposed under Minnesota Statutes, chapter 297A, on airport
6.32 	sales exceed the level of revenue for the fiscal year ending in
6.33 	2006, the excess revenues up to $3,000,000 are appropriated
6.34 	annually to the mitigation fund beginning in the fiscal year
6.35 	ending in 2007 and ending in the fiscal year ending in 2025.
6.36 		Subd. 3.Use of revenues. Amounts in the mitigation fund
7.1 	may be spent only for the following purposes:
7.2 	(1) to pay principal of, interest on, and redemption
7.3 	premium, if any, on obligations issued by a city under this act;
7.4 	(2) to pay or reimburse a city for costs incurred to
7.5 	implement a mitigation plan, including, without limit, costs of
7.6 	preparing the impact report and mitigation plan;
7.7 	(3) to pay a school district to mitigate decreases in
7.8 	student population created by mitigation activities of a city
7.9 	under the city's mitigation plan; and 
7.10 	(4) by the department to pay the costs of administering the
7.11 	mitigation fund and related activities of the department under
7.12 	this act.
7.13 		Subd. 4.Payment provisions. (a) Before disbursing any
7.14 	amounts from the mitigation fund, the commissioner must
7.15 	establish criteria for selecting activities identified in
7.16 	subdivision 3 to be financed from the fund.  The commissioner
7.17 	must consult with the cities, the school districts, the council,
7.18 	and the metropolitan airports commission in developing the
7.19 	criteria.  The commissioner must approve final criteria by
7.20 	December 31, 2006.  The criteria must identify priorities for
7.21 	funding, taking into account:
7.22 	(1) the severity of airport impacts among the cities and
7.23 	school districts;
7.24 	(2) the type of mitigation measures required in order to
7.25 	address the impacts;
7.26 	(3) the cost of impact mitigation activities identified in
7.27 	the mitigation plans;
7.28 	(4) the amount of obligations to be issued under this act
7.29 	as identified in the mitigation plans; and 
7.30 	(5) the amount of other revenues available to pay the costs
7.31 	identified in subdivision 3.
7.32 	(b) The commissioner may establish procedures for
7.33 	administration of the mitigation fund as necessary, including
7.34 	without limitation a process for applications, disbursement, and
7.35 	reporting of expenditures.
7.36 		Subd. 5.Termination of mitigation fund. The mitigation
8.1 	fund ends on the earlier of:
8.2 	(1) the date by which all cities and school districts have
8.3 	notified the commissioner that all costs payable from the
8.4 	mitigation fund under this act have been paid; or 
8.5 	(2) the end of the fiscal year ending in 2030.
8.6 	The balance of amounts in the mitigation fund on its termination
8.7 	are credited to the state general fund.

8.8 	Sec. 5. BONDS; SECURITY.
 8.9 		Subdivision 1.Terms. (a) A city may issue obligations
8.10 	secured by:
8.11 	(1) abatements;
8.12 	(2) amounts disbursed from the airport mitigation fund;
8.13 	(3) any other revenues available to the city under law; or 
8.14 	(4) any combination of revenue described in clauses (1) to
8.15 	(3).
8.16 	(b) The proceeds of obligations must be used to pay or
8.17 	reimburse any costs to implement a mitigation plan, including,
8.18 	without limit, costs of preparing the impact report and the
8.19 	mitigation plan.  The governing body may provide by resolution
8.20 	that the obligations are additionally secured by the full faith
8.21 	and credit of the city.  Notwithstanding any other law or
8.22 	charter provision, voter approval is not required and net debt
8.23 	limits do not apply to obligations issued under this section.
8.24 		Subd. 2.Metropolitan area credit enhancement
8.25 	program. (a) The council may establish an airport impact
8.26 	mitigation bond credit enhancement program as provided in this
8.27 	section.  The council may pledge its full faith and credit and
8.28 	taxing powers to obligations issued under this act if:
8.29 	(1) the city so requests and the commissioner and the
8.30 	council approves that pledge as part of the city's mitigation
8.31 	plan; and 
8.32 	(2) the council finds that revenues pledged for payment of
8.33 	the obligations will produce, as estimated at the time of the
8.34 	pledge, at least 125 percent of the principal and interest due
8.35 	on the obligations.
8.36 	(b) The pledge must be made by resolution of the council.
9.1 	Voter approval of obligations secured by the pledge described in
9.2 	this subdivision is not required and net debt limits do not
9.3 	apply.
9.4 	(c) Before pledging its full faith and credit, the council
9.5 	must establish criteria for approving requests for credit
9.6 	enhancement under this section.  The council must establish
9.7 	criteria in consultation with the cities, the commissioner, and
9.8 	the Metropolitan Airports Commission.  The criteria must set
9.9 	forth priorities for credit enhancement that are consistent with
9.10 	the priorities established by the commissioner for disbursement
9.11 	from the mitigation fund under section 4 and may contain limits
9.12 	on the total amount of obligations that may be credit enhanced
9.13 	under this subdivision.
9.14 	(d) If there is a deficiency in revenues pledged to
9.15 	obligations that are credit enhanced under this subdivision, the
9.16 	council must levy a tax against all taxable property in the
9.17 	metropolitan area and advance the proceeds of the levy to the
9.18 	city for deposit in the debt service fund for the obligations.
9.19 	The city must reimburse the council for the advance to the
9.20 	extent the deficient revenues are later collected.
9.21 	(e) Taxes levied by the council because of credit
9.22 	enhancement under this subdivision do not affect the amount or
9.23 	rate of taxes that may be levied by the council for other
9.24 	purposes and are not subject to limit as to rate or amount.
9.25 	(f) The council and each city that participates in the
9.26 	credit enhancement program may enter into agreements they
9.27 	determine to be necessary to implement the credit enhancement
9.28 	program.  The agreements may extend over any period,
9.29 	notwithstanding any law to the contrary.

9.30 	Sec. 6. APPLICATION; EFFECTIVE DATE.
 9.31 	This act does not require local approval because Minnesota
9.32 	Statutes, section 645.023, subdivision 1, paragraph (a), applies.
9.33 	Section 5 applies in the counties of Anoka, Carver, Dakota,
9.34 	Hennepin, Ramsey, Scott, and Washington.  This act is effective
9.35 	June 1, 2005.