1.1                          A bill for an act
  1.2             authorizing the use of tax increment financing for 
  1.3             mitigation related to large railroad projects; 
  1.4             providing exemptions from certain provisions; 
  1.5             proposing coding for new law in Minnesota Statutes, 
  1.6             chapter 469. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [469.1751] [MITIGATION RELATED TO LARGE 
  1.9   RAILROAD PROJECTS.] 
  1.10     Subdivision 1.  [AUTHORIZATION.] A city or county that 
  1.11  contains qualifying railroad property may establish a railroad 
  1.12  improvement tax increment financing district under this section 
  1.13  to pay for mitigation measures. 
  1.14     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
  1.15  the following terms have the meanings given. 
  1.16     (b) "City" means a statutory or home rule charter city. 
  1.17     (c) "Qualifying railroad property" means the Minnesota 
  1.18  railroad operating property of a railroad company that 
  1.19  undertakes a series of improvements to its operating property if 
  1.20  the following requirements are met: 
  1.21     (1) the improvements consist of construction of new 
  1.22  railroad track or a substantial rebuilding of existing track; 
  1.23     (2) the improvements are approved by the federal Surface 
  1.24  Transportation Board; and 
  1.25     (3) the total expenditures on the improvements in Minnesota 
  1.26  are projected to exceed $250,000,000 over a five-year period, 
  2.1   based on the estimates submitted to the federal Surface 
  2.2   Transportation Board. 
  2.3      (d) "Railroad operating property" has the meaning given in 
  2.4   section 270.80, subdivision 3. 
  2.5      Subd. 3.  [BEGINNING APPLICATION OF AUTHORITY.] The 
  2.6   authority to establish a tax increment financing district under 
  2.7   this section applies beginning for the first assessment year 
  2.8   after the following occur: 
  2.9      (1) approval by the federal Surface Transportation Board of 
  2.10  the improvements; and 
  2.11     (2) the commissioner of revenue determines that the 
  2.12  railroad company's tax capacity has increased by five percent 
  2.13  over the assessment year in which the federal Surface 
  2.14  Transportation Board approves the improvement. 
  2.15     Subd. 4.  [AREA OF DISTRICT.] (a) If a city exercises its 
  2.16  authority to create a tax increment financing district under 
  2.17  this section, the district consists of all of the parcels 
  2.18  located in the city that constitute railroad operating property, 
  2.19  including those of any other railroad company. 
  2.20     (b) If a county exercises its authority to create a tax 
  2.21  increment financing district under this section, the district 
  2.22  consists of all of the parcels located in the county, but 
  2.23  outside of the boundaries of a city, that constitute railroad 
  2.24  operating property, including those of any other railroad 
  2.25  company. 
  2.26     Subd. 5.  [DURATION LIMIT.] No tax increment may be paid to 
  2.27  the city or county after 25 years after receipt by the city or 
  2.28  county of the first increment for a district established under 
  2.29  this section. 
  2.30     Subd. 6.  [PERMITTED USES OF INCREMENT.] (a) Increment from 
  2.31  a district established under this section may only be used to 
  2.32  pay for mitigation measures and administrative expenses. 
  2.33     (b) Mitigation measures include, but are not limited to: 
  2.34     (1) traffic crossing safety improvements; 
  2.35     (2) traffic and train vehicle conflict reduction measures 
  2.36  such as grade separations; 
  3.1      (3) improvements to connecting streets to redirect traffic 
  3.2   to other crossings or alternative railroad alignments; 
  3.3      (4) pedestrian safety measures; 
  3.4      (5) noise mitigation measures including, but not limited to:
  3.5      (i) sound walls; 
  3.6      (ii) construction of berms; 
  3.7      (iii) acquisition or relocation of the most severely 
  3.8   impacted properties; 
  3.9      (iv) whistle-free crossing improvements; 
  3.10     (v) directional horns for train crossings; and 
  3.11     (vi) other measures to reduce noise impacts on adjacent 
  3.12  properties; 
  3.13     (6) improvements to emergency services operations designed 
  3.14  to reduce emergency response time including, but not limited to: 
  3.15     (i) advance training warning systems; and 
  3.16     (ii) construction of emergency services facilities (fire, 
  3.17  police, and ambulance) to improve response time. 
  3.18     (c) A city may spend increments from the district on 
  3.19  mitigation activities anywhere in the city.  A county may spend 
  3.20  increments from the district on mitigation activities anywhere 
  3.21  within the county, but outside of the boundaries of a city, or 
  3.22  within the boundaries of a city, if the governing body of the 
  3.23  city approves the plan for the spending in writing before it is 
  3.24  undertaken. 
  3.25     Subd. 7.  [EXEMPTIONS.] The following provisions of law 
  3.26  applicable to tax increment financing districts established 
  3.27  under sections 469.174 to 469.178 do not apply to districts 
  3.28  established under this section: 
  3.29     (1) increments from the district may be spent within or 
  3.30  outside the tax increment district or project area, 
  3.31  notwithstanding any restrictions to the contrary under sections 
  3.32  469.174 to 469.178; 
  3.33     (2) section 273.1399 (state aid offset or local 
  3.34  contribution requirement) does not apply; 
  3.35     (3) section 469.176, subdivision 1a (three-year activity 
  3.36  rule) does not apply; 
  4.1      (4) section 469.176, subdivision 4g (prohibition on general 
  4.2   government use) does not apply; 
  4.3      (5) section 469.176, subdivision 6 (requirements for 
  4.4   agreements) does not apply; 
  4.5      (6) section 469.1763 (restrictions on pooling and five-year 
  4.6   limit) do not apply; 
  4.7      (7) section 469.177, subdivision 1a (original local tax 
  4.8   rate) does not apply and increment calculations must be made 
  4.9   using the full tax rates for the current year. 
  4.10     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  4.11  following final enactment.