1.1                          A bill for an act 
  1.2             relating to taxation; eliminating the LGA/HACA offset 
  1.3             from certain tax increment financing districts; 
  1.4             providing for state grants to certain tax increment 
  1.5             financing districts; appropriating money; amending 
  1.6             Minnesota Statutes 1994, section 116J.556; repealing 
  1.7             Minnesota Statutes 1994, sections 273.1399; and 
  1.8             469.175, subdivision 7a. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1994, section 116J.556, is 
  1.11  amended to read: 
  1.12     116J.556 [LOCAL MATCH REQUIREMENT.] 
  1.13     (a) In order to qualify for a grant under sections 116J.551 
  1.14  to 116J.557, the municipality must pay for at least one-half of 
  1.15  the project costs as a local match.  The municipality shall pay 
  1.16  an amount of the project costs equal to at least 18 percent of 
  1.17  the cleanup costs from the municipality's general fund, a 
  1.18  property tax levy for that purpose, or other unrestricted money 
  1.19  available to the municipality (excluding tax increments).  These 
  1.20  unrestricted moneys may be spent for project costs, other than 
  1.21  cleanup costs, and qualify for the local match payment equal to 
  1.22  18 percent of cleanup costs.  The rest of the local match may be 
  1.23  paid with tax increments or any other money available to the 
  1.24  municipality. 
  1.25     (b) If the development authority establishes a tax 
  1.26  increment financing district or hazardous substance subdistrict 
  1.27  on the site to pay for part of the local match requirement, ~~the~~ 
  2.1   ~~district or subdistrict is not subject to the state aid~~ 
  2.2   ~~reductions under section 273.1399.  In order to qualify for the~~ 
  2.3   ~~exemption from the state aid reductions, the municipality must~~ 
  2.4   ~~elect, by resolution, on or before the request for certification~~ 
  2.5   ~~is filed that all tax increments from the district or~~ 
  2.6   ~~subdistrict will be used exclusively to pay (1) for project~~ 
  2.7   ~~costs for the site and (2) administrative costs for the district~~ 
  2.8   ~~or subdistrict.~~  the district or subdistrict must be decertified 
  2.9   when an amount of tax increments equal to no more than three 
  2.10  times the costs of implementing the response action plan for the 
  2.11  site and the administrative costs for the district or 
  2.12  subdistrict have been received, after deducting the amount of 
  2.13  the state grant. 
  2.14     Sec. 2.  [TAX INCREMENT FINANCING GRANTS.] 
  2.15     Subdivision 1.  [DEFINITIONS.] The definitions in Minnesota 
  2.16  Statutes, section 469.174, apply to this section. 
  2.17     Subd. 2.  [APPROPRIATION.] $....... is appropriated from 
  2.18  the general fund to the commissioner of trade and economic 
  2.19  development to be used to provide grants to authorities 
  2.20  operating tax increment financing districts under Minnesota 
  2.21  Statutes, sections 469.174 to 469.179, or special law. 
  2.22     Subd. 3.  [CRITERIA.] An authority may apply to the 
  2.23  commissioner of trade and economic development for a grant under 
  2.24  this section for the benefit of a tax increment financing 
  2.25  district that meets the following criteria: 
  2.26     (1) the governing bodies of the city, county, and school 
  2.27  district in which the district is located adopt resolutions 
  2.28  asserting the value of the project to the community; 
  2.29     (2) the authority provides evidence that the amount of 
  2.30  revenues from tax increment estimated to be produced in the 
  2.31  district is insufficient to make the project viable; 
  2.32     (3) the authority provides evidence that the activities to 
  2.33  be conducted in the district are not intended to induce 
  2.34  enterprises to relocate into the district from another location 
  2.35  in Minnesota; and 
  2.36     (4) the municipality in which the district is located meets 
  3.1   at least two of the following conditions: 
  3.2      (i) median household income in the municipality is less 
  3.3   than $37,500; 
  3.4      (ii) the municipality provides evidence of a shortage of 
  3.5   low and moderate income housing; 
  3.6      (iii) the per capita adjusted net tax capacity of the 
  3.7   municipality is less than 110 percent of the statewide average 
  3.8   per capita adjusted net tax capacity; and 
  3.9      (iv) the local unemployment rate is higher than the 
  3.10  statewide average unemployment rate. 
  3.11     If the commissioner verifies that the project meets the 
  3.12  criteria, the project is eligible for a grant under this section.
  3.13     Subd. 4.  [GRANT PROCESS.] To obtain a grant under this 
  3.14  section, the authority shall apply to the commissioner of trade 
  3.15  and economic development, in a form prescribed by the 
  3.16  commissioner, which must include the information necessary to 
  3.17  determine whether the tax increment financing district meets the 
  3.18  requirements set forth in subdivision 3.  If applications for 
  3.19  grants exceed the available appropriation, the commissioner 
  3.20  shall make grants for districts that, in the commissioner's 
  3.21  judgment, provide the highest return in public benefits for the 
  3.22  public costs incurred.  The determination of whether to make a 
  3.23  grant is within the sole discretion of the commissioner, subject 
  3.24  to the process provided by this section, and available 
  3.25  unencumbered money in the appropriation.  The commissioner's 
  3.26  decisions are not subject to judicial review, except for abuse 
  3.27  of discretion. 
  3.28     Sec. 3.  [REPEALER.] 
  3.29     Minnesota Statutes 1994, sections 273.1399; and 469.175, 
  3.30  subdivision 7a, are repealed. 
  3.31     Sec. 4.  [EFFECTIVE DATE.] 
  3.32     Sections 1 and 3 are effective for districts for which 
  3.33  certification is requested after April 30, 1990.