Bill Text: MN HF1721 | 2011-2012 | 87th Legislature | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Redevelopment demolition loans authorized, semiannual report eliminated, small business advocate office established in the Business Assistance Center, and Albert Lea granted the authority to establish an industrial sewer charge rebate program.
Sponsorship: Partisan Bill (Republican 3)
Status: (Passed) 2012-05-10 - Secretary of State Chapter 288 [HF1721 Detail]
Download: Minnesota-2011-HF1721-Engrossed.html
Bill Title: Redevelopment demolition loans authorized, semiannual report eliminated, small business advocate office established in the Business Assistance Center, and Albert Lea granted the authority to establish an industrial sewer charge rebate program.
Sponsorship: Partisan Bill (Republican 3)
Status: (Passed) 2012-05-10 - Secretary of State Chapter 288 [HF1721 Detail]
Download: Minnesota-2011-HF1721-Engrossed.html
1.2relating to economic development; authorizing redevelopment demolition loans;
1.3eliminating a semiannual report; establishing a small business advocate office in
1.4the Business Assistance Center; granting Albert Lea the authority to establish
1.5an industrial sewer charge rebate program;amending Minnesota Statutes 2010,
1.6sections 116J.555, subdivision 2; 116J.571; 116J.572; 116J.575, by adding a
1.7subdivision; 116J.66; proposing coding for new law in Minnesota Statutes,
1.8chapter 116J.
1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.10 Section 1. Minnesota Statutes 2010, section 116J.555, subdivision 2, is amended to
1.11read:
1.12 Subd. 2. Application cycles; reporting to legislature. (a) In making grants, the
1.13commissioner shall establish semiannual application deadlines in which grants will be
1.14authorized from all or part of the available appropriations of money in the account.
1.15(b) After each semiannual cycle in which grants are awarded, the commissioner shall
1.16report to the environment and natural resources committees of the senate and house of
1.17representatives, the Finance Division of the senate Committee on Environment and Natural
1.18Resources, and the house of representatives Committee on Environment and Natural
1.19Resources finance the grants awarded and appropriate supporting information describing
1.20each grant made. This report must be made within 30 days after the grants are awarded.
1.21(c) (b) The commissioner shall annually report to the legislative committees in
1.22paragraph (b) committees of the senate and house of representatives with jurisdiction over
1.23environment and natural resources finance on the status of the cleanup projects undertaken
1.24under grants made under the programs. The commissioner shall include in the annual
1.25report information on the cleanup and development activities undertaken for the grants
2.1made in that and previous fiscal years. The commissioner shall make this report no later
2.2than 120 days after the end of the fiscal year.
2.3 Sec. 2. Minnesota Statutes 2010, section 116J.571, is amended to read:
2.4116J.571 CREATION OF ACCOUNTS.
2.5Two redevelopment accounts are created, one in the general fund and one in
2.6the bond proceeds fund. Moneyin the accounts for the program may be used to make
2.7grants as provided in section116J.575 and loans as provided in section 116J.5761 and
2.8to pay for the commissioner's costs in reviewing applications and making grants and
2.9loans and is available until spent. The repayment of principal and interest on loans and
2.10investment income earned on money in the account is deposited in the special revenue
2.11fund and may be used for making grants and loans and for administrative costs and are
2.12appropriated for such purposes.
2.13 Sec. 3. Minnesota Statutes 2010, section 116J.572, is amended to read:
2.14116J.572 DEFINITIONS.
2.15 Subdivision 1. Scope of application. For purposes of sections116J.571 to
116J.575
2.16116J.5765, the terms in this section have the meanings given.
2.17 Subd. 1a. Demolition costs. "Demolition costs" means the costs of demolition,
2.18destruction, removal and clearance of all structures and other improvements on the project
2.19site, including interior remedial activities, and proper disposal thereof. As used in this
2.20subdivision, "structure" has the meaning given it in section 116G.03, subdivision 11.
2.21 Subd. 2. Development authority. "Development authority" includes a statutory
2.22or home rule charter city, county, housing and redevelopment authority, economic
2.23development authority, or port authority.
2.24 Subd. 2a. Metropolitan area. "Metropolitan area" means the seven-county
2.25metropolitan area, as defined in section473.121, subdivision 2 .
2.26 Subd. 2b. Municipality. "Municipality" means the statutory or home rule charter
2.27city, town, or, in the case of unorganized territory, the county in which the redevelopment
2.28or project is located.
2.29 Subd. 3. Redevelopment costs or costs. "Redevelopment costs" or "costs" means
2.30the costs of land acquisition, stabilizing unstable soils when infill is required,demolition,
2.31infrastructure improvements, and ponding or other environmental infrastructure,
2.32demolition costs and costs necessary for adaptive reuse of buildings, including remedial
2.33activities.
3.1 Sec. 4. Minnesota Statutes 2010, section 116J.575, is amended by adding a subdivision
3.2to read:
3.3 Subd. 4. Grant repayment. If a project fails to substantially provide the public
3.4benefits listed in the grant application within five years from the date of the grant award,
3.5the commissioner may require that 100 percent of the grant amount be repaid by the
3.6development authority over a term not to exceed ten years. The commissioner may
3.7exercise discretion to require repayment of only a portion of the grant amount taking into
3.8account the public benefits generated by the completed development.
3.9 Sec. 5. [116J.5761] LOANS.
3.10 Subdivision 1. Authority. The commissioner may make loans to development
3.11authorities for projects that meet the criteria under sections 116J.5761 to 116J.5764. The
3.12commissioner may make a loan for up to 100 percent of the estimated land acquisition and
3.13demolition costs of the project. The determination whether to make a loan for a project
3.14is within the discretion of the commissioner, subject to this section, sections 116J.5761
3.15to 116J.5764, and available unencumbered money in the redevelopment accounts. The
3.16commissioner's decisions and application of the priorities under this section are not subject
3.17to judicial review, except for abuse of discretion.
3.18 Subd. 2. Qualifying projects. A project qualifies for a loan under this section,
3.19if the following criteria are met:
3.20(1) the property and structures are owned by the development authority;
3.21(2) the structures on the property have been vacant for at least one year;
3.22(3) the structures constitute a threat to public safety because of inadequate
3.23maintenance, dilapidation, obsolescence, or abandonment;
3.24(4) the structures are not listed on the National Register of Historic Places; and
3.25(5) upon completion of the demolition, the development authority reasonably
3.26expects that the property will be improved and these improvements will result in economic
3.27development benefits to the municipality.
3.28 Sec. 6. [116J.5762] LOAN APPLICATIONS.
3.29 Subdivision 1. Application required. To obtain a demolition loan, a development
3.30authority shall apply to the commissioner. The governing body of the municipality must
3.31approve the application by resolution.
3.32 Subd. 2. Required content. The commissioner shall prescribe and provide the
3.33application form. The application must include at least the following information:
3.34(1) identification of the property;
4.1(2) proof of ownership by the development authority;
4.2(3) a description of how the structures on the property constitute a threat to public
4.3safety, are functionally obsolete, or are economically unfeasible to repair;
4.4(4) length of vacancy;
4.5(5) a detailed estimate, along with supporting evidence, of the total demolition
4.6costs for the project;
4.7(6) evidence that the structures on the property are not listed on the National Register
4.8of Historic Places;
4.9(7) as assessment of the development potential or likely use of the property after
4.10completion of the demolition plan;
4.11(8) the current appraised or assessed value of the property;
4.12(9) financial documentation necessary for loan underwriting;
4.13(10) other sources of funding if the total estimated demolition costs exceed the
4.14loan amount;
4.15(11) the proposed source of funds to be used for repayment of the loan;
4.16(12) information showing the applicant's financial condition and ability to repay
4.17the loan;
4.18(13) the proposed term and principal repayment schedule for the loan;
4.19(14) the statutory authorization for the applicant to issue bonds, together with a
4.20statement that the statutory provision authorizes the use of proceeds of such bonds to pay
4.21demolition costs and secure the loan; and
4.22(15) any additional information the commissioner prescribes.
4.23 Sec. 7. [116J.5763] PRIORITIES.
4.24 Subdivision 1. Priorities. (a) If applications for loans exceed the available
4.25appropriations, loans shall be made for projects that, in the commissioner's judgment,
4.26provide the highest return in public benefits for the public costs incurred. "Public benefits"
4.27include health, safety and other environmental benefits, blight reduction including
4.28the property's potential for improved economic vitality, functionality and aesthetics,
4.29community stabilization, crime reduction, reduced maintenance costs, and the potential
4.30for future development. In making this judgment, the commissioner shall consider the
4.31following:
4.32(1) the extent to which the existing property conditions threaten public safety;
4.33(2) the length of vacancy of the property;
4.34(3) the development potential of the property;
4.35(4) the proximity of the property to existing sufficient public infrastructure;
5.1(5) the applicant's financial condition and ability to repay the loan.
5.2(b) The factors in paragraph (a) are not listed in a rank order or priority; rather, the
5.3commissioner may weigh each factor, depending upon the facts and circumstances, as
5.4the commissioner considers appropriate. The commissioner may consider other factors
5.5that affect the net return of public benefits.
5.6 Subd. 2. Application cycle. The commissioner shall establish semiannual
5.7application deadlines in which loans will be authorized from available money in the
5.8accounts.
5.9 Sec. 8. [116J.5764] LOAN TERMS AND CONDITIONS.
5.10 Subdivision 1. Terms. Loans to development authorities for demolition costs may
5.11be made by the commissioner subject to the following terms and conditions:
5.12(1) the agreement to repay the loan must be a general obligation of the development
5.13authority, payable primarily from a dedicated source of revenue, and the development
5.14authority must deliver its bond or note to the commissioner to secure the loan;
5.15(2) the term of the loan may not exceed 15 years;
5.16(3) the loan shall bear interest at a rate equal to two percent, but interest will not
5.17accrue during the first two years of the loan term;
5.18(4) the development authority shall make semiannual interest payments and annual
5.19principal payments beginning in the third year of the loan until the end of the term;
5.20(5) the principal amount of a loan may not exceed $1,000,000;
5.21(6) loan proceeds shall be disbursed for eligible demolition costs as incurred or
5.22paid by borrower and upon submission of invoices and other supporting documentation
5.23satisfactory to the commissioner;
5.24(7) an eligible borrower shall establish a dedicated source of revenue for repayment
5.25of the loan.
5.26 Subd. 2. Modification of loan terms. The commissioner has the discretion to
5.27consent to the modification of the rate of interest, time of payment, installment of principal
5.28or interest, or other term of a loan made under sections 116J.5761 to 116J.5764.
5.29 Subd. 3 Forgiveness. The commissioner may forgive principal of the loan and
5.30interest accrued but unpaid thereon, if any, up to 50 percent of the original loan amount,
5.31not to exceed the costs of demolition, upon completion of the redevelopment plan, if the
5.32project would otherwise have received grant funding in the most recent semiannual grant
5.33round, based on the priorities in section 116J.575.
5.34 Sec. 9. [116J.5765] NONLIABILITY.
6.1The state shall have no responsibility or liability relating to or arising out of
6.2activities at the site of a project solely by reason of the making of a grant or loan by the
6.3commissioner under sections 116J.5761 to 116J.5764.
6.4 Sec. 10. Minnesota Statutes 2010, section 116J.66, is amended to read:
6.5116J.66 BUSINESS ASSISTANCE.
6.6The commissioner shall establish within the department a business assistance center.
6.7The center shall consist of (1) a Bureau of Small Business which shall have as its sole
6.8function the provision of assistance to small businesses in the state and (2) a bureau
6.9of licenses to assist all businesses in obtaining state licenses and permits. This center
6.10shall be accorded at least equal status with the other major operating units within the
6.11department. A small business advocate office is established in the Business Assistance
6.12Center to provide one-stop access for small businesses in need of information or assistance
6.13in obtaining or renewing licenses, meeting state regulatory requirements, or resolving
6.14disputes with state agencies.
6.15 Sec. 11. ALBERT LEA; INDUSTRIAL SEWER CHARGE REBATE
6.16AUTHORITY.
6.17Notwithstanding Minnesota Statutes, section 444.075, the city of Albert Lea may
6.18by ordinance establish an industrial sewer charge rebate program in order to provide an
6.19incentive for new or expanded businesses that would be industrial users of the city's
6.20wastewater collection and treatment system to locate in the city. The ordinance must
6.21specify the criteria for awarding a rebate. The rebate program must not result in increased
6.22charges to current users.
6.23EFFECTIVE DATE.This section is effective the day after the governing body of
6.24the city of Albert Lea and its chief clerical officer timely complete their compliance with
6.25Minnesota Statutes, section 645.021, subdivisions 2 and 3.
6.26 Sec. 12. REVISOR'S INSTRUCTION.
6.27The revisor of statutes shall change the term "neighborhood land trust" to
6.28"community land trust" and the term "neighborhood land trusts" to "community land
6.29trusts" wherever they appear in Minnesota Statutes, section 273.11, subdivision 12; and
6.30chapter 462A.
1.3eliminating a semiannual report; establishing a small business advocate office in
1.4the Business Assistance Center; granting Albert Lea the authority to establish
1.5an industrial sewer charge rebate program;amending Minnesota Statutes 2010,
1.6sections 116J.555, subdivision 2; 116J.571; 116J.572; 116J.575, by adding a
1.7subdivision; 116J.66; proposing coding for new law in Minnesota Statutes,
1.8chapter 116J.
1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.10 Section 1. Minnesota Statutes 2010, section 116J.555, subdivision 2, is amended to
1.11read:
1.12 Subd. 2. Application cycles; reporting to legislature. (a) In making grants, the
1.13commissioner shall establish semiannual application deadlines in which grants will be
1.14authorized from all or part of the available appropriations of money in the account.
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.23environment and natural resources finance on the status of the cleanup projects undertaken
1.24under grants made under the programs. The commissioner shall include in the annual
1.25report information on the cleanup and development activities undertaken for the grants
2.1made in that and previous fiscal years. The commissioner shall make this report no later
2.2than 120 days after the end of the fiscal year.
2.3 Sec. 2. Minnesota Statutes 2010, section 116J.571, is amended to read:
2.4116J.571 CREATION OF ACCOUNTS.
2.5Two redevelopment accounts are created, one in the general fund and one in
2.6the bond proceeds fund. Money
2.7grants as provided in section
2.8to pay for the commissioner's costs in reviewing applications and making grants and
2.9loans and is available until spent. The repayment of principal and interest on loans and
2.10investment income earned on money in the account is deposited in the special revenue
2.11fund and may be used for making grants and loans and for administrative costs and are
2.12appropriated for such purposes.
2.13 Sec. 3. Minnesota Statutes 2010, section 116J.572, is amended to read:
2.14116J.572 DEFINITIONS.
2.15 Subdivision 1. Scope of application. For purposes of sections
2.16116J.5765, the terms in this section have the meanings given.
2.17 Subd. 1a. Demolition costs. "Demolition costs" means the costs of demolition,
2.18destruction, removal and clearance of all structures and other improvements on the project
2.19site, including interior remedial activities, and proper disposal thereof. As used in this
2.20subdivision, "structure" has the meaning given it in section 116G.03, subdivision 11.
2.21 Subd. 2. Development authority. "Development authority" includes a statutory
2.22or home rule charter city, county, housing and redevelopment authority, economic
2.23development authority, or port authority.
2.24 Subd. 2a. Metropolitan area. "Metropolitan area" means the seven-county
2.25metropolitan area, as defined in section
2.26 Subd. 2b. Municipality. "Municipality" means the statutory or home rule charter
2.27city, town, or, in the case of unorganized territory, the county in which the redevelopment
2.28or project is located.
2.29 Subd. 3. Redevelopment costs or costs. "Redevelopment costs" or "costs" means
2.30the costs of land acquisition, stabilizing unstable soils when infill is required,
2.31infrastructure improvements, and ponding or other environmental infrastructure,
2.32demolition costs and costs necessary for adaptive reuse of buildings, including remedial
2.33activities.
3.1 Sec. 4. Minnesota Statutes 2010, section 116J.575, is amended by adding a subdivision
3.2to read:
3.3 Subd. 4. Grant repayment. If a project fails to substantially provide the public
3.4benefits listed in the grant application within five years from the date of the grant award,
3.5the commissioner may require that 100 percent of the grant amount be repaid by the
3.6development authority over a term not to exceed ten years. The commissioner may
3.7exercise discretion to require repayment of only a portion of the grant amount taking into
3.8account the public benefits generated by the completed development.
3.9 Sec. 5. [116J.5761] LOANS.
3.10 Subdivision 1. Authority. The commissioner may make loans to development
3.11authorities for projects that meet the criteria under sections 116J.5761 to 116J.5764. The
3.12commissioner may make a loan for up to 100 percent of the estimated land acquisition and
3.13demolition costs of the project. The determination whether to make a loan for a project
3.14is within the discretion of the commissioner, subject to this section, sections 116J.5761
3.15to 116J.5764, and available unencumbered money in the redevelopment accounts. The
3.16commissioner's decisions and application of the priorities under this section are not subject
3.17to judicial review, except for abuse of discretion.
3.18 Subd. 2. Qualifying projects. A project qualifies for a loan under this section,
3.19if the following criteria are met:
3.20(1) the property and structures are owned by the development authority;
3.21(2) the structures on the property have been vacant for at least one year;
3.22(3) the structures constitute a threat to public safety because of inadequate
3.23maintenance, dilapidation, obsolescence, or abandonment;
3.24(4) the structures are not listed on the National Register of Historic Places; and
3.25(5) upon completion of the demolition, the development authority reasonably
3.26expects that the property will be improved and these improvements will result in economic
3.27development benefits to the municipality.
3.28 Sec. 6. [116J.5762] LOAN APPLICATIONS.
3.29 Subdivision 1. Application required. To obtain a demolition loan, a development
3.30authority shall apply to the commissioner. The governing body of the municipality must
3.31approve the application by resolution.
3.32 Subd. 2. Required content. The commissioner shall prescribe and provide the
3.33application form. The application must include at least the following information:
3.34(1) identification of the property;
4.1(2) proof of ownership by the development authority;
4.2(3) a description of how the structures on the property constitute a threat to public
4.3safety, are functionally obsolete, or are economically unfeasible to repair;
4.4(4) length of vacancy;
4.5(5) a detailed estimate, along with supporting evidence, of the total demolition
4.6costs for the project;
4.7(6) evidence that the structures on the property are not listed on the National Register
4.8of Historic Places;
4.9(7) as assessment of the development potential or likely use of the property after
4.10completion of the demolition plan;
4.11(8) the current appraised or assessed value of the property;
4.12(9) financial documentation necessary for loan underwriting;
4.13(10) other sources of funding if the total estimated demolition costs exceed the
4.14loan amount;
4.15(11) the proposed source of funds to be used for repayment of the loan;
4.16(12) information showing the applicant's financial condition and ability to repay
4.17the loan;
4.18(13) the proposed term and principal repayment schedule for the loan;
4.19(14) the statutory authorization for the applicant to issue bonds, together with a
4.20statement that the statutory provision authorizes the use of proceeds of such bonds to pay
4.21demolition costs and secure the loan; and
4.22(15) any additional information the commissioner prescribes.
4.23 Sec. 7. [116J.5763] PRIORITIES.
4.24 Subdivision 1. Priorities. (a) If applications for loans exceed the available
4.25appropriations, loans shall be made for projects that, in the commissioner's judgment,
4.26provide the highest return in public benefits for the public costs incurred. "Public benefits"
4.27include health, safety and other environmental benefits, blight reduction including
4.28the property's potential for improved economic vitality, functionality and aesthetics,
4.29community stabilization, crime reduction, reduced maintenance costs, and the potential
4.30for future development. In making this judgment, the commissioner shall consider the
4.31following:
4.32(1) the extent to which the existing property conditions threaten public safety;
4.33(2) the length of vacancy of the property;
4.34(3) the development potential of the property;
4.35(4) the proximity of the property to existing sufficient public infrastructure;
5.1(5) the applicant's financial condition and ability to repay the loan.
5.2(b) The factors in paragraph (a) are not listed in a rank order or priority; rather, the
5.3commissioner may weigh each factor, depending upon the facts and circumstances, as
5.4the commissioner considers appropriate. The commissioner may consider other factors
5.5that affect the net return of public benefits.
5.6 Subd. 2. Application cycle. The commissioner shall establish semiannual
5.7application deadlines in which loans will be authorized from available money in the
5.8accounts.
5.9 Sec. 8. [116J.5764] LOAN TERMS AND CONDITIONS.
5.10 Subdivision 1. Terms. Loans to development authorities for demolition costs may
5.11be made by the commissioner subject to the following terms and conditions:
5.12(1) the agreement to repay the loan must be a general obligation of the development
5.13authority, payable primarily from a dedicated source of revenue, and the development
5.14authority must deliver its bond or note to the commissioner to secure the loan;
5.15(2) the term of the loan may not exceed 15 years;
5.16(3) the loan shall bear interest at a rate equal to two percent, but interest will not
5.17accrue during the first two years of the loan term;
5.18(4) the development authority shall make semiannual interest payments and annual
5.19principal payments beginning in the third year of the loan until the end of the term;
5.20(5) the principal amount of a loan may not exceed $1,000,000;
5.21(6) loan proceeds shall be disbursed for eligible demolition costs as incurred or
5.22paid by borrower and upon submission of invoices and other supporting documentation
5.23satisfactory to the commissioner;
5.24(7) an eligible borrower shall establish a dedicated source of revenue for repayment
5.25of the loan.
5.26 Subd. 2. Modification of loan terms. The commissioner has the discretion to
5.27consent to the modification of the rate of interest, time of payment, installment of principal
5.28or interest, or other term of a loan made under sections 116J.5761 to 116J.5764.
5.29 Subd. 3 Forgiveness. The commissioner may forgive principal of the loan and
5.30interest accrued but unpaid thereon, if any, up to 50 percent of the original loan amount,
5.31not to exceed the costs of demolition, upon completion of the redevelopment plan, if the
5.32project would otherwise have received grant funding in the most recent semiannual grant
5.33round, based on the priorities in section 116J.575.
5.34 Sec. 9. [116J.5765] NONLIABILITY.
6.1The state shall have no responsibility or liability relating to or arising out of
6.2activities at the site of a project solely by reason of the making of a grant or loan by the
6.3commissioner under sections 116J.5761 to 116J.5764.
6.4 Sec. 10. Minnesota Statutes 2010, section 116J.66, is amended to read:
6.5116J.66 BUSINESS ASSISTANCE.
6.6The commissioner shall establish within the department a business assistance center.
6.7The center shall consist of (1) a Bureau of Small Business which shall have as its sole
6.8function the provision of assistance to small businesses in the state and (2) a bureau
6.9of licenses to assist all businesses in obtaining state licenses and permits. This center
6.10shall be accorded at least equal status with the other major operating units within the
6.11department. A small business advocate office is established in the Business Assistance
6.12Center to provide one-stop access for small businesses in need of information or assistance
6.13in obtaining or renewing licenses, meeting state regulatory requirements, or resolving
6.14disputes with state agencies.
6.15 Sec. 11. ALBERT LEA; INDUSTRIAL SEWER CHARGE REBATE
6.16AUTHORITY.
6.17Notwithstanding Minnesota Statutes, section 444.075, the city of Albert Lea may
6.18by ordinance establish an industrial sewer charge rebate program in order to provide an
6.19incentive for new or expanded businesses that would be industrial users of the city's
6.20wastewater collection and treatment system to locate in the city. The ordinance must
6.21specify the criteria for awarding a rebate. The rebate program must not result in increased
6.22charges to current users.
6.23EFFECTIVE DATE.This section is effective the day after the governing body of
6.24the city of Albert Lea and its chief clerical officer timely complete their compliance with
6.25Minnesota Statutes, section 645.021, subdivisions 2 and 3.
6.26 Sec. 12. REVISOR'S INSTRUCTION.
6.27The revisor of statutes shall change the term "neighborhood land trust" to
6.28"community land trust" and the term "neighborhood land trusts" to "community land
6.29trusts" wherever they appear in Minnesota Statutes, section 273.11, subdivision 12; and
6.30chapter 462A.
