Purpose of the Bill

The bill aims to support economic development in Minnesota by creating a Tax-Stressed Cities Demolition Grant Program. This program will provide financial assistance to cities with high tax rates to help them demolish vacant and unsafe structures. The goal is to enhance public safety and improve the overall condition of communities struggling with abandoned properties.

Main Provisions

• Establishment of a Grant Program: The bill establishes a grant program that covers 50% of demolition costs for qualifying properties in tax-stressed cities.

• Definitions and Eligibility: The bill defines "tax-stressed city" as one with a tax rate 125% or more of the standard rate, and "qualifying property" as a vacant property threatening public safety, not listed on the National Register of Historic Places. Properties must have been vacant for at least a year.

• Application Process: Municipal development authorities must apply for the grants, and applications require approval from the municipal governing body. Necessary documentation includes a cost estimate, funding plans for the remaining costs, proof of property qualifications, and evidence of financial need.

• Funding and Financial Details:

  • Creation of a special revenue fund account for the grant program.
  • Appropriations of $2,246,000 for the fiscal years 2026 and 2027 each from the general fund.
  • Administrative costs are capped at 5% of the annual appropriation.

• Priority and Selection Criteria: Financial need and the public safety threat level are the main criteria for prioritizing grant allocations.

• Reporting Requirements: The commissioner must provide annual reports to the legislature detailing how the grant funds are used.

Significant Changes to Existing Law

The bill proposes new law coding for the Minnesota Statutes chapter 116J, introducing a structured financial support program that is specifically focused on facilitating the demolition of hazardous, vacant properties in cities with elevated tax burdens.

Relevant Terms

tax-stressed cities, demolition grants, vacant structures, public safety, economic development, property vacancy, special revenue fund, financial assistance, Minnesota Statutes chapter 116J