HF 3037

as introduced - 86th Legislature (2009 - 2010) Posted on 02/17/2010 04:06pm

A bill for an act
relating to economic development; establishing a manufacturing equipment
loan program for manufacturing businesses in the state; authorizing sale and
issuance of revenue bonds; proposing coding for new law in Minnesota Statutes,
chapter 116J.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [116J.4361] MANUFACTURING EQUIPMENT LOAN PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given.
new text end

new text begin (b) "Business entity" means a sole proprietorship, partnership, limited liability
corporation, or corporation.
new text end

new text begin (c) "Manufacturing" means manufacturing, fabricating, mining, or refining of
materials resulting in the production of personal property to be sold at wholesale or retail.
new text end

new text begin (d) "Manufacturing equipment" means machinery and equipment purchased and
used in this state by the purchaser essential to the integrated production process of
manufacturing.
new text end

new text begin (e) "Qualifying manufacturing business" means a business entity with at least ..
employees that is involved in manufacturing and is located or has a physical presence in
the state at which the manufacturing equipment will be used.
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The commissioner shall administer a manufacturing equipment
loan program under this section to make low-interest, long-term loans to qualifying
manufacturing businesses to purchase and install manufacturing equipment. A
manufacturing business shall apply for a loan under this section in a manner and on a form
prescribed by the commissioner. Loans under this section are intended to cover up to 50
percent of the cost of the project.
new text end

new text begin Subd. 3. new text end

new text begin Loan proposals. new text end

new text begin At least once a year, the commissioner shall publish in
the State Register a request for proposals for a loan under this section. Within 45 days
after the deadline for receipt of proposals, the commissioner shall select proposals based
on the following criteria:
new text end

new text begin (1) the business growth and jobs that will be created as a result of the loan;
new text end

new text begin (2) the reliability, efficiency, and cost-effectiveness of the manufacturing equipment
to be installed under the proposal;
new text end

new text begin (3) the geographic distribution of projects throughout the state;
new text end

new text begin (4) the percentage of total project cost requested;
new text end

new text begin (5) the proposed security for payback of the loan; and
new text end

new text begin (6) other criteria determined by the commissioner to maximize economic
development with loans under this section.
new text end

new text begin Subd. 4. new text end

new text begin Loan terms. new text end

new text begin A loan under this section must be issued at the lowest interest
rate required to recover principal and interest plus the costs of issuing the loan, and must be
for a minimum of 15 years, unless the commissioner determines that a shorter loan period
is necessary and feasible. A grace period of up to 24 months before payments become due
on the loan may be extended by the commissioner to qualifying manufacturing businesses.
new text end

new text begin Subd. 5. new text end

new text begin Account. new text end

new text begin A manufacturing equipment loan account is established in the
state treasury. Money in the account consists of the proceeds of revenue bonds issued
under section 116J.4362, interest and other earnings on money in the account, money
received in repayment of loans from the account, legislative appropriations, and money
from any other source credited to the account.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin Money in the account is appropriated to the commissioner
to make manufacturing equipment loans under this section and to the commissioner of
management and budget to pay debt service and other costs under section 116J.4362.
Payment of debt service costs and funding reserves take priority over use of money in the
account for any other purpose.
new text end

Sec. 2.

new text begin [116J.4362] MANUFACTURING EQUIPMENT LOAN REVENUE
BONDS.
new text end

new text begin Subdivision 1. new text end

new text begin Bonding authority; definition. new text end

new text begin (a) The commissioner of
management and budget, if requested by the commissioner of employment and economic
development, shall sell and issue state revenue bonds for the following purposes:
new text end

new text begin (1) to make manufacturing equipment loans under section 116J.4361;
new text end

new text begin (2) to pay the costs of issuance, debt service, and bond insurance or other credit
enhancements, and to fund reserves; and
new text end

new text begin (3) to refund bonds issued under this section.
new text end

new text begin (b) The aggregate principal amount of bonds for the purposes of paragraph (a),
clause (1), that may be outstanding at any time may not exceed $.......; the principal
amount of bonds that may be issued for the purposes of paragraph (a), clauses (2) and
(3), is not limited.
new text end

new text begin (c) For the purpose of this section, "commissioner" means the commissioner of
management and budget.
new text end

new text begin Subd. 2. new text end

new text begin Procedure. new text end

new text begin The commissioner may sell and issue the bonds on the terms
and conditions the commissioner determines to be in the best interests of the state. The
bonds may be sold at public or private sale. The commissioner may enter into any
agreements or pledges the commissioner determines necessary or useful to sell the bonds
that are not inconsistent with section 116J.4361. Sections 16A.672 to 16A.675 apply to
the bonds. The proceeds of the bonds issued under this section must be credited to the
manufacturing equipment loan account created under section 116J.4361.
new text end

new text begin Subd. 3. new text end

new text begin Revenue sources. new text end

new text begin The debt service on the bonds is payable only from the
following sources:
new text end

new text begin (1) revenue credited to the manufacturing equipment loan account from the sources
identified in section 116J.4361 or from any other source; and
new text end

new text begin (2) other revenues pledged to the payment of the bonds.
new text end

new text begin Subd. 4. new text end

new text begin Refunding bonds. new text end

new text begin The commissioner may issue bonds to refund
outstanding bonds issued under subdivision 1, including the payment of any redemption
premiums on the bonds and any interest accrued or to accrue to the first redemption date
after delivery of the refunding bonds. The proceeds of the refunding bonds may, at the
discretion of the commissioner, be applied to the purchases or payment at maturity of the
bonds to be refunded, or the redemption of the outstanding bonds on the first redemption
date after delivery of the refunding bonds and may, until so used, be placed in escrow to
be applied to the purchase, retirement, or redemption. Refunding bonds issued under this
subdivision must be issued and secured in the manner provided by the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Not a general or moral obligation. new text end

new text begin Bonds issued under this section are
not public debt, and the full faith, credit, and taxing powers of the state are not pledged
for their payment. The bonds may not be paid, directly in whole or in part from a tax of
statewide application on any class of property, income, transaction, or privilege. Payment
of the bonds is limited to the revenues explicitly authorized to be pledged under this
section. The state neither makes nor has a moral obligation to pay the bonds if the pledged
revenues and other legal security for them is insufficient.
new text end

new text begin Subd. 6. new text end

new text begin Trustee. new text end

new text begin The commissioner may contract with and appoint a trustee for
bondholders. The trustee has the powers and authority vested in it by the commissioner
under the bond and trust indentures.
new text end

new text begin Subd. 7. new text end

new text begin Pledges. new text end

new text begin A pledge made by the commissioner is valid and binding from
the time the pledge is made. The money or property pledged and later received by the
commissioner is immediately subject to the lien of the pledge without any physical
delivery of the property or money or further act, and the lien of the pledge is valid and
binding as against all parties having claims of any kind in tort, contract, or otherwise
against the commissioner, whether or not those parties have notice of the lien or pledge.
Neither the order nor any other instrument by which a pledge is created need be recorded.
new text end

new text begin Subd. 8. new text end

new text begin Bonds; purchase and cancellation. new text end

new text begin The commissioner, subject to
agreements with bondholders that may then exist, may, out of any money available for the
purpose, purchase bonds of the commissioner at a price not exceeding (1) if the bonds are
then redeemable, the redemption price then applicable plus accrued interest to the next
interest payment date thereon, or (2) if the bonds are not redeemable, the redemption price
applicable on the first date after the purchase upon which the bonds become subject to
redemption plus accrued interest to that date.
new text end

new text begin Subd. 9. new text end

new text begin State pledge against impairment of contracts. new text end

new text begin The state pledges and
agrees with the holders of any bonds that the state will not limit or alter the rights vested in
the commissioner to fulfill the terms of any agreements made with the bondholders, or
in any way impair the rights and remedies of the holders until the bonds, together with
interest on them, with interest on any unpaid installments of interest, and all costs and
expenses in connection with any action or proceeding by or on behalf of the bondholders,
are fully met and discharged. The commissioner may include this pledge and agreement
of the state in any agreement with the holders of bonds issued under this section.
new text end