SF 1933

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to public finance; providing terms and conditions related to the issuance
of obligations and the financing of public improvements and services; extending
the time for certain publications of notices; providing for the financing of
postemployment benefits; authorizing the issuance of certain obligations;
amending Minnesota Statutes 2006, sections 118A.03, subdivision 3; 123B.61;
331A.05, subdivision 2; 365A.02; 365A.04; 365A.08; 365A.095; 373.01,
subdivision 3; 375B.09; 383B.117, subdivision 2; 410.32; 412.301; 453A.02,
subdivision 3; 473.39, by adding a subdivision; 475.52, subdivision 6; 475.58,
subdivisions 1, 3b; proposing coding for new law in Minnesota Statutes, chapter
471.

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

Section 1.

Minnesota Statutes 2006, section 118A.03, subdivision 3, is amended to read:

Subd. 3.

Amount.

The total amount of the collateral computed at its market value
shall be at least ten percent more than the amount on deposit deleted text begin plus accrued interest deleted text end at
the close of the financial institution's banking day, except that where the collateral is
irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of
collateral shall be at least equal to the amount on deposit deleted text begin plus accrued interest deleted text end at the close
of the financial institution's banking day. The financial institution may furnish both a
surety bond and collateral aggregating the required amount.

Sec. 2.

Minnesota Statutes 2006, section 123B.61, is amended to read:

123B.61 PURCHASE OF CERTAIN EQUIPMENT.

The board of a district may issue general obligation certificates of indebtedness
or capital notes subject to the district debt limits to: (a) purchase vehicles, computers,
telephone systems, cable equipment, photocopy and office equipment, technological
equipment for instruction, and other capital equipment having an expected useful life at
least as long as the terms of the certificates or notes; (b) purchase computer hardware and
software, without regard to its expected useful life, whether bundled with machinery or
equipment or unbundled, together with application development services and training
related to the use of the computer; and (c) prepay special assessments. The certificates or
notes must be payable in not more than deleted text begin five deleted text end new text begin ten new text end years and must be issued on the terms
and in the manner determined by the board, except that certificates or notes issued to
prepay special assessments must be payable in not more than 20 years. The certificates
or notes may be issued by resolution and without the requirement for an election. The
certificates or notes are general obligation bonds for purposes of section 126C.55. A tax
levy must be made for the payment of the principal and interest on the certificates or
notes, in accordance with section 475.61, as in the case of bonds. The sum of the tax
levies under this section and section 123B.62 for each year must not exceed the lesser
of the amount of the district's total operating capital revenue or the sum of the district's
levy in the general and community service funds excluding the adjustments under this
section for the year preceding the year the initial debt service levies are certified. The
district's general fund levy for each year must be reduced by the sum of (1) the amount
of the tax levies for debt service certified for each year for payment of the principal and
interest on the certificates or notes issued under this section as required by section 475.61,
(2) the amount of the tax levies for debt service certified for each year for payment of the
principal and interest on bonds issued under section 123B.62, and (3) any excess amount
in the debt redemption fund used to retire bonds, certificates, or notes issued under this
section or section 123B.62 after April 1, 1997, other than amounts used to pay capitalized
interest. If the district's general fund levy is less than the amount of the reduction, the
balance shall be deducted first from the district's community service fund levy, and next
from the district's general fund or community service fund levies for the following year. A
district using an excess amount in the debt redemption fund to retire the certificates or
notes shall report the amount used for this purpose to the commissioner by July 15 of the
following fiscal year. A district having an outstanding capital loan under section 126C.69
or an outstanding debt service loan under section 126C.68 must not use an excess amount
in the debt redemption fund to retire the certificates or notes.

Sec. 3.

Minnesota Statutes 2006, section 331A.05, subdivision 2, is amended to read:

Subd. 2.

Time of notice.

Unless otherwise specified by deleted text begin a particular statute deleted text end new text begin law new text end , or
by order of a court, publication of a public notice shall be as follows:

(a) the notice shall be published once;

(b) if the notice is intended to inform the public about a future event, the last
publication shall occur not more than deleted text begin 14 deleted text end new text begin 30 new text end days and not less than seven days before
the event;

(c) if the notice is intended to inform the public about a past action or event, the last
publication shall occur not more than 45 days after occurrence of the action or event.

Sec. 4.

Minnesota Statutes 2006, section 365A.02, is amended to read:

365A.02 deleted text begin DEFINITION deleted text end new text begin DEFINITIONS new text end .

new text begin Subdivision 1. new text end

new text begin Subordinate service district. new text end

"Subordinate service district" means a
defined area within the town in which deleted text begin one or more governmental services or additions to
townwide deleted text end new text begin special new text end services are provided deleted text begin by the town specially for the area and financed
from revenues from the area deleted text end . The boundaries of a single subordinate service district
may not embrace an entire town.

new text begin Subd. 2. new text end

new text begin Special services. new text end

new text begin "Special services" means one or more governmental
services or additions to townwide services provided by the town specially for the area
and financed from revenues from the area.
new text end

Sec. 5.

Minnesota Statutes 2006, section 365A.04, is amended to read:

365A.04 CREATION deleted text begin BY PETITION deleted text end .

Subdivision 1.

Petition.

A petition signed by at least 50 percent of the property
owners in the part of the town proposed for the subordinate service district may be
submitted to the town board requesting the establishment of a subordinate service district
to provide a service that the town is otherwise authorized by law to provide. The petition
must include the territorial boundaries of the proposed district and specify the kinds of
services to be provided within the district.

new text begin Subd. 1a. new text end

new text begin Creation by town board. new text end

new text begin The town board may establish a subordinate
service district in a portion of the town by adoption of a resolution, subject to the
requirements of subdivision 2.
new text end

Subd. 2.

Public hearing.

Upon receipt of the petition, and the verification of the
signatures by the town clerk new text begin or prior to adoption of the resolution specified in subdivision
1a new text end , the town board shall, within 30 days following verification new text begin or prior to adoption of the
resolution specified in subdivision 1a new text end , hold a public hearing on the question of whether or
not the requested district shall be established. new text begin The notice of public hearing must specify
the special services to be provided within the subordinate service district and must specify
the territorial boundaries of the requested district. The notice of public hearing must be
published once in a newspaper of general circulation in the town at least 14 days prior
to the date of the public hearing.
new text end

Subd. 3.

Approval; disapproval.

Within 30 days after the public hearing, the
town board by resolution shall approve or disapprove the establishment of the requested
district. new text begin An approving resolution must specify the special services to be provided within
the subordinate service district and must specify the territorial boundaries of the district.
new text end A resolution approving the establishment of the district may contain amendments or
modifications of the district's boundaries or functions as set forth in the petition new text begin or the
resolution specified in subdivision 1a new text end .

Sec. 6.

Minnesota Statutes 2006, section 365A.08, is amended to read:

365A.08 FINANCING.

new text begin Subdivision 1. new text end

new text begin Budget. new text end

new text begin (a) new text end Upon adoption of the next annual budget following
the creation of a subordinate service district the town board shall include in the budget
appropriate provisions for the operation of the district including either a property tax
levied only on property of the users of the service within the boundaries of the district
or a levy of a service charge against the users of the service within the district, or a
combination of a property tax and a service charge on the users of the service.

new text begin (b) new text end A tax or service charge or a combination of them may be imposed to finance a
function or service in the district that the town ordinarily provides throughout the town
only to the extent that there is an increase in the level of the function or service provided
in the service district over that provided throughout the town. In that case, in addition
to the townwide tax levy, an amount necessary to pay for the increase in the level of the
function or service may be imposed in the district.

new text begin Subd. 2. new text end

new text begin Bonds. new text end

new text begin At any time after the requirements of section 356A.06 have been
met and the subordinate service district created, the town board may issue obligations
in an amount it deems necessary to defray in whole or in part the expense incurred
and estimated to be incurred in making capital improvements necessary to operate the
subordinate service district and provide the special services in the district, including every
item of cost from inception to completion and all fees and expenses incurred in connection
with the capital improvements or the financing. The obligations are payable primarily
out of the proceeds of the taxes and service charges imposed under subdivision 1, net
revenues as described in section 444.075, and special assessments under chapter 429. The
town board may by resolution pledge the full faith credit and taxing power of the town
to ensure payment of the principal and interest on the obligations if the proceeds of the
taxes and service charges are insufficient to pay the principal and interest. Obligations
must be issued in accordance with chapter 475, except that an election is not required, and
the amount of the obligations is not included in determining the net indebtedness of the
town under the provisions of any law limiting indebtedness.
new text end

new text begin Subd. 3. new text end

new text begin Covenants to secure obligations. new text end

new text begin In resolutions authorizing the issuance
of general or special obligations and pledging taxes and service charges imposed under
subdivision 1, net revenues, or special assessments to their payment, the town board
may make covenants for the protection of holders of the obligations and taxpayers of the
town as it deems necessary, including a covenant that the town will impose and collect
charges of the nature authorized by this chapter at the time and in the amounts required to
produce, together with any taxes or special assessments designated as a primary source
of payment of the obligations, funds adequate to pay all principal and interest when due
on the obligations, and to create and maintain reserves securing the payments as may be
provided in the resolutions.
new text end

Sec. 7.

Minnesota Statutes 2006, section 365A.095, is amended to read:

365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.

new text begin Subdivision 1. new text end

new text begin Petition. new text end

A petition signed by at least 75 percent of the property
owners in the territory of the subordinate service district requesting the removal of the
district may be presented to the town board. Within 30 days after the town board receives
the petition, the town clerk shall determine the validity of the signatures on the petition. If
the requisite number of signatures are certified as valid, the town board must hold a public
hearing on the petitioned matter. Within 30 days after the end of the hearing, the town
board must decide whether to discontinue the subordinate service district, continue as it is,
or take some other action with respect to it.

new text begin Subd. 2. new text end

new text begin Bonds. new text end

new text begin If obligations have been issued for the benefit of the subordinate
service district, the rates, charges, and tax levies, if any, shall continue until the obligations
and any obligations issued to refund them have been paid in full.
new text end

Sec. 8.

Minnesota Statutes 2006, section 373.01, subdivision 3, is amended to read:

Subd. 3.

Capital notes.

(a) A county board may, by resolution and without
referendum, issue capital notes subject to the county debt limit to purchase capital
equipment useful for county purposes that has an expected useful life at least equal to the
term of the notes. The notes shall be payable in not more than ten years and shall be
issued on terms and in a manner the board determines. A tax levy shall be made for
payment of the principal and interest on the notes, in accordance with section 475.61,
as in the case of bonds.

(b) For purposes of this subdivision, "capital equipment" means:

(1) public safety, ambulance, road construction or maintenance, and medical
equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled. deleted text begin The authority to issue capital notes for software expires on July 1, 2007.
deleted text end

Sec. 9.

Minnesota Statutes 2006, section 375B.09, is amended to read:

375B.09 FINANCING.

new text begin Subdivision 1. new text end

new text begin Budget. new text end

new text begin (a) new text end Upon adoption of the next annual budget following the
creation of a subordinate service district the county board shall include in the budget
appropriate provisions for the operation of the district including, as appropriate, either a
property tax levied only on property within the boundaries of the district or a levy of a
service charge against the users of the service within the district, or any combination of a
property tax and a service charge.

new text begin (b) new text end A tax or service charge or a combination thereof shall not be imposed to finance a
function or service in the new text begin subordinate new text end service district which the county generally provides
throughout the county unless an increase in the level of the service is to be supplied in the
new text begin subordinate new text end service district in which case, in addition to the countywide tax levy, only an
amount necessary to pay for the increased level of service may be imposed.

new text begin Subd. 2. new text end

new text begin Bonds. new text end

new text begin At any time after the requirements of section 375B.07 have been
met and the subordinate service district created, the county board may issue obligations
in an amount it deems necessary to defray in whole or in part the expense incurred
and estimated to be incurred in making capital improvements necessary to operate the
subordinate service district and provide the special services in the district, including every
item of cost from inception to completion and all fees and expenses incurred in connection
with the capital improvements or the financing. The obligations shall be payable primarily
out of the proceeds of the taxes and service charges imposed pursuant to subdivision 1, net
revenues as described in section 444.075, and special assessments under chapter 429. The
county board may by resolution pledge the full faith credit and taxing power of the county
to ensure payment of the principal and interest on the obligations if the proceeds of the
taxes and service charges are insufficient to pay the principal and interest. Obligations
must be issued in accordance with chapter 475, except that an election is not required, and
the amount of the obligations is not included in determining the net indebtedness of the
county under the provisions of any law limiting indebtedness.
new text end

new text begin Subd. 3. new text end

new text begin Covenants to secure obligations. new text end

new text begin In resolutions authorizing the issuance
of general or special obligations and pledging taxes and service charges imposed under
subdivision 1, net revenues, or special assessments to their payment, the county board
may make covenants for the protection of holders of the obligations and taxpayers of the
county as it deems necessary, including a covenant that the county will impose and collect
charges of the nature authorized by this chapter at the time and in the amounts required to
produce, together with any taxes or special assessments designated as a primary source
of payment of the obligations, funds adequate to pay all principal and interest when due
on the obligations and to create and maintain reserves securing the payments as may be
provided in the resolutions.
new text end

new text begin Subd. 4. new text end

new text begin Continuance in the event of withdrawal. new text end

new text begin If obligations have been issued
for the benefit of the subordinate service district, and the district is withdrawn or removed
pursuant to either section 375B.10 or 375B.11, the rates, charges, and tax levies, if any, in
the withdrawn or removed district must continue until the obligations and any obligations
issued to refund them have been paid in full.
new text end

Sec. 10.

Minnesota Statutes 2006, section 383B.117, subdivision 2, is amended to read:

Subd. 2.

Equipment acquisition; capital notes.

The board may, by resolution and
without public referendum, issue capital notes within existing debt limits for the purpose
of purchasing ambulance and other medical equipment, road construction or maintenance
equipment, public safety equipment and other capital equipment having an expected
useful life at least equal to the term of the notes issued. The notes shall be payable in
not more than deleted text begin five deleted text end new text begin ten new text end years and shall be issued on terms and in a manner as the board
determines. The total principal amount of the notes issued for any fiscal year shall not
exceed one percent of the total annual budget for that year and shall be issued solely for
the purchases authorized in this subdivision. A tax levy shall be made for the payment
of the principal and interest on such notes as in the case of bonds. new text begin For purposes of this
subdivision, "equipment" includes computer hardware and software, whether bundled with
machinery or equipment or unbundled. new text end For purposes of this subdivision, the term "medical
equipment" includes computer hardware and software and other intellectual property for
use in medical diagnosis, medical procedures, research, record keeping, billing, and other
hospital applications, together with application development services and training related
to the use of the computer hardware and software and other intellectual property, all
without regard to their useful life. For purposes of determining the amount of capital notes
which the county may issue in any year, the budget of the county and Hennepin Healthcare
System, Inc. shall be combined and the notes issuable under this subdivision shall be in
addition to obligations issuable under section 373.01, subdivision 3.

Sec. 11.

Minnesota Statutes 2006, section 410.32, is amended to read:

410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.

(a) Notwithstanding any contrary provision of other law or charter, a home rule
charter city may, by resolution and without public referendum, issue capital notes subject
to the city debt limit to purchase capital equipment.

(b) For purposes of this section, "capital equipment" means:

(1) public safety equipment, ambulance and other medical equipment, road
construction and maintenance equipment, and other capital equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled.

(c) The equipment or software must have an expected useful life at least as long as the
term of the notes. deleted text begin The authority to issue capital notes for software expires on July 1, 2007.
deleted text end

(d) The notes shall be payable in not more than ten years and be issued on terms and
in the manner the city determines. The total principal amount of the capital notes issued
in a fiscal year shall not exceed 0.03 percent of the market value of taxable property
in the city for that year.

(e) A tax levy shall be made for the payment of the principal and interest on the
notes, in accordance with section 475.61, as in the case of bonds.

(f) Notes issued under this section shall require an affirmative vote of two-thirds of
the governing body of the city.

(g) Notwithstanding a contrary provision of other law or charter, a home rule charter
city may also issue capital notes subject to its debt limit in the manner and subject to the
limitations applicable to statutory cities pursuant to section 412.301.

Sec. 12.

Minnesota Statutes 2006, section 412.301, is amended to read:

412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.

(a) The council may issue certificates of indebtedness or capital notes subject to the
city debt limits to purchase capital equipment.

(b) For purposes of this section, "capital equipment" means:

(1) public safety equipment, ambulance and other medical equipment, road
construction and maintenance equipment, and other capital equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled.

(c) The equipment or software must have an expected useful life at least as long as
the terms of the certificates or notes. deleted text begin The authority to issue capital notes for software
expires on July 1, 2007.
deleted text end

(d) Such certificates or notes shall be payable in not more than ten years and shall be
issued on such terms and in such manner as the council may determine.

(e) If the amount of the certificates or notes to be issued to finance any such purchase
exceeds 0.25 percent of the market value of taxable property in the city, they shall not
be issued for at least ten days after publication in the official newspaper of a council
resolution determining to issue them; and if before the end of that time, a petition asking
for an election on the proposition signed by voters equal to ten percent of the number of
voters at the last regular municipal election is filed with the clerk, such certificates or notes
shall not be issued until the proposition of their issuance has been approved by a majority
of the votes cast on the question at a regular or special election.

(f) A tax levy shall be made for the payment of the principal and interest on such
certificates or notes, in accordance with section 475.61, as in the case of bonds.

Sec. 13.

Minnesota Statutes 2006, section 453A.02, subdivision 3, is amended to read:

Subd. 3.

City.

"City" means a city organized and existing under the laws of
Minnesota or a city charter adopted pursuant thereto, and authorized by such laws or
charter to engage in the local distribution and sale of gas, provided that any city so
engaged on January 1, 1979 is authorized to continue such distribution and sale, and every
city now or hereafter so authorized may exercise, either individually or as a member of a
municipal gas agency, all of the powers granted in sections 453A.01 to 453A.12.

new text begin "City" also includes a city organized and existing under the laws of another state
or a city charter adopted pursuant thereto which participates in a municipal gas agency
with Minnesota cities.
new text end

Sec. 14.

new text begin [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization; establishment. new text end

new text begin A political subdivision or other
public entity that creates or has created an actuarial liability to pay postemployment
benefits to employees or officers after their termination of service may establish a trust to
pay those benefits. For purposes of this section, the term "postemployment benefits" means
benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting
Standards Board and the term "trust" means a trust, a trust account, or a custodial account
or contract authorized under section 401(f) of the Internal Revenue Code.
new text end

new text begin Subd. 2. new text end

new text begin Purpose of trust. new text end

new text begin The trust established under this section may only be
used to pay postemployment benefits and may be either revocable or irrevocable.
new text end

new text begin Subd. 3. new text end

new text begin Trust administrator. new text end

new text begin The trust administrator of a trust established under
this section shall be either:
new text end

new text begin (1) the Public Employees Retirement Association;
new text end

new text begin (2) a bank or banking association incorporated under the laws of the United States or
of any state and authorized by the laws under which it is organized to exercise corporate
trust powers; or
new text end

new text begin (3) an insurance company or agency qualified to do business in Minnesota which has
at least five years' experience in investment products and services for group retirement
benefits and which has a specialized department dedicated to services for retirement
investment products.
new text end

new text begin A political subdivision or public entity may, in its discretion and in compliance
with any applicable trust document, change trust administrators and transfer trust assets
accordingly.
new text end

new text begin Subd. 4. new text end

new text begin Account maintenance. new text end

new text begin A political subdivision or other public entity may
establish a trust account to be held under the supervision of the trust administrator for the
purposes of this section. A trust administrator shall establish a separate account for each
participating political subdivision or public entity. The trust administrator may charge
participating political subdivisions and public entities fees for reasonable administrative
costs. A trust administrator may establish other reasonable terms and conditions for
creation and maintenance of these accounts. The trust administrator must report to the
political subdivision or other public entity on the investment returns of invested trust
assets and on all investment fees or costs incurred by the trust. The annual rates of return,
along with investment and administrative fees and costs for the trust, must be disclosed in
the political subdivision's or public entity's annual financial audit in a manner prescribed
by the state auditor.
new text end

new text begin Subd. 5. new text end

new text begin Investment. new text end

new text begin (a) The assets of a trust or trust account shall be invested and
held as stipulated in paragraphs (b) to (e).
new text end

new text begin (b) The Public Employees Retirement Association must certify all money in the trust
accounts for which it is trust administrator to the State Board of Investment for investment
created under section 11A.14, subject to the policies and procedures established by the
State Board of Investment. Investment earnings must be credited to the trust account of
the individual political subdivision or public entity.
new text end

new text begin (c) A trust administrator, other than the Public Employees Retirement Association,
must ensure that all money in the trust accounts for which it is trust administrator is
invested by a registered investment adviser, a bank investment trust department or an
insurance company or agency retirement investment department. Investment earnings
must be credited to the trust account of the individual political subdivision or public entity.
new text end

new text begin (d) For trust assets invested by the State Board of Investment, the investment
restrictions shall be the same as those generally applicable to the State Board of
Investment. For trust assets invested by a trust administrator other than the Public
Employees Retirement Association, the assets may only be invested in investments
authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified
in the applicable trust document.
new text end

new text begin (e) A political subdivision or public entity may provide investment direction to a
trust administrator in compliance with any applicable trust document.
new text end

new text begin Subd. 6. new text end

new text begin Limit on deposit. new text end

new text begin A political subdivision or public entity may not
deposit money in a trust or trust account created pursuant to this section if the total
amount invested by that political subdivision or public entity would exceed the political
subdivision's or public entity's actuarially determined liabilities for postemployment
benefits due to officers and employees, as determined under the applicable standards of the
Governmental Accounting Standards Board.
new text end

new text begin Subd. 7. new text end

new text begin Withdrawal of funds and termination of account. new text end

new text begin (a) For a revocable
account, a political subdivision or public entity may withdraw some or all of its money
or terminate the trust account. Money and accrued investment earnings withdrawn
from a revocable account must be deposited in a fund separate and distinct from any
other funds of the political subdivision or public entity. This money, with accrued
investment earnings, must be used to pay legally enforceable postemployment benefits
to former officers and employees, unless (i) there has been a change in state or federal
law affecting that political subdivision's or public entity's liabilities for postemployment
benefits, or (ii) there has been a change in the demographic composition of that political
subdivision's or public entity's employees eligible for postemployment benefits, or (iii)
there has been a change in the provisions or terms of the postemployment benefits in that
political subdivision or public entity including, but not limited to, the portion of the costs
eligible employees must pay to receive the benefits, or (iv) other factors exist that have
a material effect on that political subdivision's or public entity's actuarially determined
liabilities for postemployment benefits, in which event any amount in excess of 100
percent of that political subdivision's or public entity's actuarially determined liabilities for
postemployment benefits, as determined under standards of the Government Accounting
Standards Board, may be withdrawn and used for any purpose.
new text end

new text begin (b) For an irrevocable account, a political subdivision or public entity may withdraw
money only:
new text end

new text begin (1) as needed to pay postemployment benefits owed to former officers and employees
of the political subdivision or public entity; or
new text end

new text begin (2) when all postemployment benefit liability owed to former officers or employees
of the political subdivision or public entity has been satisfied or otherwise defeased.
new text end

new text begin (c) A political subdivision or public entity requesting withdrawal of money from
an account created under this section must do so at a time and in the manner required by
the executive director of the Public Employees Retirement Association or specified in an
applicable trust document. The political subdivision or public entity that created the trust
must ensure that withdrawals comply with the requirements of this section.
new text end

new text begin (d) The legislature may not divert funds in these trusts or trust accounts for use
for another purpose.
new text end

new text begin Subd. 8. new text end

new text begin Status of irrevocable trust. new text end

new text begin (a) All money in an irrevocable trust or
trust account created in this section is held in trust for the exclusive benefit of former
officers and employees of the participating political subdivision or public entity, and are
not subject to claims by creditors of the state, the participating political subdivision or
public entity, the current or former officers and employees of the political subdivision
or public entity, or the trust administrator.
new text end

new text begin (b) An irrevocable trust fund or trust account created in this section shall be deemed
an arrangement equivalent to a trust for all legal purposes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 15.

Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
to read:

new text begin Subd. 1m. new text end

new text begin Obligations. new text end

new text begin After July 1, 2007, in addition to other authority in this
section, the council may issue certificates of indebtedness, bonds, or other obligations
under this section in an amount not exceeding $44,000,000 for capital expenditures as
prescribed in the council's regional transit master plan and transit capital improvement
program and for related costs, including the costs of issuance and sale of the obligations.
new text end

Sec. 16.

Minnesota Statutes 2006, section 475.52, subdivision 6, is amended to read:

Subd. 6.

Certain purposes.

Any municipality may issue bonds for paying
judgments against it; for refunding outstanding bonds; for funding floating indebtedness; new text begin
for funding actuarial liabilities to pay postemployment benefits to employees or officers
after their termination of service; new text end or for funding all or part of the municipality's current
and future unfunded liability for a pension or retirement fund or plan referred to in
section 356.20, subdivision 2, as those liabilities are most recently computed pursuant
to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or
relief association referred to in section 69.77 or chapter 422A must consent and must
be a party to any contract made under this section with respect to the fund held by it
for the benefit of and in trust for its members. new text begin For purposes of this section, the term
"postemployment benefits" means benefits giving rise to a liability under Statement No.
45 of the Governmental Accounting Standards Board.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 17.

Minnesota Statutes 2006, section 475.58, subdivision 1, is amended to read:

Subdivision 1.

Approval by electors; exceptions.

Obligations authorized by law or
charter may be issued by any municipality upon obtaining the approval of a majority of
the electors voting on the question of issuing the obligations, but an election shall not be
required to authorize obligations issued:

(1) to pay any unpaid judgment against the municipality;

(2) for refunding obligations;

(3) for an improvement or improvement program, which obligation is payable wholly
or partly from the proceeds of special assessments levied upon property specially benefited
by the improvement or by an improvement within the improvement program, or from tax
increments, as defined in section 469.174, subdivision 25, including obligations which are
the general obligations of the municipality, if the municipality is entitled to reimbursement
in whole or in part from the proceeds of such special assessments or tax increments and
not less than 20 percent of the cost of the improvement or the improvement program is to
be assessed against benefited property or is to be paid from the proceeds of federal grant
funds or a combination thereof, or is estimated to be received from tax increments;

(4) payable wholly from the income of revenue producing conveniences;

(5) under the provisions of a home rule charter which permits the issuance of
obligations of the municipality without election;

(6) under the provisions of a law which permits the issuance of obligations of a
municipality without an election;

(7) to fund pension or retirement fund new text begin or postemployment benefit new text end liabilities pursuant
to section 475.52, subdivision 6;

(8) under a capital improvement plan under section 373.40; and

(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if
the proceeds of the bonds are not used for a purpose prohibited under section 469.176,
subdivision 4g, paragraph (b).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 18.

Minnesota Statutes 2006, section 475.58, subdivision 3b, is amended to read:

Subd. 3b.

Street reconstruction.

(a) A municipality may, without regard to
the election requirement under subdivision 1, issue and sell obligations for street
reconstruction, if the following conditions are met:

(1) the streets are reconstructed under a street reconstruction plan that describes the
deleted text begin streets to be reconstructed deleted text end new text begin street reconstruction to be financed new text end , the estimated costs, and
any planned reconstruction of other streets in the municipality over the next five years,
and the plan and issuance of the obligations has been approved by a new text begin unanimous new text end vote deleted text begin of all deleted text end
of the members of the governing body new text begin who are present at the meeting new text end following a public
hearing for which notice has been published in the official newspaper at least ten days but
not more than 28 days prior to the hearing; and

(2) if a petition requesting a vote on the issuance is signed by voters equal to
five percent of the votes cast in the last municipal general election and is filed with the
municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
only after obtaining the approval of a majority of the voters voting on the question of
the issuance of the obligations.

(b) Obligations issued under this subdivision are subject to the debt limit of the
municipality and are not excluded from net debt under section 475.51, subdivision 4.

(c) For purposes of this subdivision, street reconstruction includes utility
replacement and relocation and other activities incidental to the street reconstruction, turn
lanes and other improvements having a substantial public safety function, realignments,
other modifications to intersect with state and county roads, and the local share of state
and county road projects.

(d) Except in the case of turn lanes, safety improvements, realignments, intersection
modifications, and the local share of state and county road projects, street reconstruction
does not include the portion of project cost allocable to widening a street or adding curbs
and gutters where none previously existed.

Sec. 19. new text begin VALIDATION.
new text end

new text begin Any trust or trust account or other custodial account or contract authorized under
section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay
postemployment benefits to employees or officers after termination of service, is hereby
validated, may continue in full force and effect, and shall have continuing authority
to accept new funds; however, this section does not validate or correct defects in any
previously created trust document. Any funds held by a validated trust or account
under this section may be invested as provided in section 471.6175, subdivision 5. A
validated trust or account shall have until January 1, 2008, to bring its trust documents
and procedures into compliance with section 471.6175.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 20. new text begin TOWN OF CRANE LAKE, CERTIFICATES OF INDEBTEDNESS.
new text end

new text begin Notwithstanding Minnesota Statutes, section 366.095, the town board of the town of
Crane Lake in St. Louis County may issue one or more certificates of indebtedness in a
total amount not to exceed $225,000, which are not subject to the debt limits of the town.
The proceeds of the certificates must be used to acquire property and pay other costs
related to a land exchange with the United States Forest Service. The certificates shall be
payable in not more than 30 years and be issued on the terms and in the manner as the
board may determine. Minnesota Statutes, sections 475.54, subdivision 1, and 475.56,
paragraph (c), do not apply to the certificates issued under this section. A tax levy shall be
made to pay the principal and interest on the certificates as in the case of bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the Crane Lake Town
Board and its chief clerical officer timely complete their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.
new text end

Sec. 21. new text begin CITY OF WINSTED; BONDING AUTHORITY.
new text end

new text begin (a) The city of Winsted may issue general obligation bonds under Minnesota
Statutes, chapter 475, to finance the acquisition and betterment of a facility consisting of
a city hall, community center, and police station; park improvements, including trails
and an amphitheater; related public improvements; and substantial landscaping for the
improvements.
new text end

new text begin (b) The bonds may be issued as general obligations of the city without an election to
approve the bonds under Minnesota Statutes, section 475.58.
new text end

new text begin (c) The bonds are not included in computing any debt limitation applicable to the
city, including, but not limited to, the net debt limits under Minnesota Statutes, section
475.53, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of
and interest on the bonds is not subject to any levy limitation.
new text end

new text begin (d) The aggregate principal amount of bonds used to pay costs of the acquisition and
betterment of the facility consisting of a city hall, community center, and police station;
park improvements, including trails and an amphitheater; related public improvements;
and substantial landscaping for the improvements may not exceed $4,900,000, plus an
amount equal to the costs related to issuance of the bonds and capitalized interest.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3.
new text end