SF 3186

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to Minnesota Public Facilities Authority; providing for wastewater
infrastructure funding; providing for guarantee of certain government building
debt; providing a credit enhanced bond program; appropriating money; amending
Minnesota Statutes 2006, section 446A.12, subdivision 1; Minnesota Statutes
2007 Supplement, sections 446A.072, subdivisions 3, 5a; 446A.086; proposing
coding for new law in Minnesota Statutes, chapter 446A.

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

Section 1.

Minnesota Statutes 2007 Supplement, section 446A.072, subdivision 3,
is amended to read:

Subd. 3.

Program administration.

(a) The authority shall provide supplemental
assistance, as provided in subdivision 5a to governmental units:

(1) whose projects are listed on the Pollution Control Agency's project priority list;

(2) that demonstrate their projects are a cost-effective solution to an existing
environmental or public health problem; and

(3) whose projects are approved by the USDA/RECD or certified by the
commissioner of the Pollution Control Agency.

(b) For a governmental unit receiving grant funding from the USDA/RECD,
applications must be made to the USDA/RECD with additional information submitted to
the authority as required by the authority. Eligible project costs and affordability criteria
shall be determined by the USDA/RECD.

(c) For a governmental unit not receiving grant funding from the USDA/RECD,
application must be made to the authority on forms prescribed by the authority for the
clean water revolving fund program with additional information as required by the
authority. In accordance with section 116.182, the Pollution Control Agency shall:

(1) calculate the essential project component percentage which must be multiplied
by the total project cost to determine the eligible project cost; and

(2) review and certify approved projects to the authority.

(d) deleted text begin At the time funds are appropriated under this section, deleted text end new text begin Each fiscal year the
authority shall make funds available for projects based on their ranking on the Pollution
Control Agency's project priority list. new text end The authority shall reserve deleted text begin supplemental assistance deleted text end
new text begin funds new text end for deleted text begin projects in order of their rankings on the Pollution Control Agency's project
priority list and deleted text end new text begin a project when the applicant receives a funding commitment from the
United States Department of Agriculture Rural Development (USDA/RECD) or submits
plans and specifications to the Pollution Control Agency. Funds must be reserved new text end in an
amount based on deleted text begin their most recent deleted text end new text begin the project new text end cost deleted text begin estimates deleted text end new text begin estimate new text end submitted to the
authority deleted text begin or deleted text end new text begin prior to the appropriation of the funds and awarded in the amount reserved
or an amount based on new text end the as-bid costs, whichever is less.

Sec. 2.

Minnesota Statutes 2007 Supplement, section 446A.072, subdivision 5a,
is amended to read:

Subd. 5a.

Type and amount of assistance.

(a) For a governmental unit receiving
grant funding from the USDA/RECD, the authority shall provide assistance in the form
of a grant of up to deleted text begin one-half deleted text end new text begin 65 percent new text end of the eligible grant deleted text begin amount deleted text end new text begin need new text end determined by
USDA/RECD. A governmental unit may not receive a grant under this paragraph for more
than $4,000,000 or $15,000 per existing connection, whichever is less, unless specifically
approved by law. In the case of a sanitary district or other multijurisdictional project for
which the USDA/RECD is unable to fully fund deleted text begin up to one-half deleted text end new text begin its share new text end of the eligible grant
deleted text begin amount deleted text end new text begin need new text end , the authority may provide up to an additional $1,000,000 for each additional
governmental unit participating up to a maximum of $8,000,000 or $15,000 per existing
connection, whichever is less, but not to exceed the maximum grant level determined by
the USDA/RECD as needed to keep the project affordable.

(b) For a governmental unit not receiving grant funding from the USDA/RECD,
the authority shall provide assistance in the form of a loan for the eligible project costs
new text begin plus the outstanding balance on any existing wastewater system debt new text end that new text begin together new text end exceed
five percent of the market value of properties in the project service area, less the amount of
any other grant funding received by the governmental unit for the project. A governmental
unit may not receive a loan under this paragraph for more than $4,000,000 or $15,000 per
existing connection, whichever is less, unless specifically approved by law. In the case of
a sanitary district or other multijurisdictional project, the authority may provide a loan
under this paragraph for up to an additional $1,000,000 for each additional municipality
participating up to a maximum of $8,000,000 or $15,000 per existing connection,
whichever is less, unless specifically approved by law. A loan under this paragraph must
bear no interest, must be repaid as provided in subdivision 7, and must only be provided in
conjunction with a loan from the clean water revolving fund under section 446A.07.

(c) Notwithstanding the limits in paragraphs (a) and (b), for a governmental unit
receiving supplemental assistance under this section after January 1, 2002, if the authority
determines that the governmental unit's construction and installation costs are significantly
increased due to geological conditions of crystalline bedrock or karst areas and discharge
limits that are more stringent than secondary treatment, the authority shall provide
assistance in the form of half grant and half loan. Assistance from the authority may not
be more than $25,000 per existing connection. Any additional grant amount received for
the same project must be used to reduce the amount of the governmental unit's loan from
the new text begin clean new text end water deleted text begin pollution control deleted text end revolving fund that exceeds five percent of the market
value of properties in the project service area.

Sec. 3.

Minnesota Statutes 2007 Supplement, section 446A.086, is amended to read:

446A.086 STATE MAY GUARANTEE deleted text begin COUNTY deleted text end new text begin GOVERNMENTAL UNIT new text end
BUILDING DEBT; REPAYMENT.

Subdivision 1.

Definitions.

(a) As used in this section, the following terms have
the meanings given.

(b) "Authority" means the Minnesota Public Facilities Authority.

(c) "Commissioner" means the commissioner of finance.

(d) "Debt obligation" means new text begin : new text end

new text begin (1) new text end a general obligation bond issued by a county, a bond to which the general
obligation of a county is pledged under section 469.034, subdivision 2, or a bond payable
from a county lease obligation under section 641.24, to provide funds for the construction
of:

deleted text begin (1) deleted text end new text begin (i) new text end jails;

deleted text begin (2) deleted text end new text begin (ii) new text end correctional facilities;

deleted text begin (3) deleted text end new text begin (iii) new text end law enforcement facilities;

deleted text begin (4) deleted text end new text begin (iv) new text end social services and human services facilities;

deleted text begin (5) deleted text end new text begin (v) new text end solid waste facilities; or

deleted text begin (6) deleted text end new text begin (vi) new text end qualified housing development projects as defined in section 469.034,
subdivision 2 new text begin ; or
new text end

new text begin (2) a general obligation bond issued by a governmental unit and acquired under the
credit enhanced bond program established under section 446A.087 new text end .

Subd. 2.

Application.

(a) This section provides a state guarantee of the payment of
principal and interest on debt obligations if:

(1) the obligations are issued after June 30, 2000;

(2) application to the Public Facilities Authority is made before issuance; and

(3) the obligations are covered by an agreement meeting the requirements of
subdivision 3.

(b) Applications to be covered by the provisions of this section must be made in a
form and contain the information prescribed by the authority. Applications are subject to a
fee of $500 for deleted text begin the first deleted text end new text begin each new text end bond issue requested by the county deleted text begin and $250 for each bond
issue thereafter deleted text end new text begin or applicable fees under section 446A.087 new text end .

(c) Application fees paid under this section must be deposited in a separate deleted text begin county deleted text end new text begin
credit enhancement new text end bond guarantee account in the general fund. Money in the deleted text begin county deleted text end new text begin
credit enhancement new text end bond guarantee account is appropriated to the authority for purposes
of administering this section.

(d) Neither the authority nor the commissioner is required to promulgate
administrative rules under this section and the procedures and requirements established by
the authority or commissioner under this section are not subject to chapter 14.

Subd. 3.

Agreement.

(a) For specified debt obligations deleted text begin of a county deleted text end to be covered
by this section, the deleted text begin county deleted text end new text begin governmental unit new text end must enter an agreement with the authority
obligating the deleted text begin county deleted text end new text begin governmental unit new text end to be bound by this section.

(b) This agreement must be in a form prescribed by the authority and contain any
provisions required by the authority, including, at least, an obligation to:

(1) deposit with the paying agent three days before the date on which the payment is
due an amount sufficient to make that payment new text begin or ten days prior to the date a payment is
due on revenue bonds issued by the authority under section 446A.087 new text end ;

(2) notify the authority, if the deleted text begin county deleted text end new text begin governmental unit new text end will be unable to make all
or a portion of the payment; and

(3) include a provision in the bond resolution and county's agreement with the paying
agent for the debt obligation that requires the paying agent to inform the commissioner if
it becomes aware of a default or potential default in the payment of principal or interest
on that issue or if, on the day two business days before the date a payment is due on that
issue, there are insufficient funds to make the payment on deposit with the paying agent.

(c) Funds invested in a refunding escrow account established under section 475.67
that are to become available to the paying agent on a principal or interest payment date are
deemed to be on deposit with the paying agent three business days before the payment date.

(d) The provisions of an agreement under this subdivision are binding as to an issue
as long as any debt obligation of the issue remains outstanding.

(e) This section and the obligations of the state under this section are not a public debt
of the state under article XI, section 4, of the Minnesota Constitution, and the legislature
may, at any time, choose not to appropriate amounts under subdivision 4, paragraph (b).

Subd. 4.

Notifications; payment; appropriation.

(a) After receipt of a notice of a
default or potential default in payment of principal or interest in debt obligations covered
by this section or an agreement under this section, and after consultation with the deleted text begin county, deleted text end new text begin
governmental unit and new text end the paying agent, and after verification of the accuracy of the
information provided, the authority shall notify the commissioner of the potential default.
The notice must include a final figure as to the amount due that the deleted text begin county deleted text end new text begin governmental
unit new text end will be unable to repay on the date due.

(b) Upon receipt of this notice from the authority, the commissioner shall issue a
warrant and authorize the authority to pay to the new text begin bond holders or new text end paying agent for the
debt obligation the specified amount on or before the date due. The amounts needed
for the purposes of this subdivision are annually appropriated to the authority from the
general fund.

Subd. 5.

Interest on state paid amount.

If the state has paid part or all of the
principal or interest due on a deleted text begin county's deleted text end debt obligation, the amount paid bears interest
from the date paid by the state until the date of repayment. The interest rate is the
commissioner's invested cash rate as it is certified by the commissioner. Interest only
accrues on the amounts paid and outstanding less the reduction in aid under subdivision 7
and other payments received from the deleted text begin county deleted text end new text begin governmental unit new text end .

Subd. 6.

Pledge of deleted text begin county's deleted text end new text begin governmental unit's new text end full faith and credit.

If the
state has paid part or all of the principal or interest due on a deleted text begin county's deleted text end debt obligation,
the deleted text begin county's deleted text end new text begin governmental unit's new text end pledge of its full faith and credit and unlimited taxing
powers to repay the principal and interest due on those debt obligations becomes, without
an election or the requirement of a further authorization, a pledge of the full faith and
credit and unlimited taxing powers of the deleted text begin county deleted text end new text begin governmental unit new text end to repay to the state
the amount paid, with interest. Amounts paid by the state must be repaid in the order
in which the state payments were made.

Subd. 7.

Aid reduction for repayment.

(a) Except as provided in paragraph (b),
the commissioner may reduce, by the amount paid by the state under this section on behalf
of the deleted text begin county deleted text end new text begin governmental unit new text end , plus the interest due on the state payments, the deleted text begin county
program deleted text end new text begin local government new text end aid under deleted text begin section 477A.0124 deleted text end new text begin chapter 477A new text end . The amount of any
aid reduction reverts from the appropriate account to the state general fund.

(b) If, after review of the financial situation of the deleted text begin county deleted text end new text begin governmental unit new text end , the
authority advises the commissioner that a total reduction of the aids would cause an
undue hardship on the deleted text begin county deleted text end new text begin governmental unit new text end , the authority, with the approval of the
commissioner, may establish a different schedule for reduction of aids to repay the state.
The amount of aids to be reduced are decreased by any amounts repaid to the state by the
deleted text begin county deleted text end new text begin governmental unit new text end from other revenue sources.

Subd. 8.

Tax levy for repayment.

(a) With the approval of the authority, a deleted text begin county deleted text end new text begin
governmental unit new text end may levy in the year the state makes a payment under this section an
amount up to the amount necessary to provide funds for the repayment of the amount
paid by the state plus interest through the date of estimated repayment by the deleted text begin county deleted text end new text begin
governmental unit new text end . The proceeds of this levy may be used only for this purpose unless
they exceed the amount actually due. Any excess must be used to repay other state
payments made under this section or must be deposited in the debt redemption fund of
the deleted text begin county deleted text end new text begin governmental unit new text end . The amount of aids to be reduced to repay the state are
decreased by the amount levied.

(b) If the state is not repaid in full for a payment made under this section by
November 30 of the calendar year following the year in which the state makes the
payment, the authority shall require the deleted text begin county deleted text end new text begin governmental unit new text end to certify a property
tax levy in an amount up to the amount necessary to provide funds for repayment of the
amount paid by the state plus interest through the date of estimated repayment by the
deleted text begin county deleted text end new text begin governmental unit new text end . To prevent undue hardship, the authority may allow the deleted text begin county deleted text end new text begin
governmental unit new text end to certify the levy over a five-year period. The proceeds of the levy
may be used only for this purpose unless they are in excess of the amount actually due, in
which case the excess must be used to repay other state payments made under this section
or must be deposited in the debt redemption fund of the deleted text begin county deleted text end new text begin governmental unit new text end . If the
authority orders the deleted text begin county deleted text end new text begin governmental unit new text end to levy, the amount of aids reduced to repay
the state are decreased by the amount levied.

(c) A levy under this subdivision is an increase in the levy limits of the deleted text begin county deleted text end new text begin
governmental unit new text end for purposes of section 275.065, subdivision 6, and must be explained
as a specific increase at the meeting required under that provision.

Subd. 9.

Mandatory plan; technical assistance.

If the state makes payments on
behalf of a deleted text begin county deleted text end new text begin governmental unit new text end under this section or the deleted text begin county deleted text end new text begin governmental unit new text end
defaults in the payment of principal or interest on an outstanding debt obligation, it must
submit a plan to the authority for approval specifying the measures it intends to implement
to resolve the issues which led to its inability to make the payment and to prevent
further defaults. If the authority determines that a deleted text begin county's deleted text end new text begin governmental unit's new text end plan is
not adequate, the authority shall notify the deleted text begin county deleted text end new text begin governmental unit new text end that the plan has
been disapproved, the reasons for the disapproval, and that the state will not make future
payments under this section for debt obligations of the affected deleted text begin county deleted text end new text begin governmental unit new text end
issued after the date specified in that notice until its plan is approved. The authority may
also notify the deleted text begin county deleted text end new text begin governmental unit new text end that until its plan is approved, aids due the deleted text begin county deleted text end new text begin
governmental unit new text end will be withheld after a date specified in the notice.

Subd. 10.

Continuing disclosure agreements.

The authority may enter into written
agreements or contracts relating to the continuing disclosure of information needed to
facilitate the ability of deleted text begin counties deleted text end new text begin governmental units new text end to issue debt obligations according
to federal securities laws, rules, and regulations, including securities and exchange
commission rules and regulations, section 240.15c2-12. The agreements or contracts may
be in any form the authority deems reasonable and in the state's best interests.

Sec. 4.

new text begin [446A.087] CREDIT ENHANCED BOND PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment of program. new text end

new text begin A credit enhanced bond program is
established for the purposes set forth in subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The purpose of the credit enhanced bond program is to
provide loans to governmental units through the purchase of general obligation bonds
of governmental units issued to finance all or a portion of the costs of a project. The
program shall include providing credit enhancement to the general obligation bonds of the
governmental unit through the guarantee program as provided in section 446A.086. The
authority shall obtain funds to make the loans authorized pursuant to this section through
the issuance of its revenue bonds payable from loan repayments pledged to the bonds, and
such other sources and security as are specifically pledged by the authority.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin (a) Terms used in this section have the meanings given to
them in this subdivision.
new text end

new text begin (b) "Applicant" means any governmental unit applying to the authority for a loan
pursuant to this section.
new text end

new text begin (c) "Borrower" means any governmental unit that has entered into a commitment
for the sale of its general obligation bonds to the authority pursuant to this section and
subsequently sells its general obligation bonds to the authority and enters into a regulatory
agreement.
new text end

new text begin (d) "Commitment" means a written agreement between a governmental unit and the
authority obligating the governmental unit to deliver its general obligation bonds to the
authority on a date in the future evidencing a loan pursuant to this section and to enter
into a regulatory agreement with the authority, all upon the terms and conditions set
forth in the commitment.
new text end

new text begin (e) "Eligible cost" means any cost of a project authorized by law to be financed from
the proceeds of general obligation bonds of a governmental unit.
new text end

new text begin (f) "General obligation bonds" means bonds or notes secured by the full faith and
credit and unlimited taxing powers of a governmental unit.
new text end

new text begin (g) "Project" means the construction, improvement, or rehabilitation of:
new text end

new text begin (1) wastewater facilities;
new text end

new text begin (2) drinking water facilities;
new text end

new text begin (3) storm water facilities;
new text end

new text begin (4) streets, street lighting, curbs, gutters, and sidewalks;
new text end

new text begin (5) energy conservation or alternative energy sources for use in public buildings or
facilities;
new text end

new text begin (6) telecommunications facilities;
new text end

new text begin (7) public safety buildings including those providing police and fire protection; or
new text end

new text begin (8) any publicly owned building or infrastructure improvement that has received
partial funding from grants awarded by the commissioner of employment and economic
development related to redevelopment, contaminated site cleanup, bioscience, small cities
development programs, and rural business infrastructure programs.
new text end

new text begin (h) "Regulatory agreement" means a written agreement entered into by the authority
and a borrower in connection with the purchase of the borrower's general obligation bonds
by the authority pursuant to this section.
new text end

new text begin Subd. 4. new text end

new text begin Establishment of fund and accounts. new text end

new text begin A credit enhancement bond
program fund is established for the purposes described in subdivision 2. Other accounts
may be established in the fund as necessary for its management and administration.
Money in the fund is annually appropriated to the authority and does not lapse. The fund
must be credited with investment income, and with repayments of principal and interest,
except for fees assessed under section 446A.04, subdivisions 5 and 15.
new text end

new text begin Subd. 5. new text end

new text begin Management of fund and accounts. new text end

new text begin The authority shall manage and
administer the credit enhancement bond program fund and individual accounts in the fund.
For those purposes, the authority may exercise all powers provided in this chapter.
new text end

new text begin Subd. 6. new text end

new text begin Applications. new text end

new text begin (a) Applicants for participation in the credit enhancement
bond program must submit an application to the authority on forms prescribed by the
authority. The applicant shall provide information customary to that needed for the
disclosure purposes in issuing general obligation bonds in the market, in addition to the
following information:
new text end

new text begin (1) the total estimated cost of the project and the amount of general obligation
bond proceeds sought;
new text end

new text begin (2) other sources of funding if the general obligation bond proceeds do not cover
the entire costs identified;
new text end

new text begin (3) the proposed sources of funds to be used for repayment of the general obligation
bonds;
new text end

new text begin (4) information showing the applicant's financial status and ability of the applicant
to repay loans;
new text end

new text begin (5) the proposed term and principal repayment schedule for the general obligation
bonds of the applicant; and
new text end

new text begin (6) the statutory authorization for the applicant to issue such general obligation
bonds, together with a statement that the statutory provision authorizes the use of proceeds
of such general obligation bonds to pay the costs of a project.
new text end

new text begin (b) The authority may establish deadlines or time periods for the submission of
applications to facilitate funding loans from the proceeds of a specific bond issue proposed
or previously issued by the authority, or the authority may accept applications from time
to time.
new text end

new text begin (c) Each application must be complete and accurate to be considered delivered to
and received by the authority or to be considered as having met any deadline established
by the authority with respect to an application period. If any application is determined by
the authority to be incomplete or inaccurate, the authority shall notify the applicant and
specify the missing or inaccurate information.
new text end

new text begin (d) The executive director and the staff of the authority shall evaluate the applications
to determine if the application should be accepted or rejected by the authority.
new text end

new text begin (e) The authority is not obligated to accept any application including those complete
and accurate and submitted by any specified deadline for submission if the authority
determines that it is not practicable to fund the loan for any reason including, but not
limited to, the creditworthiness of the applicant, the proposed loan amount, the term
and repayment schedule, the sources of funding available to the authority, and current
market conditions. Upon acceptance and approval of an application by the authority, the
authority may require that the applicant authorize, execute, and deliver a commitment to
the authority within such time period specified by the authority in its acceptance of the
application. The authority may reject an approved application for failure by the applicant
to authorize, execute, and deliver a commitment by the specified deadline.
new text end

new text begin Subd. 7. new text end

new text begin Loan terms and conditions. new text end

new text begin (a) The terms and conditions of loans
provided by the authority pursuant to the credit enhanced bond program are as provided
by this section, any applicable bond resolution or series bond resolution of the authority,
any trust indenture pursuant to which any series of bonds of the authority are issued,
the regulatory agreement, the commitment and the general obligation bond, and the
authorizing resolution of the borrower.
new text end

new text begin (b) The loan must be made by the authority through its purchase of the general
obligation bond of the borrower. The borrower shall provide the authority with the
opinion of nationally recognized bond counsel as to the valid authorization, issuance, and
enforceability of the general obligation bond of the borrower, and the exclusion of interest
thereon from gross income for the purposes of federal taxation, subject to customary
qualifications. The general obligation bond of the borrower may pledge other specified
sources of revenues for repayment to the extent permitted or required by law, in addition
to the full faith and credit and unlimited taxing powers of the borrower.
new text end

new text begin (c) The authority may disburse the proceeds of the loan as a single payment for the
general obligation bond or from time to time pursuant to draw requests if the general
obligation bond of the borrower is structured as a periodic drawdown bond. In the event
the authority pays for the general obligation bond in a single payment, the borrower
shall establish a project account and disburse the proceeds of its general obligation bond
solely for costs of the project approved in its application pursuant to such additional
requirements specified in the regulatory agreement.
new text end

new text begin (d) In order to facilitate the issuance of the authority's revenue bonds to finance
a pool of loans to different borrowers, the authority may require the borrower in the
commitment to issue its general obligation bond on a date certain in the future, and
may require the borrower to pay the costs incurred by the authority as a result of the
borrower's failure to deliver its general obligation bond as required by the commitment.
The commitment may also require the borrower to provide to the authority full disclosure
of all material facts and financial information relating to the borrower that would be
required if the borrower issued its general obligation bond to the public, certified as to
completeness and accuracy by authorized officers of the borrower, and authorization for
the authority to use such information in connection with the sale of the authority's revenue
bonds or disclosure relating to the authority's revenue bonds.
new text end

new text begin (e) In addition to delivering its general obligation bond, each borrower shall enter
into a regulatory agreement with the authority providing additional terms of the loan
as the authority may specify, including providing to the authority periodic reports and
information relating to the acquisition or construction of the project and use of the
proceeds of the borrower's general obligation bond and periodic operating, financial, and
other information as to the creditworthiness of the borrower, and providing and filing
continuing secondary market disclosure to the extent required by the authority.
new text end

new text begin (f) The purchase or commitment to purchase general obligation bonds of borrowers
by the authority shall be subject to the availability of proceeds of revenue bonds of the
authority for such purpose and the authority is not liable to any borrower for the failure to
purchase its general obligation bond pursuant to a commitment or any other agreement if
proceeds of the authority's revenue bonds are not available for any reason.
new text end

new text begin Subd. 8. new text end

new text begin Interest rate determination. new text end

new text begin The rate of interest on the general obligation
bonds of the borrower must be the true interest cost on the revenue bonds of the authority
issued to purchase such general obligation bonds of the borrower plus the ongoing
percentage fee charged by the authority under subdivision 10; provided that the interest
rate must not exceed any limit imposed by federal tax law with respect to the authority's
revenue bonds.
new text end

new text begin Subd. 9. new text end

new text begin Market considerations. new text end

new text begin The authority may suspend offering loans if it is
determined by the executive director that there are extreme or unusual events impacting
the bond market and that to continue making loans would be detrimental to holders of the
authority's revenue bonds or the financial viability of the credit enhanced bond program,
or if the state is warned by one of its rating agencies that continuing to make loans will
result in lowering the state's bond rating. If the making of loans is suspended under this
section, the authority shall have the option to resume making loans once it has determined
that the conditions for suspending the program no longer exist.
new text end

new text begin Subd. 10. new text end

new text begin Fees. new text end

new text begin The authority shall charge a nonrefundable application fee of
$1,000 payable by each applicant upon submission of an application to the authority. A
separate application fee must be payable for each application submitted, including a
resubmitted application for an application that was rejected by the authority or determined
to be incomplete or inaccurate by the authority. The authority shall charge an ongoing
periodic fee of ten basis points of the outstanding principal amount of the loan to be added
to, and be a component of, the interest rate on the general obligation bonds of the borrower.
new text end

new text begin Subd. 11. new text end

new text begin Authority revenue bonds. new text end

new text begin (a) The authority is authorized to issue
revenue bonds as provided in this chapter to fund the credit enhanced bond program.
The revenue bonds may be issued in one or more series pursuant to a resolution of the
authority or a series resolution or pursuant to a trust indenture with a financial institution
with trust powers as trustee, authorized by resolution of the authority. Any issue of bonds
may be used to fund one or more loans, may be payable by the loans funded from such
issue of bonds and such additional loans as pledged by the authority, and may be payable
on a subordinated basis to other bonds. As permitted by the terms of any revenue bonds
issued by the authority, the authority may sell the general obligations pledged to the
payment of the revenue bonds and any proceeds of the sale in excess of those used to pay
the principal of the revenue bonds must be deposited to the credit enhanced bond program
fund and may be used to purchase additional general obligation bonds of borrowers, to
provide credit enhancement for the authority's revenue bonds, or to pay any other expense
of the credit enhanced bond program.
new text end

new text begin (b) The authority may issue short-term bonds in anticipation of issuing long-term
bonds for the purpose of acquiring general obligation bonds of borrowers.
new text end

new text begin (c) Bonds issued by the authority for the credit enhanced bond program must not
be general obligations of the authority to the payment of which the general assets of the
authority are pledged or available for payment. All bonds issued for the credit enhanced
bond programs by the authority must be revenue bonds payable solely from the sources
specified in the bond.
new text end

new text begin Subd. 12. new text end

new text begin Reports, disclosure, audits. new text end

new text begin (a) During the term of the loan the borrower
shall provide written reports to the authority. The content and timing of these reports must
be as specified in the regulatory agreement.
new text end

new text begin (b) During the term of the loan the borrower shall disclose to the authority any
material information or events adversely affecting the creditworthiness of the borrower
as specified in the regulatory agreement. If required by the authority in a regulatory
agreement, the borrower shall enter into a continuing disclosure undertaking to provide
disclosure to the market.
new text end

new text begin (c) During the term of the loan, the borrower shall provide to the authority on an
annual basis financial statements of the borrower audited by an independent accounting
firm, as further specified in the regulatory agreement.
new text end

Sec. 5.

Minnesota Statutes 2006, section 446A.12, subdivision 1, is amended to read:

Subdivision 1.

Bonding authority.

The authority may issue negotiable bonds in a
principal amount that the authority determines necessary to provide sufficient funds for
achieving its purposes, including the making of loans and purchase of securities, the
payment of interest on bonds of the authority, the establishment of reserves to secure
its bonds, the payment of fees to a third party providing credit enhancement, and the
payment of all other expenditures of the authority incident to and necessary or convenient
to carry out its corporate purposes and powers, but not including the making of grants.
Bonds of the authority may be issued as bonds or notes or in any other form authorized
by law. The principal amount of bonds issued and outstanding under this section at any
time may not exceed $1,500,000,000, excluding bonds for which refunding bonds or
crossover refunding bonds have been issued deleted text begin . deleted text end new text begin , and excluding any bonds issued for the
credit enhanced bond program or refunding or crossover refunding bonds issued under the
program. The principal amount of bonds issued and outstanding under section 446A.087,
may not exceed $500,000,000, excluding bonds for which refunding bonds or crossover
refunding bonds have been issued.
new text end