HF 832

as introduced - 93rd Legislature (2023 - 2024) Posted on 01/25/2023 12:44pm

A bill for an act
relating to capital investment; appropriating money for West Central Regional
Water System; authorizing the sale and issuance of state bonds; proposing coding
for new law in Minnesota Statutes, chapter 16A.

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

Section 1.

new text begin [16A.9675] WEST CENTRAL REGIONAL WATER SYSTEM
APPROPRIATION BONDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this section.
new text end

new text begin (b) "Appropriation bond" or "bond" means a bond, note, or other similar instrument of
the state payable during a biennium from one or more of the following sources:
new text end

new text begin (1) money appropriated by law from the general fund in any biennium for debt service
due with respect to obligations described in subdivisions 2a and 2b;
new text end

new text begin (2) proceeds of the sale of obligations described in subdivisions 2a and 2b;
new text end

new text begin (3) payments received for that purpose under agreements and ancillary arrangements
described in subdivision 2, paragraph (d); and
new text end

new text begin (4) investment earnings on amounts in clauses (1) to (3).
new text end

new text begin (c) "Debt service" means the amount payable in any biennium of principal, premium, if
any, and interest on appropriation bonds.
new text end

new text begin Subd. 2. new text end

new text begin Authorization to issue appropriation bonds. new text end

new text begin (a) Subject to the limitations of
this subdivision, the commissioner may sell and issue appropriation bonds of the state under
this section for public purposes as provided by law. Grant agreements entered into under
this section must provide for reimbursement to the state from any federal money provided
for the project, consistent with an agreement among counties served by the project.
new text end

new text begin (b) The appropriation bonds may be issued and sold only after the commissioner
determines that the construction and administration for work done on the project will comply
with (1) all federal requirements and regulations, and (2) terms of agreements relating to
the project. Proceeds of the appropriation bonds must be credited to a special appropriation
West Central Regional Water System bond proceeds fund in the state treasury. All income
from investment of the bond proceeds, as estimated by the commissioner, is appropriated
to the commissioner for the payment of principal and interest on the appropriation bonds.
new text end

new text begin (c) Appropriation bonds may be issued in one or more issues or series on the terms and
conditions the commissioner determines to be in the best interests of the state, but the term
on any series of appropriation bonds may not exceed 25 years. The appropriation bonds of
each issue and series thereof shall be dated and bear interest, and may be includable in or
excludable from the gross income of the owners for federal income tax purposes.
new text end

new text begin (d) At the time of, or in anticipation of, issuing the appropriation bonds, and at any time
thereafter, so long as the appropriation bonds are outstanding, the commissioner may enter
into agreements and ancillary arrangements relating to the appropriation bonds, including
but not limited to trust indentures, grant agreements, lease or use agreements, operating
agreements, management agreements, liquidity facilities, remarketing or dealer agreements,
letter of credit agreements, insurance policies, guaranty agreements, reimbursement
agreements, indexing agreements, or interest exchange agreements. Any payments made
or received according to the agreement or ancillary arrangement shall be made from or
deposited as provided in the agreement or ancillary arrangement. The determination of the
commissioner included in an interest exchange agreement that the agreement relates to an
appropriation bond shall be conclusive.
new text end

new text begin (e) The commissioner may enter into written agreements or contracts relating to the
continuing disclosure of information necessary to comply with or facilitate the issuance of
appropriation bonds in accordance with federal securities laws, rules, and regulations,
including Securities and Exchange Commission rules and regulations in Code of Federal
Regulations, title 17, section 240.15c 2-12. An agreement may be in the form of covenants
with purchasers and holders of appropriation bonds set forth in the order or resolution
authorizing the issuance of the appropriation bonds, or a separate document authorized by
the order or resolution.
new text end

new text begin (f) The appropriation bonds are not subject to chapter 16C.
new text end

new text begin Subd. 2a. new text end

new text begin Bond authorization; project description. new text end

new text begin (a) Appropriation bonds may be
sold and issued in amounts that, in the opinion of the commissioner, are necessary to provide
sufficient money to the Public Facilities Authority under subdivision 7, paragraph (a), not
to exceed $8,300,000 net of costs of issuance, for the purposes as provided under this
subdivision, and pay debt service including capitalized interest, costs of issuance, costs of
credit enhancement, or make payments under other agreements entered into under subdivision
2, paragraph (d).
new text end

new text begin (b) The bonds authorized by this subdivision are for the purposes of financing the land
acquisition, design, engineering, and construction of facilities and infrastructure necessary
to complete Phase 1 of the West Central Regional Water System project, including a trunk
transmission pipeline and associated clean water infrastructure to transport potable water
from the East Central Regional Water District in North Dakota to cities along Trunk Highway
75 and Highway 9, including the cities of Climax, Nielsville, Shelly, Halstad, Hendrum,
Perley, Georgetown, Beltrami, Borup, and Felton. No bonds shall be sold under this
subdivision until the commissioner determines that a nonstate match of at least $8,300,000
is committed to this project phase.
new text end

new text begin Subd. 2b. new text end

new text begin Additional bond sale authorization; further project description. new text end

new text begin (a)
Appropriation bonds may be sold and issued in amounts that, in the opinion of the
commissioner, are necessary to provide sufficient money to the Public Facilities Authority
under subdivision 7, paragraph (b), not to exceed $64,000,000 net of costs of issuance, for
the purposes as provided under this subdivision, and pay debt service including capitalized
interest, costs of issuance, costs of credit enhancement, or make payments under other
agreements entered into under subdivision 2, paragraph (d).
new text end

new text begin (b) The bonds authorized by this subdivision are for the purposes of financing the land
acquisition, design, engineering, and construction of facilities and infrastructure necessary
for a rural pipeline distribution system connected to the trunk transmission pipeline under
subdivision 2a to provide potable water to rural communities in west central Minnesota for
agricultural and domestic use. No bonds shall be sold under this subdivision until the
commissioner determines that a nonstate match of at least $....... is committed to the final
phase of the project.
new text end

new text begin Subd. 3. new text end

new text begin Form; procedure. new text end

new text begin (a) Appropriation bonds may be issued in the form of bonds,
notes, or other similar instruments, and in the manner provided in section 16A.672. In the
event that any provision of section 16A.672 conflicts with this section, this section shall
govern.
new text end

new text begin (b) Every appropriation bond shall include a conspicuous statement of the limitation
established in subdivision 6.
new text end

new text begin (c) Appropriation bonds may be sold at either public or private sale upon such terms as
the commissioner determines are not inconsistent with this section and may be sold at any
price or percentage of par value. Any bid received may be rejected.
new text end

new text begin (d) Appropriation bonds must bear interest at a fixed or variable rate.
new text end

new text begin (e) Notwithstanding any other law, appropriation bonds issued under this section shall
be fully negotiable.
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 appropriation bonds for the
purpose of refunding any appropriation bonds then outstanding, including the payment of
any redemption premiums on the bonds, any interest accrued or to accrue to the redemption
date, and costs related to the issuance and sale of the refunding bonds. The proceeds of any
refunding bonds may, in the discretion of the commissioner, be applied to the purchase or
payment at maturity of the appropriation bonds to be refunded, to the redemption of the
outstanding appropriation bonds on any redemption date, or to pay interest on the refunding
bonds and may, pending application, be placed in escrow to be applied to the purchase,
payment, retirement, or redemption. Any escrowed proceeds, pending such use, may be
invested and reinvested in obligations that are authorized investments under section 11A.24.
The income earned or realized on the investment may also be applied to the payment of the
appropriation bonds to be refunded or interest or premiums on the refunded appropriation
bonds, or to pay interest on the refunding bonds. After the terms of the escrow have been
fully satisfied, any balance of the proceeds and any investment income may be returned to
the general fund or, if applicable, the special appropriation West Central Regional Water
System bond proceeds fund for use in any lawful manner. All refunding bonds issued under
this subdivision must be prepared, executed, delivered, and secured by appropriations in
the same manner as the appropriation bonds to be refunded.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation bonds as legal investments. new text end

new text begin Any of the following entities may
legally invest any sinking funds, money, or other funds belonging to them or under their
control in any appropriation bonds issued under this section:
new text end

new text begin (1) the state, the State Board of Investment, public officers, municipal corporations,
political subdivisions, and public bodies;
new text end

new text begin (2) banks and bankers, savings and loan associations, credit unions, trust companies,
savings banks and institutions, investment companies, insurance companies, insurance
associations, and other persons carrying on a banking or insurance business; and
new text end

new text begin (3) personal representatives, guardians, trustees, and other fiduciaries.
new text end

new text begin Subd. 6. new text end

new text begin No full faith and credit; state not required to make appropriations. new text end

new text begin The
appropriation bonds are not public debt of the state, and the full faith, credit, and taxing
powers of the state are not pledged to the payment of the appropriation bonds or to any
payment that the state agrees to make under this section. Appropriation bonds shall not be
obligations paid directly, in whole or in part, from a tax of statewide application on any
class of property, income, transaction, or privilege. Appropriation bonds shall be payable
in each fiscal year only from amounts that the legislature may appropriate for debt service
for any fiscal year, provided that nothing in this section shall be construed to require the
state to appropriate money sufficient to make debt service payments with respect to the
appropriation bonds in any fiscal year. Appropriation bonds shall be canceled and shall no
longer be outstanding on the earlier of (1) the first day of a fiscal year for which the
legislature shall not have appropriated amounts sufficient for debt service, or (2) the date
of final payment of the principal of and interest on the appropriation bonds.
new text end

new text begin Subd. 7. new text end

new text begin Appropriation of proceeds. new text end

new text begin (a) The proceeds of appropriation bonds issued
under subdivision 2a and interest credited to the special appropriation West Central Regional
Water System bond proceeds fund are appropriated as follows:
new text end

new text begin (1) to the Public Facilities Authority for a grant to the West Central Regional Water
System Joint Powers Board for payment of capital expenses as specified in subdivision 2a;
and
new text end

new text begin (2) to the commissioner for debt service on the bonds including capitalized interest,
nonsalary costs of issuance of the bonds, costs of credit enhancement of the bonds, and
payments under any agreements entered into under subdivision 2, paragraph (d), each as
permitted by state and federal law.
new text end

new text begin (b) The proceeds of appropriation bonds issued under subdivision 2b and interest credited
to the special appropriation West Central Regional Water System bond proceeds fund are
appropriated as follows:
new text end

new text begin (1) to the Public Facilities Authority for a grant to the West Central Joint Powers Board
for payment of capital expenses as specified in subdivision 2b; and
new text end

new text begin (2) to the commissioner for debt service on the bonds including capitalized interest,
nonsalary costs of issuance of the bonds, costs of credit enhancement of the bonds, and
payments under any agreements entered into under subdivision 2, paragraph (d), each as
permitted by state and federal law.
new text end

new text begin Subd. 8. new text end

new text begin Appropriation for debt service and other purposes. new text end

new text begin (a) An amount up to
$....... needed to pay principal and interest on appropriation bonds issued under subdivision
2a is appropriated each fiscal year from the general fund to the commissioner, subject to
repeal, unallotment under section 16A.152, or cancellation, otherwise pursuant to subdivision
6, for deposit into the bond payments account established for such purpose in the special
appropriation West Central Regional Water System bond proceeds fund. The appropriation
is available in fiscal years 2024 through 2045.
new text end

new text begin (b) An amount up to $....... needed to pay principal and interest on appropriation bonds
issued under subdivision 2b is appropriated each fiscal year from the general fund to the
commissioner, subject to repeal, unallotment under section 16A.152, or cancellation,
otherwise pursuant to subdivision 6, for deposit into the bond payments account established
for such purpose in the special appropriation West Central Regional Water System bond
proceeds fund. The appropriation is available in fiscal years 2025 through 2046.
new text end

new text begin Subd. 9. new text end

new text begin Waiver of immunity. new text end

new text begin The waiver of immunity by the state provided for by
section 3.751, subdivision 1, shall be applicable to the appropriation bonds and any ancillary
contracts to which the commissioner is a party.
new text end