HF 2342

1st Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to economic development; modifying bonding 
  1.3             authority for the Minnesota Public Facilities 
  1.4             Authority; amending Minnesota Statutes 2002, sections 
  1.5             446A.12, subdivision 1; 446A.14; 446A.17; 446A.19. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 446A.12, 
  1.8   subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [BONDING AUTHORITY.] The authority may 
  1.10  issue negotiable bonds in a principal amount that the authority 
  1.11  determines necessary to provide sufficient funds for achieving 
  1.12  its purposes, including the making of loans and purchase of 
  1.13  securities, the payment of interest on bonds of the authority, 
  1.14  the establishment of reserves to secure its bonds, the payment 
  1.15  of fees to a third party providing credit enhancement, and the 
  1.16  payment of all other expenditures of the authority incident to 
  1.17  and necessary or convenient to carry out its corporate purposes 
  1.18  and powers, but not including the making of grants.  Bonds of 
  1.19  the authority may be issued as bonds or notes or in any other 
  1.20  form authorized by law.  The principal amount of bonds issued 
  1.21  and outstanding under this section at any time may not exceed 
  1.22  $1,000,000,000 $1,250,000,000, excluding bonds for which 
  1.23  refunding bonds or crossover refunding bonds have been issued. 
  1.24     Sec. 2.  Minnesota Statutes 2002, section 446A.14, is 
  1.25  amended to read: 
  2.1      446A.14 [INTEREST EXCHANGES RATE SWAPS AND OTHER 
  2.2   AGREEMENTS.] 
  2.3      The authority may enter into an agreement with a third 
  2.4   party for an exchange of interest rates under this subdivision.  
  2.5   With respect to outstanding obligations bearing interest at a 
  2.6   variable rate, the authority may agree to pay sums equal to 
  2.7   interest at a fixed rate or at a different variable rate 
  2.8   determined in accordance with a formula set out in the agreement 
  2.9   on an amount not exceeding the outstanding principal amount of 
  2.10  the obligations, in exchange for an agreement by the third party 
  2.11  to pay sums equal to interest on a similar amount at a variable 
  2.12  rate determined according to a formula set out in the agreement. 
  2.13  With respect to outstanding obligations bearing interest at a 
  2.14  fixed rate or rates, the authority may agree to pay sums equal 
  2.15  to interest at a variable rate determined according to a formula 
  2.16  set out in the agreement on an amount not exceeding the 
  2.17  outstanding principal amount of the obligations in exchange for 
  2.18  an agreement by the third party to pay sums equal to interest on 
  2.19  a similar amount at a fixed rate or rates set out in the 
  2.20  agreement.  Subject to any applicable bonds covenants, payments 
  2.21  required to be made by the municipality under the swap agreement 
  2.22  may be made from amounts secured to pay debt service on the 
  2.23  obligations with respect to which the swap agreement was made 
  2.24  from any other available source of the authority. Subdivision 1. 
  2.25  [AGREEMENTS.] (a) The authority may enter into interest rate 
  2.26  exchange or swap agreements, hedges, forward purchase or sale 
  2.27  agreements, loan sale or pooling agreements or trusts, or other 
  2.28  similar agreements in connection with: 
  2.29     (1) the issuance or proposed issuance of bonds; 
  2.30     (2) the making, proposed making, or sale of loans or other 
  2.31  financial assistance or investments; 
  2.32     (3) outstanding bonds, loans, or other financial 
  2.33  assistance; or 
  2.34     (4) existing similar agreements.  
  2.35     (b) The agreements authorized by this subdivision include, 
  2.36  without limitation, master agreements, options or contracts to 
  3.1   enter into such agreements in the future and related agreements, 
  3.2   including, without limitation, agreements to provide credit 
  3.3   enhancement, liquidity, or remarketing; valuation; monitoring; 
  3.4   or administrative services currently or in the future.  However, 
  3.5   the term of an option to enter into an interest rate swap, 
  3.6   exchange, hedge, or other similar agreement and the term of a 
  3.7   contract to sell, buy, or refund bonds in the future must not 
  3.8   exceed five years. 
  3.9      (c) The agreements authorized by this subdivision or 
  3.10  supplements to master agreements may be entered into on the 
  3.11  basis of negotiation with a qualified third party or through a 
  3.12  competitive proposal process on terms and conditions and with 
  3.13  covenants and provisions approved by the authority and may 
  3.14  include, without limitation: 
  3.15     (1) provisions establishing reserves; 
  3.16     (2) pledging assets or revenues of the authority for 
  3.17  current or other payments or termination payments; 
  3.18     (3) contracting with the other parties to such agreements 
  3.19  as to the custody, collection, securing, investment, and payment 
  3.20  of money of the authority or money held in trust; or 
  3.21     (4) requiring the issuance of bonds or entering into loans 
  3.22  or other agreements authorized by this subdivision in the future.
  3.23     (d) Subject to the terms of the agreement and other 
  3.24  agreements of the authority with bondholders or other third 
  3.25  parties, the agreements authorized by this subdivision may be 
  3.26  general or limited obligations of the authority payable from all 
  3.27  available or certain specified funds appropriated to the 
  3.28  authority.  The agreements authorized by this subdivision do not 
  3.29  constitute debt of the authority for the purposes of the limits 
  3.30  on bonds or notes of the authority set forth in section 446A.12, 
  3.31  subdivision 1.  
  3.32     (e) The authority may issue bonds to provide funds to make 
  3.33  payments, including, without limitation, termination payments 
  3.34  pursuant to an agreement authorized by this subdivision. 
  3.35     (f) The aggregate notional amount of interest rate swap or 
  3.36  exchange agreements in effect at any time must not exceed an 
  4.1   amount equal to ten percent of the aggregate principal amount of 
  4.2   bonds the authority is authorized to have outstanding pursuant 
  4.3   to section 446A.12, subdivision 1, including the notional amount 
  4.4   of interest rate swap or exchange agreements with respect to 
  4.5   which a reversing agreement has been entered into, the effect of 
  4.6   which is to terminate the original agreement or a portion 
  4.7   thereof, and reversing agreements with respect to all or a 
  4.8   portion of existing agreements. 
  4.9      Subd. 2.  [POWERS OF AUTHORITY.] For the purposes of this 
  4.10  section, the authority may exercise all powers provided in this 
  4.11  chapter.  The authority may consent, whenever it considers it 
  4.12  necessary or desirable in connection with agreements entered 
  4.13  into under this subdivision, to modifications, amendments, or 
  4.14  waivers of the terms of such agreements.  The proceeds of any 
  4.15  agreements entered into pursuant to this subdivision are 
  4.16  appropriated to the authority pursuant to section 446A.11, 
  4.17  subdivision 13.  The agreements entered into pursuant to this 
  4.18  subdivision are not subject to sections 16C.03, subdivision 4, 
  4.19  and 16C.05. 
  4.20     Sec. 3.  Minnesota Statutes 2002, section 446A.17, is 
  4.21  amended to read: 
  4.22     446A.17 [NONLIABILITY.] 
  4.23     Subdivision 1.  [NONLIABILITY OF INDIVIDUALS.] No member of 
  4.24  the authority or other person executing the bonds, loans, 
  4.25  interest rate swaps, or other agreements or contracts of the 
  4.26  authority is liable personally on the bonds such bonds, loans, 
  4.27  interest rate swaps, or other agreements or contracts of the 
  4.28  authority or is subject to any personal liability or 
  4.29  accountability by reason of their issuance, execution, delivery, 
  4.30  or performance.  
  4.31     Subd. 2.  [NONLIABILITY OF STATE.] The state is not liable 
  4.32  on bonds, loans, interest rate swaps, or other agreements or 
  4.33  contracts of the authority issued or entered into under this 
  4.34  chapter and those bonds such bonds, loans, interest rate swaps, 
  4.35  or other agreements or contracts of the authority are not a debt 
  4.36  of the state.  The bonds Such bonds, loans, interest rate swaps, 
  5.1   or other agreements or contracts of the authority must contain 
  5.2   on their face a statement to that effect. 
  5.3      Sec. 4.  Minnesota Statutes 2002, section 446A.19, is 
  5.4   amended to read: 
  5.5      446A.19 [STATE PLEDGE AGAINST IMPAIRMENT OF CONTRACTS.] 
  5.6      The state pledges and agrees with the holders of bonds 
  5.7   issued under sections 446A.051, and 446A.12 to 446A.20 or other 
  5.8   parties to any loans, interest rate swaps, or other agreements 
  5.9   or contracts of the authority that the state will not limit or 
  5.10  alter the rights vested in the authority to fulfill the terms of 
  5.11  any agreements made with the bondholders or parties to any 
  5.12  loans, interest rate swaps, or other agreements or contracts of 
  5.13  the authority or in any way impair the rights and remedies of 
  5.14  the holders until the bonds, together with interest on them, 
  5.15  with interest on any unpaid installments of interest, and all 
  5.16  costs and expenses in connection with any action or proceeding 
  5.17  by or on behalf of the bondholders, are fully met and discharged 
  5.18  or, with respect to any loans, interest rate swaps, or other 
  5.19  agreements or contracts of the authority, such agreements have 
  5.20  been fully performed by the authority or otherwise terminated or 
  5.21  discharged.  The authority may include this pledge and agreement 
  5.22  of the state in any agreement with the holders of bonds issued 
  5.23  under sections 446A.051, and 446A.12 to 446A.20 or in any loans, 
  5.24  interest rate swaps, or other agreements or contracts of the 
  5.25  authority.