1.1                          A bill for an act 
  1.2             relating to capital improvements; authorizing spending 
  1.3             to acquire and to better public land and buildings and 
  1.4             other public improvements of a capital nature with 
  1.5             certain conditions; authorizing the sale of state 
  1.6             bonds; appropriating money; amending Minnesota 
  1.7             Statutes 1998, section 16A.642, subdivision 1; Laws 
  1.8             1998, chapter 404, section 7, subdivision 23; and Laws 
  1.9             1998, First Special Session chapter 1, article 3, 
  1.10            section 8; proposing coding for new law in Minnesota 
  1.11            Statutes, chapter 41A. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13  Section 1.  [CAPITAL IMPROVEMENT APPROPRIATIONS.] 
  1.14     The sums in the column under "APPROPRIATIONS" are 
  1.15  appropriated from the bond proceeds fund, or another named fund, 
  1.16  to the state agencies or officials indicated, to be spent for 
  1.17  public purposes including to acquire and to better public land 
  1.18  and buildings and other public improvements of a capital nature, 
  1.19  as specified in this act.  Unless otherwise specified, the 
  1.20  appropriations in this act are available until the project is 
  1.21  completed or abandoned. 
  1.22                              SUMMARY 
  1.23  MINNESOTA STATE COLLEGES AND UNIVERSITIES        $    3,730,000 
  1.24  CHILDREN, FAMILIES, AND LEARNING                     49,155,000 
  1.25  NATURAL RESOURCES                                    24,723,000
  1.26  OFFICE OF ENVIRONMENTAL ASSISTANCE                    3,000,000 
  1.27  PUBLIC FACILITIES AUTHORITY                          32,200,000 
  1.28  BOARD OF WATER AND SOIL RESOURCES                     3,750,000 
  2.1   TRANSPORTATION                                       13,000,000 
  2.2   VETERANS NURSING HOME BOARD                           4,700,000 
  2.3   CORRECTIONS                                           1,785,000 
  2.4   TRADE AND ECONOMIC DEVELOPMENT                        5,000,000 
  2.5   COMMERCE                                                200,000
  2.6   BOND SALE EXPENSES                                      147,000 
  2.7   TOTAL                                            $  141,390,000
  2.8   Bond Proceeds Fund                                   91,485,000
  2.9   Maximum Effort School Loan Fund                      39,905,000 
  2.10  Transportation Fund                                  10,000,000 
  2.11                                                   APPROPRIATIONS
  2.12                                                   $ 
  2.13   Sec. 2.  MINNESOTA STATE
  2.14  COLLEGES AND UNIVERSITIES 
  2.15  Moorhead State University
  2.16  Blight Elimination                                    3,730,000
  2.17  This appropriation is to demolish 
  2.18  structures, eliminate blight, and 
  2.19  construct parking facilities and 
  2.20  necessary amenities on certain recently 
  2.21  acquired land at Moorhead state 
  2.22  university. 
  2.23  Sec. 3.  CHILDREN, FAMILIES, AND LEARNING 
  2.24  Subdivision 1.  To the commissioner of
  2.25  children, families, and learning for the
  2.26  purposes specified in this section                   49,155,000 
  2.27  Subd. 2. Maximum Effort
  2.28  School Loans                                         39,905,000
  2.29  This appropriation is from the maximum 
  2.30  effort school loan fund to make capital 
  2.31  loans to school districts for which 
  2.32  loans are approved in this section as 
  2.33  provided in Minnesota Statutes, 
  2.34  sections 126C.61 to 126C.72. 
  2.35  The commissioner shall make capital 
  2.36  loans to independent school district 
  2.37  No. 38, Red Lake, in the amount of 
  2.38  $11,166,000; to independent school 
  2.39  district No. 115, Cass Lake, in the 
  2.40  amount of $7,505,000; to independent 
  2.41  school district No. 299, Caledonia, in 
  2.42  the amount of $14,134,000; and to 
  2.43  independent school district No. 306, 
  2.44  LaPorte, in the amount of $7,100,000.  
  2.45  Capital loans to these districts in 
  2.46  these amounts are approved. 
  2.47  The commissioner of children, families, 
  2.48  and learning shall complete the review 
  2.49  and comment process according to 
  2.50  Minnesota Statutes, section 126C.69, 
  2.51  subdivisions 3, 4, 5, and 8, for the 
  2.52  projects approved in this subdivision.  
  3.1   For the purposes of Minnesota Statutes, 
  3.2   section 126C.69, subdivision 3, the 
  3.3   project in the Caledonia school 
  3.4   district is considered to meet the 
  3.5   requirement that the district will 
  3.6   serve, on average, at least 80 pupils 
  3.7   per grade.  
  3.8   The commissioner shall review the 
  3.9   proposed plan and budget of the 
  3.10  projects approved in this subdivision 
  3.11  and may reduce the amount of a loan to 
  3.12  ensure that a project will be 
  3.13  economical.  The commissioner may 
  3.14  recover the cost incurred by the 
  3.15  commissioner for any professional 
  3.16  services associated with the final 
  3.17  review by reducing the proceeds of the 
  3.18  loan paid to a district. 
  3.19  Subd. 3. Metropolitan 
  3.20  Magnet School Grants                                  9,250,000
  3.21  This appropriation is to make grants 
  3.22  under Minnesota Statutes, section 
  3.23  124D.88. 
  3.24  $7,000,000 is for a grant to the 
  3.25  Southwest Metropolitan Integration 
  3.26  magnet school in Edina. 
  3.27  $2,250,000 is for a grant to the 
  3.28  Interdistrict Arts and Science Middle 
  3.29  School in the east metropolitan area. 
  3.30  Sec. 4.  NATURAL RESOURCES 
  3.31  Flood Hazard Mitigation Grants                       24,723,000
  3.32  This appropriation is to the 
  3.33  commissioner of natural resources for 
  3.34  the local share of flood hazard 
  3.35  mitigation grants to local government 
  3.36  units for publicly owned capital 
  3.37  improvements to prevent or alleviate 
  3.38  flood damages under Minnesota Statutes, 
  3.39  section 103F.161.  The local 
  3.40  governments include the cities of Ada, 
  3.41  Breckenridge, Crookston, Dawson, East 
  3.42  Grand Forks, Granite Falls, Montevideo, 
  3.43  St. Paul, and Warren, and the town of 
  3.44  Oakport. 
  3.45  Sec. 5.  OFFICE OF ENVIRONMENTAL  
  3.46  ASSISTANCE 
  3.47  Solid Waste Recovery Center                           3,000,000
  3.48  This appropriation is to the director 
  3.49  of the office of environmental 
  3.50  assistance for a grant under Minnesota 
  3.51  Statutes, section 115A.54, to Otter 
  3.52  Tail county to retrofit and reconstruct 
  3.53  a solid waste resource recovery 
  3.54  facility in the city of Perham that 
  3.55  serves a seven-county area.  The 
  3.56  appropriation is available until June 
  3.57  30, 2001. 
  3.58  Sec. 6.  PUBLIC FACILITIES AUTHORITY 
  4.1   Subdivision 1.  To the public
  4.2   facilities authority for the purposes
  4.3   specified in this section                            32,200,000
  4.4   Subd. 2.  Matching Money
  4.5   for Federal Grants                                    2,200,000
  4.6   For state matching money for federal 
  4.7   grants to capitalize the drinking water 
  4.8   fund under Minnesota Statutes, section 
  4.9   446A.081. 
  4.10  Subd. 3.  Wastewater
  4.11  Infrastructure Program                               30,000,000
  4.12  For grants to eligible municipalities 
  4.13  under the wastewater infrastructure 
  4.14  funding program established in 
  4.15  Minnesota Statutes, section 446A.072. 
  4.16  Sec. 7.  BOARD OF WATER AND SOIL RESOURCES 
  4.17  Subdivision 1.  To the board of water 
  4.18  and soil resources for the purposes      
  4.19  specified in this section                             3,750,000
  4.20  Subd. 2.  Lazarus Creek                               1,500,000
  4.21  For a grant to Area II Minnesota River 
  4.22  Basin Projects, Inc. for construction 
  4.23  of the LQP-25/Lazarus Creek floodwater 
  4.24  retention project.  The grant may not 
  4.25  exceed 75 percent of the project's 
  4.26  cost.  The remaining 25 percent must be 
  4.27  matched by Area II Minnesota River 
  4.28  Basin Projects, Inc. 
  4.29  Subd. 3.  Grass Lake   
  4.30  Restoration                                           2,250,000
  4.31  For a grant to the city of Willmar and 
  4.32  Kandiyohi county to construct 
  4.33  stormwater flood reduction and water 
  4.34  quality improvements related to the 
  4.35  restoration of Grass Lake. 
  4.36  Sec. 8.  TRANSPORTATION                             
  4.37  Subdivision 1.  To the commissioner of
  4.38  transportation for the purposes specified
  4.39  in this section                                      13,000,000
  4.40  Subd. 2.  Local Bridge
  4.41  Replacement and Rehabilitation                       10,000,000
  4.42  This appropriation is from the state 
  4.43  transportation fund as provided in 
  4.44  Minnesota Statutes, section 174.50, to 
  4.45  match federal funds and to replace or 
  4.46  rehabilitate local deficient bridges. 
  4.47  Political subdivisions may use grants 
  4.48  made under this section to construct or 
  4.49  reconstruct bridges, including: 
  4.50  (1) matching federal aid grants to 
  4.51  construct or reconstruct key bridges; 
  4.52  (2) paying the costs of preliminary 
  4.53  engineering and environmental studies 
  4.54  authorized under Minnesota Statutes, 
  5.1   section 174.50, subdivision 6a; 
  5.2   (3) paying the costs to abandon an 
  5.3   existing bridge that is deficient and 
  5.4   in need of replacement, but where no 
  5.5   replacement will be made; and 
  5.6   (4) paying the costs to construct a 
  5.7   road or street to facilitate the 
  5.8   abandonment of an existing bridge 
  5.9   determined by the commissioner to be 
  5.10  deficient, if the commissioner 
  5.11  determines that construction of the 
  5.12  road or street is more cost efficient 
  5.13  than the replacement of the existing 
  5.14  bridge. 
  5.15  Subd. 3.  Port Development Assistance                 3,000,000 
  5.16  For port development assistance grants 
  5.17  to political subdivisions for capital 
  5.18  improvements constructed after the 
  5.19  effective date of this appropriation 
  5.20  under Minnesota Statutes, sections 
  5.21  457A.01 to 457A.06.  Any improvements 
  5.22  made with these grants must be publicly 
  5.23  owned. 
  5.24  Sec. 9.  VETERANS NURSING HOMES BOARD              
  5.25  Luverne Veterans Home                                 4,700,000
  5.26  This appropriation is to the 
  5.27  commissioner of administration to abate 
  5.28  and repair the Luverne veterans home to 
  5.29  resolve a moisture and mold problem.  
  5.30  Any money received from the federal 
  5.31  government or as a result of litigation 
  5.32  to correct this problem must be 
  5.33  deposited in the state treasury and 
  5.34  credited to the state bond fund. 
  5.35  Sec. 10.  CORRECTIONS                                 
  5.36  Faribault Sewer System                                1,785,000
  5.37  This appropriation is to the 
  5.38  commissioner of administration for 
  5.39  capital repairs to the storm and 
  5.40  sanitary sewer system of the Minnesota 
  5.41  correctional facility-Faribault. 
  5.42  Sec. 11.  TRADE AND ECONOMIC DEVELOPMENT
  5.43  Empowerment Zone Match                                5,000,000
  5.44  This appropriation is to the 
  5.45  commissioner of trade and economic 
  5.46  development for a grant to the 
  5.47  metropolitan council to be used as the 
  5.48  local match for a federal empowerment 
  5.49  zone designation grant awarded in 
  5.50  1999.  The grant must be used to 
  5.51  acquire and better public land and 
  5.52  buildings and other public improvements 
  5.53  of a capital nature. 
  5.54  Sec. 12.  BOND SALE EXPENSES                             147,000 
  5.55  To the commissioner of finance for bond 
  5.56  sale expenses under Minnesota Statutes, 
  6.1   section 16A.641, subdivision 8.  This 
  6.2   appropriation is from the bond proceeds 
  6.3   fund. 
  6.4      Sec. 13.  [BOND SALE AUTHORIZATIONS.] 
  6.5      Subdivision 1.  [BOND PROCEEDS FUND.] To provide the money 
  6.6   appropriated in this act from the bond proceeds fund, the 
  6.7   commissioner of finance, on request of the governor, shall sell 
  6.8   and issue bonds of the state in an amount up to $91,485,000 in 
  6.9   the manner, upon the terms, and with the effect prescribed by 
  6.10  Minnesota Statutes, sections 16A.631 to 16A.675, and by the 
  6.11  Minnesota Constitution, article XI, sections 4 to 7.  
  6.12     Subd. 2.  [MAXIMUM EFFORT SCHOOL LOAN FUND.] To provide the 
  6.13  money appropriated in this act from the maximum effort school 
  6.14  loan fund, the commissioner of finance, on request of the 
  6.15  governor, shall sell and issue bonds of the state in an amount 
  6.16  up to $39,905,000 in the manner, upon the terms, and with the 
  6.17  effect prescribed by Minnesota Statutes, sections 16A.631 to 
  6.18  16A.675, and by the Minnesota Constitution, article XI, sections 
  6.19  4 to 7.  The proceeds of the bonds, except accrued interest and 
  6.20  any premium received on the sale of the bonds, must be credited 
  6.21  to a bond proceeds account in the maximum effort school loan 
  6.22  fund. 
  6.23     Subd. 3.  [TRANSPORTATION FUND.] To provide the money 
  6.24  appropriated in this act from the transportation fund, the 
  6.25  commissioner of finance, on request of the governor, shall sell 
  6.26  and issue bonds of the state in an amount up to $10,000,000 in 
  6.27  the manner, upon the terms, and with the effect prescribed by 
  6.28  Minnesota Statutes, sections 16A.631 to 16A.675, and by the 
  6.29  Minnesota Constitution, article XI, sections 4 to 7.  The 
  6.30  proceeds of the bonds, except accrued interest and any premium 
  6.31  received on the sale of the bonds, must be credited to a bond 
  6.32  proceeds account in the state transportation fund. 
  6.33     Subd. 4.  [AGRICULTURAL RESOURCE LOAN GUARANTEES.] For the 
  6.34  purpose of developing the state's agricultural resources by 
  6.35  extending credit on real estate security, to guarantee the 
  6.36  timely payment of a portion of the principal of and the interest 
  6.37  on mortgage loans made by private lenders to qualified operators 
  7.1   of family farms to restructure existing debt, or to refund bonds 
  7.2   issued for that purpose, the commissioner of finance upon 
  7.3   request of the governor may issue bonds of the state in one or 
  7.4   more series, in an aggregate principal amount to be outstanding, 
  7.5   not exceeding $200,000.  The bonds of each series shall be sold 
  7.6   and issued to a trustee for participating lenders in the manner, 
  7.7   upon the terms, and with the effect provided in Minnesota 
  7.8   Statutes, sections 41A.11 to 41A.16, and in the Minnesota 
  7.9   Constitution, article XI, sections 5 and 7. 
  7.10     Sec. 14.  [BOND REAUTHORIZATIONS.] 
  7.11     The following bond authorizations, which have been reported 
  7.12  to the legislature according to Minnesota Statutes, section 
  7.13  16A.642, subdivision 1, are reauthorized, and do not cancel 
  7.14  under the terms of that subdivision: 
  7.15     (1) an amount remaining of $4,078,196.35 for appropriations 
  7.16  from the state transportation fund for railroad assistance, 
  7.17  authorized in Laws 1984, chapter 597, section 22; 
  7.18     (2) an amount remaining of $414,786.89 for appropriations 
  7.19  from the bond proceeds fund for labor history center planning 
  7.20  and design authorized in Laws 1990, chapter 610, article 1, 
  7.21  section 30, subdivision 1; 
  7.22     (3) an amount remaining of $198,666.40 for appropriations 
  7.23  from the bond proceeds fund for labor history center design 
  7.24  competition authorized in Laws 1990, chapter 610, article 1, 
  7.25  section 30, subdivision 1; 
  7.26     (4) an amount remaining of $321,071.22 for appropriations 
  7.27  from the bond proceeds fund for the water bank program 
  7.28  authorized in Laws 1990, chapter 610, article 1, section 30, 
  7.29  subdivision 1; and 
  7.30     (5) an amount remaining of $484,270.96 for appropriations 
  7.31  from the bond proceeds fund for conservation easements on 
  7.32  wetlands authorized in Laws 1991, chapter 354, article 11, 
  7.33  section 2, subdivision 1. 
  7.34     Sec. 15.  Minnesota Statutes 1998, section 16A.642, 
  7.35  subdivision 1, is amended to read: 
  7.36     Subdivision 1.  [REPORTS.] (a) The commissioner of finance 
  8.1   shall report to the chairs of the senate committee on finance 
  8.2   and the house of representatives committees on ways and means 
  8.3   and on capital investment by February 1 of each odd-numbered 
  8.4   year on the following: 
  8.5      (1) all laws authorizing the issuance of state bonds for 
  8.6   state or local government building projects enacted more than 
  8.7   five years before February 1 of that odd-numbered year; the 
  8.8   projects authorized to be acquired and constructed with the bond 
  8.9   proceeds for which less than 100 percent of the authorized total 
  8.10  cost has been expended, encumbered, or otherwise obligated; the 
  8.11  cost of contracts to be let in accordance with existing plans 
  8.12  and specifications shall be considered expended for this report; 
  8.13  and the amount of bonds not issued and bond proceeds held but 
  8.14  not previously expended, encumbered, or otherwise obligated for 
  8.15  these projects; and 
  8.16     (2) all laws authorizing the issuance of state bonds for 
  8.17  state or local government programs or projects other than those 
  8.18  described in clause (1), enacted more than five years before 
  8.19  February 1 of that odd-numbered year; and the amount of bonds 
  8.20  not issued and bond proceeds held but not previously expended, 
  8.21  encumbered, or otherwise obligated for these programs and 
  8.22  projects. 
  8.23     (b) The commissioner shall also report on bond 
  8.24  authorizations or bond proceed balances that may be canceled 
  8.25  because projects have been canceled, completed, or otherwise 
  8.26  concluded, or because the purposes for which the bonds were 
  8.27  authorized or issued have been canceled, completed, or otherwise 
  8.28  concluded.  
  8.29     (c) The bond authorizations or bond proceed balances that 
  8.30  are unencumbered or otherwise not obligated that are reported by 
  8.31  the commissioner under this subdivision are canceled, effective 
  8.32  July 1 and are not encumbered or obligated by June 30 of the 
  8.33  year of the report are canceled on that date, unless 
  8.34  specifically reauthorized by act of the legislature.  If bonds 
  8.35  for a project or program are reauthorized, the time limits in 
  8.36  paragraph (a) run from the date of reauthorization. 
  9.1      Sec. 16.  [41A.11] [PURPOSE.] 
  9.2      Sections 41A.11 to 41A.16 establish a program under which 
  9.3   state bonds are authorized to be issued and the proceeds of 
  9.4   their sale are appropriated, with other funds, under the 
  9.5   authority of article XI, section 5, clause (h), of the Minnesota 
  9.6   Constitution, to develop the state's agricultural resources by 
  9.7   extending credit on real estate security.  The purpose of the 
  9.8   bonds is to guarantee timely payment of a portion of the 
  9.9   principal and the interest of mortgage loans to be made 
  9.10  available by private investors to qualified operators of family 
  9.11  farms, in order to restructure existing long-term debt so that 
  9.12  annual interest may be paid from a portion of current cash flow 
  9.13  for a period of years after which the debt may be refinanced 
  9.14  from other sources at a lower ratio of debt to the then value.  
  9.15  The restructuring is necessitated in many cases by the emergency 
  9.16  conditions presently affecting the farm economy:  recent 
  9.17  decreases in the market value of farm land and the prices of 
  9.18  farm products; reduction of federal price support and loan 
  9.19  programs, and the quantity and high cost and short term of 
  9.20  financing of equipment and supplies needed for intensive 
  9.21  farming.  The object is to induce the loan from private sources 
  9.22  of the full amount needed to restructure and refinance the 
  9.23  farmer's existing long-term debt, not exceeding the productive 
  9.24  value of the land based on those prices and yields, by providing 
  9.25  for investors a minimum guaranteed yield, return of a portion of 
  9.26  principal, and a prospective yield and share of appreciation in 
  9.27  excess of the guaranteed principal and interest, depending on 
  9.28  the maintenance and increase of revenues and land values at 
  9.29  historic rates over a reasonable period.  The repayment of all 
  9.30  amounts advanced by the state with respect to the guaranteed 
  9.31  portion of principal and interest of each mortgage loan shall be 
  9.32  secured by the mortgage and other security interests securing 
  9.33  the mortgage loan. 
  9.34     Sec. 17.  [41A.12] [DEFINITIONS.] 
  9.35     Subdivision 1.  [APPLICATION.] The definition of each term 
  9.36  given in this section applies whenever the term is used in 
 10.1   sections 41A.11 to 41A.16. 
 10.2      Subd. 2.  [FARM.] "Farm" means real property constituting a 
 10.3   family farm as defined in section 500.24, subdivision 2, 
 10.4   paragraph (b), and as described in the mortgage documents 
 10.5   relating to a mortgage loan. 
 10.6      Subd. 3.  [FARMER.] "Farmer" means one or more individuals 
 10.7   owning a farm, or a "family farm corporation" or "authorized 
 10.8   farm corporation" as those terms are defined in section 500.24, 
 10.9   subdivision 2, paragraphs (b) to (d). 
 10.10     Subd. 4.  [GUARANTEED INTEREST RATE.] "Guaranteed interest 
 10.11  rate" means the minimum interest rate or a higher annual rate of 
 10.12  interest on a mortgage loan, as approved by the commissioner of 
 10.13  commerce, the payment of which is guaranteed by the state. 
 10.14     Subd. 5.  [GUARANTIES.] "Guaranties" mean written orders 
 10.15  executed by the commissioner of finance on behalf of the state 
 10.16  when authorized by the commissioner of commerce, providing for 
 10.17  the sale and issuance of state bonds to the trustee for lenders 
 10.18  purchasing mortgage loans approved by the commissioner of 
 10.19  commerce, in amounts not exceeding in the aggregate the amounts 
 10.20  from time to time authorized by law, for the purpose of funding 
 10.21  the guaranteed portions of the principal and of the interest of 
 10.22  the mortgage loans. 
 10.23     Subd. 6.  [MAXIMUM ANNUAL PAYMENT.] "Maximum annual payment"
 10.24  means the maximum amount payable by a farmer as current interest 
 10.25  on a mortgage loan in each 12-month period, approved by the 
 10.26  commissioner of commerce as a fixed percentage of the actual 
 10.27  gross receipts from the operation of the farm during that period.
 10.28     Subd. 7.  [MINIMUM INTEREST RATE.] "Minimum interest rate" 
 10.29  means the minimum annual rate of interest payable under the 
 10.30  terms of a mortgage loan. 
 10.31     Subd. 8.  [MORTGAGE LOAN.] "Mortgage loan" means a loan to 
 10.32  a farmer purchased by the trustee and secured by a first 
 10.33  mortgage on a farm, or by a first mortgage for the guaranteed 
 10.34  portion and a second mortgage for the remainder of the mortgage 
 10.35  loan, including security interests in all real and personal 
 10.36  property refinanced.  
 11.1      Subd. 9.  [MORTGAGE LOAN COSTS.] "Mortgage loan costs" mean 
 11.2   the sum of all amounts to be paid or incurred from the proceeds 
 11.3   of a mortgage loan as approved by the commissioner of commerce, 
 11.4   not exceeding in the aggregate the productive value of the land 
 11.5   according to an estimate approved by the commissioner of 
 11.6   commerce. 
 11.7      Subd. 10.  [PRODUCTIVE VALUE.] "Productive value" of a farm 
 11.8   means that amount which, invested at simple interest, would 
 11.9   produce an annual rate equal to the target rate. 
 11.10     Subd. 11.  [PROGRAM ADMINISTRATOR.] "Program administrator" 
 11.11  means a qualified private mortgage banking firm, approved by the 
 11.12  trustee and the commissioner of commerce to review mortgage 
 11.13  documents and servicers' reports, receive and disburse mortgage 
 11.14  loan payments, and administer and enforce mortgage loans on 
 11.15  behalf of the trustee, as mortgagee of record or otherwise. 
 11.16     Subd. 12.  [SERVICER.] "Servicer" means a bank or other 
 11.17  lending institution, which may be an existing creditor whose 
 11.18  debt is repaid from the proceeds of a mortgage loan, agreeing 
 11.19  with the trustee to bill and remit mortgage loan interest and 
 11.20  principal, to verify the facts on which computations of interest 
 11.21  and appreciation are based, and to assist the farmer in 
 11.22  arranging private refinancing of the mortgage loan or sale of 
 11.23  the farm prior to maturity.  
 11.24     Subd. 13.  [TARGET RATE.] "Target rate" means an annual 
 11.25  rate of interest equal to the prospective current return 
 11.26  necessary, in the opinion of the underwriters, to induce the 
 11.27  investment of risk capital by lenders in mortgage loans. 
 11.28     Sec. 18.  [41A.13] [MORTGAGE LOAN GUARANTEES.] 
 11.29     Subdivision 1.  [AUTHORITY; LIMITATION ON 
 11.30  GUARANTY.] Subject to sections 41A.11 to 41A.16, the state may 
 11.31  guarantee and commit to guarantee against loss an amount not 
 11.32  exceeding 65 percent of the total principal amount of each of a 
 11.33  pool or pools of mortgage loans to farmers to restructure and 
 11.34  refinance existing farm debt, together with interest at a stated 
 11.35  guaranteed rate on the total principal amount of the mortgage 
 11.36  loan (equal to a correspondingly higher rate on the guaranteed 
 12.1   portion of principal).  The guaranty shall be made by the sale 
 12.2   and issuance at par, to the trustee for the holders of units of 
 12.3   participation in the pool of mortgage loans to be made and 
 12.4   guaranteed, of bonds of the state in a principal amount equal to 
 12.5   the guaranteed portion of principal of the pool, and bearing 
 12.6   interest at a rate sufficient to produce the guaranteed rate on 
 12.7   the entire principal amount, as approved by the commissioner of 
 12.8   commerce.  The proceeds of the bonds shall be deposited by the 
 12.9   state treasurer with the trustee, to be held in trust solely for 
 12.10  the purchase of the guaranteed portion of the principal of 
 12.11  mortgage loans made in accordance with the provisions of this 
 12.12  section, of which the remaining portion is purchased from other 
 12.13  funds deposited by investors.  
 12.14     Subd. 2.  [PLANNING.] The commissioner of finance shall 
 12.15  cause to be prepared for the commissioner of commerce a 
 12.16  tentative plan for the guaranteed financing of one or more pools 
 12.17  of mortgage loans.  
 12.18     Subd. 3.  [REFINANCING PROPOSALS.] After approving a 
 12.19  tentative plan, the commissioner of commerce shall cause copies 
 12.20  of the plan and application to be made available to farmers, to 
 12.21  banking institutions, federal instrumentalities, and other 
 12.22  organizations. 
 12.23     Subd. 4.  [RULES.] The commissioner of commerce shall adopt 
 12.24  rules for the implementation of the program.  
 12.25     Subd. 5.  [PRIVACY.] Information regarding lenders and 
 12.26  farmers contained in records of the trustee and in applications 
 12.27  and mortgage loan documents is nonpublic data under section 
 12.28  13.02, subdivision 9, or private data on individuals under 
 12.29  section 13.02, subdivision 12, as applicable.  The information 
 12.30  is open only to the subject of it, except as disclosure is:  
 12.31     (1) necessary for the trustee, the commissioner of finance, 
 12.32  the treasurer, or the legislative auditor to perform a duty in 
 12.33  accordance with state or federal law or for the underwriter to 
 12.34  prepare and offer the investment trust interests; 
 12.35     (2) requested by an authorized representative of the state 
 12.36  commissioner of revenue, the state attorney general, or the 
 13.1   United States commissioner of internal revenue to determine the 
 13.2   application of a tax; or 
 13.3      (3) required under section 13.03, subdivision 4.  
 13.4      Sec. 19.  [41A.14] [MORTGAGE LOAN TERMS.] 
 13.5      Subdivision 1.  [PRINCIPAL.] The total principal amount of 
 13.6   the mortgage loan must not exceed mortgage costs and must not 
 13.7   exceed the productive value of the farm, as determined by the 
 13.8   commissioner of commerce. 
 13.9      Subd. 2.  [INTEREST.] The mortgage loan shall bear interest 
 13.10  at a minimum annual rate approved by the commissioner of 
 13.11  commerce plus additional interest which, added to interest at 
 13.12  the minimum rate, equals in each year the maximum annual payment.
 13.13     Subd. 3.  [COMPUTATION AND PAYMENT OF INTEREST.] Not less 
 13.14  than the minimum annual rate shall be payable on each interest 
 13.15  payment date.  In advance of the first half of each calendar 
 13.16  year, the farmer must furnish for verification by the servicer a 
 13.17  statement of the gross receipts from the operation of the farm 
 13.18  during the preceding 12 months (or during the period since 
 13.19  disbursement if less than 12 months), including, with cash 
 13.20  receipts, the value at current prices of any products of the 
 13.21  operation which the farmer has used or has then stored for 
 13.22  future sale and excluding the value of stored products included 
 13.23  in the previous statement, and must pay to the servicer on or 
 13.24  before that date the maximum annual amount. 
 13.25     Subd. 4.  [APPRECIATION.] The mortgage loan documents may 
 13.26  provide that in consideration of the mortgage loan the mortgagee 
 13.27  shall also be entitled to receive a share in any appreciation of 
 13.28  the farm in value, at the maturity or upon prepayment of the 
 13.29  mortgage loan, in excess of the productive value as originally 
 13.30  determined.  
 13.31     Subd. 5.  [SERVICER.] Servicing contracts, subject to 
 13.32  approval by the commissioner of commerce, may provide for 
 13.33  servicing fees to be added to required interest payments.  
 13.34     Subd. 6.  [DISBURSEMENT.] The principal amount of each 
 13.35  mortgage loan, when available for funding as part of a pool 
 13.36  financed pursuant to sections 41A.15 and 41A.16, must be 
 14.1   disbursed solely to pay approved mortgage loan costs. 
 14.2      Sec. 20.  [41A.15] [OFFERING TO LENDERS.] 
 14.3      Upon approval of each mortgage loan, the commissioner of 
 14.4   commerce shall forward mortgage documents to the servicer for 
 14.5   completion and to assemble a pool for the offering of 
 14.6   participation interests in the trust, based on the aggregate 
 14.7   amount of the portions of the principal of each mortgage loan 
 14.8   which the commissioner has determined shall be guaranteed. 
 14.9      Sec. 21.  [41A.16] [STATE BONDS.] 
 14.10     Subdivision 1.  [CONDITIONS FOR ISSUANCE.] Within the 
 14.11  maximum amount authorized by law from time to time in accordance 
 14.12  with the Minnesota Constitution, article XI, sections 5 and 7, 
 14.13  and upon request of the governor and after report to legislative 
 14.14  committees as provided in section 16A.641, the commissioner of 
 14.15  finance may issue bonds of the state evidencing public debt 
 14.16  incurred for the purpose and program described in section 41A.11.
 14.17  The bonds required for each pool of mortgage loans shall be 
 14.18  issued, sold, and secured as provided in sections 16A.641 and 
 14.19  16A.672 except as otherwise or additionally provided in this 
 14.20  section.  
 14.21     Subd. 2.  [SALE AND DISPOSITION OF PROCEEDS.] From the 
 14.22  proceeds an amount equal to the aggregate guaranteed portion of 
 14.23  the principal amount of the mortgage loans must be deposited by 
 14.24  the state treasurer with the trustee, in trust solely to 
 14.25  purchase this portion of each mortgage loan.  The remaining 
 14.26  proceeds must be deposited in a special account in the state 
 14.27  bond fund and invested in securities that are direct obligations 
 14.28  of the United States or an instrumentality of the United States, 
 14.29  maturing at or about the date of the maturity of the bonds, 
 14.30  bearing interest payable currently, and purchased at the most 
 14.31  favorable price obtainable at the time of purchase.  
 14.32     Subd. 3.  [INTEREST PAYMENTS.] From the interest received 
 14.33  on each mortgage loan interest payment date the program 
 14.34  administrator shall pay to the state treasurer an amount equal 
 14.35  to the interest then due at the guaranteed rate on the total 
 14.36  principal amount of mortgage loans, or any lesser amount that is 
 15.1   actually received by the program administrator from the 
 15.2   servicers, and shall pay any excess amount over the guaranteed 
 15.3   rate to the trustee.  On the next following bond interest 
 15.4   payment date the state treasurer shall pay to the trustee the 
 15.5   interest then due on the bonds.  The trustee shall distribute 
 15.6   the total amount received, less compensation and reimbursement 
 15.7   of expenses of the trustee, to the lenders in proportion to 
 15.8   their interests.  
 15.9      Subd. 4.  [PRINCIPAL.] Upon the maturity of the mortgage 
 15.10  loans, the program administrator shall pay to the state 
 15.11  treasurer an amount equal to the guaranteed portion of the 
 15.12  principal amount of the mortgage loans, plus accrued interest on 
 15.13  the mortgage loans at the guaranteed rate, or any lesser amount 
 15.14  that is then actually received from the servicers.  If the 
 15.15  amount so received is sufficient, with the amounts then held by 
 15.16  the state treasurer in the state bond fund account, to pay all 
 15.17  of the bonds with interest then accrued, the state treasurer, 
 15.18  upon request of the trustee, shall immediately call the bonds 
 15.19  for redemption. 
 15.20     Sec. 22.  Laws 1998, chapter 404, section 7, subdivision 
 15.21  23, is amended to read: 
 15.22  Subd. 23.  Metro Regional Trails                      5,000,000 
 15.23  For grants to the metropolitan council 
 15.24  for acquisition and development of a 
 15.25  capital nature of trail connections in 
 15.26  the metropolitan area as specified in 
 15.27  this subdivision.  The purpose of the 
 15.28  grants is to improve trails in the 
 15.29  metropolitan park and open space system 
 15.30  and connect them with existing state 
 15.31  and regional trails.  Priority shall be 
 15.32  given to matching funds for an ISTEA 
 15.33  grant. 
 15.34  The funds shall be allocated by the 
 15.35  council as follows: 
 15.36  (1) $1,050,000 is allocated to Ramsey 
 15.37  county as follows: 
 15.38  (i) $400,000 to complete six miles of 
 15.39  trails between the Burlington Northern 
 15.40  Regional Trail and Bald Eagle-Otter 
 15.41  Lake Regional Park; 
 15.42  (ii) $150,000 to complete a one-mile 
 15.43  connection between Birch Lake and the 
 15.44  Lake Tamarack segment of Bald 
 15.45  Eagle-Otter Lake Regional Park; 
 16.1   (iii) $500,000 to acquire real property 
 16.2   and design and construct or renovate 
 16.3   recreation facilities along the 
 16.4   Mississippi River in cooperation with 
 16.5   the city of St. Paul; 
 16.6   (2) $1,050,000 is allocated to the city 
 16.7   of St. Paul as follows: 
 16.8   (i) $250,000 to construct a bridge over 
 16.9   Lexington Parkway in Como Regional 
 16.10  Park; and 
 16.11  (ii) $800,000 to enhance amenities for 
 16.12  the trailhead at the Lilydale-Harriet 
 16.13  Island Regional Park pavilion; 
 16.14  (3) $1,400,000 is allocated to Anoka 
 16.15  county as follows to construct: 
 16.16  (i) $1,100,000 to construct a 
 16.17  pedestrian tunnel under Highway 65 on 
 16.18  the Rice Creek West Regional Trail in 
 16.19  the city of Fridley; and 
 16.20  (ii) $300,000 to construct a pedestrian 
 16.21  bridge on the Mississippi River 
 16.22  Regional Trail crossing over 
 16.23  Mississippi Street in the city of 
 16.24  Fridley; and 
 16.25  (4) $1,500,000 is allocated to the 
 16.26  suburban Hennepin regional park 
 16.27  district as follows: 
 16.28  (i) $1,000,000 to connect North 
 16.29  Hennepin Regional Trail to Luce Line 
 16.30  State Trail and Medicine Lake; and 
 16.31  (ii) $500,000 is for the cost of 
 16.32  development and acquisition of the 
 16.33  Southwest regional trail in the city of 
 16.34  St. Louis Park.  The trail must connect 
 16.35  the Minneapolis regional trail system 
 16.36  at Cedar Lake park to the Hennepin 
 16.37  parks regional trail system at the 
 16.38  Hopkins trail head. 
 16.39     Sec. 23.  Laws 1998, First Special Session chapter 1, 
 16.40  article 3, section 8, is amended to read: 
 16.41     Sec. 8.  [JUDY GARLAND CHILDREN'S MUSEUM.] 
 16.42     The appropriation in Laws 1997, chapter 200, article 1, 
 16.43  section 2, subdivision 2, to the commissioner of trade and 
 16.44  economic development for the Judy Garland Children's Museum is 
 16.45  available until and may be matched until June 30, 1999 2000. 
 16.46     Sec. 24.  [EFFECTIVE DATE.] 
 16.47     This act is effective the day following final enactment.