1.1                          A bill for an act 
  1.2             relating to public finance; exempting certain bonds 
  1.3             from the definition of business subsidy; extending 
  1.4             sunsets for self-executing special service district 
  1.5             and housing improvement district laws; authorizing 
  1.6             special assessments for communications facilities; 
  1.7             providing for replacement heating systems and related 
  1.8             energy conservation measures in cities discontinuing 
  1.9             district heating systems; authorizing establishment of 
  1.10            nonmetropolitan county economic development 
  1.11            authorities; providing for additional bonding 
  1.12            authority for the financing of metropolitan area 
  1.13            transit and paratransit capital expenditures; 
  1.14            modifying interest rate requirements; providing that 
  1.15            the Uniform Commercial Code does not apply to 
  1.16            government security interests; allowing Yellow 
  1.17            Medicine county to establish an economic development 
  1.18            authority; allowing certain cities to be eligible for 
  1.19            replacement transit service; regulating 800-MHZ radio 
  1.20            contract requirements; appropriating money; amending 
  1.21            Minnesota Statutes 1998, sections 428A.101; 428A.21; 
  1.22            429.021, subdivision 1; and 475.78; Minnesota Statutes 
  1.23            1999 Supplement, sections 116J.993, subdivision 3; 
  1.24            473.39, subdivision 1g; and 475.56; proposing coding 
  1.25            for new law in Minnesota Statutes, chapters 451; and 
  1.26            469. 
  1.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.28     Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.29  116J.993, subdivision 3, is amended to read: 
  1.30     Subd. 3.  [BUSINESS SUBSIDY.] "Business subsidy" or 
  1.31  "subsidy" means a state or local government agency grant, 
  1.32  contribution of personal property, real property, 
  1.33  infrastructure, the principal amount of a loan at rates below 
  1.34  those commercially available to the recipient, any reduction or 
  1.35  deferral of any tax or any fee, any guarantee of any payment 
  1.36  under any loan, lease, or other obligation, or any preferential 
  2.1   use of government facilities given to a business. 
  2.2      The following forms of financial assistance are not a 
  2.3   business subsidy: 
  2.4      (1) a business subsidy of less than $25,000; 
  2.5      (2) assistance that is generally available to all 
  2.6   businesses or to a general class of similar businesses, such as 
  2.7   a line of business, size, location, or similar general criteria; 
  2.8      (3) public improvements to buildings or lands owned by the 
  2.9   state or local government that serve a public purpose and do not 
  2.10  principally benefit a single business or defined group of 
  2.11  businesses at the time the improvements are made; 
  2.12     (4) redevelopment property polluted by contaminants as 
  2.13  defined in section 116J.552, subdivision 3; 
  2.14     (5) assistance provided for the sole purpose of renovating 
  2.15  old or decaying building stock or bringing it up to code, 
  2.16  provided that the assistance is equal to or less than 50 percent 
  2.17  of the total cost; 
  2.18     (6) assistance provided to organizations whose primary 
  2.19  mission is to provide job readiness and training services if the 
  2.20  sole purpose of the assistance is to provide those services; 
  2.21     (7) assistance for housing; 
  2.22     (8) assistance for pollution control or abatement; 
  2.23     (9) assistance for energy conservation; 
  2.24     (10) tax reductions resulting from conformity with federal 
  2.25  tax law; 
  2.26     (11) workers' compensation and unemployment compensation; 
  2.27     (12) benefits derived from regulation; 
  2.28     (13) indirect benefits derived from assistance to 
  2.29  educational institutions; 
  2.30     (14) funds from bonds allocated under chapter 474A, bonds 
  2.31  issued to refund outstanding bonds, and bonds issued for the 
  2.32  benefit of an organization described in section 501(c)(3) of the 
  2.33  Internal Revenue Code of 1986, as amended through December 31, 
  2.34  1999; 
  2.35     (15) assistance for a collaboration between a Minnesota 
  2.36  higher education institution and a business; 
  3.1      (16) assistance for a tax increment financing soils 
  3.2   condition district as defined under section 469.174, subdivision 
  3.3   19; 
  3.4      (17) redevelopment when the recipient's investment in the 
  3.5   purchase of the site and in site preparation is 70 percent or 
  3.6   more of the assessor's current year's estimated market value; 
  3.7   and 
  3.8      (18) general changes in tax increment financing law and 
  3.9   other general tax law changes of a principally technical nature. 
  3.10     Sec. 2.  Minnesota Statutes 1998, section 428A.101, is 
  3.11  amended to read: 
  3.12     428A.101 [SPECIAL SERVICE DISTRICT; SUNSET OF 
  3.13  SELF-EXECUTING PROVISIONS.] 
  3.14     The establishment of a new special service district after 
  3.15  June 30, 2001, must be made pursuant to enabling legislation 
  3.16  under Minnesota Statutes 1994, sections 428A.01 to 428A.10 2005, 
  3.17  requires enactment of a special law authorizing the 
  3.18  establishment. 
  3.19     Sec. 3.  Minnesota Statutes 1998, section 428A.21, is 
  3.20  amended to read: 
  3.21     428A.21 [SUNSET.] 
  3.22     No new housing improvement areas may be established under 
  3.23  sections 428A.11 to 428A.20 after June 30, 2001 2005.  After 
  3.24  June 30, 2001 2005, a city may establish a housing improvement 
  3.25  area, provided that it receives enabling legislation authorizing 
  3.26  the establishment of the area. 
  3.27     Sec. 4.  Minnesota Statutes 1998, section 429.021, 
  3.28  subdivision 1, is amended to read: 
  3.29     Subdivision 1.  [IMPROVEMENTS AUTHORIZED.] The council of a 
  3.30  municipality shall have power to make the following improvements:
  3.31     (1) To acquire, open, and widen any street, and to improve 
  3.32  the same by constructing, reconstructing, and maintaining 
  3.33  sidewalks, pavement, gutters, curbs, and vehicle parking strips 
  3.34  of any material, or by grading, graveling, oiling, or otherwise 
  3.35  improving the same, including the beautification thereof and 
  3.36  including storm sewers or other street drainage and connections 
  4.1   from sewer, water, or similar mains to curb lines. 
  4.2      (2) To acquire, develop, construct, reconstruct, extend, 
  4.3   and maintain storm and sanitary sewers and systems, including 
  4.4   outlets, holding areas and ponds, treatment plants, pumps, lift 
  4.5   stations, service connections, and other appurtenances of a 
  4.6   sewer system, within and without the corporate limits. 
  4.7      (3) To construct, reconstruct, extend, and maintain steam 
  4.8   heating mains. 
  4.9      (4) To install, replace, extend, and maintain street lights 
  4.10  and street lighting systems and special lighting systems. 
  4.11     (5) To acquire, improve, construct, reconstruct, extend, 
  4.12  and maintain water works systems, including mains, valves, 
  4.13  hydrants, service connections, wells, pumps, reservoirs, tanks, 
  4.14  treatment plants, and other appurtenances of a water works 
  4.15  system, within and without the corporate limits. 
  4.16     (6) To acquire, improve and equip parks, open space areas, 
  4.17  playgrounds, and recreational facilities within or without the 
  4.18  corporate limits. 
  4.19     (7) To plant trees on streets and provide for their 
  4.20  trimming, care, and removal. 
  4.21     (8) To abate nuisances and to drain swamps, marshes, and 
  4.22  ponds on public or private property and to fill the same. 
  4.23     (9) To construct, reconstruct, extend, and maintain dikes 
  4.24  and other flood control works. 
  4.25     (10) To construct, reconstruct, extend, and maintain 
  4.26  retaining walls and area walls. 
  4.27     (11) To acquire, construct, reconstruct, improve, alter, 
  4.28  extend, operate, maintain, and promote a pedestrian skyway 
  4.29  system.  Such improvement may be made upon a petition pursuant 
  4.30  to section 429.031, subdivision 3.  
  4.31     (12) To acquire, construct, reconstruct, extend, operate, 
  4.32  maintain, and promote underground pedestrian concourses. 
  4.33     (13) To acquire, construct, improve, alter, extend, 
  4.34  operate, maintain, and promote public malls, plazas or 
  4.35  courtyards. 
  4.36     (14) To construct, reconstruct, extend, and maintain 
  5.1   district heating systems.  
  5.2      (15) To construct, reconstruct, alter, extend, operate, 
  5.3   maintain, and promote fire protection systems in existing 
  5.4   buildings, but only upon a petition pursuant to section 429.031, 
  5.5   subdivision 3.  
  5.6      (16) To acquire, construct, reconstruct, improve, alter, 
  5.7   extend, and maintain highway sound barriers. 
  5.8      (17) To improve, construct, reconstruct, extend, and 
  5.9   maintain gas and electric distribution facilities owned by a 
  5.10  municipal gas or electric utility. 
  5.11     (18) To improve, construct, extend, and maintain facilities 
  5.12  for Internet access and other communications purposes. 
  5.13     Sec. 5.  [451.10] [DISTRICT HEATING SYSTEM.] 
  5.14     Subdivision 1.  [APPLICATION.] Sections 451.10 to 451.17 
  5.15  apply to a city that: 
  5.16     (1) owns and operates a district heating system either 
  5.17  directly by the city council or by a utility board or utility 
  5.18  commission of the city; and 
  5.19     (2) has taken action under law or charter to discontinue 
  5.20  the operation of the district heating system in whole or in part.
  5.21     Subd. 2.  [SUPERSEDES OTHER LAW.] Sections 451.10 to 451.17 
  5.22  apply to the cities described in subdivision 1 notwithstanding a 
  5.23  contrary provision in a city charter or in any other law 
  5.24  including section 451.09. 
  5.25     Subd. 3.  [SUPPLEMENTAL TO OTHER LAW.] The powers granted 
  5.26  by sections 451.10 to 451.17 are supplemental and additional to 
  5.27  other powers granted by law or charter. 
  5.28     Sec. 6.  [451.11] [POLICY; PURPOSE.] 
  5.29     Subdivision 1.  [FINDINGS.] The legislature finds that it 
  5.30  is in the public interest that cities owning and operating a 
  5.31  district heating system that have determined to discontinue the 
  5.32  system in whole or in part be authorized to establish and 
  5.33  conduct a program to provide replacement heating and related 
  5.34  equipment to the owners of property whose district heating 
  5.35  service is discontinued.  The legislature also finds that the 
  5.36  cities should be authorized to adopt and implement programs to 
  6.1   provide for the installation of energy conservation equipment 
  6.2   and measures to enhance the efficient and economical use of 
  6.3   energy in buildings and structures served by a district heating 
  6.4   system and in which replacement heating systems are installed 
  6.5   under sections 451.10 to 451.17. 
  6.6      Subd. 2.  [PUBLIC PURPOSE.] The legislature further finds 
  6.7   that expenditures made by cities for a purpose in sections 
  6.8   451.10 to 451.17 are expenditures for a public purpose. 
  6.9      Sec. 7.  [451.12] [DEFINITIONS.] 
  6.10     Subdivision 1.  [APPLICATION.] In sections 451.10 to 451.17 
  6.11  the definitions in this section apply. 
  6.12     Subd. 2.  [CITY.] "City" means a city, however organized, 
  6.13  acting through its city council or through a public utilities 
  6.14  commission duly created by law or charter. 
  6.15     Subd. 3.  [REPLACEMENT HEATING SYSTEM IMPROVEMENT.] 
  6.16  "Replacement heating system improvement" means and includes 
  6.17  furnaces, boilers, and similar heat generating and exchanging 
  6.18  equipment together with related equipment, duct work, and 
  6.19  control mechanisms that are installed to provide heating, 
  6.20  ventilating, and air conditioning services in a building or 
  6.21  structure whose district heating service has been discontinued 
  6.22  by a city. 
  6.23     Subd. 4.  [ENERGY CONSERVATION IMPROVEMENT.] (a) "Energy 
  6.24  conservation improvement" means and includes, but is not limited 
  6.25  to, the following devices, methods, and materials, if 
  6.26  recommended by an energy audit approved in a program and having 
  6.27  a maximum cost of $20,000, that increase the efficiency of the 
  6.28  use of energy in a building or structure: 
  6.29     (1) insulation and ventilation; 
  6.30     (2) storm windows, thermal windows, and storm doors; 
  6.31     (3) caulking and weatherstripping; 
  6.32     (4) heating system modifications; and 
  6.33     (5) thermostats or lighting controls. 
  6.34     (b) The term does not include a device or method that 
  6.35  creates, converts, or actively uses energy from renewable 
  6.36  resources such as wind, solar, or biomass. 
  7.1      Subd. 5.  [PROGRAM.] "Program" means a statement of goals, 
  7.2   procedures, standards of eligibility, and methods of financing 
  7.3   for the installation of heating replacement system improvements 
  7.4   and energy conservation improvements. 
  7.5      Subd. 6.  [IMPROVEMENT.] "Improvement" includes replacement 
  7.6   heating system improvements and energy conservation improvements.
  7.7      Sec. 8.  [451.13] [PROGRAM.] 
  7.8      Subdivision 1.  [AFTER NOTICE AND HEARING.] A program may 
  7.9   be adopted by resolution of the city council of a city after 
  7.10  reasonable notice and hearing provided for by the city council. 
  7.11     Subd. 2.  [ELEMENTS.] The program must contain at least the 
  7.12  following elements: 
  7.13     (1) a description of the kinds of property eligible for 
  7.14  assistance with heating replacement improvements and energy 
  7.15  conservation improvements; 
  7.16     (2) procedures for accomplishing the improvements by the 
  7.17  city or private contractors; 
  7.18     (3) methods of financing the installation of the heating 
  7.19  replacement and energy conservation improvements; and 
  7.20     (4) the administrative agency of the city responsible for 
  7.21  conducting the program. 
  7.22     Subd. 3.  [DELEGATION.] The city council may by resolution 
  7.23  delegate the responsibility for the conduct of the program to a 
  7.24  public utilities commission or public utilities board of the 
  7.25  city. 
  7.26     Sec. 9.  [451.14] [INSTALLING THE IMPROVEMENTS.] 
  7.27     Subdivision 1.  [METHODS.] The program may provide for the 
  7.28  methods of installing the improvements set out in this 
  7.29  subdivision. 
  7.30     (a) The city may contract with one or more contractors to 
  7.31  perform work and furnish materials for the improvements. 
  7.32     (b) The owner of a building or structure eligible for an 
  7.33  improvement may contract for the installation of the 
  7.34  improvement, subject to approval by the city as provided in the 
  7.35  program. 
  7.36     (c) The city may contract with a property owner for the 
  8.1   installation of an improvement by the property owner, but no 
  8.2   payment under section 451.15 may be made for the property 
  8.3   owner's labor. 
  8.4      Subd. 2.  [INSPECTION AND CERTIFICATION.] The program must 
  8.5   provide a method by which a city official or employee may 
  8.6   inspect and is to certify the completed installation of the 
  8.7   improvement to ensure compliance with city codes and ordinances 
  8.8   and other standards specified in the program.  
  8.9      Subd. 3.  [COMPETITIVE BIDS.] Contracts entered into under 
  8.10  subdivision 1, paragraph (a), are subject to competitive bidding 
  8.11  requirements of law. 
  8.12     Sec. 10.  [451.15] [PAYMENTS; FINANCING.] 
  8.13     Subdivision 1.  [FINANCING.] The program may include one or 
  8.14  more of the methods described in this section for financing the 
  8.15  cost of the installation of improvements. 
  8.16     Subd. 2.  [CASH.] The city may contract with a property 
  8.17  owner for the payment in cash of the cost of the installation of 
  8.18  the improvements upon completion of the installation of the 
  8.19  improvements.  The payment must be secured by: 
  8.20     (1) a deposit with the city of 90 percent of the contract 
  8.21  price; or 
  8.22     (2) a written commitment from a bank or other financial 
  8.23  institution approved in the program to lend the property owner 
  8.24  the full amount of the contract price for payment to the city.  
  8.25     Subd. 3.  [PROMISSORY NOTE.] The city may accept payment of 
  8.26  the contract price by a promissory note from the property owner 
  8.27  delivered at the time of entering into the contract payable at 
  8.28  such times, not exceeding ten years, and in the amounts and at 
  8.29  the interest rate specified in the program. 
  8.30     Subd. 4.  [LIEN AS SECURITY.] The balance of payments due 
  8.31  under subdivision 2 and the entire principal of and interest on 
  8.32  a promissory note delivered under subdivision 3 are secured by a 
  8.33  lien created by this subdivision on the real property on which 
  8.34  the improvements are made.  If payment is not made according to 
  8.35  the terms of the program, or the note, the chief financial 
  8.36  officer of the city may certify the entire amount so due to the 
  9.1   county auditor for collection as other taxes are collected. 
  9.2      Subd. 5.  [SPECIAL ASSESSMENTS.] The program may provide 
  9.3   that at the request of the property owner the unpaid cost of the 
  9.4   installation of an improvement is to be specially assessed 
  9.5   against the real property on which the improvement is installed 
  9.6   in the manner provided by section 429.101, except that: 
  9.7      (1) the adoption of an ordinance is not required; and 
  9.8      (2) obligations issued to finance the improvements must 
  9.9   mature not later than ten years from the date of their issuance. 
  9.10     Sec. 11.  [451.16] [FINANCING; OBLIGATIONS.] 
  9.11     Subdivision 1.  [BONDS; OTHER OBLIGATIONS.] In addition to 
  9.12  the authority to issue obligations under section 429.101, a city 
  9.13  may issue its bonds or other obligations to finance the cost of 
  9.14  the installation of improvements as provided in this section. 
  9.15     Subd. 2.  [REVENUE OBLIGATIONS.] A city may issue and sell 
  9.16  its revenue obligations payable solely from the revenues derived 
  9.17  or to be derived from assessments and payments from property 
  9.18  owners under section 451.15, which revenues must be pledged to 
  9.19  the payment of the obligations.  Obligations issued under this 
  9.20  subdivision are considered to be payable wholly from the income 
  9.21  of a revenue producing convenience within the meaning of 
  9.22  sections 475.51 and 475.58. 
  9.23     Subd. 3.  [GENERAL OBLIGATIONS.] A city may issue and sell 
  9.24  its general obligations under chapter 475, payable from the 
  9.25  revenues and assessments derived or to be derived from property 
  9.26  owners under section 451.15, which revenues must be pledged to 
  9.27  the payment of the obligations.  General obligations must not be 
  9.28  issued unless the pledged revenues are estimated to equal at 
  9.29  least 105 percent of the amount necessary to pay when due the 
  9.30  principal of and interest on the obligations.  Obligations 
  9.31  issued under this subdivision are considered to be payable 
  9.32  wholly from the income of a revenue producing convenience within 
  9.33  the meaning of sections 475.51 and 475.58. 
  9.34     Sec. 12.  [451.17] [CITY OF VIRGINIA.] 
  9.35     The city of Virginia is considered to have complied with 
  9.36  section 451.09, notwithstanding section 451.09, subdivision 4. 
 10.1      Sec. 13.  [469.1082] [COUNTY ECONOMIC DEVELOPMENT SERVICE 
 10.2   PROVIDER; NONMETRO ALTERNATIVE CREATION.] 
 10.3      Subdivision 1.  [AUTHORITY TO CREATE.] A county located 
 10.4   outside the Minneapolis-St. Paul metropolitan area, as defined 
 10.5   by the Bureau of the Census of the United States Department of 
 10.6   Commerce, may form a county economic development authority or 
 10.7   grant a housing and redevelopment authority the powers specified 
 10.8   in subdivision 4, clause (2), if it receives a recommendation to 
 10.9   do so from a committee formed under subdivision 2.  An economic 
 10.10  development authority established under this section has all the 
 10.11  powers and rights of an authority under sections 469.090 to 
 10.12  469.1081, except the authority granted under section 469.094 if 
 10.13  so limited under subdivision 4.  This section is in addition to 
 10.14  any other authority to create a county economic development 
 10.15  authority or service provider.  
 10.16     Subd. 2.  [LOCAL COMMITTEES.] Upon notice to all local 
 10.17  government units and development agencies within the county, a 
 10.18  county may adopt a resolution to create a committee to recommend 
 10.19  options for a county economic development service provider. 
 10.20     The committee shall consist of no fewer than 11 and no more 
 10.21  than 15 members appointed by the county board.  At least one 
 10.22  city official and at least one township official from the county 
 10.23  to be served by the county economic service provider must be 
 10.24  included on the committee.  Members may also represent school 
 10.25  districts, political subdivisions that currently provide 
 10.26  services under sections 469.001 to 469.047 and 469.090 to 
 10.27  469.1081, nonprofit or for-profit housing and economic 
 10.28  development organizations, business, and labor organizations 
 10.29  located within the county.  Political subdivision 
 10.30  representatives must be selected by their local governments and 
 10.31  must constitute no more than 50 percent of the total committee 
 10.32  membership.  The county may appoint no more than two county 
 10.33  commissioners.  The committee shall select a chair at its 
 10.34  initial meeting. 
 10.35     Subd. 3.  [COMMITTEE REPORT.] The committee shall issue its 
 10.36  report within 90 days of its initial meeting.  The committee may 
 11.1   request one 60-day extension from the county board.  The report 
 11.2   must contain the committee's recommendation for the preferred 
 11.3   organizational option for a county economic development service 
 11.4   provider.  The report must contain written findings on issues 
 11.5   considered by the committee including, but not limited to, the 
 11.6   following: 
 11.7      (1) identification of the current level of economic 
 11.8   development, housing, and community development programs and 
 11.9   services provided by existing agencies, any existing gaps in 
 11.10  programs and services, and the capacity and ability of those 
 11.11  agencies to expand their activities; and 
 11.12     (2) the recommended organizational option for providing 
 11.13  needed economic development, housing, and community development 
 11.14  services in the most efficient, effective manner. 
 11.15     Subd. 4.  [ORGANIZATIONAL OPTIONS.] The committee may only 
 11.16  recommend: 
 11.17     (1) establishment of a county economic development 
 11.18  authority to operate under sections 469.090 to 469.1081, except 
 11.19  that the county shall not have the powers of section 469.094 
 11.20  without the consent of an existing county housing and 
 11.21  redevelopment authority operating within that county.  For the 
 11.22  purposes of a county economic development authority's operation, 
 11.23  the county is considered to be the municipality and the county 
 11.24  board is considered to be the city council; 
 11.25     (2) requiring an existing county housing and redevelopment 
 11.26  authority or multicounty housing and redevelopment authority to 
 11.27  operate under sections 469.090 to 469.1081; 
 11.28     (3) that the county pursue special legislation; or 
 11.29     (4) no change in the existing structure. 
 11.30     Subd. 5.  [AREA OF OPERATION.] The area of operation of a 
 11.31  county economic development service provider created under this 
 11.32  section includes all cities within a county that have adopted 
 11.33  resolutions electing to participate.  A city may adopt a 
 11.34  resolution electing to withdraw participation.  The withdrawal 
 11.35  election may be made every fifth year following adoption of the 
 11.36  resolution electing participation.  The withdrawal election is 
 12.1   effective on the anniversary date of the original resolution 
 12.2   provided notice is given to the county economic development 
 12.3   authority not less than 90 nor more than 180 days prior to that 
 12.4   anniversary date.  The city electing to withdraw retains any 
 12.5   rights, obligations, and liabilities it obtained or incurred 
 12.6   during its participation.  If a city prohibits a county economic 
 12.7   development service provider created under this section from 
 12.8   operating within its boundaries, the city's property taxpayers 
 12.9   are not subject to the property tax levied for the county 
 12.10  economic development service provider. 
 12.11     Subd. 6.  [CITY ECONOMIC DEVELOPMENT AUTHORITIES.] If a 
 12.12  county economic development service provider has been 
 12.13  established under this section, existing city economic 
 12.14  development authorities continue to function and operate under 
 12.15  sections 469.090 to 469.1081.  Additional city economic 
 12.16  development authorities may be created within the area of 
 12.17  operation of the county economic development service provider 
 12.18  created under this section without the explicit concurrence of 
 12.19  the county economic development service provider. 
 12.20     Subd. 7.  [CONTINUATION OF EXISTING COUNTY AND MULTICOUNTY 
 12.21  HOUSING AND REDEVELOPMENT AUTHORITIES.] Existing county and 
 12.22  multicounty housing and redevelopment authorities continue to 
 12.23  function and operate under the provisions of sections 469.001 to 
 12.24  469.047. 
 12.25     Sec. 14.  Minnesota Statutes 1999 Supplement, section 
 12.26  473.39, subdivision 1g, is amended to read: 
 12.27     Subd. 1g.  [OBLIGATIONS; 2000-2002.] In addition to the 
 12.28  authority in subdivisions 1a, 1b, 1c, 1d, and 1e, the council 
 12.29  may issue certificates of indebtedness, bonds, or other 
 12.30  obligations under this section in an amount not exceeding 
 12.31  $36,000,000 $55,400,000, which may be used for capital 
 12.32  expenditures, other than for construction, maintenance, or 
 12.33  operation of light rail transit, as prescribed in the council's 
 12.34  transit capital improvement program and for related costs, 
 12.35  including the costs of issuance and sale of the obligations.  
 12.36  The funds must be proportionally spent on capital improvement 
 13.1   projects as recommended by the regional transit capital 
 13.2   evaluation committee. 
 13.3      Sec. 15.  Minnesota Statutes 1999 Supplement, section 
 13.4   475.56, is amended to read: 
 13.5      475.56 [INTEREST RATE.] 
 13.6      (a) Any municipality issuing obligations under any law may 
 13.7   issue obligations bearing interest at a single rate or at rates 
 13.8   varying from year to year which may be lower or higher in later 
 13.9   years than in earlier years.  Such higher rate for any period 
 13.10  prior to maturity may be represented in part by separate coupons 
 13.11  designated as additional coupons, extra coupons, or B coupons, 
 13.12  but the highest aggregate rate of interest contracted to be so 
 13.13  paid for any period shall not exceed the maximum rate authorized 
 13.14  by law.  Such higher rate may also be represented in part by the 
 13.15  issuance of additional obligations of the same series, over and 
 13.16  above but not exceeding two percent of the amount otherwise 
 13.17  authorized to be issued, and the amount of such additional 
 13.18  obligations shall not be included in the amount required by 
 13.19  section 475.59 to be stated in any bond resolution, notice, or 
 13.20  ballot, or in the sale price required by section 475.60 or any 
 13.21  other law to be paid; but if the principal amount of the entire 
 13.22  series exceeds its cash sale price, such excess shall not, when 
 13.23  added to the total amount of interest payable on all obligations 
 13.24  of the series to their stated maturity dates, cause the average 
 13.25  annual rate of such interest to exceed the maximum rate 
 13.26  authorized by law.  This section does not authorize a provision 
 13.27  in any such obligations for the payment of a higher rate of 
 13.28  interest after maturity than before. 
 13.29     (b) Any municipality issuing obligations under any law may 
 13.30  sell original issue discount obligations having a stated 
 13.31  principal amount in excess of the authorized amount and the sale 
 13.32  price, provided that: 
 13.33     (1) the sale price does not exceed by more than two percent 
 13.34  the amount of obligations otherwise authorized to be issued; 
 13.35     (2) the underwriting fee, discount, or other sales or 
 13.36  underwriting commission does not exceed two percent of the sale 
 14.1   price; and 
 14.2      (3) the discount rate necessary to present value total 
 14.3   principal and interest payments over the term of the issue to 
 14.4   the sale price does not exceed the lesser of the maximum rate 
 14.5   permitted by law for municipal obligations or ten percent. 
 14.6      (c) Any obligation of an issue of obligations otherwise 
 14.7   subject to section 475.55, subdivision 1, may bear interest at a 
 14.8   rate varying periodically at the time or times and on the terms, 
 14.9   including convertibility to a fixed rate of interest, determined 
 14.10  by the governing body of the municipality, but the rate of 
 14.11  interest for any period shall not exceed the any maximum rate of 
 14.12  interest for the obligations determined in accordance with 
 14.13  section 475.55, subdivision 1 established by law.  For purposes 
 14.14  of section 475.61, subdivisions 1 and 3, the interest payable on 
 14.15  variable rate obligations for their term shall be determined as 
 14.16  if their rate of interest is the maximum rate permitted for the 
 14.17  obligations under section 475.55, subdivision 1, or the lesser 
 14.18  of the maximum rate of interest payable on the obligations in 
 14.19  accordance with their terms or the rate estimated for such 
 14.20  purpose by the governing body, but if the interest rate is 
 14.21  subsequently converted to a fixed rate the levy may be modified 
 14.22  to provide at least five percent in excess of amounts necessary 
 14.23  to pay principal of and interest at the fixed rate on the 
 14.24  obligations when due.  For purposes of computing debt service or 
 14.25  interest pursuant to section 475.67, subdivision 12, interest 
 14.26  throughout the term of bonds issued pursuant to this subdivision 
 14.27  is deemed to accrue at the rate of interest first borne by the 
 14.28  bonds.  The provisions of this paragraph do not apply to general 
 14.29  obligations issued by a statutory or home rule charter city with 
 14.30  a population of less than 7,500, as defined in section 477A.011, 
 14.31  subdivision 3, or to general obligations that are not rated A or 
 14.32  better, or an equivalent subsequently established rating, by 
 14.33  Standard and Poor's Corporation, Moody's Investors Service or 
 14.34  other similar nationally recognized rating agency, except that 
 14.35  any statutory or home rule charter city, regardless of 
 14.36  population or bond rating, may issue variable rate obligations 
 15.1   as a participant in a bond pooling program established by the 
 15.2   league of Minnesota cities that meets this bond rating 
 15.3   requirement. 
 15.4      Sec. 16.  Minnesota Statutes 1998, section 475.78, is 
 15.5   amended to read: 
 15.6      475.78 [PERFECTION OF PLEDGE; SECURITY INTERESTS.] 
 15.7      Neither filing nor possession is required to perfect the 
 15.8   security interest created by any pledge or appropriation of 
 15.9   revenues or funds of the municipality, including any of its 
 15.10  investments, to the payment of bonds issued by the municipality. 
 15.11  Notwithstanding any contrary provision of law, article 9 of the 
 15.12  Uniform Commercial Code does not apply to security interests 
 15.13  created by a municipality or the state, except security 
 15.14  interests in equipment and fixtures. 
 15.15     Sec. 17.  [YELLOW MEDICINE COUNTY; ECONOMIC DEVELOPMENT 
 15.16  AUTHORITY; ESTABLISHMENT AND POWERS.] 
 15.17     Subdivision 1.  [ESTABLISHMENT.] The board of county 
 15.18  commissioners of Yellow Medicine county may establish an 
 15.19  economic development authority in the manner provided in 
 15.20  Minnesota Statutes, sections 469.090 to 469.1081, and may impose 
 15.21  limits on the authority enumerated in Minnesota Statutes, 
 15.22  section 469.092.  The economic development authority has all of 
 15.23  the powers and duties granted to or imposed upon economic 
 15.24  development authorities under Minnesota Statutes, sections 
 15.25  469.090 to 469.1081.  The county economic development authority 
 15.26  may create and define the boundaries of economic development 
 15.27  districts at any place or places within the county, provided 
 15.28  that a project as recommended by the county authority that is to 
 15.29  be located within the corporate limits of a city may not be 
 15.30  commenced without the approval of the governing body of the 
 15.31  city.  Minnesota Statutes, section 469.174, subdivision 10, and 
 15.32  the contiguity requirement specified under Minnesota Statutes, 
 15.33  section 469.101, subdivision 1, do not apply to limit the areas 
 15.34  that may be designated as county economic development districts. 
 15.35     Subd. 2.  [POWERS.] If an economic development authority is 
 15.36  established as provided in subdivision 1, the county may 
 16.1   exercise all of the powers relating to an economic development 
 16.2   authority granted to a city under Minnesota Statutes, sections 
 16.3   469.090 to 469.1081, or other law, including the power to levy a 
 16.4   tax to support the activities of the authority. 
 16.5      Subd. 3.  [LOCAL APPROVAL.] This section is effective the 
 16.6   day after the governing body of Yellow Medicine county and its 
 16.7   chief clerical officer timely complete their compliance with 
 16.8   Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
 16.9      Sec. 18.  [REPLACEMENT TRANSIT SERVICE; ELIGIBILITY.] 
 16.10     (a) Notwithstanding the eligibility requirements in 
 16.11  Minnesota Statutes, section 473.388, subdivision 2, the city of 
 16.12  Minnetonka is eligible for the replacement service program under 
 16.13  Minnesota Statutes, section 473.388, if the city first applies 
 16.14  for assistance or exercises the local levy option under 
 16.15  Minnesota Statutes, section 473.388, before June 30, 2003. 
 16.16     (b) Notwithstanding the eligibility requirements in 
 16.17  Minnesota Statutes, section 473.388, subdivision 2, the city of 
 16.18  Shorewood is eligible for the replacement service program under 
 16.19  Minnesota Statutes, section 473.388, if the city first applies 
 16.20  for assistance or exercises the local levy option under 
 16.21  Minnesota Statutes, section 473.388, before June 30, 2003. 
 16.22     Sec. 19.  [800-MHZ TRUNKED SYSTEM RADIOS.] 
 16.23     Subdivision 1.  [800-MHZ RADIO CONTRACT.] For purposes of 
 16.24  this section "800-MHZ radio contract" means a contract awarded 
 16.25  by a state agency for the purchase of radios for use with the 
 16.26  infrastructure system architecture and software of the 800-MHZ 
 16.27  trunked radio system. 
 16.28     Subd. 2.  [SOURCE CODE.] (a) An entity holding the source 
 16.29  code for the system architecture and its software applications 
 16.30  may not submit a bid for an 800-MHZ radio contract unless the 
 16.31  entity has furnished the source code to the commissioner of 
 16.32  administration within 60 days of the effective date of this 
 16.33  section.  The commissioner of administration shall disclose and 
 16.34  provide access to the source code only to bidders on an 800-MHZ 
 16.35  radio contract who are signatories to the share technology 
 16.36  agreement, APCO Project 25, which are standards of the 
 17.1   Association of Public Safety Commission Officers, and only to 
 17.2   the extent the commissioner deems necessary to allow those 
 17.3   bidders to operate with the system's architecture.  
 17.4      (b) For purposes of Minnesota Statutes, section 13.37, the 
 17.5   source code is trade secret information except as provided in 
 17.6   paragraph (a). 
 17.7      Subd. 3.  [CONTRACT REQUIREMENTS.] (a) An agency may not 
 17.8   award an 800-MHZ radio contract if the radios to be purchased 
 17.9   under that contract may only be operated using software and 
 17.10  equipment provided by the entity holding the source code for the 
 17.11  system architecture and software applications. 
 17.12     (b) An agency issuing a request for bids, as defined in 
 17.13  Minnesota Statutes, section 16C.02, subdivision 11, for an 
 17.14  800-MHZ radio contract may not issue the request for bids until 
 17.15  at least 90 days after the source code has been provided to the 
 17.16  commissioner of administration under subdivision 2. 
 17.17     Sec. 20.  [APPLICATION.] 
 17.18     Section 14 applies in the counties of Anoka, Carver, 
 17.19  Dakota, Hennepin, Ramsey, Scott, and Washington. 
 17.20     Sec. 21.  [NO LOCAL APPROVAL; EFFECTIVE DATE.] 
 17.21     Sections 5 to 12 do not require local approval as it fits 
 17.22  within the exception in section 645.023, subdivision 1, clause 
 17.23  (a).  Sections 5 to 12 are effective the day after final 
 17.24  enactment. 
 17.25     Sec. 22.  [EFFECTIVE DATE.] 
 17.26     Section 19 is effective the day following final enactment.