1.1                          A bill for an act 
  1.2             relating to finance; clarifying division of proceeds 
  1.3             of sale of state bond financed property; amending 
  1.4             Minnesota Statutes 2002, section 16A.695, subdivision 
  1.5             3. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 16A.695, 
  1.8   subdivision 3, is amended to read: 
  1.9      Subd. 3.  [SALE OF PROPERTY.] A public officer or agency 
  1.10  shall not sell any state bond financed property unless the 
  1.11  public officer or agency determines by official action that the 
  1.12  property is no longer usable or needed by the public officer or 
  1.13  agency to carry out the governmental program for which it was 
  1.14  acquired or constructed, the sale is made as authorized by law, 
  1.15  the sale is made for fair market value, and the sale is approved 
  1.16  by the commissioner.  If any state bonds issued to purchase or 
  1.17  better the state bond financed property that is sold remain 
  1.18  outstanding on the date of sale, the net proceeds of sale must 
  1.19  be applied as follows: 
  1.20     (1) if the state bond financed property was acquired and 
  1.21  bettered solely with state bond proceeds, the net proceeds of 
  1.22  sale must be paid to the commissioner, deposited in the state 
  1.23  bond fund, and used to pay or redeem or defease the outstanding 
  1.24  state bonds in accordance with the commissioner's order 
  1.25  authorizing their issuance, and the proceeds are appropriated 
  2.1   for this purpose; or 
  2.2      (2) if the state bond financed property was acquired or 
  2.3   bettered partly with state bond proceeds and partly with other 
  2.4   money, the net proceeds of sale must be used:  first, to pay to 
  2.5   the state the amount of state bond proceeds used to acquire or 
  2.6   better the property; second, to pay in full any outstanding 
  2.7   public or private debt incurred to acquire or better the 
  2.8   property; and third, any excess over the amount needed for those 
  2.9   purposes must be divided in proportion to the shares contributed 
  2.10  to the acquisition or betterment of the property and paid to the 
  2.11  interested public and private entities, other than any private 
  2.12  lender already paid in full, and the proceeds are appropriated 
  2.13  for this purpose.  In calculating the share contributed by each 
  2.14  entity, the amount to be attributed to the owner of the property 
  2.15  must be the fair market value of the property that was bettered 
  2.16  by state bond proceeds at the time the betterment began. 
  2.17     When all of the net proceeds of sale have been applied as 
  2.18  provided in this subdivision, this section no longer applies to 
  2.19  the property. 
  2.20     Sec. 2.  [EFFECTIVE DATE.] 
  2.21     This act is effective the day following final enactment.