1.1 	A bill for an act
1.2 	relating to public finance; providing terms and conditions related to the issuance 
1.3 	of obligations and the financing of public improvements and services; extending 
1.4 	the time for certain publications of notices; providing for the financing of 
1.5 	postemployment benefits; authorizing the issuance of certain obligations;
1.6 	amending Minnesota Statutes 2006, sections 118A.03, subdivision 3; 123B.61; 
1.7 	331A.05, subdivision 2; 365A.02; 365A.04; 365A.08; 365A.095; 373.01, 
1.8 	subdivision 3; 375B.09; 383B.117, subdivision 2; 410.32; 412.301; 453A.02, 
1.9 	subdivision 3; 473.39, by adding a subdivision; 475.52, subdivision 6; 475.58, 
1.10 	subdivisions 1, 3b; proposing coding for new law in Minnesota Statutes, chapter 
1.11 	471.
1.12 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13 	Section 1. Minnesota Statutes 2006, section 118A.03, subdivision 3, is amended to read:
1.14 		Subd. 3.Amount. The total amount of the collateral computed at its market value 
1.15 	shall be at least ten percent more than the amount on deposit plus accrued interest at 
1.16 	the close of the financial institution's banking day, except that where the collateral is 
1.17 	irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of 
1.18 	collateral shall be at least equal to the amount on deposit plus accrued interest at the close 
1.19 	of the financial institution's banking day. The financial institution may furnish both a 
1.20 	surety bond and collateral aggregating the required amount.

1.21 	Sec. 2. Minnesota Statutes 2006, section 123B.61, is amended to read:
1.22 	123B.61 PURCHASE OF CERTAIN EQUIPMENT.
1.23 	The board of a district may issue general obligation certificates of indebtedness 
1.24 	or capital notes subject to the district debt limits to: (a) purchase vehicles, computers, 
1.25 	telephone systems, cable equipment, photocopy and office equipment, technological 
1.26 	equipment for instruction, and other capital equipment having an expected useful life at 
2.1 	least as long as the terms of the certificates or notes; (b) purchase computer hardware and 
2.2 	software, without regard to its expected useful life, whether bundled with machinery or 
2.3 	equipment or unbundled, together with application development services and training 
2.4 	related to the use of the computer; and (c) prepay special assessments. The certificates or 
2.5 	notes must be payable in not more than five ten years and must be issued on the terms 
2.6 	and in the manner determined by the board, except that certificates or notes issued to 
2.7 	prepay special assessments must be payable in not more than 20 years. The certificates 
2.8 	or notes may be issued by resolution and without the requirement for an election. The 
2.9 	certificates or notes are general obligation bonds for purposes of section 126C.55. A tax 
2.10 	levy must be made for the payment of the principal and interest on the certificates or 
2.11 	notes, in accordance with section 475.61, as in the case of bonds. The sum of the tax 
2.12 	levies under this section and section 123B.62 for each year must not exceed the lesser 
2.13 	of the amount of the district's total operating capital revenue or the sum of the district's 
2.14 	levy in the general and community service funds excluding the adjustments under this 
2.15 	section for the year preceding the year the initial debt service levies are certified. The 
2.16 	district's general fund levy for each year must be reduced by the sum of (1) the amount 
2.17 	of the tax levies for debt service certified for each year for payment of the principal and 
2.18 	interest on the certificates or notes issued under this section as required by section 475.61, 
2.19 	(2) the amount of the tax levies for debt service certified for each year for payment of the 
2.20 	principal and interest on bonds issued under section 123B.62, and (3) any excess amount 
2.21 	in the debt redemption fund used to retire bonds, certificates, or notes issued under this 
2.22 	section or section 123B.62 after April 1, 1997, other than amounts used to pay capitalized 
2.23 	interest. If the district's general fund levy is less than the amount of the reduction, the 
2.24 	balance shall be deducted first from the district's community service fund levy, and next 
2.25 	from the district's general fund or community service fund levies for the following year. A 
2.26 	district using an excess amount in the debt redemption fund to retire the certificates or 
2.27 	notes shall report the amount used for this purpose to the commissioner by July 15 of the 
2.28 	following fiscal year. A district having an outstanding capital loan under section 126C.69
2.29 	or an outstanding debt service loan under section 126C.68 must not use an excess amount 
2.30 	in the debt redemption fund to retire the certificates or notes. 

2.31 	Sec. 3. Minnesota Statutes 2006, section 331A.05, subdivision 2, is amended to read:
2.32 		Subd. 2.Time of notice. Unless otherwise specified by a particular statute law, or 
2.33 	by order of a court, publication of a public notice shall be as follows:
2.34 	(a) the notice shall be published once;
3.1 	(b) if the notice is intended to inform the public about a future event, the last 
3.2 	publication shall occur not more than 14 30 days and not less than seven days before 
3.3 	the event;
3.4 	(c) if the notice is intended to inform the public about a past action or event, the last 
3.5 	publication shall occur not more than 45 days after occurrence of the action or event.

3.6 	Sec. 4. Minnesota Statutes 2006, section 365A.02, is amended to read:
3.7 	365A.02 DEFINITION DEFINITIONS.
3.8 		Subdivision 1.Subordinate service district. "Subordinate service district" means a 
3.9 	defined area within the town in which one or more governmental services or additions to 
3.10 	townwidespecial services are provided by the town specially for the area and financed 
3.11 	from revenues from the area. The boundaries of a single subordinate service district 
3.12 	may not embrace an entire town.
3.13 		Subd. 2.Special services. "Special services" means one or more governmental 
3.14 	services or additions to townwide services provided by the town specially for the area 
3.15 	and financed from revenues from the area.

3.16 	Sec. 5. Minnesota Statutes 2006, section 365A.04, is amended to read:
3.17 	365A.04 CREATION BY PETITION.
3.18 		Subdivision 1.Petition. A petition signed by at least 50 percent of the property 
3.19 	owners in the part of the town proposed for the subordinate service district may be 
3.20 	submitted to the town board requesting the establishment of a subordinate service district 
3.21 	to provide a service that the town is otherwise authorized by law to provide. The petition 
3.22 	must include the territorial boundaries of the proposed district and specify the kinds of 
3.23 	services to be provided within the district.
3.24 		Subd. 1a.Creation by town board. The town board may establish a subordinate 
3.25 	service district in a portion of the town by adoption of a resolution, subject to the 
3.26 	requirements of subdivision 2.
3.27 		Subd. 2.Public hearing. Upon receipt of the petition, and the verification of the 
3.28 	signatures by the town clerk or prior to adoption of the resolution specified in subdivision 
3.29 	1a, the town board shall, within 30 days following verification or prior to adoption of the 
3.30 	resolution specified in subdivision 1a, hold a public hearing on the question of whether or 
3.31 	not the requested district shall be established. The notice of public hearing must specify 
3.32 	the special services to be provided within the subordinate service district and must specify 
3.33 	the territorial boundaries of the requested district. The notice of public hearing must be 
4.1 	published once in a newspaper of general circulation in the town at least 14 days prior 
4.2 	to the date of the public hearing.
4.3 		Subd. 3.Approval; disapproval. Within 30 days after the public hearing, the 
4.4 	town board by resolution shall approve or disapprove the establishment of the requested 
4.5 	district. An approving resolution must specify the special services to be provided within 
4.6 	the subordinate service district and must specify the territorial boundaries of the district. 
4.7 	A resolution approving the establishment of the district may contain amendments or 
4.8 	modifications of the district's boundaries or functions as set forth in the petition or the 
4.9 	resolution specified in subdivision 1a.

4.10 	Sec. 6. Minnesota Statutes 2006, section 365A.08, is amended to read:
4.11 	365A.08 FINANCING.
4.12 		Subdivision 1.Budget. (a) Upon adoption of the next annual budget following 
4.13 	the creation of a subordinate service district the town board shall include in the budget 
4.14 	appropriate provisions for the operation of the district including either a property tax 
4.15 	levied only on property of the users of the service within the boundaries of the district 
4.16 	or a levy of a service charge against the users of the service within the district, or a 
4.17 	combination of a property tax and a service charge on the users of the service.
4.18 	(b) A tax or service charge or a combination of them may be imposed to finance a 
4.19 	function or service in the district that the town ordinarily provides throughout the town 
4.20 	only to the extent that there is an increase in the level of the function or service provided 
4.21 	in the service district over that provided throughout the town. In that case, in addition 
4.22 	to the townwide tax levy, an amount necessary to pay for the increase in the level of the 
4.23 	function or service may be imposed in the district.
4.24 		Subd. 2.Bonds. At any time after the requirements of section 356A.06 have been 
4.25 	met and the subordinate service district created, the town board may issue obligations 
4.26 	in an amount it deems necessary to defray in whole or in part the expense incurred 
4.27 	and estimated to be incurred in making capital improvements necessary to operate the 
4.28 	subordinate service district and provide the special services in the district, including every 
4.29 	item of cost from inception to completion and all fees and expenses incurred in connection 
4.30 	with the capital improvements or the financing. The obligations are payable primarily 
4.31 	out of the proceeds of the taxes and service charges imposed under subdivision 1, net 
4.32 	revenues as described in section 444.075, and special assessments under chapter 429. The 
4.33 	town board may by resolution pledge the full faith credit and taxing power of the town 
4.34 	to ensure payment of the principal and interest on the obligations if the proceeds of the 
4.35 	taxes and service charges are insufficient to pay the principal and interest. Obligations 
5.1 	must be issued in accordance with chapter 475, except that an election is not required, and 
5.2 	the amount of the obligations is not included in determining the net indebtedness of the 
5.3 	town under the provisions of any law limiting indebtedness.
5.4 		Subd. 3.Covenants to secure obligations. In resolutions authorizing the issuance 
5.5 	of general or special obligations and pledging taxes and service charges imposed under 
5.6 	subdivision 1, net revenues, or special assessments to their payment, the town board 
5.7 	may make covenants for the protection of holders of the obligations and taxpayers of the 
5.8 	town as it deems necessary, including a covenant that the town will impose and collect 
5.9 	charges of the nature authorized by this chapter at the time and in the amounts required to 
5.10 	produce, together with any taxes or special assessments designated as a primary source 
5.11 	of payment of the obligations, funds adequate to pay all principal and interest when due 
5.12 	on the obligations, and to create and maintain reserves securing the payments as may be 
5.13 	provided in the resolutions.

5.14 	Sec. 7. Minnesota Statutes 2006, section 365A.095, is amended to read:
5.15 	365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.
5.16 		Subdivision 1.Petition. A petition signed by at least 75 percent of the property 
5.17 	owners in the territory of the subordinate service district requesting the removal of the 
5.18 	district may be presented to the town board. Within 30 days after the town board receives 
5.19 	the petition, the town clerk shall determine the validity of the signatures on the petition. If 
5.20 	the requisite number of signatures are certified as valid, the town board must hold a public 
5.21 	hearing on the petitioned matter. Within 30 days after the end of the hearing, the town 
5.22 	board must decide whether to discontinue the subordinate service district, continue as it is, 
5.23 	or take some other action with respect to it.
5.24 		Subd. 2.Bonds. If obligations have been issued for the benefit of the subordinate 
5.25 	service district, the rates, charges, and tax levies, if any, shall continue until the obligations 
5.26 	and any obligations issued to refund them have been paid in full.

5.27 	Sec. 8. Minnesota Statutes 2006, section 373.01, subdivision 3, is amended to read:
5.28 		Subd. 3.Capital notes. (a) A county board may, by resolution and without 
5.29 	referendum, issue capital notes subject to the county debt limit to purchase capital 
5.30 	equipment useful for county purposes that has an expected useful life at least equal to the 
5.31 	term of the notes. The notes shall be payable in not more than ten years and shall be 
5.32 	issued on terms and in a manner the board determines. A tax levy shall be made for 
5.33 	payment of the principal and interest on the notes, in accordance with section 475.61, 
5.34 	as in the case of bonds.
6.1 	(b) For purposes of this subdivision, "capital equipment" means:
6.2 	(1) public safety, ambulance, road construction or maintenance, and medical 
6.3 	equipment; and
6.4 	(2) computer hardware and software, whether bundled with machinery or equipment 
6.5 	or unbundled. The authority to issue capital notes for software expires on July 1, 2007.

6.6 	Sec. 9. Minnesota Statutes 2006, section 375B.09, is amended to read:
6.7 	375B.09 FINANCING.
6.8 		Subdivision 1.Budget. (a) Upon adoption of the next annual budget following the 
6.9 	creation of a subordinate service district the county board shall include in the budget 
6.10 	appropriate provisions for the operation of the district including, as appropriate, either a 
6.11 	property tax levied only on property within the boundaries of the district or a levy of a 
6.12 	service charge against the users of the service within the district, or any combination of a 
6.13 	property tax and a service charge.
6.14 	(b) A tax or service charge or a combination thereof shall not be imposed to finance a 
6.15 	function or service in the subordinate service district which the county generally provides 
6.16 	throughout the county unless an increase in the level of the service is to be supplied in the 
6.17 	subordinate service district in which case, in addition to the countywide tax levy, only an 
6.18 	amount necessary to pay for the increased level of service may be imposed.
6.19 		Subd. 2.Bonds. At any time after the requirements of section 375B.07 have been 
6.20 	met and the subordinate service district created, the county board may issue obligations 
6.21 	in an amount it deems necessary to defray in whole or in part the expense incurred 
6.22 	and estimated to be incurred in making capital improvements necessary to operate the 
6.23 	subordinate service district and provide the special services in the district, including every 
6.24 	item of cost from inception to completion and all fees and expenses incurred in connection 
6.25 	with the capital improvements or the financing. The obligations shall be payable primarily 
6.26 	out of the proceeds of the taxes and service charges imposed pursuant to subdivision 1, net 
6.27 	revenues as described in section 444.075, and special assessments under chapter 429. The 
6.28 	county board may by resolution pledge the full faith credit and taxing power of the county 
6.29 	to ensure payment of the principal and interest on the obligations if the proceeds of the 
6.30 	taxes and service charges are insufficient to pay the principal and interest. Obligations 
6.31 	must be issued in accordance with chapter 475, except that an election is not required, and 
6.32 	the amount of the obligations is not included in determining the net indebtedness of the 
6.33 	county under the provisions of any law limiting indebtedness.
6.34 		Subd. 3.Covenants to secure obligations. In resolutions authorizing the issuance 
6.35 	of general or special obligations and pledging taxes and service charges imposed under 
7.1 	subdivision 1, net revenues, or special assessments to their payment, the county board 
7.2 	may make covenants for the protection of holders of the obligations and taxpayers of the 
7.3 	county as it deems necessary, including a covenant that the county will impose and collect 
7.4 	charges of the nature authorized by this chapter at the time and in the amounts required to 
7.5 	produce, together with any taxes or special assessments designated as a primary source 
7.6 	of payment of the obligations, funds adequate to pay all principal and interest when due 
7.7 	on the obligations and to create and maintain reserves securing the payments as may be 
7.8 	provided in the resolutions.
7.9 		Subd. 4.Continuance in the event of withdrawal. If obligations have been issued 
7.10 	for the benefit of the subordinate service district, and the district is withdrawn or removed 
7.11 	pursuant to either section 375B.10 or 375B.11, the rates, charges, and tax levies, if any, in 
7.12 	the withdrawn or removed district must continue until the obligations and any obligations 
7.13 	issued to refund them have been paid in full.

7.14 	Sec. 10. Minnesota Statutes 2006, section 383B.117, subdivision 2, is amended to read:
7.15 		Subd. 2.Equipment acquisition; capital notes. The board may, by resolution and 
7.16 	without public referendum, issue capital notes within existing debt limits for the purpose 
7.17 	of purchasing ambulance and other medical equipment, road construction or maintenance 
7.18 	equipment, public safety equipment and other capital equipment having an expected 
7.19 	useful life at least equal to the term of the notes issued. The notes shall be payable in 
7.20 	not more than five ten years and shall be issued on terms and in a manner as the board 
7.21 	determines. The total principal amount of the notes issued for any fiscal year shall not 
7.22 	exceed one percent of the total annual budget for that year and shall be issued solely for 
7.23 	the purchases authorized in this subdivision. A tax levy shall be made for the payment 
7.24 	of the principal and interest on such notes as in the case of bonds. For purposes of this 
7.25 	subdivision, "equipment" includes computer hardware and software, whether bundled with 
7.26 	machinery or equipment or unbundled. For purposes of this subdivision, the term "medical 
7.27 	equipment" includes computer hardware and software and other intellectual property for 
7.28 	use in medical diagnosis, medical procedures, research, record keeping, billing, and other 
7.29 	hospital applications, together with application development services and training related 
7.30 	to the use of the computer hardware and software and other intellectual property, all 
7.31 	without regard to their useful life. For purposes of determining the amount of capital notes 
7.32 	which the county may issue in any year, the budget of the county and Hennepin Healthcare 
7.33 	System, Inc. shall be combined and the notes issuable under this subdivision shall be in 
7.34 	addition to obligations issuable under section 373.01, subdivision 3.

8.1 	Sec. 11. Minnesota Statutes 2006, section 410.32, is amended to read:
8.2 	410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
8.3 	(a) Notwithstanding any contrary provision of other law or charter, a home rule 
8.4 	charter city may, by resolution and without public referendum, issue capital notes subject 
8.5 	to the city debt limit to purchase capital equipment.
8.6 	(b) For purposes of this section, "capital equipment" means:
8.7 	(1) public safety equipment, ambulance and other medical equipment, road 
8.8 	construction and maintenance equipment, and other capital equipment; and
8.9 	(2) computer hardware and software, whether bundled with machinery or equipment 
8.10 	or unbundled.
8.11 	(c) The equipment or software must have an expected useful life at least as long as the 
8.12 	term of the notes. The authority to issue capital notes for software expires on July 1, 2007.
8.13 	(d) The notes shall be payable in not more than ten years and be issued on terms and 
8.14 	in the manner the city determines. The total principal amount of the capital notes issued 
8.15 	in a fiscal year shall not exceed 0.03 percent of the market value of taxable property 
8.16 	in the city for that year.
8.17 	(e) A tax levy shall be made for the payment of the principal and interest on the 
8.18 	notes, in accordance with section 475.61, as in the case of bonds.
8.19 	(f) Notes issued under this section shall require an affirmative vote of two-thirds of 
8.20 	the governing body of the city.
8.21 	(g) Notwithstanding a contrary provision of other law or charter, a home rule charter 
8.22 	city may also issue capital notes subject to its debt limit in the manner and subject to the 
8.23 	limitations applicable to statutory cities pursuant to section 412.301.

8.24 	Sec. 12. Minnesota Statutes 2006, section 412.301, is amended to read:
8.25 	412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
8.26 	(a) The council may issue certificates of indebtedness or capital notes subject to the 
8.27 	city debt limits to purchase capital equipment.
8.28 	(b) For purposes of this section, "capital equipment" means:
8.29 	(1) public safety equipment, ambulance and other medical equipment, road 
8.30 	construction and maintenance equipment, and other capital equipment; and
8.31 	(2) computer hardware and software, whether bundled with machinery or equipment 
8.32 	or unbundled.
8.33 	(c) The equipment or software must have an expected useful life at least as long as 
8.34 	the terms of the certificates or notes. The authority to issue capital notes for software 
8.35 	expires on July 1, 2007.
9.1 	(d) Such certificates or notes shall be payable in not more than ten years and shall be 
9.2 	issued on such terms and in such manner as the council may determine.
9.3 	(e) If the amount of the certificates or notes to be issued to finance any such purchase 
9.4 	exceeds 0.25 percent of the market value of taxable property in the city, they shall not 
9.5 	be issued for at least ten days after publication in the official newspaper of a council 
9.6 	resolution determining to issue them; and if before the end of that time, a petition asking 
9.7 	for an election on the proposition signed by voters equal to ten percent of the number of 
9.8 	voters at the last regular municipal election is filed with the clerk, such certificates or notes 
9.9 	shall not be issued until the proposition of their issuance has been approved by a majority 
9.10 	of the votes cast on the question at a regular or special election.
9.11 	(f) A tax levy shall be made for the payment of the principal and interest on such 
9.12 	certificates or notes, in accordance with section 475.61, as in the case of bonds.

9.13 	Sec. 13. Minnesota Statutes 2006, section 453A.02, subdivision 3, is amended to read:
9.14 		Subd. 3.City. "City" means a city organized and existing under the laws of 
9.15 	Minnesota or a city charter adopted pursuant thereto, and authorized by such laws or 
9.16 	charter to engage in the local distribution and sale of gas, provided that any city so 
9.17 	engaged on January 1, 1979 is authorized to continue such distribution and sale, and every 
9.18 	city now or hereafter so authorized may exercise, either individually or as a member of a 
9.19 	municipal gas agency, all of the powers granted in sections 453A.01 to 453A.12. 
9.20 	"City" also includes a city organized and existing under the laws of another state 
9.21 	or a city charter adopted pursuant thereto which participates in a municipal gas agency 
9.22 	with Minnesota cities.

9.23 	Sec. 14. [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS.
9.24 		Subdivision 1.Authorization; establishment. A political subdivision or other 
9.25 	public entity that creates or has created an actuarial liability to pay postemployment 
9.26 	benefits to employees or officers after their termination of service may establish a trust to 
9.27 	pay those benefits. For purposes of this section, the term "postemployment benefits" means 
9.28 	benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting 
9.29 	Standards Board and the term "trust" means a trust, a trust account, or a custodial account 
9.30 	or contract authorized under section 401(f) of the Internal Revenue Code.
9.31 		Subd. 2.Purpose of trust. The trust established under this section may only be 
9.32 	used to pay postemployment benefits and may be either revocable or irrevocable.
9.33 		Subd. 3.Trust administrator. The trust administrator of a trust established under 
9.34 	this section shall be either:
10.1 	(1) the Public Employees Retirement Association; 
10.2 	(2) a bank or banking association incorporated under the laws of the United States or 
10.3 	of any state and authorized by the laws under which it is organized to exercise corporate 
10.4 	trust powers; or 
10.5 	(3) an insurance company or agency qualified to do business in Minnesota which has 
10.6 	at least five years' experience in investment products and services for group retirement 
10.7 	benefits and which has a specialized department dedicated to services for retirement 
10.8 	investment products. 
10.9 	A political subdivision or public entity may, in its discretion and in compliance 
10.10 	with any applicable trust document, change trust administrators and transfer trust assets 
10.11 	accordingly.
10.12 		Subd. 4.Account maintenance. A political subdivision or other public entity may 
10.13 	establish a trust account to be held under the supervision of the trust administrator for the 
10.14 	purposes of this section. A trust administrator shall establish a separate account for each 
10.15 	participating political subdivision or public entity. The trust administrator may charge 
10.16 	participating political subdivisions and public entities fees for reasonable administrative 
10.17 	costs. A trust administrator may establish other reasonable terms and conditions for 
10.18 	creation and maintenance of these accounts. The trust administrator must report to the 
10.19 	political subdivision or other public entity on the investment returns of invested trust 
10.20 	assets and on all investment fees or costs incurred by the trust. The annual rates of return, 
10.21 	along with investment and administrative fees and costs for the trust, must be disclosed in 
10.22 	the political subdivision's or public entity's annual financial audit in a manner prescribed 
10.23 	by the state auditor.
10.24 		Subd. 5.Investment. (a) The assets of a trust or trust account shall be invested and 
10.25 	held as stipulated in paragraphs (b) to (e).
10.26 	(b) The Public Employees Retirement Association must certify all money in the trust 
10.27 	accounts for which it is trust administrator to the State Board of Investment for investment 
10.28 	created under section 11A.14, subject to the policies and procedures established by the 
10.29 	State Board of Investment. Investment earnings must be credited to the trust account of 
10.30 	the individual political subdivision or public entity.
10.31 	(c) A trust administrator, other than the Public Employees Retirement Association, 
10.32 	must ensure that all money in the trust accounts for which it is trust administrator is 
10.33 	invested by a registered investment adviser, a bank investment trust department or an 
10.34 	insurance company or  agency retirement investment department. Investment earnings 
10.35 	must be credited to the trust account of the individual political subdivision or public entity.
11.1 	(d) For trust assets invested by the State Board of Investment, the investment 
11.2 	restrictions shall be the same as those generally applicable to the State Board of 
11.3 	Investment. For trust assets invested by a trust administrator other than the Public 
11.4 	Employees Retirement Association, the assets may only be invested in investments 
11.5 	authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified 
11.6 	in the applicable trust document.
11.7 	(e) A political subdivision or public entity may provide investment direction to a 
11.8 	trust administrator in compliance with any applicable trust document.
11.9 		Subd. 6.Limit on deposit. A political subdivision or public entity may not 
11.10 	deposit money in a trust or trust account created pursuant to this section if the total 
11.11 	amount invested by that political subdivision or public entity would exceed the political 
11.12 	subdivision's or public entity's actuarially determined liabilities for postemployment 
11.13 	benefits due to officers and employees, as determined under the applicable standards of the 
11.14 	Governmental Accounting Standards Board.
11.15 		Subd. 7.Withdrawal of funds and termination of account. (a) For a revocable 
11.16 	account, a political subdivision or public entity may withdraw some or all of its money 
11.17 	or terminate the trust account. Money and accrued investment earnings withdrawn 
11.18 	from a revocable account must be deposited in a fund separate and distinct from any 
11.19 	other funds of the political subdivision or public entity. This money, with accrued 
11.20 	investment earnings, must be used to pay legally enforceable postemployment benefits 
11.21 	to former officers and employees, unless (i) there has been a change in state or federal 
11.22 	law affecting that political subdivision's or public entity's liabilities for postemployment 
11.23 	benefits, or (ii) there has been a change in the demographic composition of that political 
11.24 	subdivision's or public entity's employees eligible for postemployment benefits, or (iii) 
11.25 	there has been a change in the provisions or terms of the postemployment benefits in that 
11.26 	political subdivision or public entity including, but not limited to, the portion of the costs 
11.27 	eligible employees must pay to receive the benefits, or (iv) other factors exist that have 
11.28 	a material effect on that political subdivision's or public entity's actuarially determined 
11.29 	liabilities for postemployment benefits, in which event any amount in excess of 100 
11.30 	percent of that political subdivision's or public entity's actuarially determined liabilities for 
11.31 	postemployment benefits, as determined under standards of the Government Accounting 
11.32 	Standards Board, may be withdrawn and used for any purpose.
11.33 	(b) For an irrevocable account, a political subdivision or public entity may withdraw 
11.34 	money only:
11.35 	(1) as needed to pay postemployment benefits owed to former officers and employees 
11.36 	of the political subdivision or public entity; or
12.1 	(2) when all postemployment benefit  liability owed to former officers or employees 
12.2 	of the political subdivision or public entity has been satisfied or otherwise defeased.
12.3 	(c) A political subdivision or public entity requesting withdrawal of money from 
12.4 	an account created under this section must do so at a time and in the manner required by 
12.5 	the executive director of the Public Employees Retirement Association or specified in an 
12.6 	applicable trust document. The political subdivision or public entity that created the trust 
12.7 	must ensure that withdrawals comply with the requirements of this section.
12.8 	(d) The legislature may not divert funds in these trusts or trust accounts for use 
12.9 	for another purpose.
12.10 		Subd. 8.Status of irrevocable trust. (a) All money in an irrevocable trust or 
12.11 	trust account created in this section is held in trust for the exclusive benefit of former 
12.12 	officers and employees of the participating political subdivision or public entity, and are 
12.13 	not subject to claims by creditors of the state, the participating political subdivision or 
12.14 	public entity, the current or former officers and employees of the political subdivision 
12.15 	or public entity, or the trust administrator.
12.16 	(b) An irrevocable trust fund or trust account created in this section shall be deemed 
12.17 	an arrangement equivalent to a trust for all legal purposes.

12.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

12.19 	Sec. 15. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision 
12.20 	to read:
12.21 		Subd. 1m.Obligations. After July 1, 2007, in addition to other authority in this 
12.22 	section, the council may issue certificates of indebtedness, bonds, or other obligations 
12.23 	under this section in an amount not exceeding $44,000,000 for capital expenditures as 
12.24 	prescribed in the council's regional transit master plan and transit capital improvement 
12.25 	program and for related costs, including the costs of issuance and sale of the obligations.

12.26 	Sec. 16. Minnesota Statutes 2006, section 475.52, subdivision 6, is amended to read:
12.27 		Subd. 6.Certain purposes. Any municipality may issue bonds for paying 
12.28 	judgments against it; for refunding outstanding bonds; for funding floating indebtedness;
12.29 	for funding actuarial liabilities to pay postemployment benefits to employees or officers 
12.30 	after their termination of service; or for funding all or part of the municipality's current 
12.31 	and future unfunded liability for a pension or retirement fund or plan referred to in 
12.32 	section 356.20, subdivision 2, as those liabilities are most recently computed pursuant 
12.33 	to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or 
12.34 	relief association referred to in section 69.77 or chapter 422A must consent and must 
13.1 	be a party to any contract made under this section with respect to the fund held by it 
13.2 	for the benefit of and in trust for its members. For purposes of this section, the term 
13.3 	"postemployment benefits" means benefits giving rise to a liability under Statement No. 
13.4 	45 of the Governmental Accounting Standards Board.

13.5 	EFFECTIVE DATE. This section is effective the day following final enactment.

13.6 	Sec. 17. Minnesota Statutes 2006, section 475.58, subdivision 1, is amended to read:
13.7 		Subdivision 1.Approval by electors; exceptions. Obligations authorized by law or 
13.8 	charter may be issued by any municipality upon obtaining the approval of a majority of 
13.9 	the electors voting on the question of issuing the obligations, but an election shall not be 
13.10 	required to authorize obligations issued:
13.11 	(1) to pay any unpaid judgment against the municipality;
13.12 	(2) for refunding obligations;
13.13 	(3) for an improvement or improvement program, which obligation is payable wholly 
13.14 	or partly from the proceeds of special assessments levied upon property specially benefited 
13.15 	by the improvement or by an improvement within the improvement program, or from tax 
13.16 	increments, as defined in section 469.174, subdivision 25, including obligations which are 
13.17 	the general obligations of the municipality, if the municipality is entitled to reimbursement 
13.18 	in whole or in part from the proceeds of such special assessments or tax increments and 
13.19 	not less than 20 percent of the cost of the improvement or the improvement program is to 
13.20 	be assessed against benefited property or is to be paid from the proceeds of federal grant 
13.21 	funds or a combination thereof, or is estimated to be received from tax increments;
13.22 	(4) payable wholly from the income of revenue producing conveniences;
13.23 	(5) under the provisions of a home rule charter which permits the issuance of 
13.24 	obligations of the municipality without election;
13.25 	(6) under the provisions of a law which permits the issuance of obligations of a 
13.26 	municipality without an election;
13.27 	(7) to fund pension or retirement fund or postemployment benefit liabilities pursuant 
13.28 	to section 475.52, subdivision 6; 
13.29 	(8) under a capital improvement plan under section 373.40; and 
13.30 	(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if 
13.31 	the proceeds of the bonds are not used for a purpose prohibited under section 469.176, 
13.32 	subdivision 4g, paragraph (b). 

13.33 	EFFECTIVE DATE. This section is effective the day following final enactment.

14.1 	Sec. 18. Minnesota Statutes 2006, section 475.58, subdivision 3b, is amended to read:
14.2 		Subd. 3b.Street reconstruction. (a) A municipality may, without regard to 
14.3 	the election requirement under subdivision 1, issue and sell obligations for street 
14.4 	reconstruction, if the following conditions are met:
14.5 	(1) the streets are reconstructed under a street reconstruction plan that describes the 
14.6 	streets to be reconstructed street reconstruction to be financed, the estimated costs, and 
14.7 	any planned reconstruction of other streets in the municipality over the next five years, 
14.8 	and the plan and issuance of the obligations has been approved by a unanimous vote of all
14.9 	of the members of the governing body who are present at the meeting following a public 
14.10 	hearing for which notice has been published in the official newspaper at least ten days but 
14.11 	not more than 28 days prior to the hearing; and
14.12 	(2) if a petition requesting a vote on the issuance is signed by voters equal to 
14.13 	five percent of the votes cast in the last municipal general election and is filed with the 
14.14 	municipal clerk within 30 days of the public hearing, the municipality may issue the bonds 
14.15 	only after obtaining the approval of a majority of the voters voting on the question of 
14.16 	the issuance of the obligations.
14.17 	(b) Obligations issued under this subdivision are subject to the debt limit of the 
14.18 	municipality and are not excluded from net debt under section 475.51, subdivision 4.
14.19 	(c) For purposes of this subdivision, street reconstruction includes utility 
14.20 	replacement and relocation and other activities incidental to the street reconstruction, turn 
14.21 	lanes and other improvements having a substantial public safety function, realignments, 
14.22 	other modifications to intersect with state and county roads, and the local share of state 
14.23 	and county road projects.
14.24 	(d) Except in the case of turn lanes, safety improvements, realignments, intersection 
14.25 	modifications, and the local share of state and county road projects, street reconstruction 
14.26 	does not include the portion of project cost allocable to widening a street or adding curbs 
14.27 	and gutters where none previously existed.

14.28 	Sec. 19. VALIDATION.
 14.29 	Any trust or trust account or other custodial account or contract authorized under 
14.30 	section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay 
14.31 	postemployment benefits to employees or officers after termination of service, is hereby 
14.32 	validated, may continue in full force and effect, and shall have continuing authority 
14.33 	to accept new funds; however, this section does not validate or correct defects in any 
14.34 	previously created trust document. Any funds held by a validated trust or account 
14.35 	under this section may be invested as provided in section 471.6175, subdivision 5. A 
15.1 	validated trust or account shall have until January 1, 2008, to bring its trust documents 
15.2 	and procedures into compliance with section 471.6175.

15.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

15.4 	Sec. 20. TOWN OF CRANE LAKE, CERTIFICATES OF INDEBTEDNESS.
 15.5 	Notwithstanding Minnesota Statutes, section 366.095, the town board of the town of 
15.6 	Crane Lake in St. Louis County may issue one or more certificates of indebtedness in a 
15.7 	total amount not to exceed $225,000, which are not subject to the debt limits of the town. 
15.8 	The proceeds of the certificates must be used to acquire property and pay other costs 
15.9 	related to a land exchange with the United States Forest Service. The certificates shall be 
15.10 	payable in not more than 30 years and be issued on the terms and in the manner as the 
15.11 	board may determine. Minnesota Statutes, sections 475.54, subdivision 1, and 475.56, 
15.12 	paragraph (c), do not apply to the certificates issued under this section. A tax levy shall be 
15.13 	made to pay the principal and interest on the certificates as in the case of bonds.

15.14 	EFFECTIVE DATE. This section is effective the day after the Crane Lake Town 
15.15 	Board and its chief clerical officer timely complete their compliance with Minnesota 
15.16 	Statutes, section 645.021, subdivisions 2 and 3.

15.17 	Sec. 21. CITY OF WINSTED; BONDING AUTHORITY.
 15.18 	(a) The city of Winsted may issue general obligation bonds under Minnesota 
15.19 	Statutes, chapter 475, to finance the acquisition and betterment of a facility consisting of 
15.20 	a city hall, community center, and police station; park improvements, including trails 
15.21 	and an amphitheater; related public improvements; and substantial landscaping for the 
15.22 	improvements. 
15.23 	(b) The bonds may be issued as general obligations of the city without an election to 
15.24 	approve the bonds under Minnesota Statutes, section 475.58.
15.25 	(c) The bonds are not included in computing any debt limitation applicable to the 
15.26 	city, including, but not limited to, the net debt limits under Minnesota Statutes, section 
15.27 	475.53, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 
15.28 	and interest on the bonds is not subject to any levy limitation.
15.29 	(d) The aggregate principal amount of bonds used to pay costs of the acquisition and 
15.30 	betterment of the facility consisting of a city hall, community center, and police station; 
15.31 	park improvements, including trails and an amphitheater; related public improvements; 
15.32 	and substantial landscaping for the improvements may not exceed $4,900,000, plus an 
15.33 	amount equal to the costs related to issuance of the bonds and capitalized interest.

16.1 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
16.2 	body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3.