HF 3037

1st Committee Engrossment - 86th Legislature (2009 - 2010)

Posted on 03/19/2013 07:29 p.m.

1.1A bill for an act 1.2relating to economic development; establishing a manufacturing equipment 1.3loan program for manufacturing businesses in the state; authorizing sale and 1.4issuance of revenue bonds;proposing coding for new law in Minnesota Statutes, 1.5chapter 116J. 1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.7    Section 1. new text begin [116J.4361] MANUFACTURING EQUIPMENT LOAN PROGRAM. new text end 1.8     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the following terms new text end 1.9 new text begin have the meanings given. new text end 1.10 new text begin (b) "Business entity" means a sole proprietorship, partnership, limited liability new text end 1.11 new text begin corporation, or corporation. new text end 1.12 new text begin (c) "Manufacturing" means manufacturing, fabricating, mining, or refining of new text end 1.13 new text begin materials resulting in the production of personal property to be sold at wholesale or retail. new text end 1.14 new text begin (d) "Manufacturing equipment" means machinery and equipment purchased and new text end 1.15 new text begin used in this state by the purchaser essential to the integrated production process of new text end 1.16 new text begin manufacturing. new text end 1.17 new text begin (e) "Qualifying manufacturing business" means a business entity with at least .. new text end 1.18 new text begin employees that is involved in manufacturing and is located or has a physical presence in new text end 1.19 new text begin the state at which the manufacturing equipment will be used. new text end 1.20     new text begin Subd. 2. new text end new text begin Purpose. new text end new text begin The commissioner shall administer a manufacturing equipment new text end 1.21 new text begin loan program under this section to make low-interest, long-term loans to qualifying new text end 1.22 new text begin manufacturing businesses to purchase and install manufacturing equipment. A new text end 1.23 new text begin manufacturing business shall apply for a loan under this section in a manner and on a form new text end 1.24 new text begin prescribed by the commissioner. Loans under this section are intended to cover up to 50 new text end 1.25 new text begin percent of the cost of the project. new text end 2.1     new text begin Subd. 3. new text end new text begin Loan proposals. new text end new text begin At least once a year, the commissioner shall publish in new text end 2.2 new text begin the State Register a request for proposals for a loan under this section. Within 45 days new text end 2.3 new text begin after the deadline for receipt of proposals, the commissioner shall select proposals based new text end 2.4 new text begin on the following criteria: new text end 2.5     new text begin (1) the business growth and jobs that will be created as a result of the loan; new text end 2.6 new text begin (2) the reliability, efficiency, and cost-effectiveness of the manufacturing equipment new text end 2.7 new text begin to be installed under the proposal; new text end 2.8     new text begin (3) the geographic distribution of projects throughout the state; new text end 2.9     new text begin (4) the percentage of total project cost requested; new text end 2.10     new text begin (5) the proposed security for payback of the loan; and new text end 2.11     new text begin (6) other criteria determined by the commissioner to maximize economic new text end 2.12 new text begin development with loans under this section. new text end 2.13     new text begin Subd. 4. new text end new text begin Loan terms. new text end new text begin A loan under this section must be issued at the lowest interest new text end 2.14 new text begin rate required to recover principal and interest plus the costs of issuing the loan, and must be new text end 2.15 new text begin for a minimum of 15 years, unless the commissioner determines that a shorter loan period new text end 2.16 new text begin is necessary and feasible. A grace period of up to 24 months before payments become due new text end 2.17 new text begin on the loan may be extended by the commissioner to qualifying manufacturing businesses. new text end 2.18     new text begin Subd. 5. new text end new text begin Account. new text end new text begin A manufacturing equipment loan account is established in the new text end 2.19 new text begin state treasury. Money in the account consists of the proceeds of revenue bonds issued new text end 2.20 new text begin under section new text end new text begin , interest and other earnings on money in the account, money new text end 2.21 new text begin received in repayment of loans from the account, and money from any other source new text end 2.22 new text begin credited to the account. new text end 2.23     new text begin Subd. 6. new text end new text begin Appropriation. new text end new text begin Money in the account is appropriated to the commissioner new text end 2.24 new text begin to make manufacturing equipment loans under this section and to the commissioner of new text end 2.25 new text begin management and budget to pay debt service and other costs under section new text end new text begin . new text end 2.26 new text begin Payment of debt service costs and funding reserves take priority over use of money in the new text end 2.27 new text begin account for any other purpose. new text end 2.28    Sec. 2. new text begin [116J.4362] MANUFACTURING EQUIPMENT LOAN REVENUE new text end 2.29 new text begin BONDS. new text end 2.30     new text begin Subdivision 1. new text end new text begin Bonding authority; definition. new text end new text begin (a) The commissioner of new text end 2.31 new text begin management and budget, if requested by the commissioner of employment and economic new text end 2.32 new text begin development, shall sell and issue state revenue bonds for the following purposes: new text end 2.33     new text begin (1) to make manufacturing equipment loans under section new text end new text begin ; new text end 2.34     new text begin (2) to pay the costs of issuance, debt service, and bond insurance or other credit new text end 2.35 new text begin enhancements, and to fund reserves; and new text end 3.1     new text begin (3) to refund bonds issued under this section. new text end 3.2     new text begin (b) The aggregate principal amount of bonds for the purposes of paragraph (a), new text end 3.3 new text begin clause (1), that may be outstanding at any time may not exceed $.......; the principal new text end 3.4 new text begin amount of bonds that may be issued for the purposes of paragraph (a), clauses (2) and new text end 3.5 new text begin (3), is not limited. new text end 3.6     new text begin (c) For the purpose of this section, "commissioner" means the commissioner of new text end 3.7 new text begin management and budget. new text end 3.8     new text begin Subd. 2. new text end new text begin Procedure. new text end new text begin The commissioner may sell and issue the bonds on the terms new text end 3.9 new text begin and conditions the commissioner determines to be in the best interests of the state. The new text end 3.10 new text begin bonds may be sold at public or private sale. The commissioner may enter into any new text end 3.11 new text begin agreements or pledges the commissioner determines necessary or useful to sell the bonds new text end 3.12 new text begin that are not inconsistent with section 116J.4361. Sections new text end new text begin to new text end new text begin apply to new text end 3.13 new text begin the bonds. The proceeds of the bonds issued under this section must be credited to the new text end 3.14 new text begin manufacturing equipment loan account created under section 116J.4361. new text end 3.15     new text begin Subd. 3. new text end new text begin Revenue sources. new text end new text begin The debt service on the bonds is payable only from the new text end 3.16 new text begin following sources: new text end 3.17     new text begin (1) revenue credited to the manufacturing equipment loan account from the sources new text end 3.18 new text begin identified in section 116J.4361 or from any other source; and new text end 3.19     new text begin (2) other revenues pledged to the payment of the bonds. new text end 3.20     new text begin Subd. 4. new text end new text begin Refunding bonds. new text end new text begin The commissioner may issue bonds to refund new text end 3.21 new text begin outstanding bonds issued under subdivision 1, including the payment of any redemption new text end 3.22 new text begin premiums on the bonds and any interest accrued or to accrue to the first redemption date new text end 3.23 new text begin after delivery of the refunding bonds. The proceeds of the refunding bonds may, at the new text end 3.24 new text begin discretion of the commissioner, be applied to the purchases or payment at maturity of the new text end 3.25 new text begin bonds to be refunded, or the redemption of the outstanding bonds on the first redemption new text end 3.26 new text begin date after delivery of the refunding bonds and may, until so used, be placed in escrow to new text end 3.27 new text begin be applied to the purchase, retirement, or redemption. Refunding bonds issued under this new text end 3.28 new text begin subdivision must be issued and secured in the manner provided by the commissioner. new text end 3.29     new text begin Subd. 5. new text end new text begin Not a general or moral obligation. new text end new text begin Bonds issued under this section are new text end 3.30 new text begin not public debt, and the full faith, credit, and taxing powers of the state are not pledged new text end 3.31 new text begin for their payment. The bonds may not be paid, directly in whole or in part from a tax of new text end 3.32 new text begin statewide application on any class of property, income, transaction, or privilege. Payment new text end 3.33 new text begin of the bonds is limited to the revenues explicitly authorized to be pledged under this new text end 3.34 new text begin section. The state neither makes nor has a moral obligation to pay the bonds if the pledged new text end 3.35 new text begin revenues and other legal security for them is insufficient. new text end 4.1     new text begin Subd. 6. new text end new text begin Trustee. new text end new text begin The commissioner may contract with and appoint a trustee for new text end 4.2 new text begin bondholders. The trustee has the powers and authority vested in it by the commissioner new text end 4.3 new text begin under the bond and trust indentures. new text end 4.4     new text begin Subd. 7. new text end new text begin Pledges. new text end new text begin A pledge made by the commissioner is valid and binding from new text end 4.5 new text begin the time the pledge is made. The money or property pledged and later received by the new text end 4.6 new text begin commissioner is immediately subject to the lien of the pledge without any physical new text end 4.7 new text begin delivery of the property or money or further act, and the lien of the pledge is valid and new text end 4.8 new text begin binding as against all parties having claims of any kind in tort, contract, or otherwise new text end 4.9 new text begin against the commissioner, whether or not those parties have notice of the lien or pledge. new text end 4.10 new text begin Neither the order nor any other instrument by which a pledge is created need be recorded. new text end 4.11     new text begin Subd. 8. new text end new text begin Bonds; purchase and cancellation. new text end new text begin The commissioner, subject to new text end 4.12 new text begin agreements with bondholders that may then exist, may, out of any money available for the new text end 4.13 new text begin purpose, purchase bonds of the commissioner at a price not exceeding (1) if the bonds are new text end 4.14 new text begin then redeemable, the redemption price then applicable plus accrued interest to the next new text end 4.15 new text begin interest payment date thereon, or (2) if the bonds are not redeemable, the redemption price new text end 4.16 new text begin applicable on the first date after the purchase upon which the bonds become subject to new text end 4.17 new text begin redemption plus accrued interest to that date. new text end 4.18     new text begin Subd. 9. new text end new text begin State pledge against impairment of contracts. new text end new text begin The state pledges and new text end 4.19 new text begin agrees with the holders of any bonds that the state will not limit or alter the rights vested in new text end 4.20 new text begin the commissioner to fulfill the terms of any agreements made with the bondholders, or new text end 4.21 new text begin in any way impair the rights and remedies of the holders until the bonds, together with new text end 4.22 new text begin interest on them, with interest on any unpaid installments of interest, and all costs and new text end 4.23 new text begin expenses in connection with any action or proceeding by or on behalf of the bondholders, new text end 4.24 new text begin are fully met and discharged. The commissioner may include this pledge and agreement new text end 4.25 new text begin of the state in any agreement with the holders of bonds issued under this section. new text end