SF 647

Introduction - 91st Legislature (2019 - 2020)

Posted on 01/31/2019 02:45 p.m.

A bill for an act
relating to capital investment; changing the source of funds from the environment
and natural resources trust fund to the general fund to pay back certain appropriation
bonds; amending Minnesota Statutes 2018, sections 16A.969, subdivisions 1, 2,
4, 7; 116P.08, subdivision 1; Laws 2018, chapter 214, article 6, section 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2018, section 16A.969, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) The definitions in this subdivision apply to this section.

(b) "Appropriation bond" or "bond" means a bond, note, or other similar instrument of
the state payable during a biennium from one or more of the following sources:

(1) money appropriated by law from the deleted text begin environment and natural resources trust deleted text end new text begin general
new text end fund in any biennium for debt service due with respect to obligations described in subdivision
2;

(2) proceeds of the sale of obligations described in subdivision 2;

(3) payments received for that purpose under agreements and ancillary arrangements
described in subdivision 2, paragraph (d); and

(4) investment earnings on amounts in clauses (1) to (3).

(c) "Debt service" means the amount payable in any biennium of principal, premium, if
any, and interest on appropriation bonds.

deleted text begin (d) "Environment and natural resources trust fund" or "trust fund" means the fund
established under the Minnesota Constitution, article XI, section 14, and governed by that
section and chapter 116P.
deleted text end

Sec. 2.

Minnesota Statutes 2018, section 16A.969, subdivision 2, is amended to read:

Subd. 2.

Authorization to issue appropriation bonds; accounts.

(a) Subject to the
limitations of this subdivision, the commissioner may sell and issue appropriation bonds of
the state under this section for public purposes and in amounts as provided by law. deleted text begin This
authorization meets the public purposes established by the Minnesota Constitution, article
XI, section 14, and chapter 116P and shall be a supplement to the traditional sources of
funding for environment and natural resources activities.
deleted text end

(b) The special appropriation deleted text begin trust fund deleted text end new text begin environment new text end bond proceeds fund is established
in the state treasury. Proceeds of the appropriation bonds issued and sold must be credited
to the special appropriation deleted text begin trust fund deleted text end new text begin environment new text end bond proceeds fund. A bond payments
account is established in the special appropriation deleted text begin trust fund deleted text end new text begin environment new text end bond proceeds
fund. All income from investment of the bond proceeds, as estimated by the commissioner,
must be deposited into the account and is appropriated to the commissioner for the payment
of principal and interest on the appropriation bonds.

(c) Appropriation bonds may be issued in one or more issues or series on the terms and
conditions the commissioner determines to be in the best interests of the state, but the term
on any series of appropriation bonds may not exceed 20 years. The appropriation bonds of
each issue and series thereof shall be dated and bear interest, and may be includable in or
excludable from the gross income of the owners for federal income tax purposes.

(d) At the time of, or in anticipation of, issuing the appropriation bonds, and at any time
thereafter, so long as the appropriation bonds are outstanding, the commissioner may enter
into agreements and ancillary arrangements relating to the appropriation bonds, including
but not limited to trust indentures, grant agreements, lease or use agreements, operating
agreements, management agreements, liquidity facilities, remarketing or dealer agreements,
letter of credit agreements, insurance policies, guaranty agreements, reimbursement
agreements, indexing agreements, or interest exchange agreements. Any payments made
or received according to the agreement or ancillary arrangement shall be made from or
deposited as provided in the agreement or ancillary arrangement. The determination of the
commissioner included in an interest exchange agreement that the agreement relates to an
appropriation bond shall be conclusive.

(e) The commissioner may enter into written agreements or contracts relating to the
continuing disclosure of information necessary to comply with or facilitate the issuance of
appropriation bonds in accordance with federal securities laws, rules, and regulations,
including Securities and Exchange Commission rules and regulations in Code of Federal
Regulations, title 17, section 240.15c 2-12. An agreement may be in the form of covenants
with purchasers and holders of appropriation bonds set forth in the order or resolution
authorizing the issuance of the appropriation bonds, or a separate document authorized by
the order or resolution.

(f) The appropriation bonds are not subject to chapter 16C.

Sec. 3.

Minnesota Statutes 2018, section 16A.969, subdivision 4, is amended to read:

Subd. 4.

Refunding bonds.

The commissioner may issue appropriation bonds for the
purpose of refunding any appropriation bonds then outstanding, including the payment of
any redemption premiums on the bonds, any interest accrued or to accrue to the redemption
date, and costs related to the issuance and sale of the refunding bonds. The proceeds of any
refunding bonds may, in the discretion of the commissioner, be applied to the purchase or
payment at maturity of the appropriation bonds to be refunded, to the redemption of the
outstanding appropriation bonds on any redemption date, or to pay interest on the refunding
bonds and may, pending application, be placed in escrow to be applied to the purchase,
payment, retirement, or redemption. Any escrowed proceeds, pending such use, may be
invested and reinvested in obligations that are authorized investments under section 11A.24.
The income earned or realized on the investment may also be applied to the payment of the
appropriation bonds to be refunded or interest or premiums on the refunded appropriation
bonds, or to pay interest on the refunding bonds. After the terms of the escrow have been
fully satisfied, any balance of the proceeds and any investment income may be returned to
the deleted text begin trust deleted text end new text begin general new text end fund or, if applicable, the special appropriation deleted text begin trust fund deleted text end new text begin environment new text end
bond proceeds fund for use in any lawful manner. All refunding bonds issued under this
subdivision must be prepared, executed, delivered, and secured by appropriations in the
same manner as the appropriation bonds to be refunded.

Sec. 4.

Minnesota Statutes 2018, section 16A.969, subdivision 7, is amended to read:

Subd. 7.

Appropriation for debt service and other purposes.

deleted text begin Notwithstanding section
116P.05, subdivision 2, paragraph (b), deleted text end The amount needed to pay principal and interest on
appropriation bonds issued under this section and as authorized by other law is appropriated
each fiscal year from legally available amounts in the deleted text begin environment and natural resources
trust deleted text end new text begin general new text end fund to the commissioner, subject to repeal, unallotment under section 16A.152,
or cancellation, otherwise pursuant to subdivision 6, for deposit into the bond payments
account established for such purpose in the special appropriation deleted text begin trust fund deleted text end new text begin environment new text end
bond proceeds fund. Investment income earned on proceeds of the appropriation bonds
issued under this section shall be deposited in the bond payments account and is appropriated
to the commissioner.

Sec. 5.

Minnesota Statutes 2018, section 116P.08, subdivision 1, is amended to read:

Subdivision 1.

Expenditures.

(a) Money in the trust fund may be spent only for:

(1) the reinvest in Minnesota program as provided in section 84.95, subdivision 2;

(2) research that contributes to increasing the effectiveness of protecting or managing
the state's environment or natural resources;

(3) collection and analysis of information that assists in developing the state's
environmental and natural resources policies;

(4) enhancement of public education, awareness, and understanding necessary for the
protection, conservation, restoration, and enhancement of air, land, water, forests, fish,
wildlife, and other natural resources;

(5) capital projects for the preservation and protection of unique natural resources;

(6) activities that preserve or enhance fish, wildlife, land, air, water, and other natural
resources that otherwise may be substantially impaired or destroyed in any area of the state;

(7) administrative and investment expenses incurred by the State Board of Investment
in investing deposits to the trust fund; new text begin and
new text end

(8) administrative expenses subject to the limits in section 116P.09 deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (9) to pay principal and interest on special appropriation trust fund bonds issued pursuant
to section 16A.969 and other law.
deleted text end

(b) In making recommendations for expenditures from the trust fund, the commission
shall give priority to funding programs and projects under paragraph (a), clauses (1) and
(6). Any requests for proposals issued by the commission shall clearly indicate these
priorities.

Sec. 6.

Laws 2018, chapter 214, article 6, section 4, is amended to read:

Sec. 4. deleted text begin SPECIAL deleted text end new text begin ENVIRONMENT new text end APPROPRIATION deleted text begin TRUST FUND deleted text end BONDS; AUTHORIZATION; APPROPRIATIONS.

Subdivision 1.

Appropriations; general.

The sums shown in the column under
"Appropriations" are appropriated from the special appropriation deleted text begin trust fund deleted text end new text begin environment
new text end bond proceeds fund new text begin established in Minnesota Statutes, section 16A.969, new text end to the state agencies
or officials indicated, to be spent for public purposes. Money appropriated in this section
must be spent as authorized by the Minnesota Constitution, article XI deleted text begin , section 14, Minnesota
Statutes, section 16A.969, and unless otherwise specified, as authorized by and subject to
the requirements of Minnesota Statutes, chapter 116P deleted text end . Unless otherwise specified, money
appropriated in this section is available until June 30, deleted text begin 2022 deleted text end new text begin 2023 new text end . Money remaining from
an appropriation for a project that is completed or abandoned cancels to the bond payments
account established for such purpose in the special appropriation deleted text begin trust fund deleted text end new text begin environment new text end
bond proceeds fund, or if not needed for debt service, to the deleted text begin environment and natural
resources trust deleted text end new text begin general new text end fund.

deleted text begin Subd. 2. deleted text end

deleted text begin Legislative findings; appropriations supplement other sources of funding
for projects. deleted text end

deleted text begin The legislature finds that the appropriations in this section are consistent with
the requirement in Minnesota Statutes, section 116P.03, that expenditures of money from
the environment and natural resources trust fund are for public purposes that supplement
traditional sources of money to pay for expenditures authorized by Minnesota Statutes,
section 116P.08, subdivision 1. Further, the legislature finds that notwithstanding any
limitation on use of trust fund money in Minnesota Statutes, chapter 116P, the appropriations
in this section are for a public purpose and supplement other sources of money to help pay
for projects that are consistent with the purposes of the trust fund.
deleted text end

Subd. 3.

Bond sale authorization.

To provide the money appropriated in this section,
and to pay debt service including capitalized interest, costs of issuance, costs of credit
enhancement, or make payments under other agreements entered into under Minnesota
Statutes, section 16A.969, the commissioner of management and budget shall sell and issue
up to $98,000,000, net of costs of issuance, of deleted text begin special deleted text end appropriation deleted text begin trust fund deleted text end bonds, in the
manner, upon the terms, and with the effect prescribed by Minnesota Statutes, section
16A.969.

Subd. 4.

Management and budget; bond sale expenses; annual debt service.

Up to
$2,940,000 is appropriated in fiscal year 2019 and up to $7,840,000 is appropriated each
fiscal year beginning in fiscal year 2020 and through fiscal year 2039, from the deleted text begin environment
and natural resources trust deleted text end new text begin general new text end fund to the commissioner of management and budget to
pay principal and interest on appropriation bonds issued under this section, as provided in
Minnesota Statutes, section 16A.969, subdivision 7.

Subd. 5. Natural Resources

To the commissioner of natural resources for
the purposes specified in this section.

(1) Natural Resources Asset Preservation

3,419,000

For the renovation of state-owned facilities
and recreational assets within units of the
outdoor recreation system classified under
Minnesota Statutes, section 86A.05, operated
by the commissioner of natural resources to
be spent in accordance with Minnesota
Statutes, section 84.946. Notwithstanding
Minnesota Statutes, section 84.946, the
commissioner may use this appropriation to
replace buildings if, considering the embedded
energy in the building, that is the most
energy-efficient and carbon-reducing method
of renovation.

(2) Elk River - Lake Orono

1,500,000

For a grant to the city of Elk River to dredge
Lake Orono.

(3) South St. Paul - Seidl's Lake

781,000

For a grant to the city of South St. Paul for
capital improvements to improve the water
quality of Seidl's Lake. The capital
improvements include design, engineering,
construction, and equipping of a storm water
lift station to discharge excess storm water
into the city of South St. Paul's storm sewer
system to minimize the fluctuating water
levels of the lake. This project would be
implemented jointly by the cities of South St.
Paul, Inver Grove Heights, and West St. Paul.

Subd. 6. Pollution Control Agency

To the Pollution Control Agency for the
purposes specified in this section.

(1) Anoka County-Waste Disposal Engineering Closed Landfill

6,000,000

deleted text begin Notwithstanding Minnesota Statutes, section
116P.08, subdivision 2, deleted text end To design and
construct remedial systems, including cleanup
and removal of a leaking hazardous waste pit
and protection of groundwater, at the Waste
Disposal Engineering site in Anoka County
in accordance with the closed landfill program
under Minnesota Statutes, sections 115B.39
to 115B.42.

(2) Lake Redwood Reclamation

7,300,000

For a grant to the Redwood-Cottonwood
Rivers Control Area, a joint powers entity, to
predesign, design, construct, and equip the
reservoir reclamation and enhancement of the
66-acre Lake Redwood Reservoir, to remove
approximately 650,000 cubic yards of
sediment and increase its depth from
approximately 2.8 feet to 20 feet in order to
secure renewable energy capacity of the
hydroelectric dam which is impeded by lack
of water capacity, reduce the flow of pollutants
to the Minnesota River, and increase fish
habitat and enhance recreational opportunities.

Subd. 7. Board of Water and Soil Resources

To the Board of Water and Soil Resources for
the purposes specified in this section.

Reinvest in Minnesota (RIM) Reserve Program

10,000,000

(a) To acquire conservation easements from
landowners to preserve, restore, create, and
enhance wetlands and associated uplands of
prairie and grasslands, and restore and enhance
rivers and streams, riparian lands, and
associated uplands of prairie and grasslands
in order to protect soil and water quality,
support fish and wildlife habitat, reduce flood
damage, and provide other public benefits.
The provisions of Minnesota Statutes, section
103F.515, apply to this program.

(b) The board shall give priority to leveraging
federal money by enrolling targeted new lands
or enrolling environmentally sensitive lands
that have expiring federal conservation
agreements.

(c) The board is authorized to enter into new
agreements and amend past agreements with
landowners as required by Minnesota Statutes,
section 103F.515, subdivision 5, to allow for
restoration.

(d) Of this appropriation, up to five percent
may be used for restoration, rehabilitation, and
enhancement; and no more than $1,000,000
may be used to acquire working lands
easements.

Subd. 8. Public Facilities Authority

deleted text begin Notwithstanding Minnesota Statutes, section
116P.08, subdivision 2, deleted text end To the Public
Facilities Authority for the purposes specified
in this section.

(1) State Match for Federal Grants

6,000,000

To match federal grants for the clean water
revolving fund for wastewater treatment under
Minnesota Statutes, section 446A.07. This
appropriation must be used for qualified
capital projects.

(2) Water Infrastructure Funding Program

14,652,000

For grants to eligible municipalities under the
wastewater infrastructure funding program
under Minnesota Statutes, section 446A.072,
for wastewater projects listed on the Pollution
Control Agency's project priority list in the
fundable range under the clean water revolving
fund program.

(3) Point Source Implementation Grants Program

38,348,000

For grants to eligible municipalities under the
point source implementation grants program
under Minnesota Statutes, section 446A.073.
This appropriation must be used for qualified
capital projects.

Subd. 9. Metropolitan Council

To the Metropolitan Council for the purposes
specified in this section.

Metropolitan Regional Parks and Trails Capital Improvements

10,000,000

For the cost of improvements and betterments
of a capital nature and acquisition by the
council and local government units of regional
recreational open-space lands in accordance
with the council's policy plan as provided in
Minnesota Statutes, section 473.147. This
appropriation must not be used to purchase
easements.

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective the day following final enactment.
new text end