SF 4982

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/08/2026 09:30 a.m.

A bill for an act
relating to capital investment; authorizing a lease-purchase agreement and the sale
and issuance of certificates of participation to fund improvements to or replacement
of the state's MAXIS system; proposing coding for new law in Minnesota Statutes,
chapter 16A.

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

Section 1.

new text begin [16A.83] MAXIS IMPROVEMENTS LEASE-PURCHASE FINANCING.
new text end

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 have
the meanings given.
new text end

new text begin (b) "Lease-purchase agreement" means an agreement for the lease and installment
purchase of the MAXIS project, or a portion of the project, between the commissioner, on
behalf of the state, and a vendor or a third-party financing source.
new text end

new text begin (c) "MAXIS lease-purchase guidelines" means policies, procedures, and requirements
established by the commissioner for the MAXIS project that is financed pursuant to a
lease-purchase agreement.
new text end

new text begin (d) "MAXIS project" means the development, acquisition, installation, and
implementation of a modernization plan or replacement of the state's MAXIS system.
new text end

new text begin Subd. 2. new text end

new text begin Lease-purchase financing. new text end

new text begin The commissioner may enter into a lease-purchase
agreement in an amount sufficient to fund the MAXIS project and authorize the public or
private sale and issuance of certificates of participation, provided that:
new text end

new text begin (1) the MAXIS project has been authorized by law to be funded pursuant to a
lease-purchase agreement;
new text end

new text begin (2) the term of the lease-purchase agreement and the related certificates of participation
shall not exceed the lesser of (i) the expected useful life of the MAXIS project financed by
the lease-purchase agreement and the certificates or (ii) ten years from the date of issuance
of the lease-purchase agreement and the certificates;
new text end

new text begin (3) the principal amount of the lease-purchase agreement and the certificates is sufficient
to provide for the costs of issuance, capitalized interest, credit enhancement, or reserves, if
any, as required under the lease-purchase agreement;
new text end

new text begin (4) money sufficient for payment of lease obligations has been committed in the
authorizing legislation for the MAXIS project for the fiscal year during which the
lease-purchase agreement is entered into, provided that no lease-purchase agreement shall
obligate the state to appropriate money sufficient to make lease payments due under an
agreement in a future fiscal year; and
new text end

new text begin (5) planned expenditures for the MAXIS project are permitted within the MAXIS
lease-purchase guidelines.
new text end

new text begin Subd. 3. new text end

new text begin Covenants. new text end

new text begin The commissioner may covenant in a lease-purchase agreement
that the state will abide by the terms and provisions that are customary in lease-purchase
financing transactions, including but not limited to covenants providing that the state:
new text end

new text begin (1) must maintain insurance as required under the terms of the lease-purchase agreement;
new text end

new text begin (2) is responsible to the lessor for any public liability or property damage claims or costs
related to the selection, use, or maintenance of the MAXIS project; to the extent of insurance
or self-insurance maintained by the state; and for costs and expenses incurred by the lessor
as a result of any default by the state; or
new text end

new text begin (3) authorizes the lessor to exercise the rights of a secured party with respect to the
MAXIS project or any portion of the project in the event of default or nonappropriation of
money by the state, and for the present recovery of lease payments due during the current
term of the lease-purchase agreement as liquidated damages in the event of default.
new text end

new text begin Subd. 4. new text end

new text begin Credit and appropriation of proceeds. new text end

new text begin Proceeds of the lease-purchase
agreement and certificates of participation must be credited to the MAXIS lease project
fund in the state treasury. Net income from investment of the proceeds, as estimated by the
commissioner, must be credited to the appropriate accounts in the MAXIS lease project
fund. Money in the MAXIS lease project fund is appropriated for the purposes described
in the authorizing law for the MAXIS project under this section.
new text end

new text begin Subd. 5. new text end

new text begin Transfer of funds. new text end

new text begin Before the lease-purchase proceeds are received in the
MAXIS lease project fund, the commissioner may transfer to that fund from the general
fund amounts not exceeding the expected proceeds from the lease-purchase agreement and
certificates of participation. The commissioner shall return these amounts to the general
fund by transferring proceeds when received. The amounts of these transfers are appropriated
from the general fund and from the MAXIS lease project fund.
new text end

new text begin Subd. 6. new text end

new text begin Administrative expenses. new text end

new text begin Actual and necessary travel and subsistence expenses
of employees and all other nonsalary expenses incidental to the sale, printing, execution,
and delivery of the lease-purchase agreement and certificates of participation may be paid
from the lease-purchase proceeds. The lease-purchase proceeds are appropriated for this
purpose.
new text end

new text begin Subd. 7. new text end

new text begin Treatment of MAXIS lease project fund. new text end

new text begin Lease-purchase proceeds remaining
in the MAXIS lease project fund after the purpose for which the lease-purchase agreement
was undertaken is accomplished or abandoned, as determined by the commissioner, must
be transferred to the general fund.
new text end

new text begin Subd. 8. new text end

new text begin Lease-purchase not public debt. new text end

new text begin A lease-purchase agreement does not
constitute or create a general or moral obligation or indebtedness of the state in excess of
the money from time to time appropriated or otherwise available for payments or obligations
under the agreement. Payments due under a lease-purchase agreement during a current lease
term for which money has been appropriated is a current expense of the state.
new text end

new text begin Subd. 9. new text end

new text begin Tax treatment. new text end

new text begin Property purchased subject to a lease-purchase agreement
under this section is not subject to personal property taxes. The purchaser of property for
lease to the state under a valid lease-purchase agreement under this section is not subject
to the sales tax on the purchase of the property or on the payments received under the
agreement, but the state is subject to the tax under chapter 297A on property acquired under
the agreement.
new text end

new text begin Subd. 10. new text end

new text begin Refunding certificates. new text end

new text begin The commissioner from time to time may enter into
a new lease-purchase agreement and issue and sell certificates of participation for the purpose
of refunding any lease-purchase agreement and related certificates of participation then
outstanding, including the payment of any redemption premiums, any interest accrued or
that is to accrue to the redemption date, and costs related to the issuance and sale of the
refunding certificates. The proceeds of any refunding certificates may, in the discretion of
the commissioner, be applied (1) to the purchase or payment at maturity of the certificates
to be refunded, (2) to the redemption of outstanding lease-purchase agreements and
certificates on any redemption date, or (3) to pay interest on the refunding lease-purchase
agreements and certificates and may, pending application, be placed in escrow to be applied
to the purchase, payment, retirement, or redemption. Any escrowed proceeds, pending use,
may be invested and reinvested in obligations that are authorized investments under section
11A.24. The income earned or realized on any authorized investment may also be applied
to the payment of the lease-purchase agreements and certificates to be refunded, interest or
premiums on the refunded certificates, or to pay interest on the refunding lease-purchase
agreements and certificates. After the terms of the escrow have been fully satisfied, any
balance of proceeds and any investment income may be returned to the general fund or, if
applicable, the MAXIS lease project fund, for use in a lawful manner. All refunding
lease-purchase agreements and certificates issued under the provisions of this subdivision
must be prepared, executed, delivered, and secured by appropriations in the same manner
as the lease-purchase agreements and certificates to be refunded.
new text end

Sec. 2.

new text begin [16A.835] MAXIS LEASE-PURCHASE APPROPRIATION.
new text end

new text begin $10,000,000 in fiscal year 2027, $10,000,000 in fiscal year 2028, and $10,000,000 in
each fiscal year 2029 to 2036 are appropriated from the general fund to the commissioner
to make payments under a lease-purchase agreement as defined in section 16A.83 for
development, acquisition, installation, and implementation of a modernization plan or
replacement of the state's MAXIS system, provided that the state is not obligated to continue
the appropriation of money or to make lease payments in any future fiscal year. Any
unexpended portions of this appropriation cancel to the general fund at the close of each
biennium. This section expires June 30, 2037.
new text end