HF 696

as introduced - 87th Legislature (2011 - 2012) Posted on 02/24/2011 10:41am

A bill for an act
relating to local government; borrowing authority; repealing the authority to
issue bonds payable with property taxes for certain employee benefits; amending
Minnesota Statutes 2010, sections 475.51, subdivision 4; 475.52, subdivision 6;
475.58, subdivision 1.

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

Section 1.

Minnesota Statutes 2010, section 475.51, subdivision 4, is amended to read:

Subd. 4.

Net debt.

"Net debt" means the amount remaining after deducting from its
gross debt the amount of current revenues which are applicable within the current fiscal
year to the payment of any debt and the aggregate of the principal of the following:

(1) Obligations issued for improvements which are payable wholly or partly from the
proceeds of special assessments levied upon property specially benefited thereby, including
those which are general obligations of the municipality issuing them, if the municipality is
entitled to reimbursement in whole or in part from the proceeds of the special assessments.

(2) Warrants or orders having no definite or fixed maturity.

(3) Obligations payable wholly from the income from revenue producing
conveniences.

(4) Obligations issued to create or maintain a permanent improvement revolving
fund.

(5) Obligations issued for the acquisition, and betterment of public waterworks
systems, and public lighting, heating or power systems, and of any combination thereof or
for any other public convenience from which a revenue is or may be derived.

(6) Debt service loans and capital loans made to a school district under the provisions
of sections 126C.68 and 126C.69.

(7) Amount of all money and the face value of all securities held as a debt service
fund for the extinguishment of obligations other than those deductible under this
subdivision.

(8) Obligations to repay loans made under section 216C.37.

(9) Obligations to repay loans made from money received from litigation or
settlement of alleged violations of federal petroleum pricing regulations.

(10) deleted text begin Obligations issued to pay pension fund or other postemployment benefit
liabilities under section 475.52, subdivision 6, or any charter authority.
deleted text end

deleted text begin (11) deleted text end Obligations issued to pay judgments against the municipality under section
475.52, subdivision 6, or any charter authority.

deleted text begin (12) deleted text end new text begin (11) new text end All other obligations which under the provisions of law authorizing their
issuance are not to be included in computing the net debt of the municipality.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for obligations issued after June
30, 2011.
new text end

Sec. 2.

Minnesota Statutes 2010, section 475.52, subdivision 6, is amended to read:

Subd. 6.

Certain purposes.

Any municipality may issue bonds for paying
judgments against it; for refunding outstanding bonds; new text begin or new text end for funding floating
indebtedness new text begin . new text end deleted text begin ; for funding actuarial liabilities to pay postemployment benefits to
employees or officers after their termination of service; or for funding all or part of the
municipality's current and future unfunded liability for a pension or retirement fund or
plan referred to in section 356.20, subdivision 2, as those liabilities are most recently
computed under sections 356.215 and 356.216. The board of trustees or directors of a
relief association referred to in section 69.77 must consent and must be a party to any
contract made under this section with respect to the fund held by it for the benefit of and in
trust for its members. For purposes of this section, the term "postemployment benefits"
means benefits giving rise to a liability under Statement No. 45 of the Governmental
Accounting Standards Board.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for obligations issued after June
30, 2011.
new text end

Sec. 3.

Minnesota Statutes 2010, section 475.58, subdivision 1, is amended to read:

Subdivision 1.

Approval by electors; exceptions.

Obligations authorized by law or
charter may be issued by any municipality upon obtaining the approval of a majority of
the electors voting on the question of issuing the obligations, but an election shall not be
required to authorize obligations issued:

(1) to pay any unpaid judgment against the municipality;

(2) for refunding obligations;

(3) for an improvement or improvement program, which obligation is payable wholly
or partly from the proceeds of special assessments levied upon property specially benefited
by the improvement or by an improvement within the improvement program, or from tax
increments, as defined in section 469.174, subdivision 25, including obligations which are
the general obligations of the municipality, if the municipality is entitled to reimbursement
in whole or in part from the proceeds of such special assessments or tax increments and
not less than 20 percent of the cost of the improvement or the improvement program is to
be assessed against benefited property or is to be paid from the proceeds of federal grant
funds or a combination thereof, or is estimated to be received from tax increments;

(4) payable wholly from the income of revenue producing conveniences;

(5) under the provisions of a home rule charter which permits the issuance of
obligations of the municipality without election;

(6) under the provisions of a law which permits the issuance of obligations of a
municipality without an election;

(7) deleted text begin to fund pension or retirement fund liabilities of a municipality pursuant to
section 475.52, subdivision 6;
deleted text end

deleted text begin (8) deleted text end under a capital improvement plan under section 373.40;

deleted text begin (9) deleted text end new text begin (8) new text end under sections 469.1813 to 469.1815 (property tax abatement authority
bonds), if the proceeds of the bonds are not used for a purpose prohibited under section
469.176, subdivision 4g, paragraph (b); new text begin and
new text end

deleted text begin (10) to fund postemployment benefit liabilities pursuant to section 475.52,
subdivision 6, of a municipality, other than a school district, if the liabilities are limited to:
deleted text end

deleted text begin (i) satisfying the requirements of section 471.61, subdivision 2b; and
deleted text end

deleted text begin (ii) other postemployment benefits, which the municipality no longer provides to
employees hired after a date before the obligations are issued; and
deleted text end

deleted text begin (11) deleted text end new text begin (9) new text end under section 475.755.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for obligations issued after June
30, 2011.
new text end