HF 1375

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:50am

A bill for an act
relating to public finance; eliminating authority of municipalities to issue bonds
for certain other postemployment benefits; amending Minnesota Statutes 2008,
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 2008, 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) Obligations issued to pay pension fund deleted text begin or other postemployment benefit deleted text end
liabilities under section 475.52, subdivision 6, or any charter authority.

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

(12) 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.

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Sec. 2.

Minnesota Statutes 2008, 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; for funding floating indebtedness;
deleted text begin for funding actuarial liabilities to pay postemployment benefits to employees or officers
after their termination of service; deleted text end 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 pursuant
to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or
relief association referred to in section 69.77 or chapter 422A 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. deleted text begin 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

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Sec. 3.

Minnesota Statutes 2008, 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) to fund pension or retirement fund deleted text begin or postemployment benefit deleted text end liabilities pursuant
to section 475.52, subdivision 6;

(8) under a capital improvement plan under section 373.40; and

(9) 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).

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