3rd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to public funds; regulating the deposit and 1.3 investment of these funds, and agreements related to 1.4 these funds; requiring a study; making conforming 1.5 changes; amending Minnesota Statutes 1994, sections 1.6 6.745, as amended; 103E.635, subdivision 8; 121.148, 1.7 subdivision 4; 136A.32, subdivision 7; 385.07; 447.49; 1.8 469.012, subdivision 1; 469.155, subdivision 15; 1.9 473.197, subdivision 4; 473.543, subdivision 3; and 1.10 475.51, subdivision 1; Minnesota Statutes 1995 1.11 Supplement, section 473.900, subdivision 3; proposing 1.12 coding for new law as Minnesota Statutes, chapter 1.13 118A; repealing Minnesota Statutes 1994, sections 1.14 118.005; 118.01; 118.02; 118.08; 118.09; 118.10; 1.15 118.11; 118.12; 118.13; 118.14; 118.16; 124.05; 1.16 471.56; 475.66, as amended; and 475.76. 1.17 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.18 ARTICLE 1 1.19 PUBLIC FUNDS 1.20 Section 1. Minnesota Statutes 1994, section 6.745, as 1.21 amended by Laws 1995, chapter 134, section 1, is amended to read: 1.22 6.745 [SUMMARY BUDGET DATA TO THE STATE AUDITOR.] 1.23 Subdivision 1. [CITIES.] Annually, upon adoption of the 1.24 city budget, the city council of each home rule charter or 1.25 statutory city shall forward summary budget information to the 1.26 office of the state auditor. The summary budget information 1.27 shall be provided on forms prescribed by the state auditor. The 1.28 office of the state auditor shall work with representatives of 1.29 city government to develop a budget reporting form that conforms 1.30 with city budgeting practices and provides the necessary summary 1.31 budget information to the office of the state auditor. The 2.1 summary budget data must include separately any net unrealized 2.2 gains or losses from investments. The summary budget data shall 2.3 be provided to the office of the state auditor no later than 2.4 January 31 of each budget year. 2.5 Subd. 2. [COUNTIES.] Annually, upon adoption of the county 2.6 budget, the county board shall forward summary budget 2.7 information to the office of the state auditor. The summary 2.8 budget information shall be provided on forms prescribed by the 2.9 state auditor. The office of the state auditor shall work with 2.10 representatives of county government to develop a budget 2.11 reporting form that conforms with county budgeting practices and 2.12 provides the necessary summary budget information to the office 2.13 of the state auditor. The summary budget data must include 2.14 separately any net unrealized gains or losses from investments. 2.15 The summary budget data shall be provided to the office of the 2.16 state auditor no later than December 31 of the year preceding 2.17 each budget year. 2.18 Sec. 2. [118A.01] [PUBLIC FUNDS; DEPOSITORIES AND 2.19 INVESTMENTS.] 2.20 Subdivision 1. [DEFINITIONS.] The definitions in this 2.21 section apply to sections 118A.01 to 118A.06. 2.22 Subd. 2. [GOVERNMENT ENTITY.] "Government entity" means a 2.23 county, city, town, school district, hospital district, public 2.24 authority, public corporation, public commission, special 2.25 district, any other political subdivision, except an entity 2.26 whose investment authority is specified under chapter 11A or 2.27 356A. 2.28 Subd. 3. [FINANCIAL INSTITUTION.] "Financial institution" 2.29 means a savings association, commercial bank, trust company, 2.30 credit union, or industrial loan and thrift company. 2.31 Subd. 4. [PUBLIC FUNDS.] "Public funds" means all general, 2.32 special, permanent, trust, and other funds, regardless of source 2.33 or purpose, held or administered by a government entity, unless 2.34 otherwise restricted. 2.35 Sec. 3. [118A.02] [AUTHORIZATION FOR DEPOSIT AND 2.36 INVESTMENT.] 3.1 Subdivision 1. The governing body of each government 3.2 entity shall designate, as a depository of its funds, one or 3.3 more financial institutions. The governing body may authorize 3.4 the treasurer or chief financial officer to (1) designate 3.5 depositories of the funds; (2) make investments of funds under 3.6 sections 118A.01 to 118A.06 or other applicable law; or (3) both 3.7 designate depositories and make investments as provided in this 3.8 subdivision. 3.9 Subd. 2. The treasurer or chief financial officer of a 3.10 government entity may at any time sell obligations purchased 3.11 pursuant to this section and the money received from such sale, 3.12 and the interest and profits or loss on such investment shall be 3.13 credited or charged, as the case may be, to the fund from which 3.14 the investment was made. Neither such official nor government 3.15 entity, nor any other official responsible for the custody of 3.16 such funds, shall be personally liable for any loss sustained 3.17 from the deposit or investment of funds in accordance with the 3.18 provisions of sections 118A.04 and 118A.05. 3.19 Sec. 4. [118A.03] [DEPOSITORIES AND COLLATERAL.] 3.20 Subdivision 1. To the extent that funds deposited are in 3.21 excess of available federal deposit insurance, the government 3.22 entity shall require the financial institution to furnish 3.23 collateral security or a corporate surety bond executed by a 3.24 company authorized to do business in the state. 3.25 Subd. 2. The following are the allowable forms of 3.26 collateral in lieu of a corporate surety bond: 3.27 (1) United States government treasury bills, treasury 3.28 notes, treasury bonds; 3.29 (2) issues of United States government agencies and 3.30 instrumentalities as quoted by a recognized industry quotation 3.31 service available to the government entity; 3.32 (3) general obligation securities of any state or local 3.33 government with taxing powers which is rated A or better by a 3.34 national bond rating service, or revenue obligation securities 3.35 of any state or local government with taxing powers which is 3.36 rated AA or better by a national bond rating service; 4.1 (4) irrevocable standby letters of credit issued by Federal 4.2 Home Loan Banks to a municipality accompanied by written 4.3 evidence that the bank's public debt is rated "AA" or better by 4.4 Moody's Investors Service, Inc., or Standard & Poor's 4.5 Corporation; and 4.6 (5) time deposits that are fully insured by the Federal 4.7 Deposit Insurance Corporation. 4.8 Subd. 3. The total amount of the collateral computed at 4.9 its market value shall be at least ten percent more than the 4.10 amount on deposit plus accrued interest at the close of the 4.11 business day. The financial institution may furnish both a 4.12 surety bond and collateral aggregating the required amount. 4.13 Subd. 4. Any collateral pledged shall be accompanied by a 4.14 written assignment to the government entity from the financial 4.15 institution. The written assignment shall recite that, upon 4.16 default, the financial institution shall release to the 4.17 government entity on demand, free of exchange or any other 4.18 charges, the collateral pledged. Interest earned on assigned 4.19 collateral will be remitted to the financial institution so long 4.20 as it is not in default. The government entity may sell the 4.21 collateral to recover the amount due. Any surplus from the sale 4.22 of the collateral shall be payable to the financial institution, 4.23 its assigns, or both. 4.24 Subd. 5. A financial institution may withdraw excess 4.25 collateral or substitute other collateral after giving written 4.26 notice to the governmental entity and receiving confirmation. 4.27 The authority to return any delivered and assigned collateral 4.28 rests with the government entity. 4.29 Subd. 6. For purposes of this section, default on the part 4.30 of the financial institution includes, but is not limited to, 4.31 failure to make interest payments when due, failure to promptly 4.32 deliver upon demand all money on deposit, less any early 4.33 withdrawal penalty that may be required in connection with the 4.34 withdrawal of a time deposit, or closure of the depository. If 4.35 a financial institution closes, all deposits shall be 4.36 immediately due and payable. It shall not be a default under 5.1 this subdivision to require prior notice of withdrawal if such 5.2 notice is required as a condition of withdrawal by applicable 5.3 federal law or regulation. 5.4 Subd. 7. All collateral shall be placed in safekeeping in 5.5 a restricted account at a Federal Reserve Bank, or in an account 5.6 at a trust department of a commercial bank or other financial 5.7 institution that is not owned or controlled by the financial 5.8 institution furnishing the collateral. The selection shall be 5.9 approved by the government entity. 5.10 Sec. 5. [118A.04] [INVESTMENTS.] 5.11 Subdivision 1. Any public funds, not presently needed for 5.12 other purposes or restricted for other purposes, may be invested 5.13 in the manner and subject to the conditions provided for in this 5.14 section. 5.15 Subd. 2. Public funds may be invested in governmental 5.16 bonds, notes, bills, mortgages (excluding high-risk 5.17 mortgage-backed securities), and other securities, which are 5.18 direct obligations or are guaranteed or insured issues of the 5.19 United States, its agencies, its instrumentalities, or 5.20 organizations created by an act of Congress. 5.21 Subd. 3. Funds may be invested in the following: 5.22 (1) any security which is a general obligation of any state 5.23 or local government with taxing powers which is rated A or 5.24 better by a national bond rating service; 5.25 (2) any security which is a revenue obligation of any state 5.26 or local government with taxing powers which is rated AA or 5.27 better by a national bond rating service; and 5.28 (3) a general obligation of the Minnesota housing finance 5.29 agency which is a moral obligation of the state of Minnesota and 5.30 is rated A or better by a national bond rating agency. 5.31 Subd. 4. Funds may be invested in commercial paper issued 5.32 by United States corporations or their Canadian subsidiaries 5.33 that is rated in the highest quality category by at least two 5.34 nationally recognized rating agencies and matures in 270 days or 5.35 less. 5.36 Subd. 5. Funds may be invested in time deposits that are 6.1 fully insured by the Federal Deposit Insurance Corporation or 6.2 bankers acceptances of United States banks. 6.3 Subd. 6. For the purposes of this section and section 6.4 118A.05, "high-risk mortgage-backed securities" are: 6.5 (a) interest-only or principal-only mortgage-backed 6.6 securities; and 6.7 (b) any mortgage derivative security that: 6.8 (1) has an expected average life greater than ten years; 6.9 (2) has an expected average life that: 6.10 (i) will extend by more than four years as the result of an 6.11 immediate and sustained parallel shift in the yield curve of 6.12 plus 300 basis points; or 6.13 (ii) will shorten by more than six years as the result of 6.14 an immediate and sustained parallel shift in the yield curve of 6.15 minus 300 basis points; or 6.16 (3) will have an estimated change in price of more than 17 6.17 percent as the result of an immediate and sustained parallel 6.18 shift in the yield curve of plus or minus 300 basis points. 6.19 Subd. 7. Funds may be invested in general obligation 6.20 temporary bonds of the same governmental entity issued under 6.21 section 429.091, subdivision 7, 469.178, subdivision 5, or 6.22 475.61, subdivision 6. 6.23 Subd. 8. Funds held in a debt service fund may be used to 6.24 purchase any obligation, whether general or special, of an issue 6.25 which is payable from the fund, at such price, which may include 6.26 a premium, as shall be agreed to by the holder, or may be used 6.27 to redeem any obligation of such an issue prior to maturity in 6.28 accordance with its terms. The securities representing any such 6.29 investment may be sold by the governmental entity at any time, 6.30 but the money so received remains part of the fund until used 6.31 for the purpose for which the fund was created. Any obligation 6.32 held in a debt service fund from which it is payable may be 6.33 canceled at any time unless otherwise provided in a resolution 6.34 or other instrument securing obligations payable from the fund. 6.35 Subd. 9. (a) For the purpose of this section and section 6.36 118A.05, the term "broker" means a broker-dealer, broker, or 7.1 agent of a government entity, who transfers, purchases, sells, 7.2 or obtains securities for, or on behalf of, a government entity. 7.3 (b) Prior to completing an initial transaction with a 7.4 broker, a government entity shall provide annually to the broker 7.5 a written statement of investment restrictions which shall 7.6 include a provision that all future investments are to be made 7.7 in accordance with Minnesota Statutes governing the investment 7.8 of public funds. 7.9 (c) A broker must acknowledge annually receipt of the 7.10 statement of investment restrictions in writing and agree to 7.11 handle the government entity's account in accordance with these 7.12 restrictions. A government entity may not enter into a 7.13 transaction with a broker until the broker has provided this 7.14 written agreement to the government entity. 7.15 (d) The state auditor shall prepare uniform notification 7.16 forms which shall be used by the government entities and the 7.17 brokers to meet the requirements of this subdivision. 7.18 Sec. 6. [118A.05] [CONTRACTS AND AGREEMENTS.] 7.19 Subdivision 1. In addition to other authority granted in 7.20 sections 118A.01 to 118A.06, government entities may enter into 7.21 contracts and agreements as follows. 7.22 Subd. 2. Repurchase agreements consisting of collateral 7.23 allowable in section 118A.04, and reverse repurchase agreements 7.24 may be entered into with any of the following entities: 7.25 (1) a financial institution qualified as a "depository" of 7.26 public funds of the government entity; 7.27 (2) any other financial institution which is a member of 7.28 the Federal Reserve System and whose combined capital and 7.29 surplus equals or exceeds $10,000,000; 7.30 (3) a primary reporting dealer in United States government 7.31 securities to the Federal Reserve Bank of New York; or 7.32 (4) a securities broker-dealer licensed pursuant to chapter 7.33 80A, or an affiliate of it, regulated by the securities and 7.34 exchange commission and maintaining a combined capital and 7.35 surplus of $40,000,000 or more, exclusive of subordinated debt. 7.36 Reverse agreements may only be entered into for a period of 8.1 90 days or less and only to meet short-term cash flow needs. In 8.2 no event may reverse repurchase agreements be entered into for 8.3 the purpose of generating cash for investments, except as stated 8.4 in subdivision 3. 8.5 Subd. 3. Securities lending agreements, including custody 8.6 agreements, may be entered into with a financial institution 8.7 meeting the qualifications of subdivision 2, clause (1) or (2), 8.8 and having its principal executive office in Minnesota. 8.9 Securities lending transactions may be entered into with 8.10 entities meeting the qualifications of subdivision 2 and the 8.11 collateral for such transactions shall be restricted to the 8.12 securities described in sections 118A.04 and 118A.05. 8.13 Subd. 4. Government entities may enter into agreements or 8.14 contracts for shares of a Minnesota joint powers investment 8.15 trust whose investments are restricted to securities described 8.16 in sections 118A.04 and 118A.05, subdivision 2, or shares of an 8.17 investment company which is registered under the Federal 8.18 Investment Company Act of 1940, and whose shares are registered 8.19 under the Federal Securities Act of 1933, as long as the 8.20 investment company's fund receives the highest credit rating and 8.21 is rated in one of the two highest risk rating categories by at 8.22 least one nationally recognized statistical rating organization 8.23 and is invested in financial instruments with a final maturity 8.24 no longer than 13 months. 8.25 Subd. 5. Agreements or contracts for guaranteed investment 8.26 contracts may be entered into if they are issued or guaranteed 8.27 by United States commercial banks, domestic branches of foreign 8.28 banks, United States insurance companies, or their Canadian 8.29 subsidiaries. The credit quality of the issuer's or guarantor's 8.30 short- and long-term unsecured debt must be rated in one of the 8.31 two highest categories by a nationally recognized rating 8.32 agency. Should the issuer's or guarantor's credit quality be 8.33 downgraded below A, the government entity must have withdrawal 8.34 rights. 8.35 Sec. 7. [118A.06] [DELIVERY AND SAFEKEEPING.] 8.36 Investments, contracts, and agreements may be held in 9.1 safekeeping with: 9.2 (1) any Federal Reserve Bank; 9.3 (2) any bank authorized under the laws of the United States 9.4 or any state to exercise corporate trust powers, including, but 9.5 not limited to, the bank from which the investment is purchased; 9.6 (3) a primary reporting dealer in United States government 9.7 securities to the Federal Reserve Bank of New York; or 9.8 (4) a securities broker-dealer having its principal 9.9 executive office in Minnesota, licensed under chapter 80A, or an 9.10 affiliate of it, and regulated by the Securities and Exchange 9.11 Commission; provided that the government entity's ownership of 9.12 all securities is evidenced by written acknowledgments 9.13 identifying the securities by the names of the issuers, maturity 9.14 dates, interest rates, CUSIP number, or other distinguishing 9.15 marks. 9.16 Sec. 8. [118A.07] [ADDITIONAL INVESTMENT AUTHORITY.] 9.17 Subdivision 1. [AUTHORITY PROVIDED.] As used in this 9.18 section, "governmental entity" means a city with a population in 9.19 excess of 200,000 or a county that contains a city of that 9.20 size. If a governmental entity meets the requirements of 9.21 subdivisions 2 and 3, it may exercise additional investment 9.22 authority under subdivisions 4, 5, and 6. 9.23 Subd. 2. [WRITTEN POLICIES AND PROCEDURES.] Prior to 9.24 exercising any additional authority under subdivisions 4, 5, and 9.25 6, the governmental entity must have written investment policies 9.26 and procedures governing the following: 9.27 (1) the use of or limitation on mutual bond funds or other 9.28 securities authorized or permitted investments under law; 9.29 (2) specifications for and limitations on the use of 9.30 derivatives; 9.31 (3) the final maturity of any individual security; 9.32 (4) the maximum average weighted life of the portfolio; 9.33 (5) the use of and limitations on reverse repurchase 9.34 agreements; 9.35 (6) credit standards for financial institutions with which 9.36 the government entity deals; and 10.1 (7) credit standards for investments made by the government 10.2 entity. 10.3 Subd. 3. [OVERSIGHT PROCESS.] Prior to exercising any 10.4 authority under subdivisions 4, 5, and 6, the governmental 10.5 entity must establish an oversight process that provides for 10.6 review of the government entity's investment strategy and the 10.7 composition of the financial portfolio. This process shall 10.8 include one or more of the following: 10.9 (1) audit reviews; 10.10 (2) internal or external investment committee reviews; and 10.11 (3) internal management control. 10.12 Additionally, the governing body of the governmental entity 10.13 must, by resolution, authorize its treasurer to utilize the 10.14 additional authorities under this section within their 10.15 prescribed limits, and in conformance with the written 10.16 limitations, policies, and procedures of the governmental entity. 10.17 If the governing body of a governmental entity exercises 10.18 the authority provided in this section, the treasurer of the 10.19 governmental entity must annually report to the governing body 10.20 on the findings of the oversight process required under this 10.21 subdivision. If the governing body intends to continue to 10.22 exercise the authority provided in this section for the 10.23 following calendar year, it must adopt a resolution affirming 10.24 that intention by December 1. 10.25 Subd. 4. [REPURCHASE AGREEMENTS.] A government entity may 10.26 enter into repurchase agreements as authorized under section 10.27 118A.05, provided that the exclusion of mortgage-backed 10.28 securities defined as "high risk mortgage-backed securities" 10.29 under section 118A.04, subdivision 6, shall not apply to 10.30 repurchase agreements under this authority if the margin 10.31 requirements is 101 percent or more. 10.32 Subd. 5. [REVERSE REPURCHASE AGREEMENTS.] Notwithstanding 10.33 the limitations contained in section 118A.05, subdivision 2, the 10.34 county may enter into reverse repurchase agreements to: 10.35 (1) meet cash flow needs; or 10.36 (2) generate cash for investments, provided that the total 11.1 securities owned shall be limited to an amount not to exceed 130 11.2 percent of the annual daily average of general investable monies 11.3 for the fiscal year as disclosed in the most recently available 11.4 audited financial report. Excluded from this limit are: 11.5 (i) securities with maturities of one year or less; and 11.6 (ii) securities that have been reversed to maturity. 11.7 There shall be no limit on the term of a reverse repurchase 11.8 agreement. Reverse repurchase agreements shall not be included 11.9 in computing the net debt of the governmental entity, and may be 11.10 made without an election or public sale, and the interest 11.11 payable thereon shall not be subject to the limitation in 11.12 section 475.55. The interest shall not be deducted or excluded 11.13 from gross income of the recipient for the purpose of state 11.14 income, corporate franchise, or bank excise taxes, or if so 11.15 provided by federal law, for the purpose of federal income tax. 11.16 Subd. 6. [OPTIONS AND FUTURES.] A government entity may 11.17 enter into futures contracts, options on futures contracts, and 11.18 option agreements to buy or sell securities authorized under law 11.19 as legal investments for counties, but only with respect to 11.20 securities owned by the governmental entity, including 11.21 securities that are the subject of reverse repurchase agreements 11.22 under this section that expire at or before the due date of the 11.23 option agreement. 11.24 Sec. 9. [NO SUPERSEDING EFFECT.] 11.25 Except as provided in section 11, sections 2 to 7 shall not 11.26 supersede any general or special law relating to the deposit and 11.27 investment of public funds. 11.28 Sec. 10. [STUDY; REPORT.] 11.29 The department of finance, in cooperation with the 11.30 Minnesota Association of County Treasurers, the Minnesota 11.31 Association of School Business Officials, and the Minnesota 11.32 Government Finance Officers Association, shall review the 11.33 adequacy of training and certification programs for 11.34 representatives of local government entities which are entrusted 11.35 with the deposit and investment of public funds. The department 11.36 shall report its finding and any recommendations to the local 12.1 government and metropolitan affairs committee of the house of 12.2 representatives and the metropolitan and local government 12.3 committee of the senate no later than November 15, 1996. 12.4 Sec. 11. [REPEALER.] 12.5 Minnesota Statutes 1994, sections 118.005; 118.01; 118.02; 12.6 118.08; 118.09; 118.10; 118.11; 118.12; 118.13; 118.14; 118.16; 12.7 124.05; 471.56; 475.66, as amended by Laws 1995, chapter 122, 12.8 section 3; and 475.76, are repealed. 12.9 Sec. 12. [EFFECTIVE DATE.] 12.10 Sections 2 to 7 and 11 are effective January 1, 1997. 12.11 Section 10 is effective the day following final enactment. 12.12 ARTICLE 2 12.13 CONFORMING CHANGES 12.14 Section 1. Minnesota Statutes 1994, section 103E.635, 12.15 subdivision 8, is amended to read: 12.16 Subd. 8. [COUNTY INVESTMENT, PURCHASE, AND SELLING OF 12.17 TEMPORARY DRAINAGE BONDS.] (a) Funds of the issuing county may 12.18 be invested in temporary drainage bonds under
sections 471.5612.19 and 475.66section 118A.04, except that the temporary drainage 12.20 bonds may be: 12.21 (1) purchased by the county when the temporary drainage 12.22 bonds are initially issued; 12.23 (2) purchased only out of funds that the board determines 12.24 will not be required for other purposes before the temporary 12.25 drainage bonds mature; and 12.26 (3) resold before the temporary drainage bonds mature only 12.27 if there is an unforeseen emergency. 12.28 (b) If a temporary drainage bond purchase is made from 12.29 money held in a sinking fund for other bonds of the county, the 12.30 holders of the other bonds may enforce the county's obligation 12.31 to sell definitive bonds at or before the maturity of the 12.32 temporary drainage bonds, or exchange the other bonds, in the 12.33 same manner as holders of the temporary drainage bonds. 12.34 Sec. 2. Minnesota Statutes 1994, section 121.148, 12.35 subdivision 4, is amended to read: 12.36 Subd. 4. [UNFAVORABLE REVIEW AND COMMENT.] If the 13.1 commissioner submits an unfavorable review and comment for a 13.2 proposal under section 121.15, the school board, by resolution 13.3 of the board, must reconsider construction. If, upon 13.4 reconsideration, the school board decides to proceed with 13.5 construction, it may initiate proceedings for issuing bonds to 13.6 finance construction under sections 475.51 to 475.76chapter 475. 13.7 Unless 60 percent of the voters at the election approve of 13.8 issuing the obligations, the board is not authorized to issue 13.9 the obligations. 13.10 Sec. 3. Minnesota Statutes 1994, section 136A.32, 13.11 subdivision 7, is amended to read: 13.12 Subd. 7. The authority may invest any bond proceeds, 13.13 sinking funds or reserves in any securities authorized for 13.14 investment of debt servicefunds of municipalities pursuant to 13.15 section 475.66, subdivision 3118A.04, including securities 13.16 described in section 475.67, subdivision 8. In addition, such 13.17 bond proceeds, sinking funds and reserves may be 13.18 (1) deposited in time deposits of any state or national 13.19 bank subject to the limitations and requirements of chapter 118, 13.20 or 13.21 (2) invested in repurchase agreements with, providing for 13.22 the repurchase of securities described in the preceding sentence 13.23 by, a bank qualified as a depository of money of the authority, 13.24 a national or state bank in the United States that is a member 13.25 of the federal reserve system and whose combined capital and 13.26 surplus equals or exceeds $10,000,000, or a reporting dealer to 13.27 the federal reserve bank of New York. Power to make any such 13.28 investment or deposit is subject to the provisions of any 13.29 applicable covenant or restriction in a resolution or trust 13.30 agreement of the authority. 13.31 Sec. 4. Minnesota Statutes 1994, section 385.07, is 13.32 amended to read: 13.33 385.07 [FUNDS, WHERE DEPOSITED OR INVESTED.] 13.34 All county funds shall be deposited promptly and intact by 13.35 the county treasurer in the name of the county or invested as 13.36 provided in sections 471.56 and 475.66section 118A.04. 14.1 Interest and profits which accrue from such investment shall, 14.2 when collected, be credited to the general revenue fund of the 14.3 county. 14.4 Sec. 5. Minnesota Statutes 1994, section 447.49, is 14.5 amended to read: 14.6 447.49 [MISCELLANEOUS PROVISIONS.] 14.7 Bonds issued under sections 447.45 to 447.50 must be issued 14.8 and sold as provided in chapter 475. If the bonds do not pledge 14.9 the credit of the county, city, or hospital district as provided 14.10 in section 447.48, the governing body may negotiate their sale 14.11 without advertisement for bids. They shall not be included in 14.12 the net debt of any municipality, and are not subject to 14.13 interest rate limitations, as defined or referred to in sections 14.14 475.51 and 475.55. If the bonds do not pledge the credit of the 14.15 county, city, or hospital district as provided in section 447.48 14.16 and are payable from rental payments to be made under a lease 14.17 agreement entered into pursuant to section 447.47, the county, 14.18 city, or hospital district may invest or deposit, or authorize a 14.19 trustee to invest or deposit, any proceeds of the bonds, rental 14.20 payments, and income from the investment of them, in any manner 14.21 and upon any terms and conditions agreed to by the lessee under 14.22 the lease agreement, resolution, or indenture, notwithstanding 14.23 chapter 118 or section 471.56 or 475.66118A, but subject to any 14.24 statutory provisions that govern the deposit and investment of 14.25 funds of a lessee which is itself a governmental subdivision or 14.26 agency. 14.27 Sec. 6. Minnesota Statutes 1994, section 469.012, 14.28 subdivision 1, is amended to read: 14.29 Subdivision 1. [SCHEDULE OF POWERS.] An authority shall be 14.30 a public body corporate and politic and shall have all the 14.31 powers necessary or convenient to carry out the purposes of 14.32 sections 469.001 to 469.047, except that the power to levy and 14.33 collect taxes or special assessments is limited to the power 14.34 provided in sections 469.027 to 469.033. Its powers include the 14.35 following powers in addition to others granted in sections 14.36 469.001 to 469.047: 15.1 (1) to sue and be sued; to have a seal, which shall be 15.2 judicially noticed, and to alter it; to have perpetual 15.3 succession; and to make, amend, and repeal rules consistent with 15.4 sections 469.001 to 469.047; 15.5 (2) to employ an executive director, technical experts, and 15.6 officers, agents, and employees, permanent and temporary, that 15.7 it requires, and determine their qualifications, duties, and 15.8 compensation; for legal services it requires, to call upon the 15.9 chief law officer of the city or to employ its own counsel and 15.10 legal staff; so far as practicable, to use the services of local 15.11 public bodies in its area of operation, provided that those 15.12 local public bodies, if requested, shall make the services 15.13 available; 15.14 (3) to delegate to one or more of its agents or employees 15.15 the powers or duties it deems proper; 15.16 (4) within its area of operation, to undertake, prepare, 15.17 carry out, and operate projects and to provide for the 15.18 construction, reconstruction, improvement, extension, 15.19 alteration, or repair of any project or part thereof; 15.20 (5) subject to the provisions of section 469.026, to give, 15.21 sell, transfer, convey, or otherwise dispose of real or personal 15.22 property or any interest therein and to execute leases, deeds, 15.23 conveyances, negotiable instruments, purchase agreements, and 15.24 other contracts or instruments, and take action that is 15.25 necessary or convenient to carry out the purposes of these 15.26 sections; 15.27 (6) within its area of operation, to acquire real or 15.28 personal property or any interest therein by gifts, grant, 15.29 purchase, exchange, lease, transfer, bequest, devise, or 15.30 otherwise, and by the exercise of the power of eminent domain, 15.31 in the manner provided by chapter 117, to acquire real property 15.32 which it may deem necessary for its purposes, after the adoption 15.33 by it of a resolution declaring that the acquisition of the real 15.34 property is necessary to eliminate one or more of the conditions 15.35 found to exist in the resolution adopted pursuant to section 15.36 469.003 or to provide decent, safe, and sanitary housing for 16.1 persons of low and moderate income, or is necessary to carry out 16.2 a redevelopment project. Real property needed or convenient for 16.3 a project may be acquired by the authority for the project by 16.4 condemnation pursuant to this section. This includes any 16.5 property devoted to a public use, whether or not held in trust, 16.6 notwithstanding that the property may have been previously 16.7 acquired by condemnation or is owned by a public utility 16.8 corporation, because the public use in conformity with the 16.9 provisions of sections 469.001 to 469.047 shall be deemed a 16.10 superior public use. Property devoted to a public use may be so 16.11 acquired only if the governing body of the municipality has 16.12 approved its acquisition by the authority. An award of 16.13 compensation shall not be increased by reason of any increase in 16.14 the value of the real property caused by the assembly, clearance 16.15 or reconstruction, or proposed assembly, clearance or 16.16 reconstruction for the purposes of sections 469.001 to 469.047 16.17 of the real property in an area; 16.18 (7) within its area of operation, and without the adoption 16.19 of an urban renewal plan, to acquire, by all means as set forth 16.20 in clause (6) but without the adoption of a resolution provided 16.21 for in clause (6), real property, and to demolish, remove, 16.22 rehabilitate, or reconstruct the buildings and improvements or 16.23 construct new buildings and improvements thereon, or to so 16.24 provide through other means as set forth in Laws 1974, chapter 16.25 228, or to grade, fill, and construct foundations or otherwise 16.26 prepare the site for improvements. The authority may dispose of 16.27 the property pursuant to section 469.029, provided that the 16.28 provisions of section 469.029 requiring conformance to an urban 16.29 renewal plan shall not apply. The authority may finance these 16.30 activities by means of the redevelopment project fund or by 16.31 means of tax increments or tax increment bonds or by the methods 16.32 of financing provided for in section 469.033 or by means of 16.33 contributions from the municipality provided for in section 16.34 469.041, clause (9), or by any combination of those means. Real 16.35 property with buildings or improvements thereon shall only be 16.36 acquired under this clause when the buildings or improvements 17.1 are substandard. The exercise of the power of eminent domain 17.2 under this clause shall be limited to real property which 17.3 contains, or has contained within the three years immediately 17.4 preceding the exercise of the power of eminent domain and is 17.5 currently vacant, buildings and improvements which are vacated 17.6 and substandard. Notwithstanding the prior sentence, in cities 17.7 of the first class the exercise of the power of eminent domain 17.8 under this clause shall be limited to real property which 17.9 contains, or has contained within the three years immediately 17.10 preceding the exercise of the power of eminent domain, buildings 17.11 and improvements which are substandard. For the purpose of this 17.12 clause, substandard buildings or improvements mean hazardous 17.13 buildings as defined in section 463.15, subdivision 3, or 17.14 buildings or improvements that are dilapidated or obsolescent, 17.15 faultily designed, lack adequate ventilation, light, or sanitary 17.16 facilities, or any combination of these or other factors that 17.17 are detrimental to the safety or health of the community; 17.18 (8) within its area of operation, to determine the level of 17.19 income constituting low or moderate family income. The 17.20 authority may establish various income levels for various family 17.21 sizes. In making its determination, the authority may consider 17.22 income levels that may be established by the Department of 17.23 Housing and Urban Development or a similar or successor federal 17.24 agency for the purpose of federal loan guarantees or subsidies 17.25 for persons of low or moderate income. The authority may use 17.26 that determination as a basis for the maximum amount of income 17.27 for admissions to housing development projects or housing 17.28 projects owned or operated by it; 17.29 (9) to provide in federally assisted projects any 17.30 relocation payments and assistance necessary to comply with the 17.31 requirements of the Federal Uniform Relocation Assistance and 17.32 Real Property Acquisition Policies Act of 1970, and any 17.33 amendments or supplements thereto; 17.34 (10) to make an agreement with the governing body or bodies 17.35 creating the authority which provides exemption from all real 17.36 and personal property taxes levied or imposed by the state, 18.1 city, county, or other political subdivisions, for which the 18.2 authority shall make payments in lieu of taxes to the state, 18.3 city, county, or other political subdivisions as provided in 18.4 section 469.040. The governing body shall agree on behalf of 18.5 all the applicable governing bodies affected that local 18.6 cooperation as required by the federal government shall be 18.7 provided by the local governing body or bodies in whose 18.8 jurisdiction the project is to be located, at no cost or at no 18.9 greater cost than the same public services and facilities 18.10 furnished to other residents; 18.11 (11) to cooperate with or act as agent for the federal 18.12 government, the state or any state public body, or any agency or 18.13 instrumentality of the foregoing, in carrying out any of the 18.14 provisions of sections 469.001 to 469.047 or of any other 18.15 related federal, state, or local legislation; and upon the 18.16 consent of the governing body of the city to purchase, lease, 18.17 manage, or otherwise take over any housing project already owned 18.18 and operated by the federal government; 18.19 (12) to make plans for carrying out a program of voluntary 18.20 repair and rehabilitation of buildings and improvements, and 18.21 plans for the enforcement of laws, codes, and regulations 18.22 relating to the use of land and the use and occupancy of 18.23 buildings and improvements, and to the compulsory repair, 18.24 rehabilitation, demolition, or removal of buildings and 18.25 improvements. The authority may develop, test, and report 18.26 methods and techniques, and carry out demonstrations and other 18.27 activities for the prevention and elimination of slums and 18.28 blight; 18.29 (13) to borrow money or other property and accept 18.30 contributions, grants, gifts, services, or other assistance from 18.31 the federal government, the state government, state public 18.32 bodies, or from any other public or private sources; 18.33 (14) to include in any contract for financial assistance 18.34 with the federal government any conditions that the federal 18.35 government may attach to its financial aid of a project, not 18.36 inconsistent with purposes of sections 469.001 to 469.047, 19.1 including obligating itself (which obligation shall be 19.2 specifically enforceable and not constitute a mortgage, 19.3 notwithstanding any other laws) to convey to the federal 19.4 government the project to which the contract relates upon the 19.5 occurrence of a substantial default with respect to the 19.6 covenants or conditions to which the authority is subject; to 19.7 provide in the contract that, in case of such conveyance, the 19.8 federal government may complete, operate, manage, lease, convey, 19.9 or otherwise deal with the project until the defaults are cured 19.10 if the federal government agrees in the contract to reconvey to 19.11 the authority the project as then constituted when the defaults 19.12 have been cured; 19.13 (15) to issue bonds for any of its corporate purposes and 19.14 to secure the bonds by mortgages upon property held or to be 19.15 held by it or by pledge of its revenues, including grants or 19.16 contributions; 19.17 (16) to invest any funds held in reserves or sinking funds, 19.18 or any funds not required for immediate disbursement, in 19.19 property or securities in which savings banks may legally invest 19.20 funds subject to their control or in the manner and subject to 19.21 the conditions provided in section 475.66118A.04 for the 19.22 deposit and investment of debt servicepublic funds; 19.23 (17) within its area of operation, to determine where 19.24 blight exists or where there is unsafe, unsanitary, or 19.25 overcrowded housing; 19.26 (18) to carry out studies of the housing and redevelopment 19.27 needs within its area of operation and of the meeting of those 19.28 needs. This includes study of data on population and family 19.29 groups and their distribution according to income groups, the 19.30 amount and quality of available housing and its distribution 19.31 according to rentals and sales prices, employment, wages, 19.32 desirable patterns for land use and community growth, and other 19.33 factors affecting the local housing and redevelopment needs and 19.34 the meeting of those needs; to make the results of those studies 19.35 and analyses available to the public and to building, housing, 19.36 and supply industries; 20.1 (19) if a local public body does not have a planning agency 20.2 or the planning agency has not produced a comprehensive or 20.3 general community development plan, to make or cause to be made 20.4 a plan to be used as a guide in the more detailed planning of 20.5 housing and redevelopment areas; 20.6 (20) to lease or rent any dwellings, accommodations, lands, 20.7 buildings, structures, or facilities included in any project 20.8 and, subject to the limitations contained in sections 469.001 to 20.9 469.047 with respect to the rental of dwellings in housing 20.10 projects, to establish and revise the rents or charges therefor; 20.11 (21) to own, hold, and improve real or personal property 20.12 and to sell, lease, exchange, transfer, assign, pledge, or 20.13 dispose of any real or personal property or any interest 20.14 therein; 20.15 (22) to insure or provide for the insurance of any real or 20.16 personal property or operations of the authority against any 20.17 risks or hazards; 20.18 (23) to procure or agree to the procurement of government 20.19 insurance or guarantees of the payment of any bonds or parts 20.20 thereof issued by an authority and to pay premiums on the 20.21 insurance; 20.22 (24) to make expenditures necessary to carry out the 20.23 purposes of sections 469.001 to 469.047; 20.24 (25) to enter into an agreement or agreements with any 20.25 state public body to provide informational service and 20.26 relocation assistance to families, individuals, business 20.27 concerns, and nonprofit organizations displaced or to be 20.28 displaced by the activities of any state public body; 20.29 (26) to compile and maintain a catalog of all vacant, open 20.30 and undeveloped land, or land which contains substandard 20.31 buildings and improvements as that term is defined in clause 20.32 (7), that is owned or controlled by the authority or by the 20.33 governing body within its area of operation and to compile and 20.34 maintain a catalog of all authority owned real property that is 20.35 in excess of the foreseeable needs of the authority, in order to 20.36 determine and recommend if the real property compiled in either 21.1 catalog is appropriate for disposal pursuant to the provisions 21.2 of section 469.029, subdivisions 9 and 10; 21.3 (27) to recommend to the city concerning the enforcement of 21.4 the applicable health, housing, building, fire prevention, and 21.5 housing maintenance code requirements as they relate to 21.6 residential dwelling structures that are being rehabilitated by 21.7 low- or moderate-income persons pursuant to section 469.029, 21.8 subdivision 9, for the period of time necessary to complete the 21.9 rehabilitation, as determined by the authority; 21.10 (28) to recommend to the city the initiation of municipal 21.11 powers, against certain real properties, relating to repair, 21.12 closing, condemnation, or demolition of unsafe, unsanitary, 21.13 hazardous, and unfit buildings, as provided in section 469.041, 21.14 clause (5); 21.15 (29) to sell, at private or public sale, at the price or 21.16 prices determined by the authority, any note, mortgage, lease, 21.17 sublease, lease purchase, or other instrument or obligation 21.18 evidencing or securing a loan made for the purpose of economic 21.19 development, job creation, redevelopment, or community 21.20 revitalization by a public agency to a business, for-profit or 21.21 nonprofit organization, or an individual; 21.22 (30) within its area of operation, to acquire and sell real 21.23 property that is benefited by federal housing assistance 21.24 payments, other rental subsidies, interest reduction payments, 21.25 or interest reduction contracts for the purpose of preserving 21.26 the affordability of low- and moderate-income multifamily 21.27 housing; 21.28 (31) to apply for, enter into contracts with the federal 21.29 government, administer, and carry out a section 8 program. 21.30 Authorization by the governing body creating the authority to 21.31 administer the program at the authority's initial application is 21.32 sufficient to authorize operation of the program in its area of 21.33 operation for which it was created without additional local 21.34 governing body approval. Approval by the governing body or 21.35 bodies creating the authority constitutes approval of a housing 21.36 program for purposes of any special or general law requiring 22.1 local approval of section 8 programs undertaken by city, county, 22.2 or multicounty authorities; and 22.3 (32) to secure a mortgage or loan for a rental housing 22.4 project by obtaining the appointment of receivers or assignments 22.5 of rents and profits under sections 559.17 and 576.01, except 22.6 that the limitation relating to the minimum amounts of the 22.7 original principal balances of mortgages specified in sections 22.8 559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 22.9 does not apply. 22.10 Sec. 7. Minnesota Statutes 1994, section 469.155, 22.11 subdivision 15, is amended to read: 22.12 Subd. 15. [INVESTMENT AND DEPOSIT OF FUNDS.] It may invest 22.13 or deposit, or authorize a trustee to invest or deposit, any 22.14 proceeds of revenue bonds or notes issued pursuant to sections 22.15 469.152 to 469.165, and income from the investment of the 22.16 proceeds, in any manner and upon any terms and conditions agreed 22.17 to by the contracting party under the related revenue agreement, 22.18 resolution, or indenture, notwithstanding chapter 118 or section22.19 471.56 or 475.56118A, but subject to any statutory provisions 22.20 which govern the deposit and investment of funds of a 22.21 contracting party which is itself a governmental subdivision or 22.22 agency. 22.23 Sec. 8. Minnesota Statutes 1994, section 473.197, 22.24 subdivision 4, is amended to read: 22.25 Subd. 4. [DEBT RESERVE; LEVY.] To provide money to pay 22.26 debt service on bonds issued under the credit enhancement 22.27 program if pledged revenues are insufficient to pay debt 22.28 service, the council must maintain a debt reserve fund in the 22.29 manner and with the effect provided by section 475.66118A.04 22.30 for public debt servicefunds. To provide funds for the debt 22.31 reserve fund, the council may use up to $3,000,000 of the 22.32 proceeds of solid waste bonds issued by the council under 22.33 section 473.831 before its repeal. To provide additional funds 22.34 for the debt reserve fund, the council may levy a tax on all 22.35 taxable property in the metropolitan area and must levy the tax 22.36 if sums in the debt reserve fund are insufficient to cure any 23.1 deficiency in the debt service fund established for the bonds. 23.2 The tax authorized by this section does not affect the amount or 23.3 rate of taxes that may be levied by the council for other 23.4 purposes and is not subject to limit as to rate or amount. 23.5 Sec. 9. Minnesota Statutes 1994, section 473.543, 23.6 subdivision 3, is amended to read: 23.7 Subd. 3. The moneys on hand in said funds and accounts may 23.8 be deposited in the official depositories of the council or 23.9 invested as hereinafter provided. The amount thereof not 23.10 currently needed or required by law to be kept in cash on 23.11 deposit may be invested in obligations authorized for the 23.12 investment of municipal sinkingpublic funds by section 475.6623.13 118A.04. Such moneys may also be held under certificates of 23.14 deposit issued by any official depository of the council. 23.15 Sec. 10. Minnesota Statutes 1995 Supplement, section 23.16 473.900, subdivision 3, is amended to read: 23.17 Subd. 3. [DEPOSITORIES; INVESTMENTS.] The money on hand in 23.18 the funds and accounts may be deposited in the official 23.19 depositories of the metropolitan council or invested as provided 23.20 in this subdivision. The amount not currently needed or 23.21 required by law to be kept in cash on deposit, may be invested 23.22 in obligations authorized for the investment of municipal23.23 sinkingpublic funds by section 475.66118A.04. The money may 23.24 also be held under certificates of deposit issued by any 23.25 official depository of the metropolitan council. 23.26 Sec. 11. Minnesota Statutes 1994, section 475.51, 23.27 subdivision 1, is amended to read: 23.28 Subdivision 1. [TERMS.] For the purposes of sections23.29 475.51 to 475.76this chapter, the terms defined in this section 23.30 shall have the meanings given them. 23.31 Sec. 12. [REVISOR'S INSTRUCTION.] 23.32 To replace or remove references to repealed statutes, in 23.33 the next edition of Minnesota Statutes the revisor of statutes 23.34 shall 23.35 (a) in the sections listed in column A, change the 23.36 reference in column B to the reference in column C: 24.1 Row 24.2 No. Column A Column B Column C 24.3 (1) 37.07 118.01 118A.03 24.4 (2) 37.07 118.10 118A.03 24.5 (3) 60F.05 475.66 118A.04 24.6 (4) 62H.05 475.66 118A.04 24.7 (5) 115.46, subd. 2 475.66 118A.04 24.8 (6) 136F.90, subd. 5 475.66 118A.04 24.9 (7) 356A.06, subd. 6 118.01 118A.03 24.10 (8) 356A.06, subd. 8a 118.01 118A.03 24.11 (9) 400.11 475.66 118A.04 24.12 (10) 427.01 118.01 118A.03 24.13 (11) 427.02 118.01 118A.03 24.14 (12) 429.091 471.56 118A.04 24.15 (13) 458D.16 118.01 118A.03 24.16 (14) 458D.17, subd. 3 475.66 118A.04 24.17 (15) 462.396, subd. 6 118.10 118A.03 24.18 (16) 469.084, subd. 13 471.56 118A.04 24.19 (17) 469.178, subd. 5 471.56 118A.04 24.20 (18) 471.982, subd. 2 475.66 118A.04 24.21 (19) 473.542 118.01 118A.03 24.22 (20) 473.606, subd. 3 471.56 118A.04 24.23 (21) 473.711, subd. 3 118.01 118A.03 24.24 (22) 473.711, subd. 3 118.10 118A.03 24.25 (23) 473.811, subd. 1 475.66 118A.04 24.26 (24) 473.899 118.01 118A.03 24.27 (25) 475.54, subd. 6a 475.66, subd. 1 118A.06 24.28 (26) 475.60, subd. 7 475.66 118A.04 24.29 (27) 475.61, subd. 6 471.56 118A.04 24.30 (28) 475.67, subd. 13 475.66, subd. 3, 118A.05, subd. 5; 24.31 clause (f) 24.32 and (b) in sections 365.48, subdivision 4; 469.129, subdivision 24.33 1; and 475.79, remove the reference to section 475.66.