HF 1614

1st Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to public finance; providing conditions and 
  1.3             requirements for the issuance of debt and use of the 
  1.4             proceeds; authorizing use of capital improvement bonds 
  1.5             for indoor ice arenas; exempting issuance of certain 
  1.6             debt from election requirements; authorizing home rule 
  1.7             charter cities to issue tax anticipation certificates; 
  1.8             authorizing operation of certain recreational 
  1.9             facilities; authorizing continuing disclosure 
  1.10            agreements; providing for funding of self-insurance by 
  1.11            political subdivisions; providing for the issuance of 
  1.12            temporary obligations and modifying issuance 
  1.13            procedures; amending Minnesota Statutes 1994, sections 
  1.14            373.40, subdivision 1; 447.46; 469.041; 469.060, 
  1.15            subdivision 1; 469.102, subdivision 1; 471.16, 
  1.16            subdivision 1; 471.191, subdivisions 1 and 2; 471.98, 
  1.17            subdivision 3; 471.981, subdivisions 2, 4a, 4b, and 
  1.18            4c; 475.51, subdivision 4; 475.52, subdivision 6; 
  1.19            475.58, subdivision 1, and by adding subdivisions; 
  1.20            475.60, by adding a subdivision; 475.61, by adding a 
  1.21            subdivision; 475.63; and 475.79; Laws 1971, chapter 
  1.22            773, section 4, as amended; proposing coding for new 
  1.23            law in Minnesota Statutes, chapters 373; and 410. 
  1.24  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.25     Section 1.  Minnesota Statutes 1994, section 373.40, 
  1.26  subdivision 1, is amended to read: 
  1.27     Subdivision 1.  [DEFINITIONS.] For purposes of this 
  1.28  section, the following terms have the meanings given. 
  1.29     (a) "Bonds" means an obligation as defined under section 
  1.30  475.51. 
  1.31     (b) "Capital improvement" means acquisition or betterment 
  1.32  of public lands, buildings, or other improvements within the 
  1.33  county for the purpose of a county courthouse, administrative 
  1.34  building, health or social service facility, correctional 
  2.1   facility, jail, law enforcement center, hospital, morgue, 
  2.2   library, park, qualified indoor ice arena, and roads and 
  2.3   bridges.  An improvement must have an expected useful life of 
  2.4   five years or more to qualify. "Capital improvement" does not 
  2.5   include light rail transit or any activity related to it or a 
  2.6   recreation or sports facility building (such as, but not limited 
  2.7   to, a gymnasium, ice arena, racquet sports facility, swimming 
  2.8   pool, exercise room or health spa), unless the building is part 
  2.9   of an outdoor park facility and is incidental to the primary 
  2.10  purpose of outdoor recreation. 
  2.11     (c) "Commissioner" means the commissioner of trade and 
  2.12  economic development. 
  2.13     (d) "Metropolitan county" means a county located in the 
  2.14  seven-county metropolitan area as defined in section 473.121 or 
  2.15  a county with a population of 90,000 or more. 
  2.16     (e) "Population" means the population established by the 
  2.17  most recent of the following (determined as of the date the 
  2.18  resolution authorizing the bonds was adopted): 
  2.19     (1) the federal decennial census, 
  2.20     (2) a special census conducted under contract by the United 
  2.21  States Bureau of the Census, or 
  2.22     (3) a population estimate made either by the metropolitan 
  2.23  council or by the state demographer under section 4A.02. 
  2.24     (f) "Qualified indoor ice arena" means a facility that 
  2.25  meets the requirements of section 2. 
  2.26     (g) "Tax capacity" means total taxable market value, but 
  2.27  does not include captured market value. 
  2.28     Sec. 2.  [373.43] [FINANCING AUTHORITY; ICE FACILITIES.] 
  2.29     A county may issue and sell its general obligations under 
  2.30  chapter 475 to finance acquisition and construction of an indoor 
  2.31  ice arena intended to be used predominantly for youth athletic 
  2.32  activities if all the following conditions are met. 
  2.33     (a) The obligations are secured by a pledge of revenues 
  2.34  from the facility. 
  2.35     (b) The county has entered into a qualified agreement.  A 
  2.36  qualified agreement means: 
  3.1      (1) a joint powers agreement with the school district or 
  3.2   the city in which the facility is located that governs 
  3.3   ownership, operation, and maintenance of the facility; or 
  3.4      (2) an agreement with a nonprofit corporation, qualifying 
  3.5   under section 501(c)(3) of the Internal Revenue Code of 1986, 
  3.6   that provides that the corporation will operate, manage, and 
  3.7   maintain the facility; or 
  3.8      (3) any combination of agreements under clauses (1) and (2).
  3.9      (c) The agreements under paragraph (b) provide that all 
  3.10  parties must pay the principal and interest on obligations, if 
  3.11  the revenues for the facility are insufficient to pay the 
  3.12  obligations in full. 
  3.13     (d) The county board finds, based on analysis provided by a 
  3.14  professional experienced in finance, that the facility's 
  3.15  revenues and other available money will be sufficient to pay the 
  3.16  obligations, without reliance on a property tax levy or the 
  3.17  general purpose state aid of the county or any party to a joint 
  3.18  powers agreement. 
  3.19     Sec. 3.  [373.44] [REVENUE FINANCING AUTHORITY; ICE 
  3.20  FACILITIES.] 
  3.21     For the purpose of acquiring, leasing, equipping, or 
  3.22  maintaining land or buildings for use as an indoor ice arena as 
  3.23  defined in section 2, a county has the same authority and powers 
  3.24  granted to a city by section 471.191. 
  3.25     Sec. 4.  [410.325] [TAX ANTICIPATION CERTIFICATES.] 
  3.26     Notwithstanding a contrary provision of other law or 
  3.27  charter, a home rule charter city may issue tax anticipation 
  3.28  certificates in the manner and subject to the limitations 
  3.29  applicable to statutory cities under section 412.261.  The 
  3.30  certificates may also be issued in anticipation of federal and 
  3.31  state aids, but the total amount of certificates issued against 
  3.32  any fund for any year with interest on them must not exceed any 
  3.33  limits in the charter relating to the total of the anticipated 
  3.34  tax levy and the anticipated state aids for any fund not yet 
  3.35  collected or received.  
  3.36     Sec. 5.  Minnesota Statutes 1994, section 447.46, is 
  4.1   amended to read: 
  4.2      447.46 [REVENUE PLEDGED.] 
  4.3      The county, city, or hospital district may pledge and 
  4.4   appropriate the revenues to be derived from its operation of the 
  4.5   facilities, except related medical facilities, to pay the 
  4.6   principal and interest on the bonds when due and to create and 
  4.7   maintain reserves for that purpose, as a first and prior lien on 
  4.8   the revenues or, if so provided in the bond resolution, as a 
  4.9   lien on the revenues subordinate to the current payment of a 
  4.10  fixed amount or percentage or all of the costs of running the 
  4.11  facilities.  
  4.12     Sec. 6.  Minnesota Statutes 1994, section 469.041, is 
  4.13  amended to read: 
  4.14     469.041 [STATE PUBLIC BODIES, POWERS AS TO PROJECTS.] 
  4.15     For the purpose of aiding and cooperating in the planning, 
  4.16  undertaking, construction, or operation of projects, any state 
  4.17  public body may upon the terms, with or without consideration, 
  4.18  as it may determine: 
  4.19     (1) Dedicate, sell, convey, or lease any of its interests 
  4.20  in any property, or grant easements, licenses, or any other 
  4.21  rights or privileges therein to an authority.  Except in cities 
  4.22  of the first class having a population of less than 200,000, the 
  4.23  public body may pay the bonds of or make loans or contributions 
  4.24  for redevelopment projects, and the receipt or expenditure of 
  4.25  any money expended hereunder by the state public body shall not 
  4.26  be included within the definition of any limitation imposed on 
  4.27  per capita taxing or spending in the charter of the state public 
  4.28  body.  No state public body may use any revenues or money of 
  4.29  that state public body to pay the bonds of or make any loans or 
  4.30  contributions to any public housing project, except to a public 
  4.31  low-rent housing project (i) for which financial assistance is 
  4.32  provided by the federal government which requires a municipality 
  4.33  or other local public body to use its revenues or money for a 
  4.34  direct loan or grant to the project as a condition for federal 
  4.35  financial assistance and (ii) where the local financial 
  4.36  assistance for the project is authorized by resolution of the 
  5.1   governing body of the municipality; 
  5.2      (2) Cause parks, playgrounds, recreational, community, 
  5.3   education, water, sewer or drainage facilities, or any other 
  5.4   works which it may undertake, to be furnished adjacent to or in 
  5.5   connection with such projects; 
  5.6      (3) Approve, through its governing body or through an 
  5.7   agency designated by it for the purpose, redevelopment plans, 
  5.8   plan or replan, zone or rezone its parks; in the case of a city 
  5.9   or town, make changes in its map; the governing body of any city 
  5.10  may waive any building code requirements in connection with the 
  5.11  development of projects; 
  5.12     (4) Cause services to be furnished to the authority of the 
  5.13  character which it may otherwise furnish; 
  5.14     (5) Enter into agreements with respect to the exercise by 
  5.15  it of its powers relating to the repair, closing, or demolition 
  5.16  of unsafe, unsanitary, or unfit buildings; 
  5.17     (6) Do any and all things necessary or convenient to aid 
  5.18  and cooperate in the planning, undertaking, construction, or 
  5.19  operation of the projects; 
  5.20     (7) Incur the entire expense of any public improvements 
  5.21  made by it in exercising the powers granted in sections 469.001 
  5.22  to 469.047; 
  5.23     (8) Enter into agreements with an authority respecting 
  5.24  action to be taken by the state public body pursuant to any of 
  5.25  the powers granted by sections 469.001 to 469.047; the 
  5.26  agreements may extend over any period, notwithstanding any law 
  5.27  to the contrary; and 
  5.28     (9) Furnish funds available to it from any source, 
  5.29  including the proceeds of bonds, to an authority to pay all or 
  5.30  any part of the cost to the authority of the activities 
  5.31  authorized by section 469.012, subdivision 1, clause (7); and 
  5.32     (10) With respect to a housing development project for 
  5.33  which an authority has issued bonds, exercise the powers 
  5.34  available to a city under section 471.191 for a recreational 
  5.35  program; provided that this power may only be exercised by a 
  5.36  city or county in which the project is located or in accordance 
  6.1   with a joint powers agreement with other cities or counties that 
  6.2   have authorized the exercise of the powers for other projects as 
  6.3   part of a common financing plan. 
  6.4      Sec. 7.  Minnesota Statutes 1994, section 469.060, 
  6.5   subdivision 1, is amended to read: 
  6.6      Subdivision 1.  [POWER; PROCEDURE.] A port authority may 
  6.7   issue bonds in the principal amount authorized by its city's 
  6.8   council.  The bonds may be issued in anticipation of income from 
  6.9   any source.  The bonds may be issued:  (1) to secure funds 
  6.10  needed by the authority to pay for acquired property or (2) for 
  6.11  other purposes in sections 469.049, 469.050, and 469.058 to 
  6.12  469.068.  The bonds must be in the amount and form and bear 
  6.13  interest at the rate set by the city council.  The authority 
  6.14  shall sell the bonds to the highest bidder.  The authority shall 
  6.15  publish notice of the time and the place for receiving bids once 
  6.16  at least two weeks before the bid deadline.  Except as otherwise 
  6.17  provided in sections 469.048 to 469.068, the issuance of the 
  6.18  bonds is governed by chapter 475.  The port authority when 
  6.19  issuing the bonds is a municipal corporation under chapter 475.  
  6.20  Notwithstanding any contrary city charter provision or any 
  6.21  general or special law, the bonds may be issued and sold without 
  6.22  submission of the question to the electors of the city, provided 
  6.23  that the ordinance of the governing body of the city authorizing 
  6.24  issuance of the bonds by the port authority shall be subject to 
  6.25  any provisions in the city charter pertaining to the procedure 
  6.26  for referendum on ordinances enacted by the governing body. 
  6.27     Sec. 8.  Minnesota Statutes 1994, section 469.102, 
  6.28  subdivision 1, is amended to read: 
  6.29     Subdivision 1.  [AUTHORITY; PROCEDURE.] An economic 
  6.30  development authority may issue general obligation bonds in the 
  6.31  principal amount authorized by two-thirds majority vote of its 
  6.32  city's council.  The bonds may be issued in anticipation of 
  6.33  income from any source.  The bonds may be issued:  (1) to secure 
  6.34  funds needed by the authority to pay for acquired property or 
  6.35  (2) for other purposes in sections 469.090 to 469.108.  The 
  6.36  bonds must be in the amount and form and bear interest at the 
  7.1   rate set by the city council.  The authority shall sell the 
  7.2   bonds to the highest bidder.  The authority shall publish notice 
  7.3   of the time and the place for receiving bids, once at least two 
  7.4   weeks before the bid deadline.  Except as otherwise provided in 
  7.5   sections 469.090 to 469.108, the issuance of the bonds is 
  7.6   governed by chapter 475.  The authority when issuing the bonds 
  7.7   is a municipal corporation under chapter 475.  
  7.8      Sec. 9.  Minnesota Statutes 1994, section 471.16, 
  7.9   subdivision 1, is amended to read: 
  7.10     Subdivision 1.  Any city, however organized, or any town, 
  7.11  county, school district, or any board thereof, or any 
  7.12  incorporated post of the American Legion or any other 
  7.13  incorporated veterans' organization, may operate such a program 
  7.14  independently, or they may cooperate among themselves or with 
  7.15  any nonprofit organization in its conduct and in any manner in 
  7.16  which they may mutually agree; or they may delegate the 
  7.17  operation of the program to a recreation board created by one or 
  7.18  more of them, and appropriate money voted for this purpose to 
  7.19  such board which may in turn support or cooperate with a 
  7.20  nonprofit organization.  In the case of school districts after 
  7.21  May 15, 1978, the right to enter into such agreements with any 
  7.22  other corporation, board or body hereinbefore designated where 
  7.23  bonds are issued by the other party and revenue pledged for 
  7.24  bonds issued pursuant to section 471.191, shall be authorized 
  7.25  only upon obtaining the approval of a majority of the electors 
  7.26  voting on the question at a regular or special school election. 
  7.27     Sec. 10.  Minnesota Statutes 1994, section 471.191, 
  7.28  subdivision 1, is amended to read: 
  7.29     Subdivision 1.  Any city operating a program of public 
  7.30  recreation and playgrounds pursuant to sections 471.15 to 471.19 
  7.31  may acquire or lease, equip, and maintain land, buildings, and 
  7.32  other recreational facilities, including, but without 
  7.33  limitation, outdoor or indoor swimming pools, skating rinks and 
  7.34  arenas, athletic fields, golf courses, marinas, concert halls, 
  7.35  museums, and facilities for other kinds of athletic or cultural 
  7.36  participation, contests, and exhibitions, together with related 
  8.1   automobile parking facilities as defined in section 459.14, and 
  8.2   may expend funds for the operation of such program and borrow 
  8.3   and expend funds for capital costs thereof pursuant to the 
  8.4   provisions of this section.  A school district operating a 
  8.5   program of public recreation and playgrounds has the rights 
  8.6   provided in this section.  Any facilities to be operated by a 
  8.7   nonprofit corporation, as contemplated in section 471.16, may be 
  8.8   leased to the corporation upon such rentals and for such term, 
  8.9   not exceeding 30 years, and subject to such other provisions as 
  8.10  may be agreed; including but not limited to provisions (a) 
  8.11  permitting the lessee, subject to whatever conditions are 
  8.12  stated, to provide for the construction and equipment of the 
  8.13  facilities by any means available to it and in the manner 
  8.14  determined by it, without advertisement for bids as required for 
  8.15  other municipal facilities, and (b) granting the lessee the 
  8.16  option to renew the lease upon such conditions and rentals, or 
  8.17  to purchase the facilities at such price, as may be agreed; 
  8.18  provided that (c) any such lease shall require the lessee to pay 
  8.19  net rentals sufficient to pay the principal, interest, 
  8.20  redemption premiums, and other expenses when due with respect to 
  8.21  all city bonds issued for the acquisition or betterment of the 
  8.22  facilities, less such amount of taxes and special assessments, 
  8.23  if any, as may become payable in any year of the term of the 
  8.24  lease, on the land, building, or other facilities leased, and 
  8.25  (d) no option shall be granted to purchase the facilities at any 
  8.26  time at a price less than the amount required to pay all 
  8.27  principal and interest to become due on such bonds to the 
  8.28  earliest date or dates on which they may be paid and redeemed, 
  8.29  and all redemption premiums and other expenses of such payment 
  8.30  and redemption.  
  8.31     Sec. 11.  Minnesota Statutes 1994, section 471.191, 
  8.32  subdivision 2, is amended to read: 
  8.33     Subd. 2.  Any such city may issue bonds pursuant to chapter 
  8.34  475, for the acquisition and betterment of land, buildings, and 
  8.35  facilities for the purpose of carrying out the powers granted by 
  8.36  this section.  Such bonds, unless authorized as general 
  9.1   obligations of the issuer pursuant to approval of the electors 
  9.2   or pursuant to another law or charter provision permitting such 
  9.3   issuance without an election, shall be payable solely from the 
  9.4   income of land, buildings, and facilities used or useful for the 
  9.5   operation of the program, but may be secured by a pledge to the 
  9.6   bondholders, or to a trustee, of all income and revenues of 
  9.7   whatsoever nature derived from any such land, buildings, and 
  9.8   facilities, as a first charge on the gross revenues thereof to 
  9.9   the extent necessary to pay the bonds and interest thereon when 
  9.10  due and to accumulate and maintain an additional reserve for 
  9.11  that purpose in an amount equal to the total amount of payments 
  9.12  to become due in any fiscal year.  In this event the governing 
  9.13  body of the issuer may by resolution or trust indenture define 
  9.14  the land, buildings, or facilities, the revenues of which are 
  9.15  pledged, and establish covenants and agreements to be made by 
  9.16  the issuer for the security of the bonds, including a covenant 
  9.17  that the issuer will establish, maintain, revise when necessary, 
  9.18  and collect charges for all services, products, use, and 
  9.19  occupancy of the land, buildings, and facilities, in the amounts 
  9.20  and at the times required to produce the revenues pledged, and 
  9.21  also sufficient, with any other funds appropriated by the 
  9.22  governing body from time to time, to provide adequately for the 
  9.23  operation and maintenance of the land, buildings, and 
  9.24  facilities.  After the issuance of any bonds for which revenues 
  9.25  are so pledged, the governing body of the issuer shall provide 
  9.26  in its budget each year for any anticipated deficiency in the 
  9.27  revenues available for such operation and maintenance.  For this 
  9.28  purpose any issuer may levy a tax on the taxable property within 
  9.29  its boundaries, in excess of taxes which may otherwise be levied 
  9.30  within charter limitations, provided the excess levy for a city 
  9.31  subject to a charter limitation is approved by a majority of its 
  9.32  electors voting on the question at a regular or special 
  9.33  election.  The authority to levy additional taxes granted herein 
  9.34  shall not apply to cities or towns in which the net tax capacity 
  9.35  consists in part of iron ore or lands containing taconite or 
  9.36  semitaconite.  
 10.1      Sec. 12.  Minnesota Statutes 1994, section 471.98, 
 10.2   subdivision 3, is amended to read: 
 10.3      Subd. 3.  [POOL.] "Pool" means any self-insurance fund or 
 10.4   agreement for the reciprocal assumption of risk established by 
 10.5   or among two or more political subdivisions for coverage of 
 10.6   their respective risks including, but not limited to, the pools 
 10.7   described in section 471.982, subdivision 3.  
 10.8      Sec. 13.  Minnesota Statutes 1994, section 471.981, 
 10.9   subdivision 2, is amended to read: 
 10.10     Subd. 2.  A political subdivision may establish a self 
 10.11  insurance revolving fund.  The initial amount of the fund shall 
 10.12  be determined by the governing body.  The governing body may 
 10.13  appropriate the amounts necessary to maintain the fund at the 
 10.14  level specified in the ordinance or resolution establishing it.  
 10.15  Expenditures from the fund may be made for:  
 10.16     (a) Payment of losses; 
 10.17     (b) Costs of defense and investigation; 
 10.18     (c) Premiums and deductible amounts when commercial 
 10.19  insurance is purchased for a risk; 
 10.20     (d) Debt service and debt service related expenses for 
 10.21  bonds issued under this section; 
 10.22     (e) Cost of loss control activities; and 
 10.23     (e) (f) Any other costs customarily borne by commercial 
 10.24  insurers under conventional insurance policies.  
 10.25     Sec. 14.  Minnesota Statutes 1994, section 471.981, 
 10.26  subdivision 4a, is amended to read: 
 10.27     Subd. 4a.  [INSURANCE INSTALLMENT PURCHASE AGREEMENT.] 
 10.28  A county political subdivision may, by resolution of its 
 10.29  governing body, and without advertisement for bids, enter into 
 10.30  an insurance installment purchase agreement with a 
 10.31  self-insurance pool created under subdivision 3.  Such a 
 10.32  self-insurance pool may purchase insurance on behalf of the 
 10.33  participating counties political subdivisions and may use 
 10.34  insurance installment purchase agreements or other obligations 
 10.35  of the participating counties political subdivisions to provide 
 10.36  the participating counties political subdivisions with coverage 
 11.1   against all or any part of the risks enumerated in subdivision 1 
 11.2   and against any risk which the county political subdivision is 
 11.3   authorized to insure under section 176.181, subdivision 1.  The 
 11.4   Notwithstanding any limitations set forth under section 475.52, 
 11.5   a political subdivision which has established a self-insurance 
 11.6   revolving fund under subdivision 2 or self-insurance pool may 
 11.7   fund insurance claims and reserves and finance insurance 
 11.8   installment purchase agreements for the political subdivision, 
 11.9   self-insurance pool, or a mutual insurance company established 
 11.10  pursuant to subdivision 4 and fund other costs set forth in 
 11.11  subdivision 2 by issuing revenue bonds, bonds which are general 
 11.12  obligations of the self-insurance pool or mutual insurance 
 11.13  company, as applicable, or other obligations secured by payments 
 11.14  made or to be made by the participating counties political 
 11.15  subdivisions or pool.  An insurance installment purchase 
 11.16  agreement of a participating county political subdivision may 
 11.17  require that the county political subdivision make payments 
 11.18  sufficient to produce revenue for the prompt payment of the 
 11.19  bonds or other obligations, including all interest and premiums, 
 11.20  if any, accruing on them.  The insurance installment purchase 
 11.21  agreements may provide for additional contributions or premiums 
 11.22  if it is actuarially determined that the assets of the insurance 
 11.23  installment purchase agreements available to pay claims are 
 11.24  insufficient.  The insurance installment purchase agreements may 
 11.25  be multiyear contracts and shall not be subject to any 
 11.26  referendum, public bidding, or net debt limitation requirement 
 11.27  of chapter 475.  
 11.28     Sec. 15.  Minnesota Statutes 1994, section 471.981, 
 11.29  subdivision 4b, is amended to read: 
 11.30     Subd. 4b.  [BOND ISSUE FOR INSURANCE PROCUREMENT OR 
 11.31  SELF-INSURANCE.] A self-insurance pool of counties may issue 
 11.32  bonds which are general obligations of the self-insurance pool 
 11.33  or revenue bonds secured by insurance installment purchase 
 11.34  agreements of the participating counties political subdivisions 
 11.35  issued pursuant to subdivision 4a.  The self-insurance pool, 
 11.36  with the approval of the governing body of each 
 12.1   participating county political subdivision, shall fix the total 
 12.2   amount needed for the procurement of insurance and shall 
 12.3   apportion to each participating county political subdivision the 
 12.4   county's political subdivision's share of that amount and of the 
 12.5   costs of operation, or of annual debt service or payments 
 12.6   required to pay such amount with interest.  Notwithstanding any 
 12.7   limitations set forth under section 475.52, or any other general 
 12.8   or special law or charter to the contrary, a political 
 12.9   subdivision may issue revenue bonds or other obligations to 
 12.10  provide funds for the purposes, including self-insurance, 
 12.11  authorized by this section.  Any other law notwithstanding, 
 12.12  bonds or other obligations issued under this subdivision may be 
 12.13  sold at public or private sale upon the terms and conditions the 
 12.14  issuer determines.  No election shall be required to authorize 
 12.15  the issuance of the obligations, and the obligations shall not 
 12.16  be subject to any limitation on net debt.  Notwithstanding any 
 12.17  limitation imposed by section 475.54, the obligations shall 
 12.18  mature in the years the issuer determines.  In addition to 
 12.19  permitted uses described above, proceeds of obligations issued 
 12.20  pursuant to this subdivision may be used to establish a debt 
 12.21  service reserve for the obligations, pay costs of issuing the 
 12.22  bonds or to refund obligations previously issued pursuant to 
 12.23  this subdivision.  Any debt service reserve fund established 
 12.24  under this subdivision shall not be subject to investment 
 12.25  guidelines set forth in chapters 118 and 475.  A self-insurance 
 12.26  pool An issuer of bonds authorized under this subdivision may 
 12.27  designate a bank or trust company authorized to exercise trust 
 12.28  powers in this state as trustee for the holders of obligations 
 12.29  issued pursuant to this subdivision and may create funds and 
 12.30  accounts necessary to secure payment of the obligations.  Sales 
 12.31  proceeds of bonds issued under this subdivision, except for 
 12.32  sales proceeds used to pay costs of issuing the bonds shall be 
 12.33  invested so that the average life of the investments exceeds the 
 12.34  average life of the bonds.  The proceeds from bonds issued under 
 12.35  this subdivision must be held in trust and may only be paid to 
 12.36  the self-insurer according to the schedule of payments set forth 
 13.1   in the trust instruments. 
 13.2      A qualified actuary shall certify that the amount of the 
 13.3   scheduled payment does not exceed the amount necessary to meet 
 13.4   the obligation of the self-insurer at the time payment is 
 13.5   scheduled to be made. 
 13.6      Notwithstanding the investment limitations imposed in 
 13.7   chapters 118 and 475, proceeds of bonds issued pursuant to this 
 13.8   subdivision, and debt service funds and reserves held in 
 13.9   connection with them shall be invested solely in governmental 
 13.10  bonds, notes, bills, and other securities, which are direct 
 13.11  obligations or are guaranteed or insured issues of the United 
 13.12  States, its agencies, its instrumentalities, or organizations 
 13.13  created by act of Congress, excluding mortgage-backed securities.
 13.14     If required by the resolution authorizing the issuance of 
 13.15  obligations pursuant to this subdivision, the governing body of 
 13.16  each participating county political subdivision shall annually 
 13.17  levy a tax sufficient to repay the costs of retirement of any 
 13.18  bonds or to make payments under insurance installment purchase 
 13.19  agreements.  Taxes may be levied pursuant to this subdivision 
 13.20  without limitation as to rate or amount.  
 13.21     Sec. 16.  Minnesota Statutes 1994, section 471.981, 
 13.22  subdivision 4c, is amended to read: 
 13.23     Subd. 4c.  [INSURANCE INSTALLMENT PURCHASE; INTEREST RATE.] 
 13.24  Participating counties political subdivisions may delegate to a 
 13.25  self-insurance pool of counties political subdivisions the power 
 13.26  to determine the interest rate on insurance installment purchase 
 13.27  agreements provided that the rate is uniform and does not exceed 
 13.28  the net effective rate on revenue bonds or other obligations 
 13.29  sold by or on behalf of the pool by more than one-fourth of one 
 13.30  percent. 
 13.31     Sec. 17.  Minnesota Statutes 1994, section 475.51, 
 13.32  subdivision 4, is amended to read: 
 13.33     Subd. 4.  [NET DEBT.] "Net debt" means the amount remaining 
 13.34  after deducting from its gross debt the amount of current 
 13.35  revenues which are applicable within the current fiscal year to 
 13.36  the payment of any debt and the aggregate of the principal of 
 14.1   the following: 
 14.2      (1) Obligations issued for improvements which are payable 
 14.3   wholly or partly from the proceeds of special assessments levied 
 14.4   upon property specially benefited thereby, including those which 
 14.5   are general obligations of the municipality issuing them, if the 
 14.6   municipality is entitled to reimbursement in whole or in part 
 14.7   from the proceeds of the special assessments. 
 14.8      (2) Warrants or orders having no definite or fixed maturity.
 14.9      (3) Obligations payable wholly from the income from revenue 
 14.10  producing conveniences. 
 14.11     (4) Obligations issued to create or maintain a permanent 
 14.12  improvement revolving fund. 
 14.13     (5) Obligations issued for the acquisition, and betterment 
 14.14  of public waterworks systems, and public lighting, heating or 
 14.15  power systems, and of any combination thereof or for any other 
 14.16  public convenience from which a revenue is or may be derived. 
 14.17     (6) Debt service loans and capital loans made to a school 
 14.18  district under the provisions of sections 124.42 and 124.431. 
 14.19     (7) Amount of all money and the face value of all 
 14.20  securities held as a debt service fund for the extinguishment of 
 14.21  obligations other than those deductible under this subdivision. 
 14.22     (8) Obligations to repay loans made under section 216C.37.  
 14.23     (9) Obligations to repay loans made from money received 
 14.24  from litigation or settlement of alleged violations of federal 
 14.25  petroleum pricing regulations. 
 14.26     (10) Obligations issued to pay pension fund liabilities 
 14.27  under section 475.52, subdivision 6, or any charter authority. 
 14.28     (11) All other obligations which under the provisions of 
 14.29  law authorizing their issuance are not to be included in 
 14.30  computing the net debt of the municipality. 
 14.31     Sec. 18.  Minnesota Statutes 1994, section 475.52, 
 14.32  subdivision 6, is amended to read: 
 14.33     Subd. 6.  [CERTAIN PURPOSES.] Any municipality may issue 
 14.34  bonds for paying judgments against it; for refunding outstanding 
 14.35  bonds; for funding floating indebtedness; or for funding all or 
 14.36  part of the municipality's current and future unfunded liability 
 15.1   for a pension or retirement fund or plan referred to in section 
 15.2   356.20, subdivision 2, as those liabilities are most recently 
 15.3   computed pursuant to sections 356.215 and 356.216 by purchasing 
 15.4   one or more insurance policies or annuity contracts to pay all 
 15.5   or a specified part of the liability within the period required 
 15.6   by law.  The board of trustees or directors of a pension fund or 
 15.7   relief association referred to in section 69.77 or chapter 422A 
 15.8   must consent and must be a party to any contract made under this 
 15.9   section with respect to the fund held by it for the benefit of 
 15.10  and in trust for its members. 
 15.11     Sec. 19.  Minnesota Statutes 1994, section 475.58, 
 15.12  subdivision 1, is amended to read: 
 15.13     Subdivision 1.  [APPROVAL BY MAJORITY OF ELECTORS; 
 15.14  EXCEPTIONS.] Obligations authorized by law or charter may be 
 15.15  issued by any municipality upon obtaining the approval of a 
 15.16  majority of the electors voting on the question of issuing the 
 15.17  obligations, but an election shall not be required to authorize 
 15.18  obligations issued: 
 15.19     (1) to pay any unpaid judgment against the municipality; 
 15.20     (2) for refunding obligations; 
 15.21     (3) for an improvement or improvement program, which 
 15.22  obligation is payable wholly or partly from the proceeds of 
 15.23  special assessments levied upon property specially benefited by 
 15.24  the improvement or by an improvement within the improvement 
 15.25  program, or of taxes levied upon the increased value of property 
 15.26  within a district for the development of which the improvement 
 15.27  is undertaken, including obligations which are the general 
 15.28  obligations of the municipality, if the municipality is entitled 
 15.29  to reimbursement in whole or in part from the proceeds of such 
 15.30  special assessments or taxes and not less than 20 percent of the 
 15.31  cost of the improvement or the improvement program is to be 
 15.32  assessed against benefited property or is to be paid from the 
 15.33  proceeds of federal grant funds or a combination thereof, or is 
 15.34  estimated to be received from such taxes within the district; 
 15.35     (4) payable wholly from the income of revenue producing 
 15.36  conveniences; 
 16.1      (5) under the provisions of a home rule charter which 
 16.2   permits the issuance of obligations of the municipality without 
 16.3   election; 
 16.4      (6) under the provisions of a law which permits the 
 16.5   issuance of obligations of a municipality without an election; 
 16.6      (7) to fund pension or retirement fund liabilities pursuant 
 16.7   to section 475.52, subdivision 6; and 
 16.8      (8) under a capital improvement plan under section 373.40; 
 16.9   and 
 16.10     (9) to fund facilities as provided in subdivision 3. 
 16.11     Sec. 20.  Minnesota Statutes 1994, section 475.58, is 
 16.12  amended by adding a subdivision to read: 
 16.13     Subd. 3.  [YOUTH ICE FACILITIES.] (a) A municipality may, 
 16.14  without regard to the election requirement under subdivision 1 
 16.15  or under any other provision of law or a home rule charter, 
 16.16  issue and sell obligations to finance acquisition, improvement, 
 16.17  or construction of an indoor ice arena intended to be used 
 16.18  predominantly for youth athletic activities if all the following 
 16.19  conditions are met: 
 16.20     (1) the obligations are secured by a pledge of revenues 
 16.21  from the facility; 
 16.22     (2) the facility and its financing are approved by 
 16.23  resolutions of at least two of the following governing bodies of 
 16.24  (i) the city in which the facility is located, (ii) the school 
 16.25  district in which the facility is located, or (iii) the county 
 16.26  in which the facility is located; 
 16.27     (3) the governing body of the municipality finds, based on 
 16.28  analysis provided by a professional experienced in finance, that 
 16.29  the facility's revenues and other available money will be 
 16.30  sufficient to pay the obligations, without reliance on a 
 16.31  property tax levy or the municipality's general purpose state 
 16.32  aid; and 
 16.33     (4) no petition for an election has been timely filed under 
 16.34  paragraph (b). 
 16.35     (b) At least 30 days before issuing obligations under this 
 16.36  subdivision, the municipality must hold a public hearing on the 
 17.1   issue.  The municipality must publish or provide notice of the 
 17.2   hearing in the same manner provided for its regular meetings.  
 17.3   The obligations are not exempt from the election requirement 
 17.4   under this subdivision, if: 
 17.5      (1) registered voters equal to ten percent of the votes 
 17.6   cast in the last general election in the municipality sign a 
 17.7   petition requesting a vote on the issue; and 
 17.8      (2) the petition is filed with the municipality within 20 
 17.9   days after the public hearing. 
 17.10     (c) This subdivision expires December 31, 1997. 
 17.11     Sec. 21.  Minnesota Statutes 1994, section 475.58, is 
 17.12  amended by adding a subdivision to read: 
 17.13     Subd. 4.  [FIRST CLASS CITIES; WATER UTILITY BONDS.] A city 
 17.14  that has a population in excess of 200,000 may issue general 
 17.15  obligations pledging its full faith and credit without an 
 17.16  election to acquire, construct, and improve its water utility if 
 17.17  the city covenants that rates and charges will be imposed and 
 17.18  collected at the times and in the amounts required to produce, 
 17.19  together with any taxes or special assessments designated as a 
 17.20  primary source of payment of the obligations, net revenues 
 17.21  adequate to pay all principal and interest when due on the 
 17.22  obligations and to create and maintain reserves securing the 
 17.23  payments as may be provided in the resolutions. 
 17.24     Sec. 22.  Minnesota Statutes 1994, section 475.60, is 
 17.25  amended by adding a subdivision to read: 
 17.26     Subd. 8.  [CONTINUING DISCLOSURE AGREEMENTS.] Any officer 
 17.27  of a municipality charged with the responsibility of issuing 
 17.28  bonds for or on behalf of the municipality is authorized to 
 17.29  enter into written agreements or contracts relating to the 
 17.30  continuing disclosure of information necessary to comply with, 
 17.31  or facilitate the issuance of bonds in accordance with, federal 
 17.32  securities laws, rules and regulations, including securities and 
 17.33  exchange commission rules and regulations, section 240.15c2-12.  
 17.34  An agreement may comprise covenants with purchasers and holders 
 17.35  of bonds set forth in the resolution authorizing the issuance of 
 17.36  the bonds, or a separate document authorized by resolution. 
 18.1      Sec. 23.  Minnesota Statutes 1994, section 475.61, is 
 18.2   amended by adding a subdivision to read: 
 18.3      Subd. 6.  [OTHER TEMPORARY OBLIGATIONS.] When all 
 18.4   conditions exist precedent to the offering for sale of 
 18.5   obligations of any municipality in any amount for any purpose 
 18.6   authorized by law, the governing body may issue and sell 
 18.7   temporary obligations not exceeding the total amount authorized, 
 18.8   maturing in not more than three years from the date the 
 18.9   obligations are issued, in anticipation of the issuance of the 
 18.10  permanent obligations.  To the extent that the principal of and 
 18.11  interest on the temporary obligations cannot be paid when due 
 18.12  from other sources pledged or appropriated for the purpose, they 
 18.13  shall be paid from the proceeds of permanent bonds or additional 
 18.14  temporary bonds which the governing body shall offer for sale in 
 18.15  advance of their maturity but the indebtedness funded by an 
 18.16  issue of temporary bonds shall not be extended by the issue of 
 18.17  additional temporary bonds for more than six years from the date 
 18.18  of the first issue.  The holders of any temporary bonds shall 
 18.19  have and may enforce, by mandamus or other appropriate 
 18.20  proceedings, all rights respecting the levy and collection of 
 18.21  taxes that are granted by law to holders of permanent bonds, 
 18.22  except the right to require the levies to be collected prior to 
 18.23  the maturity of the temporary bonds.  If any temporary bonds are 
 18.24  not paid in full at maturity, the holders may require the 
 18.25  issuance in exchange for them, at par, of new temporary bonds 
 18.26  maturing within one year from their date of issue but not 
 18.27  subject to any other maturity limitation, and bearing interest 
 18.28  at the maximum rate permitted by law.  The governing body may by 
 18.29  resolution adopted prior to the sale of any temporary bonds 
 18.30  pledge the full faith, credit, and taxing power of the 
 18.31  municipality for the payment of the principal and interest, in 
 18.32  addition to all provisions made for their security in the 
 18.33  authorizing resolution.  If it does so, the bonds will be 
 18.34  designated as general obligation temporary bonds, and the 
 18.35  governing body shall levy taxes for their payment in accordance 
 18.36  with this section.  Proceeds of permanent bonds or temporary 
 19.1   bonds not yet sold may be treated as pledged revenues, in 
 19.2   reduction of the tax otherwise required by this section to be 
 19.3   levied prior to delivery of the obligations.  Funds of a 
 19.4   municipality may be invested in its temporary bonds in 
 19.5   accordance with section 471.56, and may be purchased upon their 
 19.6   initial issue, but shall be purchased only from funds which the 
 19.7   municipality determines will not be required for other purposes 
 19.8   before the maturity date, and shall be resold before maturity 
 19.9   only in the case of an emergency. 
 19.10     Sec. 24.  Minnesota Statutes 1994, section 475.63, is 
 19.11  amended to read: 
 19.12     475.63 [CERTIFICATE AS TO REGISTRATION.] 
 19.13     Before any obligations payable in whole or in part from 
 19.14  taxes shall be delivered to the purchaser, the municipality 
 19.15  shall obtain and deliver to the purchaser a certificate of the 
 19.16  county auditor that the issue has been entered on the register.  
 19.17  If a tax levy is required by law, such certificate shall also 
 19.18  recite that such tax has been levied as required by law.  
 19.19     Sec. 25.  Minnesota Statutes 1994, section 475.79, is 
 19.20  amended to read: 
 19.21     475.79 [POWERS AVAILABLE TO OTHER POLITICAL SUBDIVISIONS.] 
 19.22     Any powers granted to a municipality under this chapter, 
 19.23  other than the power to issue general obligation bonds and levy 
 19.24  taxes, may be exercised by any other governmental unit.  This 
 19.25  grant of authority does not limit the powers granted to an 
 19.26  entity under any other law.  In connection with the issuance of 
 19.27  bonds authorized to be issued by any law or charter provision 
 19.28  other than this chapter, a governmental unit determining to 
 19.29  exercise any power under any of sections 475.54, 475.55, 
 19.30  475.553, 475.56, 475.561, 475.60, 475.61, 475.65, 475.66, 
 19.31  475.67, 475.69, 475.70, and 475.78 may do so notwithstanding any 
 19.32  contrary provision in the authorizing law or charter unless the 
 19.33  authorizing law or charter provides that this chapter or the 
 19.34  specific section does not apply.  This section is, in part, 
 19.35  remedial in nature.  Obligations issued prior to the effective 
 19.36  date of this section are not invalid or unenforceable for 
 20.1   providing terms, consequences, or remedies that are authorized 
 20.2   by this section and chapter 475. 
 20.3      Sec. 26.  Laws 1971, chapter 773, section 4, as amended by 
 20.4   Laws 1976, chapter 234, section 2, is amended to read: 
 20.5      Sec. 4.  No proceeds of any bonds issued pursuant to 
 20.6   section 1, hereof shall be expended for the construction or 
 20.7   equipment of any portion of the St. Paul auditorium or civic 
 20.8   center connected thereto; nor shall any such proceeds be 
 20.9   expended for the acquisition or betterment of the building known 
 20.10  as the Lowry Medical Arts Annex.  All bonds issued under this 
 20.11  act shall mature at any time or times within ten 30 years from 
 20.12  the date of issue. 
 20.13     Sec. 27.  [EFFECTIVE DATE.] 
 20.14     This act is effective the day following final enactment, 
 20.15  provided that section 26 is effective only after its approval by 
 20.16  a majority of the governing body of the city of St. Paul and 
 20.17  upon compliance with the provisions of Minnesota Statutes, 
 20.18  section 645.021.