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HF 2268

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to public finance; providing terms and conditions related to the issuance
of obligations and the financing of public improvements and services; extending
the time for certain publications of notices; authorizing and validating trusts
to pay public postemployment benefits; amending Minnesota Statutes 2006,
sections 118A.03, subdivision 3; 123B.61; 204B.46; 275.61, subdivision 1;
331A.05, subdivision 2; 365A.02; 365A.04; 365A.08; 365A.095; 373.01,
subdivision 3; 373.40, subdivision 4; 375B.09; 383B.117, subdivision 2;
383B.77, subdivisions 1, 2; 410.32; 412.301; 428A.02, subdivision 1; 453A.02,
subdivision 3; 473.39, by adding subdivisions; 475.52, subdivision 6; 475.53,
subdivision 1; 475.58, subdivisions 1, 3b; proposing coding for new law in
Minnesota Statutes, chapters 471; 475.

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

Section 1.

Minnesota Statutes 2006, section 118A.03, subdivision 3, is amended to read:


Subd. 3.

Amount.

The total amount of the collateral computed at its market value
shall be at least ten percent more than the amount on deposit deleted text beginplus accrued interestdeleted text end at
the close of the financial institution's banking day, except that where the collateral is
irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of
collateral shall be at least equal to the amount on deposit deleted text beginplus accrued interestdeleted text end at the close
of the financial institution's banking day. The financial institution may furnish both a
surety bond and collateral aggregating the required amount.

Sec. 2.

Minnesota Statutes 2006, section 123B.61, is amended to read:


123B.61 PURCHASE OF CERTAIN EQUIPMENT.

The board of a district may issue general obligation certificates of indebtedness
or capital notes subject to the district debt limits to: (a) purchase vehicles, computers,
telephone systems, cable equipment, photocopy and office equipment, technological
equipment for instruction, and other capital equipment having an expected useful life at
least as long as the terms of the certificates or notes; (b) purchase computer hardware and
software, without regard to its expected useful life, whether bundled with machinery or
equipment or unbundled, together with application development services and training
related to the use of the computer; and (c) prepay special assessments. The certificates or
notes must be payable in not more than deleted text beginfivedeleted text endnew text begin tennew text end years and must be issued on the terms
and in the manner determined by the board, except that certificates or notes issued to
prepay special assessments must be payable in not more than 20 years. The certificates
or notes may be issued by resolution and without the requirement for an election. The
certificates or notes are general obligation bonds for purposes of section 126C.55. A tax
levy must be made for the payment of the principal and interest on the certificates or
notes, in accordance with section 475.61, as in the case of bonds. The sum of the tax
levies under this section and section 123B.62 for each year must not exceed the lesser
of the amount of the district's total operating capital revenue or the sum of the district's
levy in the general and community service funds excluding the adjustments under this
section for the year preceding the year the initial debt service levies are certified. The
district's general fund levy for each year must be reduced by the sum of (1) the amount
of the tax levies for debt service certified for each year for payment of the principal and
interest on the certificates or notes issued under this section as required by section 475.61,
(2) the amount of the tax levies for debt service certified for each year for payment of the
principal and interest on bonds issued under section 123B.62, and (3) any excess amount
in the debt redemption fund used to retire bonds, certificates, or notes issued under this
section or section 123B.62 after April 1, 1997, other than amounts used to pay capitalized
interest. If the district's general fund levy is less than the amount of the reduction, the
balance shall be deducted first from the district's community service fund levy, and next
from the district's general fund or community service fund levies for the following year. A
district using an excess amount in the debt redemption fund to retire the certificates or
notes shall report the amount used for this purpose to the commissioner by July 15 of the
following fiscal year. A district having an outstanding capital loan under section 126C.69
or an outstanding debt service loan under section 126C.68 must not use an excess amount
in the debt redemption fund to retire the certificates or notes.

Sec. 3.

Minnesota Statutes 2006, section 204B.46, is amended to read:


204B.46 MAIL ELECTIONS; QUESTIONS.

A county, municipality, or school district submitting questions to the voters at a
special election may apply to the county auditor for approval of an election by mail with
no polling place other than the office of the auditor or clerk. No deleted text beginmore than two questions
may be submitted at a mail election and no
deleted text end offices may be voted onnew text begin at a mail electionnew text end.
Notice of the election and the special mail procedure must be given at least six weeks prior
to the election. No earlier than 20 or later than 14 days prior to the election, the auditor
or clerk shall mail ballots by nonforwardable mail to all voters registered in the county,
municipality, or school district. Eligible voters not registered at the time the ballots are
mailed may apply for ballots pursuant to chapter 203B.

Sec. 4.

Minnesota Statutes 2006, section 275.61, subdivision 1, is amended to read:


Subdivision 1.

Market value.

new text begin(a) new text endFor local governmental subdivisions other than
school districts, any levydeleted text begin, including the issuance of debt obligations payable in whole or in
part from property taxes,
deleted text end required to be approved and approved by the voters at a general
or special election for taxes payable in 1993 and thereafter, shall be levied against the
referendum market value of all taxable property within the governmental subdivision, as
defined in section 126C.01, subdivision 3. Any levy amount subject to the requirements of
this section shall be certified separately to the county auditor under section 275.07.

new text begin (b) new text endThe ballot shall state the maximum amount of the increased levy as a percentage
of market value and the amount that will be raised by the new referendum tax rate in the
first year it is to be levied.

new text begin (c) This subdivision does not apply to tax levies for the payment of debt obligations
that are approved by the voters after June 30, 2007.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2006, section 331A.05, subdivision 2, is amended to read:


Subd. 2.

Time of notice.

Unless otherwise specified by deleted text begina particular statutedeleted text endnew text begin lawnew text end, or
by order of a court, publication of a public notice shall be as follows:

(a) the notice shall be published once;

(b) if the notice is intended to inform the public about a future event, the last
publication shall occur not more than deleted text begin14deleted text endnew text begin 30new text end days and not less than seven days before
the event;

(c) if the notice is intended to inform the public about a past action or event, the last
publication shall occur not more than 45 days after occurrence of the action or event.

Sec. 6.

Minnesota Statutes 2006, section 365A.02, is amended to read:


365A.02 deleted text beginDEFINITIONdeleted text endnew text begin DEFINITIONSnew text end.

new text begin Subdivision 1. new text end

new text begin Subordinate service district. new text end

"Subordinate service district" means a
defined area within the town in which deleted text beginone or more governmental services or additions to
townwide
deleted text end new text beginspecial new text endservices are provided deleted text beginby the town specially for the area and financed
from revenues from the area
deleted text end. The boundaries of a single subordinate service district
may not embrace an entire town.

new text begin Subd. 2. new text end

new text begin Special services. new text end

new text begin "Special services" means one or more governmental
services or additions to townwide services provided by the town specially for the area
and financed from revenues from the area.
new text end

Sec. 7.

Minnesota Statutes 2006, section 365A.04, is amended to read:


365A.04 CREATION deleted text beginBY PETITIONdeleted text end.

Subdivision 1.

Petition.

A petition signed by at least 50 percent of the property
owners in the part of the town proposed for the subordinate service district may be
submitted to the town board requesting the establishment of a subordinate service district
to provide a service that the town is otherwise authorized by law to provide. The petition
must include the territorial boundaries of the proposed district and specify the kinds of
services to be provided within the district.

new text begin Subd. 1a. new text end

new text begin Creation by town. new text end

new text begin The town may establish a subordinate service district
in a portion of the town by adoption of a resolution, subject to the requirements of
subdivision 2.
new text end

Subd. 2.

Public hearing.

Upon receipt of the petition, and the verification of the
signatures by the town clerknew text begin or prior to adoption of the resolution specified in subdivision
1a
new text end, the town board shall, within 30 days following verificationnew text begin or prior to adoption of the
resolution specified in subdivision 1a
new text end, hold a public hearing on the question of whether or
not the requested district shall be established.new text begin The notice of public hearing must specify
the special services to be provided within the subordinate service district and must specify
the territorial boundaries of the requested district. The notice of public hearing must be
published once in a newspaper of general circulation in the town at least 14 days prior
to the date of the public hearing.
new text end

Subd. 3.

Approval; disapproval.

Within 30 days after the public hearing, the
town board by resolution shall approve or disapprove the establishment of the requested
district. new text beginAn approving resolution must specify the special services to be provided within
the subordinate service district and must specify the territorial boundaries of the district.
new text endA resolution approving the establishment of the district may contain amendments or
modifications of the district's boundaries or functions as set forth in the petitionnew text begin or the
resolution specified in subdivision 1a
new text end.

Sec. 8.

Minnesota Statutes 2006, section 365A.08, is amended to read:


365A.08 FINANCING.

new text begin Subdivision 1. new text end

new text begin Budget. new text end

new text begin(a) new text endUpon adoption of the next annual budget following
the creation of a subordinate service district the town board shall include in the budget
appropriate provisions for the operation of the district including either a property tax
levied only on property deleted text beginof the users of the servicedeleted text end within the boundaries of the district
or a levy of a service charge against the users of the service within the district, or a
combination of a property tax and a service charge on the users of the service.

new text begin (b) new text endA tax or service charge or a combination of them may be imposed to finance a
function or service in the district that the town ordinarily provides throughout the town
only to the extent that there is an increase in the level of the function or service provided
in the service district over that provided throughout the town. In that case, in addition
to the townwide tax levy, an amount necessary to pay for the increase in the level of the
function or service may be imposed in the district.

new text begin Subd. 2. new text end

new text begin Bonds. new text end

new text begin At any time after the requirements of section 356A.06 have been
met and the subordinate service district created, the town board may issue obligations in an
amount it deems necessary to defray in whole or in part the expense incurred and estimated
to be incurred in making capital improvements necessary to operate the subordinate service
district and provide the special services in the district, including every item of cost from
inception to completion and all fees and expenses incurred in connection with the capital
improvements or the financing. The obligations are payable primarily out of the proceeds
of the taxes and service charges imposed under subdivision 1, net revenues as described
in section 444.075, and special assessments under chapter 429. The town board may by
resolution pledge the full faith credit and taxing power of the town to ensure payment of
the principal and interest on the obligations if the proceeds of the taxes and service charges
are insufficient to pay the principal and interest. Obligations must be issued in accordance
with chapter 475, except that the amount of the obligations is not included in determining
the net indebtedness of the town under the provisions of any law limiting indebtedness.
new text end

new text begin Subd. 3. new text end

new text begin Covenants to secure obligations. new text end

new text begin In resolutions authorizing the issuance
of general or special obligations and pledging taxes and service charges imposed under
subdivision 1, net revenues, or special assessments to their payment, the town board
may make covenants for the protection of holders of the obligations and taxpayers of the
town as it deems necessary, including a covenant that the town will impose and collect
charges of the nature authorized by this chapter at the time and in the amounts required to
produce, together with any taxes or special assessments designated as a primary source
of payment of the obligations, funds adequate to pay all principal and interest when due
on the obligations, and to create and maintain reserves securing the payments as may be
provided in the resolutions.
new text end

Sec. 9.

Minnesota Statutes 2006, section 365A.095, is amended to read:


365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.

new text begin Subdivision 1. new text end

new text begin Petition. new text end

A petition signed by at least 75 percent of the property
owners in the territory of the subordinate service district requesting the removal of the
district may be presented to the town board. Within 30 days after the town board receives
the petition, the town clerk shall determine the validity of the signatures on the petition. If
the requisite number of signatures are certified as valid, the town board must hold a public
hearing on the petitioned matter. Within 30 days after the end of the hearing, the town
board must decide whether to discontinue the subordinate service district, continue as it is,
or take some other action with respect to it.

new text begin Subd. 2. new text end

new text begin Bonds. new text end

new text begin If obligations have been issued for the benefit of the subordinate
service district, the rates, charges, and tax levies, if any, continue until the obligations and
any obligations issued to refund them have been paid in full.
new text end

Sec. 10.

Minnesota Statutes 2006, section 373.01, subdivision 3, is amended to read:


Subd. 3.

Capital notes.

(a) A county board may, by resolution and without
referendum, issue capital notes subject to the county debt limit to purchase capital
equipment useful for county purposes that has an expected useful life at least equal to the
term of the notes. The notes shall be payable in not more than ten years and shall be
issued on terms and in a manner the board determines. A tax levy shall be made for
payment of the principal and interest on the notes, in accordance with section 475.61,
as in the case of bonds.

(b) For purposes of this subdivision, "capital equipment" means:

(1) public safety, ambulance, road construction or maintenance, and medical
equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled. deleted text beginThe authority to issue capital notes for software expires on July 1, 2007.
deleted text end

Sec. 11.

Minnesota Statutes 2006, section 373.40, subdivision 4, is amended to read:


Subd. 4.

Limitations on amount.

A countydeleted text begin, other than Ramsey,deleted text end may not issue
bonds under this section if the maximum amount of principal and interest to become due in
any year on all the outstanding bonds issued pursuant to this section (including the bonds
to be issued) will equal or exceed deleted text begin0.05367deleted text endnew text begin 0.12new text end percent of taxable market value of property
in the county. deleted text beginRamsey county may not issue bonds under this section if the maximum
amount of principal and interest to become due in any year on all the outstanding bonds
issued pursuant to this section (including the bonds to be issued) will equal or exceed
0.06455 percent of taxable market value of property in the county.
deleted text end Calculation of the
limit must be made using the taxable market value for the taxes payable year in which
the obligations are issued and sold. This section does not limit the authority to issue
bonds under any other special or general law.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for bonds issued after June 30, 2007.
new text end

Sec. 12.

Minnesota Statutes 2006, section 375B.09, is amended to read:


375B.09 FINANCING.

new text begin Subdivision 1. new text end

new text begin Budget. new text end

new text begin(a) new text endUpon adoption of the next annual budget following the
creation of a subordinate service district the county board shall include in the budget
appropriate provisions for the operation of the district including, as appropriate, either a
property tax levied only on property within the boundaries of the district or a levy of a
service charge against the users of the service within the district, or any combination of a
property tax and a service charge.

new text begin (b)new text end A tax or service charge or a combination thereof shall not be imposed to finance a
function or service in the new text beginsubordinate new text endservice district which the county generally provides
throughout the county unless an increase in the level of the service is to be supplied in the
new text begin subordinate new text endservice district in which case, in addition to the countywide tax levy, only an
amount necessary to pay for the increased level of service may be imposed.

new text begin Subd. 2. new text end

new text begin Bonds. new text end

new text begin At any time after the requirements of section 375B.07 have been
met and the subordinate service district created, the county board may issue obligations
in an amount it deems necessary to defray in whole or in part the expense incurred
and estimated to be incurred in making capital improvements necessary to operate the
subordinate service district and provide the special services in the district, including every
item of cost from inception to completion and all fees and expenses incurred in connection
with the capital improvements or the financing. The obligations shall be payable primarily
out of the proceeds of the taxes and service charges imposed pursuant to subdivision 1, net
revenues as described in section 444.075, and special assessments under chapter 429. The
county board may by resolution pledge the full faith credit and taxing power of the county
to ensure payment of the principal and interest on the obligations if the proceeds of the
taxes and service charges are insufficient to pay the principal and interest. Obligations
must be issued in accordance with chapter 475, except that the amount of the obligations
is not included in determining the net indebtedness of the county under the provisions of
any law limiting indebtedness.
new text end

new text begin Subd. 3. new text end

new text begin Covenants to secure obligations. new text end

new text begin In resolutions authorizing the issuance
of general or special obligations and pledging taxes and service charges imposed under
subdivision 1, net revenues, or special assessments to their payment, the county board
may make covenants for the protection of holders of the obligations and taxpayers of the
county as it deems necessary, including a covenant that the county will impose and collect
charges of the nature authorized by this chapter at the time and in the amounts required to
produce, together with any taxes or special assessments designated as a primary source
of payment of the obligations, funds adequate to pay all principal and interest when due
on the obligations and to create and maintain reserves securing the payments as may be
provided in the resolutions.
new text end

new text begin Subd. 4. new text end

new text begin Continuance in the event of withdrawal. new text end

new text begin If obligations have been issued
for the benefit of the subordinate service district, and the district is withdrawn or removed
pursuant to either section 375B.10 or 375B.11, the rates, charges, and tax levies, if any, in
the withdrawn or removed district must continue until the obligations and any obligations
issued to refund them have been paid in full.
new text end

Sec. 13.

Minnesota Statutes 2006, section 383B.117, subdivision 2, is amended to read:


Subd. 2.

Equipment acquisition; capital notes.

The board may, by resolution and
without public referendum, issue capital notes within existing debt limits for the purpose
of purchasing ambulance and other medical equipment, road construction or maintenance
equipment, public safety equipment and other capital equipment having an expected
useful life at least equal to the term of the notes issued. The notes shall be payable in
not more than deleted text beginfivedeleted text endnew text begin tennew text end years and shall be issued on terms and in a manner as the board
determines. The total principal amount of the notes issued for any fiscal year shall not
exceed one percent of the total annual budget for that year and shall be issued solely for
the purchases authorized in this subdivision. A tax levy shall be made for the payment
of the principal and interest on such notes as in the case of bonds. new text beginFor purposes of this
subdivision, "equipment" includes computer hardware and software, whether bundled with
machinery or equipment or unbundled.
new text endFor purposes of this subdivision, the term "medical
equipment" includes computer hardware and software and other intellectual property for
use in medical diagnosis, medical procedures, research, record keeping, billing, and other
hospital applications, together with application development services and training related
to the use of the computer hardware and software and other intellectual property, all
without regard to their useful life. For purposes of determining the amount of capital notes
which the county may issue in any year, the budget of the county and Hennepin Healthcare
System, Inc. shall be combined and the notes issuable under this subdivision shall be in
addition to obligations issuable under section 373.01, subdivision 3.

Sec. 14.

Minnesota Statutes 2006, section 383B.77, subdivision 1, is amended to read:


Subdivision 1.

Creation.

The Hennepin County Housing and Redevelopment
Authority is created in the county of Hennepin. It shall have all of the powers and duties
of a housing and redevelopment authority under sections 469.001 to 469.047. For the
purposes of applying the municipal housing and redevelopment act to Hennepin County,
the county has all of the powers and duties of a city, the county board has all the powers
and duties of a governing body, the chair of the county board has all of the powers and
duties of a mayor, andnew text begin, notwithstanding section 469.008,new text end the area of operation includes the
area within the territorial boundaries of the county.

new text begin EFFECTIVE DATE. new text end

new text begin Because the population of Hennepin County is more than
1,000,000, under Minnesota Statutes, section 645.023, this section is effective without
local approval.
new text end

Sec. 15.

Minnesota Statutes 2006, section 383B.77, subdivision 2, is amended to read:


Subd. 2.

Limitation.

This section does not limit or restrict any existing housing
and redevelopment authority or prevent a municipality from creating an authority. For
purposes of this subdivision, "housing and redevelopment authority" includes any
municipal department, agency, or authority of the city of Minneapolis which exercises the
powers of a housing and redevelopment authority pursuant to section 469.003 or other
law. The county authority shall notify a municipal authority by January 31 of each year
as to the activities the county authority plans to participate in within the municipality.
The municipal authority shall notify the county authority within 45 days of the date of
the notice from the county authority, if the municipal authority does not consent to the
activities of the county authority. deleted text beginThe county authority shall not exercise its powers in a
municipality where a housing and redevelopment authority was created under Minnesota
Statutes 1969, chapter 462, before June 8, 1971, except as provided in this subdivision.
deleted text end If a
city housing and redevelopment authority requests the county housing and redevelopment
authority to exercise any power or perform any function of the municipal authority, the
county authority may do so.

new text begin EFFECTIVE DATE. new text end

new text begin Because the population of Hennepin County is more than
1,000,000, under Minnesota Statutes, section 645.023, this section is effective without
local approval.
new text end

Sec. 16.

Minnesota Statutes 2006, section 410.32, is amended to read:


410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.

(a) Notwithstanding any contrary provision of other law or charter, a home rule
charter city may, by resolution and without public referendum, issue capital notes subject
to the city debt limit to purchase capital equipment.

(b) For purposes of this section, "capital equipment" means:

(1) public safety equipment, ambulance and other medical equipment, road
construction and maintenance equipment, and other capital equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled.

(c) The equipment or software must have an expected useful life at least as long as the
term of the notes. deleted text beginThe authority to issue capital notes for software expires on July 1, 2007.
deleted text end

(d) The notes shall be payable in not more than ten years and be issued on terms and
in the manner the city determines. The total principal amount of the capital notes issued
in a fiscal year shall not exceed 0.03 percent of the market value of taxable property
in the city for that year.

(e) A tax levy shall be made for the payment of the principal and interest on the
notes, in accordance with section 475.61, as in the case of bonds.

(f) Notes issued under this section shall require an affirmative vote of two-thirds of
the governing body of the city.

(g) Notwithstanding a contrary provision of other law or charter, a home rule charter
city may also issue capital notes subject to its debt limit in the manner and subject to the
limitations applicable to statutory cities pursuant to section 412.301.

Sec. 17.

Minnesota Statutes 2006, section 412.301, is amended to read:


412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.

(a) The council may issue certificates of indebtedness or capital notes subject to the
city debt limits to purchase capital equipment.

(b) For purposes of this section, "capital equipment" means:

(1) public safety equipment, ambulance and other medical equipment, road
construction and maintenance equipment, and other capital equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled.

(c) The equipment or software must have an expected useful life at least as long as
the terms of the certificates or notes. deleted text beginThe authority to issue capital notes for software
expires on July 1, 2007.
deleted text end

(d) Such certificates or notes shall be payable in not more than ten years and shall be
issued on such terms and in such manner as the council may determine.

(e) If the amount of the certificates or notes to be issued to finance any such purchase
exceeds 0.25 percent of the market value of taxable property in the city, they shall not
be issued for at least ten days after publication in the official newspaper of a council
resolution determining to issue them; and if before the end of that time, a petition asking
for an election on the proposition signed by voters equal to ten percent of the number of
voters at the last regular municipal election is filed with the clerk, such certificates or notes
shall not be issued until the proposition of their issuance has been approved by a majority
of the votes cast on the question at a regular or special election.

(f) A tax levy shall be made for the payment of the principal and interest on such
certificates or notes, in accordance with section 475.61, as in the case of bonds.

Sec. 18.

Minnesota Statutes 2006, section 428A.02, subdivision 1, is amended to read:


Subdivision 1.

Ordinance.

The governing body of a city may adopt an ordinance
establishing a special service district. Only property that is classified under section 273.13
and used for new text beginresidential, new text endcommercial, industrial, or public utility purposes, or is vacant
land zoned or designated on a land use plan for commercial or industrial use and located
in the special service district, may be subject to the charges imposed by the city on the
special service district. Other types of property may be included within the boundaries of
the special service district but are not subject to the levies or charges imposed by the city
on the special service district. If 50 percent or more of the market value of a parcel of
property is classified under section 273.13 as new text beginresidential, new text endcommercial, industrial, or vacant
land zoned or designated on a land use plan for commercial or industrial use, or public
utility for the current assessment year, then the entire market value of the property is
subject to a service charge based on net tax capacity for purposes of sections 428A.01
to 428A.10. The ordinance shall describe with particularity the area within the city to
be included in the district and the special services to be furnished in the district. The
ordinance may not be adopted until after a public hearing has been held on the question.
Notice of the hearing shall include the time and place of hearing, a map showing the
boundaries of the proposed district, and a statement that all persons owning property in the
proposed district that would be subject to a service charge will be given opportunity to be
heard at the hearing. Within 30 days after adoption of the ordinance under this subdivision,
the governing body shall send a copy of the ordinance to the commissioner of revenue.

Sec. 19.

Minnesota Statutes 2006, section 453A.02, subdivision 3, is amended to read:


Subd. 3.

City.

"City" means a city organized and existing under the laws of
Minnesota or a city charter adopted pursuant thereto, and authorized by such laws or
charter to engage in the local distribution and sale of gas, provided that any city so
engaged on January 1, 1979 is authorized to continue such distribution and sale, and every
city now or hereafter so authorized may exercise, either individually or as a member of a
municipal gas agency, all of the powers granted in sections 453A.01 to 453A.12.

new text begin City also includes a city organized and existing under the laws of another state or
a city charter adopted pursuant thereto which participates in a municipal gas agency
with Minnesota cities.
new text end

Sec. 20.

new text begin [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization; establishment. new text end

new text begin A political subdivision or other
public entity that creates or has created an actuarial liability to pay postemployment
benefits to employees or officers after their termination of service may establish a trust to
pay those benefits. For purposes of this section, the term "postemployment benefits" means
benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting
Standards Board and the term "trust" means a trust, a trust account, or a custodial account
or contract authorized under section 401(f) of the Internal Revenue Code.
new text end

new text begin Subd. 2. new text end

new text begin Purpose of trust. new text end

new text begin The trust established under this section may only be
used to pay postemployment benefits and may be either revocable or irrevocable.
new text end

new text begin Subd. 3. new text end

new text begin Trust administrator. new text end

new text begin The trust administrator of a trust established under
this section shall be either:
new text end

new text begin (1) the Public Employees Retirement Association;
new text end

new text begin (2) a bank or banking association incorporated under the laws of the United States or
of any state and authorized by the laws under which it is organized to exercise corporate
trust powers; or
new text end

new text begin (3) an insurance company or agency qualified to do business in Minnesota which has
at least five years' experience in investment products and services for group retirement
benefits and which has a specialized department dedicated to services for retirement
investment products.
new text end

new text begin A political subdivision or public entity may, in its discretion and in compliance
with any applicable trust document, change trust administrators and transfer trust assets
accordingly.
new text end

new text begin Subd. 4. new text end

new text begin Account maintenance. new text end

new text begin (a) A political subdivision or other public entity
may establish a trust account to be held under the supervision of the trust administrator for
the purposes of this section. A trust administrator shall establish a separate account for
each participating political subdivision or public entity. The trust administrator may charge
participating political subdivisions and public entities fees for reasonable administrative
costs. The amount of any fees charged by the Public Employees Retirement Association is
appropriated to the association from the account. A trust administrator may establish other
reasonable terms and conditions for creation and maintenance of these accounts.
new text end

new text begin (b) The trust administrator must report to the political subdivision or other public
entity on the investment returns of invested trust assets and on all investment fees or costs
incurred by the trust. The annual rates of return, along with investment and administrative
fees and costs for the trust, must be disclosed in the political subdivision's or public entity's
annual financial audit in a manner prescribed by the state auditor.
new text end

new text begin (c) Effective for fiscal years beginning after December 31, 2010, the trust
administrator must report electronically to the state auditor the portfolio and performance
information specified in section 356.219, subdivision 3, in the manner prescribed by
the state auditor.
new text end

new text begin Subd. 5. new text end

new text begin Investment. new text end

new text begin (a) The assets of a trust or trust account shall be invested and
held as stipulated in paragraphs (b) to (e).
new text end

new text begin (b) The Public Employees Retirement Association must certify all money in the trust
accounts for which it is trust administrator to the State Board of Investment for investment
under section 11A.14, subject to the policies and procedures established by the State
Board of Investment. Investment earnings must be credited to the trust account of the
individual political subdivision or public entity.
new text end

new text begin (c) A trust administrator, other than the Public Employees Retirement Association,
must ensure that all money in the trust accounts for which it is trust administrator is
invested by a registered investment adviser, a bank investment trust department, or an
insurance company or agency retirement investment department. Investment earnings
must be credited to the trust account of the individual political subdivision or public entity.
new text end

new text begin (d) For trust assets invested by the State Board of Investment, the investment
restrictions shall be the same as those generally applicable to the State Board of
Investment. For trust assets invested by a trust administrator other than the Public
Employees Retirement Association, the assets may only be invested in investments
authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified
in the applicable trust document.
new text end

new text begin (e) A political subdivision or public entity may provide investment direction to a
trust administrator in compliance with any applicable trust document.
new text end

new text begin Subd. 6. new text end

new text begin Limit on deposit. new text end

new text begin A political subdivision or public entity may not
deposit money in a trust or trust account created pursuant to this section if the total
amount invested by that political subdivision or public entity would exceed the political
subdivision's or public entity's actuarially determined liabilities for postemployment
benefits due to officers and employees, as determined under the applicable standards of the
Governmental Accounting Standards Board.
new text end

new text begin Subd. 7. new text end

new text begin Withdrawal of funds and termination of account. new text end

new text begin (a) For a revocable
account, a political subdivision or public entity may withdraw some or all of its money
or terminate the trust account. Money and accrued investment earnings withdrawn
from a revocable account must be deposited in a fund separate and distinct from any
other funds of the political subdivision or public entity. This money, with accrued
investment earnings, must be used to pay legally enforceable postemployment benefits
to former officers and employees, unless (i) there has been a change in state or federal
law affecting that political subdivision's or public entity's liabilities for postemployment
benefits, or (ii) there has been a change in the demographic composition of that political
subdivision's or public entity's employees eligible for postemployment benefits, or (iii)
there has been a change in the provisions or terms of the postemployment benefits in that
political subdivision or public entity including, but not limited to, the portion of the costs
eligible employees must pay to receive the benefits, or (iv) other factors exist that have
a material effect on that political subdivision's or public entity's actuarially determined
liabilities for postemployment benefits, in which event any amount in excess of 100
percent of that political subdivision's or public entity's actuarially determined liabilities for
postemployment benefits, as determined under standards of the Government Accounting
Standards Board, may be withdrawn and used for any purpose.
new text end

new text begin (b) For an irrevocable account, a political subdivision or public entity may withdraw
money only:
new text end

new text begin (1) as needed to pay postemployment benefits owed to former officers and employees
of the political subdivision or public entity; or
new text end

new text begin (2) when all postemployment benefit liability owed to former officers or employees
of the political subdivision or public entity has been satisfied or otherwise defeased.
new text end

new text begin (c) A political subdivision or public entity requesting withdrawal of money from
an account created under this section must do so at a time and in the manner required by
the executive director of the Public Employees Retirement Association or specified in an
applicable trust document. The political subdivision or public entity that created the trust
must ensure that withdrawals comply with the requirements of this section.
new text end

new text begin (d) The legislature may not divert funds in these trusts or trust accounts for use
for another purpose.
new text end

new text begin Subd. 8. new text end

new text begin Status of irrevocable trust. new text end

new text begin (a) All money in an irrevocable trust or trust
account created in this section is held in trust for the exclusive benefit of former officers
and employees of the participating political subdivision or public entity, and is not subject
to claims by creditors of the state, the participating political subdivision or public entity,
the current or former officers and employees of the political subdivision or public entity,
or the trust administrator.
new text end

new text begin (b) An irrevocable trust fund or trust account created in this section shall be deemed
an arrangement equivalent to a trust for all legal purposes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and is applicable immediately to all political subdivisions or public entities subject to
Statement No. 45 of the Governmental Accounting Standards Board in 2007, to those
political subdivisions or public entities whose trusts or trust accounts are validated
by section 28, and to those political subdivisions or public entities that have begun
consideration of measures to implement Statement No. 45 in 2007. This section is
applicable on July 1, 2008, for all other political subdivisions or public entities.
new text end

Sec. 21.

Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
to read:


new text begin Subd. 1m. new text end

new text begin Obligations. new text end

new text begin After July 1, 2007, in addition to other authority in this
section, the council may issue certificates of indebtedness, bonds, or other obligations
under this section in an amount not exceeding $33,600,000 for capital expenditures as
prescribed in the council's regional transit master plan and transit capital improvement
program and for related costs, including the costs of issuance and sale of the obligations.
new text end

new text begin APPLICATION AND EFFECTIVE DATE. new text end

new text begin This section applies in the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the
day following final enactment.
new text end

Sec. 22.

Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
to read:


new text begin Subd. 5. new text end

new text begin Anticipation of grants. new text end

new text begin In addition to other authority granted in this
section, the council may exercise the authority granted to an issuing political subdivision
by section 475.522.
new text end

Sec. 23.

Minnesota Statutes 2006, section 475.52, subdivision 6, is amended to read:


Subd. 6.

Certain purposes.

Any municipality may issue bonds for paying
judgments against it; for refunding outstanding bonds; for funding floating indebtedness;new text begin
for funding actuarial liabilities to pay postemployment benefits to employees or officers
after their termination of service;
new text end or for funding all or part of the municipality's current
and future unfunded liability for a pension or retirement fund or plan referred to in
section 356.20, subdivision 2, as those liabilities are most recently computed pursuant
to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or
relief association referred to in section 69.77 or chapter 422A must consent and must
be a party to any contract made under this section with respect to the fund held by it
for the benefit of and in trust for its members. new text beginFor purposes of this section, the term
"postemployment benefits" means benefits giving rise to a liability under Statement No.
45 of the Governmental Accounting Standards Board.
new text end

Sec. 24.

new text begin [475.522] GRANT ANTICIPATION FINANCING OF
TRANSPORTATION OR TRANSIT PROJECTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the term "political
subdivision" means a county or a statutory or home rule charter city, and the term
"issuing political subdivision" means a political subdivision that issues obligations under
subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Authorization. new text end

new text begin An issuing political subdivision may enter into agreements
with any other political subdivision of the state, within or without its jurisdiction, and any
state agency, with respect to federal grants for transportation or transit projects to be
received directly or indirectly by or on behalf of the political subdivision or agency,
under an executed grant agreement with the relevant federal agency. The agreements
may provide that the political subdivision or agency will pledge to the issuing political
subdivision all or a specified portion of the federal grants received by or on behalf of the
political subdivision or agency for a specified period of years, or until all obligations issued
by the issuing political subdivision under subdivision 3 with respect to those federal grants
have been paid or legally defeased. If the issuing political subdivision issues obligations
under subdivision 3, the agreements must provide the method by which the proceeds of
the obligations will be used to pay or reimburse the costs of the transportation or transit
projects relating to the federal grants described in the executed federal grant agreement.
new text end

new text begin Subd. 3. new text end

new text begin Issuance of obligations. new text end

new text begin In anticipation of any federal grants for
transportation or transit projects to be received directly or indirectly by any political
subdivision or agency as specified in subdivision 1, or by an issuing political subdivision
with respect to any transportation or transit projects within its jurisdiction, an issuing
political subdivision may issue its obligations payable from the collections of those
federal grants. The obligations may be issued in the principal amount the issuing political
subdivision determines provided that the estimated collections of the federal grants under
the relevant executed federal grant agreement in each year in which the obligations will
be outstanding must be at least equal to:
new text end

new text begin (1) if the obligations are to be issued as revenue obligations, 150 percent of the
maximum annual debt service on the obligations; or
new text end

new text begin (2) if the obligations are to be issued as general obligations, 110 percent of the
maximum annual debt service on the obligations.
new text end

new text begin Except as otherwise provided in this section, the issuing political subdivision shall
provide for the issuance, sale, and security of the obligations as provided in chapter 475,
and has the same powers and duties as a municipality issuing bonds under that law, except
that no election is required and the net debt limitations in chapter 475 do not apply to the
obligations. The issuing political subdivision may determine to issue the obligations as
revenue obligations, payable solely from the collections of the federal grants anticipated,
or may pledge its full faith and credit to the payment of the obligations.
new text end

new text begin Subd. 4. new text end

new text begin Use of proceeds. new text end

new text begin The proceeds of the obligations must be used:
new text end

new text begin (1) to pay or reimburse the costs of the transportation or transit projects relating to
the federal grants being anticipated;
new text end

new text begin (2) to pay the costs of issuance of the obligations, including credit enhancement;
new text end

new text begin (3) to pay interest on the obligations for a period not exceeding three years from
their date of issue; and
new text end

new text begin (4) if the full faith and credit of the issuing political subdivision is not pledged to the
payment of the obligations, to fund a debt service reserve fund for the obligations.
new text end

Sec. 25.

Minnesota Statutes 2006, section 475.53, subdivision 1, is amended to read:


Subdivision 1.

Generally.

Except as otherwise provided in sections 475.51 to
475.74, no municipality, except a school district or a city of the first class, shall incur or
be subject to a net debt in excess of deleted text begintwodeleted text endnew text begin threenew text end percent of the market value of taxable
property in the municipality.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for obligations issued after June
30, 2007.
new text end

Sec. 26.

Minnesota Statutes 2006, section 475.58, subdivision 1, is amended to read:


Subdivision 1.

Approval by electors; exceptions.

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

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

(2) for refunding obligations;

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

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

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

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

(7) to fund pension or retirement fundnew text begin or postemployment benefitnew text end liabilities pursuant
to section 475.52, subdivision 6;

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

(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if
the proceeds of the bonds are not used for a purpose prohibited under section 469.176,
subdivision 4g
, paragraph (b).

Sec. 27.

Minnesota Statutes 2006, section 475.58, subdivision 3b, is amended to read:


Subd. 3b.

Street reconstruction.

(a) A municipality may, without regard to
the election requirement under subdivision 1, issue and sell obligations for street
reconstruction, if the following conditions are met:

(1) the streets are reconstructed under a street reconstruction plan that describes the
deleted text begin streets to be reconstructeddeleted text endnew text begin street reconstruction to be financednew text end, the estimated costs, and
any planned reconstruction of other streets in the municipality over the next five years,
and the plan and issuance of the obligations has been approved by a vote of all of the
members of the governing body new text beginpresent at the meeting new text endfollowing a public hearing for
which notice has been published in the official newspaper at least ten days but not more
than 28 days prior to the hearing; and

(2) if a petition requesting a vote on the issuance is signed by voters equal to
five percent of the votes cast in the last municipal general election and is filed with the
municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
only after obtaining the approval of a majority of the voters voting on the question of
the issuance of the obligations.

(b) Obligations issued under this subdivision are subject to the debt limit of the
municipality and are not excluded from net debt under section 475.51, subdivision 4.

(c) For purposes of this subdivision, street reconstruction includes utility
replacement and relocation and other activities incidental to the street reconstruction, turn
lanes and other improvements having a substantial public safety function, realignments,
other modifications to intersect with state and county roads, and the local share of state
and county road projects.

(d) Except in the case of turn lanes, safety improvements, realignments, intersection
modifications, and the local share of state and county road projects, street reconstruction
does not include the portion of project cost allocable to widening a street or adding curbs
and gutters where none previously existed.

Sec. 28. new text beginVALIDATION.
new text end

new text begin Any trust or trust account or other custodial account or contract authorized under
section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay
postemployment benefits to employees or officers after termination of service, is hereby
validated, may continue in full force and effect, and shall have continuing authority
to accept new funds; however, this section does not validate or correct defects in any
previously created trust document. Any funds held by a validated trust or account under
this section may be invested as provided in section 20, subdivision 5. A validated trust
or account shall have until January 1, 2008, to bring its trust documents and procedures
into compliance with section 20.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 29. new text beginTOWN OF CRANE LAKE, CERTIFICATES OF INDEBTEDNESS.
new text end

new text begin Notwithstanding Minnesota Statutes, section 366.095, or any other law to the
contrary, the town board of the town of Crane Lake in St. Louis County may issue one
or more certificates of indebtedness in a total amount not to exceed $225,000, which
are not subject to the debt limits of the town. The proceeds of the certificates must be
used to acquire property and pay other costs related to a land exchange with the United
States Forest Service. The certificates shall be payable in not more than 30 years and be
issued on the terms and in the manner as the board may determine. Minnesota Statutes,
sections 475.54, subdivision 1, and 475.56, paragraph (c), do not apply to the certificates
issued under this section. A tax levy shall be made to pay the principal and interest on the
certificates as in the case of bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the town of Crane Lake and its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

Sec. 30. new text beginCITY OF WINSTED; BONDING AUTHORITY.
new text end

new text begin (a) The city of Winsted may issue general obligation bonds under Minnesota
Statutes, chapter 475, to finance the acquisition and betterment of a facility consisting of
a city hall, community center, and police station; park improvements, including trails
and an amphitheater; related public improvements; and substantial landscaping for the
improvements.
new text end

new text begin (b) The bonds may be issued as general obligations of the city without an election to
approve the bonds under Minnesota Statutes, section 475.58.
new text end

new text begin (c) The bonds are not included in computing any debt limitation applicable to the
city, including, but not limited to, the net debt limits under Minnesota Statutes, section
475.53, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of
and interest on the bonds is not subject to any levy limitation.
new text end

new text begin (d) The aggregate principal amount of bonds used to pay costs of the acquisition and
betterment of the facility consisting of a city hall, community center, and police station;
park improvements, including trails and an amphitheater; related public improvements;
and substantial landscaping for the improvements may not exceed $4,900,000, plus an
amount equal to the costs related to issuance of the bonds and capitalized interest.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3.
new text end