HF 2447

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to public finance; modifying requirements
relating to financial statements; authorizing
purchases of certain guaranteed investment contracts;
authorizing a special levy; modifying the authority of
cities and counties to finance purchases of computers
and related items; extending the term of certain
notes; clarifying the financing of conservation
easements; extending sunsets on establishment of
special service districts and housing improvement
areas; providing for financing of certain
improvements; extending the maximum maturity of
certain bonds; revising time for certain notices of
issues; exempting obligations issued to pay judgments
from net debt limits; modifying the authority to
finance street reconstruction; modifying limits on
city capital improvement bonds and enabling certain
towns to issue bonds under a capital improvement plan;
amending Minnesota Statutes 2004, sections 80A.25,
subdivision 3; 118A.05, subdivision 5; 275.70,
subdivision 5; 373.01, subdivision 3; 373.40,
subdivision 1; 410.32; 412.301; 428A.101; 428A.21;
429.031, by adding a subdivision; 429.051; 469.034,
subdivision 2; 469.158; 474A.131, subdivision 1;
475.51, subdivision 4; 475.52, subdivisions 1, 3, 4;
475.521, subdivisions 1, 2, 3, 4; 475.58, subdivision
3b.

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

Section 1.

Minnesota Statutes 2004, section 80A.25,
subdivision 3, is amended to read:

Subd. 3.

Financial statements.

The commissioner may by
rule or order prescribe (a) the form and content of financial
statements required under sections 80A.01 to 80A.31, (b) the
circumstances under which consolidated financial statements
shall be filed, and (c) whether any required financial
statements shall be certified by independent or certified public
accountants. All financial statements shall be prepared in
accordance with generally accepted accounting principles unless
otherwise permitted by rule or order. new text begin The commissioner may not
require, as a condition of registration, the consent of the
independent or certified public accountants to the use of
financial statements in the offering documents.
new text end

Sec. 2.

Minnesota Statutes 2004, section 118A.05,
subdivision 5, is amended to read:

Subd. 5.

Guaranteed investment contracts.

Agreements or
contracts for guaranteed investment contracts may be entered
into if they are issued or guaranteed by United States
commercial banks, domestic branches of foreign banks, United
States insurance companies, or their Canadian subsidiaries new text begin , or
the domestic affiliates of any of the foregoing new text end . The credit
quality of the issuer's or guarantor's short- and long-term
unsecured debt must be rated in one of the two highest
categories by a nationally recognized rating agency. Should the
issuer's or guarantor's credit quality be downgraded below "A",
the government entity must have withdrawal rights.

Sec. 3.

Minnesota Statutes 2004, section 275.70,
subdivision 5, is amended to read:

Subd. 5.

Special levies.

"Special levies" means those
portions of ad valorem taxes levied by a local governmental unit
for the following purposes or in the following manner:

(1) to pay the costs of the principal and interest on
bonded indebtedness or to reimburse for the amount of liquor
store revenues used to pay the principal and interest due on
municipal liquor store bonds in the year preceding the year for
which the levy limit is calculated;

(2) to pay the costs of principal and interest on
certificates of indebtedness issued for any corporate purpose
except for the following:

(i) tax anticipation or aid anticipation certificates of
indebtedness;

(ii) certificates of indebtedness issued under sections
298.28 and 298.282;

(iii) certificates of indebtedness used to fund current
expenses or to pay the costs of extraordinary expenditures that
result from a public emergency; or

(iv) certificates of indebtedness used to fund an
insufficiency in tax receipts or an insufficiency in other
revenue sources;

(3) to provide for the bonded indebtedness portion of
payments made to another political subdivision of the state of
Minnesota;

(4) to fund payments made to the Minnesota State Armory
Building Commission under section 193.145, subdivision 2, to
retire the principal and interest on armory construction bonds;

(5) property taxes approved by voters which are levied
against the referendum market value as provided under section
275.61;

(6) to fund matching requirements needed to qualify for
federal or state grants or programs to the extent that either
(i) the matching requirement exceeds the matching requirement in
calendar year 2001, or (ii) it is a new matching requirement
that did not exist prior to 2002;

(7) to pay the expenses reasonably and necessarily incurred
in preparing for or repairing the effects of natural disaster
including the occurrence or threat of widespread or severe
damage, injury, or loss of life or property resulting from
natural causes, in accordance with standards formulated by the
Emergency Services Division of the state Department of Public
Safety, as allowed by the commissioner of revenue under section
275.74, subdivision 2;

(8) pay amounts required to correct an error in the levy
certified to the county auditor by a city or county in a levy
year, but only to the extent that when added to the preceding
year's levy it is not in excess of an applicable statutory,
special law or charter limitation, or the limitation imposed on
the governmental subdivision by sections 275.70 to 275.74 in the
preceding levy year;

(9) to pay an abatement under section 469.1815;

(10) to pay any costs attributable to increases in the
employer contribution rates under chapter 353 that are effective
after June 30, 2001;

(11) to pay the operating or maintenance costs of a county
jail as authorized in section 641.01 or 641.262, or of a
correctional facility as defined in section 241.021, subdivision
1, paragraph (f), to the extent that the county can demonstrate
to the commissioner of revenue that the amount has been included
in the county budget as a direct result of a rule, minimum
requirement, minimum standard, or directive of the Department of
Corrections, or to pay the operating or maintenance costs of a
regional jail as authorized in section 641.262. For purposes of
this clause, a district court order is not a rule, minimum
requirement, minimum standard, or directive of the Department of
Corrections. If the county utilizes this special levy, except
to pay operating or maintenance costs of a new regional jail
facility under sections 641.262 to 641.264 which will not
replace an existing jail facility, any amount levied by the
county in the previous levy year for the purposes specified
under this clause and included in the county's previous year's
levy limitation computed under section 275.71, shall be deducted
from the levy limit base under section 275.71, subdivision 2,
when determining the county's current year levy limitation. The
county shall provide the necessary information to the
commissioner of revenue for making this determination;

(12) to pay for operation of a lake improvement district,
as authorized under section 103B.555. If the county utilizes
this special levy, any amount levied by the county in the
previous levy year for the purposes specified under this clause
and included in the county's previous year's levy limitation
computed under section 275.71 shall be deducted from the levy
limit base under section 275.71, subdivision 2, when determining
the county's current year levy limitation. The county shall
provide the necessary information to the commissioner of revenue
for making this determination;

(13) to repay a state or federal loan used to fund the
direct or indirect required spending by the local government due
to a state or federal transportation project or other state or
federal capital project. This authority may only be used if the
project is not a local government initiative;

(14) to pay for court administration costs as required
under section 273.1398, subdivision 4b, less the (i) county's
share of transferred fines and fees collected by the district
courts in the county for calendar year 2001 and (ii) the aid
amount certified to be paid to the county in 2004 under section
273.1398, subdivision 4c; however, for taxes levied to pay for
these costs in the year in which the court financing is
transferred to the state, the amount under this clause is
limited to the amount of aid the county is certified to receive
under section 273.1398, subdivision 4a; deleted text begin and
deleted text end

(15) to fund a police or firefighters relief association as
required under section 69.77 to the extent that the required
amount exceeds the amount levied for this purpose in 2001 new text begin ; and
new text end

new text begin (16) for purposes of a storm sewer improvement district,
pursuant to section 444.20 new text end .

Sec. 4.

Minnesota Statutes 2004, section 373.01,
subdivision 3, is amended to read:

Subd. 3.

Capital notes.

new text begin (a) new text end 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 deleted text begin five deleted text end new text begin ten new text end 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.

new text begin (b) new text end For purposes of this subdivision, "capital equipment"
means new text begin :
new text end

new text begin (1) new text end public safety, ambulance, road construction or
maintenance, and medical equipment deleted text begin , deleted text end new text begin ; new text end and

new text begin (2) new text end computer hardware and deleted text begin original operating system
deleted text end software new text begin , whether bundled with machinery or equipment or
unbundled, together with application development services and
training related to the use of the computer or software new text end . deleted text begin The
authority to issue capital notes for original operating systems
software expires on July 1, 2005.
deleted text end

Sec. 5.

Minnesota Statutes 2004, section 373.40,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this
section, the following terms have the meanings given.

(a) "Bonds" means an obligation as defined under section
475.51.

(b) "Capital improvement" means acquisition or betterment
of public lands, deleted text begin development rights in the form of conservation
easements under chapter 84C, deleted text end buildings, or other improvements
within the county for the purpose of a county courthouse,
administrative building, health or social service facility,
correctional facility, jail, law enforcement center, hospital,
morgue, library, park, qualified indoor ice arena, deleted text begin and deleted text end roads and
bridges new text begin , and the acquisition of development rights in the form
of conservation easements under chapter 84C new text end . An improvement
must have an expected useful life of five years or more to
qualify. "Capital improvement" does not include light rail
transit or any activity related to it or a recreation or sports
facility building (such as, but not limited to, a gymnasium, ice
arena, racquet sports facility, swimming pool, exercise room or
health spa), unless the building is part of an outdoor park
facility and is incidental to the primary purpose of outdoor
recreation.

(c) "Commissioner" means the commissioner of employment and
economic development.

(d) "Metropolitan county" means a county located in the
seven-county metropolitan area as defined in section 473.121 or
a county with a population of 90,000 or more.

(e) "Population" means the population established by the
most recent of the following (determined as of the date the
resolution authorizing the bonds was adopted):

(1) the federal decennial census,

(2) a special census conducted under contract by the United
States Bureau of the Census, or

(3) a population estimate made either by the Metropolitan
Council or by the state demographer under section 4A.02.

(f) "Qualified indoor ice arena" means a facility that
meets the requirements of section 373.43.

(g) "Tax capacity" means total taxable market value, but
does not include captured market value.

Sec. 6.

Minnesota Statutes 2004, section 410.32, is
amended to read:

410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL
EQUIPMENT.

new text begin (a) new text end 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 new text begin capital equipment.
new text end

new text begin (b) For purposes of this section, "capital equipment" means:
new text end

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

new text begin (2) new text end computer hardware and deleted text begin original operating system
deleted text end software, deleted text begin provided deleted text end new text begin whether bundled with machinery or equipment
or unbundled, together with application development services and
training related to the use of the computer or software.
new text end

new text begin (c) new text end The equipment or software deleted text begin has deleted text end new text begin must have new text end an expected
useful life at least as long as the term of the notes. deleted text begin The
authority to issue capital notes for original operating system
software expires on July 1, 2005.
deleted text end

new text begin (d) new text end The notes shall be payable in not more than deleted text begin five deleted text end new text begin ten
new text end 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.

new text begin (e) new text end 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.

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

new text begin (g) new text end 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. 7.

Minnesota Statutes 2004, section 412.301, is
amended to read:

412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.

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

new text begin (b) For purposes of this section, "capital equipment" means:
new text end

new text begin (1) new text end public safety equipment, ambulance new text begin and other medical
new text end equipment, road construction deleted text begin or deleted text end new text begin and new text end maintenance equipment, and
other capital equipment new text begin ; new text end and

new text begin (2) new text end computer hardware and deleted text begin original operating system
deleted text end software, deleted text begin provided deleted text end new text begin whether bundled with machinery or equipment
or unbundled, together with application development services and
training related to the use of the computer or software.
new text end

new text begin (c) new text end The equipment or software deleted text begin has deleted text end new text begin must have new text end an expected
useful life at least as long as the terms of the certificates or
notes. deleted text begin The authority to issue capital notes for original
operating system software expires on July 1, 2005.
deleted text end

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

new text begin (e) new text end 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.

new text begin (f) new text end 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. 8.

Minnesota Statutes 2004, section 428A.101, is
amended to read:

428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
GENERAL LAW.

The establishment of a new special service district after
June 30, deleted text begin 2005 deleted text end new text begin 2009 new text end , requires enactment of a special law
authorizing the establishment.

Sec. 9.

Minnesota Statutes 2004, section 428A.21, is
amended to read:

428A.21 SUNSET.

No new housing improvement areas may be established under
sections 428A.11 to 428A.20 after June 30, deleted text begin 2005 deleted text end new text begin 2009 new text end . After
June 30, deleted text begin 2005 deleted text end new text begin 2009 new text end , a city may establish a housing improvement
area, provided that it receives enabling legislation authorizing
the establishment of the area.

Sec. 10.

Minnesota Statutes 2004, section 429.031, is
amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Improvements; orderly annexation. new text end

new text begin An
improvement may be made by a municipality in an area that is the
subject of an orderly annexation agreement under section
414.0325 to which the municipality is a party. The municipality
may subsequently reimburse itself for all or any part of the
cost of such an improvement by levying assessments on the
property subject to the orderly annexation agreement, when
annexed, in the manner provided in section 429.051.
new text end

Sec. 11.

Minnesota Statutes 2004, section 429.051, is
amended to read:

429.051 APPORTIONMENT OF COST.

The cost of any improvement, or any part thereof, may be
assessed upon property benefited by the improvement, based upon
the benefits received, whether or not the property abuts on the
improvement and whether or not any part of the cost of the
improvement is paid from the county state-aid highway fund, the
municipal state-aid street fund, or the trunk highway fund. The
area assessed may be less than but may not exceed the area
proposed to be assessed as stated in the notice of hearing on
the improvement, except as provided below. The municipality may
pay such portion of the cost of the improvement as the council
may determine from general ad valorem tax levies or from other
revenues or funds of the municipality available for the
purpose. The municipality may subsequently reimburse itself for
all or any of the portion of the cost of deleted text begin a water, storm sewer,
or sanitary sewer deleted text end new text begin an new text end improvement so paid by levying additional
assessments upon any properties abutting on but not previously
assessed for the improvement, on notice and hearing as provided
for the assessments initially made. To the extent that such an
improvement benefits nonabutting properties which may be served
by the improvement when one or more later extensions or
improvements are made but which are not initially assessed
therefor, the municipality may also reimburse itself by adding
all or any of the portion of the cost so paid to the assessments
levied for any of such later extensions or improvements,
provided that notice that such additional amount will be
assessed is included in the notice of hearing on the making of
such extensions or improvements. The additional assessments
herein authorized may be made whether or not the properties
assessed were included in the area described in the notice of
hearing on the making of the original improvement.

In any city of the fourth class electing to proceed under a
home rule charter as provided in this chapter, which charter
provides for a board of water commissioners and authorizes such
board to assess a water frontage tax to defray the cost of
construction of water mains, such board may assess the tax based
upon the benefits received and without regard to any charter
limitation on the amount that may be assessed for each lineal
foot of property abutting on the water main. The water frontage
tax shall be imposed according to the procedure and, except as
herein provided, subject to the limitations of the charter of
the city.

Sec. 12.

Minnesota Statutes 2004, section 469.034,
subdivision 2, is amended to read:

Subd. 2.

General obligation revenue bonds.

(a) An
authority may pledge the general obligation of the general
jurisdiction governmental unit as additional security for bonds
payable from income or revenues of the project or the
authority. The authority must find that the pledged revenues
will equal or exceed 110 percent of the principal and interest
due on the bonds for each year. The proceeds of the bonds must
be used for a qualified housing development project or
projects. The obligations must be issued and sold in the manner
and following the procedures provided by chapter 475, except the
obligations are not subject to approval by the electors new text begin , new text end and the
maturities may extend to not more than deleted text begin 30 deleted text end new text begin 35 new text end years deleted text begin from the
estimated date of completion of the project deleted text end new text begin for obligations sold
to finance housing for the elderly and 40 years for other
obligations issued under this subdivision new text end . The authority is the
municipality for purposes of chapter 475.

(b) The principal amount of the issue must be approved by
the governing body of the general jurisdiction governmental unit
whose general obligation is pledged. Public hearings must be
held on issuance of the obligations by both the authority and
the general jurisdiction governmental unit. The hearings must
be held at least 15 days, but not more than 120 days, before the
sale of the obligations.

(c) The maximum amount of general obligation bonds that may
be issued and outstanding under this section equals the greater
of (1) one-half of one percent of the taxable market value of
the general jurisdiction governmental unit whose general
obligation deleted text begin which includes a tax on property deleted text end is pledged, or (2)
$3,000,000. In the case of county or multicounty general
obligation bonds, the outstanding general obligation bonds of
all cities in the county or counties issued under this
subdivision must be added in calculating the limit under clause
(1).

(d) "General jurisdiction governmental unit" means the city
in which the housing development project is located. In the
case of a county or multicounty authority, the county or
counties may act as the general jurisdiction governmental unit.
In the case of a multicounty authority, the pledge of the
general obligation is a pledge of a tax on the taxable property
in each of the counties.

(e) "Qualified housing development project" means a housing
development project providing housing either for the elderly or
for individuals and families with incomes not greater than 80
percent of the median family income as estimated by the United
States Department of Housing and Urban Development for the
standard metropolitan statistical area or the nonmetropolitan
county in which the project is located, and will be owned by the
authority for the term of the bonds. A qualified housing
development project may admit nonelderly individuals and
families with higher incomes if:

(1) three years have passed since initial occupancy;

(2) the authority finds the project is experiencing
unanticipated vacancies resulting in insufficient revenues,
because of changes in population or other unforeseen
circumstances that occurred after the initial finding of
adequate revenues; and

(3) the authority finds a tax levy or payment from general
assets of the general jurisdiction governmental unit will be
necessary to pay debt service on the bonds if higher income
individuals or families are not admitted.

Sec. 13.

Minnesota Statutes 2004, section 469.158, is
amended to read:

469.158 MANNER OF ISSUANCE OF BONDS; INTEREST RATE.

Bonds authorized under sections 469.152 to 469.165 must be
issued in accordance with the provisions of chapter 475 relating
to bonds payable from income of revenue producing conveniences,
except that public sale is not required, the provisions of
sections 475.62 and 475.63 do not apply, and the bonds may
mature at the time or times, in the amount or amounts, within deleted text begin 30
deleted text end new text begin 40 new text end years from date of issue, and may be sold at a price equal to
the percentage of the par value thereof, plus accrued interest,
and bearing interest at the rate or rates agreed by the
contracting party, the purchaser, and the municipality or
redevelopment agency, notwithstanding any limitation of interest
rate or cost or of the amounts of annual maturities contained in
any other law. Bonds issued to refund bonds previously issued
pursuant to sections 469.152 to 469.165 may be issued in amounts
determined by the municipality or redevelopment agency
notwithstanding the provisions of section 475.67, subdivision 3.

Sec. 14.

Minnesota Statutes 2004, section 474A.131,
subdivision 1, is amended to read:

Subdivision 1.

Notice of issue.

Each issuer that issues
bonds with an allocation received under this chapter shall
provide a notice of issue to the department on forms provided by
the department stating:

(1) the date of issuance of the bonds;

(2) the title of the issue;

(3) the principal amount of the bonds;

(4) the type of qualified bonds under federal tax law;

(5) the dollar amount of the bonds issued that were subject
to the annual volume cap; and

(6) for entitlement issuers, whether the allocation is from
current year entitlement authority or is from carryforward
authority.

For obligations that are issued as a part of a series of
obligations, a notice must be provided for each series. A
penalty of one-half of the amount of the application deposit not
to exceed $5,000 shall apply to any issue of obligations for
which a notice of issue is not provided to the department within
five business days after issuance or before deleted text begin the last Monday deleted text end new text begin 4:30
p.m. on the last business day new text end in December, whichever occurs
first. Within 30 days after receipt of a notice of issue the
department shall refund a portion of the application deposit
equal to one percent of the amount of the bonding authority
actually issued if a one percent application deposit was made,
or equal to two percent of the amount of the bonding authority
actually issued if a two percent application deposit was made,
less any penalty amount.

Sec. 15.

Minnesota Statutes 2004, section 475.51,
subdivision 4, is amended to read:

Subd. 4.

Net debt.

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

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

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

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

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

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

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

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

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

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

(10) Obligations issued to pay pension fund liabilities
under section 475.52, subdivision 6, or any charter authority.

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

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

Sec. 16.

Minnesota Statutes 2004, section 475.52,
subdivision 1, is amended to read:

Subdivision 1.

Statutory cities.

Any statutory city may
issue bonds or other obligations for the acquisition or
betterment of public buildings, means of garbage disposal,
hospitals, nursing homes, homes for the aged, schools,
libraries, museums, art galleries, parks, playgrounds, stadia,
sewers, sewage disposal plants, subways, streets, sidewalks,
warning systems; for any utility or other public convenience
from which a revenue is or may be derived; for a permanent
improvement revolving fund; for changing, controlling or
bridging streams and other waterways; for the acquisition and
betterment of bridges and roads within two miles of the
corporate limits new text begin ; new text end for the acquisition of development rights in
the form of conservation easements under chapter 84C; and for
acquisition of equipment for snow removal, street construction
and maintenance, or fire fighting. Without limitation by the
foregoing the city may issue bonds to provide money for any
authorized corporate purpose except current expenses.

Sec. 17.

Minnesota Statutes 2004, section 475.52,
subdivision 3, is amended to read:

Subd. 3.

Counties.

Any county may issue bonds for the
acquisition or betterment of courthouses, county administrative
buildings, health or social service facilities, correctional
facilities, law enforcement centers, jails, morgues, libraries,
parks, and hospitals, for roads and bridges within the county or
bordering thereon and for road equipment and machinery and for
ambulances and related equipment new text begin ; new text end for the acquisition of
development rights in the form of conservation easements under
chapter 84C, and for capital equipment for the administration
and conduct of elections providing the equipment is uniform
countywide, except that the power of counties to issue bonds in
connection with a library shall not exist in Hennepin County.

Sec. 18.

Minnesota Statutes 2004, section 475.52,
subdivision 4, is amended to read:

Subd. 4.

Towns.

Any town may issue bonds for the
acquisition and betterment of town halls, town roads and
bridges, nursing homes and homes for the aged, and for
acquisition of equipment for snow removal, road construction or
maintenance, and fire fighting new text begin ; new text end for the acquisition of
development rights in the form of conservation easements under
chapter 84C new text begin ; new text end and for the acquisition and betterment of any
buildings to house and maintain town equipment.

Sec. 19.

Minnesota Statutes 2004, section 475.521,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this
section, the following terms have the meanings given.

(a) "Bonds" mean an obligation defined under section 475.51.

(b) "Capital improvement" means acquisition or betterment
of public lands, buildings or other improvements for the purpose
of a city hall, new text begin town hall, library, new text end public safety facility, and
public works facility. An improvement must have an expected
useful life of five years or more to qualify. Capital
improvement does not include light rail transit or any activity
related to it, or a park, deleted text begin library, deleted text end road, bridge, administrative
building other than a city new text begin or town new text end hall, or land for any of
those facilities.

(c) deleted text begin "City" deleted text end new text begin "Municipality" new text end means a home rule charter or
statutory city new text begin or a town described in section 368.01,
subdivision 1 or 1a new text end .

Sec. 20.

Minnesota Statutes 2004, section 475.521,
subdivision 2, is amended to read:

Subd. 2.

Election requirement.

(a) Bonds issued by a
deleted text begin city deleted text end new text begin municipality new text end to finance capital improvements under an
approved capital improvements plan are not subject to the
election requirements of section 475.58. deleted text begin The bonds are subject
to the net debt limits under section 475.53. deleted text end The bonds must be
approved by an affirmative vote of three-fifths of the members
of a five-member deleted text begin city council deleted text end new text begin governing body new text end . In the case of
a deleted text begin city council deleted text end new text begin governing body new text end having more new text begin or less new text end than five
members, the bonds must be approved by a vote of at least
two-thirds of the deleted text begin city council deleted text end new text begin members of the governing body new text end .

(b) Before the issuance of bonds qualifying under this
section, the deleted text begin city deleted text end new text begin municipality new text end must publish a notice of its
intention to issue the bonds and the date and time of the
hearing to obtain public comment on the matter. The notice must
be published in the official newspaper of the deleted text begin city deleted text end new text begin municipality
new text end or in a newspaper of general circulation in the deleted text begin city
deleted text end new text begin municipality new text end . Additionally, the notice may be posted on the
official Web site, if any, of the deleted text begin city deleted text end new text begin municipality new text end . The notice
must be published at least 14 but not more than 28 days before
the date of the hearing.

(c) A deleted text begin city deleted text end new text begin municipality new text end may issue the bonds only after
obtaining the approval of a majority of the voters voting on the
question of issuing the obligations, if a petition requesting a
vote on the issuance is signed by voters equal to five percent
of the votes cast in the deleted text begin city deleted text end new text begin municipality new text end in the last general
election and is filed with the deleted text begin city deleted text end clerk within 30 days after
the public hearing. The commissioner of revenue shall prepare a
suggested form of the question to be presented at the election.

Sec. 21.

Minnesota Statutes 2004, section 475.521,
subdivision 3, is amended to read:

Subd. 3.

Capital improvement plan.

(a) A deleted text begin city
deleted text end new text begin municipality new text end may adopt a capital improvement plan. The plan
must cover at least a five-year period beginning with the date
of its adoption. The plan must set forth the estimated
schedule, timing, and details of specific capital improvements
by year, together with the estimated cost, the need for the
improvement, and sources of revenue to pay for the improvement.
In preparing the capital improvement plan, the deleted text begin city council
deleted text end new text begin governing body new text end must consider for each project and for the
overall plan:

(1) the condition of the deleted text begin city's deleted text end new text begin municipality's new text end existing
infrastructure, including the projected need for repair or
replacement;

(2) the likely demand for the improvement;

(3) the estimated cost of the improvement;

(4) the available public resources;

(5) the level of overlapping debt in the deleted text begin city deleted text end new text begin municipality new text end ;

(6) the relative benefits and costs of alternative uses of
the funds;

(7) operating costs of the proposed improvements; and

(8) alternatives for providing services most efficiently
through shared facilities with other deleted text begin cities deleted text end new text begin municipalities new text end or
local government units.

(b) The capital improvement plan and annual amendments to
it must be approved by the deleted text begin city council deleted text end new text begin governing body new text end after
public hearing.

Sec. 22.

Minnesota Statutes 2004, section 475.521,
subdivision 4, is amended to read:

Subd. 4.

Limitations on amount.

A deleted text begin city deleted text end new text begin municipality new 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 under this section, including the bonds
to be issued, will equal or exceed deleted text begin 0.05367 deleted text end new text begin 0.16 new text end percent of new text begin the
new text end taxable market value of property in the deleted text begin county deleted text end new text begin municipality new 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. new text begin In the case of a municipality with a
population of 2,500 or more, the bonds are subject to the net
debt limits under section 475.53. In the case of a shared
facility in which more than one municipality participates, upon
compliance by each participating municipality with the
requirements of subdivision 2, the limitations in this
subdivision and the net debt represented by the bonds shall be
allocated to each participating municipality in proportion to
its required financial contribution to the financing of the
shared facility, as set forth in the joint powers agreement
relating to the shared facility. new text end This section does not limit
the authority to issue bonds under any other special or general
law.

Sec. 23.

Minnesota Statutes 2004, 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 streets to be
reconstructed, 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 following 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, deleted text begin but deleted text end new text begin 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.
new text end

new text begin (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 new text end does not
include the portion of project cost allocable to widening a
street or adding curbs and gutters where none previously existed.

Sec. 24. new text begin EFFECTIVE DATE.
new text end

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