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HF 728

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/04/2021 03:07pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to capital investment; authorizing the issuance of redevelopment
appropriation bonds for areas damaged by civil unrest; appropriating money;
proposing coding for new law in Minnesota Statutes, chapter 16A.

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

Section 1. new text beginLEGISLATIVE FINDINGS; PURPOSE.
new text end

new text begin (a) The legislature recognizes the civil unrest that occurred in Minnesota in May and
June of 2020. While the immediate cause of the unrest was the apparent murder of George
Floyd by an officer of the Minneapolis Police Department, it was compounded by other
long-standing structural systems of inequality and racism within the city, state, and nation.
The legislature further recognizes that some acts of protest and civil disobedience, occurring
among a small minority of participants, led to severe damage or destruction to small
businesses and other private property in Minneapolis and St. Paul.
new text end

new text begin (b) The financing provided by Minnesota Statutes, section 16A.962, is for the public
purpose of redeveloping the areas damaged by the civil unrest. The public purpose of
redevelopment is to help support enterprise development and wealth creation for persons
adversely affected by long-standing structural racial discrimination and poverty and prevent
displacement of low-income residents, homes, and small businesses owned by people of
color and indigenous people.
new text end

Sec. 2.

new text begin [16A.962] REDEVELOPMENT APPROPRIATION BONDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this section.
new text end

new text begin (b) "Appropriation bond" or "bond" means a bond, note, or other similar instrument of
the state payable during a biennium from one or more of the following sources:
new text end

new text begin (1) money appropriated by law from the general fund in any biennium for debt service
due with respect to obligations described in subdivision 2, paragraph (a);
new text end

new text begin (2) proceeds of the sale of obligations described in subdivision 2, paragraph (a);
new text end

new text begin (3) payments received for that purpose under agreements and ancillary arrangements
described in subdivision 2, paragraph (d); and
new text end

new text begin (4) investment earnings on amounts in clauses (1) to (3).
new text end

new text begin (c) "City" means Minneapolis or St. Paul, or an agency of Minneapolis or St. Paul.
new text end

new text begin (d) "Debt service" means the amount payable in any biennium of principal, premium,
if any, and interest on appropriation bonds, and the fees, charges, and expenses related to
the bonds.
new text end

new text begin (e) "Eligible area" means an area in Minneapolis or St. Paul adversely affected by civil
unrest during the peacetime emergency declared in Emergency Executive Order 20-64.
new text end

new text begin (f) "Redevelopment" may include the acquisition of real property; site preparation;
predesign, design, engineering, repair, or renovation of facilities damaged during the civil
unrest and construction of buildings, infrastructure, and related site amenities; landscaping;
street-scaping; land-banking for future development or redevelopment; or financing any of
these activities taken on by a private party pursuant to an agreement with the city.
Redevelopment does not include project costs eligible for compensation or assistance
available through insurance policies or from other organizations or government agencies.
new text end

new text begin Subd. 2. new text end

new text begin Authorization to issue appropriation bonds. new text end

new text begin (a) Subject to the limitations of
this subdivision, the commissioner may sell and issue appropriation bonds of the state under
this section for public purposes as provided by law, including for the purposes of capitalizing
an account in the city of Minneapolis' community property development fund and an account
in the St. Paul housing and redevelopment authority's funds to pay for redevelopment in
the eligible areas. Appropriation bonds may be sold and issued in amounts that, in the
opinion of the commissioner, are necessary to provide sufficient money to the commissioner
of administration under subdivision 7, not to exceed $....... net of costs of issuance, for the
purposes as provided under this subdivision; to pay debt service including capitalized
interest, costs of issuance, and costs of credit enhancement; or to make payments under
other agreements entered into under paragraph (d).
new text end

new text begin (b) Proceeds of the appropriation bonds must be credited to a special appropriation
redevelopment bond proceeds fund in the state treasury. All income from investment of the
bond proceeds is appropriated to the commissioner for the payment of principal and interest
on the appropriation bonds.
new text end

new text begin (c) Appropriation bonds may be issued in one or more issues or series on the terms and
conditions the commissioner determines to be in the best interests of the state, but the term
on any series of appropriation bonds may not exceed 21 years. The appropriation bonds of
each issue and series thereof shall be dated and bear interest from the date of issuance, and
may be includable in or excludable from the gross income of the owners for federal income
tax purposes.
new text end

new text begin (d) At the time of, or in anticipation of, issuing the appropriation bonds, and at any time
thereafter so long as the appropriation bonds are outstanding, the commissioner may enter
into agreements and ancillary arrangements relating to the appropriation bonds, including
but not limited to trust indentures, grant agreements, lease or use agreements, operating
agreements, management agreements, liquidity facilities, remarketing or dealer agreements,
letter of credit agreements, insurance policies, guaranty agreements, reimbursement
agreements, indexing agreements, or interest exchange agreements. Any payments made
or received according to the agreement or ancillary arrangement shall be made from or
deposited as provided in the agreement or ancillary arrangement. The determination of the
commissioner, included in an interest exchange agreement, that the agreement relates to an
appropriation bond, shall be conclusive.
new text end

new text begin (e) The commissioner may enter into written agreements or contracts relating to the
continuing disclosure of information necessary to comply with or facilitate the issuance of
appropriation bonds in accordance with federal securities laws, rules, and regulations,
including Securities and Exchange Commission rules and regulations in Code of Federal
Regulations, title 17, section 240.15c 2-12. An agreement may be in the form of covenants
with purchasers and holders of appropriation bonds set forth in the order or resolution
authorizing the issuance of the appropriation bonds, or a separate document authorized by
the order or resolution.
new text end

new text begin (f) The appropriation bonds are not subject to chapter 16C.
new text end

new text begin Subd. 3. new text end

new text begin Form; procedure. new text end

new text begin (a) Appropriation bonds may be issued in the form of bonds,
notes, or other similar instruments in the manner provided in section 16A.672. In the event
that any provision of section 16A.672 conflicts with this section, this section shall control.
new text end

new text begin (b) Every appropriation bond shall include a conspicuous statement of the limitation
established in subdivision 6.
new text end

new text begin (c) Appropriation bonds may be sold at either public or private sale upon such terms as
the commissioner shall determine are not inconsistent with this section and may be sold at
any price or percentage of par value. Any bid received may be rejected.
new text end

new text begin (d) Appropriation bonds must bear interest at a fixed or variable rate.
new text end

new text begin (e) Notwithstanding any other law, appropriation bonds issued under this section shall
be fully negotiable.
new text end

new text begin Subd. 4. new text end

new text begin Refunding bonds. new text end

new text begin The commissioner may issue appropriation bonds for the
purpose of refunding any appropriation bonds issued under subdivision 2 then outstanding,
including the payment of any redemption premiums on the bonds, any interest accrued or
to accrue to the redemption date, and costs related to the issuance and sale of the refunding
bonds. The proceeds of any refunding bonds may, at the discretion of the commissioner,
be applied to the purchase or payment at maturity of the appropriation bonds to be refunded,
to the redemption of the outstanding appropriation bonds on any redemption date, or to pay
interest on the refunding bonds and may, pending application, be placed in escrow to be
applied to the purchase, payment, retirement, or redemption. Any escrowed proceeds,
pending such use, may be invested and reinvested in obligations that are authorized
investments under section 11A.24. The income earned or realized on the investment may
also be applied to the payment of the appropriation bonds to be refunded or interest or
premiums on the refunded appropriation bonds, or to pay interest on the refunding bonds.
After the terms of the escrow have been fully satisfied, any balance of the proceeds and any
investment income may be returned to the general fund or, if applicable, the special
appropriation redevelopment bond proceeds fund for use in any lawful manner. All refunding
bonds issued under this subdivision must be prepared, executed, delivered, and secured by
appropriations in the same manner as the appropriation bonds to be refunded.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation bonds as legal investments. new text end

new text begin Any of the following entities may
legally invest any sinking funds, money, or other funds belonging to them or under their
control in any appropriation bonds issued under this section:
new text end

new text begin (1) the state, the investment board, public officers, municipal corporations, political
subdivisions, and public bodies;
new text end

new text begin (2) banks and bankers, savings and loan associations, credit unions, trust companies,
savings banks and institutions, investment companies, insurance companies, insurance
associations, and other persons carrying on a banking or insurance business; and
new text end

new text begin (3) personal representatives, guardians, trustees, and other fiduciaries.
new text end

new text begin Subd. 6. new text end

new text begin No full faith and credit; state not required to make appropriations. new text end

new text begin The
appropriation bonds are not public debt of the state, and the full faith, credit, and taxing
powers of the state are not pledged to the payment of the appropriation bonds or to any
payment that the state agrees to make under this section. Appropriation bonds shall not be
obligations paid directly, in whole or in part, from a tax of statewide application on any
class of property, income, transaction, or privilege. Appropriation bonds shall be payable
in each fiscal year only from amounts that the legislature may appropriate for debt service
for any fiscal year, provided that nothing in this section shall be construed to require the
state to appropriate money sufficient to make debt service payments with respect to the
appropriation bonds in any fiscal year. Appropriation bonds shall be canceled and shall no
longer be outstanding on the earlier of (1) the first day of a fiscal year for which the
legislature shall not have appropriated amounts sufficient for debt service, or (2) the date
of final payment of the principal of and interest on the appropriation bonds.
new text end

new text begin Subd. 7. new text end

new text begin Appropriation of proceeds. new text end

new text begin The proceeds of appropriation bonds issued under
subdivision 2, paragraph (a), and interest credited to the special appropriation redevelopment
bond proceeds fund are appropriated as follows:
new text end

new text begin (1) to the commissioner of employment and economic development for a grant of $.......
to the city of Minneapolis and $....... to the Saint Paul Housing and Redevelopment Authority,
and as further specified in subdivision 2, paragraph (a); and
new text end

new text begin (2) to the commissioner of management and budget for debt service on the bonds
including capitalized interest, nonsalary costs of issuance of the bonds, costs of credit
enhancement of the bonds, and payments under any agreements entered into under
subdivision 2, paragraph (d), as permitted by state and federal law.
new text end

new text begin Subd. 8. new text end

new text begin Appropriation for debt service and other purposes. new text end

new text begin An amount needed to
pay principal and interest on appropriation bonds issued under subdivision 2, paragraph (a),
is appropriated each fiscal year from the general fund to the commissioner, subject to repeal,
unallotment under section 16A.152, or cancellation, otherwise pursuant to subdivision 6,
for deposit into the bond payments account established for such purpose in the special
appropriation redevelopment bond proceeds fund. The appropriation is available beginning
in fiscal year 2021 and remains available through fiscal year 2042.
new text end

new text begin Subd. 9. new text end

new text begin Waiver of immunity. new text end

new text begin The waiver of immunity by the state provided for by
section 3.751, subdivision 1, shall be applicable to the appropriation bonds and any ancillary
contracts to which the commissioner is a party.
new text end

new text begin Subd. 10. new text end

new text begin Grant agreements. new text end

new text begin In addition to any other terms in a grant agreement between
the commissioner of employment and economic development, a grant of special appropriation
redevelopment bonds proceeds must:
new text end

new text begin (1) require the city to segregate the grant funds in a separate account;
new text end

new text begin (2) pay to the state for deposit into the bond payments account established for such
purpose in the special appropriation redevelopment bond proceeds fund the proceeds of the
sale of any property financed with a grant under this section, in an amount up to the amount
of the grant; and
new text end

new text begin (3) report to the commissioner of employment and economic development each on the
expenditures made from the accounts funded with a grant made under this section in the
form that the commissioner prescribes and include any documentation of and supporting
information regarding the expenditures that the commissioner requires.
new text end

new text begin Subd. 11. new text end

new text begin Audit. new text end

new text begin The commissioner of employment and economic development must
review the report of expenditures made by the cities.
new text end