1.1 	A bill for an act
1.2 	relating to public finance; authorizing the issuance of improvement bonds 
1.3 	with certain terms and conditions; modifying definitions; making clarifying, 
1.4 	technical, and other changes relating to the issuance of municipal bonds;
1.5 	amending Minnesota Statutes 2010, sections 116J.994, subdivision 2; 216C.435, 
1.6 	subdivision 8; 216C.436, subdivisions 7, 8; 373.40, subdivisions 1, 2, 4; 
1.7 	429.101; 474A.02, subdivisions 22b, 23a; 475.521, subdivisions 1, 2, 4; 475.54, 
1.8 	subdivision 1; 475.58, subdivision 3b.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. Minnesota Statutes 2010, section 116J.994, subdivision 2, is amended to 
1.11 	read:
1.12 		Subd. 2.Developing a set of criteria. A business subsidy may not be granted until 
1.13 	the grantor has adopted criteria after a public hearing for awarding business subsidies 
1.14 	that comply with this section. The criteria may not be adopted on a case-by-case basis. 
1.15 	The criteria must set specific minimum requirements that recipients must meet in order 
1.16 	to be eligible to receive business subsidies. The criteria must include a specific wage 
1.17 	floor for the wages to be paid for the jobs created. The wage floor may be stated as a 
1.18 	specific dollar amount or may be stated as a formula that will generate a specific dollar 
1.19 	amount. A grantor may deviate from its criteria by documenting in writing the reason 
1.20 	for the deviation and attaching a copy of the document to its next annual report to the 
1.21 	department. The commissioner of employment and economic development may assist 
1.22 	local government agencies in developing criteria. A copy of the criteria must be submitted 
1.23 	to the Department of Employment and Economic Development along with the first annual 
1.24 	report following May 15, 2000, or with the first annual report after it has adopted criteria, 
1.25 	whichever is earlier. Notwithstanding section 116J.993, subdivision 3, clauses (1) and 
2.1 	(21), for the purpose of this subdivision, "business subsidies" as defined under section 
2.2 	116J.993 includes the following forms of financial assistance:
2.3 	(1) a business subsidy of $25,000 or more; and
2.4 	(2) business loans and guarantees of $75,000 or more.

2.5 	Sec. 2. Minnesota Statutes 2010, section 216C.435, subdivision 8, is amended to read:
2.6 		Subd. 8.Qualifying real property. "Qualifying real property" means a 
2.7 	single-family or multifamily residential dwelling, or a commercial or industrial building, 
2.8 	that the implementing entity has determined, after review of an energy audit or renewable 
2.9 	energy system feasibility study, can be benefitedmay experience increased energy 
2.10 	efficiency by installation of energy improvements.

2.11 	Sec. 3. Minnesota Statutes 2010, section 216C.436, subdivision 7, is amended to read:
2.12 		Subd. 7.Repayment. An implementing entity that finances an energy improvement 
2.13 	under this section must:
2.14 	(1) secure payment with a lien against the benefited qualifying real property; and
2.15 	(2) collect repayments as a special assessment as provided for in section 429.101 
2.16 	or by charter; provided that special assessments may be made payable in up to 20 equal 
2.17 	annual installments.
2.18 	If the implementing entity is an authority, the local government that authorized 
2.19 	the authority to act as implementing entity shall impose and collect special assessments 
2.20 	necessary to pay debt service on bonds issued by the implementing entity under 
2.21 	subdivision 8, and shall transfer all collections of the assessments upon receipt to the 
2.22 	authority.

2.23 	Sec. 4. Minnesota Statutes 2010, section 216C.436, subdivision 8, is amended to read:
2.24 		Subd. 8.Bond issuance; repayment. (a) An implementing entity may issue 
2.25 	revenue improvement bonds as provided in chapter 475 section 429.101 for the purposes 
2.26 	of this section; provided that such improvement bonds shall be payable not more than 20 
2.27 	years from the date of issuance.
2.28 	(b) The bonds principal amount of the improvement bonds must be payable as to 
2.29 	both principal and interest solely from the revenues from not exceed the amount of the 
2.30 	assessments established in subdivision 7.
2.31 	(c) No holder of bonds issued under this subdivision may compel any exercise of the 
2.32 	taxing power of the implementing entity that issued the bonds to pay principal or interest 
2.33 	on the bonds, and if the implementing entity is an authority, no holder of the bonds may 
3.1 	compel any exercise of the taxing power of the local government. Bonds issued under 
3.2 	this subdivision are not a debt or obligation of the issuer or any local government that 
3.3 	issued them, nor is the payment of the bonds enforceable out of any money other than the 
3.4 	revenue pledged to the payment of the bonds.

3.5 	Sec. 5. Minnesota Statutes 2010, section 373.40, subdivision 1, is amended to read:
3.6 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
3.7 	the meanings given.
3.8 	(a) "Bonds" means an obligation as defined under section 475.51.
3.9 	(b) "Capital improvement" means acquisition or betterment of public lands, 
3.10 	buildings, or other improvements within the county for the purpose of a county 
3.11 	courthouse, administrative building, health or social service facility, correctional facility, 
3.12 	jail, law enforcement center, hospital, morgue, library, park, qualified indoor ice arena, 
3.13 	roads and bridges, public works facilities, fairgrounds buildings, and records and data 
3.14 	storage facilities and the acquisition of development rights in the form of conservation 
3.15 	easements under chapter 84C. An improvement must have an expected useful life of five 
3.16 	years or more to qualify. "Capital improvement" does not include light rail transit or any 
3.17 	activity related to it or a recreation or sports facility building (such as, but not limited to, a 
3.18 	gymnasium, ice arena, racquet sports facility, swimming pool, exercise room or health 
3.19 	spa), unless the building is part of an outdoor park facility and is incidental to the primary 
3.20 	purpose of outdoor recreation. For purposes of this section, "capital improvement" 
3.21 	includes expenditures for purposes described in this paragraph that have been incurred by 
3.22 	a county before approval of a capital improvement plan, if such expenditures are included 
3.23 	in a capital improvement plan approved on or before the date of the public hearing under 
3.24 	subdivision 2 regarding issuance of bonds for such expenditures.
3.25 	(c) "Metropolitan county" means a county located in the seven-county metropolitan 
3.26 	area as defined in section 473.121 or a county with a population of 90,000 or more.
3.27 	(d) "Population" means the population established by the most recent of the 
3.28 	following (determined as of the date the resolution authorizing the bonds was adopted):
3.29 	(1) the federal decennial census,
3.30 	(2) a special census conducted under contract by the United States Bureau of the 
3.31 	Census, or
3.32 	(3) a population estimate made either by the Metropolitan Council or by the state 
3.33 	demographer under section 4A.02.
3.34 	(e) "Qualified indoor ice arena" means a facility that meets the requirements of 
3.35 	section 373.43.
4.1 	(f) "Tax capacity" means total taxable market value, but does not include captured 
4.2 	market value.

4.3 	Sec. 6. Minnesota Statutes 2010, section 373.40, subdivision 2, is amended to read:
4.4 		Subd. 2.Application of election requirement. (a) Bonds issued by a county 
4.5 	to finance capital improvements under an approved capital improvement plan are not 
4.6 	subject to the election requirements of section 375.18 or 475.58. The bonds must be 
4.7 	approved by vote of at least three-fifths of the members of the county board. In the case 
4.8 	of a metropolitan county, the bonds must be approved by vote of at least two-thirds of 
4.9 	the members of the county board. 
4.10 	(b) Before issuance of bonds qualifying under this section, the county must publish 
4.11 	a notice of its intention to issue the bonds and the date and time of a hearing to obtain 
4.12 	public comment on the matter. The notice must be published in the official newspaper 
4.13 	of the county or in a newspaper of general circulation in the county. The notice must be 
4.14 	published at least 14 ten, but not more than 28, days before the date of the hearing.
4.15 	(c) A county may issue the bonds only upon obtaining the approval of a majority of 
4.16 	the voters voting on the question of issuing the obligations, if a petition requesting a vote 
4.17 	on the issuance is signed by voters equal to five percent of the votes cast in the county in 
4.18 	the last county general election and is filed with the county auditor within 30 days after 
4.19 	the public hearing. The commissioner of revenue shall prepare a suggested form of the 
4.20 	question to be presented at the election. If the county elects not to submit the question to 
4.21 	the voters, the county shall not propose the issuance of bonds under this section for the 
4.22 	same purpose and in the same amount for a period of 365 days from the date of receipt 
4.23 	of the petition. If the question of issuing the bonds is submitted and not approved by the 
4.24 	voters, the provisions of section 475.58, subdivision 1a, shall apply.

4.25 	Sec. 7. Minnesota Statutes 2010, section 373.40, subdivision 4, is amended to read:
4.26 		Subd. 4.Limitations on amount. A county may not issue bonds under this section 
4.27 	if the maximum amount of principal and interest to become due in any year on all the 
4.28 	outstanding bonds issued pursuant to this section (including the bonds to be issued) will 
4.29 	equal or exceed 0.12 percent of taxable market value of property in the county. Calculation 
4.30 	of the limit must be made using the taxable market value for the taxes payable year in 
4.31 	which the obligations are issued and sold., provided that, for purposes of determining 
4.32 	the principal and interest due in any year, the county may deduct the amount of interest 
4.33 	expected to be paid or reimbursed to the county by the federal government in such year on 
5.1 	any outstanding bonds or the bonds to be issued. This section does not limit the authority 
5.2 	to issue bonds under any other special or general law.

5.3 	Sec. 8. Minnesota Statutes 2010, section 429.101, is amended to read:
5.4 	429.101 UNPAID SPECIAL CHARGES MAY BE SPECIAL ASSESSMENTS.
5.5 		Subdivision 1.Ordinances. (a) In addition to any other method authorized by 
5.6 	law or charter, the governing body of any municipality may provide for the collection 
5.7 	of unpaid special charges as a special assessment against the property benefited for all 
5.8 	or any part of the cost of:
5.9 	(1) snow, ice, or rubbish removal from sidewalks;
5.10 	(2) weed elimination from streets or private property;
5.11 	(3) removal or elimination of public health or safety hazards from private property, 
5.12 	excluding any structure included under the provisions of sections 463.15 to 463.26;
5.13 	(4) installation or repair of water service lines, street sprinkling or other dust 
5.14 	treatment of streets;
5.15 	(5) the trimming and care of trees and the removal of unsound trees from any street;
5.16 	(6) the treatment and removal of insect infested or diseased trees on private property, 
5.17 	the repair of sidewalks and alleys;
5.18 	(7) the operation of a street lighting system;
5.19 	(8) the operation and maintenance of a fire protection or a pedestrian skyway system;
5.20 	(9) inspections relating to a municipal housing maintenance code violation;
5.21 	(10) the recovery of any disbursements under section 504B.445, subdivision 4, 
5.22 	clause (5), including disbursements for payment of utility bills and other services, even if 
5.23 	provided by a third party, necessary to remedy violations as described in section 504B.445, 
5.24 	subdivision 4, clause (2); or
5.25 	(11) [Repealed, 2004 c 275 s 5]
5.26 	(12) the recovery of delinquent vacant building registration fees under a municipal 
5.27 	program designed to identify and register vacant buildings.
5.28 	(b) The council may by ordinance adopt regulations consistent with this section to 
5.29 	make this authority effective, including, at the option of the council, provisions for placing 
5.30 	primary responsibility upon the property owner or occupant to do the work personally 
5.31 	(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming, 
5.32 	care, and removal, or the operation of a street lighting system) upon notice before the work 
5.33 	is undertaken, and for collection from the property owner or other person served of the 
5.34 	charges when due before unpaid charges are made a special assessment.
6.1 	(c) A home rule charter city, statutory city, county, or town operating an energy 
6.2 	improvements financing program under section 216C.436 has the authority granted to a 
6.3 	municipality under paragraph (a) with respect to energy improvements financed under 
6.4 	that section.
6.5 		Subd. 2.Procedure for assessment. Any special assessment levied under 
6.6 	subdivision 1 shall be payable in a single installment, or by up to ten equal annual 
6.7 	installments as the council may provide. With this exception, sections 429.061, 429.071, 
6.8 	and 429.081 shall apply to assessments made under this section. For special assessments 
6.9 	levied under subdivision 1, the municipality shall not be required to demonstrate that 
6.10 	the value of the property is increased or that the property is otherwise benefited by the 
6.11 	special charges described in subdivision 1.
6.12 		Subd. 3.Issuance of obligations. (a) After a contract for any of the work 
6.13 	enumerated in subdivision 1 has been let, or the work commenced, the council may 
6.14 	issue obligations improvement bonds to defray the expense of any such work financed 
6.15 	in whole or in part by special charges and assessments imposed upon benefited property 
6.16 	under this section.
6.17 	(b) Section 429.091 shall apply to such obligations improvement bonds with the 
6.18 	following modifications:
6.19 	(1) such obligations improvement bonds shall be payable not more than two ten
6.20 	years from the date of issuance, or six months following the last installment of the special 
6.21 	assessments levied as provided in subdivisions 1 and 2, whichever is later;
6.22 	(2) the amount of such obligations improvement bonds, other than improvement 
6.23 	bonds for energy improvements described in subdivision 1, paragraph (c), which are 
6.24 	limited by section 216C.436, issued at one time in a municipality shall not exceed the cost 
6.25 	of such work during the ensuing six months as estimated by the council;
6.26 	(3) a separate improvement fund shall be set up for each of the enumerated services 
6.27 	referred to in subdivision 1 and financed under this section.
6.28 	(c) Proceeds of special charges as well as special assessments and taxes shall be 
6.29 	credited to such improvement fund.

6.30 	Sec. 9. Minnesota Statutes 2010, section 474A.02, subdivision 22b, is amended to read:
6.31 		Subd. 22b.Public facilities project. "Public facilities project" means any publicly 
6.32 	owned facility, or facility owned by a nonprofit organization that is used for district 
6.33 	heating or cooling, that is eligible to be financed with the proceeds of public facilities 
6.34 	bonds as defined under section 474A.02, subdivision 23a.

7.1 	Sec. 10. Minnesota Statutes 2010, section 474A.02, subdivision 23a, is amended to 
7.2 	read:
7.3 		Subd. 23a.Qualified bonds. "Qualified bonds" means the specific type or types 
7.4 	of obligations that are subject to the annual volume cap. Qualified bonds include the 
7.5 	following types of obligations as defined in federal tax law:
7.6 	(a) "public facility bonds" means "exempt facility bonds" as defined in federal 
7.7 	tax law, except for residential rental project bonds, which are those obligations issued 
7.8 	to finance airports, docks and wharves, mass commuting facilities, facilities for the 
7.9 	furnishing of water, sewage facilities, solid waste disposal facilities, facilities for the 
7.10 	local furnishing of electric energy or gas, local district heating or cooling facilities, and 
7.11 	qualified hazardous waste facilities. New bonds and other obligations are ineligible to 
7.12 	receive state allocations or entitlement authority for public facility projects under this 
7.13 	section if they have been issued:
7.14 	(1) for the purpose of refinancing, refunding, or otherwise defeasing existing debt; 
7.15 	and
7.16 	(2) more than one calendar year prior to the date of application;
7.17 	(b) "residential rental project bonds" which are those obligations issued to finance 
7.18 	qualified residential rental projects;
7.19 	(c) "mortgage bonds";
7.20 	(d) "small issue bonds" issued to finance manufacturing projects and the acquisition 
7.21 	or improvement of agricultural real or personal property under sections 41C.01 to 41C.13;
7.22 	(e) "student loan bonds" issued by or on behalf of the Minnesota Office of Higher 
7.23 	Education;
7.24 	(f) "redevelopment bonds";
7.25 	(g) "governmental bonds" with a nonqualified amount in excess of $15,000,000 as 
7.26 	set forth in section 141(b)5 of federal tax law; and
7.27 	(h) "enterprise zone facility bonds" issued to finance facilities located within 
7.28 	empowerment zones or enterprise communities, as authorized under Public Law 103-66, 
7.29 	section 13301 section 1394 of the Internal Revenue Code.

7.30 	Sec. 11. Minnesota Statutes 2010, section 475.521, subdivision 1, is amended to read:
7.31 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
7.32 	the meanings given.
7.33 	(a) "Bonds" mean an obligation defined under section 475.51.
7.34 	(b) "Capital improvement" means acquisition or betterment of public lands, 
7.35 	buildings or other improvements for the purpose of a city hall, town hall, library, public 
8.1 	safety facility, and public works facility. An improvement must have an expected useful 
8.2 	life of five years or more to qualify. Capital improvement does not include light rail transit 
8.3 	or any activity related to it, or a park, road, bridge, administrative building other than a 
8.4 	city or town hall, or land for any of those facilities. For purposes of this section, "capital 
8.5 	improvement" includes expenditures for purposes described in this paragraph that have 
8.6 	been incurred by a municipality before approval of a capital improvement plan, if such 
8.7 	expenditures are included in a capital improvement plan approved on or before the date of 
8.8 	the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
8.9 	(c) "Municipality" means a home rule charter or statutory city or a town described in 
8.10 	section 368.01, subdivision 1 or 1a.

8.11 	Sec. 12. Minnesota Statutes 2010, section 475.521, subdivision 2, is amended to read:
8.12 		Subd. 2.Election requirement. (a) Bonds issued by a municipality to finance 
8.13 	capital improvements under an approved capital improvements plan are not subject to the 
8.14 	election requirements of section 475.58. The bonds must be approved by an affirmative 
8.15 	vote of three-fifths of the members of a five-member governing body. In the case of a 
8.16 	governing body having more or less than five members, the bonds must be approved by a 
8.17 	vote of at least two-thirds of the members of the governing body.
8.18 	(b) Before the issuance of bonds qualifying under this section, the municipality must 
8.19 	publish a notice of its intention to issue the bonds and the date and time of the hearing 
8.20 	to obtain public comment on the matter. The notice must be published in the official 
8.21 	newspaper of the municipality or in a newspaper of general circulation in the municipality. 
8.22 	Additionally, the notice may be posted on the official Web site, if any, of the municipality. 
8.23 	The notice must be published at least 14 ten but not more than 28 days before the date 
8.24 	of the hearing.
8.25 	(c) A municipality may issue the bonds only after obtaining the approval of a 
8.26 	majority of the voters voting on the question of issuing the obligations, if a petition 
8.27 	requesting a vote on the issuance is signed by voters equal to five percent of the votes cast 
8.28 	in the municipality in the last municipal general election and is filed with the clerk within 
8.29 	30 days after the public hearing. The commissioner of revenue shall prepare a suggested 
8.30 	form of the question to be presented at the election. If the municipality elects not to submit 
8.31 	the question to the voters, the municipality shall not propose the issuance of bonds under 
8.32 	this section for the same purpose and in the same amount for a period of 365 days from the 
8.33 	date of receipt of the petition. If the question of issuing the bonds is submitted and not 
8.34 	approved by the voters, the provisions of section 475.58, subdivision 1a, shall apply.

9.1 	Sec. 13. Minnesota Statutes 2010, section 475.521, subdivision 4, is amended to read:
9.2 		Subd. 4.Limitations on amount. A municipality may not issue bonds under this 
9.3 	section if the maximum amount of principal and interest to become due in any year on 
9.4 	all the outstanding bonds issued under this section, including the bonds to be issued, will 
9.5 	equal or exceed 0.16 percent of the taxable market value of property in the municipality. 
9.6 	Calculation of the limit must be made using the taxable market value for the taxes 
9.7 	payable year in which the obligations are issued and sold, provided that, for purposes of 
9.8 	determining the principle and interest due in any year, the municipality may deduct the 
9.9 	amount of interest expected to be paid or reimbursed to the municipality by the federal 
9.10 	government in such year on any outstanding bonds or the bonds to be issued. In the 
9.11 	case of a municipality with a population of 2,500 or more, the bonds are subject to the 
9.12 	net debt limits under section 475.53. In the case of a shared facility in which more than 
9.13 	one municipality participates, upon compliance by each participating municipality with 
9.14 	the requirements of subdivision 2, the limitations in this subdivision and the net debt 
9.15 	represented by the bonds shall be allocated to each participating municipality in proportion 
9.16 	to its required financial contribution to the financing of the shared facility, as set forth in 
9.17 	the joint powers agreement relating to the shared facility. This section does not limit the 
9.18 	authority to issue bonds under any other special or general law.

9.19 	Sec. 14. Minnesota Statutes 2010, section 475.54, subdivision 1, is amended to read:
9.20 		Subdivision 1.In installments; exception; annual limit. Except as provided in 
9.21 	subdivision 3, 5a, 15, or 17, or as expressly authorized in another law, all obligations of 
9.22 	each issue shall mature or be subject torequire deposits in a mandatory sinking fund 
9.23 	redemption in installments of principal, the first not later than three years and the last 
9.24 	not later than 30 years from the date of the issue; or 40 years or the useful life of the 
9.25 	asset, whichever is less, for municipal water and wastewater treatment systems and 
9.26 	essential community facilities financed or guaranteed by the United States Department of 
9.27 	Agriculture. No amount of principal of the issue payable due or required to be deposited
9.28 	in any calendar year shall exceed an amount equal to the smallest amount payable due or 
9.29 	required to be deposited in any preceding calendar year ending three years or more after 
9.30 	the issue date multiplied:
9.31 	(1) by five, in the case of obligations maturing not later than 25 years from the 
9.32 	date of issue; and
9.33 	(2) by six, in the case of obligations maturing 25 years or later from the date of issue.

9.34 	Sec. 15. Minnesota Statutes 2010, section 475.58, subdivision 3b, is amended to read:
10.1 		Subd. 3b.Street reconstruction. (a) A municipality may, without regard to 
10.2 	the election requirement under subdivision 1, issue and sell obligations for street 
10.3 	reconstruction, if the following conditions are met:
10.4 	(1) the streets are reconstructed under a street reconstruction plan that describes the 
10.5 	street reconstruction to be financed, the estimated costs, and any planned reconstruction 
10.6 	of other streets in the municipality over the next five years, and the plan and issuance of 
10.7 	the obligations has been approved by a vote of all of the members of the governing body 
10.8 	present at the meeting following a public hearing for which notice has been published in 
10.9 	the official newspaper at least ten days but not more than 28 days prior to the hearing; and
10.10 	(2) if a petition requesting a vote on the issuance is signed by voters equal to 
10.11 	five percent of the votes cast in the last municipal general election and is filed with the 
10.12 	municipal clerk within 30 days of the public hearing, the municipality may issue the bonds 
10.13 	only after obtaining the approval of a majority of the voters voting on the question of the 
10.14 	issuance of the obligations. If the municipality elects not to submit the question to the 
10.15 	voters, the municipality shall not propose the issuance of bonds under this section for the 
10.16 	same purpose and in the same amount for a period of 365 days from the date of receipt 
10.17 	of the petition. If the question of issuing the bonds is submitted and not approved by the 
10.18 	voters, the provisions of subdivision 1a, shall apply.
10.19 	(b) Obligations issued under this subdivision are subject to the debt limit of the 
10.20 	municipality and are not excluded from net debt under section 475.51, subdivision 4.
10.21 	(c) For purposes of this subdivision, street reconstruction includes utility 
10.22 	replacement and relocation and other activities incidental to the street reconstruction, turn 
10.23 	lanes and other improvements having a substantial public safety function, realignments, 
10.24 	other modifications to intersect with state and county roads, and the local share of state and 
10.25 	county road projects. For purposes of this subdivision, "street reconstruction" includes 
10.26 	expenditures for street reconstruction that have been incurred by a municipality before 
10.27 	approval of a street reconstruction plan, if such expenditures are included in a street 
10.28 	reconstruction plan approved on or before the date of the public hearing under paragraph 
10.29 	(a), clause (1), regarding issuance of bonds for such expenditures.
10.30 	(d) Except in the case of turn lanes, safety improvements, realignments, intersection 
10.31 	modifications, and the local share of state and county road projects, street reconstruction 
10.32 	does not include the portion of project cost allocable to widening a street or adding curbs 
10.33 	and gutters where none previously existed.