SF 1257

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:19am

A bill for an act
relating to public finance; providing terms and conditions relating to issuance
of obligations and financing of public improvements; modifying restrictions on
mail elections; amending Minnesota Statutes 2008, sections 204B.46; 360.036,
subdivision 2; 366.095, subdivision 1; 373.01, subdivision 3; 373.40, subdivision
1; 373.47, subdivision 1; 375.18, subdivision 3; 383B.117, subdivision 2; 410.32;
412.301; 428A.02, subdivision 1; 428A.03, subdivision 1; 428A.08; 428A.09;
428A.10; 469.005, subdivision 1; 469.034, subdivision 2; 469.040, subdivisions
1, 2, 4; 471.191, subdivision 1; 475.67, subdivision 8; repealing Minnesota
Statutes 2008, sections 428A.101; 428A.21.

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

Section 1.

Minnesota Statutes 2008, 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 conduct an election by mail with no polling place other than the office
of the auditor or clerk. No deleted text begin more than two questions may be submitted at a mail election
and no deleted text end offices may be voted on new text begin at a mail election new text end . Notice of the election must be given
to the county auditor at least 53 days prior to the election. This notice shall also fulfill
the requirements of Minnesota Rules, part 8210.3000. The special mail ballot procedures
must be posted 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. 2.

Minnesota Statutes 2008, section 360.036, subdivision 2, is amended to read:

Subd. 2.

Issuance of bonds.

(a) Bonds to be issued by a municipality under sections
360.011 to 360.076, shall be authorized and issued in the manner and within the limitation
prescribed by laws or the charter of the municipality for the issuance and authorization of
bonds for public purposes generally, except as provided in paragraphs (b) and (c).

(b) No election is required to authorize the issuance of the bonds if:

(1) a board organized under section 360.042 recommends by a resolution adopted
by a vote of not less than 60 percent of its members the issuance of bonds, and the
bonds are authorized by a resolution of the governing body of each of the municipalities
acting jointly pursuant to section 360.042, adopted by a vote of not less than 60 percent
of its members; or

(2) new text begin the bonds are authorized by a resolution of the governing body of the
municipality, adopted by a vote of not less than 60 percent of its members; or
new text end

new text begin (3) new text end the bonds are being issued for the purpose of financing the costs of constructing,
enlarging, or improving airports and other air navigation facilities; and

(i) the governing body estimates that passenger facility charges and other revenues
pledged to the payment thereof will be at least 20 percent of the debt service payable
on the bonds in any year;

(ii) the project will be funded in part by a new text begin state or new text end federal grant for airport
development; and

(iii) the principal amount of the bonds issued under this clause does not exceed 25
percent of the amount of the new text begin state or new text end federal grant.

(c) If the bonds are general obligations of the municipality, the levy of taxes required
by section 475.61 to pay principal and interest on the bonds is not included in computing
or applying any levy limitation applicable to the municipality.

Sec. 3.

Minnesota Statutes 2008, section 366.095, subdivision 1, is amended to read:

Subdivision 1.

Certificates of indebtedness.

The town board may issue certificates
of indebtedness within the debt limits for a town purpose otherwise authorized by law.
The certificates 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 the terms
and in the manner as the board may determine. If the amount of the certificates to be
issued exceeds 0.25 percent of the market value of the town, they shall not be issued for at
least ten days after publication in a newspaper of general circulation in the town of the
board's resolution determining to issue them. If within 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 town election is filed with the clerk, the certificates shall not be issued
until their issuance has been approved by a majority of the votes cast on the question at
a regular or special election. A tax levy shall be made to pay the principal and interest
on the certificates as in the case of bonds.

Sec. 4.

Minnesota Statutes 2008, 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, deleted text begin and deleted text end medical
equipment new text begin , and other capital equipment new text end ; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled new text begin , together with application development services and training related to the
use of the computer hardware and software and fiber-optic cable or other means of voice
and data transmission among municipal buildings, provided that software, application,
and development services and training shall be deemed to have the same useful life as the
computer equipment to which they are related new text end .

Sec. 5.

Minnesota Statutes 2008, 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,
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,
roads and bridges, new text begin public works facilities, fairgrounds buildings, fiber-optic cable or other
means of voice and data transmission among municipal buildings, new text end and the acquisition
of development rights in the form of conservation easements under chapter 84C. 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) "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.

(d) "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.

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

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

Sec. 6.

Minnesota Statutes 2008, section 373.47, subdivision 1, is amended to read:

Subdivision 1.

Authority to incur debt.

Subject to prior approval by the Statewide
Radio Board under section 403.36, the governing body of a county may finance the cost of
designing, constructing, and acquiring public safety communication system infrastructure
and equipment for use on the statewide, shared public safety radio system by issuing:

(1) capital improvement bonds under section 373.40, as if the infrastructure and
equipment qualified as a "capital improvement" within the meaning of section 373.40,
subdivision 1, paragraph (b) new text begin , bonds issued under this section are exempt from and shall
not be included in calculating the limitations in section 373.40, subdivision 4 new text end ; and

(2) capital notes under the provisions of section 373.01, subdivision 3, as if the
equipment qualified as "capital equipment" within the meaning of section 373.01,
subdivision 3.

Sec. 7.

Minnesota Statutes 2008, section 375.18, subdivision 3, is amended to read:

Subd. 3.

Courthouse.

new text begin (a) new text end Each county board may erect, furnish, and maintain a
suitable courthouse. new text begin Except as provided in paragraph (b), new text end no indebtedness shall be created
for a courthouse deleted text begin in excess of an amount equal to a levy of 0.04030 percent of taxable
market value deleted text end without the approval of a majority of the voters of the county voting on the
question of issuing the obligation at an election.

new text begin (b) No election is required if the amount of all bonds, other than bonds approved by
the voters issued for this purpose, and interest on them, that are due and payable in any
year does not exceed an amount equal to 0.015 percent of market value of taxable property
within the county, as last determined before the bonds are issued.
new text end

Sec. 8.

Minnesota Statutes 2008, 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 ten 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. For purposes of this subdivision, "equipment"
includes computer hardware and software, whether bundled with machinery or equipment
or unbundled new text begin , together with application development services and training related to the
use of the computer hardware and software and fiber-optic cable or other means of voice
and data transmission among municipal buildings, provided that software, application,
and development services and training shall be deemed to have the same useful life as
the computer equipment to which they are related new text end . For 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. 9.

Minnesota Statutes 2008, 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 new text begin , together with application development services and training related to the
use of the computer hardware and software and fiber-optic cable or other means of voice
and data transmission among municipal buildings, provided that software, application,
and development services and training shall be deemed to have the same useful life as the
computer equipment to which they are related new text end .

(c) The new text begin capital new text end equipment deleted text begin or software deleted text end must have an expected useful life at least
as long as the term of the notes.

(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. 10.

Minnesota Statutes 2008, 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 new text begin , together with application development services and training related to the
use of the computer hardware and software and fiber-optic cable or other means of voice
and data transmission among municipal buildings, provided that software, application,
and development services and training shall be deemed to have the same useful life as the
computer equipment to which they are related new text end .

(c) The new text begin capital new text end equipment deleted text begin or software deleted text end must have an expected useful life at least as
long as the terms of the certificates or notes.

(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. 11.

Minnesota Statutes 2008, 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 begin residential, new text end commercial, 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. new text begin Property that is classified under section 273.13 and
used for residential purposes may be subject to such charges if no more than 50 percent
of the total charges imposed by the city on the special service district are imposed on
residential property. new text end 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. deleted text begin If 50 percent or more of the market value of a parcel of
property is classified under section 273.13 as commercial, 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. deleted text end
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. 12.

Minnesota Statutes 2008, section 428A.03, subdivision 1, is amended to read:

Subdivision 1.

Hearing.

Service charges may be imposed by the city within the
special service district at a rate or amount sufficient to produce the revenues required to
provide special services in the district. To determine the appropriate rate for a service
charge based on net tax capacity, taxable property or net tax capacity must be determined
without regard to captured or original net tax capacity under section 469.177 or to the
distribution or contribution value under section 473F.08. Service charges may not be
imposed to finance a special service if the service is ordinarily provided by the city from
its general fund revenues unless the service is provided in the district at an increased level.
In that case, a service charge may be imposed only in the amount needed to pay for the
increased level of service. A service charge may not be imposed on the receipts from the
sale of intoxicating liquor, food, or lodging. Before the imposition of service charges in a
district, for each calendar year, a hearing must be held under section 428A.02 and notice
must be given and must be mailed to any new text begin owner, new text end individual new text begin , new text end or business organization
subject to a service charge. For purposes of this section, the notice shall also include:

(1) a statement that all interested persons will be given an opportunity to be heard at
the hearing regarding a proposed service charge;

(2) the estimated cost of improvements to be paid for in whole or in part by service
charges imposed under this section, the estimated cost of operating and maintaining
the improvements during the first year and upon completion of the improvements, the
proposed method and source of financing the improvements, and the annual cost of
operating and maintaining the improvements;

(3) the proposed rate or amount of the proposed service charge to be imposed in
the district during the calendar year and the nature and character of special services to
be rendered in the district during the calendar year in which the service charge is to be
collected; and

(4) a statement that the petition requirements of section 428A.08 have either been
met or do not apply to the proposed service charge.

Within six months of the public hearing, the city may adopt a resolution imposing
a service charge within the district not exceeding the amount or rate expressed in the
notice issued under this section.

Sec. 13.

Minnesota Statutes 2008, section 428A.08, is amended to read:

428A.08 PETITION REQUIRED.

No action may be taken under section 428A.02 new text begin or 428A.03, new text end unless owners of 25
percent or more of the land area of property that would be subject to service charges in the
proposed special service district and new text begin either: (1) new text end owners of 25 percent or more of the net tax
capacity of property that would be subject to new text begin a proposed new text end service deleted text begin charges in the proposed
special service district deleted text end new text begin charge, based on net tax capacity; or (2) owners, individuals, and
business organizations subject to 25 percent or more of a proposed service charge based
on other than net tax capacity new text end file a petition requesting a public hearing on the proposed
action with the city clerk. deleted text begin No action may be taken under section 428A.03 to impose
a service charge based on net tax capacity unless owners of 25 percent or more of the
land area subject to a proposed service charge and owners of 25 percent or more of the
net tax capacity subject to a proposed service charge file a petition requesting a public
hearing on the proposed action with the city clerk. No action may be taken under section
428A.03 to impose any other type of service charge unless 25 percent or more of the
individual or business organizations subject to the proposed service charge file a petition
requesting a public hearing on the proposed action with the city clerk. deleted text end If the boundaries of
a proposed district are changed or the land area or net tax capacity subject to a service
charge or the individuals or business organizations subject to a service charge are changed
after the public hearing, a petition meeting the requirements of this section must be filed
with the city clerk before the ordinance establishing the district or resolution imposing
the service charge may become effective.

Sec. 14.

Minnesota Statutes 2008, section 428A.09, is amended to read:

428A.09 VETO POWER OF OWNERS.

Subdivision 1.

Notice of right to file objections.

Except as provided in section
428A.10, the effective date of any ordinance or resolution adopted under sections 428A.02
and 428A.03 must be at least 45 days after it is adopted. Within five days after adoption
of the ordinance or resolution, a summary of the ordinance or resolution must be mailed
to the owner of each parcel included in the special service district and any individual or
business organization subject to a service charge in the same manner that notice is mailed
under section 428A.02. The mailing must include a notice that owners subject to a service
charge based on net tax capacity and new text begin owners, new text end individuals new text begin , new text end and business organizations
subject to a service charge imposed on another basis have a right to veto the ordinance
or resolution by filing the required number of objections with the city clerk before the
effective date of the ordinance or resolution and that a copy of the ordinance or resolution
is on file with the city clerk for public inspection.

Subd. 2.

Requirements for veto.

If owners of 35 percent or more of the land
area in the district subject to the service charge based on net tax capacity or owners
deleted text begin of deleted text end new text begin , individuals, and business organizations subject to new text end 35 percent or more of the deleted text begin net tax
capacity in the district subject to the service charge based on net tax capacity deleted text end new text begin service
charges to be imposed in the district, new text end file an objection to the ordinance adopted by the city
under section 428A.02 with the city clerk before the effective date of the ordinance, the
ordinance does not become effective. If owners of 35 percent or more of the land area
subject to the service charge based on net tax capacity or owners of 35 percent or more
of the net tax capacity subject to the service charge based on net tax capacity file an
objection to the resolution adopted imposing a service charge based on net tax capacity
under section 428A.03 with the city clerk before the effective date of the resolution, the
resolution does not become effective. If deleted text begin 35 percent or more of deleted text end new text begin owners, new text end individuals new text begin , new text end and
business organizations subject to deleted text begin a deleted text end new text begin 35 percent or more of the new text end service deleted text begin charge deleted text end new text begin charges to
be imposed in the district new text end file an objection to the resolution adopted imposing a service
charge on a basis other than net tax capacity under section 428A.03 with the city clerk
before the effective date of the resolution, the resolution does not become effective. In the
event of a veto, no district shall be established during the current calendar year and until a
petition meeting the qualifications set forth in this subdivision for a veto has been filed.

Sec. 15.

Minnesota Statutes 2008, section 428A.10, is amended to read:

428A.10 EXCLUSION FROM PETITION REQUIREMENTS AND VETO
POWER.

The petition requirements of section 428A.08 deleted text begin and deleted text end new text begin do not apply to second or
subsequent years' action to impose service charges under section 428A.03. new text end The right of
owners and those subject to a service charge to veto a resolution in section 428A.09
deleted text begin do deleted text end new text begin does new text end not apply to second or subsequent years' applications of a service charge that
is authorized to be in effect for more than one year under a resolution that deleted text begin has met the
petition requirements of section 428A.08 and which deleted text end has not been vetoed under section
428A.09 for the first year's application. A resolution imposing a service charge for more
than one year must not be adopted unless the notice of public hearing required by section
428A.03 and the notice mailed with the adopted resolution under section 428A.09 include
the following information:

(1) in the case of improvements, the maximum service charge to be imposed in any
year and the maximum number of years the service deleted text begin charges deleted text end new text begin charge is new text end imposed to pay
for the improvement; and

(2) in the case of operating and maintenance services, the maximum service charge
to be imposed in any year and the maximum number of years, or a statement that the
service charge will be imposed for an indefinite number of years, the service charges will
be imposed to pay for operation and maintenance services.

The resolution may provide that the maximum service charge to be imposed in any
year will increase or decrease from the maximum amount authorized in the preceding
year based on an indicator of increased cost or a percentage amount established by the
resolution.

Sec. 16.

Minnesota Statutes 2008, section 469.005, subdivision 1, is amended to read:

Subdivision 1.

County and multicounty authorities.

The area of operation of a
county authority shall include all of the county for which it is created, and in case of
a multicounty authority, it shall include all of the political subdivisions for which the
multicounty authority is created; provided, that a county authority or a multicounty
authority shall not undertake any project within the boundaries of any city which has not
empowered the authority to function therein as provided in section 469.004 unless a
resolution has been adopted by the governing body of the city deleted text begin , and by any authority which
has been established in the city, deleted text end declaring that there is a need for the county or multicounty
authority to exercise its powers in the city. A resolution is not required for the operation of
a Section 8 program or a public housing scattered site project.

Sec. 17.

Minnesota Statutes 2008, 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, and the maturities may extend to
not more than 35 years for obligations sold to finance housing for the elderly and 40 years
for other obligations issued under this subdivision. 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 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. The project must be
owned for the term of the bonds either by the authority or by a limited partnership or other
entity in which the authority or another entity under the sole control of the authority is the
sole general partner and the partnership or other entity must receive (1) an allocation from
the Department of Finance or an entitlement issuer of tax-exempt bonding authority for
the project and a preliminary determination by the Minnesota Housing Finance Agency
or the applicable suballocator of tax credits that the project will qualify for four percent
low-income housing tax credits or (2) a reservation of nine percent low-income housing
tax credits from the Minnesota Housing Finance Agency or a suballocator of tax credits
for the project. 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.

new text begin (f) The authority may issue bonds to refund bonds issued under this subdivision in
accordance with section 475.67. The finding of the adequacy of pledged revenues required
by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the
issuance of refunding bonds. This paragraph applies to refunding bonds issued on and
after July 1, 1992.
new text end

Sec. 18.

Minnesota Statutes 2008, section 469.040, subdivision 1, is amended to read:

Subdivision 1.

Declaration, essential public and governmental purposes.

The
property of an authority is public property used for essential public and governmental
purposes. The property and the authority shall be exempt from all real and personal
property taxes of the city, the county, the state, or any political subdivision thereof. "Taxes"
does not include charges for special assessments or for utilities and special services, such
as heat, water, electricity, gas, sewage disposal, or garbage removal. For purposes of this
subdivision, "special services" means those physical services provided to a project for
which the actual cost of the governing body providing the service can be calculated. deleted text begin When
the obligations issued by an authority to assist in financing the development of a project
have been retired and federal contributions have been discontinued, or the authority is
no longer obligated by contracts with the federal government to maintain a project as a
low-income housing project, whichever is later, then the exemptions from taxes for that
project shall terminate.
deleted text end

Sec. 19.

Minnesota Statutes 2008, section 469.040, subdivision 2, is amended to read:

Subd. 2.

Leased property, exception.

Notwithstanding the provisions of
subdivision 1, any property other than property to be operated as a parking facility that
the authority leases to private individuals or corporations for development in connection
with a redevelopment project shall have the same tax status as if the leased property were
owned by the private individuals or corporations. new text begin This subdivision does not apply to
leases by the authority to individuals or families for residential use.
new text end

Sec. 20.

Minnesota Statutes 2008, section 469.040, subdivision 4, is amended to read:

Subd. 4.

Facilities funded from multiple sources.

In the metropolitan area, as
defined in section 473.121, subdivision 2, the tax treatment provided in subdivision 3
applies to that portion of any multifamily rental housing facility represented by the ratio of
(1) the number of units in the facility that are deleted text begin subject to the requirements of deleted text end new text begin constructed
with funds provided under new text end Section 5 of the United States Housing Act of 1937, new text begin and are
receiving operating subsidy under Section 5 or rental assistance under Section 8 of the
United States Housing Act of 1937 new text end as the result of the implementation of a federal court
order or consent decree to (2) the total number of units within the facility.

The housing and redevelopment authority for the city in which the facility is located,
any public entity exercising the powers of such housing and redevelopment authority, or
the county housing and redevelopment authority for the county in which the facility is
located, shall annually certify to the assessor responsible for assessing the facility, at the
time and in the manner required by the assessor, the number of units in the facility that
are deleted text begin subject to the requirements of deleted text end new text begin constructed with funds provided under new text end Section 5 new text begin of the
United States Housing Act of 1937, and are receiving operating subsidy under Section 5
or rental assistance under Section 8 new text end of the United States Housing Act of 1937.

Nothing in this subdivision shall prevent that portion of the facility not subject to
this subdivision from meeting the requirements of section 273.128, and for that purpose
the total number of units in the facility must be taken into account.

Sec. 21.

Minnesota Statutes 2008, section 471.191, subdivision 1, is amended to read:

Subdivision 1.

Lease to nonprofit.

Any city operating a program of public
recreation and playgrounds pursuant to sections 471.15 to 471.19 may acquire or lease,
equip, and maintain land, buildings, and other recreational facilities, including, but
without limitation, outdoor or indoor swimming pools, skating rinks and arenas, athletic
fields, golf courses, marinas, concert halls, museums, and facilities for other kinds of
athletic or cultural participation, contests, new text begin conventions, conferences, new text end and exhibitions,
together with related automobile parking facilities as defined in section 459.14, and may
expend funds for the operation of such program and borrow and expend funds for capital
costs thereof pursuant to the provisions of this section. A school district operating a
program of public recreation and playgrounds has the rights provided in this section. Any
facilities to be operated by a nonprofit corporation, as contemplated in section 471.16,
may be leased to the corporation upon such rentals and for such term, not exceeding 30
years, and subject to such other provisions as may be agreed; including but not limited to
provisions (a) permitting the lessee, subject to whatever conditions are stated, to provide
for the construction and equipment of the facilities by any means available to it and in the
manner determined by it, without advertisement for bids as required for other municipal
facilities, and (b) granting the lessee the option to renew the lease upon such conditions
and rentals, or to purchase the facilities at such price, as may be agreed; provided that (c)
any such lease shall require the lessee to pay net rentals sufficient to pay the principal,
interest, redemption premiums, and other expenses when due with respect to all city
bonds issued for the acquisition or betterment of the facilities, less such amount of taxes
and special assessments, if any, as may become payable in any year of the term of the
lease, on the land, building, or other facilities leased, and (d) no option shall be granted
to purchase the facilities at any time at a price less than the amount required to pay all
principal and interest to become due on such bonds to the earliest date or dates on which
they may be paid and redeemed, and all redemption premiums and other expenses of
such payment and redemption.

Sec. 22.

Minnesota Statutes 2008, section 475.67, subdivision 8, is amended to read:

Subd. 8.

Escrow account securities.

Securities purchased for the escrow account
shall be limited to:

(a) general obligations of the United States, securities whose principal and interest
payments are guaranteed by the United States, and securities issued by the following
agencies of the United States: Banks for Cooperatives, Federal Home Loan Banks,
Federal Intermediate Credit Banks, Federal Land Banks, and the Federal National
Mortgage Association; or

(b) obligations issued or guaranteed by any state or any political subdivision of a
state, which at the date of purchase are rated new text begin in new text end the highest or the next highest rating
deleted text begin given deleted text end new text begin category new text end by Standard and Poor's Corporation, Moody's Investors Service, or a
similar nationally recognized rating agency, but not less than the rating on the refunded
bonds immediately prior to the refunding.

new text begin "Rating category," as used in this subdivision, means a generic securities rating
category, without regard in the case of a long-term rating category to any refinement or
gradation of such long-term rating category by a numerical modifier or otherwise.
new text end

Sec. 23. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2008, section 428A.101, new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2008, section 428A.21, new text end new text begin is repealed.
new text end

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

new text begin (a) The amendments made to Minnesota Statutes, section 469.040, subdivisions 1
and 2, by sections 18 and 19, apply to housing projects and housing development projects
constructed or acquired by an authority after July 1, 1987, for property taxes payable in
2010 and thereafter.
new text end

new text begin (b) Section 6 applies to bonds issued after May 22, 2002.
new text end

new text begin (c) The remaining sections of this act are effective the day following final enactment.
new text end