as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to public finance; modifying provisions 1.3 relating to the issuance of debt and the use and 1.4 investment of public funds; amending Minnesota 1.5 Statutes 1996, sections 118A.04, subdivision 9; 1.6 118A.05, subdivision 4; 136A.32, subdivision 7; 1.7 373.01, subdivision 3; 373.40, subdivision 7; 410.32; 1.8 412.301; 414.067, subdivision 2; 429.021, subdivision 1.9 1; 447.45, subdivision 2; 465.71; 469.0171; 469.059, 1.10 subdivision 6; 469.101, subdivision 6; 469.153, 1.11 subdivision 2; 469.154, subdivisions 3, and 6; 1.12 469.155, by adding a subdivision; 471.981, by adding a 1.13 subdivision; 475.61, subdivision 3; 475.67, 1.14 subdivision 12; and 641.23; proposing coding for new 1.15 law in Minnesota Statutes, chapters 471; and 475. 1.16 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.17 Section 1. Minnesota Statutes 1996, section 118A.04, 1.18 subdivision 9, is amended to read: 1.19 Subd. 9. [BROKER; STATEMENT AND RECEIPT.] (a) For the 1.20 purpose of this section and section 118A.05, the term "broker" 1.21 means a broker-dealer, broker, investment adviser, or agent of a 1.22 government entity, who transfers, purchases, sells, or obtains 1.23 securities for, or on behalf of, a government entity. 1.24 (b) Prior to completing an initial transaction with a 1.25 broker, a government entity shall provide annually to the broker 1.26 a written statement of investment restrictions which shall 1.27 include a provision that all future investments are to be made 1.28 in accordance with Minnesota Statutes governing the investment 1.29 of public funds. 1.30 (c) A broker must acknowledge annually receipt of the 2.1 statement of investment restrictions in writing and agree to 2.2 handle the government entity's account in accordance with these 2.3 restrictions. A government entity may not enter into a 2.4 transaction with a broker until the broker has provided this 2.5 written agreement to the government entity. 2.6 (d) The state auditor shall prepare uniform notification 2.7 forms which shall be used by the government entities and the 2.8 brokers to meet the requirements of this subdivision. 2.9 (e) A broker is exempt from the requirements of paragraphs 2.10 (b) to (d) when executing securities transactions for or on 2.11 behalf of a government entity at the direction of a third-party 2.12 investment adviser who is registered under chapter 80A or the 2.13 Investment Adviser's Act of 1940. 2.14 Sec. 2. Minnesota Statutes 1996, section 118A.05, 2.15 subdivision 4, is amended to read: 2.16 Subd. 4. [
MINNESOTA JOINT POWERSINVESTMENT TRUSTFUNDS.] 2.17 Government entities may enter into agreements or contracts for: 2.18 (1) shares of a Minnesota joint powers investment trust 2.19 whose investments are restricted to securities described in 2.20 subdivision 2 and section 118A.04 ,; 2.21 (2) units of a short-term investment fund established and 2.22 administered pursuant to regulation 9 of the Office of the 2.23 Comptroller of the Currency, in which investments are restricted 2.24 to securities described in subdivision 2 and section 118A.04; or 2.25 (3) shares of an investment company which is registered 2.26 under the Federal Investment Company Act of 1940, and whose2.27 shares are registered under the Federal Securities Act of 1933,2.28 as long as the investment company's fund receives the highest2.29 credit ratingwhich holds itself out as a money market fund 2.30 meeting the conditions of rule 2a-7 of the Securities and 2.31 Exchange Commission and is rated in one of the two highest risk2.32 rating categories for money market funds by at least one 2.33 nationally recognized statistical rating organization and is2.34 invested in financial instruments with a final maturity no2.35 longer than 13 months. 2.36 Sec. 3. Minnesota Statutes 1996, section 136A.32, 3.1 subdivision 7, is amended to read: 3.2 Subd. 7. The authority may invest any bond proceeds, 3.3 sinking funds or reserves in any securities authorized for 3.4 investment of funds of municipalities pursuant to section3.5 sections 118A.04 and 118A.05, including securities described in 3.6 section 475.67, subdivision 8. In addition, such bond proceeds, 3.7 sinking funds and reserves may be 3.8 (1) deposited in time deposits of any state or national 3.9 bank subject to the limitations and requirements of chapter 1183.10 118A, or 3.11 (2) invested in repurchase agreements with, providing for 3.12 the repurchase of securities described in the preceding sentence 3.13 by, a bank qualified as a depository of money of the authority, 3.14 a national or state bank in the United States that is a member 3.15 of the federal reserve system and whose combined capital and 3.16 surplus equals or exceeds $10,000,000, or a reporting dealer to 3.17 the federal reserve bank of New York. Power to make any such 3.18 investment or deposit is subject to the provisions of any 3.19 applicable covenant or restriction in a resolution or trust 3.20 agreement of the authority. 3.21 Sec. 4. Minnesota Statutes 1996, section 373.01, 3.22 subdivision 3, is amended to read: 3.23 Subd. 3. [CAPITAL NOTES.] A county board may, by 3.24 resolution and without referendum, issue capital notes subject 3.25 to the county debt limit to purchase (1) capital equipment 3.26 useful for county purposes that has an expected useful life at 3.27 least equal to the term of the notes, and (2) computer software, 3.28 without regard to its expected useful life, whether bundled with 3.29 machinery or equipment or unbundled. The notes shall be payable 3.30 in not more than five years and shall be issued on terms and in 3.31 a manner the board determines. A tax levy shall be made for 3.32 payment of the principal and interest on the notes, in 3.33 accordance with section 475.61, as in the case of bonds. For 3.34 purposes of this subdivision, "capital equipment" means public 3.35 safety, ambulance, road construction or maintenance, medical, 3.36 and data processing equipment. 4.1 Sec. 5. Minnesota Statutes 1996, section 373.40, 4.2 subdivision 7, is amended to read: 4.3 Subd. 7. [REPEALER.] This section is repealed effective 4.4 for bonds issued after July 1, 19982002, but continues to apply 4.5 to bonds issued before that date. 4.6 Sec. 6. Minnesota Statutes 1996, section 410.32, is 4.7 amended to read: 4.8 410.32 [CITIES AUTHORIZED TO ISSUE CAPITAL NOTES FOR 4.9 CERTAIN EQUIPMENT ACQUISITIONS.] 4.10 Notwithstanding any contrary provision of other law or 4.11 charter, a home rule charter city may, by resolution and without 4.12 public referendum, issue capital notes subject to the city debt 4.13 limit to purchase (1) public safety equipment, ambulance and 4.14 other medical equipment, road construction and maintenance 4.15 equipment, andother capital equipment having an expected useful 4.16 life at least as long as the term of the notes, and (2) computer 4.17 software, without regard to its expected useful life, whether 4.18 bundled with machinery or equipment or unbundled. The notes 4.19 shall be payable in not more than five years and be issued on 4.20 terms and in the manner the city determines. The total 4.21 principal amount of the capital notes issued in a fiscal year 4.22 shall not exceed 0.03 percent of the market value of taxable 4.23 property in the city for that year. A tax levy shall be made 4.24 for the payment of the principal and interest on the notes, in 4.25 accordance with section 475.61, as in the case of bonds. Notes 4.26 issued under this section shall require an affirmative vote of 4.27 two-thirds of the governing body of the city. Notwithstanding a 4.28 contrary provision of other law or charter, a home rule charter 4.29 city may also issue capital notes subject to its debt limit in 4.30 the manner and subject to the limitations applicable to 4.31 statutory cities pursuant to section 412.301. 4.32 Sec. 7. Minnesota Statutes 1996, section 412.301, is 4.33 amended to read: 4.34 412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 4.35 The council may issue certificates of indebtedness or 4.36 capital notes subject to the city debt limits to purchase (1) 5.1 public safety equipment, ambulance equipment, road construction 5.2 or maintenance equipment, andother capital equipment having an 5.3 expected useful life at least as long as the terms of the 5.4 certificates or notes, and (2) computer software, without regard 5.5 to its expected useful life, whether bundled with machinery or 5.6 equipment or unbundled. Such certificates or notes shall be 5.7 payable in not more than five years and shall be issued on such 5.8 terms and in such manner as the council may determine. If the 5.9 amount of the certificates or notes to be issued to finance any 5.10 such purchase exceeds 0.25 percent of the market value of 5.11 taxable property in the city, they shall not be issued for at 5.12 least ten days after publication in the official newspaper of a 5.13 council resolution determining to issue them; and if before the 5.14 end of that time, a petition asking for an election on the 5.15 proposition signed by voters equal to ten percent of the number 5.16 of voters at the last regular municipal election is filed with 5.17 the clerk, such certificates or notes shall not be issued until 5.18 the proposition of their issuance has been approved by a 5.19 majority of the votes cast on the question at a regular or 5.20 special election. A tax levy shall be made for the payment of 5.21 the principal and interest on such certificates or notes, in 5.22 accordance with section 475.61, as in the case of bonds. 5.23 Sec. 8. Minnesota Statutes 1996, section 414.067, 5.24 subdivision 2, is amended to read: 5.25 Subd. 2. [ENTIRE TOWNSHIP OR MUNICIPALITY.] When an entire 5.26 township is annexed by an existing municipality, or an entire 5.27 township is incorporated into a new municipality, or a 5.28 municipality is consolidated into a new municipality, all money, 5.29 claims, or properties, including real estate owned, held, or 5.30 possessed by the annexed, incorporated township or municipality, 5.31 and any proceeds or taxes levied by such town or municipality, 5.32 collected or uncollected, shall become and be the property of 5.33 the new or annexing municipality with full power and authority 5.34 to use and dispose of the same for public purposes as the 5.35 council or new annexing municipality may deem best, subject to 5.36 the rights of creditors. Any taxes levied to pay bonded 6.1 indebtedness of a town or former municipality annexed to an 6.2 existing municipality or incorporated or consolidated into a new 6.3 municipality shall be borne only by that taxable property within 6.4 the boundaries of the former town or municipality, provided, 6.5 however, the units of government concerned may by resolution of 6.6 their governing bodies agree that taxes levied to pay the 6.7 indebtedness must be levied upon all taxable property within the 6.8 boundaries of the new municipality shall assume the bonded6.9 indebtedness of the former units of government existing and6.10 outstanding at the time of annexation, incorporation or6.11 consolidation. Notwithstanding that the bonded indebtedness may 6.12 be payable from taxes levied on only a portion of the taxable 6.13 property in the new or surviving municipality, the full faith 6.14 and credit of the new or surviving municipality must secure any 6.15 outstanding bonded indebtedness to which the full faith and 6.16 credit of the annexed or consolidated township or municipality 6.17 was pledged. If any general funds of the new or surviving 6.18 municipality are used to pay debt service on the bonded 6.19 indebtedness, the general funds must be reimbursed, with or 6.20 without interest, from taxes levied on taxable property in the 6.21 former township or municipality. 6.22 Sec. 9. Minnesota Statutes 1996, section 429.021, 6.23 subdivision 1, is amended to read: 6.24 Subdivision 1. [IMPROVEMENTS AUTHORIZED.] The council of a 6.25 municipality shall have power to make the following improvements: 6.26 (1) To acquire, open, and widen any street, and to improve 6.27 the same by constructing, reconstructing, and maintaining 6.28 sidewalks, pavement, gutters, curbs, and vehicle parking strips 6.29 of any material, or by grading, graveling, oiling, or otherwise 6.30 improving the same, including the beautification thereof and 6.31 including storm sewers or other street drainage and connections 6.32 from sewer, water, or similar mains to curb lines. 6.33 (2) To acquire, develop, construct, reconstruct, extend, 6.34 and maintain storm and sanitary sewers and systems, including 6.35 outlets, holding areas and ponds, treatment plants, pumps, lift 6.36 stations, service connections, and other appurtenances of a 7.1 sewer system, within and without the corporate limits. 7.2 (3) To construct, reconstruct, extend, and maintain steam 7.3 heating mains. 7.4 (4) To install, replace, extend, and maintain street lights 7.5 and street lighting systems and special lighting systems. 7.6 (5) To acquire, improve, construct, reconstruct, extend, 7.7 and maintain water works systems, including mains, valves, 7.8 hydrants, service connections, wells, pumps, reservoirs, tanks, 7.9 treatment plants, and other appurtenances of a water works 7.10 system, within and without the corporate limits. 7.11 (6) To acquire, improve and equip parks, open space areas, 7.12 playgrounds, and recreational facilities within or without the 7.13 corporate limits. 7.14 (7) To plant trees on streets and provide for their 7.15 trimming, care, and removal. 7.16 (8) To abate nuisances and to drain swamps, marshes, and 7.17 ponds on public or private property and to fill the same. 7.18 (9) To construct, reconstruct, extend, and maintain dikes 7.19 and other flood control works. 7.20 (10) To construct, reconstruct, extend, and maintain 7.21 retaining walls and area walls. 7.22 (11) To acquire, construct, reconstruct, improve, alter, 7.23 extend, operate, maintain, and promote a pedestrian skyway 7.24 system. Such improvement may be made upon a petition pursuant 7.25 to section 429.031, subdivision 3. 7.26 (12) To acquire, construct, reconstruct, extend, operate, 7.27 maintain, and promote underground pedestrian concourses. 7.28 (13) To acquire, construct, improve, alter, extend, 7.29 operate, maintain, and promote public malls, plazas or 7.30 courtyards. 7.31 (14) To construct, reconstruct, extend, and maintain 7.32 district heating systems. 7.33 (15) To construct, reconstruct, alter, extend, operate, 7.34 maintain, and promote fire protection systems in existing 7.35 buildings, but only upon a petition pursuant to section 429.031, 7.36 subdivision 3. 8.1 (16) To acquire, construct, reconstruct, improve, alter, 8.2 extend, and maintain highway sound barriers. 8.3 (17) To acquire, improve, construct, reconstruct, extend, 8.4 and maintain gas and electric distribution facilities. 8.5 Sec. 10. Minnesota Statutes 1996, section 447.45, 8.6 subdivision 2, is amended to read: 8.7 Subd. 2. [POWERS OVER SPECIAL FACILITIES.] With respect to 8.8 facilities for the care, treatment, and training of persons with 8.9 mental retardation or related conditions, and facilities 8.10 attached or related to a nursing home providing supportive 8.11 services to elderly persons who are not yet in need of nursing 8.12 home care, including congregate housing, adult day care and 8.13 respite care services, a hospital district, county, or city may 8.14 exercise the powers in sections 447.45 to 447.50 as if these 8.15 facilities were hospital or nursing home facilities within the 8.16 meaning of sections 447.45 to 447.50. "County or city" includes 8.17 cities of the first class and counties containing them. 8.18 "Related conditions" is defined in section 252.27, subdivision 8.19 1a. 8.20 Sec. 11. Minnesota Statutes 1996, section 465.71, is 8.21 amended to read: 8.22 465.71 [INSTALLMENT AND LEASE PURCHASES; CITIES; COUNTIES; 8.23 SCHOOL DISTRICTS.] 8.24 A home rule charter city, statutory city, county, town, or 8.25 school district may purchase personal property under an 8.26 installment contract, or lease real or personal property with an 8.27 option to purchase under a lease purchase agreement, by which 8.28 contract or agreement title is retained by the seller or vendor 8.29 or assigned to a third party as security for the purchase price, 8.30 including interest, if any, but such purchases are subject to 8.31 statutory and charter provisions applicable to the purchase of 8.32 real or personal property. For purposes of the bid requirements 8.33 contained in section 471.345, "the amount of the contract" shall 8.34 include the total of all lease payments for the entire term of 8.35 the lease under a lease-purchase agreement. The obligation 8.36 created by a lease purchase agreement shall not be included in 9.1 the calculation of net debt for purposes of section 475.53, and 9.2 shall not constitute debt under any other statutory provision. 9.3 No election shall be required in connection with the execution 9.4 of a lease purchase agreement authorized by this section. The 9.5 city, county, town, or school district must have the right to 9.6 terminate a lease purchase agreement at the end of any fiscal 9.7 year during its term. The lessor may be a housing and 9.8 redevelopment authority, an economic development authority, a 9.9 port authority, another political subdivision, or a nonprofit 9.10 corporation created under chapter 317A by or on behalf of the 9.11 city, county, town, or school district. The directors of a 9.12 nonprofit corporate lessor may consist of or include members of 9.13 the governing body of the city, county, town, or school 9.14 district. Any nonprofit corporation so organized is deemed to 9.15 be a public corporation for purposes of section 465.035. 9.16 Conveyances of interests in real property may include existing 9.17 facilities that are to be improved under the lease purchase 9.18 agreement. Nonprofit corporations organized and conveyances 9.19 made as permitted by this section before the effective date of 9.20 this act are valid, and any defect in the organization of any 9.21 lessor or in a conveyance to a lessor does not affect the 9.22 validity of any lease purchase agreement entered into under this 9.23 section. 9.24 Sec. 12. Minnesota Statutes 1996, section 469.0171, is 9.25 amended to read: 9.26 469.0171 [HOUSING PLAN, PROGRAM, AND REVIEW.] 9.27 Prior to the issuance of bonds or obligations for a housing 9.28 development project proposed by an authority under section 9.29 469.017, the authority shall :9.30 (1) prepare a plan meeting the requirements of section9.31 462C.03, subdivision 1, paragraphs (a) to (d);9.32 (2) obtain review of the plan in the manner provided in9.33 section 462C.04, subdivision 1; and9.34 (3)prepare and submit for review a program as defined in 9.35 section 462C.02, subdivision 3, in the manner provided in 9.36 section 462C.04, subdivision 2, and section 462C.05, subdivision 10.1 5, for the making or purchasing of loans by cities. 10.2 The authority shall prepare and submit the report required 10.3 under section 462C.04, subdivision 3. 10.4 Sec. 13. Minnesota Statutes 1996, section 469.059, 10.5 subdivision 6, is amended to read: 10.6 Subd. 6. [PARTNER, MEMBER, OR SHAREHOLDER.] The port 10.7 authority may be a limited partner, a member of a limited 10.8 liability company, or a shareholder of a corporation. 10.9 Sec. 14. Minnesota Statutes 1996, section 469.101, 10.10 subdivision 6, is amended to read: 10.11 Subd. 6. [LIMITED PARTNER, MEMBER, OR SHAREHOLDER.] The 10.12 economic development authority may be a limited partner in a 10.13 partnership whose purpose is consistent with the authority's10.14 purpose, a member of a limited liability company, or a 10.15 shareholder of a corporation. 10.16 Sec. 15. Minnesota Statutes 1996, section 469.153, 10.17 subdivision 2, is amended to read: 10.18 Subd. 2. [PROJECT.] (a) "Project" means (1) any 10.19 properties, real or personal, used or useful in connection with 10.20 a revenue producing enterprise, or any combination of two or 10.21 more such enterprises engaged or to be engaged in generating, 10.22 transmitting, or distributing electricity, assembling, 10.23 fabricating, manufacturing, mixing, processing, storing, 10.24 warehousing, or distributing any products of agriculture, 10.25 forestry, mining, or manufacture, or in research and development 10.26 activity in this field; (2) any properties, real or personal, 10.27 used or useful in the abatement or control of noise, air, or 10.28 water pollution, or in the disposal of solid wastes, in 10.29 connection with a revenue producing enterprise, or any 10.30 combination of two or more such enterprises engaged or to be 10.31 engaged in any business or industry; (3) any properties, real or 10.32 personal, used or useful in connection with the business of 10.33 telephonic communications, conducted or to be conducted by a 10.34 telephone company, including toll lines, poles, cables, 10.35 switching, and other electronic equipment and administrative, 10.36 data processing, garage, and research and development 11.1 facilities; (4) any properties, real or personal, used or useful 11.2 in connection with a district heating system, consisting of the 11.3 use of one or more energy conversion facilities to produce hot 11.4 water or steam for distribution to homes and businesses, 11.5 including cogeneration facilities, distribution lines, service 11.6 facilities, and retrofit facilities for modifying the user's 11.7 heating or water system to use the heat energy converted from 11.8 the steam or hot water. 11.9 (b) "Project" also includes any properties, real or 11.10 personal, used or useful in connection with a revenue producing 11.11 enterprise, or any combination of two or more such enterprises 11.12 engaged in any business. 11.13 (c) "Project" also includes any properties, real or 11.14 personal, used or useful for the promotion of tourism in the 11.15 state. Properties may include hotels, motels, lodges, resorts, 11.16 recreational facilities of the type that may be acquired under 11.17 section 471.191, and related facilities. 11.18 (d) "Project" also includes any properties, real or 11.19 personal, used or useful in connection with a revenue producing 11.20 enterprise, whether or not operated for profit, engaged in 11.21 providing health care services, including hospitals, nursing 11.22 homes, and related medical facilities, including facilities for 11.23 the care, treatment, and training of persons with mental 11.24 retardation or related conditions, and facilities attached or 11.25 related to a nursing home providing supportive services to 11.26 elderly persons who are not yet in need of nursing home care, 11.27 including congregate housing, adult day care, and respite care 11.28 services. 11.29 (e) "Project" does not include any property to be sold or 11.30 to be affixed to or consumed in the production of property for 11.31 sale, and does not include any housing facility to be rented or 11.32 used as a permanent residence except as otherwise permitted by 11.33 paragraph (d). 11.34 (f) "Project" also means the activities of any revenue 11.35 producing enterprise involving the construction, fabrication, 11.36 sale, or leasing of equipment or products to be used in 12.1 gathering, processing, generating, transmitting, or distributing 12.2 solar, wind, geothermal, biomass, agricultural or forestry 12.3 energy crops, or other alternative energy sources for use by any 12.4 person or any residential, commercial, industrial, or 12.5 governmental entity in heating, cooling, or otherwise providing 12.6 energy for a facility owned or operated by that person or entity. 12.7 (g) "Project" also includes any properties, real or 12.8 personal, used or useful in connection with a county jail, 12.9 county regional jail, community corrections facilities 12.10 authorized by chapter 401, or other law enforcement facilities, 12.11 the plans for which are approved by the commissioner of 12.12 corrections; provided that the provisions of section 469.155, 12.13 subdivisions 7 and 13, do not apply to those projects. 12.14 (h) "Project" also includes any real properties used or 12.15 useful in furtherance of the purposes and policies of sections 12.16 469.135 to 469.141. 12.17 (i) "Project" also includes related facilities as defined 12.18 by section 471A.02, subdivision 11. 12.19 (j) "Project" also includes an undertaking to purchase the 12.20 obligations of local governments located in whole or in part 12.21 within the boundaries of the municipality that are issued or to 12.22 be issued for public purposes. 12.23 Sec. 16. Minnesota Statutes 1996, section 469.154, 12.24 subdivision 3, is amended to read: 12.25 Subd. 3. [CONDITIONS; APPROVAL.] No municipality or 12.26 redevelopment agency shall undertake any project authorized by 12.27 sections 469.152 to 469.165469.1651, except a project referred 12.28 to in section 469.153, subdivision 2, paragraph (g) or (j), 12.29 unless its governing body finds that the project furthers the 12.30 purposes stated in section 469.152, nor untiland the 12.31 commissioner has approved the project, on the basis of 12.32 preliminary information the commissioner requires, as tending to 12.33 further the purposes and policies of sections 469.152 12.34 to 469.165. The commissioner may not approve any projects12.35 relating to health care facilities except as permitted under12.36 subdivision 6469.1651, except that with respect to a project 13.1 financed with "qualified 501(c)(3) bonds" within the meaning of 13.2 section 145 of the Internal Revenue Code of 1986, as amended 13.3 through December 31, 1996, no approval by the commissioner is 13.4 required unless the project is subject to subdivision 6. 13.5 Approval shall not be deemed to be an approval by the 13.6 commissioner or the state of the feasibility of the project or 13.7 the terms of the revenue agreement to be executed or the bonds 13.8 to be issued therefor, and the commissioner shall state this in 13.9 communicating approval. 13.10 Sec. 17. Minnesota Statutes 1996, section 469.154, 13.11 subdivision 6, is amended to read: 13.12 Subd. 6. [HEALTH CARE FACILITIES.] The commissioner of 13.13 trade and economic development shall forward to the commissioner 13.14 of human services and the commissioner of health for review, all 13.15 applications for projects relating to nursing homes licensed by 13.16 the commissioner of health under chapter 144A. This review 13.17 process does not apply to projects approved by the housing13.18 finance agencyinvolving residences for the elderly, the costs 13.19 of which will not be reimbursed under the medical assistance 13.20 program. The commissioner of human services and the 13.21 commissioner of health must return the applications to the 13.22 commissioner of trade and economic development with a 13.23 recommendation within 30 days of receipt. The commissioner of 13.24 trade and economic development may not approve an application 13.25 unless the project has been determined by both the commissioner 13.26 of human services and the commissioner of health to be 13.27 consistent with policies of the state as reflected in a statute 13.28 or rule. The following projects shall not be approved: 13.29 (1) projects that will result in an increase in the number 13.30 of nursing home or boarding care beds in the state, unless the 13.31 increase is authorized under section 144A.071; 13.32 (2) projects involving refinancing, unless the refinancing 13.33 will result in a reduction in debt service charges that, and, 13.34 except with respect to projects participating in the contractual 13.35 alternative payment demonstration project under section 13.36 256B.434, such reduction will be reflected in charges to 14.1 patients and third-party payors; and 14.2 (3) projects that are inconsistent with the established 14.3 policies of the state as reflected in a statute or rule. 14.4 Sec. 18. Minnesota Statutes 1996, section 469.155, is 14.5 amended by adding a subdivision to read: 14.6 Subd. 4a. [REFINANCING FACILITIES.] It may issue revenue 14.7 bonds to pay, purchase, or discharge all or any part of the 14.8 outstanding indebtedness of a contracting party that is an 14.9 organization described in section 501(c)(3) of the Internal 14.10 Revenue Code of 1986, as amended through December 31, 1996, 14.11 previously incurred in the acquisition or betterment of its 14.12 existing facilities, other than hospital or nursing home 14.13 facilities, to the extent deemed necessary by the governing body 14.14 of the municipality or redevelopment agency. This financing may 14.15 include any unpaid interest on the indebtedness accrued or to 14.16 accrue to the date on which the indebtedness is finally paid and 14.17 any premium the governing body of the municipality or 14.18 redevelopment agency determines to be necessary to be paid to 14.19 pay, purchase, or defease the outstanding indebtedness. If 14.20 revenue bonds are issued for this purpose, the refinancing and 14.21 the existing properties of the contracting party shall be deemed 14.22 to constitute a project under section 469.153, subdivision 2, 14.23 clause (b). 14.24 Sec. 19. [471.831] [POLITICAL SUBDIVISION BONDS FOR ENERGY 14.25 AND COMMODITY PROCUREMENT.] 14.26 Subdivision 1. [BONDS TO FINANCE SUPPLY 14.27 CONTRACTS.] Notwithstanding any limitations set forth under 14.28 section 475.52, or any other general or special law or charter 14.29 to the contrary, a political subdivision may issue bonds or 14.30 other obligations to provide funds to purchase or prepay 14.31 contracts for the supply of electricity, gas, water, and other 14.32 commodities. The obligations shall be issued as provided in 14.33 chapter 475, except that no election is required to authorize 14.34 the issuance of the obligations, and the obligations are not 14.35 included for purposes of computing the net debt of a political 14.36 subdivision. The obligations must mature in the years and 15.1 amounts determined by the governing body, not exceeding the term 15.2 of the supply contract purchased or prepaid with the proceeds of 15.3 the obligations. Proceeds of obligations issued pursuant to 15.4 this subdivision may also be used to establish a debt service 15.5 reserve for the obligations, pay costs of issuing the 15.6 obligations, or to refund obligations previously issued under 15.7 this subdivision. An issuer of obligations authorized under 15.8 this subdivision may designate a bank or trust company 15.9 authorized to exercise trust powers in this state as trustee for 15.10 the holders of obligations issued under this subdivision and may 15.11 create funds and accounts necessary to secure payment of the 15.12 obligations. 15.13 Subd. 2. [POLITICAL SUBDIVISION; DEFINITION.] For purposes 15.14 of this section, "political subdivision" means a statutory or 15.15 home rule charter city, a county, a school district, a town, a 15.16 metropolitan agency, a public utilities commission, a municipal 15.17 gas agency, a municipal power agency, or any instrumentality of 15.18 any of them. 15.19 Subd. 3. [LIMITATION.] Bonds issued by a municipal gas 15.20 agency, a municipal power agency, or any instrumentality of a 15.21 political subdivision shall not pledge any taxing powers to the 15.22 payment of obligations issued by the agency or instrumentality 15.23 under this section. 15.24 Sec. 20. [471.832] [POLITICAL SUBDIVISION LEASES AND 15.25 SUBLEASES.] 15.26 Subdivision 1. [PROPERTY LEASES AUTHORIZED.] (a) A 15.27 political subdivision may lease any of its real or personal 15.28 property, including property used or useful for the governmental 15.29 purposes of the political subdivision, to any entity, but only 15.30 if the political subdivision subleases the property back from 15.31 the lessee and the conditions in clauses (1) to (4) are met: 15.32 (1) the sublease has a term of at least eight years; 15.33 (2) the sublease provides that the political subdivision 15.34 may purchase the lessee's remaining interest in the lease at the 15.35 end of the sublease term; 15.36 (3) the political subdivision enters into a guaranteed 16.1 investment contract meeting the requirements of section 118A.05, 16.2 subdivision 5, which provides for payments at least sufficient 16.3 to meet all scheduled sublease payments; and 16.4 (4) the lease payments scheduled to be received by the 16.5 political subdivision are at least sufficient to pay the cost of 16.6 the investment contract required under clause (3). 16.7 (b) A sublease entered into under this section is not an 16.8 obligation for purposes of chapter 475. 16.9 Subd. 2. [POLITICAL SUBDIVISION; DEFINITION.] For purposes 16.10 of this section, the term "political subdivision" means a 16.11 statutory or home rule charter city, a county, a school 16.12 district, a town, a metropolitan agency, a public utilities 16.13 commission, a municipal gas agency, a municipal power agency, or 16.14 any instrumentality of the foregoing. 16.15 Subd. 3. [POWERS ADDITIONAL.] The powers provided by this 16.16 section are in addition to the powers of political subdivisions 16.17 to lease property as provided by other laws, including the power 16.18 to lease property in furtherance of their governmental purposes 16.19 and to lease property not used for governmental purposes. 16.20 Sec. 21. Minnesota Statutes 1996, section 471.981, is 16.21 amended by adding a subdivision to read: 16.22 Subd. 4d. [POLITICAL SUBDIVISION BONDS FOR INSURANCE 16.23 PROCUREMENT.] (a) Notwithstanding any limitations set forth 16.24 under section 475.52, or any other general or special law or 16.25 charter to the contrary, a political subdivision may issue bonds 16.26 or other obligations to provide funds to purchase insurance 16.27 coverage for employee health benefits, all or any part of the 16.28 risks enumerated in subdivision 1, and any risk which the 16.29 political subdivision is authorized to insure under section 16.30 176.181, subdivision 1. The obligations must be issued pursuant 16.31 to chapter 475, except that no election is required to authorize 16.32 the issuance of the obligations, and the obligations are not 16.33 included for purposes of computing the net debt of a political 16.34 subdivision. The obligations must mature in the years and 16.35 amounts determined by the governing body, not exceeding the term 16.36 of the insurance contract purchased with the proceeds of the 17.1 obligations. 17.2 (b) In addition to permitted uses described in paragraph 17.3 (a), proceeds of obligations issued pursuant to this subdivision 17.4 may be used to establish a debt service reserve for the 17.5 obligations, to pay costs of issuing the obligations, or to 17.6 refund obligations previously issued pursuant to this 17.7 subdivision. 17.8 (c) An issuer of obligations authorized under this 17.9 subdivision may designate a bank or trust company authorized to 17.10 exercise trust powers in this state as trustee for the holders 17.11 of obligations issued pursuant to this subdivision and may 17.12 create funds and accounts necessary to secure payment of the 17.13 obligations. 17.14 Sec. 22. Minnesota Statutes 1996, section 475.61, 17.15 subdivision 3, is amended to read: 17.16 Subd. 3. [IRREVOCABILITY.] Tax levies so made and filed 17.17 shall be irrevocable, except as provided in this subdivision. 17.18 In each year when there is on hand any excess amount in the 17.19 debt redemption fund of a school district at the time the 17.20 district makes its property tax levies, the amount of the excess 17.21 shall be certified by the school board to the commissioner. The 17.22 commissioner shall report the amount of the excess to the county 17.23 auditor and the auditor shall reduce the tax levy otherwise to 17.24 be included in the rolls next prepared by the amount certified. 17.25 The commissioner shall prescribe the form and calculation to be 17.26 used in computing the excess amount. The school board may, with 17.27 the approval of the commissioner, retain the excess amount if it 17.28 is necessary to ensure the prompt and full payment of the 17.29 obligations and any call premium on the obligations, or will be 17.30 used for redemption of the obligations in accordance with their 17.31 terms. The school board may, with the approval of the 17.32 commissioner, specify a tax levy in a higher amount if necessary 17.33 because of anticipated tax delinquency or for cash flow needs to 17.34 meet the required payments from the debt redemption fund. 17.35 Any excess amount on hand in the debt service fund may be 17.36 used to pay any arbitrage rebate described in section 475.561, 18.1 subdivision 2, or any costs relating to any continuing 18.2 disclosure agreement described in section 475.60, subdivision 18.3 8. If the governing body, including the governing body of a 18.4 school district, in any year makes an irrevocable appropriation 18.5 to the debt service fund of money actually on hand or if there 18.6 is on hand any excess amount in the debt service fund, the 18.7 recording officer may certify to the county auditor the fact and 18.8 amount thereof and the auditor shall reduce by the amount so 18.9 certified the amount otherwise to be included in the rolls next 18.10 thereafter prepared. 18.11 Sec. 23. Minnesota Statutes 1996, section 475.67, 18.12 subdivision 12, is amended to read: 18.13 Subd. 12. [ADDITIONAL CONDITIONS.] In the refunding of 18.14 general obligations, for which the full faith and credit of the 18.15 issuing municipality has been pledged, the following additional 18.16 conditions shall be observed: each such obligation, if 18.17 repayable, shall be called for redemption prior to its maturity 18.18 in accordance with its terms no later than either (i) the 18.19 earliest date on which it may be redeemed without payment of any 18.20 premium, or (ii) if the obligation is only prepayable with 18.21 payment of a premium, on the earliest date on which it may be 18.22 redeemed with payment of the least premium required by its 18.23 terms. No refunding obligations shall be issued and sold more 18.24 than six months before the refunded obligations mature or are 18.25 called for redemption in accordance with their terms, unless 18.26 either (i) as a result of the refunding the average life of the 18.27 maturities is extended at least three years or (ii) as of the 18.28 nominal date of the refunding obligations the present value of 18.29 the dollar amount of the debt service on the refunding 18.30 obligations, computed to their stated maturity dates, after 18.31 deducting any premium, is lower by at least three percent than 18.32 the present value of the dollar amount of debt service, on all 18.33 general obligations refunded, exclusive of any premium, computed 18.34 to their stated maturity dates; provided that in computing the 18.35 dollar amount of debt service on the refunding obligations, any 18.36 expenses of the refunding payable from a source other than the 19.1 proceeds of the refunding obligations or the interest derived 19.2 from the investment thereof shall be added to the dollar amount 19.3 of debt service on the refunding obligations. For purposes of 19.4 this subdivision, the present value of the dollar amount of debt 19.5 service means the dollar amount of debt service to be paid, 19.6 discounted to the nominal date of the refunding obligations at a 19.7 rate equal to the yield on the refunding obligations. Expenses 19.8 of the refunding include the amount, if any, in excess of the 19.9 proceeds of the refunding obligations or the principal amount of 19.10 obligations to be refunded, whichever is the greater, which is 19.11 required to be deposited in escrow to provide cash and purchase 19.12 securities sufficient to retire the refunded obligations and 19.13 unaccrued interest thereon in accordance with subdivision 6; 19.14 charges of the escrow agent and of the paying agent for the 19.15 refunding obligations; and expenses of printing and publications 19.16 and of fiscal, legal, or other professional service necessarily 19.17 incurred in the issuance of the refunding obligations. This 19.18 subdivision does not apply if the purpose of the refunding is to 19.19 eliminate or reduce a reserve fund for the refunded obligations 19.20 or to eliminate a material restriction imposed by a covenant 19.21 relating to the refunded obligations. 19.22 Sec. 24. [475.80] [PLEDGE ON ATTACHMENT, ANNEXATION, 19.23 COMBINATION, CONSOLIDATION, OR INCORPORATION.] 19.24 When all or a part of a municipality is attached, annexed, 19.25 combined, consolidated, or incorporated into another 19.26 municipality, the full faith and credit of the surviving or new 19.27 municipality must secure any general obligation bonds which the 19.28 surviving or new municipality has assumed or which are payable 19.29 from property taxes levied on all or any portion of its taxable 19.30 property, notwithstanding that the bonds may be payable from 19.31 taxes levied on taxable property in only a portion of the new or 19.32 surviving municipality. If any general funds of the 19.33 municipality are used to pay debt service on general obligation 19.34 bonds payable from taxes levied on taxable property in only a 19.35 portion of the new or surviving municipality, the general funds 19.36 must be reimbursed, with or without interest, from taxes levied 20.1 on the taxable property in that portion of the new or surviving 20.2 municipality which was primarily responsible for the general 20.3 obligation bonds. 20.4 Sec. 25. Minnesota Statutes 1996, section 641.23, is 20.5 amended to read: 20.6 641.23 [FUNDS, HOW PROVIDED.] 20.7 Before any contract is made for the erection of a county 20.8 jail, sheriff's residence, or both, the county board shall 20.9 either levy a sufficient tax to provide the necessary funds, or 20.10 issue county bonds therefor in accordance with the provisions of 20.11 chapter 475, provided that, unless the issuance of the bonds is 20.12 approved by the majority of voters voting on the questions of 20.13 their issuance, the amount of all bonds issued for this purpose 20.14 and interest on them which are due and payable in any year shall 20.15 not exceed an amount equal to 0.09671 percent of market value of 20.16 taxable property within the county, as last determined before 20.17 the bonds are issued. 20.18 Sec. 26. [EFFECTIVE DATE.] 20.19 This act is effective the day following final enactment.