SF 2225

as introduced - 88th Legislature (2013 - 2014) Posted on 03/04/2014 09:28am

A bill for an act
relating to telecommunications; providing authority for broadband infrastructure
development and bonding; authorizing the state to guarantee debt of local units
of government incurred for broadband infrastructure development; authorizing
local units of government to establish certain entities to deliver broadband
services; abolishing limits on contributions to regional or local organizations by
cities or towns; requiring a report; amending Minnesota Statutes 2012, sections
446A.086, subdivision 1; 469.191; Minnesota Statutes 2013 Supplement, section
275.066; proposing coding for new law in Minnesota Statutes, chapter 237;
repealing Minnesota Statutes 2012, section 237.19.

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

Section 1.

new text begin [237.90] BROADBAND INFRASTRUCTURE DEVELOPMENT;
BONDING.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section and sections 237.91
and 237.92, the following terms have the meanings given them.
new text end

new text begin (b) "Broadband" or "broadband service" has the meaning given in section 116J.39,
subdivision 1, paragraph (b).
new text end

new text begin (c) "Broadband infrastructure" has the meaning given in section 116J.391,
subdivision 1, paragraph (c).
new text end

new text begin (d) "Local unit of government" has the meaning given in section 116G.03,
subdivision 3.
new text end

new text begin Subd. 2. new text end

new text begin Legislative intent; purpose. new text end

new text begin The legislature finds that the goal of
increasing access to and speed of broadband service is crucial to the state's present and
future economic development and competitiveness. The legislature further finds that the
need for improved broadband service is particularly acute in rural areas, where private
investment in broadband infrastructure new text end new text begin has consistently lagged behind metropolitan areas.
It is thus the policy of the state of Minnesota to encourage, foster, develop, and improve
broadband within the state in order to:
new text end

new text begin (1) drive job creation, promote innovation, and expand markets for Minnesota
businesses;
new text end

new text begin (2) serve the ongoing and growing needs of Minnesota's education systems, health
care system, public safety system, industries and businesses, governmental operations,
and citizens; and
new text end

new text begin (3) improve accessibility for underserved communities and populations.
new text end

new text begin Subd. 3. new text end

new text begin General eligibility; state general obligation bond funds. new text end

new text begin The Minnesota
Constitution, article XI, section 5, clause (a), requires that state general obligation bonds
be issued to finance only the acquisition or betterment of public land, buildings, and other
public improvements of a capital nature. The legislature finds broadband infrastructure
projects constitute betterments and capital improvements within the meaning of the
Constitution and capital expenditures under generally accepted accounting principles.
new text end

new text begin Subd. 4. new text end

new text begin Local authority; broadband infrastructure bonding. new text end

new text begin (a) Each local
unit of government may by resolution authorize the issuance of bonds to provide funds
for the acquisition or betterment of its broadband infrastructure, or for refunding any
outstanding bonds issued for that purpose.
new text end

new text begin (b) The local unit of government may pledge to the payment of the bonds and
interest, its full faith, credit, and taxing powers, or the proceeds of any designated tax
levies, or the gross or net revenues or charges to be derived from any broadband service
operated by or for the local unit of government, or any combination thereof. Taxes levied
for the payment of the bonds and interest shall not reduce the amounts of other taxes
which the local unit of government is authorized by law to levy.
new text end

new text begin (c) The proceeds of the bonds may be used in part to establish a reserve as further
security for the payment of the principal and interest of the bonds when due.
new text end

new text begin (d) Bonds issued under this section may be sold at public or private sale upon the terms
and conditions the local unit of government determines. Except as otherwise provided, the
bonds shall be issued and sold in accordance with the provisions of chapter 475.
new text end

new text begin (e) No election shall be required to authorize the issuance of the bonds under this
section.
new text end

Sec. 2.

new text begin [237.91] BROADBAND SERVICE DELIVERY.
new text end

new text begin Subdivision 1. new text end

new text begin Local authority; broadband service. new text end

new text begin A local unit of government
may finance, acquire, construct, maintain, and operate a broadband service in the territory
within its jurisdiction.
new text end

new text begin Subd. 2. new text end

new text begin Formation of nonprofit broadband corporation. new text end

new text begin (a) Notwithstanding
sections 465.717 and 465.719, a local unit of government or a broadband joint powers
board under subdivision 3 may create and operate a nonprofit corporation organized
under chapter 317A for the sole and limited purpose of financing, acquiring, constructing,
maintaining, and operating broadband service in the territory within its jurisdiction.
new text end

new text begin (b) A nonprofit corporation under this subdivision shall not afford pecuniary
gain, incidental or otherwise, to any private individual, firm, or corporation (except the
payment of reasonable fees for goods and services rendered and approved in accordance
with the bylaws of the corporation) and no part of the net income or net earnings of the
corporation shall, directly or indirectly, be distributable to or otherwise inure to the benefit
of any individual.
new text end

new text begin (c) A nonprofit corporation under this subdivision is authorized to partner or contract
with other incorporated organizations, partnerships, cooperatives, political subdivisions,
or Indian tribal governments to deliver broadband service.
new text end

new text begin Subd. 3. new text end

new text begin Broadband joint powers board. new text end

new text begin (a) A local unit of government may enter
into agreements under section 471.59 with other local units of government to finance,
acquire, construct, maintain, and operate broadband service in the territory within the
jurisdiction of the participating local units of government.
new text end

new text begin (b) An agreement entered into under section 471.59 as provided by this section
may provide that:
new text end

new text begin (1) each local unit of government shall issue bonds to pay their respective shares of
the cost of the projects;
new text end

new text begin (2) one of the local units of government shall issue bonds to pay the full costs of
the project and that the other participating local units of government shall levy the tax
authorized under this subdivision and pledge the collections of the tax to the local unit
of government that issues the bonds; or
new text end

new text begin (3) the joint powers board shall issue revenue bonds to pay the full costs of the
project and that the participating local units of government shall levy the tax authorized
under this subdivision and pledge the collections of the tax to the joint powers entity for
payment of the revenue bonds.
new text end

new text begin (c) Bonds issued under this section may be issued without an election and shall not
constitute net debt of any participating local unit of government.
new text end

new text begin Subd. 4. new text end

new text begin Broadband service district. new text end

new text begin A broadband service district operating
under section 237.92 is authorized to acquire, finance, construct, maintain, and operate
broadband service in the territory within its jurisdiction.
new text end

Sec. 3.

new text begin [237.92] BROADBAND SERVICE DISTRICT.
new text end

new text begin Subdivision 1. new text end

new text begin Districts authorized; members. new text end

new text begin A local unit of government,
together with other local units of government, may create a broadband service district.
For purposes of this chapter, "broadband service" means a governmental entity created
pursuant to this section for the purpose of financing, acquiring, establishing, constructing,
maintaining, improving, and operating broadband service within the jurisdiction of the
participating local units of government.
new text end

new text begin Subd. 2. new text end

new text begin Process to establish; resolution; approval. new text end

new text begin (a) A local unit of
government, by joint resolution together with other willing governmental units, may
create a broadband service district that is authorized to exercise its functions upon passage
of a joint resolution by each of their governing bodies, including a proposed date for the
first meeting of the broadband service district's board.
new text end

new text begin (b) The local units of government seeking to establish a broadband service district
must petition and receive authorization from the Office of Broadband Development prior
to commencing operations.
new text end

new text begin (c) The broadband service district is created or reorganized on the effective date
of the last resolution required to authorize it, and subject to approval by the Office of
Broadband Development under subdivision 8. Certified copies of each resolution must be
sent by the clerk or other recording officer of the governing body or board adopting it to
the county auditor of each county containing territory in the broadband service district.
On receiving the required resolutions, each county auditor shall record certified copies
of them as a public record with the county recorder of the auditor's county. The county
auditor of the county containing most of the population of the district shall send a certified
copy of each resolution to the secretary of state to be filed as a public record.
new text end

new text begin Subd. 3. new text end

new text begin Operating agreement. new text end

new text begin (a) A broadband service district must adopt an
operating agreement to accomplish the purposes of this section and to implement the
powers authorized under subdivision 8.
new text end

new text begin (b) The contents of the operating agreement must include, but are not limited to:
new text end

new text begin (1) a statement describing the reasons for the broadband service district's
establishment;
new text end

new text begin (2) the roles and responsibilities of the broadband service district's board, and
provide for the general management of the district;
new text end

new text begin (3) a broadband management plan describing, in detail, the broadband service
district's plan for delivering broadband service;
new text end

new text begin (4) processes to increase in size, decrease in size, or dissolve the broadband service
district; and
new text end

new text begin (5) any other requirements specified by the Office of Broadband Development.
new text end

new text begin (c) Prior to adoption, the proposed operating agreement or amendment to the
operating agreement must be submitted to the Office of Broadband Development for
approval. The Office of Broadband Development shall have 45 days from receipt of
the proposed rule or amendment to make its determination. If the Office of Broadband
Development fails to make its determination within 45 days, the operating agreement is
deemed approved.
new text end

new text begin Subd. 4. new text end

new text begin Territory. new text end

new text begin No local unit of government shall be included in a broadband
service district created or reorganized under this section unless its entire territory is
included in the district and the territory is contiguous at one or more points to the territory
of one or more of the other local units of government included.
new text end

new text begin Subd. 5. new text end

new text begin Levy authority. new text end

new text begin (a) The broadband service district may levy ad valorem
property taxes on taxable property within the area of its jurisdiction. The proceeds of the
tax must be placed in a separate account and used only in furtherance of the purposes
specified in this section and section 237.91. A broadband service district is a special taxing
district as defined by section 275.066, with the power to adopt and certify a property tax
levy to the county auditor.
new text end

new text begin (b) A levy under this subdivision is not subject to voter referendum, or any other
limitation as provided by law.
new text end

new text begin Subd. 6. new text end

new text begin Corporate powers of district. new text end

new text begin (a) A broadband district created or
reorganized under this section is a municipal corporation and political subdivision of the
state and has perpetual succession.
new text end

new text begin (b) A broadband district has the power, to the extent necessary for lawful
telecommunications purposes:
new text end

new text begin (1) to contract and be contracted with;
new text end

new text begin (2) to sue and be sued;
new text end

new text begin (3) to incur debts, liabilities, and obligations, including using revenue bonds;
new text end

new text begin (4) to provide for assessments and to issue certificates, warrants, and bonds;
new text end

new text begin (5) to use a corporate seal;
new text end

new text begin (6) to acquire real and personal property as needed, and hold, manage, control, sell,
convey, or otherwise dispose of the property as its interests require;
new text end

new text begin (7) to cooperate or contract with any state or subdivision of a state or federal agency,
private corporation, political subdivision, or cooperative association, as necessary to
operate broadband service within the district; and
new text end

new text begin (8) to perform all acts expressly authorized, and all other acts necessary and proper
for the broadband service district to carry out and exercise the powers expressly vested in it.
new text end

new text begin (c) Taxable property in the district is taxable to pay any bonded debt incurred by or
on behalf of the preexisting district. Real, personal, or mixed properties that are acquired,
owned, leased, controlled, used, or occupied by a district for the purposes of sections
237.90 to 237.92 are exempt from taxation by the state or its political subdivisions.
new text end

new text begin (d) Upon reorganization of a district, real and personal assets of the preexisting
district pass to the new reorganized district. "Assets" includes all property in which the
county has held legal title for the use and benefit of the preexisting district. All legally
valid and enforceable claims and contract obligations of the preexisting district must be
assumed by the new reorganized district.
new text end

new text begin Subd. 7. new text end

new text begin Report. new text end

new text begin (a) A broadband service district must prepare a yearly report of
the financial conditions of the broadband district, the status of all projects, the business
transacted by the broadband district, other matters affecting the interests of the district,
and a discussion of the district's plans for the succeeding year.
new text end

new text begin (b) Copies of the report must be transmitted to the board of the broadband service
district and submitted to the Office of Broadband Development within a reasonable time.
new text end

new text begin Subd. 8. new text end

new text begin Oversight; Office of Broadband Development. new text end

new text begin (a) The Office of
Broadband Development shall perform oversight of broadband service districts established
under this section.
new text end

new text begin (b) Before a broadband service district may begin operations, it must be approved by
the Office of Broadband Development. The petition by the proposed broadband service
district must be in the form and include the contents as determined by the Office of
Broadband Development.
new text end

new text begin (c) When considering a petition, the Office of Broadband Development must, at a
minimum, consider whether the proposed broadband service district has sufficient:
new text end

new text begin (1) interest from local residents who have pledged to pay a given amount for service;
new text end

new text begin (2) initial private and public investment targeted toward the infrastructure necessary
to support the district; and
new text end

new text begin (3) tax capacity available to support the district.
new text end

new text begin (d) If the Office of Broadband Development deems the establishment petition is
sufficient and the establishment of a broadband service district is appropriate, it shall:
new text end

new text begin (1) authorize the establishment of the broadband service district;
new text end

new text begin (2) define the boundaries of the broadband service district; and
new text end

new text begin (3) appoint the first board of managers of the broadband service district.
new text end

new text begin (e) The Office of Broadband Development shall review each broadband service
district's annual report submitted under subdivision 7, and shall provide comments and
technical guidance as appropriate.
new text end

new text begin Subd. 9. new text end

new text begin Administrative procedure; appeal. new text end

new text begin (a) In a proceeding to establish
or terminate a broadband district, a local unit of government or 25 or more residents
within the area affected by the proceeding may, prior to judicial appeal of the Office
of Broadband Development's decision, demand a contested case hearing be conducted
by the Office of Administrative Hearings.
new text end

new text begin (b) In the report of the administrative law judge, the fees of the Office of
Administrative Hearings and transcript fees may be apportioned among the parties and the
board. Apportionment must be based on the degree to which the parties and the board
prevailed, or caused unnecessary delay or expense. Following receipt of the report of
the administrative law judge, the Office of Broadband Development shall make a final
decision in accordance with chapter 14.
new text end

new text begin (c) A party that is aggrieved by the final decision made by the board may appeal the
decision to the Court of Appeals in the manner provided by sections 14.63 to 14.69.
new text end

Sec. 4.

Minnesota Statutes 2013 Supplement, section 275.066, is amended to read:

275.066 SPECIAL TAXING DISTRICTS; DEFINITION.

For the purposes of property taxation and property tax state aids, the term "special
taxing districts" includes the following entities:

(1) watershed districts under chapter 103D;

(2) sanitary districts under sections 442A.01 to 442A.29;

(3) regional sanitary sewer districts under sections 115.61 to 115.67;

(4) regional public library districts under section 134.201;

(5) park districts under chapter 398;

(6) regional railroad authorities under chapter 398A;

(7) hospital districts under sections 447.31 to 447.38;

(8) St. Cloud Metropolitan Transit Commission under sections 458A.01 to 458A.15;

(9) Duluth Transit Authority under sections 458A.21 to 458A.37;

(10) regional development commissions under sections 462.381 to 462.398;

(11) housing and redevelopment authorities under sections 469.001 to 469.047;

(12) port authorities under sections 469.048 to 469.068;

(13) economic development authorities under sections 469.090 to 469.1081;

(14) Metropolitan Council under sections 473.123 to 473.549;

(15) Metropolitan Airports Commission under sections 473.601 to 473.679;

(16) Metropolitan Mosquito Control Commission under sections 473.701 to 473.716;

(17) Morrison County Rural Development Financing Authority under Laws 1982,
chapter 437, section 1;

(18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section 6;

(19) East Lake County Medical Clinic District under Laws 1989, chapter 211,
sections 1 to 6;

(20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article
5, section 39;

(21) Middle Mississippi River Watershed Management Organization under sections
103B.211 and 103B.241;

(22) emergency medical services special taxing districts under section 144F.01;

(23) a county levying under the authority of section 103B.241, 103B.245, or
103B.251;

(24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home
under Laws 2003, First Special Session chapter 21, article 4, section 12;

(25) an airport authority created under section 360.0426; deleted text begin and
deleted text end

(26) any other political subdivision of the state of Minnesota, excluding counties,
school districts, cities, and towns, that has the power to adopt and certify a property tax
levy to the county auditor, as determined by the commissioner of revenue deleted text begin . deleted text end new text begin ; and
new text end

new text begin (27) a broadband service district under section 237.92.
new text end

Sec. 5.

Minnesota Statutes 2012, section 446A.086, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) As used in this section, the following terms have
the meanings given.

(b) "Authority" means the Minnesota Public Facilities Authority.

(c) "Commissioner" means the commissioner of management and budget.

(d) "Debt obligation" means:

(1) a general obligation bond or note issued by a county, a bond or note to which the
general obligation of a county is pledged under section 469.034, subdivision 2, or a bond
or note payable from a county lease obligation under section 641.24, to provide funds
for the construction of:

(i) jails;

(ii) correctional facilities;

(iii) law enforcement facilities;

(iv) social services and human services facilities;

(v) solid waste facilities; or

(vi) qualified housing development projects as defined in section 469.034,
subdivision 2; deleted text begin or
deleted text end

(2) a general obligation bond or note issued by a governmental unit to provide funds
for the construction, improvement, or rehabilitation of:

(i) wastewater facilities;

(ii) drinking water facilities;

(iii) storm water facilities; or

(iv) any publicly owned building or infrastructure improvement that has received
partial funding from grants awarded by the commissioner of employment and economic
development related to redevelopment, contaminated site cleanup, bioscience, small cities
development programs, and rural business infrastructure programs, for which bonds are
issued by the authority under section 446A.087 deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) a bond issued by a local unit of government under section 237.90.
new text end

(e) "Governmental unit" means a county or a statutory or home rule charter city.

Sec. 6.

Minnesota Statutes 2012, section 469.191, is amended to read:

469.191 CONTRIBUTIONS TO REGIONAL OR LOCAL ORGANIZATIONS.

A home rule or statutory city or town described in section 368.01, subdivision 1 or
1a, may appropriate deleted text begin not more than $50,000 annually deleted text end new text begin money new text end out of the general revenue
fund of the jurisdiction to be paid to any incorporated development society or organization
of this state for promoting, advertising, improving, or developing the economic and
agricultural resources of the city or town.

Sec. 7. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 237.19, new text end new text begin is repealed.
new text end