Minnesota Legislature
SF 3342
as introduced - 89th Legislature (2015 - 2016) Posted on 04/15/2016 09:16am
Current Version - as introduced
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A bill for an act
relating to capital investment; providing for the Lewis and Clark Regional Water
System; appropriating money; authorizing the sale and issuance of state bonds;
amending Minnesota Statutes 2015 Supplement, section 16A.967.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2015 Supplement, section 16A.967, is amended to read:
16A.967 LEWIS AND CLARK APPROPRIATION BONDS.
Subdivision 1.
Definitions.
(a) The definitions in this subdivision apply to this
section.
(b) "Appropriation bond" or "bond" means a bond, note, or other similar instrument
of the state payable during a biennium from one or more of the following sources:
(1) money appropriated by law from the general fund in any biennium for debt
service due with respect to obligations described in deleted text begin subdivision 2, paragraph (c)
deleted text end new text begin subdivisions 2a and 2bnew text end ;
(2) proceeds of the sale of obligations described in deleted text begin subdivision 2, paragraph (c)
deleted text end new text begin subdivisions 2a and 2bnew text end ;
(3) payments received for that purpose under agreements and ancillary arrangements
described in subdivision 2, paragraph deleted text begin (e)deleted text end new text begin (d)new text end ; and
(4) investment earnings on amounts in clauses (1) to (3).
(c) "Debt service" means the amount payable in any biennium of principal, premium,
if any, and interest on appropriation bonds.
Subd. 2.
Authorization to issue appropriation bonds.
(a) Subject to the limitations
of this subdivision, the commissioner may sell and issue appropriation bonds of the state
under this section for public purposes as provided by lawdeleted text begin , including, in particular, the
financing of the land acquisition, design, engineering, and construction of facilities and
infrastructure necessary to complete the next phase of the Lewis and Clark Regional Water
System project, including completion of the pipeline to Magnolia, extension of the project
to the Lincoln-Pipestone Rural Water System connection near Adrian, and engineering,
design, and easement acquisition for the final phase of the project to Worthington. No
bonds shall be sold until the commissioner determines that a nonstate match of at least
$9,000,000 is committed to this project phasedeleted text end . Grant agreements entered into under this
section must provide for reimbursement to the state from any federal money provided for
the project, consistent with the Lewis and Clark Regional Water System, Inc., agreement.
(b) The appropriation bonds may be issued and sold only after the commissioner
determines that the construction and administration for work done on the project will
comply with (1) all federal requirements and regulations associated with the Lewis and
Clark Rural Water System Act of 2000, and (2) the cooperative agreement between the
United States Department of the Interior and the Lewis and Clark Regional Water System,
Inc. Proceeds of the appropriation bonds must be credited to a special appropriation Lewis
and Clark bond proceeds fund in the state treasury. All income from investment of the
bond proceeds, as estimated by the commissioner, is appropriated to the commissioner for
the payment of principal and interest on the appropriation bonds.
deleted text begin
(c) Appropriation bonds may be sold and issued in amounts that, in the opinion of
the commissioner, are necessary to provide sufficient money, not to exceed $19,000,000
net of costs of issuance, for the purposes as provided under paragraph (a), and pay debt
service including capitalized interest, costs of issuance, costs of credit enhancement, or
make payments under other agreements entered into under paragraph (e).
deleted text end
deleted text begin (d)deleted text end new text begin (c)new text end Appropriation bonds may be issued in one or more issues or series on the
terms and conditions the commissioner determines to be in the best interests of the
state, but the term on any series of appropriation bonds may not exceed 25 years. The
appropriation bonds of each issue and series thereof shall be dated and bear interest,
and may be includable in or excludable from the gross income of the owners for federal
income tax purposes.
deleted text begin (e)deleted text end new text begin (d)new text end At the time of, or in anticipation of, issuing the appropriation bonds, and at
any time thereafter, so long as the appropriation bonds are outstanding, the commissioner
may enter into agreements and ancillary arrangements relating to the appropriation bonds,
including but not limited to trust indentures, grant agreements, lease or use agreements,
operating agreements, management agreements, liquidity facilities, remarketing or
dealer agreements, letter of credit agreements, insurance policies, guaranty agreements,
reimbursement agreements, indexing agreements, or interest exchange agreements. Any
payments made or received according to the agreement or ancillary arrangement shall be
made from or deposited as provided in the agreement or ancillary arrangement. The
determination of the commissioner included in an interest exchange agreement that the
agreement relates to an appropriation bond shall be conclusive.
deleted text begin (f)deleted text end new text begin (e)new text end The commissioner may enter into written agreements or contracts relating
to the continuing disclosure of information necessary to comply with or facilitate the
issuance of appropriation bonds in accordance with federal securities laws, rules, and
regulations, including Securities and Exchange Commission rules and regulations in Code
of Federal Regulations, title 17, section 240.15c 2-12. An agreement may be in the form
of covenants with purchasers and holders of appropriation bonds set forth in the order or
resolution authorizing the issuance of the appropriation bonds, or a separate document
authorized by the order or resolution.
deleted text begin (g)deleted text end new text begin (f)new text end The appropriation bonds are not subject to chapter 16C.
new text begin Subd. 2a. new text end
new text begin Project authorization. new text end
new text begin
Appropriation bonds may be sold and issued in
amounts that, in the opinion of the commissioner, are necessary to provide sufficient
money to the Public Facilities Authority under subdivision 7, paragraph (a), not to exceed
$19,000,000 net of costs of issuance, for the purposes as provided under this subdivision,
and pay debt service including capitalized interest, costs of issuance, costs of credit
enhancement, or make payments under other agreements entered into under subdivision 2,
paragraph (d). The bonds authorized by this subdivision are for the purposes of financing
the land acquisition, design, engineering, and construction of facilities and infrastructure
necessary to complete Phase 2 of the Lewis and Clark Regional Water System project,
including completion of the pipeline to Magnolia; extension of the project to the
Lincoln-Pipestone Rural Water System connection near Adrian; and engineering, design,
and easement acquisition for the final phase of the project to Worthington. No bonds shall
be sold under this subdivision until the commissioner determines that a nonstate match of
at least $9,000,000 is committed to this project phase. Upon completion of Phase 2, the
unspent, unencumbered portion of the appropriation in this subdivision is available for
the purposes of subdivision 2b.
new text end
new text begin Subd. 2b. new text end
new text begin Additional project authorization. new text end
new text begin
Appropriation bonds may be sold
and issued in amounts that, in the opinion of the commissioner, are necessary to provide
sufficient money to the Public Facilities Authority under subdivision 7, paragraph (b),
not to exceed $11,500,000 net of costs of issuance, for the purposes as provided under
this subdivision, and pay debt service including capitalized interest, costs of issuance,
costs of credit enhancement, or make payments under other agreements entered into
under subdivision 2, paragraph (d). The bonds authorized by this subdivision are for
the purposes of financing the land acquisition, design, engineering, and construction of
facilities and infrastructure necessary to complete Phase 3 of the Lewis and Clark Regional
Water System project, including extension of the project from the Lincoln-Pipestone
Rural Water System connection near Adrian to Worthington, construction of a reservoir
in Nobles County and a meter building in Worthington, and acquisition and installation
of a supervisory control and data acquisition (SCADA) system. No bonds shall be sold
under this subdivision until the commissioner determines that a nonstate match of at least
$9,000,000 is committed to the final phase of the project.
new text end
Subd. 3.
Form; procedure.
(a) Appropriation bonds may be issued in the form
of bonds, notes, or other similar instruments, and in the manner provided in section
16A.672. In the event that any provision of section 16A.672 conflicts with this section,
this section shall control.
(b) Every appropriation bond shall include a conspicuous statement of the limitation
established in subdivision 6.
(c) Appropriation bonds may be sold at either public or private sale upon such terms
as the commissioner shall determine are not inconsistent with this section and may be sold
at any price or percentage of par value. Any bid received may be rejected.
(d) Appropriation bonds must bear interest at a fixed or variable rate.
(e) Notwithstanding any other law, appropriation bonds issued under this section
shall be fully negotiable.
Subd. 4.
Refunding bonds.
The commissioner may issue appropriation bonds
for the purpose of refunding any appropriation bonds then outstanding, including the
payment of any redemption premiums on the bonds, any interest accrued or to accrue to
the redemption date, and costs related to the issuance and sale of the refunding bonds. The
proceeds of any refunding bonds may, in the discretion of the commissioner, be applied
to the purchase or payment at maturity of the appropriation bonds to be refunded, to the
redemption of the outstanding appropriation bonds on any redemption date, or to pay
interest on the refunding bonds and may, pending application, be placed in escrow to be
applied to the purchase, payment, retirement, or redemption. Any escrowed proceeds,
pending such use, may be invested and reinvested in obligations that are authorized
investments under section 11A.24. The income earned or realized on the investment may
also be applied to the payment of the appropriation bonds to be refunded or interest or
premiums on the refunded appropriation bonds, or to pay interest on the refunding bonds.
After the terms of the escrow have been fully satisfied, any balance of the proceeds and
any investment income may be returned to the general fund or, if applicable, the special
appropriation Lewis and Clark bond proceeds fund for use in any lawful manner. All
refunding bonds issued under this subdivision must be prepared, executed, delivered, and
secured by appropriations in the same manner as the appropriation bonds to be refunded.
Subd. 5.
Appropriation bonds as legal investments.
Any of the following entities
may legally invest any sinking funds, money, or other funds belonging to them or under
their control in any appropriation bonds issued under this section:
(1) the state, the investment board, public officers, municipal corporations, political
subdivisions, and public bodies;
(2) banks and bankers, savings and loan associations, credit unions, trust companies,
savings banks and institutions, investment companies, insurance companies, insurance
associations, and other persons carrying on a banking or insurance business; and
(3) personal representatives, guardians, trustees, and other fiduciaries.
Subd. 6.
No full faith and credit; state not required to make appropriations.
The
appropriation bonds are not public debt of the state, and the full faith, credit, and taxing
powers of the state are not pledged to the payment of the appropriation bonds or to any
payment that the state agrees to make under this section. Appropriation bonds shall not be
obligations paid directly, in whole or in part, from a tax of statewide application on any
class of property, income, transaction, or privilege. Appropriation bonds shall be payable
in each fiscal year only from amounts that the legislature may appropriate for debt service
for any fiscal year, provided that nothing in this section shall be construed to require the
state to appropriate money sufficient to make debt service payments with respect to the
appropriation bonds in any fiscal year. Appropriation bonds shall be canceled and shall
no longer be outstanding on the earlier of (1) the first day of a fiscal year for which the
legislature shall not have appropriated amounts sufficient for debt service, or (2) the date
of final payment of the principal of and interest on the appropriation bonds.
Subd. 7.
Appropriation of proceeds.
new text begin (a) new text end The proceeds of appropriation bonds
new text begin issued under subdivision 2anew text end and interest credited to the special appropriation Lewis and
Clark bond proceeds fund are appropriatednew text begin as follows:
new text end
new text begin (1)new text end to the deleted text begin commissionerdeleted text end new text begin Public Facilities Authoritynew text end for new text begin a grant to the Lewis and
Clark Joint Powers Board for new text end payment of capital expenses deleted text begin for the purposes provided bydeleted text end new text begin as
specified innew text end subdivision deleted text begin 2, paragraph (a),deleted text end new text begin 2a; and
new text end
new text begin (2) to the commissioner fornew text end debt service on the bonds including capitalized interest,
nonsalary costs of issuance of the bonds, costs of credit enhancement of the bonds and
payments under any agreements entered into under subdivision 2, paragraph deleted text begin (e)deleted text end new text begin (d)new text end , each
as permitted by state and federal lawdeleted text begin , and such proceeds may be granted, loaned, or
otherwise provided for the public purposes provided by subdivision 2, paragraph (a)deleted text end .
new text begin
(b) The proceeds of appropriation bonds issued under subdivision 2b and interest
credited to the special appropriation Lewis and Clark bond proceeds fund are appropriated
as follows:
new text end
new text begin
(1) to the Public Facilities Authority for a grant to the Lewis and Clark Joint Powers
Board for payment of capital expenses as specified in subdivision 2b; and
new text end
new text begin
(2) to the commissioner for debt service on the bonds including capitalized interest,
nonsalary costs of issuance of the bonds, costs of credit enhancement of the bonds, and
payments under any agreements entered into under subdivision 2, paragraph (d), each as
permitted by state and federal law.
new text end
Subd. 8.
Appropriation for debt service and other purposes.
new text begin (a) new text end An amount, up
to $1,351,000 needed to pay principal and interest on appropriation bonds issued under
deleted text begin this sectiondeleted text end new text begin subdivision 2anew text end is appropriated each fiscal year from the general fund to the
commissioner, subject to repeal, unallotment under section 16A.152, or cancellation,
otherwise pursuant to subdivision 6, for deposit into the bond payments account established
for such purpose in the special Lewis and Clark appropriation bond proceeds fund. The
appropriation is available beginning in fiscal year 2017 and through fiscal year 2038.
new text begin
(b) An amount up to $855,000 needed to pay principal and interest on appropriation
bonds issued under subdivision 2b is appropriated each fiscal year from the general fund to
the commissioner, subject to repeal, unallotment under section 16A.152, or cancellation,
otherwise pursuant to subdivision 6, for deposit into the bond payments account established
for such purpose in the special Lewis and Clark appropriation bond proceeds fund. The
appropriation is available beginning in fiscal year 2018 and through fiscal year 2039.
new text end
Subd. 9.
Waiver of immunity.
The waiver of immunity by the state provided for
by section 3.751, subdivision 1, shall be applicable to the appropriation bonds and any
ancillary contracts to which the commissioner is a party.