SF 3705

as introduced - 91st Legislature (2019 - 2020) Posted on 02/27/2020 03:41pm

A bill for an act
relating to capital investment; establishing a debt limit; amending Minnesota
Statutes 2018, section 16A.105.

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

Section 1.

Minnesota Statutes 2018, section 16A.105, is amended to read:

16A.105 DEBT CAPACITY FORECAST.

new text begin Subdivision 1. new text end

new text begin Forecast. new text end

In February and November of each year the commissioner
shall prepare a debt capacity forecast to be delivered to the governor and legislature according
to section 16A.103, subdivision 1. The debt capacity forecast must include statements of
the indebtedness of the state for bonds, notes, and other forms of long-term general obligation
indebtedness. The forecast must show the actual amount of the debt service for at least the
past two completed fiscal years, and the estimated amount for the current fiscal year and
the next six fiscal years, the debt authorized and unissued, and the borrowing capacity for
the next six fiscal years. new text begin Beginning with forecasts prepared after July 1, 2019, the forecast
must include the debt limit determined under subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Debt limit. new text end

new text begin (a) For the purposes of this subdivision, "debt" means state debt
payable from nondedicated state general fund revenues, including:
new text end

new text begin (1) state general obligation bonds payable from the general fund;
new text end

new text begin (2) state appropriation bonds;
new text end

new text begin (3) agency appropriation bonds payable from a statutory appropriation from the general
fund or other debt issued by the state, a state agency, or the University of Minnesota, payable
from a statutory appropriation of general fund money;
new text end

new text begin (4) state certificates of participation; and
new text end

new text begin (5) state lease-purchase financing for acquisition of real estate or equipment payable
from the general fund.
new text end

new text begin (b) The debt limit established in this subdivision applies in addition to any other guideline
adopted or used by the commissioner to prudently manage debt in the state's best interests.
new text end

new text begin (c) For each forecast under subdivision 1, the commissioner shall determine the maximum
amount of new debt that may be issued so that the payment due on all outstanding debt is
no more than 3.5 percent of the estimated nondedicated general fund revenue received by
the state for the same time periods.
new text end

new text begin (d) In addition, for each forecast under subdivision 1, the commissioner shall determine
the maximum amount of debt payable from nondedicated state general fund revenues under
paragraph (a), clauses (2) to (5), that may be issued so that the payment due is no more than
0.625 percent of the estimated nondedicated general fund revenue received by the state for
the same time periods.
new text end

new text begin (e) The debt limits in this subdivision may only be used to delay issuance of debt
authorized in a law enacted after the forecast that indicates the limits will be exceeded and
do not require either: (1) delay in the sale of or reduction in the amount of debt authorized
before that forecast; or (2) cancellation of appropriations made before that forecast. The
commissioner must delay issuance until a forecast indicates that the debt limits will not be
exceeded with the issuance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end