Minnesota Session Laws - 1983, Regular Session

  

                         Laws of Minnesota 1983 

                        CHAPTER 365--S.F.No. 889
           An act relating to local government; clarifying powers 
          of municipalities and redevelopment agencies with 
          respect to acquisition, construction, leasing, 
          selling, loan of funds, and issuance of revenue bonds 
          for industrial development projects; amending 
          Minnesota Statutes 1982, sections 474.03, 474.06, and 
          475.65. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 474.03, is 
amended to read: 
    474.03 [POWERS.] 
    Subdivision 1.  [GENERAL.] Any municipality or 
redevelopment agency, in addition to the powers prescribed 
elsewhere by the laws of this state, shall have the power to:  
has all powers set forth in this section.  
    (1) Subd. 2.  [PROJECT ACQUISITION.] It may acquire, 
construct, and hold any lands, buildings, easements, water and 
air rights, improvements to lands and buildings, and capital 
equipment to be located permanently or used exclusively on a 
designated site and solid waste disposal and pollution control 
equipment, and alternative energy equipment and inventory, 
regardless of where located, which are deemed necessary in 
connection with a project to be situated within the state, 
whether wholly or partially within or without the municipality 
or redevelopment agency, and construct, reconstruct, improve, 
better, and extend the project;.  It may also pay part or all of 
the cost of an acquisition and construction by a contracting 
party under a revenue agreement.  
    (2) Subd. 3.  [REVENUE BONDS.] It may issue revenue bonds, 
in anticipation of the collection of revenues of the project, to 
finance, in whole or in part, the cost of the acquisition, 
construction, reconstruction, improvement, betterment, or 
extension thereof and, in the case of an alternative energy 
project, in addition to the other powers granted by this 
chapter, to finance the acquisition and leasing or sale of 
equipment and products to others;.  
    (3) Subd. 4.  [REFINANCING HEALTH FACILITIES.] It may issue 
revenue bonds to pay, purchase, or discharge all or any part of 
the outstanding indebtedness of a contracting party engaged 
primarily in the operation of one or more nonprofit hospitals or 
nursing homes, theretofore incurred in the acquisition or 
betterment of its existing hospital or nursing home facilities, 
including, to the extent deemed necessary by the governing body 
of the municipality or redevelopment agency, any unpaid interest 
on the indebtedness accrued or to accrue to the date on which 
such indebtedness is finally paid;, and any premium the 
governing body of the municipality or redevelopment agency 
determines to be necessary to be paid to pay, purchase, or 
defease the outstanding indebtedness;.  If revenue bonds are 
issued for this purpose, the refinancing and the existing 
properties of the contracting party shall be deemed to 
constitute a project under section 474.02, subdivision 1c.  
Industrial Revenue bonds shall only may not be available under 
issued pursuant to this provision if the commissioner of energy, 
planning and development has been shown subdivision unless the 
application for approval of the project pursuant to section 
474.01 shows that a reduction in debt service charges to 
patients and third party payors will occur.  All reductions in 
debt service charges pursuant to this program shall be passed on 
is estimated to result and will be reflected in charges to 
patients and third party payors.  These industrial Proceeds of 
revenue bonds issued pursuant to this subdivision may not be 
used for any purpose not consistent inconsistent with the 
provisions of chapter 256B;.  Nothing in this subdivision is 
intended to prohibit prohibits the use of revenue bond proceeds 
to pay outstanding indebtedness of a contracting party to the 
extent now permitted by law; on March 28, 1978.  
    (4) Subd. 5.  [REVENUE AGREEMENTS.] It may enter into a 
revenue agreement with any person, firm, or public or private 
corporation or federal or state governmental subdivision or 
agency in such manner so that payments required thereby to be 
made by the contracting party shall be are fixed, and revised 
from time to time as necessary, so as to produce income and 
revenue sufficient to provide for the prompt payment of 
principal of and interest on all bonds issued hereunder when due 
, and.  The revenue agreement shall must also provide that the 
contracting party shall be is required to pay all expenses of 
the operation and maintenance of the project including, but 
without limitation, adequate insurance thereon and insurance 
against all liability for injury to persons or property arising 
from the its operation thereof, and all taxes and special 
assessments levied upon or with respect to the project and 
payable during the term of the revenue agreement,; during which 
term, except as provided in subdivision 17, a tax shall be 
imposed and collected upon the project or, pursuant to the 
provisions of section 272.01, subdivision 2, for the privilege 
of using and possessing the project, in the same amount and to 
the same extent as though the contracting party were the owner 
of all real and personal property comprising the project;.  
    (5) Subd. 6.  [PLEDGE OF REVENUES.] It may pledge and 
assign to the holders of the bonds or a trustee therefor all or 
any part of the revenues of one or more projects and define and 
segregate the revenues or provide for the payment thereof to a 
trustee, whether or not the trustee is in possession of the 
project under a mortgage or otherwise;.  
    (6) Subd. 7.  [SECURITY INTERESTS.] It may mortgage or 
otherwise encumber the projects or grant a security interest in 
any project and its revenues, or may permit a mortgage, 
encumbrance, or security interest to be granted by a contracting 
party to the revenue agreement, in favor of the municipality or 
redevelopment agency, the holders of the bonds, or a trustee 
therefor, provided that.  However, in creating any the mortgages 
or encumbrances mortgage, encumbrance, or security interest a 
municipality or redevelopment agency shall does not have the 
power to obligate itself except with respect to the project; and 
its revenues, unless otherwise specifically provided by law.  
    (7) Subd. 8.  [IMPLEMENTATION OF POWERS AND COVENANTS; 
CONSTRUCTION AND ACQUISITION BY CONTRACTING PARTY.] It may make 
all contracts, execute all instruments, and do all things 
necessary or convenient in the exercise of the powers herein 
granted, or in the performance of its covenants or duties, or in 
order to secure the payment of its bonds; including, but without 
limitation, a contract entered into prior to the construction of 
the project revenue agreement authorizing the contracting party, 
subject to such any terms and conditions as the municipality or 
redevelopment agency shall find finds necessary or desirable and 
proper, to provide for the construction, acquisition, and 
installation of the buildings, improvements, and equipment to be 
included in the project by any means legally available to the 
contracting party and in the manner determined by the 
contracting party and without advertisement for bids as may be 
required for the construction or acquisition of other municipal 
facilities; unless advertisement by the contracting party is 
otherwise required by law.  
    (8) Subd. 9.  [INTERGOVERNMENTAL AGREEMENTS.] It may enter 
into and perform such contracts and agreements with other 
municipalities, political subdivisions, and state agencies, 
authorities, and institutions as the respective governing bodies 
body of the same municipality or redevelopment agency may deem 
proper and feasible for or concerning the planning, 
construction, lease, purchase, mortgaging or other acquisition, 
and the financing of a project, and the maintenance thereof, 
including an agreement whereby one municipality issues its 
revenue bonds in behalf of one or more other municipalities 
pursuant to revenue agreements with the same or different 
contracting parties, which contracts and agreements may 
establish a board, commission, or such other body as may be 
deemed proper for the supervision and general management of the 
facilities of the project; provided.  However, no municipality 
or redevelopment agency shall may enter into or perform any 
contract or agreement with any school district under which the 
municipality or redevelopment agency issues its revenue bonds or 
otherwise provides for the construction of school facilities and 
the school leases or otherwise acquires these facilities;.  
    (9) Subd. 10.  [FEDERAL LOANS AND GRANTS.] It may accept 
from any authorized agency of the federal government loans or 
grants for the planning, construction, acquisition, leasing, 
purchase, or other provision of any project, and enter into 
agreements with the agency respecting the loans or grants;.  
    (10) Subd. 11.  [CONVEYANCE OF PROJECTS.] It may sell and 
convey all properties acquired in connection with the projects, 
including without limitation the sale and conveyance thereof 
subject to the a mortgage as herein provided, and or the sale 
and conveyance thereof under an option granted to the lessee of 
the project, for such the price, and at such the time as the 
governing body of the municipality or redevelopment agency may 
determine, provided, determines.  However, that no sale or 
conveyance of the properties shall ever may be made in such a 
manner as to impair that impairs the rights or interests of the 
holder, or holders, of any bonds issued under the authority of 
this chapter;.  
    (11) Subd. 12.  [REFUNDING.] It may issue revenue bonds to 
refund, in whole or in part, bonds previously issued by the 
municipality or redevelopment agency under authority of this 
chapter;, and interest on them.  
    (12) Subd. 13.  [TERMINATION OF REVENUE AGREEMENT.] If so 
provided in the revenue agreement, it may terminate the 
agreement and re-enter or repossess the project upon the default 
of the contracting party, and operate, lease, or sell the 
project in such the manner as may be authorized or required by 
the provisions of the revenue agreement or of the resolution or 
indenture securing the bonds issued for the project;.  Any 
revenue agreement which includes provision for a conveyance of 
real estate to the contracting party may be terminated in 
accordance with the revenue agreement, notwithstanding that the 
revenue agreement may constitute an equitable mortgage provided 
that no municipality or redevelopment agency shall have power 
otherwise to.  
     Subd. 14.  [LIMITATIONS ON POWERS.] It may not operate any 
project referred to in this chapter as a business or in any 
manner whatsoever, and except as authorized in subdivision 13.  
Nothing herein in this section authorizes any municipality or 
redevelopment agency to expend any funds on any project herein 
described, other than the revenues of the projects project, or 
the proceeds of revenue bonds and notes issued hereunder, or 
other funds granted to the municipality or redevelopment agency 
for the purposes herein contemplated, except:  
    (1) as may be is otherwise permitted by law and except to 
enforce;  
    (2) to enforce any right or remedy under any revenue 
agreement or related agreement for the benefit of the 
bondholders or for the protection of any security given in 
connection with a revenue agreement, provided that; or 
    (3) to pay without reimbursement part or all of the public 
cost of redevelopment of land paid by a city or its 
redevelopment agency including the acquisition of the site of 
the project, which cost shall not be deemed part of the cost of 
any the project situated on the land;.  
    (13) Subd. 15.  [INVESTMENT AND DEPOSIT OF FUNDS.] It may 
invest or deposit, or authorize a trustee to invest or deposit, 
any money on hand in funds or accounts established in connection 
with a project or payment of bonds issued therefor, to the 
extent they are not presently needed for the purposes for which 
such funds or accounts were created, in accordance with section 
471.56, as amended; proceeds of revenue bonds or notes issued 
pursuant to this chapter, and income from the investment of the 
proceeds, in any manner and upon any terms and conditions agreed 
to by the contracting party under the related revenue agreement, 
resolution, or indenture, notwithstanding chapter 118 or section 
471.56 or 475.56, but subject to any statutory provisions which 
govern the deposit and investment of funds of a contracting 
party which is itself a governmental subdivision or agency.  
    (14) Subd. 16.  [CONTRACTOR'S BOND AND MECHANICS' LIENS.] 
It may waive or require the furnishing of a contractors 
contractor's payment and performance bond of the kind described 
in section 574.26, whether or not the municipality or 
redevelopment agency is a party to the construction contract.  
and If the bond shall be is required, then the provisions of 
chapter 514 relating to liens for labor and materials, shall are 
not be applicable in with respect of any to work done or labor 
or materials supplied for the project, and.  If the bond be is 
waived then, the said provisions of chapter 514 shall apply in 
with respect of to work done or labor or materials supplied for 
the project; and.  
    (15) Subd. 17.  [VALUATION OF UNFINISHED SALE OR RENTAL 
PROJECTS.] Exempt from property taxes on a nonresidential If a 
building is to be constructed for sale or rent in a project to a 
contracting party, the building is exempt from taxation as 
public property exclusively used for a public purpose until the 
building is first sold, conveyed or first occupied or rented by 
the lessee, in whole or in part, whichever occurs first, up to a 
maximum of four years from the date of issue of bonds or notes 
for the project, provided that the exemption must be provided 
applied for before October 10 of the levy year of the levy of 
the first taxes to which the exemption applies.  
     Sec. 2.  Minnesota Statutes 1982, section 474.06, is 
amended to read: 
    474.06 [MANNER OF ISSUANCE OF BONDS; INTEREST RATE.] 
    Bonds authorized under this chapter shall must be issued in 
accordance with the provisions of chapter 475 relating to bonds 
payable from income of revenue producing conveniences, except 
that public sale shall is not be required, and the bonds may 
mature at any the time or times in such amount or amounts within 
30 years from date of issue and may be sold at a price equal to 
such the percentage of the par value thereof, plus accrued 
interest, and bearing interest at such the rate or rates, as may 
be agreed by the contracting party, the purchaser, and the 
municipality or redevelopment agency, notwithstanding any 
limitation of interest rate or cost or of the amounts of annual 
maturities contained in any other law, and bonds issued to 
refund bonds previously issued pursuant to this chapter may be 
issued in amounts as may be determined by the municipality or 
redevelopment agency notwithstanding the provisions of section 
475.67, subdivision 3.  When bonds authorized under this chapter 
are issued, they shall state whether they are issued for a 
project defined in section 474.02, subdivisions 1, 1a, 1b, or 
1c.  The rate of interest payable on bonds issued pursuant to 
this section after December 31, 1985, shall not exceed nine 
percent per year.  
    Sec. 3.  Minnesota Statutes 1982, section 475.65, is 
amended to read: 
    475.65 [DELIVERY OF BONDS; USE OF PROCEEDS.] 
    Upon payment to the treasurer of the purchase price by the 
successful bidder, the obligations shall be delivered, and the 
treasurer shall account for the receipt and disbursement of the 
proceeds thereof for the use named in the resolution or other 
instrument or instruments authorizing such obligations, in a 
separate fund or account in the official financial records of 
the municipality.  Pending such use the proceeds may be invested 
and reinvested in accordance with law, and the income and gain 
therefrom shall be held as part of the proceeds and applied to 
such use or to the payment of the obligations and interest 
thereon or otherwise as provided in any city charter or any 
other law.  The purchaser shall not be obligated to see to the 
application of the purchase price.  When the use authorized is 
the acquisition or betterment of any land, easements, buildings, 
structures, machinery, or equipment, the proceeds may be used to 
pay all expenses, incurred and to be incurred, which are 
reasonably necessary and incidental to such acquisition or 
betterment, including, but without limitation, the cost of 
necessary professional planning studies to determine desirable 
locations, architectural, engineering, legal, financial 
advisory, and other professional services, printing and 
publication, and interest to accrue on the obligations prior to 
the anticipated date of commencement of the collection of taxes 
or special assessments to be levied or other funds pledged for 
the payment of the obligations and interest thereon.  When the 
obligations are payable wholly from the income from a utility or 
other project, for the acquisition or betterment of which the 
obligations are issued, the proceeds may be used in part to 
establish a reserve as further security for the payment of such 
principal and interest when due.  If the contemplated use be 
afterward abandoned, or if any balance of the proceeds of the 
obligations remains after the use is accomplished, such or if 
the governing body determines that at least 85 percent of the 
cost of the use has been paid or finally determined and retains 
in the fund an amount sufficient to pay the estimated costs of 
completion, the remainder of the fund may be devoted to any 
other public use authorized by law, and approved by resolution 
adopted or vote taken in the manner required to authorize bonds 
for such new use and purpose.  Any balance remaining after the 
improvement has been completed and paid for, unless devoted to a 
new use as herein authorized, shall become a part of the debt 
service fund of the municipality.  
    Sec. 4.  [VALIDATION.] 
    The amendment effected by section 1 is remedial in 
character, being adopted to clarify the powers intended to be 
granted to municipalities and redevelopment agencies in the 
undertaking, construction, and financing of projects under 
Minnesota Statutes, section 474.03.  All proceedings and other 
actions taken heretofore by municipalities and redevelopment 
agencies which would be authorized under section 474.03 as 
amended by this act are validated and confirmed, and all 
obligations incurred and to be incurred and contracts made and 
to be made pursuant to those actions and proceedings are valid 
and binding.  
    Sec. 5.  [EFFECTIVE DATE.] 
     This act is effective the day after final enactment. 
    Approved June 14, 1983