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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1984 

                        CHAPTER 582-H.F.No. 2186 
           An act relating to public finance; authorizing the 
          levy of special assessments or service charges for 
          fire protection and pedestrian skyway systems; 
          providing for allocation of federal authority to issue 
          certain state and local obligations; amending 
          Minnesota Statutes 1982, sections 116J.58, by adding a 
          subdivision; 273.77; 429.021, subdivision 1; 429.031, 
          subdivision 3; 429.091, subdivision 2, and by adding a 
          subdivision; 429.101, subdivision 1; 430.12; and 
          472.09, by adding a subdivision; proposing new law 
          coded in Minnesota Statutes, chapters 458; 459; 462; 
          474; and 475. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 116J.58, is 
amended by adding a subdivision to read: 
    Subd. 4.  [FEDERAL LIMITATION ACT ALLOCATION.] The 
commissioner shall:  
    (1) in accordance with sections 13 to 20, review 
applications for and grant allocations of authority to issue 
bonds or other obligations subject to a federal limitation act; 
and 
    (2) adopt rules, including temporary rules under sections 
14.29 to 14.36, to provide for the allocation of the amount of 
issuance authority allocated pursuant to section 11, subdivision 
3.  The rules shall contain criteria and procedures for 
allocation of authority for use by the department, and to other 
state agencies, political subdivisions, or other authorities 
authorized by other law to issue bonds subject to a federal 
limitation act.  
    For the purposes of this subdivision, a "federal limitation 
act" is an act of congress defined in section 13, subdivision 5. 
    Sec. 2.  Minnesota Statutes 1982, section 273.77, is 
amended to read: 
    273.77 [TAX INCREMENT BONDING.] 
    Any other law, general or special, notwithstanding, after 
August 1, 1979 no bonds, payment for which tax increment is 
pledged, shall be issued in connection with any project for 
which tax increment financing has been undertaken other than as 
is authorized hereby and the proceeds therefrom shall be used 
only in accordance with section 273.75, subdivision 4 as if said 
proceeds were tax increment, except that a tax increment 
financing plan need not be adopted for any project for which tax 
increment financing has been undertaken prior to August 1, 1979, 
pursuant to statutes not requiring a tax increment financing 
plan.  Such bonds shall not be included for purposes of 
computing the net debt of any municipality. 
    (a) A municipality may issue general obligation bonds to 
finance any expenditure by the municipality or an authority the 
jurisdiction of which is wholly or partially within that 
municipality, pursuant to section 273.75, subdivision 4 in the 
same manner and subject only to the same conditions as those 
provided in chapter 475 for bonds financing improvement costs 
reimbursable from special assessments.  Any pledge of tax 
increment, assessments or other revenues for the payment of the 
principal of and interest on general obligation bonds issued 
under this subdivision, except when the authority and the 
municipality are the same, shall be made by written agreement by 
and between the authority and the municipality and filed with 
the county auditor.  When the authority and the municipality are 
the same, the municipality may by covenant pledge tax increment, 
assessments or other revenues for the payment of the principal 
of and interest on general obligation bonds issued under this 
subdivision and thereupon shall file the resolution containing 
such covenant with the county auditor.  When tax increment, 
assessments and other revenues are pledged, the estimated 
collections of said tax increment, assessments and any other 
revenues so pledged may be deducted from the taxes otherwise 
required to be levied before the issuance of the bonds under 
section 475.61, subdivision 1, or the collections thereof may be 
certified annually to reduce or cancel the initial tax levies in 
accordance with section 475.61, subdivision 1 or 3. 
     (b) When the authority and the municipality are not the 
same, an authority may, by resolution, authorize, issue and sell 
its general obligation bonds to finance any expenditure which 
that authority is authorized to make by section 273.75, 
subdivision 4.  Said bonds of the authority shall be authorized 
by its resolution, shall mature as determined by resolution of 
the authority in accordance with Laws 1979, Chapter 322, and may 
be issued in one or more series and shall bear such date or 
dates, bear interest at such rate or rates, be in such 
denomination or denominations, be in such form either coupon or 
registered, carry such conversion or registration privileges, 
have such rank or priority, be executed in such manner, be 
payable in medium of payment at such place or places, and be 
subject to such terms of redemption, with or without premium, as 
such resolution, its trust indenture or mortgage may provide.  
The bonds may be sold at public or private sale at the price or 
prices as the authority by resolution shall determine, and any 
provision of any law to the contrary notwithstanding, the bonds 
shall be fully negotiable.  In any suit, actions, or proceedings 
involving the validity of enforceability of any bonds of the 
authority or the security therefor, any bond reciting in 
substance that it has been issued by the authority to aid in 
financing a project shall be conclusively deemed to have been 
issued for such purpose, and the tax increment financing 
district within the project shall be conclusively deemed to have 
been planned, located, and carried out in accordance with the 
purposes and provisions of Laws 1979, Chapter 322.  Neither the 
authority, nor any director, commissioner, council member, board 
member, officer, employee or agent of the authority nor any 
person executing the bonds shall be liable personally on the 
bonds by reason of the issuance thereof.  The bonds of the 
authority, and such bonds shall so state on their face, shall 
not be a debt of any municipality, the state or any political 
subdivision thereof, and neither the municipality nor the state 
or any political subdivision thereof shall be liable thereon, 
nor in any event shall such bonds be payable out of any funds or 
properties other than those of the authority and any tax 
increment and revenues of a tax increment financing district 
pledged therefor. 
     (c) Notwithstanding any other law general or special, an 
authority may, by resolution, authorize, issue and sell revenue 
bonds payable solely from all or a portion of revenues, 
including but not limited to tax increment revenues and 
assessments, derived from a tax increment financing district 
located wholly or partially within the municipality to finance 
any expenditure which the authority is authorized to make by 
section 273.75, subdivision 4. The bonds shall mature as 
determined by resolution of the authority in accordance with 
Laws 1979, Chapter 322 and may be issued in one or more series 
and shall bear such date or dates, bear interest at such rate or 
rates, be in such denomination or denominations, be in such form 
either coupon or registered, carry such conversion or 
registration privileges, have such rank or priority, be executed 
in such manner, be payable in medium of payment at such place or 
places, and be subject to such terms of redemption, with or 
without premium, as such resolution, its trust indenture or 
mortgage may provide.  The bonds may be sold at public or 
private sale at the price or prices as the authority by 
resolution shall determine, and any provision of any law to the 
contrary notwithstanding, shall be fully negotiable.  In any 
suit, action, or proceedings involving the validity or 
enforceability of any bonds of the authority or the security 
therefor, any bond reciting in substance that it has been issued 
by the authority to aid in financing a project shall be 
conclusively deemed to have been issued for such purpose, and 
the tax increment financing district within the project shall be 
conclusively deemed to have been planned, located, and carried 
out in accordance with the purposes and provisions of Laws 1979, 
Chapter 322.  Neither the authority, nor any director, 
commissioner, council member, board member, officer, employee or 
agent of the authority nor any person executing the bonds shall 
be liable personally on the bonds by reason of the issuance 
thereof.  The bonds may be further secured by a pledge and 
mortgage of all or any portion of the district in aid of which 
the bonds are issued and such convenants as the authority shall 
deem by such resolution to be necessary and proper to secure 
payment of the bonds.  The bonds, and the bonds shall so state 
on their face, shall not be payable from nor charged upon any 
funds other than the revenues and property pledged or mortgaged 
to the payment thereof, nor shall the issuing authority be 
subject to any liability thereon or have the powers to obligate 
itself to pay or pay the bonds from funds other than the 
revenues and properties pledged and mortgaged and no holder or 
holders of the bonds shall ever have the right to compel any 
exercise of any taxing power of the issuing authority or any 
other public body, other than as is permitted or required under 
Laws 1979, Chapter 322 and pledged therefor hereunder, to pay 
the principal of or interest on any such bonds, nor to enforce 
payment thereof against any property of the authority or other 
public body other than that expressly pledged or mortgaged for 
the payment thereof. 
     (d) (1) In anticipation of the issuance of bonds pursuant 
to either paragraph (a), (b) or (c) of this section, the 
authority or municipality may by resolution issue and sell 
temporary bonds pursuant to paragraph (a), (b) or (c), maturing 
within not more than three years from their date of issue, to 
pay any part or all of the cost of a project.  To the extent 
that the principal of and interest on the temporary bonds cannot 
be paid when due from receipts of tax increment, assessments, or 
other funds appropriated for the purpose, they shall be paid 
from the proceeds of long-term bonds or additional temporary 
bonds which the authority or municipality shall offer for sale 
in advance of the maturity date of the temporary bonds, but the 
indebtedness funded by an issue of temporary bonds shall not be 
extended by the issue of additional temporary bonds for more 
than six years from the date of the first issue.  Long-term 
bonds may be issued pursuant to paragraph (a), (b) or (c) 
without regard to whether the temporary bonds were issued 
pursuant to paragraph (a), (b) or (c).  If general obligation 
temporary bonds are issued pursuant to paragraph (a), proceeds 
of long-term bonds or additional temporary bonds not yet sold 
may be treated as pledged revenues, in reduction of the tax 
otherwise required by section 475.61 to be levied prior to 
delivery of the obligations.  Subject to the six-year maturity 
limitation contained above, but without regard to the 
requirement of section 475.58, if any temporary bonds are not 
paid in full at maturity, in addition to any other remedy 
authorized or permitted by law, the holders may demand, in which 
case the authority or municipality shall, issue pursuant to 
paragraph (a), (b) or (c) as the temporary bonds and in exchange 
for the temporary bonds, at par, replacement temporary bonds 
dated as of the date of the replaced temporary bonds, maturing 
within one year from the date of the replacement temporary bonds 
and earning interest at the rate set forth in the resolution 
authorizing the issuance of the replaced temporary bonds, 
provided that the rate shall not exceed the maximum rate 
permitted by law at the date of issue of the replaced temporary 
bonds.  
    (2) Funds of a municipality may be invested in its 
temporary bonds in accordance with the provisions of section 
471.56, and may be purchased upon their initial issue, but shall 
be purchased only from funds which the governing body of the 
municipality determines will not be required for other purposes 
before the maturity date, and shall be resold before maturity 
only in case of emergency.  If purchased from a debt service 
fund securing other bonds, the holders of those bonds may 
enforce the municipality's obligations on the temporary bonds in 
the same manner as if they held the temporary bonds.  
    (e) Sections 13 to 20 apply to any issuance of obligations 
under this section which are subject to limitation under a 
federal limitation act as defined in section 13, subdivision 5.  
    Sec. 3.  Minnesota Statutes 1982, section 429.021, 
subdivision 1, is amended to read: 
    Subdivision 1.  [IMPROVEMENTS AUTHORIZED.] The council of a 
municipality shall have power to make the following improvements:
    (1) To acquire, open, and widen any street, and to improve 
the same by constructing, reconstructing, and maintaining 
sidewalks, pavement, gutters, curbs, and vehicle parking strips 
of any material, or by grading, graveling, oiling, or otherwise 
improving the same, including the beautification thereof and 
including storm sewers or other street drainage and connections 
from sewer, water or similar mains to curb lines. 
     (2) To acquire, develop, construct, reconstruct, extend and 
maintain storm and sanitary sewers and systems, including 
outlets, holding areas and ponds, treatment plants, pumps, lift 
stations, service connections, and other appurtenances of a 
sewer system, within and without the corporate limits. 
     (3) To construct, reconstruct, extend and maintain steam 
heating mains. 
     (4) To install, replace, extend and maintain street lights 
and street lighting systems and special lighting systems. 
     (5) To acquire, improve, construct, reconstruct, extend and 
maintain water works systems, including mains, valves, hydrants, 
service connections, wells, pumps, reservoirs, tanks, treatment 
plants, and other appurtenances of a water works system, within 
and without the corporate limits. 
     (6) To acquire, improve and equip parks, open space areas, 
playgrounds and recreational facilities within or without the 
corporate limits. 
    (7) To plant trees on streets and provide for their 
trimming, care and removal. 
    (8) To abate nuisances and to drain swamps, marshes and 
ponds on public or private property and to fill the same. 
    (9) To construct, reconstruct, extend, and maintain dikes 
and other flood control works. 
    (10) To construct, reconstruct, extend and maintain 
retaining walls and area walls. 
    (11) To acquire, construct, reconstruct, improve, alter, 
extend, operate, maintain and promote a pedestrian skyway system.
Such improvement may be made upon a petition pursuant to section 
429.031, subdivision 3.  
    (12) To acquire, construct, reconstruct, extend, operate, 
maintain and promote underground pedestrian concourses. 
    (13) To acquire, construct, improve, alter, extend, 
operate, maintain and promote public malls, plazas or courtyards.
    (14) To construct, reconstruct, extend, and maintain 
district heating systems.  
    (15) To construct, reconstruct, alter, extend, operate, 
maintain and promote fire protection systems in existing 
buildings, but only upon a petition pursuant to section 429.031, 
subdivision 3.  
    Sec. 4.  Minnesota Statutes 1982, section 429.031, 
subdivision 3, is amended to read: 
    Subd. 3.  [PETITION BY ALL OWNERS.] Whenever all owners of 
real property abutting upon any street named as the location of 
any improvement shall petition the council to construct the 
improvement and to assess the entire cost against their 
property, the council may, without a public hearing, adopt a 
resolution determining such fact and ordering the improvement.  
The validity of the resolution shall not be questioned by any 
taxpayer or property owner or the municipality unless an action 
for that purpose is commenced within 30 days after adoption of 
the resolution as provided in section 429.036. Nothing herein 
prevents any property owner from questioning the amount or 
validity of the special assessment against his property pursuant 
to section 429.081.  In the case of a petition for the 
installation of a fire protection or a pedestrian skyway system, 
the petition must contain or be accompanied by an undertaking 
satisfactory to the city by the petitioner that the petitioner 
will grant the municipality the necessary property interest in 
the building to permit the city to enter upon the property and 
the building to construct, maintain, and operate the fire 
protection or pedestrian skyway system.  In the case of a 
petition for the installation of a fire protection or pedestrian 
skyway system which will be privately owned, the petition shall 
also contain the plans and specifications for the improvement, 
the estimated cost of the improvement and a statement indicating 
whether the city or the owner will contract for the construction 
of the improvement.  If the owner is contracting for the 
construction of the improvement, the city shall not approve the 
petition until it has reviewed and approved the plans, 
specifications, and cost estimates contained in the petition. 
The construction cost financed under section 429.091 shall not 
exceed the amount of the cost estimate contained in the petition.
In the case of a petition for the installation of a fire 
protection or a pedestrian skyway system, the petitioner may 
request abandonment of the improvement at any time after it has 
been ordered pursuant to subdivision 1 and before contracts have 
been awarded for the construction of the improvement under 
section 429.041, subdivision 2.  If such a request is received, 
the city council shall abandon the proceedings but in such case 
the petitioner shall reimburse the city for any and all expenses 
incurred by the city in connection with the improvement.  
    Sec. 5.  Minnesota Statutes 1982, section 429.091, 
subdivision 2, is amended to read: 
    Subd. 2.  [TYPES OF OBLIGATIONS PERMITTED.] The council may 
by resolution adopted prior to the sale of obligations pledge 
the full faith, credit, and taxing power of the municipality for 
the payment of the principal and interest.  Such obligations 
shall be called improvement bonds and the council shall pay the 
principal and interest out of any fund of the municipality when 
the amount credited to the specified fund is insufficient for 
the purpose and shall each year levy a sufficient amount to take 
care of accumulated or anticipated deficiencies, which levy 
shall not be subject to any statutory or charter tax 
limitation.  Obligations for the payment of which the full faith 
and credit of the municipality is not pledged shall be called 
improvement warrants or, in the case of bonds for fire 
protection or pedestrian skyway systems, revenue bonds and shall 
contain a promise to pay solely out of the proper special fund 
or funds pledged to their payment.  It shall be the duty of the 
municipal treasurer to pay maturing principal and interest on 
warrants or revenue bonds out of funds on hand in the proper 
special fund funds and not otherwise. 
    Sec. 6.  Minnesota Statutes 1982, section 429.091, is 
amended by adding a subdivision to read: 
    Subd. 8.  [FEDERAL LIMITATION ACT.] Sections 13 to 20 apply 
to any issuance of obligations under this section which are 
subject to limitation under a federal limitation act as defined 
in section 13, subdivision 5.  
    Sec. 7.  Minnesota Statutes 1982, section 429.101, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ORDINANCES.] In addition to any other 
method authorized by law or charter, the governing body of any 
municipality may provide for the collection of unpaid special 
charges for all or any part of the cost of 
    (a) snow, ice, or rubbish removal from sidewalks, 
    (b) weed elimination from streets or private property, 
    (c) removal or elimination of public health or safety 
hazards from private property, excluding any structure included 
under the provisions of sections 463.15 to 463.26, 
    (d) installation or repair of water service lines, street 
sprinkling or other dust treatment of streets, 
    (e) the trimming and care of trees and the removal of 
unsound trees from any street, 
    (f) the treatment and removal of insect infested or 
diseased trees on private property, the repair of sidewalks and 
alleys, or 
    (g) the operation of a street lighting system, or 
    (h) the operation and maintenance of a fire protection or a 
pedestrian skyway system, 
as a special assessment against the property benefited.  The 
council may by ordinance adopt regulations consistent with this 
section to make this authority effective, including, at the 
option of the council, provisions for placing primary 
responsibility upon the property owner or occupant to do the 
work himself (except in the case of street sprinkling or other 
dust treatment, alley repair, tree trimming, care, and removal 
or the operation of a street lighting system) upon notice before 
the work is undertaken, and for collection from the property 
owner or other person served of the charges when due before 
unpaid charges are made a special assessment. 
    Sec. 8.  Minnesota Statutes 1982, section 430.12, is 
amended to read: 
    430.12 [BONDS FOR IMPROVEMENTS.] 
    The city council, for the purpose of realizing the funds 
for making an improvement and paying damages may, from time to 
time as may be needed, issue and sell special certificates of 
indebtedness, or special street or parkway improvement bonds, as 
they may decide, which shall entitle the holder thereof to all 
sums realized upon any assessment or, if deemed advisable, a 
series of two or more certificates or bonds against any one 
assessment, or against the assessments in two or more different 
proceedings, the principal and interest being payable at fixed 
dates out of the funds collected from the assessments, including 
interest and penalties, and the whole of the fund or funds is 
hereby pledged for the pro rata payment of the certificates or 
bonds and the interest thereon, as they severally become due.  
These certificates or bonds may be made payable to the bearer, 
with interest coupons attached, and the city council may bind 
the city to make good deficiencies in the collection up to, but 
not exceeding, the principal and interest at the rate fixed, as 
hereinafter provided, and for the time specified in section 
430.06.  If the city, because of this guaranty, shall redeem any 
certificate or bond, it shall thereupon be subrogated to the 
holder's rights.  For the purpose of this guaranty, penalties 
collected shall be credited upon deficiencies of principal and 
interest before the city shall be liable.  These certificates or 
bonds shall be sold at public sale or by sealed proposals at a 
meeting of which at least two weeks' published notice shall be 
given, to the purchaser who will pay the par value thereof at 
the lowest interest rate, and the certificates or bonds shall be 
drawn accordingly, but the rate of interest shall in no case 
exceed seven percent per annum, payable annually or 
semiannually.  The city clerk shall certify to the county 
auditor the rate of interest so determined at the first bond 
sale held for any such improvement, and interest shall be 
computed upon the assessments at this annual rate, in accordance 
with the terms of section 430.06.  In case the rate of interest 
so determined at any subsequent bond sale for the same 
improvement is greater than the rate so determined at the first 
bond sale therefor, the difference between these rates of 
interest shall be a general city charge.  
    In case the proceeds of any special certificates of 
indebtedness or special street or parkway improvement bonds are 
in excess of the amount actually necessary to make the 
improvements for which the same were issued, or in case the 
proceeds are not immediately required for the prosecution or 
completion of the improvement, these proceeds may meanwhile be 
used by the city council for the making of other improvements 
authorized under the provisions of this chapter, and the amount 
of the proceeds so used shall be replaced and made good so far 
as may be necessary from the proceeds of special certificates of 
indebtedness or special bonds issued for the purpose of making 
such other improvements.  
    Sections 13 to 20 apply to any issuance of obligations 
under this section which are subject to limitation under a 
federal limitation act as defined in section 13, subdivision 5.  
    Sec. 9.  [458.1941] [FEDERAL LIMITATION ACT.] 
    Sections 13 to 20 apply to any issuance of obligations 
under chapter 458 which are subject to limitation under a 
federal limitation act as defined in section 13, subdivision 5.  
    Sec. 10.  [459.35] [FEDERAL LIMITATION ACT.] 
    Sections 13 to 20 apply to any issuance of obligations 
under chapter 459 which are subject to limitation under a 
federal limitation act as defined in section 13, subdivision 5.  
    Sec. 11.  [462.556] [FEDERAL LIMITATION ACT.] 
    Sections 13 to 20 apply to any issuance of obligations 
under chapter 462 which are subject to limitation under a 
federal limitation act as defined in section 13, subdivision 5.  
    Sec. 12.  Minnesota Statutes 1982, section 472.09, is 
amended by adding a subdivision to read: 
    Subd. 8.  [FEDERAL LIMITATION ACT.] Sections 13 to 20 apply 
to any issuance of obligations under this section which are 
subject to limitation under a federal limitation act as defined 
in section 13, subdivision 5.  
    Sec. 13.  [474.16] [DEFINITIONS.] 
    Subdivision 1.  For the purposes of sections 13 to 20, the 
terms defined in this section have the meaning given them.  
    Subd. 2.  "Local issuer" means any home rule charter or 
statutory city, any town, any housing and redevelopment 
authority referred to in chapter 462 or any body authorized to 
exercise the powers of a housing and redevelopment authority, 
any port authority referred to in chapter 458 or any body 
authorized to exercise the powers of a port authority, any area 
or municipal redevelopment agency referred to in chapter 472, 
any county, or any other municipal authority or agency 
established pursuant to special law other than the iron range 
resources and rehabilitation board, acting as an issuer of 
obligations pursuant to law.  
    Subd. 3.  "Entitlement issuer" means a local issuer with an 
average annual previous use of $1,000,000 or more based on the 
highest annual use in three of the calendar years from 1980 to 
1983.  
    Subd. 4.  "Previous use" means the principal amount of 
obligations of a type subject to limitation under the terms of a 
federal limitation act issued by a local issuer during a 
specified period.  Prior to enactment by Congress of the United 
States of America of a federal limitation act, "previous use" 
means the principal amount of obligations of a type subject to 
limitation under the terms of section 721 of the Tax Reform Bill 
of 1984, H.R. 4170, as reported by the Ways and Means Committee 
of the United States House of Representatives on March 5, 1984, 
issued by a local issuer during a specified period.  
    Subd. 5.  "Federal limitation act" means an act of congress 
of the United States of America other than the Mortgage Subsidy 
Bond Tax Act of 1980, Public Law Number 96-499, section 1102(a) 
and amendments to it, amending the Internal Revenue Code of 
1954, to limit the aggregate amount of obligations of a 
specified type or types which may be issued by an issuing 
authority during any calendar year whose interest is exempt from 
inclusion in gross income for purposes of federal income 
taxation pursuant to section 103(a) of the Internal Revenue Code 
of 1954, as amended, and providing for an allocation of issuing 
authority by the legislature of a state.  
    Sec. 14.  [474.17] [ALLOCATION OF PRIVATE ACTIVITY BONDS.] 
    Subdivision 1.  [HIGHER EDUCATION COORDINATING BOARD 
ALLOCATION.] $30,000,000 for calendar year 1984 and $10,000,000 
for calendar year 1985 of the aggregate limit of bond issuance 
authority allocated to the state pursuant to a federal 
limitation act is allocated to the higher education coordinating 
board for the issuance of obligations pursuant to chapter 136A. 
On September 1, 1985, any unused portion of the bonding 
authority allocated to the higher education coordinating board 
shall be canceled and the authority shall be allocated pursuant 
to section 16.  If the commissioner of energy and economic 
development determines that pursuant to a federal limitation 
act, the higher education coordinating board cannot issue 
obligations whose interest is exempt from inclusion in gross 
income for purposes of federal income taxation pursuant to 
section 103(a) of the Internal Revenue Code of 1954, as amended, 
this allocation shall cancel and the allocation provided in 
subdivision 3 shall be increased to $55,000,000 for calendar 
year 1984 and to $65,000,000 for calendar year 1985.  
    Subd. 2.  [IRON RANGE RESOURCES AND REHABILITATION 
ALLOCATION.] From January 1 to August 31 of each calendar year, 
$25,000,000 of the aggregate limit of bond issuance authority 
allocated to the state for any calendar year pursuant to a 
federal limitation act is allocated to the iron range resources 
and rehabilitation commissioner.  From September 1 to October 31 
of each year, the iron range resources and rehabilitation 
commissioner may retain his allocation or a portion of it only 
if he has submitted to the department of energy and economic 
development on or before September 1 a letter which states (a) 
his intent to issue obligations pursuant to his allocation or a 
portion of it before the end of the calendar year or within the 
time period permitted by a federal limitation act and (b) a 
description of the specific project or projects for which the 
obligations will be issued, together with an application deposit 
in the amount of one percent of the amount of the remaining 
unused allocation or the portion of it pursuant to which he 
intends to issue obligations.  If the iron range resources and 
rehabilitation commissioner does not submit the required letter 
of intent and the application deposit, the amount originally 
allocated to the iron range resources and rehabilitation 
commissioner or the portion not already used not subject to a 
letter of intent shall be canceled and subject to reallocation 
in accordance with section 16.  If the iron range resources and 
rehabilitation commissioner returns for reallocation all or any 
part of his allocation on or before October 31, that portion of 
his application deposit equal to one percent of the amount 
returned shall be refunded within 30 days.  The iron range 
resources and rehabilitation commissioner may enter into a joint 
powers agreement with any other state or municipal entity which 
has authority to issue obligations subject to a federal 
limitation act whereby the other entity issues the bonds on 
behalf of the iron range resources and rehabilitation 
commissioner.  
     Subd. 3.  [DEPARTMENT OF ENERGY AND ECONOMIC DEVELOPMENT 
ALLOCATION.] From January 1 to August 31 of calendar year 1984, 
$40,000,000 and for calendar year 1985 $60,000,000 of the 
aggregate limit of bond issuance authority allocated to the 
state pursuant to a federal limitation act is allocated to the 
department of energy and economic development for use or 
allocation pursuant to section 1, clause (2).  From September 1 
to October 31 of each year, the department or any entity which 
receives an allocation from the department pursuant to section 
1, clause (2), may retain its allocation or a portion of it only 
if it has submitted to the division of the department 
responsible for administering this act on or before September 1 
a letter which states (a) its intent to issue obligations 
pursuant to its allocation or a portion of it before the end of 
the calendar year or within the time period permitted by a 
federal limitation act, and (b) a description of the specific 
project or projects for which the obligations will be issued, 
together with an application deposit in the amount of one 
percent of the amount of its remaining unused allocation or the 
portion of it pursuant to which it intends to issue 
obligations.  If the department or any entity which receives an 
allocation from the department pursuant to section 1, clause 
(2), does not submit the required letter of intent and the 
application deposit, the amount originally allocated to the 
department or any entity which receives an allocation from the 
department pursuant to section 1, clause (2), or the portion not 
already used and not subject to a letter of intent shall be 
canceled and subject to reallocation in accordance with section 
12.  If the department or any entity which receives an 
allocation from the department pursuant to section 1, clause 
(2), returns for reallocation all or any part of its allocation 
on or before October 31, that portion of its application deposit 
equal to one percent of the amount returned shall be refunded 
within 30 days.  
    Subd. 4.  [LOCAL ISSUER ALLOCATION.] Any amount of the 
aggregate limit of bond issuance authority allocated to the 
state for any calendar year pursuant to a federal limitation act 
which is not allocated pursuant to subdivisions 1 to 3 shall be 
allocated among local issuers pursuant to sections 15 to 20.  
    Sec. 15.  [474.18] [ALLOCATION AMONG ENTITLEMENT ISSUERS.] 
    Subdivision 1.  [ALLOCATION AMOUNTS.] From January 1 to 
August 31 of each calendar year, 80 percent of the amount of 
authority determined pursuant to section 14 shall be available 
solely for issuance of obligations by entitlement issuers.  
    Subd. 2.  [ALLOCATION PROCEDURE.] To obtain an allocation 
pursuant to this section, an entitlement issuer shall within 30 
days after the effective date of this act, submit to the 
department of energy and economic development a certification as 
to previous use for the four preceding calendar years, and the 
average annual previous use for the highest three of the four 
preceding calendar years.  Within 15 days thereafter, the 
department of energy and economic development shall determine 
and publish the amount of issuance authority allocated to each 
entitlement issuer which submitted the information required 
above.  The amount of authority for an issuer is the aggregate 
authority allocated to entitlement issuers pursuant to 
subdivision 1, multiplied by a fraction.  The numerator of the 
fraction is the highest three-year previous use average as 
certified by the entitlement issuer.  The denominator of the 
fraction is the combined highest three-year previous use average 
as certified by all entitlement issuers.  Local issuers with 
boundaries which are coterminous shall be treated as a single 
issuer for purposes of determining their entitlement allocation, 
if any.  
    In such cases the amount of the issuance authority to be 
allocated to each issuer shall be determined by the city council 
in the case of a city or the county board in the case of a 
county.  The entitlement issuer may allocate its entitlement 
allocation to any project for which obligations are issued or 
are to be issued after December 31, 1983, without regard to any 
preliminary resolutions which have been adopted for any project. 
    Within 15 days after the effective date of a federal 
limitation act, any issuer who submitted a certification in 
accordance with the first paragraph of this subdivision shall 
submit a new certification as to previous use as defined in 
accordance with the federal limitation act for the highest three 
of the four preceding calendar years.  Within 15 days 
thereafter, the department of energy and economic development 
shall determine and publish the revised amount of issuance 
authority allocated to each issuer that is an entitlement issuer 
that submitted the information required by this subdivision. 
Failure to submit the new certification required by this 
paragraph shall result in forfeiture of unused previously 
allocated issuance authority.  The revised amount of issuance 
authority for each entitlement issuer shall be determined in 
accordance with the first paragraph of this subdivision, but 
shall be reduced by the principal amount of obligations issued 
by the entitlement issuer prior to the date of the 
determination.  If the revised amount of issuance authority for 
any entitlement issuer is less than zero, the amount shall 
reduce the amount otherwise available for allocation pursuant to 
section 16, subdivision 1.  The principal amount of any 
obligations issued by a local issuer that does not qualify as an 
entitlement issuer based on previous use determined in 
accordance with the federal limitation act, but issued pursuant 
to an allocation published in accordance with the first 
paragraph of this subdivision, shall reduce the amount otherwise 
available for allocation pursuant to section 16, subdivision 1.  
    Subd. 3.  [LETTER OF INTENT.] From September 1 to October 
31 of each year, an entitlement issuer may retain its allocation 
or a portion of it only if it has submitted to the department of 
energy and economic development on or before September 1 a 
letter which states its intent to issue obligations pursuant to 
its allocation or a portion of it before the end of the calendar 
year or within the time period permitted by a federal limitation 
act, together with an application deposit in the amount of one 
percent of the amount of its remaining unused allocation or the 
portion of it pursuant to which it intends to issue 
obligations.  If an entitlement issuer does not submit the 
required letter of intent and the application deposit, the 
amount originally allocated to the entitlement issuer or the 
portion not already used and not subject to a letter of intent 
shall be canceled and subject to reallocation in accordance with 
section 16.  If an entitlement issuer returns for reallocation 
all or any part of its allocation on or before October 31, that 
portion of its application deposit equal to one percent of the 
amount returned shall be refunded within 30 days.  
    Subd. 4.  [JOINT POWERS.] An entitlement issuer may enter 
an agreement with a local issuer or the iron range resources and 
rehabilitation commissioner or the department of energy and 
economic development by which the local issuer or the iron range 
resources and rehabilitation commissioner or the department of 
energy and economic development issues bonds pursuant to 
issuance authority allocated to the entitlement issuer pursuant 
to this section.  The amount of the issuance shall be considered 
as issued by the issuer granting use of its allocation for 
purposes of previous use determination.  
    Sec. 16.  [474.19] [ALLOCATION OF POOL AMOUNT.] 
    Subdivision 1.  [POOL AMOUNT.] From January 1 to August 31 
of each year, 20 percent of the amount determined pursuant to 
section 14 shall be available solely for local issuers that do 
not qualify as entitlement issuers and shall be allocated as 
provided in this section.  From September 1 to October 31 of any 
calendar year, any amounts remaining available for allocation or 
reallocation pursuant to section 15 or this section shall be 
allocated among all local issuers and the department of energy 
and economic development and the iron range resources and 
rehabilitation commissioner, pursuant to this section.  An 
entitlement issuer, the department of energy and economic 
development or the iron range resources and rehabilitation 
commissioner may apply for an allocation pursuant to this 
section only if the applicant has issued bonds equal to any 
allocation received pursuant to section 14 or 15 or has returned 
any remaining allocation for reallocation pursuant to this 
section.  
    Subd. 2.  [APPLICATION.] A local issuer that is not an 
entitlement issuer may apply for an allocation of bond issuance 
authority pursuant to this section by submitting to the 
department of energy and economic development on or before the 
20th day of any month from December to September an application 
on forms provided by the department of energy and economic 
development, accompanied by (i) a resolution of the local issuer 
expressing a preliminary intention to issue obligations adopted 
in accordance with section 474.01, subdivision 7b, if 
applicable, which identifies the proposed project and the 
proposed amount of the obligations to be issued; and (ii) an 
application deposit in the amount of one percent of the 
requested allocation.  A local issuer may enter into a joint 
powers agreement with any other state or municipal entity which 
has authority to issue obligations subject to a federal 
limitation act whereby the other entity issues the bonds on 
behalf of the local issuer for the project for which an 
allocation was received by the local issuer.  A local issuer may 
request an allocation for obligations issued prior to the 
effective date of this subdivision.  A local issuer may elect 
not to submit an application for an allocation of bond issuance 
authority for a project for which the local issuer previously 
adopted a preliminary resolution.  
    After July 31 of any year, an entitlement issuer may also 
apply for an allocation under this section.  Its application 
need not comply with clause (i).  
    Subd. 3.  [ALLOCATION CRITERIA.] The department of energy 
and economic development shall rank each application on the 
basis of the number of points awarded to it, with one point 
being awarded for each of the following criteria satisfied:  
    (1) The current rate of unemployment for the applicant is 
at or above 110 percent of the statewide average unemployment 
rate for the previous year, as determined by the department of 
economic security.  The unemployment rate for the applicant 
shall be the greater of (i) the most recent estimate available 
for the smallest jurisdiction which wholly includes the 
jurisdiction of the applicant, as reported by the department of 
economic security, or (ii) another estimate supplied by the 
applicant with respect to its jurisdiction, which is documented 
by the applicant. 
    (2) The number of individuals employed in the applicant's 
jurisdiction declined from the second calendar year before the 
application, to the first calendar year before the application. 
The estimate of the number of individuals employed for each year 
shall be based on the same source, and shall be (i) the most 
recent estimate available for the smallest jurisdiction which 
wholly includes the applicant, as reported by the department of 
economic security, or (ii) another estimate supplied by the 
applicant with respect to its jurisdiction, which is documented 
by the applicant.  
    (3) The number of jobs to be created by the project 
described in the application is at least 1/10 of one percent of 
the number of individuals employed in the applicant's 
jurisdiction in the first calendar year before the application 
as determined in the manner provided in clause (2). 
     (4) The number of jobs to be created by the project 
described in the application is at least two jobs for each 
$100,000 of issuance authority requested for the project.  
     (5) As of the date of application the total market value of 
all taxable property in the applicant's jurisdiction, as based 
on the most recent certification of assessed value to the 
commissioner of revenue, has either (i) declined in relation to 
the first calendar year before the certification, or (ii) 
increased in relation to the first calendar year before the 
certification at a rate which is not in excess of 90 percent of 
the rate of increase of the state average market value over the 
same period. 
     (6) The estimated market value of the project described in 
the application is at least one-half of one percent of the total 
market value of all taxable property in the applicant's 
jurisdiction as based on the most recent certification of 
assessed value to the commissioner of revenue.  
     (7) The project is wholly located in an enterprise zone 
designated pursuant to section 273.1312. 
     (8) The project site meets the criteria necessary to 
qualify as a tax increment redevelopment district as defined in 
section 273.73, subdivision 10.  To qualify under this clause 
the project need not be included in a tax increment financing 
district.  
     (9) The project meets one of the following energy 
conservation criteria:  (i) the project is eligible for the 
additional federal investment tax credits for energy property, 
(ii) the project involves construction or expansion of a 
district heating system as defined in section 116J.36, or (iii) 
the project involves construction of an alternative energy 
source as described in section 116J.26, clause (a), (b), or (d), 
or 116J.922, subdivision 6 or 7. 
     (10) Ninety percent or more of the proceeds of the proposed 
obligations will be used for construction, installation, or 
addition of equipment used primarily to abate or control 
pollutants to meet or exceed state laws, rules, or standards. 
     (11) The project consists of the renovation, 
rehabilitation, or reconstruction of an existing building which 
is (i) located in a historic district designated under section 
138.73, or on a site listed in the state registry of historical 
sites under sections 138.53 to 138.5819; or (ii) designated in 
the National Register pursuant to United States Code, title 16, 
section 470a.  
    (12) Ninety percent or more of the proceeds of the proposed 
obligations will be used to finance facilities for waste 
management as defined in section 115A.03, subdivision 36, or 
solid waste as defined in section 116.06, subdivision 10.  
    (13) Service connections to sewer and water systems are 
available to the project at the time the application is 
submitted.  
     (14) The minority population in the applicant's 
jurisdiction is at least 110 percent of the statewide average as 
determined by the affirmative action division of the department 
of economic security according to the most recent census data.  
    (15) When the application is submitted either (a) neither 
the anticipated owner of the project, nor any party of which the 
owner was a controlling partner or shareholder, or which was a 
controlling shareholder or partner of the owner, owned or 
operated a substantially similar business within the state or 
(b) the project is an expansion of the operations of an existing 
business which is not likely to have the effect of transferring 
existing employment from one or more other municipalities within 
the state to the municipality in which the project is located.  
    (16) A controlling interest in the project will be owned by 
one or more women or minority persons.  
    (17) Seventy-five percent or more of the proceeds of the 
proposed issue will be used to rehabilitate an existing 
structure.  
    (18) At the time of application, the property on which the 
project is to be located is properly zoned for the proposed use. 
    (19) The bond issue involves a credit enhancement device 
providing additional security for bondholders involving 
commitments or fees to be paid by the issuer other than from 
bond proceeds.  No points shall be awarded for credit 
enhancement devices financed directly or indirectly by a 
private, for-profit party which has a financial interest in or 
is related to any party which has a financial interest in the 
project.  
    Subd. 4.  [ALLOCATION PROCEDURE.] The department of energy 
and economic development shall allocate available issuance 
authority to applications by the fifth day of the month 
succeeding each application deadline specified in subdivision 2 
on the basis of the numerical rank determined pursuant to this 
section, but (i) no allocation shall be awarded to an 
application demonstrating less than four points, (ii) any 
project which is authorized by chapter 115A, chapter 400, or 
sections 473.801 to 473.834, shall receive an allocation of 
issuance authority without regard to its numerical rank to the 
extent that the amount of issuance authority allocated to the 
project when added to the issuance authority previously 
allocated during the calendar year pursuant to this clause does 
not exceed 49 percent of the amount provided in subdivision 1, 
provided that if obligations for any project described in this 
clause are not subject to a federal limitation act, no 
allocation shall be made pursuant to this clause, (iii) if on or 
before September 1, the department of energy and economic 
development returns a portion of its allocation for reallocation 
pursuant to this section, and the iron range resources and 
rehabilitation commissioner has issued obligations in an amount 
equal to its allocation or has submitted a letter of intent for 
any amount not issued, applications from the iron range 
resources and rehabilitation commissioner which demonstrate four 
or more points shall receive an allocation up to an amount equal 
to $10,000,000 or the amount returned for reallocation by the 
department of energy and economic development or the amount 
remaining to be allocated, whichever is less, (iv) if on or 
before September 1, the iron range resources and rehabilitation 
commissioner returns a portion of his allocation for 
reallocation pursuant to this section, and the department of 
energy and economic development has issued obligations in an 
amount equal to its allocation or has submitted a letter of 
intent for any amount not issued, applications from the 
department of energy and economic development which demonstrate 
four or more points shall receive an allocation up to an amount 
equal to $10,000,000 or the amount returned for reallocation by 
the iron range resources and rehabilitation commissioner or the 
amount remaining to be allocated, whichever is less, and (v) if 
two or more applications have the same numerical rank, the 
allocation of issuance authority as between the applications 
shall be by lot unless otherwise agreed by the respective local 
issuers.  If an application is rejected, the department of 
energy and economic development shall return the application 
deposit to the applicant within 30 days.  
    Subd. 5.  [LETTER OF INTENT.] A local issuer which has 
received an allocation pursuant to this section prior to 
September 1 and which intends to issue obligations pursuant to 
it after August 31 of the year in which the allocation was 
received, shall submit to the department of energy and economic 
development on or before September 1 a letter stating its intent 
to issue bonds before the end of the calendar year or within the 
time period permitted by a federal limitation act.  If the 
letter of intent is not submitted to the department of energy 
and economic development, the one percent application deposit 
shall be returned to the local issuer, the issuance authority 
shall be canceled, and the issuance authority previously 
allocated to the local issuer will be available for reallocation 
pursuant to this section.  If a local issuer returns for 
reallocation all or any part of its allocation on or before 
October 31, that portion of its application deposit equal to one 
percent of the amount returned shall be refunded within 30 days. 
    Subd. 6.  [FINAL ALLOCATION.] From November 1 to December 
31 of each year any amount determined pursuant to section 14, 
which is not both previously allocated and subject to a 
preliminary resolution for a specific project, whether or not 
committed pursuant to a letter of intent, shall be allocated 
among local issuers based on a ranking of points for criteria as 
set forth in subdivisions 3 and 4.  No minimum number of points 
shall be required for allocation.  If two or more applications 
receive an equal number of points, allocation among them shall 
be made by lot unless otherwise agreed by the respective 
applicants.  An application for this allocation shall be 
submitted by October 20, shall include evidence of passage of a 
preliminary resolution giving approval to a specific project and 
stating that it is the intent of the applicant that the 
obligations will be issued by the end of the year or within the 
time period permitted by a federal limitation act, and shall be 
accompanied by an application deposit in the amount of one 
percent of the requested allocation.  The department of energy 
and economic development shall notify applicants of their 
allocation on or before November 5.  
    Any amounts of authority which may become available for 
reallocation after November 5 shall be allocated among issuers 
which filed an application by October 20, pursuant to the 
criteria stated in subdivision 3. 
    Subd. 7.  [CARRYOVER ALLOCATION.] If prior to December 20 
of any year, an issuer determines that it will not issue 
obligations pursuant to authority allocated to it pursuant to 
this section or section 10 or 11 by the end of that year or 
within the time period permitted by a federal limitation act, 
the issuer may notify the department of energy and economic 
development and such amount will be available for reallocation 
pursuant to this subdivision.  In such case, the department of 
energy and economic development shall refund to the issuer 
within 30 days that portion of any application deposit equal to 
one-third of one percent of the amount returned for 
reallocation.  The amounts available for reallocation shall be 
allocated on or before December 31 of each year among issuers 
which have submitted an application by December 10, and which 
have certified that the project to which the application relates 
qualifies for carryover treatment of allocated authority 
according to the terms of a federal limitation act, such that 
obligations may be issued pursuant to such allocation of 
authority after the end of the year, without expiration of such 
authority.  If there is insufficient authority for allocation 
among applications received pursuant to this subdivision, 
allocation among them shall be made by lot unless otherwise 
agreed by the respective applicants.  
    Sec. 17.  [474.20] [NOTICES REQUIRED.] 
     Subdivision 1.  [NOTICE OF ISSUE.] Any issuer of 
obligations subject to limitation under a federal limitation act 
shall give a notice of issue stating the date of issuance of the 
obligations, the allocation under which the obligations are 
issued, and the principal amount of the obligations to the 
department of energy and economic development within five days 
after the obligations are issued.  If the notice of issue is not 
filed within five days after the obligations are issued, the 
obligations shall be void unless this provision is waived by the 
commissioner of the department of energy and economic 
development.  Within 30 days after receipt of the notice, the 
department of energy and economic development shall refund a 
portion of any application deposit equal to one percent of the 
principal amount of the obligations issued.  
    Subd. 2.  [NOTICE OF AVAILABLE AUTHORITY.] The department 
of energy and economic development shall as soon as possible 
after the fifth day of each month publish in the State Register 
a notice of the amount of authority available for allocation or 
reallocation in the following month as of the fifth day of the 
month during which the notice is published, after allocation of 
authority pursuant to section 16.  
    Sec. 18.  [474.21] [APPLICABILITY TO OTHER CHAPTERS.] 
    Sections 13 to 20 apply to any issuance of obligations 
subject to limitation under a federal limitation act, whether 
issued under sections 474.01 to 474.13, or other law.  
    Sec. 19.  [474.22] [LEGISLATIVE REVIEW.] 
    On March 1, 1986, the department of energy and economic 
development shall deliver a comprehensive report to the 
secretary of the senate and the clerk of the house which 
provides detailed information concerning the allocation of 
issuing authority pursuant to sections 13 to 20.  
    Sec. 20.  [474.23] [ADDITIONAL CONDITIONS.] 
    If a federal limitation act as defined in section 13, 
subdivision 5, is adopted, action under chapter 474 with respect 
to any project which is to be financed by obligations which are 
subject to a federal limitation act shall be subject to the 
following conditions:  
    (a) No municipality or redevelopment agency shall undertake 
any project, except a project referred to in section 474.02, 
subdivision 1f, unless its governing body finds that the project 
would not be undertaken but for the availability of industrial 
development bond financing. 
     (b) Notwithstanding any provision of this chapter, the term 
"project" shall not include:  an airplane; a private luxury box; 
a facility primarily used for gambling; or a store the principal 
business of which is the sale of alcoholic beverages for 
consumption off premises.  
     (c) No more than ten percent of the proceeds of revenue 
bonds may be used to finance movable equipment not constituting 
a fixture, no more than 25 percent of the proceeds of revenue 
bonds may be used to finance the acquisition of land, and not 
more than $10,000,000 in revenue bonds which are industrial 
development bonds subject to the exemption described in section 
103(b)(6) of the Internal Revenue Code of 1954, as amended 
through December 31, 1983, may be issued with respect to any one 
building which is used for commercial, office or industrial 
purposes, without regard to ownership of condominium units 
within the building.  
    This section takes effect 90 days after the federal 
limitation act is signed by the president or passed over his 
veto.  
    Sec. 21.  [475.77] [OBLIGATIONS SUBJECT TO FEDERAL 
LIMITATION ACT.] 
    Sections 13 to 20 apply to any issuance of obligations 
which are subject to limitation under a federal limitation act 
as defined in section 13, subdivision 5.  
    Sec. 22.  [474.24] [ORDER OF THE GOVERNOR.] 
    If for any reason the provisions of this act do not become 
effective insofar as they provide for an allocation of issuing 
authority by the legislature of the state under a federal 
limitation act and if the governor may under the federal 
limitation act effect the allocation, the governor may provide 
for the allocation but only in accordance with the terms and 
conditions of this act.  
    Sec. 23.  [REPEALER.] 
    Sections 1, 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 
20, 21, and 22 are repealed effective January 1, 1986.  
    Sec. 24.  [EFFECTIVE DATE.] 
    This act is effective the day after final enactment. 
    Approved April 26, 1984