Minnesota Session Laws - 1984, Regular Session

  

                         Laws of Minnesota 1984 

                        CHAPTER 583-H.F.No. 1775 
           An act relating to energy and economic development; 
          energy and economic development authority; adding 
          definitions; clarifying duties and powers of the 
          energy and economic development authority; correcting 
          statutory references; amending Minnesota Statutes 
          1982, sections 116J.88, as amended; 116J.89, 
          subdivision 4; 116J.90, by adding a subdivision; 
          116J.91, subdivisions 15, 17, 18, and by adding a 
          subdivision; 474.01, subdivisions 7 and 7a; Minnesota 
          Statutes 1983 Supplement, sections 116J.89, 
          subdivisions 1, 1a, 1b, 1c, 2, 6, and 8; 116J.90, 
          subdivisions 1, 2, 3, 5, and 6; 116J.91, subdivisions 
          1, 4, 11, 12, 16, 19, and 20; 116J.923, subdivision 7; 
          116J.924, subdivision 3; 116J.925, subdivisions 1 and 
          3; 275.125, subdivision 12a; Laws 1983, chapter 323, 
          section 5, subdivision 2; proposing new law coded as 
          Minnesota Statutes, chapter 116M; repealing Minnesota 
          Statutes 1983 Supplement, sections 116J.922; 116J.923, 
          subdivisions 2 and 12; and 116J.924, subdivision 1. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
   Section 1.  Minnesota Statutes 1982, section 116J.88, as 
amended by Laws 1983, chapter 289, sections 63, 64, 65, 66, 67, 
68, and 69, is amended to read: 
    116J.88 [SMALL BUSINESS FINANCE AGENCY, MINNESOTA ENERGY 
AND ECONOMIC DEVELOPMENT AUTHORITY; DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] Each term defined in this section 
has the meaning given it whenever used in sections 116J.63 and 
116J.88 116J.875 to 116J.91 116J.926.  
    Subd. 2.  [AUTHORITY.] "Authority" means the Minnesota 
energy and economic development authority created in section 
116J.89. 
    Subd. 3a.  [BUSINESS.] "Business" means any person engaged 
in a trade or business of any nature that is operated for profit 
or not for profit.  
    Subd. 4.  [ELIGIBLE SMALL BUSINESS.] "Eligible small 
business" means an enterprise determined by the authority to 
constitute a small business concern as defined in regulations of 
the United States small business administration pursuant to 
United States Code, title 15, sections 631 to 647, as amended 
from time to time. 
    Subd. 4a.  [PERSON.] "Person" means any person, including 
individuals, firms, partnerships, associations, societies, 
trusts, public or private corporations, or other legal entities, 
including public or governmental bodies as well as natural 
persons.  "Person" includes the plural as well as the singular.  
    Subd. 5.  [TARGETED SMALL BUSINESS.] "Targeted small 
business" for the purpose of section 116J.90, subdivision 5, 
means a business entity organized for profit, including but not 
limited to any individual, partnership, corporation, joint 
venture, association, or cooperative, which entity business: 
    (a) has 20 or fewer full-time employees or not more than 
the equivalent of $1,000,000 in annual gross revenues in the 
preceding fiscal year; and 
    (b) is not at least 20 percent owned by a business dominant 
in its field of operation, or by partners, officers, directors, 
majority stockholders, or their equivalent, of a business 
dominant in its field of operation.  For the purpose of this 
subdivision, "dominant in its field of operation" means having 
more than 20 full-time employees and more than $1,000,000 in 
annual gross revenues. 
    "Targeted small business" includes may include a farm 
business engaged in farming, agricultural production or 
processing, or storage of agricultural products.  
    Subd. 6.  [FINANCIAL INSTITUTION.] "Financial institution" 
means a bank, bank or trust company, trust company, mortgage 
company, credit union, mortgage banker, national banking 
association, savings bank, savings association, savings and loan 
association, building and loan association, insurance company, 
securities broker-dealer, financial organizations relating to 
commercial credit or venture capital, or a lender certified by 
the secretary of housing and urban development or by the 
administrator of veterans affairs, or approved or certified by 
the administrator of the farmers home administration or any 
other financial or lending institution, whether organized under 
federal law or the laws of any state of the United States, and 
whether located within or without this state. 
    Subd. 6a.  [LOANS.] "Loans" means any of the following 
types of loans:  business loans, small business loans, pollution 
control loans, energy loans, and farm loans.  
    Subd. 7.  [BUSINESS LOAN.] "Business loan" means a loan, 
other than a pollution control loan, energy loan, or farm loan, 
to the owner of an eligible small a business for the financing 
of (a) capital expenditures, on an interim or long-term basis, 
for the acquisition or improvement of land, acquisition, 
construction, rehabilitation, removal, or improvement of 
buildings, or acquisition and installation of fixtures and 
equipment useful for the conduct of the business, including all 
facilities of a capital nature useful or suitable for any 
business engaged in any enterprise promoting employment (or any 
of the other purposes listed below), including, without 
limitation, those facilities included within the meaning of the 
term "project" as defined in section 474.02, subdivisions 1 to 
1f and section 474.03, subdivision 4; or 
    (b) short-term costs of conducting an eligible small 
business. 
    Subd. 7a.  [FARM LOAN.] "Farm loan" means a loan to a farm 
business for the acquisition, installation, improvement, 
construction, rehabilitation, or removal of buildings, or 
acquisition and installation of fixtures or equipment, useful 
for the conduct of a farm business. 
    Subd. 8.  [POLLUTION CONTROL LOAN.] "Pollution control 
loan" means a loan to an eligible small a business for the 
acquisition, construction, or improvement of pollution control 
facilities or operations.  Pollution control facilities or 
operations may include real and personal property likely to help 
prevent, reduce, abate, or control noise, air, or water 
pollution or contamination by removing, altering, disposing, or 
storing pollutants, contaminants, wastes, or heat, and real and 
personal property to be used for the collection, storage, 
treatment, utilization, processing, or final disposal of solid 
or liquid waste.  
    Subd. 9.  [FUND FUNDS.] "Fund" "Funds" means the group of 
funds controlled by the authority, including the economic 
development fund created by section 116J.89, subdivision 1c, the 
energy loan insurance fund created by section 116J.924, and the 
energy development fund created by section 116J.925. 
    Subd. 10.  [ENERGY LOAN.] "Energy loan" means a loan or 
advance of credit, to finance a "qualified energy project" as 
defined in this section.  
    Subd. 11.  [SMALL BUSINESS LOAN.] "Small business loan" 
means a loan to a business that is an "eligible small business" 
or a "targeted small business" for the financing of (a) capital 
expenditures on an interim or long-term basis for the 
acquisition or improvement of land, acquisition, construction, 
rehabilitation, removal, or improvement of buildings, or the 
acquisition and installation of fixtures and equipment useful to 
conduct a small business, including all facilities of a capital 
nature useful or suitable for any business engaged in any 
enterprise promoting employment including, without limitation, 
those facilities included within the meaning of the term 
"project" as defined in section 474.02, subdivisions 1 to 1f and 
section 474.03, subdivision 4; or (b) short-term costs of 
conducting a small business.  
    With respect to financing the capital expenditure or 
facility or short-term costs, if the authority determines that 
the expenditure, facility, or costs will accomplish one or more 
of the following purposes:  tend to maintain or provide gainful 
employment opportunities within or for the people of Minnesota; 
aid, assist, and encourage the economic development or 
redevelopment of any political subdivision of Minnesota; or 
maintain or diversify and expand employment promoting enterprise 
within Minnesota.  
    Subd. 12.  [CONSERVATION.] "Conservation" means a product 
or system designed to reduce the amount of energy needed for an 
energy-consuming activity or process.  Conservation includes but 
is not limited to thermal insulation and air infiltration 
control in buildings, products, or methods that reduce energy 
consumption for transportation or soil tillage practices, 
improvements in combustion efficiency or heat transfer 
efficiency in boilers, furnaces, or direct-fired process 
heaters, and changes to industrial production equipment that 
result in lower energy use per unit of output.  
    Subd. 13.  [MUNICIPALITY.] "Municipality" means a city, 
town, county, school district, special taxing district, or a 
municipal power agency governed by chapter 453, or a group or 
combination of those units operating under an agreement to 
jointly undertake projects authorized by sections 116J.921 to 
116J.926.  
    Subd. 14.  [ALTERNATIVE ENERGY RESOURCE.] "Alternative 
energy resource" means a source of energy available from 
indigenous Minnesota resources including but not limited to 
peat, biomass, solar energy, wind, municipal wastes, 
agricultural or forestry wastes, hydropower, and agricultural 
crops suitable for conversion to an energy fuel.  
    Subd. 15.  [RENEWABLE ENERGY RESOURCE.] "Renewable energy 
resource" means a source of energy occurring in Minnesota which, 
when consumed for energy purposes, is replaced within a matter 
of days, months, or years by new or additional supplies of the 
energy source.  Renewable energy resources include, but are not 
limited to, forestry products and forest harvest residues, solar 
energy, wind energy, waterpower, and agricultural wastes.  
    Subd. 16.  [ENERGY RECOVERY.] "Energy recovery" means the 
extraction of energy from materials, components, or processes 
which would normally represent wasted energy resources. 
Municipal solid wastes, volatile sewer gases, and power plant 
waste heat, among others, offer the potential for energy 
recovery.  
    Subd. 17.  [RESOURCE RECOVERY.] "Resource recovery" means 
the cost effective collection, extraction, or reuse of resources 
from materials, components, or processes which would normally 
represent wasted resources or energy, such collection, 
extraction or reuse to result in a lesser energy intensity than 
would be required to produce the same product from any non-waste 
materials.  
    Subd. 18.  [QUALIFIED ENERGY PROJECT.] "Qualified energy 
project" means acquiring, installing, rehabilitating or 
constructing land, buildings, capital improvements, or equipment 
for (1) conservation of energy or use of alternative or 
renewable energy resources in the operation of a business, (2) 
recovery or production from alternative or renewable resources 
of energy to be sold in the course of business, (3) production 
for sale in the course of business of equipment for the 
conservation or recovery of energy or for the use of energy from 
alternative or renewable resources, (4) creation of facilities 
to manufacture or fabricate devices and equipment for the 
conservation or recovery of energy or to obtain energy from 
alternative or renewable energy resources, if the equipment is 
for sale in the course of business, (5) manufacture of products 
by means of resource recovery for sale in the ordinary course of 
business.  
    Sec. 2.  Minnesota Statutes 1983 Supplement, section 
116J.89, subdivision 1, is amended to read:  
    Subdivision 1.  [CREATION; SUCCESSOR STATUS.] The small 
business finance agency created by Laws 1980, chapter 547, is 
renamed the Minnesota energy and economic development authority 
and may act on behalf of the state within the scope of the 
powers granted to it in sections 116J.88 116J.875 to 116J.91 
116J.926 to implement loan programs and to provide financial 
assistance under the economic development fund funds by which, 
the authority alone or in cooperation with cities, towns, 
counties, and private or public lenders, may provide adequate 
funds or incentives to financing such as guarantees or insurance 
on sufficiently favorable terms to assist and encourage the 
establishment, maintenance, and growth of eligible small 
businesses and or employment opportunities in Minnesota, and to 
reduce to a manageable level the cost of the control of 
pollution and disposal of waste resulting from the operations of 
eligible small businesses and to improve the efficiency of 
energy use by businesses and to encourage businesses to provide 
a reliable and economic supply of energy for use by the state's 
households, business establishments, and municipalities, through 
energy conservation, the production or recovery of energy from 
alternative or renewable energy resources, or the production of 
equipment or products which conserve, produce, or recover energy.
    The authority so named is the legal successor in all 
respects of the small business finance agency as originally 
named and constituted and all bonds, resolutions, contracts, and 
liabilities of that original agency are the bonds, resolutions, 
contracts, and liabilities of the authority as so renamed and 
reconstituted.  
    Because of its ability to pool or combine loans to be 
funded from one or more issues of bonds, whether or not the 
interest on the bonds is exempt from federal income taxes, the 
authority will be able to spread its financing costs among the 
eligible small businesses to which the authority provides 
financing recipients of its financial assistance, thereby 
reducing the costs incurred by each eligible small business to 
the recipients of the authority's financial assistance. 
    Sec. 3.  Minnesota Statutes 1983 Supplement, section 
116J.89, subdivision 1a, is amended to read:  
    Subd. 1a.  [USE OF ECONOMIC DEVELOPMENT FUND FUNDS.] In 
addition, The authority may use the energy loan insurance fund 
as provided in section 116J.924.  The authority may use the 
economic development fund in connection with small business 
loans, pollution control loans, and farm loans to provide 
financial assistance to eligible small businesses; it may use 
the economic development fund in connection with business loans 
when the loans are made as a part of the special assistance 
program under section 116J.90, subdivision 5a; and the authority 
may use the energy development fund in connection with energy 
loans to provide financial assistance to businesses; as follows: 
    (a) to provide loan guarantees or insurance, in whole or in 
part, to eligible small businesses in connection with business 
loans, small business loans, energy loans, farm loans, or 
pollution control loans;  
    (b) to provide direct loans to eligible small businesses in 
connection with business loans, small business loans, energy 
loans, farm loans, or pollution control loans;  
    (c) to participate in other investment programs as 
appropriate under the terms of sections 116J.65, 116J.67, 
116J.88 116J.875 to 116J.91 116J.926, and chapters 472 and 474;  
    (d) to purchase loan packages made to eligible small 
businesses by financial institutions in the state in connection 
with business loans, small business loans, energy loans, farm 
loans, or pollution control loans;  
    (e) to enter into or to pay fees on insurance contracts, 
letters of credit, municipal bond insurance, surety bonds, or 
similar obligations and other agreements or contracts with 
financial institutions or providers of similar services;  
    (f) to guarantee or insure bonds and notes issued by the 
authority, in whole or in part; 
    (g) to make interest subsidy payments on behalf of eligible 
small businesses to be applied to the payment of interest on 
bonds or notes of the authority equal to the difference in 
interest payable on loans and the interest payable on bonds or 
notes of the authority where the proceeds of these bonds or 
notes are used to make or participate in making these loans;  
    (h) for any legal purpose or program of the authority, 
including without limitation the payment of the cost of issuing 
authority bonds and notes and authority administrative costs and 
expenses.  
    In addition, the authority may use the economic development 
fund to purchase, lease, or license technology-related products 
for education or training or to participate in programs where 
technology-related products are purchased, leased, or licensed.  
    (g) The authority may create separate accounts within any 
of the fund funds for use in accordance with the separate 
purposes listed in this section and may irrevocably pledge and 
allocate moneys on deposit in any of the fund funds to the 
accounts for the purposes.  The authority may make contracts 
with note and bond holders, trustees for them, financial 
institutions, or other persons interested in the disposition of 
moneys in the fund funds or its their accounts with respect to 
the conditions upon which money in the any fund or its accounts 
is to be held, invested, applied, and disposed of and the use of 
the fund and its accounts and the termination of accounts.  The 
authority may determine to leverage amounts in accounts to be 
used to guarantee or insure bonds and notes of the authority or 
loans to eligible small businesses and may covenant as to the 
rate of leveraging with holders of the authority's bonds and 
notes or any trustee for them, financial institutions, or other 
persons.  Money in the fund funds and its their accounts shall, 
consistent with contracts with holders of the authority's bonds 
and notes or any trustee for them, financial institutions, or 
other interested persons, be invested in accordance with section 
116J.91, subdivision 15, and the investment income from them, 
absent contractual provisions to the contrary, shall be added to 
and retained in the fund funds or its their accounts if provided 
by the authority.  The repayments to the authority of any direct 
loans made by the authority from money in the fund funds or its 
their accounts shall be paid by the authority into the 
particular fund that was used in conjunction with the loan being 
repaid, or, as provided by the authority, into an account.  The 
authority may collect fees, initially or from time to time, or 
both, with respect to any direct loan it extends or any 
insurance or guarantee it grants.  The authority may enter into 
contracts and security instruments with eligible small 
businesses, with bond and note holders or any trustee for them, 
or financial institutions or other persons to provide for and 
secure the repayment to the authority of money provided by the 
authority from the fund funds or its their accounts for direct 
loans or which have been paid by the authority from the fund or 
accounts pursuant to an authority guarantee or insurance.  
    The state covenants with all holders of the authority's 
bonds and notes, financial institutions, and other persons 
interested in the disposition of money in the fund funds or its 
their accounts, which money the authority has irrevocably 
pledged and allocated for any authorized purpose described in 
this subdivision, that the state will not take any action to 
limit the effect of the pledge and allocation and will not take 
any action to limit the effect of contracts entered into as 
authorized in this subdivision with respect to the pledge and 
allocation and will not limit or alter the rights vested in the 
authority or the state to administer the application of money 
pursuant to the pledge and allocation and to perform its 
obligations under the contracts.  The authority may include and 
recite this covenant of the state in any of its bonds or notes 
benefitting from the pledge and allocation or contracts or 
related documents or resolutions;.  
    (h) to enter into contract with note and bond holders or 
other persons interested in the disposition of the fund; and 
    (i) for any legal purpose or program of the authority, 
including without limitation the payment of the cost of issuing 
authority bonds and notes and authority administrative costs and 
expenses.  
    Sec. 4.  Minnesota Statutes 1983 Supplement, section 
116J.89, subdivision 1b, is amended to read: 
    Subd. 1b.  [ECONOMIC DEVELOPMENT FUNDS; PREFERENCES.] (a) 
The following eligible small businesses have preference among 
all business applicants for financial assistance from the 
economic development fund:  
    (1) businesses located in areas of the state that are 
experiencing the most severe unemployment rates in the state;  
    (2) eligible small businesses that are likely to expand and 
provide additional permanent employment;  
    (3) businesses located in border communities that 
experience a competitive disadvantage due to location;  
    (4) businesses that have been unable to obtain traditional 
financial assistance due to a disadvantageous location, minority 
ownership, or other factors rather than due to the business 
having been considered a poor financial risk;  
    (5) businesses that utilize state resources, thereby 
reducing state dependence on outside resources, and that produce 
products or services consistent with the long-term social and 
economic needs of the state;  
    (6) businesses located in designated enterprise zones, as 
described in section 273.1312, subdivision 4; and 
    (7) business located in federally designated economically 
distressed areas.  
    (b) Except in connection with the issuance of authority 
bonds or notes, the authority may not invest the fund funds in a 
program that does not have financial participation from the 
private sector, as determined by the authority.  
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 
116J.89, subdivision 1c, is amended to read:  
    Subd. 1c.  [CREATION OF ECONOMIC DEVELOPMENT FUND.] There 
is created the economic development fund to be administered by 
the authority.  All money in the fund is appropriated to the 
authority to accomplish the authority's business development 
purposes.  
    The money in the economic development fund must be used as 
provided in sections 116J.65, 116J.67, 116J.875 to 116J.926, and 
chapters 472 and 474, to provide financial assistance to 
businesses, eligible small businesses, targeted small 
businesses, and farm businesses.  This financial assistance 
includes business loans, pollution control loans, small business 
loans, and farm loans and the purchasing, leasing, or licensing 
of technology-related products or rights to the products.  
    Sec. 6.  Minnesota Statutes 1983 Supplement, section 
116J.89, subdivision 2, is amended to read: 
    Subd. 2.  [PUBLIC PURPOSES.] Sections 116J.88 to 116J.91 
and sections 116J.921 116J.875 to 116J.926 are enacted to 
promote the welfare and prosperity of the state by maintaining 
and increasing the career and job opportunities of its citizens; 
by reducing, controlling, and preventing environmental pollution 
and waste of energy and other resources; and by protecting and 
enhancing the tax base on which state and local governments 
depend for the financing of public services. 
    Sec. 7.  Minnesota Statutes 1982, section 116J.89, 
subdivision 4, is amended to read:  
    Subd. 4.  The state pledges and agrees with all holders of 
obligations of the agency authority that it will not limit or 
alter the rights vested in the agency authority to fulfill their 
terms, and will not in any way impair the rights or remedies of 
the holders, until all of the obligations and interest on them, 
with interest on any unpaid installments of interest and all 
costs and expenses in connection with any action or proceeding 
by or on behalf of such holders to enforce the payment and other 
provisions of the obligations, are fully met and discharged.  
The agency authority is authorized to include and recite this 
pledge and agreement of the state in any obligation or related 
document. 
    Sec. 8.  Minnesota Statutes 1983 Supplement, section 
116J.89, subdivision 6, is amended to read:  
    Subd. 6.  The property of the agency authority and its 
income and operation shall be exempt from all taxation by the 
state or any of its political subdivisions. 
    Sec. 9.  Minnesota Statutes 1983 Supplement, section 
116J.89, subdivision 8, is amended to read:  
    Subd. 8.  [MEMBERSHIP.] The members and governing body of 
the authority shall be the commissioner and ten other members 
appointed by the governor.  The governor shall designate the 
chairman from among the members.  The board shall elect a 
secretary and other officers as it deems fit from among its 
members.  On July 1, 1983, the governor shall have authority to 
appoint new members.  The terms of the current members shall 
expire, respectively, when they are replaced and new members are 
appointed by the governor and qualified.  Section 15.0575 
governs the terms, compensation, removal and filling of 
vacancies in the offices of members other than the commissioner. 
    Sec. 10.  Minnesota Statutes 1983 Supplement, section 
116J.90, subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] The authority may make or 
purchase or participate with financial institutions in making or 
purchasing business loans, small business loans, energy loans, 
pollution control loans, and farm loans upon the conditions 
described in this section, and may enter into commitments 
therefor.  
    Sec. 11.  Minnesota Statutes 1983 Supplement, section 
116J.90, subdivision 2, is amended to read:  
    Subd. 2.  [SMALL BUSINESS LOANS; LIMITATIONS.] The 
authority may make or purchase or participate with financial 
institutions in making or purchasing small business loans not 
exceeding $1,000,000 in principal amount with respect to small 
business loans made or purchased by the authority and not 
exceeding $1,000,000 principal amount with respect to the 
authority's share thereof when the authority participates in 
making or purchasing small business loans.  
    With respect to business loans that the authority makes or 
purchases or participates with, the authority may determine or 
provide for their servicing, the percentage of authority 
participation, if any, the times the loans or participations 
shall be payable and the amounts of payment, their amount and 
interest rates, their security, if any, and other terms, 
conditions, and provisions necessary or convenient in connection 
with them and may enter into all necessary contracts and 
security instruments in connection with them.  The authority 
shall obtain the best available security for all loans.  The 
authority may provide for or require the insurance or 
guaranteeing of the business loans or authority participations 
in whole or in part by the federal government or a department, 
agency, or instrumentality of it, by an appropriate account 
created with respect to the economic development fund in 
connection with business loans, small business loans, pollution 
control loans, and farm loans, and with respect to the energy 
development fund in connection with energy loans, or by a 
private insurer.  In connection with making or purchasing 
business loans or participations in them, the authority may 
enter into commitments to purchase or participate with financial 
institutions or other persons upon the terms, conditions, and 
provisions determined by it.  Business Loans or participations 
may be serviced by financial institutions or other persons 
designated by the authority.  The dollar limitations contained 
in this subdivision do not apply to energy loans and loans 
insured under sections 93 116J.924 and 94 116J.925.  
    Sec. 12.  Minnesota Statutes 1983 Supplement, section 
116J.90, subdivision 3, is amended to read: 
    Subd. 3.  [DIRECT BUSINESS AND FARM LOANS; LIMITATIONS.] 
The authority may make business loans or farm loans not 
exceeding $100,000 in principal amount, at interest rates and 
subject to terms determined by the authority, provided that each 
loan shall be made only from the proceeds of a bond or note 
payable in whole or part from the repayments of principal and 
interest on the loan.  The loans may also be guaranteed or 
insured by money on deposit in the economic development fund or 
any special account of it, and may be secured by reserve funds 
and other collateral and available money as determined by the 
authority.  The authority may enter into all necessary contracts 
and security instruments in connection with them.  The 
limitation on loan amounts in this subdivision does not apply to 
energy loans and loans insured under sections 93 and 94 any 
other loan authorized under the Minnesota Energy and Economic 
Development Authority Act.  
    Sec. 13.  Minnesota Statutes 1983 Supplement, section 
116J.90, subdivision 5, is amended to read: 
    Subd. 5.  [TARGETED LOANS.] The authority shall make every 
effort to assure that at least 50 percent of the principal 
amount of the loans made or purchased by the authority in each 
fiscal year consists of loans with a principal amount of 
$100,000 or less to targeted small businesses as defined in 
section 116J.88, subdivision 5, and the financial management 
division shall provide technical assistance needed by targeted 
small businesses to complete applications and meet other 
requirements for those loans.  The authority shall report to the 
legislature annually on or before February 1 as to its 
compliance with the requirements of this subdivision during the 
preceding fiscal year.  Noncompliance with this subdivision does 
shall not affect the validity of bonds and notes heretofore or 
hereafter issued.  
    Sec. 14.  Minnesota Statutes 1982, section 116J.90, is 
amended by adding a subdivision to read: 
    Subd. 5a.  [SPECIAL ASSISTANCE PROGRAM.] (a) The authority 
may operate a special assistance program and may designate 
certain businesses as being in need of special assistance.  In 
connection with the special assistance program the authority may 
borrow money and may issue negotiable bonds and notes in 
accordance with section 116J.91, subdivisions 11 and 12. 
Notwithstanding any provision to the contrary in section 
116J.91, subdivision 11, the aggregate principal amount of the 
authority's bonds and notes outstanding at any one time and 
issued in connection with the special assistance program, 
excluding the amount satisfied and discharged by payment and 
deducting amounts held in debt service reserve funds and amounts 
used to make loans guaranteed or insured by the federal 
government or a department, agency, or instrumentality of the 
federal government or by a private insurer or guarantor 
authorized to do business in the state of Minnesota and 
acceptable to the authority, shall not exceed $10,000,000.  
    (b) No business shall be eligible to receive special 
assistance unless the authority has first passed a resolution 
designating the business as being in need of special 
assistance.  The resolution shall include findings that the 
designation and receipt of the special assistance will be of 
exceptional benefit to the state of Minnesota in that at least 
three of the following criteria are met:  
    (1) in order to expand or remain in Minnesota, the business 
has demonstrated that it is unable to obtain suitable financing 
from other sources;  
    (2) special assistance will enable a business not currently 
located in Minnesota to locate a facility within Minnesota which 
directly increases the number of jobs within the state;  
    (3) the business will create or retain significant numbers 
of jobs within a community in Minnesota;  
    (4) the business has a significant potential for growth in 
jobs or economic activities within Minnesota within the ensuing 
five-year period; and 
     (5) the business will maintain a significant level of 
productivity within Minnesota within the ensuing five-year 
period.  
    (c) Special assistance may include:  
    (1) a business loan;  
    (2) a small business loan; or 
    (3) use of moneys in the economic development fund to 
provide financial assistance to businesses in accordance with 
section 116J.89, subdivision 1a, except that section 116J.89, 
subdivision 1a(g), shall apply only to eligible small businesses.
    Sec. 15.  Minnesota Statutes 1983 Supplement, section 
116J.90, subdivision 6, is amended to read: 
    Subd. 6.  [REPORTS.] (a) Each financial institution that 
participates in a pollution control or business loan with the 
authority shall annually on or before March 1 submit a report 
for the prior calendar year to the authority on a form 
prescribed by the state auditor commissioner.  The report shall 
include a listing of each new and outstanding loan in which the 
financial institution is a participant, the amount and terms of 
the loan, the purpose of the loan, and any other information as 
the state auditor commissioner may reasonably require.  
    (b) The authority shall annually on or before May 1 submit 
a report on a form prescribed by the state auditor commissioner 
for the prior calendar year to the state auditor on all loans 
that it makes, purchases, or participates in.  The report shall 
include a listing of each new and outstanding loan in which the 
financial institution is a participant, the amount and terms of 
the loan, the purpose of the loan, and any other information as 
the state auditor may reasonably require.  
    (c) The state auditor shall annually on or before July 1 
submit a report for the prior calendar year to the governor and 
the legislature summarizing the report submitted pursuant to 
clause (b).  
    (d) The cost of preparing and submitting the reports 
required by this subdivision shall be borne by the party 
submitting it.  Any financial institution that fails to comply 
with the requirements of this subdivision shall be prohibited 
from participating in future loans until it complies.  
    Sec. 16.  Minnesota Statutes 1983 Supplement, section 
116J.91, subdivision 1, is amended to read: 
    Subdivision 1.  In implementing the purposes and the 
programs described in sections 116J.88 to 116J.91 116J.65, 
116J.67, 116J.875 to 116J.926, and chapters 472 and 474, the 
authority shall have the powers and duties set forth in this 
section.  
    Sec. 17.  Minnesota Statutes 1983 Supplement, section 
116J.91, subdivision 4, is amended to read:  
    Subd. 4.  It may adopt, amend, and repeal rules, including 
temporary rules, not inconsistent with the provisions of 
sections 116J.88 to 116J.91 116J.65, 116J.67, 116J.875 to 
116J.926, and chapters 472 and 474 as necessary to effectuate 
its purposes.  The authority to adopt temporary rules expires 
June 30, 1985.  
    Sec. 18.  Minnesota Statutes 1983 Supplement, section 
116J.91, subdivision 11, is amended to read:  
    Subd. 11.  It may borrow money to carry out and effectuate 
its purposes and may issue its negotiable bonds or notes as 
evidence of any such borrowing in accordance with sections 
462A.08 to 462A.13, 462A.16 and 462A.17, all with the force and 
effect stated and the incidental powers granted and duties 
imposed in those sections.  The bonds and notes may be issued 
pursuant to a trust indenture that is substantially identical to 
a resolution pursuant to which the authority issues bonds and 
notes as provided in sections 462A.08 to 462A.13, 462A.16, and 
462A.17, except that the authority may pledge money and 
securities to a trustee for the security of the holders of bonds 
and notes.  The authority may refund bonds and notes and may 
guarantee or insure its bonds and notes in whole or in part with 
money from the economic development fund funds or an account 
created by the authority for that purpose.  The aggregate 
principal amount of the authority's bonds and notes outstanding 
at any one time, excluding the amount satisfied and discharged 
by payment or provision for payment in accordance with their 
terms, and deducting amounts held in debt service reserve funds 
therefor and amounts used to make loans guaranteed or insured by 
the federal government or a department, an agency or 
instrumentality of the federal government or by a private 
insurer or guarantor authorized to do business in the state of 
Minnesota and acceptable to the authority, shall not exceed 
$30,000,000 unless authorized by another law.  
    Sec. 19.  Minnesota Statutes 1983 Supplement, section 
116J.91, subdivision 12, is amended to read:  
    Subd. 12.  It may issue and sell bonds, notes, and other 
obligations payable solely from particular moneys, assets, or 
revenues derived from its programs, or any business loan, farm 
loan, or pollution control loan, notwithstanding section 
462A.08, subdivision 3.  Obligations issued to participate in 
making or purchasing business loans or pollution control loans 
shall be payable solely from revenues derived by the authority 
from repayments of these loans and from enforcement of the 
security therefor, or from a debt service reserve fund or funds, 
or from a general reserve fund or from a segregated portion 
thereof, or from other funds or security specifically pledged by 
the authority, irrevocably pledged and appropriated to pay 
principal and interest due, for which other funds are not 
available.  A general reserve fund is created and is eligible to 
receive direct appropriations from the state treasury or a 
transfer from any of the economic development fund funds as the 
authority may provide by resolution.  The authority may 
irrevocably pledge and appropriate all or a segregated portion 
of the general reserve fund to pay principal and interest due on 
all or one or more series of its obligations for which other 
funds are not available, pursuant to the terms and conditions 
that the authority shall determine.  Until so pledged and 
appropriated by the authority the general reserve fund shall not 
be available to pay principal and interest on the authority's 
obligations.  The authority may at its option provide by 
resolution that obligations issued to participate in making or 
purchasing business loans or pollution control loans be secured 
at the time of issuance in whole or in part by a debt service 
reserve fund or funds, a portion of the general reserve fund 
segregated to secure one or more series of bonds, or the portion 
of the general reserve fund not segregated to secure one or more 
series of bonds.  The operation of the debt service reserve fund 
or funds or a segregated portion of the general reserve fund and 
other relevant terms or provisions shall be determined by 
resolution or indenture of the authority.  Obligations issued to 
make or purchase business loans, farm loans, or pollution 
control loans may be issued pursuant to an indenture of trust or 
a resolution of the authority.  It may pledge to holders of 
obligations, or to a trustee, repayments from the loans, any 
security or collateral for them, contract rights with respect to 
them, and any other funds or security specifically pledged by 
the authority for them.  
    Sec. 20.  Minnesota Statutes 1982, section 116J.91, 
subdivision 15, is amended to read:  
    Subd. 15.  It may cause any funds not required for 
immediate disbursement, including the general reserve fund, to 
be invested in direct obligations of or obligations guaranteed 
as to principal and interest by the United States, or in insured 
savings accounts, up to the amount of the insurance, in any 
institution the accounts of which are insured by the federal 
savings and loan insurance corporation or to be deposited in a 
savings or other account in a bank insured by the federal 
deposit insurance corporation or to be invested in time 
certificates of deposit issued by a bank insured by the federal 
deposit insurance corporation and maturing within one year or 
less and in the investments described in section 11A.24, 
subdivision 4, except clause (d) of subdivision 4.  It may 
deposit funds in excess of the amount insured with security as 
provided in chapter 118.  Notwithstanding the foregoing, it may 
invest and deposit funds into accounts established pursuant to 
resolutions or indentures securing its bonds or notes in such 
investments and deposit accounts or certificates, and with such 
security, as may be agreed therein with the holders or a trustee 
for the holders. 
    Sec. 21.  Minnesota Statutes 1983 Supplement, section 
116J.91, subdivision 16, is amended to read: 
    Subd. 16.  It may provide general consultative and 
technical services to assist in financing small business 
facilities for the businesses to which loans may be made.  It 
may enter into agreements or other transactions concerning the 
receipt or provision of those services.  
    Sec. 22.  Minnesota Statutes 1982, section 116J.91, 
subdivision 17, is amended to read:  
    Subd. 17.  Financial information, including, but not 
limited to, credit reports, financial statements and net worth 
calculations, received or prepared by the agency authority 
regarding any agency authority loan, financial assistance, or 
insurance is private data with regard to data on individuals as 
defined in section 13.02, subdivision 9 and non-public data with 
regard to data not on individuals as defined in section 13.02, 
subdivision 12.  
    Sec. 23.  Minnesota Statutes 1982, section 116J.91, 
subdivision 18, is amended to read: 
    Subd. 18.  It The authority may accept appropriations, 
gifts, grants, bequests, and devises and use or dispose of them 
for its corporate purposes.  All gifts, grants, bequests, and 
revenues from those sources are appropriated to the authority 
for the purposes of sections 116J.65, 116J.67, and 116J.875 to 
116J.926.  The funding may include, but is not limited to, 
voluntary public utility investments and expenditures as 
provided by a utility and submitted in a program approved by the 
public utilities commission under section 216B.241.  Any 
voluntary investments or expenditures or gifts by a utility as 
described in this subdivision shall be appropriated to the 
authority only for purposes of sections 116J.921 to 116J.926.  
    Sec. 24.  Minnesota Statutes 1983 Supplement, section 
116J.91, subdivision 19, is amended to read:  
    Subd. 19.  Proceeds of the authority's bonds, notes, and 
other obligations; amounts granted or appropriated to the agency 
authority for the making or purchase or the insurance or 
guaranty of loans or for bond reserves; income from investment; 
money in the economic development fund funds; and all revenues 
from loans, fees, and charges of the authority including 
rentals, royalties, dividends, or other proceeds in connection 
with technology-related products, energy conservation products, 
or other equipment are annually appropriated to the agency 
authority for the accomplishment of its corporate purposes and 
shall be expended, administered, and accounted for in accordance 
with the applicable provisions of all bond and note resolutions, 
indentures, and other instruments, contracts, and agreements of 
the agency.  Notwithstanding section 16A.28, these 
appropriations are available until expended.  
    Sec. 25.  Minnesota Statutes 1982, section 116J.91, is 
amended by adding a subdivision to read: 
    Subd. 19a.  The authority may receive payments in the form 
of royalties, dividends, or other proceeds in connection with 
technology-related products, energy conservation products, or 
other equipment which it has purchased or in which it has 
participated. 
    Sec. 26.  Minnesota Statutes 1983 Supplement, section 
116J.91, subdivision 20, is amended to read:  
    Subd. 20.  The authority may do all things necessary and 
proper to fulfill its purpose and the purposes of the economic 
development fund as provided in sections 116J.65, 116J.67, 
116J.88 to 116J.91, sections 116J.921 116J.875 to 116J.926, and 
chapters 472 and 474. 
    Sec. 27.  Minnesota Statutes 1983 Supplement, section 
116J.923, subdivision 7, is amended to read: 
    Subd. 7.  [LOANS TO MUNICIPALITIES.] The authority shall 
receive approve applications from municipalities for loans to 
finance improvements to public buildings for the purpose of 
energy conservation, reduction of the use of conventional energy 
sources, or the use of alternative energy resources, and make 
recommendations thereon to the commissioner of finance, in the 
event of the authorization and issuance of bonds of the state 
for this purpose.  Financial and technical support for this 
program shall be provided by the financial management division. 
This program shall include the district heating loan program 
established in section 116J.36 and the program of energy 
improvement loans to schools created by Laws 1983, chapter 323. 
    Sec. 28.  Minnesota Statutes 1983 Supplement, section 
116J.924, subdivision 3, is amended to read: 
    Subd. 3.  [INSURANCE OF LOANS.] (a) [AUTHORIZATION.] The 
authority is authorized, upon application by a lender financial 
institution, to insure loans for cost-effective qualified energy 
projects as provided in this section; and under terms as the 
authority may prescribe by rule, to make commitments for the 
insuring of loans prior to the date of their execution or 
disbursement.  In the event the authority shall determine that 
the energy loan insurance fund is or will be depleted in 
connection with the use of the fund as authorized by the act 
which has been approved or given preliminary approval by the 
authority, then the authority may by resolution transfer money 
from the energy development fund created pursuant to section 
116J.925.  
    (b) [ELIGIBILITY REQUIREMENTS.] The authority may by rule 
establish requirements for energy loans to be eligible for 
insurance under this section, relating to:  
    (1) maximum principal amount, amortization schedule, 
interest rate, delinquency charges, and other terms;  
    (2) the portion of the loan to be insured;  
    (3) acceleration and other remedies;  
    (4) covenants regarding insurance, repairs, and maintenance 
of the project;  
    (5) conditions regarding subordination of the loan 
security, if any, of the project to other liens against the 
property;  
    (6) the aggregate principal amount of loans to be insured 
in relation to the reserves from time to time on hand in the 
insurance fund, and priorities as to the loans to be insured; 
and 
    (7) any other matters determined by the authority.  
    The authority shall by rule establish criteria for 
analyzing the cost-effectiveness of projects.  
    (c) [CONCLUSIVE EVIDENCE OF INSURABILITY.] Any contract of 
insurance executed by the authority under this section shall be 
conclusive evidence of the eligibility of the loan for 
insurance, and the validity of any contract of insurance 
properly executed and in the hands of any approved lender shall 
not be contestable, except for fraud or misrepresentation on the 
part of the lender financial institution.  
    (d) [PREMIUMS.] The authority is authorized to fix premium 
charges for the insurance of loans under this section at levels 
which in its judgment, taking into account other amounts 
available in the fund, will be sufficient to cover and maintain 
a reserve for loan losses.  
    (e) [PROCEDURES UPON DEFAULT.] The authority may establish 
procedures to be followed by lenders financial institutions and 
to be taken by the authority in the event of default upon an 
energy loan, including: 
    (1) time for filing claims;  
    (2) rights and interests to be assigned and documents to be 
furnished by the lender financial institution;  
    (3) principal and interest to be included in the claim; and 
    (4) conditions, if any, upon which the authority will pay 
the entire principal amount in default, after foreclosure and 
receipt of marketable title to the property.  
    Sec. 29.  Minnesota Statutes 1983 Supplement, section 
116J.925, subdivision 1, is amended to read:  
    116J.925 [ENERGY LOAN PROGRAM DEVELOPMENT FUND.] 
    Subdivision 1.  [AUTHORITY TO MAKE ENERGY LOANS.] The 
authority may make energy loans to individuals, partnerships, 
corporations, or other entities a business for the financing of 
capital improvements to be used in connection with a trade or 
business if the principal purpose of improvement is energy 
conservation, to reduce the usage of conventional fuels as a 
source of energy, or to develop Minnesota's alternative energy 
resources as provided by the authority's rules a qualified 
energy project.  
    Sec. 30.  Minnesota Statutes 1983 Supplement, section 
116J.925, subdivision 3, is amended to read:  
    Subd. 3.  [ENERGY DEVELOPMENT FUND.] An energy development 
fund is created and is eligible to receive appropriations.  The 
authority may irrevocably pledge and appropriate all or a 
segregated portion of the energy development fund to make 
principal and interest payments when due on all or one or more 
series of its obligations for which other funds are not 
available, pursuant to the terms and conditions the authority 
shall prescribe.  Unless the energy development fund has been 
pledged and appropriated to secure the obligations, the energy 
development fund shall not be available to make principal or 
interest payments on the obligations The authority may otherwise 
operate the fund according to section 116J.89.  In the event the 
authority shall determine that the energy development fund is or 
will be depleted in connection with the use of the fund as 
authorized by the act which has been approved or given 
preliminary approval by the authority, then the authority may by 
resolution transfer money from the energy loan insurance fund 
created pursuant to section 116J.924.  
    Sec. 31.  [116M.01] 
    Sections 116J.62; 116J.65; 116J.67; 116J.88; 116J.89; 
116J.90; 116J.91; 116J.921; 116J.923; 116J.924; 116J.925; and 
116J.926 may be cited as the Minnesota Energy and Economic 
Development Authority Act.  
    Sec. 32.  Minnesota Statutes 1983 Supplement, section 
275.125, subdivision 12a, is amended to read:  
    Subd. 12a.  [ENERGY CONSERVATION LEVY.] The school district 
may annually levy, without the approval of a majority of the 
voters in the district, an amount equal to the actual costs of 
the energy conservation investments for the purposes of repaying 
sufficient to repay the annual principal and interest of the law 
loan made pursuant to section 116J.37.  
    Sec. 33.  Minnesota Statutes 1982, section 474.01, 
subdivision 7, is amended to read: 
    Subd. 7.  Any municipality or redevelopment agency 
contemplating the exercise of the powers granted by this chapter 
may apply to the commissioner of energy, planning and economic 
development for information, advice, and assistance.  The 
commissioner is authorized to handle such preliminary 
information in a confidential manner, to the extent requested by 
the municipality. 
    Sec. 34.  Minnesota Statutes 1982, section 474.01, 
subdivision 7a, is amended to read: 
    Subd. 7a.  No municipality or redevelopment agency shall 
undertake any project authorized by this chapter, except a 
project referred to in section 474.02, subdivision 1f, unless 
its governing body finds that the project furthers the purposes 
stated in this section, nor until the commissioner of energy, 
planning and economic development has approved the project, on 
the basis of preliminary information which the commissioner may 
require, as tending to further the purposes and policies of this 
chapter.  Approval shall not be deemed to be an approval by the 
commissioner of energy, planning and economic development or the 
state of the feasibility of the project or the terms of the 
revenue agreement to be executed or the bonds to be issued 
therefor, and the commissioner shall state this in communicating 
approval. 
    Sec. 35.  Laws 1983, chapter 323, section 5, subdivision 2, 
is amended to read: 
    Subd. 2.  None of the appropriations made in this section 
shall lapse until the purpose for which it is made has been 
accomplished or abandoned.  The amount of each loan approved for 
disbursement shall be and remain appropriated for that purpose 
until the loan is fully disbursed or part or all of it is 
revoked by the energy division authority.  
    Sec. 36.  [INSTRUCTIONS TO REVISOR.] 
    Subdivision 1.  [CHANGE OF TERMS.] The revisor of statutes 
shall change the words "development revolving fund" or 
"revolving fund" to "Minnesota Fund" whenever they appear in 
Minnesota Statutes, chapter 472.  
    Subd. 2.  [RENUMBERING.] The revisor of statutes shall 
renumber each section specified in column A with the number in 
column B.  The revisor shall also make the necessary 
cross-reference changes consistent with this renumbering.  
          Column A         Column B
          116J.62          116M.03
          116J.65          116M.04
          116J.67          116M.05
          116J.88          116M.02
          116J.89          116M.06
          116J.90          116M.07
          116J.91          116M.08
          116J.921         116M.09
          116J.923         116M.10
          116J.924         116M.11 
          116J.925         116M.12 
          116J.926         116M.13
    Sec. 37.  [REPEALER.] 
    Minnesota Statutes 1983 Supplement, sections 116J.922; 
116J.923, subdivisions 2 and 12; and 116J.924, subdivision 1, 
are repealed. 
    Approved April 26, 1984